Dog Days of Summer

As the United States celebrated its Independence Day on July 4th, several jurisdictions around the world, including South Korea, Bermuda and Malta, passed legislation to support crypto assets and virtual currencies. Of these, South Korea’s appears the most detailed by providing a classification scheme as a framework for regulation. This is the most sophisticated understanding of the blockchain sector I have seen to date from a government:

“The government has subdivided its industry classification scheme into three sectors, with ten further subdivisions under the guidance of the Korean Standard Industrial Classification ( KSIC ). The subdivisions include detailed considerations of blockchain-powered infrastructure for DApps such as EOS , Ethereum and NEO , blockchain-based cloud computing services, and cryptocurrency mining.The survey is also covering blockchain systems integration into existing industries, including the financial sector, security, insurance, copyright management, supply chain management, medical services, and software development.” — Cointelegraph, Continue reading "Dog Days of Summer"

Becoming Un-Tethered

I just wrapped up 2 days of speaking at MoneyConf in Dublin, an annual conference dedicated to all things fintech. In contrast to previous years, at least 50% of the programming involved blockchain technology. I shared the stage with two early FPV portfolio companies, Blockchain and Bitpesa, and connected with a number of old friends in the sector, including Ethereum co-founder Joe Lubin, academic and entrepreneur Emin Gun Sirer, and Circle founder Jeremy Allaire. We talked about the sector’s growth and challenges, tokenization, and regulation. There was little hype, real conversation and hyper-focus on overcoming current challenges and building what’s next. It was refreshing to be amongst the early adopters who keep it real, and I came away more convinced than ever that we’re in good hands…

The big news over the past couple of days was new research that linked stablecoin Tether to Bitcoin price manipulation :

“ Using Continue reading "Becoming Un-Tethered"

ICOs 2.0

Blockchain Week 2018 came in with a bang — 8500 attendees at the Consensus conference (vs 400 the last time I spoke there in 2015), thousands more at side events. The price of major cryptocurrencies saw a run up to the week, with vivid memories of the boom last year’s conference started. However, the prices soon came down, with Bitcoin trading near $7500 recently.

While the price may have disappointed, news continued to flow. Over the past few weeks:

  • Institutional grade security was high on announcement lists with Coinbase, Bitgo, and hardware wallet Ledger all announcing new custody products aimed at larger investors
  • Coinbase continued its acquisition spree, buying Paradex, a decentralized exchange (DEX — discussed in one of our newsletters earlier this year). This signals a closer move to offering altcoin trading, as Paradex focuses on the ERC-20 tokens that most initial coin offerings (ICOs) are built on
  • The Continue reading "ICOs 2.0"

The Calm Before Blockchain Week NYC

I am back in NYC after a trip around the world — with stops in London, Mumbai, Beijing, Korea, Los Angeles and Palo Alto along the way. I wrote about London and India observations in the last newsletter. A few takeaways on the rest:

Last time I spoke at the Milken Conference in LA, in 2015, I was on a panel to discuss the promise of blockchain technology. We were the only panel addressing the topic, and while it was standing room only, there was little knowledge amongst the audience about bitcoin and blockchain. This year I counted at least 5 sessions related to blockchain and cryptocurrency, with much more engagement and heated opinions…in fact Bill Barhydt, CEO of FPV portfolio company Abra went head to head with economist Nouriel Roubini and wrote about it after in this piece.

Built Environments and Blockchain Tech

After a few days in Mumbai meeting with large industrials and regulators (and FPV portfolio company Everledger which just opened a Mumbai office), I spent the past couple of days in London, where I spoke at the World Built Summit, an annual conference convened by RICS, the Royal Institution of Chartered Surveyors. RICS is one of the world’s leading professional bodies for qualifications and standards in land, property and construction (currently in 140 countries) and was established in 1868 by a group of surveyors in London, to respond to a lack of regulatory frameworks during the Industrial Revolution. Interesting parallels to the current state of the cryptoasset market.

I spoke at several sessions, including one on the Future\Perfect Ventures thesis of IoT, machine learning and blockchain convergence, and how these technologies can impact the “built environment”. Perhaps the most lively of the sessions was one I led on regulation. It Continue reading "Built Environments and Blockchain Tech"

Campus Crypto Fever

This past Friday I spoke at Penn’s inaugural Blockchain Conference. It was a special speaking engagement for me, as I am a Penn grad and my interest in economics and business started and flourished there.

Over the past five years speaking on college campuses, I have encouraged students to explore the blockchain sector. During the past year, I have received hundreds of emails from students in those audiences, some expressing regret for not paying attention sooner, and others thankful I helped them pay off their loans, or find a career path. Given this, I expected a lot of interest and engaged students at the Penn conference. My expectation was met and exceeded. From students studying cryptoeconomics to faculty guiding independent studies on the new asset class, it is clear that the oldest university in the United States is on board with the newest technology wave.

What were students most interested Continue reading "Campus Crypto Fever"

The Big Chill

The first quarter was not a pretty one for cryptocurrency prices — from January 1-March 31, Bitcoin lost over 50% of its value, with a number of smaller altcoins down over 60%. Regulatory action, hacks and scams weighed heavily, with newer investors who came in during the gold rush of Q4 heading for the exits. Are we headed for another cryptowinter, as what happened in 2014–2016? During that time, in the wake of the Mt Gox hack and Silk Road scandal, Bitcoin prices fell and stayed there consistently until March 2017, when Japan’s regulators ruled that Bitcoin could be used as a currency.

Much is different this time around — the underlying technologies underpinning cryptoassets continue to develop at a rapid pace; more enterprise projects are pinpointing use cases of blockchain technology (and just as importantly, which ones don’t make sense); and institutional capital has entered the asset class. In Continue reading "The Big Chill"

Crypto Chess Continues

“Welcome to #Malta @binance,” Joseph Muscat, the country’s prime minister, tweeted on Friday. “We aim to be the global trailblazers in the regulation of blockchain-based businesses.”

Binance, one of the world’s largest cryptoasset exchanges by volume, announced this past week that it moved its headquarters from Hong Kong to Malta. This move came on the heels of Japan reaching out to the Binance with a warning for operating without a license there, and Hong Kong regulator Securities and Future Commission (SFC) warning crypto exchanges not to trade digital assets defined as securities (similar to the US SEC’s warning to unlicensed exchanges earlier this month).

Binance, which has a broad listing of “altcoins” (smaller cryptocurrencies) with over 250 trading pairs, also recently announced it was developing a decentralized exchange. Decentralized exchanges (DEXs) have proliferated over the past few months — they allow trades to occur between users peer to peer Continue reading "Crypto Chess Continues"

Lightning Strikes the Sector

I took a hiatus from the newsletter last week, while meeting with entrepreneurs and speaking at SXSW in Austin. Similar to what I saw (at the very different gathering) at Davos in January, much of the conference chatter revolved around blockchain technology. Almost on cue, last Sunday night John Oliver broadcast an episode (link below) focused on cryptocurrencies and blockchain. If you haven’t seen it and want a good laugh while gaining a better cultural understanding of the sector, I’d encourage you to watch it!

Ahead of more regulatory concerns, cryptocurrencies entered a bear market (with Bitcoin down to $7200 and Ether near $500) this past week before recovering earlier today on a statement that the FSB did not see cryptocurrencies as a risk to the global financial system. This news came as the G20 Summit got underway in Buenos Aires — many had expected a more heavy handed approach Continue reading "Lightning Strikes the Sector"

Securities Tokens

In the past week, more news started to emerge about the SEC subpoenas that I alluded to in last week’s newsletter. While it remains to be seen what the SEC plans to do with the information, it is clear that they are signaling to the market that they are serious about investigating practices over the past year and will be using that information to, at the least, provide more concrete guidance moving forward.

These recent regulatory probes have led to a new class of cryptocurrencies: the security token. While definitions vary, with the broadest being that this category would encompass a token that is issued in compliance with current securities laws (including disclosures), some companies are looking at how the secondary market, in addition to the issuance, can be compliant without hindering liquidity. Harbor, one of the newer companies to emerge in this space, is looking to utilize smart contracts Continue reading "Securities Tokens"

Personal Reflections on 2017

As 2017 comes to a close, I think of it as the year of validation and gratitude, personally and for so many people around the world who have been marginalized and silenced in so many different ways. A year of validation for those who have lived as minorities in a world that has valued and listened to the majority voice –the status quo, the male, the white person.

 

What happened this year was a reckoning, when collectively minorities decided to voice their experiences so that they could no longer be ignored or viewed as one-offs.  Every professional woman I know has been sexually harassed.  Many to the point of giving up on their careers.  The amount of lost talent and productivity from this is staggering to think of.

 

I was lucky – I was born to persevere and grew up with parents who told me Continue reading "Personal Reflections on 2017"

Bitcoin at $10K – The Beginning

The price of bitcoin reached $10K earlier today.  Over the years I have seen a significant change in conversations around virtual currencies (“it’s for drug dealers!”; “there’s no underlying asset!”; “it’s a fraud!” to “how do I buy bitcoin”?;“can you help me look at this ICO?”) and we are no doubt at the cusp of more widespread acceptance of the concept.  It’s important to note that a fair amount of the recent capital in the market is driven by speculation from the astronomical returns that cryptocurrencies have achieved in 2017, and a “fear of missing out” (FOMO).  True alpha returns have been difficult to achieve in the globally low interest rate environment and softening of many real estate markets, all factors that have been fuel for cryptocurrency market cap growth.  Many of these investors have not experienced the price volatility many Continue reading "Bitcoin at $10K – The Beginning"

Blockchains and Society

In July, I sat down The Falkes Group, organizers of the annual Women’s Private Equity Summit in Half Moon Bay, to talk about my fund, and how I got interested in investing in bitcoin and blockchain technology in 2013.

As we see bitcoin near $6000 (it was near $1000 in the beginning of this year), it’s important to remember that there are still many question marks on how the technology will develop, particularly as we see more cryptocurrencies come to market. The pace of growth in the blockchain sector has exceeded what those of us who got involved in 2013 (or earlier) could have predicted. I think it is a testament to pent-up demand for better mechanisms for value transfer, authentication, and security. As if on cue, Equifax recently showed us how a large, well funded company whose sole job it was to protect our data, failed at its basic Continue reading "Blockchains and Society"

Blockchains and Society

In July, I sat down The Falkes Group, organizers of the annual Women’s Private Equity Summit in Half Moon Bay, to talk about my fund, and how I got interested in investing in bitcoin and blockchain technology in 2013.

As we see bitcoin near $6000 (it was near $1000 in the beginning of this year), it’s important to remember that there are still many question marks on how the technology will develop, particularly as we see more cryptocurrencies come to market. The pace of growth in the blockchain sector has exceeded what those of us who got involved in 2013 (or earlier) could have predicted. I think it is a testament to pent-up demand for better mechanisms for value transfer, authentication, and security. As if on cue, Equifax recently showed us how a large, well funded company whose sole job it was to protect our data, failed at its basic Continue reading "Blockchains and Society"

Token Thoughts on the Blockchain Boom

The past 10 days have been heady for anyone in the cryptocurrency space.  The market cap of digital currencies increased to over $90 billion last week (a 50% increase in 7 days).  Bloomberg put together the chart below to show relative value increases in major cryptocurrencies.  
There is also a lot of buzz about ICO’s, or initial coin offerings, a new asset class of cryptocurrencies being issued in crowdsales to fund development of projects on top of Bitcoin or Ethereum (or in some cases, entirely new protocols).  I spoke at the inaugural Ethereal Summit in Brooklyn on May 19th on this topic, stating that there is undoubtedly a bubble in the market, driven by speculation.  I also said that I think these ICO’s can eventually change the world. Longer term, I believe tokens can enable a whole new ownership model, where consumers will be incentivized Continue reading "Token Thoughts on the Blockchain Boom"

Token Launch

This is not the story of another cryptocurrency coin offering, but of a product that is using a tangible, age-old form factor to manage and secure our digital and analog identities. I am pleased to announce that Future\Perfect Ventures portfolio company Tokenize has launched its latest product: Token, a ring that allows users to make payments, use public transport, log into websites, and enter our homes, cars and offices without carrying around keys or credit cards. Using advanced biometric technology and sensor detection, the ring is disabled when the user takes it off and has a battery life of 14 days on one charge.

Over the past few years as I’ve invested in the thesis of rapid decentralization, I was on the lookout for a company that represented what I call the “post smartphone” world. In the future, we will be accessing services and products through more seamless means, rather Continue reading "Token Launch"

My Talk at MIT: Beyond Finance, Considering Business and Social Impact of Blockchains

A couple of weeks ago I spoke at a conference entitled “Business of Blockchains” that the MIT Technology Review and MIT Media Lab organized in Cambridge.

One of the reasons I started investing in the blockchain space 4 years ago was the rush I got learning about the tech at my first bitcoin conference – akin to the chills I got when I first logged into the Internet in 1994, when I was deeply passionate about more equal access to education. There were some debates at the MIT conference on where we were in blockchain development vs the internet (is it 1960’s or 1990’s?). I’m not sure that this is the right way to frame it. Successful investors know when to draw inferences – but are also aware of conditions that create new opportunities. Pattern recognition is straightforward and linear– the way to recognize and invest in disruption is Continue reading "My Talk at MIT: Beyond Finance, Considering Business and Social Impact of Blockchains"

The LP Opportunity to Change Tech Culture

Over the past month, Silicon Valley has been at the forefront of many conversations outside of the technology world.  Unfortunately not for groundbreaking technology, but for rampant sexual harassment and predatory behavior. The stories outlined by a number of brave women in the NY Times last week recount investors using their power and position to proposition female founders.  Just a week before, Justin Caldbeck, founder of Binary Capital, admitted to sexually harassing a number of women who were seeking investment from his fund.  Binary Capital was dissolved within days by its investors once the extent of the allegations were revealed. While this behavior has existed in the industry for years, women are now standing up and speaking out.  For too long, too many men have taken the view that women were “reading too much” into behavior, didn’t have a “sense of humor”, or just didn’t Continue reading "The LP Opportunity to Change Tech Culture"