Real Ventures Crypto Brief - October 26, 2017

It emerged recently amidst the Tezos controversy that the cofounders consider ICO contributions to be donations, saying that the Tezos fundraiser was like contributing to a public television station and receiving “a tote bag” in return. As it turns out, many projects incorporate this language in the fine print when they issue tokens. Rather than greed, these projects have cited legal liability as the reason for the official designations of tokens as worthless notes of participation. However, if it walks like a duck and quacks like a duck, regulators are likely to think it’s securities law violation. 

This video is pretty obscure - I came across a link on Twitter. It’s the recording of Credit Suisse’s inaugural Blockchain Symposium. The speaker states that the bank has been investigating blockchain technology since 2014, and is now expanding its interest into a practice (along with many other banks). Balaji Srinivasan, who has written extensively about the potential for blockchain technology, gives a solid overview as the first guest speaker and is included in this video as well. It’s a good practice to attend events and watch videos like these to have a good understanding about what large enterprises are thinking. 

Another day in Bitcoin world, another civil war. This time, just as the Bitcoin network is moving past the SegWit fork, another fork of the Bitcoin network is at hand. This time, the debate is over blocksize - one side wants to keep the current 1MB specification, and the other wants to double it to 2MB. While this does have implications for who can mine Bitcoins and how fast the network can operate, this is still only a linear (2x) improvement. In order to serve as a platform for humanity, much more scaling needs to take place. This time, just like the SegWit split, there will likely be a fork into two separate Bitcoin blockchains - one called “Bitcoin” and the other one “Bitcoin Gold”. There’s also a war over which chain gets what name. In the meantime, Bitcoin’s price continues to flirt with all-time highs. Pretty typical for crypto world. 

This is a short-story “futurecast” that I wrote to piece together some of the great opportunities with blockchain technology in a way that people could understand and that also shows the more.. disruptive side of the crypto future. 

I appreciate this perspective from Joe Lubin. He acknowledges what the rest of us know to be true - the vast majority currently entering the crypto ecosystem is unaware of what it is actually investing in, and that’s a recipe for a bubble. At the same time, he points out that bubbles have a way of allocating capital to the area that needs it most - the new one - which clears the way for further development and deployment over time. This framework was originally articulated by Carlota Perez, it’s a good one.

Multicoin Capital, a U.S. investment firm with a multi-year horizon, said on Thursday it has launched two funds that will invest in digital currencies or tokens. They’re looking to raise $100m between the two. This is one of many new funds focused on the crypto space that have been launched in recent months. 

This is totally unrelated to crypto, so you might ask what it’s doing here. I loved reading this because it highlights one of the key problems that exists today that blockchains are primed to solve: the principal-agent problem. Just take a look at the kind of thinking that has to go into the design and operation of paper-based legal structures for running society, and then think about the possibilities when all of that can be programmed. 

Polkadot is a blockchain for scalable decentralized computation and interoperability. The parachain is one of the main technological elements of the polkadot network’s architecture. Understanding details like these are important, because interoperability is one of the most pressing needs and areas ripe with potential in the blockchain space. 

Nick Tomaino, founder of the 1confirmation crypto investment fund, unpacks the notion of the “firm” and outlines the ways that blockchain technology will make them less relevant. Thinking in “macro” terms like these is helpful to inform an investment thesis geared to capitalize upon trends over time.