Fintech Week …The Economist Versus The Venture Capitalist on Bitcoin and The Blockchain

Just yesterday, three seasoned investors told me (without prompting) that Bitcoin was going to zero.

One of the investors actually took a phone call mid conversation and made an options bet on Apple earnings (that were an hour away).

Smacks forehead!!!

Because it is my first fintech week on the blog, I might as well get an updated post right now on Crypto and The Blockchain. Currently I personally own some Bitcoin, Eos, Zcash and Ethereum.

Our fund, Social Leverage, is an investor in Etoro, Robinhood and Civic.com which are very tied to Crypto and The Blockchain and one new investment that is stealth.

Other than Civic (identity and the blockchain), we have kept our thesis on this sector very simple. If we truly are headed for a revolution with crypto, we want to be investors that focus on the onboarding of the next generation and lightweight access to the masses that may start investing and saving.

On the more technical side, Fred Wilson just posted his update on how he sees the revolution progressing …perfect timing for fintech week! The gist:

This frenzy of entrepreneurship and investment has unleashed thousands of crypto projects all around the world.

And many of these teams, projects, companies are shipping things now.

Which is leading to an incredible amount of innovation coming to market in a very short period of time.

Like any early market, most of these projects and companies will fail. Some will fail to ship. Some will ship things that don’t work. Some will ship things that work but aren’t adopted. And some will ship things that are adopted but are surpassed by something better. The failure rate of these thousands of projects will be very high.

But inside this cohort of companies and projects will be the next Google, Amazon, Facebook, Twitter, Dropbox, Uber, and Airbnb.

And so the job of a crypto investor is to sort through all of them and decide which ones have the best chance of emerging as a winner.

We have been doing that for seven years now, since we first started poking around this sector in 2011.

And it has never been harder.

It is like drinking from a firehose right now.

There are so many high-quality projects, high-quality teams, and blue-chip financings happening in the crypto market right now.

It makes my head spin just trying to stay on top of it all.

On the other side of the spectrum I give You Paul Krugman, ‘famous‘ Economist who sounds very smart from his perch at The New York Times about the Blockchain and has good timing for me with this piece ‘Why I Am a Crypto Skeptic‘. He basically rails against Bitcoin and the Blockchain and than covers his ass at the end (as all Economists seem to do) with:

But if you want to argue that I’m wrong, please answer the question, what problem does cryptocurrency solve? Don’t just try to shout down the skeptics with a mixture of technobabble and libertarian derp.

Paul should meet/watch my friend who is trading Apple options around earnings over a smartphone to say that as long as Bitcoin is trading it at least solves the same problems that trading Apple earnings calls does. Almost nothing, but something.


Also published on Medium.