EB123 – Brock Pierce: From Digital Goods To Digital Currency

Transcript

[Music] this episode of epicenter Bitcoin is brought to you by the Gtech blockchain contest if you have an idea for a blockchain related project make sure you apply for your chance to win Awards worth €50,000 go to epicenter bitcoin.com Gtech that's gtec to learn more about Gtech and how you can apply hi welcome to epicenter Bitcoin the show which talks about the technology projects and people driving decentralization and the global cryptocurrency Revolution my name is Sebastiano and my name is Brian faan

today we have a person on that probably most of you know in the in the cryptocurrency in Bitcoin space is Brock Pierce Brock Pierce has been involved in so many projects that if he listed all his titles and all his involvement it would take up the first 10 minutes of the show and uh perhaps what he's best known at this point is that he's the chairman of the Bitcoin foundation and he's also the managing partner of blockchain capital ban Capital has invested in lots and lots of companies in the space like probably half of the companies that you know most people know and uh yeah he's been involved in lots of projects here so I'm I'm super excited to have you on Brock well thank you guys for having me I'm not sure it

would take 10 minutes certainly not the title's worth uh I guess worth stating but but that being said so we have you know sort of gone through your background and I think that's one of the things that's really impressing impressive and astonishing just the the wealth of different projects you have done I'm curious so how did you become how did you become such an entrepreneurial guy and and starting constantly starting new projects well I I think uh I mean in some ways I was born an entrepreneur um you know I mean even from the ages of probably what five or six I was building lemonade you know stand like businesses one after another

um I mean every little silly thing you would expect uh you know a kid to be doing I think I was selling software uh by second grade uh uh and I found like this um remember these games word munchers number munchers Oregon Trail and things of that nature anyway the uh one of the places I used to hang out frequently as a kid uh uh was one of the Distributors there and they would throw away any boxes that had any damages or anything else and you know I had kids jumping in the dumpster to pull all the software out which then I would rent at school in like first or second grade for a dollar to rent it which at the time mean you'd just install it you'd pay $5 if essentially you wanted the box and the manual and you know all

the sort of supporting materials otherwise you would just return it a couple days later but uh I built you lots of businesses like that in elementary school and then more as uh as a teenager which eventually led to starting my first real business when I was 17 and then that led to another and another and another and somehow I ended up as a venture capitalist cool yeah that that is I mean first the lemonade sand is sort of you know the stereotypical no American entrepreneurship story so got everybody's got to start somewhere yeah now one thing that I thought was particularly interesting perhaps we can dive a little bit deeper in there is your involvement in in gaming and

digital Goods because I think that also sort of ties into then you how that led to your involvement in the Bitcoin space yeah no so I um I raised uh like $88 million for my first company when I was 17 business ended up spending 96 um obviously that didn't work out too well uh because we didn't have much well we pre-signed $150 Million worth of advertising contracts but um we were never able to meet the fill rates required to actually collect um that b business was dependent upon Broadband penetration rolling out which you know clearly took about 10 years longer than every analyst had forecast but at that point I found myself post

the first internet sort of 1.0 bubble uh having collapsed it's you know mid 2000 and I said okay well you know at this point the only skill I arguably have is is as an internet entrepreneur at a time where there's no one in the world that wants to finance or you know even be pitched an internet idea I said okay well what else do I got I can go get a get a job or or start something and having grown up playing games I had identified a a market um you had these early emerging what we'd call massively multiplayer games or persistent worlds and because these worlds were persistent in nature the assets that you would accumulate in them had value and so I identified that the people playing these online games had a desire to buy and

sell the digital currency or the digital Goods that they've accumulated and this is really before any game company in the world uh was buying and selling them so I started testing that model in 98 and 99 kind of just in the background but didn't have time to uh to do it seriously um but you know following the internet Bubble Burst I went ahead and started the business called IG which uh was initially focused on uh uh EverQuest and Timon line and then games like Final Fantasy 11 and you know ashon call and others as they emerged eventually World of Warcraft um but it was you know quite an interesting thing so if you were someone that had too much time on your hands you may have more inventory than you needed and if you were someone that might be working too hard you might have

more money than you need but you lacked some of the things that you wanted in that game world so I was making a market between you know players essentially uh I took that business uh from 2001 to 2004 from zero to 100 million in Revenue the problem I had is I had more customers willing to buy uh than I had players that wanted to sell and so I had um uh you know gone and taught the Chinese how they could play games professionally uh to mine digital currency which led to you know building up a supply chain of about 400,000 people in China that would play these games professionally to mine the digital currency that I would then sell into the Western markets and I'm still doing uh over over a billion dollars a year in

that business today so you started that thing because I mean I I've certainly heard about you know basically you know factories quote unquote factories in China right where people basically play video games to get digital goods and then sell them and that was your company that kind of started that uh industry yeah yeah uh and it was interesting because again I had more people that wanted to buy than I had people that wanted to sell and so I was like okay how am I going to get more inventory and I was looking through all of my Sellers and I I noticed that there were I was starting to see a few people emerging in Eastern Europe a few people in Latin America a few people in Asia

and you know this is what it dawned on me that you know all someone had to have is a computer an internet connection the game software and the ability to pay for it and they could play from anywhere in the world and if you were a good gamer you could make a you know a few hundred a couple hundred dollars a day uh which you know if you were in China in 2001 you know that's a lot of money depending upon where you are in China and so I I said okay I see I definitely need to take this you know sort of you know great job opportunity to the developing World another question was where um and I thought that the Chinese in particular had the greatest propensity to game I mean and as you've noticed it's a huge gaming Market similar to like South

Korea more so than you know call it the rest of the world and so China seemed like the obvious place I knew nothing about China at the time and so basically jumped on a plane moved to Hong Kong opened up a phone book you know got a lawyer got an office got an accountant you know hired a recruiter and just started hiring people because I decided that I needed to be near the epicenter of where I thought my industry would emerge then I set up shop in Shanghai and set up a team of hundreds of people that just started to educate everyone about how you can make more money than your dad who's a doctor and a lawyer you know by playing games um and that uh is how I ended up creating the supply chain that I needed to to sort of meet the

demand in the developing world that's really fascinating and uh so then how did you transition then into Bitcoin and now blockchain well that came uh you know quite a bit later so I I ran that business until about 2007 as um you know founder and CEO uh then went on and started a number of other businesses which you know I don't think we're going to want to spend time on here today but um uh having had a background in this and I'm still in the business I I just operate as chairman I'm not the day-to-day sort of management team anymore um and that business guess I said still doing about a billion dollars a year in places like Korea you know we've got 99% market share and China we're very active the Western World so we're all over the place but um uh you

know anytime someone was working on a digital currency project it was fairly common that I'd get a phone call uh and so Bitcoin was on my radar from you know more or less the very beginning I mean the first call I got was hey Brock if you take a look at this you know sort of white paper thing what do you think I'm like hold on I'm on the other line let me call you right back the reality is I hadn't heard of it and you know I didn't want to be like no so I did a quick Google search you know at least you know got a formed a 10-minute opinion made the call back I'm like yeah well yeah Bitcoin looks interesting this or you know something like it is clearly the future I just don't know if the future is now or 25 years from now and

they're like okay yeah that makes sense and uh uh I went ahead and you know at that point played around a little bit of mining nothing actively I wasn't convinced or sold that this is something I needed to focus on because if anything what I learned from my experience as an early entrepreneur is that market timing was everything um but uh you know at that point started tracking Bitcoin and checking in on it you know every few months I wasn't you know an active participant in the community until about 2012 uh uh and that's when it had become clear that momentum was you know building critical mass you know was forming you were starting to see entrepreneurs you know um you building businesses you were starting to see

Capital taking interest um and that's when I said okay I should start thinking about moving all of my time and energy into into this Market which I I did shortly thereafter uh at least it took me a little while to start talking very publicly about it uh because my my first concern was regulatory in nature I'm like this looks really interesting but I could see governments reacting very negatively um I know Orange Is the New block uh in fashion at least uh but I didn't think I would look very good in that color um stripe jumpsuits I don't think work too well on me either but uh uh you that was how that migration had happened it had been and there's not just me there's a lot of us that came out of call it the video game sort of uh aspect of virtual currency uh Jesse

Powell the uh uh the founder of Kraken ran a website called loot.com and you know Hayden Gil and I know I know dozens uh of us in this space that ended up here through that path versus you know you know one of the three or four other you know kind of most likely paths that would have brought Bitcoin you know uh uh into your scene in the call it 2011 12 sort of so then what what why is it you think that there are so many people coming from that uh from that sort of gaming e ecosystem bring bringing and coming into to the Bitcoin space What are the type of things that you learned in your previous businesses that uh are are of good value to you now that you're in in the Bitcoin space

well yeah I me it was it it's pretty simple in the sense that 10 years ago someone would say Brock you're selling hundreds of millions of dollars of digital currency that only exists in Games like World of Warcraft they're like that doesn't make any sense to me why would anyone pay for that stuff so because if you didn't play these games you didn't understand it the insight for me was the same Insight that led to bitcoin and then obviously that Insight is expanded and that was that just because something is intangible doesn't make it any less valuable very simple insight and almost all great businesses are built off something simple like that but to to the average person you know 10 years ago that would have sounded kind of insane um uh and I think that's what

allowed the people that came uh into the industry with my background is we already had established that you know something being digital in nature didn't reduce its value in any way if anything it might have increased its utility so that was what caused us to at least um I think say Okay Bitcoin is very fascinating from this perspective um and you're starting to see that you know there's value being ascribed to it markets are emerging transaction volumes are increasing uh and then you start looking at obviously the uh uh all of the other applications of the technology you start to then as a a matter of curiosity start studying the history of money start understanding you know issues with the current Financial system which causes you know the peeling back of the onion in this industry that we

all go through and I I imagine we're still all peeling back the onion uh you know we might be pretty deep into to it but uh uh I think everyone found there for all of us there was something some hook that caused us to become interesting you know interested in in in what's going on here and then start to to figure out kind of the many layers that exist in Bitcoin you know I don't know what level we're all on but it feels like if it were a video game we you know maybe level 37 or something of that nature and and and and it might be one of those games that you know you know never ends right so I'm curious when you were running the the game the the company with all these people playing video games in

China how did you do payments back then was that also part of the thing that you sort of saw in Bitcoin is like well this would be an easy way to to handle payments for this well that was again a big part of what I learned anyone that sold built any substantially Commerce Business Online has learned that payments you know are one of the biggest problems of being on the inter at certainly 10 15 years ago uh it's gotten a lot easier because of businesses like square and stripe if you're trying to just be a domestic business but um yeah my company was uh I think we were the PayPal's largest Merchant for about three years in a row uh there was a a project code named project IG which was uh uh I helped

design and actually cause PayPal to create their um external credit card processing piece if you wanted to um if you use PayPal was a merchant um call it 10 years ago uh and you sent a customer off to to pay for something uh PayPal would require that user to sign up for PayPal to be able to pay you with a credit card I said that's you know unacceptable that you're creating friction in my transactions and uh they said well we're not going to do it any other way so I shifted you know uh 50 or hundred million dollars of transactions to a competing platform that would allow me to do that and they said okay wait wait wait wait wait we'll build it and and so that's how the the external credit card processing business got built so that was on the the sort of western side and

after eBay we were the largest driver of new customers I mean keep in mind when when PayPal was early on in the you know 2002 2003 2004 period there were no Walmarts using it there were no big Merchants it was companies like mine that were the largest in the world that were getting PayPal all of their early customers um that also then led to uh becoming essentially the main business driving all the initial customers to alipay or if you're familiar with Alibaba uh so alipay had approached us and said you know we would like to uh we understand the value that you've driven to PayPal uh you know can you you know start using us to process all your transactions in China I said well I'm not sure I really want to do that uh because I'm going to start to enable all of my Chinese supply chain to be able to

you know accept payments from you know my customers abroad eventually I'm going to be you know fueling the competition for my own business and they're like no no no no no well what do you need to be able to drive us all of our initial business and this is when M pay was nothing of a company uh I said well I want an exclusive on All Digital assets and so we we did enter into an exclusivity contract which um uh like a lot of things in China uh wasn't worth the paper it was printed on but um know I was definitely an early Pioneer in the world of uh of payments and as a result of that recognized the friction the value of something like uh uh Bitcoin I mean and one of the arguments I've been making for many years now is it only

about 25% of the world's population has the ability to participate in the internet economy Bitcoin is democratizing you know uh the Global Financial system but in the area of internet payments in a way where everyone is going to be able to participate in the internet economy and that's a big deal and that was one of the sort of many uh I think um reasons why I I I saw this you know to be such an an interesting opportunity cool fantastic and and then you got involved in Bitcoin sort of prob in 2012 what did that look like what kind of projects did you pursue back then well uh uh again it was mostly just dedicating a lot of time to what do I want to do um uh acquiring Bitcoin uh and Bitcoin

mining was the you know sort of the area where we started which led to eventually having about 10% of all of the batch one Avalons uh so I've got some a a good little mining operation but that was the and and the reason I got into mining uh uh well at first there's the Allure of buying a machine that prints money um you eventually start to build better calculators and predict you know you know difficulty uh uh sort of rate increases and then mining starts to Lo lose some of its Allure and you know most of the hardware was prototypes so learning to manage it and just keeping the hardware online you know starts to become a full-time job and you know building scripts to set off alarms when things aren't working and that you end

up not sleeping for well for months at a time but um it was a lot of what I would call or I think as as Eric Vorhees had called when we first started shagging he's like oh you've been like one of these Bitcoin ninjas I go yeah I was just kind of nervous about you know publicly you know kind of getting out there I think uh I started uh uh talking very broadly not just within my sort of uh smaller Social Circles uh I became very open about everything I was doing by the uh the San Jose Bitcoin conference and that's when uh I'd said all right I looked at you know kind of a few dozen opportunities uh historically as an entrepreneur I normally would start one company and start building that but I saw dozens of interesting opportunities I couldn't

figure out which was best uh and so I made a decision to start just incubating companies you know I'd build one after another after another and that led to you know uh a number of you know there was a a Bitcoin sort of long Fund in there similar to bitcoin Investment Trust I decided not to go forward with it because I didn't think the fees were very interesting and scaling it you know looked at building a public ETF got pretty far along the path and doing that in Canada I actually had full approval to do that back in 2013 and it's funny we we didn't start seeing that until more recently but my my view is it's easier to do that internationally than it was domestically and I think that's proven probably true in retrospect um starting companies like gocoin uh and you know a handful of

others but what I figured out very quickly there is uh I also couldn't scale uh there's only so many businesses I think I'm I'm the founder of about 12 companies that are are operating today uh and that takes up a lot of time uh uh and the ability to add any new businesses is essentially impossible for me uh and so if I wanted to continue to get broader exposure to the sector the only way to do that was as an investor which is how blockchain Capital got started um you know decided if you know I want to uh broadly um participate in the overall ecosystem I have to buy my way into everything um which is you know essentially what I've done the last now few years let's take a short break to talk about

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epicenter Bitcoin so let's talk about the Bitcoin Foundation of which you are the chairman um so it's it it seems that the Bitcoin Foundation has lost in my in my opinion I think Brian would probably agree that it has lost a lot of its uh um its visibility in the space I mean maybe because you know there's been so much debate like this block size debate has been taking up so much of the of the uh of the interest of everyone but for other reasons as well um I'd I'd like you to tell us what is the current state of the Bitcoin Foundation what um how has its role evolved since perhaps two three years ago when it was a lot more present in what seems in the community

well I mean the Bitcoin Foundation early on you know was performing an important function that no one else was performing at the time you know it was the first organization that was set up to you know Advocate and educate on behalf of the industry it was set up to help Finance core development at a time where you know that hadn't been occurring so you know and then building you know conferences that brought many of us together in great conferences I mean you know uh San Jose was phenomenal Amsterdam I don't know if you know we were quite quite I imagine quite quite a large number of the audience was there and these were were great events you know but like all things you know the industry evolved and the organization needed to evolve along with it so uh the foundation made a

couple of you know substantial missteps uh one is uh you know like all of us and understandably so when Bitcoin was on that big run in 2013 you know that balance sheet of Bitcoin starts looking like a lot of money and you know most of us were like okay it's going to go from 500 to 5,000 to you know I mean we were all kind of you know we were all drinking the Kool-Aid and probably you know a little bit uh uh getting a little too excited and that was true of every company I mean look at all the companies in the space they started ramping up you know Staffing levels and engineering and advertising toit things like the Bitcoin Bowl I mean there was this you know kind of like the internet bubble of 1999 or any of these things everyone got a

little excited probably start started spending more than they should you know just because everyone was you know hoping to you know we were we were on the the the roller coaster ride of the moment and everyone is quite excited now the mistake the foundation made is it didn't uh you know it did it failed to recognize that organizations like this are never going to receive massive amounts of money uh they normally wouldn't and that like a pension plan or an endowment of a university you know that Capital needed to be better uh better um saved because you're not going to get more of it the reason we had a big balance sheet is because we had received lots of Bitcoin early on and we had benefited from the appreciation so we we we spent too much money we scaled that back um we consciously made a decision to uh uh to

move core development out of the organization so you know very happy that you know Gavin and uh uh uh and team ended up over it MIT which I think is a much better place you know I mean that that happened as a result of uh uh Patrick and Gavin having run around the industry and said okay you know if we're really going to be financing development here we need millions of dollars and you know the thing that we had heard from you know the companies that had the funds or the VCS that had the capital to be able to do this was we would rather see this inside of an academic institution than inside of the Bitcoin Foundation you know with its elected board and you know it its issues and things that nature and we said yeah that makes sense uh uh and so that I think

was a great outcome you know for the industry and clearly more core development is needed uh uh and glad anytime anyone's supporting that and the foundation has had to ask itself okay is there a role for us in the industry because now there's not just the Bitcoin Foundation you've got other groups like you know coin Center and things that are focused on policy uh we decided as an organization and we're still the largest membership organization in the industry by far we're still the most recognizable organization in the industry by far and it's called as the you know the stewards that are governing you know governing this entity what should we be doing okay we shouldn't be you know financing core development because we don't have the money to do so and there are other organizations that are better situated

to do so we don't believe that we can represent our constituents in being deeply involved in policy because you know that's a there's always going to be a large group of people with different opinions you know we shouldn't be saying that here's our political position other than what we've decided which is you know we believe in you know we don't want to encourage regulation we think that this is a you know an industry that's young and uh uh it needs time to uh to flourish and grow before those conversations start you know we're very much aligned with the uh the eff uh um which U I think is the right position to take from a policy perspective and you know get too deeply into lobbying of governments so then what's left it's advocacy it's education uh you know I

think we've got a pretty pretty good board with the the uh the new recent board members I don't know if you followed that but um and we've got a strategy that we hope to announce uh uh by the beginning of Q2 which is April 1 and that is that I think we've determined a path to be able to uh you know the grow grow the the Bitcoin foundation's membership to uh you to a million users uh uh and to be a hub for sort of connecting the world's Bitcoin enthusias which I think is a good role for us and you know we as a board if we can't figure out how to make the organization you know if we can't figure out how to have an a material and positive impact on the industry you know then you then we'll become you know irrelevant um you know we've been

through you know a difficult period uh like a lot of Bitcoin companies today I mean we've been in a bare Market it's not just the foundation uh uh philanthropic organizations are going to suffer more than for-profit ones but uh you know I mean if you go talk to to bitcoin companies today it's it's been tough you know we've had a a very rough you know 2014 and 15 we've had you know the last six months have been a bit positive but whatever positive sort of growth we've seen around the Bitcoin price which is the primary sort of barometer sentiment whatever you know benefits we've seen there we've we've lost you know in this sort of uh uh Bitcoin block siiz debate which is created a great deal of uncertainty um you know forget about so you have to

think about our industry is you know what the perspective of us that are in it you know looking out and then the outside world looking in uh you know financial markets really hate they dislike uncertainty and you know we as an industry are you know uh starting to suffer I think a great deal from the external perspective you know the people that were thinking about getting involved the people that liked the technology the people that you know you know had Ambitions or plans to play here a lot of those people are are being turned off by what I like to think of as you know self-inflicted wounds it's interesting that you you mentioned one thing that I thought was was interesting is that you you said that the foundation would focus more on on enthusiasts but you you didn't

mention um companies in there and Industry players and uh so I I I as a trade organization I imagine that that is obviously one of the mandates is to you know also cater to the industry but in i i one one of the things that's obvious is that you know startups that were around in in 2013 2014 and before that we mostly focused on on consumer products with wallets and services and remittances and that kind of thing and since about a year we've seen a shift and now things are moving more into B B2B and and Industry with as regards to the use of the Bitcoin blockchain that is uh not so much on the consumer side um how does the the Bitcoin Foundation

plan to or how is the Bitcoin Foundation um evolving to to serve this this this new use of the Bitcoin blockchain in in industry yeah that I mean the early Bitcoin companies were focused on you know what I like to refer to as just basic infrastructure know building of the the bridges the roads the tunnels you know kind of what people refer to as Bitcoin 1.0 um and the reason you see less new companies in that area is because as investors you know you don't normally want to invest in the 10th you know Bitcoin exchange know certainly exchanges benefit from Network effects um and so that's where you know Capital has migrated to this concept of you know Bitcoin 2.0 that you know sort of

blockchain uh uh uh you know application layer uh and we've seen a lot of that um and that's continuing to evolve U but as the foundation yeah we've got uh I mean obviously I got elected as a a representative of the industry membership um which is not surprising you know when you've invested in 40 plus companies that you know I mean everybody they they all knew me pretty well maybe the the the individual membership didn't but uh you know it was it was probably it's not unlikely when you've invested in everyone that you're also going to get their votes um but uh uh uh you know and that's also because everybody you know knows you obviously um but uh uh uh you know the the the industry

membership is I mean obviously the the perspective that I operate from but I'm not sure if we're going to be as able to play as big a role there as I think we can in the individual membership I mean the thing that the Bitcoin Foundation has uh is the largest individ individual sort of membership base we have thousands of people and if we eliminate eliminated the need to pay you know to become a a member of the Bitcoin Foundation if we eliminated the affiliate program that existed where you had to sign a you know a 30 page contract and give up half of the revenues that your affiliate chapter generated and if we made that free uh and picked you know kind of the best people in countries all around the world to head up the foundation's activities if we said you know if you want to

become a member of the foundation it's it's free to sign up and then have various paying tiers you can see there's probably an easy path to organizing the world's Bitcoin user base and so that you have that you know million person email list and the industry members I think benefit more than anything by having a channel to be able to communicate with everyone because not everybody hangs out in Reddit not everyone hangs out in Bitcoin talk there are a lot of people that are you know Enthusiast huge Believers spend a lot of their time but they don't hang out in those sorts of forums or channels and figuring out a to communicate with call it the broader Bitcoin Community all over the world uh I think is you know a potentially achievable task for an organization like ours um you know and

again there's you know when you have an organization that's small where most of your staff is volunteer and you don't have a whole lot of money you know you have to pick your battles you can't try and boil the ocean and do 10 things at once it's called where can we add value where can we be most helpful again on the lobbying front you've got great organizations attempting to do that in terms of the financing core development you know we've we' got Academia you know supporting that so where you know our job is not to compete with other organizations our job is to figure out how can we continue to add value in the same way that you know we did uh as a foundation early on and hopefully we can continue to do that going forward today's magic word is Sinbad s i n b a d head over to let's talk

bitcoin.com to sign in enter the magic word and claim your part of the listener reward [Music] so Brock you mentioned before uh the block size uh debate and and how that has harmed the industry in the past six months what's your personal view on what's going on there well I mean I I I think that this harm is inevitable um and and that's part of the problem with an open- Source development project where the debate is public you know everyone gets to see how the sausage is made and it's not pretty um and this is different than any other

open source project because You' got billions of dollars of value involved and so people are going to uh you know take these decisions much more seriously than they would in call it other sector sectors so it's not surprising to me that you know the things are going the way that they're going and creating this sort of uh uh uncertainty from a public perspective but I believe it's going to be a a success experiment when we eventually reach consensus you know we're going to look back on it and I think we're going to say you know bitcoin's corporate you know bitcoin's governance you know is a success you know this idea of consensus building around distributed systems but you know as we go through this you know it creates a lot of uncertainty once it's

been solved everyone's going to say ah I see how that works you assuming it's solved um you know from a a block size perspective you know or can we scale Bitcoin well I guess the best thing I like to frame that says when people bring this up with me they're like oh yeah isn't Bitcoin have scalability issues oh didn't my current just say Bitcoin is a failed experiment blah blah blah blah blah I say well let's start and take a look at the first aspect of this Bitcoin is so successful it's it's scaling exponentially and as a result of that or growing exponentially we're running into scalability issues these are the problems that Facebook has you know has this is the problems that WhatsApp has this is the problem of very very successful Technologies so start and make sure that we understand that we're

not talking about Bitcoin as a failure we're saying Bitcoin is a success and as a result of that we need to scale it so you know I think that's an important way for any of us when talking to external parties you know that we're framing the issue correctly Bitcoin is becoming a victim of its own success um so uh that's issue number one now the question is is it scalable uh my belief is absolutely it's not a matter of if it's just a matter of how and so what's going on now is you've got a lot of very very smart people core developers that care a great deal about Bitcoin uh that are putting forth their proposals as to how to best scale this um and you know uh we have a number of different opinions which is not surprising and you know

we'll we'll come to a resolution at some point hopefully sooner in my opinion than later um but uh you know I I'm not the I don't think I'm the person that's best qualified to say this is the right approach I just hope we find an approach uh you know my guess is that we're going to end up with a A 2 megabyte block size increase sooner rather than later uh uh probably before the having because that seems to be what everybody wants uh even though that might be sooner than some people think we should do it uh you know that probably goes to four and we probably end end with you know segregated witness at some point um but again I'm I'm going to defer to you know the core developers and I spent a lot of time talking with many of them trying to

understand why they have differing views and you know hopefully you know and then trying to help bring bring people together so that people can you know understand concerns you know that another might have so that we reach consensus again sooner rather than later right I I mean talking about the governance process right so you you can I think that's one of the the big problems here right is because you you sort of have two discussions going on at the same time one is the the discussion about you know what is the right thing for the system what's the right thing for the network like you know can it handle this block size you know should we do this before the other thing you know is segregated witness good scalability solution all of those questions and then at the same time you

have all those discussions about what's the right process to even discuss this and reach a decision and who should have what to say here and I think that makes it really hard to make any progress because you have this this questions on two different levels at the same time and and it's sort of also a way of course if you disagree with one party about yeah you know the content of the question you can sort of just move the discussion to the process side or the other way and I think this way this has made it hugely difficult to to make real progress there I mean hopefully it will be resolved but personally I think there's there's a real problem there and that there is not really more of an

explicit way to say here's how we're going to discuss those question and here's how we're going to reach decisions yeah I mean as an industry we could have been a little bit more organized in how we ran through this process but you know I I feel that's coming together um you know we may end up with two competing sort of development teams or more um I'm not sure that's a bad thing competition is is is probably good uh though I think we need you know consensus and resolution sooner rather than later um uh but uh you know yeah uh I think that his historically the core developer Community had you know not done a great

job of you know communicating with the rest of the industry but you know I think that's improving rapidly you know the mining industry you know staying deeply you know being in constant communication with core developers is something that wasn't happening historically but I believe that's happening now um I mean we're growing up we're maturing and we're having to put together these better processes hopefully so that we get to the best answer in the short term but also so that we you know these uh we have less of these issues going forward you know we're putting in place you know you know a a process for how to continue to update uh the underlying code and I believe that we'll get there um and I believe everyone's learning how to work

together uh even though again it's it's been a painful process thus far and it doesn't look like we're you know near the Finish Line just yet so so assuming you can't reach an agreement right assuming there it's not like core developers or the develop get on the same page and say okay this is the way forward what do you think is the right way to resolve this is it is the right way that you know you have different clients and kind of the miners aside by putting their hash rate behind you know the client that they support yeah I mean I I mean that's one path forward that may happen I'm not sure that's going to be the best path but it's a path and it's a path that's

possible at this point and uh you know you could end up with hard forks and two Bitcoin networks uh and then you know when we think about the sort of the governance and the Democracy of the system then the third portion of the ecosystem so you got the developers that are you know putting forward code and proposals you got the miners that are deciding what runs and gets processed but then you've got the payment processors and the exchanges you know the the the the the coin that wins in a fork is also going to be the one that's the most useful so you know if bit pay and gocoin and coinbase and others say you know this is the coin that all the merchants are accepting that starts to matter and so what you start to learn is that everyone in the ecosystem is important and has a role in this it's

not just the core developers it's not just the miners there's no one party that you know really has the control over Bitcoin like we used to debate we used to think oh it's the minors you know the miners have too much or you know the it's the cordev everybody has a role to play in the industry in terms of reaching consensus uh uh and depending upon where we are in the process you know some people may have more influence than others obviously core developers have the most influence over the code getting written but you don't need all the core developers together in theory I guess one core developer could end up writing the code that ends up being implemented right um you know and the mining piece has got its yeah I mean we we'll see how this all plays out um and you know it could end up we could end up

seeing a hard Fork I think that that's going to have a negative impact on price in the short term but in the long run it might be it might be healthy again I don't have a crystal ball uh and one thing I've always learned in is you never know if something is good or bad until you have the benefit of hindsight and I mean a lot of hindsight uh uh it normally takes many years I mean I I know lots of stories and I'll I'll keep it short but you know I've met people that have come to me and said ah this is the worst day of my life oh my God this was so awful what happened to me oh I out of this job I you know I was a Founder I can't believe my partner screwed me whatever may have happened you know they end up selling their stock

you know and three years later they're the only ones that made any money on the company so what was the worst day of their life ended up being the best day of their life and again until you have the benefit of hindsight it's difficult to know whether something is good or bad um you know um but again uh uh uh financial markets really dislike uncertainty and I think Bitcoin is suffering you know we're uh suffering from self-inflicted wounds as it relates to the external world you know looking in no I tend to agree with Brian and that that this whole process is been really messy and uh it's it's strange because we've seen this before and we you were there and the ' 90s at the the dawn of the internet and I think you probably remember what it was like

working with uh you know building websites back then that kind of thing and and and how every industry player had their own standards and and you know we came to to build standards because of organizations standardizing bodies like w3c or or the if uh and I think that at some point if Bitcoin wants to be taken seriously by industry key industry players like corporate uh large corporate companies Enterprise as well as um uh as just governments and and and uh and States um Bitcoin will need to be to become standardized in some way uh whether that means joining the uh theft

or simply creating another standards body for Bitcoin and potentially even blockchain Technologies as as a whole uh that would borrow some of the concepts and some of the this the the standard uh process that they've developed and has tried and tested to to come to consensus around these kind of things um Brian mentioned earlier that we or perhaps it was before the show that we had mat spor on a couple weeks ago who he's at w3c and is working on on on the payment standard uh proposal there and his you know he's he's very close to the Bitcoin community and and and he what he mentioned was that every time that he's tried to bring up the idea to people in the Bitcoin community that you know these are the standards

the process that we have at WC at the w3c the Bitcoin Community should look at these as a potential way to come to consensus that that he's um most often been met with with resistance uh and I find that kind of alarming and I find it too bad that uh that the Bitcoin Community uh rather than um try to do things in a disorganized way wouldn't just look at these uh other processes that we already have in place to to come to consensus what do you think about that I I I believe in you know you don't have to reinvent the wheel every time you do anything I mean the idea of using a a road map that has worked successfully in the past I think is a

great idea um again I think the the issue here is the fact that there's billions of dollars you know at play uh and that just adds another you know another element to it that makes it probably you know more complicated to reach consensus by an order of magnitude and yeah everyone's seeing how the sausage is made and and really unfortunate thing is the timing of it all you know it's taken all of us working in this industry until really 2015 2016 for the broader world to finally take what we're doing seriously at least in recognizing that there's Merit in the technology of nothing else right and now as these large organizations and governments and things are taking a look at what we're doing very seriously you know Bitcoin is basically I think getting uh dismissed

in a big way when you know it has potential to kind of really reach the world's stage that we had all been hoping for uh and so the timing I don't think could be any worse you know it it's literally as organizations like IBM and you know major Banks and governments around the world are looking at this they're going okay yeah we we like this you know Bitcoin bad but you know they could get potentially over that blockchain good oh but we don't want to have anything to do with bitcoin's blockchain because that's got all this uncertainty and you know you know all these sort of infighting and things that make it you know an unreliable platform uh uh which is it's really unfortunate because things are moving elsewhere um again due to self-inflicted wounds and the timing I don't think could be any worse you know in 2014 it wouldn't have

mattered very much and it may not would may not have mattered as much next year but the decisions are being made in boardrooms around the world right now as to where and how to build on this technology and you know Bitcoin sadly is you know missing out on a ton of interesting opportunity um you know again it's why I I hope hope we find consensus soon sooner rather rather than later and you know some of the damage this is doing is going to be permanent you know not permanent but at least it's going to set back the industry by years and it's allowing competitive solutions to you know achieve scale that might not have otherwise yeah I think that's I think that's exactly right the timing here

really did not work out well I mean I think there's of course there's been some other challenges that probably were in the way of having larger scale adoption uh in particular I think the consumer adoption has sort of been underwhelming um so the consumer adoption has been you know a bit below expectations especially you know if you think back with 2013 2014 you know because you sort of saw that that scale okay everybody adopts it we can use it as a payment system and and this will have a huge tremendous positive impact and that has sort of stayed behind and I think that has also contributed to you know people being much more hesitant

to build on bitcoin I mean I I personally certainly uh felt that was a a big factor in evaluating opportunities in the space was that you know if if the success of your company is like fully dependent on bitcoin adoption it's it just it layers risks up right you have all the regular startup risks and then you have this risk of this thing you does it get adopted and what time Horizon you don't know um but then yeah of course the block size debate here has definitely been a big a big negative because otherwise maybe we would have seen much more adoption especially on the payment uh system side and you know maybe one would have seen integration into things like PayPal wallets and yeah

so I mean the consumer adoption piece is uh something I Now understand I I think we all had kind of been hopeful in the same way that oh we had had our Eureka moments and we're all like ah Bitcoin Bitcoin is the future you know Bitcoin is our savior all of these sorts of you know when when when you have that that that Epiphany um but uh uh I mean when you first heard about Bitcoin how long did it take for you to acquire your first Bitcoin you know what was the time between your when you first became aware of it and when you actually got access to your first Bitcoin oh it was like three weeks or something like that it was pretty uh I I I learned about it I became immediately obsessed it was uh

summer of 2013 I started listening to all the old let of Bitcoin episode sort of caught up on everything and I I was pretty pretty quick to be you know fairly all in and that was incidentally it was also sort of the price just started Rising I mean at the time it wasn't very high it was like seven $90 or something like that but it was just when it started picking up and I think that also contributed a little bit to the sort of wrong impression I had at that time which was that you know I've discovered this it makes so much sense the price is rising the whole world is waking up to this uh obviously this is going to just take off I think it might have been different if I had discovered it in a time you know in when it wasn't

doing so well but uh since I was just taking off I think that sort of contributed also to a little bit of um a wrong impression yeah that it did that for all anyone during that time period it was a very exciting period and and we we just saw this path that we're going to go from a million users to 10 million to 100 million to a billion and this is going to take over the world and we all saw that path forward because we were looking at it from our sort of vantage point so the your three-week time is very fast so for those of us that listen to this show we are you know uh uh forward thinking early adopters technology sort of centric lives uh uh you know people that think for

ourselves um uh and for people like us it took takes days weeks months or years from when we first learn about this technology to before we start using it so how long do you think it's going to take the average person eventually I do believe we'll reach a Tipping Point but the consumer adoption I'm I'm not convinced but I think it's highly likely that it's going to take a long time and and when we start to see consumer adoption I think it's going to come in one of two places it's going to come in the developing world where it's most needed you know Latin America America Africa southeast Asia you know much in the same way that you know Mesa became very popular in Kenya because the people didn't have an alternative you know uh

for most of us that live in the developed world you know we've got a bank account we've got plastic in our pocket that lets us you know conveniently pay for things we've got rule of law that's there in theory you know to protect us and we've got a currency that most everyone around the world wants more of uh but in places where you you know you've got a huge percentage of the population on bank they don't have you know payment infrastructure that's where I could see something happening fast uh but even then or places with great economic uncertainty the Venezuela Argentinas Etc where you know uh uh Bitcoin is less volatile and and and and is clearly I think a better store of value um but uh uh you know that's where that could happen but I think most of our growth is

going to happen in in ways where the consumer doesn't know if you look at businesses like Abra uh uh they won the launch uh uh uh Festival last year as number one startup and uh you never heard the word Bitcoin once in their pitch uh they're rolling out what I think is the most interesting Bitcoin remittance business but again you won't see the word Bitcoin anywhere in their product and that's because they put Bitcoin into the plumbing it's in the the way that they move money across borders so what is bitcoin good at today you know there's a lot of theoret theoretical use cases where we say Bitcoin could do this Bitcoin can do that but does it do it better than the Alternatives today in most instances no you know Bitcoin is a very interesting speculative investment meaning that you

know it's a scarce resource and as more and more people want it it's going to go up uh uh so that's an interesting you know use which is the main use that most people started using it for everything else was theoretical but today though it is better faster and cheaper it may be the best way to move money Between Borders you know through a lot of you know country to Country corridors it does it faster and cheaper than a lot of the traditional Financial system does today and that's a real use case that's starting to work the problem is convincing people that they need to use Bitcoin to do that if you can actually as a business use Bitcoin to do that but just tell customers I'm better faster cheaper than Western Union uh the minute you add the Bitcoin element you're going

to probably have a harder time convincing users to use your product than just using Bitcoin as a business and not telling them about it uh and so I think a lot of our growth over the next couple of years is going to come from Smart entrepreneurs and businesses figuring out how to use bit Bitcoin but not putting it into their consumer product uh I think consumer adoption is going to continue to grow much in the same way that we've joined but it's going to be much slower going than we would like you know because it's a long process for people to say okay I understand why I want to use Bitcoin directly uh so I think most of the growth again will come from businesses that intelligently figure out how to integrate it rather than convince consumers to use it though I think both are going to continue to grow in

parallel so you think that both users that use Bitcoin directly and users that uh are using Bitcoin without knowing about it will grow in parallel sort of equal pace and at an equal uh capacity I I think I think the users that don't know about it are going to grow much more in terms of number of users the users that do know about it are are normally going to be higher volume so I think probably from a volume perspective they'll grow at equal Pace but in terms of individual users I think the people using Bitcoin directly is going to grow at a much slower Pace like we've seen it just it's a long process it takes guys like us days weeks months for years you know to start using Bitcoin I think the average consumer unless there's a strong need you know again if you're in Kenya

and you know you're paying the high rates that Mesa charges there's a strong incentive to switch to bitcoin and use bit PESA if you're living in India uh I was just in uh uh Bombay teaching at the singularity University like a week or two ago excuse me Mumbai um uh they have a huge population of people that are working in the Middle East today uh you know and they're having the biggest remittance country in the world so I'm working in the Middle East I'm sending money back home I'm spending s sending small sums of money the ability to save 5% is a really big incentive to use Bitcoin and all it takes is one person that starts doing that in that community and then they tell their friend and their friend is like I can save 5% I can save 10% when I desperately need that

money my family desperately needs that money you know then I'm going to show my friend how to do it and they're going to show five friends how to do it and they're going to show five friends how to do it those are the areas where I can see you know some substantial consumer adoption it's going to be not amongst people like us it's going to be amongst people that need it the most and have the strongest incentive where it can improve their lives you know materially substantially I mean Bitcoin does not change you know most of our Lives I mean it does you know from a philosophical perspective uh it does from you know but it's not really changing our lives other than if you had a lot of Bitcoin early on and and benefited from the appreciation we believe in the long-term impact it's going to have but it's not

really radically Transforming Our Lives today but if you're you know a GU working in India sending money back home and you're able to get 10% more home to your you know what family and you know your kids that is going to radically change your life for the better and that's where I think you're going to see substantial adoption so but for for the foundation though as as you mentioned as a as a as an organization that Advocates to to end users on using this technology if if the majority of people are using and I think this is you know this is one of the use cases that's going to grow where we have companies using Bitcoin uh and the blockchain to power Services where people don't actually know that they're using it that's probably the best way to to to to deploy this type of

technology to a mass Market um but what do that mean for the foundation like those people are not going to sign up for the foundation uh to be members uh much like there's there's no sort of Internet Foundation where like every user of Facebook gets a membership to the internet Foundation um I'm just I guess I'm I'm I'm unsure what the future of the foundation is if Mass adoption is just of people that don't really understand the technology not technologists but just regular people yeah I mean again I think this is not a one year or two-year process it's a 10-year process I'm not advocating or saying that consumer adoption isn't going to happen I just think it's a much longer road than we all had hoped uh you know you know it's the sort of thing

where you know we can go from a few million people using it to a few million more to 10 million more and you know in five years you know hopefully we're at 50 or 100 million and at some point though like Malcolm Gladwell would say you reach an inflection point or a Tipping Point and I think at some point we'll get there I just don't think it's going to be in the next year or two as much as I wished it were you know but you know unfortunately wishing and hoping isn't going to make it happen uh uh uh but there's still a role you know for us to continue to educate people about why Bitcoin matters and it actually gets much easier to say uh oh you're already using Bitcoin they're like what do you mean I'm already using Bitcoin well you're you're sending money back home to the

Philippines how do you think you're doing that they go well I use that this service Abra and you go that is Bitcoin uh and and it's a lot easier I think to convince people to use something when you're able to show them that they're already using it um but the consumer adoption is essential long term if we if for Bitcoin to achieve many of the use cases that we all talk about you know if it's purely a pay pay rail in the background um you know it still has a ton of potential um but it's going to be a very different Bitcoin than the Bitcoin we think of uh you know and I you know I'm I'm not uh you know giving up on the long-term consumer adoption side of this I just think it's going to be a long road um but you know you know sometimes

great things uh take time so let's come back to the topic of uh your fund and blockchain capital can you tell us a little bit of background about how it is structured and the fund was started by me and my my two other partners which are Bart and Brad Stevens uh I got to know them uh more than a decade ago they were an investor in my old virtual currency business so they ran a uh a half a billion dollar hedge fund and they had uh three or four Venture Capital funds that they were running one of their uh Industries they were investing in was media and games so they owned a 99.99% of the nine which was the publisher of World of Warcraft in China they were an

early investor in 10cent which owns Riot that makes League of Legends and you know they had been very active game investors and uh the way that they would tell the story is they were playing World of Warcraft doing their research and development yeah um and uh uh they started buying digital currency and digital goods and you know one day they had their like aha moment they're like hm we're spending a100 or $200 a month with this company and we only pay blizzard $15 a month there's a good business here let's start doing some research and figure out who owns it and then they went and you know looked up the top five or 10 sites and then they started doing who is searches

and doing background checks and they saw my name behind all of them because I operated the top eight Brands um which made it harder for anyone else to start up when I'm both the the Walmart and the premium shops and you know I was I was running them all with different pricing strategies and uh uh uh they eventually got got a hold of me and they ended up participating they invested a few million dollars in my old business along with Goldman Sachs and you know a number of large institutions that financed me at the time um and you know the Goldman of the world found it interesting because I was essentially running a proprietary trading desk for you know 30 you know call it 500 virtual countries you know each game server you know looked like it had its own currency which you know traded against you know

uh every other currency you know on its own at a different supply and demand type base so we live in a world with call it 200 countries and currencies uh I was essentially running the currency markets for another 500 or a thousand and so if you were a you know ran if you worked on a proprietary trading desk on Wall Street you would kind of understand what I was doing very very quickly um so they invested in that business I uh uh one of the things I wanted to do back in uh uh uh I don't know if it was late 2012 or early 2013 but I had gone to my board of directors of my old virtual currency exchange and said I want to buy this company called Mount Gau and my board's like what's that they go uh it's the largest Bitcoin exchange in the world and Goldman Sachs

I was like black Bitcoin are you you must be kidding me and that was essentially the reaction of my whole board at the time uh including my partners today uh uh and I said all right well you know our industry we've got all the market share our sector is only growing at 10% you know a year that you know impacts you know if if your industry is not growing rapidly uh the way that your business is valued is not that impressive you know your goal is to get a big multiple of Revenue or a big multiple of earnings and if your industry isn't growing you're not going to see that I said we need to expand into a new market I'm convinced that this you know this Bitcoin thing is going to be a big deal um and let me tell you a little bit about Mount Gau

it's uh the biggest Exchange in the world they're you know they own the sector by far the management team is maybe the most incompetent I've ever met uh and their technology is awful but I said we've got management and we've got technology they've got market share this is a perfect fit for us and so uh we went forward almost bought Mount GX at the time uh uh they ended up uh uh so I went back to the board uhh whatever three months later after I had sent them a bunch of research material so we went back on a call I said I'd like to buy Mount gox again and they laughed for a second time and this is when I got a little upset I'm like I'm like I mean I've been building digital currency businesses for a long time you guys have invested you know nearly hundred million

you know in me in this particular field uh and I said that this Bitcoin thing is very real and that you need to understand it so that we can have an informed conversation about this opportunity and I sent you all the research material and none of you bothered to read it I'm really really disappointed in all of you it's one thing to disagree with me it's another not to have done your homework you know and and shown up and you know been ready to debate you know my view so I called up my my partners following that uh that board meeting and I said guys you're you're young you invest in technology you understand digital currency uh uh what's going going on here and you know guilty is charged they you know made a point of saying Brock okay you're right and they spent uh a month researching uh

uh the sector talking to cryptographers mathematicians economists Venture capitalists you know anyone they could and they took a very deep dive research project which led to they shut down their hedge fund they were running a half a billion dollar hedge fund and they shut it down to then come work full-time with me um so I ended up being successful not in buying Mount gaau but uh in terms of convincing you know some of my investors that they need to uh to come get into this business and then my other board members went on to fund Circle and you know a number of other businesses in the space because that's how they got their Early Education uh mostly with you know me presenting what seemed like a joke of an idea to them at the time but um so blockchain capital is the first Venture Capital fund to uh

invest in call it startups in the space on a on a sector focused basis meaning we don't invest in anything anything else uh all we do is invest in the space we've now got 44 um portfolio companies and uh we're investing out of our our second fund which had its final close uh in the Q4 of last year um and so we're uh you know actively investing like the first uh collection of companies were what we'd call those basic infrastructure type businesses Bitcoin 1.0 a lot of Bitcoin companies the second sort of phase of companies we've been investing in are sort of blockchain uh SAS or Enterprise Services businesses is providing software to you know financial institutions and and the likes and and the area that we're

investing in most these days are uh sort of non-financial use cases for blockchain technology I don't know if you're familiar with companies like Stamper uh they're focused on on legal services and you know notaries on the blockchain and creating immutable records um uh focused on uh We've invested in a company in in Israel called wave which is very cool recently uh which is focusing on the global sort of shipping or global trade that that whole industry runs on a bill of lading and a letter of credit and so they're doing some cool things there um just invested in a company called Tyrion which is focused on some health care and insurance applications again asset registry uh uh we invested in a company called stem out of Los Angeles which is

focused on content creation uh and bringing transparency to an opaque market and getting money to content creators or artists you know quickly uh which you know so we're investing in a lot of these sort of edge use cases that are not yet obvious you know to to everyone um well we're we're you had mentioned before the show but we're we've also been very active uh uh in ethereum I mean uh uh I was a I I've been very active in sort of the ethereum E ecosystem both as an large investor in the crowd sale and then uh having been friends with most of the the founders and watching its development up and into this point so uh I think you're going to see a number of interesting announcements related to the fun you

know stepping up and being the first fund to actively finance a lot of companies building in and around that emerging ecosystem you're starting a a fund just focus on ethereum no no no no no no no um uh blockchain Capital has always been uh well we're stage agnostic meaning we'll invest in seed stage all the way up to whatever stage I mean we we were uh uh an investor in coin bases uh series C for example um most of the deal that we've done our seed stage or series a because there's only been a couple of series B type financings in the entire ecosystem but we're stage agnostic we'll invest at any stage uh uh and we're geographically agnostic we'll invest

anywhere in the world um because it we're so but the fund the fund size because I read somewhere that you guys raised a $10 million fund is is that just a part of it or yeah no so we're the the second fund is uh like a little over a 13 called a 13 A5 million fund we also have an anciel list indicate if you're familiar with angelist yeah and we co co- Syndicate you know a number of our deals which you know probably it takes the fund from being called a $15 million fund to about a $25 million fund and then we have a number of sort of billionaire and high net worth LPS that have an interest in investing uh in uh uh some of the deals and what we'll do is we'll create what are called spvs or special purpose vehicles to allow our

LPS to invest more than our typical check size you know in some of these deals we'll write checks that are you know3 three4 million we in theory could write checks as big as 10 or 20 so our fund is call it the equivalent of a $50 million fund though you know in terms of the committed Capital it's only about 15 um you know and that is because you haven't had any institutional investors that have funded uh uh funds in our space you know up until the point that our fund had had its first close I think that's going to be very different this year but in the same way that we're geographically agnostic um stage agnostic we're also blockchain agnostic um uh but you know obviously the bulk of our investments have been around Bitcoin or bitcoin's blockchain to date because

Bitcoin still is 80% you know of the market in terms of market cap and in terms of venture capital investment it's 95% of you know or 90% of everything that's out there and so Bitcoin still is obviously very representative of you know everyone's portfolio that plays in the space I was actually uh curious about that whether whether or not you would invest in other blockchain startups than than than Bitcoin well we're an investor in in in Ripple for example um okay and that would be a perfect example of uh uh you know something that wasn't you know Bitcoin clearly and hasn't been for a very long time but um yeah no we we we we're we're we're blockchain agnostic as a firm but again the bulk of our

investments are around uh Bitcoin and bitcoin's blockchain to date right and do you guys have an explicit investment thesis or it's sort of is involved by a bigger view of the space and then and your assessment of specific projects and teams yes so I mean uh our strategy as a firm is we typically don't uh lead Investments uh we typically co-invest uh preferably with you know other generalist type Venture firms um and that's because we have so many Investments you know we're we're uh about to hit our 45th investment and so uh as a firm with three partners and I don't know if you know Jeremy Gardner but Jeremy's you

know works with us fulltime and he's the the fourth sort of most active person I in Will O'Brien but uh for for a small team like that a normal fund can only manage you know call it six to eight deals per partner and so uh you know call it that would cap us at about 24 deals maybe 30 and so we don't want to lead Investments because we want to continue to invest and it's because we see the world a lot like the internet in 1994 I know this internet thing is going to be a big deal there's GNA be lots of amazing businesses that get built in and around it but could I pick them all in 1994 no uh and so our strategy is instead of using a rifle we're using a shotgun and so we look a little bit like an index fund and that is we first and

foremost want to back great entrepreneurs you know that are pursuing ideas that we think have lots of potential and it's not you know the eighth person trying to do something uh and where we believe the timing for that is right uh and then we we choose to invest with the the hopes as the industry continues to develop that we have a the thesis as it evolves uh you develop an asymmetry of information and then we'll you know hopefully be in a position that by this year and next year you know you're backing up the truck around you know the you know the best and biggest ideas in the space you know you as a venture capitalist we manage other people's money with the intention of delivering returns uh you know I'm a a big investor in Bitcoin and things like ethereum uh but that's not my fund

my fund is no um you know there's no Bitcoin component of our fund uh though a lot of our LPS are obviously investors in Bitcoin I think we have 15 you know sort of Bitcoin CEOs that are you know advisers or investors in the fund you know people like Bobby Lee and Charlie Lee and again Will O'Brien and the list goes on and on and on okay well Brock thanks so much for coming on we're we're at the show at the end of our show and we also don't want to keep you stuck here because you you're heading to South by Southwest which I'm sure will be lots of fun so uh thanks so much for coming on it was was super interesting talking to you and exciting to hear about all the projects you've been all involved in and interesting ways you've been supporting

this industry well I thank you guys for for having me uh uh we still got lots of work ahead absolutely so I think I'm sure we'll we'll have you back on at some point with to talk about all the interesting changes the industry has gone through in in the meantime sounds good again thank you yeah so thanks so much for listen for listening we'll be back next week if you want to so we are part of let Bitcoin Network so you can check out lots of great shows on let talk bitcoin.com if you want to listen to the uh our episodes of course you can subscribe to our show on any of the podcast application or you can watch video on

youtube.com/ Bitcoin and the other thing we do is if you leave us an iTunes review and you send us an email at show at eper bitcoin.com then we'll send you a t-shirt like this we've sent out certainly over 50 to cont all over the world so if you won want to then please do that so thanks so much and we look forward to being back next [Music] week