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Hi, welcome. The epicenter Bitcoin the show,
which talks about the Technologies, projects and
startups, driving decentralization, and the global
cryptocurrency Revolution. My name is Sebastian with you.
And my name is Brian Friday and crane.
And we're here today, with Adam Draper, Adam is the founder of.
We see, probably many of you have heard of.
We see, it's been. It was the first accelerator
just focus on bitcoin startup and it has taken on an important
role in the Bitcoin ecosystem. So thanks very much for joining
us today at Thanks for having me.
I'm really excited to be here. This is a really, really great
thing. You guys are doing.
Yeah, thanks. I mean, we've actually had some
people before on who were in the accelerator.
Although maybe Flavia is the only one but I'm sure there's
going to be some more future anytime you want an intro.
Let me know. We have 47 others who could be a
part of it. Actually, I know that before we
get into the topics, we had, we did the one, the lightning
episode, right? So there's the mirror, guys.
Oh, great. There were part of their trivia.
So, Adam, well, tell us a bit about.
How did you get into a Bitcoin originally, and how did you end
up deciding to start an accelerator?
Yeah. So first, I'll just say hi.
I'm Adam Draper founder, and managing director of boost VC.
And our first boost VC. It's an accelerator.
It's a three-month program where we provide housing office space
and we invest in startups that are focused around the Bitcoin
industry. And we've had that Focus for
about two and a half years. We've recently added an
additional focus of virtual reality this session and we
bring everyone to Silicon Valley and we really just build a
network in a community of investors and entrepreneurs
around them. I'm over the course of three
months program builds toward to demo day on demo day.
They get to present in front of a large amount of investors
150-200 investors to ideally obtain funding.
So my story about Bitcoin is unique in a couple ways.
One is first time, ever heard about Bitcoin was actually from
the CEO of coinbase, three years ago almost to the day.
Probably. It's like Zero would be in early
August 3 years ago and I met with him at a coffee shop
because I had read this summary of what his company did and it
said digital currency Marketplace and that was like
how he was defining his company. And and so I met up with him and
he pitched this great story about how this digital currency
concept, which is called Bitcoin is going to help revolutionize
the world and what I We pulled from.
That was the idea that there would be this meta currency or a
currency that lies on top of all other currencies.
So that you never have to transact.
You never need to cash out of a crunchy while you like travel
the world or and more than that. What was really?
I like I like that concept like a Global Currency, but I also
loved the idea that who I loved was a strong word, but I really
I thought it was really cool. Cools, not the right word either
interesting. That in 2011, Bitcoin had gone
from $30 to per Bitcoin, 20 dollars per Bitcoin because of
that crash I found because at that at the time, I was speaking
with Brian Armstrong at coinbase, the price of Bitcoin
was already about $15 per Bitcoin again, and that to me
made me feel that there was a passionate community of people
who really wanted this to exist. And that that's a really great
indicator of some form of technological, Evolution or
revolution one or the other, and so much.
So my early days of Bitcoin, so I ended up investing in Brian.
More than anything more. I wasn't even, I wasn't a crazy
expert on Bigfoot. Had just learned about Bitcoin
from Brian. I ended up investing because
Brian what is this three years ago.
He had just left. Airbnb.
He was one of the first 100 employees at Airbnb which was
known to be a rocket ship company and he was leaving this
company. There's probably valued at about
a billion dollars to join a market that in total was 200
million dollars, the entire Marketplace.
So he was trying to jump into a market and it's impossible to
own an entire market. And so I was thinking either
this guy is absolutely insane or he knows something.
I don't and so I ended up really being enthusiastic about Brian
and that was my first foray into Bitcoin.
What ended up happening? Six months later was, well,
about two weeks later after I invested in him.
I found a boost. We were not focused on bitcoin
at that time. We did an entire session just to
making sure that the wheels stayed on the ship.
Well, it was moving at a thousand miles per hour and
then, you know, our first session went really well.
Six of the seven companies raise additional money.
It went great in between the first and the second session.
We were trying to figure out what technology, we really
wanted to throw our weight behind and Bitcoin kept coming
up. And we realized that there were
only five Bitcoin companies, two and a half years ago that anyone
could list on their hands. So, this was January, February,
2013. Wish someone like that.
Is that right? I think so.
Yeah, that's about right. Yeah.
So it was 2012 before 2013 08, for example got the time maybe
coinbase. Like one or two others had
gotten close. It was Mount gox, everyone knew
man cocks, if you were in the has everyone knew bitpay
coinbase bit for was one and then blockchain blockchain and
those were like the main five there's really probably six or
seven that anyone could Masters could list, but we were
thinking, okay. Well, let's write down all the
ideas that could exist from this new technology and we wrote
down. Down 10 ideas immediately that
we were like, well, we might as well double the population, a
Bitcoin companies. Because I think that these are
all going to be different companies using this new
technology, and there was a resounding response immediately,
but then also know you might remember six weeks after
February. So about late March early, April
there was a huge run up from twenty dollars per Bitcoin to
$250 per Bitcoin and so all of a sudden because we had proclaimed
that big Was going to be a sector.
We look like experts because like there was a immediate
reaction in the marketplace and so on.
So like we got called by, you know, 150 different enthusiasts
investors and entrepreneurs in the space.
And we until we met I met with every single person I could I
probably became an expert over that time.
Just because I had finally met with as many people as I could.
And so that's really like the background of how we ended up
getting into Bitcoin. We have Now invested in about
47, Bitcoin companies. So we maintain the focus
throughout the last five tribes, four tribes.
So we've done five tribes at Boost but for tribes would
Bitcoin focus. Our last session had about 22
Bitcoin startups. And yeah, and we've just really
enjoyed being such a big part of the Bitcoin space.
We've had a lot of fun helping out the Bitcoin companies, get
off the ground and get funded. So when you when you have
Bitcoin startups applying in boost that so you mentioned
Brian Armstrong and you know, him being either crazy or he was
onto something. Is that something that you still
look for when when filtering applicants definitely?
So we so, I mean, I would say on the sort of our, what we look at
it. When we're reviewing an
application. We do normal stuff like Market
team idea. So, a lot of it, that's what
most investors will do. They'll go through.
What is the market, big enough and we're making the assumption
that the Bitcoin Market is going to explode over.
The next X number of years. Is can the team do what they're
saying? They're going to do?
Is this the right team? Is this the team that's actually
going to pull it off idea. Is this the right time for the
idea or is, is it possible that people will want this idea.
Is it useful to the world and Then we have a fourth category
that we go through, which is called scrappiness.
And so we basically the filter prescribing is, if this person
were, you know, out of money living in their parents
basement, would they still be building this product?
Because one of the things that I think entrepreneurs don't
understand sometimes when they're starting a business
because it's sort of cool to start a business right now is
it's really really hard. And so You're not in it for the
reasons to be, if you're not passionate about the idea.
If you're not going to be doing it for no money, when the times
get tough, you will not continue to do it.
Probably. And so we, we really want the
founders who are going to be fearless and really go after Big
Ideas and be very passionate about them actually a patch.
I find it very difficult to say, no to a Founder, who is both
very passionate, and very knowledgeable about their space.
Because when they're knowledgeable about the space,
and they speak very We about it. It's like they understand
everything about this space and you're sort of like here, take
my money. So, is there something different
about Bitcoin entrepreneurs from people starting business in
other areas? That is a it's an interesting
question because so I'd say there's been an evolution over
the last three years for Bitcoin entrepreneurs.
There was I'd say it started out as like philosophical idealists.
Were the entrepreneurs that were in the space and they've
gradually evolved into opportunistic.
Builders. And I think that that's one
thing that there has been a steady Evolution towards like
just the The entrepreneurs have just evolved and changed over
the last three years in the Bitcoin space.
Already, you have to be a little crazy to be in the Bitcoin space
because it's the market still, not huge.
The ideas still aren't flushed out the you know, it's becoming
more useful. So I would say entrepreneurs in
general, if you're entering the Bitcoin space.
Its you are passionate about the technology still like there's no
reason for you to be as insane as jumping into like the Bitcoin
space if you're not passionate, so it's almost a filter for Is
that they're already vast like fascinated and passionate about
this space. And then I'd say some Bitcoin
entrepreneurs. This is something that we've run
into a little bit, is some Bitcoin entrepreneurs.
Just love really the technology layer.
This happens with other entrepreneurs to we were there.
They just want they like want to really change the way that the
technology works, but then you really need to be solving a
problem. Otherwise like The business side
of it doesn't work. And so that's it.
We want to find where those two things Clash like where those
two things like mix because that's where great companies
come from. It's sort of like, I mean, the
best analogy is probably like, you know, Wozniak couldn't have
done Apple without jobs and jobs probably could have done with
that Wozniak and you sort of need like those two pieces to
make a really great foundation for a company.
Otherwise, you just have someone who loves fiddling with the Vmn,
someone who likes to just talk about things.
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Bitcoin. You mentioned before you guys
are making the assumption that Bitcoins going to explode,
right? So otherwise this wouldn't make
much sense. Are there other aspects to your
investment thesis or other assumptions.
You guys are making Yes, so so I would say well, yeah, I mean the
fact that we're in the Bitcoin space at all.
You know, we're probably the largest investors as far as
sheer number of companies in the Bitcoin space.
It means that we are definitely making a couple of large
assumptions one. Is that the Bitcoin space is
going to go through a huge transformation and become this
huge huge technology that everyone uses my assumption is
That all payments will be running on Bitcoin in the next
10 years. And so, if you assume that it
makes sense to back, basically, every Bitcoin company, you can
get your hands on. And my how I justify that to
myself is really, there are a couple ways, but one is mostly,
it's voice over IP. So originally everyone has been
making telephone calls for the last, you know, 70 years or
whatever. Whenever Edison, created the
telephone. What's he doing?
Telephone, or was he the light bulb?
And I think it was Alexander Graham.
Alexander Graham Bell whenever he made when he made the
telephone, but it. But recently in the last 10
years, Skype zentrum, and the team had Skype.
They with Skype. You were still making calls.
It was still called to call because you're, you could hear
the other person over this mechanism, but the entire
back-end had changed out. And suddenly, they were like
decoding bits and then sending those bits across a wire and
then you re-encoding the bits so that you could hear it.
Like we're using Google Hangouts right now.
And so voice over IP was an entire shift for the entire
telephone industry that I'd say the end consumer didn't see as
much because they were still just making calls.
And I think that that's that's very similar to bitcoin with
payments where it's still going to be called a payment, but the
entire back-end is about to shift.
Doubt and become an international payments Network.
And so I'm really excited about that and there's a lot of
opportunity in that that we're excited about.
So that's what I think. But having said that, a lot of
the companies in Bruges, we see, haven't necessarily been doing
payments. I mean, some have, I mean
there's been snap card and some others I believe.
Yeah, but can you talk about, you know, what's the sort of
thesis behind the other companies that you funded, like
zap chain, or yeah. So others that are not
necessarily in a transfer value or in the payment sector.
So I would say when you're looking at Bitcoin and the
blockchain their first, I will break you like a breakdown.
Sort of Coin and I group them all together and I think that
they're all in the same sector, so don't really deviate too
much. But the so, the what we did is
we broke down what Bitcoin does better than cash, because that's
where really usefulness comes in and that's where opportunity is
for businesses. And the through, there are three
things that Bitcoin does better than cash.
It's store a value for emerging markets.
That really don't have a great currency.
Greasewood should probably adopt Bitcoin.
That's I'm going to probably write a blog post about how
Greece you to die. Pickling the transfer of
cross-border for money using Bitcoin as the rails.
And then microtransactions something that is actually was
probably not possible before Bitcoin existed.
And so I'd say almost All of our investments.
All 47 Bitcoin companies. We've invested in cover are
encompassed. The Bitcoin ones are encompassed
in those three categories. And so we were trying to find,
you know, all each of those though even break down further
where, you know, I there are a lot of really great companies.
Doing microtransactions. Zap chain, I believe is one of
the best implementations of microtransactions in their
tipping. And so that was one of the
reasons that we were really excited about what they were
building. They just started out as sort of
a social network for Bitcoin people and now, they built out
this great tipping system and people are actually, like,
making money off of this tipping system, which is incredibly
powerful long-term. But when you, when we deviate to
the blockchain, I'd say the blockchain.
Everyone's very excited about blockchain 2.0 or Bitcoin 2.0 or
whatever. Everyone's calling the next
generation of Bitcoin stuff. But really what it comes down to
is it's digitizing assets, transferring assets and then a
smart contracts inside of those and those aren't even like
categories. They all sort of grouped
together in a lot of ways because if I'm going to transfer
like real estate, I'm going to need it to be a digital asset,
and I'm going to be able to transfer that asset.
So they're all sort of one thing and you need smart contract to
be able to enable those two things to happen.
And I'd say it's still super early in the blockchain
development. I everyone is still creating
what that those three things look like and I'm really
excited. You know, we mentioned flavian
earlier who works whose founded coin prism, any really was one
of the core reasons that open assets is is fully fleshed out
as it is and the in which Probably the primary thing that
most companies are looking at in order to digitize assets.
They're looking at that over etherium over other Technologies
who are trying to do that. So I think that, that sort of
our investment thesis is going down, those two category
verticals, and then seeing who's really solving big problems.
And then we try to invest in help where we can Has that
evolved since you started, we see?
So when we, when we started boost, everyone was expected
about the speculative nature of Bitcoin.
And the reason that it went up, so high was because Traders were
like, hey, I could triple my money in a day.
That's awesome. They're huge.
Margins is where like speculators and Traders love to
play. And so a lot of people were
looking at it as like Bitcoin as the currency and I'd say the
evolution has been away for has been a like We were on board
with that to what, you know, we back payment processors, we back
and I still think some payment processor will probably end up
working. Especially if Greece adopts
Bitcoin, we backed Brokers, we packed about 10, brokers, in
different countries. It just would like Argentina,
Mexico, Brazil, South America, South Africa, just tons of
really great Europe. Lots of them.
The and the reason for that was I believe that my initial belief
was cross-border transfer and I was thinking, hey, the fastest
way to get like a huge remittance network setup is to
have these brokers in every country so that you could send
Bitcoin in as long as the broker handled the cash and cash out.
You'd have an entire remittance Network.
So, right now, technically, you could send money from Argentina
to Brazil, to Australia to Europe.
All on something like a Bitcoin companies, boost Bitcoin
companies rails, which is really, really cool.
And you can save a lot of money, because that's what Bitcoin does
cross-border. But I'd say the study Evolution
has been really about not sending Bitcoins specifically,
but sending money across Borders or, and I'm, I mean, I'm I'm
also really excited. So I told you my two verticals,
but I'm also really excited about things.
I wasn't expecting to hear about.
So like we had a company in the last tribe that was called bit
mesh, and they they allow you to resell your Wi-Fi.
And the reason that they're able to do that.
You couldn't do that before Bitcoin.
The reason you're able to do that is because of Bitcoin, but
also because it micro payment channels because you only have
two, you can pay for what you use.
Use rather than like a monthly subscription or a hourly
subscription. It's like, literally what you
use you pay for, which is never been done before, and it was
theoretical. And now bit mesh has done it.
So it's awesome and they're going to be trying it in a code,
couple places. But like, I love the crazy
things. Also that are like, even no one
was expecting that this would influence.
I think what Zach chain is, the beginning of is really replacing
ads on the internet. Like There.
Now, there's a new way in which people Can get paid or be paid
for content on the internet, which is really, really exciting
because before everyone's been sort of handcuffed to ads like
they've completely, you've needed to be using it.
Yeah. So I you asked about the
evolution. I'm went back to your last
question. Sorry.
The evolution has really been about it's really been about
Bitcoin transitioning to everyone saying the blockchain
but really yeah, I'd say right now.
We're in the state where it's Bitcoin as the rails for sending
money, which is using the block and I guess technically.
And then the next stage is going to be blockchain related and
it's going to be a transfer of assets, you know, nasdaq's doing
tests with it. I get reached out to by
institutions. I think, I actually think the
next evolution in these stages. So startups have done a lot from
the bottom up, building the technology getting users,
getting people excited about it. But the marketing costs that it
would cost to get everyone on the earth to adopt.
This would be very, very capital-intensive.
So I actually think that the next step is going to be
institutional adoption from the top down, where institutions are
starting to find that the technology is useful to them and
they're trying to figure out how they either save money or make
money. I'm using this new technology
and that's a very exciting Evolution that.
I'm not sure everyone's seeing yet, but it's going to be a
really big deal over the next 18 months.
I think you're going to see huge institutions adopt aspects of
Bitcoin or the blockchain for actual products.
And I think people will end consumers will be using Bitcoin
and the blockchain without them knowing they're using Bitcoin
blockchain in the next 18 months.
I think it's 18 months and you think those institutions
Primarily use the Bitcoin blockchain, maybe through some
projects, like side chains or open assets or things like that.
Or do you think that they will use other types of blockchains,
maybe private blockchains or things like that?
So it's going to depend on what problem they're trying to solve
for themselves. So I think a lot of big
institutions have problems with cross-border payments.
And so I think that's actually going to be a big piece of it.
It's going to be I think a lot of people are going to trip try
this, start figuring out a way to do cross-border payments more
efficiently using the blockchain, but then also, you
know, loyal great loyalty programs can be created using
the blockchain. The trick.
I mean, NASDAQ is openly saying that they're doing, they're
running tests with open assets to do, transfer of stocks
Securities. And though I think on a per
institution basis, there is a different way to Use Bitcoin or
the blockchain and I think that it depends what they're trying
to solve for themselves. So this is actually a question
that we want to bring up with you is do.
There's the appears to be this sort of shift.
We've, I mean, I don't have any really concrete examples, but it
seems like companies are starting to shift towards more
financial institution type Services.
I mean one example is chain. Now if you were to change
outcomes website, there's like not one place on the web site
that it mentions Bitcoin. All right, I think the even
bitpay mentioned Something like that.
Yeah. I mean, I think that the what's
probably happening was probably likely to be happening is all
this adoption that Bitcoin startups were expecting a year
ago when the price gone up to thousand dollars or whatever
didn't happen? And now they're running out of
money or perhaps are, you know, their investors are saying like,
what's going on. And now they're sort of Shifting
to where there might be some money, which is institutions and
trying to sell them on the technology.
And Which is fine, right? I mean if it gets people using
Bitcoin one way or another whether that's through banks
using Bitcoin to like you said in the backend or financial
institutions now offering payments for consumers to use
but having Bitcoin the button the back end that you know,
that's fine. If it brings more adoption than
why. Not.
Right? Yeah.
And so I actually think that that's What?
That's sort of the way you're explaining is sort of how its
I'd say, it's sort of how it's happening.
A big piece of it is, you know, as a business you want to figure
out how to make the business work.
And so and where you can solve big problems.
And if an institution is the way that you get to solve a big
problem, startups will start working with the big
institutions, and institutions are a little unsure of how they
can use it. And so they need the startups
guidance a lot on this stuff. So it's Of a, it's a great.
It's a great thing that they that the institutions might
start working with all these different companies.
Right now. I'm curious what you think about
this apparent shift. I I think of it like this,
right. So if you you might expect that
Bitcoin was going to be used widely and I think many of us,
like, I certainly believe that and especially I was going to be
used by li like as a currency by like normal people, adopted on a
mass scale soon to pay like for the coffee for remittances and
whatever. So I think that was sort of a
common assumption we had in, you know, 2013, when the It's going
up and and you know, adoption is also increasing rapidly then.
And so I think a lot of startups they built their business
models, you know using that some right they say, oh, you know
going to execute grade and then they're all these users will be
there and maybe that's going to happen but it hasn't happened so
far and I think I'm actually really curious about what your
point of view is there. Adam, but you know, one problem
is you raise money and then you you burn through them.
Money you spend it. They need to raise more money.
And then if if you don't if you aren't able to show like big
traction, then it's hard to raise more money.
And if the Bitcoin user base doesn't grow, it's really hard
to show traction and go to user base.
I mean, because the Bitcoin you space is so limited, maybe to
some extent, you can do it just with that, but then you soon you
hit ceiling. I mean, coinbase is going to
have a really hard time going more users unless they can
convert. You know, new people to using
Bitcoin. Well, unless they sort of become
a and I've no idea what their plans are.
But if they become International repository for the unbanked,
like, technically, that would be a use case, that would be really
valuable to the world or the unbanked.
Anyway, I think the one of the reasons that Bitcoin itself
captivated me early on was how Global the world has become.
I'm like if one country gets hit by economic crisis, the entire
world gets hit by economic crisis in some way.
And everything's connected. So closely mostly because of the
internet because of how you can communicate, frictionlessly
through the internet. And I think that when you think
globally, every country still has different Financial issues
and problems, and those are all different ways in which Bitcoin
can help and improve the Situation.
And so, you know like one of our companies zap go there in South
Africa turns out, it's the two percent credit card adoption and
no one buys anything online just because that's how it works.
And like in America. I don't know how I would live
without being able to buy anything online.
And so I it's just everyone's in a different situation.
And so I think Bitcoin is the thing that will bring us all to
one level where we We effectively have the same
payment structure and rails and so I but everyone needs to solve
their own problems inside of their own countries.
And so it's important that internationally Bitcoin
companies are building. Yeah.
I know. I mean, I agree.
I think that that Vision I totally share with you.
I think it's such an exciting thing and something that makes
so much sense. The idea that you have a Global
Currency that's like free from nation states, free from that.
I think that's just an idea that kind of makes sense and it's
obviously It's super powerful idea.
Yeah, and so what what's your impression R is the rate at
which new Bitcoin startups are being created?
Now at the sort of, you know, maybe precede level but people
trying to build something trying to raise money.
How is that develop? Has that been going down with
the decrease in price? So, I could probably say that
after or applications have come in and I could see like What the
enthusiasm based off of number of applications we get in
general? I would say it's becoming a more
legitimate currency and there's less speculation in it.
So it's It's more about business.
It's more about like what business you can build rather
than like what technology you can build, which is sort of an
interesting transition. As a technology.
It's sort of like TCP IP was just this weird thing for awhile
for communication. And then, you know, people tried
out web pages and then they were like, oh this is sort of like
marketing and then they found a use case which was marketing for
the web pages and then things were built on top of that,
communication AI I'm like all these different ways of
communicating. I think that we're in the stages
of like, if you are starting a Bitcoin company, you do need to
find a use case, that's different than what other people
are building right now. And that is It's, you have to be
creative. I mean, you have to find the,
you know, create something where robots are paying each other for
something or get the, you know, found a new country.
That's founded, you know, currency first, like it's almost
like everyone needs to start thinking a little bigger about
about the about their ideas because You know, I promised a
hundred Bitcoin companies to the Bitcoin ecosystem.
We're at 47, and I plan on following through, on my
promise, which I'm definitely going to be doing and probably
continue to back more after that, because I think the
eventually it's just going to be like I'm backing fintech
companies because everyone's using Bitcoin, I think that's
how it's going to work. But the like people need a, they
need to be actually solving a problem and be it needs to be
different from the market, like I A lot of people saw a lot of
money flowing into brokerages like coinbase or, you know, or
payment processor, bitpay, blockchain got some wallets that
sort of thing. But like, there were so many
like competitors that were created, just because that money
flew to in that direction that now, it's sort of like, we need
to see the next generation of like Bitcoin and the blockchain
we need to see what really it's entrepreneurs job to really push
the limits rather than play it safe and follow the money.
And I want to see the next level of stuff and you know, we've
back 10 brokerages. I will for good entrepreneurs.
I'll probably continue to back brokerages but the it's just the
competitive level and Landscape in every country has begotten,
pretty high. That you find a new opportunity.
That's basically my suggestion and the as far as building
companies. I but I do continue to see stuff
and it continues. You crazy weird stuff.
And so, I would say. The, in the speculative,
enthusiasm has definitely died down a little bit, but like,
people are still so curious. And I'd say on a institutional
level, they're curious now, and so, there's going to be a lot
more money pouring into the companies over the next 18
months, but it really needs to solve problems.
Big problems. And I think one of the funny
things was that when this is website, but with Bitcoins, do
you know it, what's it called? But with Bitcoins.
No, no, so it's sort of a joke, but it says like a Bitcoin
business generators. You can click like button and it
comes up with something and then boat with Bitcoins, right?
I felt like that was a little bit like that.
The think, you know, during the bubble bubble where it's just
everybody was like start Like some Bitcoin company and you
know, just doing that but both Bitcoins it's that's funny.
We used to have a sort of inside joke at Boost was like anytime
we needed a solution that we didn't really have to a
question. We would say because Bitcoin
like so yeah the like I'd say it's a little less that way now
and it's more. Finding an actual business.
Today's magic word is tried TR IB e head over to.
Let's talk Bitcoin.com to sign in enter the magic word and
claim your part of the listener reward.
So moving on from startups to a recent event and in the u.s. at
least well, which affects us companies and specifically those
in New York, but also might affect company.
Startups worldwide, is bitlicense.
I believe today. This day of recording is the day
that actually comes into effect. I might be wrong on that.
But oh really? Exactly.
And I think I saw it on Reddit this morning anyway, but so can
you tell us? What do you think about
bitlicense? Everything you read on Reddit is
true. So so, so what are your thoughts
about bit license? Okay, so my I actually released
a response about. I don't think they made the
changes that I sort of wanted to be changed.
So I submitted a response. It was like a day or two after
the responses were allowed to be do but it was because the first
time it was like very loud and like bitlicense came out and
everyone like, you know, crush the spirit of the thing and then
they like silently released their second draft and I didn't
even know it was out there for until basically the end.
The response period. But the things I didn't, there
were only like two major. I actually think it's the
closest thing to what we'll get and and it's very it's pretty
well thought through it. Like I will say the first one
was like, hey, let's throw as many rules at the board as
possible. And do you want to rule like let
that guy create like five rules and it was their attempt at the
aimed at the sun. Hoping to hit the Moon.
Une sort of thing. And I think that's exactly what
they got. They, and I think Testament, to
been laski for actually releasing it on Reddit to accept
comments. And here responses.
I think that's a really big move as far as the government's
concerned, the things I don't like, I don't like that New York
State Regulators are duplicating the I am L, KY C rules.
So federally you have to do a certain level of AML kyc.
And what New York is saying is that there's a like oh, that's
not enough. Like Federal Federal isn't doing
enough. Like we need a duplicate of that
also and doing it. It just UPS the cost for every
startup. I'd say bitlicense is something
that's going to affect my business, almost more than
anyone else's business. because we give, you know, smaller
checks to these companies and they And so and you know, our
check won't be able to get them through the bitlicense, at this
level for becoming a brokerage or becoming whatever they want
to do, as far as being a money transmitter.
And so, I would say I'm I understand the regulation
Necessities. I just wish that.
There were they allowed a little more like, low-level
experimentation on like a hundred users so that you could
test out ideas. And that was something that I
requested. I think, you know, sandbox
environment for fintech would be a really great idea for the
government to have. Because if I knew I was being
experimented on, I think I would probably it.
I would be fine with it. Like as I knew that I was like
the guinea pig. So those are I mean, those are
like the main things there it's just become.
Now. It's going to be really, really
the barrier to entry to becoming a Bitcoin company and I feel
what we were talking about. Last time was what's been the
transition of Bitcoin companies. I would say the transition from
tribe for to tribe five was tribe.
Five felt more most of the conversations.
We were having Thing were very regulation oriented where before
it was very much more gray area. Now, everyone is very
formalizing on processes and really they're a little like
worried and scared and fear the government.
Even if the rules aren't completely hashed out officially
and I mean, I completely understand why.
I and we really try to guide them towards, you know, doing
Create a ml K YC and doing the appropriate regulatory steps.
It's just it does become expensive and burdensome and
like two people who decided to start a company in their garage
and wanted to change the way banking works and zap now
needing something like 2 million dollars just to get off the
ground. And so that that process is sort
of tough. So so what does that mean for
you? How do you go about that now
that it's too expensive to start a company, especially if you
have to go through bit license, With the funds, you guys are
able to provide. Does that mean you going to
specifically try to fund companies that don't require a
bit license? So that excuse, you know, we
won't exclusively do that. What we're really good for is,
sort of hooking early stage company into a network and that
Network includes investors, who might be able to get them to
that through that stage. And so that's really one of the
benefits of joining an accelerator.
Like ours, is that we Can you click them into?
You know, the biggest Bitcoin Network there is.
So we will continue to look at it because I don't want to be
afraid of the regulatory bodies that be I want to be able to
like help fintech be innovated on and not be stopped and
Innovation. It's just I do feel the general.
Feel really in the environment is like when you're starting a
Bitcoin company, you need to be regulated.
Otherwise you go to jail like that is what they feel and it's
like that, that's like not a great space.
That's not a great feeling to have where like, they fear like
jail. It's that's a tough.
It's a tough spot to bait. So we're going to continue
backing everything like because I think Innovation comes from
the craziest of And you know, sometimes people will have to
innovate on themselves and figure out a way in which maybe
they're not transferring money, or maybe they're not
transferring assets. If they aren't if it's not
possible to raise the money at that time.
But yeah, I'm not going to stop doing that.
What? We're but we are looking more
towards the future and I would say that we will be It will be
difficult, more difficult for us to be backing more and more
brokerages. Probably because it's just,
there are so many of them now. So one question I'm really
curious about. So you are based in California
and I presume most of the startups that join Boost VCR.
Not from New York. Now.
I know that interpretation of Foodies New York rules.
Apply to were pretty broad, but Does that mean if we sample, one
of you startups, just blocks, New York, IP addresses or
something like that? Is that enough to avoid
bitlicense? Because I've heard from people
say that that's not an often. Some people have said that is
enough. So I'm really unsure.
So I think that's something that's still being debated and
there is no clear answer on. I think that that would be
enough for your you're making a statement that you're not
dealing with new. And you're not breaking New
York's rules. However, the problem is that, I
believe a lot of states will adopt whatever gets passed in
the bitlicense. So, because they would rather
like, oh, well, these people got all the way to the Finish Line.
I think that we can probably either.
Actually, it turns out like, I think South Dakota has very
friendly Bitcoin rolls, something like that.
Like they're a couple and then California is just awful.
Like, they're trying to prove something bitlicense, at least
had good. Like it's a good name and
Marketing California, like they call it a be 126 or something.
It's not it's a number and letters.
It's a horrible concept and it has just a bunch of like
over-regulation I think and yeah, I don't know what they're
expecting out of it. I think they should probably go
talk to at what's this? What's the status on that?
It has that been passed and so it's they have created it and
it's I think it's out for responses right now is where
Believe me. I don't think they'd be 126 be
just type that in and that wasn't what popped up.
But it's a be something numbers. And the fact that I can't
remember it and I can remember bit licenses to not probably
problematic for a lot of people and so, I mean, yeah, it's a
it's there's still definitely gray area out there, but it's
becoming more formalized, which is actually a good thing for the
industry as a whole. The When the government
recognizes something as real and has spent enough time on it the
masses then think, oh, well, it's not just for like criminals
and drugs and like it changes the dialogue of what Bitcoin
will be ripped. How big, when we represented.
The problem is more from the startup side where you do need
to go through appropriate, protocols and processes before
you really break the mold and be a Bitcoin company.
If you're transferring money, if you're not transferring money,
I'd say. That's a general reason that a
lot more people are moving towards, the blockchain is
because it makes more sense from a cost standpoint.
Like it's just cheaper to start a blockchain company, then a
Bitcoin related company. So let's move on to another
topic recently. You announced that you'd have
50% of the, the company's coming at the booster ECB in the VR
space. What gets you?
So excited about this technology.
Okay. So actually, the reason that we
picked VR was because there are a lot of analogous things to VR
and Bitcoin. As I say scientist VR virtual
reality for people who are surprised by this turn.
Yeah. So we're doing a VR AR and
Bitcoin and the, the switch is we feel there's a lot of
knowledge for the state that the VRA are spaces in.
It's very similar to what Bitcoin was in three years ago
where the infrastructure layer of the technology had really
been laid. So mining equipment was sort of
the infrastructure layer, which means and so for VR, it's the
the goggles, so it's Oculus. It's you know, magic leaps
building them. But Samsung, all these other
companies who are really laying the groundwork for the
development of the Next Generation, which is where we're
very good, which is sort of infrastructure, infrastructure,
software and infrastructure and apps built for the first
generation. And that's where we were really
good for Bitcoin and the blockchain and I believe that
that will be where we're really great for virtual reality and
augmented reality. It's it's more.
And what we do really well and what we found with Bitcoin, and
the like, we have a lot of thanks to the community of
Bitcoin for this, is that we're very good at building early
technology communities around an early stage technology sector,
which is inclusive of investors, entrepreneurs, enthusiasts and
press. And like lots of things in that
space where we are able to build up and package this this thing
and then sort of help our companies plug into it.
It. And so that's what we're, that's
our value add. And I think that we, it doesn't
only need to relate to bitcoin. It can also relate to VR.
Obviously. We're going to continue
supporting the Bitcoin ecosystem.
That's the plan indefinitely. But the I think that we if
you've tried VR, also one of the things.
It's like, VR is really cool. I don't know if you've tried it.
It's pretty awesome. I've tried it.
I've tried quick. At some conference.
But I mean, I thought it was I thought it was interesting.
It's definitely one of those things were like, oh, I want to
try this thing. At least.
That's the way I felt like, I want to try this thing.
I've seen it on TV or on the Internet, whatever.
But was it like totally Blown Away by it, but I then again,
you know, it's early stages, like we're still using.
It's it's early one technology. It's sort of the perfect time
for us to help supporting the ecosystem and help build our
Network to help. Help sort of are the companies
we back become thought leaders in the space.
And that's that's what we did with the question.
We're going to continue doing that.
We're with Bitcoin. I really agree with this other.
There are there's that seemed to be like a lot of people really
really really excited about VR just as just as in Bitcoin,
there's like a lot of really enthusiastic people.
There seems to be like this whole other planet of people
that are just all all into VR. And yeah, it's there's very
little overlap in the communities that One thing that
we definitely recognized and the, but yeah, well, one of the
reasons that we also chose it was because small passionate
communities like when they start with small passionate
technological communities, its General.
It means it generally means it's probably happening.
Yeah. Yeah, so one question Do you see
any intersection there are synergies between VR and
cryptocurrencies being used together?
I've heard some people mentioned that I really haven't.
I think it's going to be a big deal.
I actually think so, you know people joke and say that Bitcoin
is going to be the currency of the metaverse metal versus like
the virtual reality space, but I actually think the blockchain is
going to be really really important too.
The metaverse or the virtual reality world, because what if
you only want to sell like 100 virtual reality chairs, like
being able to put a cap on the number of real virtual, Goods is
only possible through something like the blockchain.
And so I actually think that there's going to be a lot of
overlap with these two technologies.
Given I think that those overlaps will happen in X number
of years. I don't think they're happening
in the next. 18 months at all. Like they're just going to.
That's, that's interesting. Are you aware of a scribe?
What is it? Describe the company ascribe?
I've heard of a scrub. Yeah.
So, so day they use the blockchain exactly for that to
track digital property and they have like, addition and limited
edition and loaning things. So that seems like it would be a
perfect fit and they do focus on that digital art Market, but at
the at the moment, but it seems like that would be sort of
Natural way to develop into. I think that there's been a
huge. I mean, like, I think a lot of
this, you know, a lot of Art and photos and stuff will still be
free like a lot of them. You'll still be able to search
through Google images and grab Google images and stuff.
But some artists will just be like, hey, I only want there to
be a hundred of these out there and it's like, okay, that's
that's now possible, that was not possible in the internet was
created. Internet was just this open
portal 2. Like share everything and so
business models were created as such.
And now there's another way where you can restrict the
number of goods and create a certain amount of demand for
that good, which is awesome. So, just before I wrap up here,
so you're, you're from a lineage of venture capitalists your
dad's, of course, Tim Draper. The who invested in some of the
early internet companies like Hotmail Skype and others and I
read your grandfather's book at one point.
Like Years ago though. The startup game.
Well, yeah, that one. Yes.
Yeah. It's a great book.
I actually really recommend it. It's if it's his You can hear
him when he when it's being when you're reading it.
Like that is his tone. That is his voice.
It's very yeah. So my question was, you know,
what what has your dad been able to to pass on to your teach you
regarding investing in such disruptive Technologies as he
did back in the 90s? he was actually one of the ones
who helped us make the decision to focus on bitcoin because we
were, I was sort of deciding I was going to focus on something
and I was talking to him and I said, you know, I think that
there are a lot of different ideas in the Bitcoin space in
his analogy. To me was, you know, one of the
best decisions we ever made at dfj was we, everyone thought we
were crazy, but we said we're only going to be backing
internet startups. Which sounds like bogus because
there's so many interests, internet startups now, but like
he got the pick of the litter at the beginning, for internet
startups, which got him, you know, Hotmail and like a bunch
of other ones stuck in that space.
And so he said that ended up being a really Great thing and
so I was like, well, that's the you know, it's a no-brainer that
we should pick an industry. Now, we as a team ended up
evolving into the Bitcoin space, but I love I really.
That was one major thing that he liked, helped us focus on
General stuff. It's it's difficult to say like
I'm really close to my dad and like I would say his advice has
been invaluable. What's really, really great is
the you know, I'm running a fund that invests in companies and my
dad's done it for 30 years. My grandpa has done it for 40
years. And so, like if I run into a
situation where I don't know what the answer is, they've
probably gone through the situation.
And so I like that has been an incredible information.
Is for me. Other than that, you know, he's
definitely helped me figure out what type of Founders we like to
back. He's definitely helped.
It's, it's really difficult to Define everything because it's
like, you know, crazy ideas. Often are the ones that work.
Like, there's like little, you know, idioms that he says that
have sort of stuck with my, a whole thesis throughout the
time. I've been in investor and he's
super smart. Art, he's way smarter than me.
So also, that's cool. Yeah, so I don't know, it's
those are all broad things but it's just been, it's sort of
fun, having someone who I can bother and just be like, hey,
I'm going through this thing right now.
What is your answer to it? And then I take his answer and I
change it, but I did, like, it's great to have his like feedback
on like, hey, this is how it worked for me and then he sort
of recommends, what he would do. And I'm like, well, you know, I
need to position a little better, but that's a really good
thesis. He's creative.
Be creative is probably the other thing like think
differently than everyone else because that is generally the
way that the world to going. Yeah.
Absolutely. Well, I think we're at the end
of our show. So you mentioned it beginning.
I don't know that the Boost VC application is due on.
That's is that Wednesday? So next Wednesday boost VC
application is due so that when July 1st.
Yeah, so yeah. And today's yeah.
And then the program starts. August 3rd, that's all I was
gonna say. Okay, perfect.
Yeah, so we'll put that link in the show notes.
So anyone who's listening to that you have about 48 hours or
perhaps less to finish you applications.
So you may have to do some caffeine infused all-nighters,
but but do so and hopefully hopefully some of you will end
up at least we see. We hope to see you all in.
On Valley at some point. So yeah, please apply to boost.
We're really excited about the next chapter and it's going to
be really, really fun tribe. Six.
Talk to you guys later. Yeah.
Well, thanks so much for joining.
So and thanks to our listeners for listening.
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