On this same page is Christopher Calicott from Trammell Venture Partners, or TVP, who said that the idea of financing projects that attract customers by generating tokens is not only symptomatic of a short-term view, but is also inconsistent with the typical incentives of a venture capital fund.
“Investing in these tokens, Calicott said, is a fundamental misalignment of interest in truly growing the company and achieving maximum success. Investors actually become speculators trying to get out of their position at the best timing.”
Also, while in the past there was a feeling that it was difficult to build on Bitcoin – and so many moved to other cryptocurrencies – things are changing today:
“Bitcoin is becoming a platform and entrepreneurs are starting to realize that,” Calicott continued. “There is blood in the streets brought by the crypto industry, but despite this, there are now more entrepreneurs willing to build services on Bitcoin than ever before. We see ourselves as long-term investors. We try to bet smart on companies that we believe can usher in a whole new global monetary order on a solid standard: Bitcoin.
Overcoming an outdated system
A new money standard, a global store of value, a peer-to-peer payment method that makes the big traditional players obsolete. However you look at it, Bitcoin offers a vision of the future that completely overturns the paradigms we are used to: the idea of inflation as necessary for growth, that of macroeconomic control by states and central banks, the idea of having to entrust the management of savings and digital payments to intermediaries.
Is the old way of seeing things compatible with the Bitcoin future? According to Ego Death Capital’s website, it is not.
“For a new system to thrive, to provide abundance, opportunity and accessibility, the old system must self-destruct,” according to the website of the VC firm, whose CEO is Jeff Booth , author of “The Price of Tomorrow.” “For this to happen, it will require a phase of ‘surrender and transition’.”
Confirms the view is Nico Lechuga and Andy Pitt both general partners in Ego Death.
“The traditional system is already self-defeating,” they explained. “Banking systems are failing billions of people around the world – this is very evident in emerging markets, but even in Western countries. Meanwhile, the Visa and Mastercard duopoly is holding back innovation and opportunity, so that when competition arises – including through Lightning Network, which provides very fast and affordable transactions – they are already destroying themselves.”
The Lightning Network is also seen as a payment exchange for Oleg Mikhalsky of Fulgur Ventures, because, as he said, “near-instant settlement with very limited counterparty risk is a feature of Lightning that is well positioned to reduce traditional payment costs and lower counterparty risk that exists in fiat rails.”
“For the digital economy to grow,” Mikhalsky added, “we need a native digital currency that has two functions: speed and the ability to make microtransactions. We believe Bitcoin and Lightning will become the global money and payment standards. Some aspects of the Lightning Network adoption spectrum is yet to be explored: we see some adoption in video games, digital content monetization, but there are other use cases such as machine-to-machine payments and microtransactions for energy.”
More and more Bitcoin-only startups
Contrary to what one might think, in a year when the market collapsed dramatically, the world of Bitcoin-only startups has experienced a very indicative growth. As confirmed by all VCs surveyed for this article, the number of companies focused solely on Bitcoin has grown significantly over the past year. It is plausible to think that when the Pandora’s box of the crypto world was discovered, at that time, entrepreneurs realized that it was wiser to focus on the one technology whose fundamental elements have never stopped strengthening since the beginning.
Julian Liniger CEO of Relai – a Swiss startup that allows users to buy and sell bitcoin in a non-custodial way – emphasized the future growth.
“In the long run, investing in Bitcoin-only startups is less risky than in crypto startups: investors see Bitcoin-focused companies as more profitable and a more sustainable business model,” he explained. “With Bitcoin-only VCs, we’re 100% aligned. They see the future in 10 years, they understand where we’re going, they understand that all the experiments that happen on other blockchains will end up on Bitcoin.
This is a guest post by Federico Rivi. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
