Unbounded Perspectives Austin 2023: VC Perspectives on Investing in Blockchain Companies

Bitcoin thought leader and developer Joshua Henslee recently participated in a panel discussion at Unbounded Perspectives Austin 2023. He joined Andrea Kalmans and Ted Moskovitz in a discussion moderated by Mike Hennessey of Unbounded Capital.

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We present the panelists

The discussion starts with Kalmans telling a bit about her story. When the 2008 financial crisis hit, she was working at Dell after completing an MBA. Due to the crisis, she voluntarily resigned from Dell, which gave her an opening to fulfill her ambition to be involved in start-ups.

Kalmans started investing, following the trends of Austin, including enterprise software, digital health, Bitcoin/blockchain, developer tools and so on. She says this is an amazing time in Austin, with a lot of innovation and progress taking place.

Moskovitz then shares a bit about his background. He was an adviser in the US Senate, became a lawyer at the SEC, and is now an investor in blockchain, psychedelics and genetics. He is excited about the potential of psychedelics to unlock empathy and help people connect with nature and each other.

Moskovitz notes a distinct difference between investors in Washington, DC and Silicon Valley and those in Austin. In the first two, there is a lot of name-dropping, a desire to be seen as having a high status, and a focus on what people do. In Austin, there is more privacy and more focus on revenue and profit rather than growth for growth’s sake.

Henslee introduces himself. For those who don’t know, he is one of the leading voices in the BSV ecosystem and is now an advisor at Unbounded Capital. He tells us that he used to work for a top accounting firm as a technical manager, helping to implement Microsoft VRP. He specialized in implementing credit cards and saw the pain points such as security, compliance, etc.

During this time, Henslee became interested in Bitcoin. After reading the white paper, he fell down the rabbit hole and slowly Bitcoin became a bigger part of his life. Finally, he decided to go all in to build Bitcoin applications.

Questions and answers about blockchain technology

Hennessey asks Kalmans if there are any companies in her portfolio that are using blockchain in a meaningful way today. He notes that discussions of the potential of blockchain are usually about the future, but he wants to know how it is being used today, if at all.

Kalmans replies that she has invested in a company called Niftory. It helps people create and create NFTs of all kinds. It currently runs on Polygon, but she notes that it could run on any blockchain.

Hennessey then asks Henslee to elaborate on the intersection of blockchain, AI and identity/security. Henslee replies that they work well together and are a natural fit for each other. He sees how blockchain and blockchain-based identity can help people prove they created specific messages and output, giving them a way to prove AI-generated work is theirs using the immutable ledger that is the blockchain.

Hennessey asks where Henslee sees the enterprise clients coming from – will it be data management and storage? He replies that he does not think business use of the blockchain comes first. In his view, it will be a viral consumer-facing app that kicks things off. Kalmans supports this point, noting that the popular messaging app Slack started with users organically before branching out into businesses.

Moskovitz then tells us about his interests in blockchain and how he has focused on its social impact, saying that he is also interested in bringing real-world assets on-chain. His team is working on a project involving decentralized energy storage and arbitrage in Europe. This is an example of a practical application of blockchain technology that directly affects people’s lives.

Hennessey wants to know if Moskovitz, as a lawyer, is concerned about regulatory impacts on his companies given the recent US government crackdown. He replies that he has been aware of how ICOs were securities since 2017 and has been shouting it from the rooftops. Because of the bragging of FTX, BlockFi and others, it’s going to be a more brutal crackdown than otherwise necessary. This will cause short-term pain, but it will be good for the long-term development of the room. However, the harsh attitude of the US government will cause many companies to go offshore.

Where does Kalmans see the industry in 5-7 years from now? She says it’s a painful time right now, but looking back at her time in New York at the height of the Dot Com bubble, she says the mess will go away, regulations will come, and the credibility of the industry will be rebuilt. .

Henessee then asks Henslee if he has any advice for tech entrepreneurs about developing and building their companies and futures. He replies that demand is king and everything should start with the customer. He also points out that there is no need to develop an app since many successful games and applications exist on domains, including Ordinals.

Audience questions and answers

Questions. Is there a crossover between the psychedelic drug industry and blockchain/digital currencies?

Moskovitz says that there is much philosophical ground that the two share in common. Both make us question everyday concepts most people take for granted, including ideas about what money is. We also need to throw out old ideas and embrace new ones in both industries. In the early days, some psychedelic drug companies used Bitcoin and other digital currencies to raise money.

Q. What is the one thing you are going to focus on in the near future?

Moskovitz says they are getting close to buying a Major League Pickleball team, so that will be his focus. Henslee wants to focus on building games, and he believes ChatGPT and other AI tools can help him move faster. Kalmans says she just wants to be there for her portfolio companies as the world is throwing a lot of curveballs right now.

Q. It is important for the value to be stable. Can you talk about the importance of a stable protocol in determining a digital asset as a commodity?

Henslee responds to this saying that the value of Bitcoin is clear in the white paper; it enables commerce on the internet by lowering payment costs. It’s hard for people to imagine use cases for micro- and nano-payments when the floor on payment sizes is completely removed, but we’re now experimenting with what’s possible. In any case, a stable protocol is essential to make all this work.

See: Blockchain Venture Investments Driving Utility for a Better World

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