Naval: The Investor
Abstract:
Naval Ravikant gives a full spectrum view on the current state of the blockchain industry. It’s a balanced view that focuses on solving specific problems.
Commentary:
Institutional interest is just starting, but the buidl crowd has a lot of work to do to solve for scalability and figure out adoption.
Notes:
Institutional interest
Paradigm, Sequoia crypto light — legitimizes crypto funds, other LPs and other VCs
USV, Sequoia, A16Z gave the green light on crypto
Willing to take these risks
Legitimization story, but other endowments will kick the tires for another 12 months
Slowly inching in
Institutions are waiting for high quality custodians
Coinbase, BitGo, Ledger, Anchor
Largest classic institutions
You need to have custody
The power of crypto is in decentralization
You can be your own bank or you don’t need a bank
The real revolution is armies of programmers deploying code that drives consensus mechanisms
It’s still at the infrastructure layer
The institutions will eventually come in if the technology works
Problems
None of the coins are very decentralized
We don’t have enough developers within each of the coins
Two big areas, distribution of the coins themselves — 25 million bitcoins estimates
It’s not billions
How many machines are using bitcoins?
Not enough of those
How many dapps are functioning? Not enough
How many wallets on Android and iPhone, that infrastructure doesn’t exist yet
Fair coin — give 1 or 2 to everyone on earth
ICOs only go to a small group
Airdrop is the newest thing
How do we get these coins into people’s hands
Obstacles
Not good enough wallets
No killer dapp
The intersection of a country’s currency collapsing while population can get access to crypto
We redefine money after every few lifetimes
There’s no real analogy here
You are intersecting money, technology, governance
I don’t think anyone knows
Skeptics
Strong argument of skeptics — expensive database
A blockchain is only needed if you need censorship resistant, permission-less programmability, using coin to coordinate an entire industry
Filecoin can create a mechanism to coordinate the file storage ecosystem
Blockchain is inefficient
Crypto becomes the government’s most powerful tool
It runs counter to the way current government is constructed
It’s always a negotiation between government and individual
Will governments allow it is a big deal
Markets are larger than governments
In the fields where it does apply, it is incredibly important
It doesn’t have to have a lot of applications
Your investment model
Deeply technical teams
Working on layer 1 scaling, decentralization, consensus mechanism
People working on blockchain even if it weren’t cool
The rise of shadow financial system
dydx, dharma, 0x
everything wall street does that is exotic — high frequency trader — is done by bankers over the phone, very manual
there’ll be a day 2,3,4 years from now crypto does better
trades 24/7 global, trustless
stablecoins are there
Shadow financial system will technologically exceed the existing financial system
Advice for entrepreneurs
If you are technical, contribute to open source projects
There’s a handful of developers working on bitcoin
Community development is a big deal
There’s no master set of resources
Synthesis and communication
Get ready for when something bad happens with Zcash, Monero
Crypto is just code
Code is just speech
Speech is just thought
Government might try to control your thought
