Capital Enterprise December Cryptocurrency Round-Up
Hello! This is our third blog post in a series. This publication, alongside NatWest, will explore and provide input in the cryptocurrency scene, highlight interesting tech startups, and detail upcoming tech events of note.
1. Cryptocurrencies, Blockchains and ICO’s: A brief intro. By Nikhil Vadgama, Founder at Propcoin.ai
Discussing Blockchain technology without mentioning Bitcoin is like pretending there isn’t an elephant in the room. Let me start with a question: Are you worried about missing out on buying bitcoins?
Don’t be. There are plenty of other cryptocurrencies out there. The “bitcoin” slayer may have already been created. Its price is £0.01. Being first doesn’t necessitate longevity. Let us not forget Myspace or AltaVista. Bitcoin as the leading cryptocurrency has plenty of issues with it (technologically, environmentally, morally?). Futures offered by the CME GROUP later this month supposedly give it legitimacy (who made the most money during the gold rush? It was not the prospectors). The Bitcoin price is volatile precisely because there are no fundamentals behind it (I would recommend reading Reminiscences of a Stock Operator to see parallels from another time).
The technology behind Bitcoin is a different matter. The Blockchain could fundamentally change the world we live in.
Blockchain technology offers a way for untrusted parties to reach agreement, consensus, on a shared digital history. It does so without needing to use a trusted intermediary. Why is this important? Precisely because digital assets and transactions are in principle easily duplicated or faked. Blockchains solve this without the need for an authoritative middleman. This is great where everyone needs a record of ownership, and a trusted third-party intermediary is not preferred (think property records and identity). Also where multiple parties need access to a common record, (i.e. financial institutions). But it seems that startups are using blockchain technology now as a panacea for every problem they seek to solve.
A new mechanism has emerged: ICOs (sounds like IPO but isn’t). Initial Coin Offerings are when businesses (mostly start-ups) raise money through issuing tokens (or are these shares?). Tokens are usually classified as either security tokens or utility tokens. The former is like equity (a security). The later is buying a business’s products/services in advance, at a discount (usually treated as deferred revenue).
In 2017 there have been over 250 ICOs with more than $2bn of investment into Blockchain companies.
ICO’s haven’t been without issue though. Initially, there were many scams with several countries banning ICO’s outright (most notably China). However, now regulation is slowly coming to the market. Several regulators now provide guidance, most notably the Monetary Authority of Singapore (who usually look to the UK’s Financial Conduct Authority ).
As front pages lead with stories on cryptos, blockchain and ICO’s these phenomena enter the mainstream. However, I see backlash against start-ups looking to use blockchains or do an ICO without good reason. Those who thought ICO’s were easy are now realising how difficult things are behind the scenes. Those who believe using blockchains means for an easy path to funding have realised the technology can be inefficient.
There is no question blockchains are the next wave in tech. The question is to what extent.
Find out more about Cryptocurrencies, Blockchains and ICO’s.
By Nikhil Vadgama, Founder at Propcoin.ai — Microequity As A New Means To Home Ownership
2. Our favourite articles from the past month, by John Spindler
- The State of European Tech — Annual report by Atomico. Evidence shows that London is still king in the tech entrepreneurial scene.
- My 5 point plan for the UK’s new Industrial Strategy, by John Spindler
- Tactical and technical advice for startups by First Round
- The Long Tail: When A Famous Theory Got (Almost) All Wrong, by Willy Braun, co-founder of VC fund daphni.
Details why we were wrong about e-commerce — the failure of the long tail theory?
- Report detailing the impact of the rise of Fintech startups on banks, by Oscar Williams-Grut for Business Insider.
Is it time the big banks used the cash on their balance sheet to start buying Fintech startups whilst they still can- before it’s too late?
- NHS looks for tech start-ups to solve mental health and surgery challenges
3. The top 4 startups from the Capital Enterprise network to watch
The London based AI in Synthetic Biology raises £3.66m from top-tier investors to harness evolution. LabGenius discover novel and optimised biological molecules using artificial intelligence, automation, and synthetic DNA. Congratulations to Harry and the team at LabGenius.
Oviva, who are creating technology-enabled dietetic services, raise $12m for its smart Diet application. Oviva were ‘green lighted’ as part of our investment readiness programme here at Capital Enterprise. Congratulations to Mark and team.
This Glasgow-based Space Tech Data startup secure Series A funding. Bird.i offers Earth observation data by accessing high-quality satellite, airborne and drone imagery in real time, and has now attracted £2.5m of investment since it was founded last year. Congratulations to Corentin and the team at Bird.i.
Propcoin, who provide home ownership as a service for high-income asset-like professionals, are a startup to watch. Based at IDEALondon, a post-accelerator, they are building machine learning real estate funds that outperform markets and increase efficiency, liquidity, and accessibility.
4. News in the startup network this month
- Three Accelerators that are now open for applications, and that we at Capital Enterprise think are worth applying for:
Accelerator Network — For those who have yet to give up their jobs to pursue their startup dreams
IOT Tribe North — The Internet of Things accelerator for those who want to disrupt manufacturing. There are already some great UK Manufacturers involved.
Entrepreneur First — With their different prorgrammes, EF help startups build their team and develop their idea, launch their company through access to funding and investment opportunities, and scale their businesses. EF is still the best for AI startups.
- Lots of UK VC’s have announced new funds in the past 30 days.
From Balderton’s new £375m Series A+ fund, to the British Business Bank backed Episode 1, £61m, and Capital Enterprise member Seedcamp, £41m.
Also the welcome news that Fair by Design, in partnership with our good friends Ascension Capital, have a new £20m to invest in startups focused on helping the poor.
But despite the good news overall in the UK and across the world, Seed stage investments are significantly down.
- Blockchain and Cryptocurrency Christmas Panel, Monday 11th December
On the 11th December, IDEALondon, UCL, Cambridge University, the London Stock Exchange and NewFinance came together for an evening discussion on how Blockchain technologies, in particular, will impact our future.
Questions discussed included Blockchain opportunities and risks, and how these technologies will be regulated.
The evening featured a keynote speech from Michel Rauchs, a brief talk by Raoul Lumb about the legal perspective behind cryptocurrency, Blockchain and ICOs, and a finally panel featuring Alastair Moore, David Prais, James Clarke, Eddie George, and Jo Rabin, with Nick Russell and Nikhil Vadgama as Chairs.
The room was packed with those eager to learn about cryptocurrency, Blockchain and ICOs, with the event a great way to forward the agenda for Fintech in an accessible manner. This event was the first in a series of 3, with upcoming events focusing on Energy & Blockchain, and Blockhain & Supply.
We hope you have a great winter holiday, take a break, and enjoy the festivities. We look forward to bringing you more from the latest topics in tech in the new year.
