Time To Move To Crypto Valley
This year my family and I will be making a transition to a new nation, a new city and a new community. Switzerland, Zurich, and Crypto Valley
Switzerland Is Calling
Switzerland’s crypto friendly ways the past 6 years have truly made it the best place in the world to launch a blockchain project. As a result more than 1,000 blockchain startups have selected Switzerland as their launch pad. Many of the top industry leading projects such as the Ethereum Foundation, Shapeshift, Xapo, Cardano Foundation, Tezos Foundation and many others are based in the Canton of Zug. With additional clusters of blockchain projects based in near by Zurich, Lucerne, Basel, Bern & Liechtenstein. Taken together, a powerful network effect is emerging under the banner of “Crypto Valley”.
To put that in context, there are now more blockchain startups in Switzerland than the rest of the world combined. To highlight this trend Facebook’s recent selection of Switzerland as the location for the Libra Association has shown just how much Switzerland has become the global default location for crypto projects, even for a deep pocketed mega corporation like Facebook.
Therefore it is time to say clearly, if you are serious about building decentralized technology, I encourage you to join me in moving to Crypto Valley where your project can thrive. Once your project reaches enough scale and success you can always expand to the US and other jurisdictions, but Crypto Valley is THE place to begin your journey.
Why Everyone Is Headed To Switzerland
In short, everyone is headed to Switzerland and especially the Canton of Zug (25 minutes south of Zurich) because it offers clear rules for incorporating, launching, funding and listing your blockchain project, regardless of if you are starting a new payment protocol, launching a utility token, or issuing a security token. In contrast the global regulation of crypto has been been a messy, confusing, expensive and even a hostile experience for entrepreneurs in India, China, and the US. Legal gray areas have discouraged founders from launching new ventures after the 2017 ICO crackdown and have made operating difficult for even the best teams in these locations.
This leaves Europe by far the friendliest major economic area for the emerging blockchain industry to base out of. Anyone who has browsed the various lists of top crypto friendly cities / jurisdictions discovers it is mostly populated by European locations including, Zug, Zurich, Geneva, Amsterdam, London, Berlin, Malta, Tallinn, & Liechtenstein. And for good reason.
Now, More Than The Best Mail Box Address
When I first visited Zug in 2013 it would be fair to say that its reputation was that of the place you set up a mail box, a small required work desk, and hired local counsel to set up your company or foundation. Similar to the way people utilize Delaware incorporation and registered agent services in the U.S.
And that is where things started for Crypto Valley. After a global search for friendly places to set up, the Ethereum Foundation selected Zug, Switzerland and began holding their board meetings there. As many of the Ethereum developers were based in Europe, more developers started living and working out of the Ethereum office in Zug and the ecosystem began to grow as other projects also selected Zug and began moving staff there and holding regular events there.
Foundations, Accelerators, VC’s & Exchanges
In 2019 Crypto Valley has developed a great deal and moved past being only a place to incorporate your project, into the ideal place to fund and accelerate your growth and even get your project listed on exchanges.
Key to this evolution has been the addition of blockchain focused accelerators, digital asset exchanges and investors flocking to Switzerland. For Example Crypto Valley Venture Capital. CV VC’s first batch of 12 startups graduated on July 4th 2019 from their dedicated blockchain accelerator located at the heart of Zug. CV VC has opened a huge new office space for co-working and their accelerator focuses on blockchain & crypto technology, making it easy for a startup founder to set up their first office in Crypto Valley.
The second important launch in the summer of 2019 has been that of Smart Valor’s crypto exchange and soon to be security token marketplace. Leveraging the friendly regulations in Switzerland and near by Liechtenstein Smart Valor will be one of the first exchanges in the world that will be able to list the full variety of digital assets. Digital commodities, stablecoins, crypto currencies, payment tokens and even security tokens can all be listed and traded in Europe and around the world (except the US). Smart Valor’s recent equity round was led by VI Partners AG, the venture arm of Switzerland’s 10 largest corporations. That should tell you everything about the level of interest and buy in from all sectors of the Swiss economy into this new digital wave of blockchain powered transformation.
Third, global corporate and institutional focused investor groups are headed to Crypto Valley, for example the Silicon Valley Blockchain Society (SVBS) kicked off their Swiss chapter in 2019. In fact, when SVBS held their Swiss chapter launch event at the World Economic Forum in 2019, they had their largest investor turn out ever, with more than 500 investors attending their kick off in Klosters (the town next to Davos).
As of 2019, founders have the ability to go through the entire project life cycle all based out of Switzerland. From the early stages of setting up, to hiring coders to build the software, finding investors, and finally to getting their tokens or securities listed on an exchange.
Connecting The World’s Blockchain Cities
Having explored most of the world’s tech hubs, I sum up the state of blockchain as a story of North American developers, who go set up in friendly European jurisdictions, and then find their capital in Asia. And while this is certainly a simplification, it’s not far from the truth when it comes to a path to success for many projects in our industry.
Take the example of Ethereum. Vitalik started out in Toronto, bumped around SF, NYC, and other US cities while formulating Ethereum, with his kick off speech in Miami in January of 2014. Soon after experienced counsel convinced him to set up the Ethereum Foundation in Zug, Switzerland, and it was only after great review and a lot of legal bills did they even decide to allow US participates into the Ethereum Crowd Sale in 2014.
After a long period of development, involving engineers from around the world, but primarily North America and Europe the Ethereum Foundation and the ecosystem in general was low on capital during the crypto winter of 2014 & 2015. In order to find capital Vitalik journeyed to China in 2015 to raise funds, joining Fenbushi Capital as one of the Founding General Partners and ended up spending much of 2016 and 2017 touring over 100 cities in Asia educating developers and investors about Ethereum. This play book worked out well and is a testament to Ethereum’s founders and especially Vitalik’s being willing to go where ever was required to make their project successful.
I tell that story from the early days of Ethereum as a way of saying that Switzerland has its role, but by no means is it valuable in isolation. Crypto Valley works so well because it has easy visa free travel from the US for developers. Crypto Valley works so well because it has a friendly trade and investment relationship with the largest economies of Asia. Crypto Valley works so well because it is neutral, and while Switzerland is in Europe, it is not in the European Union. Crypto Valley works so well because it isn’t in a trade war or physical war with any nation. Crypto Valley works because its unique Canton system is highly competitive and allows for a great deal of innovation in local rule making.
Crypto Valley is in Switzerland because the history, culture, economy and its location have ideally positioned it so, and partly because the other major economies have been too slow to embrace the blockchain industry.
What About Austin?
I have a well known passion for Austin, Texas. Living there the last 7 years has been an amazing pleasure. I love Austin’s culture, music, food, friendly people and fast growing startup scene.
In fact, during 2014 in response to the New York BitLicense I put up the website MoveToAustin.io and invited Blockchain Startups to move to Texas. Since then Austin has become one of the top blockchain cities with more than 200 crypto projects based there. I firmly believe Austin is the best crypto friendly tech hub in the United States and I plan to keep a home & office there forever.
I’ll be splitting time between Zurich and Austin going forward and I plan to stay heavily involved with Factom, YGC, and all the other projects I have close relationships with, who are rooted in Austin. With this move I believe I can best serve them by connecting them to what is happening in Crypto Valley.
With all that said about Austin, today in 2019 I believe Crypto Valley to be the best place in the World for blockchain projects to launch. And as I want to maximize my positive impact on the blockchain industry, I’ve decided I need to play a bigger role at the heart of Crypto Valley.
My goal by moving to Crypto Valley is to be a bridge between Austin + Zurich + Singapore. I want to bring over the best engineers and projects in the world from North America to live and work in Crypto Valley. Similarly I want to connect the most innovative investors in the world from Asia to the best crypto projects in the world based in Switzerland.
I’ve moved a few times in a my life. I’m well aware that it is a big decision which times a lot of time and energy to execute on, but I’d argue its among the most important decisions an entrepreneur / investor makes in setting themself up for success in their industry of choice.
There is a truly once in a life time transition from the old centralized world to our new decentralized one, so I feel moving to Switzerland is the only logical course of action for me and my family.
If it was 1999 and I was building an Internet company, I’d be headed for Silicon Valley. In 2019 with building blockchain projects as my passion, it’s time to head for Crypto Valley.
See you all there my friends.
David A. Johnston