Investor Lou Kerner: There’s More than One Reason to be Excited about the Next Era of Crypto
(This is Part I or a two-part interview.)
Lou Kerner is the founder of Crypto Oracle and an accomplished venture capitalist. He has been extremely active on the American and Israeli startup fronts and threw his hat into the crypto ring just over a year ago. We picked his brain for thoughts on the current industry and where people can improve their knowledge of blockchain.
Lou is sharp, and is in anything but a malaise over the crypto market. In fact, he thinks blockchain — also known as distributed ledger technology (DLT) — holds more promise than the internet.
“When the internet happened, there were certainly lots of smart people who went into it, but people weren’t leaving Goldman Sachs and McKinsey to start internet companies in ’94, ’95, and ’96. That’s what’s happening now.”
“The quality of people — literally the smartest people in the world — that’s what gives me as much confidence as anything.”
The Market Is Going Global
Lou just returned from Israel, where he met with new blockchain and crypto projects, just the latest in his years as an avid investor on the Israeli startup scene.
“I met with a wide variety of Israeli crypto companies (e.g. QEDit, Orbs, DAOstack, Coinmamma, etc.) providing both consumer and enterprise crypto applications. Most of my meeting were the third, fourth, or fifth time I’ve spoken with these entrepreneurs. I’ve watched their progress, and the progress of the entire ecosystem. It’s all very exciting.”
Kerner has his eyes on the entire global blockchain economy. Seeing the the ecosystem between Tel Aviv and Jerusalem and Berlin, which is “emerging as a hub” as just a few nodes in a multi-polar, global crypto economy.
The Next Frontier
The market is also just taking off for certain applications of this new kind of currency, which should rekindle some hype around the technology.
“I’m particularly excited by security tokens. The idea of innovating around what a security is, is one of the things that’s frankly not enough people are talking about. It will inform us on what a security really is, thanks to the digitization of securities and fitting more on smart contracts. We’re only limited now by our imagination.”
Doubts about tokenization don’t enter into the equation for securities. Their trade can only be made easier through cryptographic trades.
“I’m excited about the opportunity to raise large amounts of capital on a global basis in a short period of time. I’m excited about the trillions of dollars of privately held assets that will become liquid in the coming years. But what I’m most excited about, is the innovation about to come to securities as they become digitized, with smart contracts on top. We’re only limited by our imagination.
Optimism Abounds
He is an optimist on blockchain and crypto, despite the industry’s down year, and he has plenty of reasoning to back it up. Back in January, he told CNBC that any new asset would have some volatility.
“Blockchain is waiting for this its ‘Lazy Sunday’ moment, the video that when it was uploaded on YouTube really made that site take off. Now look where YouTube is.”
But despite a slew of headlines about new projects from banks to credit card companies, the hype is still waning. Kerner says that’s fine, because we’re merely on the dawn of something new.
“I’m more sanguine than most. It’s going to get there by going through bubbles and crashes. They all seem epic, but here we are 20 years later and no one is talking about the internet crash of 2000; or the financial crisis 2008 for that matter.”
“These things happen in cycles. Bubbles. Crashes. Bubbles. I have a word for that. I call that ‘capitalism.’”
All things considered, that doesn’t mean governments shouldn’t have figured out their policies toward cryptocurrency offerings already. In the short term, uncertainty is still the reason the ICO market and blockchain hype have both died down.
“The sooner we get a better regulatory environment, the better, but I’m not looking for anything in particular right now. ‘What’s gonna make crypto primetime?’ The truth is, nobody knows. But there are so many brilliant people leaving places like Goldman Sachs and McKinsey and developing these great projects. It’s just a matter of time.”
Although blockchain products are still in their infancy compared to the storefronts that dominated the dot-com boom, there is a key advantage that Kerner says will give DLT a much bigger boost later.
“In our view, we have these four technologies — blockchain, cryptocurrency, smart contracts, and zero-knowledge proof — in combination, a new computing paradigm allowing all sorts of new business processes. We’re really focused on where the industry is going to be in 20 years. There are nothing but a bunch of crumbs today.”
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