In the blockchain world, we often see breakthroughs achieved in Asia and North America, compared with Europe, which is more low-key.
The town of Zug in Switzerland is known as the "crypto valley" and is the cradle of a large number of blockchain and cryptocurrency companies. The Libra Association is also registered in Switzerland. But other than that, the entire Europe does not seem to occupy a favorable terrain on the blockchain landscape.
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(Jamie Burke, Founder and CEO of Outlier Ventures (middle))
The meeting with Jamie Burke, founder and CEO of Outlier Ventures, gave us a deep understanding of the development of the European blockchain ecosystem. At the same time, he also analyzed the new trends of blockchain in the future from the perspective of investment institutions, and the question that everyone is most concerned about: Is the institutional investor coming?
Who is Outlier Ventures?
As the first blockchain investment company in Europe, Outlier Ventures has been established for 6 years. Outlier Ventures currently has two businesses: Base Camp and Growth Camp. The former is an accelerator and the latter is suitable for projects that plan to sell tokens or launch testnets and mainnets.
Jamie told Babbitt that they proposed the convergence theory as early as 2016, which is to create a new Internet through the combination of the Internet of Things, blockchain and artificial intelligence (AI).
"The common theme of many of our investments is data. It is clear that the Internet of Things generates data; blockchain organizes data; AI consumes data. We call it the new data economy. Digital currencies are just blockchain technology used to redesign and Configure a small part of the Internet. "
On the website of Outlier Ventures, there is an investment layout diagram covering the five levels of hardware, distribution, routing, verification, interface, and application. It plans to invest in projects in each of these five levels to create a complete "New Internet" ecology.
(Outlier Ventures investment layout map)
Jamie also revealed that Outlier Ventures, which had previously focused on the European market, now plans to build a bridge between Europe and China on blockchain project investment and incubation.
Last month, Outlier Ventures invested in its first Chinese project, Sperax. Focusing on the hardware layer, Sperax is a new consensus innovation that guarantees network security through hardware. It is worth noting that Sperax is also supported by National Science Holdings (CASH). The latter is a state-owned enterprise and a major shareholder of Lenovo.
Blockchain + AI = Economic Explosion
Jamie said that today's Internet members are more devices than people. The number of mobile phones and IoT devices has far exceeded users, and half of the traffic on the network comes from robots.
"The problem with humans is lack of logic and irrationality. So if you want to coordinate an economy, you have to find ways to get people to do the right thing. But inevitably, people are either too stupid to be Make the right choice or simply don't want to do the right thing at all. "
In other words, machines are rational compared to humans. Jamie said that the crypto assets on the chain can be used as a reward to coordinate the operation between machines: efficient operations can get rewards; malicious activities must pay high costs. The importance of blockchain is that it can remove the cost of trust, and AI can help us do the right thing. Therefore, Jamie believes that blockchain + AI will have a significant impact on economic growth.
Develop blockchain ecology, Europe has advantages
Unlike the United States, we know from Jamie's mouth that Europe has a very positive attitude towards cryptocurrencies and blockchain, and has a very competitive advantage for three reasons.
First, Europe is plagued by the "invasion" of American technology. While companies such as Google, Facebook and Uber are aggressively making inroads into the European market, they do not respect the laws and data privacy here. Therefore, Europe sees blockchain as an opportunity to create a new Internet, and digital assets may be an important part of it.
Second, Europe, and especially the United Kingdom, has always led the way in fintech innovation. Taking crowdfunding as an example, the United Kingdom was the first country to conduct equity crowdfunding online and the first country in Europe to provide online lending. And Jamie said that the US has only recently begun to popularize online crowdfunding.
In addition, Europe has very strong academic institutions. Tim Berners-lee, the inventor of the World Wide Web, is from the UK, Linus Benedict Torvalds, the founder of Linux, is from Finland … Europe also has a long history of open source technology.
Last week, news from Germany broke the circle of friends. German regulators have announced that all German commercial banks can hold and sell cryptocurrencies. According to Jamie, this once again shows the strength of the European market. In contrast, the United States has become increasingly conservative.
European VC has a bug
However, there has always been a problem for European venture capital institutions: that is, the scale of venture capital is significantly smaller than that of the US. Many local projects will choose early financing in Europe, but when they need to expand, they have to move to Silicon Valley.
As a result, Jamie said that European VCs have a bad habit, and they always look for technological trends from the United States.
With the increasingly strict US regulatory policies, the survival space of the token project is also getting smaller and smaller. Such projects cannot find funding in the United States, so they can only choose to stay in Europe for equity fundraising. However, many VCs in Europe do not like the token project and will require the release of the token to be postponed. Jamie said that they are one of the few VCs who want technology to be open source and to see technology tokenization because they think this is an important innovation.
Where is the next blockchain unicorn?
In the 10 years since the birth of Bitcoin, we have seen more valuation explosions by exchanges, wallets and mining companies. So in what areas can we find blockchain unicorns in the future?
The answer given by Jamie is that the next "unicorn" will be companies that help developers and entrepreneurs to really use the blockchain protocol.
Jamie tells us that currently, less than 1% of code activity on GitHub is related to the blockchain. 99% of developers don't care, don't understand, or don't use blockchain. this is a big problem. If even developers do n’t use blockchain, how can it be universal?
"Just like the relationship between Red Hat and Linux, Linux was established with Red Hat to allow enterprise customers or developers to use open source Linux. I think projects like this, as long as they can scale up, will bring practical benefits to these protocols. Requirements so that you can start building interesting applications on top of it. Because we found that entrepreneurs have two problems, they do n’t care which technology they use, they just want to do their own business. ”
Industrial blockchain we did 6 years ago
When it comes to industrial blockchains, Jamie resonates. He said:
"We have been investing in industrial blockchain for 6 years. We are merchants, we are not liberals, and for us, cryptocurrencies have nothing to do with politics, it is a business."
He believes that blockchain can have a positive social impact. Currently, they are actively communicating with European governments and large enterprises to cooperate on the understanding and application of blockchain technology, including SAP, Bosh, Siemens, Daimler and Volkswagen. In addition, they are cooperating with smart city projects in Dubai.
"So I'm glad to see that blockchain in China is more than just digital currency, not just speculation, but can have a social impact."
Institutional investors will come, but not the way you want
Jamie said that the main source of funding for the current blockchain market is retail investors, developers, and a small group of venture capitalists who understand the technology. But the funds they have provided have reached the ceiling and there will not be much growth.
Institutional investors will enter the market as providers of new funds. But unlike many people's expectations, Jamie believes that institutional investors will not directly buy cryptocurrencies such as Bitcoin and Ethereum. In the future, digital goods and indexes will be an important entrance for institutional funds.
Digital assets are digital commodities, and investment methods are similar to traditional commodity markets. In the current commodity market, people will guess the market demand for new cars, and analyze the demand for auxiliary products such as metals, oil and tires. Jamie said that in the future, there will be more complex capital markets, predicting whether the medical industry will use events such as Ethereum.
As for the index, it is the pricing of data, which will bring trillions of dollars into this field in the future. The index can combine multiple blockchain assets (such as DeFi) to allow investors to invest in multiple assets, but at the same time save the trouble of holding cryptocurrencies.
"This is called passive investment, not active investment, and this is an important trend. Even the broader capital market is undergoing such a transition from active asset management to passive management. Active management models like hedge funds The scale is shrinking. The index is growing. Therefore, I believe that the trend facing the index will be applied to cryptocurrencies. "
Looking forward to 2020: the spring of competing coins will not come again
Jamie believes that in 2019 we have stepped out of the "trough of disillusionment" and are moving towards the "efficient production" stage.
During the ICO frenzy, everyone was crazy. Everyone knows that blockchain is important, but they don't know how to price. Obviously, during that time, all kinds of crypto assets were overvalued, so they have now experienced a callback.
There are still many people looking forward to the spring of competing coins again, but Jamie said that this is impossible.
"We now have a new face, a face about blockchain applications. I think-whether you like it or not, the advent of digital currencies like Facebook Libra and the People's Bank of China means everyone realizes its importance. So I'm optimistic about 2020. "