Eddy Travia, the CEO of investment company, notes that we are facing an unprecedented growth of blockchain technologies – a real explosion.
Earlier, the ecosystem was developed on its own (services were created for buying, exchanging and storing cryptocurrency), now the technology penetrates into the outside world, instantly conquering new spheres. All this opens a wide range of investing opportunities. In the interview for the ICO events press service, Eddy Travia told what to be afraid of when investing in cryptocurrency, how to choose a promising project and what challenges regulation of the digital currencies and tokens market entails.
Interviewer: press service of ICO events (Press)
Speaker: Eddy Travia, CEO and Co-founder of Coinsilium (E.T.)
Press: Mr. Travia, your company (Coinsilium) has been investing into blockchain projects for over three years now. How did the market dynamics change over this period? How do you see the situation in the industry, has it grown enough?
E.T. The market has grown and changed substantially in the time that Coinsilium has been active in the space. For the first few years it was still a fairly small community and all of the innovation from startups was focused on building the basic infrastructure needed to grow bitcoin; exchanges, wallets and payments / remittances. With the recent growth of ethereum and smart contracts we have seen an explosion in innovation with virtually all imaginable sector verticals being tackled with some kind of decentralized blockchain solution.
The emergence of ICOs and token issuances has provided entrepreneurs with a quicker, cheaper and more simple method to raise funds than ever before, whilst also building their community from the investors themselves. This provides great scope for Coinsilium to use our years of industry experience and wide network to help some of the best and brightest projects grow and prosper. I would say the industry has clearly grown a lot in the last year but in terms of the big picture this is just the beginning and there is a huge amount of growth still to come.
Press: How risky are these investments currently following latest news from China and robust actions from the regulators all over the world?
E.T. As with any investment there is always a risk and people should be aware of that and do the necessary due-diligence before committing funds to anything, crypto-related or not. There has clearly been a huge rise in the value of cryptocurrencies of late and this has led to even more speculation as people look for quick profits. This is why we welcome regulation which is provided in a thoughtful and constructive manner, as it gives some guidelines to prevent foul play and ensure that growth can be achieved in the correct manner.
The nature of this technology means that no government can control it, and so I think we will see regulators having to educate themselves around blockchain technology and providing fluid guidelines which adapt as the industry develops and grows. Coinsilium is working with the government of Gibraltar to operate various blockchain services from that jurisdiction, due to the fact that they have shown a proactive attitude and willingness to offer positive regulation which can cultivate the blockchain ecosystem and allow it to prosper.
Press: What are the criteria of investment promising blockchain projects? Would they change as long as the industry and your company in particular are moving forward?
E.T. There are a few considerations we have when looking at blockchain projects. Firstly, there has to be a real use-case; some kind of real problem that is being solved or service that is being significantly improved. Secondly there has to be a real relevance for blockchain technology to exist within the project, contributing in a major way to the effectiveness or structure of the offering. In the same vein, any cryptocurrency issued or used as part of the project needs to have a real utility rather than simply being an instrument through which to raise funds for ICO event Amsterdam development of the project. Finally, we will look at the team and their experience to see if they have the necessary credentials to stand up to the challenges that will come as the project scales.
There are a lot of traditional businesses now looking to do an ICO purely to capitalize on the quick fundraising opportunities, which is why we need to establish the projects that are truly operating in the blockchain space with relevant backgrounds. Of course our investment criteria are subject to change depending on industry developments, but we expect the current trend to remain in place for quite a while now, building on the ethereum protocol and other smart-contract applications.
Press: Tell about your work with startup incubators. Do you think that young enthusiasts are capable of changing the development of the technology and turn it into mainstream?
E.T. Coinsilium owns and operates Blockchain Space which is an accelerator program that we ran in Barcelona last year, and we’re looking to extend this to various other countries in the coming months and years. There is now widespread awareness of blockchain which is attracting more and more technical people to the space and this is exactly what is required to build the industry and enable it to become mainstream.
We are particularly looking at areas such as Israel and Singapore for setting up accelerators and discovering new talents. There is absolutely scope for young developers and enthusiasts to impact the development of the technology, and we actively encourage young people to get involved in the space and try to build the applications and services of the future on the blockchain.
Press: Does Initial Coin Offering has a chance to become a major investment tool within all global jurisdictions in the future? Will it stay a half-legal tool for a quick funds raising or will it be strictly regulated, as it’s happened in the USA?
E.T. There has been around $1.8bn raised through ICO’s in the last year, so I would argue that this should already be considered a major investment tool as it has exceeded the rate of traditional Venture Capital funding and may well signal the end of traditional venture capital investments. The reason for such huge popularity in ICO’s is the ease with which they operate and the global reach to investors of all sizes. Whereas traditional investment funds are made up of a few wealthy individuals who offer support and advice, the ICO allows startups to raise money directly from people who will go on to use their product or service as customers. This is a powerful shift in the fundraising landscape, allowing new projects to build up a network effect with financial incentives from the outset.
The global, decentralized nature of blockchain technology means that it’s very difficult for a government or regulator to stop people participating in ICO’s, and in the USA we are seeing people easily circumvent the restrictions by using a VPN on their computer. We do not condone people acting in breach of their country’s law, this is simply an example of the global nature of blockchain technology which transcends control from centralized authorities. We welcome regulatory guidance on ICO’s which is why we are working with the government of Gibraltar who are developing a regulatory framework for distributed ledger technology which will be released in its first incarnation in January 2018, so we look forward to having some official guidelines within which to operate and this should give investors peace of mind that they are taking part in verified and accountable projects.
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