Hash Power Ep.2 - Investing in Cryptocurrencies [Invest Like the Best, Replay]

Today we are re-sharing our Hash Power documentary. This series was originally released in September 2017 when 1 Bitcoin hovered around $4000 US Dollars. While so much has changed in the years since - these episodes are a great introduction to the technology, the power of decentralization, Bitcoin, Ethereum, ICO's, cryptography, and hashing. You will hear from a variety of industry experts throughout these episodes - please enjoy.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

 

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Original Intro (10.03.17)

 

In episode 1 of Hash Power, we explored blockchains as a technology—how they work, why tokens (also known as cryptocurrencies) are an integral part of any blockchain, and how these new networks might change the world. In episode two, we spend time with the leading investors in the field. Like any frenzied asset class, there are countless cryptocurrency hedge funds popping up everywhere. But founders from three of the original firms—Polychain, Metastable, and Blocktower Capital—are our primary guides this week.

As I speak, the total market cap of all cryptocurrencies is $136B. There are hundreds of tokens currently available, but bitcoin and Ethereum represent 75% of the total market cap. $136B sounds like a big number, but its tiny relative to any other asset class—and I use that term with hesitation. To put it in perspective, that’s exactly the same size as the market cap of IBM. But IBM had more than $10B of earnings in 2016. Tokens have none. As you will hear, valuing tokens is a very hard exercise.

In such a nascent world, we are seeing investing strategies take hold. Olaf Carlson-Wee, Josh Seims, and Ari Paul walk us through different takes on cryptocurrency investing, be it early stage, long term buy and hold, or more hedge fund style strategies.

 

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Show Notes:

[00:00:05] – Recap of part 1 and introduction to part 2 of Hash Power

[00:02:58] – Ari Paul, CIO of Blocktower explains how he got involved in cryptocurrencies

[00:05:23] – Why do we need bitcoin

[00:07:23] – Polychain Capital founder Olaf Carlson-Wee on why the value of tokens accrue

[00:09:23] – How mainstream money is getting into this space

[00:12:26] – Useful comparisons when talking about ICOs when compared to IPOs

[00:15:01] – Naval Ravikant, CEO of Angellist, is asked to explain the protocols of cryptocurrencies to platform businesses like Uber or Airbnb

[00:20:25] – What are the most compelling counter-arguments to using cryptocurrencies

[00:23:07] – Olaf Carlson Wee on the lifecycle of a token

[00:25:31] – What is the earliest stage that edge is most present for investors in cryptocurrency protocols

[00:28:12] – How do you mitigate the volatility that is present in blockchain

[00:31:18] – Jeremiah Lowin, a risk and statistics expert, who runs risk management for a large private family office, talks about why he no longer owns cryptocurrencies

[00:34:19] – Jordan Cooper, a venture capital investor, is optimistic about blockchains in general, but thinks there may be some overvaluations in current currencies

[00:43:52] – Josh Seims, of Metastable, the value investor in blockchain?

[00:51:15] – Ari Paul on the equivalent of listed stocks in the cryptocurrency world

[00:55:07] – The fairground analogy to understand cryptocurrencies

[01:02:48] – Where do family offices stand when it comes to jumping into this space

[01:06:51] – Ari is asked to discuss some of the alternative cryptocurrencies

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