Blockchain Capital’s Spencer Bogart: A Bold Outlook for 2020

Host Tom Shaughnessy talks to Spencer Bogart, general partner with Blockchain Capital. Spencer discusses the current state of crypto, his predictions for its future, and more.

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Key Points:

1. Crypto is becoming increasingly relevant to global macroeconomics.
2. It’s difficult to pinpoint exactly where in the crypto development arc we are, so some believe it’s growing more slowly than expected and others believe it’s moving faster.
3. There is an overall shift in crypto from horizontal competition to vertical construction.

Episode Highlights

• Blockchain Capital has over 300 million assets and 80 portfolio companies.
• Spencer got into crypto after buying some Bitcoin, which led to him getting more and more interested and eventually writing some research pieces on the crypto space.
• Bitcoin is just starting to become relevant on a macroeconomic scale.
• Political unrest globally could be a driver towards crypto to avoid government regulation and interference.
• Technological developments and the best tech are not what establish standards.
• Spencer predicts that rather than a new protocol launching and becoming number one, more success and better standards will be established by people building on top of existing protocols.
• People will build for the chains that have the most end-users, and those options are Bitcoin and Ethereum.
• Now that it has become easier to build up the stack, Spencer predicts we will see more innovative and creative solutions.
• Tom thinks given new involvement in crypto from China, Facebook, and other places, that we’re maybe moving slower than expected, but Spencer disagrees.
• Spencer points out that asset value is not the only way to assess a crypto’s success, but that you can also look at the transaction value.
• Spencer suggests when pitching to a VC, don’t overrepresent what you’re doing.
• Be cautious about assuming that what you see online, on crypto Twitter for example, is representative of everything that’s going on in the industry; some of the most knowledgeable and impactful people aren’t on crypto Twitter because they’re too busy building.
• Spencer’s long-term view of the industry is that there’s an overall shift from horizontal competition to vertical construction.
• Bitcoin probably does not need vertical construction to grow because it is focused on a specific market and specific use cases.

Quotes

• “Keep in mind that any kind of venture investor that you’re going to go and talk to, they just see a lot of opportunities, so they’re looking for reasons—as much as they’re looking for reasons to invest in something, they’re also looking for reasons not to invest.” –Spencer Bogart

• “It’s only because of fee pressure that we started to get innovations on things like lightning. So the other option would have been to increase the block size to try to keep transaction fees low, but the reality is there’s unbounded demand for cheap block space.” –Spencer Bogart

• “We’re seeing a shakeout in terms of trying to establish standards. So I think these standards are trying to basically create the foundation for programmable assets. And standards are almost never set by best tech.” –Spen