Video Of The Week: The Upfront Summit Crypto Video

The annual Upfront Summit took place in LA this past week. I attended day two and enjoyed it very much.

Prior to the summit, the Upfront team interviewed a bunch of investors in the crypto sector and put together this video.

I think it captures the current investor sentiment very well.


Comments (Archived):

  1. William Mougayar

    …the investment sentiment, which has almost nothing to do with what the companies are really doing, but more with what the traders/speculators are doing to the market.

    1. LE

      Short and interesting to watch so I did. Anyway my takeaway [1] was more or less that if enough money (over investment) goes into an industry [2] [3] that there will be a benefit in the end.[1] Other than seeing that has pivoted to a “new kind of social network where you earn digital currency by replying to emails and completing tasks.” which is interesting because it removes some of the psychological barriers of ‘not worth my time’ with the tendency to give more value (entertainment wise) via gambling.[2] All good things come from war, conflict and trying to avoid it.[3] Mark Suster and ‘multiple waves’ in categories. That said obviously Cable, Mobile and the Internet are vastly different than crypto and the blockchain I don’t think anyone would dispute that.

      1. Lawrence Brass

        I think that solutions that originate from the scarcity of resources are fundamentally different from the solutions originating from abundance. Not necessarily better but different. In general, solutions will work better in the same environment (scarce or abundant) where they are developed, which may be obvious.Personally, I don’t think that throwing money to problems is enough to generate optimal solutions.

        1. PhilipSugar

          My belief is that every new technology starts off with tremendous riches and excesses.I mean forever: Oil, Steel, Sears Catalog, Intel Chips, Cisco Routers, HP Computers, etc.Then the marketplace gets mature, and there are players (like me) that will wring the excesses out of that market, with communication and internationalization it has gotten even more brutal..I give Jeff Bezos ultimate credit because he does it to himself. But I find the HQ2 thing an abomination and think it should be illegal from a Federal Government point of view. States can have their own laws but the Federal Government should enforce that they are applied equally to all no different than voting. If your city wins HQ2 and you have tech people you now get to compete against a subsided opponent for talent.

          1. LE

            I tend to agree with you about the government help it’s almost like when companies here are upset because a foreign government allows overseas firms to sell for less by subsidizing them.But here’s the thing. Both of us are located in places where people don’t exactly flock to when they think ‘opportunity’. So isn’t it also possible that if Amazon decides to build in Bear Delaware then other companies follow and all the sudden it’s an employment destination and you get people applying for jobs (2nd tier) that can’t cut the mustard at Amazon? Safety companies (like safety schools). Or you can in theory lure them away from Amazon because of other incentives that Amazon can’t offer?And if Amazon locates in Philadelphia and you are located there I don’t think the critical mass is going to impact you that much you already have others you have to contend with.

          2. PhilipSugar

            Middletown, DE fastest growing suburb is what you want to compare to.Hey, I don’t mind the potato farmers that came from Long Island now grow houses and strip malls.And yes it will benefit me. But it does bother me that people spend energy getting “a better deal”Yes everybody does it but I don’t have to like it.

          3. sigmaalgebra

            “Every”?The fast Fourier transform revolutionized much of signal processing, e.g., filtering, deconvolution, molecular spectroscopy. But J. Tukey only reinvented the idea; the first case was decades before and ignored.The IBM Scientific Center in Boston had the CP67 virtual machine running on the IBM 360/67 in 1969, but IBM chose nearly to ignore virtual machine for at least 10 years and then for many more years pursued it slowly and only on their mainframes. The rest of the industry ignored virtual machine for many more years. Now virtual machine is a big deal.Object oriented software (OOP) made a big splash with C++ and Windows, but IBM had object oriented software in firmware in 1970, about 25 years before OOP caught on.Freshman calculus is a big part of education. There they teach the Riemann integral. But the Lebesque integral is no more difficult to teach and learn, is much more powerful, and was nicely in place by Borel student Lebesque in France soon after year 1900. It is also, via Kolmogorov, the foundation of “modern probability” as of year 1933 but still ignored in nearly all teaching of probability and statistics short of some rarely taken graduate courses.Currently anomaly detection for computer and network security, as in CBInsight now and DarkTrace and much more, is making a big splash. E.g., DarkTrace has equity funding from KKR, Insight, and more.But such detection is necessarily mostly an application of statistical hypothesis testing with false alarms(Type I error) and missed detections of real problems (Type II error) that goes back to K. Pearson near year 1900. The fundamental Neyman-Pearson result of the best possible test was from the late 1940s. Non-parametric tests, i.e., distribution-free, date from the 1950s or before and since then used in the social sciences. My unique work, a large collection of tests both distribution-free and multi-dimensional, was published in 1999 but so far essentially ignored.So, good work in statistical hypothesis testing has been around for a long time. But, so far, the computer security community has yet to discover statistical hypothesis testing!!!! So, the new technology of hypothesis testing of 1900, the late 1940s, the 1950s, and my work of 1999 have not taken off and then gone quiet and, instead, have just remained quiet for 20, 70, 80, 120, your choice, years. Computer security MUST embrace the technology of statistical hypothesis testing, and then it stands to make a big splash, but it will have been new for a long time before the splash.Curiously, Bradley Efron and Persi Diaconis are now both at Stanford where they might contribute to computer security, but apparently the Stanford-Berkeley RAD lab project, funded by Google, Microsoft, Sun, ignored hypothesis testing.Lesson: New technology that does get adopted and make a big splash doesn’t always get fast adoption and, instead, can sit unused or heavily neglected for decades.These are just a few examples; there are many more.

          4. Lawrence Brass

            Many of the “jobs that left the country” had a tax deal behind.

      2. William Mougayar

        yes, but the fear is that the reality doesn’t catch-up to the forward expectations. at some point in time, there will need to be more sensible correlation.

    2. JamesHRH

      But if you based it on what companies are actually doing, it would make 2000 look like Amazon 2018.

    3. jason wright

      Canada just approved its first bitcoin ETF. How do you see that shaping up?

      1. JamesHRH

        CDN government would eat their own young if it made them look progressive.Means nothing.

        1. jason wright

          Trudeau is a public relations puppet, right?From what I read CDN gov is a victim of ‘state capture’. very fashionable.

          1. JamesHRH

            That’s a fair comment, although he has a strong empathetic ability to reflect your emotional hot buttons back to you, both personally ( I assume) and to the general public.Hence, the ‘It is 2015.’ comment about why he has a gender balanced cabinet. FWIW, the physically challenged member has been dropped for sexual harassment claims, 2 of the really inexperienced women (we also have the insane term ‘visible minority’ in Canada, one qualified on that front) have been dropped due to incompetence and the Min of Defence, who is also a ‘VisiMin’ with a stirring resume, appears to be someone who overstates his role in things.To be sure, some of his old white dudes have screwed up, none moreso than the Finance Minister, but none of the experienced old white dudes have screwed up.The short answer is that he is a hands-off CEO type, surrounded by a lot of incompetence.He is one of the most deeply superficial people in public life. Famous for never passing a mirror without checking his hair – google it – and telling photographers how to frame and light him (usually, incorrectly too).He is good at building relationships but sees everything as a relationship – he is in trouble with the ethics rules – that he set up – because he took a free Xmas vacation from the Aga Khan, on his private island. His claim – we are old family friends (his Dad & Aga Khan go way back). Fact – he had not see the Aga Khan in 17 years.This week, there was an article claiming that reporters have given up asking second level questions on topics, because they know he only has top line speaking points and its a waste of time.Honestly. He’s basically a progressive Trump.

    4. awaldstein

      yes and no.If 80+% of the tokens go to zero then that same amount or more of the companies that way it is directly correlated.

  2. jason wright

    Balaji makes a good point. The first million is the hardest, and this ‘bull market’ will capitalise enough people to independently fund the next blockchain wave.

  3. JamesHRH

    Its like listening to cult members. Not a single mention of value creation.This new paradigm belief is Jonestown level stuff.I have seen only one that makes sense – complex DRM. So, thats one industry that might drive out some costs via Blockchain. Maybe.All the comments are:- next fool wave of investors (retail, institutional)- black market (regulation a major headwind, permissive states breaking the will of First World regulators – ‘come to Grenada and Blockchain Man!’- comments on mania pricing – mostly mature comments, which is likely why no one can see how insane this is.Unlike other commodity manias, Blockchain can go to zero.2018 is absolutely the year that Blockchain meets it Waterloo.

    1. Richard

      Got to love the comment “there is nothing that they (presumably US Regulators) can do”. She should give Martha Stewart/Bernie Maddoff a call.

      1. JamesHRH

        I think that comment is bang on.But, the implication of that comment is that Blockchain is never mainstream

        1. Richard

          Let’s rememner, that the start for bitcoin was to replace the dollar. So here we are in the United States with the words fiat currency currency and the benefits that come therefrom and VCs investors with the help of the media (putting profits before people) – saying fuck the current system and you’ll get rich if you do it first, using every possible psychological distoration to make it so. All done with a smile.

    2. sigmaalgebra

      SOOOO, critical!!! SOOO skeptical. REALLY hard to please. You are resisting!! You are slow to go with the flow!!! Just what is it about those pretty, little tulips you don’t like????After all, the money won’t really be lost. No one will be burning money or throwing gold into the sea. Instead, the money will just change hands!!!

    3. sigmaalgebra

      Available at Amazon Prime, just CRUCIAL for blockchain, artificial intelligence, and machine learning:https://images-na.ssl-image

    4. Fred is a despicable shill

      Fred Wilson is a despicable shill.I have not bought any crypto-junk, but when the inevitable crash comes, some irate “investors” (who are akin to gamblers) might not have warm and fuzzy feelings towards folks like Fred Wilson.According to https://history.stackexchan… the author of the following quotation is disputed. But, more or less, the following applies to this crypto-nonsense Fred Wilson is helping to foist on a gullible and greedy people.“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

      1. fredwilson

        Definition of despicable: deserving to be despised : so worthless or obnoxious as to rouse moral indignation

        1. jason wright

          which dicktionary is he using?

      2. jason wright

        if you truly believe he is “despicable” then you’ve topped out in the adjective category and left yourself with nowhere to go to describe the utterly ‘rapacious’ (my word, you can’t have it) behaviour of a whole slew of people operating in the crypto space. he’s a pro, but still a human being. be who you are, but try to ‘join in’.

      3. JamesHRH

        Come on.Fred is the exact opposite. This says a lot about you and nothing about Fred.He’s just wrong on Blockchain’s long term future while being in a position to profit at every stage.Jealous much?

    5. Sebastian Wain

      > Blockchain can go to zero.I would say this is impossible and the number is always greater than zero. There is and will be concrete utility beyond the zillion scammers out there. I always repeat the same example: I live in Buenos Aires, Argentina, one of many countries where fintech is comparable with science fiction. If I receive a wire transfer from an international customer and convert it to ARS (Argentinian pesos) the exchange rate USD/ARS will be less fair than if they send Bitcoins and we change it to ARS in a completely legal and regulated scheme by our central bank. This is not a Bitcoin endorsement, just an example people living in countries with well developed financial systems generally miss.Beyond this, we are deepliy involved on investment syndicates that the media is not covering yet. There are some of them which are securities structured in US by companies that are known to the public and find all this as a good way to raise funds.

      1. JamesHRH

        Not sure what technical advantage a Blockchain gives you here – these issues are market based.Cost of transaction not a factor in unfair exchange rates, is it?Just for fun, did you just use the word ‘concrete’ to describe a digital currency?;-)Hey, its not like my Portuguese or Spanish is any good!

        1. Sebastian Wain

          > Not sure what technical advantage a Blockchain gives you here – these issues are market based.I think what I said was clear enough: we receive more money if we transfer via BTC and converting them to ARS than receiving a wire transfer in USD and converting them to ARS. This is a real, non theoretical, benefit.> Cost of transaction not a factor in unfair exchange rates, is it?No, cost of transaction is a separated item. In this case it is unfair exchange rate.> Just for fun, did you just use the word ‘concrete’ to describe a digital currency?I used the word concrete as “existing in a material or physical form; not abstract.”.

          1. JamesHRH

            Who sends you each of those transfers? the BTC & the USD.

          2. Sebastian Wain

            Customers send either BTC or USD. When they send it via wire transfer (USD) the bank exchanges it to ARS but when they send it via Bitcoin we use a local third party exchange (Bitex) and they perform the exchange and send the money via a local bank transfer. Bitex has an exellent service for handling many of the legal aspects while our company presents all the required paperwork.

          3. JamesHRH

            So, its a cost of transaction issue, not a ‘who, the Bitex people can do something that the bank can not do!’ issue?If so, what happens when the bank cuts the price of the wire transfer?

          4. Sebastian Wain

            > So, its a cost of transaction issue, not a ‘who, the Bitex people can do something that the bank can not do!’ issue?The local banks cannot do that because they don’t have any execution capability. See next answer.> If so, what happens when the bank cuts the price of the wire transfer?If we look at Argentinian history, banks will never cut their price, they will never cut their price because they don’t have competition, and they don’t have competition because nobody is interested in competing with them or investing (big) money in the Argentinian financial sector. Instead of cutting the price they will try to attack the new incumbents and if they can’t, many of them will just die. Returning to our main topic, cryptoassets are currently solving an issue in this context. I also mentioned another use case when known companies in US are raising funds in cryptoassets and releasing tokenised securities. These examples are enough to probe the price of some cryptoasset is strictly greater than zero, and not epsilon.

          5. JamesHRH

            I bet they cut their prices.

    6. BillT

      If you don’t understand the potential behind blockchain technology and can’t see the value in crypto currency then you should ask questions and learn. A lot of people are like you, scared of the unknown and confused, some will never adjust to the changes. In 10 years time remember this reply while checking you usd savings account.

      1. JamesHRH

        Which part of your comment is most telling:- complete assumption of your superiority?- complete assumption of my ignorance? laziness? fear? stupidity?- complete avoidance of specific examples of mainstream uptake of a Blockchain offering?- complete ignorance of Warren Buffet’s IRR (the Ole Oracle of Omaha not a big tech guy, and yet…..)?Personally, I think its a poi-poi platter of all of them.In 1998, access to information, in a multitude of manners, was clearly just a question of bandwidth and tools. It was a new way of connecting people to do things they wanted to do, but could not. It drove out costs via automation and self service and it created new opportunities by connecting people from all over the planet, simply and cheaply.Amazon = Sears Roebuck catalog x 1B.Facetime = Long distance phone calls x 1B.Email = snail mail x 1M.Webs sites = publishing x 1M.Etc.The bubble was just people jumping to the end of the evolution, without taking the steps along the way. In essence, was not stupid, just stupidly early.Nothing about BlockChain is the same. What does it allow people to do that they cannot do via current web protocols? It allows anonymity (not a huge demand) and it allows transactions without a middleman (almost no demand, check out the usage of VISA, PayPal, governments & lawyers).The web had NO INCUMBENT. Blockchain has ALL THE INCUMBENTS.Incumbents are underrated.

        1. BillT

          Do you really believe you are worth of my time?

          1. JamesHRH

            Invert that statement and most of your issues in life are resolved.

    7. Donna Brewington White

      I heard a mix of skepticism, cautious optimism and uncertainty…a lot of “we don’t really know what this is yet but it’s something with tremendous potential.”Do you not see this as the edge of a frontier? Or, instead, do you see this as a precipice?

      1. jason wright

        that’s the mix that creates opportunity.

        1. JamesHRH

          See response to DBW.

          1. jason wright

            no demand for traffic demand for demand for parachutes.we just don’t yet know what demands will be created. it’s early.

          2. Donna Brewington White

            Exactly! That is what I was trying to say, in essence.

          3. JamesHRH

            But there were problems begging to be solved and they were solved with, typically, the existing model or a prior model…..and a reduction in costs &/or a increase in quality.Traffic lights replaced traffic cops. Networked lights replaced stand alone, LED bulbs replaced gas. Same model, better cost and performance.Blockchain- requires a shift to a model that has never been used in the mainstream (non-intermediated transfers, yes, I know it happens in terrorist networks but, thats my point)- does not meaningfully reduce costs (bank fees are not for transaction costs but assurance costs)- does not meaningfully improve performance (wire transfer technology may be out of date, but it is extremely secure, with the assurance of the banks involved – I think they could build an IP platform for it……that might be a BlockChain platform, but that’s not a paradigm shift)

      2. JamesHRH

        I am firmly in the Amazingly Complex Product Looking for a Problem to Solve campThe technical things that Blockchain does do not create unique capabilities.By their own admission, its biggest proponents call it A Better Mousetrap / Internet Protocols Paradigm.You can do anything today that Blockchain does, except No Middleman Tx & Anonymous Tx. No mainstream user demand exists for either.

        1. Donna Brewington White

          James, with your enormous thinking capacity and ability to sift through complexity while also applying sharp instincts, I am always interested in your perspective. You have called some things pretty spot on IMO.So I think there is a strong possibility that you may be right. But I also believe that blockchain involves a paradigm shift and that we have barely scraped the surface of its potential.

          1. JamesHRH

            That’s where the fun is. And thanks!Unfortunately, I never really wanted to be an Andy Swan trader type. There is tons of money to be made as this flares up……I just think it will flare out.Remember Y2K?

  4. Vendita Auto

    The state controlled machine that is China has IMO a unique opportunity to become the architect for new financial foundations

    1. sigmaalgebra

      “Financial” is meaningless without capital, and in China nearly all capital is held by the state, or at least that is what the state wants.

      1. Vendita Auto

        Not so but the China centric control is exactly my point. Ones personal software bias should not cloud ones judgement of the potential power play financial model, I do not say agree with me but the China centric state is in a unique position to develop an internal model that would have huge consequences globally as the modern Cyrus offers gifts of financial & technological gifts of earth and water to the third world

        1. sigmaalgebra

          Hmm …. So, China is trying the old “take over the world ploy”.

  5. Salt Shaker

    Crypto or Klepto? Seems increasingly difficult discerning what’s a prudent investment or having your pocket picked.

  6. sigmaalgebra

    Ah, it’s always easy to listen to Mark Suster:I have seen multiple ways of over investment in categories, whether it was in cable infrastructure, whether it was in mobile infrastructure, or even the Internet itself.So I think the over-investment in ICOs that are happening right now a lot of money is going to be lost. But what’s going to come behind that is a wave of innovation that will surprise us all. Well, Mark, was it really “over” investment or just poorly selected investment?Well, Mark, if you have some good ideas for “a wave of innovation”, then be not shy and let us all know!!!! Heck, let us know even if you have only some ideas for some SOURCES of innovation that would “surprise us all” or good even if we would not be surprised!Net, for good innovation, don’t wait on blockchain!!! To heck with blockchain!! To paraphrase,Blockchains? We ain’t got no blockchains. We don’t need no stinkin’ blockchains. I don’t have to show you any stinkin’ blockchains! Instead, bring forth this “surprise us all” innovation NOW!!!Mark, the research libraries of the US are a huge, mountainous continent of astounding results in math, physical, social, and medical science, engineering, and technology, and more results are arriving daily!Then just why are you assuming that “the next big thing” or a big thing at all will be based on blockchain technology?First, you are picking one little technical result out of the huge, mountainous continent. Just what makes you so impressed with that one, comparatively little result that you pick it and nearly ignore everything else?Sounds like have been taken in by the pop culture hype: So, with that hype, blockchain is the unique, one, powerful, valuable, new tool so that for any problems the old tools didn’t solve blockchain has to be the best hope and will be really good because of the huge list of so far unsolved problems?Second, you are picking the wrench before you see the nut, picking the medical procedure before you examine the patient, picking the solution before you see the problem.If you have no destination in mind, any wind will take you there. Okay, okay, I exaggerated; blockchain is not the only good, new tool. Instead there are now exactly three, good new tools — blockchain, AI (artificial intelligence), and ML (machine learning) so that for any unsolved problem the solution just MUST be one of those three so that if none of those three works then we can’t hope for a solution??? Is that the situation??Did I mention poorly selected investments?Mark, since you saw a lot of “over-investment”, here is some Project Selection and Investing 101: Pick a pair, a coordinated pair of nut and wrench, medical diagnosis and medical intervention, problem and solution.For a level 102 lesson, but it’s a judgment call, look first for the problem; see the problem from somewhere below, say, 10,000 feet up; look for a problem where the first good or a much better solution clearly should have revenue enough to make a successful business; and THEN start to look for solutions.But there is a simpler approach!!!! Just IGNORE solutions, all of them, just ignore technology and solutions!!! Gee, that’s a course Technology 101 anyone can make an A in!!!Then believe in a Markov assumption: The past and future of the business are conditionally independent given the present level of traction. So, wait for traction, significant and growing rapidly, f’get about everything before the traction, in particular f’get about any internals of the solution.So, with this Markov assumption, get to ignore blockchain, AI, ML, everything already in the research libraries, and all research now!!! A fantastic simplification!!

    1. P Donohue

      The Blockchain Technology that becomes ubiquitous will probably not be in the current configuration as currency.

      1. sigmaalgebra

        Well, IIRC, blockchain is a curious, novel, distributed, secure database. Okay. But the world is otherwise already awash in database technology where there is a lot of security. IIRC, in a sense, a blcokchain is headless, but I see that as mostly a weakness, not a strength.Blockchain is a tool available to solve problems. But I don’t see the problems that blockchain can solve that can’t be solved plenty well enough and as well or better by existing tools, e.g., data base.We don’t expect to see potential users screaming for a particular tool. Instead they would be screaming for solutions to particular problems. I don’t see the problems people are screaming to have solved where blockchain is the only, important, or better tool. Before we get excited about the tool, let’s see the pressing problems.

  7. jason wright

    I want to see the video where they discuss the future of the VC industry in the age of crowd sourced funding. Is there the faintest possibility of a blind spot in their thinking?Did I just witness the sociological phenomenon known as groupthink? No room to be ‘wrong’ in LA in seems. Back to NYC tout suite before it’s too late….and none of them are holding tokens, naturally.

  8. jason wright

    when I troop of venture capitalists go to the trouble of having a video montage put together and distributed it’s for a reason, and i don’t think the reason is that they have the wider world’s financial interests at heart. It’s a campaign to direct sentiment, influence behaviour, and ultimately to gain an advantage. they’re pros, and they keep score.

  9. JamesHRH

    Right, because he Title Companies are going to just roll over and give this up.

  10. sigmaalgebra

    So, let me get this straight: In the short term, investors lose but in the long term they win??? Is that how it goes??? Maybe a corollary is that a car dealer loses money on each car but makes it up on the volume?