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Thrive is set up by Funding London, a venture capital company bridging the finance gap for early stage businesses based in London. With over a decade’s experience in supporting the startups of London through a variety of funding vehicles, Funding London sensed a need to illuminate the ever-evolving scenario of London’s early stage businesses.

Thrive features interviews with and opinion from budding entrepreneurs, investors and industry experts. A mix of contributors from all areas of the industry is desired in order to spark genuine discussion about ongoing critical issues. While it showcases the effectiveness of successful ventures, it also encourages sharing lessons learned from missteps and unsuccessful projects.

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It was at that point I realised that the world had changed, and for the better!

About

Chair of the newly funded Greater London Investment Fund, David is an experienced Founder, Board Director and Chairman with a demonstrated history of working in the VC, Public & Private Equity, Digital and Marketing Industries . Skilled in Strategy, Business Planning, Executive Coaching, Blockchain, Business Tokenization, Fund-raising, Digital & Integrated Marketing, and E-commerce. A strong entrepreneurial professional with an excellent record of delivering exceptional results.

3 September 2018

You are a serial Founder, Board Director and Chairman. How did you get involved in Blockchain?

I did a degree in Computer Science in the 1980s. Back then we studied something called ‘a linked list’ which was an early form of database.  All Blockchain is, is an encrypted linked list with security features. So when Blockchain appeared, it made a lot of sense to me and I viewed it as a remarketing of a true simplistic database within a secure networked environment. Blockchain, as with many things, has been an evolution rather than a revolution.

In terms of crypto, it is a far more amusing story.  It started when I arrived at an Old Street coffee shop and they accepted bitcoin!   So, I thought, if it’s going to get consumerised then I’ve really got to get into crypto. I went online and bought some bitcoin (£135) and a few weeks later went back to the coffee shop.  However, they had stopped accepting bitcoin as no one was using it. I ignored Bitcoin for 2 years until I realised my £135 had turned into £1,000. That’s when I really started to get seriously involved in crypto. I got involved in a prospective ICO about 2 years ago, which came to market in May 2017. Over a remarkable period of 48hrs we raised $18.5m (while still in Private Sale mode) and it was at that point I realised that the world had changed, and for the better.

In your opinion, should all countries adopt a regulatory framework for blockchain?

Firstly there are some built in self-regulatory rules around the crypto space. By definition it works on a contention/resolution basis as they need more than 50% of people to vote for a change in the firmly defined hard coded rules.  Secondly, every transaction within most blockchains are traceable. By definition, blockchain transactions are immutable, i.e. not changeable and auditable, that is what makes it unique..

There is a need for certain regulation frameworks when it comes to blockchain interacting with money. In all areas of finance and business there is regulation and the real question is how light that regulatory touch should be.  There are some leaders in the space and certain followers, but there’s no question that every financial regulator is looking to regulation and how impactful that regulation should be.

How does Blockchain offer an opportunity for anti-money laundering prevention?

There was this great belief that investments in blockchain through ICOs can be anonymous.  That really isn’t the case, as an investment can be traced from the source IP address of an investor to their wallet.  Where the anonymity comes in, is linking the actual business/person to a specific wallet.  However, it won’t take long for the relevant tools to come out which can trace all transactions.

Blockchain in reality is a foolish place to do anything inappropriate. We are now seeing traditional banks transitioning/moving large sums of money on public and private blockchains due to the immutability and safety and in terms of money laundering they are totally capable of ensuring the correct checks are in place. I do believe that in time it will become a key focus for law enforcement both nationally and internationally, and those that have done wrong will be caught far more easily than in a cash economy.

How can we fully utilise the advantages of blockchain for the start-up community?

Full utilisation will cause challenges.  As time progresses, blockchain protocol will start to infuse itself into many areas. It doesn’t mean however, that we will be aware we are using it.  We may be filling out a form for a bank and the fact that goes on the block chain rather than a banks database is irrelevant.   It is exactly the same as when internet 1.0 was being developed.  The reality is, that in time we will all be using the blockchain and most of us won’t even realise it.

In your opinion what is the current state of crypto markets?

A lot of people would like to try and relate the crypto markets to many other successes of the past.  I prefer to relate it to the 80s and90s internet market when we found phenomenal wins were rare and a lot of the companies did not survive.  What we have already seen is the large bubble towards the end of 2017 and the crash in the first half of 2018.  When we reach the bottom, we will then see a steadier increase of a rational market, and several success stories will emerge. Over time (as with the web) there will be more rapid rises and consequently more crashes. Due to the immaturity of this market there is bound to be an unstable future for a while.

Why is the blockchain of interest to both start-ups and investors?

Clearly there is massive opportunity. There are many investors staying away because they just don’t understand it. When should people invest is something to be debated.   It’s inherent on anyone who is looking to invest to get expert knowledge and not simply ask others opinion for the next big crypto win.  This just creates hype with investors following each other. There are great opportunities out there, but you do need to do your due diligence.

Can you explain why we are now starting to see rollouts of real world solutions?

A lot people would say we are not seeing rollouts of real world solutions, but the reality is that quietly and slowly we are. Last year we saw investments in hope, this year we are starting to see people invest in the real world with real opportunities occurring.  I often point people to a HSBC transaction regarding international letters of credit. It used to take 2 weeks and now, using the blockchain it only takes half a day. De Beers have released a solution to track diamonds from the specific diamond mine to your finger. We are seeing phenomenal savings in the trustless economy through the use of blockchain and beginning to see real benefits accruing by those using it.

Who are the top companies in blockchain at the moment?

You could say that the most successful blockchain businesses are not really businesses they are Foundations.  Because we are talking networked economies, the most successful are the most decentralised.  In other words, ownership is held by the users of the system through use of tokens rather than equity per se and in reality they are the owners.

What makes it particularly interesting, is the fact that this is a networked world with networked ownership, and as such the value is democratically distributed. There are other incredibly successful mining companies, people that are mining cryptocurrencies, who are very wealthy too.  But the reality is that as time progresses we will see more success in a distributed manner, as historically seen by shareholders in a private company.  Clearly some of the winners have been speculators but I think we are going to see far more distributed wealth moving forwards.

Where does the UK and London fit in with Blockchain and Crypto?

The UK was really very slow to adopt blockchain, partly because of Brexit and partly due to a lot of our financial regulatory minds focused on preservation of the current system in a time of significant change. Quite interestingly, in the last couple of months we have started to see the bank of England and central government loosen their reigns and consequently great developments are happening within the UK.  London being the centre of the global financial market, has a unique opportunity to take advantage of blockchain within finance, insurance and pensions. So, I think it is time for London and the UK to step forward and take a leading position in the blockchain and cryptocurrency world.

We saw the House of Commons put together a select committee looking at exactly this and we are still awaiting the results. I guess we are all hoping they will make the right decisions around regulatory activity and put in place systems encouraging entrepreneurs to stay. London could really become a world leader in this space and this in turn can counteract the negative effects of Brexit for the economy.