Venture Capital’s Future Is In Bitcoin-Only Businesses

Mike Jarmuz, a Bitcoin Magazine contributor, stated that “the smartest people in this world are working on Bitcoin.” They’re not selling real estate in a metaverse fantasy world or working on altcoins. Your medical records will not be transferred to another thing posing as a Blockchain. These are completely absurd and uninvestable ideas. “Jarmuz is the managing partner of Lightning Ventures, an investment fund whose peculiarity lies in its focus on only companies that are developing products and services on Bitcoin and no other cryptocurrency. McShane, a Venture Partner at Lightning Ventures and an employee of BTC Inc, the company that operates Bitcoin Magazine, stated, “The 21st Century digital economy is being built upon Bitcoin-native businesses.” We invest in the best-in-class Bitcoin founders that deliver differentiated and focused value to humanity. Through Bitcoin companies that make a positive difference in the world, we are determined to return a multiple of our investors. “And Lightning Ventures is not alone, but rather part of a growing niche, that of Bitcoin-only venture capitalists (VCs).The Fall Of Crypto Hedge FundsLast year, at the height of the bull market, it was the crypto VCs who dominated the headlines, pouring over $33 billion into crypto/blockchain/Web3 projects and startups. This golden age was short-lived as the market crash this year also saw the death of many prominent hedge fund investors. Three Arrows Capital was one of these victims. They invested over $33 billion in crypto/blockchain/Web3 projects and startups last year, at the height of the bull market. However, when the bet is on projects that issue tokens out-of-the-blue, the temptation to invest in speculation is strong. This is contrary to the mindset of VCs who believe that Bitcoin will succeed over the long term. They invest in companies that are able to create real value for the market, and not just tokens that can be resold. Jarmuz stated that angel investing or early-stage Bitcoin startups are definitely not a good choice. Many ‘crypto’ projects will issue unregistered securities in exchange for equity, but they don’t always end up with quality investors. Investors tend to dump these ‘tokens’ and equity as soon as they can. Lightning Ventures’ thesis, and Bitcoin-only investments, ensures that we are fully committed to the company’s life and not just selling tokens when we can. We invest in companies and we support them throughout their entire life cycle. Christopher Calicott, Trammell Venture Partners (or TVP) is on the same page. He stated that the idea of funding projects to attract customers through the generation of tokens is not only inconsistent with the typical incentives offered by a venture capital fund, but also symptomatic that he has a short-term perspective. Calicott stated that investing in tokens is a fundamental misalignment. This is not the best way to grow the company and achieve maximum success. Investors are actually speculators who try to escape their position at the best time. “Moreover, although there was once a perception that Bitcoin was difficult to build on — and so many people moved to other cryptocurrency — today things are changing. “Bitcoin has become a platform and entrepreneurs have begun to realize this,” Calicott said. “There is blood on the streets from the crypto industry, but there are more entrepreneurs who are willing to build services using Bitcoin than ever before. We view ourselves as long-term investors. We make smart bets about companies that we believe can bring about a new global monetary order based on a solid standard: Bitcoin. “Overcoming an Obsolete SystemsA new monetary system, a global store value, and a peer-to–peer payment method that renders obsolete the big traditional players. Whatever your perspective, Bitcoin offers a vision for the future that completely challenges the paradigms we have been accustomed to: the idea that inflation is necessary for growth, the idea that central banks and states can control the economy, and the idea that savings and digital payments must be managed by intermediaries. According to Ego Capital’s website, it isn’t. According to the website of Ego Death Capital, “For a new system, to thrive, and to bring abundance, chance, and accessibility, the existing system must self-destruct.” Jeff Booth, author of “The Price of Tomorrow,” is the CEO of the VC firm. It will take a phase of self-surrender, and transition for this to happen. Nico Lechuga, Andi Pitt, general partners at Ego Death, confirm this view. They explained that the traditional system is already in danger of self-destruction. “Banking systems fail billions around the globe — it is very apparent in emerging markets, but also in Western countries. The Visa and Mastercard duopoly are holding back innovation and opportunity so that competition arises — including through Lightning Network, which provides very fast and cheap transactions — they are already in process of self-destructing. Oleg Mikhalsky, Fulgur Ventures, also sees the Lightning Network as a payments gamechanger. Lightning’s ability to settle almost instantly with very little counterparty risk is a feature that Lightning has that can reduce traditional payment overheads as well as lower counterparty risks in fiat rails. Mikhalsky stated that the digital economy must have a native currency with two key features: speed and the ability to make microtransactions. We believe that Lightning and Bitcoin will be the global monetary and payments standards. We are still exploring some aspects of the Lightning Network adoption range: we see some adoptions in video games and digital content monetisation. But there are also other use cases like machine-to-machine payment and micro-transactions to energy. “More and More Bitcoin-Only Startups” Despite what some might think, the world of Bitcoin only startups has seen a lot of growth in an area that was hit hard by the market crash. All VCs surveyed confirmed that the number of companies that are solely focused on Bitcoin has increased significantly in the past year. It is possible to believe that entrepreneurs realized that the Pandora’s Box of the crypto world was opened when they discovered that bitcoin was the only technology that could be used to purchase and sell it. He explained that it is safer to invest in Bitcoin-only startups rather than in crypto startups. Investors see Bitcoin-focused businesses as more profitable and more sustainable. We are 100% aligned with Bitcoin-only VCs. They can see the future in 10+ years. They understand where we are going. They also know that all the experiments on other blockchains will eventually end up on Bitcoin. Federico Rivi contributed this guest post. These opinions are not necessarily those of BTC Inc.

 

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