Tim and Adam Draper Bitcoin today | Blockchain: Out of the Labs

With that, let's give them a round of applause and invite both of them up on stage.

We're also related. Not sure if that was clear. Yeah.

So thanks, Andy. This is terrific.

Thank you all for coming.

So good. You're all interested in new fintech Mm-hmm. Technologies, new things that are happening out there. I'll give a little overview and then I'll ask Adam some questions and then we can roll it. The overview is I'm always looking for industries where customers are getting bad service at a high cost. And that has been the case in finance for many years. From investment banks to banks to venture capital, we are all charging super high prices for pretty much bad service. It's true in a lot of other industries too. We're actually looking for companies in healthcare because that's also a place where you get bad service at a high cost. We're really interested in insurance, bad service at a high cost. We're interested in real estate, bad service at a high cost. And we're interested in GovTech because that's where you get the worst service at the highest cost. So that was the beginning of me thinking about FinTech. And when some of these new technologies came along, I saw that the whole, the whole, playground, the whole platform, was going to be completely transformed. And Adam and I together were both involved in something called Expert Financial. Started as called Exchange, but the SEC said anything called Exchange we have to regulate, so— Oh, whoa, whoa, whoa. Don't want to do that. And what we thought was that Since Sarbanes-Oxley happened and all those regulations happened to financial companies, it made it almost impossible for a company worth $50, $100, $200 million to go public. It was starting— it was looking like it was going to cost $5 million a year just to comply.

And still does. Still does.

In fact, it's gone up because the regulators just keep coming up with new things that they want to poke you with if you're public. And so now we have this huge— it's like a bottleneck. All of these companies that have gotten to be worth $100 million should be starting to get more liquidity so the entrepreneur can get out. So that the investor can return the money to his investors, his or her investors.

By the way, I should say that my dad was so committed to Expert Financial that he got his Series 63, which is the broker-dealer test to be able to actually make these transactions happen. So—

Just barely passed. Yeah, a lot of studying and just barely passed. And the things you learn, are completely unnecessary for the rest of your life, just so you know.

Yeah.

Pretty much none of it will ever be used. I have never tapped into that part of my brain since. So '76, you needed a 70 to pass '76. I always feel like I probably put an extra hour in that I didn't need to put in. So we worked on that, and then all these other things started to happen. These accelerators like Boost are going to change the nature of venture capital. The crowdfunding, AngelList, the new platforms are going to change things. They worked on these Title I, II, and III of the JOBS Act, and the regulators pretty much made those things completely useless.

Yeah.

But other countries have lit up on those, and those have— so for instance, London is being very active on saying, sure, we'll allow crowdfunding for anybody. Estonia is making everything digital and very efficient. I know Singapore's SEC and stock market are being very active on encouraging private— a private market that's tradable. We have backed now a number of companies. I think Andy said 50 or something. I think it's probably more closer to 100 companies, everything from crowdfunding companies to electronic share companies, eShares and Capshare. To the crowdfunding companies, AngelList, CrowdCube, Funders Club, Crowdfund, Crowdfunder. Anyway, we backed a bunch of these because we think this is the new wave. Interesting things are happening. And then Bitcoin came, and what that did was that That brought us a technology that was potentially as powerful for fintech as the internet was for information. And we started to get very interested and very active in Bitcoin, did a whole number of different things. I won the auction. By the way, when you win an auction, it's like, whoa. I paid more than anyone else. Didn't look too smart there for a couple of years, but it's come back. Then, but Bitcoin has allowed us to use a currency that now makes it so that we are more liquid. Liquidity turns out to be one of those things, it's like this weird financial term nobody really thinks about, It is the equivalent of wealth. Because imagine you're somebody and you've got, you got a house and you're starving, but you can't sell the house because you're— it's illiquid. It's out in the boonies and it's illiquid, but it might be worth $10 million. You can't seem to find a buyer for it, but you're starving. And somebody else has $1 billion worth of Uber stock. And, and they're starving and they can't get liquid in their Uber stock. And then somebody else has this huge farm and they've got so much food, but, uh, but they have no housing.

No Uber stock.

Um, if the 3 of you can't get together because of some regulation that says, you know, the farmer can't talk to the Uber guy or the Uber guy can't talk to the housing guy, You're poor. All 3 of you are poor. Dirt poor. But if there's liquidity, you're rich. You're all rich. And, uh, and so liquidity turns out to be really important. Bitcoin has allowed much better liquidity throughout the world. You're not tied to one fiat currency. You can move it across borders very quickly. It moves much faster. You don't have to have some physical item to move it, and it is really quite an extraordinary thing. So that's where we are today. Now we're getting into Bitcoin and the blockchain and all these, these new ICOs. All these new things are happening. And now we're getting into the blockchain.