Transcript Dan Morehead

Venture Capital Will Drive Consumer Applications
BITCOIN VS. EARLY INTERNET VC INVESTMENT2
$Millions
$400
$350
$350
$300
$250
$250
$241
$200
$150
$99.5
$100
$50
$2.1
$0
2012
Bitcoin
2013
Bitcoin
2014
Bitcoin
1995
Internet
2015 YTD
Bitcoin
1 There can be no assurance that (1) future investments in Bitcoin businesses will parallel post-1995 investments in Internet companies or (2) such investments will achieve comparable returns.
2 Source: PricewaterhouseCoopers, National Venture Capital Association, CoinDesk, Dow Jones VentureSource, VentureScanner. Includes first sequence venture deals but excludes late-stage 1995
internet investments of $257.6 million.
3 As of April 05, 2015.
1
The Future of Bitcoin
“The best way to predict the future is to invent it.”
- Alan Kay, American Computer
Scientist
Venture Focus Areas:
• Mobile Money
• Cross-Border Flows
• Micropayments
2
Confidential | Not for further distribution. |
Micropayments Already In Action
:
Facebook:
Social media
giant
Slack:
Popular
collarborativ
e work
platform
Twitch:
Popular video
game
streaming
platform
3
Mobile Money:
The “Un-Landlined” Skipped Straight to Mobile Phones
ESTIMATES MOBILE PHONE USERS WORLDWIDE
Millions
4
Mobile Money:
The “Un-Banked” Going Straight to Mobile Money
5
Cross-Border Flows: Remittance
The global remittance market is over $500 billion.
International remittances cost an individual an
average of 9.2%.
6
Cross-Border Flows
Overview of the clunky correspondent banking system
The correspondent banking industry
today is exactly the way the Medicis
set it up in the 14th century.
7
Cross-Border Flows: Align Commerce
8
MoIP – Money over Internet Protocol
International calling before
VoIP was very expensive and
awkward.
Skype saw the pain
point for SMBs, and
VoIP quickly became
popular through
savings of up to 40%
on domestic calls
and up to 90% on
international ones.
Just as VoIP became popular with SMBs through cost savings and
simplicity, Bitcoin will do the same through cost savings, speed, and
transparency.
9
The Final Piece of the Protocol Puzzle
TCP
transmission
control
protocol
IP
internet
protocol
FTP
file
transfer
protocol
SMTP
HTTP
VoIP
simple mail
web
voice over
transfer
transfer
internet
protocol
protocol
protocol
RTP
TLS/SSL
BTC
real-time
transport
transport
layer
money
transfer
protocol
security
protocol
“The one thing that’s missing, but that will soon be
developed, is a reliable e-cash, a method whereby on the
Internet you can transfer funds from A to B, without A knowing
B or B knowing A.”
-Milton Friedman, 1999
10
Phases of Bitcoin Development
BITCOIN ECOSYSTEM PHASES
Phase
Era
Who/What
Use Case
Pantera
I.
2009
Early Adopters
Belief that Bitcoin is a
currency/gold 2.0
Invests in bitcoin via
the Pantera Bitcoin
Fund
II.
2013
Infrastructure
Exchanges, payment
networks, wallets
Pantera Venture Fund I
invests in Bitstamp,
Circle, Xapo, Ripple
Labs, and BitPagos.
III.
2015
Creating new use
cases
Bitcoin enabling new
participants/addressing
pain points…
micropayments, crossborder flows,
remittance, etc.
Pantera Venture Fund
II invests in ChangeTip,
BitPesa, Align
Commerce, and 21.
IV.
Next few
years
General blockchain
applications
Using Bitcoin for nonpayment applications
V.
5-10 years
Disrupting payment
oligopolies/monopol
ies
Visa/MasterCard users
have no pain. Swipe
and get “free” airline
miles.
11
Pantera BitIndex
Our view of Bitcoin’s long-term adoption potential
12
Bitcoin Adoption Metrics
Change since bitcoin price was last at
$230 /BTC
PANTERA BITINDEX CONSTITUENTS
Adoption Metric
April 2015
% Change
3,371
336,551
10,772%
1,541,772
6,765,490
339%
Merchant Adoption
12,208
38,500
215%
Developer Interest
1,868
5,528
196%
Social Media Interest
56,190
159,729
171%
Transaction Volume
54,180
105,815
95%
7,643,261
13,376,292
75%
25
21
-18%
PANTERA BITINDEX
211
422
99%
Bitcoin Price
230
230
-
Hashrate (TH/s)
User Adoption (Wallets)
Wikipedia Views
Google Searches
November 2013
13
Familiar Picture: Bitcoin Currency Market Capitalization
$Billio
12
10
8
6
4
2
0
Apr-13
Aug-13
Dec-13
Apr-14
Aug-14
Dec-14
Apr-15
14
Bitcoin Market Cap = Currency + Ecosystem
$Billio
14
Industry Market Cap (Venture Cap
+ Currency Cap)
Venture Market Cap
12
Currency Market Cap
10
8
6
4
2
0
Apr-13
Aug-13
Dec-13
Apr-14
Aug-14
Dec-14
Apr-15
15
Value Holding Steady
BITCOIN MARKET CAP = CURRENCY + ECOSYSTEM, LOG SCALE
$Billio
100.00
10.00
1.00
0.10
0.01
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
16
Equity Market Capitalization Relative to Money Supply
6
5
4
Ratio of Bitcoin Companies to
Bitcoin Currency Market
Capitaliztions
3
Ratio of U.S. Equities to U.S. M0
Market Capitalizations
2
1
0
Apr-13
Oct-13
Apr-14
Oct-14
17