The Week In Bitcoin - Issue #62: Aussie VCs Continue To Ignore Blockchain Startups

Aussie VCs Continue To Ignore Blockchain StartupsIf you ask a VC for their top 3 hottest verticals in
The Week In Bitcoin
The Week In Bitcoin - Issue #62: Aussie VCs Continue To Ignore Blockchain Startups
By The Week In Bitcoin • Issue #4
Aussie VCs Continue To Ignore Blockchain Startups
If you ask a VC for their top 3 hottest verticals in fintech it’s likely that most will come back with blockchain tech very high up on their list. Unsurprisingly, VC investment in digital currency and blockchain startups has reflected this. Since 2012 over a billion dollars has been poured into the sector with most funding coming from U.S. based VC funds (and large international corporates).
However, when you drill down into the data it’s very interesting to see that in spite of Australia being the home of some of the most profitable banks in the world (where most think blockchain tech will ultimately be most disruptive) almost no investments have been made by Aussie based VC funds into Australian digital currency and/or blockchain startups. This is in spite of a record year in terms of money raised by the industry and every major bank experimenting with blockchain technology.
Being based in Australia this really stands out as a strange data point. Having spoken to a number of Aussie VCs about the industry many are very quick to espouse how disruptive blockchain technology will be across a variety of sectors. Yet almost none have put their money to work in this space. When you drill down and actually ask why this is the case the answers end up being extremely generic - “We just haven’t met the right company/founders”
In my opinion, if this is your response your fund has a deal flow problem. The reality is that there are a number of amazing Australian (not to mention international) digital currency and blockchain companies who are building some great tech and getting real traction.
Given the fertile breeding ground for blockchain companies in Australia (i.e. a solid regulatory backdrop, many corporate customers and amazing talent) if you’re not investing in the industry now you’re missing the boat on what might end up being the most important vertical in fintech. 
While for Aussie blockchain tech startups the lesson here is don’t pitch Aussie VCs - their wallets are slammed shut. 
P.S - If you’re an Aussie VC (I know a number of you subscribe to this newsletter) feel free to ping me on Twitter if I’ve got anything wrong or if I’m missing something. I’m always happy to be corrected.
— Alan Tsen, @alantsen 👊💯
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News This Week
It’s strange to hear chief executives pour cold water on technologies that are at the heart of their own companies. Yet that’s what Adam Ludwin, who is the CEO of blockchain company Chain, did when I met with him this month.
Digital currency may be the most effective way the world has ever seen to increase economic freedom.
An anonymous cryptographer, who refers to himself as Harry Potter’s mortal enemy Voldemort, may have come up with a solution to address two of the biggest issues holding bitcoin back—and the community is beginning to take it seriously.
Forget bitcoin. There’s a new digital currency that is surging as online drug-dealers begin adopting it to conduct business with more anonymity.
People hold up blockchain as the answer to many security issues, including Swift-related hacks and card-not-present fraud. But distributed ledgers have vulnerabilities, too.
Remember Windows Vista? The new Coke? An upgrade is not always a good thing until it is a good thing. Yet, without making changes and testing, things will never improve.
Andy Beal was our general council when Bitwage launched in 2014, but he’s since moved on to Ernst & Young’s Blockchain Consulting Group. The other day, he and I got a chance to catch up over lunch. 
Bitcoin quickly made its way from a whitepaper to a production network, which is pretty amazing when you think about it. But its scripting/ programming language was initially, intentionally, limited for a few reasons, which meant that building new apps on bitcoin wasn’t always easy.
Bitcoin and blockchain spaces have received much attention in recent years as investors recognize massive opportunities in the spaces – they themselves can enter into the cutting edge of financial technology.
The ETC/ETH Split Continues
From Cold Storage
UBS, Deutsche Bank, Santander and BNY Mellon have partnered up to create a new digital currency to facilitate intra-bank settlements, the FT reports. The cryptocurrency will use blockchain technology underpinning the Bitcoin.
Over the past year, there has been considerable confusion around the term consensus as it relates to both the consensus mechanism that Satoshi wrote of in the Bitcoin whitepaper, and the consensus rules that underpin the Bitcoin network.
R3 CEV, the much-watched but opaque startup that brought together more than 60 banks in an effort to build a blockchain-based platform for the financial industry, finally took the wraps off its plans, filing a patent application for software within a new platform it calls Concord.
Across the ocean of impossible depths and beyond the beach of fractal sands lies the imaginary town of Nakamoto Village. Like most towns, the denizens of Nakamoto Village have a system of accounting for the goods and services they produce and consume.
Bitcoin Beats
Some beats to listen to while you read this week’s newsletter 🎶 🎶 🎶
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