Exclusive Interview With William Mougayar, a blockchain legend

This interview is with a blockchain legend, William Mougayar. In this interview we talk principally about the blockchain, JM3 Capital, cryptocurrencies and Token Summit.

William Mougayar is a blockchain investor, researcher, speaker, blogger, author of The Business Blockchain (Wiley, 2016), managing partner at JM3 Capital, founder of The Token Summit, and manager of WMX, a cryptocurrency index fund. He is a known authority on, and a direct participant in the crypto-technology market. William is an advisor or board member to some of the world’s leading blockchain organizations, including the Ethereum Foundation (former advisor), the Kin Foundation, OpenBazaar, Coin Center, Steem, Stratumn, Cofound.it and Bloq. He blogs regularly about the present and future of blockchains at Startup Management.

You are welcome to read the interview and travel through the expert mindings by yourself:

SatoshiNakamotoBlog.com : To begin, can you briefly explain us what sparked your interest in cryptocurrency/blockchain?

WILLIAM MOUGAYAR: I was first exposed to Bitcoin and the blockchain in 2011, but was too busy running the last startup I founded then, Engagio; so I ignored it until the end of 2012 when I sold that last startup. In early 2013, I started reading and getting educated about Bitcoin. A few things immediately struck me about Bitcoin which were not that obvious back then. I realized that the technology behind Bitcoin would be more significant than Bitcoin itself, and that the magnitude of that impact would be at least equal to the Internet’s proportion. Then I had flash-backs to my first encounter with the first wave of peer-to-peer technologies in 2001 when it was primarily about file sharing for music content, if you remember the Napster days (I was running a site called PeerIntelligence in 2001), so I saw the blockchain as that second wave of peer-to-peer technology, but now with money involved, not just data, and with an underlying technology protocol that seemed to have been well thought out, and was promising (via the Satoshi paper of course). I realized that peer-to-peer could now be applied to entire business models, not just content, and not just for money transmissions.

SNB: You launched a Blockchain Investment Fund: JM3 Capital, aimed at promoting medium-terminvestments in the world of cryptocurrencies and Blockchain. In your opinion what are theprospects for the adoption of cryptocurrencies?

WM: To be exact, JM3 Capital is a brand of Blockchain Technology Ventures, which is a division of Geneva-based Jabre Capital Partners SA. JM3 Capital is currently awaiting FINMA approval, and I will be the Managing Director and Chief Investment Officer for this division that will begin operations after regulatory approval. The prospects for adoption of cryptocurrency is actually greater than the adoption of the broad blockchain technology itself in non-currency settings,- at least for the next 5 years. In my opinion, we have figured the money elements of blockchain technology quite well already, i.e. owning it, transferring it, and adding logic around it. But we haven’t fully grasped yet how to integrate these new elements into non-financial applications, i.e. where non-monetary assets are being transferred as part of a particular application that could be as far from financial services as possible.

SNB: Your company’s strategy, which is intrinsically linked to this optimistic position regarding thefuture of crypto, seems to be the implementation of VC-style investments in blockchaincompanies. What are your selection criteria?

WM: We emphasize the VC-style investment, because that has been lacking amidst the flurry of fast-paced ICOs that are quick on the money raising trigger, coupled with the onslaught of crypto hedge funds that are mostly momentum chasers and whose managers may not well understand the underlying business models behind the tokens they are speculating in. Our selection criteria starts with good grounding in a thesis that informs us about what we will or will not invest in. Then, it would be about applying standard diligence and relationship-based activities, such as knowing the teams, assessing product-market fit, reviewing the credibility of the underlying cryptoeconomics (if a token is present) or technology itself, evaluating good governance practices, and assessing the innovative nature of the token usage, its potential network effects, and the size of the market.

SNB: Are you in a strategy consisting to invest in cryptocurrencies that are undervalued, so more of a buy-and-hold strategy?

WM: One of the three prongs of our investment strategy will consist in taking long positions in tokens that have future growth potential over the next few years. These could include ones we believe have earned initial traction or that might have been under-valued by the market. Some of these positions might consist of governance related stakes. In essence, instead of taking a board seat, we could own a large number of tokens that give us a voice in the governance of the protocol or project. The underlying belief is that, in successful projects, value will accrue to the token, and we want to be there.

SNB: In your opinion, which is one of the main problems, hindering the move towards legal adoption of cryptocurrencies?

WM: On one hand, you have western regulators who have been trying to fit the square peg into the round holes of existing regulations, and that has hindered the full growth and innovation potential of cryptocurrency in these large economies. On the other hand, you have alternative regulatory jurisdictions that have been progressive in conceptualizing new regulations, and they are trying to attract various blockchain activity to them, with varying degrees of success. But mainstream adoption may not come from the largest western economies. It’s possible that the adoption of cryptocurrencies becomes more deeply rooted in other parts of the world. For that to happen, we will need to see much easier to use end-user experiences within applications that didn’t exist before. Cryptocurrencies are not just a replacement to the dollar or euro. They must find usages that are native to this new alternative world,- the emerging blockchain economy.

 

SNB: As one of the most renowned experts in the blockchain sector, in your opinion what is thesingle biggest thing that will change Blockchain Technology in the next five to 10 years?

WM: That is difficult to predict, but I would bet on ease of use and more human-centered security as two important features that we are still struggling with. I’m not too worried about scalability, speed and interoperability of blockchains, because these challenges will be resolved over time. When the world runs on blockchain states instead of database states, then that would be a giant leap forward, because we would have eliminated a lot of inefficiencies in the systems we currently put up with.

SNB: Blockchain is considered a trustable approach can you tell us why?

WM: The blockchain puts into question the essence of the age-old belief that the database owner is the keeper of the truth. Now, hopefully the blockchain will hold the truth, and it doesn’t require a supervisor of truth. If the truth or facts are about you, you should have greater authority on that version of the truth. But old trust dies hard, so the new blockchain-based trustees will need to earn that trust with us.

SNB: Is there any network specific conditions for using Blockchain technology in an organization?

WM: They need to be open about openness. In the same way that the Internet shattered the old world of closed networks and internal databases, and gave the rest of us a window into these enterprise databases (think about tracking a package online, a feature that wasn’t available before the Web), the blockchain represents another layer of linkage to the outside that unravels itself. Companies will need to figure out how to integrate with blockchain networks and applications, and give us a peak into some of their secrets. In parallel, large organizations have a chance to re-imagine how technology allows them to do business with each other. Although partner networks exist already, most of them run on antiquated technology and database applications that are flush with inefficient processes at their core. Blockchain technology can help to re-trace and re-define how electronic relationships should be implemented in the future.

SNB: In which industry, do you think, this technology will help the most. Which industry more thanany other one needs Blockchain?

WM: First and foremost, financial industries, by and large. The current technological backbones of our global (and many national) financial systems are in shambles and based on archaic spaghetti-like networks, embroiled with one another. But I’m not sure if the finance world can fix itself, or whether it will watch this new parallel system (the blockchain one) dwarf it eventually. Real estate and Energy are two other popular industry that are poised to benefit from blockchain technology, but the use cases and players will be fragmented in these two sectors because that’s the nature of these industry, being local first, and global second. The blockchain is a great global equalizer. Find an industry or sector that doesn’t need boundaries, and the blockchain will be there. As far as government applications, these will come much later, because most governments are slow to adopt change.

 

Read everything you can put your hands on for an entire 6 months, and don’t do anything until you have had a firm understanding of the blockchain.

SNB: Can you give some advice for people who want to enter the Blockchain space?

WM: Read my book and my blog. Read everything you can put your hands on for an entire 6 months, and don’t do anything until you have had a firm understanding of the blockchain. It is not an easy topic to grasp because it is multi-faceted and has multiple usage and applications personalities, just like the Web, and even more. If you only grasp one aspect, for e.g. the money side, but not the technology side, you’d be missing out on understanding it completely and you will have blind spots that can later impact you. I see a lot of people with superficial knowledge about the blockchain stretching their implementations and wanting to speed things up. Well, accidents happen when you speed-up, both on the roads, and in technology cycles.

SNB: The fact that cryptos are mainly used as a means of speculation in trading is due to thedifficulty of developing industries that offer other real uses. Precisely this situation would alsomotivate a massive adoption of ETH over BTC: While people see BTC as a valuable storagemedium, ETH has a more extensive platform that makes it more versatile. Do you think that ETHwill surpass BTC?

WM: There are many dimensions to this question. It is difficult to predict. Ethereum and Bitcoin have some overlapping features, while also exhibiting divergent intrinsic properties. Both ecosystems are large in their ways and different at the same time. Ethereum is more developer platform centric, whereas Bitcoin is more money centric. We currently have several technological giants like Facebook, Amazon, Google, Microsoft, Apple and a few others, and they all co-exist, although compete in some ways. So, why can’t we have that same diversity in the blockchain space?

SNB: As a producer and Token Summit Host, can you explain what is the main idea behind theproject Token Summit and why did you decide to work on it?

WM: I conceived the idea in the fall of 2016 when I foresaw the fact that tokens would become important as a business model innovation lever, and that we needed to further explore these models, and how to implement them. At that time, I had observed that most blockchain conferences were focused on the currency aspects of Bitcoin, and no events were diving into meaningful discussions behind the usage, governance, implications, regulation and economics of tokens. So, I decided to start a conference. Actually, the first one was supposed to be in Toronto in early 2016, but I shelved those plans when I helped Consensus 2016 instead, and took advantage of that event to launch my book, The Business Blockchain. We gave 500 free copies to 1/3 of the attendees, and I recall the line-ups that extended around the exhibit floor, and lasted a good 3 hours. My hand was sore signing 500 copies. Fast forward to early 2017 when I started to put the idea into action, I connected with Nick Tomaino and asked if to co-host the first event wit me, and the rest is history.

Crypto-assets are the non-money assets that can live on the blockchain and inherit the same properties as digital money: self-ownership, peer-to-peer transferability, value appreciation, non-fungeability and programmability.

SNB: The third conference, "TOKEN SUMMIT III", on the emerging Token-Based economy tookplace in New York May 16th and 17th 2018 where discussions upon economics, regulation andbest practices around blockchain-based tokens, protocols, and crypto-assets continued. Forthose who are not familiar with the terms, can you explain us briefly, what blockchain-basedtokens, protocols, and crypto-assets are or means?

WM: Incidentally, many of the themes from that third conference were similar to the first one, as I felt we needed to continue elaborating on them. Crypto-assets was a new topic, due to the advent of the CryptoKitties phenomenon (disclosure, I’m an investor). Crypto-assets are the non-money assets that can live on the blockchain and inherit the same properties as digital money: self-ownership, peer-to-peer transferability, value appreciation, non-fungeability and programmability. That last feature is very interesting because these crypto-assets can find themselves in games or other online applications now, and that opens-up a plethora of interesting end-user cases. In regards to defining what a token is, I like to simply say that a token is like a cryptocurrency, but with a purpose attached to it. That purpose could be simple (like a payment token), or more complex, like a governance related token that grants certain rights based on certain conditions, or it could be based on some business logic, of the “If this, then that” nature.

SNB: Did the conference met your expectation on terms of audience and feedback?

WM: Yes, 1,200 attendees came to the 3rd Token Summit in New York last May, and we heard many times over that it was the best event of that week, the New York Blockchain Week which consisted of a over a dozen various events. Despite other events around the world trying to emulate us, we are still the best conference on the topic, for several reasons that I don’t disclose, as it is part of our secret sauce.

SNB: Are other "TOKEN SUMMIT" conferences already planned? If so, where and when?

WM: Yes, stay tuned via the website www.tokensummit.com and Twitter handle @token_summit and my blog where we will announce something. My partner and I have thinking of evolving it further.

Thank you for this interview.

 



ABOUT WILLIAM MOUGAYAR



As a long time industry insider, William Mougayar is a prolific researcher, writer and theorist who has been described as the most sophisticated blockchain business thinker. His views and insights are well respected worldwide.

William is a direct participant in the crypto-technology market, working alongside startups, entrepreneurs, pioneers, leaders, innovators, creators, enterprise executives and practitioners; in addition to being an investor, advisor, and Board member in some of the leading organizations in this space.

William is the General Partner at Virtual Capital Ventures, an early stage venture capital fund, and currently on the Board of Directors of OB1, the OpenBazaar open source protocol that is pioneering decentralized peer-to-peer commerce, a Board Advisor to the Ethereum Foundation, a member of OMERS Ventures Board of Advisors, an Advisory Board member to the Coin Center and Bloq, and founder of Startup Management. William is also the founder and produced of The Token Summit, and manager of WMX, a cryptocurrency index fund that trades on ICONOMI.

Previously, he held senior level positions at Hewlett-Packard, Cognizant and Aberdeen Group, and he founded 3 startups, CYBERManagement, Eqentia, and Engagio.

William is a graduate of the University of Washington, the University of Western Ontario Ivey School of Business, and attended the University of British Columbia Graduate Commerce School.  

 

Contact: [email protected]
Twitter: @wmougayar
Blog: http://startupmanagement.org/blog/
Book site: http://thebusinessblockchain.com/



The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology



The definitive pioneering blueprint covering the what, why and how of the blockchain.

Blockchains are new technology layers that rewire the Internet and threaten to side-step older legacy constructs and centrally served businesses. At its core, a blockchain injects trust into the network, cutting off some intermediaries from serving that function and creatively disrupting how they operate. Metaphorically, blockchains are the ultimate non-stop computers. Once launched, they never go down, and offer an incredible amount of resiliency, making them dependable and attractive for running a new generation of decentralized services and software applications.

The Business Blockchain charts new territory in advancing our understanding of the blockchain by unpacking its elements like no other before. William Mougayar anticipates a future that consists of thousands, if not millions of blockchains that will enable not only frictionless value exchange, but also a new flow of value, redefining roles, relationships, power and governance. In this book, Mougayar makes two other strategic assertions. First, the blockchain has polymorphic characteristics; its application will result in a multiplicity of effects. Second, we shouldn’t ask ourselves what problems the blockchain solves, because that gives us a narrow view on its potential. Rather, we should imagine new opportunities, and tackle even more ambitious problems that cross organizational, regulatory and mental boundaries.

Drawing on 34 years of technology industry experience as an executive, analyst, consultant, entrepreneur, startup mentor, author, blogger, educator, thought leader and investor, William Mougayar describes a future that is influenced by fundamental shifts brought by blockchain technology as the catalyst for change. William Mougayar has been described as the most sophisticated blockchain business thinker. He is a blockchain industry insider whose work has already shaped and influenced the understanding of blockchain for people around the world, via his generous blogging and rigorous research insights. He is a direct participant in the crypto-technology market, working alongside startups, entrepreneurs, pioneers, leaders, innovators, creators, enterprise executives and practitioners; in addition to being an investor, advisor, and board member in some of the leading organizations in this space, such as the Ethereum Foundation, OpenBazaar and Coin Center.

Just as the Internet created new possibilities that we didn’t foresee in its early years, the blockchain will give rise to new business models and ideas that may still be invisible. Following an engaging Foreword by Vitalik Buterin, this book is organized along these 7 chapters:

1. What is the Blockchain?

2. How Blockchain Trust Infiltrates

3. Obstacles, Challenges & Mental Blocks

4. Blockchain in Financial Services

5. Lighthouse Industries & New Intermediaries

6. Implementing Blockchain Technology

7. Decentralization as the Way Forward

The Business Blockchain is an invitation for technologists to better understand the business potential of the blockchain, and for business minded people to grasp the many facets of blockchain technology. This book teaches you how to think about the blockchain.

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