After successfully launching, developing and exiting several companies, ranging from a scalable hospitality concept to a medical platform in Western Europe, Patrick Van de Mosselaer co-founded Tioga Capital in Luxembourg. It is a venture capital fund specialized in high growth sectors (early stage) including startups and scaleups, with a focus on applications related to blockchain technology. Visionary and enthusiastic, he gives us his analysis of this volatile market. (Opinion Column written by: Patrick Van de Mosselaer, Managing Director at Tioga Capital)
Photo: Tioga Capital is a European Venture Capital fund focused on blockchain technology. / Credits © Tioga Capital
In August 2011, venture capitalist Marc Andreessen wrote an article in the Wall Street Journal entitled “Why software is eating the world”. While this sounded prophetic then, it resonates perfectly today, as history seems to repeat itself with the advent of the blockchain revolution. That’s why I think it’s interesting to adapt this punchline… we could even go so far as to write “blockchain is eating the world”! Bitcoin is one of the first applications that uses blockchain technology to create a digital sovereign store of value. This application has the potential to gradually evolve into payments that will use blockchain technology: there are already billions of payments being made using stable coins (dollars and euros).
“Tomorrow, our children will be able to embed marketable brands on their avatars.”
For an investor, blockchain technology offers different opportunities:
● Investing directly in Bitcoins (BTC)
As gold can be with real currencies, Bitcoin is a unit of value in the blockchain. For all that, we can’t really talk about a currency but rather an asset (“asset”). It is a speculative asset, in which even pension funds invest today, but also large groups like Paypal or Twitter. The Israeli pension giant Altshuler Shaham has invested $100 million in Bitcoins via the Grayscale Bitcoin Trust (GBTC).
● Invest in the infrastructure needed for the ecosystem.
Next, it will be necessary to create a whole infrastructure to make the value accessible in the blockchain ecosystems being built. For example: market makers to bring liquidity to these markets, or tokenization players, like Tokeny, or Stokr in Luxembourg.
Then, on this infrastructure, Open Finance applications, the fintech sector will be able to take advantage of the blockchain by creating “smart contracts”. In the future, all bank functionality will be smart or linked to blockchain rails that can verify issues/changes/settings. In Luxembourg, for example, a company like Ibisa is applying smart contracts in the microinsurance sector. There is currently between 40 and 50 billion in loan volume on blockchain technology, which gives you a sense of its potential.
These ecosystems are already regulatable and regulated, among others, on the basis of the AMLD5 directive created at the European level and applicable since January 1, 2021. In Luxembourg, there is a world leader in exchange platforms: Bitstamp. In the coming years, other sectors will enter the blockchain economy such as real estate, health, culture…
● Investing in unique assets in the new digital economy
The open metaverse (a virtual world much like in Steven Spielberg’s “Ready player one”), is a whole new economy that is developing. This is where this technology will have a massive impact: before, you could copy anything you wanted on the web indefinitely. From now on, the blockchain allows the creation of digital objects limited in quantity or unique (NFTs, non-fungible tokens). This new digital economy is powered by blockchain payments and the circulation of goods secured by it, with full transparency and traceability. It will become the largest economy in the world over the next generation. We spend more and more time on screens: 7-15 hours a day on average, and there are 4.5 billion people online daily. Recently, an investor paid more than 60 million US dollars to buy a digital artwork (Beeple). Tomorrow, our children will be able to embed marketable brands on their avatars. In Capital Venture there is “adventure”: this one is crucial!
This article was first published in Silicon Luxembourg magazine. Read our full Fintech edition.