Madhu Kutty, Arcadia Crypto Ventures | Blockchain Week NYC 2018

from New York it's the cube covering blockchain week now here's John furry I'll run this is the cubes exclusive coverage here in New York or blockchain week New York hashtag blockchain NY mr. cube I'm John for a year host our next guest is Madhu Cuddy who's the partner at Arcadia crypto ventures thanks for joining me here in New York City we're at the block party that private event here thanks for joining blockchain week yeah so you guys do a lot of deals we had Richard on who's the managing partner the firm I see early in the space yep super really see you in the front wave get all the best deals now it's competitive you have to read the white papers you gotta get down and dirty yeah also look at the pretenders figure out what's the bad deals the good deals and then when you get a good deal make sure it's tailor fit yeah both the tech matches which I find it'll be interesting because you can't have a brilliant entrepreneur come in and but their token models off yeah you see this every day yeah we see this a lot so especially til last year things were much more easier because the you know the most of the people who are coming were genuine at least trying to do something good but this year we see a lot of people you know who just want to make use of the wave that's happening just get on the hype and get some clear but even our traditional like firms that have failed are coming and trying to capture the blockchain hype yes the Hail Mary basically let's do an idea when the we're going under throw the Hail Mary yes yes that's what we see a lot happening and then there was a lot of her tech projects back in the past so it was a little more easy to evaluate so but this year we are seeing more real business applications kind of Richard about these similar growth things around crypto I want to get your take on it because you know the Internet infrastructure is changing yeah you know we see the web one day and this I mean all the events that go to similar kind of conversation tcp/ip created internetworking and interoperability yep HTTP created a whole new way to do things web wonder now we're hearing token economics and blockchain yeah as a new way but yet interoperating with the old systems so you have a whole sea change yeah and there's a real Czech enablement so what's your view on this because some people get it wrong you know they have sent the business logic meeting with these they want to know what the tech enablement is what's the tech that's driving all this new infrastructure yep so the internet you could think of it as a way to share information with the worldwide audience so blockchain for the first time ever enables all drug chain or you know the entire crypto infrastructure first time enables humans to transfer value over the wire so you know you could represent one as one or the wire rather than creating you know like a duplication of one so you could have you know your own Bitcoin stored on the network and you can access it to yourself and you can send that value across this was never possible in the history of the human race so that's what blockchain enables the solution to Byzantine generals problem and we always thought that there's not possible but for the first time ever we have a means to achieve that I also say this when these cube events every company needs a chief economic officer you serve as CTO yeah I need to see achieve economic officer so I got to ask you when you see a technology you got to kind of make sure it marries the right models so in the token world putting security tokens aside which I like by the way yes I even I like a damn they're very easy to deal with Tilly totes are different you have two types of utility so it was a work a work like token yeah and a burn mint equilibrium approach yeah what's your take on the two strategies there when does should someone deploy a burn mythical or BME strategy worse to say at work token which is much more of utility classic so a burn token is what you know has been the walk at least in the past like for building actual platforms so that solution itself is not fully solved so you know once we solve that completely that's when we see much more utility tokens coming on board but at this point we see more of the remittance problem that's being solved so that we have a lot of exchanges and you know transferring of currency that's being worked on so you can think of it like the email in the Internet era so though we had all these different different coms only email worked well so right now the transfer of value the remittance and the exchange is the only thing that's working but as we go you know forward we will see much more you know business models coming up so yeah I think this could be the year that's going to be you know the etherium was a moment when you know there was a theory a moment when you really could you know start the next generation of the cryptocurrency movement so I think this year we could see more business I heard so the conversations here at the consensus Levin around a lot of people trying to force blockchain and decentralized yes specifically with a centralized business models yeah people are pooh-poohing that which is we just call that you know blockchain washing just whitewashing yeah I'm trying to save themselves so I got to ask you I mean first of all I mean I remember having conversations back on the web started oh my god AOL and this 1414 point for dial-up is so slow yeah it's so much slower than a mini computer yes exactly right yeah I mean the computer was much faster than dial-up modem to the web but the web wasn't replacing the many computers but direct mail direct response and a lot of things yeah so the question I want to ask you is what is the analog displacement what apples to apples comparison should we be making when people throughout these idiotic comments like oh my god blockchain so slow because it is slow yeah it slow the web was slow too yep but it replaced something old yeah is it right or there is blockchain replacing something old and what is the right comparison so the right compare that it is you know it has solved theoretically the problems the theoretical solution for these problems we are going to solve the decentralization you know and digitalize in business theoretically we have solved it and we proved it practically it's possible but it is not really there for that you know the mass adoption for real business to on board it is not reached that scale yet you know as we all know if Netflix Netflix was a business in 1999 it could never succeed but then lot of infrastructure was built up and on top of it Netflix worked so the same thing is gonna happen you say it's low no because there's more and I see you know each time I go to these conferences these events as you have seen more and more smart people are jumping in more money is flowing in so more web routes you more where people were using the web so growth growth was the key yeah growth is the key and more smart people will come in and they gonna figure it out you know when you look under the hood of the company and they come in they say hey I want to get funding yeah we're have this great business model or take an existing business and tokenize it what are the things that you look for in a good i co candidate or just someone who's trying to touken economics with a technology trying to transition not pivot transform yeah into token economics so so that in a lot of it that there's a you know something people call it as a conviction based in when investing so that's a lot you know that's there a lot in this a cryptocurrency space so we look at you know the technology underlying technology how it can solve some of the issues we look at a broader aspect of the space how big the space is so it can you can solve that and we also look at the team and you know these three things if they are in good combination we believe in it can be a viable business and also the partners have you know all the founders have to be a little less greedy and unlike look for you know smaller races that's good enough for the next two years oh I think I think I can get liquid faster on token economics I think it's actually better for the entrepreneur yeah my opinion I want to take change gear so they can talk about you personally how did you get here I mean how do you just wake up one day and say I'm gonna go work for Arcadia crypto ventures I mean were you scratching an itch did you come from finance what's your background my background has been in technology and finance so being worked with a bunch of Wall Street banks then private equity firms so then I was running a technology firm when I met rich it was very early in the space so we talked about it and you know he you know he Allah he he had a lot of interesting questions about the space so myself and one of my partner of even back and researched on it so we came back with his answers and he had a little more insight and you know back in the days much more access to the deed for you know during that time so we worked with him and loosely we worked as some kind of analyst for him and we started working together and then you know it formalized in a bigger way and now we did you have the moment idea this is gonna be good I think so I was one so we totally understood the santoshi paper at that point we knew that this is going to change the world but I even I didn't expect that this would be this fast so what we are seeing today at that time I thought maybe we'll see that in 2020 2021 but if space explore it you know aetherium hitting a thousand which it hit sometimes they say I was think it might happen sometime 20 21 or 20 22 both sexes surprised you the most was just a trading size the entrepreneur side what area of the market is surprised you the most the surprising is the worldwide adoption and how especially the you know the new generation who's kind of lost a bit of you know interest or I would say and not even like they are disillusioned with the you know various other investment model they're jumping in a big way and I think you know this is a you know even regulators everyone has to look for that you know these people have come in so let's get it get it right for these these folks so that you know they they have a belief in the system and they can go forward but do I want to get your thoughts on something I think it's important for folks understand and that is there's a lot of liquidity Richard mentioned liquidity is an important hub salutely so there's a lot of new dynamics and art and science that goes into the trading side of it yeah much accelerated than a classic IPO yeah or say a hedge fund kind of deal that was always constant stuff going on but here you can get much earlier on the process talk about the folks who like now know what a wallet is yeah it might have an account on coinbase to the extent that that's their knowledge base yeah you're so much deeper on some of the trade side what are the dynamics how would you break down the trading situation on crypto give us the crypto trading 101 so the idea is that you know there first of all there are some huge exchanges so every crypto currency out there want to be on these exchanges so these exchanges have much more trading volume they have much more liquidity that's where you want to be are and if you're as you know if you are doing some investment and you want to kind of protect it you want to be in these highly liquid instruments so I would stick to top 10 20 coins for majority of the portfolio if you want to kind of protect your investment so that has you know a lot more liquidity and then around I would say it you know 10 to 20 percent you would do you know in sectors that that you are interested in where you really have some kind of idea that's what I would call a conviction based investment version so if I want to convert my crypto a fiat currency yeah you're saying stay with the top trading firms or stay with the sector what was the advice just say I'm sitting on say if you if you're a regular investor right who's not following the market at 24/7 I would say at least you know put that there like 80 person on the top 20 coins where there's much more liquidity and which you know one go tomorrow and then you would focus you know maybe it you know ten twenty percent of your this is I'm just talking about the crypto portfolio on something you are you know you have some kind of conviction if you are in like let's say you are in automobile space that's what you understand a lot so any crypto on debt you know which you think is interesting you could put your money there and I read the tech person so I would put more on technology platforms what's your favorite Czech coins right now when they're investments that you're putting money into oh we you know we've always been long on Bitcoin etherium so there are a lot of new exciting stuff coming like yo s like we are big on tezo's it's a very community driven project you're very excited about that then what block is bringing metronome I think you know that's going to be huge there these are like these are very unique in their own ways you know you're suffering something as a challenging Challenger to aetherium tezo's also in some form with a very community focus and metronome for the first time offers ability to do cross-platform transactions Madhu this space is attracting a lot of young kids and yeah I'd say kids you know coming either out of business school or from a firm like Goldman Sachs got these classic firms yeah kind of bored they want to do something new what's your advice to the next generation coming in you know jump on the way fall down learn it get off my way get off my Beach everybody I mean what's your advice for the young people maybe five you know I you know if I was you know in that spot right now I would be no just jump in and go with the flow and you know you'll figure out I know what you need to do so you know would at least rather than stick with the traditional companies this is something new and exciting and you know at least in the next two to three years spent on this get your hands there you go hands there's a lot of money yeah try not to lose a lot of money yeah many thanks for coming up thank you the commentary we're here exclusive coverage with the block party here at the the blockchain week New York exclusive continued coverage with the cube we're here in New York City to break down all the action inside the ropes of the industry I'm John Ferrier thanks for watching

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