David Sacks: Encrypted currency to achieve PayPal once the “original vision”

nnnDavid Sacks talked about the impact and challenges of the encrypted money economy from its own experience, analyzed the impact of the encrypted currency ICO on traditional VC, and the challenges of regulation. The Finally, he warned people to invest cautiously, do not invest directly in ICO.n
nnTranslation: Annien
nDavid Sacks was former chief operating officer of PayPal, who said the encrypted currency was realizing the original vision of the company’s “currency database”.n
nHe said we had the best preparation, to adjust the assessment, but he wanted to achieve a soft landing, rather than the same experience as the Internet boom and depression cycle.n
nHe explains why the encrypted currency is a long-term threat to VC mode.n
nDavid Sacks is one of Silicon Valley’s best known entrepreneurs and investors. He has served as a founding member of PayPal for 15 years and has been a founding member of the so-called PayPal Mafia, an influential Silicon Valley investor and executive, including Reid Hoffman, founder and early Facebook Investor Peter Thiel.n
nSacks founded Yammer in 2008 and was later acquired by Microsoft for $ 1.2 billion, an early investor with Facebook, gifted, Palantir, SpaceX and Airbnb. He recently started as CEO of Zenefits, a public relations software startup that helped companies survive some legal and financial dilemmas after the start of CEO Parker Conrad.n
nI would like to know how he commented on this year’s encrypted currency rise and how he commented on Howard Marks’ recent letter to investors about the “untrue “ness of digital assets.n
nEdit the conversation between us last week:n
nnAs someone involved in the initial PayPal, what are these digital assets that are most attractive to you?n
nnDavid Sacks:n
nAfter leaving PayPal, I never thought I would pay attention again to pay. But Bitcoin in the realization of PayPal initially created the “new world currency” vision. We had customized the T-shirt in 1999 and wrote the mission on it.n
nThe payment is only the transfer of funds from one account to another, the database entry. We believe that if we can get enough people to participate, money does not need to leave the system at all. PayPal can become a currency database.n
nWe have added interest and debit cards and other functions, so you do not need to mention the legacy of the banking system. When we were acquired by eBay, the project stopped.n
nBut the encrypted currency, such as Bitcoin, is now in the process of achieving this initial vision, and is centrally located (using a center-to-center database called a block chain), and the way PayPal has tried is central.n
nnYou recently said in Twitter, that the encrypted currency may become Web 3.0, what did you mean then?n
nAs if we were witnessing the birth of a new type of Internet, some people called it to go to the center of the network or the currency of the Internet.n
nBitcoin after the emergence of a larger development lies in the underlying support technology block chain has become a developer platform, the leading platform is the ether square. You can build a new to the center of the application and encryption money (or tokens). It has also created a new financing channel for this innovation – ICO. I have already had all the elements needed for a new wave of innovation.n
nFor generations from the dot-com era, it is very nostalgic, with the same excessive speculation and random getting rich. But you can also feel that something is changing. Money becomes programmable. This is a fundamental change that is still unpredictable.n
nnReminiscent of the recent letter to investors, Oak Marks (Oaktree) Howard Marks in the letter that Bitcoin and other digital assets “unreal”. How do you think of this view?n
nMarks issued a speculative warning and was not wrong, but said “untrue” itself is wrong. It’s like the software is not real. Of course it is real.n
nHave you ever lost gold support when the dollar becomes untrue? The encrypted currency is the same as the next evolution – making the currency more virtual.n
nThe purest form of money is faith. It is around the unanimously approved network of media effects, the media there is the possibility of scarcity. Bitcoin carries out this scarcity through the combination of encryption technology and economic incentives (encrypted economy). Many people find it more comfortable than relying on the integrity of the government. We believe in mathematics.n
nAmericans, especially those who have long touched the US financial system, are always prone to underestimating Bitcoin because we have long been accustomed to a relatively stable political and financial system. Some of the global areas of the system are less reliable to accept it more quickly, because almost anything is better than letting their lives get together with the currency that does not know when it will collapse or confiscated.n
nnIf the encrypted currency at this time is like the dot-com era, does it mean that it is a bubble, or does it seem to be in 1995 or 1999?n
nThe technology may still be in 1995, the price is at or near 1999. It is a combination of the real existence of speculation.n
nI have been trying to figure out the excellent team and interesting projects in the field. I have been trying to understand the future of the regulatory environment, only the investment structure is accurate, may be inevitable in the collapse of the surviving company.n
nI think the large-scale adjustment of the fuse may be the regulation, not the technology. A few weeks ago, the Securities and Exchange Commission (SEC) provided some important guidance in the DAO report, but effective enforcement actions allowed us to learn more. It is more important for future development beyond the frightening bitcoin bifurcation. Just like a few weeks ago Bitcoin bifurcation, more like a similar Y2K motorcycle bluff.n
nnSo when the bubble burst, will appear similar to the Internet bubble after three years of nuclear winter?n
nIt is still promising to do a soft landing, not a nuclear winter. If all the scammers and advocates disappear from this field, it is a good thing.n
nBut still there will be adjustments. Many ICO is only fog, but it is the kind of valuation of the D wheel. The current stage of development they are not the height of this valuation. May be rational at some point.n
nnHow will ICOs and future SEC regulators meet?n
nSEC is expected to distinguish between “negotiating currency” (which is actually used in software ecology and should not be regarded as securities) “assets” (ie securities). Public policy think tank CoinCenter has made a good legal framework and policy basis for this purpose.n
nSo far, most ICOs around the coin. Better projects are trying to make sure that their tokens are not securities on the structure.n
nHowever, I believe that we will soon see the emergence of asset coins (also known as traditional assets tokens). These are securities. Need to ensure that the process is not wrong, but this is exciting areas.n
nnWhat securities can be metered?n
nAlmost any already existing non-current assets go well into the chain of chains and carry out the tokenization. It will create a deep market that will improve the price discovery mechanism and increase the value of these assets.n
In the long run, even mobile assets such as stocks can be transferred to the chain because the platform can bring benefits.nnUltimately this is a technology that maximizes all asset efficiencies, market liquidity, payment mechanisms, and holdings. Its purpose is to optimize and maximize the global economy, may be the biggest change.n
nnAre digital assets and tokens a long-term threat to traditional VC?n
Yes, from two aspects can be determined.nFirst, many venture capital firms that could have sought venture capital are turning to ICO financing. I call it “crypto capitalism” (relative to venture capitalism).nEntrepreneurs are more likely to accept the term encrypted capital than VC, so any ICO start-up company will be ICO. The start-up company’s ICO will rely on technology and regulatory applicability, but it will eventually become a large group of start-up companies.nnIn this case, of course, will challenge VC. Often investing in larger ICs after ICO will compete with hedge funds, which is not a good place to compete. And VCs that want to invest in ICO must compete with angel investors and offer real added value.n
Second, at the investor level of VC, I think the interests of the limited partners are likely to be tokens, including most other non-current assets. Well-known VC will resist this, but there are already a few marginal areas of the new VC in the toison. Soon a batch of companies will do so. Ultimately, non-liquidity will be the only competitive disadvantage that the top companies are eligible to argue.nnTo sum up, the SEC’s regulation in this area will have a significant impact on its results. If these regulators support innovation, will give VC a more competitive environment. But the world will be less friction, more efficient.n
nSacks comment on this continuous release tweets:n


nn1. Crypto Capitalism is a new venture capitalist.n
n2. Now there are 1500 ICO has been or will soon launch, start-up companies who can ICO, will go to ICO.n
n3. More risk capital chase the encrypted currency, the risk home (VC) will be forced into an encrypted capitalist (CC).n
n4. Traditional VC classification (seed stage, early, late, etc.) will become pre-ICO, post-ICO.n
n5. Post-ICO (Post-ICO) VC and hedge funds to compete, this is not a (suitable for VC competition) a good place.n
n6. The former ICO (Pre-ICO) VC needs to be as valuable as angel investors, and for many VCs this is not where they are familiar with the habit.n
n7. The final (US) SFC will decide how much ICO this area, may be great.n

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