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August 20, 2020

Episode 017

Bloq, LAB577 & BCB Group


In Conversation With 

Bloq co-founder Matthew Roszak first heard about bitcoin in 2010-2011 when he was chairman of a social gaming company in Singapore. As a venture capitalist, he knew that there was either something “not here” or something “really here,” based on the reaction from other venture capitalists, and he went on to back Kraken, Coinbase and other early exchanges, wallets and payment processors. He also invested in Ethereum and Ethereum killers including Block.One, EOS and others.

Roszak discussed the evolution of Bloq, which he co-founded alongside Jeff Garzik, since the early days when they built Fidelity’s first bitcoin wallet.

“At the end of the day we’re plumbers, we’re builders, we’re kind of sitting behind the scenes of a lot of projects and platforms. Today Bloq is building a lot of the core infrastructure to underpin blockchains, so that’s nodes, data, staking services and a whole other portfolio of things that will be coming out later this year/next year…All these services, whether storage, compute, etc., they’re vending machines that require a token for the service. And so abstracting that and saying, we have an engine that will help you find storage based on time, security and cost, based on these parameters, and we’ll just deliver that to you. And so we’re creating this program that harmonizes that experience. Because right now it’s really difficult to get all that individually. And so that’s what Bloq is building toward.”

Teana asked him about when the blockchain will add critical value as opposed to souped up database for enterprises like large banks to manage information.

“I think it’s still early in that curve for them. I think they’re more predisposed to just buy some bitcoin in their Treasury than to dive into a tokenized network. Because it’s just easier and more discreet to say, oh yeah, we’re into the crypto. But for them to light up a new tokenized affinity token for their customers — when they buy more, they get more kind of a thing — tracking and tracing a lot of that with these incentives, that doesn’t seem like a heavy lift. But it’s so external, there’s marketing, there’s compliance, all these other things that are more complicated to do and orchestrate. And so I think people tokenizing their mileage points and being able to trade those mileage points…if these mileage points, these affinity points are thought of carefully, they could be really amazing currencies for those ecosystems.”

Roszak explained that he thought the bitcoin would be further along in 2020 than it is and that it would be used widely for payments by now, saying:

“I think in the early internet, a lot of the pitch decks, a lot of the ideas actually were spot on. It just took an extra 10 years to get there. In this case, I think if I look back at what we’re doing here, it’s a lot different. It’s not like you and I are trading photos on Instagram. This is money. And so the adoption of money, the trust factors around money, the compliance, the custody, the confidence, all that stuff, it takes a lot longer to bake that cake. And so it’s still in the oven, and it’s still baking. And you know you’re kind of checking on it, it’s like hey…it’s baking really well. And so I think seeing signals over the last year, I can’t be more bullish about, certainly bitcoin and the rest of the ecosystem. I’m more bullish now than I’ve ever been…It’s kind of satisfying to see big name investors, public companies engaging in this.”

Market Spotlight: Instant Fiat Payments on BLINC

A recent collaboration between LAB577 and BCB Group culminated in the launch of the BLINC network, which is designed to facilitate instant settlement for fiat and digital currencies. Farzad Pezeshkpour, director LAB577, and Oliver Von Landsberg Sadie, CEO of BCB Group, joined Teana to discuss the details.

“It certainly helps large organizations in the crypto space to move money where it needs to be much quicker than they could do through traditional payment rails. That superpower is also super useful for arbitraging gaps in the market, so where there are trading inefficiencies at venues which have different liquidity positions and therefore have slightly disconnected prices, a trader can quickly switch between these venues by moving money fast over BLINC. This is just not possible if you’re trying to do it over SEPA or SWIFT or any other traditional networks…So what BLINC is here to do is to fill a gap in the European market and eventually the Asian market as well to cover GBP, euro, Swiss francs, eventually USD too, whether independently or by partnership is TBD. But it’s really to solve those problems,” said BCB Group’s Von Landsberg Sadie, adding that the type of clients they’re looking at are exchanges, market makers, traders and funds as well as retail and commercial services.

Teana asked Lab577’s Pezeshkpour about the sales process to crack into larger and less agile organizations, in response to which he said:

“So definitely we are seeing traction by some significant market participants, some of which are public already…and others who are just examining the potential and are talking to clients like us to see what’s possible. We are working really hard with all of those individuals and parties there, we’ve got a few engagements already. Some institutions that we’ve been working with are looking at saying well okay we don’t want to do interbank transfers but we are geographically located all around the world. We have entities in the US, in the Netherlands, in the UK and can we have an internet [block?] for ourselves just so that we can settle our books at the end of the day without having the complexities of international payments and so on.”
Teana also asked them about other critical problems that similar collaboration could solve, in response to which BCB Group’s Von Landsberg Sadie said:
“I’m going to put a regulatory lens on because it’s helpful to think of markets through a regulatory lens because that’s what’s ultimately going to shape what really takes hold in the next few years.” He pointed to the market efficiency role of regulators and consumer protection as the first two pillars, adding: “I think the third and biggest opportunity ahead is the representation of equities and other real world assets on the blockchain because that’s where I think DASL will truly shine.”

Onchain Reaction

Philip Gradwell, chief economist at Chainalysis, provided an overview of what’s been happening on the blockchain over the past few weeks.

  • “Well it’s an exciting time to be in cryptocurrency. Bitcoin has now spent multiple weeks with its price above $10,000. It’s only the third time in bitcoin’s history the price has been above $10K for multiple weeks.”
  • “Due to those high prices, there’s been a very large amount of bitcoin flowing into exchanges to be sold. This is because people want to take advantage of this high demand and these high prices to lock in some gains. Now, in the last week, there has been a slight decrease in bitcoin inflows to exchanges compared to the previous weeks, which suggests that some of the selling pressure is starting to ease.”
  • Bitcoin holders are cashing in 25%+ gains at a rate, given the price level, not seen since the late 2017 bull market.
  • Ethereum has a similar story of reduced profit taking last week, easing the sell pressure somewhat.
  • Tether inflows to exchanges have been at all-time highs, with $806 million, 9% of supply, incoming on Aug. 10.
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Gerelyn Terzo
Gerelyn caught wind of bitcoin in mid-2017 and after learning about the peer-to-peer nature of Satoshi's creation has never looked back. Previously she covered institutional investing and fintech for several major trade publications. Gerelyn resides in Verona, N.J.

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