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Deep Dive with Kyle Samani, Managing Partner Multicoin Capital

Kyle will be answering questions on 2/1 - ask your questions here.

Multicoin Capital posted 8 months ago

with or if you'd like to join the discussion.
Stanley
I know you are a big fan of the 0x team. In your opinion which other crypto projects are in the same caliber? If you had to go all in on 1 altcoin which one would it be?
9
Kyle Samani
@stanleyhataria

If you asked me to pick one coin and come back in 10 years, I'd choose ETH, no questions asked.

I also think that the probability that ETH is the mega winner is 15-20%. It's there's to lose, but they definitely can lose it.

Of the non-smart contract platform utility tokens beyond 0x, we're not really bullish on much of anything right now. I spend most of my time these days on smart contract platforms, store of value, and regulatory issues.
6
Val Klump
How do you feel about Bitcoin's long-term future?
4
Kyle Samani
@valdean

I think Bitcoin is going to be come increasingly less relevant. It's not going to die anytime soon, but it seems rather clear to me that the Bitcoin team is far too rigid in it's thinking to win.

On a long enough time scale, the answer to everything becomes "evolve or die." Bitcoin generally refuses to evolve.
4
Bass Bauman
@KyleSamani What are your thoughts then on Bitcoin Cash? Do you view the project and community as more likely to evolve and become more relevant over time compared to Bitcoin?
0
Lawrence Hecht
What are you doing with all the business Multicoin Capital must be turning down now a days?
3
Kyle Samani
@LawrenceHecht

ha! Our minimums recently went to $1M, so there are lots of folks who we can't accept. For now, we refer them to other funds and fund of funds that take smaller investments.

We do want to launch a product later this year to fill that gap. It's not something we're working on immediately, but we're getting there.
3
Kyle Samani
@LawrenceHecht

ha! Our minimums recently went to $1M, so there are lots of folks who we can't accept. For now, we refer them to other funds and fund of funds that take smaller investments.

We do want to launch a product later this year to fill that gap. It's not something we're working on immediately, but we're getting there.
0
Kyle Samani
@LawrenceHecht

ha! Our minimums recently went to $1M, so there are lots of folks who we can't accept. For now, we refer them to other funds and fund of funds that take smaller investments.

We do want to launch a product later this year to fill that gap. It's not something we're working on immediately, but we're getting there.
0
soona
Opinion on proof of space and time as a validation mechanism?
3
Kyle Samani
@soonaorlater

I'm not familiar with the low level computer science mechanisms on proof of space time. Assuming it works, it seems better than hash-based PoW.

But I still think that in the long run, to scale blockchains, we'll need PoS models, as they accommodate far more compelling network topologies.
0
jonathanmarcus
Are you able to share any of your ideas for potentially improving 0x's token mechanics?
3
Kyle Samani
@jonathanmarcus

Publishing something next week
2
Val Klump
What's going on with the market these days?
3
Kyle Samani
@valdean

Dunno. We're not traders.

I'm not really worried. I see the tidal wave of capital coming :)
5
Steven Zheng
What is the one that got away? i.e. You had the opportunity to invest but decide not to, and not it is relatively successful.
3
Kyle Samani
@Dogetoshi

EOS. I was too ideological about decentralization.
2
M
Appreciate your thoughts on programmable money being a superior SoV than Bitcoin. How will alternatives, like ETH, make up for the gap to the hardened (and intrinsically secure due to its simplicity) BTC in terms of security and immutability? Could both work together, with BTC maintaining an edge in regards to fulfilling the SoV function and if not, why not?
3
Kyle Samani
@mahermilly

So there is a case to be made here. Nick Szabo articulates quite well here - http://unenumerated.blogspot.com/2016/02/two-malthusian-scares.html

However, I don't think this is a compelling long term argument.

The formal verification people say that all smart contract platforms need formal verification to mitigate smart contract risk. Our historical analogues suggest otherwise.

Today's mission critical systems - car OS, military, banking, etc - are overwhelmingly written using object oriented models. There are some rare instances of using formally verified OSes for niche tasks, but this is the exception, not the norm. I don't expect this to change in smart contract land.

I do expect that we'll see increasing abstractions in Solidity and other smart contract languages to ensure that developers don't do stupid things.

Today, when you're building an app, you can use Swift, and let all of its magical garbage collection, dynamic memory allocation, etc work, or you can write in objective-C, and insert memory leaks to your heart's content.
1
russmonk
Hi Kyle, thank you for the stream of informative pieces via the blog and your Twitter feed. I greatly enjoy them all!

My overall feeling from your writing is that you have a long time horizon and are much more forward-looking than most in this space, at least from the investment angle. But given that you’re running a fund with limited lock-in periods of presumably just a year or two, you’re probably forced to be both heavier and lighter in some positions than you would prefer. Could you give a representative example of each (overly heavy and light) and why the current weighting is the case? I ask not for a “tip” on an individual project but because specific instances of your thinking on a project vis-a-vis time frames could be instructive and interesting.

And a second question, if you’re inclined to answer. On Twitter you’ve said the money play is hundreds of times more valuable than all the other use cases combined, however you’ve written almost nothing, as far as I can see, on the privacy coins. Do you just assign Zcash and Monero into the non-programmable money camp and write them off together with Bitcoin as long-term irrelevant? Or could you see the off-shore multi-trillion SoV play not requiring much in the way of programmability and all in the way of anonymity and security? And if the latter, are you at all bullish on the privacy coin space?
2
Ben Tossell
How can non-technical people look to evaluate ICOs?
2
Kyle Samani
@bentossell

IMO, you shouldn't be pre-ICO investing unless you're doing it professionally. Way too many gotchyas.

Even if you have the technical/crypto chops, you don't get access to the team. Investing pre-ICO without talking to the team 1 on 1 is insane. As an individual investor, you probably don't have the capital or the brand such that the team will spend time with you on1 on 1.
3
Kyle Samani
@bentossell @Jyannos

How is the problem uniquely solved using crypto
Team
Total addressable market
go to market strategy
3
Jason Yannos
@bentossell Mind sharing those "Checklists"/ Resources by chance :)?
2
Lawrence Hecht
@bentossell If it is a token white paper, they should have all the information they need in the white paper. If they don't, then it wasn't well written. The exception is the roadmap section -- they could use help to determine if the engineering goals are realistic.
1
Ben Tossell
@bentossell @LawrenceHecht Lots of white papers are difficult to read for non-technical people I think.

Often people mention things like:
Team
Github activity (for developer enthusiasm)
use of the token

Muneeb from Blockstack and Bruce Fenton both put together some great 'checklists' for this. (as well as lots of other people for that matter)
1
Lawrence Hecht
@bentossell non-technical people can understand the things you mention above.
1
Ben Tossell
@bentossell @LawrenceHecht yeah I know :) - just wondering what Kyle would recommend
1
Ben Tossell
If you had to start your career from right now, what would you focus on?
2
Kyle Samani
@bentossell

Be an expert in whatever it is your passionate about. For me, it was "general tech." I've read - not joking - over 200 tech headlines every single day without exception for the last 10 years. Of those, I then read every article whose headline I found compelling.

That evolved into writing, which ultimately got both Pristine and Multicoin off the ground.

I will say, writing is way under-rated. I made it a new year's resolution in 2013 to write 3 blog posts / week. I did it. 156 posts that year. That really kickstarted my writing ability.
6
Martin Skakala
Hi Kyle, how do you think the DEX will solve KYC/AML requirements for institutional trading?
2
Kyle Samani
@mskakala

Most DEXs will ignore KYC/AML. There's a very good argument that DEXs are just "Craigslist on steroids" in that they just help to parties find one another, and then charge each a side a finder's fee. Some DEXs may still try to comply with KYC/AML, but many will not.

It's about to get a whole lot more wild wild west. Especially after a major exchange implodes.
4
Crypdope
What is your perspective on the value capture and investing upside between base protocols (e.g., Ethereum and NEO) vs. application protocols (e.g., 0x and Civic)?
2
Kyle Samani
@Crypdope_

The "money" use case is many orders of magnitude larger than every other use case combined.

Some argue that smart contract native tokens will not be money tokens. Rather, they argue that pure SoV tokens like BTC, XMR, etc will be SoVs, and MoE will be separate. I believe that the most useful tokens will become the de facto SoVs. ETH is best positioned to fulfill this vision.

Most application protocols suffer from the velocity problem - https://multicoin.capital/2017/12/08/understanding-token-velocity/

I'm publishing a follow up to this next week that proposes some new models to solve this problem
2
Josh Rio
You've coined (pardon the pun) the phrase "token velocity" especially in reference to 0x.

Firstly, could you explain this concept to people not familiar with it. Secondly, could you explain if, or how, this concept is evolving in your mind as time goes by.

Thanks!
2
Josh Rio
@josh_rio @KyleSamani Look forward to it. Appreciate your time.
1
Kyle Samani
@josh_rio

See here - https://multicoin.capital/2017/12/08/understanding-token-velocity/

Posting a follow up to this next week with some of my thoughts on evolution.
0
Tudor Stanciu
How far away do you think we are from the projects that will create the infrastructure / protocols of the blockchain ecosystem? How can investors get more involved in making this happen?
1
Kyle Samani
@TudStanciu I don't follow the question
0
Matt McCool
You've raised the question before of whether or not the crypto market is rational. What is your gut feeling on this, and how does it play a role in your firms thesis investment strategy for both the short and long term?
1
Kyle Samani
@1mccool

Crypto is clearly not efficient at the macro or micro levels.

Hard to generalize how this impacts our investments. One interesting effect is that we have far fewer positions, and are far more concentrated, than most of our peers. The more investments you have, the more you have to keep your eye on. Focus is a beautiful thing.

Every week during investment committee, we ask ourselves, " are we comfortable buying each of our positions at current prices?" With 30 positions, given how dynamic this market is, that's very difficult to do. We maintain under 10 liquid positions for exactly this reason
1
Tudor Stanciu
What is the type of expertise that teams working on crypto projects are lacking the most right now?
1
Kyle Samani
@TudStanciu

Recruiting aggressively

Thinking about and executing on go-to-market

In general, company-building stuff
2
Tudor Stanciu
@KyleSamani and in terms of skills (technical/economics/legal/other)?
0
Hassan Ahmed
Thanks for the newsletters. How do you see the competitive market for interoperability chains play out? Is this a winner-takes-all market? Or will specific use cases create big verticals for many chains to have sufficient utility?
1
Kyle Samani
@Hassan_NY

As a result of my post on interoperable chains of chains, I've been talking with the Cosmos team directly. I've become far more bullish on Cosmos than I was previously. I will be publishing a podcast with Sunny Agarwal, lead researcher at Tendermint, in the next few weeks, along with a broader post on models for scaling trustless computation.

I'm also far less bullish on Polkadot than I was.
2
Erik Torenberg
What do you think is the biggest existential threat to Bitcoin? Curious of your views on either a technical level, or a non technical level.
1
Kyle Samani
@eriktorenberg

On a long enough time scale, all things must evolve or die. Bitcoin seems to be trending away from "evolve."

I also fundamentally don't believe that the future of trustless computation is the handicapped script language of bitcoin. That's like saying OSes are perpetually bound to be written in C because the Java VM has too much overhead for application development.
1
Erik Torenberg
Something you've recently changed your opinion on in the crypto space?
1
Kyle Samani
@eriktorenberg

Way more bullish on Cosmos than I was 14 days ago. Posts and podcasts coming in the next few weeks.
2
Erik Torenberg
What do you think of privacy coins?
1
Ben Tossell
Are you going to do more public analysis like you did with IOTA?
1
Kyle Samani
@bentossell Yes, we're targeting one formal asset analysis per month
4
Ben Tossell
What are good reliable places to do due dill for a non-technical person in crypto?
1
Kyle Samani
@bentossell

Twitter, Reddit, onchain fx, team's website

Talk to people. Lots of people. Peers, colleagues, competitors, etc.
2
Val Klump
As an investor, do you focus mostly on coins with a particular market cap, or do you invest in coins across all market caps?
1
Kyle Samani
@valdean

Multicoin Capital is a long-biased, stage agnostic crypto hedge fund.
1
Isake
Any room at Multicoin Capital for a Harvard grad with a focus in biotechnology?
1
Kyle Samani
@IsakeNow Please see our careers page - https://angel.co/multicoin-capital/jobs
0
soona
Can you explain Token Not Necessary a little more? Don't we want a token so the community's efforts can have a meaningful effect on the token's value?
1
Kyle Samani
@soonaorlater

Most tokens - including those of high profile projects like 0x, BAT, RDN, GNT, and others - can be forked and basically CMD+F' with ETH, and they will work perfectly fine

Very few tokens *must* exist. REP is one of the few that must exist separately from ETH
2
Pranay Srinivasan
Hi Kyle - Would love to know your thoughts on futures / forward contracts in Crypto esp ETH - Can these be something that can be built into a tradeable dashboard?
1
Kyle Samani
@utekkare

Sure they can. But we are not traders, and I'm definitely not the person you should ask about derivatives in general. Not my forte
1
Blockchain enthusiast
What do you think about cvc? Do u hold any? :)
0
Mourad Ben Mahmoud
Hi, what's your favorite crypto-tools? Wallets, Hardware, Software to manage portfolio, etc..
0
Kyle Samani
@mourad1bm

Blockfolio, ledger/trezor, google sheets. Overall, tooling isn't great, but it's getting better
2
Nathaniel
as plenty of Ethereum based projects will begin to launch in 2018--What role do you see projects like Aragon in governing communities within these Dapps.
0
Kyle Samani
@N___jr

I think Aragon is 3-5 years too early.

Right now, I care exactly 0 about decentralization of governance. I want to bet on enlightened, benevolent dictators. If I disagree with one such dictator, I'm free to move my capital elsewhere.

In the long run, I see a place for Aragon-like tools, but it's not clear to me at all that Aragon specifically is the right answer.
2
Nathaniel
What are your strategies in going after short,medium,and long term profits?
0
Ben Tossell
What is your favourite White Paper and why?
0
Kyle Samani
@bentossell

I thought Filecoin was extremely polished, though there remain a lot of questions. I loved Keep's as well.

My highest priority upcoming reads are Dfinity, Kadena (chainweb), and Spectre. I'm already quite familiar with the first two, but am looking forward to doing deep dives into their academic papers.
0
Ben Tossell
What is the most interesting White Paper you've read recently?
0
Erik Torenberg
What do you believe in crypto that others disagree with you on?
0
Kyle Samani
@eriktorenberg

Bitcoin will become irrelevant

EOS and Ethereum can both succeed

There will be very tokens that matter. Very few

Most projects still have fundamental computer science challenges ahead of them
1
Erik Torenberg
What do you think of stable coins?
0
Kyle Samani
@eriktorenberg

Huge fan of the vision. I think it's the most compelling opportunity in all of crypto. There's even a case to be made that stablecoins beat Ethereum.

Current valuations on stablecoin projects are absolutely out of control.
1
Josiah ☕️
Really enjoyed your Coindesk article on token velocity. Curious if your thinking on that has evolved at all in the last few months, whether you see any of the specific velocity reduction tactics you mentioned in that piece gaining steam, and how you think on-chain governance may impact staking economics for networks experimenting with that approach.
0
Kyle Samani
@jgulden

Posting a piece next week on this. Stay tuned
1
X