 So welcome everybody and what a what a great talk from gigi Oh, there'll be a lot of shared themes across these across these two talks. So we'll We'll get going and see what happens. Hopefully everyone can hear me loud and clear and And you enjoy the presentation. So today's talk is going to be about Bitcoin as a startup and how it's grown You know from a seed company into now a store of value currently in its series be phase of life And we'll we'll get to that in a few short clicks So today's talk I'll first give a couple of disclaimers then I'll talk about the Bitcoin company the circle of price the different fundraising rounds that Bitcoin has experienced and And I'll I'll leave you guys with a bit of an investment Decision question whether to invest in Bitcoin the startup company or Bitcoin startups or all both So as a disclaimer first things first these need to be made so The target audience for this talk are vcs that are used to valuing Startup businesses. So if someone is used to you know, just valuing startup businesses Maybe we should present Bitcoin to them as a startup so they can possibly apply their valuation lens in that way So to start off the Bitcoin company So the founder of the company is Satoshi Nakamoto the CEO CTO CFO C Everything Oh is simply the invisible hand of the market The the company's pitch deck is is the white paper Anyone is is free to invest other by the you know financially by buying Bitcoin or investing You know in kind by becoming a developer and and growing their slice of the pie. We'll talk about Slices of pie and growing and number go up shortly the main product that that Bitcoin Provides is effectively an all-encompassing parallel monetary system The vision and this is a plucked straight from the white paper is to allow online payments to be sent directly From one party to another without going through a financial institution and the mission of Bitcoin is the solution of the double spending problem using a peer-to-peer network So an organization is defined as an organized group of people with a particular purpose Bitcoin is effectively that but it's just an unorganized group of people So if you want to get into the the the thick of it, you could almost call Bitcoin a well-oiled unorganization with founders, but no CEOs many volunteers, but no employees and provably non-diluting equity Available to anyone that's willing to work for it So Bitcoin like other companies has a has a suite of products and Utilities, so let's compare it to another behemoth like Google for example So Google started off, you know in the in the garage in the mid 90s as a search Company and it had you know little bits of added on products which provided Utility and now you've gone from simple search to an ads behemoth with you know Google Maps Google flights YouTube all of these other other stuff and as as time went on Google's utility increased as a company So what are Bitcoin's main product offerings? There's effectively six basic offerings Offering number one and the most important of the offerings is as a gigi was talking about NGU technology That's probably For investors one of the one of the bits of the product that's most interesting to them You have a buying and selling function you have ascending and receiving function Storage of Bitcoin Bitcoin privacy and the programmability of it And you'll see each of these products in the product suite has been Improved over time with increasing utility. So for example in the very very early stages of Bitcoin in you know in the in the pre-se stage in 2009 for example Buying and selling was was not an option There was nowhere you could buy it. There was nowhere you can sell it Until Laszlo gave Bitcoin its first value through through the through the purchasing of pizzas in 2010 So what are the corporate dynamics of the Bitcoin company? so The staff or other volunteers work how they like when they like where they like and on what they like and and for a solid decade of Bitcoin's life What the staff liked basically nobody else in the world liked or found interesting. There were really little Itches that one particular person wanted scratched So they went off and and worked on that without too much consideration You know for mass market appeal These staff are responsible for their own expenses and their own product development budgets They can compete With each other or they can cooperate through the through the open source System but there are no central managers or coordinators and the competition is unholy with with Paid products, especially having very short shelf lives So the circle of price and that also goes back to the staff needing to pay for their own development costs So how does the circle of price work and and we go back into the circular loops That that gigi was was talking about in his talk a little earlier So You have your early hodlers sell or let's call them the staff or early equity holders in the startup So you could almost say, you know Satoshi is no different to you know to say Jeff Bezos or Mark Zuckerberg or Jack Dorsey You know holding a good chunk of equity in a startup company that they founded in this case You know Satoshi is is alleged to have a million coins or rather five percent of the equity in the Bitcoin company So and you know, there were several others like him in the early days mining as well Now these people sell when when you have a price spike, they get money in They retire and they switch to work on Bitcoin Full-time whether that's developing evangelizing start up starting up companies Whatever it is they develop and grow the utility of Bitcoin when the utility of Bitcoin increases Customers or people flock to use the improved range of products whether that's number going up attracting them or getting Privacy technology that they that they really needed Once the utility increases the cash comes in when the cash comes in the price increases when the price increases the early holders sell they then go on to develop and the number go up loop is set almost in perpetual motion in a in an unstoppable way and And number just keeps going up Whether that's a price metric a hash rate metric a user's metric The NGU loop is designed to be triggered when it goes from zero to n and and never stop So once the once the the NGU is is used as a sort of a throwaway line and joke and comment But once a number go up as a concept is is understood you'll find that that's One of bitcoins most most powerful properties So let's walk through the investment rounds of bitcoins life So we've so far gone through three investment rounds from the from the pre-seed phase the seed phase and series a and we've now just entered series B In in in what I've evaluated as as bitcoins product life. So in terms of a startup We are still very very early in bitcoins Life and for it to be you know IPO level or you know sort of investment grade We're still we're still a good Eight to twelve years away from that point. So let's walk. Let's walk through the the little life episodes in in bitcoins history so far So the first the first phase the pre-seed phase This stage in a in a traditional company typically refers to the to the very very start Founders opening a startup in the garage scraping together whatever money they have money from parents money from relatives money from friends and and using that to to really do it rough and and bootstrap the company and get its early build going So during this phase the the risk profile was was extreme Prices could fluctuate by you know well over 50% Over up or down over the over the period of as little as a week the block reward and inflation Were were extremely high inflation was technically infinite because the base was was growing from zero It was it was worthless to start with 40 million dollars went in so by cash in I've I've used that metric as The the total revenue in US dollars marked to market that the miners earned for their rewards Which is the the block subsidy which at the time was 50 Bitcoin per block and and any fees earned Price started at nothing. There was a huge spike up to thirty five dollars about two-thirds of the way Into the into the round and you could probably call that the seed money are going in that money was drawn down and then reinvested Into development to grow the ecosystem. So after that 40 million went in we ended the series at a post-money valuation of a billion dollars So These were the these were the early pioneers Risking risking everything the the chance of Bitcoin going to zero was Was far far higher than the chance of Bitcoin succeeding even so this was was still a still a dream and Basically that the equity holders of this business were the founders the earliest developers speculators and Anyone in the in the right place at the right time? This really was a diamond in the rough and you and you sort of had to be lucky to get in This this this early so in the pre-seed round o9 to 2012 If you're in this round, there's there's great privilege and responsibility for these equity holders And as I've noted the user experience and interface during this phase Was was absolutely terrible and and for even people that were interested in it It was really effectively unusable unless you were a computer science buff You had a couple of exchanges get launched and and get hacked But with time things things did improve. So let's have a look at the next round, which is the seed round Which was effectively the first mainstream round with the with the 2013 bubble being the first real bubble that made it onto onto TV So you can you can think of this round as the as As Nathan reef would say The funding required for the seed to plant the tree and you give this tree enough care and water and attention and sunlight and Hopefully this seed will eventually grow into a tree. So During this round, we we did see Bitcoin blossom into a nice little robust Tree with a with a with a thickening a trunk. So a risk here was still quite high as you can see inflation did did drop by half and The valuation grew from one billion dollars to eleven billion dollars With post-money valuation effectively being the market cap of Bitcoin at the end of The of the round with miners earning four point six billion in revenue During the duration As you can see the the prices went spanned from twelve dollars to eleven hundred dollars With the ending price being six hundred and fifty dollars With the hash rate growing unbelievably and tremendously due to the start of What we saw in the seed round as the age of asic miners. So Here the risk of failure was still extremely high The earliest developers and speculators were still the main equity holders, but now with a with a reduced stake The age of you know panning for gold was over there's no more mining on on CPUs and laptops There's you know, you couldn't open open up a laptop install a wallet and be rewarded with 50 Bitcoin anymore Those days were long gone. The first hardware wallets became available But the the user interface and experience was still terrible still very high to still very hard to buy Bitcoin still very hard to store it Still very hard to really do anything on it. So people investing here were legitimately Investing in it in a seed round equivalent product that wasn't quite ready for prime time Series a which which we've just come out of a very busy Series so in the first eight years of of life Bitcoin has had established success against, you know, several Technical technological and social attacks. We saw Silk Road come and go. We saw The government auctioning seizing and then auctioning Bitcoins we saw satellites get launched into space in series a Really really a great series, but as you can see here along a similar trend You had between your pre-money valuation and your post money valuation you saw a 10x rise Over the over the investment round with a cash in amount of around 16.1 billion dollars So you had a more than more than 10x increase in price and Just under a hundred x increase in hash rate. So still growing very seriously and by by orders of magnitude so Even though it was a far safer product. It was still Extremely high risk of failure with price volatility With with 40% swings in a few days possible and and witnessed Just as as recently as as Black Friday March the 13th March the 12th in the US Bitcoin dropping 50% in a in a 48 hour period and you know, lo and behold You know three months later Price has has gone up 250% so still extreme volatility The earliest developers and speculators are still the main equity holders But but only just belly and we have started to enter really the redistribution phase Through things like the auto DCA movement One of the most important things that happened during this series, which really brought Bitcoin to the main stage Which sort of happened behind Behind the scenes and without too much a media fanfare was the user activated soft fork where Bitcoin proved that it was truly the money of the people and could not be co-opted by You know, neither the Bitcoin establishment Nor nor any other establishment for that matter Plug-and-play nodes came onto the scene the lightning network came onto the scene You know the the UI and UX improved dramatically, but you know, it's still not good You know lightning for example not ready for mainstream But again, this is this is still series a and things are still being built So as time moves forward number go up will move forward on all of these things so You know an example of a coming update will be, you know, schnore signatures Schnore signatures will you know allow, you know a couple more transactions per second So if number go up on transactions per second number go up on price number go up on users All of that incentivizes more development and the number go up loop just goes on and on Importantly the age of auto DCA and Bitcoin only has commenced during series a and will be carried on forward through series B And I'll be dwelling on auto DCA quite a bit in the in the in the rest of the presentation So for me nothing matters in Bitcoin except a Auto DCA and that is because auto DCA is the is the fuel behind NGU technology and if price appreciation stalls out Everything stalls out So so by auto DCA, which is automatic buying of Bitcoin on an extremely regular basis, whether that's daily or weekly Is sort of an ideological stand against the fiat system by by forcing yourself to save Money in this in this new ecosystem and also prop up the price floor and and Effectively a force perpetual number go up in a in a self-fulfilling prophecy So so the power of the of the of the auto DCA in a During series a to keep the price at $10,000 only six point five seven billion per year Was required to hold the price and if you think about Bitcoin as a as a startup company And looking at the valuation it experienced during series a you could say that a you know a five to six billion dollar per year Investment inflow into Bitcoin for the level of utility provided was probably warranted and you should see this level of yearly investment Increase as utility increases as we go on through the series So that just translate to a very very small fraction of people Saving $10 a day in Bitcoin to hold a price of $10,000 All right, so I'm running out of time. So I'll I'll I'll get through these next ones Quite quickly. So series B. This is this is where we are now So series B is is the scale? Round so Effectively money that goes in during this phase will be focused on on scaling The the business as quickly and and effectively as possible Or rather, sorry, it's the the building phase sees that is the scaling phase on I apologize So so the build phase so all remaining things that that need to be built out in Bitcoin from a from a usability and and privacy Point of view will most likely happen during this next four-year period So having multi-sig that's usable by my mom having effectively putting myself in my mom's shoes By the end of this four years my mom should be able to seamlessly be a bit coiner and She will because she must and and I believe four years is a very very long time in Bitcoin and there will be enough Investment money and number go up That go in during these next four years that should that should really bring Bitcoin into the into the point where it is ready for prime time so with You know, I was alluding to Schnorr signatures Earlier, that's you know one of many protocol improvements that will come these these improvements will allow things like massively multi-sig addresses that will help You know with with institutions and institutional funds if you increase utility for institutions number go up and and so on and so forth You'll have a lot more vertical and horizontal integration amongst Bitcoin companies and you'll see You know full-stack companies Develop so for example mining companies that produce their own hardware Produce their own energy produce their own wallets have their own exchange attached and so on as a sort of all-in-one solution and As the series as the as Bitcoin grows more mature you need less and less adults Putting in less and less money per day to hold a higher and higher floor so series see the scale series this this Series effectively is the point where Bitcoin is completely ready for For prime time and the masses. It's just that nobody knows about it yet Inflation here is lower than gold Risk is is far lower and it's basically here now an exercise of of getting the product out to the people through increased marketing and evangelism at this point a lot of Early holders are quite wealthy and spending a bit of money on on marketing. Although They're they're they're Bitcoin stash will slightly Reduce the Bitcoin pie will become much larger You know allowing them to compensate for their loss in Bitcoin via increase in wealth More more vertical and horizontal integration will will be seen here and and there will be More improvements in in user experience and user interface At this point as as gigi was mentioning Bitcoin will start to disappear and be abstracted Again through the auto DCA army if you see 1% of adults saving just $2.70 a day at this point Would would leave a price a Bitcoin price of $300,000. So through the through the harvings And and the increase of utility the number just goes up and up Relentlessly and you'll see these numbers almost shadow plan B's stock to flow model Finally at IPO bitcoins ready for prime time extremely low risk of failure The the wealth distribution has is well and truly underway and and circular self-reliant economies have formed Bitcoin has has effectively disappeared and And very very few people Saving $5 a day gives you your million dollar million dollar Bitcoin at only a hundred billion a year of investment flows Which by 2030 will be will really be nothing in the scheme of things It then moves on to blue chip status like it like you know like a JP Morgan Level company where it's effectively a risk risk-free asset low volatility Innovation is incremental at that point and and the wealth distribution is ongoing So as you can see a DCA army It could could see a six million dollar coin at that point with with very with very little investment So not many people have to be involved to see Bitcoin absolutely take over the world So in terms of the the the investment decision It's almost impossible for a Bitcoin startup to outperform Bitcoin if you're thinking of investing in a Bitcoin startup but Bitcoin only performs well if you have a If you have an increase in core functionality So it's a it's a bit of a catch-22 you have to invest in startups to improve Bitcoin to make Bitcoin number go up So if you're going to insist on investing in a startup you should also hedge By taking a long position in Bitcoin too