The Convergence Brief: September

September 2017

The Convergence Brief: September

New Funds, Better Valuations & NextGen Blockchains

Here’s your rundown of the top convergence stories of the month — here’s to the bold and most contrarian stories in the world of blockchains, tokens and convergent emerging tech! Please show your appreciation with some applause! 👏 👏 👏

By OV Research: Curated by Harry McLaverty, Edited by Lawrence Lundy

Convergence

1. Magos AI project brings Artificial Intelligence and Neural Networks to the world of blockchain

Yes, AI and blockchain together finally. Magos AI, the first ever blockchain-based prediction software, has already gathered over $700,000 in its token sale. MAG is an Ethereum-based token that allows the community to receive profits generated by the Magos platform and to vote on the project’s constant development, allowing the platform to run on a decentralised ethos.

Magos AI is a great example of a team that understands market adjacencies. They realise that their tech is applicable well beyond prediction markets and sportsbooks (particularly decentralised asset management) — if they identify the right markets early then their TAM will increase, similar to the likes of Uber and Airbnb. One to watch. — Link

2. TraneAI to Launch ICO for $50M in Tokens to Seed the First Open-Course AI-Development Ecosystem Built on Blockchain

TraneAi, an emerging player in the rapidly expanding artificial-intelligence market, announced that it would offer the sale of $50 million in tokens to seed the first decentralised, open-source AI-development ecosystem built on Blockchain technology.

More proof of the value from combining blockchain with AI — faster, more accurate training at low cost is just what we like to hear. Perhaps we will begin to start ‘fattening’ the app-layer and see much more Blockchain/AI convergence in the consumer space, especially the Entertainment, Gambling & Gaming sector which has had over 64 token sales in the last quarter.— Link

Investments

3. Ethereum Startup ConsenSys Launches $50 Million Blockchain Fund

Ethereum startup and incubator ConsenSys has announced a $50 million venture fund for startups working with blockchain technology. Named ConsenSys Ventures, the new fund is being led by investment specialist Kavita Gupta.

One more to add to the list of blockchain funds, expect several more to spring up over the next few months. It is particularly pleasing to see value placed on due diligence and social impact. Blockchain technology continues to blur the lines between traditional venture capital investing and driving social change, and funds like the UNICEF Innovation Fund are making great strides here. Important to note that ‘blockchain funds’ can still be equity backed!— Link

4. SPiCE VC Launches Liquid VC Fund With Tradable Token-Based Digital Securities

“While equity crowdsourcing brought startup investments to the public, we are hoping that SPiCE with its liquidity and inclusivity will bring more people to investing in a venture capital fund, taking the portfolio approach, and avoiding the inherent risk of investing into a single startup or ICO,” said Carlos Domingo, co-founder and managing partner of SPiCE and a former CEO of Telefonica R&D.

Following on from the liquid VC fund raised by Blockchain Capital back in March, SPiCE transfers money from the proceedings from startups that exit directly to token holders via buyback and is a closed-ended fund, not evergreen. Autonomous Research has already listed over 70 funds, but expect more liquid funds and much more disruption in the funding mechanism with the blockchain; that’s not to mention diversity and disintermediation! — Link

The Market

5. The Next Generation of Blockchain is Here, and Its Name is Soferox

Soferox is a brand new blockchain concept (Proof of Pact) created by blockchain experts to maximise all the benefits of current blockchain systems, while at the same time minimising the difficulties. After a presale, the company launched via a token sale on September 15th.

In order to achieve consensus, Proof of Work (PoW) and Proof of Stake (PoS) make different trade-offs that impact adoption — wasted energy in the case of PoW and with PoS the tendency to system centralisation (although miner centralisation is also a feature in PoW. However, Cosmos has made strides in interoperability and IOTA has made strides in developing systems without transaction fees; Soferox attempts to balance both through a hybrid PoW/PoS system. One to keep an eye on — Link

6. Cryptoasset Valuations by Chris Burniske

Recently, an increasing number of crypto market participants and observers have become interested in a framework for valuing cryptoassets. Over the years, many a dinosaur has proclaimed bitcoin valueless, an asset worse than tulips (at least with tulips you got a flower). Now they’re trying to figure out how valuable these assets truly are.

This article is an excellent follow-up from Chris, and he’s made advancements in most areas. However, for an even stronger valuation model and to make Reverse ICOs a reality, we desperately need to understand the ramifications of ‘token velocity’. Great work, and as he says himself, more to be done! At Outlier Ventures we are thinking deeply about how these asset valuation models can be combined with developer community metrics to develop a more holistic model! — Link

That’s all for September, let me know what you thought and if I missed any stories or topics worth including going forward —see you next month! 👋