We believe digital currencies are here to stay, but bitcoin may not be the winner

Digital Currencies are Growing

The concept of “money as protocol” is here to stay.

We are at the very early stages of understanding all the applications of decentralized cryptographic currencies.

Given the pace of changes, we feel it’s impossible to predict what this space will look like in 10 years, other than it will be very different from today.

Exposure to AltCoin Upside

This fund is a vehicle for accredited investors to expose themselves to the upside potential of AltCoins.

We are strong believers in bitcoin, but there’s no certainty that the value of digital currencies will continue to accrue to bitcoin in the long term.

An optimal digital currency investment strategy would place some percentage of funds in AltCoins.

Protocol-level innovations are happening in AltCoins

Anonymity

Bitcoin is not anonymous. All balances and all transactions are visible to everyone, for all time.

However, there’s a huge desire for anonymity. It’s why 30% of the wealth of High Net Worth individuals is held offshore.

An anonymous protocol could eat into a significant portion of bitcoin’s market cap (if not the majority).

Consensus Algorithms

Bitcoin’s Proof-of-Work approach to consensus wastes energy, and is vulnerable to 51% attacks.

AltCoins are innovating in different approaches (such as Proof-of-Stake) that offer benefits.  It will be politically impossible for Bitcoin to adopt whatever approach emerges as the winner, as that would require over 50% of miners to throw away their investment in mining hardware.

Intelligent Blockchain Applications

Bitcoin introduced the idea of the blockchain, which has fascinating implications that could change how we trade with one another and enforce contracts.

However, to make full use of such concepts as smart contracts and Distributed Autonomous Corporations, we need a more expressive protocol.