What is the basic concept of Bitcoin
"The bitcoin bubble is insane"
Frank Thelen doesn't have much time for the interview, he's about to go on stage. But he's used to getting to the heart of things. In the television series "Die Höhle der Löwen", known by fans as DHDL, Thelen has been a jury member and investor from the start. The start-ups only have a few minutes to explain their business model.
Frank Thelen doesn't need much more to present his opinion of Bitcoin and blockchain. He clarifies the most important things right at the start: "We can say you too," says Frank. Then he nods, we're ready to go, just don't waste any time.
Yeah, sure, I have bitcoins.
And you haven't sold them yet?
I'm still holding some. Well, sometimes I had more, I sometimes had a reasonable amount of bitcoins. That was a position in the amount of a typical DHDL investment.
The Bitcoin rate is still rising, but many experts are just waiting for the bubble to burst. You also?
Yes. This is a bubble, there is no real value behind this price development. Bitcoin is pure speculation. And the worst thing is: Bitcoin uses blockchain technology, and that's why no other blockchain is efficient.
The way it is built, the blockchain needs a lot of computing units if I want to move something from A to B. The technology is not designed for so many transactions to take place on the blockchain. There is a lot of energy going on right now. We have a speculative bubble in Bitcoin currency, and then we have this waste of energy. That’s madness. We are trimming everything for energy efficiency, and then with these algorithms we will soon be wasting as much energy as the country of Denmark in a year.
Last week you just invested in a blockchain startup yourself, in Neufund from Berlin. How big is the risk that blockchain companies will suffer if the Bitcoin bubble bursts?
Zero! They have nothing to do with each other. Blockchain is something like a new database on which bitcoins are based. I don't even know whether blockchain is the future. It's more of a transition technology before there is something more efficient. But the basic concept behind it will stay and that has a brutally great future.
Isn't it a problem for companies like Neufund if the blockchain is currently so overloaded because of bitcoins?
No, that's still okay with us. But we don't do a billion transactions a day either. Should Neufund get that big, then we would probably switch to Hashgraph or other more efficient mechanisms.
What was it about Newfound that fascinated you so much?
We can bring company shares to the blockchain. And with it we can move company shares back and forth very easily and effectively all at once. Up until now this was very expensive and heavily regulated by the stock exchange. And then, as an alternative, there were ICOs, i.e. virtual IPOs, but it's like in the Wild West. Nobody knows whether they are buying shares in a company or a fuel voucher.
Neufund are the first to guarantee that you really only buy company shares, just like on the stock exchange. But because it's so inexpensive and easy, it's worth it for small businesses too. And that is the liberation of the start-ups. They can make their shares tradable much earlier.
Will we soon be buying start-up shares like we are buying shares today?
Yes exactly. It is unfair that start-ups remain completely hidden from private investors as an asset class. And in crowdfunding, sorry, but that's where the crap comes in. We want to change that. Today the market is basically only accessible to professionals, like me. And I have been in a start-up for an average of seven to twelve years because I cannot trade it liquidly. I can't just sell the shares again.
This is not a problem with shares in Daimler or Adidas, I can sell them straight away. We want to introduce this for start-ups as well. This is of course a huge challenge for private investors because you have to think very carefully about what you are buying. Start-ups will also fail.
How much potential do you see then? Germans aren't particularly well known for buying stocks. Then why should they want to invest their money even more riskily in start-ups?
The potential is huge. But yes, of course that is also risky. Ultimately, you should look at every company and ask yourself, is this a project that I can identify with? And then you should invest a small amount of your assets - five to a maximum of twenty percent - and then distribute the sum.
That is not possible today, you cannot invest in a start-up for less than 50,000 euros. But what if you could only invest 500 euros? I think many would like to do that.
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