[HKBCS2018] 500 Startups Sees Blockchain as Major Pillar of Web 3.0

In 2014, while everyone was still discussing what Bitcoin was, 500 Startups, a U.S venture capital firm, had already taken the lead, noting the underlying technology of Bitcoin, blockchain, and investing in related projects.

In the next wave of internet web 3.0, blockchain is going to be one of the three pillars, Bonnie Cheung, venture partner of 500 Startups, said in an interview with CoinsNetwork. The other two pillars are artificial intelligence and AR/VR.

Blockchain, from her perspective, is going to bring the next layer of internet payment protocols, which will become an ‘innate feature’ of the internet. People would then be able to transact any asset of value with anyone without middlemen.

“Right now we are seeing the next layer of the internet being built, and this is where we are focusing a lot of our investments on,” Cheung said.

Blockchain-related startups have become the focus of 500 Startups. Being one of the most active seed stage investors, the venture capital had early investments back in 2014, including Chain, a blockchain startup that was recently acquired by Lightyear, powered by Stella, forming a new company called Interstellar.

However, blockchain is still in the early stage of development. While seeing opportunities in blockchain, Cheung believes it is not easy to bring the next layer of the internet to application level in the near future.

Cheung has regarded the gaming platform as one of the ‘first adopters’ in application level. “When I talk about gaming, it is not the CryptoKitties games,” she clarified, “but more so of development platforms that are leveraging blockchain as a toolset to enrich the experience of game developers and also enrich the life-time experience of gamers.”

Besides gaming, 500 Startups is also closely looking at areas including trade financing and identification relating to KYC and AML.

In addition to equity investment and blockchain related companies, Cheung revealed that the venture capital firm has also actively involved in token investments. The current focus of 500 Startups is still on protocol level-based chain, and second layer scalability solutions and privacy solutions. According to Cheung, 500 Startups is currently investing in one blockchain project per month.

Hong Kong-based startups are facing varied challenges while growing their business. However, Cheung believes that Hong Kong, as an international financial center, should understand its own unique advantages.

Having a big pool of intelligent resources in algorithmic trading and quantitative trading, Hong Kong should make use of such ‘unfair advantages’ and grow startups like digital asset exchanges, she continued.

Cheung did not rule out interesting tech-focusing blockchain projects in Hong Kong, “but in terms of probability, I would say a bit lower.”

The local government is often criticized by the industry due to the lack of support. Cheung agreed to a certain extent, saying “no government’s aid is ever enough.” The industry always pushes for more. Nonetheless, she understands changing regulatory environment takes time and Hong Kong is doing quite a bit.

Bonnie Cheung is one of the speakers at ‘Hong Kong Blockchain Summit 2018’ on December 12, hosted by CoinsNetwork, Bloomberg Businessweek/Chinese Edition and Hong Kong blockchain consultant and investment firm BlackHorse Group. A list of renowned speakers with diverse backgrounds will also share the latest trends in the blockchain industry during the summit. Stay tuned if you want to learn more about investment insight.