First Stage Investor

A Bright Future: Startups, Bitcoin and DeFi

A Bright Future: Startups, Bitcoin and DeFi
By Vin Narayanan
Date December 21, 2020
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I am hopeful. That’s not an easy sentence for me to write here at the end of 2020. Even as the new year approaches, there’s still plenty to be concerned about.

A close friend’s dad has taken a turn for the worse (not COVID related — and it’s weird that I feel compelled to specify that). I have no idea how to help him or his family right now. 

Coronavirus cases are surging. My parents — who fall into the at risk category — are increasingly homebound as a result.

Like much of America, I didn’t visit my parents for Thanksgiving. And like much of America, I won’t be visiting them for Christmas or the New Year.

New unemployment claims unexpectedly jumped to 885,000 earlier this month. More than 5.5 million Americans are unemployed right now.  

Yet, I’m hopeful — and not just because COVID-19 vaccines are on the way.

I’m hopeful because startups have shown us they’re not afraid of the moment. This year, equity crowdfunding deal flow was the highest I’ve ever seen it. And the quality of the startups raising capital was off the charts.

I’m hopeful because startups are challenging big problems — like delivering medical treatments at the cellular level, detecting cancer early and creating the world’s first saliva test for autism.

They’re working on systemic problems like securing biometric data. They’re fixing widespread market problems like the shortage of truckers.

And they’re being cleverly opportunistic by improving how we buy wine online.

Startups are showing us that the future is bright. Whether it’s high-end tequila or helping buildings use energy more efficiently, startups are on the case. They’re doing the heavy lifting now. And they’re poised to make early investors a handsome return on their investments.

But startups aren’t the answer to every problem we face. So much about our current financial systems is broken. The payments system doesn’t work for small businesses. Cross-border payments are inefficient and expensive. Our national debt is too high. And we have to keep interest rates at close to zero because we can’t afford the interest payments (and we need to keep the stock market going). 

But I’m still hopeful. 

This is why bitcoin was invented. This is why the crypto ecosystem was built. Our world needs sound money. It needs an alternative to gold. It needs new financial instruments for the future.

Bitcoin is the beginning of that future. It’s currently trading around $22,800. And on Sunday, it cracked the $24,000 mark to set a new all-time high.

DeFi (decentralized finance) is another segment of the crypto universe that took off this year. DeFi is building the financial infrastructure for the future. It’s too early to say which projects or ideas will survive right now. But watching as the next financial infrastructure is constructed in real time is exhilarating.

So yes, I’m hopeful. Startups make me hopeful. So does bitcoin, other cryptocurrencies and DeFi. Vaccines make me hopeful too.

The future is being built right now. And I can’t wait to see what it looks like — or to invest in it.

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