1Mby1M Virtual Accelerator Investor Forum: With Hamiz Awan, Founder and Partner at Plutus21 Capital (Part 2)

Hamiz Awan: One example is the Ethereum network. It’s essentially a plug-and-play Blockchain solution. If you want to build a Blockchain startup, you don’t have to go and build a Blockchain yourself. You can just plugin to the Ethereum network that already has the infrastructure, security, and incentives figured out. You are just using it like you’re using the internet to build Facebook.

In order for anybody to use the Ethereum network, they have to pay a certain fee to process their transaction. That fee has to be paid, and it’s the second largest digital asset in the world.

One of the ways you can invest in this network would be to buy ether. If you buy ether, you’re essentially buying the fuel that all of the cars in the future will need. You’re holding on to this today and that gives it value. If these cars become popular and everybody in the world wants to use these cars, they’re going to need the fuel to run them. You’re essentially owning the fuel. 

Sramana Mitra: In terms of your investment, are you investing in only Ethereum-based businesses?

Hamiz Awan: We invest across the board, but we focus on infrastructure. Instead of picking individual applications, we like to pick platforms where all applications are being built on. You’re investing in the app store instead of the applications themselves. When you invest in the app store, you get broad exposure to all applications.

You might have thousands and thousands of applications, and most of them won’t work; but as long as they’re using the platform, you have exposure to the growth. It’s a layer one investment strategy. We like to invest in those infrastructure plays because it gives us broad exposure without us having to pick the winners.

Sramana Mitra: Take us into examples of infrastructure layer investments that you have made, and talk us through what they do and what is the model.

Hamiz Awan: We really like investing in one of the infrastructure plays that is necessary. There should be a marketplace for people to buy and sell digital assets. That’s infrastructure. We really like that business model because one of the things about marketplaces is that they make money in both good markets and bad markets. The Blockchain market is volatile. The infrastructure ones benefit from the volatility. The more volatility there is, the more transactions they process. An example is a protocol. What they figured out is why do we need the NYSE and the infrastructure behind it when all that the stock exchange and the brokers are doing is matching a group of buyers with a group of sellers.

Sramana Mitra: It’s just a marketplace.

Hamiz Awan: Yes, why can’t we just do that with a computer. When there’s a buyer, why can’t we just tell a computer program to match with a seller? Why do we need all these organizations that take a cut of all the fees? They taught that concept to a computer program. It’s called Uniswap. It’s trading a billion dollars or more a day without any companies or people involved.

You can essentially go peer to peer. There is no need for a broker or a clearinghouse. It’s just you and me going directly at each other. There’s disintermediation. The software is infinitely scalable. The cost of running that software for an entire year might be the cost of a few employees at JP Morgan. It’s so much more efficient and cheaper. We believe that these programs are going to give traditional businesses a run for their money.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Hamiz Awan, Founder and Partner at Plutus21 Capital
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