I first met Unbounded Capital partners Dave and Zach while we all lived in the Bay area in 2018 while I was running a monthly Bitcoin SV meetup in San Francisco. They came not knowing much about the ecosystem but attended with an open mind - I even was the first person Dave had a conversation with in the BSV space at one of these meetups while Unbounded was just getting started. From that point, I developed friendships with Dave, Zach, Jack, as well as other members of the team. Since then, I have also done some work for the fund on occasion but never entered any formal working agreement, until now.
Initially upon entering the Bitcoin space, many have been focused on the coin price of BSV and how it could appreciate compared to its primary forks, BTC and BCH. As time has passed, investors have started to realize this asset class is no different historically than others, and that taking a more traditional focus on the companies leveraging the asset to solve big problems versus investing directly in the asset is logical. Much like established commodities such as precious metals or crude oil, investors are targeting the companies that utilize the commodity instead of the price of it.
Unbounded has evolved its thesis as time has gone on from primarily companies that build tools to enable developers to build on the technology to consumer-facing applications that demonstrate the value of the technology front and center. The show not tell approach is crucial for potential customers and other investors to understand the value proposition of a scalable blockchain. Tooling is very difficult to value given that potential companies that would-be customers have subjective, varying requirements. Applications that speak to a consumer’s heart are much easier to understand, and I am glad to see Unbounded increasingly targeting these types of applications as well.
For example, Unbounded has invested in many companies focused on the original value proposition of Bitcoin, micropayments. Satoshi Nakamoto wrote on the first page of the Bitcoin white paper in 2008 that the existing financial system cuts “off the possibility for small casual transactions”. Unbounded has invested in the best Bitcoin wallet in my opinion, HandCash, who facilitates micropayments seamlessly in novel ways, such as airdrops, sending money to friends, and their easy to use development SDK which over 30 applications have comprehensively implemented to date. I believe that 1 year from now, there is a good chance there will be 300 apps in HandCash’s App Gallery, a 10x growth given the quality of the product. This implies not only immense growth in the space but huge upside and potential for HandCash the company.
Another favorite company of mine is Haste Arcade, who uses HandCash’s SDK to distribute micropayments to hundreds of users on a daily basis. Users can spend various amounts of Bitcoin (as low as 1 cent) to play casual games in the arcade in hopes of achieving a high score to earn a top spot on the leaderboard. Each time other players play afterwards, the Bitcoin spent is distributed instantly to those players on the leaderboard, proportionally based on how high their spot is. Their implementation using Bitcoin shows not tells and is very easy to understand the value proposition. I was one of the first users of their platform when they released their first game in January 2021 and always thought they had a high chance of success given their unique approach to utilizing Bitcoin. Unbounded investing in Haste as well as HandCash is a winning combination in my view and has great potential to change how the world views micropayments.
Attending the Unbounded Capital 2022 Annual Summit in September was a much-needed breath of fresh air. Instead of dealing with the typical hot topic of digital currency prices, the focus was on investing in companies. How could companies uniquely leverage scalable blockchain technology, such that they justify investment from venture capital?
A key concept I keep track of to know if I am on the right path in terms of my own thesis is “Are other individuals coming to the same conclusions as I am independently?” Given the wild west nature of the digital currency space where coin prices are as predictable as gambling on red or black at roulette, I had been thinking leading up to the summit that having exposure to the companies building atop the tech was a better investment strategy compared to simply buying the coin and hoping for “number go up”. Unbounded’s move to investing exclusively in companies versus any coins is evident via their new Fund II structured as a traditional venture capital fund and many investors in attendance clearly appreciated the focus on value independent of token speculation. One investor in particular went on to state on a panel that he believed all digital currencies were going to zero (except Bitcoin SV) and that he was only interested in the companies building on top of the coin. This is a stark contrast to other funds established in the space that invest in ICOs, tokens or even NFTs.
This summit was one of the best professional events I have ever attended, and I heard that same feedback from other investors as well. The distinguishing factor during the event I noticed is the presentation holding the viewers' attention. I have been to many events such as these where the audience is “multi-tasking”, doing everything and anything except watching the presentations. Not only was the audience watching intently, but they were also asking very informed questions and remained engaged throughout the all-day event. This was a huge indication to me that my own core reasons for leaping into this space were validated by others that I’ve never come in contact with before.
As someone fully entrenched in Bitcoin technology for almost 3 years now, I constantly evaluate emerging products, services, and businesses I see building on Bitcoin SV. As I write, publish videos, create educational content, and develop my own applications coupled with my payments and enterprise consulting background I feel that I have a unique insight into what is viable long-term in the blockchain space. Realizing that the space has matured since I originally met the partners from Unbounded 4 years ago, and now our investment theses are aligning, joining forces seems appropriate. By joining Unbounded as an advisor to the investment committee, I can lend that unique insight that I already am developing daily to the team I feel is best suited for capitalizing on this information for investment decisions in the blockchain world.