What do venture capitalists think of DAH's huge financing: blockchain startups vs. Bitcoin startups

Last Friday, Digital Asset Holdings (DAH), a blockchain startup led by former JPMorgan Chase executive Blythe布莱斯•马斯特斯, received a huge investment of $52 million in its Series A funding round, the largest investment ever made by a private or licensed blockchain startup. Investors are also very eye-catching, including financial giants Citigroup, JPMorgan Chase, and Santander Bank.

Many observers believe that DAH’s funding confirms a trend in which venture capitalists are increasingly interested in blockchain startups, while bitcoin-focused startups may find it increasingly difficult to grow.

According to incomplete statistics from CoinDesk, blockchain startups accounted for 34% of the 1 billion dollars of investment in the entire Bitcoin ecosystem. In 2015, more and more startups focused on blockchain were launched. DAH's huge financing came at a time when the financing of Bitcoin-based startups was declining, so analysts speculated that future entrepreneurs might be more inclined to the blockchain field.

However, there are also staunch supporters of Bitcoin in the venture capital community. They believe that DAH's huge financing has aroused people's attention to blockchain, and this attention has also brought positive effects to the entire ecosystem and even startups focusing on Bitcoin blockchain.

Matt Roszak, founding partner at Tally Capital, told CoinDesk:

“It’s a positive sign (DAH’s funding) that people are pouring money into this space. Public blockchain and private blockchain are two different dynamics. But it’s huge for financial services firms and Wall Street to invest in this space.”

Bart Stephens of Blockchain Capital, a fund that invests in blockchain-focused companies including Abra, BitFury and Ripple, said Blockchain Capital has long believed that the idea that blockchain is not bitcoin is a “mistake.”

“Bitcoin and the Bitcoin blockchain are inextricably linked, it can only be said that some use cases for blockchain technology may not include the Bitcoin blockchain.”

However, Stephens welcomes competition between various types of blockchains, saying:

“I want the best blockchain to win.”

Pressure on DAH

While investors are happy about DAH's successful financing, they also say that Masters and his team will face considerable pressure to come up with products of equal value.

William Mougayar, a partner at Virtual Capital Ventures, said it was time for DAH to "showcase actual products and deployment use cases."

“Given that (DAH)’s technology is a mix of technologies or products from multiple technology companies, I hope (DAH) can further clarify its product roadmap. I am sure that the investors who invested in DAH will continue to develop their own related projects.”

Trace Mayer, an angel investor who has invested in bitcoin exchange Kraken and bitcoin wallet provider Armory, does not seem optimistic about DAH's successful financing.

He believes Masters is fighting an uphill battle against a superior version of the blockchain.

Mayer also expressed his concerns about DAH’s new investors, saying:

“It seems like these investors are firmly in this camp: If they’ve invented a new technology, great, but if not, what happens when they go back and try to do this innovation themselves? I think they’re going to lose a lot of money.”

Meyer believes that what DAH needs to do now is to ensure the quality of its code, otherwise it may face serious consequences.

Notably, DAH has begun open-sourcing the code produced by its team, recently detailing its Hyperledger platform, which was moved to the Linux Foundation’s Open Ledger Project for further development.

Among many analysts, Meyer expressed doubts about the development prospects of DAH.

In particular, Meyer believes DAH may face a talent gap.

Mel says:

This industry is still very young, with only 7 years of development history, so if you want to find a senior blockchain expert, it may be a bit difficult?

Impact on other startups

Marc van der Chijs from Cross Pacific Capital Partners believes that DAH’s financing could have a profound impact on early-stage entrepreneurs in the industry.

“DAH has suddenly become a leader in the blockchain space, and it is difficult for emerging startups to compete with it”

Adam Draper, CEO of San Mateo-based startup accelerator Boost VC, isn't worried about these issues. In his view, DAH's financing news is "good news" for the market.

Draper said: Bitcoin and blockchain are intertwined and inseparable, so it's a good thing no matter which one of them gets attention.

Draper believes that DAH’s funding is unlikely to affect the enthusiasm of bitcoin startups to join Boost VC, which has already recruited bitcoin startups Blockcypher and Wealthcoin, as well as blockchain startups Epiphyte and Align Commerce.

Prefer private blockchains?

Still, most observers believe that DAH funding is not good news for the bitcoin blockchain or other public blockchains.

Alex Tapscot, CEO of North West Passage Ventures, a consultancy that advises early-stage startups in the blockchain industry, believes DAH’s funding is a sign of a shift in market interest.

“[This funding round] reaffirms banks’ strong preference for permissioned (private) distributed ledger systems over public or open blockchains like Bitcoin and Ethereum.”

He believes it is time for the Bitcoin ecosystem to respond and innovate, first by ending the block size debate and then proving that public blockchains are more secure than private blockchains.

He concluded:

“I think there’s a chance that it will change again in the future.”

Original article: http://www.coindesk.com/digital-assets-50-million-blockchain-bitcoin-vc/
By Pete Rizzo
Compiled by: printemps
Source (translation): Babbitt Information (http://www.8btc.com/vc-opinion)