I had the pleasure of meeting Eric Allred at Token Fest in March of 2018 in San Francisco, CA. We were both invited to dinner by a mutual friend and sat next to one another by chance. We instantly connected as we started chatting. Eric and I share the same values and our investment approaches are similar in many ways.

I was fortunate to spend more time with Eric last week during a leadership workshop in London and Scotland where we stayed together at the most incredible Airbnb and spent more time discussing the efficiencies and inefficiencies of current crypto markets.

I predict a bright future for Eric Allred and his team running their fund at Blockchain Technology Partners. Their success will come down to being at the right place, at the right time, and with the right people. BTP has all of those boxes checked at this point in 2018.

Read this interview once now and again down the road, it’s that good. Enjoy!

How did you get started with cryptocurrency?

I heard of Bitcoin several years back from a friend who at the time was mining Bitcoin on his laptop; those were the good old days of ASIC-free block rewards. At the time, I didn’t think much of this “internet money,” and he didn’t go too far out of his way to explain it (he spent a lot of time on his computer playing games).

At the end of 2015, my (now) partner Matt gave a talk on cryptocurrencies, at an event we were both speaking at. I distinctly remember the comparison of the Bitcoin network effect value contrasted with the market cap of Apple, net worths of billionaires Bill Gates and Warren Buffet, and the comparison of Bitcoin to markets like gold or the United States money supply. I didn’t know what to make of it all; I just knew I was still early; that was enough to place my feet next to the rabbit hole and off I went.

Aside from one-off-Internet purchases, I didn’t invest a substantial amount until late 2016.

At that time I found our other partner Xander, and he and I began investing alongside for the better part of 2017 before deciding to start the fund we launched in April of 2018.

What is your digital currency investment strategy?

I come from a diverse business background and have participated as an angel investor in anything from real estate technology, sleep tracking, to a platform-as-a-service company performing Web-based behavioral interventions.

My cryptocurrency investment strategy reflects this.

I tend to focus more general sentiment of the population, global pricing movements, and macroeconomic trends then I do look in front of a chart. The industry is still flowering and extremely event-driven, what are the rare events that could wipe me out?

In my opinion, each phase of crypto assets will require different skill sets and managers and investors alike will be challenged not to get too deep into the data and welcome emerging information.

Some of the signals, events, questions I’m pondering…

– What is the cost for an end user to participate in the ecosystem? An institution?

– What human behaviors and patterns is the project tackling for adoption? (i.e., holding onto the private key, no “forgot password” alternatives)

– How will governance and consensus mechanisms handle institutional participants?

– How are humans interacting with the economic models and principles of decentralization?

– Should the project be decentralized? What are the tradeoffs?

– Do the users added to the ecosystem participate in speculation or value creation?

– What is the correlation between all assets in the class? Are there individual price drivers? Is the driver reflective of the actions the incentive model was built to encourage?

– How has the founding team managed their tokens? Have they exercised a fiduciary responsibility in managing liquidity through both bear and bullish trends alike?

– How are team members being paid? Is compensation tied to the token price or cash?

– Did this project launch an ICO? Is there an established operating company behind it?

…and the list goes on…

My digital currency investment strategy breaks down into a liquid and illiquid approach, our fund’s strategy mirrors this.

Investments in Crypto Assets:

I focus on projects that mimic the characteristics of money: a store of value, medium of exchange, and unit of account. I believe blockchain 1.0 is about custody of assets, scalable solutions, and infrastructure required to deliver the services and value promised by meta layer and application layer products.

Infrastructure Investment:

Our expertise and industry relationships allow us to participate in indirect infrastructure investments such as data centers, operating companies, and their underlying real estate.

Extensive supply chain relationships enable direct hardware investments based on project income forecasts and the value of underlying assets.

1. Direct hardware investments involve the purchase of highly liquid physical assets that the network rewards with underlying crypto assets in exchange for performing network security functions.

2. Our indirect investments involve deployment of capital in data centers, management companies, and the associated underlying real estate.

What projects are you currently working on?

My fund, Blockchain Technology Partners, LP launched in April of 2018. This fund is a multi-strat fund that splits investment strategies between tokens (liquid direct) and infrastructure investments into Proof-of-Work mining.

These infrastructure investments allow us to offer exposure to the underlying asset, the ability to mine it or participate in a more capital-intensive coin-agnostic strategy into the actual hosting and management of the mining operation driven by an investor’s risk profile and desired outcome.

How do you see your business growing?

1. Focusing on proper custody of assets, minimizing risk and exposure.

2. Invest in current utility, and what fulfills the value proposition it is making to the marketplace. Be wary of dependencies on concurrent projects being successful. For example, investing heavily in an app layer product built on a blockchain that doesn’t have feasible scaling solutions.

3. Pick projects that we can leverage our expertise not only to capture but also create value in the ecosystem. Running the fund as an organism and solving for return on investment outside of trading the underlying asset, focusing on helping generate value in the ecosystem.

What’s your biggest pet peeve about digital currency?

My biggest pet peeve would be the lack of a practical approach to what appears to be an incredibly powerful and transformative technology.

It is easy to get caught up in what distributed ledger technology, applied cryptography, etc. can do, but some people seem to miss on a few pretty significant factors:

– Humans will be humans.

– Governments aren’t just going to go away; interested to see how the U.S. handles Puerto Rico’s crypto experiment.

– Military power still rules all.

– Incumbents won’t go easy, serious resources thrown behind open-source technology makes for an exciting future battle.

– Timing is everything.

I am excited about the paradigm shifts that crypto ushers in and the new perspectives it seeks to introduce, however; I don’t think it happens as drastically or absent of governance as some messaging seems to imply.

Looking to connect with Eric Allred? Reach out via LinkedIn or his company’s website.