Brock Pierce is a US entrepreneur, investor and a public speaker, co-founder of Blockchain Capital, chairman of Bitcoin Foundation. He’s also a founder, board member or advisor for several Bitcoin companies.

Brock Pierce talks to Cointelegraph about the matters of Blockchain future development, Bitcoin price and gives some advice of how to deal with the ICOs.

BP: I’ve been in the digital currency space since the late 90’s with video games like World of Warcraft and Second Life. I was the primary market maker with 400,000 people in China playing video games to mine digital currency, which naturally led me to Bitcoin and Blockchain. I’ve been working full time in the space since 2012 and affiliated with a lot of projects.

Bitcoin price performance

The Bitcoin price has actually been pretty resilient in light of all of the recent developments specifically in China and South Korea, as well as the hard fork. I mean it’s very impressive how well the Bitcoin price has been able to hold up, which also means we could see a continued increase in price just due to the increased demand. If you want to follow Bitcoin price information, I recommend Spencer Bogart’s research for Blockchain Capital. I think he does the best work when it comes to Bitcoin price analysis.

CT: What is the ideal price for Bitcoin to strike a balance between growth and stability?

BP: Well, the Bitcoin price is not really connected with the technology. The Bitcoin price is the primary barometer of sentiment, which actually has nothing to do with the fundamental performance of the technology. The technology itself has pretty consistently been improving- it’s going to continue to do so. But the prices we’ve seen over the years really is completely disconnected because it’s an emotional thing, it’s driven by sort of by market sentiment, so it is very difficult to predict that. I am not a trader, but I keep both Bitcoin and Bitcoin Cash. If you have forked coins, I recommend not selling them because it’s unclear how that development will evolve over time and there may even be a third Bitcoin.

My advice to anyone listening is until you really have a strong opinion about how those markets are going to develop the safest thing to do is hold. Or if you lose confidence - sell, whatever you want to do. The best thing is- don’t listen to anybody else’s advice. I don’t ever tell people what to do with their money or what to invest in. All I do is give people information so that they can make their own informed decision.

CT: How do you approach ICO token phenomenon?

BP: I have been around since day one. I was one of the founding board members of Mastercoin. We were the first ICO in June of 2013; it was J. R. Willett’s idea. You know sometimes I have been overly credited with inventing the ICO. I wasn’t the inventor; I was just one of the founding board members of the first ICO, which is still pretty close. But obviously, I have been in the ICO market and probably the largest investor throughout the first year, certainly one of them. Leading to what I did with B Cap or Blockchain Capital third fund where it was the first ICO of a security, which is where I think the market is going.

I think a year or two out from now security tokens will outnumber utility tokens. Because I think the benefit to market participants and contributors is greater when they can be offered actual rights, when they can actually have ownership, when they can actually have royalties, when they can have dividends, when you can have smart contracts that would allow for projects that are not performing as they should to return money or tokens to their contributors.

I think the market is a little out of control right now. I think that deals are being funded that shouldn’t be funded. I think that deals are getting more capital than they should be receiving. But that is the market. When the ducks are quacking, you feed the ducks.

So I am not blaming anyone for those market conditions but if we want this market to continue to develop without having some sort of crash we need to continue to evolve. There is this Japanese term called Kaizen, which is to continuously improve. Every time you look at a deal figure out how you can do it the best you possibly can. Improve on the work the last person has done.

My thought on the current ICO market is we should be looking to incorporate a smart contract where if a deal brings in $50 mln in contributions, which is probably more than that project needs in the immediate term, that there is some milestone. This is how venture capital historically has worked. It’s milestone based financing, but where they say ‘with this first $5 mln, we are going to accomplish - blank’ and have some sort of KPI associated with it. And if the team fails to hit that mark with that money in the time that’s been allocated those funds theoretically go back to all the original contributors. Essentially it’s in escrow. It’s these types of improvements in the market that I think may allow the market to continue to grow. If we continually improve with the market, the market will continue to perform well.

Some advice for the ICO projects

For anyone in the space whether you are focused on doing an ICO or anything else, I have a very strong principle that I communicate to everyone. I am here to help everyone I possibly can. I really only have one rule and that is: absolutely operate with complete and total integrity always. Never ever ever compromise your integrity. In this space and over time you may make a mistake. You may have projects that don’t work out but as long as you will always operate above board, as long as you always try to do the best you can do and you are always looking out for others and not just yourself the market will reward you with continued opportunity. This is a market that is filled with infinite opportunities at this point. There is going to be so much abundance here that you should never ever ever compromise your integrity. This is one big family and if you are new to this space that might not be immediately obvious, but most of us that have been around the space a long time are looking out for each other, and we are inclusive of newcomers. The only rule with me at least is never ever ever compromise your integrity.

Blockchain implementation in government services

Blockchain technology is being played within every sector. The Blockchain is going to have a larger impact on the world than the Internet has. I could argue is that all it is a secure Internet. It’s the real Internet 2.0 or call it 3.0-Web 3.0.

Governments are no different. This is a technology that’s going to be pervasive in a way that it touches every industry. Governments are recognizing that there is great benefit for them as well. As well as banks, I mean it’s worth talking even about the JP. The JP Morgan and Jamie Dimon type quotes. I see a lot of paper in the sector criticizing the incumbents and generally they are just doing their jobs.

Jamie Dimon is doing his job, his job as the incumbent is to protect the status quo. The fact that he is making statements about Bitcoin in a negative context is actually something very good. He is validating the things we are doing. And you know, Thank you, Jamie!

Governments are doing the same thing all over the world whether it’s looking at putting their national or fiat currency on the Blockchain so that they can get the benefits of things like Bitcoin. The Philippines have talked about this for a while. They could have financial inclusion, ubiquitous financial inclusion across that whole nation. Much in the way that the industrial revolution allowed the developed world to get this advantage over the developing world, I think that Blockchain technology has the potential of allowing the developing world to leapfrog the developed world.

Because they don’t have the same incumbent infrastructure that’s going to take more time for them and the benefit is greatest.

I get approached by these days because everything in this space is too hot. For many years now by people that are going ‘Brock, Brock why should I want Bitcoin?’ Always argumentative because they read some fake news or something, some sensational headline that has led them to believe they know something on the subject, but they are like ‘Brock why should I want it?’ My answer is always ‘You shouldn’t.’ And then they are all confused like ‘What do you mean I shouldn’t?’ Well, it’s not for you. And then this really gets them upset, ‘What do you mean not for me?!’ I go, ‘Do you have a bank account? And they are like, ‘Yeah!’ I’m guessing you got a piece of plastic in your pocket too that lets you conveniently pay for things. And they’re like, ‘Yeah.” And I got, ‘You’ve got the rule of law that’s here in theory to protect you and in most cases often will. You’ve got faith in the system I guess and the two hundred currencies in the world you’ve got one that everyone wants more of. This isn’t going to change your life in the short-term unless you want to speculate and judging by the things that you’ve said so far you’re not going to be the speculator unless it’s shorting and I probably would advise you against that no matter what your beliefs are.’

South of the border

But the real benefit is South of the border, or it’s in Africa, it’s in Southeast Asia. Much like Africa leapfrog wired telecommunications and went straight to wireless. It’s these parts of the world that stand to benefit the most and where adoption is likely to happen to the greatest extent.

I mean the most advanced payment market in the world is Kenya, and the primary currency of Kenya is now no longer the government-issued one, the Kenya Shilling, it’s a prepaid cellphone minute known as M-Pesa.

CT: For how much will you sell your Bitcoin in five years?

BP: Well the concept of selling cryptocurrency is something I am often asked by people with old world mentalities.

I don’t have any intention of selling my Bitcoin or my cryptos. I got approached by some traditional wealth management type people the other day saying ‘How are you diversifying? How are you getting out of this? What are you doing? What are you doing?’ I am like doing everything as aggressively as I can. He goes well what’s the strategy? I go: I am trying to get rid of my dollars as quickly as I can for more cryptocurrencies. He was like, ‘What?’ trying to understand why that would be the approach.

The reality is that fiat money was designed to go down in value over time. Most cryptocurrencies were designed to go up in value over time.

So really the main asset classes that I find interesting today are Blockchain related things and real estate if I am looking for something more conservative, because it weathers well against currency depreciation in price, and it’s the other thing I like right now. I don’t intend to sell. If I sell my Bitcoin, it will be for other cryptocurrencies. Thank you.