In 2013, Tim Zagar was busy launching the first Bitcoin payment processor in Europe. In 2016, sensing the growth in demand from people buying, storing and investing in Bitcoin and other cryptocurrencies, together with his co-founders built their second company, ICONOMI. Soon to become another big success, ICONOMI raised $10M during its ICO (crowdsale launch). In January 2018, ICONOMI was valued at a market cap of $0.5Bn. Regardless of these successes Tim Zagar is less interested in Bitcoin itself but deeply fascinated by the technology underlying Bitcoin and the power it has to disrupt. “Investing in crypto simply with the intention to make money is not cool. It is driven by greed”.

ICONOMI, based in Ljubljana, is the first-ever platform based on Ethereum technology for managing digital assets. For managers, we enable the creation and management of diversified baskets of different digital assets called Digital Asset Arrays (DAAs). For users, we provide a platform for buying into these baskets with just a few clicks. Digital assets are the foundation of the new economy. They represent stakes (tokens) in services like prediction markets, micropayments, smart contracts, remittance, games, distributed computing, and others. From an investment perspective, tokens and cryptocurrencies constitute an entirely new asset class.

We had a chance to sit down with Tim and talk about ICONOMI and his outlook on the blockchain world and cryptocurrencies amongst other things.

How was the idea ICONOMI born?

After launching the payment system for Bitcoin, we realized that people didn’t actually want to pay with Bitcoin but buy and hold it. This gave us important insight into how people thought about Bitcoin. After this experience we realized our clients wanted to invest in cryptocurrencies but didn’t want the hassle of having to decide which protocols to invest in. This is how ICONOMI was born.

How important is Bitcoin to the actual Blockchain ecosystem?

Bitcoin is slow, hard to use and store and currently there are coins better than that, i.e. Ethereum.

If we compare Bitcoin to the today’s web world, Bitcoin is like the IRC vs. Whatsapp. People still value it for various reasons; it’s not dead. Bitcoin was the first to show that trust can be decentralized. Historically, it is extremely important, but that’s about it.

Today there are over 1,500 cryptocurrencies. The only way that Bitcoin can die is if the governments forbid it, but we see that that train has passed. The second and more realistic scenario is if something better comes along, which is faster, cheaper, and more evolved, and that could be Ethereum.

Another aspect of Bitcoin is that the financial sector is marketing it as Digital Gold, similarly even better than gold as it can be transported easier, and is a good “store of value”. If one believes that, then it is easy to believe that Bitcoin could replace gold as an investment vehicle and is undervalued in relation to gold. The financial sector goes on to explain that the Gold’s market cap is about €5 trillion, that means that bitcoin’s market cap of €150 Billion is only 3% of Gold’s market cap, then why should it not reach a 30% market share of Gold?

How safe is Blockchain?

Blockchain is 100% safe and was never compromised, however centralized services such as exchanges were subject to security bridges and I could say it’s kinda similar to the aviation industry in a sense, it becomes better with every hack. The more we develop, the better and safer the processes and businesses using it will become, preventing human error and potential hacks in the operations. Blockchain in itself is 100% secure. People using it aren’t. Regulation will help give technical guidelines and allow people and processes to become safer.

Like in every industry there are risks and professional scammers that take advantage of the situation and ignorance of investors. The market is majorly self-regulated, and it will most like be this year that the regulators step in to clear out the rules of the game.

Blockchain innovation Europe vs. USA?

Is it not an anomaly today that looking at your Smartphone all the apps installed on it are probably companies in Silicon Valley or the US? Where is Europe in the innovation race? There is a technological innovation unbalance in the world. Today (ICOs) CrowdSales, will give an alternative vehicle to startups in Europe to built their business. The initial coin offerings (Public Crowdsale) changed the landscape of how startups can raise money, in a similar way to what Kickstarter did to the product world. Startups have alternatives besides asking for funds from traditional VCs; they can get “funded by the crowd”.

To date, however, the US regulations have been adding additional friction to the growth of blockchain startups, much more than Europe, and this in a way may allow young European startups to balance the situation. Only in Slovenia, a population of 2M, the major blockchain companies coming up may be worth more than 1Bn in the following year.

What is in your opinion the threshold that will give you an indication that blockchain and crypto have hit a global/corporate/governmental mass adoption?

In financial terms the dot.com bubble was valued at 5-6 Trillion, that is only present in the US. The whole crypto sector is valued at €400Bn at a Global level, so when the crypto sector reaches the levels of 5-6 Trillion, then it will reach a public adoption.

Are there risks of mass adoption?

A technology that is 100% accurate and traceable brings on its own risks since it can be used as a powerful tool of control. Governments, companies and other organizations could use it as a method of control in payments, tracing people and movements and anything else that uses the blockchain technology. However, there are systems to prevent that. If all transactions and movements are recorded throughout the distributed ledger, then this information could have effects on the privacy of the people, even more than the current digital payment technologies.

What is the market outlook for 2018?

The blockchain technology is here to stay. I think it will be the year that regulations and frameworks will clear up the confusion that will in return allow for startups and companies in the sector to focus on building products. It’s an exciting time where startups can raise money and test more ideas.

Similar to the evolution of the web, starting from the 90’s till today most of the companies built the infrastructure necessary: Google was a representation of the yellow pages, News sites where a representation of paper newspapers. It took 20 years for the first native applications to be born on the internet. The first native application was Facebook, built on top of the infrastructure that existed before it. In the same way, in the blockchain world, certain things need to happen before native blockchain applications come along. We are decades away from getting native applications on the blockchain world. Now we are setting the infrastructure of this new technology. This has just started.

As seen on Wired.it

Disclaimer: This post is not financial advice and reflects the personal views of the author. The author invests in digital assets and has positions in the aforementioned cryptocurrencies. This article should not be used as investment advice or financial trading advice and it should not be construed as a solicitation to invest in any cryptocurrency, and nothing herein should be construed as a recommendation to engage in any investment strategy or transaction. Please conduct careful due diligence and consult with investment, legal, and tax professionals before investing in any digital asset.