Encourage free markets — Bitcoin is the first asset freely traded without any restrictions. It’s not controlled by any nation or country, it’s only regulated by supply and demand. We should encourage more currencies that can transcend national borders and not be monitored by any one group.
As part of my series about the “5 Ways That We Can Help Stabilize The Cryptocurrency Market”, I had the pleasure of interviewing Lou Kerner.
Lou Kerner is the CEO of BIGtoken, the first privacy focused, opt-in data marketplace where people can own and monetize their data. Lou has a diverse background from being a Wall Street analyst to CEO of a social media company. But since 2017, he’s focused on crypto as an analyst, investor, and advisor. He also started CryptoMondays, the largest crypto Meetup group with chapters in more than 50 cities.
Thank you so much for doing this with us! Our readers would love to “get to know you” a bit more. Can you tell us a bit about your “backstory”?
I started my career as a Wall Street analyst following media companies, spending four years at Goldman Sachs, before transitioning to operating tech companies. My first CEO role was at The .tv Corporation, which acquired the top-level domain .tv from the island nation of Tuvalu. After .tv was acquired by Verisign in 2001, I became the CEO of Bolt Media, the largest social media company before MySpace. After Bolt, I became an angel investor, best known for writing the first Wall Street style research report on Facebook in 2010. Then in 2012, I launched a small VC fund and then joined Flight Ventures, where I focused on tech companies founded by Israeli teams.
Since 2017, I’ve been focused on crypto as an analyst, investor, and advisor for companies including Blockchain Co-investors (a crypto fund-of-funds), Casper (a layer one protocol), Props (an SEC-approved token used to drive loyalty programs), and Silver Castle (an institutional grade digital asset manager). In addition, I’m a Partner in an AngelList Syndicate that actively invests in crypto projects. Furthermore, I started CryptoMondays, the largest crypto-focused Meetup group, with chapters in more than 50 cities around the world.
In January 2021, I became CEO of BIGtoken, the first privacy focused, opted-in data marketplace where people can own and monetize their data.
Can you tell us the story of how you first got involved with the regtech or crypto markets?
I held a conference call on ICOs on June 29, 2017, and someone said something, and I saw the crypto light. I was in a manic state for three months until I was able to put all my thoughts together in a blog post titled “7 Thoughts On Crypto After Three Months Down The Rabbit Hole.”
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Weirdly, I’ve found that crypto can’t be taught, it has to be learned. Because it is infinite, it is something different to everyone, based on our own unique prism through which we see the world and our own unique life experiences.
That said, I’ve had a long series of people who’ve helped me to better understand crypto. If I had to choose one person, it would be Ari Paul, who I’ve learned from discussions, and even more from his writing, largely just tweets. He comes from the same institutional investing background that I do, so his writing really speaks to me.
Others on the short list are Ryan Selkis, Mati Greenspan, Travis Kling, Kyle Samani, and Meltem Demirors. I think Michael Saylor is the leading crypto sherpa today, at least in the U.S.
Can you share “5 Things That Should Be Done To Help Stabilize The Cryptocurrency Market”?
1. Clear state and national regulations
In the past decade, cryptocurrency has gained massive popularity and adoption around the world; crypto is now omnipresent. The spread of this technology and its decentralized nature, however, has raised regulatory concerns.
While crypto and blockchain regulation has been discussed by several U.S. agencies including the Department of Treasury, Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), Internal Revenue Service (IRS) and Financial Crimes Enforcement Network (FinCEN), little formal rulemaking has actually happened.
So it’s currently up to the states to pass legislation, but the mere definition of cryptocurrency varies from state to state. This lack of uniformed definitions is enough to make the regulatory landscape blurry and uncertain, impacting stability in the market.
2. Prosecute criminals, not businessmen and technologists, not people who don’t cross a “t” or dot an “i”
In early 2020, investors filed lawsuits against 11 defendants for violating U.S. securities laws. The lawsuits allege that the tokens were unregistered securities, that their issuers failed to follow appropriate registration requirements and that the token exchanges violated exchange and broker-dealer registration rules. In addition, the SEC sued cryptocurrency company Ripple in December 2020 for allegedly selling unregistered securities when it sold the digital token XRP to investors around the world.
What we should be focusing on is the people who are using cryptocurrencies for money laundering and other crimes. It’s difficult for law enforcement to follow a money trail on the blockchain, but it seems people who are failing to follow appropriate registration requirements are the only ones in the spotlight and this makes the value of the cryptocurrency drop.
3. Encourage free markets
Bitcoin is the first asset freely traded without any restrictions. It’s not controlled by any nation or country, it’s only regulated by supply and demand. We should encourage more currencies that can transcend national borders and not be monitored by any one group.
4. More fintech sandboxes
Sandboxes are increasingly being implemented across the U.S. as a way to foster innovation. Florida and West Virginia have recently passed legislation to offer fintech sandboxes, joining Arizona, Nevada, Utah, and Wyoming. They provide companies the opportunity to test new products and services, including blockchain technology, in a controlled environment before mass distribution and adoption.
Ideas don’t always come to fruition, but with sandboxes, they can be tested, analyzed, and improved. The environment is perfect for spurring innovation in the industry.
Although we’ve seen mass adoption in such a short time, cryptocurrencies are still new to the world. We’re still learning and educating others, and it will take time for the market to really mature.
In your experience, what are the top strategies that crypto firms should be considering in order to have a competitive edge?
1. Be transparent. At BIGtoken, we make sure that we are 100% transparent with our users about their data, privacy, and money. And this should be no different for other companies. Being transparent with your customers, the people buying into your product or service, will make the difference between a fickle customer and a loyal customer.
2. Focus on community. We’re always looking for opportunities to grow and give back to our community. Recently, we announced we’ll be offering our users, employees, and vendors payments in bitcoin. As we build out this service, we’re also focusing on educating our community about all things crypto and providing the resources and tools they need to learn more.
3. Try as many different things as you can. You don’t need to do it all at once, but test something out, then test some more. Some ideas will take off and some won’t.
4. Truly innovate, do things that couldn’t be done before. Best way to compete is to not compete. Be the first at what you’re doing.
5. Don’t have any orthodoxies.
What are the 3 things that most excite you about the blockchain industry? Why?
- We now have a toolset to solve for the community…rules without rulers. It’s not controlled by anyone, yet it’s controlled by everyone. This is by design.
- Composability. Blockchain is highly composable, meaning the infrastructure is already there so developers can build right on top of it. We’re seeing blockchain introduced into all areas of the world. Not just banking, but also education, music, real estate, healthcare, retail, and so much more.
- The smartest people in the world are quitting Goldman and Mckinsey and coming to crypto. The quality of people entering the space is remarkable; it speaks a lot to how groundbreaking blockchain really is.
What are the 3 things that most worry you about the blockchain industry? Why?
- Bad regulations. As I mentioned earlier, we can’t even agree to use the same definitions in this market. Any new legislation will need to be put under the microscope, especially if we want to preserve the blockchain’s main selling points, transparency and anonymity.
- Government and business overreach to protect legacy power. It worries me how far some governments will go to control and preserve revenue streams.
- Bubbles will crash and lots of people will get hurt. Crypto is still risky. While some are saying that a lot has changed since 2017 and that we shouldn’t compare, history almost always repeats itself.
How have you used your success to bring goodness to the world? Can you share a story?
I believe that crypto is all about community. I’m most proud to have started the CryptoMondays Meetup, which has chapters in 58 cities. The newest, started just last week, CryptoMondays Tulum. We’re fully decentralized, which is why it’s been so successful.
Can you share a story of a time when things went south for you? What kept you going and helped you to overcome those times?
My second company, Bolt, a social network, we slaved over for years, was sued out of business, even though we did nothing wrong. It was devastating, and that I overcame via time. It took me 15 years to operate again. I didn’t want to endure that kind of devastating low again.
I think I have a better perspective now. Life is a ferris wheel. Sometimes you’re on top. And you should enjoy it for what it is. Which is ephemeral. There’s are many great lines from Rudyard Kipling’s poem “If”, including: ‘If you can meet with Triumph and Disaster, And treat those two impostors just the same;’
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I have many… starting with the whole poem If. Others …
“Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” — Ferris Bueller. Life is short. It’s over in a heartbeat. Enjoy the journey, because there is no there to ever reach.
“Everybody has a plan until they get punched in the mouth.” — Mike Tyson.
“The simplest explanation is usually the right one.” — Also known as Occam’s Razor
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