This interview has been edited and condensed.
Mike Butcher, an editor-at-large of TechCrunch is a pioneer of the tech and journalism industries. He has also started covering the crypto industry and blockchain technology, as — in his words — “that is effectively going to be a new way to the future.”
He first heard about crypto back in 2011 and it was "Bitcoin that got [him] interested in the space."
“I think it is sort of a general theme — decentralization. It is really fascinating, you know. We had Google, Apple, Facebook, Twitter, Amazon, effectively build centralized networks for the last 25 years of development of the internet and what we are doing now is we are looking for [the] decentralized players of the future. I mean, the fascinating ideas: for instance, you can create the decentralized Uber, which will be an incredible kind of move. And the exciting thing about it is how we will have brand new actors. There is more collaboration between all of these projects than in previous systems, so that is why it is so amazing.”
Catherine Ross: Does the crypto space really resemble the beginning of the tech market? There’s been a lot of comparison to the ‘dotcom’ bubble.’
Mike Butcher: Yeah, it is very similar to previous bubbles in many ways. What is different about this one is the amount of money that is in the space. Previously, in sort of mid-nineties [sic], in order to be able to work in the internet space, you had to raise proper, real money. And that was a different kind of era. But now, the money is effectively built into the bubble. And so that is why it is so fascinating and potentially dangerous for some people, given that there is such a lack of sophistication amongst people who want to be involved in this space — whether or not the’re investors or the people who want to be involved in the ICOs.
CR: Do you think the crypto industry is similar to the derivatives market?
MB: Well, there are some parallels out there.
CR: And do you think [crypto] will have the same fate?
MB: Well, I mean if you look at what is going to happen in the next year or so, crypto assets will probably eventually be regulated, like other kinds of assets — to some extent — depending on what they are. You’ve got some big players like Goldman Sachs becoming involved, launching their own [cryptocurrency] trading desk*. So, that is clearly going to happen, and you have got some sovereign funds becoming involved as well. I think that there's the legitimacy coming, it is not there quite yet in some places. But it makes a lot of sense, if you think about it. You know, even [science fiction] writers have been talking about the idea of having global currencies, which are not the fiat currencies. We already have credit in things like Star Trek and Star Wars. So it is clearly the idea that the time has come.
Mike Butcher at BlockShow, Berlin 2018
In his speech at BlockShow in Berlin entitled “Disinformation Could Kill Crypto,” Mike stressed the importance of creating the ‘trust’ toward the industry or “the public will return to centralized systems.”
CR: You talked about the danger of disinformation in the space, mentioning that it’s very important to build content platforms that people can trust. How do we achieve that?
MB: Well, I mean the way that the traditional financial media operates is that there is a separation of powers: between journalists who write content, news and advertising and commercial people. And they don’t talk to each other, right?
MB: So, in fact, they are not allowed to talk to each other. And if they do talk to each other, that is a conflict of interests. The people who advertise on the website go through the commercial people by advertising, and they speak to the clients. When you write the content, you should not be talking to those people. You should be actually writing about what is going on, and then you are paid by the media organization. That is how journalism has evolved over the last two hundred years or so, roughly. And if the media outlet is abiding by those rules, the separation of powers between the advertising and editorials, and if journalists are not being paid to write about the companies, and if they are being paid generally as a salary to write about what the news is, then that is ok. But if there is any change in that, if journalists are being paid to write specific stories, then that is not allowed, that is wrong.
CR: That is not journalism.
MB: That is not journalism! And right, so, don’t read those guys! So, just don’t read them. I’ve been shown [that] you guys are abiding by those rules. And so the market is always in the crypto moving [sic] every day, it is kind of [a] pretty crazy world out there. And it is up to those journalists that bad actors don’t get any promotion. And, like I said, there is independence out there. One part of the problem, of course, is that journalists are not just a part of the media space anymore, you have all these Telegram groups, you have got all these WhatsApp groups, you have got online boards, or whatever it is, messaging services. That is where a lot of the problems develop. But I do think that the part of my talk [at Blockshow] was that if we do not pay attention to this, then decentralization and the blockchain technology will not be trusted. It won’t ever go mainstream because it will not be trusted by anybody. And so it is everybody’s job in the industry to promote good media, media that actually has the separation of powers in between advertising and editorial and that is independent. It is our job to do that and de-emphasize and detune the bad actors in the space.
CR: So what you mean is that you can read medium and any other blog articles, but you need to be very cautious about making an investment decision.
MB: Absolutely! I mean that is always out there, isn’t it? Checks and balances, always do your research. Even the most sophisticated investors today find it difficult to understand what is going on. And many of them are extremely cautious. Actually, they operate much more [cautiously] than the average person. So, and I think what’s going to happen is that, if more problems continue to happen, then regulators will come in, then there actually will be some heavy-handing regulation and some of the more innovating aspects of what has happened in the last few years might be stamped on, you know, it might change. So, it is up to the industry to get its own house in order.
You can watch the interview here:
CR: You have obviously visited a lot of events and have met a lot of people from the [crypto] industry. Is the crypto community somehow different from others?
MB: It depends. I mean, if you take blockchain projects, they remind me of early internet space with developers coming up with the fascinating new ideas, and you have got that sort of people much more involved in the crypto [industry]. As a currency side of things, it is sort of different from the traditional services. It’s a startup space where you have got, you know, the entrepreneur and the venture capitalist. But the two are merging. If you think about six months ago or a year ago, the ICO space took place really quickly.
MB: Everyone was actually quite blindsided by how quickly it took off. Now what’s going on with private sales, private ICOs is that you have got more traditional investors becoming involved at the earliest phases of an ICO and a private sale. And actually sometimes even [a] public ICO is being cancelled. Or the public sale is changed in sort of different order, sort of [a] 50/50 relationship later on with the public sale.
If you want to build something, and if you want to be an entrepreneur, you don't just make money from the ICO, [...] you go build it.
MB: What you do is you bring another partner to help you build it. People who have networks and relationships you don't have as an entrepreneur. And it does require professional investors, because they have the contacts, they have the know how, the knowledge. They have the partnership relationships and they have the experience about how to scale the company. All the staff [are] familiar with the start up space. So the worlds are gradually starting to merge.
CR: You’ve visited quite a lot crypto events recently. What is the best way to benefit from one?
MB: It is always the same — as at any conference. Just learn how to network, learn how to introduce yourself well. I mean, the best way to do these things is just to introduce yourself, but talk about the issues [that], you know, display your knowledge. As soon as somebody starts pitching you, well, it is kind of discouraging. I think it is more interesting to have a conversation first. Show up how clever you are first.
CR: Great advice. Thank you, Mike! And thanks for being here with us!
MB: My pleasure!
*On January 24, 2018 Lloyd Blankfein, Goldman Sachs CEO, told CNBC that the company has no plans to launch its own cryptocurrency trading desk.