Denver Data Center Summit Preview with Josh Finkleman, BXE Capital
by Josh Anderson
DENVER, CO — Josh Finkleman is the Co-Founder and Managing Partner with BXE Capital. Mr. Finkleman has over 25 years of combined experience within both public and privately held corporations and carved out a specialty within FinTech and corporate finance. Prior to founding the Fund, Mr. Finkleman spent nearly eight years working in virtually every aspect within corporate payments, including establishing robust E-Commerce and Retail payment processing platforms and building sophisticated backend support infrastructures for enhanced sales, compliance, risk management and third party acquiring services. Finkleman will participate on on the panel “The Next Chapter: Blockchain, Cryptocurrency and Bitcoin: What are They and How Do They Impact Data Center Design, Construction, Development and Operations” at CapRE’s upcoming Second Annual Data Center Summit. In anticipation of the summit, we connected with Finkleman to learn more about how blockchain is a gamechanger — for the data arena, digital arena, and Colorado.
CapRE: Thanks for chatting with us today, Josh. Please share with us a bit about yourself and your organization.
Finkleman: Last year, when we launched, we became Colorado’s first legitimate crypto-currency investment fund. That was our full focus – to provide exposure into digital assets, for our investors. We registered with the SEC and the state in 2017 to launch the Jagger Fund. And there are groups that are doing blockchain traditional venture capital investing, but to date, I think we’re the only fund in the state that’s operating. And essentially there are over 300 crypto-funds out there in the world. So we’re basically boarding investors and deploying traditional capital into digital assets, and providing exposure into this new asset class for our investors.
CapRE: What might be the most exciting opportunity out there for the data center industry with regards to blockchain?
Finkleman: With relation to the data center industry, we have all probably been impacted by certain databases being penetrated, i.e. Home Depot or the Yahoo hacks, etc. And those hacks are possible because you have a centralized database where you house all of this data. So I think that one of the big benefits of blockchain technology is that it makes it very, very difficult for data hacks to happen, because you essentially have a distributed database out there. There’s no central authority, if you will, to hack. So that’s one of the big benefits that the data center industry will benefit from – the distributed ledger technology.
And expanding from there, spanning the many applications of blockchain technology, it’s application is very wide. This technology can be leveraged as a disintermediation tool, or as a means of transporting data and value easily around the world, or it can also be a commodity – stored value. There are so many possibilities for this technology and I’m of the mindset that this technology will be as pervasive as the internet. And some of these blockchain technology platforms are protocol layers, very similar to the internet protocol. Bitcoin is a protocol layer. The internet gave us Voice-Over Internet, and bitcoin will give us MOIP (Money over the internet).
CapRE: And so on the flipside, what are some of the most significant challenges you’ve identified for the industry?
Finkleman: There are still a lot of hurdles. I tell people that we are in the equivalent of the early 90s for the internet with regard to where we are in the development and adoption of Blockchain Technology. In the early 90s, with internet development, that was a nascent technology. The technology was clunky and it didn’t really work well. We all remember the first browsers and the modem to dial into and the technology wasn’t safe or easy to use. And we’re experiencing the same growing pains with blockchain.
It’s early days. A lot of these platforms are experimental. They’re in alpha or beta mode. They’re iterating and they’re trying to make the technology wide-spanning and able to facilitate scale and growth and come up with real-world use-cases that they can deploy and then people can actually leverage that technology in a real-world application.
So it’s going to take some time for that to happen. Much like the early days of the internet, there is not yet a regulatory framework around the industry. That needs to take root. And there’s also the the traditional banking and financial services, who still look at this technology as a competitor, which it is, but they almost regard it more as something that could even be used nefariously or on the black market. So there’s a lot of work that needs to happen around the eco-system for the infrastructure to grow and for the space to become legitimized to enable scale and global adoption. And for the institutional players to come into the space.
That’s what I focus on more so than price is what infrastructure is being built out around these eco-systems, and is that infrastructure growing exponentially. So is the user-base and so is the activity on some of these blockchains. The hurdles go back to the same hurdles that the internet experienced in early 90s – how do you scale that technology, how do you educate people on it, what hardware do you need, and what regulatory framework do you need? It’s the same concerns that we had at that time.
CapRE: What do you anticipate might be some of the most salient themes of topics on the Blockchain and Mining panel you will participate in at our upcoming Denver Data Center Summit?
Finkleman: Well, we’ve got a nice cross-section with a miner and someone from a health care application of blockchain as the other panelists. People always want to talk about the regulatory landscape and what we can expect, and of course, is this a bubble? How big is it going to be? Sometimes I’ll be asked certain questions about bitcoin. I’m happy to talk about what the evolution of the asset class is going to be. People want to know if they can make money and how to invest and I can bring the perspective of why I’m so passionate about exposure to this kind of asset class. And I hope to talk about where we are today and where we have the potential to go down the road.
CapRE: How would you characterize the Colorado crypto-arena?
Finkleman: It’s interesting. Denver is becoming somewhat of a blockchain hub. I’m not sure why that is, but we’ve got Burst IQ. We’re got SALT Lending. We’ve got Radar Relay, and Shapeshift, the largest decentralized exchange in the world. Denver is a great place to live with a high quality of life. The Bay Area and New York are, in comparison, pretty expensive. And Denver has attracted a lot of wealth and lot of intelligent, smart entrepreneurs who want a high quality of life and a clean city and cheaper living. So it’s become a hub of innovation and liquidity. And through that I think that a lot of entrepreneurs are realizing the opportunity of blockchain.
CapRE: That’s very exciting to hear.
Finkleman: The U.S. government is actually working with the Governor on legislation and a framework for enticing blockchain innovation in Denver. I think that the Governor and the State and the governing bodies therein recognize the opportunities within the technology and they’re making a concerted effort to put Denver on the map as a blockchain-friendly state.
CapRE: That’s even more exciting. So what’s your last word until we hear more from you in Denver on the 16th?
Finkleman: I think that the analogy that I made earlier, to the internet, is accurate. I really do think that due to the merits of the technology, blockchain will be as pervasive as the internet in the future. Those of us who lived through the internet revolution and missed the opportunities that lied therein have a second chance to get into a new industry that is very nascent, and make an impact and help grow out the community and the ecosystem to what I think are going to be billions of users.
CapRE: Great. Thanks for your time, Josh. We’ll see you soon.
BXE Capital (formerly Colorado Blockchain Capital) is the first cryptocurrency capital management firm which invests exclusively in Blockchain based technologies. BXE Capital take a long-term approach toward investing in infrastructure blockchain applications which are going to shape the next generation of banking, payments, remittances, and commerce.