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An Investors View of Blockchain Technology: “At its core, blockchains are about trust.”

As of early 2018 the common understanding of blockchain technologies is that they enable cryptocurrencies, such as Bitcoin or Ether. But this is only part of the story. What other scenarios are possible? We spoke with Marcus Erken from Sunfish Partners, a venture capital investor.

Background: Marcus Erken is a founding partner of Sunfish Partners (www.sunfish-partners.com). Based in Berlin, Sunfish Partners invests in early-stage startups in the “world of data” (machine learning, blockchain, Internet of Things (IoT)). Sunfish Partners is mostly active in Poland and the broader Central and Eastern European market. Marcus Erken is also a lecturer in the field of entrepreneurship. He co-lectures two annual university courses in which students start their own companies. Previously, Marcus worked with more than 120 student startups at WHU’s university incubator, which he helped establish and run. He still supports WHU Incubator as a volunteer. Marcus studied at WHU Vallendar, RWTH Aachen, and Harvard University.

Marcus Erken, Sunfish Partners


Can you briefly describe who you are and what your role at Sunfish Partners is?

Marcus Erken: “I’m fascinated by technology and early-stage startups. Hence, I’m very lucky that I get to work at the intersection of the two on a daily basis. I’m a venture capitalist at Sunfish Partners. Based in Berlin, we invest in early-stage startups in the “world of data” (blockchain, machine learning, Internet of Things). We primarily focus on startups in Poland and Eastern Europe. In addition, we help investors and companies explore and implement blockchain solutions. We see about 500 pitches from tech startups every year. So far, 10-15% of those are blockchain related.

“We screen about 500 pitches from tech startups every year. So far, 10-15% of those are blockchain related.”

How many pitches do you see that mention Blockchain/Cryptocurrencies?

“We screen about 500 pitches from tech startups every year. So far, 10-15% of those are blockchain related. That number is likely to increase going forward. Despite the current wave of excitement, we are still in the super-early days of the blockchain.”

How many teams are considering using blockchain technologies to manage media content?

“Very few at the moment. However, I can see many of them seriously consider blockchains in the future. Take the internet as an analogy: In the 90s few media companies thought hard about the internet, today every company does. This is normal. In their infancy, new technologies seem weak, buggy, and slow. With our limited imagination, we all find it hard to imagine how powerful a new technology could become a couple years into the future. And, despite the current wave of excitement, we are still in the super-early days of the blockchain. A lot of the critical technical infrastructure has yet to be built but the long-term opportunities seem endless.”

Could you provide some scenarios or even examples, where media and blockchain would be a good match?

“As said: We are still in the very early days. Most of the exiting stuff that is being built in the blockchain space right now is at the fundamental protocol layer. This layer will provide the infrastructure for the next wave of ideas – and it is an important process for all industries, not just the media. It will take some time until we see a lot of successful consumer-facing applications on top of that.

Nevertheless, a couple of media use cases already exist:

  • Steemit is trying to build a social media platform where everyone gets paid for creating and curating content.
  • The Brave browser is a new web browser that runs on crypto (the Basic Attention Token)
  • Last April, Spotify acquired blockchain startup Mediachain. I have no insight on what exactly they are currently working on but I would guess they are focusing on attribution issues.
  • Last November/ December, CryptoKitties made news in the community. This project is interesting in that it is all about digital ownership. The blockchain verifies that you, and only you, own a digital cat.

Going forward, it’ll be exciting to see data marketplaces emerge. This should also be relevant to the media industry. Information/ research/ data will be tradeable. You will also be able to work with data without seeing that data itself, which will be a game changer. Blockchain also offers tremendous potential for automation. No trusted middleman needed. Just code. Hence, the distribution will happen exactly as agreed upon and payments can be settled automatically in real time.

Screenshot: Steemit

Blockchain technologies spark many ideas, beyond payment. What would be a concept or general idea you would love to see?

“At its core, blockchains are about trust. Through blockchain technology, for the first time, we don’t have to trust in middlemen anymore. We don’t have to trust that middlemen have our best interest in mind. This is exciting. It can make a lot of industries faster, cheaper, and fairer. It can empower citizens and end customers throughout the world. Taking a long-term view, new forms of government and companies can emerge out of this. This is probably what excites me most. In addition, blockchain is currently the only technology that might be able to handle the Internet of Things. A world in which billions of gadgets communicate with each other every second. A centralized (human) middleman would simply not be able to cope with that.”

There is an expectation among both technology and creative people that by using blockchain technologies we could better manage rights and royalties for creative work. What is your current opinion about such ideas?

“I think the hope is justified. However, change takes time; so, we shouldn’t expect too much too soon. Let’s first look at what the media industry looks like right now: Publishers have become a commodity.
They are just one of a million on Facebook’s news feed. Right now, the most used online services seem to be free. They are not really free, of course. We pay with our data. Google and Facebook then use our data for targeted advertising and that’s how they make money. And they are good at that, extremely good – Facebook and Google account for 2/3 of America’s online ad revenues. So right now, the advertising-based revenue model is clearly the dominant revenue model. In summary, at least at the moment: The media a is a highly concentrated game that is dominated by a handful of players.

“Blockchain has the potential to completely disrupt the advertising-based model”.

Do you see an approach to change this?

“The best way to change that – and make a different distribution of profits possible – is to change the advertising-based revenue model. And Blockchain has the potential to completely disrupt the advertising-based model. It can be a lot more decentralized where individual users own their data and not a handful of companies. On the contrary, whoever wants to use an individual’s data has to pay for that. That’s why a lot of people – including me – think that blockchain could help create the internet that the world always wanted but hasn’t gotten so far”.

Which is a far-reaching statement…

“Yes, but I’m in good company: Even Tim Berners-Lee who invented the web warned about the dangers that target advertising can pose to an open internet.  He pointed out that “misinformation, or fake news, which is surprising, shocking or designed to appeal to our biases, can spread like wildfire”.

“Main stream media’s understanding of blockchain is limited.”

As of late 2017 and early 2018, we have all signs of a bubble around cryptocurrencies. How will this situation affect other blockchain-related ideas and concepts?

“My take is that the mainstream media’s understanding of blockchain is limited. Too limited in many cases for qualified comments. Writing profound articles on the topic requires thought, time, effort, and most of all, a deep technical understanding. On the other hand, writing a clickbaity article on whether we are or aren’t in a bubble or how some people made or lost a lot of money is easy. And people read that kind of stuff.  Hence, in our advertising-driven revenue model, it makes sense for the mainstream media to do just that. You also see a lot of so-called analyst saying stuff like “a crash is coming”. Wow – great insight! As long as you don’t define what exactly you mean by “crash” and don’t define “when” exactly something is going to happen the odds of you being right are obviously super high. However, I cannot learn anything from your statement. If someone were to write an honest article about a potential bubble, it would be a pretty boring piece. That person would probably say that there are a couple of known factors that drive the blockchain market but more importantly an unknown number of unknown factors. Hence, at this point in time, every statement about a bubble is mere speculation. So, in conclusion, reading clickbaity articles on blockchain bubbles is a waste of time.”

Ok, what is your advice from a VC perspective for people/start-ups or projects entering this technology field?

“Here’s some advice I would give to people who want to enter the space.

  1. Understand that blockchain is a challenging concept. It is going to take you a serious amount of time until you start to understand it. However, learning more and more about it every day is what gives me most pleasure about it.
  2. Read a lot. Think for yourself. Talk to people.
  3. Learning about blockchain will pay off. Education about important and relevant topics always does.
  4. None of what I’m saying in this interview is meant to be investment advice in any way. If you think about investing in the space, don’t start until you have a solid understanding of blockchains. Once you do, start with small amounts that you can afford to lose. While the potential of blockchains is gigantic, we are still talking about a risky technology in its very early days.
  5. Personally, I only invest in projects that I believe are working on solving fundamental problems in the space and I’m happy to wait for years to see the fruits of my investments.”

Short profiles of the companies mentioned:


Steemit aims to create a “different” social network, where good content is rewarded by others. Quote: “Steemit is a social media platform that works by having the crowd reward the crowd for their content. It does this thanks to the Steem blockchain and cryptocurrency; Steem is ‘minted’ daily and distributed to content producers according to the votes they get.

Brave Browser

Founded by Brendan Eich, the former longtime Chief Technology Officer of Mozilla, the Brave browser promises a web experience entirely without being tracked by cookies or other software used to monitor user behaviour. User privacy is the main goal. The browser received mixed reviews first. By the end of 2017 verdicts about Brave as an alternative to other browsers were more positive. Quote  “Eich is widely recognized for his enduring contributions to the Internet revolution. In 1995, Eich invented JavaScript (ECMAScript), the Internet’s most widely used programming language. He co-founded the mozilla.org project in 1998.”


Mediachain, a company based in Brooklyn, US, develops technologies to connect artists and right holders to their work, based on Blockchain technologies. At the core, the goal is to solve current problems with attribution. The goal is to create new connections between a variety of media and to store information about single items, such as photos, music. The set-up is that of a peer-to-peer, decentralized database. Through this, the information relevant can be shared between applications and organizations. The company received $1,5 Million in Venture Capital in 2016 and was acquired by music streaming service Spotify in April 2017.


From Wikipedia:CryptoKitties is a blockchain-based virtual game that allows players to adopt, raise, and trade virtual cats, and it represents one of the earliest attempts to deploy blockchain technology for recreational and leisurely purposes. The game’s popularity in December 2017 congested the Ethereum network, causing for it to reach an all-time high in transactions and slow down significantly.


Sunfish Partners

Early-stage tech VC that primarily invests in Poland and the broader CEE market. It focuses on the areas of Blockchain, Machine Learning, and Internet of Things. http://www.sunfish-partners.com

Follow Marcus Erken:

Twitter: @marcuserken
Twitter: @sunfishpartners

Please note that Bloomen.io as a research project is not affiliated with either Sunfish Partners or any other company or project mentioned in this interview.