Blockchain is a system for processing digital currency deals, based on a distributed and encrypted database. What is new about this technology is that it facilitates payments without a central entity (such as a bank or credit card company) supervising the transfers and controlling the database. The system is based on a communications network in which each of the parties is both a customer and a server, and there are no intermediaries between them.
The technology, which is based on “blocks” of deals, is designed for use in a range of industries. Last year alone, blockchain startups raised over $2 billion worldwide. This mighty stream naturally also drew in Israeli investors who spotted the opportunity, with Assia and Moyal among the leaders. They are in fact local pioneers in this redhot sector, which is still relatively virgin ground for investors. The new fund that they founded has already invested $15 million in seven startups.
“We started investing in companies operating in the sector because we realized that there are many funds that are afraid of it because of its controversial reputation. Many companies could not even manage to open a bank account in order to pay salaries, because the banks put spokes in the wheels of entrepreneurs in this field. Entrepreneurs founded offshore companies in order to remain beyond the regulators’ radar, and tried to build interesting technology with extremely limited resources.”
“So far, the fund has a 300% return,” says Moyal. “Such opportunities come along once in a lifetime. It’s risky, volatile, and can go down. We have already experienced sharp dips. This is a crazy world. My husband (Cyhawk Ventures general partner Kfir Moyal, R.K.) sometimes tells me, ‘I can’t talk to you; stop talking about blockchain.’ My whole day revolves around it; it’s addictive.”