Hamiz Mushtaq Awan, Founder and Partner at Plutus21 Capital, shares his views on blockchain technology, its use cases, advice for interested entrepreneurs, and more.
‘To Next Web’ had an informative conversation with Hamiz. Plutus21 is a multistrategy investment firm specializing in blockchain technology infrastructure investments. The entrepreneur opened arenas for practical discussions and solutions. Stay tuned till the end to learn all about the interaction!
About Plutus21 Capital
Plutus21 Capital is a venture capital company that started its operations in 2017. Hamiz shared they specialize in blockchain infrastructure investments, including the marketplace, the protocols, and the platforms that run the blockchain ecosystem. The company is agnostic as it has invested across different stages of funding and investment.
Since the company’s primary focus has been on supporting startups and other ventures using blockchain technology, Hamiz thinks that eventually, the company’s internal processes will be more blockchain and tech-focused.
“The sectors we’re focusing on, and the companies we’re excited about are blockchain companies. So, eventually, what will happen is a lot of our internal processes will also be built using blockchain technology and will be more technology-focused.”
Views on Blockchain Technology and its Use-Cases
Hamiz describes blockchain as an open, secure, and shareable database. The technology makes the foundation of popular and trending systems like cryptocurrencies and NFTs (Non-Fungible Tokens).
People haven’t understood blockchain technology and its potential well. Hamiz said there are so many ideas and areas that can be explored and many fundamental problems that can be solved using this technology. As an investor, he hopes that entrepreneurs and innovators will come up with unique ideas, tapping into the fullest potential of this technology.
“Blockchain is a platform for entrepreneurs to innovate on. I think there are going to be things that we are not even imagining today that people, businesses, companies will do with the technology in the future.”
Hamiz shared his knowledge of the use-cases of the technology. He thinks that all the sectors and areas that are natively digital and lightly regulated would adopt blockchain technology real quick. For instance, games, DeFi, NFTs, and others are the areas that have been originally digital.
One of the reasons these areas have been able to engage people’s attention is light regulations. These industries are therefore generating a more significant user base. On the other hand, since banking, insurance, commerce, and other industries are heavily regulated, their transition to blockchain technology will take some time.
“I think we’ll see a gradual transition here with blockchain. First, we’ll see the low-hanging fruits grow, and then gradually, as the infrastructure gets built up, e-commerce and other services/products will follow.”
Another essential factor that will govern the use-cases and transition will be the user-friendliness of the applications. If companies or business organizations decide to switch to the blockchain, they must focus considerably on ensuring that the user experience is satisfying or even the best.
In addition, all the technical and complicated processes should happen at the backend, and the front should be clean, simple, and hassle-free. Hamiz said following these base points, different sectors across industries can utilize blockchain in the best possible way.
“In order to break past the one percent user base and go into the mainstream with billions of people using blockchain, it has to be driven by user experience. For the blockchain ecosystem to grow, what’s necessary for applications to get a userbase and get people’s attention is to get very user-friendly.”
Impact of Regulations on the Tech
Hamiz shared how he views the talks around regulations and policies that would potentially control the technology. He thinks that reporters and media make the matter sound dramatic and consequential. The fact of the case, however, is that regulations and their compliance are inherently slow.
Hamiz added that we’re past the point where the government should be expected to interfere extensively. Too many people and companies are involved in the space now. Hence, instead of a complete shutdown, he thinks there would be a slow and gradual progression towards regulating different industries. This would imply filing more forms for blockchain companies and getting more registrations done.
“What we’ll see is the compliance cards will go up. Companies/Organizations would be required to fill out more forms and do more registration at the most. I believe regulations are not going to kill anybody’s business.”
Hamiz thinks to help people understand the concept of NFTs, Crypto, and other tech-related ideas better, it would be necessary to know what people are already aware of and how they comprehend it. After this, we can draw analogies to assist them in getting clarity on various aspects from their standpoint.
“A lot of people relate to the idea of collecting stamps, baseball cards, or something of that nature. So, to draw the analogy, you say this NFT picture is similar to a baseball card that is unique and has value because there are only a few of them. And that’s how you can make a connection.”
According to Hamiz, many people think of NFTs narrowly, constrained only to art. In his view, only one percent of the disruption will happen in this area. Whereas the fact is that NFTs are a much broader concept. People can put anything of value as an NFT on the blockchain, and this could be an experience, a picture, a license, a document, or anything of that sort.
“I’m already seeing music, movies, writing, and other such things being put out as NFTs. So that they can be owned by a specific person and monetized, I think it’s a whole world out there, things we haven’t even imagined today. So I’m excited about people realizing all of those things and then building companies with that bigger mindset regarding NFTs.”
Doing Business or Investing in Blockchain StartUps
Before thinking about starting a business or investing in blockchain-related ventures, Hamiz thinks one must read enough literature on the subject and get first-hand experience with the technology. He said the whole scenario is evolving fast, and new information is always available. The only way to keep up with the trend would be to try the technology to do a transaction or buy a license.
“The only way to learn about new technologies is to try them out for yourself. Invest a small amount of money in the testing phase like an educational piece. But that is the only way you’ll learn it. And once you start testing it out, your mind will start working and get innovative about it, and you’ll be able to come up with all kinds of solutions.”
The same goes for investing in tech startups, said Hamiz. He emphasized people should realize that investing is not a game. With investing in a startup or a company comes a whole different level of responsibility. Before taking a step in this direction, one must think about their purpose of investing, whether they want to explore this space or learn the basics since both are very different.
“I’ll suggest one thing. Read more and try for yourself. Figure out by actually testing these things. See if they work that you believe after testing them that they solve a real problem. And if you believe that it is usable and could disrupt the industry, then you can decide on investing in it or not.”
Looking Out for Scams/Fraud, Staying Safe
Several blockchain companies could potentially be a fraud today as it is still a very early stage for the technology being used. Hamiz thinks people should be vigilant and not over-invest in something unless they’re confident in the organization and its background.
“I’ll go back to the same thing. It’ll be harder for someone to scam you if they deliver a product with a good user base. And so, if you go and test the product, it works, and you see other users are using the product, then most likely it is decent and safe.”
Hamiz emphasized when one tests a product/service; it gives them a better idea about the product and helps spot the potential and existing problems. Using the product before investing is also a great way to understand what it offers, thus giving a significant idea about its credibility.
“For instance, if a service offers to do a transaction in 10sec, and did so. Then you know it can be trusted. Next, if they say they’ll send you a debit card that you can spend crypto with, but it never shows up, don’t interact with that application anymore.”
Hamiz suggested another way to stay away from shifty companies/ventures is to observe if an active community is forming around their projects, where the founder and management team are very public.
“There are so many crypto companies where nobody knows who the founders are. So they’re not putting their reputation down the line because there’s a lot of social pressure that would come if they turned out to be fraudulent. So, you should look for really active communities, that very public founders and management, speaking and engaging with the community.”
Blockchain and Metaverse/Web 3.0: Do They Relate?
Hamiz honestly shared that Web 3.0 is a new concept that people have started discussing; however, he wouldn’t describe it definitively. He is sure that blockchain is not the core of these ideas but a contributing element. According to Hamiz, ‘Web 3.0’ is nothing but the application of blockchain. Whereas the social aspect of blockchain would be called ‘Metaverse.’
“So, I think blockchain is the coherent technology. And other things would be a subset of that, instead of the other way around.”
Would everyone be a part of Blockchain and Metaverse?
Whether everyone in the world would use metaverse or not is something Hamiz accepted his skepticism about. He thinks the likelihood of everyone engaging in the metaverse is low as there are not enough devices that could support high fidelity graphics that transcend the users to a different reality.
“For everyone to experience the metaverse or be in it, we need to have 8 Billion VR headsets. I think it still seems like science fiction will take at least ten years to come about. And so I don’t believe it is that much big of an opportunity as people make it seem.”
On the other hand, he is confident that the future will enable people to interact with blockchain technology. As a result, the transition he believes would be much faster and wouldn’t take many years.
“I do think, and I am pretty confident, that every person in the world, somewhere in their daily lives, will be interacting with the blockchain. There would be interaction with this technology in some way, maybe through the backend of the applications or something like that. It will take only a couple of years, and we can get to that point.”
Contributing to the Future: Plans and Vision
Hamiz feels the best way he could contribute to the future of these technologies would be to support the early-stage companies exploring ideas and possibilities with the tech and aim to solve real problems. His support would be in various areas per the company’s requirements, including the capital, networking with the right people, identifying the stakeholders, and more.
“I don’t know if I’ll ever start a Web 3.0 company. But, I’m very excited to back the best Web 3.0 founders and give them the support they need to go and solve problems.”
Our conversation with Hamiz Mushtaq Awan was full of learnings about blockchain technology’s business and investment opportunities. In addition, he raised some interesting points on how to ensure security and credibility while using the evolving technology. Hamiz focused the most on educating oneself on the tech through reading and trying it out with minimal risk. He asserted that this kind of knowledge would be beneficial and irreplaceable.
Hamiz Mushtaq Awan is the Founder and Partner at Plutus21 Capital, a multi-strategy investment firm focusing on blockchain infrastructure investments since 2017. Before dedicating his time to this venture, he had experience as an analyst across esteemed organizations.
Author: Nitisha Lal
Nitisha Lal is a writer enthusiastic and curious to learn new things. Currently, she writes about the latest developments in technology, particularly around Web3 and the Metaverse. She enjoys nature walks, capturing the world around her on the phone, or reading books when away from work.