Tax Pacific not your average tech founder. He is a self-taught cryptographer, college dropout, a proud member and advocate of the transgender community, and a self-proclaimed anti-capitalist anarchist who believes in free market principles deeply rooted in the early days of cryptocurrencies. when bitcoin dominated and banks were not interested in this sector.
Pacific’s radically different experience compared to other entrepreneurs is exactly what shapes their unique way of thinking, they said in an interview with TechCrunch. Pacific founded and is the CEO Entropydecentralized crypto custodian that claims to have raised $25 million for its seed round led by Andreessen Horowitz (a16z) along with Coinbase Ventures, Robot Ventures, Dragonfly Capital, Ethereal Ventures, Variant and Inflection. Notable angel investors from the tech community, including The round also included Naval Ravikant, Sabrina Khan and James Prestwich, according to Entropy. This latest round follows the company $1.95 million pre-seed fee in January.
The Brooklyn, New York-based startup is looking to change the way digital assets are stored with its decentralized self-custody solution, according to Pacific. Before founding Entropy last year, Pacific worked for the NuCypher crypto network while living in Berlin, Germany where they learned advanced crypto techniques.
In the status quo, large cryptocurrency custodians, including Fireblocks, Coinbase, and Anchorage Digital, which hold assets for cryptocurrency users, are fundamentally centralized and function similarly to banks. In some cases, storing users’ private keys in a central location has resulted in these custodians vulnerable to hackingand their users may not always interact with their funds as they wish.
“We’ve heard a lot of stories that we’ve always used people like Coinbase, or we’ve used all these other storage solutions. They call them and they’re like, hey – we need to transfer funds. As well as [the custodian repsonds]oops, sorry, we have to wait for the person to do that,” Pacific said. They told one anecdote they had heard about a fund that was prepared to lose several billion dollars in an OTC transfer because their contact at the custody firm was on vacation.
Entropy, in contrast, uses cryptographic methods based on multi-party computing to enable users to deposit and use cryptocurrencies on any block chain at any time, Pacific explained. Using the Entropy protocol, users can implement their own rules for interacting with funds, such as time limits, a particularly useful feature for groups such as DAOs that attempt to make decisions based on a collectively defined set of rules.
Pacific describes Entropy’s solution as comparable to Google Authenticator in that it doesn’t provide its own wallet or products for users – it just handles the process of “signing” their data cryptographically. Other groups, including companies and DAOs, can then use Entropy to host custom funds for secure storage, but are not required to comply with the centralized custodian’s restrictions.
According to Pacific, most cryptographers start with a protocol and then envision a user experience that matches it. In the case of Entropy, Pacific conceived this idea by reversing that process by thinking about what the ideal custody experience would look like for a cryptocurrency user, and then designing the Entropy protocol accordingly.
“I approach this problem in a very different way than many other people … There are competitors who just create wallets and just try to adapt their cryptographic protocols that they came up with for this. [My perspective is that] all the other people who created these cryptographic protocols before me, there is nothing supernova in them. I’m just going to put it together in a radically different way from them and just make it very user friendly,” Pacific said.
Pacific also attributes Entropy’s advantage to its own willingness to deviate from the traditional business model for custodians, in which users pay them a fee to hold funds securely, and to work towards finding a model that can generate revenue not only for the custodian, but also for the protocol. themselves, as well as users of cryptography. They readily admit that Entropy’s 9-person team hasn’t worked out the details of this model yet, but the company’s VC backers don’t seem to mind.
“When we started raising money, one of the most important things I started telling people was that we don’t have a business model,” Pacific said. Pacific says that, as is typical for early-stage startups, they focus on building a great product before thinking about monetization.
Pacific added that Entropy also targets a different audience than typical keepers.
“This is not like some enterprise blockchain like CredoPacific said of another decentralized digital asset custodian that, unlike Entropy, provides users with a wallet. “We are building a product that is unique to crypto bearers and decentralized institutions. We do not expect JPMorgan to use us,” Pacific said.
Entropy’s focus on serving individual crypto users stems in some way from Pacific’s personal connection to the crypto community. While they said they faced some resistance for being trans founders, for the most part they found crypto to be an unusually supportive environment.
“In fact, I never felt like I was in a space where it would be more acceptable for people to be so different. If you go to [crypto] conference, it’s just filled with weird, weird people,” Pacific said.
According to them, Pacific was used to forging their own path, talking about how they had no role models that they could compare to growing up. Today, there is still almost no research on LGBTQ+ founders and how they are funded, although venture capital firm Backstage Capital estimates they receive less than 1% of venture dollars overall.
“Growing up, it was very important for me to see transgender entrepreneurs, especially transgender people who are entrepreneurs and have similar political values,” Pacific said.
Credit: techcrunch.com /