About halfway through a presentation at Blockchain Week in New York City this month, Jimmy Song had heard enough. The venture partner of Blockchain Capital LLC’s funds had watched and listened as one entrepreneur labored through a slide deck to describe a new company based on blockchain technology. And Song still had no idea what the product was about.

So Song (pictured) articulated what he figured the audience was thinking along with him. “I just saw lots and lots of buzzwords, and I didn’t even know what the heck it was,” Song said. “It’s all social signaling. It’s not about the tech at all.”

Song spoke with John Furrier, host of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the Blockchain Week event. They discussed how entrepreneurs can miss the boat when trying to create companies on cryptocurrency technology, the flaws in some initial coin offerings and why building a viable blockchain model is so hard.

Blockchain not always a good fit

Part of the issue in the blockchain world, as Song sees it through the eyes of a venture capitalist, is that many entrepreneurs are trying to build businesses on a technology model where the decentralized ledger may not be a good fit. Many are ignoring simpler tools, like public-key cryptography, which have been around for decades.

“A lot of the companies are taking a centralized system and trying to add a decentralized tech into it, like a blockchain,” Song said. “It doesn’t work because the fundamental proposition of the blockchain is that no single person controls it, but these are companies that are trying to control it.”

Song is generally supportive of the security token, where the value is backed by tangible, tradeable assets. But he is less positive about utility tokens that represent investment in a company’s future product or service and have been the focus of fundraising initiatives known as ICOs.

“I think ICOs are a broken business model,” Song said. “They are more or less ‘kickstarters’ where the people that are delivering don’t have to deliver anything to take the money. You’re selling seats to a restaurant before the building is built.”

In a public post earlier this month, Song articulated his philosophy for why creating technology suited for the blockchain is hard. Strict, slow development and costly maintenance are among a lengthy list of reasons.

“It’s extremely hard to develop,” Song said. “Facebook’s motto is move fast and break things. You can’t do that on the blockchain.”

Here’s the complete video interview, and there’s more coverage of Blockchain Week NYC from SiliconANGLE and theCUBE:

Photo: SiliconANGLE