Riding the cryptocurrency wave in the DC region

The D.C. region contains a very deep, and extremely varied, entrepreneurial community that has its eyes on all of the newest innovations. Charlie Kiser, CEO of cryptocurrency tech company Atlas Cloud Enterprises, is another fantastic example of this.

ABERMAN: Well, you’re up to some really interesting stuff, Charlie, but let’s start here. How does a guy like you end up in D.C.?

KISER: Well, I’m originally from West Virginia. I’m a scrappy entrepreneur here, kind of battling like everybody else. I went to school at West Virginia University, and actually spent some time in Colorado, kind of out-of-school. I graduated with a degree in finance right when the stock market died in 1987. So, not a lot of jobs at that point.

So, I skipped MBA school, and kind of got my own type of MBA that was the yeoman’s work that we do. So, ended up here because my family was close to here. Great area, and technology was really kicking when I moved back in about 1999. I ended up staying in technology for the last twenty years.

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ABERMAN: And you’ve been involved in various consumer enterprise-focused businesses along the way, a lot of technology, a lot of encryption stuff. You’re very much what I call a D.C. entrepreneur, sort of crossing over back and forth. Right?

KISER: Yeah, I’ve had the benefit of working for a couple of In-Q-Tel-backed companies. My primary focus has been on companies that have a business-forward value. Not necessarily something around policy or information, but really businesses, software as a service, information, and a lot of that is rooted in encryption. A lot of what you have to do is focus on how to secure information.

ABERMAN: Let’s talk about what you’re up to now. I know you’re really, really engaged now in cryptocurrency. How does the grandson of a miner in West Virginia end up in cryptocurrency?

KISER: Well, it’s actually one of the reasons that I’m in it. So, there’s a movie called Matewan, by John Sayles, and it was about the revolution of the unions being developed in Southern West Virginia. My grandfather was actually indicted for murder back in the twenties, for something called the Matewan Massacre, where they were pushing back on the coal companies who were using scrip, their own currency, to help manage and create the coal camps.

ABERMAN: And they used the scrip to, basically, the only place you could spend it was a company store, so it would encourage wage compression or even deflation, because they could manipulate the price of everything.

KISER: Right! And then the families didn’t have much choice. So, what happened was, they were sending in their own private detectives to break up the union, and they had big altercation, and about eleven people are killed, but three or four thousand rounds of the mission were traded back and forth in Matewan, West Virginia. My grandfather was one of the 19 people that was indicted for that.

So, it started just with an interest in, not that cryptocurrency is necessarily going to replace all currency, but what is interesting about the dynamics of currencies, information and how people share it? So, I just naturally progressed to that when I started my interest in technology from the nineties up until now.

ABERMAN: I don’t think that, with all the hype around cryptocurrency and Bitcoin, enough people are focusing on the fundamental, decentralized nature of it, that it would make something like scrip impossible to do.

KISER: Well, what’s actually happened is, a couple of things. Of course, what I’m also interested in here in the D.C. area is, the company that I work for, we’re focused on mining right now, cryptocurrency mining. Meaning the actual computers that are securing transactions. And here, of course, regulation is a big issue. And with all the wave of what’s known as an initial coin offering, the way that not just a company can issue currency, but a business can start their own token, or currency, or security, or whatever it’s going to be defined as. And that’s what’s happening right now.

As a company, we’re looking, and interested in, the companies that are actually creating business value, on the early of revenue, for blockchain. But none of us really know, yet, how the global jurisdictions are going to play out. Who can regulate this? Is it going to be a currency that’s issued by a country? We’ve got other countries right now that are looking at doing that, and businesses that are doing that. And so, I think the SEC, CFTC, FINRA, everybody is working hard to try to figure it out, and provide a gateway. But they’ve got answer to the Hill, and everybody else, about things that can happen with cryptocurrency.

ABERMAN: I was struck, recently, when I saw, for example, the large investment banks are in the process of setting up an exchange, so that they can take big trading positions in Bitcoin. Bitcoin going to be a ubiquitous currency, and it won’t be the only one. Although, Charlie, it seems to me that the bigger thing here is the blockchain. The whole technology. The idea that we can create these distributed ledgers where people can keep score of, whether it’s the exchange of money, or you name it. This reminds me a lot—and you were part of the internet bubble as well as I was back, in the late 90s and early 00s—this reminds a lot of where we were in town, I would say 1995, 1996. So, there was an inkling that something big was happening. Is that what it feels like right now, is this going to be another boom, like the telecom boom for this town?

KISER: Well. for this town, one thing that we have, as an advantage that a lot of people don’t realize, is that you do have a lot of folks that are in this area, encryption, crypto in the sense of NSA, CIO, those folks. They haven’t really had a gateway to actually monetize, and move into the business community. This might be one way to do it. So, you might find that, but I think the larger picture is looking at the regulatory side of it. The folks that are setting up shop, and ultimately, how do these types of decentralized networks actually operate?

Even to the point where the basic premise behind it now is, you’ve got a public infrastructure of computers around the world, that are securing information at the lowest level. But now you look at private blockchains. So, would a federal government, a DOD, or someone else develop a private blockchain that’s large enough to actually have some level of security and decentralization to it? So, I think that’s some of the stuff that’s really fascinating, and you’ve got bigger companies exploring. You talked about the big banks, investment banks and stuff. These guys, they’ll trade Pokemon cards. They don’t care. They’re going to arbitrage anything that has value if they can get to it. So, that’s the hype around it. The real technology piece is still going to take a lot of development.

ABERMAN: I think about my own grand dad, who owned a furniture store, and I think about, in some ways, how my life is so similar to his. Do you ever think about your grand dad, and think how interesting it is, what would he think about you, your life right now, what do you think he would say?

KISER: Oh my gosh. Well, I think his premise was speaking for the man who didn’t have a voice. Part of cryptocurrency is, as you alluded to earlier, being able to level the playing field. Even from an investor point of view, letting folks buy into something where, maybe they’re not an accredited investor, but they can participate in something that allows them to get a shot at getting it on Facebook or something like that. So, I think he would be proud of me for looking at that. But it’s still the Wild West.

I remember a story where—and I still have the .45 that he used in the shootout—but my grandmother told me, he came to her a couple of times, and he said, listen. I’m going to go to a meeting about something that’s important. If I’m not out of this meeting in thirty minutes, you need to get this gun and come and get me. I don’t think it’s Wild West at that level yet, but there are some big players around the world that are trying to assert what they want to do with cryptocurrency. And then, you’ve got others that really want to make it used for the right type of technology and information. I’m hoping to be a part of that movement.

ABERMAN: Well, I’m sure you will be, Charlie. We wish you the best. Have fun, and, more that anything else, get stuff down here in D.C.

KISER: Hey, we will. Thanks so much for having me.

ABERMAN: Charlie Kiser, CEO of Atlas Cloud Enterprises.

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