BR Research: Tell us about yourself.
Alexander Shulgin: My background is very simple yet very interesting, at least for me. I was born in Siberia. In my teenage, I got into rock 'n' roll. Rock 'n' roll was the biggest innovation in the 70s that changed the world. In 90s I moved to Moscow and joined the number one rock band, at that time in USSR - the Kruiz as a guitarist. It was the first Soviet band that was signed by a major label and was the first rock band from the USSR to tour abroad.
With the beginning of Soviet Union's dissolution in the mid-1980s, the band's first album was a huge success and later the album was released by a German company when we went to Germany. I was 20 years old when I started working in Germany and started learning about business and its various facets like merchandising, distribution etc. that were non-existent in the socialist Soviet Union where everything belonged to the state. It was a very exciting time to learn.
The band split in two years and I came back to Russia towards the end of 1980s where I continued working in the music field and created one of Russia's first private companies that worked in the field of intellectual property, copyright and music publishing. I was also the founder of the first recording company in Russia. Between 1990-1995, I also created a big distribution company for consumer electronics for the Russian and CIS market.
Though I was doing fine, in 2000 I just realised that it's time to exit the music business, and I started investing in new technology and digital companies and eventually became a venture capitalist.
I founded the investment group called Gruppa Kompaniy Familia, which is the Group of Companies Familia that specialises in digital economy, media and new media space. The company was established in 1998 and during 20 years of its history it has completed over 100 projects and has become a shareholder in the number of world recognised companies and venture funds. We work with startups, venture capital, consulting and intermediary obligations.
BRR: So how did you start investing in cryptocurrency?
AS: My interest in Blockchain technology dates back to the time when I started investing in technology. It was early 2000s, and record label associations started to bend peer-to-peer file sharing technology, which I believe is the foundation of Blockchain. I was always interested in things that were very sharp and new. In 2011, I started investing in Blockchain technology. I still compose music because I took composition as an investment too.
BRR: Blockchain is a very wide spectrum technology. What part of Blockchain technology are you investing in?
AS: Let me first explain that Blockchain is not currency. While paper or coin money both physical and virtual shows that you have some equivalent amount of tangible or intangible asset, Bitcoin Blockchain is an asset itself - you don't need cash to prove that you have that digital asset.
Second, how I explain Blockchain is different from what the so-called Blockchain. It is that the huge infrastructure behind Bitcoin Blockchain is not built by any government or company but individuals and humans, and it is only one infrastructure to which everyone is connected. All decentralised solutions are based on this one global infrastructure that is created and owned by humans.
The Blockchain technology has allowed the decentralisation of virtually everything thanks to the miners. Miners all around the world are responsible for building the global infrastructure that is known as Blockchain, and I am one of the miners.
BRR: No one knows who actually started Bitcoin except that an unknown person or a group of people using the name Satoshi Nakamoto was behind it. It is also said that it started somewhere in Russia. What are your views?
AS: I will tell you how I encountered it. As I said earlier, it was probably the music and the media industry that first encountered this technology back in 1999-2000 when P2P file sharing technology like BitTorrent, eDonkey and later Ethereum were introduced. Then came the monetization aspect of it around 2008-09. No one knows who it was. What I believe that it's not important who was behind it but how it benefits. And today, I think it's a much more sustainable system now.
BRR: One criticism that Bitcoin technology faces the amount of energy it consumes makes it less sustainable. What is your view on this?
AS: Yes, this technology uses a lot of electricity and the numbers of computers that run the entire network are huge energy hogs. But this is when the concept of 'smart' can really make a difference when everything and everyone is connected and up to date. Like a smart home, or a smart city, energy consumption will be reduced when the Bitcoin technology and infrastructure is smart.
BRR: What kind of partnership are you looking for with Pakistan? How receptive do you think the country can be to your disruptive ideas?
AS: This is an interesting question. I met the government officials and the economic team during my first visit earlier this year in March. And I had not come with any idea as it was simply to understand the country; its market, economy, issues, and its technological progress. I believe that if you want to build a smart Pakistan, the investment has to be smart money from smart investors with smart ideas.
A lot of people here don't understand Blockchain technology and cryptocurrency. But since my first visit six months ago and now, I see a lot of progress in terms of eagerness and facilitation. That's why I think there is good future in Pakistan. Regarding building smart societies, I have proposed to the government to send a delegation of students to Siberia to participate in some sort of acceleration program with our students and then they can disseminate the information and make use of it here in Pakistan, which will help create awareness and give them hands on experience of how it being done elsewhere.