From AI to Bitcoin Evangelists: The Future of Self-Hosted Bitcoin Investments
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From AI to Bitcoin Evangelists: The Future of Self-Hosted Bitcoin Investments
An in-depth exploration of serial entrepreneur Aki Balogh's entrepreneurial journey, dlcBTC's technological innovations, and future development.
Navigating Web3 tides with focused insightsBy Joy Chen, Evan Lu
Welcome to the third episode of *DripEcho*, Waterdrip Capital’s interview series on cryptocurrency and blockchain. Our guest is serial entrepreneur Aki Balogh, founder of dlcBTC. Aki previously founded MarketMuse, an AI-driven marketing company that achieved significant success. In 2023, he embarked on a new venture—dlcBTC—aiming to build decentralized and secure DeFi solutions powered by Bitcoin. Today, we dive deep into Aki’s entrepreneurial journey, the technological innovations behind dlcBTC, and its future roadmap.
At the peak of technology, entrepreneurs face pivotal decisions about transformation. For every tech founder, there's a fundamental question: how do you meet the challenges of the future? Rather than staying within familiar domains, Aki chose to ride the wave of cryptocurrency and begin a new chapter. His entrepreneurial spirit traces back to his scientific upbringing. Born in Hungary to a nanotechnology expert father, Aki moved with his family to Boston in 1991. He recalls selling bubble gum at school as a child—an early spark for entrepreneurship. In 2011, he joined OpenView Venture Partners in Boston, where he developed a strong interest in big data, AI, and machine learning. By 2013, he launched his first startup, Market News, combining AI with marketing to optimize SEO content—a product quickly embraced by the market. Yet Aki didn’t stop there. His curiosity about crypto was sparked when he first encountered Bitcoin in 2011. He realized early on that cryptocurrency wasn't just a fintech revolution but a direct challenge to traditional banking systems. He believes this technology will empower more people worldwide with financial opportunities.
AI or Crypto?
In today’s booming AI landscape, Aki Balogh made the deliberate choice to enter the world of cryptocurrency—a natural move for him. “I first heard about Bitcoin in 2011,” he recalls, “but didn’t dig deeper then. When I finally entered the crypto space, I saw immense potential at the intersection of crypto and fintech.” As an early practitioner in AI, Aki invested heavily in the field but gradually noticed increasing centralization and monopolization—especially in access to computing power and data controlled by large corporations.
He explains: “The barriers in AI are rising. Only companies with massive computational resources and vast datasets can truly compete, making it harder and harder for small and mid-sized startups to participate.” In contrast, the decentralization inherent in crypto attracted him. To Aki, crypto offers greater opportunity for entrepreneurs because it lacks the resource concentration seen in AI. In the crypto ecosystem, even a small team can find its niche, unburdened by centralized infrastructure.
DLCBTC embodies this ethos of decentralization. By leveraging self-custody mechanisms secured directly on the Bitcoin blockchain, dlcBTC eliminates the centralized risks associated with single custodians and bridging technologies prevalent in today’s market. Aki emphasizes that this innovation not only enhances the security of Bitcoin in DeFi applications but also provides institutional investors with a more reliable liquidity solution. He firmly believes dlcBTC will pave the way for the next generation of decentralized finance.
Despite AI’s explosive growth in recent years, Aki has no regrets about shifting focus to crypto. “Both fields have their appeal, but the decentralized nature of crypto excites me more. I no longer need to rely on computing resources owned by big tech; instead, I can innovate in a more open and equitable environment.” His advice to young founders: “Stay open-minded, explore different fields, and don’t limit yourself to one path—because the best opportunities often come from unexpected places.”
Value Creation vs. Expectations
In the startup journey, securing funding and resources is often viewed as key to success. However, Aki Balogh understands that founders and investors operate with fundamentally different mindsets. Some entrepreneurs treat their company as a business, while others see it as a mission—one focused not merely on profit, but on pushing technological boundaries and driving innovation.
Mere imitation holds little value. True impact comes from creating something unique. While countless similar products flood the market, Aki remains committed to innovation. In the crypto space, his dlcBTC stands out as the only Ramp Bitcoin product using a self-custody mechanism.
It’s easy to fall into mental traps during early-stage ventures—especially around fundraising pressure. Aki stresses that capital acquisition isn’t the sole determinant of success. He shares that during the initial phases of his first two companies, he raised almost no external funds. Instead, he relied on consulting projects and grants to fund R&D. This approach allowed him to validate business ideas and customer needs without external pressures. Only after developing a working prototype and receiving market feedback did he consider raising venture capital.
“In the beginning, you can work part-time or structure your time flexibly,” says Aki. Finding the right VC partners can accelerate growth. But beyond money, the strategic alignment and added value of investors must be carefully evaluated. For Aki, early success hinges more on deeply understanding the problem and sensing market dynamics. Funding matters—but it’s not everything.
Balancing Founders and Investors
It’s undeniable that founders and investors often face conflicting pressures. Aki shares candid insights from his experience, emphasizing that a founder’s primary duty is to create value for customers. While investors naturally prioritize financial returns, Aki places greater importance on customer success and long-term sustainability. Repeat purchases, he believes, are the foundation of a successful business. Therefore, when making decisions, he prioritizes delivering superior service—even if those choices may not align with short-term investor expectations.
Aki openly discusses the tension between founders and investors, acknowledging the delicate balance required between pursuing long-term value and meeting short-term financial targets.
When discussing dlcBTC’s vision, Aki expresses his goal of building a safer asset-wrapping mechanism that allows Bitcoin holders to participate in lending and investing—without exposure to traditional risks. Through this, he aims to unlock trillions in securely invested Bitcoin, enabling broader financial use cases.
He critiques existing Bitcoin wrapping models, noting they typically depend on centralized custodians. In contrast, dlcBTC employs a novel self-wrapping mechanism that leverages Bitcoin’s own chain security. Users can lock their BTC autonomously, ensuring full control and eliminating counterparty risk inherent in centralized custody.
Excerpt from the Interview:
JoyChen: Transitioning from artificial intelligence to blockchain seems like a bold and innovative move. What led you to focus specifically on Bitcoin? How did you first become interested in cryptocurrency?
Aki Balogh: Actually, I’ve been trading stocks since I was young. I first heard about Bitcoin in 2011, but didn’t focus on it. Then in 2015, I heard about Ethereum—still didn’t dive in. But I thought crypto would be interesting because it touches fintech. Fintech is notoriously hard to break into due to strict bank regulations, so I found it fascinating.
I also believed it could help many people—especially outside the U.S. We’re relatively privileged here, but take Hungary, where I’m from—the banking system isn’t robust. From my experience across multiple countries, financial systems often fail ordinary people. If we could have software-based alternatives, things would improve. The real turning point came when I started working with a Hungarian engineer. I helped him with business development since I was new and didn’t have concrete plans. I introduced him to a friend, who ended up hiring him to build a wallet for El Salvador. That wallet is now used by millions of Salvadorans—and it’s Bitcoin-related. That made me think: if everyone in El Salvador can own Bitcoin, why not everyone in the world? And once people have Bitcoin, what can they do with it? Maybe borrow against it or invest. That’s how I got into DeFi.
JoyChen: Why didn’t you stay in AI? Do you regret shifting focus to crypto, especially given AI’s explosive growth recently?
Aki Balogh: Honestly, my timing wasn’t perfect—I should’ve done Bitcoin first, then AI. I hesitated a bit, but you never know. Actually, in 2018, we ran an NLP project a few years before OpenAI. I invested several million dollars, but it wasn’t enough to build a top-tier model. Still, we had our own model. So maybe I was too early. But I believe AI has huge potential and will keep evolving with many opportunities.
Still, I don’t regret the shift. Both fields require building, but one reason I stepped back from AI—maybe even felt a bit disillusioned—is how centralized it’s become. If you’re a big company, you buy servers, train models, and hoard data—you get all the power. There’s a natural drift toward centralization. But in crypto, opportunities are more accessible because decentralization is the core principle. If you build something meaningful, there’s always room for you. Meanwhile, the entry bar for launching an AI company keeps rising.
JoyChen: As an investor, I naturally care about ROI and assess most projects through that lens. But founders and investors often think differently. For many entrepreneurs, there are two ways to build a company: as a business or as a mission. For you, is DLCBTC more about making money, or advancing technology?
Aki Balogh: You can do both—it depends on your personality and strengths. I’ve always wanted to build companies rooted in new science because I aim to create differentiated products, not just copycats. I think there’s very limited value in building imitations.
Certain industries allow imitation and still generate profits—like CRM systems. Salesforce is huge, yet many alternative CRMs exist. Or electronic signatures like DocuSign—some sectors keep spawning new players until consolidation happens. If you’re doing exactly what others do, you’re likely to get acquired by a bigger player. But both of my companies had unique elements grounded in foundational science and academic research, which gave our products stronger defensibility. That’s my approach. Some people build BPO firms and succeed brilliantly—that’s valid too. For me, adding a scientific edge makes products more resilient. Even now, dozens of Bitcoin ramp products emerge monthly, but we’re the only one using self-custody and Bitcoin L1. Others rely on centralized custodians or bridges—Bitcoin purists know these are risky. That’s why I remain confident. Even with Coinbase launching CBBTC—a giant player—we still hold an advantage through greater decentralization. That’s how a small VC-backed startup survives.
JoyChen: Early fundraising is often one of the biggest hurdles for startups. For crypto projects like DLCBTC, is early capital critical? Beyond money, how important are the resources investors bring?
Aki Balogh: We didn’t raise any funds in the first two years. With my first company, I raised nothing in Year One, then $1 million in Years Two and Three. For the second company, we spent the first 18 months on grants before taking VC funding—and only grew afterward. So yes, going a year and a half without VC is totally fine. Doing consulting, getting grants, or generating some revenue to fund R&D works well. I call it R&D income—whether from consulting or grants. That’s how both my companies started. Once you have a product, that’s when you might want to raise venture capital. Initially, stay flexible—work part-time, split your time, or arrange things creatively.
I think VC is great. I’ve taken VC in both ventures and always looked for strong partners—they push you to move faster, give you more resources. It’s valuable. But in the earliest phase, when you only have an idea, you need to research, validate, talk to customers, build prototypes. You don’t need VC for that. Go out, find customers, attend events, make time. Once patterns emerge—when you think, ‘Wait, I have a concrete idea, real people want this, I’ve got engineers’—that’s when I’d recommend seeking pre-seed funding.
JoyChen: I’d love to hear more about your personal journey as a founder. When facing challenges, investors usually focus heavily on financial performance. As a founder, what are your gains and risks? Do you feel pressure to ensure investors don’t lose money?
Aki Balogh: Being a founder—especially a VC-backed software founder—is extremely tough. It’s brutal. I’ve been doing this for over a decade, backed by VCs, and I still face doubt, fear, and anxiety every single day. I’ve just gotten used to it. It’s normal. Most people don’t want to be founders—you’ll face constant uncertainty, self-doubt, questions like: Are we doing the right thing? Where should I spend my time? That’s the downside.
But the upside is immense: learning. You go on an incredible adventure, learn rapidly, gain extraordinary experiences. Your growth is measured by the value you create, the returns for investors, and the results for customers. For us, the most important thing is customer success—delivering real value. Seeing your team grow, watching your own personal and professional development—that’s powerful. That’s actually one reason I got into this: personal growth.
Of course, I want investors to profit. But above all, I want our customers to succeed—to not just buy once, but come back repeatedly. A repeat customer base is the strongest foundation for any business. So even if a decision seems questionable or unpopular in the short term, as long as we’re optimizing for customer value, I believe it pays off long-term.
There’s always inherent tension between founders and investors. But as a founder, my responsibility is to maximize long-term value. Even if that means doing things short-term that investors might dislike or disagree with—that’s part of the reward of being in this role.
JoyChen: To wrap up, how would you summarize dlcBTC in one sentence? What’s the ultimate goal you hope to achieve with this project?
Aki Balogh: We’re building a more secure wrapping mechanism that uses the entire Bitcoin chain to safeguard assets, then wraps them onto Ethereum and other chains for DeFi use. Our goal is simple: anyone who owns Bitcoin should be able to invest, borrow, or participate in finance—without facing bridge risks, custody risks, or any traditional vulnerabilities. We aim to put $1 trillion worth of Bitcoin safely to work in yield-generating investments. That’s our long-term vision. We’re achieving this by launching in DeFi ecosystems across Ethereum, Arbitrum, Solana, and beyond.
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