33 Takeaways From The World Crypto Economic Forum Via Twitter

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Is it Monday? Then there must be a crypto/blockchain conference going on somewhere!

That’s the way it feels lately as the number of conferences, events, forums, webinars, meetups and gatherings in this space have exploded. How do you decide which one(s) to attend and which ones to skip?

I chose to fly out to San Francisco to go to the very first World Crypto Economic Forum, based on the number of speakers there that I wanted to see.

I made the mistake of not arriving early for the Blockchain Expo back in November and got stuck in the back of the room.  Not today!

Nick Szabo on Smart Contracts

Bitcoin pioneer and blockchain evangelist, Nick Szabo, gave a talk where he linked the evolution of the human brain to the need for blockchain smart contracts.  Szabo explained why smart contracts are more efficient than human-created ones and how they will facilitate commerce around the world. He also spoke about the history of the blockchain technology and why he thinks the SEC is just trying to scare people.  (See Nick Szabo: Smart Contracts and the P2P Economy)

The human brain alone can maintain relationships with no more than around 150 individuals.  But technology has allowed us to expand this and scale into groups of hundreds or thousands.

When two strangers who do not trust each other want to make a deal, they have to contract with a middleman. This could be a broker, lawyer, bank or any other intermediary.  The middleman documents the terms of the contract and ensures that it is executed fairly.  Szabo called this traditional form of contract “wet code,” since the terms are interpreted by a human brain.

The value of smart contracts is that same two strangers could consummate a deal on a blockchain without anyone in the middle.  Szabo referred to this as “dry code,” since the terms are interpreted by software.  (Szabo first discussed wet versus dry code on his blog back in 2006!)

 

Some people even think that Szabo has been as influential in the world of crypto and blockchain as Satoshi himself…

The Emergence of Bitcoin as a Global Reserve Currency

Steven Michaels (@bitcoin_sm) is CEO of Alliance Capital, a Bitcoin Focused Investment and Advisory Services.

Michaels started off his talk by throwing handfuls of bills into the crowd. They were Ten Billion Zimbabwean Dollars, which are totally worthless.  (Zimbabwe experienced such terrible hyperinflation between 2001 and 20018 that they officially abandoned their own currency in 2009.)

He was making a point about people who say that cryptocurrency is worthless since it isn’t backed by a government. Well, tell that to the people of Zimbabwe!  Hey, I’m a billionaire now!

From an article titled, What is Money?, on BitcoinInvestor:

Ideal money has three critical characteristics: it acts as a medium of exchange; it is an economic good; and it is a means of economic calculation.

Cryptocurrency can contain all three of these characteristics, which is why it is succeeding in becoming an alternative to fiat, Michaels insisted.

If you were to invest all of your liquid assets in gold and there were some kind of crisis, you probably couldn’t leave the country carrying all of your gold (depending on how wealthy you are, it could require a pickup truck to carry it all.) Michaels noted that cryptocurrencies are an excellent way to avoid government restrictions on the movement of physical commodities or fiat currency. Most countries, especially China and the US, have laws on the books that require notification when large amounts of wealth are moved, which is why they are afraid of the expanding usage of cryptocurrencies.

Michales was playing to the Libertarians in the crowd, which is understandable.  He pointed out that crypto is an asset that is very difficult for a government to confiscate and could be completely hidden from authorities, if you have some technical knowledge and used a tool such as the Dark Wallet.

A few variations of this line gets repeated a lot, especially when it comes to promoting use of crypto over fiat.

Unfortunately (or fortunately), this turns out to be a myth.

At least it’s only true if you’ve kept your savings stuffed inside a mattress for the past 50 years. If you’ve invested in almost anything pays interest or dividends, then your purchasing power is actually way up.

As you can see from the chart below, the grey line at the bottom is what Michaels is referring to; the purchasing power of a dollar invested in nothing at all. The light purple line at the top shows your purchasing power if you’ve collected the rate being paid by 3-month T-Bills. It shows that your purchasing power has gained a lot since 1960.

 

 

 

 

 

 

 

 

 

 

While this doesn’t mean that you should keep all your money in USD, it does mean you need a better reason to invest in crypto than just avoiding inflation.

Miko Matsumura on Open Source Money

Miko gave an impassioned speech that implored the 1,000+ crypto-loving attendees to “grow the hell up and stop focusing on just grabbing the cash.”  His desire to refocus people’s efforts towards projects that benefit society and advance the usability of blockchain and crypto technology is commendable. But there will still be many who are rushing into the space with dollar signs in their eyes.  (See Planet Blockchain by Miko Matsumura)

I know that I had heard this somewhere before, but couldn’t remember where. The earliest reference I found was an article by Rok Sivante on Steemit called Crypto: The Dawn Of The Single Greatest Wealth Transfer In The History Of Mankind…? Although, Sivante admits that he didn’t create the phrase, but had “read or heard about from a number of different sources.”

Sivante has high hopes for Bitcoin to positively impact society beyond the transfer of wealth:

Satoshi Nakamoto was far more than just an anonymous computer programmer. Gifting Bitcoin, he laid the seeds for the transformation of our society so as to serve the human race from averting the complete disaster inevitable were we to carry down the path we have been. He gave birth to a movement, and an army of developers desiring to build an alternative to the corrupted fiat banking system nurtured those seeds. The outcome: we are witnessing – and participants in – the complete transformation of society’s economic governance systems.

Maybe there is a brilliant programmer somewhere who can create a smart contract for this USDCoin thing?

Blockchain for Social Impact

Caterina Rindi (@CaterinaRindi and Rindi Consulting) is a consultant and speaker who has been involved in the bitcoin/blockchain ecosystem since late 2013. She focuses on education to try and introduce non-technical audiences to crypto technology. She has organized Bitcoin Meetups and events and works with  startups and other fintechs in the area of social impact.

Rindi reviewed a number of social impact programs being run by the UN’s Sustainable Development Program and how crypto/blockchain startups are helping to achieve their goals:

The most interesting of these project, to me at least, is the company working to improve access to kidney transplantation worldwide by helping institutions matching kidney paired-exchange programs.  Called Kidner, they leverage blockchain smart contracts to provide secure and traceable information transfers between healthcare facilities.

Token Pitch Competition

After sitting through the first hour of the token pitch competition where we listened to a dozen founders giving us their best three-minute presentation, you gained a bit of understanding of the life of a VC. Sitting through pitch after pitch every day.

It would drive me crazy. But for an hour or two at conference, I could handle it.

Some of my personal favorites were:

  • Amchart from AMSYS Blockchain – delivering electronic, universal medical records, with a patient-centric model and incentive-based loyalty program.  They are also launching a mobile app, combined with IoT wearables for importing patients’ vital signs for analysis.
  • Ponder – a decentralized matchmaking platform where users get paid if the people they match like each other and get married.  The real scalability play is their expansing beyond dating into business recruiting.
  • Shipnext – building an international shipping marketplace that connects shippers and carriers to improve tracking, accountability and reduce costs by cutting out middlemen. Their Shipcoin token sale starts in March.

No more needs to be said about this toke(n).

Women in Blockchain Panel

April Fools! There was no Women in Blockchain Panel. As Bahia Fear accurately noted in her tweet only around 10% of speakers at #WCEF2018 were women:

An excellent point about a problem that I’ve seen at every crypto/blockchain conference; a consistent lack of female voices on stage.  For anyone putting together any kind of event in this space, this should be your go to guide for women to include (care of Michelle Tsng):

200+ (Female) Thought Leaders in Crypto and Blockchain — The Ultimate Crypto List for Event Planners, Influencers and the Like

Token Sale Best Practices Panel

Matt Liston is special advisor and a founding member of Gnosis, founded Augur, and previously worked for Ethereum and Consensys. He has been deeply involved in the DApp space since 2012 and currently advises a handful of companies.

I believe that TRON was the ICO that was accused of copying large sections of their white paper from pervious projects such as IPFS and Filecoin.

Token sales should be looked at as early stage financing, not as IPO’s, according to Liston.

Tokenizing Real World Assets Using Trusts

Rafael Cosman is a co-founder and CTO of TrustToken. He holds a B.S. in Computer Science from Stanford, where he co-founded StreetCode Academy, a volunteer program dedicated to teaching coding to disadvantaged youths. Previously, Cosman worked on machine learning research at Palantir and Google Brain.

An argument could be made that there are hundreds of millions of people who have benefited from the free services provided by Google and Facebook.  There are far fewer who have made any real money from Bitcoin yet.  Cryptocurrency is still in the infancy of its life cycle and could impact millions or billions of people someday.  But trying to measure public benefit by comparing market cap is not valid.

I’ve been wary of projects that show a crazy large market size (like $256 trillion) and claim they have a high probability of success since they only need to capture a tiny fraction to be a billion dollar company. The problem is that if the world is your target market, then your marketing costs quickly approach infinity.

I can hear the attorney all rubbing their hands together with glee at the thought of millions of smart contract  lawsuits.

Here’s an excellent piece written by Gideon Greenspan, CEO of Coin Sciences, the company behind the MultiChain platform for private blockchains, Why Many Smart Contract Use Cases Are Simply Impossible.

Japan may be ahead in their regulatory progress, but it hasn’t done anything to improve security at their crypto exchanges.  Major Japanese cryptocurrency exchange Coincheck has just confirmed that more than $600 million worth of XEM were stolen in a hack.

How can they determine the physical location of an Ethereum address or digital wallet?

This is a major differentiator between the crypto revolution and the Internet revolution.  The vast majority of globally successful Internet firms are US-based (see Facebook, Google and Twitter).  Has the ICO broken the grip of the US on technology-related startups?

Evaluating ICOs

James Sowers is an ICO Advisor, Angel Investor and Crypto Capitalist who is the founder at Crypto Specialist LLC and a mentor at the Alchemist Accelerator. Sowers has invested in over 30 startups and over a dozen ICO’s and was an advisor on 5 ICO’s that raised over $75 million.

James recently joined Caviar as an advisor. He is also a contributor to Crypto Daily U.K. and was recently interviewed by The Huffington Post on his Theory of Tokenarism which was featured in economic trends.

Inbound web traffic is important for new ICO’s to attract the attention of potential investors. Almost half of this traffic came from a single site: Coinmarketcap.com. This market dominance will be difficult to break as more and more ICO’s will have to advertise on Coinmarketcap in order to be successful.

CoinMarketcap.com was in the news for a change to their algorithms that allegedly contributed to the recent crypto market crash: The Programmer at the Center of a $100 Billion Crypto Storm.

Decentralized Governance and Autonomous Organizations

Chelsea Palmer is an educator, community organizer, and decentralist. She’s primarily based in Vancouver, BC, where she is Operations Coordinator at Frontier Foundry and co-runs the DCTRL blockchain hackerspace.

Many people believe that smart contracts will help develop alternate governance structures, it is not clear that endless hard forks would necessarily be a benefit to the overall crypto ecosystem.  Hard forks are often the result of fighting over control of a system and is seen by some as a waste of resources that should be avoided, if possible.

What makes forks disruptive for users are:

  • The opaque and chaotic governance model common to public blockchain systems such as Bitcoin.
  • The uncomfortable responsibilities related to wallet updates, inability to make transactions at specific times and the need to stay informed about the consequences of forks in general.
  • The inability to directly influence the decision-making process leading to forks unless running a costly validating node (definition below).

Guide to Forks: Everything You Need to Know About Forks, Hard Fork and Soft Fork

Community & Token Ecosystems

Amy Vernon is VP of Community at Rivetz, which is building a hardware-based, decentralized, identity model and a cybersecurity token. She co-founded a predictive analytics platform for news publishers and was the top female submitter of all time on Digg.com back when that meant something.

This is good advice for everyone with an online presence and a dedicate community. Leverage inspiration of positive voices to drown out the negative ones.

This could be an advertisement for the upcoming $1 billion Telegram ICO.

Open Garden is a building a software-based, wifi sharing service with their own token used for P2P payments for Internet access.  They also have a cool app called Firechat that allows group messaging through Bluetooth and Wifi, bypassing the Internet entirely.

Why would I ever spend any Bitcoin on anything? I’m a hodler!

It’s easier to launch a new token than to do the math and figure out if it is economically viable. Everyone seems to think they’re going to be rich.

Why didn’t these guys didn’t have a booth at WCEF? They could have made a fortune selling crypto sweaters!

 

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