Consensus 2017 roundup
Holy *^&#, time flies. I promised I’d prepare a summary of my thoughts around Consensus 2017 & here we are already — a month later! So let’s get to it.
It would be remiss of me if I didn’t admit from the outset that Consensus 2017 was mostly not about Bitcoin. The ongoing scaling debate finally exhausted just about everyone. Talk at lunch and in the corridors was mostly focused elsewhere in crypto.
Digital gold
As the day started, news broke on Twitter about a Barry Silbert-sponsored scaling agreement, Segwit2x, or the so-called “New York Agreement” — an allusion to the original Hong Kong scaling agreement from early 2016. This agreement includes large miner consent to activate Segwit on a new client, BTC1, and that a hard fork to a 2MB base block size + the Segwit discount would enable blocks of up to 8MB within 3 months of Segwit activation. Initial responses varied from “that’s not enough time for testing!” to “meh” as just another scaling solution was added to the heap of perfectly fine solutions that hadn’t been adopted.
Perhaps fittingly, the first panel discussions at 10:45am was titled “Can Bitcoin Scale?”. Unfortunately a solid group of contributors from Bitgo, Bitcoin Core, Bcoin, BU, BTCC & Bitpay couldn’t solve this bad boy in the allotted 40 minutes. Which was really a pity since the rest of us thought this was finally going to be the end of it. The energy on the panel was so low that I thought the panelists had also lost all interest in rehashing their side of the trope when it was obvious that all had already been said many times before, without a meeting of minds.
Those of us still interested in Bitcoin were more focused on its climb that week from $2,000 to a new all time high of $2,500 by the end of the week. Bitcoin’s technology didn’t seem to be scaling, but who cared when it was turning out to be a perfectly good store of value.
ICO tokens
Perhaps the most interesting and most misunderstood topic at Consensus was that of Initial Coin Offerings (ICOs) and their related tokens. A talk on day 1 at 15:30 on “Legality & Structure of ICOs” with Chris Burniske (ARK Invest), Preston Byrne and Peter van Valbenburg (Coin Center) didn’t shed much light. In summary: we didn’t see this coming, most ICO tokens are probably securities in the US, the token prices and amounts raised are driven by FOMO and ICOs may be the drivers for the current ETH bull run. Further, an ICO is going to be picked on by the SEC to make an example and this will not end well for someone, so don’t do an ICO or invest in them. Way to go with encouraging fintech innovation, guys!
The flippening
When the price of ETH reached $150 on May 22, the market value of Ethereum compared to that of Bitcoin reached a a critical psychological mark (~40%) and crypto-enthusiasts started questioning whether or not Bitcoin would always be the biggest dog in town. Would Ethereum become a more valuable network by market value and enable the so-called “flippening”? Bitcoin maximalists laughed and Ethereum fans rubbed their hands with glee. Newly minted ETH millionaires relished in a tweet from Bruce Fenton suggesting that one of them overheard a banker saying that the scruffy bunch at Consensus were all millionaires now.
Blockchain as a service
Consensus 2017 had 3 floors of exhibition space, much of that space taken up by the likes of IBM, Deloitte and PWC. A talk at 16:45 on day 1 titled “Taking blockchain live: reimagining trade finance” was unfortunately little more than an infomercial for Deloitte’s blockchain practice and summed up this category of blockchain service provider quite succinctly: Now anyone can get an overpriced bespoke blockchain in mauve. We don’t have any real value being exchanged or clients using it in production, but we’re getting there! I really wish I could be more supportive, but this is a great example of technology that is not mature enough to be deployed in live environments or at scale, desperately seeking a (any?) use case. Good luck to the management consultants; I don’t see enough paying demand here yet.
Networking
Thank you to our friends at Coindesk for hosting an excellent event. Aside from the many excellent talks, I most enjoyed the many opportunities to meet so many people in our industry face-to-face over a beer and get a sense of where the though leaders privately think we’re headed. That alone is worth the trip to New York.
It’s going to be a bumpy ride for crypto in 2017, but I wouldn’t want to be anywhere else. It’s going to be fun! See you at Coindesk 2018.
