Blockchain Innovation in the Startup Nation: What’s Next for ConsenSys Israel

In advance of Ethereal Tel Aviv, see what's on the horizon for the local ConsenSys’ team and their vision for blockchain in Israel.

For the first time, Ethereal Summit will take place in Tel Aviv, Israel on September 15th, 2019 at the culmination of the bustling Tel Aviv Blockchain Week. Ethereal Summit — having grown from its annual New York City flagship — has developed a worldwide reputation for bringing together futurists, technologists, entrepreneurs, investors, enterprises, humanitarians and creatives for a day of storytelling and knowledge sharing. With #EtherealTLV taking place on the balmy Mediterranean shores of Tel Aviv this September, Ethereal now has the global locale to match that reputation.

Also for the first time ever, Ethereum founder Vitalik Buterin will speak at Ethereal Summit. He will be joined by ConsenSys and Ethereum co-founder Joseph Lubin, alongside a handpicked curation of blockchain and technology pioneers, provocateurs, and trailblazers — many more of which will be announced very soon.

That the first international Ethereal Summit will take place in Tel Aviv’s sunny climes is a logical progression. Israel’s outsized influence in regards to decentralized technology is evidenced by leading organizations like StarkWare, eToro, and DaoStack, while blockchain in Israel builds upon an integral history of technological innovation in the country. Whether it’s through homegrown world-beaters like MobilEye, Fiverr, Waze, WeWork, Lemonade, or big moves and acquisitions by the likes of Microsoft, Amazon, Google, and Alibaba (to name only a few), Israel is already a global tech powerhouse, one that sees blockchain as integral to the future of business and tech.

Here are some facts to back that up: Israel has the highest density of startups per capita in the world, and was recently rated #10 in Bloomberg’s 2018 Innovation Index. With a longstanding background in cybersecurity, military advancement, and government investment in technology, Israel has uniquely positioned itself as an incubator for early-stage companies. Israel was the first country to incorporate research and development investments into its GDP. Between 2006–2015, over 1,000 tech startups exited in Israel with over $60 billion in capital. In 2016, Israel boasted the second-highest percentage of engineers and scientists of any country.

“Israel is a hotbed of technology advancement and central to the development of modern cryptography,” explains ConsenSys Founder Joe Lubin. “In the year since launching ConsenSys Israel, we have witnessed incredible traction amongst developers, enterprises, and individuals passionate about our shared vision of decentralized technology. We are proud to be a catalyst for Ethereum development in Tel Aviv and look forward to ConsenSys’ first international Ethereal Summit.”

ConsenSys first opened offices in Tel Aviv one year ago, and the team of four tenacious individuals has been laying the foundations to support widespread adoption of blockchain in sectors public and private. We spoke with Dror Avieli, ConsenSys Israel Lead, and Or Wilder, ConsenSys Isreal Tech Lead, to get a deeper understanding of Israel’s penchant for innovation, ConsenSys’ gameplan in the region, and what to expect when Ethereal Summit hits Tel Aviv…

How did Israel become known as ‘Startup Nation,’ and what does it mean?

Dror Avieli: The term ‘Startup Nation’ is often used to explain modern business trends in Israel. There’s a 2010 book by the same name by Dan Senor and Saul Singer that focused its research on not only why Israel has produced so many successful companies, but the technological innovation that makes it all possible. NASDAQ IPOs, acquisitions by Western and now Chinese organizations, the numbers are huge, but there is more to it than numbers. The book’s research posed a few key underlying factors, the foremost of which was a necessity. Israel is a small country, in the desert, surrounded by challenging political relationships. Innovation has been required to keep food to eat, water to drink, and develop defense necessary for survival. It has been the case from the early days that necessity has fueled innovation in Israel.

The second reason lies in the people in Israel, and the combination of different immigration waves that came from different corners of the world: People from Western and Eastern Europe, Africa, Asia, they came with huge diversity. Maybe not from a religious view, but culturally, educationally, their perspectives have all blended together to participate in society. As we now know, diversity is always helpful for innovation.

Are there other sociopolitical phenomena that offer an advantage?

Dror Avieli: Another item relates to Israel’s university system, which is of very high quality and almost free to attend as it’s heavily subsidized by the government. That results in a competent workforce that’s ready to innovate. Lastly, Israel is a very small country. The size of the nation fosters the ability to collaborate quite quickly — many startups are just a 15-minute drive from one another. In Israel, if you want to meet a team, you can go and do it today. When it comes to international business, because countries with limited opportunities for trade surround Israel, Israelis are quick to fly out to do business. Now people say they expect Israelis to fly out all the way to Columbia or San Francisco to close a deal. Yes, technological innovation is important, but the face-to-face part of business is something Israelis are eager to take part in.

What has been the focus of ConsenSys Israel so far?

Or Wilder: For the past year, ConsenSys Israel has been heavily focused on developing the blockchain ecosystem. We’ve taken up a role as an anchor for the local startup community, and help connect the dots between the R&D talent in Israel with the growing blockchain movement we as ConsenSys are connected to globally. We’ve been focusing on capturing innovation, entrepreneurship, and connecting with leading ventures as investors and partners. Our view of the industry is unique as we have a pipeline of enterprise Ethereum projects that are already in production, this is new to the local Israeli market — seeing blockchain used by big enterprises globally, we are working with local corporations and the government to help and advise them about blockchain use-cases.

For ConsenSys, Israel is the main hub for Customer Success and one of the major DevOps hubs for the company. Some of the company’s developers work remotely here and enjoy the local atmosphere. The next phase of ConsenSys Israel features a blockchain accelerator to help local startups as a bridge for technology and global business development using our multinational anchors and experience.

Is there a prevalence of certain kinds of blockchain projects in Israel?

Or Wilder: We’re finding meaningful innovation in a few key areas. One pillar is deep research through companies like StarkWare, QEDit, and Certora. A lot of R&D and innovation comes from academic research and development. Most of the capital raised during the ICO phase has been invested back into the ecosystem: R&D centers, developers, infrastructure, protocols, and standards utilizing Israeli talent. There are many fintech projects, ranging from exchanges to security mechanisms. And there is a big trend for wallet security and custodial services, including FireBlocks, Curve, KZen and many others — each with its own value proposition and targeting different types of customers. There is a large community of open source developers who live in Israel and contribute code for everything from Bitcoin to Ethereum who are heavily involved in the ecosystem and companies that give back to the community.

Why is Tel Aviv such a good cultural fit for the first international Ethereal Summit?

Or Wilder: Tel Aviv is basically the hottest city in the Middle East. It’s very open, very liberal. We had a huge Pride celebration here recently, and it was a global event. There are fantastic beaches, food, atmosphere, nightlife, and the quality of life that is available here attracts people from all over the world. Tel Aviv is a perfect setting for Ethereal Summit because even though we’re in an ancient part of the world, there’s a very youthful and free energy to challenge the status quo and be ambitious. That is very much like the blockchain industry right now, and we’re looking forward to welcoming the blockchain world to Tel Aviv and Israel in September.

Disclaimer: The views expressed by the author above do not necessarily represent the views of Consensys AG. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to express their diverse ideas and perspectives freely. To learn more about ConsenSys and Ethereum, please visit our website.