NYC Tech Debate: ActiveAether and trueDigital Discuss the Future of Blockchain and Cryptocurrency
On Tuesday, 6/19, Stride Consulting hosted an NYC Tech Debate about the future of blockchain and cryptocurrency. Stride is an agile software development consultancy here in NYC who embed engineers/consultants into tech teams to help their clients reach their goals. Stride occasionally hosts these debate events, though perhaps the term “forum” or “discussion” is more precise than “debate,” as the tone of both speakers was friendly and constructive throughout.
The featured speakers were Robert F. MacInnis, founder and CEO of ActiveAether and Nicholas Goodrich of trueDigital Holdings LLC, both companies doing exciting work in the crypto space. ActiveAether is a distributed network enabling the sharing of computational resources, which you can read all about here. TrueDigital, meanwhile, offers a variety of services related to the pricing and investment of digital assets.
Overall, the event was a lot of fun. The audience was an eclectic group of developers, bloggers, students, and people who simply had an interest in learning more about blockchain.
Below are some of the questions posed to the debaters and discussion highlights from the event (this is not an exact transcript, but rather a summary of the main points).
1) Let’s start by defining the whole ecosystem: can you define blockchain vs cryptocurrency?
Blockchain is the technology that powers a cryptocurrency. A blockchain at its core is just a distributed ledger that functions based on consensus. What gives the system value is that rather than having a central point of ownership over the ledger (a custodian), a large series of participants all own and see the exact copy of the ledger. Should ownership of anything change hands, the participants essentially have to agree on the transactions — this is a process known as consensus.
Cryptocurrency was the first (and possibly best) use case for blockchain. It helps demonstrate transfer and ownership. There are thousands of cryptocurrencies now and 99% of them have very little adoption.
2) What are the top opportunities in blockchain in the next 5–10 years? What will the landscape look like in the next ten years?
The early days of blockchain focused on protocols — everyone was trying to build a better blockchain. Going forward, we should see a major shift from protocols to applications built on top of (presumably) stable blockchains. A natural use case with massive potential is distributed compute, like ActiveAether, which supports decentralization and makes sense to host and transfer on the blockchain. Compare that to trying to host a physical good on the blockchain, which doesn’t really make sense.
Blockchain has the potential to change systems we’ve considered for centuries to be the bedrock of our society. Banks are centralized institutions who charge massive fees to protect your funds and provide various ancillary services. The majority of what banks do is already being done on blockchains. A hacker at any moment has the potential to change your ledger at your bank and claim your funds belong to him; with blockchain (provided you protect your private keys!) this cannot be done to you.
3) What are the biggest risks? What are your concerns about regulation?
Sober regulation with regard to blockchain is a major concern… for bad actors. For folks working with established lawyers and following the SEC rulings, regulation is a welcome opportunity. Having rules to follow is a good thing. Our chief concern is that
4) Is this a fad or is blockchain here to stay?
Blockchain has been around for a decade and is here to stay. Pandora’s box has been opened. There are too many good opportunities and use cases for it to simply go away. Governments can (and should) regulate certain elements of blockchain technology, but it will prove extremely difficult to outlaw entirely due to its decentralized, democratized nature.
5) Is there such as thing as a risky cryptocurrency vs a more stable one?
Like any other investment, some cryptocurrencies are riskier than others. Do your own research and don’t fall for hype or scams.
6) Is every asset destined to become liquid on the blockchain?
Probably not. For the most part, physical goods don’t make sense for blockchain in its current form.
Ownership of real estate is an interesting example. In a perfect world, the deed to your house or office would exist immutably on a blockchain. No thief (or nefarious government) could simply change the record over to themselves and put you out on the streets. But how does a system like that start? Do we just pick a year and say “okay, from now on, all real estate ownership is to be managed on the blockchain.” Could blockchain and the traditional system work in parallel for a trial period? The older generation is still quite skeptical of digital ownership, but this is changing rapidly.
7) What makes a “Good” Token?
One key to a “good” token is whether it fills a real need. Like any other investment, there needs to be a real demand and a natural fit for the distributed model. Without these elements, the token may appear to be a cash grab.
8) Are ICOs a true alternative to VC funding?
ICOs are absolutely a true alternative to VC funding, just a democratized version. ICOs provide access to deals that would otherwise only ever get done through VC. The average person can’t get funding for their big idea through the VC firms without connections or a grand stroke of luck, but a competent, dedicated individual can run a successful ICO without needing to appease any sort of gatekeeping community like traditional VC.
How many people own crypto? Quite a few. How many people got to participate in Andreesen’s latest fund? Not so many. Crypto provides more opportunity, gives people a shot at an early investment in the few meteoric startups they’d never be able to touch that early in the game.
Going forward, we may see a demand for competent ICO analysis in the same way investment professionals cover and analyze equities and other ventures. There are some sites that offer something like this, but it could become its own industry to a degree. This would be interesting as it would be a shift back to some manner of re-centralization. As crypto investments continue to pick up more mainstream coverage, a shift back to centralization in certain respects is likely.
9) Will the success rate of ICOs be better or worse than tech startups?
We think it will be about the same, which is to say, very low.