“The US does not matter” and other takeaways from the Blockchain Invest Conference
On Monday, May 22nd the Keybox team attended the Blockchain Invest Conference hosted by Baker Botts and produced by Novum Insights, the leading market monitor for Blockchain and emerging technologies.
Attended by crypto leaders and enthusiasts, the event focused on the current state of Blockchain, ICO regulation and the major trends that Blockchain addresses. With some bold statements being made by the esteemed Blockchain panelists, we briefly sum up the main takeaways of the conference, to save you the time of watching the 5-hour conference yourself (You’re welcome).
The US does not matter in the ICO market
With the US seemingly a leading player in almost all major industries, it is rare to hear that for once, they do not matter. Therefore, when James Roy-Poulter, CEO at Blockchain Reserve was asked to share his thoughts on US regulation in the panel titled, Regulation is coming for ICOs, his response was unexpected: “The US is not important in this market. The reality is, that in the US, basically every single token is a security to start with. But the problem is that the world does not work with a security. You therefore can’t issue something from the US because if you do it in a compliant way, then you can’t operate in the token world as it exists right now.”
Stop faking utility coins
This point has been brought up by Keybox before (See article), and was once more discussed at the conference. Eric van der Kleij, Chairman of Keybox, asked the panel how, with Swiss regulation clearly defining three types of tokens, this could mean that people are more likely to describe themselves as a utility token. In response, Neil Foster, a partner at Baker Botts, said “Absolutely. Most tokens pretend to be a utility token, which just buys themselves pain in the future. Regulators are silently observing what’s happening with Blockchain as the cost of observing is negligible. And then at the point when regulators do decide to take action, that action can be extraordinarily expensive and result in all sorts of fines and taxes. So the idea of pretending to be a utility token when clearly you’re a security is just naïve.” You heard it folks, although pretending to be a utility coin now may seem like a smart way to avoid extensive regulation, it will come back to haunt you in the future!
The financial sector will be the most suitable for Blockchain technology
David White, CEO of Keybox described how, in his opinion, finance was the obvious industry to benefit most from Blockchain technology. This is not surprising considering his background as the Head of Technology Innovation at the Royal Bank of Scotland. Firstly, finance will likely attract Blockchain technology as finance is where the money is. Secondly, David alluded to the fundamental problems of the current banking system that Blockchain-type technology could help with: “One of the more practical issues of banking today, is the transaction speed. If you look at most European and US banks they are relying on legacy systems, which are increasingly expensive to maintain and difficult to change as well. We are therefore going to see a migration away from those technologies into technologies more like Blockchain, which can make banking transactions quicker”.
Blockchain is as transformative as the Internet itself- but we’re still not there yet
A common theme throughout the conference was acknowledging the myriad of potential Blockchain applications — but this will still take time. “As far as technology goes, we’re still in the very early stages”, said Hen Tekle, founding partner at AlphaChain Capital. “Right now in terms of Blockchain 3.0 (the latest version of Distributed Ledger Technology), it’s focusing on scalability, interoperability and with Ethereum, building a secure distributed network of nodes that can scale transactions. However, we’re still very far away from that as Ethereum can now only do about 15 transactions per second, which is nowhere near the needed level of throughput.”
Therefore, although we are right to be enthusiastic about the benefits that distributed ledger technology can offer, there are still regulatory and operational issues that need to be tackled before we see the technology making any relevant changes to our daily lives.
