Blockstack: a signature fund event 03/18
A few notes I’ve taken during the event. For those who couldn’t make it.
On Friday 2nd, Blockstack was holding its Signature event. One of the best events I’ve attended so far this year and one that further cements Berlin’s leading position on the EU’s crypto scene.
The event was for Blockstack the opportunity to announce in more details its signature fund. A $25m fund dedicated to support and grow its eco-system — and “rebuild the internet’.
The agenda for the day was split in two with some inspiring talks in the morning and projects being showcased in the afternoon.
Check below for words of wisdom from thoughtleaders like Nick Szabo, Albert Wenger, Nader Al-Naji, Elizabeth Stark and so many more. Includes a few words from Edward Snowden no less.
PART I
Forewords — Ryan Shea (Blockstack Co-founder)
To open the day, Ryan reminded us of Blockstack’s goal. Providing an infrastructure where users can bring:
- their own Dapp
- their own ID
- their own data
- their own asset
With Blockstack you get your personal API.
From cloud to decentralized computing — Dr Muneeb Ali (Blockstack Co-founder)
Where big companies are replaced with open protocols.
We were reminded of three key issues of open protocols and how they compare with the cloud:
- Scalability: decentralized infrastructures are not there yet but closing fast. Take the example of Graphite. Graphite is a new Blockstack dapp capable of scaling to a large number of users. More on that during the project showcase.
- Security: is still very early stage, which makes it hard to anticipate where it’s going to lead. Which in turn makes it critical for any investor to understand the attack surface of the project.
- Developer tools: this was one of AWS major victories. Currently in the Blockchain space there is too much emphasis on infrastructure and not enough on tools. We need more digital picks and shovels.
Blockchain has the capacity to level the playing field for all participants. With open source, anyone can now access the right resources to truly innovate. Somewhat echoing Placeholder’s investment thesis.
Fireside chat — Melanie Shapiro (Token CEO)
We were treated with what I call the “Token knock knock video” that went viral a while back.
On safety: Token is safe. There is a finger scanner on the ring. Just try not to get your finger cut.
On adoption: the device has gone viral. The video had over 100m views and 40k people have already signed on the waitlist. The device is sold at $150 per units. It comes in a variety of metals and materials.
Web3 and the decentralized Internet — Jutta Steiner (Parity CEO)
Jutta raised an important problem within the industry, which is that communities are highly closed to one another. How do you encourage outside interactions and avoid “p2p nationalism”?
The idea behind Polkadot is to act as international law that connects Blockchains together by making ideating, connecting and securing Blockchains easy.
Crypto politics: Beyond the nation state — Santiago Siri
Politically loaded. Feel free to Google Santiago for more info.
Building a censorship and surveillance free Internet — Waterhouse (Orchid Protocol)
Where Waterhouse reminded us of the need to resist and taught us about the Panopticon. The Panopticon was an English prison where prisoners didn’t know if they’re under surveillance. A consequence was that they always acted as if they were.
Waterhouse encourages us to always behave as if we were in one such Panopticon.
Investor panel
We started the panel by being introduced to Goodheart’s law. Where “When a measure becomes a target, it ceases to be a good measure.”
On data points: Blocktower Ari Paul reminded us that we don’t have a single successful data point to assess token economics. Is there accretion of market value to the tokens? How important are team and tech? And so on. We still don’t know.
On early stage investors: Lattice Ventures Brittany Laughlin exposed how early stage investors might have a leg up compared with more traditional investors for their capacity to assess teams and ideas without a product. She also stressed the importance of understanding additional aspects specific to cryptos that are legal, tech and economic risk. Good teams should have already figured out basic questions. Where do you setup, how are you taxed, how do you split equity?
On first mover advantage: Fabric Richard Muirhead view is that there will be a strong first mover advantage for funds starting to invest in the space.
On the Telegram staggering raise: Why was everyone in SV jumping on the Telegram bet? This was an opportunity that they understood. The team had proven its ability to execute in the past and the TAM seems strong. Telegram was very traditional pitch compared with Blockstack for instance.
On how ICO is not the new IPO: You shouldn’t raise that much money when you’re not at scale. ICOs come with high reporting burden. An IPO might be more equivalent to a Coinbase listing. But not really.
On forking and network effect: Forking is a critical point that we don’t fully understand yet. It might be more applicable to a narrow piece of code that doesn’t need a large user base.
On the number of new funds: most of the so-called new funds are not really funds. The total amount controlled by actual funds is below 10% versus 95% in more traditional markets. It would actually be a good thing to have more of them.
On airdrops: contrary to widespread belief they are not really a regulatory arbitrage. They’re good for wide redistribution, good for bootstrapping and governance. But come with the challenge to be targeted.
Social blockchain and scalability — Nick Szabo
Where Nick reminded of his love for bitcoin: 11804 full nodes running in 11 different countries.
On social scaling and how critical it is: Humans are leaving in a social fog. We lack the kind of knowledge and trust that we would have if we spent our life with the same 150 same people. To make it work we rely on institutions and laws. In fact, a large part of our society is dedicated to scaling beyond the 150 persons limit (alluding to the Dunbar limit). Markets are tools that participate in augmenting our social capacity.
Nick reminded us that some social scaling experiment failed miserably like communism.
He also alluded to how our huge computation surplus enabled Blockchains and how it could replace some of the above-mentioned institutions with trust-minimized robots.
Finally, he left with the idea that every times money becomes more a medium of censorship, it also becomes less a medium of exchange.
Building the future of layer 2 — Elizabeth Stark CEO of Lightning
Blockchain haven’t been around for that long. The importance of infrastructure for layer 2 in order to build the app layer is still crucial.
Reminding us what Lightening enables: instant and high volume transactions where bitcoin becomes equivalent to a saving account (long term holdings) and lightning deals with more regular transactions.
Today bitcoin handles 5–10 tx/sec while lightning’s aim is to reach 100k tx/sec.
In fact, an often-overlooked fact is that lightning could function as an application layer.
Also, Block&Jerry’s!
There remains one important bottleneck for widespread adoption though, which is the need to learn both bitcoin and lightning protocols.
Stable Coins — Nader Al-Nadj (basecoin)
Where Nader started with reminding us that gold still had 15% annual volatility.
On the importance of having a stable coin: most financial contracts don’t work if we have volatility. Like loans. In other words, if there is volatility you create a lot of friction on contract creation.
Nader gave us his own stable coin classification:
- Centralized and collateralized
- Decentralized and collateralized
- Decentralized and un-collateralized.
According him, the third bucket is the only that can scale to a whole economy.
MakerDAO is decentralized and collateralized. It’s built on a hair cut on the stable coin to balance supply and demand. Ultimately, it is bottled necked by the Ethereum throughput.
Tether is centralized and collateralized the best stable coin out there. The problem here is the size of the collateral. If the pot gets very big, the pot could get seized. According to Nader, a government would never use such a risky product.
Basecoin is decentralized and un-collateralized. Its basic principle follows that of the American system (aside from over-printing due to perverse incentive). Basecoin skips the scaling issue (maker) and the seizing issue (tether).
Tether is built on bitcoin and works well despite the low throughput.
Basecoin could be a better ICO raising utility then Ethereum as of now (despite low throughput).
On sharding: implementing sharding or similar for higher throughput would be premature optimization.
Basecoin could be pegged to anything.
On KYC and AML: If US imposed a KYC or AML it would be anti-competitive compared with where other countries would go.
Edward Snowden, Former US, Intelligence Officer and Whistleblower
On Blockchain and anonymity: Surveillance has always been there. We’re building the tools to offer anonymity.
Every system will have methods of control built into it. The only way to operate beyond surveillance is to look for the space the adversaries don’t understand and the people that live in it.
Digital conversations are fundamentally different then face to face. Face to face are ephemeral. Digital conversations enter database and are never forgotten.
People need a right to be forgotten.
According to Edward we’re soon going to be confronted to a real problem: Are we going to improve our technology or are we going to choose to rescue our democracy?
Every technology will be abused.
As a privacy advocate, no one should ever say that they own crypto-currencies. Also Edward mentioned quite a few good things about Zcash.
If we don’t believe that people will use this new capability for good things rather then bad things, then we might just pack up our stuff and decide to be a less advanced civilization.
On Blockchain transparency: Edward expressed concerns about government based crypto currencies that would become the ultimate way to track people.
Bitcoin needs to be perfected.
5 years and none of the stash of information that Snowden has leaked have been hacked because if it did, there would be behavioral changes in some concerned countries.
Privacy — Albert Wenger, USV
“New technology grows the space of the possible.”
In both the good and the bad direction.
Blockchain:
⁃ Good: title registry, self sovereign identity
⁃ Bad: dark money
Albert reminded us that decentralized is not automatically good.
Decentralized, immutable, secure, scalable are technologies not actual possibilities. Possibilities enabled by these technologies could be good or bad.
Is privacy a value?
Is it an inherent human right?
Privacy is actually incompatible with technological progress (really strict privacy). Take the example of a medical record. It works better on a general-purpose computer that doesn’t guarantee full privacy. Take the example of deep fake. Privacy is a terrible defense against deep fake.
There is a fundamental asymmetry in the universe. It’s much more easier to destroy then build (entropy). Our ability to destroy grows much faster then our ability to create. It’s becoming more and more easy to destroy the world from a basement.
Privacy is not a value. It’s a strategy. It’s a strategy used for freedom from persecution and of expression.
We shall build a system that could make it so that we don’t have to work to survive. Let’s make more transparency. Let’s increase government’s transparency through immutability.
Life after Google — George Gilber
Where George gave us an energizing talk on the importance of Blockchain technology.
PART II DEMOS
Then came a few early-stage Blockstack Dapp demos. My personal favorites were Casa, Coins and Graphite.
Casa — Jeremy Welsh
Launching the best key system on the planet no less!
Stealthy — Patrick Stanley
A stealthy messenger app:
Fully encrypted, no third parties. Ed Snowden approved.
Misthos — Justin Carter
Dealing with the inefficiencies of founding a company — and more specifically dealing with equity splits.
DotPodcast — Bill Hessert
A censor free podcast search and funding mechanism.
Anybody can register a podcast; anybody can source one in an anonymous way and it supports crypto tipping.
Symmitree
Helping the displaced reclaim their identity.
Most of aid value is lost because the intendant recipient is not able to provide identification. The answer is a Symmitree biometric phone built on Blockstack.
Health Here — Ryan Wells
Taking the friction out of health system.
Coins-Chase Wackerfuss
The first decentralized crypto tracker I hear about.
The app is broken down in portfolio and holdings and it tracks all 100 tokens on coin market cap.
Coins will soon be available on smartphones.
Postly app
A social layer for web 3
Where user can move their social graph and data from one app to another.
Postly has a direct share model with no news feeds.
Graphite — Justin Hunter
A fully decentralized Google docs.
And of course, we finished the day with CryptoKitties!
