Leaders Series: Caitlin Long at the Wyoming Blockchain Coalition
Issue 44 — March 28, 2018
Caitlin Long is the Co-Founder of the Wyoming Blockchain Coalition
She spent over 2 decades working for big banks, and was one of the leading voices advocating for the use of blockchain technology in the financial services community. While president of Symbiont she jointly led its index data project with Vanguard. Caitlin is a Wyoming native, and recently launched the Wyoming Blockchain Coalition which helped pass five bills into law. These bills are laying the foundation to make Wyoming the epicenter for cryptocurrency firms and blockchain technology companies.
How did you get into the crypto / blockchain industry
In 2012 I came across bitcoin in Austrian School economics circles. But I didn’t act on it right away, just as most people don’t when they first hear about bitcoin. It’s bewildering at first, and it takes time and repetition to sink in. Then, in February 2013, I was flat on my back for days recovering from surgery when an article by Jeffrey Tucker hit my inbox. It contained some “how to” advice about bitcoin, and I remember thinking “it’s finally time to figure this thing out.” That day I set up my first wallet.
What did you do before you got sucked down the blockchain rabbit hole?
Before jumping to blockchain full-time in 2016, I’d spent 22 years on Wall Street in various senior roles (most recently as head of Morgan Stanley’s pension business). Initially I felt pressure to keep my bitcoin interest quiet, as a manager inside an investment bank — but gradually felt more comfortable and started participating in an internal bitcoin forum. Morgan Stanley’s CTO saw that, and out of the blue in 2014 he called to ask me to join his blockchain working group. From there it wasn’t long before I had one foot out the door to pursue blockchain full-time — it was a gradual process, but by 2016 I was all-in.
What was your motivation in starting the Wyoming Blockchain Coalition, and why do you feel passionate about this?
My passion is honest ledgers. That must sound odd and tremendously boring to your readers. But most folks don’t realize that the financial system’s ledgers are not honest. When I figured this out, it was like a betrayal — a punch to the gut — that made me question my chosen profession. But it’s true. We do not have a fair and honest financial system. One reason is that Wall Street’s accounting systems are rarely in sync with each other and smart actors have figured out how to exploit these inconsistencies to their advantage. Some of this is nefarious, but much of it is just systemic sloppiness. We will only have a fair financial system when we restore property rights back to the owners of assets in the financial system, and account for them using honest ledgers.
I witnessed some of these issues first-hand, but publicly can point to the Dole Food case as one of many examples. In February 2017 a Delaware court case detailed how 49.2 million valid claims were filed for Dole Food shares in a class-action lawsuit, but there was a problem: only 36.7 million Dole Food shares existed! All 49.2 million claims were backed up by valid brokerage statements proving that the shareholders owned the shares, but there were only 36.7 million shares outstanding. When the financial system can create 12.5 million real claims to phantom shares that don’t exist, it’s the same as if your county clerk issued someone else a valid deed to your house. It’s dishonest and shocking.
Here’s another example. The vote tally in the 2017 Procter & Gamble proxy fight was laughably inaccurate, three times, and no one really knows who won because the parties simply agreed to stop fighting and settle. The first count found P&G won by 6.2 million votes. The second count found the challenger, Nelson Peltz, won by 42,780 votes. The third and final count found P&G won by 498,312 votes. Do these wildly different vote counts give you confidence that Wall Street keeps accurate track of the securities in your brokerage account? The Wall Street Journal’s headline captured the exasperation,: “P&G Concedes Proxy Fight, Adds Nelson Peltz to Its Board,” even though P&G actually won that latest count!
All of this inaccuracy is unacceptable to me, as it should be to anyone who believes in free and fair markets. Wall Street’s ledgers are not honest. Blockchain can make them so!
What’s been the most inspiring experience you’ve had in blockchain-land thus far?
By far the most meaningful project on which I’ve worked was the Wyoming Blockchain Coalition’s passage of five blockchain bills in 2018 that make Wyoming a crypto haven. This was a purely volunteer project and was a labor of love for me, as I was born and raised in Wyoming and care deeply for my native state. Had someone been paying us for the time we spent on the ground in Cheyenne making it happen, they would have paid a fortune! But for me it was a service project, both for my native state and the blockchain community. The opportunity came at the right time for Wyoming, and fit the state’s needs like a glove. It was the most intense and gratifying project I’ve worked on in years — and I hope everyone in the community can find and make a similar contribution during their careers!
What are some ideas you’re excited about in the blockchain ecosystem?
I’m most excited by the idea of making securities markets a lot fairer to regular folks by issuing and trading securities on a blockchain. This idea was originally that of Symbiont, my former company — and it’s a great one. The insight is that if a company registers its shares on a blockchain at its genesis moment — which is when it registers with the Secretary of State in its state of incorporation — then its stock ledger will be accurate, honest and tamper-proof. No more phantom shares of Dole Food or inaccuracies in the P&G proxy vote! Blockchains can clean this up.
We always overestimate what will happen in five years and underestimate what will happen in twenty. Where do you see this all going?
I believe we will all be using bitcoin for payments in 20 years. I’m a bitcoin maximalist, but believe it will take 20 years for bitcoin to become pervasive.
Unfortunately, I believe the financial system will crack hard when the West hits the proverbial debt ceiling and our lenders stop lending to us — no one knows exactly when that will happen — and that’s when the rubber will hit the road for cryptocurrencies. Bitcoin used to be countercyclical (e.g., it rose during the financial crisis in Cyprus), but recently its trading pattern has been procyclical (i.e., it rises when stock markets rise) as institutional money flows into it. But I believe it will eventually prove to be powerfully countercyclical again.
I used to worry about the instability of the traditional financial system — but bitcoin makes me optimistic about the future because it provides a viable alternative!
Thanks to Caitlin for participating! Connect with her on LinkedIn or Twitter.
