No Consensus on Consensus2018

by James Simpson

Writing this the morning after returning from Blockchain week in New York, I am overwhelmed (and slightly jet lagged). The past week’s experiences are still so fresh, but during the flight home some thoughts were able to percolate.

Over 8,000 people descended on New York’s Hilton Midtown for Consensus 2018. This was more than a conference, it was a religious gathering:

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Compared to previous years, the conference was packed to the brim, sometimes taking hours to register.

 1% of the line

1% of the line

While everyone at the conference had an agenda, most had a common one: to spruik their wares.

 Have a t-shirt! Invest! Moon!

Have a t-shirt! Invest! Moon!

Which is fine but it also made for a complete circus. The level of immaturity and hype left me slightly uneasy about the foundations of this industry. I was too young to remember the dotcom bubble but the sheer madness seemed eerily familiar to what I have read.

 Stakey dancing like a madman

Stakey dancing like a madman

 Raffling off two Aston Martins at the Decrentral’s Consensus boat Party

Raffling off two Aston Martins at the Decrentral’s Consensus boat Party

 Snoop at XRP’s Community Night

Snoop at XRP’s Community Night

 “Can I give you my business card?”

“Can I give you my business card?”

Dot Com.png
 pets.com superbowl ad, circa 1999

pets.com superbowl ad, circa 1999

There was also the occasional sign that people were still totally misunderstanding this technology.

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On the other hand, Consensus was packed with incredible, ground breaking entrepreneurs. It was in this way deeply polarising. The best and the worst piled into one hotel. And after much reflection, I’ve come to realise this should come as no surprise. This is something we’ve known for some time. Crypto attracts scammers, the immoral, and the foolish; simultaneously, the builders and the visionaries are present in equal parts. Credit to James Eddington for highlighting this dynamic:

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One overriding lesson from my experience: it is critical to align oneself with the latter group in order to proceed with longevity and dignity in this industry.

My top 10 brain dump:

1. Despite, and maybe because of, the 10x growth since last year, the industry is still deeply immature: lambos do not a sober investor make.

2. So many guys. The lack of women at the conference was shocking. I met a couple of guns — Amber Baldet CEO of @GrowClovyr and Jenna Pilgram from Blockchain Research Institute to name a few — but we need more females, and fast. The Satoshi is Female t-shirts were cool but not enough.

3. Consensus has become a bus dev conference. While there was not gender diversity, there was a huge diversity of knowledge: from those clearly new to the space to bitcoin OGs, and everything in between. I certainly feel for Coindesk here. Making a conference catering to such a range of experience would be challenging. But on the whole, it was simply not technical. Next year, expect many to come to New York for Blockchain Week, but to go to other conferences.

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4. Many of the builders weren’t present, and some even boycotted. Famously Vitalik Buterin tweet stormed his distaste for the conference, and was not present. (Although he was spotted at Token Summit.) EOS was massively present last year at Consensus, were also not there this year. Great projects like OMG, Aragon, and many others just didn’t think it was worth showing up.

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5. There are so many projects trying to solve the same handful of industry wide problems. Scalability, cross-blockchain interoperability, private key management, security tokenisation were the problem verticals that stood out. Expect a convergence of technology in these areas, and an mass extinction of those that fail to solve their problem vertical.

6. It seems that no one cares about shilling their unregistered securities — an unnamed source from a major protocol told me he was sure that there were SEC spies throughout the conference questioning projects of their business model and the promise of future returns if they invested. Many projects, especially more centralised ICOs, will be burned.

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7. The industry is quickly becoming an oligopoly. This is a grave danger to the initial promise of distributed technology. Major players, like Coinbase, are now hugely influential in determining the future industry state.

8. We are now in the phase of ‘industrial competition’. This is described in detail by great RMIT Blockchain Innovation in their recent article. They write that while

“…crypto and blockchain is still an experimental technology…we’re now past the early innovation phase— the start-up phase— and have investment is now a C-suite concern, and a parliamentary agenda item”

9. Attached to this point is the competitive dynamics occurring geo-politically. Bermuda announced its intention to be the world’s leading crypto-regulator; Gibraltar indicated the same at Token Summit; Estonia, the Isle of Man, Switzerland, and Singapore have long been considered crypto market leaders. Canada and Australia had their own lounges at Consensus. RMIT puts this dynamic well:

we’re now in the phase of global regulatory competition, and that crypto-regulation and legislation in countries such as the US and Australia will be held by the competitive pressure of exit-options from departing too far from the competitive equilibrium.

10. Security and non-fungible tokens were the flavour of Consensus and Token Summit. This reflects some really cool projects I saw: Swarm (tokenising LP positions in private equity) & Harbor (Crypto-Securities Compliance). Others to mention: Dharma — an open protocol for tokenised debt; Decred - open protocol with on chain governance; and crypto collectibles. These stuck with me as very high potential projects. Chris Burniske and Joel Monegro of [Placeholder] spoke very highly of it at Token Summit; their investment analysis can be viewed here.

Finally, it’s clear that the Flight to Quality is still yet to come. We are still so early.

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I’ll keep deep diving on many of these points in the coming weeks, and adding more thoughts as they come.