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Notes from Day One at Consensus

If you had any doubts about the swelling surge of interest in cryptoassets, you only had to try and check in to Coindesk’s Consensus conference in midtown Manhattan around mid-morning on Monday. The line snaked its way back and forth through the 2nd floor lobby, down the escalator and out of the front door of the hotel, and it took up to two-and-a-half hours for the reported 7,700 attendees to check in for the event. Consensus began four years ago with 500 true believers in attendance, grew to 1,500 in 2016, reached 2,800 last year, and was up 275 percent this year. Full crypto craziness may be upon us.

Beyond the numbers, Consensus kicked off with a rousing endorsement from a corporate titan, featured numerous interesting and enlightening new developments, and a bit of a dust-up at the end of the day that helped to keep it all in perspective.

If it’s good enough for FedEx

The day began with crypto visionary Don Tapscott conducting a fireside chat with FedEx founder, chairman, president, and CEO Fred Smith and CIO Robert Carter. Simply put, Smith is a true believer in the promise of blockchain and says they are “working with everyone” as they explore the possibilities. In Smith’s telling, FedEx built the first chain of custody system and invented track and trace for shipments. To him, blockchain is the chain of custody on steroids and FedEx is beginning by looking at large, palletized shipments as a place to start. At the end of the day, FedEx thinks that the cost of exploring and engaging with blockchain is de minimis when compared to the cost of being disrupted.

FedEx was followed by James Bullard, the president and CEO of the Federal Reserve Bank of St. Louis. Bullard provided historical context on currency, which is an intrinsically worthless item whose value is based on the belief that it will have value in exchange. Sounds a lot like bitcoin. Bullard neither endorsed nor debunked cryptocurrencies, opting instead to put their development in historical context with the free banking era in the U.S., discussing the dynamics of non-uniform currencies and currency competition, and ultimately positing that cryptocurrencies may ironically be contributing to the confusion rather than clarifying things.

Instructive example overseas

There is a pretty clear divide between blockchain adoption in the developed and developing worlds. The experience of Elizabeth Rossiello, founder and CEO of BitPesa is an interesting metaphor for what we might expect for the adoption of blockchain and cryptocurrencies overall. BitPesa is leveraging blockchain to speed payments for businesses in sub-Saharan Africa and they have received inconsistent and variable responses from different countries where they operate. They started in Kenya but were thwarted by regulators there so they moved on to Nigeria and Ghana, where they have been embraced and are enjoying success. Meanwhile, South Africa was initially supportive but has more recently cooled while Kenya, after a two year wait that included taking their case to the Supreme Court there, is now starting to come around and may liberalize their policies. In all, the non-linear, start-stop,  and sometimes frustrating path that BitPesa is enduring is likely an apt metaphor for how cryptocurrencies and blockchain will be adopted overall.

Some cold water to keep it real

 

There was a lot of crypto love – and plenty of capital – flowing at Consensus yesterday and that made the comments from Jimmy Song that much more dramatic. Song appeared on “The Most Secure and Reliable Commercial Networks in the World” panel with Joseph Lubin of ConsenSys Systems and Amber Baldet, late of JP Morgan. Baldet had just announced the creation of her post-JP enterprise, Clovyr, and both Lubin and Song weighed in with their reactions. Lubin was supportive of her effort to help build enterprise tools for crypto, but Song was having none of that. He said that he heard “nothing but buzzwords,” described the effort as “a hammer thrower looking for nails,” and made reference to “blockchain magic dust.” In short, his argument is that efforts to centralize blockchain on an enterprise platform completely miss the point and will not work. Song and Lubin sparred back in forth with Baldet uncomfortably trying to play the middle ground until Lubin threw down the gauntlet and offered to bet Song “any amount of bitcoin” that he is wrong. They didn’t work out the terms of that wager, which will span five years, but you can bet that the moment – as well as the terms and stakes of the wager – will be remembered and discussed a great deal going forward.

Two more days to go

The agenda for Tuesday morning looks like it may contain a lot of the marketing-speak that Song was deriding, with presentations from Deloitte, ConsenSys, and SAP, and many more panels on the latest development in crypto. Stay tuned for another update tomorrow.

 

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About Author

Chuck Mackie is senior adviser at Maven Wave Partners and a contributing editor to John Lothian News.