Token Investment Summit, Vienna

To demonstrate how far Blockchain, cryptocurrencies and digital assets have permeated the traditional world of asset management, the Token Investment Summit in Vienna (organised by Crypto42 and hosted by the Vienna University of Economics and Business) covered a number of topics of particular interest to institutional investors.

Brave New Coin Head of Research, Rafael Delfin introduces the General Taxonomy for Cryptographic Assets

William Mougayer kicked the day off, discussing the need to define “Blockchain fundamentals”. In particular, some of the token jargon needs to be better explained (air dropping, locking, burning), and some industry practices (token definition, protocol design, staking, and on-chain governance) require more formal and consistent standards. Projects need to address their “Token-Market Fit”; chains need to think about their scaling and interoperability; and tokens need to deal with decentralized exchanges, post trade clearing, and asset classification.

Next, Rafael Delfin from Brave New Coin presented the General Taxonomy for Cryptographic Assets (covered here before), followed by pitches on behalf of Rigoblock (decentralized fund infrastructure), HydroMiner (green mining), Conda (equity tokens via a crowdfunding platform), Artis (time-based value or asset transfer on chain), Streem (“start & end” events only) and Ocean Protocol (the data exchange network from BigChainDB).

There was an overview of ICO regulation, comparing some of the developments in Germany (Bundes Block’s Token Regulation Paper), Austria (University of Graz’s KryptoStaat project), Switzerland (FINMA paper on ICOs) and Gibraltar (GBX token listing using a risk-based model).

Much of the day was given over to discussing compliance, taxation, accounting, token economics and investment research (such as token valuation models, correlation analysis and crypto returns). There was also a local case study on the Optioment scam, and the potential criminal and civil breaches.

Finally, a panel of VCs provided their perspective how to navigate this asset class, as the industry weighs up the recent wave of more speculative tokens, and moves to more structured capital gains, especially from so-called security tokens.

Next week: CoinAlts Fund Symposium, New York

 

Beyond Blocks, Tokyo

Thanks to my work with Techemy and Brave New Coin, Content in Context is currently on the road, attending various Blockchain and crypto events in Tokyo, Vienna, NYC and Chicago. The next few blogs will attempt to capture notes from the field.

Techemy CEO, Fran Strajnar presents on the new asset class of digital value

In Tokyo, the Beyond Blocks Summit was a stellar affair, with marquee blockchain projects and major investors presenting on stage, alongside cosplay characters, light shows, upbeat music and a crowd of crypto fanatics.

Given the significant developments in Japan’s regulatory framework for crypto-currency trading, there was a lot of interest in the presentations by bitFlyer, Quoine and Smart Contract Inc.

As with the recent APAC Blockchain Conference in Melbourne, there was a strong representation from China’s growing base of Blockchain projects (but not ICOs, of course), keen to demonstrate their infrastructure projects.

There was much debate about regulatory developments across Asia, made all the more interesting by the announcement that Monex is acquiring Coincheck, despite (or because of?) the recent hack on NEM tokens held on the local exchange.

Among international key speakers were Patrick Byrne from Overstock and tZERO, John Burbank of Passport Capital, and Techemy’s own Fran Strajnar – all looking to the future of this new asset class, especially so-called security tokens.

Interspersed throughout the two days were panel discussions and presentations on scaling, infrastructure, decentralized exchanges, stable coins and the future of ICOs.

Although this was only their second event of this kind, the Beyond Blocks team have quickly established themselves on the conference circuit.

Next week: Token Investment Summit, Vienna

 

APAC Blockchain Conference

The 2nd APAC Blockchain Conference was held in Melbourne last week. According to the organisers, the previous event attracted about 150 people. This year, registrations were around three times as many. The Blockchain story is only just beginning, if the level of interest and the range of conference topics are anything to go by. Here are a few random observations from the two-day event.

A story is just what we got from Robert Kahn, speaking on the role he played in developing the TCP/IP protocol, and the evolution of “Digital Object Architecture” as a way to identify any type of data, regardless of the technology used to create, store or retrieve it.

From NEO founder Da Hongfei we heard about dBFT (Delegated Byzantine Fault Tolerance), and ANZ’s Nigel Dobson outlined the use of Blockchain and DLT (distributed ledger technology) to remove transaction inefficiencies in commercial property lease guarantees. Civic Ledger CEO Katrina Donaghy talked about her work on “Civic Commodities” (government-issued permits and licenses) and “Sustainable Commodities” (water trading, patent registrations).

Gingkoo CEO William Zuo and Novatti‘s Blockchain Head Peter Christo introduced their collaboration on a Blockchain-based cross-border payment platform. There was a presentation on Hcash by Andrew Wasleyewicz, which talked about the “7 H’s” of their solution. While the quirkiest (and possibly most engaging/authentic presentation of Day 1) came from ConsenSys‘s Blockchain expert Lucas Cullen, who told us “7 Reasons Why Not To Use Blockchain Technology” (compulsory listening for any hapless corporate CTO under board pressure to come up with a DLT strategy…).

In between was Data 61‘s Zhu Liming who talked about some of the wider implications and opportunities for Blockchain in his capacity as Chair of the Australian Blockchain and DLT Standardisation Committee. There were also some insights from Gilbert & Tobin‘s COO Sam Nickless on how lawyers must embrace the new technology to avoid becoming disintermediated.

A diverting interlude from economist Lord Desai suggested that “Bitcoins are not coins, and cryptocurrencies are not currencies”. Many might agree, but we already know they are a new asset class in their own right, and need to be treated as such.

Standards (both technical and regulatory) were the topic of a panel discussion comprising mainly lawyers and regulators. The remaining panels on Day 1 (representing commerce and industry) addressed key themes of Blockchain scaling, interoperability, privacy, security and commercial deployment.

Day 2 began with an interesting keynote from former ASIC Chair, Greg Medcraft, now at the OECD. Mr Medcraft is no stranger to the debate on cryptocurrencies and ICOs, but chose to focus his remarks on the benefits, risks and opportunities for Blockchain. On the plus side, Blockchain can reduce the number of intermediaries in a transaction, it provides traceability and transparency, it increases the speed of payments (and reduces the cost), it offers data security, and it provides greater access to markets (e.g., SME supply chains). He foresees fiat and asset-backed digital currencies, and government support for Blockchain solutions in areas such as identity, provenance, supply chain and AML. Plus, for consumers, there should be greater trust and security, better financial access and inclusion, lower costs and better products. Key risks remain, however, in data privacy, security (ID, authentication, cyber-attacks), and consumer and investor protection. Policy makers need to be pro-active and forward-looking, keep up to date on these rapid developments, and co-ordinate across industry, sectors and globally. Citing some of the issues associated with ICOs, Mr Medcraft then urged regulators to exchange information with their counterparts and identify best practice, avoid regulatory arbitrage, create greater legal certainty, and raise awareness of the risks and rewards.

Victor Wang from the China Wanxiang Group followed up with a presentation that re-cast Blockchain as a new economic model, drawing on his reading of “Das Kapital”, and introduced the concept of GBP (“Gross Blockchain Product”). According to this theory, Blockchain is a means to redistribute and reallocate resources and assets; it is transforming the cost of transactions and value exchange; it is creating new assets; and it is building new products and services, as well as the delivery mechanism itself.

We heard from Zuotian Luan of Fortuna Blockchain on the future of OTC derivatives, and how decentralized exchanges are addressing legacy problems of counter-party and credit risk, operational efficiency, and lack of liquidity. He sees a “decentralized margin system” as a long-term solution that will reduce the costs of posting and managing collateral on traditional OTC exchanges.

There was an interesting discussion on the future of capital markets themselves, reflecting the perspective of traditional exchanges, clearing houses and custody providers, plus tZero. (As an aside, I was pleasantly surprised to see so many representatives of the “back office” at the conference, including trust banks and share registries. However, there didn’t appear to be anyone from the brokerage or advisory side, and no-one from the ASX, even though their Blockchain project to replace/enhance CHESS has been widely lauded as being in the vanguard of this new technology.)

Finally, a quick plug for my colleague, Fran Strajnar, CEO and co-founder of Brave New Coin who moderated a panel on ICOs. I think he summarized the tone of the discussion really well, when he said this is probably the only financial services sector that is asking for regulation. “Tell us the rules and let us get on with the job.”

Next week: Tech Talk on Crypto

 

 

The General Taxonomy for Cryptographic Assets

It’s not often I get to shamelessly plug a project I have been involved with – so please indulge me in the case of Brave New Coin’s recent publication, “The General Taxonomy for Cryptographic Assets”. It’s a significant piece of work, designed to bring some structure to the classification of this new asset class.

In particular, it aims to help market participants (traders, brokers, investors, fund managers, asset managers, portfolio managers, regulators etc.) make sense of the growing list of digital currencies, as not all tokens are the same. Each one has a specific use case that needs to be understood in the context of Blockchain applications, whether decentralized protocols, or trust-less payment solutions.

Currently capturing around 60 data points and metrics on around 700 tokens, in the coming months the underlying database will double in size, and constantly maintained thereafter to keep current with the most significant assets.

Useful for portfolio screening, construction and diversification, the Taxonomy methodology and underlying database, when combined with Brave New Coin’s aggregated market data and indices will provide a 360-degree view of each asset, combining key elements of a CUSIP or ISIN record, a company directory profile and a regulatory filing.

The significance of having access to robust market data and reference data tools cannot be underestimated, given the price volatility and emerging nature of this new asset class. The Taxonomy will be presented at various Blockchain and Crypto events over the coming weeks, but for further information, the authors can be contacted at: contact@bravenewcoin.com

Next week: APAC Blockchain Conference