CoinAlts Fund Symposium, New York

Following on from last week’s theme on Blockchain, crypto and asset management, the recent CoinAlts Fund Symposium in New York brought together various parts of the fund industry to discuss issues connected to crypto investment, portfolio management and back office solutions.

Although conducted under a veil of non-attribution, it wouldn’t be betraying any confidences to describe some of the key talking points. If anything, the main themes echoed much of what I have heard at similar events over the past 6 months: scaling transaction capacity and establishing Blockchain interoperability; building industry standards for this new asset class; and creating valuation models for new token issuance projects.

In addition, the conferences addressed operational matters such as crypto fund administration, audit, custody, taxation and client reporting. All the usual back office functions that are taken for granted in other asset classes.

What was particularly noticeable about this event was the lack of international participation. In fact, a number of the speakers almost berated the audience for choosing to ignore overseas industry, market and regulatory developments at their peril.

For example, on regulation, it was suggested that if the SEC doesn’t provide some constructive guidance on new token issuance (especially so-called security tokens), the USA could be left behind. Indeed, one industry representative stated that for his company, the USA is only their third largest market. Another presenter drew attention to the fact that South Korea (a leading marketplace for Blockchain and crypto) produces 15 times as many engineers as the USA, while the USA produces 40 times as many lawyers as South Korea.

A recurring theme throughout the day was that without formal standards, clearer regulation, and institutional-strength tools and infrastructure, major asset managers, pension funds and Wall Street firms will remain very cautious about investing in digital assets, whatever their current level of interest.

Next week: Startup Exchange, Chicago

 

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

 

The year ahead in Blockchain, crypto, FinTech….

I’m approaching my second anniversary working within the Blockchain and digital currency sector, but already it feels like a lifetime – such has been the pace at which the industry has grown and evolved.

The number (and size) of Initial Coin Offerings (ICOs) in 2017 was staggering. The cryptocurrency markets were equally breathtaking for their price gains (and corrections), matched only by the speed and extent to which some regulators responded. It was a rollercoaster ride, but by the end of the year, it’s fair to say this new asset class had finally arrived.

(For a round-up of 2018 forecasts and predictions for the sector, my colleagues at Brave New Coin have been publishing some handy guides.)

My personal (but far from unique) view on cryptocurrencies in general is that they represent a new asset class. As such we are seeing huge opportunities for investment and innovation, backed by Blockchain and other decentralized and distributed ledger technologies (DLT), as well as some truly innovative and disruptive solutions. There is still some hype, and considerable asset price volatility, plus pure investor speculation; but there are some great projects out there building solid business models; and sound investment cases for network protocols, industry utilities, scalable solutions and core platforms.

In 2018, I expect to see one or more of the following developments:

  1. A fully deployed, government-backed Blockchain project that will change the way citizens engage with public services
  2. A truly decentralized autonomous organisation that learns to make decisions for itself  (based on a set of dynamic, self-replicating governance rules) as to how resources are allocated, stakeholders are rewarded and participants are incentivized (for all its faults, the DAO was possibly the first new corporate structure since the joint stock company)
  3. Following Japan’s lead, more governments will recognise cryptocurrencies as legal forms of payment, while at least one Central Bank will issue a public digital currency as a form of legal tender (not just an inter-bank instrument)
  4. Traditional securities (equities, bonds, commercial paper, asset securitization) will be issued in the form of digital tokens (via a new form of Token Issuance Program) leading to wider distribution, fractional ownership and reduced cost of capital raising, plus streamlined share registry and custodial services, thanks to DLT
  5. Likewise, “traditional” digital tokens will be issued as formal securities, backed by new types of financial products, allowing for greater financial innovation and funding flexibility
  6. At least one crypto-backed ETF will list on a major exchange, along with more crypto-derivatives such as swaps and options.
  7. One or other crypto-currency will be adopted as a day-to-day payment solution for micro-payments

Only two or three years ago, none of the above seemed very likely, or at least not in the short-term. Today, there are multiple initiatives working across each of these trends. So this is not a case of “if”, but “when”.

Enjoy the ride!

Next week: Bring Your Own Change

 

Token Summit II San Francisco

While in the US this month, I attended Token Summit II in San Francisco, courtesy of Techemy, the parent company of Brave New Coin.

Apart from Bitcoin’s latest all-time highs (and of course, CryptoKitties), the main topics on Blockchain solutions, cryptocurrency trading, token issuance programs and digital asset management were:

Governance – bringing transparency, oversight and standards
Scalability – how to grow the technology in a sustainable way
Interoperability – compatibility and connectivity between chains
Regulation – especially of securities as tokens, and vice versa
Decentralized exchanges – making P2P trading truly viable
Metronome – the “first cross-blockchain cryptocurrency”
Messari – “EDGAR for cryptocurrencies”
Transaction computation vs verification – getting the balance/distinction right
Custody – what the institutional markets are looking for in this new asset class

Demonstrating the demand for access to industry thought leaders and information about the best and brightest projects, Token Summit could have filled a venue twice the size – a growth trajectory befitting the asset class.

Next week: MoMA vs SFMOMA