The Blockchain Train is Leaving the Station

Photo Credit: @martinceralde

In line with our investments in blockchain, Ash Egan, a Principal at Converge, camped out at Consensus 2017 in NYC last week. The conference’s theme “Making Blockchain Real” and the line up of speakers reflected the huge acceleration we’ve seen in the technology over the past year and expect we’ll continue to see.

We’ve cliff-noted some of Ash’s key takeaways for you:

We’re Living in Wild West of ICOs

ICOs (Initial Coin Offerings) are gaining extra attention given the massive volume in these ICOs and interest from blue-chip investors Andreesen Horowitz and USV. 15 ICOs are happening right now; 25 more expected to launch over the next 60 days. There were 64 ICOs last year which collectively raised $103M, this year we’ve had 25 offerings totaling $163M.

Not all of these ICOs will be successful, but there will be massive ($1B market cap) winners. And, yes, there will also be big losers, but figuring out how to optimize the VC and ICO equation is going to be awfully fun.

The Anarchists are Aging:

Folks in the bitcoin anarchist camp believe central banks should have no role in cryptocurrencies. Compared to last year, however, this contingent was surprisingly small. Most agreed that if cryptocurrency allows more access to the financial system, then it makes sense to rally the central banks to become more involved.

Safety First:

Security is a core pillar of cryptocurrency – during the conference, ZCash announced it was partnering with JP Morgan to provide zero cash proofs – and people have lost millions in crypto via bad security (see Mount Gox). We expect this segment to have its own conference in the next couple years.

Cryptocurrencies enable vastly superior user experiences, full stop. The value creation opportunity for financial institutions is enormous but ensuring secure transactions is paramount to unlocking this value. Our investment in Chainalysis underscores this belief and we expect to see regulation of crypto-transactions emerge in the near future.

Speaking of user experiences:

In the “Beyond Speculation: Who Actually Uses Bitcoin” talk, panelists dug into Bitcoin’s current use cases, and what the future could entail. The most notable comment from Sebastian Serrano, Ripio’s Founder & CEO, was that technology needs to disappear from the conversation – the consumer doesn’t care about blockchain or underlying system. Could not agree more – the best tech is invisible.

Blockchain has the ability to undo many of the intricate systems we’ve collectively built over time. Systems that we’ve become so used to we no longer see. Systems that, upon reflection, sort of suck.

Is it cool to be able to search and order shoes from a phone, for the transaction to race through lots of intermediaries in no time, for funds to hit accounts and shoes to get delivered in nearly no days? Yes but … the number of intermediaries and resulting backend inefficiencies are staggering for businesses and the data trail increasingly worrisome for consumers.

You know what was even cooler? When individuals freely exchanged goods, services, cash payment and IOUs directly with each other, backed by their reputation. When you think about it, blockchain technology has the power to scale reputation and personal accountability on a global level. Makes “social currency” take on a whole new meaning…stay tuned.