The Consensus conference in New York City this week was a collision of worlds. The cryptocurrency space is fresh off a volatile price boom that put it in the global spotlight, and crypto entrepreneurs are more confident than ever that the token economy is the decentralized future of blockchain. The enterprise blockchain market, meanwhile, is looking beyond coins to deploy private, permissioned blockchains across different facets of their businesses.
When you put those two camps together, the disconnect can be comical.
On the surface, the Bitcoin-led crypto space was feeling itself. There were Bitcoin Lamborghinis parked outside the Midtown venue, while an LA startup on the show floor was selling actual 18-karat cryptocurrency emblazoned jewelry and gold coins. Startups were advertising new initial coin offerings (ICOs) with dancing mascots.
The reality of how cryptocurrencies are evolving is far more nuanced. Panels delved into complex issues like the token economy, the mining boom, and advanced cryptography. Popular coins, from Ripple to ZCash, had a big presence at the show, and there was a lot of money to go around. Unicorn crypto startup Circle announced a massive $110 million funding round, a partnership with mining hardware giant Bitmain, and a Fiat-backed coin to connect US dollars to the Poloniex exchange.
— Rob Marvin (@rjmarvin1) May 14, 2018
The enterprise blockchain side of Consensus felt like a different conference. FedEx talked about using blockchain for logistics. Enterprise tech and fintech giants like Deloitte, Microsoft, and SAP made announcements around enterprise adoption and deployment-ready use cases hosted on their own clouds. Even AWS entered the fray through a partnership with new ConsenSys-owned blockchain platform Kaleido. There was also a big focus on interoperability and standardization, with organizations such as the Enterprise Ethereum Alliance announcing a 1.0 specification.
Eager startups on the exhibition floor straddled blockchain and cryptocurrency, but several people I spoke to throughout the conference talked about the detachment between the crypto bros sporting T-shirts and the blockchain businessmen in suits. Yet the 8,000-plus attendees from both sides crammed into the overstuffed venue all the same. Last year, Consensus had about a third this many people.
This year’s Consensus also marked more mainstream consumer tech buy-in. Hardware maker HTC made the surprise announcement of its forthcoming blockchain-powered HTC Exodus smartphone, which will feature a universal cryptocurrency wallet and support multiple protocols including the Bitcoin and Ethereum networks.
Smartphones are the most ubiquitous computing devices in the world. The not-yet-released Exodus is just a start, but the decentralized potential of turning millions of smartphones into blockchain nodes is staggering in its scale.
Ultimately, it comes back to that core question of what’s more important: Bitcoin and the massive cryptocurrency market it spawned, or blockchain’s potential as a foundational technology driven in large part by investments from big banks and tech giants?
Prominent venture capitalist Fred Wilson of Union Square Ventures hit on that during a Wednesday panel. He said we’ll look back at some of the valuations of crypto tokens today and say they were inflated, but doesn’t believe cryptocurrencies are a bubble. However, he does believe blockchain’s potential as foundational tech outweights the allure of its first and flashiest application.
“This is an entirely new stack we’ll get to build applications on, and the tokens are just the fuel that lights up that stack,” said Wilson.
Of course it’s not as black and white as that. IBM is using it to track carbon credits, but doing it with tokens on the Stellar financial cryptocurrency’s network. Another very different example is Blockstack, which is building a startup building a blockchain-based decentralized internet. At Consensus, Blockstack launched a new ecosystem-wide decentralized app (DApp) store that doesn’t just offer financial DApps. The marketplace features decentralized productivity apps, encrypted messaging and video chat, and social networks.
Co-founder Muneeb Ali also brought blockchain’s topicality full circle by revealing that he and co-founder Ryan Shea served as technical advisors for the decentralized internet storyline on this season of HBO’s Silicon Valley.
Enterprise blockchain company Bloq is crossing that divide as well. Co-founder Jeff Garzik is an original Bitcoin core developer and led the failed Segwit2x Bitcoin fork before it was canceled due to lack of consensus. Bloq is bridging the cryptocurrency and blockchain worlds with its new Metronome cross-blockchain crypto token, which Garzik said is the first crypto asset that doesn’t have to exist on a single network.
Things Get Heated
However, the starkest showdown between the crypto and blockchain worlds came during a Monday afternoon panel that was supposed to be about “secure and reliable commercial networks.” It turned out to be a heated debate over public cryptocurrencies and enterprise blockchains.
Former JPMorgan blockchain lead Amber Baldet moderated the panel, fresh off announcing her new Clovyr private blockchain development startup. On one side was Joseph Lubin, the reserved and soft-spoken CEO of enterprise Ethereum company ConsenSys. On the other was the bombastic, cowboy hat-wearing Jimmy Song, a Bitcoin developer and partner at Blockchain Capital who said Bitcoin is “the real innovation.”
Song came out guns blazing. At various points he called blockchain “magic dust” that doesn’t instantly solve problems and mimicked Oprah with chants of “you get a blockchain, you get a blockchain!” He said that for most of the centralized businesses exploring the decentralized technology, he doesn’t think blockchain is very useful. Song believes the future of blockchain technology is in Bitcoin and cryptocurrencies. Asked about Baldet’s Clovyr announcement, he said “I didn’t see anything but buzzwords.”
“In five years, I think most of the projects in this space will have been for nothing. Especially the enterprise ones,” Song said frankly.
Half of the crowd cheered Song’s anti-blockchain rhetoric, and the other half (including Baldet and Lubin) sat there quizzically and silent. Lubin eventually clapped back, and got Song to agree to a bet for “any amout of Bitcoin” that he’s wrong about where Bitcoin and blockchain will be half a decade from now.
In a conference full of paradoxes, the fiery exchange brought the otherwise unspoken debate at the heart of Consensus to the fore. Before Song walked offstage, he said he was excited to find the attendees in the crowd that were clapping and buy them some drinks.