🎤 Interviews Katya Michaels

Tech Has Sat on Its Hands Long Enough: Digital Asset Trade Association Speaks Up for Blockchain

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Perhaps it’s time for the tech community to stop waiting for Blockchain technology to speak for itself and take more definitive action.
Tech Has Sat on Its Hands Long Enough: Digital Asset Trade Association Speaks Up for Blockchain

As regulators step up their vigilance and take stringent measures against crypto companies that fail to comply with securities standards, many in the crypto community agree that regulation clarity is the most urgently needed ingredient for bringing stability and growth to the crypto market.

Recently, decentralized exchanges are taking their turn under fire, and while the amount of regulatory action is intensifying, regulatory confusion has not been resolved – if anything, it’s increasing.

Given how essential the resolution of this impasse is becoming for the crypto space, perhaps it’s time for the tech community to stop waiting for Blockchain to speak for itself and take more definitive action. But what forms can such action take?

Brent Cohen, Head of Product at Element Group and co-Founder of the Digital Asset Trade Association (DATA), is one member of the community taking concrete steps to shape the legal discourse around Blockchain and its applications. Having already achieved significant success with crypto legislation in Wyoming, DATA is bringing together enthusiasts, experts and legislators to come up with a common language and best practices that will facilitate the adoption of this technology.

U.Today (Katya Michaels): Advocating for supportive Blockchain and crypto legislation is not your day job. Why did you think this was important, but also feasible, to do?

Brent Cohen: There is a long tradition, both in the United States and elsewhere, of citizen lobbyists who take important issues to their representatives. Uber and Airbnb came to market, disrupted everything and then when the regulators came and shut them down, they went to the users and said – go lobby city hall. So, there are good recent case studies of technology innovators calling on their enthusiasts to lobby for change.

It's also very clear that the crypto world is up against major forces in the banking industry, which is legitimately concerned about a threat to its cash flow. Banks are investing in Blockchain and hedging their bets, but they also like the status quo, and the status quo is set up traditionally to help incumbents.

The Blockchain world is a disruptive force, and we just couldn't let this big of an opportunity go by without engaging directly in the political sphere. It was a business imperative drawn on recent history and a recognition that tech has sat on its hands for a very long time and let government push it around a little bit. Or perhaps, we think that we're outside of the realm of government influence, or that we're on the right side of history.

How does blockchain work?

All of those may be true, but it's not a good way to operate, especially when you're dealing with money, which is very regulated. So, we had to jump in and create something. An opportunity was presented to us in Wyoming, we got some laws passed there and we've just been carrying the ball forward wherever we can all around the world.

UT: Clearly, financial institutions have a lot of lobbying power and endless funding. How can an association like DATA compete?

BC: The key message is always going to be jobs and revenue. It's always going to be about being an innovator, because that attracts business and creates a climate that leads to more innovation and investment. At the grassroots level, you can get governors and state legislators to put money into accelerators, into tax breaks, incentives to energy companies. There are lots of ways you can create a conducive environment at the local level without having to rely on a federal government or an international body.

Having said that, it doesn’t stop at a state line or a country border. The global regulators, and there are more than we care to think about, have no consensus on how to handle this emerging field. That is one place where DATA can clearly play a convener role to bring regulators, legislators and the industry together in conversation, not just in the United States, but around the globe.

UT: California recently passed a bill that redefined electronic signing and electronic transactions to include Blockchain. What is the average policymaker’s level of education and awareness about this technology, in your experience?

BC: There is an old phrase “a mile wide and an inch deep” – well, it’s a mile wide and maybe a millimeter deep. It's just general principles and hearsay and a lot of bad information. When I hear US senators, mayors, congressmen talking about how crypto was used by global terrorists and drug runners, I’m thinking – yes, so is the US dollar and in a much bigger way.

California State Capitol

It's up to us as an industry to counter some of that misinformation, just by showing what we're doing. Let's talk about the best practices, the fact that we are KYC and AML, that we are trying to follow all the relevant guidelines from whatever regulatory body we're working with.

What DATA wants to do is create a framework for understanding the space, for fostering dialogue and consensus among all the parties involved. It's not going to be controlled by any one entity or any one fund. It’s a democratized grassroots organization, which we think will have wide support.

KM: Does advocating at the state level turn out to be a good entry point into wider legislation? As states lead the way, perhaps their decisions will form the groundwork for the federal policy?

BC: Absolutely. Here in the United States there have been three forces shaping the industry: The first is regulators who, as we've just described, don't necessarily have a deep understanding of the space. The second is legislators who are called into action by constituents or by business. The third is courts, specifically plaintiffs’ attorneys and others that may come to bear as the industry goes through its continued corrections.

All of those are out of our control. The only thing that we can do is mobilize our supporters. And the best pressure point is at the state and local level, because you can bring in local business leaders and talk to local legislators who are directly accountable to those.

It's a little harder on the national level – not to say that we're not trying there, and we certainly haven't abandoned talking to all the relevant regulatory agencies, but the states are where the action is right now. We have other players in the industry – Digital Chamber, Coin Center and others – that are working very heavily at the national level, doing a great job of educating and informing.

UT: Are there significant geographic differences among the states in the level of openness and acceptance of Blockchain technology?

BC: Oh, sure. Some states are more technologically progressive, like California, Washington State, New York State. Wyoming is one of the best states in the country to do business right now. There are lots of good reasons why Wyoming wanted to be in front, not the least of which is the small population. How can they generate revenue in that state?

They can bring in this sort of growing business – as a result of their passing Blockchain legislation, company registrations are way up. The University of Wyoming has a big Blockchain lab. I mean, they're all in.

There are other states that need a little encouragement. Perhaps there are just no native players in the Blockchain ecosystem in their states. So, we're being strategic on where we deploy our resources.

UT: What is the best way to deal with getting resistance or a blank stare in response to lobbying efforts?

BC: People tend to glaze over unless they are deeply engaged in our space, so we need to find things to talk about that are relevant and commonly understood: privacy, business, jobs, whatever is of interest to the audience. Once you've reached common ground, you work towards resolving areas of disagreement. I think everybody agrees that there are bad actors in this space. How do we as an industry police ourselves?

UT: You and some of the other board members of DATA come from a background of PR and marketing. Do you feel that a lot of this work is about the proper presentation of the subject?

BC: Without question, it's all how you frame the issues. If I go into a deep dive on Blockchain technology, forget about it, you lost them. It's like me going into a deep dive on how email works or how your credit card works. You whip out your credit card, you pay somebody, you don't think about how the money gets pulled from your account.

So, we have to abstract the technology from the use case. When we're talking about utility tokens, for instance, I explain that a utility token is like going to Chuck E. Cheese’s and buying a bunch of tokens. You can only use those tokens at Chuck E. Cheese’s. You've paid cash or used a credit card to buy those tokens.

Chuck E. Cheese's

Now, if you take those tokens away and you have them in your pocket at home, they're of no use to you unless you have a friend who is going to Chuck E. Cheese’s. That friend may want those tokens, so you can give them to him, or you could sell them to him, and that’s the secondary market. But the primary use is at Chuck E. Cheese’s.

It’s really about explanation. We have too many words that mean the same thing. Every time I see somebody pitch a crypto business, they spend the first three to five minutes defining terms. Just to have a common vocabulary would be progress.

UT: Some terms, like ICO, have acquired a bad reputation.

BC: ICO, crypto – these are words that have loaded meaning to them. Blockchain is definitely preferable because it's benign. It doesn't have any value associated with it, good or bad. A digital ledger technology is another way to describe it. I'd rather just get past all of this and call it digital assets. We're dealing with digital assets in a tokenized universe.

And what does that mean? What are the technologies, what are the processes, what are the regulations that need to be enforced? From the consumer point of view, they don't care – they just want it to work and they want to be protected. If there's a problem, they want to know that they can go to somebody and complain. That's a challenge in a decentralized world, because there's nobody to hold accountable. How do you handle governance and maintain a set of rules in a decentralized space? It's complicated.

UT: This is a relatively new initiative – DATA has been around for about a year. How has the community responded? What are you hopes for the near future?

BC: The immediate support for Wyoming by the crypto community was overwhelming. A call went out and it was answered – people flew to Wyoming and testified. We've managed to keep a good chunk of those people engaged over the period of time it's taken us to set up the nonprofit, to file documentation with the IRS, to get a bank account, lose that bank account because we're a crypto company, and then get that bank account reinstated because we explained – no, we're really a trade association and we're accepting all of our dues legitimately, we've got a paper trail.

We have a board – the founders of DATA that are scattered around the globe. The industry is very supportive, and the regulators are very supportive, surprisingly. They want a conversation, they do want people to come in and not just say “we've got a problem,” but come up with solutions.

UT: Maybe they're relieved to have an intermediary that speaks both languages.

BC: They would be very happy. There is a need for an industry body to speak on behalf of the industry to regulators, to set good standards, determine best practices. The greatest support we've gotten is from the attorneys, the lawyers that are actively working around the globe in this nascent space. Bringing the legal profession into this is critical. The fact that we were able to tap into some of the best minds in the industry around the world, have them donate their time just by asking them – it’s very gratifying. It also showed that they feel the need to convene. People out there in the space are raising their hand saying – pick me, because I want to be involved in this conversation.

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Crypto Commerce and Its Future: Interview with Uphold’s CEO, J.P. Thieriot

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With the world of Blockchain ever evolving and changing pace, a top level executive lays out his vision for what the future has in store for the crypto market
Crypto Commerce and Its Future: Interview with Uphold’s CEO, J.P. Thieriot

J.P. Thieriot is the CEO of Uphold, a cryptocurrency platform offering a multitude of services, which was launched in 2015. A graduate of Yale University, before going crypto, J.P. Thieriot managed a number of companies in the tech sector, as well as real-estate and agriculture, including Estancia Beef, one of the largest grass-fed beef companies in the United States. Today he agreed to sit down with us to discuss where the crypto business is at, as we’re approaching the New Year.

Why Crypto?

U.Today: Mr Thieriot, tell us a bit about yourself please. You have a substantial amount of experience in many business sectors. How did you find yourself doing what you do today?

J.P. Thieriot: My first exposure to Bitcoin came as a result of having investors’ funds trapped in Argentina in 2013. Despite statements from PWC stating that a given LP’s account was worth $X, attempting to take the money out of the country meant the LP would receive $.5X. It was a perfect example of how a third world country can use monetary games in pursuit of short-term gains, while ultimately thwarting real value creation and holding a populace hostage to incompetence. We tried every conceivable (US legal) way of getting the funds out. That’s when I came across Bitcoin. Unfortunately, we didn’t take the plunge. Seemed too precarious. BTC was at around $15 at the time!

U.Today: Tell us about the company you are currently heading. What services does it offer exactly?

J.P. Thieriot: Uphold is a global digital money platform. We have about 1m users. In some respects, this side of our business could be compared with Coinbase, i.e. not exactly an ‘exchange’, with direct links to legacy money networks like US and EU banking through rails like ACH and SEPA. Where we’re very differentiated is in having a big lead over everyone in the context of our open APIs for third party digital money applications. We do not just ‘list’ tokens like an exchange, we are deeply integrated into some of the ecosystems of the companies behind the tokens, like Brave-BAT, DASH and Cred-LBA. 2019 will be the year that some amazing utility tokens emerge from the rubble of hundreds of silly ICOs. I’d like to think Uphold will be an integral part of those likely to be the most successful.

U.Today: Uphold recently received close to 60 million USD from Greg Kidd, a former Ripple executive. Are you now partners with XRP?

J.P. Thieriot: We have a large XRP community on Uphold. They are passionate and active. We try to make them happy. Certainly, there are a number of possibilities with Ripple down the road.

The DLT Business Today

U.Today: In addition to yours, there are many companies based in San Francisco, among them Kraken, Coinbase, and Blockchain Capital. Has Silicon Valley now conquered the crypto world as well?

J.P. Thieriot: Digital money is an Internet phenomenon. It stands to reason that ‘Internet’ geographies would concentrate Blockchain companies in the early going. Ultimately, I imagine regulatory regimes will skew the array. Hopefully, the US will be able to maintain a light hand and perpetuate its early advantage over other regimes.

U.Today: What do you think it takes to “make it” in the DLT world as an entrepreneur? Is it about the savviness, i.e. the know-how, or simply the right attitude, i.e. being the go-getter type?

J.P. Thieriot:

Perseverance first. Execution second. Blazing insights a distant third. Building the right team is also critical... I have a pretty dim view of humanity :), specifically in that I’d choose to work again with perhaps 10% of the people I’ve worked with.

After four years at Uphold and many purges and reorganizations, we’ve arrived where that number is, for the first time in my work experience, inverted. 90% of the people working at Uphold today are rock stars. Work hours don’t exist; the creativity, initiative, and energy thrown at every problem is unbelievable. It feels more like (an ideal) family than a workplace. We all believe we are doing something important and exciting, and we’re unlikely to come across a similar opportunity in our lifetimes.

U.Today: Are you a believer in decentralization? It seems that this is how the Blockchain got started in the first instance. Yet, according to some, this domain has now become very centralized, from pegging to market dominance by a select few. What are your thoughts?

J.P. Thieriot: ‘Decentralization’ has become the buzzword du jour. Yesterday it was ‘Blockchain’. Obviously, these are novel and important facets of our burgeoning ecosystem, but it’s funny to me how people can get religious and sanctimonious around these banners. The idea here is that an Internet of Money has become possible… ne inevitable.

Decentralized and Blockchain technologies, methods and protocols will likely have a lot to do with the evolution and outcome; however, being theologically absolute, really about anything, strikes me as ridiculous. The Internet is decentralized; Amazon, Google and Apple are not. For this industry to jump the rails into the mainstream, particularly given how money is regulated, is going to require clusterings of human beings doing things like support and marketing for quite some time.

I’m not sure a pure peer-to-peer network, serviced by a distributed automaton is either possible or desirable. In the meantime, the more distributed, less concentrated, more collaborative things become, the better, i.e. less risk, higher output.

U.Today: While some networks openly attack one another, Ethereum and EOS being the prime example, others prefer to unite instead. Uphold is part of Universal Protocol which attempts to do just that. Is it a union created simply in order to increase profits, or is it more than that?

J.P. Thieriot: The UPP is an industry utility, the purpose of which is to mitigate a number of the current restraints on the growth of our ecosystem. We’ve identified those restraints as: 1) the lack of a common language, 2) the lack of conventional user safeguards, and 3) the lack of products built for mass adoption.

The question about Ethereum and EOS goes to the first of the above factors. It does nothing for the benefit of the ecosystem when competing protocols throw mud at each other. It debases outside opinion, puts a grin on the faces of the ossified naysayers—the Dimons and Buffetts of the world—and perpetuates confusion and uncertainty among potential new entrants.

UPP’s purpose is to usher in the next 100 million users of crypto. We can do this by disrupting a hidebound legacy financial system that has been a festering backwater in terms of innovation, soundness, fairness, equal access, and transparency. Bickering amongst ourselves is a destructive waste of time.

Ongoing Crisis and Predictions

U.Today: We simply cannot not ask about the current Bitcoin crisis. Does it complicate business, or can this low tide be treated as an opportunity to dig out whatever gold was left buried in the sand?

J.P. Thieriot: Speculative bubbles always form around the advent of revolutionary technologies. This technology happens to relate directly to money, and it has benefitted from significant Asian participation on the trading front; ergo, the ups and downs are likely to be super-charged.

We’ve been expecting a shakeout. There’ll be a lot less noise in the market. Meanwhile, nothing will deter the inexorable march of the coming Internet of Money.

U.Today: With so much on the market today, what is it that the customers are after exactly?

J.P. Thieriot: Quite simply, quantumly wider and more convenient access to better financial products and services.

U.Today: Can you make any predictions for the future? How is the market going to be different in, say, five or ten years from now?

J.P. Thieriot: 2019 will be the year of “The ICO is dead, long live the STO”. The first real utility tokens will start to show their stuff, foremost Brave’s BAT token. The general market will remain below the $200b mark as the weaker offerings perish and very few strong projects accumulate value. In five years, we will be well into the process of tokenizing/digitizing every single traditional asset class in existence.

In ten years, the use of banknote cash will at least have diminished by 50% from today’s levels… And my guess is―because one way to look at BTC is as a shorting of the monetary system’s status quo―BTC will be above $25k.

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Charles Hoskinson: Shifting the Blockchain Tradeoff Profile for the Entire Industry

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What’s happening with Cardano? Charles Hoskinson talks about the Cardano Foundation conflict, the importance of research, and resilience through community.
 Charles Hoskinson: Shifting the Blockchain Tradeoff Profile for the Entire Industry

With over two thousand altcoins on the cryptocurrency market, it can be difficult to determine what distinguishes them from each other. As an investor, looking into the teams, technology, product and culture behind each coin is a daunting proposition, although that’s the best way to go about crypto investment. Even among the top 10 coins, some enjoy – or rely on – a certain degree of hype, while others maintain their impressive market caps and continue building their products in relative media obscurity.

Although Cardano is usually one of such “un-hyped” projects, quietly focused on extensive research and dedicated engineering, the platform has been in the spotlight recently. In the past month, Cardano’s community Guardians of Cardano and the two companies working on the platform’s development, IOHK and Emurgo, have published open letters expressing concerns about the governance and operations of the Cardano Foundation.

Charles Hoskinson, CEO of IOHK, the engineering company responsible for building the Cardano Blockchain, sat down with U.Today at the StartEngine Summit in Santa Monica to talk about what happened with the Cardano Foundation, the significance of original research and the main purpose underneath it all – providing access to the global financial market for the billions of people who don’t have it.

Leadership in crypto communities

U.Today (Katya Michaels): In the crypto space, often there is an ideological leader associated with a cryptocurrency – Satoshi Nakamoto, Vitalik Buterin, Charlie Lee, Roger Ver. How do you feel about being the person to fill that role for Cardano, and how do you think this kind of idolatry affects the Blockchain community?

Charles Hoskinson: It can be a good thing if there is proper balance of powers and the people at the top use their influence to move the currency along. When you start something, you’re very small, very fragile and you need to have a lot of consensus to be able to get things where they need to go. As you get larger over time, you lose your ability to influence the ecosystem unilaterally.

There is no greater example than Microsoft. It was a monarchy under a king with absolute power – Bill Gates. Throughout the decades, Gates’s influence waned year by year, and eventually got to a reduced role within the company, until he stepped down from the chairmanship of Microsoft.

Cryptocurrencies are no different. People don’t like complicated systems, they are too hard to understand, so what they do is compress a very complicated ecosystem to a single person or a simple idea. When you get bigger, as happened with Bitcoin and Ethereum, eventually that can lead to conflict, and you end up with things like Bitcoin Cash or Ethereum Classic. It’s the great governance challenge in the space – how do you deal with these big personalities, but at the same not allow them to overcome the ecosystem.

Another thing is – I’m not perfect, no one is. Eventually, you’re going to let people down. If your entire reason to participate in the cryptocurrency is not its philosophy or its utility, but rather your liking of a person, then at some point that person will say or do something that will disappoint you. So, people leave the space for emotional reasons and create volatility in the currency.

Governance challenges

UT: Let’s talk about the open letter and the Cardano Foundation. Despite the precautions taken to avoid governance conflicts, you find yourself in this predicament. Was there a better way to do it, in hindsight?

CH: I think the checks and balances that were put in place are working properly. The whole reason we build redundant systems is that somewhere along the line one of your systems will fail. So, it’s nice to have at least two, and in our case we had three – IOHK, Emurgo and Cardano Foundation.

The issue with the Cardano Foundation is a problem of inaction. For over two years, there were no meaningful investments into community management, into regulatory outreach, into trying to engage the community and build a community-based governance system. We realized that if this trend continued, there was no way to effectively put Blockchain-based governance, the treasury system and the Cardano improvement proposal process in place.

We told the foundation there have to be some material changes, and for 15 months they kept saying “we are going to do something” and it never materialized. It really came to a head when the community as a whole, Guardians of Cardano, decided to publish an open letter. At that point, we thought it wouldn’t be too destructive to the Cardano ecosystem if we also wrote an open letter saying that we’re moving on without them. We have already been paid, Emurgo already has its funds, so we can execute autonomously without them – that was the whole point of checks and balances and the foresight of the way we constructed the system.

Would we have done things differently? We probably would have been more proactive in the initial setup of the foundation if we got a do over. To be fair to us, though, there were four people on the board from the beginning and there was an understanding that it would be replaced gradually over time with a board of seven people and a strong executive director.

The governance crisis got worse because of attrition. The people who were there in the beginning gradually retired and were not replaced, and the people that we thought were going to lead the Foundation were terminated. At IOHK we thought – it’s a big ecosystem, the foundation is not a necessity for the system to be successful, so we’re just going to go ahead and hire our own community managers, our own lobbyists and we’ll do what the foundation was supposed to do.

Resilience through community

UT: In the letter, you place a lot of emphasis on community. How important is community involvement for Blockchain adoption at this point? Does the public really have to care? Can’t they just be plugged in when the technology is ready, as happened with the Internet?

CH: The reason why community is so powerful is that it ultimately gives you a level of resilience that technology can’t. If you take a skin cell, you can replicate its DNA. Structures are resilient if one member of the system can independently go and replicate, rebuilding the entire system, its culture and its technology.

It’s super important that people in the community understand the philosophy behind the structure and how it is accomplished, as well as have the skill set necessary to do their own variant in the event that the system becomes ossified and no longer effective. That means sometimes you can have splits, but that also means that you don’t have the 2008 financial crisis which was brought on by over-centralization and over-optimization around concepts that were wrong.

It is essential to have people understand decentralization, decentralized control, checks and balances, resilient systems, the ability to replicate a system in the event that most of the nodes die. That means you have to educate people, you have to write great documentation, you have to have infographics, podcasts, do AMAs, often do interviews, conferences, debates, and you have to see people face to face and have conversations with them. That’s how they system propagates. It’s what’s allowed Bitcoin to grow from one person to the massive multinational movement that we have.

Rational ignorance and adoption

UT: Even in the community that has adopted cryptocurrency to a certain degree, there seems to be a misbalance in terms of people owning crypto and people running nodes. This technology depends on not just adoption, but active community participation, a new kind of citizenship. How do you mobilize the public to take control of their data, become aware of privacy issues, become a part of the Blockchain fabric?

CH: It’s a very difficult task. You’re never going to get people to read the end user license agreement. You have to understand this concept of rational ignorance – the idea that the cost of acquiring knowledge is more than the value of having that knowledge.

Right now, there is absolutely no incentive for running a node, so most people don’t do that. If the system is resilient, just a small group of motivated people can ensure its survival. There is actually good evidence that cryptocurrencies have that property. Even if 1 percent of the total user base are running nodes, there is still enough nodes that it would be insanely hard to take the network down.

But you can use economic incentives to sculpt consumer behavior – mechanism design – and we have a whole group at IOHK that does nothing but that. Over the next 5-10 years mechanism design will be applied to create monetary incentives for people to run nodes. A great example is the Brave browser. Just by changing from one system to another, the user can make part of the advertising share and have more control over their data and their privacy, and we’ve seen user numbers spike up for Brave as a result.

If that model is successful, we’ll observe a sea change in people’s perceptions about why they should own their data, how to host their own nodes, how to take control of their user experience. Some people are very tightly knit into behavior patterns, but you start with early adopters, you create the incentives in a way that they can find sustainable ways of using the system, and eventually those people onboard their friends and family and that becomes the dominant consumer behavior.

There is a big democratic experiment occurring right now with Blockchain and treasuries. A Blockchain prints money, and right now we give all that money to the consensus nodes. What if have a decentralized bank account and people can submit ballots to get funding? Dash has done this, PIVX has done this, and we are going to do this with Cardano. The value of having a treasury system is that now people have incentives to stay informed and think about what the best direction for the cryptocurrency is. That’s the new economy and the lessons we learn there can be ported to democracy as a whole.

Blockchain pluralism

UT: With regulations coming in, there is a move from the “wild wild west” feeling in the space to a more practical approach. Solutions like going off the chain or regulating token offerings may not reflect the pure ideology of cryptocurrency. Is there a sense in the community that this is a betrayal of Blockchain’s original principles?

CH: No, it’s not a betrayal of the original principles. People tend to take a particular application of a broad concept and say, “this is the only way to do it” like “this is the only true religion.” That’s a really bad deal. You have every right to have a different view – frankly, you should, because you are a sane thinking human being, and sane thinking human beings have the ability to disagree with each other and often do.

Now we have over a thousand altcoins; we have permission ledgers like Hyperledger Fabric. We have a lot of philosophies that are completely contrary to what Bitcoin is all about.

The STO revolution is about saying, “look, there are billions of people in the world who lost the geographic lottery and as a consequence, although they have the ability to create value, they can’t get access to capital.” But that person could issue a token, sell that token and use it to capitalize their idea on US markets.

The problem with ICOs is that they only cover a certain class of unregulated products. So, what happened was everybody contorting themselves in bizarre ways to try to cram regulated ideas into unregulated products.

There is no greater example than EOS. They raised $4 billion dollars and they say we have no fiduciary obligations, we owe you nothing, you could do whatever you want to do, and we could do whatever we want to do with the money. No reasonable person would think that’s ok. The STO makes sure that if you’re actually going to raise money and have fiduciary obligations to people, there’s a regulatory framework what works for both sides.

The reason why people aren’t doing traditional IPOs is that they were built in the 20th century. The regulatory framework is too cumbersome, too expensive, the reporting requirements are too high, and they are divorced from any of this technology that we’ve created over the last eight years. There needs to be a middle ground. There were some good ideas in securities regulations – insider trading provisions, proper disclosures of information, conflict of interest. Those checks and balances are good ideas, but all this bureaucratic, cumbersome mess that comes along with it is a bad idea.

With STOs, we can automate the bureaucracy so that it costs very little but gives access to capital on a global scale. That’s why I think there is so much excitement. ICOs were super exciting last year because people were getting rich, that always happens with a gold rush, but it’s not sustainable. STOs are sustainable because they are backed by real things – revenue flows, gold, stock, bonds. I think that’s a good step in the right direction. It’s philosophically a bit different from Bitcoin and will require different types of systems than Bitcoin, but in no way invalidates the whole notion that decentralization is good.

Shifting the tradeoff profile for the industry

UT: There is a Blockchain triangle of speed, decentralization and security – like the fast, reliable, cheap triangle where you can only choose two. Where does Cardano fall in that tradeoff? Or are you finding a way not to make that tradeoff at all?

CH: The tradeoff profile of any protocol lives within original research. Only original research can move that triangle a little in a direction that will be better at all of those dimensions. You can make it operate at less of a cost, get higher security and better throughput.

What we’ve done over the last three years for Cardano is engage academia and use an almost Dartmouth-sized research budget to move the tradeoff profile. First, we defined what exactly we are doing – what is a Blockchain, what is a network, what is a transaction, what is a programming language with respect to cryptocurrencies. Then, once we’ve defined them in a very rigorous way, we wrote a lot of papers.

The first step was saying, can proof of work and proof of stake ever have the same security model, or are they so different that you’d give up something when you go to proof of stake? What we discovered with our research is that proof of stake achieves the same security as proof of work. What does that mean? You can do everything proof of work does, but you don’t have to pay the electricity cost. That’s a huge tradeoff enhancement and we’ve been able to do that.

In terms of scalability, instead of it being a replicated system where everybody does the same work, make it a distributed system where the work is broken up among people. What’s the tradeoff of that? It’s availability. When you go from a single replicated notion to a group of people doing something, there’s always a possibility that one of your shards doesn’t show up and that basket of work is missing. But there are things you can do – like erasure codes – to chop it up in just the right way to make that tradeoff go down. There is a lot of great research trying to model this – RapidChain by Visa Research and Dfinity, what we’re doing with Ouroboros Hydra, OmniLedger, ELASTICO.

At IOHK, instead of taking a position on the matter, we said let’s have a dense research agenda. We will study how to do things off chain and on chain, and study how to shard the chain and be very neutral about different possibilities, and then look at which one will have the best tradeoff profile for what we want to accomplish. If it lives within the amount of decentralization that we want to have and the speed we want to have, then that’s the way we’re going to go and that’s what we’ve done so far.

It’s very expensive and time consuming, millions of dollars and 3 years, but we’ve published over 21 papers and I think we have another dozen that are in peer review at the moment. We’ve been moving the science of the entire field along, and we’ve seen a lot of people cite our papers. Real researchers, real conferences, real scientists are now all collectively working on this. Compared to where we are today and where we were 5 years ago, the tradeoff profile has been moved substantially, so we can do these things better and not give up as much.

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How Swiss Government Helps Launch ICOs Legally: Exclusive Interview

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Matthias Michel, head of regional business development of Canton Zug, on challenges and possibilities for ICOs in Switzerland
How Swiss Government Helps Launch ICOs Legally: Exclusive Interview

The "Cryptovalley" located in Swiss Canton Zug has become famous internationally as the place where citizens can pay for government services in digital currencies including Bitcoin. Long-term vision, strategy, infrastructure and government support are the factors which attract many entrepreneurs to Zug. Generally, Switzerland with its strong focus on innovation now attracts those who invest into new financial technologies including Blockchain.

We met Matthias Michel, Head of Department of Economic Affairs of Canton Zug at the Blockchain Leadership Summit in Zurich. Mr Michel agreed to talk to us about the challenges and possibilities for ICOs and Blockchain-based businesses in Switzerland

Cyril Gilson: Is it easy to launch an ICO based on the legal framework developed in Canton Zug with your authorities?

Matthias Michel: This question you should ask lawyers or members of the crypto association because they have done it and they can tell you. But it seems it’s possible because a lot of ICOs with big volumes have been created in Switzerland and especially in Zug. There’s a lot of lawyers, of fintech people in Zug and in Zurich, and a lot of knowledge on the subject.

CG: What seem to be the main problems, the main challenges, main hurdles in doing it?

MM: They say the main problem is working with traditional banks. You get a bank account and here banks hopefully want to be very compliant with regulations, and at the moment not every regulation is clear because it’s a dynamic evolution going on.

With the whole crypto technology, not every regulation is clear yet, so the banks will wait for clear regulations to have relationships with ICOs, to accept them and so on. It seems that’s the main challenge.

CG: Almost every day we hear some banker or representative of the banking community saying that cryptocurrencies are essentially a bubble and that Bitcoin is a bubble. In Switzerland what is the attitude of the banks and the government? How would you describe the attitude of the government and the banks in Switzerland?

MM: I cannot speak for the banks as I speak for our government. First, we think that Blockchain technology is just a part of the digital revolution, digital development. It’s a technology that can be used for good things and bad things, but you have to approach it.

Let’s take the example of the city of Zug. They thought — okay, we are eager to know what’s going on and you can only know a technology when you apply it. So they apply it to their own administration. So let’s say you can pay some expenses in Bitcoin in the city of Zug.

In my register of commerce, within my governmental department they say — okay let’s accept a company to be founded with Bitcoin, so it’s not in cash but a deposit of Bitcoin evaluated in Swiss francs, so let’s try it out because if you try it out you’ll learn. That’s maybe a symbol of our open access to the technology to learn, and after learning only if you know how it functions you can create the goods and the right regulation.

We as Cantonal government are not a regulator. The regulation is done on the federal level but we help the federal government find the appropriate solution.

We work in the task force together with the industry on how to approach this technology and how to do it in a smart and smooth way. Our aim is not to forbid it, but to enable it, giving clear regulation on what’s possible and what’s not.

For the industry, it’s important to have stability and to know what right and what’s wrong - that’s why the regulation is needed. We are working in a dynamic way. I mentioned these examples to show that we are open to this technology, which will be important for the future in any case. As the Chinese say, ‘You had better build windmills than walls.’

CG: Switzerland is a very decentralized country. How decentralized is it in terms of financial regulation?

MM: Our financial regulation is centralized. The country is quite decentralized in taxes, tax laws, in other areas. As different cantons and cities, we compete with each other as locations. We can handle a lot of key factors ourselves: taxes, universities on the cantonal level, transportation, infrastructure. We have a lot of factors, which we shape in our small states. Therefore, we want to be the best within our country to be able to compete with other cantons. We try out to attract industries of the future to get them based in Zug. That gives us a sort of competition within the country and competition leads to the best solutions.

So let’s say the register of commerce in Geneva will apply a Blockchain-based solution, then we apply one. That’s the advantage of decentralization that different states, 26 states, compete with each other for the best solutions.

CG: But what about competition with places like Singapore or Puerto Rico with its special taxation regime?  

MM: This global competition — that’s not a new thing. It’s now applied to the Blockchain community, but we lived for decades with global competition before and that’s not new.

And finally our thinking is that you cannot compete only with one factor at hand. If you have a business that needs a lot of natural spaces to build big plants — you won’t come to Zug or to Switzerland because we don’t have that much space. If you want to build a solar plant you will build it better in a desert, not in green Switzerland.

Maybe there are places in the world where you don’t pay any taxes at all, but if you go there you won’t find any talents. You need to have a combination of a moderate tax system, reliable politics, stability, good infrastructure, good schools, good universities — it’s always the combination, which can attract companies and people.

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Ex-Central Banker on Crypto: “There is no Limits to Where This is Going to Go”

“The way we think about money and earning a living is going to change”
Ex-Central Banker on Crypto: “There is no Limits to Where This is Going to Go”

Ex-central banker turned cryptocurrency aficionado and leader, Eugene Etsebeth gives us an inclusive insight into the psychological types and the mechanics of a Central Bank operations, fintech scene and its influence on governments in Africa and how ICO’s model is changing.  

The business unit head for Central Banks, ACH and Payments at Sybrin, Eugene Etsebeth worked at the South African Reserve Bank (SARB) where he founded the Virtual Currencies and Distributed Ledger Technology working group.


Eugene Etsebeth: About a year ago I left the South African Reserve Bank where I have become quite prominent as someone who understood cryptocurrency from a conceptual and technical point of view. You know the central bank was a very policy-driven institution and it has a lot of academics or researchers and auditor types. I was trying to bring a technological perspective to their thinking. When I was immersing myself in cryptocurrency I felt that they are missing a large piece. It was the technological piece but also it came from a slightly decentralized, almost libertarian thinking, giving them a different point of view.

So that’s what I brought to them out of my passion and interest in that space. South African Reserve Bank is a certain organism typical for most central banks. I mean you have banking supervision, which looks after the banking resources, and those are more auditors types. Then you’ve got your research, which are more your economic people and academics. Then in South Africa, we have exchange control so they do financial surveillance where there is not a free flow of money: those are the investigator types. Then you have national payments where they are mostly focusing on high value and low-value payments in the financial market, they almost ran a software or a system.

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So there are many different types of people, and I managed to bring them all together. I chaired the Virtual Currencies and Distributed Ledger Technology working group, the committee where we started to influence, talk to, or make an offering to the government.

Then out of that we also got involved in building some consortiums in the financial space. We as a central bank managed to find some developers interested in Ethereum and we worked with consultants to start contributing to smart contracts. A couple of years ago we played around with moving money between banks and the Central Bank on the Ethereum Blockchain.

Fast forward to now, and I was offered to lead the cryptocurrency slot at Sybrin, my current company. Their business is predominately in Africa, we have over 250 customers mainly banks, and we also run complete clearing houses of Zambia, Kenya, and Lesotho. We started to engage with some partners for cross-border remittances using existing cryptocurrencies.

Among other things, I was approached to do an ICO for a gambling entity based in Africa but ultimately I realized that to become an advisor in an ICO means moving to an unstable territory because all of it would be my own branch. I didn’t know how it’s gonna go so I pulled out of that.

Now we are gonna start engaging and looking into the Lightning Network.

The second tier framework that sits on top of Blockchains for me is very compelling, it almost works like the Internet protocol.

I think there is a lot of concern on how is that going to get market share or get people to use another wallet or another system, but I think market opening will come over time and that we will move over to Lightning Network type of behavior and we will start building applications on a second tier.

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Cyril Gilson: Is South Africa showing the rest of Africa the headway of fintech?

Fintech in South Africa

EE: The fintech scene in South Africa isn’t as strong as it looks. There are a lot of early startups, but I wouldn’t put it in the same category as for instance Israel or the West Coast. There is a big drive in millenials, like everywhere in the world, to be the owner of their own destiny. If they are computer programming literate they will probably take a risk early on. The fintech scene is prominent in South Africa, but I wouldn’t say it’s extremely large.

The central bank has created a fintech unit, but it has only three staff members, yet they are being more open into regulatory innovation apps. That’s the one thing that the startups are missing in the world: they are out, they are young, they have great ideas, but their regulatory and ecosystem knowledge is just missing. This is the cool piece that can help the ecosystem develop.

I am trying to think of examples. For me in the cryptocurrency space you have Luno. They have an exchange offering in South Africa, they started up and running about four years ago, and they have done very well. They are actually now based in London and have offerings in Singapore. So in the cryptocurrency space there is a little bit of movement. There are people engaging in crypto, probably as much as other developed countries.

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African dimension

CG: How about in terms of South Africa taking the rest of Africa along?

EE: I would say if there are any initiatives to take other countries along they are probably well concealed because everyone is trying to just look after their own house. I was in Rwanda recently, there I went to the innovation hub, where it’s a very big focus in Kigali to build both software and hardware innovation labs.

It’s almost a strategic decision by President Kagame to focus on cryptocurrencies and Blockchains.

There they are doing it very much on their own. I went there on a business trip, I went to go visit, but I would like to extend a hand in the community, but that’s more of goodwill rather than a national imperative.

There are national bodies, like the committee of central bank governors, that meets in Africa and they will talk about fintech and IT but that is just one element. It’s not organic.

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CG: Where would you put South Africa on a scale between Switzerland and China in terms of crypto regulation?

EE: Our position paper that came out in 2014 from the central bank wasn’t very helpful. It said its at your own risk and its a wait and see. That is still honestly the position.

Although when I look at these fancy maps of where its regulated and where its not, somehow South Africa is regulated it looks like because we have an exchange that its regulated, but on the outside, it’s slightly more just allowed to happen. We also have the added concern of exchange control which is unlike other companies. You aren’t allowed to just move money from cross-border, there is a lot of surveillance.

So to go back, I would say as a signal from the market, a big company called Sygnia they want to start a cryptocurrency exchange. They are picking up the correct signals from the regulator to make an investment in that regard. You know the one before, Luno, they took a risk. They were engaging a lot with the regulator early on but they couldn’t get any commitment from our KYC body called FICA.

They got quite far but they eventually got backtracked and it was at your own risk. We still are at that stage, although the central bank is making suggestions and names.

For instance, they say they will call them crypto tokens. I don’t know what that really means.

It just means they recognize it as a crypto token, that’s the language they will use and they don’t recognize it as a currency. It doesn’t really say much other than that they categorized it using their own categorization.

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ICO thinking

CG: Speaking about ICOs, there was a hype last year and they promised to disrupt finance, but it seems like now they are becoming more similar to what financing does in terms of equity they needed even before the presale or in many other aspects. Do you expect some new model changing the existing ICO model in the near future?

EE: You mean in response to the regulatory clampdown?

CG: Also maybe it will come out of some natural development, even from the inside the techniques are getting more and more oriented to mainstream...

EE: I am very excited about the ICO developments. I think it’s like cryptocurrency itself, the Bitcoins and some of the altcoins around them, it’s already a working use case that has billions of dollars of uptake. I think it’s a great future model. I think perhaps a greater responsibility should be placed on the people who start to randomize. I don’t like licenses, but you should know who they are, they should register in some shape or form because it’s a bit too scammy at the moment.

I think as a model it frees up liquidity a lot earlier, you can almost do an ICO within a day. You can create a method to raise an ICO in a short amount of time. You can offer in an exchange using a very simple protocol, the ERC20 protocol. I think for me its a case of that if a VC is doing it in a traditional sense, they better start moving quickly to an ICO thinking.

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Leadership required

CG: Do you expect more industries taking on the ICO model?

EE: I think there is no limits to where this is going to go. I think the human imagination is confined by what we know now, but it will become for our children, it will become more obvious how it’s matured. For instance, even here at this conference people are starting to offer ICOs and token sales for celebrities. And why not, anyone who adds value that you interact with, these things can be monetized.

I mean, money is really a form of communication, it’s almost a language. We have only known what we have known and know we have been introduced to a new way of money. I think this is going to change the way we think about money, how we earn money and how we earn a living.

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CG: Yeah but you are talking about cryptocurrencies being appealing to individuals rather than institutions and governments, the later would change in a slower manner. If at all - there are still this mass media stereotypes of all these crypto being scams.

EE: I think this is where it becomes very important for each individual to analyze the market, to read deeply. It’s so much easier now for you to make a prediction of what lies ahead of us. It may not be right, but we almost empower it because knowledge is so free.

We know as much or more than the previous controllers of knowledge. So I think that is going to set people apart, is by how they can predict and shape the future because I think people are complacent by thinking they have more knowledge. That’s certainly not the case.

I wouldn’t put too much emphasis on someone who has gotten to place in government by virtue of a bureaucratic career and who doesn’t know what the real reason may be why the organization was founded 100 years ago because it’s always morphing and changing. So too it might change not only growing bigger but it could grow smaller. It’s gonna take some courageous leadership going forward.

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Crypto Art For the Crypto Wealthy: Engaging New Generation of Art Patrons

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Digital records of authenticity and unique digital art are certain to change the nature of art collecting
Crypto Art For the Crypto Wealthy: Engaging New Generation of Art Patrons

Just a year ago, fine art was one of the more obscure subjects for Blockchain application, but in recent months discussions about how this new technology can help move the venerable industry forward (and bring in new sources of revenue) have heated up, with major players like Christie’s, Art Basel and Britain’s DACS joining the conversation.

In the world of fine art and other collectibles, the investment potential of a particular piece is largely defined by its provenance and authenticity. The existence of immutable, indestructible records on the Blockchain may encourage more people to see art as a viable and trustworthy long-term investment opportunity.

Perhaps even more intriguingly, Blockchain opens the door for digital art as an investment through the introduction of digital scarcity. A piece of code representing some form of artistic expression can be certified and stored as a unique digital object– an idea which is quite a leap from the “copy-paste” digital world most are accustomed to.

The concept is quite new, and the most profitable sale of a purely digital artwork to date may have been that of an exclusive CryptoKitty auctioned off at the Ethereal conference this summer for a very respectable $140,000. The auction in question was the first practical demonstration of the Codex Protocol, a decentralized registry for assets including not just art, but also fine wines, watches and other collectibles. CryptoComes spoke to Codex CEO Mark Lurie about his impressions from the auction and expectations of the protocol’s development.

Codex– the provenance scrolls

Katya Michaels: What is the main purpose of the Codex protocol? How has this been demonstrated at the Ethereal auction?

Mark Lurie: Codex is a decentralized registry for unique assets focused on art and collectibles in particular. It's really needed because this is the only asset class without a title registry, but a system of record is very important because the value of the piece in art depends on its provenance and history of ownership. Codex is a place where that information is stored and tracked. Once you have the title, you can access insurance, shipping, artists royalties, appraisals.

At Ethereal, we launched our bidding application and gave out the first Codex titles. I think the excitement about the auction proved that the crypto people want to buy and invest in art as an asset class, especially if you give them an easy way to bid and track ownership.

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The CryptoKitty code

KM: Historically, patronage of the arts had been undertaken by contemporary elites. Today’s tech entrepreneurs seem to be in that position, but the question is how the art world can attract their interest. Will crypto and blockchain technologies encourage them to get involved?

ML: Collecting art is human nature. You just need to deliver the kind of art that appeals to the new generation of wealth. In the case of tech, maybe they don't like the same things that the traditional art industry has been selling them, but they clearly like CryptoKitties, they like digital art and they like the idea that digital art can be scarce.

When you can make digital art scarce and when you can prove original ownership of unique art, it becomes an asset class that has value. Digital art is a really exciting new category. At the auction, we sold about $190,000 worth of digital and physical art. For the crypto community, it’s exciting to see a way to buy art that is most convenient for them, as well as a way to be confident about the resale value of what they buy over time.

CryptoKitty by Guilherme Twardovski
CryptoKitty by Guilherme TwardoWski

KM: Out of those $190,000, $140,000 was brought in by the CryptoKitty. Can we consider it a win for art– that the biggest sale of the auction was a digital cat?

ML: I think we can consider it a huge win. It proves that digital art is going to be a big art investment category and that artists are going to be able to make a living producing it. It's a whole new medium. That's very exciting.

A fair share

KM: Do you believe that Blockchain platforms will facilitate not only big auction purchases but also create new revenue streams for less known artists producing smaller works?

ML: Absolutely. This is one of the things Codex hopes to make possible.

KM: Perhaps it could also enable artist “ICOs”– mechanisms through which an artist could raise money for their next project by selling shares in the work.

ML: I think the idea of benefactors or the public commissioning art is something that's as old as time. Artists could certainly do an initial art offering. This can also be done with existing artwork- we have already partnered with a few companies that will sell shares in pieces to be owned collectively. People who have a Codex title be able to easily access fractional ownership clapboards.

Garbage in, garbage out

KM: Though highly secure and immutable, Blockchain is still a database– once the information is in there we can see the chain of events, but what prevents people from putting in fraudulent information originally?

ML: Today, it’s not that fraudulent pieces aren’t out there, but that good pieces have good proof of provenance and evidence of authenticity. I don't think you need to stop the garbage. You need to raise up the high-quality stuff. As long as the buyer can see that there's good evidence about the authenticity of a piece, that the item has been validated by the community and that it was sold by Christie's in the past– that’s what we want to accomplish.

There’s an aspect to the Codex protocol where appraisers, artists, galleries and auction houses get rewarded with tokens for validating pieces. They are rewarded for verifying that the information about a particular piece is correct. I don't think it's necessary to prevent garbage. All that's necessary is to empower people to tell the difference between the good stuff and the garbage.

Beyond provenance

KM: What are some of the other ways, besides rewards for validation, that the token is used on the platform?

ML: The utility token is used to access and change the database. If you want to transfer a title, add a lien to a title, add insurance or request an appraisal, those all require tokens. The fees are used for rewards to validators who make sure that the items in the database are accurate and vetted.

KM: What are some examples of third-party applications that can be built on the Codex platform?

ML: There are several partners who have announced applications already. One is an appraisal application, so you can get an overnight appraisal on your piece. Another is an asset back lending application, so you can get a loan against your piece. As mentioned before, there is a fractional ownership platform, so you can tokenize and sell shares of your piece.

Another is a company called Dust that connects physical items to digital records. They spray inexpensive industrial grade diamond dust on a piece. It's invisible to the naked eye, but you can scan the crystalline fingerprint with an iPhone and prove that the piece is actually the one that's recorded on the Blockchain.

KM: How soon do you think will major players like Christie's and Sotheby’s get onboard with ledgers like Codex and crypto payments?

ML: I can't say exactly, but I think it'll be sooner rather than later. Once they see it in action,  once they see the benefits and that it's stable, they'll get onboard.

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Portrait of the crypto artist

While traditional galleries and auction houses figure out how their business model will be affected by Blockchain art platforms, it is difficult to say where artists will emerge from the fog of rapid technological change. Undeniably, Blockchain holds a lot of promise for giving creators more control over their art and a greater share of the profits. Cryptograffiti, one of the artists who contributed work to the Codex Ethereal auction, shared some thoughts on the issue with CryptoComes over an e-mail interview.

HODL by Cryptograffiti
HODL by Cryptograffiti

KM: Do you think today’s tech elite can become the new generation of art patrons, supporting not just particular pieces but the art industry in general?

Cryptograffiti: Absolutely, however, I think to some extent it's cultural.  For example, my hometown of San Francisco is not known for being at the forefront of the art scene because people don't display their wealth as much as other cities like New York. Many of the SF/Silicon Valley tech elite have made their money while sharing a room with two other developers and another one who sleeps on the couch.  

KM: Is there a particular kind of art the crypto-wealthy audience responds to? Is crypto art more compelling for them?

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C: I think crypto art has proved to be compelling for a number of reasons. With the subject matter being intangible, it provides identity and emotion to something people are very passionate about. Many are proud of their involvement in crypto and what it stands for and want to put that on display. Artwork, and especially limited-edition artwork, is an investment that overlaps well with the controlled supply of cryptocurrency's beginnings.

KM: What is the most important way that Blockchain changes the art industry?  Establishment of provenance? Protection from theft?  

C: These are huge. Also, democratizing investment in artwork and providing additional revenue streams for artists. And the ones we don't know about yet!

KM: Cryptographic technology makes digital scarcity possible- are you excited about the reality of unique digital artworks? What are some specific applications that you are looking forward to?

C: Yes, however, we have a ways to go.  For instance, right now if you own a digitally rare item like a CryptoKitty and the parent company goes under, what you really own are just lines of code...not the cute cat to which you've grown attached. This will change as the various platforms upon which these projects are based scale.

KM: Does Blockchain open doors to new revenue sources for artists? How about for less well-known artists, who are not participating in the big auctions and multi-million sales?

C: New revenue sources for artists were one of the reasons I was initially drawn to the space.  Several years ago, I started attaching QR codes to street art to experiment with receiving instant patronage from passersby.

While micropayments haven't yet lived up to the hype, they will be game-changing. Poets can charge by the poem, journalists by the article, musicians by the listen. People will tip a driver that lets them merge– any situation where a positive experience warrants a tiny show of appreciation.

Smart contracts will also mean artists don't have to die to earn a living wage. Right now if I want to secure royalties on future sales of one of my works, it is prohibitively expensive due time, contracts and lawyers involved.  

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KM: What would be your advice to fellow artists in terms of joining Blockchain art platforms and accepting cryptocurrency?

C: My advice to fellow artists is to jump in and experiment. Recognize that much like the cryptocurrencies themselves, many of the blockchain art platforms will not survive.  Thus, do some research about the people involved and what they stand for. It's a really exciting time for art + crypto.

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Punk #754 by Larva Labs

Redefining collectibles

Amidst the excitement generated by Blockchain applications, it’s important to keep in mind that the same principle applies as to any other database or ledger– garbage in, garbage out. An immutable record of an artwork’s provenance is of little use if the record is fraudulent or erroneous to begin with. Undoubtedly, as Blockchain protocols for art records become more commonplace, mechanisms will develop to address such challenges.

Digital records of authenticity and unique digital art are certain to change the nature of art collecting. With an increased focus on art as capital and some collectibles, such as CryptoKitties, existing without any physical manifestation, the relationship between the personal experience of art and its perceived value is likely to be redefined. At any rate, Blockchain art startups are carving out a niche in the global art market, already valued at over $60 bln– something certainly worth considering for the artful investor.

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