What you need to know
The summit showed how events like this should be done while providing food for thought for casual observers and blockchain buffs alike.
The Taipei Marriott Hotel played host to two days of cryptocurrency and blockchain effervescence this week, ramming home the carnival-cum-circus nature of the space and the irresistibility of its star turn acts.
The 2018 Asia Blockchain Summit, organized by the Asia Blockchain Alliance, the brainchild of “crypto congressman” Jason Hsu (許毓仁), was a resounding success, attracting more than 2,500 attendees each day — some of whom may have even shelled out the US$500 asking price of a ticket.
A riveting agenda focused on conceptual and technological issues rather than crypto token sales pitches, the event ran almost to time, and achieved its ultimate goal of accelerating interaction between regional crypto stakeholders.
Key takeaways include that the Taiwan government is increasingly on board with the island's efforts to evolve its blockchain industry, dispatching National Development Council (NDC) Minister Chen Mei-ling (陳美伶) to the opening event, along with vice-ministers of the Ministry of Economic Affairs and Ministry of Science and Technology, as well as the chairman and deputy chairman of the Financial Supervisory Commission.
The message from the latter was clear: utility token offerings are all good, anything that we deem to be a security is a non-starter. Quite where that leaves projects that straddle the middle ground remains to be seen.
NDC Minister Chen announced that the commission is working to develop policies that will connect blockchain companies and resources with different industry sectors, offering an indication of the increasing acceptance of the technology among policymakers.
Hsu said in his opening remarks that he intends to put his campaign financing donations where his mouth is, i.e. on the blockchain, and hopes other politicians will do the same.
Hsu told The News Lens that Taiwan’s Self-Regulatory Organization (SRO) now has nearly 100 members, comprising all the major players who maintain a presence here, and that the SRO is holding bi-weekly meetings to discuss regulation with the FSC.
He also said that he “will definitely run” in the 2020 general election, and is contemplating running on a platform that promotes integrating blockchain into the operations of a Taipei constituency that he will stand in.
“When I run for re-election next year, I want to develop a blockchain district or zone in Taipei that can experiment with ideas, perhaps the district I represent, where some kind of community coin can be issued that will allow entrepreneurs to reap the benefits of the token economy,” Hsu said.
I’ll do my best in offering some thoughts on the rest of the conference, albeit from very sporadic opportunities to bear witness. As with all things crypto, observing was a perplexing task that required sifting the wheat from the splutter-inducing chaff.
The smoke-and-mirrors nature of the space was best evidenced by enterprising pre-ICO founders sidling up to crypto wunderkind Ran Neu-Ner while he was sitting in front of his CNBC signboards, grabbing a few words with the Crypto Trader host, and running their own cameras to capture the moment they made it onto CNBC.
Joking aside, Alex Gladstein, Chief Strategy Officer of the New York-based Human Rights Foundation, a nonprofit that advocates for human rights in closed societies, struck the most resounding chord from an ideological perspective.
In a keynote on the second morning, he painted a miserably bleak picture of the totalitarian agenda being pursued by the Communist Party of China, from artificial intelligence (Ai) aimed at predicting crimes before they occur to the ultimate smart surveillance panopticon being tested on the pitiable populace of the Xinjiang Uyghur Autonomous Region, and credit as a means of social and political control.
He turned on its head Jack Ma’s assertion that “Bitcoin is a bubble” and “blockchain is for real”, reinforcing that without Bitcoin’s inherent properties of being open, permissionless and decentralized, many blockchain projects onboard the technological inefficiencies of blockchain without the critical benefits.
“Next time you get an invitation to a crypto conference in an authoritarian country, ask yourself: ‘What would Satoshi Nakamoto do?’” Gladstein asked. “If you don’t want the WeChat panopticon to ruin your children’s lives then study Bitcoin for a free future.” [The News Lens will run a more expansive Q&A with Gladstein shortly].
That dichotomy of centralized versus decentralized (via distributed) control provides a useful framework in which to parse the push and pull of ideas playing out at this conference and the crypto space as a whole.
As illustrated by Gladstein, smart cities encapsulate how authoritarian governments can leverage technology, including blockchain and AI, to better monitor and control their citizens.
In the talk “Rethinking Smart Cities in the Age of Blockchain”, Boyd Cohen, CEO of the Blockchain Cities Alliance and blockchain-based mobility application IoMob, suggested blockchain could act as “a great equalizer” for Americans to push back against the centralized implementation of early era smart city solutions by the likes of Cisco and IBM, or indeed municipal authorities themselves.
Cohen suggested that smart cities must embrace decentralization to remove municipal dependence on monopolistic and oligopolistic infrastructures, encourage innovations such as the implementation of “liquid democracy” (currently being trialed in San Francisco) and fractional ownership, and reduce the risk of centralized infrastructure hijack.
The book author and smart cities expert is set to release a ranking of the world’s top 10 blockchain cities July 16 that includes Dubai, Hong Kong and Singapore as Asian representatives.
In his talk, Cohen highlighted that Dubai has committed to adopting blockchain-powered government, and by 2020 aims, according to Forbes, “to [have] all visa applications, bill payments and license renewals, which account for over 100 million documents each year, transacted digitally using blockchain”, in the process saving some US$1.5 billion in bureaucratic costs per year.
Sitting down with Cohen, The News Lens asked if his blockchain city ranking took into account whether governments implementing blockchain projects in their cities were authoritarian or democratic, and how this might play into the centralized versus decentralized debate.
“Within the criteria of national context I incorporated the regulatory environment, whether the city is a good place to do business, and transparency,” Cohen said. “For me there is a direct correlation between embracing blockchain and embracing transparency — some countries would have scored way higher on the ranking if they were in a smarter country in that regard.”
Cohen’s treatment puts Dubai towards the back of the blockchain city top 10, sees Singapore do “extremely well”, and eliminates Shanghai from the list. Taipei did not make the original list of 18 cities eligible for inclusion, which was based on ICO activity and other measures of entrepreneurial activity related to blockchain.
Sexy crypto banking
KenoteFormosa Financial could be instrumental in putting Taipei on Cohen’s global crypto map.
The Taipei-based crypto bank aims to act as a conduit for financing between traditional banks and the crypto community, in the process offering innovators vital tools to hedge their exposure to crypto markets, while also providing access to a deep pool of liquidity with which to expand their businesses.
The company already has a banking partner in Taiwan, and is working on Know Your Customer’s Customer (KYCC) frameworks to provide Taiwan’s conservative finance chiefs with the peace of mind to work within a developing anti-money laundering framework.
That framework, earmarked to be finalized before a November visit to Taiwan by the Asia Pacific Group on Money Laundering, is set to demand that banks prove the source of any crypto funds, though it is not yet clear how many transactions back up the blockchain crypto companies might have to engage analysis partners to prove.
According to Formosa Financial co-founder Ryan Terribilini, the bank will also provide secure storage for blockchain innovators to hold their ICO funds, eventually linking those funds to debit cards enabling the integration of corporate custody and payments services.
Total disruption or incremental adoption?
Elsewhere, a panel on “How Blockchain Changes Entertainment Industry” broke into a debate over whether blockchain should be viewed as a vehicle to entirely overhaul existing intermediary services such as Spotify, allowing artists to connect directly with users and receive direct compensation for their work, or as an enabling layer built on top of existing ecosystems that offers incremental benefits.
Panelist Cristof Wittig, President of the LGBT Foundation and CEO of Hornet Networks, which operates an LGBT app with about 25 million users, reiterated the problem of porting blockchain into existing centralized systems in that it provides technical downside without service-driven upside, save for authentication of the identity of copyright holders.
“This is not an enhancing technology,” he said. “Blockchain will do away with everything we know and we start from scratch. We have hype over the possibilities, but be realistic, the tech doesn’t work yet and the regulatory environment is not here yet. The focus will be on quality projects that enable new business models, but it will take time, we are now in the phase when the Googles and Amazons were born — it will be a longterm play.”
Jeff Huang, acting in his capacity as the founder of Mithril, offered a typically forthright assertion of the need to move in the now, while admitting that tokens in entertainment space do not replicate BTC’s properties.
“An organization still needs to verify the token, and if that becomes big enough, then you are back with the centralization problem,” he said, adding that while he doesn’t want to give up on the BTC ideal, speed requires a compromise, and that at least artists should be able to receive compensation for their work and a means of tracking fan interactions.
The continual transaction pileups on the Ethereum network, driven by the popularity of CryptoKitties and other crypto games, are testament to how far the technology still has to go to solve the scalability riddle that will unlock the type of transaction-based blockchain required to directly connect artists with their audience.
Talking to The News Lens on the sidelines of the conference, Wittig emphasized how blockchain’s potential to offer secure data protection solutions offers a platform for the LGBTQ community to store and disclose details of their sexual identity and orientation, which can then be tracked in order to prove the size, composition and transactional activities of the community itself — in the process offering LGBT people the thing they are so often denied: visibility.
“We don’t even know how many LGBT people there are, what their status is, in terms of gender fluidity or out and not out,” he said. “This is a ledger that can help quantify that. In the U.S. the census wants to take away the question about sexual orientation and then we become invisible, which is always an entry point for discrimination.”
Wittig is pioneering an open source LGBT token that aims to safeguard the identities of the LGBT community while offering them visibility levels controlled by the individual.
“A second element is purchasing power where you can pay for services with the LGBT token, which will allow businesses and brands to understand LGBT consumers. Airlines make maybe 10 percent of their revenue from LGBT, 30 percent of their staff are LGBT but they would never talk about it. They know everything about their demographics apart from about this community — they are trying to make it disappear,” he said, adding that the token will also act as a means to crowdfund social impact projects.
The LGBT token is a positive note to end on, and a reminder that crypto land is a rollercoaster that chunters through sunlit uplands before performing nuts-in-face dives into dark foreboding caverns.
There was of course, a lot more to the summit than there is space to present here, but the dynamic between centralized and decentralized visions of how blockchain should and could be implemented, between the tech as a force for total creative destruction over incremental gains, provided for a fascinating could of days.
Yes, the crypto space is a tumescent testament to capitalist greed, but it also serves as a powerful mirror to the overarching battle of our times: democratic liberalism and people-first solutions versus for-the-man authoritarianism. So if you’re wondering where to put your next round of investment, please do ask, “What would Satoshi Nakamoto do?”