Distributed Markets conference: a lens into the current state of blockchain
Blockchain is a very young technology and we are just scratching the surface of what is possible. At the Distributed: Markets conference in Chicago, the speakers explored both the current state of the technology and what its future could hold.
It was an interesting view into this fascinating technology and here’s what I learned:
Enterprise adoption of Blockchain is the next big step
The conversation around blockchain has changed dramatically over the past few years. Before if people knew about blockchain, they knew about Silk Road and dismissed the tech from there. Now blockchain technology has proven its value through the crypto market. Its business applications are just now emerging.
As Laurence Cook from Nanopay stated, “Blockchain is facing a different challenge today. People used to not believe in the technology. Now they have had a bad experience with it or are afraid of the risk.”
This hurdle is another place where startups have a huge advantage over established companies. With their ability to quickly adapt and lower risk aversion, it is likely that the growth of blockchain technology will cause some startups to displace established companies that fail to adapt.
Non fungible tokens are growing up
By now you’ve probably heard about CryptoKitties and some of its copycat systems. As fun as those are, the real excitement is in seeing non fungible tokens applied to the real world.
One of the most interesting applications discussed was the introduction of non fungible tokens to commodity trading. At first this seems a little strange, but as you get into the market you learn that despite the remarkable similarities between commodities, there are differentiators that can be attached to add value to specific commodities.
One of the panelists, Chris Ginsbach, works in natural gas and uses an extraction method that is better for the environment. Although natural gas is a commodity, this unique extraction method adds value to it. With the attachment of non fungible tokens, that value will be transparent to the end user and thereby drive up the price of that specific commodity in relation to other gas.
Regulation for crypto and tokens is massively important
There will always be bad actors looking to take advantage of any technology, and that has happened with crypto. Based on everything from hacks to fraudulent ICO’s, the technology has matured to the point where it needs regulation and standards that can help it continue to grow safely.
There has been a widespread push for regulation from world and state governments, but self regulation is currently being encouraged by the US government and the blockchain community.
Perianne Boring and the Chamber of Digital Commerce is working on this challenge. With input from industry experts and government officials, the Chamber is creating several alliances to tackle self regulation, such as the Smart Contract Alliance and Token Alliance.
Within the cryptocurrency space there’s a lot of concern around ICOs. ICOs are an amazing new opportunity for companies to gain access to new assets and capital. On the investor side, it’s access to new opportunities that used to only be accessible by a select few. This is absolutely amazing, but comes with perils.
Ignoring bad actors in the space, there are still pitfalls that investors and companies can fall into. Some companies see ICOs as an opportunity to raise funds without diluting ownership, but that can come at the cost of token holders. Also, with new regulations being applied to the space, it is paramount for new ICOs to ensure they’re in compliance. Lawyers are essential to any new venture in this space.
Finance is taking this seriously
After meeting and talking with the attendees and speakers, it was fantastic to see how many of them were in finance, either working on projects or trying to get involved. There’s a lot of effort being put forth to bring blockchain to financial institutions, and I am expecting to see serious headway made in this area soon.
Blockchain and tokens are still crazy fun
Admittedly, finance isn’t considered an industry that attracts creative people or inventiveness. But with demos of Blockstack, Metronome.io, and others, it’s clear that the exploratory and innovative spirit is alive and well.
The possibilities that blockchain will “Reboot the capital markets”, “create trillionaires”, and “be bigger than electricity” were presented, making clear the transformative potential of this technology. It’s the early days of this tech and we really don’t know what the future holds, and that is incredibly exciting.
