Blockchain Economic Event Talked Blockchain and Digital Currency
On Thursday, April 19th, FinTech Canada hosted their full-day conference, Blockchain Economic Event. The conference was packed full of insightful presentations by an amazing array of speakers that spanned two large halls in Toronto’s Sheraton Centre Toronto Hotel. Despite back-to-back presentations, the audience stayed loyal till the very last and really appeared to enjoy the value that was delivered to them that day.
Chris Burniske opened the morning with his keynote speech on the book, “Cryptoassets: The Innovative Investor’s Guide To Bitcoin And Beyond, that he recently co-authored with Jack Tatar. The additional topics discussed ranged from mining and Initial Coin Offerings, to regulation, anti-money laundering and philanthropy via blockchain. Noteworthy presentations included those by Iliana Oris Valiente of Accenture on “Blockchain adoption in enterprise” and Maxwell Sanchez of Veriblock on “securing the blockchain using a Proof of Proof protocol.”
Further, Adam Back of Blockstream and Alena Vranova of SatoshiLabs kept crowds incredibly engaged with their deep knowledge-sharing on developments in bitcoin and on the Trezor wallet, respectively.
Following individual presentations, the event neatly rounded off each speakers’ skill sets to collaborate in themed panel discussions, after dinner, from 6-9pm.
Panel said volatility is not a concern with cryptoassets
Panel one consisted of Oliver Gale of Bitt (second from left), Scott Howard of ePic (third), Andrei Poliakov of Coinberry (fourth), Zach Justein of Paycase Financial (fifth), Peter Conroy at Shorcan DCN/TM (sixth), and was moderated by Mawadda Basir of ColliderX (first from left). The topic was about Cryptoassets and panelists discussed buying, selling and mining cryptoassets.
Following brief introductions, panelists explained how they got started in the crypto industry and what their first and favourite cryptoassets were. Popular responses included Bitcoin, Cardano, Aion and Etherum. Interestingly, all panelists had varying reasons and backgrounds that led them to the space.
Peter Conroy of TMX was a particularly notable presence on this panel, alongside Zach Justein of Paycase; TMX’s subsidiary Digital Currency Network is set to launch a digital currency platform in collaboration with Paycase Financial.
“The traditional financial world is ripe with fierce competition but this community is completely different. Our quasi competitor is also a client,” said Peter in response to what the implications of this partnership were. “We want as many partners as possible.”
When asked what they thought of the volatility currently facing digital currencies, each of the panelists concluded that it wasn’t a problem.
From the perspective of an exchange, they agreed that volatility is “gold for traders.” leads to “increased transactions,” and that it produced “very interesting analytics.” In any situation where there was a high volume of cryptoassets, volatility was less of problem and, with more efficiency, one is less subjective on price.
Banks have an opportunity to lead the charge in digital currency
As the audience awaited the arrival of Don Tapscott, Sunny Ray hosted an insightful and dynamic fireside chat with Ruben Sahakyan of GMP Securities. They opened the conversation by discussing GMP’s activities in the space, particularly, their work with Mike Novogratz’s company Galaxy Digital. When asked why GMP was Novogratz’s choice, Sahakyan went on to explain that GMP offered him the option of a “reverse takeover” deal structure whereby a company is no longer operating a business but is looking to be acquired.
“Reverse takeovers are almost twice as fast and half as expensive as a traditional Initial Public Offering or IPO.” Sahakyan said.
When asked about institutional interest and working with banks, Sahakyan shared some interesting feedback. Francis Pouliot of Catallaxy also joined the stage to share his insights.
When Sahakyan flashed back to about one year ago, he can remember there being close to zero interest in blockchain and digital currencies. There was also a huge divergence in the level of awareness and education about the industry in the institutional space.
In some early conversations, Sahakyan had to explain what a blockchain was. In others, he could jump right into in-depth conversations about the impacts the technology was having. However, following the great bitcoin boom of December 2017, the appetite suddenly changed to the point where institutional investors were willing to invest in nearly anything.
In terms of the ability to work with banks, Sahakyan admitted that it has been much easier for blockchain companies to work with the likes of the CanAccords, GMPs and TMX’s of the industry as banks are too big and just not as agile. He drew an interesting parallel with the cannabis industry facing similar restrictions at first. However, he sees hope as he referenced how banks were hiring analysts specifically to study cannabis stocks.
Pouliot was openly vocal about his struggles with banks and confessed that his own bank account had been shut down. He commented on how relationships above board appeared to have improved, but that it was far from it with banks going after payment processors.
“I hope this mentality shifts and I look forward to working with the first bank in Canada to accept blockchain companies,” Pouliot concluded, to huge cheers from the audience. “This bank will be a first-mover and have a tremendous advantage.”
How to keep the blockchain safe while scaling quickly
Following cheers, the event transitioned into a panel discussing two very major issues surrounding blockchain development: scaling and privacy.
Panel two consisted of Justin Fisher of Veriblock (second from left), Kesem Frank of Aion (third), Alena Vranova of Trezor (fourth), Paige Peterson of Zcash (fifth), Adam Back of Blockstream (sixth) and moderated by Genia Mihalchenko (first from left) of the Blockchain Research Institute.
When asked about the importance of scaling, the speakers agreed that they needed to add more transactions to various networks without them being slow.
“If we want to fulfil the dream of helping the unbanked, bitcoin needs to scale,” said Alena Vranova of Trezor. “I’m excited about Lightning Network. It’s a necessity.”.
The speakers then went on to answer specific questions (please note that all responses are paraphrased):
Paige, what can you tell us about the difference between Zcash and other privacy coins?
Peterson confirmed that ZCash used a “zero-knowledge proof” protocol and that other privacy coins implemented their privacy in a completely different way. Dash, for example, uses a coin juggling system and Monero chooses other transactions to mix between.
Alena, what are your thoughts on GDPR and European privacy laws? How should companies work with these new regulations?
GDPR is a new directive of the European Union that forces all private companies to adhere to new rules like the “right to be forgotten”. For example, a company like Facebook is now required to delete everything including metadata.
Companies are advised not to “collect what you can’t protect”. They need to ask if they really need to know data of the person. This is where the use of crypto tokens become important. Companies can implement a hardware wallet that allows people to access their private accounts without giving up information like a username and password that can be hacked.
Kesem, from AION’s perspective, can you speak further to scaling?
Blockchain is not shaping up to be a single network. We’re seeing phenomenal projects and the question is how do we get them to become a cohesive fabric rather than isolated islands that don’t talk? How does blockchain displace mastercard/visa? We have to find a very advanced solution and that’s interoperability. It enables scaling because it understands that we’re already living in a multi-chain world.
Justin went on to discuss Veriblock’s Proof of Proof protocol for scalability from a mining and security angle.
Proof of Proof is a new consensus protocol. The idea is simple but the implementation isn’t. Technically, it creates a new form of mining for which you don’t need a high-powered device. You can secure transactions on a blockchain with a greater security blockchain which then becomes a proof of proof blockchain. Decentralized, transparent, trustless and permissionless–DTTP.
These four attributes form the cornerstones of immutability and allow Proof of Proof miners to compete and get a reward for making it to the next block.
In a final question on how it could best be scaled for the masses, there was widespread agreement about Lightning Network potentially being the solution. There would need to be better research around UX, education provided on new terminology and easy-to-navigate token economies.
“The best blockchain experience for my mom is one that makes her ignorant that she’s using blockchain,” said Kesem Frank.
Don Tapscott: blockchain will change how we see big corporations
The moment for the much-awaited keynote presentation had finally arrived just minutes after 7pm and Don was greeted by a packed room and huge applause. In true Don style, he proceeded to blow the audience away with witty quips and valuable information.
The main themes of his keynote included the birth of a fourth industrial revolution and several sister technologies playing a major role in our advancement as a society today. In all of these technologies, blockchain would be the fabric upon which the rest collaborated and grew.
“Blockchain is the internet of value” said Tapscott. “It’s bringing major contributions to the Financial Services industry,”
“We’ve had a double-spend problem for some time now that has required a middleman,” he continued.
However, middlemen create centralization and a proverbial “honey pot” ready and vulnerable to being hacked. In a new blockchain world, banks have an opportunity to help in the decentralized aggregation of individuals’ data.
Blockchain also makes it easier to transfer and lend value via peer-to-peer lending, micropayments and embedded payments via smart contracts.
“While ICOs are not a term I particularly like,” said Tapscott, “they have made crowdfunding possible on a blockchain,” thus contributing to the ability to fund and invest on a blockchain.
Underwriting continues to be a huge opportunity in the space and those working in the insurance, banking, auditing and accounting industries will need to prepare for the revolution. They will be replaced and/or will need to re-educate themselves to stay relevant as blockchain technology enables the triple-entry accounting process, i.e., debits, credits and verification of a transaction all at once.
In closing, Don concluded that blockchain would completely revise the way we see big corporations today. Our inherent structure would change from conglomerates to networks and Silicon Valley would be distributed across the world in the form of incubators, entrepreneurship, leadership with countries like Australia, Canada, China, Dubai leading the charge.
Blockchain startups must be part of the regulatory solution
A hard act to follow, the event moved on to its fourth panel discussion of the night around the legal and regulatory impacts of blockchain including taxation. The panelists included Ross McKee of Blakes Law (second from left), Matt McGuire of AML Shop (third), Albert Luk of Haxa Blockchain (fourth), Gary Clement of ACFCS (fifth), and was moderated by Rachel Lam of Polymath (first from left).
In a couple of quick questions due to a lack of time, Rachel connected with the panel on the state of the Initial Coin Offering (ICO) landscape and ICOs falling into the category of securities. Each of the panelists agreed that in spite of the wild west state of the industry, this is not a time to go light on due diligence.
Regulators will be looking closely at factors like public interest, how money was raised, whether there were banking issues and will be heavily focused on what could or did go wrong.
As for the impact on global regulations, panelists appealed to the public with thoughtful questions like, “Regulation is here, do you want regulation forced on you or do you want to give them [regulators] suggestions?”
Other panelists commented on how there was a greater appetite to move to friendlier countries with lesser regulation.
In conclusion, the panelists agreed that the issuers of ICOs had a moral obligation to do it right with KYC and a risk assessment. They need to be a part of the solution.
The public needs more education on initial token offerings (ITOs)
On the final panel of the day there was Eric Lifson of Skrumble Network (second from left), Alan Safahi of ZED Network (third), Tone Vays (fourth), Alan Wunsche of TokenFunder (fifth), Hartej Sawhney of Hosho (sixth) and was moderated by Brian Phan (first from left).
Another quick panel, Brian asked the panel why projects were doing Initial Token Offerings (ITOs) and when they shouldn’t be doing ITOs.
While most panelists agreed that the ITO was exciting because companies no longer had to rely on venture capital funding, masses still needed to be educated. Tone Vays, the ever-outspoken antagonist of the panel, was of the opinion that in spite of the innovation behind the fundraising mechanism, it was taking money from unsolicited investors and that it didn’t have much staying power. However, ultimately, the majority believed that a valid product and the right qualifying questions would help determine whether a token was worth investing in or not.
The event concluded with loud applause from a very successful day and lots of value delivered to a happy audience. One guest said, “I will come back for the networking alone.”
Watch the FinTech Canada website for updates on their next event.
All photos taken by Sanjay Chauhan.
Editor’s note: this article was updated to reflect the fact that Chris Burniske gave the opening keynote.
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