In what felt like a surprising twist to a blockchain panel last week, every panelist emphasized that blockchain, the buzzed-about public ledger system, was not a universal solution to all recordkeeping or data issues. Or, as panelist Tone Vays put it, it’s not an “ultimate unicorn.”
That was pretty much the one thing the panelists agreed on. They gathered on Tuesday night at George Washington University to discuss blockchain basics and applications. Around 40 people attended the event, hosted by the MIT Enterprise Forum of DC & Baltimore and sponsored by Women in Housing and Finance (WHF).
Moderator and former WHF president Carol van Cleef first asked the panelists, “What is blockchain?”
Darrell Duane, the organizer of the DC Blockchain Users Group Meetup and founder of local startup Identity Innovation, defined blockchain as “an immutable record of activity.” Jonathan Levin, cofounder of New York-based Chainalysis described it as “any database tech inspired by bitcoin.”
van Cleef then turned the discussion to panelist Kyle Burgess, director of operations at education organization Consumers’ Research, for information on how blockchain works.
Burgess explained that blockchain has a number of uses. Its main draw is cutting out the intermediary for many services: money can be paid directly without a bank and deeds could be transferred directly to the new owner. Burgess explained this transfer is instantaneous, so when it comes to money there’s no waiting periods.
Vays, a former Wall Street risk analyst based in New York City who was something of a instigator at the event, was less impressed by blockchain’s money transfer speed: “Your email got to you in seconds in 1997. So could have your money. [Money transfer time] is a regulatory issue.”
Burgess also explained how blockchain can be used to build “smart contracts,” which the local Cryptocurrencies 2.0 meetup is experimenting with.
Derek Tiffany, technical manager at D.C.-based 3Pillar Global, which hosts the cryptocurrency and market, GX-COIN, spoke about the blockchain bandwagon and lack of understanding around it.
“I have a lot of people who come in and say they want a blockchain,” he said. “But when you get down to it, they don’t.”
For some, difficult-to-trace currencies provide an opportunity: Allen Pulsifer, CEO of D.C.-based Creda Software, Inc., is currently developing a new cryptocurrency and blockchain called CredaCash, promising complete privacy.
For Vays, the use of cryptocurrencies is a political act, a way to “push back on regulations that [have] gotten very out of control.”
Others believed the rise of cryptocurrencies complicate law enforcement, especially given how bitcoin was originally popularized by online black markets.
van Cleef, an anti-money-laundering expert, said, “It took us almost 40 years to figure out how to track cash. And now we’re scrambling to track this new currency.”
Giving bitcoin a test run
Following the exchange over bitcoin, I wanted to test how easy it really to get and how anonymous the set up process was. So I asked Vays to give me a hand.
We searched until finding an app compatible with the old iOS on my iPhone 4. The winner was an app called Breadwallet, which required the following steps:
- I confirmed I wanted to open a new wallet.
- I made a password and Breadcoin generated a secret key Vays recommended writing down on paper.
- Vays used the bitcoin wallet on his phone to scan my address from a QR code, and he transferred me 0.0016 Bitcoins ($1 USD).
- Now that I had received a transfer, my account was approved and fully functional.
The entire process took about 10 minutes, including app download time. At no point did it require any personal information.
What blockchain could do
The second panel focused on applying blockchain.
Jason Dispenza, cofounder of D.C. blockchain consultancy SOLeS.io, spoke about speeding up healthcare services. Blockchains can share updated records with doctors, so patients
don’t have to fill out paperwork before each appointment. (Earlier, Burgess had cautioned that use cases like these required digital identification technology – a growing industry with some players right here in #DCTech.)
For Samantha Pelosi, senior VP of payments and innovation at the Bankers Association for Finance & Trade, a strong use case is financial efficiency: “In the transaction banking world, this tech has the ability to take away the middleman and reduce costs.”
Panelists also discussed market trends for companies using blockchain.
“It’s going to be a long-haul technology. It’s not going to be like Pokémon Go,” said Brian Hoffman, the Fairfax, Va.-based founder of venture-backed OpenBazaar, an open-source marketplace.
For Hoffman, blockchain’s slow growth combined with user’s unregulated creativity indicates big potential.
“It’s almost like the beginning of the internet,” he said.
Watch out for the government
Despite Blockchain’s potential, van Cleef reminded the audience it’s still relatively niche. Even the Undersecretary of the Department of the Army, whom she had bumped into earlier that evening, had never heard of blockchain. She told the audience he invited her to his office to learn more.
At the end, I spoke about this political elephant in the room with attendee and former WHF President Toni Bellissimo.
“I love the libertarian optimism of these groups,” Bellissimo told me.
She nodded at the clusters of panelists and attendees continuing their debate.
“They think the government won’t get their regulatory fingers in all this,” she said.
That process may have already begun: last year, the State of New York released an unpopular licensing framework for digital currency businesses, which caused several Blockchain companies to leave the state. The State of Vermont has also signed a bill to study the “potential opportunities and risks” of blockchain, while Delaware Governor Jack Markell and North Carolina legislators are advocating for embracing blockchain.
Bellissimo works with state legislators in financial services but asked me not to include her employer’s name. She was here independently, she explained, following fintech innovation.
Walking away, Bellissimo said over her shoulder, “I hope it plays out. I guess we’re all libertarians in spirit.”-30-