What’s next for crypto and Web3? 8 takeaways from the Penn Blockchain Conference

Over the weekend, I attended the fifth annual Penn Blockchain Conference hosted by the University of Pennsylvania. The event brought together private equity investors, regulators, students and hackers alongside some of the biggest crypto names to discuss blockchain technology’s current state and future.

Powered by Avalanche, Magna and Struck Capital, among many others, the conference offered a wealth of insights and thought-provoking discussions, along with six satellite events from around the city.

Penn Blockchain Conference 2023 by the numbers:

• 28 panels and 110 panelists
• 1,400 RSVPs
• 16 sponsors
• 200 hackers
• 120 students flown in from around the world
• 50 volunteers around the clock

Here are my eight key takeaways from the event:

1. Open DMs

First: The conference made it clear that people in the blockchain industry are open to connecting through direct messages, even those who may seem unreachable, from CoinFund to A16Z. This is especially true in a bear market, when individuals are more likely to be open to networking.

2. Building in crypto

Building applications in the crypto world is similar to building in the aerospace industry. Developers should approach their work with a mindset of building with the expectation failure, just as aerospace software engineers do — penetration testing in simulated environments that replicate the most sophisticated attacks. They should constantly test and refine their work to prevent any potential issues.

3. Interchain stablecoins

Currently, stablecoins are limited to operating within one environment, but the goal is for them to become more pervasive, just like money in a traditional financial system. For example, Venmo dollars should not be considered “Venmo dollars,” but just “dollars.”

4. Interoperability

While there are still no directly interoperable applications in the blockchain industry, significant progress has been made.

5. Blockchain and AI

Blockchain will play a significant role in the future of artificial intelligence to create trustless autonomy. Blockchain can make data intrinsically trustworthy through cryptography, removing the need for data custodians such as Google to be trusted with access to data.

6. Public and regulator conversations

There should have been more conversations between the public sphere and regulators before the outcome of the SEC’s investigation of Kraken.

There is also a lack of education about Web3, and more needs to be done to address this issue. Everyone from retail consumers to DC politicians equate crypto to the grifters that have made headline news over the last year — Celsius, Terra Luna, FTX, etc. Regulators need to learn that in this emerging era of the web, trust is in the technology, not the individuals who make it.

7. Regulation of digital assets

Regulating digital assets is more complex than regulating orange groves.

In 1946, the US Supreme Court heard the case SEC v. WJ Howey Co., which involved an investment scheme that offered people the opportunity to invest in a citrus grove with the expectation of earning profits from the sale of oranges. The Court ruled that the investment contract in the Howey case was a security, as it met the criteria of the Howey test, which examines whether an investment involves an investment of money in a common enterprise with the expectation of profits primarily from the efforts of others.

The ruling established a legal precedent that has been used in subsequent cases to determine whether other types of investments, such as real estate partnerships, limited partnerships and franchises, are securities under US law. Crypto is fundamentally different from this case for several reasons, including nature of investment, investment contract and profit expectation.

8. Philly’s Web3 scene is still in its early stages, but growing steadily

Organizations like DeFi Philly, NFT Philly and Bitcoin Jawn make this possible, carrying the torch from events like Coinvention and meetups like Philadelphia Ethereum Meetup.

I also sat down with Richard Ou, a Penn student and one of the conference’s organizers, who told me about the importance of the conference.

“The potential of students is oftentimes underestimated,” Ou said. “The conference helps to bridge the gap between academia and industry to reinforce the educational infrastructures necessary for the continued growth of the sector. The importance of the conference to Penn students is in the opportunity to make industry-wide impact by leveraging their innate talents and passion for blockchain to create a platform that truly helps to inspire, educate and connect.”