Blockchain-related projects, blockchain-related regulations and blockchain-related awards: here is CoinFox’s digest of Consensus 2016, an international summit held by CoinDesk on 2–4 May in New York.

Blockchain-bitcoin debate

Will the technology thrive without the cryptocurrency? This was one of the main topics that drove the attention of headline speakers.

Bitcoin still matters, claimed Silver Lake co-founder and a member of the Federal Reserve Bank of New York’s board Glenn Hutchins. Moreover, the impact of blockchains will be limited, he cautioned. He compared bitcoin to the Internet and private blockchains to Intranets. 

“Disconnected from the digital currency, blockchain exists more like an intranet. Intranet was quite important, but the transformative value was only when all those intranets were connected into an Internet.” 

Former US Secretary of the Treasury Larry Summers thinks differently. According to him, blockchain may prove more impactful than bitcoin and has more potential to shape our future. Still, in his careful assessment, he doesn’t deny the possibilities of bitcoin.

“Is the blockchain technology going to be fundamental? I think the answer is overwhelmingly likely to be yes. Is bitcoin going to be a valuable store of value, the same way as people use gold? I don’t know, but I think that certainly the answer is 'no' doesn’t seem like the right position to take.” 

A dispute on public and private blockchains was launched by David Rutter, founder and CEO of distributed ledger banking consortium R3CEV, and Balaji Srinivasan, co-founder and CEO of 21 Inc. The financiers spoke about distributed ledgers in connection with banking. A private blockchain is good enough as long as you trust all the parties involved, said Srinivasan. If one of them becomes less reliable, the blockchain suffers. Rutter emphasised that in banking there is always enough documentation outside the blockchain to prove the reliability of various agents, which makes a trustless blockchain unnecessary. 

Regulation and business

Speaking at a digital currency regulation panel, Dana Syracuse, a former New York Department of Financial Services attorney who helped oversee the state’s creation of the BitLicense for regulating digital currencies, said that compliance requirements for blockchain companies should be minimised and, in addition, somehow standardised at the federal level. 

Peter Van Valkenburgh, director of research at Coin Center, emphasised the necessity of clarifying the notion of ownership for digital currencies. Presently, it is rather vague. Sometimes it is difficult to determine, who exactly has custody of the digital currency at any given time, he said. The reason lies in such facilities as multi-signature wallets or third-party service providers who hold keys on behalf of the client. 

In the meantime, the state of Delaware is launching the “Delaware Blockchain Initiative”, willing to use the technology to streamline the cost and paperwork burden of registering new companies. In addition, blockchain is supposed to track share movement and keep Delaware archives. 

As for restrictions, Delaware Governor Jack Markell said the state is not planning to introduce blockchain licensure for companies.

Top managers of world corporations who gathered at the "Internal Approaches for Blockchain Strategies" panel emphasised the importance of qualified internal blockchain expertise for their companies. The panelists included Deutsche Bank's Ed Budd; Ian Lee of the virtual currencies investment department Citi Ventures; Scott Manuel of the media conglomerate Thomson Reuters; Philips' representative Bart Suichies; and Jeremy Wilson of the UK Barclays bank. Wilson admitted that it was not top managers who understood blockchain best in their companies, but usually someone with a humbler position in the corporate hierarchy. Ian Lee stated that in a big company, choosing the right project to work on was not enough. 

"It can be hard to find where in the organization this technology applies with a 10x improvement," he said.  

Technological novelties 

One of the largest accounting firms in the world, Deloitte, announced the building of 20 working blockchain prototypes to serve many industries such as insurance, employee management and cross-border payments, and demonstrated some of the projects at the conference. “When you think about insurance or healthcare or retail or trade or commerce in general, you have a lot of opportunities,” noted Deloitte partner Eric Piscini, emphasising the vast variety of possible blockchain uses. To develop new projects, the company has partnered with five blockchain startups, namely BlockCypher, Bloq, ConsenSys Enterprise, Loyyal and Stellar.

Bitcoin payments processor BitPay unveiled a new bitcoin debit card. It allows paying at Visa point-of-sale systems and withdrawing cash at Visa ATMs. Taking cash and activating the card will involve a fee while topping up bitcoins will be free of charge.  

Balaji Srinivasan introduced a revolutionary software package allowing everyone who owns a personal computer to receive bitcoins for each HTTP request.    

The conference was preceded by a two-day ‘Building Block’ Hackathon, at which 26 projects were presented. Decentralized Energy Utility, a project aimed at improving utility services in the developing world, won the Grand prize - $ 5,000, demonstrating the potential for the most immediate commercial application. 

The project enables a network of utility companies and household generators to serve rural populace more effectively. During the demonstration at the conference, an iPhone was imitating a streetlight and it switched on its flashlight when a payment was sent via blockchain.

Another competition was held during the conference itself. Decentralised employment company Colony, which helps to connect employers with freelancers all over the world, became the winner of the Consensus 2016 Proof of Work startup showcase award and its attached $10,000 prize. 

The other four candidates for the Proof of Work award included two digital currency investment platforms, an Internet of Things software library and a private chain provider. 

Andrew Levich