Top Shelf

It seems like enterprise blockchain is between finding its “killer app” and being killed.

“Everyone had a killer app three years ago. That was the state of blockchain business,” Shyam Nagarajan, a director at IBM, said during a marathon session at Consensus: Distributed. “People have wisened up since then.”

There are a number of roadblocks obstructing the possibility of adoption and successful implementation of business-grade blockchain. Cited most frequently is the problem with scalability. 

It turns out, it’s difficult to get other people or competing companies to join onto someone else’s private network, CoinDesk’s Ian Allison reported Thursday. 

Sometimes this is the result of the market itself. Microsoft’s Riccardo Trubiani pointed out the total size of the Italian blockchain industry is 30 million euro. “Market opportunities define where people will invest,” he said. 

But enterprise blockchain isn’t dead, yet. It’s a developing industry, with a learning curve. 

Take We.Trade, the first enterprise-grade distributed trade financing platform. In a candidate appraisal of his firm’s performance, General Manager Ciaran McGowan said the firm has been going through growing pains. 

Nearly everything that could have gone wrong, did. McGowan said the firm didn’t have the right governance structure – “plenty of ideas and talk, but no action” – infrastructure, or communications initially. The firm also over engineered its platform, building “a Ferrari,” McGowan said, while underdelivering on its compliance requirements – making it impossible for merchants or banks to feel comfortable signing on. 

After a period of reorganization, (McGowan replaced the firm’s first Chief Operating Officer Roberto Mancone) We.Trade has its foundations in place, and is on the pathway to profitability, he said. 

While McGowan is comfortable with the value proposition of blockchain for trade financing, there are other industry use cases where it simply doesn’t make sense. “The less we can talk purely about blockchain and solving problems with business leaders, the better off we are,”  Linda Pawczuk, global head of blockchain and digital assets at Deloitte, said in a separate program. 

As the industry matures, it’s likely there will be greater consolidations and collaboration between former competitors. 

The CoinDesk 50

The CoinDesk 50 is an annual list celebrating the most important organizations in crypto. We’ve been announcing five nominees per day, and have highlighted Binance, Cosmos, Brave, Bitmain, MakerDAO, Besu and the People’s Bank of China as particularly noteworthy. Today we honor Silvergate Bank. You can read the full list here.

Silvergate, the Bank That Wasn’t Afraid
Crypto’s first IPO was a 30-year-old bank. Southern California’s Silvergate Bank, which went public in November 2019, is one of just a handful in the U.S. willing to bank cryptocurrency firms. It was also one of the first, entering the space in 2013, a period when the bank was loaning more than it had on hand. Capital-rich crypto firms needing a place to deposit their fiat in some sense, saved the bank. Silvergate aims to stay ahead of its competition, which now includes JPMorgan, by creating new products and services that clients request. Its Silvergate Exchange Network allows customers to instantly move dollars between different crypto exchanges, and the bank is also piloting new features like bitcoin margin lending.

CoinDesk COVID Response

#NYBWGives
CoinDesk has joined Gitcoin, The Giving Block and Ethereal Summit to support charities helping communities in difficult times. We’re raising $100,000 and giving you a voice through the quadratic funding model. Learn how it works and how to donate.

In addition, New York-based abstract artist Mr. Star City created an original piece of artwork, shown above, as a part of Consensus: Distributed. The art, inspired by love, unity and technology, will be up for auction this week. Follow @coindesk on Twitter to find out how to bid — the proceeds will go to the same cause.

Consensus Magazine

Generation Crypto 
Freelance journalist Jess Klein writes about an emerging psychographic of people who see the world through the lens of decentralization. In a series of eight profiles, Klein examines “Generation Crypto,” a diffuse grouping of people of all ages, races and sexes, bound together as “children of Satoshi.” 

This excerpt taken from the series follows Preston Byrne, the libertarian lawyer. Read the full series here. 

“I’d say not all crypto people are into libertarianism, but most libertarians are into crypto,” says Preston Byrne, a conventional-looking lawyer in his thirties.

A partner at the Anderson Kill law firm as of March 1, his specialty, as it has been for years, is “understanding the nuances” of blockchain technology. He’d only just moved from Connecticut to Washington, D.C. to start at the firm on March 14 when work-from-home orders came through, so he high-tailed it back to Connecticut, where he’d already had a bunch of food stored in his mom’s freezer in case of this exact scenario.

“Those of us who were paying close attention began getting ready for this,” he says, citing a “conspiratorial” article he discovered back in February. Later banned by Twitter, the article suggested the coronavirus came from a Chinese bioweapons lab. “Is that true? I don’t know…but that was an alternative media outlet focused very, very early [on the] outbreak in China,” Byrne says.

Anti-censorship is one of the main reasons Byrne is drawn to blockchain and cryptocurrency. “Bitcoin doesn’t care what we’re using it for,” he says, pointing out it’s been a reliable alternative for those banned from establishment payment systems for political reasons, like Alex Jones and Laura Loomer. At work, he’s dealt with such cases where bitcoin has come to the aid of those “booted” from online platforms (but as an attorney, he can’t discuss them — nor can he hold cryptocurrency himself, due to potential conflicts of interest).

Since he holds no cryptocurrency, Byrne hasn’t gotten too deeply involved in any individual crypto community, but he goes to various Bitcoin and Ethereum meetups. His real “tribe,” however, is the libertarian activist members of the New Hampshire Free State Project. “They were among the earliest adopters of bitcoin at various events they held,” Byrne says. The group’s aim, as he puts it, is to overwhelm New Hampshire’s population with enough libertarians to influence the state’s politics.

Byrne’s libertarian views have only been “validated” by both the government and human response to COVID-19 in the U.S. Since the government didn’t prepare people for the pandemic in time, those who didn’t make the decision to prep for themselves were the ones standing in long lines at the grocery store and panic-buying all the toilet paper. “This really makes the libertarian case,” he says, “because our world fell apart all around us, and the only thing that really mattered was whether you yourself were ready.”

Because of the government’s poor handling of the crisis, Byrne believes more people will want to “exit the system,” he says. “I think bitcoin is one of those exit pathways.”

Money Reimagined

Is bitcoin the answer for a global monetary system not longer served by the dollar standard? Airing Friday, May 15, episode 3 of The Breakdown: Money Reimagined examines bitcoin and permissionless stablecoins – both of which are forcing the global monetary system to examine deeply ingrained beliefs. 

The Breakdown: Money Reimagined is a podcast crossover micro series exploring the battle for the future of money in the context of a post COVID-19 world. The four-part podcast features over a dozen voices including Consensus: Distributed speakers Niall Ferguson, Nic Carter and Michael Casey. New episodes air Fridays on the CoinDesk Podcast Network. Subscribe here.

Best Backgrounds at Consensus: Distributed

Jonathan “Stay Golden” Levi, of HACERA

Linda “Bikes to Work” Pawczuk, of Deloitte

Crypto Cribs

Phil Gomes takes us on a tour of his crypto crib. This is his home office, which he’s been working from since 2018 when he joined Bloq. “Built into a former walk-in closet under the pitch of the roof. I consider myself especially fortunate to have this available to me in these current times,” he said over email. 

CoinDesk Confessionals

CoinDesk sent out a questionnaire meant to gauge the innermost feelings and thoughts of the crypterati. Loosely based on the “Proust Questionnaire” popular during the fin de siecle, we’re hoping their honest answers will reveal insights about our own age of transition. 

Sunny Aggarwal, a Tendermint and Cosmos developer, answered our questions.

Your favorite blockchain protocol?
Cosmos, obviously

Your # 1 favorite crypto hero?
Vitalik

Your favorite quality in an entrepreneur?
Ability to stay true to values

Your biggest fear?
(crypto specific) Crypto adoption goes nowhere and all this time and energy we’ve spent will be naught.

What would you value bitcoin at today?
$8,893.04

One word on how you got into crypto?
Doro Wat

What should crypto disrupt next?
Let’s finish disrupting money/finance first.

Public or private?
A mix realistically. Private chains that can prove particular properties publicly.

Permissioned or permissionless?
Once again a mix. Pemissioned chains in a permissionless network of blockchains.

Your best example of sovereignty?
Israel’s ability to be surrounded by “enemies” but stand its ground.  Nuclear weapons are sovereignty.

Your net worth
Enough for now.

What gets you out of bed?
My sister who wakes me up every morning cause I sleep too much

What is your motto?
“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”

What would you like to be?
Impassioned

Where would you like to live?
Just moved to NYC a few months ago, but had to leave cause of covid situation. Looking forward to getting back there asap!

Your favorite television show or movie?
Mr. Robot

Your most vivid memory?
The day I joined my fraternity in college.

Your greatest achievement?
Created UC Berkeley pirate party.

What do you rely on?
Support of family and friends

What would you change about yourself?
Lose weight.

Where will you be in 10 years?
Working on solving problems in education.

Your favorite fiction character?
Captain America

How do you spend your free time?
Reading, motorcycling, watching television.

What do you want your legacy to be?
Having built something that brings people more sovereignty to their lives.

How would you like to die?
Preferably not in a motorcycle accident. My mom would kill me.

Media Diet

Binance Quashes Upbit Hackers’ Attempt to Launder Stolen Funds
Binance has frozen funds linked to the $49 million breach of the Upbit crypto exchange after hackers tried to liquidate some of their ill-gotten gains.

Overstock Files to Dismiss ‘Meritless’ Fraud Lawsuit Over Its Digital Dividend
In a filing on May 12, Overstock took aim at the two main allegations made in a class action suit: that the firm had made false declarations in 2019 about its financial future, and that it had deliberately launched the digital dividend (a tokenized security planned for listing on its affiliate company tZero’s trading platform) in order to create an artificial squeeze on short sellers.

Bequant Launches Crypto Prime Brokerage to Compete for Institutional Money
Digital asset services firm Bequant launched a prime brokerage service for institutional clients to have easier access to liquidity, custody, lending and other products, the company announced Thursday. 

Polymath Eyes June Testnet Launch for New Blockchain Designed for Security Tokens
Polymath is closing in on the launch of the first test network for its new blockchain – one designed to bring new safeguards for financial institutions working with security tokens. With the Aldebaran testnet, the security token issuer is implementing a relatively new type of protocol scheme known as nominated proof-of-stake (NPoS).

Industry Group Led by Polychain, Coinbase Seeks to Get Ahead on Staking Regulations
The Proof of Stake Alliance (POSA), an industry advocacy group, is publishing a series of recommended standards for companies participating in a proof-of-stake consensus protocol in an effort to reduce regulatory clampdowns on different networks.

Ledn Launches USDC Stablecoin Savings Accounts With Focus on Latin America
The crypto loan startup Ledn, which primarily serves users in Latin America, is now offering USDC stablecoin savings accounts through a partnership with the lending and trading conglomerate Genesis.

Who Won #CryptoTwitter?