Last week, NYC saw a flock of developers, entrepreneurs, investors, hodlers, enthusiasts, artists, “evangelizers” and n other types that shared one trait in common: interest in blockchain and cryptoassets. There were multiple events across town, Consensus being the largest one, registering 8,000 attendees this year. The numbers were impressive, as were some of the presentations. Of course, it wasn’t all that great. So we will highlight here some of the good stuff, point out the bad stuff and give a small taste of the ugliness that still exists in this nascent industry.

By Luiz Ramalho

The epic Spaghetti Western: The Good, The Bad and The Ugly (1966) starring Clint Eastwood tells a story about three men during the Civil War in search of a stolen cache of Confederate gold

The Good

Technical Presentations

The conference was not very heavy on the developer/technical side of things. The technical presentations were made in order to be somewhat accessible to beginners, and that’s fine. But we saw lots of announcements and very few actually developed stuff. Therefore, the “good” list is light on technical presentations. The best that we saw was the panel “Scalability, Layer 2 and Cryptographic Innovations” . Our highlights for this panel:

Coinbase’s Amy Yin — “Using Hierarchical Deterministic Wallets to Build a Non-Custodial Payment Processor”, where she described the Trilemma between Usability, Control and Privacy and Coinbase’s proposed solution: Generating and managing public keys (usability), one-time use addresses (to preserve privacy) and keeping merchants in control of their private keys. It seems like an interesting product for both merchants and consumers from Coinbase, and we are looking forward to seeing how this solution actually comes to market.

Professor Eli Ben-Sasson — “Scaling Blockchains with STARK”: ZK-STARKS are a exciting new technology for scaling blockchains, providing cryptographic proofs that are zero-knowledge, succinct, transparent (no need for a trusted setup), and post-quantum secure. The list of people that supported Prof. Ben-Sasson as investors in his company StarkWare Industries is impressive: Pantera Capital, Naval Ravikant, Polychain, Vitalik Buterin, Zcash Co., Arthur Breitman (Tezos), Da Hongfei (NEO), Bitmain, Fred Ehrsam, Linda Xie, among others.

However, the real gold in this year’s Consensus were the big picture/market analysis from investors. These are people that have clearly spent a lot of time thinking about the dynamics of this market and could contribute with one or two insights that we thought were really valuable.

World Of Tokens

This panel was the absolute highlight of the conference for us. TwoBitIdiot really did a great job of making the series of short presentations very dynamic, wrapping it up with a debate-style curated set of questions, where two panelists would debate each other for one minute. Much better than the standard “let-me-show-what-I-think-and-try-to-transform-a-statement-into-a-question-to-impress-the-audience” kind of question that we saw in every other panel. Panelists were Kyle Samani, Alex Sunnarborg, Tuur Demeester, Matthew Goetz, Alexander Tapscott, Rob Massey (aka “The Tax Guy”, a consequence of Deloitte’s sponsorship) and Timothy Enneking (aka “The Guy That Didn’t Prepare a Presentation” — seriously). Our top three presentations from the panelists:

Kyle Samani : His presentation was heavily based on the blog post “Paths to Tens of Trillions”, where Kyle described the dichotomy between two hypothesis of paths that would lead to massive adoption and value creation with cryptoassets: Store of Value and Utility. Kyle’s unique perspective on the Utility hypothesis is well worth considering for anyone trying to make sense of this new asset class. Alex Sunnarborg : In line with his Twitter feed, Alex’s presentation was full of interesting charts, thought provoking data that shows the true complexity of stakeholders, risks and mechanics of this market (slides available here). Matthew Goetz : Blocktower’s Goetz gave the global perspective many of the presentations were lacking. Crypto is indeed a truly global, 24-hour market, and it’s impossible to make sense of it without understanding the local dynamics in its relevant submarkets — particularly Asia. Special mentions to TwoBitIdiot’s presentation introducing his much-needed project Messari and Tuur Demeester for being the winner of the debate — although this was more a win for Bitcoin vs. Altcoins than to Tuur himself.

The Bad and The Ugly

It has been almost 9.5 years since the first Bitcoin block was mined. Many people may think this is a lot, but in the grand scheme of things, it truly isn’t. This is a technology not easy to grasp and very demanding for the ones who decide to develop it. However, there is a perverse dynamic, most likely led by the early access to liquidity, that incentivizes the prevalence of a kind of behavior that adds very little or nothing to the development of the space: the “promoter-type” behavior.

These people may have some positive effect of “spreading the word”, but the negatives greatly dwarf any potential benefits: inflated valuations beyond what would seem reasonable to the stage of development/deployment for many assets (and actual chances of success); and also adding to a general sense of fakeness that some people feel, especially from outside. This year’s Consensus had more than its fair share of it.

The Bad

So what we could call “Bad” in this conference was the prevalence of this promoter-type, stage-man/woman that talks big about “possibilities” while delivering absolutely no concrete proposal for the “How to Get There?” question. Large institutions that deliver very few innovations, such as FedEx and Deloitte, specially when we consider the amount of resources at their disposal, had too much time to speak. But even most the startups were talking big, while delivering little.

We want to be seen as legit by the legacy institutions (and this is fine), but the real innovation won’t come from the “strategic partnerships” and study groups in large corporations. They are simply too risk averse, too consensus-oriented, and consequently, too slow and insensitive to the real issues this industry will face in the next years.

Interoperability and Decentralized Exchanges are two areas that have massive possibility to be true game changers, and we still need a lot of development for the existing solutions to reach scale and true usability. There was too little about that, too superficially.

The Ugly

The ugly is a manifestation of another side of the bad. Focusing on the promotion and talking big leads to the inevitable air of fakeness that we get from many companies, presentations and people at these events.

One early meme that proved to be as resilient as Dogecoin or “To the moon!” is the Lambo meme. “When Lambo?” is a usual question when people want to refer to when they will be able to cash in their 1000x+ gains from a particular coin. Lamborguinis in Blockchain Conferences were seen as a testament to the wealth created to early hodlers. But Bloomberg got the perfect headline when they found out that the Lamborghinis that were parked in front of the hotel where the conference took place were, in fact, rented. When a famous professor keeps calling cryptoassets bullshit, it certainly makes our case harder to make when so much of the public image tries that hard to seem fake.

Conclusion: Take the Gold and Run

In the classic Western “The Good, The Bad and The Ugly”, Clint Eastwood’s character, Blondie (aka “The Good”) is the one who gets to ride his horse freely at the end, taking his share of the gold home. “The Bad” is dead and “The Ugly” is alive and has his share of the gold, but he is tied up and left screaming, on foot, in the middle of a desert.

That would be our advice for the next events then — follow the good, fight the bad, ignore the ugly. That’s probably the only way to end up getting your fair share of the promised gold.