Time flies…

So – it’s been a while huh?

My only excuse for the lack of action round these parts in recent months is the same one that’s recycled by bloggers around the world. Namely life off-blog (believe it’s known as ‘real’ life) got crazy-busy over the summer months.

Can’t share all of the activities on here yet but here’s a quick roundup of some of the cool things (well I think so anyway) that have been taking up some of my time recently:

1. Paul Puey, CEO of my favourite Bitcoin wallet company Airbitz popped across from San Diego to chat at the Scottish Bitcoin Meetup a couple of weeks back, delivering a great talk on keeping Bitcoin decentralised.

Paul Puey (Airbitz CEO)
Paul Puey (Airbitz CEO)

2. We followed that up with the good news from The Royal Dick at Summerhall that it was to be the first bar in Edinburgh to accept bitcoin. And I’m glad to say that the meetup group took it upon itself to, er, thoroughly stress-test the new technology to the fullest. Let’s just say, we ensured that future customers wouldnt be at any risk of having a fractured experience in the future with staff who had no experience of dishing out drinks in return for bitcoin. Happy to report that everything held up beautifully under the strain.

 

360D Conference, Glasgow SECC (September 2015)
360D Conference, Glasgow SECC (September 2015)

3. I gave a talk on Bitcoin at the 360D Conference at the SECC in Glasgow earlier this month. Getting out of a sick bed to deliver it, it unfortunately wasn’t my finest performance but still seemed to provoke quite a bit of conversation afterwards.

4. I helped organise the Blockchain Workshop at this year’s Turing Festival and watched with disproportionate pleasure as 25 or so developers – all but a couple of whom had never had any exposure to blockchain tech beforehand – learn how to mine, send money and create simple smart contracts in little under 6 hours, all under the watchful eye of Konstantin and Ken from Ethereum. A fantastic example of the potential that this technology is providing for everyone.

5. Nine major banks announced they’d agreed to work together under the talented eye of new CTO Richard Gendal Brown at R3CEV in an ongoing investigation around how blockchain technologies can be incorporated into their current businesses. BIG news when you consider where we were 12 – even 6 – months ago. In case you’re wondering, the banks are: JP Morgan Chase, Goldman Sachs, Credit Suisse, State Street, UBS, Commonwealth Bank of Australia, BBVA, Barclays and Royal Bank of Scotland.

6. A few weeks ago, I took part in a British Interactive Media Association (BIMA) panel on ‘Can FinTech Make Banking More Human’ in Edinburgh, exploring disruption across the sector.

The Ivy, London
The Ivy, London

7. I gave another talk on Bitcoin and the promise of Blockchain technology at The Ivy of all places in London as part of an event put together by the Tayburn Agency and Engine. Thanks to Nadine and the rest of the team for inviting me down. I tell you – for all the furore about this so-called ‘geek money’, it doesn’t half get you into some interesting places 😉

Swiss Embassy, Bitcoin & Blockchain Event
Swiss Embassy, Bitcoin & Blockchain Event

8. I went along to a fascinating event run by the Swiss Embassy in London on, yup, you guessed it (no prizes) the B thing. Fantastic panel (Mike Hearn, Christian Decker, Richard Gendal Brown, Vitalik ButerinRobleh Ali from the Bank of England and Oliver Bussman of UBS). Held under Chatham House rules (hmm, hate that concept – really, in a world of permanent mobile and social network connection, are we really going to still hang onto the pretension that we can restrict such conversations and attribution spreading?), I can’t really say too much of value about the discussion – other than it was a fantastic event, with loads of old and new faces from the scene in attendance. Interesting to note Switzerland’s drive to become a base for crypto-based businesses in the future as well.

And yeah, there’s been a lot more. But this is turning more into a diary entry now so I’ll wrap it up.

So we might still be no clearer to finding out where this roller coaster will finally stop and what the scenery will look like if it finally does. But to me, the outlook’s never been so positive. As a great man once sung – keep on keeping’ on

London Blockchain Conference 2015

Blockchain Conference London 2015
Blockchain Conference London 2015 – Jon Matonis (ex-Bitcoin Foundation), Marc Warne (Bittylicious), George Hallam (Ethereum) & Alex Kotenko (XBTerminal)

It’s noticeable that there have been far fewer Bitcoin Conferences taking place this year. Speaking from experience, I can understand why. Conference organising brings its own challenges, particularly when you add into the mix the topic of an emerging technology that most people don’t yet understand whose application could disrupt a variety of industries. What area(s) should you focus on when programming a coherent and informative event?

There were no such worries for the London Blockchain Conference on 24th June. It turns out that hosting this in the Barclays Accelerator and simply dropping the ‘B’ word from the title (that’s ‘Bitcoin’, not ‘blockchain’) was a smart move, evidenced by the huge turn out of representatives from a broad range of financial organisations.

How things have changed over the past few months.

But whilst the terminology might have changed slightly (and to be serious for a minute, it’s only partially up for debate whether this represents an evolution in PR treatment or the concepts themselves), there’s no doubt that traction is definitely building.

A new architecture for financial services

Hardly surprising. Because, as Simon Taylor pointed out in his brief opening, the potential for cryptographic proof equates to “an accountant’s wet dream”. Now, lofty claims about the power of a blockchain to instantly solve the world’s collective ills (or to “benchpress the earth”, as Simon put it) might not be helpful. But the simple, undeniable truth is that the existing financial system needs a reboot. So what’s the appropriate architecture to let this building commence in a digital world? Because it’s pretty clear that the system of the near future is not one that relies on masses of independently-verified, slow and expensive paper-based processes.

Undoubtedly, many in the room that day have been attracted by this shift in focus. The conversation was not, like so many in the past, one about consumer applications. Instead, this discussion sidestepped the question almost in its entirety and looked instead at the application of blockchain solutions at an enterprise level – seeking efficiencies where the industry currently shoulders significant costs and collectively dreams of reducing the settlement time for trades that travel at a snail’s pace today.

Less of a currency focus – but still unmissable

That’s not to say that there was no discussion of Bitcoin as a digital currency however. It was good to hear both Adam (Diacle) and Dan (Innovate Finance) remind everyone that the UK continues to lead the way globally when it comes to building a supportive environment on the basis of a non-interventionist policy, with money being allocated to research into digital currency. Far from being a regulator’s worst nightmare, the blockchain promises a completely different and seemingly vastly improved model for compliance (where the necessary data is verifiably correct and ‘pushed up’ as required as opposed to being extracted painfully by the regulator in a top-down model).

I don’t write about regulation on this blog often (partly to avoid people assuming I’m giving legal advice given my previous career – but mainly because, to be frank, it doesn’t really excite me). But one thing I haven’t really flagged up previously (because it’s obvious to anyone other than perhaps a newcomer to the scene) is a very valid concern that emerging regulation of Bitcoin risks somehow ensnaring those building businesses that rely on blockchain technology to certify the provenance of data (as part of a non-financial transaction – such as Provenance for example which uses Ethereum). We’re fortunate that this hasn’t turned into a major issue (in the UK) at present – but it remains an area to watch closely.

Of course, when it comes to legitimisation, you can’t go much further than demonstrating a government that is actively encouraging bitcoin businesses to relocate with a beneficial tax regime and working with Credits to create a blockchain-based company registry.

Blockchain startup tips – from your target customers

But what about the startup scene? Are the institutions starting to see an evolution and growth in maturity from those who are seeking to sell blockchain-influenced solutions into the financial services market?

Lee Braine of Barclays made a number of good points during the day. It’s time to move on from the early rhetoric of the Bitcoin startup scene. Financial institutions continue to look for solutions to a screed of vast array of problems, relating to everything from SLA’s to regulatory requirements. It’s clear that blockchain technology provides a new approach. But it’s been hard for them to engage with many entrepreneurs to date who have approached such problems from the opposite perspective – more along the lines of “we have the solution, we just need to implement it”.

I liked Lee’s comment that the blockchain is nothing more than a massive WORM (Write-Once Read Many) drive. He also had a couple of valuable pieces of advice for the Bitcoin community:

  1. To sell into financial services enterprises, you have to ‘bake in’ the bank’s non-functional requirements from the start (e.g. strive for security, reliability and low-latency at all stages).
  2. Solving part of a known issue isn’t good enough from a bank’s perspective. In other enterprise business sectors, a solution often requires a collaboration between third party vendors who collectively solve the problem in its entirety. Perhaps it’s time for startups to think in terms of forging similar alliances in order to bring blockchain-based solutions to the banks.

The message that seems to be coming across loud and clear in these discussions is that banks are (finally) starting to understand the power of blockchain technology. However, their challenge comes in trusting that the legal entity (or group) that possesses the ‘right to write’ to the (private) blockchain is sufficiently robust to provide them with trust that all of the information recorded is legally enforceable and correct (as I outlined previously). But, in general terms, they all seem to be looking for a system that provides a private ledger with designated miners, collective administration and one that focuses on the assets being exchanged, with the details of the technology itself being hidden.

Onwards and upwards

So there was definitely a much-improved level of understanding in general around the technology in comparison to a few events that I’ve been at recently, although we’re clearly still at the start of the curve. It was impressive to see the newly-launched Everledger burst out of the accelerator and set out their vision for (initially) the use of the blockchain to track diamonds “from the mine to the mistress” to prove provenance and slash insurance costs for physical items within the legacy system. And that’s without even mentioning what appeares to be an extremely promising new entrant into the world of private blockchains as a new whitepaper was released by MultiChain, developed by the hugely talented team behind Coin Sciences.

I’ll leave you with a thought from Nathaniel Popper. The New York Times reporter and author of the fascinating history ‘Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying To Reinvent Money’, pointed out that the Bitcoin ‘movement’ grew out of a desire to avoid governments and banks. Yet some of the biggest movements in the scene are by both.

I wouldn’t be in any doubt that full integration of blockchain solutions is still going to take a long time to mature. But it’s clear to me that the banks and others have started their engines.

Game on.