Smart contracts will solve all of life’s other problems.
Owen Davis of Dealbreaker went to an initial coin offering conference, ICO Summit, and oh man. Oh man:
One of the presenters at the conference is Matt McKibbin, who runs a consulting firm called DecentraNet. “Decentralization will change more in our lives over the coming years than possibly any other technological shift we’ve seen,” he says, likening the crypto rush to the Reformation. He describes building anarcho-capitalist city-states on the back of the blockchain. “If you’re going to built a new city, you’re not going to have the DMV – we don’t like the DMV,” he says at one point. Later: “We can actually tokenize the moon with a startup society.”
When I ask him about the SEC’s role in the space, he waves the question off as irrelevant. “Under crypto-anarchy,” he explains, “we’ll get to determine the government that we want.”
I first read that as “when I asked him about the SEC’s role in space,” which would have been equally appropriate. There are no securities laws on the tokenized startup moon! Just go nuts up there, have fun, knock yourselves out, really crypto it up. Meanwhile here is an earth lawyer at the conference:
“I’ve been approached by many, many people asking how I can structure my ICO so it’s not a security.” he says. “It’s a misplaced priority. When you get your subpoena from the SEC I’ll come to defend you.”
He’s gonna be busy!
Elsewhere, “This Cryptocurrency Miner Says It Solved Bitcoin’s Power Problem,” but it … obviously hasn’t? It’s just mining bitcoins in previously abandoned Austrian hydroelectric power plants. I mean, that’s fine, better that than just buying power from coal plants, but the basic math of bitcoin mining using a ton of electricity hasn’t really changed.
Oh and here’s this guy:
I want to live in my house and not be kicked out by a third party owner, but I don’t want my assets tied up in it.
I want to sell shares of my house.
Someone who wants to own a % of a real estate asset in this city could just buy a % share of mine.
Smart contracts via crypto make this super doable.
If you could only say one sentence for the rest of your life, “smart contracts via crypto make this super doable” would not be the worst choice. It is a good all-purpose answer to any modern problem. You want to securitize assets without complying with legal requirements? “Smart contracts via crypto make this super doable,” you write on your blog. You want to fix the financial system because it is too risky and rigged in favor of entrenched elites? “Smart contracts via crypto make this super doable,” you confidently inform the Senate hearing. You want to buy a candy bar? “Smart contracts via crypto make this super doable,” you explain to the confused guy at the bodega. Your girlfriend is leaving you because you never stop talking about bitcoin? “Smart contracts via crypto make this super doable,” you call to her plaintively, as she walks out the door.
Really one lesson here is that most financial-engineering problems are also marketing problems, social problems. Yes, absolutely, it is easy to conceive of a smart contract that would pay you for appreciation on my house. And we could get together and hash out exactly the events that would trigger it and how we’d calculate the appreciation and so forth. But how would we find each other? How would millions of people find each other and hash out these deals? If the deals are going to be standardized and aggregated, how do we know we can trust the standardizers and aggregators? Won’t they be subject to securities regulation? Shouldn’t they be?
