Regardless if you’re bullish or bearish on blockchain you’d have to agree it’s an interesting time for the technology, which has managed to divide technologists into roughly equal groups of skeptics and evangelists.To believe the bitcoin maximalists and crypto evangelists (all well represented at Toronto’s Blockchain Futurist Conference) crypto-currencies will initiate a massive, global re-distristribution of wealth, breaking the backs of the 1% and ushering in economic equality for all. Without apparent contradiction, many also see blockchain technology as the key to the greatest wealth creation event in history – though anyone who bought in at bitcoin’s frothy peak last December may be having second thoughts.
Despite the odd crypto-anarchist en route to Burning Man, the conference reflected a rapid maturing of companies in the space. Panelists spoke about how regulation is both needed and desired to remove uncertainty and promote adoption in the market. Bay St. lawyers were getting shout-outs from the stage, and delegates were swapping tips on crypto-savvy KYC/AML advisors. Polymath presented a framework to help businesses roll out security tokens (more on this below), Hosho talked up their smart contract auditing services, and Aion’s Matt Spoke shared some pragmatic perspective, acknowledging the need for blockchain/crypto companies to address the ‘crossing the chasm’ challenge in creating products the general public will actually use.
While the conference featured its share of exchanges (for trading one cryptocurrency for another, like TWG client Coinsquare) and brokers (services for buying crypto with cash, like Toronto startup Coinberry), evidence that the blockchain ecosystem is rapidly expanding into real commercial applications was everywhere. A couple of companies that stood out:
Cardstack: An open-source framework for decentralized applications
Typical web apps and services are centralized by design, and it can be a challenge for developers to reconcile how decentralized applications (or Dapps) can be integrated into an existing product. Cardstack’s vision of ‘progressive decentralization’ is a pragmatic approach to the isolated silos of information generated by the dozens of web apps, mobile apps and SasS services we use every day. Co-founder Chris Tse sees Cardstack as a connecting fabric that will facilitate better communication between these apps, with easier on-ramps to blockchain networks like Ethereum. “We see Dapps as essentially your regular web application with some additional crypto complexity, which changes your basic architecture.” Tse explained. “Cardstack is designed in a way that acknowledges that the truth is on the blockchain, so within your Dapp you want [access to] the data you control, like login data, and also the data you don’t control, like balances on Ethereum. We stitch them together through a data fusion tier, and make it available through a regular API. So you can build your app like a regular web application against this consistent, secure API, and any changes from your system or the blockchain system are reflected in near-real time.”
Cardstack is also open source, and is designed to run on both cloud-hosted and desktop peer-to-peer environments without any code changes. The latter scenario supports a true decentralized infrastructure supporting a large number of users running light nodes or full nodes supported by a token incentive structures to compensate users for the resources they are providing to the network.
Polymath launches a security token platform
In a community with no shortage of big ideas, it’s hard to top the ambitions of the security token crowd. Security tokens provide a mechanism for distributing ownership of an asset, not unlike shares in a company. Unlike crypto tokens, which serve as currency within their individual ecosystems (bitcoin, Litecoin, Ripple etc.) or utility tokens (which are effectively coupons that users redeem for access to an existing or future service), security tokens are issued by the owners of an asset to buyers who want a piece of the action.
As with all tokens, everything happens virtually. Security tokens exist entirely as an entry in a distributed ledger, and smart contracts define how security token holders receive benefits from that underlying asset. For example, a builder could issue $20M of security tokens to fund the construction of a building, with token holders receiving a share of tenant revenue proportional to the number of tokens held. Security tokens are highly liquid, and can be bought, sold and traded without the overhead of updating multiple binding agreements documenting the changes in property ownership. Smart contracts automatically distribute revenues based on the current distribution of tokens, all of which is transparently and permanently recorded on a blockchain.
Anticipating this massive opportunity and seeing the dearth of robust platforms for issuing security tokens, Toronto and Barbados-based Polymathhas staked an early lead in the space with some big announcements at the Futurist Conference. Polymath provides three core services. First, Polymath has created multiple, interoperable smart contract components that can be configured to match the business requirements of any client. Second, Polymath provides the actual token generation tool for customers to configure the token value and amount of the overall offering. Finally, Polymath provides their customers access to leading financial and legal professional services to ensure these new businesses are structured for regulatory and tax compliance.
Polymath’s platform expects to issue $210M of security tokens by the end of the year
Polymath has also developed its own security token standard, ST-20, which embeds regulatory requirements into the tokens themselves. This approach supports features such as restricting the sale or trade of tokens to a pool of verified buyers (e.g. investments where regulations restricts the sale to accredited investors only).
At the Futurist Conference Polymath’s CEO Trevor Koverko made several announcements, including the Polymath’s dApp launch — their application for issuing security tokens — on the Ethereum main network as well as five new security token offerings raising a combined $200M that will launch by the end of the year. You can watch the full announcement here.
A few final observations:
Everyone in crypto is on Telegram. The secure messaging app is one of the rare ICO success stories of 2018, having raised $1.8B (yes, billion) worth of GRAM tokens to date. If you’re serious about the blockchain space, this is where the real talk happens (though by the time you read this everyone may have moved over to Discord).
While Canada’s big banks maintained a fairly low-key presence, Bermudawanted everyone to know they are definitely 👏 open 👏 for 👏 business. Their Minister of National Security, the Hon. Wayne M. Caines (sporting bright red Bermuda shorts) made an enthusiastic case for headquartering in the crypto-friendly island nation, boasting about their concierge service to get your business up and running in four to five weeks. Bermuda’s government is also in the process of amending its banking act to create the Restricted Banking License — a regulatory structure specifically for ICOs and blockchain-based companies that comply with new regulatory frameworks.
Credit to conference organizers Untraceable for curating an impressive list of speakers and panelists, including tech luminaries like Etherium co-founders Anthony Di Iorio and Charles Hoskinson, VoIP pioneer Jeff Pulver, and um, Larry King. The 84-year-old spokesperson has attached himself to GEAR, a renewable energy securities token whose well-intentioned pro-environment message was diminished by their tone-deaf decision to include female models as part of their exhibit on the trade show floor.
Toronto’s Bunz put their money where their mouth is — quite literally. The social barter platform, which launched its own BTZ token (pronounced ‘Bits’) in April, gave away virtual currency that could be used to buy lunch via the Bunz mobile app from the food trucks parked outside the venue. Bunz CEO Sascha Darius Mojtahedi, who joined Bunz after eight years at TD Bank, gave an impressive presentation on the history and ambitious plans for the platform. If the future of conference promotions is airdropping tokens I can exchange for jerk chicken tacos, I’m all for it.
Aug 8 • 6 min read