Back from the Future(ist) Conference

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.

A reminder from conference organizers that today’s Lambo is yesterday’s DeLorean

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’s high level component architecture

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