The big bitcoin conference Consensus descended on Manhattan this week, and a number of significant companies chose it as a venue to announce news. (The ability to own and oversee Consensus was one of the driving factors in the Digital Currency Group's acquisition this year of bitcoin news site CoinDesk, which created the conference.)
Most of the excitement about this industry at the moment, from the financial world, is around the use of blockchain, the decentralized ledger technology that underlies the digital currency bitcoin, and less so on the currency itself. Banks and other payment giants are eager to explore how blockchain—but a closed, permissioned form without bitcoin, as opposed to the open, permissionless bitcoin blockchain—could speed up their transaction settlement processes. Much of the buzz and commentary at the conference matched this. But not all people in the industry are so eager to abandon bitcoin. Among lots of interesting news, here are 5 of the biggest stories to come out of the Consensus conference this week.
1. Creator claim
It wasn’t an announcement made at the conference, but news that broke on the first morning, and it cast a shadow over the entire event. Dr. Craig Wright, an Australian security expert, publicly outed himself as Satoshi Nakamoto, the mysterious creator of bitcoin, in a blog post and in statements to a few select news outlets. The mainstream media grabbed the story and ran with it, but among the crowds at Consensus, people doubted the claim. It only took a few hours for some experts to poke holes in the way that Wright supposedly proved he is Satoshi (he presented evidence that he owns the same private keys used by Satoshi for the first ever transaction), and now the story is looking like yet another entry on the long list of false positives. Don’t expect the media to lose interest in identifying Satoshi any time soon, even though it really doesn’t matter to the bitcoin technology anymore who created it, because it is open-source and has changed significantly since its inception. (There is one reason people in bitcoin want to know: Satoshi is believed to still hold nearly 1 million bitcoin, or about $450 million at the current price, which means he or she would have the power to crash the market by way of a selloff.)
2. Delaware's sights on blockchain
The state of Delaware announced it wants to use blockchain technology to speed the process of registering new businesses in the state. It’s significant not only because government support of this space is so rare, but because Delaware incorporates more public companies than any other state. Bitcoin believers, of course, may scoff at this as another example of blockchain being used for something rather unexciting: improving an old institution’s dated IT processes. But Delaware going digital has major implications, since other states could follow. Delaware Gov. Jack Markell even said at Consensus that the state would consider creating a new form of “distributed ledger” shares in companies registered via blockchain.
3. Banks on board
Chain, an enterprise blockchain startup, announced Open Standard 1, a form of blockchain it has built specifically for financial institutions, and a murderer’s row of launch clients along with it, including Capital One, Citi, Fidelity, Nasdaq, and Visa. To be sure, Chain is one of many competitors vying to build a blockchain for banks and other enterprise clients. The buzziest, in the mainstream business press, has been R3, a blockchain coalition of more than 45 banks, but this week Amazon Web Services (AMZN) also announced it would partner with the Digital Currency Group to offer a form of blockchain tech to enterprise clients. Still, with a completed product and big-name backers, Chain could come out to an early lead in this race.
4. The bitcoin computer
21 Inc, which only one year ago was still a mysterious bitcoin startup that had raised more money than any other bitcoin startup ($121 million, fittingly) without revealing what it would even do, came out swinging with the announcement of its next step. In February, 21 began shipping its first product, a small, sleek, personal bitcoin computer for mining bitcoin and building applications to accept bitcoin payments. This week, at Consensus, 21 CEO Balaji Srinavasan said the company’s next move is to “make every computer a bitcoin computer” by making its software compatible with any connected device. That means regular laptops and, eventually, mobile phones. This is a bitcoin innovation that should excite more than just bitcoin developers. “Every time you click a link,” Srinavasan told Yahoo Finance, “you could be earning money.” And you could do it without having to know how to mine bitcoin. It could lead to crucial solutions in an area like, say, news website paywalls.
5. Big-name support
This one’s a double: Two big names in the finance world came out in a surprising show of support for the blockchain industry.
Larry Summers, who last week joined the Digital Currency Group as a senior advisor, gave an interview at Consensus in which he went all in on the potential of blockchain technology for Wall Street solutions. “Is the blockchain technology going to be fundamental? I think the answer is overwhelmingly likely to be yes,” he said. As for bitcoin? Unsurprisingly, he's not as bullish. However, he acknowledged that there are many who believe blockchain without bitcoin defeats the whole purpose, and lacks the excitement, of bitcoin, which is open and decentralized. “While there are arguments you can’t get all the benefits without bitcoin, my suspicion is that ways will be found to get those benefits without the uncertainty in the value of bitcoin,” he said.
Glenn Hutchins, meanwhile, the founder of influential venture capital firm Silver Lake and a boardmember at AT&T, Nasdaq, and the Federal Reserve Bank of New York, appeared to do a 180 on bitcoin. Hutchins, in the past, had been dismissive of the cryptocurrency. But at Consensus, he delivered a speech on why bitcoin matters, even when the concept of bank blockchains is in vogue. He made the same comparison that has become so popular among bitcoin folks, likening private, closed blockchains to corporate Intranets, a concept that was once more widespread and is now less common and less useful to most companies. Hutchins said he now has plans to invest in bitcoin startups.
Hutchins also joined the board of Digital Currency Group, so if you’re keeping count, it’s really DCG—which owns the conference, added big players to its team, and scored a new funding round this month—that came out the real winner of Consensus.
Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.