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Delegates arriving to attend Binary District’s Genesis London Conference on 22 February immediately paused to admire the spectacular views of the city from the 32nd floor of the CityPoint building. The view from inside the conference room was rather different, although no less impressive: it offered a perspective on the future of technology and finance through the lens of blockchain.
“Blockchain is like God,” Emin Gün Sirer, an Associate Professor in the Department of Computer Science at Cornell University, joked later in the day. “We don’t use a definite or indefinite article when referring to it – it’s just ‘blockchain’.”
The technology may not have god-like powers but it, and the cryptocurrencies it supports, is playing an increasingly disruptive role in the very structure of society, influencing investment, banking, the way we set up companies and the way we work within them, as the conference moderator, Patrick de Laive of The Next Web (TNW), said in his welcoming address.
“I first encountered bitcoin in 2011,” he went on to tell delegates. “I was waiting at a traffic light and noticed someone next to me reading TNW on his phone. We got chatting and he told me he worked for an exchange that traded bitcoin, and that I should buy some. I went online and saw that the price was 76c, but then I got distracted. When I eventually got around to investing, one bitcoin was $2,000.”
The sensational rise of bitcoin has sparked a host of cryptocurrency launches, given rise to a whole new area of academic research, and driven the launch of innumerable start-ups. It has also raised questions about privacy, scaleability and regulation.
From SNARKs to STARKs
Jack Gavigan, Chief Operating Officer at Zcash, focused on privacy in his presentation, looking at ways in which cryptocurrencies can ensure confidentiality: from the low-tech, such as the use of one-time payment addresses; through high-tech solutions such as zero-knowledge succinct non-arguments of knowledge (zk-SNARKs); to emerging technologies, which include MimbleWimble, scriptless scripts and scaleable transparent arguments of knowledge (STARKs).
A fascinating panel discussion on research-based blockchain development revealed the growing body of research from academia into the technology, and the increasing funding it attracts. Eli Ben-Sasson, Professor of Computer Science at the Israel Institute of Technology, offered this insight: “Academics are deep-space explorers venturing into the unknown, but the territory we are expanding is human knowledge. Sometimes we discover something incredibly valuable, but it’s about putting effort into things that may never come to fruition.”
In his presentation, ‘Scalable, Transparent and Post-Quantum Secure Computational Integrity, with Applications to Cryptocurrencies’, Ben-Sasson remarked: “Bitcoin is the first time a societal function thought to require a trusted party has been replaced by algorithms and protocols. But how can you achieve trust in a computation?”
Bitcoin’s solution to this dilemma – that everyone sees everything – is problematic from the point of view of both privacy and scaleability, he noted, citing the limitations in transactions per second that can be achieved using blockchain.
Mythical unicorns and digital kitties
The issue of decentralisation – which he likened to a unicorn – was addressed by Sirer, who has led a study concluding that both bitcoin and ethereum are less decentralised than was once thought. “Perhaps unicorns do not exist,” he said. “And perhaps a good workhorse is better than a mythical unicorn.”
The regulatory dilemma presented by cryptocurrencies was raised in a panel discussion, ‘Is London Getting it Right?’, which revealed that the City is broadly open to cryptocurrencies, but that a lack of regulatory clarity is hindering progress. As Gavigan noted: “Switzerland and Luxembourg are taking business that naturally belongs in London.”
This theme was continued by George Morris, a Managing Associate at law firm Simmons & Simmons, in his talk on cryptocurrency and regulation. He contrasted the UK’s cautious approach to the “open-arms” environment that exists in jurisdictions such as Gibraltar and Switzerland, but believes it is natural that regulators are moving slowly. “We’ve seen a digital CryptoKitty sell for $115,000,” he said. “How do you regulate a market such as this?”
It was one of many questions that remained unanswered on the day – another being “Could we solve Brexit using blockchain?” – but the Dolfin team left with no shortage of food for thought.