To set the scene, there was a real buzz in the air. Including a number of curious Bitcoin zillionaires in attendance. They were easy to spot by their fashion appearance. Poor people are crazy, but rich people are just eccentric. One 60 something guy had a black cowboy hat with a pink scarf tied around it leaving a kind of a long tail. Another beefy 50 something guy had a renaissance over decorated outfit for summer. It was a white and navy 17th century French pattern that belongs on my grandmothers cushions. It was actually a t-shirt with matching shorts AND sandals. Anyways, enjoy my notes below.
2) Roger Ver CEO of bitcoin.com stressed ESG around democracy and economic freedom. In his view, wider cryptocurrency adoption helps economies especially in the developing world. This can directly be tracked by fewer child deaths by higher incomes in more open economies. The unbanked today, over 2 billion people, could be the biggest beneficiaries of Blockchain and any global crypto revolution. This was a similar theme repeated by others.
3) Galaxy Digital co-founder David J.Namdar, gave an interesting overview of what to expect. He is ex UBS & Millennium, in both Hong Kong & New York, and ran SolidX previously. He was trying to launch a Crypto themed ETF last March 2017, just like the Winklevoss Twins. US regulators shut that possible future down.
* As far as future trends, he stated that decentralized crypto exchanges seem to be the way forward. Japan's centralized exchanges may be 70-90% of Japanese yen trading today, but it could reduce to just 30% within 5 years.
* That seems to mean that Binance and others like it have higher growth potential going forward. His new merchant bank is expanding now, and seems to have a bright future not just trading, but across various kinds of transactions. It is a great new business model to put on your radar.
4) Ikigai Asset Management founder Travis Kling, offered hedge fund views that reflect his trader background of 10 years of trading experience. Coming from 2 top global hedge funds previously, Magnetar and Point72 (formerly SAC) he really knows how to professionally trade crypto.
* He has "fallen down the rabbit hole of crypto" and explained a number of new concepts. Everyone who saw his session got a very unique education on how to trade in crypto.
* He explained a few new laws to consider like Metcafe's law about cell phone size networks and how they grow. He also introduced the NVT ratio to many in the audience. What is it? MV=PQ it is the equation of exchange and helps understand any velocity price problem. He was the only speaker to state it is good to learn from others but always remember DYOR (Do Your Own Research).
* He thinks that there was a bubble full of poor quality ICOs in 2017, and now the holders face the "Prisoner's Dilemma" between buyers & sellers. If these crypto speculators made a lot of money from Ethereum last year, many investors bought any ICO to diversity their new found gains. However, the prices are now down in 2018, but they need cash now. If they sell now, the price will go down, but they want to keep the price rising higher, so what to do?
5) Sirin Labs co-CEO Moshe Hogeg, announced live at the event his new mobile smart phone. The 2 key outstanding features were its built in "cold wallet" for any crypto holdings. He said that if Gold holdings worldwide are worth USD7 Trillion today, while all digital currencies are only worth USD250 Billion, they may the perfect phone for future growth.
* The mobile will also have cross convertibility of crypto with transactions. If you had Ethereum, but could only pay in Bitcoin, the phone would do that instantly.
* He said it has specs equal to the Galaxy 9 or the iPhone 10. It will go on sale globally in around 15 countries this November 2018. It will have a multi layer cyber protection suite.
* They will also have a decentralized app store, and use Lionel Messi (Global Soccer Superstar) is the brand ambassador for this new mobile.
* It is very similar to iPhone 10 and Samsung Galaxy 9. For sale in November 2018 and will be for sale in many cities including Tokyo. "Dive into Crypto" is on his T-shirt. His t-shirt said "Dive into Crypto" I loved that!
6) BITPOINT CEO Genki Oda, spoke publicly despite just getting FSA order for business improvement 3 days before. It was a gutsy move explaining this recent event live on stage. He did a great job. I am sure many on his team would have wanted him to cancel. Being ESG friendly, he went for a strong Corporate Governance option and spoke well.
* Bitpoint was 1 of 6 Japanese crypto exchanges given business improvement orders, he still showed up and spoke well publicly. A rare positive move for corporate Japan.
* He felt it was best as many attendees in the Japan Blockchain Conference, would be curious anyway to hear if he could comment on the orders, and give any view.
* The Kanto Finance Bureau gave 6 suggestions to Bitpoint. He was transparent and went over all 6. This included requests improvements around the Bitpoint management team, risk systems and the risk management structure in place today.
* Originally, when he had the idea for a crypto exchange, he wanted to offer a safe offering within the bitcoin space for Japan. That was the original goal.
* At the time, anything involving bitcoin was considered unsafe due to the MT Gox fiasco hack back in 2014.
* To my surprise, he explained that they have a "warm wallet" at Bitpoint. It is not hot, and not cold, but warm, a combination of the two. He did not explain the trade off in features, but I have never heard of this before.
* He wants to expand the range of digital currencies on the platform in future. He feels the range today is too limited. More choice would be better despite the technical difficulties.
* Merchants have Bit point pay while customers use Bit point wallet, both inhouse systems.
In future, other markets in Korea, Taiwan, China, Singapore and Hong Kong are part of their expansion plans starting later this year.
* They are going to advertise on TV to educate the mass market in Japan. They will have our call center in Okinawa, in order to service any growing retail customer base.
* So far only 4% of Japanese own crypto today. If they can bring a better safer crypto exchange to Japan, they hope the entire market will grow and they will certainly benefit directly.
7) Charles Hoskinson Input Output Hong Kong CEO, Research is something that is needed in these evolving times, and Charles has been at it a long time. He grew up in a small town in Maui, and explained how when he was young, he had to put in major effort to bike to a local library. He would borrow books, take them home, read them, and then return them over time. A lot of human effort. Today people just go online, and instantly find anything on the internet. This is progress and wide access to information.
* Charles is a real thinker and one of the most interesting observations he said was profound. Most of Silicon Valley is fast moving, they prefer to "Move fast and break stuff". This is fine, when the goal is to get any MVP (Minimum Viable Product) out into the market. The mentality is you can fix mistakes with a patch later, or a second patch, maybe an update. The most important thing is to get the software or hardware out there. Customer feedback on bugs can be fixed later on, just get it out now.
* Blockchain in many ways is actually Anti-Silicon Valley culturally. The whole point of a Blockchain is to be ready on day one. The goal is to be perfectly smooth running for customers, as it is their personal wealth & corporate finances at risk.
* In many ways Silicon Valley is about an aggressive tech culture, but Blockchain is more about a conservative financial market culture. These two groups are very much not the same. It may not be realistic to think California will win any Blockchain race to perfection. It is not in there DNA.
* Working with developers & regulators, testing to perfection, seeking out approvals and coordination with them takes time. This is not the Silicon Valley way at all. Just ask Facebook.
* Privacy is going to change due to a move away from centralized networks to pier to pier networks due to Blockchain. There is often a lot of "leakage" of data by centralized networks. Equifax for example, but many others will follow.
* In future banks will no longer be able to force people who want a loan to submit a lot of data that had little to do with any loan. This is often abused. Facebook and many others want to know and then sell everything they can about their customers. In future, it will be up to the individual to sell his personal data to a third party or not. This is something that the Blockchain will be able to make take place.
* Take a simple example like going to a bar in the USA. At the door, you will be asked if you are 21? In order to prove you can answer this one single question, you need to show a passport or driver's license. These documents show much more than the single answer, so leakage of extra data take place.
* Does the bar need to know your exact age? eye color? place of birth? where your passport was issued? No, it does not. Blockchain will be able to encrypt data that is needed and not release data that is not. This is the business model that Facebook has in place, and soon will be forced to change by regulators.
8) Hiwon Yoon BITARGO CEO, unlike many of the other foreign speakers, Hiwon spoke in fluent Japanese. It turns out he is Korean, and studied aquadynamics at a masters level. He joined Salomon Brothers and was a derivatives sales for 10 years. He then finished his PhD and then became a startup founder more recently.
* BITARGO was one of the first 11 Japanese crypto exchanges to get a license from the FSA on Dec 1st, 2017. They have been actively trying to make sure safety of funds for customers is a priority. He did not focus on his exchange in much detail, more his own career.
* He also explained the history of money and the costs around it. The most interesting section was the cost of making bills and coins in Japan. The government certainly makes a lot of revenue from this. As a result, they do not have a large incentive to allow new online competitors to reduce cash use in Japan via crypto currencies.
* One clearly explained example was Japan's 10,000 yen note. It only costs 20 yen to produce! For those not familiar with yen value, if you could sell $100 dollars and only pay 20 cents for production, that is a business you would keep running for as long as possible!
9) Taiwanese Politician Jason Hsu, gave a really encouraging view of a possible Blockchain future. As an elected politician in the legislature of Taiwan, he explained how Taiwan is taking clear steps to be very Blockchain friendly to new crypto entrepreneurs in the future.
* They will start the first ever ICO Sovereign Fund. This fund will be created to support the crypto industry.
* The ICO Sovereign Fund will be registered under the Ministry of Technology. Overseas startups are welcome.
* The investment mandate states they can only invest in ICOs that are properly registered in Taiwan.
* The ICO Sovereign Fund will be managed by a Board of Industry Professionals, not civil servants.
* They will have a special sandbox for ICO funded startups that allows legal protection for the first 3 years.
* Charles is a real thinker and one of the most interesting observations he said was profound. Most of Silicon Valley is fast moving, they prefer to "Move fast and break stuff". This is fine, when the goal is to get any MVP (Minimum Viable Product) out into the market. The mentality is you can fix mistakes with a patch later, or a second patch, maybe an update. The most important thing is to get the software or hardware out there. Customer feedback on bugs can be fixed later on, just get it out now.
* Blockchain in many ways is actually Anti-Silicon Valley culturally. The whole point of a Blockchain is to be ready on day one. The goal is to be perfectly smooth running for customers, as it is their personal wealth & corporate finances at risk.
* In many ways Silicon Valley is about an aggressive tech culture, but Blockchain is more about a conservative financial market culture. These two groups are very much not the same. It may not be realistic to think California will win any Blockchain race to perfection. It is not in there DNA.
* Working with developers & regulators, testing to perfection, seeking out approvals and coordination with them takes time. This is not the Silicon Valley way at all. Just ask Facebook.
* Privacy is going to change due to a move away from centralized networks to pier to pier networks due to Blockchain. There is often a lot of "leakage" of data by centralized networks. Equifax for example, but many others will follow.
* In future banks will no longer be able to force people who want a loan to submit a lot of data that had little to do with any loan. This is often abused. Facebook and many others want to know and then sell everything they can about their customers. In future, it will be up to the individual to sell his personal data to a third party or not. This is something that the Blockchain will be able to make take place.
* Take a simple example like going to a bar in the USA. At the door, you will be asked if you are 21? In order to prove you can answer this one single question, you need to show a passport or driver's license. These documents show much more than the single answer, so leakage of extra data take place.
* Does the bar need to know your exact age? eye color? place of birth? where your passport was issued? No, it does not. Blockchain will be able to encrypt data that is needed and not release data that is not. This is the business model that Facebook has in place, and soon will be forced to change by regulators.
8) Hiwon Yoon BITARGO CEO, unlike many of the other foreign speakers, Hiwon spoke in fluent Japanese. It turns out he is Korean, and studied aquadynamics at a masters level. He joined Salomon Brothers and was a derivatives sales for 10 years. He then finished his PhD and then became a startup founder more recently.
* BITARGO was one of the first 11 Japanese crypto exchanges to get a license from the FSA on Dec 1st, 2017. They have been actively trying to make sure safety of funds for customers is a priority. He did not focus on his exchange in much detail, more his own career.
* He also explained the history of money and the costs around it. The most interesting section was the cost of making bills and coins in Japan. The government certainly makes a lot of revenue from this. As a result, they do not have a large incentive to allow new online competitors to reduce cash use in Japan via crypto currencies.
* One clearly explained example was Japan's 10,000 yen note. It only costs 20 yen to produce! For those not familiar with yen value, if you could sell $100 dollars and only pay 20 cents for production, that is a business you would keep running for as long as possible!
9) Taiwanese Politician Jason Hsu, gave a really encouraging view of a possible Blockchain future. As an elected politician in the legislature of Taiwan, he explained how Taiwan is taking clear steps to be very Blockchain friendly to new crypto entrepreneurs in the future.
* They will start the first ever ICO Sovereign Fund. This fund will be created to support the crypto industry.
* The ICO Sovereign Fund will be registered under the Ministry of Technology. Overseas startups are welcome.
* The investment mandate states they can only invest in ICOs that are properly registered in Taiwan.
* The ICO Sovereign Fund will be managed by a Board of Industry Professionals, not civil servants.
* They will have a special sandbox for ICO funded startups that allows legal protection for the first 3 years.
10) Mikhail Mironov at ICORating.com, gave a unique view to the audience. He is the head of Partnership, and his firm does ICO ratings the same way that Moody's and Standard & Poor's do Credit ratings. They follow a very similar business model.
* He mentioned that the market closed USD6,184,529,160 worth of ICO deals in all of 2017 as far as ICOs. This is mostly May-December. However, some USD3,331,005,381 worth of ICO deals has closed in Q1 from around 412 projects. This is the first quarter only, so a very fast pace of growth. Will the bubble continue? end or change in form or style?
* Many ICO projects are not well developed. Some 46% percent only had an idea, 26% percent had MVP (Minimal Viable Product), 15% had alpha stage 11% were beta stage, only 0.5% had a working code at ICO time.
* Those figures seem to give a better view on any ICO progress by comparison. He said the experience of any previous entrepreneur often counts for a lot.
* Private ICOs are now common. 30-60 days is the duration. Telegram and Huobi were very big deals (over USD1Billion) that were oversubscribed and not included in the figures.
* To my surprise, half of all ICOs were for only USD100,000 or less in value. I only heard about 10 figure deals myself.
* The core team, developers, white paper, and MVP are the four main points to focus on with any solid ICO offering for investors.
* Advisors especially can help any ICO with partnership ideas and introductions for them to be executed.
* Gibraltar, Bermuda, Malta and Monaco are becoming 4 new crypto centers for licensing of entities. This is because US regulations are getting a bit too heavy and going offshore.
11) Uriel Peled, co-Founder of Orbs, gave a great speech and is a experienced entrepreneur. He already started another Israeli startup, moved it to Shanghai, then sold it to Alibaba, and is now doing his second startup called Orbs.
* He is trying to help the low speed problem now faced by many wanting to transact on the ethereum Blockchain. Quick is 20 seconds and slow can take 7 minutes for a transaction to close. It is all about the nodes.
* He mentioned how in 2017, cryptokitties was a popular ICO that got bogged down by slowness on the Blockchain. Finding a way to minimize the 15,000+ nodes today needs to be improved to speed up transaction times. The trade is a lack of security. A small node of 21 could more easily be hacked, and fast, scamming many of their funds.
* He presented a compromise of 1000 nodes with special features to speed up the traction times, all this while keeping a very high level of security for all users.
* He proposes a new way with no fees per transaction, 100K transactions per second for monthly subscription. He likes the Amazon Web Services model, and thinks this is a good one to follow.
* The key way he can technically increase speed is called "Intelligent Sharding" or virtual chains. It is a way of not randomly having transactions close, but subdividing them into mini-internal Blockchains. His clear visual slides made the concept very easy to understand to the public audience.
12) Yuri Rabinovich Venture Network CEO, is the ICO dead in 2018? Maybe in its previous form, it may be reborn as a private Token sale instead. The ICO boom from May 2017 until today may soon end in its current form. Very soon, in fact as early as this summer, a second generation of ICO offerings will start, but in new ways.
* Venture Capital investment into Blockchain, started to reduce in 2016, by 2017, the VC gap got filled by a new funding method, the ICO. The first one was done in 2013.
* Venture Networks is offering a new way to get exclusive access to the best ICO offerings in the future. This is mainly targeted at HNWIs, Family Offices and founder entrepreneurs.
* He feels that there are 3 hurdles going forward. Lack of liquidity for equity holders like founders. Diversification of risk which is often concentrated in a single startup. Access to high quality deals that many investors cannot find or be invited to consider. All 3 of these issues are being addressed by Venture Networks.
* The most interesting concept was the failed founder, with experienced skills, but no equity, getting a second chance to use his former equity value in the system despite an initial failure. It was a curious twist on how to win despite losing.
* Over the last 2 years, 800-1000 tokens have already failed, and of the remaining tokens, less than 5% ever get traded on any exchange. It is a very high risk high return investment.
* ICO trends are moving from public to private sales. Telegram is a good example. They use SynergyChain to do this. Better quality real or established business are emerging to be the norm, not "just an idea & a whitepaper anymore" The size of the ICO is now reducing as well. Very few will raise over USD50M in future unless clearly justified. Pure luck or bubble timing with an ICO, has run out.
13) COTI Group CEO Shahaf Bar Geffen, in addition to being CEO of COTI(Currency Of The Internet), Shahaf is in the Israeli Air Force and flies F-15 fighters. I like to think of him as a Top Gun and imagine his call sign to be "BG Skyking" or something similar. He is an impressive guy, a gifted public speaker. He is a family man and father, who has had "3 children by the same woman". Which I admit, is becoming rare these days.
* COTI has a number of features that many are going to benefit from. The concept of trust is a big issue with Blockchain. Unlike a credit card company, there is no recourse when a transaction is not honored. You cannot get your money back if you order products, pay for them in Bitcoin or another crypto, but do not get them delivered. This is an issue that COTI is trying to solve.
* They create a jury system of users who vote on disputes. If you win the dispute and back the winning side, you get some crypto incentives. It is a financial reward system for justice. It is limited so that it cannot be over abused, but seems to work well and the interest from users is clearly there.
* Another thing that COTI is offering is stability. The high price volatility within many crypto currencies make any store of value and any means of exchange to be near impossible. By providing a lower price volatility offering, real commerce will spread more widely on with cloud with crypto helping all tokens overall over time.
11) Uriel Peled, co-Founder of Orbs, gave a great speech and is a experienced entrepreneur. He already started another Israeli startup, moved it to Shanghai, then sold it to Alibaba, and is now doing his second startup called Orbs.
* He is trying to help the low speed problem now faced by many wanting to transact on the ethereum Blockchain. Quick is 20 seconds and slow can take 7 minutes for a transaction to close. It is all about the nodes.
* He mentioned how in 2017, cryptokitties was a popular ICO that got bogged down by slowness on the Blockchain. Finding a way to minimize the 15,000+ nodes today needs to be improved to speed up transaction times. The trade is a lack of security. A small node of 21 could more easily be hacked, and fast, scamming many of their funds.
* He presented a compromise of 1000 nodes with special features to speed up the traction times, all this while keeping a very high level of security for all users.
* He proposes a new way with no fees per transaction, 100K transactions per second for monthly subscription. He likes the Amazon Web Services model, and thinks this is a good one to follow.
* The key way he can technically increase speed is called "Intelligent Sharding" or virtual chains. It is a way of not randomly having transactions close, but subdividing them into mini-internal Blockchains. His clear visual slides made the concept very easy to understand to the public audience.
12) Yuri Rabinovich Venture Network CEO, is the ICO dead in 2018? Maybe in its previous form, it may be reborn as a private Token sale instead. The ICO boom from May 2017 until today may soon end in its current form. Very soon, in fact as early as this summer, a second generation of ICO offerings will start, but in new ways.
* Venture Capital investment into Blockchain, started to reduce in 2016, by 2017, the VC gap got filled by a new funding method, the ICO. The first one was done in 2013.
* Venture Networks is offering a new way to get exclusive access to the best ICO offerings in the future. This is mainly targeted at HNWIs, Family Offices and founder entrepreneurs.
* He feels that there are 3 hurdles going forward. Lack of liquidity for equity holders like founders. Diversification of risk which is often concentrated in a single startup. Access to high quality deals that many investors cannot find or be invited to consider. All 3 of these issues are being addressed by Venture Networks.
* The most interesting concept was the failed founder, with experienced skills, but no equity, getting a second chance to use his former equity value in the system despite an initial failure. It was a curious twist on how to win despite losing.
* Over the last 2 years, 800-1000 tokens have already failed, and of the remaining tokens, less than 5% ever get traded on any exchange. It is a very high risk high return investment.
* ICO trends are moving from public to private sales. Telegram is a good example. They use SynergyChain to do this. Better quality real or established business are emerging to be the norm, not "just an idea & a whitepaper anymore" The size of the ICO is now reducing as well. Very few will raise over USD50M in future unless clearly justified. Pure luck or bubble timing with an ICO, has run out.
13) COTI Group CEO Shahaf Bar Geffen, in addition to being CEO of COTI(Currency Of The Internet), Shahaf is in the Israeli Air Force and flies F-15 fighters. I like to think of him as a Top Gun and imagine his call sign to be "BG Skyking" or something similar. He is an impressive guy, a gifted public speaker. He is a family man and father, who has had "3 children by the same woman". Which I admit, is becoming rare these days.
* COTI has a number of features that many are going to benefit from. The concept of trust is a big issue with Blockchain. Unlike a credit card company, there is no recourse when a transaction is not honored. You cannot get your money back if you order products, pay for them in Bitcoin or another crypto, but do not get them delivered. This is an issue that COTI is trying to solve.
* They create a jury system of users who vote on disputes. If you win the dispute and back the winning side, you get some crypto incentives. It is a financial reward system for justice. It is limited so that it cannot be over abused, but seems to work well and the interest from users is clearly there.
* Another thing that COTI is offering is stability. The high price volatility within many crypto currencies make any store of value and any means of exchange to be near impossible. By providing a lower price volatility offering, real commerce will spread more widely on with cloud with crypto helping all tokens overall over time.
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