I watched the Crypto Assets Conference on the 18th and 19th October which was in Frankfurt organised by the Frankfurt Blockchain Center (Frankfurt Business School). This is the second conference this year. I attended online as the tickets to attend in person were outside of my budget at around €500. I would like to share with you a short summary of some of the more interesting presentations and some of my preconceptions and reflections from the two days of the event.
I was expecting a very stuffy affair with many corporate attendees out of touch with crypto technology, but I was pleasantly surprised with the variety of speakers and the great level of knowledge that was presented.
The conference kicked off with the consultant admitting that things are moving fast and all his predictions last year about the crypto space did not happen but that there has been massive growth in the metaverse and NFT space. Ironically now this market has also crashed.
There was no update on a digital euro or from the central banks. The reasons given were that there is no news released from them and they do not expect any changes within the next two years. I guess this means all the talk about implementing CBDCs is not moving as fast as we might think.
The conference got moving very quickly with an update about ETH from a speaker from the core Ethereum development team. I can summarise his presentation as their goal is that they are trying to implement Hive but on Ethereum.
The argument is that this should be the settlement ledger of crypto. Many ideas about the benefits of PoS over PoW were presented and made sense, although these fell down when talking about decentralisation and being able to host an ETH node costing at least 32 ETH for "security reasons".
It was worrying when he mentioned that if someone wanted to take over ETH or attack the network by buying the tokens then the community could come together and remove the stake of these bad actors. This was given as a key benefit. I didn't understand how buying ETH could allow you to take it over or be considered attacking the network. Maybe it is something to do with governance?
I am not so up-to-date on what is happening with ETH, so it was really helpful and informative.
The presentation and questions answered by Jan Brzezek from Crypto Finance were very interesting. I grabbed the above screenshot that I thought was quite important "Not your Keys, Not your Crypto".
He covered some good topics such as custodial issues, how the banks and institutions will deal with sending and receiving crypto, and regulatory considerations. One key thing I noticed was how he talked about P2P but did not explicitly say, there would be no banks involved in the future. The role of banks was talked about more on day 2 which covered more regulatory topics and the thought promoted was that banks will somehow transform into custodians of crypto assets.
Katharina gave an overview of AML (Anti-Money Laundering) considerations and warned that many challenges lay ahead for regulators.
JP Morgan was also there and announced that they are the world's largest fintech with $12 billion in assets and it is dear to their hearts. I also thought it was noteworthy that they mentioned that they have established a new department for web3 and the metaverse.
Their first topic was programmable payments or money. The main benefit of blockchain was argued is "consensus" on transactions. Blockchain gives value because it can carry code and smart contracts in real-time and instant settlements.
In Singapore, they are working to use "tokenised deposits" in a public project to see how that is working. I guess this is a precursor to the upcoming CBDC that everyone is thinking about.
They are looking for use cases with data such as crypto deposit accounts and resolving transaction reconciliation problems for example.
Regarding web3, they were saying that it isn't easy to buy and transact in crypto or NFTs, particularly for self-custody. This is then a reason holding back mass adoption. I could agree with this in the case of Metamask, as it isn't the friendliest wallet in comparison to say your Hive wallet.
Good points were raised also about that most crypto firms are small and dynamic and the banks and regulators cannot communicate with them and understand what's going on. This is also reversed in that smaller fintech companies in the crypto space don't have the regulatory teams or banking understanding to be able to communicate with the banks.
It was touched on later on day 2 that the definition of a security is unclear because with Defi, there is no intermediary, and this is where all the grey area comes from. The Howey test that was shown in detail on day 2 was pretty clear to me that there is no need for specific regulation in Defi, but I guess this isn't in the interests of the banks or regulators.
There was a nice panel discussion here and some of the key messages from some of the panel were "financial independence", "education" and "financial inclusion". There were some great ideas that I could agree with.
There was a presentation about how blockchain is implemented in a corporate environment. The speech started with the term "use cases" and he was also focused on adoption and what that looks like.
This presentation by T Systems was very interesting because they admit that Metamask is not fit for purpose and is useful for any day-to-day transactions.
However, they proposed that banks need to provide a solution for this. I couldn't disagree more! Freeing ourselves from banking is what we need, both commercial and central banks.
Their argument is that banks should provide the infrastructure and things like governance and staking options. I am not sure that this is needed, will we need banks in the future?
Although one thing that was raised later about this topic but is relevant I think was that perhaps banks will provide security for your assets. What extra protections do your crypto assets or you need if your net worth is open on the chain, I'm not quite sure?
The main goal of their presentation was also looking to provide (read sell their own) infrastructure, invest and look for or bring use cases to different blockchains. As this is the main business of T Systems, this was a pretty predictable expectation from them.
One good thing they mentioned was about the banks needing to open up their custodial infrastructure to be less centralised and move towards a decentralised model. (With them providing the infrastructure of course).
Here there was a lively panel on some of the current topics in the crypto space such as the economy and when will the market recover. It then discussed many cool ideas about the future and where we will likely be in 2023. Nothing remarkable stands out to me off of the top of my head now, but it was good to listen to at the time.
The F5 Crypto presentation was covering Crypto Asset Management and was a good walk-through on the topic. These are some of the things I generally think about when investing in crypto.
A fun presentation by Julian was about Bitcoin and why we should invest in it. A key takeaway for me was the custodial question where it was explained why you have a choice if you hold your assets. Whether as a retail or institutional investor, you can avoid using banks in the future. Funnily he swore a couple of times which made his presentation edgier.
There were many panel discussions with a few speakers at a time that made for some good discussions and these help keep the event lively. Those attending could also leave questions in the Telegram group for the presenters and panels, so it was interactive somewhat.
An interesting speech that I caught was from the European parliament spokesman who couldn't attend Frankfurt as he was busy in Strasbourg. This was a speech mainly focused on the mica agreement agreed upon in June. It is about wanting to regulate who can create coins and make capital requirements for this. The reason given was consumer protection.
It was very much as you would expect from a politician, very monotone, and the consumer protection angle was not so convincing as to their true agenda, but as I didn't know too much about it, it was informative.
The next presentation was a lively presentation about regulation. It covered as I mentioned above the situation in the US and how regulators are now suddenly getting quite active. Although there is a grey area with what is a security investment.
There were some more presentations about the German crypto market and many discussions about regulation in Germany. I didn't catch any particular takeaways except for many requests that BaFin needs to learn about the crypto products were repeated often.
Overall it was a pretty good conference and I would have liked to have been there in person to speak to some of the speakers and get more of a feel for the vibe there. It was on the one side, full of bankers and regulators and maybe less from the developers and users.
Credits:
I do not own the copyright to the screenshots. They are taken from the Livestream of the event hosted by Frankfurt School Blockchain Center and source.
Used under fair-use section 107 of the Copyright Act 1976.
I had a ticket for the Livestream, but recordings of the event by the host should be made available later for those interested.
Title image created in canva using image from source
All text is mine.
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