Consensus 2021 — Day Four and Wrap

Three takeaways from the fourth and final day of Consensus from Coindesk — plus a few extra thoughts

The fully virtual — and thoroughly consuming — Consensus crypto conference concluded on Thursday and left a chain of burnt-out attendees in it’s wake. With content streams that started at 7 AM CDT and stretched to 10 PM on most nights, the sheer volume of information was overwhelming. When you add to that the fact that many of the topics exist somewhere near the furthest reaches of human imagination and understanding, the whole affair was a tad bit overwhelming. Exhilarating, yes, but also overwhelming. Here are three takeaways from the final day:

1. The first keynote of the day featured Michael Mosier, acting director of FinCen in a one-on-one conversation with Jill Carlson from Slow Ventures. As the area within the U.S. Treasury Department that covers all manner of financial crime, FinCen is the most important regulator that most people have never heard of. Normally, I wouldn’t choose to start my day with a talk from a financial crime cop but Mosier was a welcome exception to the rule. He has significant experience in, and therefore understanding of, the crypto space and an attitude that is more inclined to listening than pronouncing. Compared to the troglodytes from the previous administration that floated such doozies as requiring reporting for anyone that transacted more than $3k/day in crypto, Mosier seems to be pointing the agency in the right direction. Then again, he’s a cop now so it’s a good idea to suspend judgement and keep our guard up.
2. Serious issues like taxes, counterterrorism and legal clarity dominated the morning session with standout panelists that included Roger Brown from Lukka, Carole House from the National Security Council, Amanda Wick of Chainalysis, dYdX’s Marc Boiron and Rebecca Reitig from Aave. They were able to describe dense subjects in ways that were both clear and interesting. These are names to pay attention to.
3. The crypto-sphere proved that it is no different than any other area as they went all gaga over an appearance from football (American) GOAT Tom Brady. He recently generated some crypto buzz when he posted a “laser eyes” meme and the noted crypto luminary Sam Bankman-Fried invited him to join his keynote slot. It was underwhelming at best.

The GOAT goes laser eyes

Overall, I estimate that I spent close to twenty hours watching and listening to Consensus programming this week so it’s not surprising that I have a few extraneous observations that didn’t make it in to any of my four posts from the event. Here are a few of them:

• Consensus attracts a good number of sponsors but the total isn’t anything like it was in 2018, the last time that I attended and wrote about the conference. That year, there were an incomprehensible 203 sponsors listed, prompting me to comment at the time that it had to be nearly impossible to get any marketing value out of dollars spent. This year, the number of sponsors fell to the healthy but more rational level of 59.
• One interesting comparison is the top level sponsors from each year. There were five top level sponsors in 2018 and six 2021 but the lists are very different. In fact, no firm that was a lead sponsor in 2018 held the same spot in 2021. This year the big sponsors were BitGo, Bitstamp, crypto.com, etoro, nexo, and stellar development foundation while bloq, Deloitte, Ledger, Octagon Strategy, and SONM spent the big bucks in 2018. Like so much in crypto, even sponsorships change and evolve radically.
• Another thing that can change is terminology and one phrase that tripped me up at first was “non-hosted wallets”. Regulators like FinCen and others are concerned about the portability of cryptocurrency which is, after all, lines of code that can be stored on a thumb drive and carried anywhere in the world without too much trouble. Back in 2018, that was called “cold storage” and it was a sometimes desirable thing because it made crypto harder to steal. Just as my freedom fighter can be your terrorist, descriptive terms are important and “non-hosted wallets” is an attempt to frame a central tenet of cryptocurrencies in a negative light.
• The stature, if not always the quality, of the speakers and panelists has improved a great deal over the past few years. Some, like Ray Dalio and Cathie Wood, are really great but many (Larry Summers, Tom Brady) don’t add much beyond their “star power” to the event. Still, the ramp in stature is a sign of the continued mainstreaming and growth of crypto.
• Can anyone give me an update of where we are with the Joe Lubin / Jimmy Song bet on Ethereum? As you may recall, Song threw down on Lubin at Consensus in 2018, saying that ETH would never gain widespread usage through DApps. The bet was finalized at Consensus in 2019 with a term of four years. We are half way through the bet now and I’d like to know who’s keeping score. Song is a Bitcoin maximalist so he agreed to pay 69.74 BTC if he lost and Lubin is on the hook for 810.8 ETH if Song wins. At today’s prices of ~$2,700 for ETH and ~$38,000 for BTC, that translates to Song paying ~$2.65 million if he loses and receiving ~$2.2 million if he wins. Who’s ahead at halftime?
• The wall of money from traditional financial institutions that was all the rage a couple of years ago isn’t coming. Fidelity, for example, talks a big game about cryptocurrencies but really only offer it to family offices and family offices of family offices. Pensions, insurance companies, endowments and all the rest won’t be coming to cryptocurrencies anytime soon.
• The chat channel for Consensus was like nothing that I’ve ever experienced at a conference before. There were more than a few shillers and kooks adding comments but there was also an intelligent and insightful stream of opinion and facts that supplemented what was going on in the presentations. It was incredibly helpful and a lot of fun to be part of.
• Finally, the DeFi 100 story is emblematic of the current state of crypto. Last Saturday, Coindesk reported that the founders of DeFi 100 may have absconded with $32 million after the home screen of the company website carried a message that read “We scammed you guys and you cant do shit about it”. Not so fast, said the founders. For one thing, we only ever raised $2 million and, in actuality, it’s just that our website was hacked. As of yesterday, The Crypto Updates reported that things were back to normal. Coindesk is curiously mum on the topic. In any case, there are many lessons to be learned from this example but one should be clear above all the rest: crypto markets are unlike any traditional markets. As the desk sergeant said on the old TV cop show: “Hey! Let’s be careful out there!”

Chuck Mackie is a principal at Fathom Communication. Fathom provides thought leadership strategy and content that delivers both depth and understanding for financial services and technology innovators.