Boston Blockchain Week 2021
One month ago, Blockchain Week 2021 brought together developers, founders, investors, and academics from across the world to discuss NFTs, DeFi, crypto, and the future of blockchain. On the mainstage, we heard from executives of blockchain and financial services companies, leaders of crypto asset markets, artists and NFT creators.
Here are 10 key takeaways from the conversation.
Maintaining privacy and security is key as decentralized applications become a part of everyday life.
Steve Kokinos, CEO of Algorand, predicts that privacy and security will become increasingly pertinent topics as decentralized currencies become more mainstream. But while better, more secure, tools are important, this needs to be balanced with a seamless consumer experience so that makes blockchain more accessible at large. While much of the underlying tech for these solutions has been developed, we’re still waiting for consumer-ready tech, and app developers will be critical for this next phase of adoption. One example of this is SeedInvest, a product by Circle that allows companies to receive investments online.
Scalable Central Bank Digital Currencies (CBDCs) are coming soon.
Banks around the world are researching and have teams focused on CBDCs, which would allow governments to represent a country’s official currency in digital form, but it’s just research right now. In the next year or 2, Paul Riegle, CPO at Algorand, believes a government is going to come out with a CBDC. But, expect that governments will lean towards regulation vs. privacy for these currencies given their objectives.
DAOs and NFTs represent a powerful opportunity to protect, support, and uplift diverse narratives.
Artist and NFT creator Latasha Alcindor believes that NFTs are the future of art, but her biggest concern is to ensure that diverse narratives, especially those of marginalized communities, are welcomed and supported in the space. With this goal in mind, Latasha co-founded HerStoryDAO, which is focused around protecting Black narratives — particularly those of Black women.
Artists are making money from NFTs, representing a new avenue of income for smaller and emerging artists.
Data collected by Flipside Crypto suggests that on selective NFT marketplaces like SuperRare, creators can earn an average income of $39k, with the majority of this coming from initial sales, but a small amount coming from commissions on secondary sales as well. Angela Minster, Data Scientist at Flipside found that in the past 6 months (Oct 2020- April 2021), there were 887 creators active on SuperRare, and 7,766 NFTs minted, coming to an average of 8.7 minted per creator. SuperRare itself only makes about 15% on primary sales and 3% on secondary revenue, earning a total of $6 million in the past 6 months.
To pull your own crypto data, check out Flipside Crypto’s dashboards here.
Blockchain will enable widespread economic connectivity.
Consider the long-tail view — analogous to the rise of the Internet at the end of the 20th century, we are only beginning to imagine the economic connectivity between people across the globe that will be made possible by blockchain technology. Jeremy Allaire of Circle explained that while we are still in the early stages of seeing this happen, the future holds economic connectivity between people in every corner of the world, which is likely to increase payments by an order of magnitude and increase use cases for tokenized assets — from art, to real estate, and more.
The key to interoperability is understanding the state of each blockchain.
Interoperability is one of the biggest challenges facing widespread adoption of crypto assets. In a conversation with Pillar VC’s Jamie Goldstein, Paul Reigle of Algorand shared that the problem is “Chain A has to know what has happened on Chain B, but chains are generally locked in their own spheres”. Alogrand has been working on a number of interoperability projects, including faster execution, faster settlement, and lower transaction cost. In 2021, Algorand’s goal is to reach 46,000 transactions per second (TPS) and 2.5 seconds to block finality.
Institutional adoption of blockchain is growing, and will become the new reality.
Cryptocurrency is appearing on more balance sheets of traditional corporations, who are opening more of their own treasury accounts using cryptocurrency as a way to pay different people in their ecosystem. Katie Chase of Coin Metrics explains that this trend is driven by the consumers themselves. Traditional barriers to institutional adoption — that there wasn’t enough customer pull to offset the risk dynamic — are being broken down. Anton Katz, CEO of Talos Trading, adds that these institutions have now grown to focus on diversification as well — buying more operational assets, like Ethereum, rather than all Bitcoin.
Layer 1 is ideal for NFTs, but we still need Layer 2 due to transaction fees.
Ideally if we have a scalable layer 1, we won’t need layer 2, notes John Crain, CEO at SuperRare. Transaction fees can be very expensive on Layer 1, but there are security tradeoffs with switching to Layer 2 (where it is less expensive). Many of the Layer 1 protocols are working to solve this, but for now, Alexei Falin, CEO at Rarible, noted solutions like lazy minting in Ethereum, where the artist can mint their work for free, and instead the buyer pays for the minting process.
When it comes to appraisal tools for NFTs, the existing auctioning systems are pretty good.
It may seem that because any past, current, and future sport, movie, tv show, etc. can be created and sold as an NFT, the potential supply is essentially limitless, but demand is limited. Christian Dittmeier, Co-Founder at evaluate.market, explains that the value of NFTs is in the competition for attention, which is reflected in the price.
John Crain, CEO at SuperRare, builds on this, sharing that appraisal can be very challenging even in existing markets. Since NFT markets are still very new, the current best way to price an NFT is to have an auction and just let it run. Alexei Falin, CEO of Rarible, recommends that artists getting into NFTs should start at a low price point and see what happens on the secondary market.
Cryptocurrency energy usage is an important factor to consider.
As blockchain use becomes more prevalent, people are more concerned about energy consumption. Algorand recently announced that they are carbon negative and have been supporting a chain of projects about carbon reduction, including reforestation in Southeast Asia, wind projects in Mexico, and land restoration in Indonesia.
Thanks again to our mainstage hosts, Pillar VC, Algorand, Circle, Flipside Crypto and Castle Island Ventures for hosting! We’ll see you next year.