The DC Blockchain Summit, set for March 3rd, is bringing bitcoin back to Washington DC in a big way. We haven’t had a major conference here since the Bitcoin in the Beltway conference, nearly two years ago. That event was a different beast all together, focusing on bringing the biggest names in bitcoin to the Capital, the DC Blockchain Summit is more focused on starting the dialog between not only industry and government, but between the various government agencies as well.
The government is getting involved in cryptocurrencies, that much is a given. Cryptocurrencies aren’t going away, the various regulation agencies seemingly have come to grips with that. If they wanted to wipe cryptocurrencies off the planet, they have no one to arrest and no way to shut them down. Even while Homero Joshua Garza sits on the verge of a $10 Million judgment against his companies, no one is seemingly trying to shut down Garza’s Paycoin, which for good or ill, has continued on like many other altcoins do today: clinging to life, but managing to do so for a while.
It is an important distinction that I don’t think has gotten enough attention: While Garza’s companies are going down, there have been no public attempts to shut down the currency he created.
Even though shutting down Bitcoin and the other cryptocurrencies doesn’t seem to be on their plate, regulation, of one form or another, is coming. It is important that when that discussion is going on, the cryptocurrency community is represented as well. Simply ignoring the conversation is surefire way to get the strictest regulation possible. It isn’t about appeasing the regulators but rather educating the regulators and finding common ground.
Bitcoin is a versatile technology. Since it can do so many things, it isn’t easy to put it in a regulatory box and that kind of confusion can lead to confusing and even damaging regulations. Whatever kind of regulation you want to see, engagement is always a better tactic than negligence.
I spoke to Perianne Boring, the creator of the DC Blockchain Summit and the head of the Chamber of Digital Commerce and Matthew Roszak the CEO of Tally Capital and a board member of the Chamber. The Chamber is based in Washington DC and recently announced the Blockchain Alliance, a semi-open forum where law enforcement and leaders in the Bitcoin industry can work together.
We talked about the DC Blockchain Summit, regulations, and the future of Bitcoin in American politics.
Ian DeMartino: Perhaps we should start with what your specific goals are for the DC Blockchain Summit, and what do you hope to accomplish?
Perianne Boring: The goal of the DC Blockchain Summit is to bring industry and government together to increase the dialog between the public and private sectors.
Matthew Roszak: As an investor and entrepreneur in this industry, the dialog in DC needs to amp up in terms of the blockchain, and the future potential for this technology. The Chamber has developed a timely conversation here at the intersection of industry, technology and regulation. It’s a great way for everyone involved to come together in DC, to compare notes and build perspective about this technology, much like how we looked at the internet in the 90s or Skype or mobile phones, any of transformative technology that didn’t fit into a traditional regulatory box.
DeMartino: The list of speakers is really getting impressive. Did you expect this kind of response when you set out to create this summit?
Boring: We do have high-level speakers, which is reflective of the high level of work we do here at the Chamber.
DeMartino: You have been entrenched in Washington with the Chamber for a while, what can you tell us about the mindset of politicians in Washington when it comes to digital currencies?
Boring: It is quite a mixed bag. While there are a few key leaders on the Hill, there is a bit of an education gap in Congress – mainly because there is no proposed legislation regarding blockchain technology – but also because Congress is not seeing this issue as a priority right now. Most of the action regarding bitcoin and blockchain is happening within the regulatory agencies and law enforcement. We have been impressed to find many within the agencies that have a deep technology understanding of the blockchain. So, it varies across government and our goal is to shorten that educational gap across all parties.
To give you a brief overview of the federal regulatory environment, there are a handful of federal agencies looking at this technology through different lenses. For an example, the US Commodity Futures Trading Commission (CFTC) is looking at this from a commodities perspective. The Security Exchange Commission (SEC) is looking at bitcoin through the lens of a security, albeit they have not deemed bitcoin itself as it a security. It only gets more complicated from here — there are multiple departments within the US Treasury Department that are regulating bitcoin including, FinCEN, the money laundering regulator, regulates bitcoin as a currency and IRS regulates it a property.
As you can imagine, for a company that wants to use this technology or build and innovate with the blockchain, how complicated navigating the regulatory environment can be.
DeMartino: When you launched the Blockchain Alliance, I did write an op-ed supporting the move. But there were some in the community who felt you shouldn’t be working with law enforcement at all, do you have anything to say to those critics?
Boring: The people that criticized us probably have never been to Washington, DC. They probably don’t understand how policy is formed. I think if they were able to understand how close law enforcement is working with regulators, they would see that it is a threat to public policy. If they see an increasing amount of criminal activity and law enforcement is intimidated by the technology, that could lead to the type of regulation that is harmful to all businesses.
DeMartino: Do you think removing Ponzi schemes and other scams in cryptocurrencies is essential to Bitcoin’s growth?
Roszak: There are always going to be edge case involved in new technology adoption. If you look at the headlines over the past 12 months it has been household names in tech and financial services marching into this space, as opposed to 24 months ago when the media was focused on Mt. Gox, Silk Road and other salacious headlines. Now those negative headlines have been muted, and the volume has been turned up on blockchain innovation – and the potential of this new railroad is on the mind of every CTO on the planet.
DeMartino: You mentioned how investors are oftentimes scared of uncertainty, how does that pertain to the current blocksize debate, is that scaring off investors?
Roszak: The debate and respective drama is in so many ways a powerful feature of this decentralized, P2P, consensus-based system. It is embedded into the fabric of the protocol. We have very committed and passionate developers in this space who have invested incredible amounts of time and energy into enhancing the technology. Industry investors, developers, customers and employees all have a lot at stake here.
From a more philosophical standpoint, the best solution will bubble to the top and win. Whether that’s Core or Classic or something new that shows up, the ecosystem will gravitate towards the best solution. That is how Satoshi engineered this system.
DeMartino: When do you think we will see cryptocurrencies as an issue in a presidential election?
Boring: It’s not surprising that we’re not seeing bitcoin come up in the Presidential debates. The Presidential debates are focused on larger issues of national importance like immigration reform, gun control, and the Iran nuclear deal. The digital currency market cap is around $6 billion, which is smaller than the Department of Education’s annual budget. We’re still in the very early days. In addition, we don’t want the issue of bitcoin and blockchain technology to be a political debate. It shouldn’t be a political issue. This is about technology, innovation, jobs, and investment. It would not be wise to try and spin this into something politically divisive.
We would like to thank Perianne Boring and Matthew Roszak for taking the time to talk to us. The DC Blockchain Summit is March 3rd.
The DC Blockchain Summit recently added more speakers to their schedule including: Stephen Pair the Co-founder and CEO of BitPay, Marc Hochstein the Editor in Chief of American Banker, Adam Ludwin, the Co-founder and CEO of Chain, Mick Mulvaney a Republican US Representative for the 5th district of South Carolina. They join an already robust speaking group that already includes members of the FBI, Microsoft, Ethereum, MIT and many more. It was also announced just today that Arvind Krishna, Senior Vice President and Director of IBM Research will head up the event as the Keynote speaker.
We will have full coverage from the event floor.