What a difference a year makes.
Lamborghini after Lamborghini rolled up to last year’s Consensus event in New York City, considered the premiere event for the crypto world. But bitcoin has since plunged in price from $3,000 from $20,000 (though it has experienced a recent rally) and the flashy expensive cars were no where to be found at Consensus 2019.
Almost as an acknowledgment, experts and entrepreneurs presenting in the New York Hilton Midtown addressed both the volatility of cryptocurrency and the potential of its underlying technology, blockchain.
“Count me as a crypto skeptic,” said Nobel Prize-winning economist Eric Maskin. “It’s a dubious store of value and I worry that we’re replacing government fiat currency with private money.”
While bitcoin has suffered, blockchain and cryptocurrency experiments have gained more adoption with incumbents, including Wall Street banks.
“We don’t get scared when it’s a down market and we don’t get too excited when it’s an up market,” said Paul Veradittakit, partner at Pantera Capital, a blockchain investment fund. “Now that people are accumulating cryptocurrencies, both consumers and institutions, we want to be backing staking and lending and services on top of the assets that you earn make sense for the space.”
While the euphoria may have dissipated, economists, investors, crypto lenders and regulators gathered to discuss the key trends and issues in digital currencies. Following is a look at debates over where the industry is headed:
What are banks waiting for?
While some banks are still bullish on blockchain, many remain firmly on the sidelines. A key debate is whether and when and whether that will change.
Most don’t appear to want to jump into the debate until blockchain is more mainstream, said Tom Glocer, lead director of Morgan Stanley’s board of directors and the executive chair and co-founder of cybersecurity services firm BlueVoyant and capital markets tech startup Capitolis.
“The right strategy at the moment is not to take your entire equities franchise and suddenly push it onto a blockchain because of the inefficiency and because of the security issues,” Glocer said. “Rather, it’s better to run a series of controlled experiments.”
And then there are the risks banks have to consider. For example, blockchain provides new opportunities for hackers to exploit, said Nadav Zafrir, CEO of cybersecurity think tank Team8. As the world becomes more connected, there’s a greater chance that a hacker could topple a longer chain of dominoes, he said.
Consumer an commercial attitudes come into play here too. For banks to fully embrace crypto, there needs to be trust in it. But we’re not at a point where the majority of the public trusts the technology, Glocer said.