NEWS – I have left Symbiont to pursue other opportunities in the blockchain sector.
I’m as optimistic as ever about bitcoin and blockchain, and will continue to work eagerly to advance these technologies as solutions to many of the problems faced by the mainstream financial sector.
Inflection points are always good opportunities for taking stock of progress and ruminating about what’s next. The blockchain sector is only in its first inning, IMHO, and here are areas where I see need for a lot more work in the coming years. You’ll find me in the middle of many of these!
- Clarify ownership of securities by restoring property rights to the true owners of securities. The industry is off to a good start, but fixing the issue will take time. This remains my biggest passion in the field. No, capital markets are not fair to savers, especially mutual funds, pensions, insurers and Mom & Pop, because the system of indirect ownership is susceptible to inaccuracies and to mischief by bad actors who have identified holes in the system that enable them to skim value from regular folks (e.g., the Dole Food case). Blockchain is key to solving this problem.
- Free hundreds of billions—maybe trillions?—of capital currently trapped on corporate balance sheets due to payment system latency, which is a deadweight loss on the economy. It makes zero sense for high-cost-of-capital companies to trap their expensive capital in bank accounts as “comfort deposits” waiting for payments to clear. And that’s why we need to…
- Expand the network effects of bitcoin even more than the staggering growth of the past 9 months, to bring down bitcoin’s bid-offer spreads and ensure daily liquidity remains at institutional levels. More companies will dip their toes into using bitcoin as intermediary for cross-currency transactions, without ever touching the bitcoin directly. A lot more education and infrastructure support (especially!) are needed to bring bitcoin into widespread use for corporate payments, but it’s no longer a crazy concept.
- Bring ICOs into regulatory compliance, thereby democratizing the capital formation process. A big lesson from the ICO boom is that regular folks matter to capital formation. Small investors are largely excluded from the securities issuance process, which is clogged and too bureaucratic—especially for small businesses. And why should prepaid software licenses be considered securities, when tradeable gift cards and prepaid cell phone minutes are not? Watch for the states to step in here, and keep a special eye on my native state of Wyoming—where grassroots efforts have gathered support for a bill, which Rep. Tyler Lindholm will introduce during the February legislative session, that would exempt utility tokens from the State’s securities and money transmission laws. Wyoming has zero state income or corporate taxes and strict privacy laws governing LLCs formed there, so passage of this bill would give the blockchain sector a clear, welcoming state regulatory jurisdiction and may cause some of the industry’s businesses to re-domicile there. Hat tip to the Coin Center for its assistance here to the Wyoming Blockchain Coalition, in which I remain highly active.
- Create efficiencies by enabling “coopetitors” to share infrastructure for maintaining a single, immutable copy of the data they share, thereby de-duplicating work and obviating the need for reconciliation. This, at bottom, is the basic value of blockchain for the developed world. And it applies to financial services, health care, supply chain, governments and much more. Enterprise blockchain is slower-moving and less sexy than the cryptoasset part of the sector, and it will take time to meet its transformative potential, but its promise is very real.
- Serve the unbanked, both at home and abroad. Cryptocurrencies have brought valuable financial services to the unbanked abroad, and the undocumented at home, via their mobile phones, many of whom are skipping right over the “old world” concept of a bank account and straight to cryptocurrency wallets, just as emerging countries skipped over landlines to mobile telephony.
- Empower individuals via blockchain property titles and self-sovereign identity. I’m grateful to Medici Ventures for introducing me yesterday to legendary economist Hernando de Soto to learn about his new venture with Overstock, which aims to bring billions of people out of poverty by providing them a means to record titles to their property on a blockchain. During the Medici event, I also heard a cypherpunk motto that fits with the zeitgeist of the community: “Privacy is the ability to selectively reveal oneself to the world.”
- Bring US regulatory-compliant, tax-efficient, 100% reserved or self-custodied vehicles for wealth management and inter-generational wealth transfer to the HODLer market. Stay tuned for developments on this front.
- Reduce—or eliminate—unfair information advantages in capital markets by implementing truly decentralized blockchain. There’s an age-old power struggle between the sell-side and buy-side in securities markets over market structure decisions. The buy-side has generally been takers, not makers, of these decisions. But blockchain will change that. Watch the enterprise blockchain space, where the sell-side will endeavor to cut costs while also maintaining its information advantages by implementing versions that have back-door centralization, but the buy-side will push back and insist on a level playing field that reflects the natural decentralization of financial transactions. This is also a multi-year undertaking, and it’s only just beginning.
Amid the get-rich-quick mania that has gripped the sector, remember that most of us “old-timers” are in it to solve real problems. Some of these problems will take years to solve, if not decades. Decentralizing legacy, centralized market structures is hard. It’s meaningful work. Worth doing.
So much work to do!
I wish my friends at Symbiont well, and remain a shareholder of the company.
To reach me, please DM me here on LinkedIn, Twitter or Facebook, or on www.caitlin-long.com.