This is a report written by our Vice President of Product, Warren Paul Anderson who recently attended the Bitcoin 2021 conference in Miami – June 4-5th 2021.
My first crypto conference was Bitcoin Miami in January 2014. There were only a few hundred people in attendance, the idea for Ethereum had just been proposed by Vitalik, and pepperoni pizza was still considered a luxury item by most.
Just recently, I was back in Miami to attend the Bitcoin 2021 conference and it’s safe to say, times have changed.
A Creator Economy is Being Built Using Third Generation Blockchains
The crypto space has entered into its third generation. A creator economy has evolved around ‘NFTs’ and ‘creator coins,’ which creative professionals can use to directly monetize their work with projects like Flow, Rally, and Tari.
Looking back at the first generation, it was mostly stateless projects with Bitcoin, Litecoin, Ripple, and ZCash. The proposed use cases were simple, payments based. The second generation added stateful smart contracts with Ethereum. The use cases grew more complex with DeFi, and tokenized assets.
The DeFi generation is helping to further decentralize the mainstream adoption of blockchain by democratizing access to financial instruments that have been previously gatekept by centralized institutions, such as investment firms and banks. The NFT generation is empowering creators and enabling them to directly engage with their fans, and monetize their work, without depending on centralized platforms and distributors.
These creators are arriving in droves, building a new economy in the metaverse. I met some inspiring creators this weekend that really crystalized the need for NFTs and why they are important. The art world is one of the oldest sectors of the economy. For centuries, art has largely been dealt through middlemen, such as galleries. These galleries have a lot of power as to which artists get displayed, and therefore paid. As gatekeepers, the galleries also typically take approx 50% of the transaction. There is also a lack of transparency on the actual sales price, which can get bid up without the artist even knowing. So galleries often end up taking more than their agreed upon share.
For the uninitiated, Non-Fungible Tokens (or NFTs) offer artists, musicians and other talented individuals a way to digitally tokenize and sell their work, which represents the ownership transaction of a unique set of data that is immutably recorded on a blockchain. NFTs solve a lot of problems for an entire class of people that make art, content and entertainment for a living. Historically this creator class has had to split most of their earnings with central intermediaries. But with NFTs, creators can now sell their content directly to users.
NFTs have directly linked talented creators and big name celebrities with some of their biggest patrons and fans, which has created highly liquid two-sided marketplaces worth billions of dollars, almost overnight. The whole operation is a lot more transparent than brick and mortar gallery deals or paid endorsements. NFTs help to remove the trust in transactions, which allows creators more time to focus on being creative.
Programmable Privacy is Becoming the Next Holy Grail
It’s also become clear that this new generation of creators is going to need more privacy as their fame and fortune continue to grow.
A number of thought leaders in the crypto space are calling confidential smart contracts, aka programmable privacy, the next holy grail in blockchain. Whichever project does it well first will unlock a ton of value for DeFi.
Financial institutions need confidentiality as a non-negotiable business requirement to retain competitive intelligence. Without confidential smart contracts, billions of dollars of institutional liquidity is watching DeFi from the sidelines, just waiting to enter the game.
That’s not to say that privacy enhancing technologies, such as zero-knowledge proofs, are only beneficial to the institutional class.They also offer value to end-users, like consumers who hold individual financial accounts, and developers who are building the tools, platforms, and apps that will potentially secure trillions in value.
I had a great time at Bitcoin 2021 in Miami – which was reportedly the largest bitcoin event to have ever taken place. After nearly 1.5 years of virtual conferences during the COVID-19 pandemic, it felt good to re-engage IRL with old friends, former colleagues, frequent collaborators, and the new generation of crypto creators. The energy, enthusiasm, and creative output in the crypto space is unparalleled.
The rapid pace at which the industry continues to grow shows that innovation is truly thriving, and that the next generation of crypto creators and adopters will demand more programmable privacy from the likes of blockchains such as Findora.
Warren Paul Anderson – Vice President, Product at Discreet Labs