After the Blockchain Bust, Ethereum Co-Founder Still Bullish

On this episode of Fast Forward, I speak with Joe Lubin, CEO and Founder of ConsenSys, an Ethereum-focused startup incubator and blockchain …

On this episode of Fast Forward, I speak with Joe Lubin, CEO and Founder of ConsenSys, an Ethereum-focused startup incubator and blockchain technology conglomerate based in Brooklyn, New York.

Fast Forward Bug ArtAlthough there are lots of places where you can take a flier on some new tokenized cryptocurrency, ConsenSys is working to build an entirely new architecture for identity management, smart contracts, and other software services. At SXSW, Lubin and I spoke about the turbulent year the crypto market just endured, and why he is still bullish on our decentralized, blockchain-powered future.

Dan Costa: So, blockchain is a technology that has alternatively been described as the next big thing in technology, similar to the internet, perhaps even surpassing it. And it’s also been described as a glorified spreadsheet. And there are arguments all along that spectrum. You are obviously more of an optimist than most. Tell me why the world needs blockchain.

Joe Lubin: So it is a glorified spreadsheet. We glorify that particular technology, which is a ledger technology, because it changes the nature of trust in human relationships and business. So essentially, we built thousands of years of technology on a foundation of trust that is subjective, that is based on centralized institutions that is run by people, sometimes reasonably well, sometimes more capriciously. And so old style databases basically force companies to build walled garden systems to conduct their business, and APIs on the internet enable us to link, in a way, one of these systems to another of these systems. This new database technology enables us to be certain that even if up to half of the actors on these systems are malicious, nobody can cheat the system.

And so you can have a spreadsheet that everybody types numbers into and everybody can know that everybody agrees on those numbers basically, and there’s no way for a minority set of actors to improperly manipulate those numbers. And so we can take the thousands of years of technology that we’ve built and we can now place it on a much more sound trust foundation. We can create agreements that are guaranteed to execute. We can use that trust to build natively digital assets or digital assets that represent assets in the real world. The thesis is that economic social and political system is built on that foundation will be much more trustworthy.

Dan Costa: Before we go too deep, let’s talk about just some definitional terms. What are differences between blockchain, Bitcoin, and then Ethereum?

Joe Lubin: So blockchain is a database technology. So we could sort of set up a blockchain here in this room, let’s say there were 10 people in this room, whatever, anybody changed the numbers on their scratch pad, they shouted out and everybody agrees to change the numbers on their scratch pad and everybody’s kept in sync. So that’s basically the equivalent of what the blockchain technology does. It’s a ledger, and it’s virtually mathematically guaranteed to be kept in sync even if there are 20,000 of them running around the world.

In order to get 20,000 of them running around the world say on the Ethereum network, you have to incentivize people to share their resources. And so because these systems are trustworthy, you can issue a natively digital asset. In the case of Bitcoin and Ethereum, it’s called Bitcoin or Ether, and every time a block is created, every time a set of transactions is packaged up and timestamped in these databases, the entity that is doing that—and it’s sort of a puzzle that gets solved in a race to actually sealing up a block of transactions. Every time that happens, the person who is devoting their compute hardware and paying for the electricity to run the system gets rewarded with some of these native assets. So Ether, Bitcoin and it can be tens of thousands of dollars for each time somebody wins one of those races.

So blockchain is the database technology, Bitcoin and Ethereum and [what] some people call DLT—decentralized or distributed letter technology—blockchain, because it doesn’t necessarily involve this incentivization element. You don’t necessarily need a token in order to get people to share their resources to run a system like this in a decentralized fashion. So blockchain could apply to a much more centrally controlled version of the technology.

Dan Costa: And so the tokens are really just a reflection of the computing power that’s required in order to keep the system running?

Joe Lubin: The tokens incentivize people to share their resources. Since everybody’s validating transactions to acquire some of these tokens, [and] that act serves to secure the network. So if the token is worthless or very inexpensive, we don’t have that many people caring about it and you don’t have a very secure network. It would be easy for a group to get lots of compute resources and censor transactions or change some of the history of the network. So the value of having a very valuable token is that it provides security for the network.

Dan Costa: By creating a more distributed platform, a lot of demand and encouraging people to share their computing resources?

Joe Lubin: The trust comes from being more distributive, or more decentralized. If we had only 50 of these nodes, or 21 of these nodes, you know, there’s much more opportunity for taking over the network or for collusion amongst the entities that are producing blocks on the network. But if you have 20,000 of those things and they’re owned by let’s say 20,000 different people, that’s hard to coordinate them to cheat the system.

Dan Costa: I think a lot of people think of Bitcoin as primarily a currency or an investment perhaps. Ether and Ethereum have sort of grander ambitions. Can you explain how ConsenSys is dedicated to furthering those greater ambitions of Ethereum?

Joe Lubin: So Bitcoin was the…first decentralized cryptocurrency. So it solved this double-spin problem where I shouldn’t be able to send you one bitcoin then send that same bitcoin to her. And to basically ensure that that is done in a decentralized way. So banks are able to do that by having a single database, and so the breakthrough was the decentralization.

Ether is the token on the Ethereum network. We always positioned Ether as a crypto fuel, as one of the first crypto commodities conceived. And crypto commodities are basically elements in a new kind of economy. The crypto fuel pays for compute, the computational operations on the Ethereum network. It also pays for storing data on the Ethereum network, and so Ether is a more capable cryptocurrency than Bitcoin just because it’s much more programmable. It can create much more sophisticated wallets with time locks and all sorts of interesting logic around how the money is used. But it was never conceived of as a money, it’s a more expansive concept.

And there are other crypto assets like for storage and bandwidth, etc. All of this is part of the…decentralized world wide web where we have lots of these inter-operating decentralized protocols that essentially will be the foundation upon which we build the next web.

Dan Costa: So what does that next web look like? What are you taking all this fuel and using it to build?

Joe Lubin: The foundational layer—there are protocols like Bitcoin and Ethereum, a whole bunch of others and decentralized storage protocols like IPFS and Swarm and decentralized bandwidth and heavy compute protocols—there are a bunch of those on Ethereum. So Ethereum’s good for trusted transactions and automated agreements, but it’s not really good for running really big compute jobs, and so there are a bunch of projects on Ethereum where you can provision for some heavy compute job to get done and pay for it using the ether token. The decentralized web’s about decentralized identity, it’s about decentralized proof of location, so all these different protocols, they constitute the foundational layer.

Above that, what’s getting built out now is basically the financial services layer. Much of it is called decentralized finance and so that’s the building blocks, the financial plumbing for the next-generation economy. That’s things like price stable tokens, it’s derivatives, futures options, other kinds of structured agreements. It’s decentralized exchanges, it’s atomic swap protocols, it’s parametrized insurance products. So lots of the things that we need, so that when we’re building in different verticals on top of that, verticals like future work tools, verticals like commodity trade finance, healthcare, music, etc. All these three layers are what our company ConsenSys is building out and many others in our space are building out applications or some of that either fundamental infrastructure of the monetary infrastructure.

Dan Costa: You wrote something, I think it was late last year that I found fascinating about identity and the role it can play in terms of building a different internet. You describe blockchain as ‘providing a better identity construct so that companies like Facebook and Google won’t be able to build business models that’ll be exploitative of our personal information and communications.’ How would that work?

Joe Lubin: Well they still will be able to build those business models. I’m sure you’ve heard many times that we are the product of Web 2.0. That we are being monetized, our identities, our personal information, our attention is being monetized, and I love all those products. I’m grateful for them, but the thesis is that there’s probably a better way. That the world is waking up to the fact that we are products and that our personal information is being used improperly and exploited and we should have more control over that, more agency over how it’s used.

So we’ve built a self-sovereign identity construct called uPort, it enables people to establish the route of their identity on the blockchain, and it can be used across different kinds of technologies, it’s not just blockchain. [It will] enable us to encrypt information and selectively disclose that information in situations that we designate. So whether it’s sharing some preferences, or part of our personal profile with an application that asks for it, or putting our personal information—maybe the really valuable stuff like medical history, financial history, etc.—on a data market. If we do want to monetize our information it should be us benefiting from it, not our friends in those organizations so much.

So we can choose to enable them to access that information, we can choose to interact with them so they build better metadata so that our information’s more valuable to them. But that should be under our control. Currently it is definitely not under our control. And I do think that the business models of Facebook and the others will be possible still, but they’re probably going to have to treat people better and pay people for that information and basically data markets are going to be a great opportunity to transform everything. So the really valuable information will be put out there, not just the stuff that is able to be scraped, plus the Internet of Things will be feeding data markets like that with enormous amounts of data.

Dan Costa: Do you think that this could help customers actually get a seat at the table and have an option that they get to control as opposed to every time they land on a website being told they can either log in with Google, Facebook, or Twitter? Which is not an ideal choice.

Joe Lubin: Absolutely. So this is a single sign-on technology. You are in control of your identity, you’re in control of your profile. If you want to share certain preferences with different e-commerce sites, you’ll be able to do that. Entities like Amazon have just astonishing advantages because they know your preferences very, very well—better than you do in many cases.

Dan Costa: And you can’t use the site without being logged in?

Joe Lubin: Exactly. So one could imagine a fairer playing field for different retailers, for different kinds of services, for advertisers, where people just have greater control and agency.

Dan Costa: So one of the things that blockchain and the crypto market, in particular, gets saddled with are these very high-profile scandals and mistakes.

Joe Lubin: Does that still happen?

Dan Costa: It does still happen, I imagine it’s going to continue to happen.

Joe Lubin: Even with all the good work that our friends at the SEC?

Dan Costa: I don’t know why they’re not on top of this.

Joe Lubin: It feels to me like so many more projects are doing their legal homework now. So there’s still a bunch of activity, but especially during the boom, in the token fever era. Basically for thousands of years, unscrupulous people were taking advantage of naïve people, preying on them because of the information asymmetries and blockchain made that really, really easy, because it’s very complex, because the context is global, the barrier to entry to perpetrate a scheme was exceedingly low. We’ve had some of our projects just copied wholesale, and sort of sold into an Asian nation.

Dan Costa: When there’s zero expectation to actually build something.

Joe Lubin: Zero intent to deliver any value, just intent to collect tokens quickly and run away.

Dan Costa: I mean it’s pure speculation, and many of the people who participate are speculators.

Joe Lubin: There are a lot of fraudulent and bad projects because it was so easy to do those things. But it’s much harder to do those things now. So regulators around the world are coming down on lots of those projects, they’re developing a really good map for what’s out there and a really good understanding of the technology. We’ve got two projects that help self-regulate. One really exciting projects, it’s called TrueSet. TrueSet is an open platform, it’s in beta right now. It’s a tokenized open platform and it is incentivizing people, sourcing the wisdom of the crowd to create an Edgar-like database for the token industry. So I think it’s like 140, 150 tokenized projects now. And people get paid to upload original information on these different projects. They also get paid to scour all the data and to correct errors, and so it’s a game that has been constructed that is compelling. People are making money basically …

Dan Costa: Self-regulating the markets.

Joe Lubin: Self-regulating the industry. It’s a really cool project.

Dan Costa: That’s is pretty cool.

Joe Lubin: And one of the beauties of that project is that we’ve been talking about these mechanisms like token curated registries and these mechanized, economically incentivized crypto game mechanism designs. And this one is working, so it’s a game that is providing value to people and to the whole ecosystem.

Dan Costa: So if people do their research, want to get involved, how would you recommend people get involved in these projects either as investors or just taking advantage of the technology and the opportunities it opens up?

Joe Lubin: So it requires a lot of reading. We hear a lot about people who get a tip from their boss or hear something [and] they run out and they buy some tokens and they don’t really understand what’s going on with those tokens. But there’s so much information out there, so ConsenSys media puts out a ton of really high-quality work. One of the projects we’re associated with is Decrypt Media. Another project that does quite a lot of content is CoinDesk. There’s Breaker, there’s Reddit. The signal-to-noise on Reddit is a little bit lower, but you get a lot of information quickly and you can pick and choose.

Dan Costa: The thing about Reddit I think is that people get trapped into smaller and smaller groups.

Joe Lubin: Oh for sure.

Dan Costa: And then they get sort of radicalized. Lots of different ways to use Reddit, but there are lots of ways to get lost in there too.

Joe Lubin: Yeah, for sure.

Dan Costa: So a lot of reading.

Joe Lubin: If you’re more technical, I would read everything that [Ethereum co-founder] Vitalik Buterin has ever written. He continues to do breakthrough brilliant work.

Dan Costa: I want to ask you some of the questions I ask all the people that come on the show. Is there a technology trend that concerns you and keeps you up at night?

Joe Lubin: Not really. So lots of people feel like we’re approaching a singularity where the machines will just choose to build paperclips.

Dan Costa: Ray Kurzweil’s looking forward to it!

Joe Lubin: Exactly, he is indeed. I really feel like AI’s going be a commercial technology but there isn’t going to be a singularity any time soon—or if there is, we’re not going to know it. We’re not going to care. So it’s possible that AI will develop itself faster and faster, but there are so many ecological niches on this planet already that don’t care about one another, and so if an AI ends up becoming a super intelligence, it’s going to operate very, very quickly. It’s going to, in order to operate very quickly, it’s probably going to occupy not a very large space. It’s probably going to see us as carbon mountains that it doesn’t really care about. I see it going off, doing its own thing.

At the same time, I think as we build trustworthy collaboration technology, these neurons, these brilliant things, very sophisticated neurons can all get wired up with one another into a sort of cognitive apparatus for Gaia, for the planet. We have so many meshes of different instantaneous communication networks and we’re getting better at very fluidly collaborating, and the Bitcoin technology enabled us to make decisions collectively even if half of the actors are malicious in 10 minutes, and the Ethereum technology is taking that to 14 seconds, and soon 5 seconds. So we’re getting wired well to one another, and there will be algorithms that enable us to make good decisions collectively and we may just be that super intelligence that rivals AI.

Dan Costa: So what happens if in this network or in this world, 51 percent of the population are bad actors?

Joe Lubin: By definition, they wouldn’t be bad actors anyway, because they would write the rules.

Dan Costa: I think we’re living in that country right now.

Joe Lubin: That’s possible.

Dan Costa: Is there a technology, service or a device that you use every day that still inspires wonder?

Joe Lubin: Maybe the Frappuccino machine?

Dan Costa: I think that’s a first on the show. But it does what it’s supposed to do.

Joe Lubin: I’m kind of used to my laptop and my phone. My hands should inspire wonder, but it’s just as common as my phone and my laptop.

Dan Costa: So how can people follow you and follow what ConsenSys is doing online?

Joe Lubin: So Twitter is @EthereumJoseph, consensys.net, media.consensys.net, lots of awesome content.

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Highly Anticipated ErisX Exchange Adds Ethereum Co-Founder Joe Lubin to Its Board

If you do, you should know that Joe Lubin, the less famous co-founder of Ethereum Network and lead of ConsenSys, has decided to join a company …
Highly Anticipated ErisX Exchange Adds Ethereum Co-Founder Joe Lubin to Its Board

Satoshi Nakamoto might not be very happy right now, as Wall Street and the crypto world were never as closely linked as they are in 2019.

Do you doubt that? If you do, you should know that Joe Lubin, the less famous co-founder of Ethereum Network and lead of ConsenSys, has decided to join a company backed by some Wall Street traders, ErisX.

The story, which was first reported by The Block Crypto, affirms that Lubin has been appointed as one of the board directors of ErisX. During the same occasion, Cris Conde has joined ErisX as an adviser.

ErisX’s CEO, Tom Chippas, which has worked in the Citigroup as the head of quantitative execution before going to the crypto world, affirmed on the official documents that he’s very pleased to welcome the new people to the team and that the company will be very benefited from having in its team so many important and decisive people from the industry.

At the same time, Cliff Lewis was leaving the board of directors. He was responsible for helping to shape the company and Chippas thanked him for the guidance and support in the market.

ErisX’s Future

The Wall Street crypto company has big plans for 2019, as expected for a company that gets Joe Lubin as part of its board. The company intends to launch a derivatives market tied to the crypto industry this year. The market will start to be available during the second quarter of the year.

Last year, the company confirmed that it wanted to support futures trading tied to ETH, BTC, BCH and LTC in the first half of 2019. However, at the moment it is not entirely clear if the regulators will allow the company to move forward with its plans.

Surely, the company won’t lack the financial resources to do it. It is backed by many Wall Street companies like Susquehanna International Group, Virtu Financial, DRW and XR Trading. At its funding round, the company was able to raise over $27 million USD.

During the announcement of his new position, Lubin has confirmed that he will use his experience with decentralized tech and digital assets to democratize the access for the market and that the year of 2019 will represent a huge breakthrough that will help the industry.

ConsenSys Joe Lubin at DevCon 4: “The Next Big Ethereum App is Already Here”

Making an appearance at the 2018 iteration of Devcon4, Consensys CEO Joe Lubin went on record to say that the “next killer Ethereum app” was …
ConsenSys Joe Lubin at DevCon 4:

Making an appearance at the 2018 iteration of Devcon4, Consensys CEO Joe Lubin went on record to say that the “next killer Ethereum app” was already in the market.

For those who may not know, Devcon is an annual gathering of ETH developers where the industry’s creme’ de la creme’ comes together to push forth ideas that help in the evolution of the Ethereum ecosystem. The latest edition of the conference was held in Prague and it saw some of the biggest crypto names talk about the future of this burgeoning industry.

Snippets From The Conference

As was to be expected, one of the main draws of the three-day conference was ETH co-founder Joe Lubin, who in his keynote address highlighted some of the core advancements that the Ether dev team had made over the course of the past 8-12 months.

In this regard, the folks over at Consensys recently published a blog post which noted:

“Reverberations from Lubin’s address are still being felt in early 2019 as Ethereum 2.0 comes into view and teams, businesses, and individuals alike prepare for the next phase of development”

Also, during his speech, Lubin remained highly optimistic about the next-generation of dApps to come out of the ETH ecosystem.

For starters, Joe Lubin pointed to a robust new suite of developer tools and protocols that had been built over the past two years (that would give devs all over the world the power to create “the next big thing” for the crypto ecosystem.)

More On The Matter

Another point that Lubin highlighted during the course of the conference was that the altcoin industry was facing “more hurdles than ever before”.

Not only that, but he also said that many pundits who have been criticizing the market for failing to create new apps just didn’t understand that “cryptocurrencies themselves were the latest killer app(s)” to come out from within this niche’ space.

On the matter, Lubin also stated that Ethereum’s second iteration is now working to make the idea of ‘Web3’ a reality. If successful, Web3 will be able to help in the “enabling, creation, issuance, distribution, exchange, and management of a wide array of different crypto assets” in a seamless, hassle-free manner.

Final Take

In rounding out his talk, Lubin stated that Ethereum’s native ecosystem is poised to transform the “global economic, social, and political engine” the same way the dotcom revolution did all through the ’90s and early 2000s.

ConsenSys Founder Joe Lubin Says The Next Killer App (Ethereum) is Already Here

During his speech at the 2018 Devcon4, Joe Lubin, the CEO of ConsenSys and co-founder of Ethereum, addressed the current state of the Ethereum …

During his speech at the 2018 Devcon4, Joe Lubin, the CEO of ConsenSys and co-founder of Ethereum, addressed the current state of the Ethereum ecosystem and said that the next killer app is much closer than you might think.

Lubin’s Devcon Address Brought New Hope to Developers

Ethereum Devcon, the annual Ethereum developer meeting, has been a congregating spot for the industry’s brightest and most forward ideas since its conception. The conference’s fourth iteration, held in Prague, Czech Republic, saw some of the biggest names in the game talking about the industry’s future.

One of them was Joe Lubin, the current CEO of ConsenSys and co-founder of Ethereum. In his speech, Lubin reviewed the state of the Ethereum ecosystem and brought forward some of the accomplishments made by its developers.

ConsenSys highlighted Lubin’s take in a Medium post on Jan. 9th, saying that its importance grew as ConsenSys prepares for the launch of a more lithe ConsenSys 2.0.

“Reverberations from Lubin’s address are still being felt in early 2019 as Ethereum 2.0 comes into view and teams, businesses, and individuals alike prepare for the next phase of development,” the company wrote in a blog post.

Lubin was optimistic about the next generation of decentralized applications, saying that the next killer app will be a killer ecosystem. He pointed out that the robust suite of developer tools and protocols built over the past two years have provided developers with everything they need to build “the next big thing” in tech.

Ethereum Is The New Killer App

Lubin’s words gained more weight as the industry entered the new year facing even more hurdles than before. He said that the crypto space has been criticized by pundits for “being all about speculation” and failing to provide any killer apps.

Arguing that cryptocurrencies themselves were the latest killer app(s) to has come out of the space, the same way the Internet drove the market almost two decades ago. The new killer app is already in the works and is bound to change the world in ways we have never seen.

Ethereum’s second iteration has brought the idea of Web3 closer than ever, enabling the creation, issuance, distribution, exchange, and management of “so many different kinds of crypto assets,” Lubin said.

He said that Ethereum is the killer ecosystem the industry has been waiting for, calling it an ecosystem that will transform global economic, social, and political systems.

While one could argue that Lubin’s praise for Ethereum is nothing short of biased, decentralization is the next killer app—one that’s meant to stay. Just as the Internet experienced its ups and downs in the early 2000s, the blockchain industry is going through the cycle, ready to change the world as we know it.

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As cryptocurrencies reel, blockchain moves into position for 2019

And there appears to be a line of small-time investors that dabbled in cryptocurrencies for the first time in 2018, only to get financially burned.

“There was an element of a bubble involved. But while there’s been a big drop in price, there have been before too. It’s cyclical and interest is still there.”

Lory Kehoe, Ireland MD of ConsenSys and its founder Joe LubinLory Kehoe, Ireland MD of ConsenSys and its founder Joe Lubin
Lory Kehoe, Ireland MD of ConsenSys and its founder Joe Lubin

This year, analysts say, will go some way to sorting things out.

But the last few months in Ireland have not been particularly promising. Towards the back of 2018, the country’s highest-profile project – Ireland’s ‘Crypto Coast’ initiative – petered out for a variety of reasons, according to one of its founders, Reuben Godfrey.

Meanwhile, a succession of court cases and high-profile hacks placed Bitcoin and Ethereum in a negative light, associating them with the proceeds of crime rather than efficient alternative payments.

And there appears to be a line of small-time investors that dabbled in cryptocurrencies for the first time in 2018, only to get financially burned.

David WachsmanDavid Wachsman
David Wachsman

“People got overly excited and now they’re overly depressed,” says John Gleeson, a Dublin-based Bitcoin trader and writer. “It’s dropped a lot, but it’s the fourth time it’s dropped 85pc or more. A lot of what happened is related to the false promises of other alt-coins that have come to light. But if you bought and held Bitcoin for any longer period than two years ago, you’re actually up.”

How many people actually own or have traded Bitcoin? Some industry practitioners estimate it at around 100,000. “We’ve dealt with around 40,000 ourselves in Ireland,” says Nagle, whose firm helps people to buy and sell Ethereum, Litecoin, Ripple and other cryptocurrencies. “But there are lots of different services out there.”

One difficulty in estimating the size of the Irish crypto market is a policy of non-engagement by banks and conventional equity-trading firms.

None of the major financial companies that people usually go to will deal in crypto-assets such as Bitcoin.

James and Peter Nagle of Bitcove.ieJames and Peter Nagle of Bitcove.ie
James and Peter Nagle of Bitcove.ie

“Goodbody does not advise on or invest in cryptocurrencies on behalf of clients and does not have any plans at this time to offer access to that asset class,” a spokesman for the brokerage told the Irish Independent.

Other main brokers here have a similar rule. This doesn’t mean that Irish investors using such companies don’t invest in cryptocurrencies. Within mainstream financial firms, some funds have allocated percentages for what are called ‘alternative strategies’. This sometimes includes crypto-related enterprises or funds, although brokerages here say that they don’t provide advice on such entities.

The biggest problem in tackling crypto assets, bankers say, is its unregulated status. The rules aren’t transparent or reliable enough, nor is there an administrative chain of responsibility that regulated investors can live with.

In the US, some institutions are moving to address this. The owner of the New York Stock Exchange, Intercontinental, is launching a new crypto-focused exchange called Bakkt to let people buy, sell and spend digital currencies like Bitcoin. Its big draw is that it promises to be regulated, giving a degree of assurance to those interested in cryptocurrencies. (It is still waiting for approval from the Commodity Futures Trading Commission). Because of this, and the bluechip array of investors it has assembled (including Microsoft), it has just raised $182m in funding.

But even if cryptocurrencies like Bitcoin become more acceptable as traded commodities, they still face the enduring problem that cryptocurrencies have had since the beginning: when, if ever, will ordinary people feel they can use the technology?

From the effort to setting up a Bitcoin wallet to finding somewhere you can actually spend it, cryptocurrencies are simply out of bounds for the vast majority of ordinary people.

“We have a cryptocurrency ATM in Cork and are going to put one in Galway and then hopefully in Dublin,” says Bitcove.ie founder Nagle.

The idea is to let people exchange euros for Bitcoin and vice versa. But even if this works, it’s not clear that people have many options to use cryptocurrencies for the kinds of activities they associate with conventional money.

While retailers such as Microsoft’s Store and Overstock.com have accepted Bitcoin-compatible payment systems (such as Coinbase) for a while, most online retailers do not. For example, two-thirds of Irish shoppers use Amazon, but the web giant doesn’t take cryptocurrencies.

In some respects, things have actually gotten worse. The influential online payment firm Stripe recently stopped processing Bitcoin payments because it took too long for transactions to go through.

The lack of regularised commerce that involves cryptocurrencies places an inordinate spotlight on shadier activities where crypto is front and centre. So when the Luas.ie website was hijacked earlier this month, most people learned the hackers were seeking a Bitcoin to unlock it.

Fraud, too, is a problem. Because so much activity around crypto currencies is unregulated, scams and flim-flam operations are common. Last year, US authorities undertook hundreds of formal crypto fraud investigations with 50 cases taken.

The high-profile digital coin BitConnect went bust in dramatic fashion last year following a cease-and-desist order from US regulators. The enterprise, which had been valued at over €2bn, is being pursued for losses of almost €1bn. Market analysts say that much of this was invested by ordinary people, lured by the promise of getting rich quick on a rising crypto market.

But it’s not all doom. Among the scepticism and doubt lies enthusiasm for the most important enabling technology behind cryptocurrencies – blockchain.

Here, business looks brisk. Dozens of Irish institutions have committees or steering groups committed to integrating more blockchain principles into their own systems. Banks such as AIB, Ulster Bank and Permanent TSB are trialling blockchain-based payments through schemes like Project Greenpay.

“This is a big year for adoption of the technology in real life applications,” says Lory Kehoe, managing director of ConsenSys’s Ireland office. ConsenSys is a blockchain company set up by one of Ethereum’s co-founders, Joe Lubin.

“A number of companies are bringing their solutions into the world for consumers to use,” says Kehoe.

That includes platforms such as Komgo, a new blockchain platform to facilitate oil and gas deals that has been launched by large multinationals such as Shell, Citi, BNP Paribas and ABN Amro. The venture will “seek to digitalise the trade and commodities finance sector through a blockchain-based open platform,” the consortium said in a statement.

“This is real,” says Kehoe. “The Government and public sector are getting involved too. There are now three projects that the European Commission are working on and Ireland is a part of this. The aim is to try and create standards sooner rather than later, so that by summertime there will be hundreds of companies that are part of it. We will have a functioning legal entity as to how to drive forward with the technology.”

Despite the upbeat assessment, ConsenSys itself has not been immune from industry pressures. The firm recently announced that it was letting 13pc of its staff go in a ‘streamlining’ exercise.

Kehoe says that this does not extend to the recently opened Irish office, which currently employs 40 and is still hiring.

“There’ll soon be significant announcements from ConsenSys in Ireland as to projects with Irish companies,” he says. “We’re still growing in Ireland. We’re a really strong team here. So the answer to whether we’re downsizing here is no.”

Kehoe isn’t alone. Blockchain, as opposed to straight cryptocurrencies, has a growing number of advocates from ‘respectable’ business circles.

“With the amount of the institutional money entering the space and increasing involvement and adoption by such top-level financiers, it’s inevitable that in 2019, blockchain, the underlying technology behind cryptocurrencies will come to the fore,” says Angel Versetti, CEO of Ambrosus, a blockchain-powered Internet of Things network for food and pharmaceutical supply chains.

Some services are already there, others say. “In growing numbers, consumers are trying the Rize app by livestreaming company YouNow, downloading the Brave web browser, or utilising events ticketing service BlockParty which runs concerts and music festivals through their blockchain-based application,” says David Wachsman, founder and CEO of Wachsman, a services firm with clients such as Coindesk and Indiegogo.

“The recent sharp plunge in crypto markets … has had a knock-on effect and has created a PR challenge for the entirety of blockchain technology. This is a short-term problem, as the actual technology continues to mature and advance with real-use cases.”

Wachsman’s view that cryptocurrencies are set to be around for the long-term is echoed by others in blockchain businesses.

“We will continue to see expansion in this area,” says Brent Jaciow of Utopia Music, a blockchain-powered music tracking and attribution platform. “Some of the primary functions include enabling fractional ownership of assets, allowing the tokenisation of assets and ideas formerly impossible with traditional capital markets.”

Local Irish proponents haven’t lost heart in cryptocurrencies.

“For me, Bitcoin has never been stronger,” says Gleeson. “The network is still extremely secure and has never been hacked. We’re in a cycle.”

Indo Business

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