Request: CryptoVista is launching a new ‘Who’s Who’ series to showcase some of the most influential and leading names in the blockchain space. We would love to include you as part of the series.
What are your priorities for the next 12 months?
Web3 innovation and innovators are going to come under increasing pressure in the next 12 months, particularly as more 'mainstream money' comes into crypto. More 'mainstream money' increases the potential scale of smart contract exploits and attacks, as well as the number of complaints and disputes that will arise due to mistakes, misunderstandings and sometimes outright rug pulls. This will inevitably attract litigation and renewed calls for policy and law reform, which is an environment unattractive for innovation to continue to occur and so only the most risky projects may prosper. Tax compliance deadlines are also looming which will for the first time capture DeFi, DAOs, play-to-earn gaming and other ‘x-to-earn’ models.
My first priority is ensuring, through my client and policy work, that people are warned as they "exit" from mainstream centralised exchanges into web3 that it is still early and risky and to proceed with caution. The second priority is advocating for legal recognition of DAOs with limited liability for founders and contributors if minimum standards are met like smart contract audits and tokenomics that are informed by principles of fair, orderly and transparent global markets. The third priority is advocating for self sovereign identity, proper understanding of our digital identity(ies) and privacy enhancing approaches to KYC, such as zkKYC. The fourth priority is working with tax authorities, analytics companies and crypto-tax software providers and tax policy makers to advocate for clarity of tax principles, a short term simplified regime of crypto-tax reporting and justifying the case for a regime of opt-in micro-auto taxing of blockchain transactions that alleviates the obligation to lodge a tax return. Last but not least, supporting greater diversity and inclusion in the blockchain industry.
The web3 innovation and innovators needs to be protected and encouraged, in the least to allow centralised exchanges a continued pipeline of 'products' to offer to the mainstream but more importantly to empower people with greater choice, sovereignty and privacy.
What does crypto mean to you and what drew you to it?
I believe in the innovation happening and want to protect it. To me, the tech represents freedom, transparency, trust and choice. I would still like minimum floor standards, and we don't necessarily need law to see the industry adopt some higher standards, but the freedom of the innovation is worth protecting. At the end of the day, I want to have the choice to participate in the existing (domestic) financial system or the emerging (global) blockchain-based ecosystem or both.
What is your long-term view of crypto?
I'm a believer in bitcoin and ether because of the underlying technology and governance models they brought to the world. I believe (as a number of others do) the Bitcoin Network will always use proof of work consensus, and the high energy usage is actually a good thing to support the commercial viability of renewable energy projects and energy grid stability. As a parent, I want to see real action on climate change and I see proof of work mining as a key part of the renewable energy puzzle.
To date, Ethereum has been the place to build the open internet functionality and is where the majority of the builder and user ecosystem lives. In my view, even if there is a better, more efficient, more trustworthy chain than Ethereum, ether will hold sentimental value (and perhaps still financial value) for enough people in the world. It is possible ether may follow in the footsteps of bitcoin and be seen as a sort of 'digital gold'. I'm actually not sure how the price will go but support ether (and Ethereum) as more of a movement than a speculative asset. I find it so convenient and empowering to just connect my wallet and spend or deploy ETH as I wish without having to fill out personal information for account access.
What advice would you give people investing in crypto?
Do your research and always continue learning about the space. Be careful. Ask a lot of questions of friends, experts in the space and speak to your lawyer, financial advisor and tax agent.
If you want to invest, set and forget to speculate, then that’s ok, but dig a little deeper from time to time and you may not be able to help yourself from falling into the rabbit hole with the rest of us. After 6 years in the space the learning and fascination is not slowing down.
How do you feel about the way the world is regulating crypto?
I think the world is grappling with - particularly regulators and policymakers - understanding decentralisation and that things can be natively global from the get go. Up until now, sovereign states may have largely reserved their sovereign right to choose whether to align with international standards but crypto and blockchain represents an ability for collections of people to form globally around a purpose or function or both and develop their own norms outside of any one sovereign country. Some are saying it represents freedom of speech and association.
In terms of how the world is regulating crypto, humans have a tendency to preference what they are familiar with as well as protect sovereignty and I fear that policymakers will default to what they know and unintentionally curb the freedom to innovate and collaborate with blockchain, crypto and DAOs. For example, most policy makers are seeking to regulate crypto-assets before dealing with what is a DAO and what constitutes ‘sufficiently decentralised’ but others are inhibiting key components of blockchain infrastructure. China moved early to ban bitcoin as well as bitcoin mining, where the latter is either an express or implied prohibition on a blockchain protocol being able to reach maximum decentralisation which some would say is a limitation on the maximum trustworthiness of a network using proof of work. Recently, the European Union tried to ban proof of work mining on environmental grounds which was rejected, with a body of evidence brought to prove how bitcoin mining can support renewable energy project and energy grid resiliency. Proof of stake consensus is yet unscathed.
The way I see it, the Bitcoin protocol and network was the world's first DAO, and bitcoin the world’s first crypto-asset. It is prescient that bitcoin was intended to be a version of electronic cash or money because as a good friend recently said to me, “You need money for four reasons: to pay for food; to pay for shelter; to pay for health; and to fight the bureaucracy.” At this point in time I strongly believe DAOs are the new economic frontier for the world and Bitcoin (the protocol) and bitcoin (the crypto-asset) are at the vanguard as the world experiences the paradigm shift from web2 to web3.