Blockchain Bites: Your Guide to Invest Ethereum Economy

Ethereum art (CoinDesk archives)

At stake

Invest: ethereum economy, a full day of conversation, workshopping and networking around the future of money, goes live today at 9 a.m. ET.

Starting off with a keynote speech from Ethereum co-creator Vitalik Buterin, the virtual event will also see appearances from MakerDAO Co-Founder Rune Christensen, Gauntlet CEO Tarun Chitra and CFTC Chairman Heath Tarbert, among many, many more. 

The most in-depth conference to date dedicated to the Ethereum economy is a gated event. You can register now to gain access to the day’s panels as well as video-on-demand content released in the coming days. 

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First, a few words from Leigh Cuen. 

Value proposition?

The fully virtual CoinDesk invest: ethereum economy is kicking off with a keynote from none other than Ethereum creator Vitalik Buterin, delivering a speech titled “Eth 2.0 and the Road Ahead.” This raises the question of whether people should invest in a project that failed to scale the first time around. The answer may be more complicated than a simple yes or no. 

The fact is, Buterin and dozens of his co-founders created something real, a robust community that ships code, lobbies lawmakers, tests and uses products, broadcasts marketing materials and orchestrates live events. 

Sure, Buterin and Ethereum co-founder Joseph Lubin subsidize this community development through organizations like ConsenSys and the Ethereum Foundation. But there are plenty of people taking on such responsibilities for themselves, without any direct connection to the founders.

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The real question is, can a volunteer community that reaches *beyond* the traditional tech industry make reliable software? 

Many skilled and experienced technologists contributed to Buterin’s Eth 2.0 roadmap, but the community’s diversity is also a hindrance. These people have different goals and skill levels. Computer systems rely on simplicity, not complexity. Complex systems break easily. In order to work efficiently, Ethereum’s builders may need to prioritize and focus with more rigor than they did in the past.  

The first version of Ethereum built a proof-of-concept using a new software toolbox, with all kinds of gadgets. That initial model was uneconomical to use in times of high traffic, which isn’t ideal for any “mainstream” platform. 

Will people use the Eth 2.0 toolbox to build a sturdy, secure platform? Or will it remain a playground of unicorn-themed experiments with friends? Even for a trust-minimizing technology, Ethereum’s long-term value is reliant on trust in the community’s ability to focus and deliver. This event, Invest: Eth, is their pitch to the public on their competence to do so.

What not to miss

Here’s a quick guide to the virtual panels you won’t want to miss. 

9:00 a.m. – 9:30 a.m. ET. Keynote: Eth 2.0 and the Road Ahead
Vitalik Buterin will discuss the future of the “world computer,” why the transition from Proof-of-Work to Proof-of-Stake consensus is necessary to fulfilling its mission and how the Ethereum community will get there.

10:00 a.m. – 10:30 a.m. A New Age: A Primer on Eth 2.0 Monetary Policy and Game Theory
Delphi Digital’s Alex Gedevani will break down Eth 2.0’s new monetary policy and incentive structure fundamental to understanding Ethereum as an investment opportunity. 

1:00 p.m. – 1:30 p.m. Can CeDeFi Eat the World? CZ Talks 1:1 With Leigh Cuen
Binance CEO Changpeng Zhao offers a vision for the centralized exchange he built to cannibalize itself. By promoting decentralization on all fronts  and relying on the BNB token for value accrual, Binance Chain has quietly become among the most important chains in the ecosystem. As the DeFi economy ramps up and fierce competition from both centralized and decentralized counterparts continues to mount, can Binance’s “CeDeFi” ambitions prevail? 

2:00 p.m. – 2:30 p.m. Wall Street and Off-Chain ETH
Grayscale’s Michael Sonnenshein, ErisX’s Thomas Chippas and OKex’s Lennix Lai will discuss the fundamental value proposition of ether and the litany of tokens and financial products Ethereum has wrought. 

2:45 p.m. – 3:00 p.m. Trade Secrets: The “Triple Point” Bull Case for ETH
David Hoffman of Bankless argues that, with the migration to Eth 2.0 and the implementation of EIP-1559, ETH is poised to become the world’s first “triple point” asset – one that creates value through being locked in DeFi, staked or consumed outright. 

3:30 p.m. – 3:45 p.m. Trade Secrets: Fast and Cheap – Why Sam Bankman-Fried Chose to Build on Solana
SBF lays out the calculus behind the decision to move Serum from Ethereum to the Solana blockchain and what might happen to Ethereum if faster and cheaper alternatives catch on.

4:30 p.m. – 5:00 pm Stablecoins, Hyper-Collateralization and the DeFi Economy
The rise of fiat- and algorithm-backed stablecoins has largely put crypto’s volatility narrative to rest. Now, they have become the bridge into the DeFi economy as well as an engine of hyper-collateralization and “money games.” Circle CEO Jeremy Allaire will discuss these programmatic tools with Aave’s Stani Kulechov and dYdX’s Antonio Juliano.

9:00 p.m. Keynote: Andre Cronje + Ian Lee (Ideo CoLab)
DeFi luminary Andre Cronje and IDEO CoLab Managing Director Ian Lee will appear for a late night discussion. 

The ledger

Camila Russo, the founder of The Defiant and the author of “The Infinite Machine,” writes about the “internet of value” being built on or using Ethereum. This section has been excerpted from its original. 

Decentralized web

The internet is at the cusp of entering a new phase, one where entrenched rulers are dethroned, more power is reclaimed by individuals and value moves as freely as cat GIFs.

To understand why we need a better internet in the first place, consider this question: Isn’t it weird the internet isn’t good at money? Think about it. The applications we use every day to search, to communicate, even to shop; the companies that dominate the web are very bad at dealing with money, even if they’re very good at making it. There’s a separate checkout process, where you repeatedly enter all your information. Cards issued in some countries don’t work on local websites in other countries. Sometimes you wait for what feels like an eternity watching that tiny wheel turn, to have the transaction fail. 

More complex transactions are almost unthinkable. Influencers and creators should be able to monetize their likes, retweets and views, with micropayments streamed from followers, without any platform taking a cut. Less-famous mortals should get paid if they opt in to view ads or consent to sharing their information. Transferring ownership of valuable assets, from art to real estate, shouldn’t take several intermediaries and tons of paperwork.

There’s the internet’s TCP/IP protocol. There are apps built on top of it. And, separately, there’s the financial system, which relies largely on infrastructure built before the internet was invented. SWIFT, IBAN, the rails handling most international money transfers, weren’t designed to handle actual money. They’re messaging systems where transfers can take up to five days and cost around $50. National money transfers fare a bit better, but in the U.S. they still take at least one business day to settle (money rests on weekends, apparently). 

Attempts to update these systems – SEPA in Europe, the Faster Payments initiatives in the U.S., VisaNet for card payments – have resulted in a messy patchwork that doesn’t solve the core problem. Fintechs try to improve the situation, but they’re building on the same old carcass.

At a time when we have global, cheap, fast communications, we should have an equally global, cheap, fast financial system.

An internet of value
The internet is ruled by innovation-stifling monopolies that have stopped us having an internet-of-value. Organizations built on top of the current internet network have almost no other option than to become for-profit corporations, with code that’s proprietary and closed to the public. But when the network itself is designed to transfer value, it enables different business models to emerge. 

In this new frontier, users retain control of their funds and their personal information. They roam freely without bowing to any king. Value – that is, money, assets, securities, property – is as native to internet apps as cat videos. And it’s already happening.

This is not about “crypto.” It’s not about the next bitcoin, or getting in on the next hot token that will pump. 

This is about a shift in the very foundation of the web.

There is a money layer that’s being added on top. A distributed network that transfers value without relying on banks, settlement and clearing agents. Money moves faster, cheaper and globally – just like the rest of the internet does. 

And this network isn’t only good at transferring value. It can also process anything a computer can, allowing developers to build applications on top. The difference from the internet apps we’re used to is that in these applications value isn’t an afterthought; it’s at the very core. The name of this new base layer for value is Ethereum. 

Payments can be made seamlessly, and that’s just the start. More complex financial services are now at the fingertips of anyone with access to the network. Users can trade tokens at a few taps, and because value can be programmed this can range from the network’s native token ether, to synthetic representations of everything from gold to a Tesla stock. It can even tokenize San Francisco’s “poop index,” where people can profit from the city’s rising number of feces sightings. 

Venezuelans can buy tokens linked to the value of the dollar. And not only that, they can deposit them in lending protocols and earn interest on those tokens. Speculators can borrow from those asset pools to trade. Others can have a computer program automatically execute a trading strategy, like a robo-adviser on steroids. There’s a no-loss lottery, streaming salaries almost by the second, tokenizing and trading limited-edition T-shirts, which are delivered in their physical versions, and can also be worn in virtual reality worlds. 

For developers, financial applications are the low-hanging fruit to build on top of a value network, but it’s only the beginning.

DeFi on Ethereum has taken the crypto world by storm this summer and set the stage for the long anticipated ETH 2.0 transition, expected to begin in late 2020. 

Let’s face it: These protocols can be rather clunky and difficult to use, and that’s a big turnoff for new entrants into the ecosystem. At #investeth Unlocked, you’ll leave with a high-level understanding of where the Ethereum and DeFi ecosystems are heading and how you can utilize these tools on their own. Before you register for invest: ethereum economy, here’s a primer on the journey to Ethereum 2.0.

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