ConsenSys’ Ajit Tripathi: ‘Rebellious Teenager’ Crypto Is Maturing

Crypto is like this kid growing up. Bitcoin came out of a bit of a revolution right in China and India. We might actually hit them. So.

Welcome to block show 2018 Europe. I'm here and we're speaking with one of the members of Consensys. So my first question to you, Ajit, is if you could just talk to us a little bit about what Consensys is and what your role is there.

Sure. So Consensys is a, is a venture production studio based in, based in Brooklyn. Now we have offices in London in about 30 countries including London, Paris, South Africa, Australia, Singapore. So we're building teams all over the world to essentially develop blockchain based solutions. We create a lot of startups, so we are technology builders and we are creating tools, components, infrastructure and solutions for a decentralized ecosystem. So if I had to put this in one line, we create technology for insider marketplaces. So what that means is that today in the old world everything was dominated by centralized platforms like banks or the likes of Facebook. They all dominate either data our assets and Start become rent seeking participants in the economy. We want to shift that to peer to peer paradigm where the individual is empowered. And we think technology, especially blockchain technology, has a big role to play in creating an ecosystem where we do not depend on these dominant intermediaries in every single market for information and assets.

So do you have any projects at consensus right now that you're really excited about, that you're developing that are maybe close to mass adoption?

So it'd be very, very difficult for me to not be excited about some of our projects. So blockchain is early stage technology. Right. But at the same time in the enterprise space we have seen a lot of progress. So we are actually working on a project with some very large financial institutions that I can't announce right now, but that's tremendously exciting. We are working on infrastructure components like Truffle is the most popular development tool in all of Ethereum development community. Then MetaMask has had 1 million downloads. It's a wallet. Infura support can support up to 12 billion transactions a day, which it's for read only transactions and takes a lot of load off the Ethereum, the public Ethereum blockchain. So infrastructure tools like that are extremely exciting. My focus is on decentralized exchanges and regulation and policy. So decentralized exchanges are peer to peer marketplaces for exchanging digital and digitized assets. Right. So let's say, and what that means is that historically we've had Centralized exchanges, for the most part, things like NASDAQ or NYSE and so on, so forth, or Deutsche Borsa Nextdoor that are very efficient in terms of providing liquidity, but then are not so great for low liquidity assets or for a wide range of digital assets that need sort of this peer discovery for exchanging. So we are working on this next generation decentralized exchange platforms. We are working on crypto custody. So trustology is our platform for institutional grade crypto custody that'll go live end of this year. So I mean we have 40 plus projects, we have a blockchain for social impact project, we have venture capital ARM now we are creating a lot of ventures in partnership with enterprise customers. So we are in some sense our role is to unleash this entrepreneurial spirit or energy of the whole blockchain community, whether it's the enterprise community or the crypto community. And these are all starting to converge. I come from the enterprise space. I worked for Goldman, Barclays, UBS, PwC, so some of the most established institutions and the kind of intermediaries I talked about and I sort of bring the whole power and this innovation in the crypto ecosystem to institutions and legacy. So my role is to help some of these institutions understand what's going on in crypto and how they can leverage this technology to participate in this decentralization revolution, so to speak.

So my next question is two parts. The first one is what made you leave working at these intermediaries and go to the crypto space? And the second thing is I noticed that I cover a lot of news of this Wall street exec now works for Coinbase. This Wall street exec now works for X crypto company. Do you think that's like a theme we're going to keep seeing in the future with you kind of being one of the examples?

So I can't speak for everybody's motivations, right? So on one hand, some people are excited about the growth of the crypto ecosystem and that's perfectly honorable and great. And some people are excited by the sheer amount of wealth that's flowing into this ecosystem and that's perfectly honorable as well. I'm an engineer, I came from technology and did some work in consulting and regulation. In the process, I met Joe. Joe is the CEO of ConsenSys. And Joe has something about him. So Joe is an inspirational figure. He has this ability to excite people about this future like this decentralized Internet and then this decentralized insider marketplace idea that we are building in so many different sectors of the global economy and this whole thing about being able to build something, something that's futuristic and, you know, so a lot of large institutions want to innovate or companies want to innovate, but they have the innovators dilemma. They are tied to what exists today and they are scared of disrupting their businesses. With Consensys, there is no such thing. Right. Consensus exists to create new things. Consensus does a lot of experimentation. Consensys is purely focused on innovation. And that's what made me really excited about Consensys at this time. Because if you have an idea and if you have a team and you can actually make things happen, then consensys is a great place for people to go. And we are hiring right now.

The next question involves, I've noticed on your Twitter you've been tweeting a lot about the new GDPR EU privacy bill.

Yeah, I have strong views on that.

Including a tweet of a refrigerator giving a family privacy update notice. What do you think about that? Could you expand on why you've been tweeting all about that?

So GDPR is well intentioned. Right. So I mean, it was partly our current privacy regime is outdated. That we know. Right. So that privacy regime needs an update. We know that as well, because now we have Facebook and we have Google and we have lots of these data intermediaries, central monopolies that are taking everybody's data and selling ads back to them. And as we found out from Edward Snowden, might be giving their data off to the governments for surveillance. And the NSA using public data for surveillance was a major political issue in various parts of Europe, especially in Germany. And to some extent the GDPR was a well intentioned response to that. But if you look at how the regulation has been written, then it has some significant flaws, or at least that regulation needs a little bit of adaptation to the technology that's emerging. Because what we don't want to do is because privacy isn't the only need. So privacy is a very, very important need. But then there is also the Europe needs to remain competitive against other jurisdictions. We need to create technology. We need to make sure that our economies are competitive against China and India and the US and so on and so forth. We need a technology ecosystem in this continent that's competitive. So now GDPR runs the risk of being too restrictive. Right. And sort of disincentivizing innovation, whether it's innovation in AI, in a data analytics, machine learning blockchain, and so on and so forth. So the way the regulation is written is very confusing to a lot of technologists today and there is no legal precedent, right? So for example, we have right to be forgotten now, what does that mean in practice? So if I used to be a consultant for banks, so I did a lot of consulting for banks at PwC and now if you try to actually delete data, customer data from a Bank because of GDPR, there are 10 other regulatory requirements that prevent you from doing that. So in practice, in theory it sounds fantastic, but in practice implementing GDPR is really hard and it can actually make people very concerned. So Parity who have a KYC utility pickups, which is very popular with the ICOs had to stop the service because now they're really concerned about gdpr. On one hand you have KYC and AML regulations and you definitely want to have KYC and AML regulations. ICOS comply with all of that. And now suddenly we have to stop a very useful service called Pickops because of GDPR concerns, because there is a lot of legal and regulatory uncertainty. These guys don't want to be in legal trouble because they're offering a great service, right? So right now there is a lot of uncertainty. There's no legal precedent for gdpr. We don't know how the various courts will rule. And GDPR doesn't protect you from governments. So the UK government has cameras on every street and there is no protection for that from gdpr. There is a bunch of derogations, right? Or they might. Governments might enforce a backdoor on encryption and there's no protection from that. There's no protection from surveillance by governments. So GDPR has significant limitations. It may actually not be able to protect privacy of individuals to the extent that it aspires to, but it is definitely well intentioned and it's a response to the. So I think what will happen is that over a period of time, policymakers and regulators and technology providers will all work together. So we are working on a project with the European Commission. It's called the EU Blockchain Observatory. And we invite all the blockchain ecosystem participants to engage in that process. And at some point policymakers and regulators will adopt GDPR to this new and exciting technology that's coming up. But until then, there is a lot of confusion and uncertainty in the marketplace.

So going off of that, the regulatory uncertainty that exists has led to a lot of confusing regulations that have, you know, in China there's been a lot of bans that have caused companies to move to Hong Kong. In India, the Central bank ended all Crypto dealings and that's been sued and it's been going back and forth. Could you comment on any of, I mean you mentioned the blockchain observatory. What other steps could be done to stop these kind of.

Yeah, so it's regulatory approaches around the world are rooted in their culture. Right. So I wrote a little bit of a humorous article about this on finxtra. So for example, when we talk to kids at the dinner table in the U.S. we tell, and they're not behaving in the U.S. we Tell them to go to their rooms in China and India we might actually hit them. So crypto is like this kid growing up and regulators are like these parents who behave in ways that are attuned to their culture. Right. So now what? Some of these are knee jerk responses from regulators around the world because. So for example, in China there was a Communist party congress just before bitcoin was banned. Right. And the governments didn't want social instability and there was a very bullish market that could have caused a lot of problems for individual investors. So a lot of these things that regulators are doing are well intentioned. But part of the challenge is that the crypto community hasn't really engaged with policymakers. We haven't tried or invested in educating. So initially bitcoin came out of a bit of a revolution. Right. We were rebelling. The crypto community was rebelling against the Chancellor's bailout and Occupy Wall street was the theme. But now that kid, rebellious teenager, has grown up a little bit and it' time for us as technologists to engage with the other processes of the society such as regulation and policy, and work collaboratively. Help regulators understand what's going on, help governments understand what's going on, educate ourselves on why the rules are the way they are, why the securities laws are set up the way they are, and then maybe find this ground where we can, the technology can develop and create the fairer world, but at the same time without causing some of the issues that might occur if we and are responsible in using this technology.

Great. That was my last question. So thank you so much for coming.

Thank you so much.

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