Dancing Badgers Draw More Attention Than SEC at Ethereum Meeting
(Bloomberg) -- In the crypto world, all eyes are on a meeting today where U.S. regulators may discuss whether Ethereum is a security, but developers at the center of the network showed few signs of caring at a three-day gathering that ended this weekend, where scaling and security were the main focus.
Ethereum co-founder Joseph Lubin was maybe the only speaker to focus on the question at the Community Ethereum Development Conference in Toronto, which featured stuffed animal unicorns, coders dancing to a video of bouncing badgers and mushrooms, and t-shirt clad attendees, largely in their 20s. Many of Ethereum’s co-founders attended, as well as hundreds of developers for the decentralized applications being built on top of the network.
Lubin said he’s unconcerned about reports that the U.S. Securities and Exchange Commission is considering whether to name Ether a security. He said digital asset is used as a means to fuel applications based on Ethereum, not as an investment or stake in a company.
The Ethereum Foundation said in an April 25 statement, that Ether is like “the gas in a vehicle that is relied upon for every action performed by thousands of independent applications, developers and users who themselves will determine the success and value of the Ethereum platform,” adding that, “the Foundation neither controls the supply of, nor has the ability to issue Ether, and the quantity of Ether that the Foundation holds (under one percent of all Ether) is already lower than that held by many other ecosystem participants.”
Regulators are trying to determine whether Ethereum’s cryptocurrency, Ether, should be considered a security, which would mean only SEC-regulated exchanges would be able to trade it. It would also attract even greater scrutiny to tokens built on the Ethereum blockchain.
Donnie Harinsut, co-founder of decentralized network for financial services OmiseGO, which sold $25 million of its OMG token in an initial coin offering last year, echoed Lubin’s statements.
OMG “is not a cryptocurrency, it’s a token made to run on a network,’’ Harinsut said, noting that they’re a Bangkok-based company and Thailand officials have encouraged cryptocurrency projects. Still, Harinsut added OMG tokens may be affected by regulation elsewhere, “it’s a global network and they can be distributed everywhere.’’
Harinsut is like most of the developers building the nuts and bolts of the Ethereum blockchain and others creating applications on top of it and was more concerned about how this network will continue to grow and processes more information, faster. Discussions revolved around the status, advantages and drawbacks of scaling solutions, like sharding and plasma.
Ethereum creator Vitalik Buterin said at a panel that he sees, “no fundamental roadblocks” for sharding to be implemented.
A large portion of the conference was also dedicated to casper, a proposed change to the way Ethereum’s protocol validates transactions. The goal is to move away from the energy-intensive mechanism of proof-of-work, like Bitcoin uses, to proof-of-stake. Buterin dedicated his talk in the conference to encourage people to become casper validators and explained how the awards and punishment system of the proposal works.
The development of these technologies will be what defines whether Ethereum will live up to its goal of becoming a world computer that’s able to change how many industries work by replacing middle-men and centralized management with self-executing code.
“Scaling is the number one issue,’’ Maria Paula Fernandez, spokeswoman for decentralized computing platform Golem, said. “Many of the projects, including Golem, face a lot of scalability problems when it comes to deploying their own projects, as when the transaction volume in Ethereum increases, they experience a bottle neck.’’
Most major blockchain projects have lawyers who are busy thinking about the regulatory changes, but developers will focus on building, Fernandez said.
©2018 Bloomberg L.P.