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On Sir Richard Branson's Necker Island, 'Bitcoin Illuminati' Reassess Blockchain Strategies

Laura Shin
This article is more than 4 years old.

On Monday night, about 40 people were scattered on Balinese and Javanese teak and bamboo furniture in a room with soaring ceilings decked out with a bar, a pool table, bembe drums and ocean views on three sides. Golden light bathed everything, an easterly wind blew and seagulls glided above the water, but the gathering didn’t notice the setting sun from their tastefully appointed perch on Sir Richard Branson’s Necker Island.

They were all fixated on a large screen, on which renowned Peruvian economist Hernando de Soto was presenting, via videoconference, a plan he and Peruvian presidential candidate Keiko Fujimori are proposing to help citizens title their property, such as land and automobiles. If such systems were rolled out worldwide, De Soto believes they would help bring $20 trillion of dead capital into the world economy and help lift people out of poverty globally. 

He told tales of how the lack of land titles or a well-organized system for managing them kept citizens in certain countries from building credit or profiting from, say, oil, gas and gold rights on the land. He said it has also contributed to 70% of the Peruvian population living in shantytowns without running water, because piping water in requires knowing who will pay the water bill — and that can’t be determined without a title. And, he added, the majority of rapes of women in shantytowns occur when they go to outdoor bathrooms in the dark of night because there is no electricity.

“[Our titling project] has got to be organized in a way that we help our most impoverished citizens,” he said.

Everyone was so intent on the problems and proposed solutions, they didn’t notice till too late that night had fallen and the mosquitoes had begun feeding. 

Discussion began. 

Tomicah Tillemann, director of New America’s Bretton Woods II initiative, asked what a global rollout strategy would look like. De Soto responded that he had been invited by 43 European political parties to see how this type of project applies to the problems of migration and terrorism, noting that “ISIS protects the homes of poor people. Everybody forgets the reasons terrorists go ahead is because they give something,” he said, adding that when countries come to him with their crises, “we’re trying to put a package together with high technology, your technology, as a counter-violence, counter-poverty, pro-wealth [solution] in a language people can understand.”

The second annual Blockchain Summit — an event considered so exclusive that, as I noted in a previous story, some sources had joked that my attendance this year officially made me “Bitcoin illuminati” — was reaching its culmination. (Blockchain is the technology behind Bitcoin that is sparking excitement among a new generation of entrepreneurs for its ability to create trust between two parties in a transaction, obviating the need for a middleman.) As the mic was passed and people practically talked over each other, arguments between individuals from different backgrounds led to new levels of understanding and points of consensus. It seemed the eclectic mix of people — authors, an aerospace engineer, former Pentagon and CIA and Department of Homeland Security officials, a musician, a foreign exchange and derivatives specialist, the founder of a Chinese fintech museum — could, through their respective industries and communities, help unleash the transformation many believe this technology can trigger. As that was the mission of sponsors BitFury Group, a Bitcoin mining, chip manufacturing and blockchain services company (disclosure: BitFury asked me to moderate a panel and paid for my lodging), and MaiTai Global, a non-profit that holds events worldwide bringing together entrepreneurs, investors and athletes, fait accompli.

The previous two-and-a-half days had been full of passionate discussion and debate — plus bonding over lemur feeding, snorkeling, kite surfing, dips in the hot tub, meals and tennis matches with Branson, a mesmerizing concert by technologist and cellist Zoe Keating that moved at least one audience member to tears, throwing people into the pool, limericks, cooing over the red-footed tortoises that roamed the great house, a conga line around the dinner table, and someone’s comment that the summit should create “blockchain babies,” which set off a series of wisecracks and peals of laughter before she was able to explain she had meant blockchain startups. (A blockchain baby to come out of last year’s gathering is Bloq, an enterprise blockchain company founded by core developer Jeff Garzik and venture capitalist Matt Roszak. Roszak will be one of the inaugural guests for my podcast, “Unchained: Big Ideas From The Worlds Of Blockchain And Fintech,” recorded on Necker and launching next Tuesday, June 14.) 

One of the most engaged discussions occurred when Jamie Smith, BitFury’s global chief communications officer, asked the group to come up with concise ways to describe the blockchain. It was a challenge befitting this year’s event. Whereas the inaugural summit had a more startup- and tech-focused guest list, the second one spanned industries as diverse as government, financial services, academia, blockchain advocacy groups, music, venture capital, communications and non-governmental organizations. 

Consequently, topics of discussion tended toward spreading the passion for the technology beyond current devotees. To that end, during the summit, the BitFury Group announced the launch of the Global Blockchain Council, a global trade association that will assist businesses adopting blockchain technology by providing a forum for them to collaborate and innovate. It also plans to work with the Chamber of Digital Commerce, which in April announced the Global Blockchain Forum, which aims to help shape international blockchain policy.

This year’s group was so much broader than the tech industry that, on Sunday morning, when individuals competed over how best to describe the security of the Bitcoin blockchain in two minutes, the group teased one entrepreneur for using words like “petahashes” and “merkle trees.”

Smith upped the ante Monday night by challenging attendees to describe what the blockchain is in 30 seconds or less. Hands flew up as people tested words and phrases like “ledger” and “galaxy of computers” or talked about the secure and efficient movement of assets. They threw out buzzwords like “trust,” “freedom” and “censorship resistance,” or even mentioned terms other groups had coined (excuse the pun), like “trustchain” and “trustnet.” 

But the room went into a hush during the recitation of a blockchain-explainer poem (appropriate given the many limericks the group had dreamed up in the previous 48 hours):

“In blockchain we trust,

People trusting people,

Moving goods and services verifiably and reliably, 

From the bottom up,” contributed by Karen McArthur, a Canadian and New York attorney who advises Canadian venture capital firms, incubators and financial institutions. 

With whoops and cheers, everyone demanded an encore. 

The group also discussed other messaging issues, like whether advocates should try to explain blockchain without mentioning Bitcoin, because of its popular conception as the currency of choice for criminals. Kathryn Haun, assistant U.S. attorney & digital currency coordinator for the U.S. Department of Justice (who was not attending the summit as a representative of the government but in her personal capacity) and a lecturer at Stanford Law School on digital currencies, urged the gathering, “Own the fact that criminals use both the internet and bitcoin, just like all kinds of great technology.”

Others wondered if the description should focus on the features of the technology or its benefits to society. Smith pointed out her mother doesn’t know the features of TCP/IP but she knows she can go onto the internet to buy shoes.

Everyone proceeded to a barbecue on the beach featuring delectable lobster tails, “the best ribs in the Caribbean” and s’mores, but discussion continued around ideas presented over the previous two days. 

In the opening session Sunday morning, venture capitalist, kite surfer and MaiTai Global cofounder Bill Tai described the trajectory of his career, and how it spanned five waves of technology beginning with chips, moving onto the commercialization of electronics such as PCs, next the public internet, then user-friendly web and mobile interfaces, and finally data science. He foresees a sixth wave that creates marketplaces and enables the efficient movement of assets, and spoke of the need for layers of technology that build upon blockchain code to create easy-to-navigate interfaces that anyone can use, equivalent to the "stack" of technologies that helped make the internet ubiquitous.

Vinny Lingham, cofounder of Civic, a blockchain-based identity company, asked how best to work with the government if startups operate on 12-18 month schedules and government agencies in years. The many Washington-affiliated attendees pointed out that the U.S. government is cultivating startups, and that it’s best to start with the ground-level managers who could benefit from blockchain in their own work and to offer to lease technology instead of asking the government to buy a whole system.

Alex Tapscott, co-author of the recently published "Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World," gave a presentation that described how blockchain can foster financial inclusion, which resulted in a discussion about the high price of remittance services — on average about 8%, though certain corridors can be much higher. One Necker Island staff member who declined to be named added that she pays $30 to send $100 to her mother in Jamaica. Elizabeth Rossiello, CEO of sub-Saharan African foreign exchange and business-to-business payments company BitPesa, mentioned that traditional remittance companies like MoneyGram and Western Union often secure deals with postal services, giving them near-monopolies in certain countries. (Rossiello is the other inaugural guest for my podcast.)

Brian Forde, the director of digital currency at the MIT Media Lab explored how personally empowering the blockchain can be. “When we went from analog to digital, we lost our ability to own our content — you can resell or rent out a book you own, but can’t do that with an ebook,” he said, giving examples of how people relying on companies to manage their property don’t actually control it. For instance, resale site Stubhub sold some customers tickets to a Lakers game but then snatched them back when Kobe Bryant announced it would be his last and the tickets' value jumped 664%. With a blockchain-based ticket resale site, after the transfer, only the new owner would have the power to move the tickets out of their possession.

During the first session of panels, which focused on fintech, the group got into a heated debate over the need for regulation. Lingham held a view that put him at odds with the many regulators around the room. “Blockchain is just a database. Why do we need regulations for databases?” He said it was like having regulations for database software Oracle.

European Parliament member Marietje Schaake pointed out that regulation is key, because if a nation-state doesn’t recognize, say, a blockchain identity solution, its citizens can’t use it to claim their pensions.

During two panels focused on security, panelists discussed the usefulness of blockchain in catching crime. Haun, who was the lead prosecutor against the government agents who had stolen Bitcoin while investigating the first big Bitcoin-based online drug marketplace, Silk Road, said, “But for the blockchain, I never would have known that we should keep on digging.” She advocated for crowdsourcing solving crimes via the blockchain and having security researchers and professional non-nefarious hackers try to hack the Bitcoin blockchain to improve its security.

Imogen Heap Skyping in for a panel on music rights (Quincy Dein)

Finally, a series of panels on music featured a Skype session with English singer-songwriter and composer Imogen Heap, who last year launched Mycelia, a foundation for creating a database for music creators, their work and their collaborators. She envisioned a world of seamless content consumption. “If it came down to everybody spending micropayments all the time on everything they ever used, then I wonder what would that look like?” she said. “What if we never thought about money, the same way we do with the water tap? I wonder if we could get to that point where the flow of money is so frictionless that we never ever need to log into anything anymore.”

Keating explained one challenge in establishing such a system would be identifying who created and controls a work. For instance, Sound Exchange, which disburses royalties from digital performances to creators, has millions leftover every year because the organization cannot always determine the rightful recipients. 

The final morning, attendees gathered for breakfast, took the kiteboards out for a final spin and savored their last soaks in the hot tub — all while continuing discussions around employing blockchain for music rights management, verifying the provenance of medicines and other applications.

Then it came time to say goodbye. With each wave of flights, flip-flops and sandals clambered down the curved stone stairs from the great house for the last time, the first steps in a Russian nesting doll-layered journey from open jeep to zodiac to turboprop plane to jet airliner that would take each ambassador back to their homes, where they trusted they could help propel excitement about blockchain technology from their friends, families and communities to ever larger organizations, industries and networks until it spanned the world. 

Update, Friday, June 10, 2016, 8:25am EST: Hernando De Soto did not connect to the summit with Skype as initially reported but used videoconferencing platform Zoom.

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