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Monday, December 17, 2018

BLOCKLAND-LAND: A Dispatch from Cleveland's New Flagship Conference

Posted By on Mon, Dec 17, 2018 at 8:16 AM

click to enlarge SAM ALLARD / SCENE
  • Sam Allard / Scene
THE LASTING IMPRESSION

The lasting impression imprinted by the Blockland Solutions Conference, held Dec. 1 - 4 at the Huntington Convention Center downtown, was this: Irrespective of blockchain’s potential as a disruptive, or even legitimate, technology, Cleveland leaders are hellbent on being associated with it.

They may get their wish. The momentum and good will generated by the conference seems to have substantiated a Descartian proposition voiced by various engineers, nonprofit executives and technologists in attendance, the most cordial of whom could be prevailed upon shortly after sunup in the main hall as they munched on white chocolate Raisinets and French-toast-casserole fingers before the morning keynotes.

Cleveland thinks blockchain is for real, one told me, therefore it is.



Who cares if the jury’s still out on the tech, in other words. Who cares that a research firm recently found that not a single one of 43 blockchain startups surveyed had “actually delivered any sort of functional products or services.”

The much more urgent note to scribble — Incidentally, had I tried the smoothies? In the little cups? — was that the conference attendees were having a terrific time. This fellow said he’d attended other niche tech conferences before. But Blockland? Right here in Cleveland, Ohio? It was among the best he’d seen.

Sunday night’s kickoff speaker Larry Sanger said much the same. Sanger is the co-founder of Wikipedia and current CIO of Everipedia, an online encyclopedia that intends to dwarf Wikipedia in total volume and re-invent online knowledge by putting competing articles on a blockchain. Sanger explained that Everipedia will allow readers to upvote or downvote articles and will tokenize voting, eventually. It will use the tokens to incentivize good-faith voting, thereby promoting accuracy. And it will collect caboodles of data in the meantime, which will facilitate the ranking of articles by accuracy as determined by various demographic and ideological groups.

Wouldn’t it be cool, Sanger asked, to see which article for “God” was most ‘accurate’ according to Christians versus Muslims versus Atheists? Unshackled from Wikipedia’s “notability” test, which determines whether certain topics merit their own entries, Everipedia would be free to put articles about anything and everything on a blockchain — Sanger’s own left thumb, for example — a prospect that the bespectacled Alaskan continually averred was “just so cool.”

But before he plunged, unbidden, into the weeds, he surveyed the sold-out Blockland crowd (reported by organizers at 1,700), and marveled at the multi-sector representation. This wasn’t just an orgy of coders, Sanger realized. This was a gathering of industry executives and industry-adjacent executives and marketers and policy wonks and lawyers and thought leaders and academics. It’s what’s known in high-powered circles as diversity.

By Tuesday, Blockland might as well have been Bonnaroo for the certitude with which attendees were referencing the thing they were at. It’s a catchy name, and the brand appears to have instantly caught on. People were talking about returning to Cleveland for Blockland’s second year and seemed genuinely amped to do so. Word from organizers was that they’d start planning the sequel in earnest in January, just as soon as they’d recovered from their five-month sprint to assemble Solutions 1. (“Solutions 2” has been scheduled for Nov. 30 - Dec. 3, 2019.)

If organizers were smart, they’d dispense with the generic “Solutions” titling and recognize the branding power that ‘Blockland’ has quickly and organically amassed: branding power, that is, for the conference itself. If organizers were really smart, they’d also dispense with the notion that on the basis of grotesquely inefficient distributed ledgers will Northeast Ohio be reborn.

click to enlarge Bernie Moreno pumps up the crowd at Blockland, (12/2/18). - SAM ALLARD / SCENE
  • Sam Allard / Scene
  • Bernie Moreno pumps up the crowd at Blockland, (12/2/18).

DESTINATION BLOCKLAND


I’m not ashamed to admit that I’d expected the conference to be a disaster. Among other things, I anticipated poor attendance. I figured the flurry of last-minute “SOLD OUT” announcements were likely the result of pity tickets purchased by Bernie Moreno’s buddies and business partners who owed him favors. Perhaps even by Bernie himself. I’d expected the content to be of minimal value, the logistics to be hellish and the vibe to be embarrassing.

This all would have made for a much more entertaining story. It is only with pouting deference to accuracy that I note the conference’s outward success. By way of example, the wi-fi worked. So, too, did the huge screens and the themed blue-green lighting and the sound system and the twin jets of smoke on the main stage. The Destination Cleveland staffers were as omnipresent as they were omni-knowledgeable and the media relations team was superb, coordinating timely interviews and guarding the media room with the dignity and grace of the Buckingham Palace Beefeaters. Regarding the coffee: it was plentiful and hot. Regarding the snacks: Not even the professors of Hogwarts could have replenished them with the swiftness and elegance of the attentive event staff.

Deals were made. Drinks were had. Afternoons, typically when attendees return to their hotel rooms for boozing and snoozing, found hordes of spry and curious note-takers filing in and out of panel discussions. Such was the joyous and fraternal atmosphere of Blockland that at any moment, within the men’s rooms, male conference guests could be heard tooting to their absolute hearts’ content.

And as referenced above, the out-of-towners seemed to find the content worthwhile, including — to my surprise — the frequent appeals by prominent locals to bring blockchain business to Cleveland.

The opening night announcements, emceed by Bernie, were choreographed to demonstrate how tech companies would find “talent, capital and customers” on Lake Erie’s shores. It was overtly promotional. The biggest news was that FlashStarts, a local startup accelerator, would create a $6 million pot for blockchain seed funding. JumpStart, another accelerator, announced that it would partner with Ohio Third Frontier on a $100 million fund for blockchain companies in the state. Brenda Kirk, Hyland Software’s Executive Vice President and Chief Product & Strategy Officer, announced a plan to train 1,000 blockchain coders in 2019, an ambitious goal.

Tuesday, County Executive Armond Budish delivered one of the conference’s flagship quotables when he declared that Cuyahoga County has “lots and lots and lots of challenges, and that’s why I’m so excited about blockchain!” (On a logically identical note, I have lots and lots and lots of challenges, and that’s why I’m so excited about this bowl of macaroni and cheese.) He said the county’s “lowest hanging fruit” would be auto titling — thanks, no doubt, to the lobbying of auto mogul and blockchain investor *checks notes* Bernie Moreno — but that there were any number of other challenges to which blockchain could be theoretically applied.

In a fireside chat with AT&T Communications CEO John Donovan, KeyCorp CEO Beth Mooney asked what Cleveland had to do to become a “city of choice” for blockchain tech. Donovan said that he viewed the task as “more about persistence than brilliance, more about collaboration than capital.” He suggested that a unified front by the region’s executives, thought leadership at the local universities and early adoption of blockchain applications by major local companies would all play a part.

While I daydreamed through much of this stuff — it was like watching those awful Goldman Sachs interviews on Facebook — and was mindful of the protesters outside demonstrating against AT&T layoffs, other Blockland attendees evidently weren’t bothered by it. The feeling was that Cleveland “was putting itself on the map” in the blockchain world, boldly asserting its desire for relevance. My sense was that Blockland stood out for many attendees because, unlike other tech conferences they’d attended, which were often extremely techy, this one was incorporating real-world use cases.

Cleveland.com’s Emily Bamforth, who ingested more Blockland content than anyone, and who managed to report on the conference highlights in real time, asked me more than once what my angle was. A few jocular civic leaders, several drinks deep, probed me for details about forthcoming coverage as well. I kept having to admit that I had no clue. I’d been itching to report on the location of City Block, the Blockland tech campus which attorney Jon Pinney has been orchestrating behind the scenes for months. Pinney was meant to announce the location on the conference’s opening night. But he and attorney Theresa Metcalf Beasley announced instead that they’d be announcing the location in 2019. (It is, presumably, still Tower City.) After that disappointment, I’d just been sampling the snack trays and taking meticulous irrelevant notes.

click to enlarge "The county has lots and lots and lots of challenges," Armond Budish, (12/4/2018). - SAM ALLARD / SCENE
  • Sam Allard / Scene
  • "The county has lots and lots and lots of challenges," Armond Budish, (12/4/2018).

CHARLIE AND THE UNIFY PROJECT FACTORY

Of the sundry afternoon “Block Study” sessions, the one I looked forward to most was a presentation by local entrepreneur Charlie Lougheed on blockchain and philanthropy. Lougheed is the co-founder of the Unify Project, a nonprofit I’d been tracking peripherally since its prominent positioning in Cleveland’s Amazon bid. It had been described in that unfortunate venue as “the most broad-reaching effort ever mounted to use big data, artificial intelligence and machine learning to end poverty,” and I was curious to see its evolution.

As for the other Block Study sessions: They produced some shocking revelations. For example, the consensus by the “Diversity in Blockchain” panel, which included not one black person, was that blockchain really doesn’t have a diversity problem. Because the tech is so new, everyone is on a level playing field, they said. The only barrier to a successful career in blockchain is ourselves!

The Opportunity Zone session was a hot ticket indeed for local attendees. It was all about the tax incentive which will allow investors to postpone or forego capital gains taxes if said gains are placed in special funds used for projects in designated high-poverty census tracts. Panelists included Jon Pinney and the AYUCO15’s own Dan Walsh. They explained the logistics more coherently than I’d heard before. (Read ideastream's piece here.) Alfred J. Puchala, Jr., CEO of CapZone Impact Investments told the room in introductory remarks that “a Republican and a Democrat got together for dinner at the home of [Napster founder] Sean Parker to solve poverty … and they did.” (By creating Opportunity Zones.) He closed the session with this cheerful note on the investment picture: “It's a tax puzzle. It has no reality!”

One other headline: A partnership between Case Western Reserve University and Cleveland State University has been formed to create a “Digital Futures” Think Tank which will research emerging tech like blockchain, the internet of things and virtual reality. A session explaining the road map for this think tank revealed that it has no funding just yet. Nor are there concrete plans for a physical home — Blockland’s Research and Innovation node is spearheading the effort and has only met three times — but its “spiritual home” will be at Case.

But back to Lougheed. His presentation was titled, “How Blockchain Can Break the Charitable Foundation Trillion-dollar Log Jam,” and was not an unveiling of a specific Unify Project Initiative. Lougheed did say that this was an area the Unify Project would explore as it continues to “map the socioeconomic genome” in an effort to disrupt social services for the betterment of mankind.

Lougheed outlined the problem: The United States is the “most generous country in the world” — and Cleveland is among its most generous cities — but more than 90 percent of the money donated to charity isn’t effectively deployed. It’s shipped to Wall Street to maintain the endowments of philanthropic organizations, which are often chartered to operate in perpetuity.

The proposed solution to this problem was … confusing. The gist was that by using smart contracts, built on blockchains, philanthropic giving and social service spending would become radically more efficient. Lougheed asked us to imagine an operating system that uses big data to coordinate relevant services for a person in need of government assistance. (In his fictitious scenario, this person’s name was Kayla. The operating system is what the Unify Project is trying to build.)

“And then imagine that operating system on top of a blockchain execution harness, an operating system to get Kayla where she needs to get to. That’s the beauty of blockchain,” Lougheed said. “That’s the beauty of smart contracts.”

Milestones would be built into these smart contracts, Lougheed explained. And achieving milestones would trigger payouts from social impact funds for the organizations responsible. So when Kayla applied to a job, the organization helping her do so would automatically get some money.

“You get to the point where you really want to see Kayla successful and get that job offer. That’s the big one,” he said. “In that process, you’re incentivizing all the different parties, either with US currency or a token.”

But that’s not all, Lougheed said. Because the Social Impact Fund still needs to be able to see a return on its investment. (This is the Unify Project’s raison d’etre, by the way, the idea of “moving from a charity to an investment model to eradicate poverty.”)

“What if we created a model where when Kayla’s employer started sending out her paychecks — and as we know, employers withhold money for taxes — what if we had a smart contract, an agreement up front with those organizations that say, ‘Hey, we’re all better off because Kayla’s got a great job.’ What if a portion within the smart contract was programmed to go to the federal government, let’s say 50 percent, and the other 50 percent goes back to the impact fund? This is a model where everybody wins.”

Uh, what?

First of all, fifty percent?

Second of all, why not just demand that people who are “lucky enough to be in a position to donate a million dollars,” in Lougheed's language, pay more taxes.  Why take a single extra nickel out of Kayla’s paycheck? I feel like the Unify Project is well-intentioned, but I also feel the need to italicize the ignorance and self-aggrandizement of suggesting that the most unequal nation in the world — the U.S. is the world’s wealthiest, but also the fourth-most impoverished, per Lougheed’s own slides — is somehow the most generous.

Lougheed conceded that the Unify Project’s modeling was easier said than done, and that it would “take a village” to make it work, to say nothing of convincing taxpayers that social impact funds of this sort would be valuable for society.

Most of the talk was gobbledygook — Real quote: “the interesting thing about blockchain is that it’s not about blockchain” — and if the Q&A was any indication, most of the attendees felt the same. Only one man stood up to ask a question. He wanted clarification about, well, pretty much everything. What exactly was the concern here? Was this whole model mostly about verifying that nonprofits are spending grant dollars appropriately?

Lougheed said that most of the nonprofits he’d spoken with were saying “bring it on” to performance-based-payments. The real challenge would be convincing taxpayers that this investment was “at the very least value neutral.”

What sort of investment was Lougheed talking about, though? The man asked. Investments by foundations on Wall Street? Or society’s investment in social impact funds?

Lougheed’s response: “You could do either with blockchain.”

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