By Alex Tapscott
I am in Austin, Texas this week for Consensus 2023, one of the world’s largest and most important (and longest running) Web3 event. After outgrowing its New York digs, the event has, for the past couple of years, effectively taken over Austin, Texas. In such a volatile industry, the mood of the event over the years has whipsawed from euphoric to catatonic. I expect this year we’ll find ourselves somewhere in the middle. 2022 was Web3’s annus horribilis, but 2023 has seen a rebound. Next week’s edition of Digital Asset Digest will dive into all my observations and insights from the event.
This year’s festivities occur at a pivotal moment for the industry and for the event’s organizer CoinDesk (owned by Digital Currency Group), which is rumored to be for sale. Perhaps we get an announcement that the industry’s leading media organization has found a suitor, or not.
For the industry, Consensus goes live against a backdrop of heightened regulatory scrutiny in the United States, and a significant pause in venture funding of both Web3 ventures specifically and tech start-ups generally. Following the collapse of Silicon Valley Bank and others, many are wondering whether the good times for tech have come to an end, at least for now. The Web3 fundamentals paint a muddled picture: On the one hand, NFT volumes on the Ethereum Network are down to 20-month lows, while the value held in smart contracts on Ethereum has surged over 70 percent this year (see quantitative section). Bitcoin miners are on firmer footing after the bounce in prices, and some analysts are positioning themselves ahead of the so-called ‘halvening,’ when the amount of new bitcoin paid to miners declines by 50 percent per block.
The headline in the U.S. has been that regulators are taking a harder line, but once again there is nuance to this discussion too. Within the SEC, one commissioner Hester Pierce has been a vocal critic of her own agency’s enforcement-oriented approach to the industry, while the CFTC has been generally more accommodating. Attendees will perhaps glean more from CFTC Commissioner Christy Goldsmith Romero, a headline speaker at the event. At the political level, Republicans are increasingly aligning with the industry (see news section) and taking the SEC to task for its approach. I don’t expect these issues to get resolved any time soon, but Congressman Patrick McHenry, another event speaker, may shed some light on this debate. Given the rhetoric out of D.C., it is only natural we’re fixated on the U.S., but even that shows signs of waning.
Indeed, for now, Consensus is the industry’s keystone event, and Austin, Texas remains one of the industry’s hotspots, but as the industry grows and becomes more international, I wonder if a U.S. event will remain relevant in the future. Yat Siu, another speaker, will likely make the case that the future of Web3 is in Asia, where internet users, enterprises and even some governments are far more open minded. As we’ve written previously, Hong Kong has made a radical shift to openly embracing Web3 as it fears its influence in finance and tech is waning post Covid. The EU, hardly the vanguard of entrepreneurial risk taking, has even introduced a workable, albeit flawed, new framework for the industry. As perhaps a sign of the times, there is a rumor that Consensus plans to relocate outside the U.S. (perhaps even to Canada) in the future. I’ve said it before and I’ll say it again: Web3 is happening to everything, everywhere, all at once. At next year’s Consensus, we could find ourselves ditching the barbeque for beavertails, bratwurst or dim sum.
