Angus Champion de Crespigny is a technology executive in London who worked for almost three years as EY’s Blockchain Americas Lead and for seven months as the company’s Americas Cryptoasset Lead.
“Blockchain” has been widely touted as a revolutionary technology set to irrevocably disrupt everything from finance to law to data to the Internet to real-world distribution systems to the media- you name it.
As Champion de Crespigny studied potential corporate applications of blockchain, however, he became disillusioned. Ultimately, he concluded simple distributed databases would do the job in most private enterprise settings.
Champion de Crespigny’s high-profile defection from blockchain was announced about a year ago in Barron’s. I caught up with him recently to ask for an update.
Blockchain promoting seems to have mostly tracked the price of cryptos, and as prices have fallen and projects have disappeared, so has the bulk of promoting. Still, richer ICO-funded (initial coin offering funded) projects, including ConsenSys, have persisted in their mission of trying to sell “Ethereum Blockchain Solutions” to governments and enterprises, but few big successes have been announced.
What is your take on the current state of the blockchain sector?
Angus Champion de Crespigny: This all raises a number of questions. What do people mean when they say “blockchain”? Many so-called “blockchains” are no closer to Bitcoin’s architecture than they are to a relational database. Does a blockchain require mining? If not, is it just a chain of blocks cryptographically linked? If so, who defines what goes into those blocks? How is that any better than a linked list or distributed database with append-only permissions?
Ultimately it really all comes down to what problem you’re looking to solve. There are two questions: is this a problem that people have, and if so, is this the best technology to solve it? In most cases, people are starting with the technology as the solution, and trying to apply it to problems that either don’t exist or could be fixed in far more efficient ways.
Putting ICOs aside, our readers are genuinely interested in any technology that could facilitate crowdfunding and strip red tape in finance, or which might help Fintechs compete. Can you see any reason why smaller fundraising platforms or startups should use public blockchains and not some kind of standard database with good encryption?
Angus Champion de Crespigny: In short, no. The challenge with crowdfunding is a regulatory one. Kickstarter and various other platforms have existed for years. They have challenges distributing equity because of regulatory restrictions. Ultimately, when crowdfunding, you are trusting some central entity to recognise the value of the database entry, whether it’s stored in a relational database or a blockchain as a ‘token’. Why Bitcoin or similar assets differ is because the database entry, in Bitcoin’s case being a transaction record, is recognised as valuable in and of itself.
The new term favoured in crypto circles is that they are “digitizing” stocks and other processes that are still “analog”? Any thoughts on this?
Angus Champion de Crespigny: Money and stocks have been digitized for decades. Much like when people say “blockchain”, people need to be specific about what they mean when they say “digitized”. Do they simply mean recorded in an electronic format? We’re already there. Do they mean cryptographically secured? Cryptography is used in most transactions, so bank transactions would meet that as well. Do they mean controlled by private keys? Moving Bitcoin via Coinbase doesn’t require me to hold my private key, so does that mean my Bitcoin isn’t digitized? There is a lot of jargon without anyone providing any real insight.
Can you see any points where the fad actually touches the ground?
Angus Champion de Crespigny: Where people have need for a digital commodity that cannot be seized or censored, and they’re willing to cope with the difficulties of dealing with such a commodity, Bitcoin has value. There are entire countries around the world which could benefit from this. It will take a long time for it to be adopted in this way, however.
Are you sure? We have seen examples of “un-confiscatibility” breaking down in courtrooms when judges have ordered alleged hackers and drug dealers to turn over their cryptocurrency proceeds of crime or face additional jail time.
Cryptocurrencies seem “elusive” to me, but not seizure-proof.
Angus Champion de Crespigny: There’s little to protect from the “monkey wrench” attack, true. I’d say it’s seizure and censor resistant at scale, unless you shut down the internet, which we have seen.
Additionally, it’s as seizure resistant as anything can possibly be: courtrooms can apply pressure to individuals to reveal their private keys and apply significant sanctions for not doing so, however with appropriate protections it will eventually require cooperation by the individual.
Do you think Ethereum can scale to accommodate the hundreds of thousands of tokens issued on it?
Angus Champion de Crespigny: I’d be surprised: blockchains have fundamental scaling tradeoffs. I also can’t help but feel it’s trying to jam too many things into one solution. The Internet is built on roughly seven different protocols, each doing very specific tasks: Ethereum is one protocol looking to do absolutely everything when in reality this technology is only needed to solve the problem of censorship-resistant value transfer.
It doesn’t seem like the right design to me.
Do you think proof-of-stake is a feasible way of securing a massive public blockchain?
Angus Champion de Crespigny: I shouldn’t comment on this. I am skeptical, but I haven’t analysed it deeply.
President Ji Xinping recently publicly endorsed blockchain, and his endorsement was reportedly accompanied by a blockchain-enthused campaign spread across state print and televised media. Critiques of blockchain were supposedly banned. What do you think of this?
Angus Champion de Crespigny: Governments around the world have promoted “blockchain” for years and the hype comes and goes. I don’t read too much into individual announcements like this. The Chinese will not promote censorship-resistant money so this will just be hype that will eventually dissipate.
What about blockchain security? In October 2018, researchers at Cornell warned that blockchains could not secure online voting because the Internet they run across is “a sea of buggy code.”
Angus Champion de Crespigny: It’s madness to consider voting on blockchains for many reasons other than the security of the infrastructure. There’s a lot of work to be done on blockchain security generally, and it really depends on what aspect you’re looking at.
Besides the problem of blockchain security being affected by bugs in the Internet, do you think Ethereum or other chains could have backdoors or other vulnerabilities?
Angus Champion de Crespigny: This is one of the reasons why protocols are typically designed quite simply, and the reason I believe almost every ‘DApp’ is bound to fail: there is next to no enterprise infrastructure that runs without maintenance. Code is hard.
Creating programs that can’t be stopped I don’t believe is feasible for anything except the most simple applications. It’s why I think working on anything except improving the security of the money use case is premature.
Where do we go from here? How can businesses improve their databases and share data without necessarily using a “blockchain” if that is not required?
Angus Champion de Crespigny: Forming consortiums are good, we’ve had them for years. The difficulty is always in organising the people. Once you’ve organised the people, the technology is easy. There’s nothing wrong with simply establishing a legal entity and developing a central solution for the benefit of all participants.
Do you think there is any money to be made in blockchain “un-consulting”?
Angus Champion de Crespigny: I’ve found there’s little money to be made in telling people what not to do 😊.
All we can do is keep educating, but I’ve found that groupthink is very difficult to get through. It is hard for people to believe that people at other large organisations who have made press releases have not done their due diligence, and will use that assumption to pursue their own press release, without noticing that they too are skipping their due diligence.