DAS NYC, Day 1

A Cypherpunk Manifesto — the urtext of crypto — was a call to action: “We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence.” 

33 years later, however, the canonical authority of the Manifesto has seemingly been undermined: The Chairs of the SEC and CFTC both spoke at a crypto conference today.

To many, that would seem like a case of cats and dogs living together. But even Eric Hughes, the author of the Manifesto, might not be so surprised: “It is to their advantage to speak of us,” he wrote of the powers that be, “and we should expect that they will speak.” 

But Hughes must surely be surprised at what they’ve been saying.

“Being free to conduct one’s affairs, including financial affairs, free from government and other surveillance is a core American value,” SEC Chair Atkins says — a radical statement from the government itself. 

Atkins adds that the current US government believes in “restoring power to individual Americans and entrusting them to manage their own affairs.”

The SEC has not gone fully cypherpunk, of course. Atkins, for example, believes that “crypto’s privacy tools can lessen…the need for mass financial surveillance.” A true believer would seek to eliminate it.

Even the truest believer, however, recognized he could not live on a digital island of his sole creation. “Privacy only extends so far as the cooperation of one’s fellows in society,” Hughes warned. To secure such cooperation, he might have been willing to negotiate terms. If so, now would be the time to do it: When high-ranking government officials are speaking at crypto conferences, it seems like an attempt to meet Hughes halfway.

Halfway is twice as far as he ever expected. 

Hughes told us not to expect anything from corporations, either — but they’re here at DAS, too. Including, incredibly, two of the most venerable.

The Bank of New York was founded by Alexander Hamilton in 1784; its shares were the first to be listed on the New York Stock Exchange, and it made the first-ever loan to the US government (to pay Congressional salaries).

Today, their CEO told a crypto conference: “We’re excited about digital assets.”

Western Union was founded 1851 as a telegraph company, invented the stock ticker in 1866, and made the first telegraphic money transfer in 1871.

Today, their CEO spoke fluidly on the relative merits of Solana and Ethereum.

I’m not sure what it all means.

If nothing else, though, it suggests that the urtext of crypto is fallible — and that cats and dogs really can live together.

Day 1: Travel-disrupted notes

Travel disruptions meant your conference correspondent had a 3:45 a.m. alarm (the things I do for crypto). I caught a rebooked flight (in place of another rebooked flight!) that then spent two and a half hours on a tarmac for the most inexplicable reason ever: An interior light needed to turn off, but for some reason it wouldn’t. As a result, I watched the first half of Day 1 on my phone, and my notes are a little haphazard. Full coverage of important conference details like the food, merch and vibes will commence tomorrow. But below are a few of the things I did manage to pick up on today.

Michael Selig, Chair, CFTC

Chair Selig says the CFTC is “excited” to bring perpetual futures to the US: “The crypto capital of the world needs the perps market.”

“We’re gonna work on getting these in the US very soon,” he promised.

He wants prediction markets to be here, too: “It’s really important we keep these markets in the US. It’s an important check on the news media.”

Selig also broke some news, announcing an “innovation-advisory task force” that will “create a space” where builders can come talk to CFTC staff on issues related to crypto, prediction markets and AI.

Devin McGranahan, CEO, Western Union

McGranahan notes that Western Union “solved” real-time money transfers about 150 years ago, but recognized that the way they currently send money has one downside: “The problem is, it keeps a couple of billion dollars of mine floating around to pre-fund all those transactions.”

Western Union hopes to change that by issuing its own stablecoin and moving that, instead: “Stablecoins, at an institutional level, allow us to take a lot of money out of the system, making it more efficient.”

This could be very good for shareholders: “If I can free up a couple of billion dollars of capital, I can buy back half the company.”

It might be very good for crypto, too. Western Union plans to open up their vast global network of money-changing outlets to anyone who wants to off-ramp their digital assets into local-currency fiat. 

He plans to give them stablecoin-backed credit cards, too, which is a very crypto thing to do: “We’re going to give people in these companies access to the banking system without having to open a bank account.”

Western Union has 100 million customers worldwide, so that could be a lot of new crypto users. “I’m talking about taking my company, which is basically the equivalent of [all] the entire stablecoin companies, and move it into stablecoins.”

It all makes a lot of sense, really — because what are stablecoins if not the latest iteration of telegraphic money transfers?

Blockworks IR

It's not so long ago that equities were thought of as a subset of bonds: “A common stock is a bond which provides future payments indefinite in number and amount,” one expert explained in 1938.

At the time, investors treated dividends like bond coupons because they had so little information about the companies paying them. If you don’t know how a company is making money, the only way to measure a stock is the dividends they pay. As a result, the dividend yield on a company’s shares often exceeded the yield on its bonds.

That seems unthinkable today, mostly because investors now have better information about the companies they invest in, so they’re willing to pay more for their shares.

Blockworks hopes to do something similar for crypto investing: Its investor relations platform, announced at DAS today, aims to provide the kind of information that equity investors have long been accustomed to.

The lesson from equities is clear: Better information leads to higher valuations — and, more importantly, a lower cost of capital for builders.

If investors someday value tokens like BNB and Jito higher than stocks, today might be the event future newsletter writers use to explain it.

Other quotable quotes:

Day 1 takeaway: Cats and dogs really can live together. 

(Bonus takeaway: Don’t fly if you don’t have to.)

See you tomorrow for Day 2.

— Byron Gilliam

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