tl;dr: I attended a meetup in Vaduz and was surprised by the youthful audience of the up-and-coming Crypto Valley v1.2. Also, ‘when binance’ has happened. Read on!
In this piece I will give a summary of a meetup I attended in Vaduz, Liechtenstein on 23rd August 2018. The presentations at this particular event were from two Bitcoin maximalists, and while that isn't really my thing it is useful to have an alternative perspective on the industry. I will provide something of an overview in this article, but I will also explore some of points of interest as they relate to the blockchain industry and Liechtenstein.
Part of my interest in this event was to gauge how the local scene was and to meet some new people. Plus I'm keen to understand and observe the ways in which Liechtenstein is trying to usurp the title of "Crypto Valley" from Zug. Understanding this potential shift is of interest to me, and I feel it is better to be there and see things in person to get a better feel for it. I also have a desire to have a Polkadot presentation with this meetup group in the Future.
After this meetup, I've now been to more blockchain meetups in Liechtenstein than I have in Scotland!
The meetup: venue, attendees, and atmosphere
The venue is clean and well laid out which is a huge plus in my opinion. There was no problem with lighting or sound and the chairs were just fine.
Some beer, cold drinks, and snacks were provided afterwards which was appreciated for those of us travelling from further afield.
Too many times I've been to events that are poorly thought out with either poor lighting, no snacks, lack of seats, and overall poor management. This was the opposite experience. I definitely felt like there was a professional approach to the organisation of this event, most of the credit is due to the organiser Klaus Stark (a local entrepreneur). I believe the event was also live streamed, which isn't always the case at many meetups.
Two shipping containers inside the venue inside a doubly landlocked country. OK!
Surprisingly, the event was attended by a friendly group of people with a fairly young average age. This is somewhat in contrast to Zug where it felt like the average age is higher. Both Zug and Liechtenstein are well known for a high percentage of legal and finance firms, so I did expect a fairly similar demographic at this recent meetup.
As with most meetup events, if you invite 100 people about 50 will show up. That was true here. Interestingly though, there were quite a few people form Austria and Switzerland too. Zug is about an hour by car, and Zürich is probably another 30 minutes at most.
Introduction to the Lightning Network - Philipp Büchel
Philipp gave a brief overview of what the Lightning Network is. I suspect most people reading this blog will already know that the network is a layer 2 scaling solution for Bitcoin. Philipp, a native to the country, also gave something of a live demonstration of his lightning node.
He brought in his machine and had it on stage. The machine itself is fairly compact and sat inside a glass box that he had purchased in IKEA. He used a Raspberry Pi for the computation and even had a small screen connected to it. I thought it was a pretty cool set up and I think it is always nice to see hardware projects in this space. Unfortunately, he wasn't able to give a proper demonstration of a transaction over the Lightning Network since he had to make new 'anchor' transaction after moving his machine from his home to the meetup venue. I've seen a live demo of the network in action before, so it wasn't upset that I didn't see it working this time around.
One thing that I did scratch my head on was a comment about using Bitcoin to become our own banks. Sure, I've heard that part before and isn't something I'm complaining over, but rather it was the following comment about not having to worry about security. That we can be relaxed about security and not have to pay out huge amounts for physical security since we could use Bitcoin and the Lightning Network, unlike banks. However, I can't see how the problem of protecting private keys will disappear with Lightning nodes. While I don't know the exact architecture of the nodes I do suspect there there ought to be a private key, of some sort, on the device itself. In the later talk by Giacomo, it sounds like my suspicion was confirmed when he mentioned cryptographic 'toxic waste' (sensitive data that must be destroyed). As with validator nodes in Proof of Stake chains, I believe that physical security will also be a major concern for this industry and not just for banks.
Bitcoin Maximalist view on the future of blockchain - Giacomo Zucco
I don't recall what the exact title of the presentation was, but Giacomo gave his opinion on what he thought the future of blockchain should look like. In short: Bitcoin is the only true "cryptocurrency" / "blockchain" and all future projects should be built upon the secure base layer that is Bitcoin. All other coins are shitcoins in his view. While I do think that Giacomo is a smart guy with a good depth of knowledge I do think his opinion on Bitcoin is overcooked.
Usurping the "Crypto Valley" crown
It seems that Liechtenstein, a small country wedged between Switzerland and Austria, and one of only two doubly-landlocked countries, is trying to usurp the title of "Crypto Valley" from Zug! With the banking drama in Switzerland, I'd say the folks in Liechtenstein are doing a pretty good job of it.
As I noted in a previous blog, obtaining a bank account for a blockchain organisation is getting very difficult, and that Liechtenstein is one of the few places that you can do it with relative ease. I do reckon that you probably need a lot of money in the bank, or the promise of a lot of money coming in, or you might struggle to get an account. Many of the banks in Liechtenstein appear to be small, niche, private banks that aren't used to a high volume of transactions. The flip-side is that you will probably get a much higher level of service, but you will pay for that.
Banking isn't the only factor. I do think there are a number of factors that are important in making this country the next Crypto Valley. The upcoming blockchain act will probably be passed by the government late in 2018, plus the fact that the banks and the lawyers are keen to carry blockchain forward suggests a bright future for blockchain in Liechtenstein. Further more, there is a competitiveness with Switzerland that makes me think Liechtenstein is happy with the new inflows to their banks that have come directly out of Switzerland.
The missing piece is perhaps having blockchain teams actually residing there. There are a few teams with some presence there, but at the moment there aren't many. Residency is notoriously difficult, but it may be easy enough to have a post box even if you can't physically be there. That is getting towards the edge of my current knowledge though.
Zuger Moat
Zug still gets a lot of things right as I alluded to in my previous article, plus there are far more resident teams:
e.g. Web3 Foundation, Melonport, Aragon, Validity Labs, Bitcoin Suisse.
Liechtenstein has a population similar to that of the town of Zug, which is about one third of the population of the entire canton of Zug. Residence is supposed to be very hard to get so it does make me wonder how easy it will be for teams to build up an actual presence there.
This proverbial moat around Zug ought to last some time, but I do find the competition to be interesting and I think it is healthy for the blockchain industry. It is also worth calling out that many other countries are falling far behind.
When Binance
One interesting thing I found out during my visit to this meetup is that Binance now have a presence in Liechtenstein. There was a newspaper clipping on the one of the bulletin boards in the venue, but I can’t say that I had read that anywhere else! They have opened a post box for one of their subsidiaries, at the very least. Although Coin Telegraph and others did pick up the story.
In my previous article I pointed out that Malta may not be the easiest place to bank. Sure, that was anecdotal evidence but corroborate that with this latest revelation and it does add up to be quite believeable.
About me
Currently, I work at the Web3 Foundation, covering numerous responsibilities, but mainly security and communications.
One of the main projects of the foundation is the Polkadot network. A next generation blockchain platform. To read more about the innovation that Polkadot is bringing to the blockchain industry I invite you to read the following blog post: link.
Questions / Comments?
You can create a reply to me here on Medium, or reach out to me on Twitter: EAThomson.
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