• Wed. Feb 28th, 2024

Blockdaemon CEO: Success of crypto is predicated on systemic failure; we’ll see more of that

  • All major players should work with multiple infrastructure providers  
  • Companies like Nasdaq will continue to work on Bitcoin, permissioned networks, and stablecoins

Talia Caplan of CNBC Crypto World talked to Konstantin Richter, the founder and CEO of Blockdaemon, about blockchain adoption following the fall of FTX and what 2023 holds for crypto. Richter also broke down whether crypto’s adoption rate would slow down after FTX’s failure.

Institutionalizing the chaos 

Talia Caplan: How do you serve your customers?

Konstantin Richter: We are a middleware platform. We make the process of buying crypto seamless. These networks are all open source, thousand of users control them. We institutionalize the chaos.

TC: You wanted to work with FTX but they insisted on running their blockchain infrastructure in-house… 

KR: When it comes to transparency and reliability, it’s important for all major players to work with multiple infrastructure providers and not only rely on their in-house infrastructure because it breeds the potential for abuse. 

Will crypto adoption increase? 

TC: This year we saw increased institutional adoption. Wall Street firms like Nasdaq are moving into crypto. Do you see more of this happening in 2023? 

KR: I don’t necessarily see a slowdown in institutional adoption. Companies like Nasdaq will continue to work on Bitcoin, permissioned networks, and stablecoins. We will see continued growth this year. There is more focus on quality, on large cap tokens like Bitcoin and Ethereum. I think volume will be a little lower; slower consumer adoption in 2023. 

TC: What will it take to turn that around?

KR: Regulation is part of the answer. I can’t speak for the industry as a whole. Regulators have the responsibility to do a lot more, to protect consumers by providing a clear framework that companies can adhere to. Otherwise you have companies like FTX who claim to be regulated, but really aren’t. The other factor is general macroeconomics, rising interest rates…general equities will be more impacted than crypto. 

TC: What advice do you have for centralized entities and DeFi after the collapse?

KR: These entities should be public and open about the board of directors, who the people involved are, who the main investors in the entity are. It’s important to understand what motivates stakeholders. That would have been hugely beneficial in the case of FTX. I can’t say enough good things about Coinbase. You have ultimate transparency, they’re a public company. 

He added that DeFi was the solution to lack of transparency because it offered software that was externally verifiable. The problem for him is that DeFi is complicated. He said it was community-driven and there was no clear regulation at this point. 

Still bullish on crypto

When asked if he still felt bullish on crypto, he said he felt more bullish than ever, adding:

I was talking to investors earlier and the general consensus is that what happened to crypto is really bad. We all thought FTX was a lot better. It’s a great reminder not to trust individuals, but to verify. FTX was a one-man fraud that was using components of crypto to solicit funding. The promise of crypto in taking out middlemen…is truer than ever. The success of crypto is predicated on systemic failure and we’re going to see more of that. The use case of crypto is more relevant than ever.   

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