“History doesn’t repeat, but it often rhymes.” So said that great quote machine, Mark Twain.
It seems like the perfect framing for the takeaways from this week’s historic Consensus 2022 festival in Austin, Texas, the first Consensus in Austin and our first in-person Consensus since 2019, following two years of a COVID-19 pandemic-induced online format.
The past Consensus in which I’m seeing a rhyme is that of 2018, which was held in the Hilton Hotel in New York. Until this week’s massive 17,000-strong event, that 2018 Consensus was CoinDesk’s previous biggest in-person event, with almost 9,000 attendees.
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In addition to the teeming crowds, Consensus 2018 was notable for some rather flashy, ostentatious displays of wealth. Two Lambos were parked out the front of the Hilton by an entrepreneur who had paid the City of New York an astronomical fee to plant them there. There were wild parties on boat trips and unfavorable articles in the New York Post about crypto bros taking over the city.
The timing of Consensus 2018 was also significant. It took place a few months into what was already being called “crypto winter.” The initial coin offering (ICO) bubble had spectacularly burst, lots of retail investors had lost their shirts, and although the parties were raging, there was a general sense that the gravy train of money that had flowed into the industry was drying up.
That, of course, is where the rhyme with Consensus 2022 exists. This year’s event occurs on the heels of a big sell-off in both crypto and traditional markets, including the contentious collapse of TerraLab’s UST stablecoin. Already people are throwing around the word “winter” like it’s a given.
Yet, as with 2018, the energy of this year’s Consensus feels intense.
Perhaps that’s because the marketing budgets that paid for sponsorships and attendance were agreed to before the meltdown began. Or perhaps it's because the unstoppable underlying interest in crypto, which is now drawing from a much wider pool of participants than in 2018 as it encompasses new concepts such as decentralized finance (DeFi), decentralized autonomous organizations (DAO) and non-fungible tokens (NFTs).
Either way, what is most striking to me is the optimistic, almost welcoming mindset displayed at Consensus by various crypto old hands who’ve been through more than a few of these down periods.
That view was perhaps best encapsulated by Morgan Creek Capital Management founder and Chief Investment Officer Mark Yusko during an on-stage conversation I had with him, Selini Capital Chief Investment Officer Jordi Alexander and Digital Currency Group’s Rumi Morales, head of venture and growth investing. “Winter is the best time for venture investing,” Yusko said.
His point was that these down periods are when the important development work gets done on projects that matter and valuations are more reasonable. Away from the “number go up” speculation and the hype – with the mainstream press losing interest – engineers and entrepreneurs are able to focus and build.
That’s exactly what played out in last crypto winter, when huge advances were made in DeFi, NFTs and layer 2 blockchain scaling systems such as Bitcoin’s Lightning Network and the ZK-rollups used with Ethereum.
In fact, many people have told me that 2019 was the Consensus they enjoyed the most. The attendees numbers dropped down to around 5,000, but the conversations were quality, involving project development and the hard but important work of building.
Who knows whether Consensus 2023 will follow a similar pattern. We’re hopeful that it will be even bigger than this year. But this ebb and flow – but ultimately upward trajectory of crypto – is well entrenched, and Consensus’ experience has reflected that over time.
In fact, the very first event, in 2015, which attracted about 500 people was forged in the middle of an earlier version of crypto winter, a period in which prices had been beaten down by failures such as the Mt. Gox hack.
After that, the 2016 event was famed for being the height of the block-size debate and 2017 for the rising buzz around ICOs until it all went pear-shaped early into 2018.