Experts break down future of bitcoin, blockchain in Sun-Times discussion

Cryptocurrency experts discussed the promise of bitcoin and blockchain at a Chicago Sun-Times event Thursday evening, addressing regulatory complications that are emerging as the burgeoning technology becomes mainstream.

Jennifer O’Rourke, who works for the state of Illinois as its “blockchain business liaison,” said the technology is changing the way we interact with government.

“What we’re talking about here is a technology that has the ability to disintermediate some of the trusted participants in a transaction,” she said. “But do I personally think that it has the potential to remove the government from the process? I do not.”

Traditional financial institutions can be sidestepped by cryptocurrency transactions. But O’Rourke argued that government ought to have some authority in this landscape, because people generally don’t like unregulated spaces. Most people want drivers on the road to have licenses, she said, and want drugs to be regulated by the FDA.

But the fact that the blockchain is decentralized is what makes it appealing, said Rumi Morales, a venture capitalist who specializes in digital currency. She explained that the technology is changing so quickly that it’s difficult for regulators to keep pace.

Jimmy Odom, CEO of Bit Capital Group, a startup that works with cryptocurrency miners, acknowledged that the framework of the blockchain and lack of regulation allow for bad actors to take advantage of unsuspecting people.

“This is provocative, but I think that’s a good thing,” he said. “We’ve gotten so comfortable being dependent on others that we’ve essentially forgone our own responsibility.”

Colleen Sullivan, a partner at CMT Digital Holdings, stressed that through nine years of the technology’s existence, the blockchain itself has never been hacked. It’s individual users and groups that have been comprised, she said.

Part of the problem, Odom said, is that the bitcoin craze is causing people to jump into the space without spending enough time educating themselves. He said he’s seen countless Reddit posts from people who’ve forgotten their seed phrases — the passcodes to their bitcoin wallets — and lost money as a result.

But he predicts that the risks associated with the blockchain will force people to educate themselves, creating “an environment of more responsible world citizens.”

O’Rourke pushed back, using her technology-challenged parents, who are in their late 60s, to illustrate her point.

“I want them to eventually use this, but my dad is going to lose his seed phrase,” she said. “The industry and the commercial market will have to recognize pragmatic application of this technology… to recognize that Jerry is going to forget his seed phrases, and Melanie is going to get locked out of her Coinbase account.”