Devcon 1: Ethereum’s Woodstock Moment

Ethereum’s Devcon 1, held in London in November 2015, was like Woodstock, except perhaps with less nudity.

Bankers and Big 4 consultants disguised in hoodies shared space with dreadlocked Ethereum coders, sitting cross-legged in the corners, their laptops open in front of them. 

Packed into a Victorian banking hall in the heart of the City of London, the audience listened as ConsenSys chief Joe Lubin predicted a new future for firms; cryptographer Nick Szabo talked about decentralization in the context of Francis Drake and the Aztecs; and chief scientist Vitalik Buterin assembled shards of the path that lay ahead.  

“The internet kind of sucks,” said Ethereum wallet designer Alex Van de Sande during his opening keynote. “It’s centralized, and it’s broken – but we can fix it this week.” 

Such was the optimism in the room. 

Keeping with the Woodstock motif, this moment in time possessed a kind of prelapsarian innocence: The DAO debacle and hard fork decision that followed was at least six months away, and further off still was the ICO gold rush.

An earlier confab, Berlin’s Devcon 0, preceded Ethereum’s launch. In London, things were starting to get real.

Today, Ethereum’s native cryptocurrency has a market cap of some $36 billion, but at that stage the Ethereum Foundation, which had managed an $18 million token sale, didn’t have any fiat currency on hand, recalls DARMA Capital managing partner Andrew Keys, the then-head of business development at ConsenSys.

“I had to lend the Ethereum Foundation $35,000 because they only had crypto. I had to put it on my credit card so we could reserve the room,” said Keys. 

A couple of weeks before the London event, Keys had managed to broker a landmark deal with Microsoft Azure, the first big enterprise to really back Ethereum. The Wall Street Journal ran a story about Microsoft working with Ethereum, and on Oct. 27, 2015, the price of ether crossed one dollar. The publicity also enabled Keys and Marley Gray, principal architect at Microsoft Azure, to cobble together some vital sponsorship money.

“I had a very difficult time getting together the funds with Microsoft as a sponsor,” said Gray. “Then the WSJ interview went really well and I was able to secure $14,000, a sponsor table and a speaking slot to announce eBaaS, or Ethereum Blockchain-as-a-Service, on Azure. That table was just a card table of questionable stability, and the first thing out of most people’s mouths when they found out I was from Microsoft was, ‘What are you doing here?’”

Another of the Ethereum OGs involved in the planning was venture investor William Mougayar, who remembers the general worry that the London event simply wouldn’t sell enough seats.

“We weren’t sure it was going to fill up,” said Mougayar. “We were giving discounts to attend. Then a week or so prior to the event, there was a fear of missing out and a swelling of attendance, resulting in a standing room situation that we ended up with.”

On the subject of FOMO, Mougayar organized an evening event at the London City offices of law firm Orrick, to introduce a gaggle of investors to Ethereum. 

“We had some of the top Ethereum developers, such as the teams led by Gavin Wood, Jeff Wilcke, the nascent ConsenSys and the Foundation proper. But only three VCs showed up from about 18 that I invited,” recalled Mougayar. “Two of these VCs are leaders today in backing blockchain companies.” 

Although investors never knew it at this stage, Ethereum was about to foster an explosion in crowdsales. In attendance at Devcon 1 was Fabien Vogelsteller, the inventor of the ERC-20 token standard that would launch a thousand ICOs.

“Devcon 1 showed us the sheer size of the developer community, just 10 months after the network launch,” said Vogelsteller, founder of LUKSO. “So, I did expect there to be an increase of ICOs, not only because of ERC-20, but because it just looked imminent.”

This gathering of brave new disruptors found itself facing the old financial world, represented in a panel featuring the likes of Lee Braine of the technology office of Barclays Investment Bank. 

This besuited boomer from Barclays must have looked like “the man” that you wanted to stick it to, at least to the cypherpunks and libertarians in the audience. (It’s worth noting, at that time the entire financial world and large parts of the legal system were expected to be soon replaced by smart contracts.)

“It was a heady time,” Braine recalls, “with an explosion of innovation coming from startups, big technology companies, universities, open-source communities and also the financial institutions themselves.”

Before too long the Devcon banking panel took the form of a lecture, with Braine asking the room how a system of blockchain-based smart contracts might handle some rather complicated netting cycles used by a large investment bank to optimize trade processing at scale. 

In fact, Braine’s post-trade securities netting question is an example of where and when decentralization, though perhaps desirable, cannot achieve the efficiency of a centralized solution.

“It’s effectively a centralized batch optimization process,” said Braine. “I’m not aware of a genuinely distributed model that can achieve the same settlement efficiency.”

(Braine and his team have subsequently explored this problem using quantum computing power.)

Keys, who was moderating the banking panel, remembers Braine’s fiendishly complex challenge, and also the fact that the Barclays scientist was “fully suited.”

“But then he is a Brit,” said Keys, “and not some ding-dong from the U.S.”