Welcome to part one of my new series Surviving Crypto Winter, where I profile companies and projects that have a shot at getting through the storm and thriving when spring comes again. Today I kick it off with co-author Carly E. Howard, JD, LLM as we profile Mattereum.
Crypto winter isn’t coming, it’s here.
Hype outstripped reality. Lambos turned to Volvos. The moon is a harsh mistress.
If you love crypto you probably thought, “This time is different. This technology really can change the world!”
Well, you were right, and you were wrong.
Gartner hype cycle.
It can and will change the world but every emerging technology goes through the famous Gartner Hype Cycle , where wild expectations drive prices to frenzied new heights and promises of a brave new world seem tantalizingly close.
It’s hard to imagine now, but the Internet took 25 years to deliver on promises of telecommuting, social media, and buying everything imaginable over the air. That’s “twenty-five” years, in case you thought that was a typo.
In a famous article, The Internet Won’t be Nirvana, Clifford Stoll laughed at optimists who dreamed of online knowledge stores like Wikipedia and buying books from Amazon. And his naysaying was 20 years into the growth of the net. Five years later, his article looked foolish and it gets more foolish with every passing day.
But even the most diehard true believer can lose hope when faced with the reality of how long new technologies take to come to pass.
You know that powerful AI in your phone that answers all your questions and guides you around the big city with ease? It took a lot of false starts, disappointment, and suffering to make that a reality.
For 50 years, AI failed to deliver on almost any promises, and the entire industry went through several winters where funding dried up so badly that even the legendary figures of the field, the pioneers now making millions, worked teaching jobs at the few universities that helped keep the research light on.
The Fedora that changed the world.
When I joined open source pioneer Red Hat eight years ago, everyone told me I was wasting time with Linux. I stuck with it because I know a better solution when I see it, and open source was a better development model than closed source. I knew it was just a matter of time before no private company could hire enough developers to compete with 100,000s of open source ones.
A top recruiter back then told me to focus on Solaris because that was the hot thing at the moment. I told him Solaris wouldn’t exist in ten years and he looked at me like I had two heads.
Ten years later, Solaris is all but dead and Linux rules the server world, but it was a battle each step of the way. Sometimes it looked dire even to true believers like me.
The truth is no technology ever fully lives up to expectations but that’s alright. We don’t have humanoid AI robots like C3P0 who answer to all our needs, but we can fly to a new country, pull out Google Maps and easily find our way as a stranger in a strange land. We don’t always get what we expect but sometimes what we get is even better.
Cryptocurrency is no different.
We went through the mountain of unrealized expectations, and now we’ve plunged into the Trough of Disillusionment on the Gartner Hype Cycle.
That’s the bad news.
The good news?
The Slope of Enlightenment is just over the horizon.
After the despair and depression, the losers, fakers, and poorly positioned companies get shaken out of the game and go the way of the dinosaur. 45% of early Internet companies failed and many of them saw massive declines as the NASDAQ-100 dropped almost 80% from its peak.
Fred Wilson, a venture capitalist, wrote “nothing important has ever been built without irrational exuberance.” Mania fuels early spending, exploration, and enthusiasm. When it goes bust, the next phase of the cycle kicks in.
Time to build.
From the ashes of competition, rises the phoenix.
As winter hits, good projects buckle down and get to work building real technology that works in the real world.
And that’s what this new series of articles is all about:
Who will survive the crypto winter?
I’m going to dig deep and profile companies with the best shot at surviving the bust and building something we can’t imagine living without in the coming years.
Back to the Beginning
When the hype crashes, we have to go back to the basics.
What are the basics?
- Solid team
- Great idea
- Cash in the bank
- Ability to execute
These are the timeless principles that make a company or project great. It’s amazing we ever forget them, but at the frenzied height of the boom, people get delusional.
As we go through this series, not every company or project we profile will have all the basics checked. They may excel in one area, like a great idea and solid team, but need some work in other areas, such as execution and fundraising.
We’ll highlight the good, the bad, and the ugly and we won’t shrink from pointing out what needs to improve for the project to emerge from crypto winter alive and thriving.
But all in all, each company featured here has a good shot at making it through the storm if they bring their parka and snow shoes.
Moving Matter to the Blockchain with Mattereum
Today we kick off the series with Mattereum.
Starting with a bang.
They’re building a decentralized property ledger that lets people register real world assets, like a car or house, and they’re testing this out on a jaw-droppingly rare $9,000,000 Stradivarius violin.
It’s an idea whose time has come.
In her famous talk on blockchain at Ted in 2016, Bettina Warburg talked about traveling around the world and working with the poor in dozens of countries. She asked some of the most downtrodden folks in the most remote locations what they wanted more than anything. Their answer may surprise you.
A property ledger.
They didn’t want handouts or money or short term infrastructure building projects. They wanted a place to keep track of what they owned.
If you live in a country with a strong and stable government, you’ve probably never thought that the things you worked so hard your whole life to buy, like your house or car, would suddenly disappear. Nobody is coming to take it from you, unless it’s a bank because you can’t pay for it.
But in an unstable country where a new dictator might overthrow the government at any time, or the national currency could go crazy and hyperinflation could make the cost of bread higher than a worker’s monthly salary overnight, a property ledger starts to look a lot more valuable.
Imagine living in China during the communist revolution era. Your family might have owned their land for hundreds of years, passing your house down generation after generation. And then Mao comes to power and men show up at your door with guns and tell you that all those property deeds are worth less than toilet paper because the government owns all the land now.
If the property ledger is state or federally run, all your rights are wiped in an instant.
There’s nothing you can do about it.
That’s the official record and now it’s gone. The only other proof you have is a fragile piece of paper in your drawer at home.
But if you have a decentralized, distributed ledger that spans the whole world and can’t be taken down by a single coup, dictator, or country, there’s a chance you might one day get that beautiful family estate back, when the winds of change have come again.
A universal property ledger also opens up all kinds of possibilities down the road. Today, we only register and transfer major assets like a house or car because we have to register them by law, not because we want to register them.
But how many other things do you have in your house worth protecting?
An expensive computer? Big screen TV? Jewelry? Designer clothes? A set of fine Beats headphones?
Today, the best you can do is take pictures of everything you own, write down what you paid, and save that list for the insurance company. If you lose something, you may get some money but that’s not much comfort if the insurance company doesn’t believe you or you forgot to take pictures or those pictures burned up in a fire with your house.
With a digital ledger, spread safely across the planet, you could prove it.
And with more and more assets on the chain we might see the rise of brand new peer to peer lending and rental systems for property, a mix of micropayments and tokenized shares in everything from Stradivarius violins to buildings. In a decade or more, we might see hundreds of people owning a fraction of a tokenized apartment building, rather than just a few multi-millionaires owning the whole thing.
That will likely spawn new trading platforms where people swap everything from fractional shares in buildings to their piece of a famous painting. We’ve already seen Warhol art auctioned to multiple crypto bidders and it’s only a matter of time before we see more tokenized assets.
Still, we don’t need vast next-gen webs of automated micropayments, or even black swan events like runaway hyperinflation or a Communist dictatorship to show the value of a digital, immutable ledger.
Going to the Department of Motor Vehicles is enough to make anyone a true believer.
Ever go to the DMV?
Do you want to go back?
If you’re like me, you look forward to it about as much as going to the dentist and having a root canal without Novocaine.
So many DMV memes I couldn’t choose just one.
That’s because property management at the state level is a convoluted and inefficient mess. Every state builds and manages their own system. Counties and cities layer their own tax and tracking systems on top of it. There’s no interoperability. The employees don’t have any incentive to offer you good service because they have a monopoly.
You also can’t transfer assets between states with ease. If you want to move from New York to California, you have to re-register your car with the local California DMV, pay all new taxes and fees and get a new license plate, instead of the title seamlessly flowing between states. To top it off you have to get a new driver’s license too.
Those digital databases are nothing but an extension of the old analog system of paper and filing cabinets. In the past, you walked to some DMV office and gave them a piece of paper and they kept it in a drawer somewhere. If you wanted to get a copy of what the state had on file, someone had to physically go to that filing cabinet, pull it out, photocopy it, and mail it somewhere. Not a fast process to say the least.
But what if you could easily move your assets from state to state or country to country?
With a universal ledger you can, because the process becomes standardized and company, country, state, and county can simply layer their processes on top of the distributed database. The way to interact with that database is well defined and open.
And that means you might never have to interact with the DMV ever again, except electronically, from the comfort of your own smartphone or AR shades.
Contracts Meet Reality in the Internet of Agreements
The second major idea Mattereum wants to tackle is melding smart contracts with written legal contracts.
They want to build an Internet of Agreements, a vast framework of interlocking, self-executing property agreements. To do that, they’ll create a web of smart contracts.
It’s worth pausing here to understand the difference between a “smart contract” and legal contract because there’s a lot of misunderstanding in the tech community, including by yours truly, friendly neighborhood futurist and sci-fi author, Daniel Jeffries.
That’s why I brought in a legal mind to co-author this piece, Carly E. Howard, JD, LLM, an expert in fiduciary law and regulatory compliance for tokenized investment funds. She’s also a sci-fi nerd, which makes her perfect for peering into the misty swirls of the futuristic legal landscape.
Not only did I not understand how smart contracts relate to real contracts, I got it almost completely backwards in an earlier draft of this piece but the doctor is in to help get it right.
The term “smart contract” is basically a misnomer.
It’s not really a contract at all. Not in the traditional legal sense. Smart contracts, the brainchild of cryptographer Nick Szabo, are more like an advanced script or a branching function in computer code.
To understand why, you just have to understand a little about the history of contract law.
Early attempts at an immutable ledger.
The way the law works, how laws are created and passed, and how they’re enforced all have a rich history that stretches back ages, to at least 1754 BC with the Code of Hammurabi, widely accepted as the first written legal code.
But a strongman could cast aside that worthless etched stone tablet and get his way with sword and blood. Yet despite the law of the jungle ruling for millions of years, a strange new concept eventually came to rule the world:
The idea of a shared framework of rules that everyone accepts and that no man or woman is above that law.
This understanding created certainty, spawned vast commercial ecosystems and launched a thousand trade ships laden with goods from near and far. Over time, governments and people have come to accept the shared consensual reality of law.
Maybe it seems strange to say that law is just an accepted reality and not actual reality, but it’s true. As Yuval Noah Harari points out in the amazing book Sapiens, laws are completely man made, albeit with consequences that do indeed feel real when the judge’s gavel falls.
Law was such a powerful idea that it went viral over the centuries, replacing strong men everywhere. Today the law is the most powerful force in the modern world, the foundation of empires. It governs everything from how we get married, to how we form companies, to the legalese nobody reads but clicks through when they get on Verizon’s mobile network.
Written contracts may seem boring to non-lawyers but they’re an amazing creation. They have all the flexibility of the human mind.
At its most basic, a contract requires an offer, acceptance, and exchange of something valuable. As long as we have this foundation, we can build more complicated terms into a contract, even something discretionary, like a child who inherits something from his parents only if he becomes a “productive” member of society, such as a doctor and not one of those starving artists who write blogs for a living.
We can’t say the same of smart contracts. They don’t have to be “contracts” at all. There doesn’t have to be an exchange of value. They don’t even need two parties to execute because you could have a smart contract with yourself that drips out your own cryptocurrency to you at fixed intervals.
Smart contracts are simply hard and fixed rules representing what we can automate in agreements. They have no way of knowing or proving esoteric clauses. A smart contract can’t tell us whether an heir to the kingdom managed to “productively” get into med school and gave up that dream of being a writer.
They’re routines, not infinitely flexible documents written in natural language.
This means that for smart contracts to make it in the real world, we’ll need something more, a kind of hybrid contract that bridges written legal contracts, drafted by lawyers, with smart contracts embedded in them to automate certain functions of that written contract.
That’s where Mattereum chief research scientist Ian Grigg comes into the picture. I profiled Grigg in my famous 2017 article, Why Everyone Missed the Most Important Invention in the Last Five Hundred Years. Satoshi Nakamoto credits him as one of his or her or their inspirations in the original Bitcoin whitepaper. Grigg is one of the great minds in crypto and in the late 90’s he came up with a way of recording written legal contracts with something called a Ricardian contract.
It’s easy to get a Ricardian contract mixed up with a smart contract but they’re not the same thing.
A Ricardian contract makes a standard written contract easier for a machine to manage. It includes several key features like a hash to identify it and markup language to make it easier to parse by machines, while also making it readable by humans with natural language text.
The rise of blockchains allowed a blending of the two concepts, smart contracts and Ricardian contracts, and makes them more robust by pushing the hashes of changes to immutable digital ledgers to indisputably mark the passage of time.
Some crypto enthusiasts dream that blockchains and smart contracts will replace current legal structures but that’s about as likely to happen as the moon crashing into the Pacific Ocean tomorrow morning. It’s a delusional pipe dream.
Instead, smart contracts need to work in the real world of established law and that’s exactly what Mattereum intends to do.
That’s why it can work.
They’re not replacing any legal system, just the clunky, old processes that slow down commerce and justice from happening.
If Mattereum was trying to replace legal systems around the world they’d fail miserably.
As Vinay Gupta, one of the founders of Mattereum, says, you can’t just show up on the shore of an established territory, set up shop with your own rules, and expect the current owners of that territory to sit idly by without a fight.
“Blockchains may be The Future but The Future shares a geography with The Present. The governments own The Present, and you can’t just open ‘The Future’ right in the middle of their turf without a dialogue.”
Interview with Vinay Gupta of Mattereum
In this episode I sit down with Vinay Gupta, Mattereum co-founder, refugee shelter designer, Ethereum blockchain…open.spotify.com
In this episode I sit down with Vinay Gupta, Mattereum co-founder, refugee shelter designer, Ethereum blockchain…open.spotify.com
Over the Mountain and Beyond
There are many mountains to climb if Mattereum hopes to become the premier property ledger, one that’s ubiquitous and trusted around the globe.
To start with, the company faces an uphill battle from state and local governments. While many of them realize their systems are horribly antiquated, they’ll default to doing what they already do: build their own proprietary systems.
A lot of what Mattereum wants to do can easily be approximated by a good centralized database and a slick user interface if it’s done at the state or federal level. Many people would gladly use such a system and never ask questions, especially if they live in a prosperous and stable first world country. A third world country, prone to hyperinflation and a government that changes the rules every five years might be suspicious, but citizens in Australia, the UK, Germany, and the US won’t think twice about a digital, centrally controlled system if they’re not offered an easy alternative upfront.
Still, a distributed ledger would have a number of advantages over a state run, centrally managed database.
The promise of blockchains in the future is that they’ll grow to scale beyond what we can do with centralized systems and the cloud today. That may seem strange when there’s so much talk of how Bitcoin and Ethereum can’t scale to Visa level transactions.
But that’s a short-term problem and it will be solved. Engineers everywhere are hammering on this challenge and we’re already seeing projects like Radix that promise to smash the Visa boundary and blow past it.
Image courtesy of CoinDesk.
It’s only a matter of time before engineers crack the scalability code and decentralized ledgers handle billions and billions of transactions. Don’t forget that in the early days of the Internet, luminaries like Robert Metcalf, who invented Ethernet no less, predicted the “Internet will soon go spectacularly supernova and in 1996 catastrophically collapse.”
As late as 2007, the head of Google TV at the time, Vincent Dureau, said the Internet won’t scale and can’t offer quality of service.
Big cable providers struggling to compete with Netflix now might wonder what Dureau was thinking.
When that happens, decentralized systems will spread across the globe and become universal platforms used by people in every country and that means we’ll also have a more stable system. A central system can only scale so far and only remain so secure.
Today’s hackers know where the centralized data is and it’s a deliciously tempting target. It’s so tempting that there isn’t a single major company or government agency on the planet that hasn’t fallen prey to hackers. If you keep all the data in one place, you’ve done hackers jobs for them. They know right where it is and they know how to get it, if they’re only persistent enough.
Why did the bank robber rob the bank? Because that’s where they hold the money.
Why did hackers hit Equifax? Because that’s where they hold the personal information.
The only solution is not to keep important data in a central location. No central entity can keep it safe. It’s impossible.
We have to push it back to the edges.
That’s the real promise of the blockchain and post-blockchain solutions. A ledger will act as a vast, active, distributed database that helps protect the world and pushes everyone to raise the level of security.
Better to trust a system that’s replicated across hundreds of jurisdictions and tens of millions of nodes.
The more the data is replicated and distributed, the more resilient it becomes.
That’s the reason your DNA exists in every cell in your body, because even if millions of cells vaporize, the rest of your cells still have the code they need to keep going strong.
This matters to Mattereum because a world-spanning database of property, that no single entity needs to try and keep safe with an army of security folks and expensive IT infrastructure, is exactly what they want to build.
And we need it now more than ever, with a new data breach letter showing up in our mail every other week.
Dude, Where’s my Key?
No matter how many amazing ideas Mattereum has going for it, establishing their platform won’t be easy. Tech challenges abound with this project. We already talked about scaling but that’s just the tip of the iceberg.
What about your private keys when everything you own is on chain?
Lost my private keys. Uh oh.
What happens if I trust my fancy new Ducati to the Ethereum blockchain and I lose my key? Managing private keys is painfully challenging, even for skilled tech people. They’re hard to explain and easy to lose for the average person who constantly forgets the one terrible and easy to hack password they use for every login.
Today, people are used to calling a support number or going through a procedure if they forget their password yet again. With crypto systems there’s no password reset and no support number to call. If you lose that private key it’s just gone.
Let’s be clear, juggling private keys and keeping them safe won’t work when half the people I used to work for in IT couldn’t remember a password they entered ten seconds ago to sign up for a website.
Distributed, decentralized ledgers will also need to get much better at useability. Whether that’s learning the fine art of user interfaces or coming up with a way to safely store and replicate backup keys or even an automated reset procedure built into the blockchain itself, we’ll have to solve these problems before any regular Joe or Jane trusts their property to the strange new world of crypto.
Identity is another major issue. Nobody has solved identity on the blockchain yet, though there are a lot of excellent teams hard at work on it now.
A strong decentralized or semi-decentralized ID system that everyone trusts and uses widely will go hand in hand with better key management. Eventually we’ll securely link all of our property to our ID and we’ll use our ID to get our keys back if we manage to lose them in the chaos of day to day life.
Mattereum isn’t working on any of these fundamental tech problems. They’re not touching scaling, managing private keys, or identity. They’re hoping someone else solves them.
On one hand, that’s a legitimate critique of the project, but on another it makes perfect sense. All of these problems are major engineering efforts. There is little to no chance that any one team will solve distributed property management, the intersection of law and smart contracts, identity, and key recovery. It will take multiple teams to make the decentralized future go.
In our opinion, Mattereum is taking the right approach here. Trying to solve all these problems is a fool’s game. They can and will be solved but solved by multiple teams.
If decentralization is the future then we have to accept that it will take a decentralized set of solutions and projects to give us the web of tomorrow.
Mattereum needs to solve the problem they want to work on and let others solve the deeper problems of the underlying protocols.
If you want to do something well, focus.
Submitting to Restraints
The next big thing Mattereum is looking to do is streamline how contracts are enforced.
Quick and painless Alabama court system process.
Right now, contract disputes usually end up in court, with loosely written language exploited by lawyers who rack up big fees fighting over whether a comma in a sentence means this or that for hours and hours. Then that decision goes up on appeal and then sent back down and then tried again and then reviewed and on and on. Months and years pass while you pay the legal bills and cringe every time a bike messenger passes, wondering whether he’s going to slap a summons on you.
Many contracts are deliberately written with the idea that if anything goes wrong it will just end up before a judge. But going to court is expensive, takes months or years, puts all your dirty laundry out there on the public record, and is a lot like rolling the dice. You never really know if you’re going to win, no matter what your lawyer tells you.
Oh, and if you do win your lawyer takes 33–40%.
That’s why there’s been a push toward meditation and arbitration in recent years. Mediation allows parties to hash it out in front of an expert negotiator/counselor/lawyer in an effort to settle without the expense and hassle of court.
In arbitration, the parties battling it out hand over decision-making authority to a mutually chosen arbitrator who acts like a judge to hear the evidence and decide the case. Usually these arbitrators have extensive experience in the relevant industrial field or law at hand and can come to a decision faster, cheaper and maybe even more accurately than generalist judges who are often accused of simply splitting the baby, not having the right experience, or just pushing political or self-serving agendas.
To make dispute resolution faster and more streamlined, Mattereum wants to create easy to understand plain language template contracts in each jurisdiction and make those contracts available to anyone through the platform. When there’s a disagreement between users, the system reframes the problem, switching to hard and fixed automated rules, while pushing any questions about enforcement to binding arbitration and in some cases to the local court system.
Their plan is to progressively build out a fair and efficient dispute resolution framework and bring in qualified, independent arbitrators from local jurisdictions across the globe. While the overall arbitration process set by Mattereum would be clear and easy to follow, specific rules of local jurisdictions will vary and hiring of arbitrators within those localities will be done by outside companies.
It’s a lot like the way Airbnb’s website provides a form-like system for listing properties yet caters to local tax laws.
Except that Mattereum would likely end up far more neutral and decentralized than Airbnb because it’s built on the back of an open platform in Ethereum.
Of course, arbitration is sometimes controversial. The biggest argument against arbitration is that the arbitrators aren’t judges sworn to serve the people yet their decision is final. There’s usually no appeal.
Some workers’ rights advocates think employees or lesser educated people enter into binding arbitration agreements without understanding the implications, unknowingly signing their access to courts away to big corporations or more savvy adversaries.
Whether everyone wants to submit to binding arbitration for all of their property remains to be seen.
But in our opinion, it’s the best idea we’ve seen yet to reduce the overwhelmed and overburdened court systems around the world.
Upon this Foundation
Which brings us to the key point about Mattereum’s binding arbitration process — and co-author Carly’s favorite aspect of the entire project.
Mattereum is a platform, not a product.
What does that mean though?
Bill Gates is credited with saying something along the lines of “[A site like Facebook] isn’t a ‘platform.’ A platform is when the economic value of everybody that uses it exceeds the value of the company that creates it. Then it’s a platform.”
The designers of the Internet didn’t think of it as a foundation to buy things. Sir Tim Berners Lee and the other fathers of the net never really saw ecommerce coming. They just wanted a way to communicate and send information between universities and governments.
Their oversight created a vacuum that let corporations slither in and build a their own closed and proprietary platform on top of the open web. They used that platform to capitalize on everything from our movements to what we buy, while racking in hundreds of billions of dollars.
And they control the legal framework too.
I think I’ll click decline!
How many times have you clicked through a website’s terms and conditions (T&C) without reading it at all?
At this point, the T&C of websites for giant Internet monopolies like Google, eBay, Amazon, and Apple have become a sort of sublayer legal code that people don’t even realize they’re signing up for as they scroll past the fine print and click “accept” as fast as they can so they can get to their shiny new objects in their virtual shopping cart.
We’ve essentially given tremendous legal authority to the same corporations that are spying on us through our devices.
We deserve better. This time around we need a purpose built platform, decentralized and distributed, that takes power back for the people and rips it out of the hands of a few titans of technology.
And if Mattereum doesn’t do it, someone else will.
Someone will build a blockchain-based platform to track all our stuff, so don’t we want that to be a neutral, decentralized system that benefits everyone?
Of course, businesses will spring up around these platforms and money will be made. Lots and lots of it. There’s nothing wrong with that but no one company should hold all the marbles.
Mattereum understands this. They’re looking to build a true platform that will keep transaction costs low and capture only a reasonable amount of revenue needed for support and growth. The real money-making potential of the platform is in the related support businesses that will rise up around it.
Even the arbitrators will be a separate, competitive business built around the web of agreements, unlike the dispute resolution processes of most Internet giants today. Arbitrators, escrow agents, contract drafting, brokers, and more will form a satellite of independent businesses swirling around a consciously crafted system of trust and dispute resolution.
Peer to peer economy apps such as Airbnb and Uber had huge economic implications no one saw coming. That funky little couchsurfing app your little brother used in college ended up putting entire hotel chains out of business.
Mattereum’s platform could do the same to those companies as people directly contract with each other to rent and buy and sell their personal property. We can’t begin to understand all the financial, societal, political, and personal implications of a system that touches every aspect of world commerce.
But we do know one thing.
If it’s not an open platform, with power distributed across the chain, we might as well call Zuckerberg and let Facebook build it right now to save time, because we’re all screwed and right back where we started, with a few massive companies controlling the world.
It happened with oil. It happened with tech. And it can happen with the web of agreements that ends up binding tomorrow’s economy together.
And if we’re talking about agreements then we’ve got to talk about something that goes with agreements like butter goes with bread.
Show Me the Lawyers
One of Mattereum’s biggest challenges is lawyers.
And no, I don’t mean in the Shakespearean sense of “the first thing we do, let’s kill all the lawyers.”
This project needs lawyers.
A project like this isn’t just about solving technical problems, it’s about solving legal ones.
Mattereum’s core team is stacked with cryptographic masterminds and early crypto visionaries like Vinay Gupta, Ian Grigg, and Rob Knight. And just one lawyer, Chris Wray. While Mattereum’s Chief Legal Officer is a total badass, like its technical founders, with only one lawyer on the team, Matterum will need to rely heavily on outside council to get the job done. That’s a bitch because legal work is super expensive.
Top lawyers in London where Mattereum is based charge upwards of ￡1,000 per hour. That’s about $1,500 — per hour — for the good ones.
And they’ll need good lawyers all over the world. Even though Mattereum isn’t trying to replace legal systems, they’ll need to coordinate their binding arbitration process with local courts in each and every country and state. Otherwise, things could get nasty real quick.
Mattereum’s two primary white papers, found here and here, state their intention to “engage a spectrum of established law firms” to not only write the contracts used on the platform but to contract with technical service providers. That means the hefty legal bills will keep piling up after the platform is up and running.
Massive global scale legal projects have been done before and Mattereum has a well-designed sequence for which countries to work with first. But it they’re going to build a platform that works with complex, overlapping legal frameworks all over the map they’ll need a crackjack team of legal ninjas, in-house and outside, working around the clock, to have any chance of making this work in the real world.
State and local law is hard enough. It’s so vast and complex that there isn’t a single person alive who can understand all of it. That’s why lawyers specialize. That’s why we have legal libraries filled with voluminous tomes of ever shifting laws and statutes and policies. That’s why we have whole teams of lawyers working a single, complex case.
International law is even more complex and filled with pitfalls and hidden traps. Countries have conflicting laws and broken laws and extradition policies and shared international agreements and corruption. Navigating all of those danger zones won’t be easy and if Mattereum wants to build a platform that cuts across legal jurisdictions near and far they’ll need the right people in each jurisdiction to help them understand how to weave blockchain into that fiendishly tricky legal maze.
In short, they will need lawyers, lots of them and a lot of cash to pay them.
Never Eat Alone
There’s one other problem for the team to solve that isn’t directly mentioned in their whitepaper but is woven throughout every aspect of the concept.
The law is an entrenched institution and it doesn’t always take kindly to new innovations, and crypto driven technology like distributed ledgers are the newest of the new.
When disputes over new technologies happen “the whole matter winds up in court, and the courts must decide — for a technology they’ve never seen before, used by a youth culture they have only read about in newspapers — what is right or wrong.” That means courts are dealing with the unknown and new things bring doubt until they have a strong history of working well in the harsh conditions of real life.
While today’s technology is about moving fast and breaking things, you can’t charge ahead recklessly when it comes to the law because people lose money, get hurt, go to jail, or even die. There are very real-world consequences for broken contracts and digital ledgers that handle our homes and autos if they fail or get hacked.
That will take a lot of face time, shaking hands, and kissing babies.
And that means Mattereum doesn’t just need tech masterminds and legal ninjas, they need strategic partnerships and lobbyists, the kinds of people who never eat alone and who know how to work the hallowed halls of power.
Mattereum already has a good start, partnering with top-notch companies like Ocean Protocol and Consensys, and publishing work to show they’re thought leaders with the smarts to make this happen. But none of this is easy or simple.
It will take time, money and patience.
Money, I’m All Right Jack, Keep Your Hands Off My Stack
Let’s talk about money.
Technical people often overlook the financial side of business but at the end of the day you have to have enough of the green stuff to keep the lights on to build something cool.
Money, gang way!
Right now investors are clutching their purses as the crypto market bleeds out and all of their early investments hemorrhage.
We’re deep into the crypto winter, with a year-long slide of every major crypto asset that’s been brutal for investors, traders, and projects alike.
I know many crypto projects with working products and paying clients that still struggle to raise money in today’s environment. A year ago, investors and the newly crypto rich were hurling digital coins at any project with a slick website and typo ridden whitepaper. Now they’re putting their money in the hard wallet mattress.
In other words, it’s a bad time to be raising money and Mattereum may be too far ahead of its time to attract panicked investors who will need to understand more than “this is digital cash” and “when moon” to want to back this idea.
Mattereum does have a strong team of seasoned pros at the top, with visionaries like Vinay Gupta, Ian Grigg, and Rob Knight, but they’ll be living on airplanes as they circle the globe in search of the right the kind of investor who can see deep into the future and understands what they want to achieve.
The Journey of Discovery and the Secrets of the Universe
Mattereum has a lot going for it, most notably a strong founding team and sound idea whose time has come.
But that doesn’t make this project simple or easy.
Like Lewis and Clark, Mattereum faces the wide and open land of untold opportunity and adventure, along with the dangers of the untamed wild. They’re traveling in the snows of crypto winter and the storms are raging. It will take everything they’ve got to hang on and chart a new path through the wilderness, creating a map for future generations.
The challenges are many and manifold. On a company-specific level, they appear to be mostly bootstrapped, but they need big cash and an ever-expanding team of adventurous spirits to fund their expedition into the unknown.
And on an industry-wide scale, they’ll need to solve all the mega challenges we talked about earlier. They’ll need to actually connect real world assets to the blockchain and get people to adopt the platform and trust it completely, all while hoping that other teams overcome the problems of scaling, identity, and key management. They’ll need to do all this while navigating the thorny maze of the law and politics near and far.
Still, it’s our hope that investors resist the urge to bury their money as the winds of winter roar and look closely at backing companies like Mattereum. If Mattereum doesn’t pull this off, then you can bet some some big company will.
And that ruthless corporate titan won’t have the morals of the crypto community or a desire to decentralize and share power. They’ll build a centrally controlled “blockchain” that will bind us forever to their iron will.
That will leave us right back where we started, locked into extreme centralization that we can never escape. We’ll wind up with another internet octopoly, its tentacles reaching deep into every aspect of our lives, leaching profits away from the people for a generation.
When I look for projects that just might make it through the winter I look for the wild ones. The crazy ones. The ones that dare to dream big.
Mattereum has bold ambition and they’re trying to solve a massive, real-world problem in a brand new way and that makes them a part of the crazy dreamers tribe.
And who are they to think they can pull this off?
There’s a great episode of The Outer Limits that just might have our answer.
Carol Maxwell: “What makes you think you can discover anything? Who are you?”
Allan Maxwell: “Nobody. Nobody at all. But the secrets of the universe don’t mind. They reveal themselves to nobodies who care.”
The people who solve our greatest problems are ones who are crazy enough to think they can do it in the first place.
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