Crypto, Miami and the Future of Tech Hubs

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With help from Mohar Chatterjee, Derek Robertson and Mark Scott

Conference Speaker Francis Suarez, Mayor of Miami, Florida, reacts during a luncheon plenary at the United States Conference of Mayors Winter Annual Meeting at the Capitol Hilton in Washington, DC on January 18, 2023 (Francis Chung/POLITICO) | Francis Chung/POLITICS

YUMYes, even this sun-drenched city is feeling the chill of the crypto winter.

During the crypto boom, as regions around the world battled to become the next Wall Street or a new Silicon Valley, Miami stood out for both its eagerness and success in attracting crypto businesses to the city. city.

A year ago this month, DFD launched with coverage of Bitcoin 2022 from the Miami Beach Convention Center. Since then, crypto markets have crashed twice, while Washington has embarked on an ongoing crypto crackdown that has industry leaders threatening to move overseas. And much of the public fascination has turned to the latest artificial intelligence craze.

I spent the first half of this week scouring the city’s crypto scene to see what its experience might tell us about the global race to attract the industries of the future.

The takeaway from this period of hibernation: Don’t count on crypto to transform your city, but don’t count either. And be aware of the extreme risk that your tech hub dreams end up being derailed not by scam artists or regulators, but by Luddite millennials.

Mayor Francis Suarez multiplies the bets.

A year ago, Suarez already taking his salary in Bitcoin marked the opening of the crypto conference by unveiling a statue of a laser-eyed robotic bull, a fiberglass and steel testament to his crypto hub ambitions.

Now, based on the city’s experience, he emphasizes economic diversification as the key for local governments looking to strengthen their economic base:

We recommend picking multiple industries to champion to create a stronger local economy of businesses and investors, Suarez, a Republican, wrote in response to DFD’s questions.

Then there are the municipal branding issues that come with adopting a vibrant industry.

A year ago, the Miami Heat played at FTX Arena. As of this month, the venue has been renamed Kaseya Center, after a locally-headquartered IT service provider.

Asked about possible damage to the city’s reputation from crypto fraud, Suarez replied that Miamis brand is technology and innovation that is not limited to the crypto industry, while verifying the name of the real estate technology, educational technology and AI as promising sectors.

The slowdown here has been palpable, if not catastrophic.

Brandon Green, director of events at BTC Media, which organizes the annual Bitcoin conference, told DFD that he expects 15,000 attendees at Bitcoin 2023 next month. About 25,000 people attended last year’s extravaganza.

In a highly unscientific poll conducted by DFD this week on a private Telegram channel for institutional crypto investors in Miami, a plurality of 32 respondents, 43%, said the city’s crypto scene is thriving less than there is. a year, compared to a quarter who said he was thriving more.

Miami and Crypto do not let go.

Suarez said he remains excited about the technology’s potential. Most investors and entrepreneurs here talk about hanging in there for the long haul rather than giving up.

We believe Miami remains the most attractive jurisdiction in the US for crypto, Jalak Jobanputra, founder of crypto-focused Future Perfect Ventures, told DFD.

The crypto bust may not be the biggest problem.

A meeting left me wondering if the biggest challenge for this city and other tech hub ambitions would turn out to be a bigger detour from tech and hubs.

Over lunch, a recently arrived venture capitalist, on condition of anonymity to candidly discuss the state of his business, said he was already eyeing exits.

He described being hit by the collapse of stablecoin TerraLuna and a holding company exposed to FTX. While many frustrated venture capitalists have switched from crypto to today’s technology, AI, the millennial investor said his research on AI hasn’t inspired any investment ideas. Above all, it had left him anxious about the future of humanity.

Just months after moving to Miami, he was seriously considering leaving. But unlike others in the industry, he wasn’t talking about London, Dubai or Singapore.

Instead, he and his girlfriend were considering buying a farm.

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Karine Perset and Audrey Plonk might not be names you first associate with artificial intelligence. But as heads of the Organization for Economic Co-operation and Development’s artificial intelligence unit and the group’s digital economy policy division, respectively, the two women spent much of the last year of hosting informal workshops with policymakers, industry leaders and academics to determine what the future of AI will look like and, more importantly, how officials across the West can react quickly to its rapid advance. In many cases, policymakers are taken by surprise by technological developments, Perset told us, adding that such discussions predate the latest generative AI craze. So (this work) seems timely, but we’ve been preparing for a while now.

As part of that work, the OECD this week set up a new task force chaired by UC Berkeleys Stuart Russell, IBM Francesca Rossi and German governments Michael Schnstein. The aim is to formalize the last year of discussions within the group of majority rich countries to see how artificial intelligence will develop in the years to come: We look to the future, but as what will happen in 10 , 20 or 30 years and maybe even further, Perset said. Policy makers aren’t very quick and just having that time to prepare for what’s to come will help.

There are also short-term issues that countries have to deal with, the OECD’s Plonk added. Ever since the public imagination was taken by ChatGPT and its competitors, officials in the United States, European Union and elsewhere have been quick to call for new rules, but few, if any, of those officials don’t know what those rules should look like. People are all over this specific question: do we need a new AI regulator or do we just need to give existing regulators new authorities to manage AI? Plonk said. We see a bit of all that. Different stakeholders are in different places, different countries are in different places. There is something different here for policy makers, there is something real and it is a cry for help. Mark Scott

[Ed. Read Marks in-depth look at the global landscape for AI regulation in todays Digital Bridge.]

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MIT’s Future of Data initiative released a white paper this week on how to design more accountable and traceable financial data systems. A major challenge, certainly. But information responsibility has been one of Daniel J. Weitzner’s areas of research for more than 15 years.

Weitzner is the co-director of the Future of Data initiative (he is also a professor of Internet public policy and holds a senior research chair at MIT CSAIL). Information accountability simply means that uses of personal data must be visible to data subjects. And that companies or governments that use personal data should be held accountable for misuse. This has been my longtime research interest, Weitzner said.

An example of such a system for sharing consumer data that the FDI white paper focuses on is the open banking ecosystem which broadly encompasses the use of open APIs to enable third-party developers to build applications around a financial institution. Finding this kind of ecosystem takes a lot of coordination, but some of MIT’s consumer data contributors include Visa, MassMutual, Fidelity Investments, and Capital One. The Initiative spans six concurrent policy-relevant research projects. We expect to have initial results in many of these areas, particularly in traceability and accountability during this calendar year, Weitzner said. Mohar Chatterjee

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Keep in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]Mohar Chatterjee ([email protected]); Steve Heuser ([email protected]); and Benton Ives ([email protected]). Follow us @DigitalFuture on Twitter.

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