Crypto, Miami and the future of tech hubs

From: POLITICO's Digital Future Daily - Thursday Apr 20,2023 08:02 pm

Apr 20, 2023

Presented by NCTA, America’s Cable Industry

With help from Mohar Chatterjee, Derek Robertson, and Mark Scott

Suarez, etc.

Conference President Francis Suarez, mayor of Miami, Fla., reacts during a plenary luncheon at the annual winter meeting of the United States Conference of Mayors at the Capitol Hilton in Washington, D.C., Jan. 18, 2023. (Francis Chung/POLITICO) | Francis Chung/POLITICO

MIAMI—Yes, even this sun-drenched city is feeling the chill of crypto winter.

During the crypto boom, as regions around the world jockeyed to become the next Wall Street or a new Silicon Valley, Miami distinguished itself by both its eagerness and its success in attracting crypto firms to the 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 abroad. And much of the public's fascination has turned to the latest craze — artificial intelligence.

I spent the first half of this week poking around the city’s crypto scene to see what its experience could tell us about the worldwide 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 it out either. And be aware of the tail risk that your tech hub dreams end up being derailed not by scam artists or regulators, but by luddite millennials.

Mayor Francis Suarez is spreading his 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’s emphasizing economic diversification as the key for local governments looking to bolster their economic base:

“We would recommend choosing multiple industries to champion to create a stronger local economy of companies and investors,” Suarez, a Republican, wrote in response to questions from DFD.

Then there’s the municipal branding issues that come from embracing a go-go industry.

A year ago, the Miami Heat were playing in “FTX Arena.” As of this month, the venue has been renamed Kaseya Center, after a locally headquartered IT service provider.

Asked about possible harm to the city's reputation from crypto frauds, Suarez responded, “Miami's brand is tech and innovation which is broader than just the crypto industry,” while name-checking property tech, educational tech and AI as promising sectors.

The downturn here has been palpable, if not catastrophic.

Brandon Green, Director of Events at BTC Media, which puts on the annual Bitcoin conference, tells DFD he’s expecting 15,000 attendees at Bitcoin 2023 next month. About 25,000 attended last year’s extravaganza.

In a highly unscientific poll conducted by DFD this week inside a private Telegram channel for institutional crypto investors in Miami, a plurality of the 32 respondents, 43 percent, said the city’s crypto scene was thriving less than it was a year ago, compared with a quarter who said it was thriving more.

Miami and Crypto are not giving up on each other.

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

“We believe Miami remains the most attractive jurisdiction in the United States for crypto,” Jalak Jobanputra, founder of crypto-focused Future Perfect Ventures, tells DFD.

The crypto bust may not be the biggest problem.

One meeting left me wondering whether the larger challenge for this and other cities’ tech hub ambitions would prove to be a larger turn away from tech … and away from hubs.

Over lunch, a recently arrived venture investor, granted anonymity to frankly discuss the state of his business, confided that he was already eyeing the exits.

He described taking hits from the collapse of stablecoin TerraLuna and from a portfolio company with exposure to FTX. While many frustrated venture investors have turned from crypto to the current hot technology, AI, the millennial investor said his AI research had not inspired investment ideas. Mostly, it had left him anxious about the future of humanity.

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

Instead, he and his girlfriend were exploring the purchase of a farm.

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are you ready for ai's next step

Karine Perset and Audrey Plonk may not be names you first associate with artificial intelligence. But as the heads of the Organization for Economic Cooperation and Development’s AI unit and the group’s digital economy policy division, respectively, the two women have spent much of the last year holding informal workshops with policymakers, industry executives and academics to figure out what the future of AI is going to look like — and, more important, how officials from across the West can respond quickly to its rapid advancement. “In many cases, policymakers are taken by surprise by technological developments,” Perset told us, adding that these discussions predate the latest generative AI craze. “So (this work) looks timely, but we have been preparing for a while now.”

As part of that work, the OECD created a new working group this week — chaired by UC Berkeley’s Stuart Russell, IBM’s Francesca Rossi and the German government’s Michael Schönstein. The goal is to formalize the last year of discussions within the group of mostly-rich countries to look at how artificial intelligence will develop in the years to come: “We’re looking at the future, but like what happens in 10, 20 or 30 years and maybe even further,” said Perset. “Policymakers are not very quick and just having that lead time to prepare for what’s coming will be useful.”

There are also some short-term pain points that countries need to grapple with, added the OECD’s Plonk. Ever since the public’s imagination has been 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 know what those rules should look like. “People are all over the place about this specific question of ‘do we need a new AI regulator’ or ‘do we just give existing regulators new authorities to deal with AI?’” Plonk said. “We see a little bit of all of it. Different stakeholders are in different places, different countries are in different places. There’s something different here for policymakers, there’s something real and this is a call for help.” — Mark Scott

[Ed. — Read Mark’s in-depth look at the global landscape for AI regulation in today’s Digital Bridge.]

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mit wants firms to handle your data (accountably)

The Future of Data Initiative at MIT published a white paper this week on how to design more accountable and traceable financial data systems. A tall order, to be sure. But information accountability has been one of Daniel J. Weitzner’s research focuses for over 15 years.

Weitzner is the co-director of the Future of Data Initiative (he’s also a teacher of Internet public policy and holds a senior research scientist chair at MIT CSAIL). Information accountability really just “means that uses of personal data should be visible to data subjects. And that the companies or governments who use personal data should be accountable for misuse. That has been my long-standing research interest,“ said Weitzner.

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

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Tweet of the Day

the future in 5 links

Talks over a stablecoin bill appear to have lost their bipartisan momentum.
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Take a closer look at the hype around “automated general intelligence.”

Stay in touch with the whole team: Ben Schreckinger (bschreckinger@politico.com); Derek Robertson (drobertson@politico.com); Mohar Chatterjee (mchatterjee@politico.com); Steve Heuser (sheuser@politico.com); and Benton Ives (bives@politico.com). Follow us @DigitalFuture on Twitter.

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