Montana Blockchain Innovator: Alex Shefrin
"Now is the perfect time to nurture Montanans’ entrepreneurial spirit to have this technology be home-grown right here. Montana is a great place to live – it’s time we make it a great place to build decentralized innovations."
The following interview features Alex Shefrin, who lives in Whitefish, MT. Alex previously was the Head of Business Development at SushiSwap, one of the largest and most well-known crypto exchanges in the world.
Alex currently manages Glacier Crypto Alliance – a consulting firm dedicated to helping companies adopt best practices for growing their business using blockchain technology and leveraging the benefits of decentralized finance.
How did you get into the Crypto space?
“My journey with Crypto started back in 2016 after I had recently graduated from the University of Denver. I knew that I wanted to work in technology, but at the time, there really weren’t a lot of tech jobs available in Colorado. So, I decided to move to Hong Kong to work for a small venture capital fund. When I took that job, I thought we would be investing in robots and rockets, instead it felt like everyone just wanted to talk about these things called “Bitcoin” and “Blockchain” and “Ethereum” – I guess you could say I didn’t have much of a choice but to dive in head first.
“At the time I was quite skeptical and thought, ‘Surely this can’t be used for anything actually useful…or legal.’ My skepticism, however, was short-lived after I began to learn about the potential applications that blockchains unlocked. I quickly realized that this technology could fundamentally change everything about how data gets organized, how humans trust each other online, how people organize themselves, how our systems work, and how finance can be completely changed, made more efficient, free, and fair. I knew even back then that I wanted to work in this space.”
“Over the following few years I worked in several venture and strategy roles at Silicon Valley Bank and a startup called Mapbox before fully transitioning to the Blockchain space a little over two years ago as head of business development at Sushi and I haven’t looked back ever since.”
How does “blockchain” technology work?
“‘Blockchain’ and ‘crypto’ can be loaded terms and there is a LOT to unpack. In the most basic sense, blockchains are simply an unalterable record of events that use fancy math called ‘cryptography’ to ensure security and decentralization. Once something has been recorded on a blockchain, it cannot be changed.”
“There are a lot of different ways to think about how this all works, but one of the simplest ways to understand it is to consider the game of telephone from elementary school. Let’s say the word getting passed along is “cat,” but somewhere along the line it becomes “hat.” No one will know whether the final word is wrong or not until the first person tells the group the word was in fact “cat.” Now imagine the same game but instead of whispering into the ears of each person one by one, the first person announces to the group that the word is “cat”. If anyone in the circle says that the answer is “hat” instead, that answer is immediately rejected by the consensus of everyone else.”
“Blockchains operate in a similar way. Rather than having a central entity that verifies whether something is correct, encrypted information is broadcasted to an entire open network of decentralized computers across the globe that verify whether a transaction is legitimate. Any computer that is participating in the network will “compete” with each other to solve the encryption with the winner being granted a small reward as an incentive. No one party or institution has control and all parties are incentivized to tell the truth.”
“‘Cryptocurrencies’ like Bitcoin are just one of many applications – in this case, decentralized money – that can be powered by blockchain networks. Ethereum is another blockchain network that allows for the development of ‘smart contracts’ which has paved the pathway for hundreds of applications to be developed on top of the network.”
“So for example, let’s say I want to send you a dollar on a blockchain. First the blockchain verifies that I have money in my account, then it broadcasts my $1 transaction to the network to be approved, once the transaction is approved by the network the dollar goes straight to your account – all in a matter of seconds. Now let’s compare that to the inefficiency of a normal credit card payment which goes through multiple different intermediaries between your credit card provider, the point of sale system, various clearing houses, different banks, etc. to get your money from Point A to Point B – not only does this take a lot of time but each intermediary charges a take rate which gets passed down you thus making everything more expensive.”
Do you have to understand Crypto to use it?
“Absolutely not. Blockchain and crypto can be complex to understand but that shouldn’t deter people from using and experimenting with it. For example, most of us know how to drive a car but have no idea how an internal combustion engine works, and that’s totally fine. Sure, some basic knowledge is helpful and sometimes needed, but you don’t have to be able to build a car to be able to use it to drive to the grocery store – and that’s exactly how we need to think about crypto and blockchain. Instead it’s important to think about ‘what can we build now that we’ve figured out how to make efficient, trusted systems? These are the early days of building this technology and there’s room for a lot of entrepreneurial creativity.”
“As you can imagine, having a fraud-proof system to automatically prove that XYZ is true and ABC is false can have endless applications beyond just ‘Did Alice pay me $20?’ Companies all over the world and right here in Montana are already adopting blockchain technology for everything from payments and loans to identity management, voting infrastructure, healthcare records management, supply-chain management, governance of AI models, and more.”
“For example, I currently advise a company called Link which is building a tool to allow small businesses all over the world to easily access US Dollars and other digital currencies for use in payments, purchases, and remittances. By using blockchain this can be done instantaneously at a fraction of the cost of using traditional banks to do the same thing.”
What are the implications of blockchain technology?
“The way society works is that we don’t trust each other, so in order to work together we look to intermediaries such as banks and the government to enforce the rules. What blockchain can do is take the role of these intermediaries because the rules are built in. Instead of looking for rules to be enforced by people, now you have rules being enforced by math.”
“The implications of this are far reaching. Besides redoing and rebuilding our entire financial infrastructure, blockchain and Crypto adoption, especially at scale, creates a more inclusive and more efficient economy for everyone. It can allow anyone to get cheaper loans, to do faster transactions, to make voting more secure, and even fight back against inflation.”
“At the end of the day, blockchain technology can help bring us more financial self sovereignty, more economic efficiency, more transparency, and ultimately more independence.”
What barriers do crypto innovators face in Montana today?
“Sadly, a major barrier to innovating in Montana is the Federal government and lack of a clear regulatory framework for responsible blockchain and crypto development. Instead, we’ve seen the SEC (Securities and Exchange Commission) and the FTC (Federal Trade Commision) doing a lot of enforcement through punishment, where they refuse to set clear rules for this kind of gray area and instead opt to just punish people and companies randomly. To make matters worse, most of the laws being applied to crypto companies today were written in the 1940s! With the inaction from the federal government, we really need states to lead on this and champion decentralized innovations.”
“The responsible development of this technology should not be politicized, we need to push both parties to come together to set the framework so we can build this technology here.”
“Right now, the United States is probably one of the most unfriendly countries in the world to crypto innovations and this will have ripple effects for a long time if we completely close the doors to blockchain innovation in America. Anecdotally, I know plenty of Americans who work in this industry that have chosen to move completely out of the United States in order to build a career in this industry. I myself have been approached to move internationally more than once but have decided to stay and build here.”
What can Montana do to lead on Crypto?
“Montana needs good laws that foster blockchain technology innovations. We should look at what other Rocky Mountain states are doing. For example, Wyoming recently passed a law that creates a pathway for decentralized companies to easily incorporate. Meanwhile, Colorado has done an excellent job in making it easier for companies in this space to just operate, such as being able to pay your taxes in crypto and easing incorporation and tax status for new crypto companies. Both states have since seen a lot of new, high paying jobs being created and there is no reason why that can’t be replicated – or done even better here in Montana.”
“I think there is a need for us, as a state, to really get behind this technology and put things in place so that people are inspired to build companies here and create good jobs. Let’s zoom out for a second, we’re at a unique moment where a lot of new, low cost technology is becoming more and more prevalent. At the same time Montana is also one of the fastest growing states in the nation and Montana companies are taking a greater, leading role both regionally and internationally primarily through the internet or internet-enabled tech. Unlike a lot of other industries, anyone can start a blockchain company with a few lines of code, and internet connection, and a logo. Now is the perfect time to nurture Montanans’ entrepreneurial spirit to have this technology be home-grown right here. Montana is a great place to live – it’s time we make it a great place to build decentralized innovations.”