Startup Spotlight: Blockpliance

Blockpliance - Making blockchain transactions easy to understand

Happy Tuesday, folks. Only three more days until you can log out for the weekend. Hooray. For the past few weeks, I've been attending YC's Startup School, a twice-weekly Zoom course designed to teach aspiring founders how to launch and scale their own ventures. While my overall review of the curriculum is a bit mixed (might post a more in-depth analysis at the end of the course), one aspect that I have really appreciated has been the weekly newsletter highlighting meetups between students around the world and new venture launches from the other members of the class. It really is pretty remarkable that YC's reach and notoriety extends from the Bay to Buenos Aires to even Cyprus. I have also gotten to put my early-stage VC skills to work with startup launches ranging from electric RVs to remote work software. This past week, one startup in particular caught my eye from among the short descriptions provided: Blockpliance.

Blockpliance claims to provide transparency to the oft-anonymized world of blockchain transactions. According to its (very new) website, the company is seeking to "help financial institutions, crypto companies and government agencies have a common understanding of blockchain transactions by detecting, monitoring and investigating risk in digital assets."

While the web3 natives among us might immediately raise objections to what sounds eerily like doxing, Blockpliance is attempting to provide the tools to help institutions and regulatory agencies collaborate by supplying just enough information to ensure that transactions are legal while still protecting details which might be used to learn the true identities of the wallets involved in the transaction.

Tools like this are huge when it comes to breaking down the knowledge barriers keeping out some of the most important actors in the web2 economy. I mean, look at the current US senators making regulatory crypto decisions and tell me how much you are really willing to bet on Dianne Feinstein (89) being able to explain the difference between PoW and PoS. It would be an SOS.

Providing the intelligence that helps align regulators, financial institutions, and web3 companies while providing education through exposure to the more skeptical of this group can open the door to broader acknowledgement of the potentials that exist in this new-age economy and could prove vital to its development, and if the US is to maintain the leadership which it has cultivated in so many emerging industries in the past, its leaders must create an environment which is conducive enough to do so.

I actually started this email prior to reading the Tornado Cash news. If you have yet to hear about it or want a refresher, might I refer you to this great breakdown by The Drop. The service has been sanctioned by the Treasury's Office of Foreign Assets Control as it has been linked to money laundering schemes in which malicious actors have been able to hide their identities and ride away with their hard-earned hacked crypto without being caught. While many users laud the privacy that comes with crypto transactions, the government's concerns over the potential use of these services for malevolent actors are valid. Tools like Blockpliance have the potential to create a sort of middle ground between regulatory agencies wanting to play sheriff in the wild west that is web3 and users hoping to keep their bandanas over their faces.

What initially drew my attention was the company's one-liner as a crypto compliance platform for non-web3 natives". I was intrigued... finally a tool to ensure that I wouldn't go to prison for incorrectly reporting my $4.20 $DOGE trade!

While I soon learned that the tool is for those with a whole lot more skin in the game and with the teams of lawyers to sort this sort of thing out, the fact that a tool like Blockpliance has arisen highlights just how important more clarity is. Everything is illegal. Nothing is illegal. Nancy, we are begging you. Please tell us what we are supposed to do.

Hopefully, Blockpliance achieves its goals. If so, it's possible that the insights it can provide might allow for more effective regulation that allows for the development of tools to simplify the crypto experience for the everyday user and perhaps even lead to the mass adoption that much of the web3 ecosystem so desperately dreams of.

Or not. I have tried about ten times and still can't seem to teach my parents how to connect to the Wifi.

Cheers to another day,

Trey