Crypto-developers gather when the turmoil takes hold in the industry

PARIS – About 65 feet below ground level in Paris is a labyrinth of centuries-old tunnels known as the catacombs, which contain the skeletal remains of about six million Parisians. Legend has it that the victims of the plague consisted of some of the bones along the corridors.

This week, it turned into a techno cave with neon lights for top ethereum programmers to party at.

“It is very illegal, but also very crypto,” explained one of the 100 or so partygoers, who refused to be identified for fear of alerting Paris police.

She also said that the trip was one of the most ridiculous things she has ever done in her life. The expedition included crawling under a fence, wiggling down caves, tracing the path to old train tracks, wading through thigh-deep, muddy water – and a little bouldering.

“There was a hole in the rocks, and I did not think about it. I was just like, ‘Oh, we’re stopping here,’ and then a human jumped out,” the participant explained.

Several teams gathered across the 14th arrondissement in Paris late Saturday night to sneak into the underground landmark. Each team was put together via an anonymous Telegram group and assigned its own entrance.

“You got a link and a password to a questionnaire, and you basically answered some questions and gave your Telegram. If you were selected for this adventure, you were added to a Telegram group with a handful of other people you did not know, and the guide fell into the thread of the day to tell you a meeting place, “Wong told of her experience.

Another party participant turned on their training tracker to map the distance and found that they had traveled four and a half miles underground.

All the paths went together on a large central cave, where there was a DJ, a bar with neon lights, candles and people dancing.

The only downside to an underground rave arranged in a mass grave?

“People are starting to think, ‘Eh, where am I going to get out?'” Said another partygoer.

Welcome to the Ethereum Community Conference, an annual event that draws the world’s best developers and cryptographers to the City of Light. The event officially started on Tuesday morning, but key players in space came down to Paris days in advance to participate in additional events such as the Metaverse Summit and a Paris-style salon called The Future of Content in Web3. And for parties like La Degen and Raave.

EthCC is in some ways the opposite of Bitcoin Miami, the high-profile cryptocurrency conference.

While Bitcoin Miami boasts attendance in the tens of thousands, the EthCC deliberately limited tickets to 2,000 to keep it small and intimate. CNBC spoke to almost a dozen people on the ground in Paris who were unable to buy a ticket before the event sold out, but still came to the city just to attend all the side events.

“They kept it tailored and small on purpose, because they could easily have sold more tickets,” said Samantha Yap, who helps coordinate EthCC.

The event comes at a difficult time for the crypto industry. Big names like Three Arrows Capital and lenders like Celsius and Voyager Digital have all filed for bankruptcy, and the spillover effect has been brutal, shaking general confidence in the sector – and raising questions about the current state of the decentralized finance (or DeFi) ecosystem.

“I think many projects were completely without substance,” said developer Max Saal about the many companies that appeared in 2021 in the midst of the token price boom. “It’s a deterrent to people who … are actually building something real.”

Meanwhile, ethereum is also on the verge of an ongoing upgrade that will be its most important overhaul since the digital currency was launched almost a decade ago. There is a lot at stake with this rollout.

Cryptocurrencies such as ethereum and bitcoin are often criticized for the process of mining to generate new coins. Both currently use a so-called proof-of-work mining model, in which miners race to solve complex mathematical equations using banks of powerful computers.

Ethereum has worked to shift from the energy-intensive proof-of-work method to secure the network to a proof-of-stake model, which requires users to utilize their existing cache of ether as a means of verifying transactions and making new ones. tokens. This requires far less power and will lead to faster transactions.

The transition has been repeatedly postponed in recent years due to major errors in the implementations. But a number of dress rehearsals in recent months have shown promising signs that everything will go smoothly when the so-called “merger” takes place in September.

If things do not go well, it is a question of what impact it can have on digital assets more broadly. Take DeFi, which aims to recreate traditional financial systems such as banks, but with cryptocurrency. They run mostly on the ethereum blockchain. It is unclear what will happen to large parts of the DeFi ecosystem if there are any problems with the large transition to evidence-of-effort later this year.

But the mood on the ground at EthCC is overwhelmingly positive, and most people are excited that a bear market means there are no griffins because there is no quick, easy profit to be made.

Dani Osorio, who has spent the last few years working on infrastructure and developer relations and organized the EthDenver conference earlier this year, tells CNBC that there are many blockchain and crypto conferences around the world, but EthCC is the only one focused on the technical participants.

“You will see CTOs, technical founders, cryptographers and protocol scientists. It is unheard of,” said Osorio, who added that she met ethereum founder Vitalik Buterin in a courtyard in Paris back in 2018 at the first EthCC trade fair.

Felice Schimmel represents TikTok celebrities, and she began to go down the rabbit hole of web3 in November 2021. She came to Paris to better understand the conversations that take place among insiders, especially as crypto and platforms become more international – and as regulation becomes more of an international conversation.

“[Web3] allows you to have an opportunity to own your fans and followers that allows you to connect with them without having a platform in the middle of that conversation. “

Not even a bohemian prince from a 600-year-old noble family in the Czech Republic managed to get a ticket in time before they were sold out. But William Lobkowicz – who has spent the past year marking the family’s collection of 20,000 cultural objects as NFTs – flew in from Prague anyway to talk to some of the smartest heads in the blockchain ecosystem.

“I come from an industry that is struggling and where drastic changes are needed for sustainable and long-term development,” he told CNBC. “What if conventional no longer works?”

People do not talk about price overviews or markets at EthCC, but ether is currently on the rise after a stretch with depressing prices. Ether is the token that is part of the ethereum blockchain, and it has risen almost 40% in the last five days, after a long fall that took it down almost 70% from the top in November last year.