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Protocol | Fintech

In bitcoin, Black entrepreneurs see a chance to rebuild generational wealth

Crypto and blockchain promise a route around traditional finance. That holds a special appeal for people who have experienced systemic racism regarding money.

Greenwood in Tulsa, Oklahoma in 1910

The Greenwood neighborhood of Tulsa was once called "the Black Wall Street" before it was destroyed in a racially-motivated attack by a white mob. Crypto entrepreneurs see a metaphor for what they're building.

Photo: Greenwood Cultural Center/Getty Images

Bitcoin and Black Wall Street might seem like two incongruous worlds. But for a loose network of Black people, the once-thriving community that existed in Tulsa a century ago resonates with the work they're doing now in crypto and blockchain.

The 100th anniversary of a white mob's violent destruction of Greenwood, a prosperous Black community in Tulsa, Oklahoma, drew a lot of attention this year, including from TIAA CEO Thasunda Brown Duckett, who said the massacre "gives a real face" to what "structural and systemic racism" is all about.

The loss of Black Wall Street isn't a forgotten atrocity — and for many Black Americans, it informs the present.

Tonya Evans, a law professor and blockchain expert, called the massacre "the most horrendous" example of the "decimation of various Black wealth centers," attacks that demoralized generations of Black people whose efforts to build their own businesses and economic power were routinely quashed by systemic racism.

"Think of the astronomical wealth that was lost" and "the cellular-level fear that was passed on from generation to generation," Evans said.

Around the centennial came new attempts to build economic power, like the creation of Audacity, a venture fund geared to Black crypto founders, and The Black Wall Street app, a digital wallet backed by actor Hill Harper. But the trend of Black entrepreneurs harnessing technology for economic empowerment started earlier.

Over the past decade, Black academics, entrepreneurs, educators and students have been embracing cryptocurrencies, blockchain technologies and decentralized finance. What draws them is not just the speculative momentum of crypto that has created billionaires worldwide, but also the promise of a new, decentralized ecosystem that could route around the barriers that Black entrepreneurs have long faced.

Greenwood after the 1921 attack Greenwood seen after the 1921 attack.Photo: Universal History Archive/Getty Images

Building viable enterprises is possible "in a decentralized finance space," said Evans, who teaches law at Penn State and began studying and speaking on blockchain and crypto four years ago. "No one's standing in the way. There's no bank. There's no credit score. There's no redlining. That's transformative and very powerful."

That was true for entrepreneur Shawn Wilkinson, who first dabbled in crypto as a computer science major at Morehouse College, where he discovered the wonders of bitcoin mining. "I had a couple of dollars' worth of bitcoin that turned into $10,000 and I'm like, 'What's going on here?'" he said, laughing.

Eventually, he went beyond mining to explore the promise of the blockchain, where he is now considered a pioneer. In 2014, Wilkinson co-founded Storj Labs, maker of a decentralized cloud storage system and one of the first companies to expand blockchain technology into that industry.

Launching a blockchain startup wasn't easy at a time when the technology was not that well understood. "Bitcoin and blockchain — that's used for drugs and guns, right?" was a typical question he was asked when he pitched Storj to investors, Wilkinson said.

And there were bigger challenges for "a young Black kid trying to build this distributed storage startup and going to a bunch of traditional VCs," Wilkinson said. He spoke of "little subtle … strange things" that happened in his initial encounters with traditional tech investors who were not used to a fundraising pitch from a Black founder. Like the time when he met with VCs who assumed that his co-founder, who is white, is the CEO. "They would shake his hand first and then myself," and he would have to clarify, "No, I'm actually the CEO and he's the business guy," Wilkinson, who is now Storj's chief strategy officer, recalled with a chuckle.

When those initial efforts didn't go anywhere, Wilkinson's team shifted to a strategy that has become a key feature of the blockchain industry: Storj issued its own token. Storj raised $500,000 through a token sale in 2014 which helped them roll out their first product. That got the attention of traditional VCs and led to a $3 million seed round in 2017, when Storj also held another token sale, raising another $30 million.

Edwardo Jackson, creator of the Blacks in Bitcoin blog and one of the early crypto advocates in the Black community, is also looking to do a token sale for his company CinemaDraft, a blockchain gaming site, after failing to raise funds through traditional venture capital.

"I've spent over five years digitally panhandling for venture capital," he told Protocol. "I am the living statistic that less than 1% of African-American founders get funded."

He has become a strong proponent of crypto as the "market-based answer to exclusionary venture capitalist funding." "It's really important for us as African Americans who've had generational wealth stolen, that we get in on this before they figure out other ways to try to keep it from us," he said. "There are no barriers to entry except for education. On the base level, if you know about it you can own it."

 Tonya Evans, Shawn Wilkinson, Edwardo Jackson and Deidra McIntyre Black crypto and blockchain entrepreneurs and advocates include (from left): Tonya Evans, Shawn Wilkinson, Edwardo Jackson and Deidra McIntyre.Photo collage: Protocol

Jackson is a member of Black People & Cryptocurrency, a private Facebook group that formed in 2017 and now has about 18,000 members. Founder Deidra McIntyre, a former teacher and journalist, said its goal is education and having a conversation about crypto and blockchain through the eyes of the Black community.

"Everyone looks at bitcoin in terms of their lens," she told Protocol. "Our lens in terms of the Black community is our relationship with the banking industry. It's more difficult for us."

Wilkinson described blockchain as "an open terrain," with fewer barriers for entrepreneurs like him "who didn't necessarily come from money or generational wealth." Referring to events like the Tulsa Race Massacre, the opportunities represent "generational wealth" that cannot be "bombed away and stolen away," he added.

Educators in the community, particularly at historically Black colleges and universities, have also begun to focus more on blockchain opportunities. Two years ago, Morgan State University in Baltimore launched the first HBCU fintech center to focus on the "study of blockchain, cryptocurrency and the digital finance industry."

Ali Emdad, the center's director, said the program, which works with faculty and students from 50 HBCUs, is also tackling broader issues that are "being discussed right now in the HBCUs and black entrepreneurship communities," such as: "How do you talk about the generational wealth in the Black community? Is fintech a new opening, a new ray of hope for underbanked communities?"

Camron Knight, a graduating senior at the HBCU Hampton University, certainly thinks so: "It's our chance to get in there." In May, Knight won the Morgan State FinTech Center's first cryptocurrency trading competition and plans to pursue a finance career. Crypto "is not just something that's trending," he told Protocol. "I believe this is genuinely the future."

There's a social justice angle in how he views the opportunity, citing the rise of a now mostly-legal marijuana industry based on a product that led to incarceration of a disproportionately large number of Black people. "We've got folks sitting in jail for crimes that other people are walking free and making millions off of," he said. "We're tired of the system being built on our backs without our ability to participate."

Knight said he was struck by how the recent attention to the Tulsa Race Massacre helped raise awareness on the Black experience. This became evident when a white manager at a major investment bank where he had worked as an intern called him out of the blue one day to say, "I never learned about this in school. This is terrible. I'm sorry about this."

"A lot of folks just didn't know," Knight said. "They weren't necessarily given the ability to understand these things in the past."


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Image: Google

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Photo: Luis Alvarez via Getty

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Photo: d3sign/Getty Images

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