Wednesday, July 11, 2018

Destroying Bitcoin


Morgen Peck at the MIT Technology Review has a fascinating article, outlining three ways to completely destroy Bitcoin. This includes (1) government takeover of Bitcoin; (2) Facebook takeover; and (3) fragmentation.

In cases (1) and (2), Bitcoin is defeated by a competitor created by a bigger, more influential entity, than the original libertarian supporters (even with the help of billions $$$ of Chinese money invested into the space). In case (3), everybody starts making new ???Coins that cannot connect, and have no interoperability, with the original Bitcoin.

In a sense, there is no justifiable reason why the original Bitcoin should emerge victorious over Bitcoin Cash, Ethereum, Litecoin, or any other coins that may not even exist today (Facebook Coin?  FedCoin? trumpCoin?).  Recent tech history is littered with followers that dominate over innovators, be it Windows over OS/2 Warp, or Android over Symbian, or MacOS over Linux; and those are just in the platforms space. 

Peck concludes:
"So under those scenarios, would there be advantage left to the original Bitcoin? Maybe it’s the one thing Bitcoin enthusiasts tout as the technology’s greatest strength: Bitcoin transactions are anonymous and impossible to censor. These qualities would disappear the moment transactions were yielded to the Federal Reserve, or to Facebook, or to a network of brokers coordinating the sale of bartered assets. [...] Early adopters have held fast to the dream of a single world currency that is private, free for all to use, and under the control of the masses. But the world's seven billion people not yet using Bitcoin might not care about any of that. With networks, convenience wins, and convenience is based on size. It’s the reason you’re on Facebook rather than some other social-media site—because everyone else is. If cryptocurrencies are to be widely used, it will be the habits of the masses, not the wishes of Bitcoin’s early adopters, that determine what becomes of Satoshi Nakamoto’s vision."

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