News from the Restless World of Bitcoin and Blockchain
If cryptocurrencies had moods, I’d say that Bitcoin was in a state of restlessness. I decided to assess the “mood” of the Bitcoin world by trawling the recent batch of news stories hitting the Bitcoin headlines in recent weeks. And yes, there’s some agitation out there right now. So, for this blog, Here’s my “news desk” of Blockchain moodiness…
As I sit here in my Brighton, UK cafe, keeping the warm winter chill away by huddling up to the warmth of the Bitcoin ATM, the value of Bitcoin has just broken the $400 barrier. Bitcoin is on the up and up. Only a few months ago we were in london hosting a BBLF gathering of over 100 people and Btcoins were sitting pretty at $251. That is some climb, compared the the ailing UK Pound and the struggling US Dollar. Yet according to Cryptocoins News, not only has Bitcoin in reality been on the up-down-up, but this is all tied to volatility in both Chinese markets, and the mood swings of one of Bitcoin’s original pioneers, Mike Hearn: “This year, Bitcoin price has reached a high of $457 on January 7 before a volatile month saw bitcoin trading end January at $368.49 in the Bitcoin Price Index. The plunge in price came soon after former core developer Mike Hearn’s post where he announced his departure from the Bitcoin space.”
Ups and Downs
So, market mood swings and the departure of pioneers adds to the restlessness.
The original doom mongers are going to have to at least respect the views and the evidence that the future of Bitcoin (in one form or another) is bright. Jacob Donnelly reminds us that Bitcoin is still a child, barely seven years old. Referring to Hearn’s downbeat words, he says: “bitcoin is going through an existential crisis. But while their message is one of failure, it’s simply another growing pain for the network.” In his optimistic article, Donnelly believes that Bitcoin is going through growing pains and is evolving.
The Classic Rejection
Now, you’ve all heard of Bitcoin Classic, which, according to Stan Higgins, “constitutes a repackaging of the latest Bitcoin Core software with support for bigger blocks, indicates what could perhaps be a new phase in the ongoing debate whether or how to scale the bitcoin network’s transaction capacity.” (To find out more about block sizes and limits, look here). Well, this was rejected by a major group of bitcoin miners last week. So, evolution so far is problematic. The miners ain’t happy. They are worried about the risk of Classic and also the danger of Bitcoin fracturing into different versions.
This could be natural, protective caution, or it could be a kind of worrying conservatism creeping into a disruptive technology that could become frightened of disrupting itself. That paradox might be the nail in Bitcoin’s coffin. It also points to the huge influence of a small number of miners who want status quo rather than risk and innovation. The nay-saying miners want a slower, more careful approach to any fundamental change to Bitcoin’s core coding. For them, a consensus approach is the way forward. It’s ironic really – Bitcoin is all about distributed trust and yet the community hasn’t found a way to trust itself to make bold change.
Schism ot Creative Storm?
The story even made into the Financial Times and was called a “schism” by them. A schism! Bitcoin battles – a sign of real troubles or just healthy growing pains? Others have even called it a “civil war“.
I’m upbeat. Groups and communities form, and a healthy part of that formation is storming. It will unfold, unravel, explode and settle, especially if the Bitcoin community practices dialogue and debate and isn’t afraid to make a few decisions together. As a writer, researcher and practitioner in the field of innovation for over twenty years, I’ve learned that the difference between successful and failed innovation is often this: collusion breaking. It is okay, even vital, to question the way things are, the challenge the dimensions (block size and limit), to question the fundamentals. It is important to enage in what colleague Pete Burden, calls “creative conflict.” That restlessness is always a risk, but it often results in significant innovation. Without it, we often sink into mediocrity and then decline.
A search on Google News of “Bitcoin” is currently throwing up trouble and strife, volatility and that big news about Bitcoin breaking the 400 dollar barrier. I call that a good kind of restlessness. The miners haven’t rejected Classic out of hand. But they are pointing to the need to storm a bit more.
Meanwhile, over at Blockchain…
Now, flip the channel over to a search for Blockchain and you are back in the land of playful innovation, mad new applications, big corporation involvement and plenty of good news stories…
The Royal bank of Scotland expands its blockchain testing, Hedge Funds get involved in blockchain, we hear Commonwealth Bank of Australia chief executive Ian Narev saying that Blockchain may transform banking, Nasdaq is to trial blockchain-underpinned voting for shareholders, and Linx and IBM “Share Bold Vision for Hyperledger Project, a Blockchain Fabric for Business“. The list goes on. I struggled to find one bad news story about Blockchain this week.
Some are suggesting that Bitcoin’s restlessness is limiting Blockchain take-up. Judging from the first ten pages of a Google search, I beg to differ.
Time for a Restless Self-Conversation?
So, here we have it. Bitcoin is evolving, storming and is a restless self-conversation, played out thankfully in the public eye. I believe that shows all the signs of a disruptive technology, potentially paradigm-shifting, in a state of innovation. It may go under. But it may well simply get radically better. Blockchain is in a state of much more open experimentation. It’s hard to find open conflict in the blockchain realm at the moment. It also seems to be an innovation free-for-all and, with no grumpy miner gatekeepers to push back, the code is being plundered by everyone from large corporations to terrorists, from charities to smugglers. While Bitcoin debates block size and limit, the realm of blockchain is exploring human identity validating, voting, door locking, driverless cars and the Internet of Things. But it is also morphing and on the verge of being adapted, diluted, changed and put to the service of the very corporations that many of its pioneers sought to react against.
It’s been a revealing exercise this week – putting Bitcoin and Blockchain side by side in the news and search stakes. It may all change next week. And whilst acknowledging Jon Southurst’s advice to ignore the mainstream media’s advice on both Bitcoin and Blockchain, I am enjoying some of the positive and negative stormy weather around both.