Bitcoin Bits: 11 March, 2016

Today I’m speaking at a conference on digital media (which is why there were no posts this week, which I hope to partially compensate for by making this post a bit longer than usual), in which one of the main topics is how to get people to pay for content. So, it was with interest that I combed through this:

Bitcoin—a solution to the ad-blockers? – by Luke Graham, for CNBC

Bitcoin, it turns out, could be the answer.

“According to Schatsky, using the cryptocurrency bitcoin would make a micropayment system feasible due to its low transaction costs. The blockchain, meanwhile, which is the underlying technology behind bitcoin that works like a huge, decentralized ledger recording every transaction, would be able to keep secure records of which pages are viewed and for how long.

The main appeal of a micropayment system would be to give more choice to content consumers.”

I need to do more research on this before I can form an opinion based on something other than hope. So, watch this space…

— x —

Bitcoin and Diversity – by Ben Thompson, of Stratechery

In spite of the title, this piece is not about diversity *in* bitcoin. Rather, Ben talks about bitcoin (a good read), and then he talks about diversity (or the lack thereof in tech), but the two subjects come together for a beautiful ending.

“Ultimately, I don’t know what will happen to Bitcoin, but I’m skeptical of folks who are attracted to it because it allegedly removes humans from the equation: that is and always has been an idea that only makes sense in the very narrowest view of a single Bitcoin transaction, as we are seeing all too clearly in the community’s inability to address a relatively minor issue.

More broadly, I hope that the fundamental humanity that goes into any decision — product, policy, or otherwise — is appreciated by everyone in tech. Just as products and companies are either growing or dying, so too efforts to make the technology industry more accurately reflect, and thus better serve (and better monetize!) the diversity of the human race, are either explicitly improving the status quo or implicitly embracing it. There are no neutral “rules.””

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My Wet and Wild Bitcoin Weekend On Richard Branson’s Island Refuge – by Hannes Grassegger, for Motherboar

Envious, me?? No, of course not.

Necker Island, via Motherboard
Necker Island, via Motherboard

Apart from descriptions of the amazing sunsets and drunk lemurs, the article does raise some interesting ideas:

“Poverty, according to the theory that brought [Hernando] de Soto international fame, is not exploitation, but exclusion. In other words, people are unable to participate in capitalism because they have nothing to bargain with. Slum residents, for example, build huts but cannot own them, as there is no place and no law that will register them. If they had some kind of official paper, a certified claim to the property, a title, the hut would be worth something. They could sell it, or take on debt to start a business. To raise people out of poverty, therefore, their valuables must somehow be linked to them as individuals. They must have property rights.”

Enter, you guessed it, the blockchain.

“The blockchain would, in essence, allow capitalism to more fully move into the realm of the internet. This has always failed in the past, because in digital environments, everything is so easy to copy. Therefore nothing is scarce, which is why digital content, like music, images, and text, is almost always free, or extremely protected. The blockchain’s comprehensive ability to allocate each piece of code within its system could completely eliminate the possibility of copying a song, for example, because who has which digital copy when would be traceable. A digital magazine based on the blockchain system would have unique copies, just like a printed magazine. It could be bought and sold like a physical object.”

An insight into the power that is either all-in or poking around the bitcoin space, this article leaves you with the feeling that the sector is disorganized, creative and the harbinger of a new world order. Perfect fodder for an elite meeting on a tropical island.

— x —

The Crisis in Bitcoin and the Rise of Blockchain – by Jeff John Roberts, for Fortune

Yet another strange critique of bitcoin from an intelligent publication.

“That’s because the true value of bitcoin is not the currency itself. Instead, it’s the blockchain technology underneath it. Banks and other big businesses have already reaped the benefit of this technology.”

Um, no, they haven’t. Yet. They’re working on it. Right now, most of the banks and a few big tech businesses (IBM and friends) are investing a lot of money in blockchain research and testing. That is not the same as “reaping benefits”.

“The idea of a tamper-proof ledger created by computers is so significant because it could let a number of industries—especially banking, brokerages, and law firms—overhaul the way they do business. Instead of relying on slow and cumbersome settlement systems to notarize and record documents, they can let a blockchain do it for them.”

And what’s wrong with a database? Settlements are slow and cumbersome, and the blockchain could speed things up some, but it can’t “do it for them”.

Having said that, I do believe that the blockchain will have a big impact on the way that we do business. Hidden efficiencies, not-so-hidden efficiencies, and the removal of middlemen and the “trusted” controller… But statements like “overhaul the way they do business” bely a lack of comprehension of 1) how the blockchain works, and 2) business.

Still, some mainstream coverage is better than no mainstream coverage, right? Ok, maybe not.

— x —

What Happened At The Satoshi Roundtable – by Brian Armstrong, via Medium

Brian Armstrong’s fierce critique of the current Bitcoin core development team:

“Being high IQ is not enough for a team to succeed. You need to make reasonable trade offs, collaborate, be welcoming, communicate, and be easy to work with. Any team that doesn’t have this will be unable to attract top talent and will struggle long term. In my opinion, perhaps the biggest risk in bitcoin right now is, ironically, one of the things that has helped it the most in the past: the bitcoin core developers.”

After a weekend at the Satoshi Roundtable conference – a gathering of Bitcoin developers to talk about the scaling problems – Brian came away convinced that the current core team are unable to manage Bitcoin’s growth, and unless power is taken away from them, Bitcoin will be rendered almost useless.

“Even though core says they are ok with a hard fork to 2MB (they have it on their own roadmap, just very far in the future), they refuse to prioritize it. They prefer to withhold something that could help the network now, because they don’t trust the community to make educated decisions in the future. They view themselves as the central planners of the network, and protectors of the people. They seem ok with watching bitcoin fail, as long as they don’t compromise on their principles.”

With ominous scenarios and concrete proposals, this article presents a thorough case for change above and beyond the current and urgent need for more capacity. Brian proposes a culture shift, that Bitcoin start to work like a democracy, to better serve its growing base of constituents.

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Have a great weekend! I’ll be exploring the mountains of Aragón. Not quite Necker Island, but I’m so looking forward to being out of cellphone coverage for a while!

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