Bitcoin Bits: 25 June, 2016

Some interesting articles on bitcoin, blockchain and ethical dilemmas from the past week. It’s not been boring.

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Brexit and safe havens

The big news of the week was Brexit. As a Brit living in Madrid (who is now going to try to get Spanish citizenship), I am stunned that short-termism and emotion of the older generation can have such a negative impact on the future of Britain’s young. We were failed by so many factors: headline-seeking politicians, the media and especially the education system. This graph from Google Trends shows the number of searches for “EU” over the past few years. It definitely looks like in June a whole lot of people realized that they didn’t know what it was.

EU

This tweet from Google Trends confirms that:

And to add another layer of weirdness to this surreal landscape, Bitcoin’s price surge after the results came out was explained as a “flight to safety”. Yes, Bitcoin is now seen as a “safe haven”.

As much as I believe in bitcoin, I am not comfortable calling it a “safe haven” just yet. It’s too volatile. And still (relatively) untested, with governance issues and structural limits. But, its potential is becoming clearer, especially when you look at it more as an alternative to gold than as a payment rail.

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By Pejac, photo by Gary Van Handley, via Colossal
By Pejac, photo by Gary Van Handley, via Colossal

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#TheDao: Failing Fast vs Failing Unnecessarily – by Preston J. Byrne

And you thought that we were done with talking about TheDAO? Nope. Not even close. There’s still so much good analysis coming out.

“Everything “THEDAO” tried to be, it could have done correctly and in full compliance with the law. For this reason, what blockchain companies should be trying to do is take complex financial, business, and governance processes and turn them into machine-readable protocols that also tick all of the human requirements, legal or otherwise. A piece of code that does all those things is what a smart contract actually is.”

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Theft is property – from The Economist

This article lays out part of the legal swamp that is the DAO hack. Is it theft if no rules have been broken? If the code governs, what obligations (if any) do humans have? And what are the consequences of walking back what happened, when the whole point of decentralized currencies is that you can’t do that?

“The blockchain could be modified to retrieve the missing funds. But doing so would require the assent of a majority of users, and not everyone is convinced. After all, if partial humans can alter smart contracts, how would they be any different from the boring old paper sort?”

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Banks claim blockchain breakthrough in money transfer – by Ben McLannahan for The Financial Times

This seems like a pretty big deal, if only because of the fact that big banks seem interested in a new way of transacting. Blockchain company Ripple brought together seven big banks (Santander, UBS, ATB Financial, CIBC and others) to trial cross-border money transfers using their technology. According to the CEO, 80 other banks are also experimenting. Whatever happens with those experiments, the fact that they’re happening at all is exciting and encouraging.

“At the end of the day, the great thing about the technology is it is the great democratiser… It is not the institution you trust but the transaction. If the funds exist then the transaction will happen.” (quote from Tim Wan, director of innovation at ATB).

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