Bitcoin Bits: 3 July, 2016

I spent most of the week in London, so I’m a bit behind on my bitcoin-blockchain reading, but here you have some of the more interesting articles I came across over the past few days:

5 Takeaways from CoinDesk’s ‘Understanding Ethereum’ Report – by Pete Rizzo, for CoinDesk

Last week CoinDesk released its latest in-depth sector research report, this time on Ethereum. Here are five of the main points they choose to share with us:

  • Most Ethereum transactions are done on exchanges. This probably means that most of the activity is speculative (people trading Ethereum for profit) rather than transactional (people actually using Ethereum for business or, well, life stuff). This makes sense. Bitcoin is in a similar position, and it’s been around much, much longer.
  • Ether is not very liquid, which means that its price could be volatile. If China starts buying, for instance, it could push the price up significantly. And if it then sells, the price could fall sharply. No big surprise here.
  • DAO investment was concentrated. The collapse of the DAO was very bad news. But the real pain is contained to a handful (well, about a 100) of investors. Some of whom are very involved with Ethereum. This could lead to conflicts of interest when deciding whether Ethereum should come to the DAO investors’ rescue.
  • The dapp (decentralized application) ecosystem is active. Of the approximately 230 (at time of writing) dapps, most are concentrated in smart contracts, gaming, information validation, and registration.
  • Ethereum is not ready for enterprise use. This is the most interesting observation so far (the others are pretty obvious). The authors of the report point out that Ethereum is still relatively untested, and debacles like the DAO highlight the importance of low-scale testing before a real launch into the enterprise jungle.

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I’m sweltering in 40ºC temperatures here in Madrid, so you can understand why I find this picture so appealing:

by Mikko Lagerstedt, via Colossal
by Mikko Lagerstedt, via Colossal

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Decentralizing IoT networks through blockchain – by Ben Dickson, for TechCrunch

The potential of connected objects, the promise of Internet of Things, is not new. But not enough attention has been paid to its limitations. True connectivity cannot happen through the current centralized systems. While it is fine for small-scale networks and for brand-centric efficiencies, it does not contemplate scale or the benefits of cross-platform communication. For the IoT to become truly efficient and universal, it needs a decentralized channel: the blockchain.

But, problems remain. Scalability, for one. Which blockchain to use, for another. And, what kind of business model can you implement on a decentralized system that anyone can access and use?

The possibilities are exciting, though, and would lead to the development of a system in which machines bypass humans and transact with each other. The data collected would be tremendous. And the new economic order that struggles to place value on that data and those transactions would usher in a reformed view of money and a new economy. You have to admit that’s exciting.

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Fixing Bitcoin’s Big UX Problem – by Richard Svinkin, for CoinDesk

Bitcoin has an image problem.

“All the focus and energy is going into determining the right way to rebuild the global financial infrastructure. In the rush to take down banking, and be more like bankers in the process, the core mission of the bitcoin project seems to have been left behind.

Many startups have tried selling bitcoin to the masses as an alternative to fiat currency, and they’ve largely failed, pivoting to infrastructure or trying to redefine bitcoin.”

What is it? Is it a new asset class? Is it a new form of money? Is it an efficient store of value? Is it all of the above? If bitcoin can be so many things to so many different groups of people, why isn’t it more mainstream?

Because we’re not selling it well. It’s still too marginal, esoteric, techie… It still seems to be only for cryptogeeks and libertarians.

“We’re in too much of a rush to usher in a utopian financial era that we forgot to take a breath, stop, look at what’s there and appreciate what an amazing thing bitcoin is. If we did, we might figure out how to sell it. And if we figure out how to sell it we might be able to bring about the utopian vision we all so secretly want.”

Bitcoin will not go “mainstream” until users are no longer afraid of it. And that comes down to designing a less intimidating user experience.

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Everything you need to know about the bitcoin ‘halving’ event – by Ian Kar, for Quartz

A good overview of what the “halving” is, and how it might affect the bitcoin ecosystem and the price.

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Watch the dancer in this 3d-printed light-based zoetrope. Hypnotic. By Akinoro Goto, via Colossal.

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