Daily Bits April 10th, 2017

My article on CoinDesk this week, on Luxembourg, asset management and how a small group can have a big impact – “Why a Quiet Blockchain Consortium Could Soon Make Noise“.

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Ha.

 

Has anyone tried to piece together a Google Maps story? Could become a new art form.

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The Guardian published an article enticingly called “Do digital currencies spell the end of capitalism?”.

As you can probably already guess from the title, the content is frustratingly simplistic.

For instance:

“The premise of cryptocurrencies is that they don’t require a central banking system or government guarantees or large piles of gold in order to function as a unit of exchange. Instead, they depend on a public ledger system, usually one that works as a “blockchain.””

The public ledger system is what makes it work, but it’s not enough to ensure that cryptocurrencies can function as a unit of exchange. It doesn’t guarantee that people will accept it as such. And if people don’t accept it as a unit of exchange, it’s not a unit of exchange.

Put another way, it’s the “how”, but not the “why”.

What makes it worth something as a unit of exchange is the belief that it is worth something as a unit of exchange. The belief that others will accept it. That can stem from a conviction that the advantages are so obvious that of course people will want to use it. Or, in the case of fiat currencies, from the confidence that the government will back up the dollar or euro or yuan by issuing more currency if necessary.

Again:

“And yet, if Ethereum could simply code the hack out of its own history, it’s not really money, is it?”

This demonstrates a lack of understanding of what ethereum wants to be – it’s not about becoming money, it’s about empowering decentralized applications. It also overlooks the number of times governments have intentionally devalued, demonetized and what have you.

And here is where I totally threw up my hands and moved on:

“This matters because the more we value things according to processor cycles instead of exchange value (or the price something can be sold for), the more we are committing to a future dictated by the logic of machines.”

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This is thoroughly perplexing:

coindesk-bpi-chart (2)

With so much internal strife in the community, and with a potential contentious fork looming, bitcoin’s price should be showing signs of nervousness and volatility.

But no, it continues to rise. CoinDesk’s Pete Rizzo gives some trading stats and some background.

 

 

 

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