Maybe there’s something in the airwaves, but cars and blockchain seems to be a hot topic this week. Apart from the two posts that I published here, The Economist posited that true autonomous vehicles were a ways off still. And Ian Bogost opens his article in The Atlantic with a musing on why his car can’t pay for its own parking.
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Continuing with Ian’s article, Cryptocurrency Might be a Path to Authoritarianism…
The article contains some contradictions, not least that Ian seems to conflate blockchain and cryptocurrencies – not the same thing. True, blockchain emerged from cryptocurrencies, and the coopting of the technology by centralized financial institutions might upset some of the cryptoanarchists. But I doubt they care that much.
And while some starutps see blockchain as a decentralizing, empowering technology, most incumbents view it as an opportunity to improve processes and lower costs. Even die-hard anarchists are unlikely to have a problem with that.
The last paragraph makes no sense:
“Likewise, Bitcoin’s triumph hinges mostly on the financial success of speculators who never had any intention of using it as currency, and who appear to have strip-mined it into oblivion in the process. Similarly, blockchain’s future seems tied to the short-term vision of investors and entrepreneurs willing to speculate on a hypothetical, distributed utopia without hedging against the consolidated autocracy it seems equally likely to realize. “This is what happens,” Greenfield says, “when very bright people outsmart themselves.””
True, bitcoin is more about speculation than currency today. But all investments, even bitcoin, are valued according to future potential. Bitcoin has value because it could one day serve as an alternative form of payment. (Note that I am not saying that it deserves its current valuation – that’s subjective.)
As for taking apart the last two sentences, I don’t know where to begin, so I’ll just leave it.
To be fair, Ian does come clean at the beginning of the piece that he doesn’t really understand cryptocurrencies (in which case I would suggest not writing about them). And his articles are usually excellent – even in this one, his writing flows, and that’s not easy, especially when writing about blockchain technology.
(And Atlantic, please, please get rid of the ads that break up the text – they very much detract from the quality of the prose. And please don’t tell me that I should pay to be able to enjoy your writing – I already pay for a print subscription, and telling me that that’s not good enough for your web articles makes me feel unvalued as a subscriber.)
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To make up for the confusion of Ian’s article, we have the insight of Ben Thompson on Stratechery.
In it, he exposes the tulip bulb mania as a myth – it was futures prices that went ballistic, not actual trade prices. And there was a crash, but it was for external reasons (in this case, war).
He goes on to highlight the importance of myths. And shows how cryptocurrencies are a myth, but so are fiat currencies.
“The U.S. dollar is worth, well, a dollar because…well, because the United States government says it is. And because currency traders have established it as such, relative to other currencies. And the worth of those currencies is based on…well, like the dollar, they are based on a mutual agreement of everyone that they are worth whatever they are worth. The dollar is a myth.”
And so is gold.
“Gold, of course, has intrinsic value because…well, because us humans think it looks pretty, I guess. In fact, it turns out gold — at least the idea that it is of intrinsically more worth than another mineral — is another myth.”
I especially liked the part where he pokes a bitcoin-sized hole in the argument that the cryptocurrency is worthless because it can’t be used in stores.
“Can you use Bitcoin to buy something from the shop down the street? Well, no, but you can’t very well use a piece of gold either, and no one argues that the latter isn’t worth whatever price the gold market is willing to bear. Gold can be converted to dollars which can be converted to goods, and Bitcoin is no different. To put it another way, enough people believe that gold is worth something, and that is enough to make it so, and I suspect we are well past that point with Bitcoin.”
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I can’t really explain why I love this so much… Maybe it’s the continuity in spite of the fragility? (Via MyModernMet.)
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My article on CoinDesk this week: How a Tiny Island Could Give Cryptocurrency a Big Boost
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And this: the ICO for internet ad-free browser Brave sells out in less than one minute (*throws up hands in bewilderment*).