There seems to be a never ending stream of cryptocurrency and blockchain startups, offering one “innovation” after another. Borrowing the trappings of the Internet world, these initiatives are being nurtured in specialized incubators and hackathons, and funded by (objectively tiny) capital infusions.
Anthropological query: are these trappings (incubators, hackathons, venture capital infusions) some kind of cargo cult? There is clearly a cultural and ideological aspect to this worship of “innovation”, not to mention “incubation”. I also observe that these processes appear to be unquestioned and generally accepted as “good” and “fun”.
But are we seeing a burst of innovative ideas and new businesses based on Bitcoin or blockchain technology? Not really.
For instance, Emily Spaven is excited to report at CoinDeck about “Three Blockchain Startups Selected for Barclays Accelerator”. The selected winners receive $20,000 and residency at Barclay’s Accelerator in London. Pretty small potatoes in the wider world, but apparently big news in Bitcoinland.
The three winners are proposing to create the non-Earth-shaking enterprises:
- A money transfer service
- A debit card service
- A registry to track diamonds and jewelry to prevent insurance fraud
The first two are not in any way innovative, and the third is, well, a niche at best. (99% of us do not own diamonds.)
This is the revolutionary world of cryptocurrency? These are worthy of special incubation?
But at least these ideas are somewhat well developed, and probably took months to get to this stage.
In Tel Aviv, the Decentralize This! Hackathon gave teams 24 hours to cook up new, innovative Bitcoin products. “building original bitcoin applications in less than a day’s time”. Winners get a small cash prize and possible opportunities to develop their concepts into a real business.
Hackathons are certainly the flavor of the year, even though there is no reason to think that poorly thought out and hastily tossed together ideas are better or even just as good as more carefully worked out concepts.
Perhaps Hackathons work well in some domains, but Bitcoin hackathons are generally disappointing. The Tel Aviv event attracted over a dozen teams, and produced nothing much. Most of the entries are simply copies of other ideas. Maybe this is a useful programming exercise (but I doubt that), it certainly isn’t a good way to come up with something truly new.
The winner was “The Blockchain Billboard”, which is “A web billboard where every pixel can be purchased through a unique bitcoin address.” This turns out to be a rehash of “Millions Dollar Homepage” except with Bitcoin.
The innovation appears to be that “the pixels can be resold again and again without any involvement by the website.” Of course, this idea is just a copy of, say Bitchcoin.
As Aaron van Wirdum comments in coindesk,
“The webpage, for instance, can never be sold out completely, like the Million Dollar Homepage has been for almost 10 years now. Instead, buyers of pixels won’t merely buy and colour their pixels for one time only, but will instead be able to set a new price for the pixel, hence automatically reselling it to whomever sends bitcoin to the corresponding bitcoin address.
As such, after the initial one million pixels are sold, the website might keep changing forever, since a marketplace for the limited amount of pixels on the webpage will continue to exits.”
Where the MDH (and Bitchcoin) create excitement and “value” by the scarcity of the product, TBB proposes to infinitely expand and resell the real estate. How is this supposed to make sense? What is being sold here, if it is not a unique or even rare object? I don’t get it.
In other words, the big “innovation” from this Hackathon is a trivial variation on two stupid ideas that have already be implemented (and who cares about them anyway). Sigh. Furthermore, the whole idea seems to have huge logical holes in the supposed business model.
Honestly, what can you expect from a hackathon?
I understand why people want to get excited and move fast, but really, this isn’t the best way to work out new, revolutionary technology. I think Bitcoin and blockchain technology needs a lot of thought to figure out how to use it well. Slow down, and don’t just flail away.
Aside: Compare the results of these shallow, trivial approaches with the real innovations from the solid, sustained, multiyear efforts in real science.