Cryptocurrency Narratives Hard to Read, Trending Toward “Blockchain”

In this era of blocksize wars, it is increasingly difficult to read the many narratives being spun around cryptocurrencies. As I have often noted, anyone can participate. Consequently, anyone can make up their own stories.

It is interesting to just scan the headlines, e.g., at Coindesk.com. There are always press releases about corporate announcements, mainly of investment funding. (Very rarely announcements of actual products, and never announcements of actual profits.) There are opinion pieces about government regulations, and stories about government studies of regulations. Boring stuff, pretty standard for the “business” pages.

Unfortunately, the headlines also include a constant parade of services that are hacked (from inside or outside), prosecutions for fraud, and other crimes. (“Mystery of Cryptsy’s Collapse Grows as CEO’s Whereabouts Unknown”, says one headline.) These, too, are not especially interesting, and no different from the rest of the lurid cybercrime news.

But Bitcoinland has some very peculiar things going on, all of its own.

For example, recent headlines include:

Bitcoin Core is Seeking to Overhaul How it Upgrades its Code
(to date, this means moving from IRC to Slack—welcome to the 21st century!)

Palantir Denies Ownership of ‘Quantum’ Bitcoin Mining Service
(! Obviously, the spooks might well be interested in Bitcoin and they certainly are into quantum computing, but apparently even these guys do not want to be associated with this—possibly fraudulent—mining company.)

Bitcoin Foundation Receives $65,000 from Mystery Mining Pool
(Most legitimate organizations do not accept donations from “unknown” entities, especially under such mysterious circumstances.)

And, of course, the enduring mystery of “Satoshi Nakamoto”, who might or might not be Craig Wright.

All in all, it is difficult to find much to “trust” here, nor are things especially “transparent”.


The overall trend is a transfer of excitement from Bitcoin, per se, to the generic blockchain.

As Coindesk summarized their annual conference (unintentionally ironically names “Consensus”), the big news is the “Blockchain”, though there are quite a few variations on this theme (they call it “The blockchain Rorschach test”). It’s a general purpose data structure, so it’s not surprising that it might be used in a lot of different ways.

Amid the alternative implementations and permutations of a “blockchain” there is increasing realization that there are only a few plausible use cases to date. Gideon Greenspan wrote about “Four Genuine Blockchain Use Cases”. He points out a basic design constraint, that “Blockchains represent a trade-off in which disintermediation is gained at the cost of confidentiality.”

His cases are:

  1. Interorganizational recordkeeping
  2. Lightweight financial systems
  3. Multiparty aggregation
  4. Provenance tracking.

This is a good list, and his discussion puts things in clear context. These use cases boil down to various kinds of public certifications, where the blockchain has the advantage of being immutable and not under the control of any single party.

I will have more to say about the many wonders that are “the blockchain” in an upcoming review of Don and Alex Tapscott’s new book, Blockchain Revolution, coming soon.

  1. Don Tapscott and Alex Tapscott, Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World, New York, Portfolio/Penguin, 2016.

 

Cryptocurrency Thursday

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