Although many are gleefully claiming that the cryptocurrency Bitcoin can now be officially declared as dead, it's initial failure could simply be a minor setback in the technology's slow but steady march towards ubiquity.
Guest Post by George Howard on Forbes
Mike Hearn, one of the original members of the Bitcoin development team, recently stated that the “Bitcoin experiment” has failed:
"Why has Bitcoin failed? It has failed because the community has failed. What was meant to be a new, decentralised form of money that lacked “systemically important institutions” and “too big to fail” has become something even worse: a system completely controlled by just a handful of people. Worse still, the network is on the brink of technical collapse. The mechanisms that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system."
In the short period of time since Mr. Hearn wrote his post, it’s been interesting to watch the response. Certain people seem to revel in some strange form of “told ya so” schadenfreude, while others are ignoring/dismissing Mr. Hearn’s proclamation.
I will never understand the mindset of a person who would actively root against a technology with such great potential – unless, of course, that person benefits from the current state of technology; as I discussed in an article entitled: Bitcoin Can’t Save The Music Industry Because The Music Industry Will Resist Transparency.
I also am skeptical of people who blithely disregard the challenges facing any new technological advancement, and who make light of the difficulties of crossing the chasm from early adopters to a more mainstream adoption.
So, is the Bitcoin Blockchain over? Is it now in an inexorable slow-moving death spiral towards obsolescence?
I don’t know. Could be. Might not be.
Whether the Bitcoin Blockchain has failed or not, the technological innovations developed or advanced because of it, and the spirit of its potential is secure, and will be utilized for continued advances.
Of course, no one else knows with any degree of certainty either, but I (and others) put a lot of stock in what the Venture Capitalist Fred Wilson thinks about emergent technologies, and he had this to say about Mr. Hearn’s post:
"The Bitcoin experiment is six years old. There has been a significant amount of venture capital investment in the Bitcoin ecosystem. There are a number of well funded companies competing to build valuable businesses on top of this technology. We are invested in at least one of them. And the competition between these various companies and their visions has played a part in the stalemate. These companies have a lot to gain or lose if Bitcoin survives or fails. So I expect that there will be some rationality, brought on by capitalist behavior, that will emerge or maybe is already emerging."
But, for a moment, let’s step back from the prognostication, and instead imagine that, yes (to the odd delight of some people), the Bitcoin Blockchain has failed. It’s over.
Where would that leave us?
Anyone who has spent any time in the tech or start up world knows and understands that success and adoption is an iterative process.
While the Apple AAPL +1.05% Newton and the Rio PMP300 mp3 player were “failures,” the technologies related to their development and launch (and, yes, failure) endured and were instrumental in terms of the development of future successful products.
Some of the most enduring posts I’ve written speak to this type of creeping, iterative development that largely goes unnoticed by the masses – until these same masses wake up one day to a deeply changed world:
- The Stream that Snuck up on You – About how streaming music and video services “suddenly” became prevalent in peoples’ lives.
- The Cloud That Snuck up on You - About how cloud services “suddenly” became prevalent in peoples’ lives.
I’m currently working on similar articles on technologies that are following this same trajectory:
- The Internet of Things that Snuck up on You
- The Artificial Intelligence that Snuck up on You
The above articles will, of course, address that fact that both IoT and AI are already here and upon us; that they – via a long, iterative process – have crossed the chasm from early adopter land to early majority, and will soon be squarely in the middle/majority of the distribution curve.
The Bitcoin Blockchain – success or failure – has similarly established a durable beachhead upon which technology will continue to build upon.
In other words, in the larger scheme of things, it doesn’t really matter if the Bitcoin Blockchain “fails,” because it has already attained a sense of permanence to the degree that it’s inconceivable that other technologies will not be built upon its principles and technologies. And, perhaps, more importantly the ethos of Bitcoin Blockchain – transparency, disintermediation – will similarly endure and be built upon.
And so, even if the Bitcoin Blockchain does “fail,” some variant of the Bitcoin Blockchain will not be a failure.
Specifically, the Bitcoin Blockchain has either more widely established or completely originated certain core technological and conceptual components, such as:
- Decentralized Registries
- Smart Contracts
- Transparent (or not, users decide) and Immutable Records of creation/creators
- Transparent records of transactions
- Disintermediated Payments
- Payments with little-to-no transaction costs
- The Mining system of incentive
- Proof of Work/Hash systems
- Incented sharing (as illustrated by Imogen Heap’s Mycelia)
Does any rational person think that any/all of these things are going to – poof – disappear and retreat to some troglodytic cave?
Suggesting such a thing is no more reasonable than asserting that CDs will make a comeback.
And guess what, some of us knew that CDs were done the moment we laid eyes on the Rio MP3 player (“failure” that it was). I’ll never forget that moment; I was running a record label at the time.
So…sure, the Bitcoin Blockchain may very well go the way of the Rio, but be very clear, the technological innovations and the general shift in mindset that have been developed and occurred because of the Bitcoin Blockchain can not and will not ever die. In fact, it’s just getting started. Ignore at your peril.