I got interested in Bitcoin many years ago as a quick cheap payment system, i.e., the currency part of the equation together with the freedom from the controlling banking system. The technology of a Blockchain worked for me.
It is now my contention that Bitcoin itself was hijacked and that as a crypto currency, it lost the currency definition. It is also my contention that Bitcoin is now a plaything of the market manipulators but it is still strong enough to pull the overall market down with it, and up with it. But this is not my focus here. Rather, my focus is what is happening in the crypto and blockchain technology or distributed ledger space now. I think we’ve seen the Terrible Twos of the Bitcoin baby and are probably into the stage of a child of 3 to 5 years old developmentally. Parents among us know that wonderful and wide eyed ‘my world is my oyster’ quality of a healthy 5 year old. Lets see what our current environment looks like.
It is clear that the activities in the space of blockchains and cryptos have increased and grown so much, that one has to be on it 24/7 to keep up. This is the way of groundbreaking technology; once it is out there, it explodes. And when it does, it changes our world. It is my contention that the arrival of crytocurrencies is already changing our world and will power the next big step of mankind, the step of going into space.
The following, The Good, The Bad and The Ugly happenings caught my interest over the past few weeks.
The Good comes from the Island of Malta
Malta is a country that has supported Cryptocurrencies, blockchains and cryptocurrencies-based business to its lengths and breadths. The country is so optimistic of blockchains and cryptocurrencies that the Prime Minister of Malta, Joseph Muscat in his speech at United Nations General Assembly, stated that cryptocurrency is inevitable the Future of Money.
The Bad – the attacks on the good businesses in the space
The Ugly – The Targeting and Caging of Ross Ulbricht
This series of articles in the link is not complete but so far, it reads like a spy novel. The part that really struck me, is how the FBI agents stole some Bitcoin while shafting Ross Ulbricht. The question of Who will Oversee the Overseers becomes paramount, not only in the space of cryptos and new technologies but overall in our lives.
The End – How to assess the new technologies.
The following is almost a year old, but still completely valid. Clif High wrote an essay on Due diligence for Cryptospace and I cannot link to it directly. It is still on the first page of his site at https://halfpasthuman.com/
“Due Diligence Clues
These linguistic clues can be used in your due diligence work before investing in any crypto offering.
- If the language of the offering is touting a ‘technological innovation’, beware, such are fleeting the world of software, being easily replicated. Further if that is the only claim to fame then you are betting on technological development and not a sound business plan. This rarely ends well.
- When you read that an offering is going to make smart contracts usable, or easy, or accessible, are they speaking of running an education program? Or are they touting an alleged technical leap that will be most likely both ignored, and lept over in mere months by the next technological breakthrough. If they are proffering their technological edge, be wary of their future. These edges dull quickly, especially quickly in the software world. Other words in this category would include ‘smart contract templates’, and ‘smart contract wizards’.
- Legally enforceable smart contracts are yet more buzz words to avoid. Legal does not enter into the picture with software contracts. The software executes the contract, or it fails. Pretty binary, and not much to give to lawyers to argue about after the failure. It is simply not within the power of the legal system to force software to perform. Smart contracts by their very nature disintermediate the legal structure of humans.
- Any ICO that has ‘storage’ within its claim to fame, as in the idea of storing anything, data, pictures, fingerprints, et al, is to be avoided. Such language indicates either they don’t have anyone with experience programming for blockchain networks, or their PR people are totally disconnected from the reality of the business. Either way, not a good situation. It costs too much to store data on the blockchain. It is inefficient by orders of magnitude over regular disk storage.
- Another idea that keeps coming up is the ‘decentralized search engine’ as competition to Google. Avoid these, and there will be a great many of them. It is not possible to have a decentralized search engine, as by their nature, searches require centralized indexing in order to be efficient.
- Yet another bad crypto idea is the decentralized, or blockchain enabled, advertising exchange. The idea is extremely appealing as a result of the ongoing ‘adpocalypse’, and the even more recent petty fascist actions of the advertising exchanges supporting the globalista socialist agenda. These exchanges can technically work, but they will need to be specific about how they are going to handle the auctions, the linkages to web sites, the payment gateways, the security of the payment gateways, the placement of advertising on specific platform pages (such as Youtube), and a million other business questions that don’t relate at all to the blockchain. Any ICO touting blockchain as the solution to the advertising problem, does not understand the workings of online advertising, and/or the blockchain.
- Yet more caution words include ‘micro-payments’. Any micro-payments system that is blockchain based will also be, by its nature, incredibly computation focused, and this is as bad (expensive) on the blockchain as is storage. Not going to end well. As the popularity of a micro-payments based blockchain driven system increases, so will its costs, even more so, until, in the real world, it will cost more in processing fees, than the payment itself.
- Popular fancy takes the blockchain into areas where it should not be going. One of these is the idea of a work exchange or job matching system. These are great ideas, but the blockchain will not be involved in delivery of resumes, or matching work seekers to employers. Why? Cost, of the processing to do the matching, and the cost of storage. IF these are being done at a computing center and the blockchain is only peripherally involved as a token between job and applicant, what purpose does the intrusion of the blockchain serve? Lacking a compelling business case for it, the blockchain, under these kind of circumstances, is merely yet another point of security vulnerability.
- More bad words for crypto offerings include ‘community control’, or any words where the ‘community’ will be ‘voting’ on any aspect of the management of the item under offer. These are, by definition, not businesses, but are social engineering attempts. These will inevitably intrude on the business case for the offering. Collective management belongs in the dust bin of history with communism. Please note that there will be ‘collectives’ forming on and around blockchains that will become successful. Our data sets have such becoming powerful over time, however, we need to note that the data is showing that community management systems that do survive (precious few) will do so as the business case will dominate all the thinking, all the time. Again, please note that these ‘community based ICOs’ show up in our data as primary sources for ‘infighting’, and ‘internal meltdowns’ that will be affecting CryptoSpace over the next decade.
- Associated with the ‘community control type’ of cryptocurrencies, are the dreaded ‘social doctor coins’. These ICOs will be touting the blockchain as a ‘solution’ to some form of perceived social problem. These ICOs are business disaster pigs painted with all manner of engaging social colors.
- The final set of bad words for cryptocurrencies include ‘distributed computing’. Running distributed computing is a nightmare, even when all aspects are tightly centralized. In the past it has not proven to be cost effective on any project. Merging cryptocurrencies and distributed computing is like giving your nightmare a belly ache. No good result will come from this.”
Finally, a Twitter Feed that is good to follow: Vitalik Buterin, the founder and maker of Ethereum.
Keep your eyes peeled out there. Like in a proverbial gold rush, the dishonest are in first to see what they can grab.