It's Not Just a Currency; You're Missing the Point

by Ry Walker

The attack on Bitcoin is on.

Bitcoin fails to meet both basic criteria of a viable currency - Goldman Completely Obliterates Bitcoin In New Report

A friend asked me this week re: Bitcoin:

Just because you can get around the regulations, you're still left with the problem that the regulations are there to prevent (namely securities fraud). As soon as that happens to any great extent, the regulations will just be broadened so they cover this approach, too. :) And I'm not sure what problem bitcoin shares really solves, other than as a possible way around the regulations. Is there some other advantage?

It's about the protocol and the blockchain

The bitcoin protocol and the blockchain provide a platform to do publicly verifiable transactions without having to rely on comparing each party's own proprietary databases to verify what happened.

Re-read that.

Remember EDI (electronic data interchange)? It was suffocatingly expensive, so was restricted to only large companies. Can you envision how that could be better in a world where there is a public ledger to write that transaction into (w/ strong encryption).

A public record, for the first time

We're exiting an age where transactional ledgers live in the enterprise — instead they will be public.

Think about sources of "public record" you know about. Are they not controlled by some organization, subject to its whims?

Here's a public record you probably didn't think of. Bitorrents. Every movie that matters is catalogued and available, and nobody can do anything to stop it. And it's driving innovation. It drove Kevin Spacey to urge TV channels to give control to the viewers, and I recently resubscribed to Netflix because they are paying attention and adapting.

Maybe the way movies get made in the future is through pre-funding. Raise $300M to make the film from the people that want to see it happen, then just drop it on bitorrent and let anyone watch it (it's getting dropped on there with or without you.)

Distributed Autonomous Apps

Taking it a step further, there is strong interest to disrupt regulated business through a distributed autonomous approach (like how bitorrent disrupted the movie business) — so that regulators can't really get at it, because it's peer-to-peer.

There is some danger in this, because the regulator is no longer present. But a regulation layer can be added to the raw service, and opted into by the people who want to pay for that.

Good example is the new app "Popcorn Time" which presents a Netflix-like experience on top of illegal torrents. Some are talking about building a paid service like that, paid with bitcoin, and putting collected funds into wallets for each movie, their's for the taking if they want to get paid.

Don't be that guy.

“I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse.” - Robert Metcalfe, 1995

We're in the first inning still. It's easy to poke holes in new technology, but critical mass has been obtained, and Bitcoin is here to stay.

Bold prediction: This disruption will be as big as Internet/web/email by the time things settle down.

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