Bitcoin In Depth Articles
Split by internal divisions while its most useful aspects are harvested by the very financial behemoths it once hoped to destroy, bitcoin is fast becoming the tech world’s version of Waiting for Godot, wherein a hermetically sealed community squabbles and bickers over arcane points of code and law as their world slowly crumbles around them. In the last 12 months, attempts made to produce a road map for the cryptocurrency’s future have come to naught, all while core developers abandon the project and opaque Chinese mining concerns wield outlandish power.
Welcome to today’s bitcoin—a phenomenon so internally focused that its advocates have barely noticed the battle has already been lost.
Back at its inception, the conversation around the currency was driven by an almost
unconscionable optimism. This wasn’t simply a mechanism for the easy transfer of
capital: This was a tool by which the entire international financial system could
be made anew, with corrupt central banks, inflationary currencies, and immoral stockbrokers
consigned to the dustbin of history. In a world still reeling from the chaos of the
global financial crisis, bitcoin seemed less like a currency and more like a way
The bitcoin boom of late 2013 brought greater mainstream attention to the cryptocurrency.
Bitcoin’s value surged from $200 to $1,200 over the space of a few weeks, temporarily
rendering it more valuable than gold. This was to be a short-
But bitcoin’s spike and crash did have one unintended effect: It shone a bright light
on a delicate, still-
At least in the early days, the shift seemed largely semantic; a question of emphasis. But as time wore on, the discussion surrounding bitcoin increasingly became focused on how banks, governments, and financial systems could create or use their own blockchains, of which bitcoin would be, at best, an incidental part.
The revolution heralded by bitcoin now looks more likely to be transactional rather
than transformational. Soon, Nasdaq, the world’s second-
One thing that links all of these projects? None of them use the word bitcoin.
For these financial behemoths, the appeal of the blockchain is obvious. Companies spend an inordinate amount of money on the intermediaries that facilitate the flow of capital between markets. Blockchain technology offers the possibility of those issues being delegated to a few lines of immutable computer code that, by their very nature, guarantee the legitimacy of the transaction. Vast swathes of complex transnational banking and investment apparatus could be rendered obsolete in a few comparatively minor technological adjustments.
Bitcoin may be the platform on which this coming blockchain boom operates, or it
may not. I imagine this will depend on some purely economic calculations being done
by unfathomably vast and powerful financial institutions. In comparison to the almost
$5 trillion traded on the international currency markets each and every day, bitcoin’s
$10 billion market cap is next best thing to a rounding error. It could vanish entirely
and only a small cadre of true believers (and high-
What does seem certain is that the revolution heralded by bitcoin now looks more likely to be transactional rather than transformational. Don’t get me wrong: I think bitcoin is a fundamentally useful thing. Its myriad advantages over fiat currency would seem to demand its widespread adoption. But at a basic level, bitcoin is trying to disrupt money. As it turns out, this may be like trying to refashion water, or the second law of thermodynamics.
And like so many technologically disrupted fields before it, the promise of great change has given way to the reality of great consolidation. Whereas we once dreamed of a flat, universal currency with an equal value for all players, irrespective of size, now we face the reality of an international financial system that’s almost entirely the same—just with a new coat of paint.
Technological innovations of all stripes have long wrestled with a tension between revolution and legitimacy, and bitcoin has perhaps felt the tension more keenly than most. To put the dilemma another way: Is bitcoin trying to replace the international economic order, or work within it? Does it want to destroy Goldman Sachs, or be bought by it? To many within the movement, this is still an active question. But as the shadows lengthen on bitcoin’s moment in the sun, it’s increasingly hard to believe in its initial promise of changing money for good.