Bitcoin… We Are All The Blockchain

Bitcoin… we are all the blockchain
Since the first great jump in Bitcoin’s exchange rate in early April 2013, speculative trade has stolen the limelight as the main Bitcoin story. Tweets of ‘To the moon!’echo like a rallying cry, selling what amounts to a collective vision statement. But what’s the vision? A respected VC assures us it’s ‘still headed to 10k’ as if Bitcoin was a prize thoroughbred being written down by the Bookies, but still had a few Derbies left in her… Is that all this is about?
Whatever one feels about the ‘profiteer mentality’ so evident across the Bitcoin movement, it is clear that without this driver, this long overdue financial systems innovation may not have taken hold. So we may as well accept that the ‘greed factor’ is serving a greater purpose. However, whenever the Bitcoin price slides, editorials claiming the demise of Bitcoin demonstrate that both the detractors and the devotees are focusing on an artifact of the system rather than the system’s innate value.
It’s about all of us…
Bitcoin’s real value is closely related to the manner in which its transactions are validated across a highly distributed network in what amounts to a collaborative process. This inclusive decentralized validation process is, after all, one of the key differences between Bitcoin and centralized financial systems. It must be understood that decentralization is inherently attractive to people because it’s about all of us.. .and the promise of guaranteeing impartiality and fairness. It is Bitcoin’s greatest achievement to date that its version of decentralization, being achieved in an area as tricky as financial transactions, actually works at all.
However, the real value of Bitcoin is not reaped at an individual level. If a few thousand of us get rich, is that what Bitcoin is about? Are we heading towards replicating the wealth disparity evident in western capitalism in the digital currency space too? If we are, perhaps we should pause and take a few breaths.
We are all the block chain, metaphorically
The real value of Bitcoin resides and is apparent at a group level. We are all the blockchain, metaphorically. Technically, miners may process the transactions by computing and embedding blocks into the blockchain, but it’s the people who make the transactions that drive the system. But what kind of transactions? This question hints at a conflict issue within the way the existing system is working, i.e. if Bitcoin continues to be hoarded and transaction volumes are mainly associated with cashing in and out of Bitcoin on exchanges, we are indeed mainly treating it as a commodity, rather than leveraging from its utility, like hoarding a limited supply of gasoline instead of using it to fuel a car to go from A to B.

This post was published at Bitcoin Magazine on OCTOBER 20, 2014.