What’s Killing Bitcoin? Bitcoiners
Spend 5 minutes on Reddit’s /r/Bitcoin or the popular forum bitcointalk.org and you’ll likely come away with the impression that users believe the banking system is outdated, behind the times and in need of a change. The change they talk about isn’t a minor facelift; Bitcoin believers want wholesale change in how financial institutions do business. This fury lends itself to the belief that Bitcoin can shake up the status quo that believers disdain. Enthusiasts for Bitcoin and other cryptocurrencies are often believers of niche political movements like Anarcho-Capitalism and Libertarianism, and these political beliefs shape their opinions about Bitcoin. The critical problem with Bitcoin is that users are more concerned with being ideologists than technologists.
Bitcoin, and the blockchain that powers Bitcoin, have garnered serious attention. Industry leaders like Goldman Sachs, Bank of America, Forbes, Fortune and a slew of venture capitalists have contributed praise, scrutiny and investment. Somewhere in all this capitalistic enthusiasm, though, exists a disconnect between what investors and financial institutions see as valuable, and what Bitcoin believers see as valuable. Investors seem to be focusing on the blockchain, variably referred to as a distributed ledger, trustless ledger, smart contract and other derivations of the underlying protocol. The proof-of-work protocol that powers the blockchain may end up powering many forms of financial transactions, helping to lessen the burden of audit requirements, KYC/AML constraints and due diligence investigations. Start-up firms like SmartContract, Hedgy and Chain are lining up to exploit this future industry, and current giants like Visa, CitiBank and Merrill Lynch are both monitoring the situation and doing their own research.
This post was published at Coin Report on 29 Sep 2015.