Will Bitcoin Make or Break the internet?
News in the last week included a report called, ironically, 'Beyond the Hype' from the global central bank (BIS, the Bank of International Settlements) which contains more than its own share of hype, including a headline stating ‘Bitcoin Could Break the Internet'. Together with the same obvious errors that the Bank of England's Mark Carney made when addressing the issue of future money and the viability of cryptocurrencies in March.
Both simply extrapolate from Bitcoin itself, basically ignoring all subsequent innovations – of which there are many. According to Wikipedia "as of April 2018 [there were] over 1,565 cryptocurrencies". Which is an underestimate as at TokenIntelligence.io, where we monitor ICOs globally, the total is fast approaching 2,200 and we see close to fifty new ICOs each week. With billions rolling in the pace of innovation continues to be both fast and furious.
So BIS’ big mistake is its ‘straw man’ argument. BitCoin is the Ford Model-T of cryptos. The first roadworthy model. Such is the pace of development that meanwhile something much more like a Tesla, or Lamborghini is already being tested.
As TeamBlockchain’s CEO Jonny Fry has pointed out, while VISA can process 65k transactions per second. “Hashgraph can process over 300k per second. Currently Telegram handles 70 Billion messages a day and is looking to do 1m per second” – and has just raised $1.7 Billion. Meanwhile the Lightning Network, now moving into ‘production’ mode, is set to speed up Bitcoin itself many times over, vastly increasing its capacity.
BIS’ report also bemoans wasteful use of energy mining coins – but without acknowledging that the solution (something known as ‘Proof of Stake’, replacing the energy hungry ‘Proof of Work’) is already in the wings – or that a plethora of projects are moving the field forward at an unprecedented rate.
While no one can say for certain whether cryptocurrencies will come to dominate, replace or live alongside traditional fiat money, basing an Aunt-Sally argument on the less likely (but feared) outcome does no one any credit and adds nothing to the debate, except perhaps a little FUD.
What is not controversial, even for BIS, is that the technology created in order to make Bitcoin possible, and on which cryptocurrencies are based, Blockchain is set to revolutionise not just banking but many other sectors. We are seeing the remaking of the Internet – the birth of its next generation.
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