Tuesday, January 19, 2016

Bitcoin: the paradox of having no gatekeepers

These don’t sound like good days for Bitcoin.  In the New York Times, Nathaniel Popper writes a long article in Sunday Business about the tribulations of British developer Mike Hearn, “A Bitcoin Believer’s Crisis of Faith”. Hearn explains his self-ouster in a piece “The resolution of the bitcoin experiment” Jan. 14.

Then in the Washington Post Vivek Rdhwa writes “R.I.P. Bitcoin, it’s time to move on”.

It would be hard to summarize Hearn’s argument any better than he can write it.  A system that was supposed to be free of political control ironically fell under limitations imposed by short-term motivations of some of the players (apparently a lot of this in China, which is not our friend, as Donald says).  It reminds me of a parallel paradox of social media: in the beginning, the emergence of user-generated content gave speakers unprecedented opportunity to be heard for what they had to say, and now we have morphed into a society where employers monitor social media as if it could monitor people for social conformity.

There is a  lot of animosity against Hearn on YouTube.

I’ll jump to a story that sounds unrelated – the recent reports that some astronomers are beginning to believe that aliens may indeed have a civilization around a particular star 1400 light years away.  Such a civilization would probably have “people” living on several planets and moons or space stations.  A civilization able to build a Dyson Sphere would probably have a pretty stable financial system.  It might have gotten over business cycles (or maybe not).  But the bitcoin ideal does resonate:  the idea of a currency governed only by mathematics (expressed in the function of block chains), not subject to manipulation by politicians.   A Dyson-civ surely has navigated the mathematics of this idea.  If somehow we could trade information through a wormhole, we could do digital transactions and invest in their “economy”, at least as a sci-fi novel thought experiment.

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