Aug 112017
The silly season continues. Speculators are piling into the cryptocurrency space in the hopes of–sometimes very literally–making money fast. As I write this Ethereum’s value has halved since June but is still 20x since January. Litecoin is up 12x since then. Even Bitcoin has tripled, again. It seems like everyone now has an opinion on, and a position in, cryptocurrencies. View image on Twitter    Follow Adam Ludwin @adamludwin  is now more popular than      And hey, if you want to speculate, and casinos seem too sedate and controlled to you, then more power to you, jump right in. But for those of us who are interested in the technology, not the money — who think that blockchains are primarily interesting because, unlike most modern technology, they decentralize power — so far this has actually been a mostly disheartening year. This has been the year of the ICO, in which an astonishing amount of money has been raised by the issuance of new cryptocurrencies in exchange for existing ones, the value of which is then inevitably measured in… US dollars, which says something. Tezos, which is basically “a more flexible Ethereum” (just as Ethereum was, to vastly oversimplify, “a more flexible Bitcoin”) raised ~$230 million. Bancor, which “enables anyone to create a new type of cryptocurrency,” raised ~$150 million. Status, “an open source messaging platform and mobile browser to interact with decentralized applications that run on the Ethereum Network,” raised $95 million. TenX, “Making Cryptocurrencies Spendable Anytime Anywhere,” raised ~$80 million. Do you notice anything that these massive fundraises have in common? That’s right; they’re projects which benefit cryptocurrencies which manipulate and/or hope to supersede other cryptocurrencies. Much, if not most, of the big-money high-profile ICOs this year have been self-referential Crypto Inception. They’re built on the (often unquestioned) assumption that decentralized blockchain apps will be widespread and enormously valuable, and therefore, blockchain tooling and infrastructure will be as well. That implicit assumption sounds nice; it even sounds plausible, if you squint the right way and accept a few uncomfortable assumptions; but — uh — tooling and infrastructure for what, exactly? Bitcoin has fought its way into a valuable and important niche as a widely recognized, fairly widely used, decentralized currency and alternative to gold, which is remarkable… although as pointed out by Adam Back, CEO of Blockstream, crypto OG, and generally extremely perspicacious guy, the rise of other cryptocurrencies is arguably a threat to the whole notion of blockchains-as-currency. When (more…)