the king is dead. long live the king

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If you’re reading this you’ll may already be aware that I have an interest in Bitcoin, and in its continued survival. Rest assured however, that I’m neither a Bitcoin speculator nor currency investor, I’m just a just very naughty boy. Bitcoin underpins the very essence of tibit, a company I’m working with, and without it, our idea of bringing pocket-change sized digital donation & content payment to the internet would simply be uneconomic and commercially unviable. If Bitcoin fails, so do we.

I concede completely that Bitcoin is an experiment, admittedly a helluva experiment, but an experiment nonetheless and as such, all experiments can fail. If you do choose to invest & speculate the golden rule of investment prevails: only bring money to the table that you can afford to lose. As an experimental currency you shouldn’t buy more of than you can afford to lose. The value of your investment et al…

So, it’s with obvious alarm that I read in the fintech press that Bitcoin is about to fail. Apparently the fundamentals are broken and whatever happens to the price in the short term, the long term trend will be spiralling ever down. It’s reported that Bitcoin is failing as its previously ever-supportive community is failing. What was meant to be a new, decentralised form of money that lacked systemically important institutions, and was too big to fail, has become something even worse: a system completely controlled by just a handful of people, and a handful of people that are now at each other’s throats. Ah, gossip, rumour & rancour. Welcome to the real world.

Far more worrying is the hearsay that implies the network is on the brink of technical collapse; that the mechanics that should have prevented this outcome have broken down, and as a result there’s no longer much reason to think Bitcoin can actually be better than the existing financial system. Ouch, the block chain is full and when the block chain network runs out of capacity, it becomes a tad unreliable. Now, that I can buy and like many others, I’d love to see the block size rise to 8MB sooner rather than later. Congestion equals delay and delay equals uncertainty. FUD. This is undeniably something that needs to be addressed but thankfully it’s a real-life situation crisis that I do not place beyond the capable, beautiful minds of those elegant and efficient Bitcoin developers. It not something they can ignore, kick into the long-grass and hope goes away. And they know it.

The cynic in me also casts his mind back into the not so dim & distant past:

Founder Satoshi leaves and has his baby adopted – Bitcoin rolls along
Major Bitcoin mining manufacturer is accused of scamming its customers – Bitcoin rolls along
A site where heroin can be mail ordered gets a high profile – Bitcoin rolls along
The first ‘bricks and mortar’ Bitcoin bank fails dramatically – Bitcoin rolls along
The largest Bitcoin exchange ‘looses’ half-a-billion dollars in customer funds – Bitcoin rolls along
A major bug in new software release causes block chain hard-fork – Bitcoin rolls along
Two major Bitcoin contributors attempt to impose a hard-fork to Bitcoin-XT – Bitcoin rolls along
Original developer has melt-down hissy-fit, sells all his Bitcoins for an (anticipated) huge profit, and quits the project – Bitcoin will just roll along

Bitcoin is dead. Long live Bitcoin.