Cryptocurrency has been the rage ever since its introduction almost a decade ago. On October 31, 2008, Satoshi Nakamoto published his paper entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“. Since then, Bitcoin (and its enthusiasts and detractors) have been on a wild ride.
I won’t burden this article with a summary of Bitcoin’s history. [For a good summary of that, take a look here.] But one thing is clear: Bitcoin was designed to take power from the existing financial institutions and hopefully vest it into the hands of “the people”.
But its history has shown that the early Bitcoin “ecosystem” was just shifting power from banks and governments towards speculators and members of the tech intelligentsia. Exchanges like Mt. Gox appeared, thrived (for a time), and then were dis-empowered as everyone noticed that con artists were the real beneficiaries.
As blockchain technology has arisen (and matured), the notion of a decentralized ledger has belatedly emerged as the most lasting vestige of the original anti-establishment craze. Everyone and their brother is now implementing blockchain technology. I even think that I saw a Blockchain slushee the last time that I went into a Quick-Trip. [Note: That actually makes some sense when you consider that convenience stores sell currency futures in the form of state-based lottery tickets.]
But the anti-establishment heritage of Bitcoin is now giving way to the centralized management of our government and corporate overlords. As banks and governments erect/impose management systems (i.e., barriers) around the blockchain infrastructure, you should be reminded of the example where governments are controlling access to waterways and irrigation systems. While the water is free, moving water through the dams and controlled waterways costs a whole lot of money. And the banks and governments happen to have a whole lot of money to use as they erect barriers against the vandals who are trying to overrun Rome.
Today, I ran across a really good thought piece about these very subjects. Medium just posted an article by Daniel Jeffries. In his article, Jeffries states, “The true power of cryptocurrencies is the power to print and distribute money without a central power.” And Jeffries is absolutely right. Of course, this means that cryptocurrency is an existential threat to the banks and to the state-supported central banks. Consequently, cryptocurrency has provoked their “immune response” mechanisms.
The outcome of this tension is not yet known. We might actually see decentralized capitalism emerge. Or we might see the stranglehold of financial institutions worsen. Finally, we might see governments further exercise their fiat power over money. This dance will end with either chaos or absolute control.
As for me, I’m hoping for something in between. And I hope that initiatives like Cicada will help to cement some of the really good seismic changes that can come out of cryptocurrency and the blockchain.