Bitcoin’s route initially, began as a blockchain technology came in to reduce the monopoly that big institutions enjoyed. However, some of the institutions are coming up with ways to co-opt it and enhance their operations.
Back in 2010, there was an alleged pyramid scheme involving the digital gold rush. Anyone who fell for that venture has realized that it was not a scam after all. Many have benefited from crypto mining especially those who went for bitcoin miners have reaped healthy rewards. The main factor when the industry was starting was openness.
Bitcoin was not worth much of anything back then but anyone could easily mine it.Blockchain, its underlying technology, seemed to make sure that anyone could participate in the mining by eliminating the need for intermediaries. This new platform was designed to deliver decentralization in all sectors that incorporated it into their functions.
Bitcoin then followed the same path followed by gold since it began making people quite rich. As more miners came in and made the competition fierce, mining became more expensive. Higher electricity demands meant that miners required having more efficient servers to enable them to yield a profit and then economies of scale.
Corporations also took interest aiming to make a profit from this trade. Currently, the mining farms are gigantic, government-subsidized businesses. Bitcoin, in the end, turned into a financial instrument and the banks invested together with the pension funds.
Just like gold, the Commodity Futures Trading Commission declared bitcoin to be a commodity. Nowadays, with various policies set in place, governments can trace bitcoin transactions easily. Thus, it is impossible to use the flagship crypto for political dissent or crime.
The Myth of Bitcoin’s Route
The myth still survives stating that under bitcoin’s technical underpinnings, it is still something that exists outside of the world which is a tool for the people left out of the system. That was the pitch used by the pyramid scheme scammers.
These criminals preyed on innocent people stating that shares in a fictitious bitcoin mining operation would save them when the fiat financial system could not. Many vulnerable people fell for these fake promises.
Therefore, bitcoin has strayed from its original intentions but blockchain has not. Blockchain offers a platonic type of decentralization of eliminating central authority and the cryptographic guarantee of trusting no one. It appeared to be the ideal antidote to the centralized internet which is a weapon of war against Big Tech.
In 2019, Big Tech shifted into blockchain which may eventually appear to be a hostile takeover. It came in handy just as the conversations about cryptos moved rapidly towards antitrust and privacy. Earlier this December, Twitter said that it would maybe decentralize with blockchain. That announcement was made despite Twitter long ignoring calls of people requesting it to do just that using readily available, non-blockchain technology.
Naysayers believed that more private tweeting would help it avoid concerns raised about content moderation. Facebook has created Libra cryptocurrency which it alleges that it does not control. But interestingly, Libra will entrench its power. The move generated sparks from China making the country accelerate its push into the digital currency world which may eventually become a worthy surveillance tool.
It is not clear what role blockchain holds in China’s effort to launch a state-owned digital currency. However, President Xi Jinping is endorsing public investment in the technology for other purposes.
A Decade in Review
The co-opting of blockchain does not come as a surprise since it is a lesson learned from time to time. Today, most social values are bestowed upon technology and never the other way around. For instance, the internet came with the promise of unlocking knowledge and making everyone free. That is not the case since various companies track and manipulate people’s browsing behaviors.
Hence, although blockchain keeps using terms like “decentralization” and “self-sovereignty” it does not make it that way. It takes a lot of work for privacy and safety protections to be achieved and for networks to operate as initially intended.
As it was the case of the internet, the original hope and promises were not entirely untrue; users were just blinded while alternating interpretations to manipulations of various ideals. Though it may appear like blockchain is different from the internet with more promises floated, users are cautioned to proceed cautiously.
Currently, ‘decentralization’ is most probably understood as cooperation between mistrusting partners aiming to work together. But, that is not what Satoshi had in mind when he was developing Bitcoin. Nevertheless, this nascent technology may help Facebook, Twitter, and Goldman Sachs embrace some ideas about openness. That will enhance the belief in the power of the individual user rather than the masses.
This will be the story to watch out for in the 2020s decade.
Blockchain came to eliminate the monopoly enjoyed by big institutions but some of them are coming up with co-opting strategies to benefit from the technology.