It’s Too Early to Write Off Blockchain

Five months ago, when we launched BREAKER, bitcoin was trading at $6500. Today, it’s closer to $3500. Ether was at $450; it’s now around $100. A year ago, bitcoin hit its all-time peak, near $20,000. The crypto markets continue to gyrate wildly, giving HODLers heartburn, and making the rest of us dizzy.

Working in this space, even as a journalist at a remove from the action, is a roller coaster. It feels like very little is certain, except perhaps that nothing is certain. Tarot card readers may be as good at forecasting tomorrow’s crypto prices as the candle-pushers on CoinDesk.

Here are a few things I know, though. The case for blockchain technologyincluding tokenization, an “identity layer” to replace today’s poisonous data economy, and the so-called “trust machine”has never been stronger. The world’s predominant social behemoth, Facebook, is an abomination, an affront to the original intent of the internet, a house-of-cards built on lies and hubris. Wall Street—by which we mean the financial intermediaries that collect 9 percent of GDP for doing very little—aren’t capitalists in the meritocratic sense. They’re freeloaders propped up by regulation, lobbying, and a lack of technological imagination.

The world needs blockchain because the world needs a more social form of capitalism, and because the world has lost trust in itself, the media especially. As Edward Snowden said this year, “in a world full of shifty bullshit, being able to prove something is true is a radical development.” Blockchain is an antidote to lies, the half-truths of marketers, and whatever Donald Trump says this afternoon on Twitter. 

Calling blockchain, the technology, a fraud makes no more sense than calling the 2001 Pentium III computer the final word in computing. 

As crypto prices plummeted through the fall, Nouriel “Dr. Doom” Roubini gloated, telling us, once again, that he told us so. But he confused his message and overplayed his hand. BUIDLers are not the same as scammers, and the crypto space contains plenty of both. While the run-up in crypto prices last year had something in common with the 2007-2008 mortgage mess, enthusiasm for crypto and blockchain has little to do with speculation in Tampa Bay condos a decade ago. Blockchain is a technology that will improve with age, much like microprocessors, mobile phones, and solar panels have. Calling blockchain, the technology, a fraud makes no more sense than calling the 2001 Pentium III computer the final word in computing.

You see, the revolution is coming, even if it feels far off at the moment. If we all were a little less obsessed with asset prices, we might see it happening more clearly. Dapps are being built for everything the web does today and more. Soon we really will be able to transfer funds seamlessly, person to person, as if money was email. Interfaces are becoming more user-friendly. Blockchains like bitcoin and Ethereum are scaling with upgrades like Lightning and Casper, able to handle many more transactions a second. Stablecoins promise to combat price volatility, and make crypto more like internet money and less like a means for speculation.

When I feel unsure about blockchain’s future, and why we started BREAKER, I like to listen to people like Chris Dixon, managing partner at VC firm Andreessen Horowitz. He puts this world in context and gives historical perspective to where the internet is going. Appearing with Coinbase CEO Brian Armstrong recently, he said blockchains are the “fourth wave” of software, a step-change on the level of the smart phone. “That’s the good news. The bad news is that we have a lot of convincing and evangelizing to do,” he said. The engineering and entrepreneurship is happening, but blockchain companies have yet to turn out the product managers and marketers required to make the technology the mainstream. The real innovation is about autonomy. This is “really a new way to build digital services that are owned and operated by communities instead of being owned and operated by companies,” he said.

At BREAKER, we enjoy picking apart the scams and taking down misogynistic blockchain cruises. That’s fun and it’s necessary. But we’re also here to tell the story of the internet’s next chapter, including the new browsers, business models, and the people who are making a difference. As this roller coaster year closes, let’s hope 2019 offers more stability, usability, and scalability, and less focus on crypto prices. Bitcoin’s all-time-high was never a good barometer of blockchain’s potential, and nor is its $3,500 level. The bigger story, as ever, lies with the underlying technology, with making value transfer easier, creating new types of organization, and bringing back verifiable truth. Happy holidays.