How we see the hype around Bitcoin
- 12. December 2017
- Posted by: Collin Müller
- Category: Technology
The price of the cryptocurrency Bitcoin has reached a new historic high in the last few days. One Bitcoin now costs more than USD 15,000, a more than fifteenfold increase in one year. The total value of all Bitcoins now amounts to over 200 billion euros. This is more than the market capitalisation of HSBC, the largest European bank and six times as much as that of Deutsche Bank, the largest German bank.
Unfortunately, the media response to this development has been dominated by instructions for buying Bitcoin on the one hand and warnings against a bubble of speculation on the other. In addition, again and again, media coverage absurdly focuses on the fact that you can buy illegal goods and handle all kinds of dark financial transactions with Bitcoin. As if none of those problems had existed before Bitcoin.
From our point of view, Bitcoin’s current and future development is irrelevant when seen in the overall context of blockchain and distributed ledger technology. Bitcoin is only a first prototype application for the underlying revolutionary technology of blockchain.
Bitcoin was only the first test case and is not technically mature in many respects. The Bitcoin network is very difficult to scale for more and more users. Moreover, it consumes a disproportionate amount of energy and is now dominated by a few professional ‘mining’ companies, so that it can hardly be described as a decentralised system. We at Blockruption even hope that Bitcoin will soon be replaced by a better and more efficient distributed ledger technology.
Today, nobody is talking about the Web Giants of the nineties like Lycos, AOL or Altavista any more. Soon Bitcoin might also be worthless.
The Web Giants were important for the development of the Web, because they demonstrated the basic benefits of the technology. But better and more powerful platforms have long since replaced them. However, the basic technology has remained the same and has completely changed our everyday life in recent years.
Bitcoin and Ethereum are the Web Giants of distributed ledger technology. Projects such as Blockstack, IOTA, BigchainDB and many others are working on solutions for the teething troubles that are plaguing Bitcoin today. Certainly some of them will prevail and replace Bitcoin. However, the principles behind Bitcoin will continue to live on, because all these projects are based on them.
On Blockruption, we look at blockchain and other distributed ledger technologies and how companies and society can benefit from them. The Web has “only” improved the global exchange of information, but has not touched the fundamental organization of the world. But the blockchain could not only provide even better access to information, but could also replace centuries-old organisational principles with better alternatives.
In our recent article, Amazon, Facebook, Google – Blockchain offers new opportunities for companies against big platforms, we describe how companies can benefit from this development.