Looking into the ASIC-driven crystal ball.
2015 was an exciting year in Bitcoin, never a dull moment. There’s been so much material, research and software released around Bitcoin it’s not really possible for any single human to keep up with all of it (my “read later” link list is looong right now).
I got into Bitcoin in February 2011 (more on me here), but I just started this blog in October this year, kicking it off with a few rather popular posts, getting more than 15.000 visits, among my own personal favorites were “Did Satoshi Predict Pooled Mining And Asic Farms?” where I went through old writings from the man himself (or woman/they/whatever), proving that Satoshi did not envision a future where anyone with a computer or a cell phone would be mining profitably. Another one of my own favorite posts was this one: “Is Bitcoin Mining An Energy Waste?” where I compare the Bitcoin network to the energy consumption of the offices of the banking industry. I also got a lot of accolades for my debunking of R3CEV.
But the most popular post was this one; “Why “Professors” In “Economics” Don’t Get Bitcoin”, followed closely by “It’s not too late to save Ethereum” (but by now it seems it is though). Placing third in my traffic stats I found my own explanation on how Bitcoin gains its value: “The Bitcoin Formula”.
I’ve just started a new podcast with that same name, listen to the pilot episode here. I will hopefully be able to kick that into weekly gear in 2016, starting with “ep. 1” in which me, myself and I and @datavetaren plan to discuss the very interesting question “What Is Money?” – and the related question: “What is Bitcoin?” – the answer is not so obvious. Datavetaren just published an excellent article on his view on that matter, here.
I’m also putting together a new “company” (Blocktime.io, not live yet), an app to begin with, exploring a new mechanism, aimed at the media industry. More on that in 2016.
I’ll be meeting with many different companies and holding talks on Bitcoin and on the so called “blockchain technology” during 2016. I do seminars together with strategy consultants Kairos Future. We meet with many different representatives from the banking industry and we’ve also met with the Central Bank of Sweden (“Riksbanken”) in December, among many other “important” players. The Swedish Riksbank is rather innovative compared to its counterparts globally (they offer all Swedes an electronic account called Swish, where Swedes can send actual centralbank-money directly between themselves). It’s not a stretch to say that they cannot ignore Bitcoin anymore and are trying to get to grips with it. Especially as there are new nimble contenders out there releasing their stuff in 2016 (I’m on the advisory board for Dreams, for instance, a promising new “banking” app doing away with all the old conceptions on how a bank must act, look and feel).
I’m really looking forward to 2016 in Bitcoin speed, a year I expect will bring at least as much news as we got in 2015, probably more. However, Bitcoin is not ready for prime time yet. I’d say Bitcoin will need another year or two, maybe even three, to really “break-out”. It takes time to “get” Bitcoin, and the banking industry has just begun, by signing up with R3 and/or Blythe Masters (both of them have no clue on what Bitcoin is, and you need to understand Bitcoin’s Blockchain before you get that you can’t copy it). We also saw a few new scamcoins, but not as many as in 2013/2014. Neucoin and Onecoin are two notable scams, I’ve debunked Neucoin and all similar altcoins here. Decred is another one which will go the same way as Ripple (which is dying, I’ll get back on that soon), the same thing will happen to Setl, Stellar, Hyperledger and similar “gateway/unifying system” copies – because of centralization, i.e. KYC/AML regulations on that central point of failure.
The fact that there is no one “in charge” of Bitcoin is a feature, not a bug.
We also got another false ‘revelation’ from a few clickbait-hungry publications saying a certain Dr Wright was Satoshi. Wrong again (Newsweek’s erroneous and very embarrassing outing of Dorian Nakamoto as Satoshi a year earlier should’ve been enough, huh?).
In 2016 we should also get more knowledge on whether sidechains will work at all, and hopefully we’ll see some tests of the very interesting and promising proposal of “the lightning network” and hopefully we’ll see an increase in block size (check toomim’s data for interesting tests on how many MB per block the Bitcoin network should be able to handle today already – wait for the page to load, it’s worth it). I also predict that we’ll see no progress whatsoever in solving the problems with Proof-Of-Stake and more people will realize it’s a useless proposition (including Ethereum’s dream of a future PoS).
A fully functioning two-way pegged sidechain would be a miracle, if Rootstock can pull it off, but I doubt it (I interviewed Diego Gutierrez Zaldivar on that earlier this year, read that here). It’s also going to be very interesting to see if anyone can create a useful smart contract outside of the “provably fair gaming”-category (not counting the lightning network and Counterparty, which both produce smart contracts, of which the latter is actually working already today, on the trusted Bitcoin Blockchain). You need oracles (and probably prediction markets) for smart contracts to really take off, and those things are far from being solved (read Paul Sztorc’s insightful thoughts on the matter here). The suggestion called Segregated Witness which was introduced at the Scaling Bitcoin conferences will probably move forward to reduce the size of the Blockchain (it somewhat reminds me of an earlier proposition called “Linear Types“), but we still need bigger blocks.
The Bitcoin landscape is already wide, including categories like payment processors, vaults, games, betting, dark markets, store-of-value, cross border transactions and more. In mining, for instance, anything can happen, it all depends on how successful the designers of the specialized hardware running the Bitcoin network are next year. It’s a cutting-edge and very difficult art to produce those nanometer hardware designs and there are no guarantees that even the bigger boys will succeed on their first attempts at creating the next generation (and it is very, very costly to fail – just one failure can cause a major player to go belly-up).
In any case, it’ll be interesting, exciting and captivating and I’ll be linking to interesting sites, comments, news, tools and apps, as well as doing podcasting and seminars on the subject over the next year. But don’t take my word alone.
Wishing my readers/listeners a happy new year, see you on the other side! Please follow this blog and share it with friends if you like what you see. And tell me what you expect to see next year; send me an email or go to Twitter to interact. To get a more in-depth look at events in the Bitcoin and “blockchain” universe subscribe to the new podcast “The Bitcoin Formula” here.