In blockchain circles, Bitcoin has fallen out of favour. Veronika Kuett, TechWeek Frankfurt speaker and product manager at Frankfurt School Blockchain Center, questions the prevailing narrative
A lot has happened since Satoshi Nakamoto penned his infamous Bitcoin whitepaper in 2009. At the time of writing, the price of Bitcoin now sits at just over $9,000, at its peak approaching the lofty heights of $14,000. The cryptocurrency now boasts a market cap of $169 billion and commands 69 percent of the crypto market.
Aside from Bitcoin establishing itself as credible object of value, blockchain, the technology (or suite of technologies) that underpins the digital currency, has captivated businesses around the world. Many are investing astronomical sums to exploit what they perceive as the biggest technological disruptor since AI.
Blockchain hype is at fever pitch. According to analyst house Gartner, the technology will create more than $176 billion dollars worth of business value by 2025. At technology conferences around the world, blockchain ‘experts’ are urging organisations to move past their Bitcoin and crypto obsessions. The crypto arena is the playground of cranks and snake oil salesman, we’re told — blockchain is the domain where serious technologists should focus their attention.
Bitcoin vs blockchain
The problem with this emphasis-shift, says Veronika Kuett, mathematician, decentralisation enthusiast and product manager at Frankfurt School Blockchain Center, is that much of the same charlatanism that pervaded peak cryptomania has infected the blockchain debate.
There is a new breed of self-proclaimed ‘blockchain experts’ who oversell the technology’s disruptive potential, hook it onto fashionable technologies like AI and IoT, and sell it as the tool that will solve all of their problems. For these experts, maintaining an ideological distance from Bitcoin is a way of adding to their credibility.
But in reality, sectors have struggled to find problems that blockchain can solve. In finance, a sector where the usual cohort of consultancies tip blockchain to have the biggest impact, firms are struggling to integrate the technology into existing processes, and concerns about maintaining the privacy of transactions are proving hard to shake off. Organisations don’t want certain transactions to be visible to all stakeholders, yet as Stuart Burns recently argued, such secrecy “flies in the face of the classic blockchain ethos.”
Bitcoin, despite well-documented struggles with volatility and scalability, is actually a blockchain application that has successfully solved a financial problem. It’s an uncensorable decentralised nation-state independent payment network that enables the transfer of value, without the need for intermediaries. At TechWeek Frankfurt, Veronika Kuett will advocate that for this reason (and others) Bitcoin should be viewed as the ‘mother of all blockchain networks’.
“Hardly anyone who’s into blockchain knows that a technical problem has actually been solved, and if some people do know, hardly anyone what it is,” she says. “If you go to a corporate function, a maximum of 2 percent of people who call themselves blockchain experts even know this problem and that Bitcoin is the only existing network that hasn’t been hacked that actually works.”