A reporter named Golan, from a blog called New Digital Money wanted to interview me regarding this year’s prospects for bitcoin. Here is a copy of my responses to his questions:
1. What will 2014 be for cryptocurrencies?
2014 will be a defining year for crypto currencies. The Texas Bitcoin Conference is already kicking off with huge success right now. Techies and investors are talking about ways to innovate bitcoin and make it easier for the masses to use. The BitShares Developer’s Conference in July will be host to another round of super-nerds gathering to compete on projects that use the block chain technology in new and imaginative ways. If I can use an example from recent history, 2014 will be like the year everyone got AOL on dial-up and could suddenly access the internet. The mainstream crowd could now access what was formerly a game for nerds. The nerds will continue to innovate in ways these people can’t see coming, because what they’re building more closely resembles the internet of today, with HTML5. 2014 will see bitcoin come into its own, adopted more into the mainstream, and set the stage for 2015, when people will be ready to embrace block chain technology to solve other real-world problems, such as escrow and encrypted email services.
2. Exchange services help or hurt cryptocurrencies?
Exchange services help crypto-currencies. They provide a market for people to trade for things they want. The more places people can buy and sell what they want, the more liquid the currencies. Liquidity is key for any market. Blockchain.info’s recent acquisition of a Real Time Trading Platform will spell good news for exchanges this year. Hopefully we’ll see a leveling out of the volatility when more price information is aggregated in one place.
3. Are (or will) cryptocurrencies in war with international cooperatives?
Cryptocurrencies are not at war with anyone or any thing. They simply exist as a tool for exchanging value, and people find them useful. War would imply some sort of aggressive force, such as the force required to compel people to pay taxes. No such force exists in any crypto currency created to date. All crypto currencies of which I am aware are traded on a purely voluntary basis. Therefore, the only people who use them are people who believe they are better off for doing so.
4. Is there a way to reassure governments that Bitcoin is not an enemy? If so, how?
I wouldn’t try to reassure governments that bitcoin is not an enemy. It may be, in some respects. It returns control over their money to the people. It gives individuals the freedom to send money to any other individual without being obstructed by laws or borders. Governments exist to control people, and bitcoin gives people an escape from some of those controls. Bitcoin is even more of an existential threat to governments than most people realize because 1) it is a sound currency introduced into a world of doomed fiat currency, and 2) the block chain technology will empower individuals to depend on code rather than individuals. Trust in many traditional ways will become obsolete, and with it, trust in politicians, lawyers, and bankers, too.
5. Who would you like to see (portrait) next to the Bitcoin logo (from any time in history)?
I don’t want to see an person’s face next to the Bitcoin logo. I trust in the soundness of the code and cryptography, not in individuals.
6. Do we have to much ‘coins’? (http://coinmarketcap.com/)?
People think that the explosion in the number of “alt-coins” is a bad thing, but I say give me more! Each new alt-coin offers something different, building on the designs of their predecessors, and going through the endless trial and error of serving a market. Do crypto users want digital money with proof of work, or proof of stake? Questions like these may seem technical today, but this is how we describe the different features offered by the different currencies.
Unlike paper money, code-able money is an instrument, a tool that can be upgraded. It can be re-tooled and improved. All of this can be done without anyone having to turn in their old notes and get issued new ones. It’s an entirely new way to think about money, and in some ways, it’s old. It used to be that anyone could issue bank notes and trade them as currency. The banks with solid business practices thrived, while the banks with poor habits or little utility failed. Saying there are too many coins would be worse than saying there are too many flavors of ice cream, it is to cut off the possibility of ever innovating ice-cream into a sandwich or a root-beer float. The next big innovation in blockchain technology will come from experimentation in the alt-coin realm.
Yours in peace,
Derrick J Freeman