Bitcoin is rapidly becoming a collector’s item, exhibited by the flash brigade and horded for the ‘big sell’ by the peer-to-peer dealers. But the artform has moved on in the hands of the cryptographic followers of the Nakamoto master. ‘Process infrastructure’ has become the new focus to titillate the cognoscenti.
Fine, so the ubiquitous Bitcoin is out of fashion and the technology is now being pursued by ‘miners’ sustaining the hype for the myopic to sink substantial sums of flat money into enhanced processing power. However, the incestuous nature of this algorithmic elite will mean that they will be unable to depart from their comfort zone and, despite the emergence of copycat Bitcoin ventures, the concept as it stands will eventually stagnate. The history of applied technology has shown that closed-loop technological innovations superimposed on ‘real’ applications lack credibility. Blind ego or intransigent avarice are often the motivating force behind these creations and Bitcoin could be said to fall into this category.
There is undoubtedly a need for an alternative approach to traditional banking and perhaps the Bitcoin experience will be a catalyst for more constructive thinking in the world of applied finance. Established high-end technologies in the communications sector are clearly in the frame so, maybe soon, one of them will take the initiative to mount a ground-breaking collaborative venture with the banking fraternity. Tim Cook of Apple has announced this week the impending launch of Apple Pay which has undoubtedly tweaked the ears of leading financial players. There is still a difficult road ahead however for any venture that seeks to address the question of regulation in order to create a fully fledged virtual bank.
Further reading: Bitcoin: Trash or trophy?