Inside Bitcoin: The Majors Versus the Miners?



In 1993, Alan Meckler held his first Internet World expo at the Javits Center. Three hundred people and eight exhibitors showed up. Three years later, he was hosting Internet World Expos in 20 countries.

When Meckler organized his first Bitcoin conference in New York last July, 150 people and 30 exhibitors showed up. This past week, his Inside Bitcoin Conference and Expo at the Javits Center drew 2000 attendees from 30 countries and 38 states.

So you think there might be something to this Internet thing?

“This is the first time in history there is a system of storing value in an open source, completely distributed, decentralized system,” said keynote speaker Jeremy Allaire, former CTO of Macromedia, founder of Brightcove and most recently, founder of Circle, a company building digital currency products for end-users, businesses and charities. “This is as significant as the birth of the web or email.”

It’s tempting to draw parallels between the birth of the web and the emergence of Bitcoin, which is how Allaire explains the lack of mainstream adoption.

“There’s no ‘Netscape browser.’ No killer app that makes it accessible and usable for the general public,” said Allaire.

But the issues are larger and the stakes potentially higher than what Allaire infers.

The volume of transactions is presently tiny, and consists mostly of trades rather than ecommerce. 90% of Bitcoin buyers hold the currency as an investment, he noted. Allaire suggested that the banks and payment processors will need to get involved and that a hybrid economy is critical.

In other words, he was calling for more transparent layers that would make Bitcoin accessible to consumers – and for more controls.

“When the money gets into the trillions, governments will get involved to protect against mining cartels,” he added. “ATMs are also vital. Right now, they’re mostly in garages.”

Which is also pretty much where the internet-based industry as we know it began as well.

Given the present state of the global economy and that the communications layer of the internet has morphed into a surveillance layer, it’s no wonder that there’s a strong faction in the Bitcoin community that rails against government oversight – and government intervention. In Allaire’s world, Bitcoin must move away from its libertarian and anarchistic roots and towards regulations: government controls must be put into place so that hybrid traditional currency/Bitcoin currencies can evolve.

“$6 billion was ‘lost’ by the State Department in Iraq,” Austin Alexander, Deputy Director at Bitcoin Center NYC, noted on the next panel. “The Pentagon ‘lost’ a trillion. And there is no audit of the Federal Reserve. We need to add accountability to government.” He suggested that the block chain could slow down that loss, too. “In Brazil, there’s a law that the government must publish all government financial dealings. They publish it as a jpeg – it’s impossible to search.”

Maybe it is 1994 from Allaire’s point of view, but this time around, we may be wise to take it as a head’s up to watch the watchers.

About the author: AlleyWatch

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