“The best way to predict the futur is to invent it.” Alan Kay
Those words were written on a wall of the Miami Entrepreneurship Center. I went there for a BitCoin meetup last month. This event aimed to “create some buzz” through the gathering of many actors of this new “dotCom Eldorado”. But people agreed: there is more money invested in BitCoin at the current moment, than disruptive ideas per-see. Most of the products presented were mostly adaptation from the “traditional” market. The core of the disruption is inherited from BitCoin itself, or more generally, from the concept of crypto currency.
Why is BitCoin disruptive?
Taking the example of BitCoin, this currency provides for the first time anonymity, decentralization, and transparency simultaneously. These three aspects are quite of matter of interest in our world encountering major issues with privacy and its financial system. As I was arguing in my TEDx talk, the crisis we are facing is partly caused by an imbalance of connectivity between financial institutions; an imbalance creating too much centralization of power and destabilizing the global dynamics. If one solution would be to better regulate the connectivity, the conflict of interests are so big that it is pragmatically out of reach. BitCoin present an alternative: build a parallel system, which will balance the connectivity through distributed governance.
The dark face of the coin
Of course, BitCoin has been criticized about the anonymous aspect and its absence of centralized regulation. At the level of the users, this major problem is coined (;)) in the numbered of frauds or bitcoins robbery, and the impossibility to find the “bad guys.” Some startup bet on this issue by creating black lists of suspicious IPs. It provides an illusion of safety but this solution is far from being efficient when the bad guys can use proxy or change their IPs.
Another fear looming around BitCoin is the money laundry and funding of illegal activity. This is as an argument for a BitCoin law enforcement. The question becomes who is in charge of such regulation? The government? Of which country? If most of the newcomers in the BitCoin sphere see that as a business opportunity, others tend to see it the other way around. Regulation may also be an antibitcoin business. Most of the market is indeed focused on anonymous purchase, from the Silk road to lawyers.
Of course, as it has been said at the meetup: “They will do it anyway!”, and BitCoin regulation will probably convince more people to use BitCoin. This is a good news for business people but the philosophy behind crypto currency is far from advocating centralized regulation.
Crypto business and crypto politics
BitCoin is more a protocol or a philosophy than a digital currency. If its success attracts entrepreneurs, it does not necessarily mean they want to stick to the initial motivation behind this system. The mechanism of encryption is indeed two-fold: it guarantee the integrity of the transactions, but also is undecypherable with current technology (and even quantum computers can’t break the encryption algorithm). After the recent disclosure of PRISM, the political idea of crypto anarchism has gain interest. The core idea is indeed that freedom of speech requires privacy and anonymity. A good exemple are the whistleblowers, who risk a lot bringing into light some of the dark sides of our centralized governance.
Transparency, open data and open science
The question of governance is linked to transparency. Paradoxically, BitCoin manages a subtle combination of anonymity at the individual level and transparency at the global level: all transactions are encrypted, but also publicly available. Thus, anyone have access to the online registry, the so called blockchain. The whole system being in open data, it represents a wonderful opportunity for open science, and more precisely open economics. And since BitCoin is open source, it allows to run local experiments with custom crypto currencies. This is what triggered the most my curiosity. I was thus quite surprise that no open science project with BitCoin has been already launched. Some would argue that BitCoin itself is an experiment. I agree but all the data generated are far from being easily useable by scientists. So I have just created a public project “BitCoinGraph” on the Open Science Framework website. Anyone is much welcome to join! The initial goal is to reproduce the same analyses of the PLoS ONE paper “The network of global corporate control.” This will provide a nice comparison of the structure of centralized and decentralized financial systems (would be also neat to compare with the anatomical brain structure…), a quite hot issue for the future of our society…