Reflections on Bitcoin – 3

Posted by John Patrick on

Bitcoin

This week on CNBC, Warren Buffett said that Bitcoin is a joke. Once again, this reminds me of 1995 when many pundits said the World Wide Web was a joke. Needless to say, many of them had a stake in the status quo. I remain bullish about the future of Bitcoin as a transaction platform. I believe this view is consistent with the evolution of the Internet. In the beginning, the Internet was a simple communications network that allowed messages or files to be transferred from one computer to another. The World Wide Web was built on top of that underlying infrastructure. Then along came e-commerce, which was an additional layer built on top of the web. This was followed by social media, which was another layer, and now we have Bitcoin, which is providing a payment, currency, and contracts platform as another layer. It is certainly possible that Bitcoin could go the way of Napster, but I believe the grassroots is gaining momentum.

The press does not quite get what Bitcoin is about yet. Last wee, the New York Times Bits Daily reported “Mystery Swirls Around Unmasking of Bitcoin Inventor ” A much more relevant news item would have been to invite an expert on cryptography from MIT and get their opinion about the strengths and weaknesses of the Bitcoin platform. Another newsworthy interview would be with the folks at Coinbase, which reported they now have more than 1 million digital wallets. This past week Coinbase announced that Pounce, a retail mobile purchasing app, will allow consumers to shop at Lord & Taylor and other retail firms, and pay for their purchases with Bitcoin. The Coinbase announcements are signs of adoption, which will be the key to success or failure for Bitcoin. Some were not happy with my prior comments that we need some light regulation, but I still stick behind that notion – not that I like regulation, but without the light dose, regulators may attempt to handcuff the Bitcoin innovation. See other patrickWeb posts about Bitcoin here.

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