Historical background, revealing context and prescient vision were presented on blockchain and Bitcoin at a recent Tampa Bay conference entitled, “The Past, Present and Future of Blockchain and Crypto.” These components are greatly needed in the current discussions and warnings being bandied about by Congress, Wall Street, regulators and now Main Street, thanks to all the sound and fury. But does all this signify nothing?

Three Tampa Bay entrepreneurial ecosystem leaders BlockSpaces, High Tech Connect, and Masterminds Tampa organized and called forth this event to recognize that, at the core of all this rhetoric, there is a tale told by technologists and data scientists. It is an important perspective addressing major challenges and needs that will drive the future, and will affect our businesses and lives. Unfortunately there are elements of the current discussions that confuse the conversation or deflect attention away from bottom-line issues and very real solutions.

The Conference did a great job of setting the record straight for a proper context for discussions of blockchain and cryptocurrencies. The following are some highlights:

The Past

Why created and by whom? Despite the alluring origin story of Bitcoin’s creator being a mysterious individual, Satoshi Nakamoto, or that name being the pseudonym of a merry band of really smart computer scientists and cryptographers, this history to myth to legend nature of its story should not overtake the major point of its history. Enough cannot be said about Bitcoin, a cryptocurrency, directly being created in response to the 2008 financial crisis with its near global banking system failure. It really is quite amazing that Bitcoin is, essentially, a network of people—a rather large network of people (now estimated as to 32 million globally) that stopped believing in the “full faith and credit” of any government and its paper fiat money as a store of value.  In a bold act of defiance and creativity, they got up and started their own “currency” that was built by combining a group of technologies in a novel way to create this blockchain digital ledger technology that immortalizes and secures value of all kinds.  

Incumbent reaction. As true of most new disruptive innovations and the uprisings behind them, the initial response was one of vehement dismissiveness and downright scorn from leaders throughout the incumbent financial system. Disruption means loss of profits and the potential of going out of business; others fear the consequences of the US dollar losing its place as the reserve currency in the world.

Bitcoin evolution. The first recorded Bitcoin transaction on 5/22/2010 was for two pizzas which rapidly grew into an active promotion for merchant adoption across the global economy. Concerns quickly developed on its use to fund illegal activities on the SilkRoad, a dark shadowy realm on the web. In the early years, it was not known how to track activity on the blockchain as well as they do now. Bitcoin was then getting recognition as a tradeable asset. It was pointed out that there is a finite amount of Bitcoin—only 21 million Bitcoin in existence are hard coded into the source code of the currency (unlike fiat currency which can print infinite amounts of paper). It was pointed out that digital currency does exist—not tangibly to pick up—but as information of value on the Internet that is verifiable, quantifiable, and exists as an amount. People started realizing how to use this fact by creating exchanges where Bitcoin and other cryptocurrencies can be bought and sold; where they would trade as an asset, like stocks or bonds. So for many people, the initial interaction with the blockchain space was over this viable, sellable asset that they could potentially buy low and sell high.

2017 had a massive bull run with Bitcoin going to $20,000/Bitcoin with massive hype versus reality going on. It is unfortunate that most people new to blockchain and cryptocurrrencies were introduced in a ridiculous environment driven by different altcoins and crazy scams. That is a shame because it is so much more important to understand the underlying technology and how that technology is going to be radically changing all of our lives—how it is a foundational technology that we will all have to deal with in some manner, shape or form in the coming future. This has been lost in all the hyperbole and speculation.

Blockchain technology. The underlying technology of Bitcoin—the protocol that holds Bitcoin—is really a combination of a lot of really old technologies that were combined in a unique way, such as, time-stamping of digital documents created in early 1990’s by computer scientists which help create a train of “providence” for these digital documents.

Centralized vs. decentralized systems. We always tend to think in terms of centralized systems that have an intermediary to transactions that establishes trust, like a bank. Blockchain technology allows us to have that kind of interaction in a decentralized environment backed by many entities or participants in the chain that are confirming all transactions on the ledger. It was explained that what centralization means or represents—to be basic about it—is an unfair advantage to a certain player or group of people that are part of the game. If the underlying playing field is decentralized, pretty much anyone can play that game and conduct business fairly -no one has a competitive advantage. Decentralization takes the ownership of the data away from one or a small group of people so someone can’t bring in counterfeits or make illegal changes to the data, to the numbers.

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