Not so long ago, just before the 2008 crash in fact, the Quants disdainfully told the world that their algorithms and their application were just too difficult for the uninitiated to understand. We all know where that led. Now the same is happening with Bitcoin and other crypto currencies. It’s the same old story that “this time it’s different”. We leave it to your judgment. The following from Institutional Investor.
“The future of Bitcoin is not Bitcoin”
“In October several prominent figures in the Bitcoin development community launched a start-up to considerable fanfare in the technology and finance worlds. San Francisco - based Blockstream aims to take the encryption technology that Bitcoin is built upon - the blockchain - and improve it in ways that will, its founders say, ”transform global systems of value exchange”. The company calls these improvements sidechains.
But ask Austin Hill, chief executive and co-founder of Blockstream, to explain - in less than one minute and using terms intelligible to a lay audience – what sidechains are and how they might help institutional finance, and he launches into a meandering answer that begins, “I think the analogy that’s been used is the TCP/IP and routing infrastructure that existed before the consumer Internet”. By the time he has finished, six minutes later,he has dropped in unexplained references to “hash power,” the blockchain’s “hash rate,” “industrial mining centers” and “the SHA-256 algorithm” before concluding with a brief digression on how 98 percent of developers of alt.coins, or alternative, Bitcoin-like cryptocurrencies, are “attempting to pump and dump an asset class.” This, Hill says, confirms that there is a “Wolf of Wall Street - style dynamic at work in much of the Bitcoin world - referencing Martin Scorsese’s 2013 film about a corrupt stockbroker.”
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