Nations, banks, and the private sector are on fire over the promise of adopting Bitcoin’s blockchain technology for their own gain. It is simply faster, more secure, and more cost efficient than the ancient systems still in use today. It is a real step into the future of technology, and everyone wants the superior technology, even your nearby Fortune 100 multi-national corporation. While this may be a step forward for the establishment, does this diminish the luster of Bitcoin’s original blockchain? Not at all! It actually highlights its natural superiority. Here are five reasons why.
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Reason #1 - Trust
The key to Bitcoin’s success is the user’s trust in a global decentralized, open-source network. Let’s say a nation that has debased their currency for decades creates a new digital currency knock-off that they can control and manipulate. Why should a citizen trust them over the original blockchain? Not only will a nation have to sell a citizen on the idea of using and trusting cryptocurrencies, but also that they can manage it, after proving over generations that they can’t handle money to begin with.
Take something people don’t understand and add people the citizens don’t trust, putting their hands in the cookie jar. If a nation’s people are going to accept a new economic system, they’d want to have more input, not just make it more complicated. That would undermine what little trust people still have in “The system.” applying the failed fiat currency principles to digital currency is a losing formula when it comes to the public trust.
Reason #2 - Innovation
With altcoins, side chains, and BIPs, the entire Bitcoin community is always looking to innovate and improve the system. Closed-networks that will be the heart of privatized blockchains will have a core hell bent on control, with a limited ability to innovate. Two heads are better than one, and private blockchains will close off the avenues to fresh ideas and improvement. Think of your office “Intranet.” It takes the global Internet, removes the innovation and external options, and adds massive amounts of control. We’ve been down this road before, and it didn’t work at scale. The Internet did. Another advantage for “The Internet of Money.”
Reason #3 - Easily Corrupted From The Inside
If a corporation creates an altcoin, or a nation creates a digital currency, why wouldn’t they create something that serves their interest, and not the greater good? Nations print more money when they want war. Why would this stop with a digital currency? If one person controls these private networks, they can be easily corrupted or manipulated, a flaw Bitcoin does not have baked into the cake. This is probably the main reason Satoshi Nakamoto removed himself from the space, to protect its long-term integrity. Integrity is not something private organizations, or national governments, care about. They care about monetization.
Reason #4 - No Incentives for The Consumer
If the private blockchain can be manipulated to no end, and will adopt failed economics from the legacy banking system, by the legacy banking system, why should anyone outside use it? If you go to a bank, maybe in 5 years, they can do a wire transfer in an hour, no 3 days. Big deal! Bitcoin does it in ten minutes today. Governments, banks, and private sectors take so long to regulate and update their metrics, they can never match the speed and freedom the original blockchain affords. It makes the establishment somewhat more efficient, but still several steps behind Bitcoin.
Reason #5 - No Honor Amongst Thieves
In Bitcoin, there is a basic underlying need for the protocol and global system to work. Its total value helps all users gain value, in the long-run. Banks working with a consortium have accountability to the stockholders. It’s all about showing a return or profit. They all compete against each other. There is no “greater good,” in practice or in mentality. If one bank actually came up with a real innovation, they rather break off of the consortium and start their own system to monetize it than give it away. Like a stand-up comic who is paid by another comic to write him jokes. If the paid writer comes up with something really good, do you think he’s going to give it away, or will he keep it for his own act for his show next week? Think about it.
Bitcoin can never die because the system is open-source, global, decentralized, and has a limited unit structure no one entity can corrupt. It is constantly growing, learning and innovating. Private blockchains would have none of these features, or advantages. Again, with office “intranets” versus the global Internet, we’ve seen this movie before, and know who wins in the end. When the establishment refuses to learn from history, they are doomed to repeat it.