Rethinking cryptocurrency
I’m still unsure about bitcoins’ uncertain future as far as mainstream adoption is concerned, but such issues have been hogging media limelight so much so that people are missing out on why bitcoins are actually awesome. They’re not awesome because they’re worth about $800 apiece (at the time of writing this) or because they threaten to trivialize the existence of banks. These concerns have nothing to do with bitcoins – they’re simply anti-establishment frustrations in post-recession era. Bitcoins, and other cryptocurrencies like it, are awesome because of their technical framework which enables:
- Public verification of validity (as opposed to third-party verification)
- Zero transaction costs (although this is likely to change)
Thinking about bitcoins as alternatives to dollars only five years into the cryptycurrency’s existence is stupid. Even scoffing at how steep the learning curve is (to learn about how to acquire and moblize bitcoins) is stupid. Instead, what we must be focusing on are the characteristics of the technology that makes the two mentioned techniques possible because they have great reformative potential in a country like India (if adopted correctly, which I suppose is a subjective ideal, but hey). Zero transaction costs enable individual and small enterprises to avoid painful scaling costs, while public verification enables only value to be transferred across a network instead of forcing two parties to share information unrelated ot the transaction itself with a bank, etc. Here’s my OpEd on this idea for The Hindu.
