The word revolution comes from the latin revolutio, meaning a turn around. It could mean a modification of an existing constitution, or a complete change of it. However, revolution is almost always understood as a quick change. And that is exactly where my pitfall detector starts ringing.
In recent months we have seen many claims of "revolutionary" developments and technologies in the crypto scene. Next to a plethora of new coins being announced, there are also organizations claiming to have “the next big thing”. The many new hypes are often flashy enough to woo a great amount of users of cryptocurrency into investing their coins into these ventures.
Along with many revolutions that have happened in human history came not only rapid, significant changes in (geo)politics and social situations, yet most often also systemic instability and insecurity, loss of cultural identity, and destruction of value. Pitfalls, many of them historically documented, that come back with every revolution. And these mass-behavioural cycles, in circling back to zero, oust unwanted elements out of a system. What can we deduce from this? Revolution also means reinvention and reset, and the effects of this are not solely beneficial.
Evolution, on the other hand, is less often highlighted in social and cultural contexts. And yet in a manner of speech we often refer to positive development processes in society and in our cultures as evolutionary ones. Nature itself contains many forms of evolution and progression, and it forms a prime example for our own development.
When weighing evolution versus revolution, the Internet of Coins team has decided on attempting to navigate a more long term route. Instead of simply declaring another revolution, they seem to rather declare an evolution aimed at augmenting technologies that are already out there. It is the announcement of a project that is aimed at organic growth. Not reinventing wheels, but rather enhancing the current state of money-like informational commodities we call crypto currency.
It is possible to bring change step-by-step. To replace the current financial structure all of the crypto currency enthousiasts together need to create something so useful that it makes the current systems obsolete. This movement and the work it encompasses are of such magnitude that it cannot be done overnight. So we may want to choose our positions wisely
With the Internet of Coins project and the other decentralized options out there it may become realistic to start adding stability and overall constructive development to the cryptosphere. Together making strides towards being evolutionary, instead of just revolutionary.
The current decline of alt-coins has recently been on my mind a lot. As has been the marginalization of many of these coins. Some of them have great concepts, for example Datacoin. So what is going on with these coins, and what to do about them? (also featured on CoinTelegraph)
For the past eight months I have been running my own trading bot called Project Stormwind. It is a bot that performs arbitrage across the board of seven exchanges and many different types of cryptocurrencies. It is supposed to identify pumps-and-dumps in the market and tries to invest capital to stop these from destabilizing the currency by returning the price action to average levels. While the trading engine makes a profit, the overall value of the alt-coins it trades has measurably and steadily been declining.
It can also be seen on the charts that the collective value of most of the coins has been dwindling. Would this leave Bitcoin as the only cryptocurrency to become successful? Some avid Bitcoin fans would have us believe this. It reminds me of a history I once read of the development of bank notes in the United States.
An essay in the spirit of the Friesian School on www.friesian.com says: National Bank Notes were established by the National Banking Act of 1863. This was done to raise money for the federal government, since it required that National Banks that wished to issue banknotes deposit United States Securities with the Treasury as backing for the notes. This effectively multiplied the money with which such securities were purchased, turning the money itself over to the Treasury, for its purposes, but then enabling the banks to issue currency against it. The desire of the federal government to monopolize banknotes is evident in the tax that was subsequently levied on all banknotes issued by State banks.
Although this development much differs from what we see happening in cryptocurrencies today, there is a similarity in the way value flows from 'independent' initiatives in digital cash back to the cryptocurrency-to-rule-them-all: Bitcoin. There may be many reasons for this, beside Bitcoin being perceived by a lot of traders as the reserve cryptocurrency, and I do not pretend to know each and every one of them. Still, I want to explore some directions I think this can take us, and contemplate on the concept of creating an Internet of Coins.
Bitcoin is being tempered with legislative action as of late in the United States and other parts of the world. Regulating Bitcoin is impossible according to some, however, the fact that Bitcoins are pseudonymous makes a good case for government to have power over it nonetheless. Spending from non-identified addresses could made illegal for businesses wanting to accept cryptocurrency, and this would severly hamper the adoption of Bitcoin. An immutable public ledger can be abused by governing powers and used to start a campaign for identifying its users.
What we need to stay free from this is further decentralization of the cryptosphere, but this also causes fragmentation and isolation. And that is what we see happening right now. Cryptocurrencies that become marginalized lose value because they cater only to speculators. A cryptocurrency cannot live on speculation alone. It needs a market of diverse elements to thrive.
During the development of the world-wide-web we saw many different ideas and technologies taking shape and making a niche for themselves. However, what made the Internet so powerful was the way in which all these technologies became integrated, empowering eachother its users. Up to today this has never stopped. Some concepts like Gopher, for example, have become marginalized, but are still in use by many across the globe today. My hope is for many marginalized alt-coins to be as resilient in the years to come.
We mustn't forget the diversity of the Internet is often threatened by large companies trying to take a large slice of its market by enticing netizens to use their centralized services. So the same will most likely happen in the world of cryptocurrencies. We must already be thinking right now about how to protect the cryptosphere from becoming just a plateau of monoliths.
So how can we further decentralize the cryptosphere without spreading its benefits too thin and destroying its potential? My take on it is integration of technologies. In the past years we have seen a lot of innovation, and a multitude of blockchains spring forth from this. We have seen the implementation of innovative concepts from being your own bank, to distributed assets, and running decentralized applications.
To make sure we can benefit from all this in the future, now is the time to tie it all together and shape it into a coherent, useful and decentralized philosophy. Now is the time to integrate the greater and smaller technologies. To look beyond your own blockchain, and look towards The Internet of Coins.