Innovation

Blockchain believers

It’s been a wild ride for cryptocurrencies, which, at times last year, resembled a raucous church service. Why all the noise?

13 March 2018

If you believe money to be humanity’s greatest invention, then cryptocurrencies must come a close second. It has only been nine years and a few months since Satoshi Nakamoto published ‘Bitcoin: A Peer-to- Peer Electronic Cash System’, and look at where we are: hundreds of cryptocurrencies, a futures market and billions raised from initial coin offerings. There has also been a steep rise in the number of Bitcoin obituaries, and by one measure, 236 articles (and counting) have predicted its demise. How did it come to this? With all the noise, who do you believe? As South African writer Gus Silber put it in a tweet just before Christmas: “One day, when the history of Bitcoin is written, it will consist entirely of people shouting, ‘I told you so!’ at each other.”

Part of the problem is that getting your head around the technical aspects of blockchain and cryptocurrencies is quite hard and it seems that much of the investment – the total market cap is around $500 billion – has taken place without a deep understanding of the technology. Many people rely on someone who understands the technology, and if they’re wrong, you’ll hardly be in a position to complain. Greed among investors also appears to have played a part, at least towards the end of 2017.

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