Here is some thoughts on Bitcoin, Blockchain, Ethereum and TheDAO, risks involved and the driving power of money.
The Fintech Bubble by Joi Ito calls for "as
many of us as possible [to] focus on the infrastructure and the
opportunities at the lowest layers of this stack we are trying to
build." The article points out that it might be a bad idea to build
castles on top of slippery ground that needs to be properly secured
before putting too much pressure on it. This is a good thing to keep in
mind, but learning fast is the positive side to having a lot of
interesting and ambitious activity in the application layer. If
everybody involved keeps a close eye on how much risk he or she can
personally take, I think that learning fast even if it involves failing
is a good thing to do. Chances are that being quick is necessary to
"completely reinvent the nature of money and accounting". If regulation
and big names in the money business should really catch up they will try
to defend their assets. This has a lot of potential to get in the way
of strengthening and exploring the blockchain.
Why do we need learning?
As
we have no final idea how the layers in block chain tech should be
organized to optimize for robustness, adaptability and ease of
understanding/using the technology, it won't work out to get things
right without experiments in applications. There will be fails, major
ones likely, before the platform or landscape of platforms has settled.
Comparing early blockchain to early internet is a fruitful point of view
but you need to keep in mind that the link to money is much more direct
for the blockchain and the link to user applications is less direct for
blockchain tech. This makes for a very much different risk profile.
Blockchain, Coins, Platforms for distributed consensus dig into the
major conflict between centralized and decentralized infrastructure and
are dealing with assets that convert to fiat currencies instantly. Hope
and greed at scale will always have a seat at this table and everyone
involved needs to find his very personal balance for investing time and
money.
Is risk realized a bad thing?
No
it is not. There is no doubt, whenever some risk materializes. it
hurts. Someone will be in pain and needs to ask: Could I have known this
to avoid the trouble I got myself into. This is learning and it is
never more direct as in moments of great clearity when you lost a sum of
money recently. If you take risk you better know that you can handle
it. That said we should remember that money is not lost but changes
hands. Blown investments are one of the more efficient mechanisms to
transfer money from the relatively wealthy to those who invested time
and devotion. This is why we should continue to aggressively evaluate
the problem landscape for fast learning while embracing and controlling
risk at the personal and corporate level.
