Bitcoin
A client asked me this week whether his company should accept Bitcoin. It crossed a thousand dollars last month. This week China’s central bank told its banks to stay away from it — which, in my experience, is the kind of announcement that makes a new thing more interesting, not less. He wanted a yes or a no. I gave him an education instead, which is the consultant’s oldest dodge.
Here is what it actually is, stripped down: a ledger that nobody owns. Thousands of computers keep copies of the same record book and settle which copy is true by mathematics instead of by meeting. No bank in the middle. No center to call. I have spent my career in the center business — mainframes, then data centers, then the cloud — and Bitcoin is the first serious technology I have met that asks what happens if you delete the center entirely.
The honest problems are also plain. The price moves like a rumor. The wallets are easy to lose and impossible to un-lose. Half the exchanges look like they were built in a dorm room, because they were. My client should not accept it this quarter. Almost nobody should. Yet.
But I have filed the whitepaper — nine pages, 2008, signed by a pseudonym — with the documents I re-read every year. The internet did to publishing what this proposes to do to settlement. Ideas like that do not need my permission, and they do not usually ask twice. I told the client: not yet. I did not tell him never.