As the mainstream media starts to accept the fact that Bitcoin is here to stay, some in the space have started to laud the potential of the blockchain while continuing to eschew the idea of Bitcoin-the-drug-money being anywhere involved. It is difficult to talk blockchains (Satoshi called it a block chain) without fully understanding Bitcoin – and I believe that much of the confusion stems from this issue. This past month, the BayPay Forum hosted a panel at the Gem headquarters in Venice, CA.
The panel was moderated by BayPay Forum’s managing director, Daniel Chatelain, and the panelists included GoCoin’s Steve Beareguard, Airbitz’s Paul Puey, Merge Capital Partner’s Alysse Killeen, and Gem’s COO Ken Miller. Gem provided the event with a home, drinks, and catchy “I am Satoshi” shirts. As one of the leading sources of Bitcoin analysis and opinion, Bitcorati seeks to provide coverage of all Bitcoin events (If you can provide coverage of an event that we are unable to attend, please email email@example.com to submit an article for publication).
Are Bitcoin and its Blockchain “Separate-able?”
The short answer is: No. Separating Bitcoin and its blockchain into separate parts is great for admiring the technological achievement and its very volatile manifestation; however, a good analogy was touched upon at the event. Steve Beareguard explained how he saw the Bitcoin vs the blockchain debate. He explained it as such:
“Bitcoin is the Model T, but the blockchain is the wheel.”
Airbitz’s CEO Paul Puey was quick to grab the microphone and add to the analogy. Paul emphasized that while yes there is no (model T) Bitcoin without the (wheel) blockchain, the reverse is also true. There is no usable Bitcoin blockchain without Bitcoin and all of its rules. You can’t take any ol’ blockchain and compare it to the Bitcoin blockchain. The differentiation is slight, and while there are many in the space dedicating time and effort to creating the blockchain that replaces the Bitcoin blockchain, the mainstream media probably only has the capacity to comprehend one blockchain – as we have seen from past reporting. It is of the utmost importance to make sure that people understand that there is no Bitcoin without the blockchain; furthermore, the blockchain – sans bitcoin – that you hear about is still likely the Bitcoin blockchain. However, Steve’s analogy is still accurate. If in the future, we are using a new digital currency that isn’t Bitcoin – it will still most certainly be running on a blockchain.
While answering the questions asked by the moderator, the Bitcoin panelists were able to identify problems that have stymied Bitcoin adoption. Issues such as merchant adoption, consumer adoption, perceived security of the network, and whatnot. Of course, the CEOs on the stage had long since been working on plans to change these externalities, and hearing about these possible solutions first hand was one of the highlights of the event.
GoCoin Remains Committed to Merchant Processing – Calls Out Coinbase and BitPay
GoCoin CEO Steve Beareguard emphasized that the merchant processing space in the Bitcoin world was becoming more empty. He commented that BitPay had moved on to the development side of things while Coinbase had moved on to become a genuine international exchange. The numbers on their respective merchant processing programs have never been the main cash cow for BitPay or Coinbase; however, Steve emphasized that GoCoin was staying in the space, especially with their newest partnership with Ziftrcoin. Ziftrcoin would be used as a coupon for the merchant and theoretically incentivize merchants to accept cryptocurrencies: Bitcoin or Ziftrcoin. GoCoin’s merchant processing has always been different than Coinbase’s and BitPay’s because GoCoin also accepts Litecoin and Dogecoin.
Airbitz and Gem also talked heavily about their evolving position within the digital currency industry and what the next advancements would be. Airbitz has been on a recent hiring spree and has received funding. Both Paul Puey and Ken Miller emphasized that security was key. While Gem has gone forward with hardware security modules (HSMs), Airbitz is looking into Trusted Execution Environments (TEEs).
Will the Bitcoin Blockchain Stay the Biggest or Most Used?
On that note, Bitcorati believes that the Bitcoin blockchain block size needs to be increased in order to reach an ideal level of use. With the 1 megabyte block size limit imposed by Satoshi Nakamoto, there is also a roughly 7 transactions per second limit that the Bitocin network reaches. In fact, given the way that transactions with multiple inputs are formed, a 1 mb block size actually keeps the Bitcoin network well under 7 transactions per second.
In the real world of cryptocurrency, there are a growing handful of companies in the space that have made a name for themselves by being notoriously unfriendly towards altcoins. While Coinbase might employ Litecoin’s founder Charlie Lee, the California Bitcoin company still only works with Bitcoin, and by extension: the Bitcoin blockchain. Other companies around the world, such as Huobi, are more open to Litecoin and other digital currencies. Companies such as Gem, which offer world class security and ease-of-use for digital currency developers at Bitcoin and non-Bitcoin companies, are technically “blockchain-agnostic,” though they almost always start off with a Bitcoin only product. What people around the world are now beginning to realize is that blockchains are here to stay – whether or not Bitcoin as we know it today will be the most used blockchain ten years from now remains to be seen.