The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world.
Start your week with The Blockchain Bitcoin & Crypto Weekly CXO Briefing in your email by 7am CET. It should take you 5-10 minutes to read properly (and a minute or less to skim if it is one of those crazy Mondays).
You owe it to yourself to invest 5-10 minutes a week to learn about the technology that will change your company, your career and your world. Don’t get blindsided by important news from the Blockchain Bitcoin & Crypto world. Be in the know and in the flow – without getting stuck in the weeds.
Each week we select 3 news items that matter. We keep it to 3 because we know that you are busy. If it is a big news week, it is our job to find the 3 news stories that matter so that you get a high signal to noise ratio. We give you the news in one sentence and link to the announcement.
For each news item we offer News Decrypted, which explains why investors, bankers and entrepreneurs should take notice. We include a Glossary if we have to mention some critical jargon (which will be marked in red like this). Finally we offer Our Take on the underlying trends represented by this news and “where the puck is headed”.
In addition to 3 news items, we select one analysis/opinion/insight piece each week that we think is excellent or a controversial subject that is being debated in some forum.
Our point of view is that all three are important – Blockchain Bitcoin & Crypto. There can be private, permissioned Blockchains without any Bitcoin or any other Cryptocurrency. There can also be Cryptocurrencies other than Bitcoin (Altcoins) and distributed ledgers that use some form of Crypto other than Blockchain. We cover them all.
In this first post, we are tracking news for a bit longer than a week as we are in catch up mode:
News Decrypted: This could be the last bloody battle in the Bitcoin Civil War. A major Bitcoin miner (Bitmain) who has been backing the breakaway group (called Bitcoin Unlimited) has filed for a patent to a technology called ASICBOOST that would be harmed if Bitcoin used a technology called SegWit.
Glossary. SegWit is shorthand for Segregated Witness. It enables signatures to be kept outside the Bitcoin block (which matters if you don’t want to increase the block size and that is the technical issue at the heart of what is referred to as the Bitcoin Civil War). Think of this like keeping signatures on a check outside the core banking system (which only records that a signature was received and points to the system where evidence of that signature is stored). This becomes more important now that MultiSig means more signatures.
Glossary. MultiSig is shorthand for Multiple Signatures. This is critical to fraud prevention. It means that more than one person is needed to release a transaction (payment or other value exchange), just like in old-fashioned banking/payments systems.
Our Take. The ASICBOOST patent is filed in China (which raises doubts about its enforceability). More importantly it raises doubt about the intellectual credibility of those opposing Segwit and other Bitcoin Core approaches to scaling (for our decrypted take on Bitcoin scaling challenges please read this).
This could be the last bloody battle in the Bitcoin Civil War. The war has to end for Bitcoin to move forward. A hard fork would be “game over” for Bitcoin, Blockchain and Crypto. Obviously this news can be interpreted in different ways. The Bitcoin price action in the weeks and months to come will be the wisdom of the crowd that will tell us who is winning this argument. I am putting my belief on the line by launching The Blockchain Bitcoin & Crypto Weekly CXO Briefing this week. If I thought that a hard fork was likely and that everything Blockchain Bitcoin & Crypto would be relegated to the dustbin of history, I would be foolish to do this.
News Decrypted: Many Bitcoin enthusiasts love the transparency that is enabled by every transaction being publicly visible on the Blockchain. That transparency does not work for enterprises that thrive on proprietary data, secrecy and control. Nor does it work for those individuals who, for whatever reason, don’t want anybody being able to see their transaction. Blockstream, a VC funded venture, offers “cryptographically-enforced confidentiality” (translation = hard to hack). Blocksteam is a driving force behind the idea of Sidechains, which is an alternative to a Turing Complete Blockchain platform such as Ethereum. Blockstream, via Confidential Assets, aims to offer the benefits of transparency – that transactions can be publicly verified to be accurate – without losing the benefits of privacy, by giving control to individuals who can selectively disclose the hidden asset values and types.
Glossary. Sidechains is the idea of taking a Bitcoin transaction and sending it off to anther system where some additional processing can be done. The idea is to keep the core Bitcoin transaction processing simple (which tends to mean cheap, fast and reliable) while enabling each transaction to be programmable.
Glossary. Turing Complete means you can run application code on a platform. That is why Ethereum is such an ambitious project; it is a decentralised operating system.
- This could be a blow to Z Cash, Monero and other Altcoins selling anonymity.
- This could be a blow to Ethereum as it will boost the idea of Sidechains as an alternative way to have programmable transactions.
- This could be a boost for Bitcoin as it will overcome one of the perceived weaknesses (lack of privacy).
- This signals a more commercial Bitcoin, with VC funded companies like Blockstream making the big moves. The price for this commercialisation is greater centralization and less control by individuals (unless they invest time and money to get that control), but the commercialisation is probably needed for Bitcoin to go mainstream.
News Decrypted: Legality is essential to any move to the mainstream. The issues are complex and this has been debated a lot in many countries. It is natural for politicians to fear the lack of control, but there is also the increasing recognition that being bitcoin friendly can drive innovation, productivity, jobs and a higher standard of living. So when one of the biggest economies in the world does this, it is a seriously big deal.
Our Take: This is another sign of something that took most people by surprise, which is that Bitcoin adoption is happening first in countries with strong currencies and fairly good governance. Many people were drawn to Bitcoin by dreams of stateless trust based on math replacing more authoritarian governance. So the meme got established that Bitcoin would first go mainstream in countries like Argentina; we debunked that theory here.
We spotted the trend towards wealthy countries adopting bitcoin first in Switzerland and now the news from Japan indicates that exactly the opposite of what pundits expected is coming to pass – mainstream adoption happens first in a country where citizens have an unusually high amount of trust in their currency and the government that issues the currency. Here is our review of Bitcoin in Japan.
Opinion of the week
Why pay attention: because Fred Wilson is a VC with a great track record, who is very thoughtful and who has made many bets in Bitcoin ventures, including Coinbase. Cynical counterpoint: he is just talking his book
Bernard Lunn is a Fintech thought-leader and deal-maker
Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.