Andreas Antonopoulos when addressing the O'Reilly Radar Summit on "Bitcoin and the Blockchain" on January 27th 2015 in San Francisco, said “When we end up with the subject ‘Bitcoin and the Blockchain’ for the conference-which is kind of edgy-we are hoping that if one works, maybe the other will work.
We are trying both to see what happens. And if one of them fails spectacularly ten years from now, we have the other on the title and we got it right”
In recent months, this observation seems to be receiving a lot of credence, albeit with a slight twist. Instead of waiting to see which of the two fails spectacularly, industry trends are illuminating the writings on the wall for Bitcoin; the currency.
As a matter of fact, Coindesk’s third quarter report of 2015, in its State of Bitcoin and Blockchain series, asserts that the “earlier hype surrounding bitcoin has been supplanted by the Blockchain and distributed ledgers”.
Apparently, that includes the number of times the words Bitcoin and Blockchain are googled.
Investors Prefer To Hear Blockchain
Explaining this unfolding scenario best, many argued that “the blockchain- the decentralized public ledger on which Bitcoin and other decentralized digital currencies run- just might have the opportunity to take off and change the way global, corporate payments are done, whether its sibling, bitcoin, comes along for the ride or not”
In an interview with Coindesk, Adam Draper, CEO of Boost VC, a venture firm that has invested in over 50 Bitcoin startups, has been quoted as saying investors don't want to hear the word Bitcoin.
"We use the word blockchain now. I say bitcoin, and they think that's the worst thing ever. It just feels like they put up a guard. Then, I switch to blockchain and they're very attentive and they're very interested."
Adam does not, however, give the reason for this new mantra of ‘we don't like Bitcoin, but we are interested in the Blockchain’. It is anyone’s guess that its origins could be the link Bitcoin has had with nefarious entities such as the Silk Road.
Another likely issue is the competition cryptocurrency brings to traditional payment methods. The latter could explain why Bitcoin is experiencing what can be described as sabotage or censorship.
In Australia, for instance, commercial banks are ceasing banking relationships with Bitcoin startups whilst eyeing off the latest Blockchain companies in the space.
Bitcoin - The Incentive For Blockchain
At the global level, Barclays, Citi and UBS are engaged in independent experiments or in partnerships with Blockchain startups.
BNP Paribas and Lloyds bank have published detailed reports on the Blockchain. While others like Goldman Sachs and BBVA have invested in Bitcoin companies with a bias towards the blockchain.
However, in the absence of a currency such as bitcoin, what will motivate miners to maintain the Blockchain? Nothing.
Like Adam Draper acknowledges, "Bitcoin and the blockchain are so interspersed together, the incentive structure of Blockchain is Bitcoin."
Written by Rupert Hackett
Rupert Hackett works for Global Internet Ventures, an Australian based investment and consultancy group developing multiple Bitcoin companies. Rupert is studying the world’s first Masters in Digital Currencies and regularly blogs for BuyaBitcoin.