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Three Possible Ways to Destroy Bitcoin

Sead Fadilpašić
Last updated: | 2 min read

Nine years after Satoshi Nakamoto came up with Bitcoin, it is by far the biggest cryptocurrency we have. But since success breeds competition, Bitcoin could well be made redundant by copycats in three scenarios brought to us by TechnologyReview.

Source: iStock/ismagilov

The first option would be a government takeover. Not too unlikely to happen, given that many government officials, especially in the West, recognize the merits of the blockchain technology, but are wary of Bitcoin and other cryptocurrencies due to their decentralized and pseudonymous nature.

This option was described by David Andolfatto, a researcher at the Federal Reserve Bank of St. Louis, and later refined by Sahil Gupta, an undergraduate at Yale University. Gupta created a system where everything works just like Bitcoin does, except the ledger is managed by institutions certified by the Federal Reserve.

Option two would be Facebook pulling a Telegram. Just like Telegram, a messaging app, that is trying to make its own coin that users could send each other or use to pay for services within the network and raised USD 1.7 billion in its pre-ICO, the same thing could happen with Facebook, given that they claim to have around two billion active users around the globe. They wouldn’t even have to make a new coin: they could just fork Bitcoin into a corporate version – or take it over completely.

According to TechnologyReview, this would include building a user-friendly Facebook-hosted Bitcoin wallet, integrating it into every profile on the platform, and voila: the whole wallet-alphanumeric-string thing would be much less confusing to your average Joe. They could let users watch ads or write posts to earn coins, or even let the platform mine on their computers. After having 2.2 billion users hooked onto Bitcoin through their own platform, seizing it and making it centralized would only be a step away.

Option three is quaintly named: go forth and multiply, in light of what’s already happening. There would be coins for everything, from specific services to groceries, even coins that are exclusive to stores. “My vision of the future is that there would be thousands if not millions of ways to pay for stuff,” Campbell Harvey, a professor of finance at Duke University, was quoted as saying. This is not a new idea: for example, Kodak announced a KodakCOIN, that people could use to license the rights to their photography on their platform.

Although evocative of gift cards and coupons, blockchain would now make them easily and securely transferable. In the article by TechnologyReview Harvey suggests to think of this as a barter system: “If you have a network and you tokenize the goods and services and enable it with a blockchain, it can become very efficient.”

This would then include moving tokens from one chain to another – an idea similar to exchanging fiat from one currency to another when traveling to another country. A broker would facilitate these exchanges and help you find the coin you need, in exchange for one you already have.

The seven billion people not yet using Bitcoin might not care about the freedom of Bitcoin. As TechnologyReview puts it, convenience would always win: “If cryptocurrencies are to be widely used, it will be the habits of the masses, not the wishes of Bitcoin’s early adopters, that determine what becomes of Satoshi Nakamoto’s vision.”