One of the favorite arguments from the nocoiners is “they like blockchain and not bitcoin”. So we compiled a letter based on statements and tweets of different crypto figures that pretty much dismantle this narrative. Enjoy.
When I hear “I like blockchain but not Bitcoin”, I reply in the most respectful way, “that statement demonstrates a fundamental misunderstanding of Bitcoin”.
The banker’s mantra of “blockchain not bitcoin” has caught fire on Wall Street – everybody loves blockchain, they may not know what it is, but they love it! Jamie Dimon, CEO of JPMorgan, hates Bitcoin, but loves blockchain, Goldman Sachs CEO, Lloyd Blankfein, has embraced blockchain while he is warming to Bitcoin.
Blockchain is just a database. Databases are a valuable tech but blockchain without the token is an extra shitty database. Bitcoin itself is the breakthrough. It allows the database to self finance its security/existence. The blockchain works because the miners get paid in bitcoins
Blockchain implies decentralization. There needs to be proper incentives for individuals to operate decentralized platforms.
Data can be stored efficiently, robustly, reliably without blockchain. Transactions can be verified with cryptographic signatures without blockchain. Trust can be established between parties without blockchain. Ledgers can be achieved without blockchain. “Smart contracts” can be done without blockchain. IFTTT is a very simple example.
As Xapo founder Wences Casers said:
“Saying you like blockchain but not bitcoin is like ‘I like the browser but not TCP/IP'”
To like blockchain and not bitcoin is an oxymoron, blockchain without a game theory based incentivised token is only really a slow database, may as well use SQL.
The fact that people are incentivized to maintain and grow the database (mining) because of something intrinsic to the database is what makes blockchain a useful tech.
If you employ a Private Blockchain for private utilization within a firm or groups of firms and it improves the overall efficiency and effectiveness of these firms, either through cost savings or improved operational efficiency, then the increased value of your firm goes to the private owners of that private Blockchain which was employed. R3 for example!
Bitcoin is a reward currency of a Public Blockchain used to transfer value, its accrued benefit through usage in whatever form goes to everyone participating in using the protocol layer through its price appreciation due to its supply/demand economics. You cannot say you like Blockchain technology but do not like Bitcoin!
The use of both Blockchains lead to practical benefits, it is either some set of few folks in a private setting benefits as in the case of R3, or the public benefits as in the case of Bitcoin!
Without the currency, there would be no incentive for people to spend money on the computers needed to run the Bitcoin software. Blockchain without Bitcoin replicates the same financial system already in existence. There may be some efficiency gains through sharing private distributed ledgers, but blockchain without Bitcoin is not one of the most important innovations in the history of finance.
And in conclusion, to quote Matt Khoury: