MIT Joi Ito: Why I'm worried about Bitcoin and blockchain

The author, Joichi Ito, is the director of the MIT Media Lab and the chairman of the board of PureTech Health. In addition, Ito serves on the board of directors of giant companies such as Sony and the New York Times. He has also founded several Internet companies, such as PSINet Japan, Digital Garage, and Infoseek Japan. Joichi Ito is an important figure in the popularization of the Internet in Japan.

In previous posts, I’ve written about my belief that blockchain technology has the potential to be disruptive (it can unlock a lot of opportunities and innovation), just like the Internet, and that it could be a ubiquitous, interoperable, reliable, low-cost network for many kinds of transactions.

But while blockchain has great potential, it also faces similar challenges, but it is very different from the Internet and the Open Web.

I am concerned about the current state of Bitcoin and blockchain.

An excess of risk assets has been pumped into the industry. In fact, Bitcoin has received more funding in its first few years than the early days of the Internet. It is going through a crisis, but there are not many similarities to the early Internet.

However, the formation of the Internet has provided us with some important experiences, the most important of which is the issue of talent and knowledge reserve pool.

Lack of understanding

In the early days, only a few people understood the core elements that made up the Internet. I remember that at that time, only a few people in the world could really understand the Border Gateway Protocol (BGP), and we had to dig deep and share them with our "competitors" (at that time, we built PSINet in Japan).

This is very similar to Bitcoin and blockchain today.

The number of people who truly understand the cryptographic principles and code associated with the Bitcoin software is also very small. Most of them work on Bitcoin, some work on Ethereum and other "related" systems, and a few are scattered elsewhere.

Such a community, whose members include those of the 1990s, is like any free and open source software community on the Internet, a group of people who know each other but don't always respect each other.

Unfortunately, the crazy growth of Bitcoin, and now the "blockchain", has been caught off guard by the governance perspective, making it impossible for the developers of Bitcoin's Core software to effectively access commercial interests.

When asked, “Can you expand?” they say, “We’ll do the best we can.”

For many people, this answer is obviously not enough, especially those who do not understand the architecture of Bitcoin and those who are not clear about the essence of Bitcoin.

Many companies that have decided in the past to build systems around less complex systems (like building a website, or buying and running an enterprise resource planning system) might simply hire other engineers, listen to customer needs, or complain about their requests with a "we can't guarantee it, but we'll try" attitude from Core developers, lowering their standards to those who promised to meet their requirements.

Warning is needed

The future of Bitcoin, decentralized ledgers, and other blockchain projects depends on the community.

Many people refer to the members of “Bitcoin Core” as if they were employees of a company that you could fire or train to join the team. This is not the case. They are more like artists, scientists, and careful engineers who have established a common culture and language.

Finding another group of people to do what they are doing is like asking web designers to launch the space shuttle. You can't drive a community like that, simply put, the people who work on Bitcoin make up the community.

Bitcoin is an open project, a sometimes inefficient but open community process that always drives the foundations of decentralization, robustness, and innovation.

But Bitcoin is not a single facility, it is a living, working system with a value of $6.5 billion.

This high valuation has also led to amplified caution. Anything deployed on this network needs to be tested, but we can be sure that many people have thought about how to break this system, but it still exists robustly today.

Ethereum and Ripple are probably the two largest networks after Bitcoin. Their network valuations both exceed $100 million. Ripple’s consensus protocol is completely different from Ethereum’s, and so is their positioning.

If you can’t do certain transactions or develop certain applications on top of Bitcoin, then we see why Ripple or Ethereum might be interesting.

If security and stability are your primary concern, Bitcoin is almost your only choice because it has the largest market capitalization, the largest community, and the most widely deployed and active network in real life.

Open innovation at risk

Many people are excited about the potential applications, but they are missing the fundamental issues.

Just as a lot of Internet companies thought the Internet would work on their own version, they thought all blockchains would work the same way, but blockchain technology is not as mature as the Internet. You often see those Bitcoin enthusiasts, a bunch of crazy libertarians who came up with a cool idea, but you also believe that a bunch of gunslingers can do the same thing and provide enough money.

Governments and banks have launched various plans without giving enough thought to how to actually establish a secure ledger.

I'm worried that we're going to build something at the application layer that's still the same old transactional system under the hood, with no interoperability, no distributed systems, no trustless networks, no scalability, no open innovation, and nothing except a few efficiency gains brought by new technologies.

We have a great example of this. One of the main benefits of the Internet is that open protocols allow innovation and competition at every layer, and standards at every layer are developed and set by the community. This drives down costs and promotes innovation.

When we built the mobile network around it, we lost sight of (or controlled) our principles and let the mobile operators build that network. That's why on fixed-line Internet you don't have to worry about data charges, but when you travel abroad, "normal" Internet on your phone can cost more than your rent.

The mobile Internet "looks" like the Internet, but it is ugly, just a distorted copy of many layers of the Internet, it is a monopolistic system. This is what happens when we let these application layers be deployed in a flawed and unprincipled way.

Human Cost

Finally, and most importantly, we are extinguishing the enthusiasm of the developers who have put their heart and soul into the Bitcoin code and architecture, which is what we need most. Many of them are preparing to quit, or are threatened to quit. Many are completely discouraged by the public debate.

Even if you believe that we will eventually have a new generation of financial cryptographers, you can’t train them without this community. There are a lot of smart people on both sides of this debate, and I think most of them have good intentions.

However, those onlookers within the community who fan the flames, make provocative statements, and fundamentally underestimate the contributions of the Bitcoin community in the past, present, and even future, do the community a disservice.

I've been sitting in the background watching quietly, hoping that things would calm down, and of course they probably will eventually, but I'm a little sad to see more and more misinformation and hype around "blockchain" coupled with keywords like "internet of things" and "cloud," which is a little crazy.

I decided to take the time to try to counteract or balance some of the things I see as being most wrong, in hopes that this will have an impact on our future.

For example, while the Bitcoin Core developer community is strong, the ecosystem of stakeholders, the way decisions are made, and information is shared, remains fragile and vulnerable.

I worry that the communication and emotional divide between key groups and individuals is now widening, but I believe it is necessary for us to find ways to bring the community together and reach consensus on technology and practices.

I sincerely hope that the community and process we can build in the future will be stronger and able to handle inevitable disagreements, with less emotion and more technical and operational discussions.

The original article was published on Joi.ito.com.

Original article: http://www.coindesk.com/joi-ito-worried-bitcoin-blockchain/
Author: Joichi Ito
Compiled by: Satuoxi
Source (translation): Babbitt Information (http://www.8btc.com/joi-ito-bitcoin-blockchain ‎)