The ongoing disharmony within Bitcoin's core development team and other stakeholders stands in harsh contrast to the exuberance over blockchain's potential to reshape the economy with some kind of mathematically perfect, trust-free new infrastructure.
That's the view of Constellation Research VP and principal analyst Steve Wilson, who has authored a major upcoming report that examines Bitcoin and its foundational technology known as blockchain. (Go here for all of Wilson's blog coverage on the issue.)
"You've got a staggering amount of interest and blind acceptance out there that blockchain is going to be part of the fabric of the economy," Wilson says. "There are people who say it's going to be as important as the Internet, and it's said with a straight face."
In terms of viable, scalable blockchain technology, today's climate "is more about making announcements than having real smoke come out of the chimney stack," Wilson says. "There's a race on to be first."
While offshoots have emerged, the original blockchain's core development "is run by a handful of programmers who are reportedly dysfunctional, divided, and having these incredible bloody arguments," Wilson says. "I'm sorry—If the Internet or the interbank payment systems were like this, heads would roll on Wall Street."
Coinbase CEO Brian Armstrong drew some attention recently with his in-depth recap of the Satoshi Roundtable, a private retreat for Bitcoin core developers, Bitcoin company CEOs and bitcoin miners:
As you’re aware, there is a large disagreement about how bitcoin should scale right now. On one side you have the core developers who have concerns about how on-chain scaling will impact decentralization. On the other side you have most bitcoin companies who want growth. The miners are sort of caught in between and are split.
The conversations initially focused on various compromises to kick the can down the road on scalability. But as the conversations went on, I became less and less concerned about what short term solution we pick because I realized we all had a much bigger problem:the systemic risk to bitcoin if Bitcoin Core was the only team working on bitcoin.
The core team contains some very high IQ people, but there are some things which I find very concerning about them as a team after spending some time with them last weekend. Some of them show very poor communication skills or a lack of maturity — this has hurt bitcoin’s ability to bring new protocol developers into the space.
An Uncertain Future
There's much more in Armstrong's full post, which is obviously only one side of the story. But the bottom line is that for the blockchain to live up to the hype, peace, compromise and cooperation will be paramount.
Blockchain has attracted major interest not only from Wall Street and software companies, but also government entities. “They all talk of blockchain becoming critical infrastructure yet Bitcoin is expressly anarchistic," Wilson says. "The Core development team doesn’t have much sympathy for business or government interests. If blockchain is really the fabric of world commerce, one wonders how its developers and its stakeholders are going to get along?”
Meanwhile, there is still a disconnect between the attention blockchain gets in the mainstream and business media, and in professional security circles. “We saw very little detail about blockchain at RSA Security Conference last month," Wilson says. At that event, security expert Adi Shamir (one of the co-developers of the RSA algorithm) remarked that he had not seen a use case for blockchain “that can't be solved with an existing simpler technology”.
Wilson agrees. “My research shows that blockchain is not necessary nor sufficient for any mainstream business application," he says. "All it does is stop fraud in electronic cash without needing a central umpire. That’s a very special, special case.”
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