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Bitcoin, Ripple, and CryptoKitties; Apple’s battery brouhaha; more.
BITCOIN DID RATHER WELL last year, to put it mildly. Talk and speculation is now everywhere. Bubbling under, however, we have a new hot property: Ripple. This rose 120 percent in a week, to become the second largest cryptocurrency by market value. One to watch, and there’s good reason: It can do what Bitcoin struggles to achieve.
Bitcoin remains the trailblazer for now. It started last year trading at $976 a pop, high enough to start attracting attention from pundits, investors, and less savory characters. Stories of Mafia money laundering and North Korean sanction dodging painted a somewhat unwholesome image, and major financial figures, such as Warren Buffett, were scathing. However, the new generation of tech money was hot.
More cryptocurrencies were launched, and Bitcoin was seen as the benchmark for an emerging market of blockchainpowered currencies. People started to jump aboard, and the bandwagon gathered pace. By August, it had reached $2,787, and started to enter more mainstream business. It became legal tender in Japan, and banks started dabbling. In November alone, it jumped by nearly 40 percent. The price finally spiked on 18 December at $19,498, before settling down to $13,378 at the end of the year. Some people were clearly making a lot of money, and it had everybody’s attention.
So, where now? Despite unflattering comparisons with the Dutch tulip mania of the 17th century, the bubble, if it is indeed one, refuses to burst. There is a problem, though: The blockchain is getting big, and it’s getting slow. Banks can alleviate this by bundling together transactions, but this requires some solid trust, and a stable price. Bitcoin’s blockchain wasn’t designed for this kind of load.
As digital gold, it has problems, too. The blockchain consumes enough electricity to run a small European country, which is ludicrous. This has led to a worrying concentration in the land of cheap electricity: China. Bitcoin n has faced sanctions ons there, and if the e State Council were to pull the plug, it would cause a sizeable wobble. As the Bitcoin blockchain gets closer to its s mathematical end, nd, mined coins become rare; somebody will have to pay that electricity bill. One good thing about actual gold is you don’t need to plug it in to ensure its existence; it’ll stay exactly as it is until the sun turns into a red giant.
The real story is the blockchain. Of the myriad recent cryptocurrency launches, most of which are withering on the vine, we still have Ripple. This was designed from the start to be about quick and seamless transactions. It has been picked up by a slew of big credit card companies, including American Express.
Unlike Bitcoin, all the coins have already been mined, and are simply released as it grows. The blockchain is run by those people who want to use it. Ripple’s recent spike is not welcomed by all. This bandwagon does not want to roll too fast, because its use in ban banking requires ac a certain stability. A At the same time, miners and speculators looking for new veins to plunder have moved to Stellar, Ethereum, and L Litecoin. Oh, and Cry CryptoKitties—yes, digital kittens. The blockchain is here to stay. The increasing complexity of these chains as they mature means they will have to be periodically reset. Digital money is here to stay, too. Bitcoin will always be known as the first over the wall, and will survive at some level for the foreseeable future. The lasting legacy, however, will be the introduction of the blockchain itself, and that will be anywhere that a complex list of data needs to be managed across multiple systems, which in the age of the IoT, is all over the place. Meanwhile, we will undoubtedly have more highs and lows in various flavors of cryptocurrencies, that will continue to annoy us by making certain GPUs more expensive than they should be.
One good thing about gold is you don’t need to plug it in to ensure its existence.