5 Lessons from Bitcoin in the Beltway

Journalist:
June 28, 2014

Bitcoin in the Beltway took place last weekend in Washington, D.C. Though the Washington Post may not have found the conference newsworthy,  the conference produced several headlines. As I am sure you have read, Overstock CEO Patrick Byrne also made the much-lauded announcement that Overstock will donate 3% of Bitcoin revenue to fund global Bitcoin adoption.

Overall, it was a great experience, despite the fact that several presenters, including keynote speaker Cody Wilson, could not make the conference for various reasons. The speakers that did attend gave impressive presentations about a variety of Bitcoin-related topics, including government regulation, mining, next-generation cryptocurrency, and the state of the non-profit industry. After spending a week reflecting on the Bitcoin in the Beltway, these five lessons impacted me the most.

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1. The Consensus Algorithm is the Future of Cryptocurrency

The single most overarching lesson of Bitcoin in the Beltway was that currency is just the beginning of the Bitcoin revolution. Andreas Antonopolous and other presenters explained that the Bitcoin consensus algorithm has incredible non-monetary potential. From decentralized cloud storage to crowdfunding, the consensus algorithm presents endless possibilities.

Several groups have already begun building the next generation of cryptocurrency. NXT and Counterparty are already two of the top currencies in terms of market cap, and they both offer users the ability to trade assets, vote, run decentralized autonomous corporations, operate smart contracts, and even trade between currencies. Though still in development, Ethereum also promises to streamline next-gen cryptocurrency be creating an entirely new programming language.

2. 51% Attacks Are a True Threat, But There Are Solutions

Over the past few weeks, the Bitcoin community has hotly debated the question of whether or not 51% attacks are truly a threat. At Bitcoin in the Beltway, Ethereum’s Vitalik Buterin tackled this subject and argued that they are a problem because they centralize the Bitcoin network and render it vulnerable to attacks. Even though there may not be many incentives to attack the Bitcoin network, it is still dangerous. Buterin gave several suggestions about how to eliminate the threat of 51% attacks, including forcing miners to download the entire blockchain and Multi-PPS, which would make both P2Pool’s and small mining pools economically viable alternatives to Ghash and other large pools. However, Buterin is not confident that the Bitcoin Foundation will pursue a course that fundamentally changes the way Bitcoin operates.

3. People Don’t Need to Understand Every Detail of How Bitcoin Works

When people ask what Bitcoin is and how it works, it is tempting to launch into a speech laden with technical details and complicated terminology. However, the vast majority of people do not truly care or possess the capacity to understand the inner workings of the Bitcoin protocol. People do not use credit cards because they understand every facet of how they work; they use them because they trust that somehow these pieces of plastic let them make purchases. Rather than engage in futile quests to explain Bitcoin to skeptics, let them watch you make a purchase from Overstock, Gyft, or another store that accepts Bitcoin. Once they recognize how simple Bitcoin makes electronic commerce, they will be much more receptive to the idea of cryptocurrency.

Sean’s Outpost is a Bitcoin-funded charity in Pensacola, Florida.

4. The American Non-profit System is Broken

Bitcoin in the Beltway placed a heavy emphasis on cryptocurrency’s impact on charities. Event co-organizer and founder of Sean’s Outpost Jason King elucidated many of the problems American charities face as they try to help people and improve lives. King explained the shocking truth that the average charity must spend more than 20% of its yearly income just to maintain its 501c(3) status with the government. This status tends to increase external donations, but it also handcuffs the charity’s ability to market itself and operate similarly to a business. Additionally, the public frowns upon charities who pay their top executives competitive salaries, which does nothing but ensure that charities do not have access to the most effective leaders.

5. Bitcoin Desperately Needs Professional Marketing

The Bitcoin community has done an effective job of marketing itself to the tech-savvy. However, the general public has been much more difficult to reach. Several presenters at Bitcoin in the Beltway alluded to this problem and noted that Bitcoin desperately needs professional marketing to reach mainstream society in a relatable way.

Reflections on Bitcoin in the Beltway

Despite working in the cryptocurrency industry, I found Bitcoin in the Beltway incredibly educational, and it was great to have a chance to interact with so many people who are just as passionate about cryptocurrency as I am. I had to travel seven hours to attend the conference, but it was definitely worth the effort. If you have never been to a Bitcoin conference, you should attend one in your area.

Josiah Wilmoth @Y3llowb1ackbird

Josiah is the US Editor at CCN, where he focuses on financial markets. He has written over 2,000 articles since joining CCN in 2014. His work has also been featured on ZeroHedge, Yahoo Finance, and Investing.com. He lives in rural Virginia. Follow him on Twitter @y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.