The MIT Technology Review has a plan — or three — to take down Bitcoin.
Writing in an article titled “Let’s Destroy Bitcoin,” tech writer Morgan Peck presents three scenarios that she believes could lead to Bitcoin’s eventual demise.
The first option is a “government takeover,” whereby governments create their own digital currencies — dubbed “Fedcoins” — which will allegedly “improve upon the efficiencies of Bitcoin,” presumably reducing or even eliminating demand for decentralized cryptocurrencies.
Another of MIT’s strategies to take down Bitcoin involves the “tokenization of everything.” In this scenario, economic activity evolves into a hyper-efficient mass-barter system, in which virtually every company releases its own cryptocurrency and an automated system allows users to seamlessly trade their “FacebookCoins” for “ToyotaCash” depending on which asset they need to complete a transaction.
“Think of this as an incredibly efficient barter system,” says Campbell Harvey, a finance professor at Duke University. “Barter is generally inefficient, but if you have a network and you tokenize the goods and services and enable it with a blockchain, it can become very efficient.”
The author’s most unique strategy to take down Bitcoin involves social media conglomerate Facebook masterminding a stealth takeover of the cryptocurrency.
In this scenario, Facebook launches a multi-pronged attack on the cryptocurrency’s current implementation.
First, the company creates a proprietary, third-party Bitcoin wallet and integrates it throughout Facebook’s product suite, a scheme designed to trick users into giving the company outsized control of the Bitcoin ecosystem.
“For those who already use Bitcoin, the experience is so vastly superior to what they’ve previously experienced that they immediately migrate their funds to their Facebook wallet. Those who don’t yet own any bitcoins, or have never heard of them, could be given the option of earning some on the site, either by watching advertisements or by writing Facebook posts for others to see.”
Meanwhile, the company would secretly launch a mining operation, which it could perhaps augment by allowing users to opt-in to a Coinhive-style mining script in exchange for an ad-free browsing experience.
Once Bitcoin has firmly entered the mainstream and become inseparable from Facebook’s product suite, the company could wield its influence to quietly fork Bitcoin and force its users — most of whom are ignorant of the software’s technical details — to adopt the new version, which will be structured however the company sees fit.
Could one of these scenarios come to fruition, leaving Bitcoin as currently structured by the wayside? Peck certainly seems to think so. I, however, have my doubts. Here’s a follow-up post in which I explain why I believe these strategies are far-fetched.
Featured image from Shutterstock.
Last modified: May 20, 2020 8:51 PM