This is a response to a wonderfully insightful recent post by Joichi Ito,
the Director of the MIT Media Lab. In it, Dr. Ito, notably a former Board
Member of ICANN, offered his thoughts on "Why Bitcoin is and isn't like the
Internet" and asked a most pertinent question: "Whether there is an ICANN
equivalent needed for Bitcoin." As suggested in recent posts to the mailing
list, I believe there might be, but for a reason that may not seem obvious
at first.
Alan Reiner expressed the need this way: "I think one of the biggest issues
facing Bitcoin right now is not the lack of a 'killer app.' It is lack of
insurance options. Early adopters would like to believe that the majority
of users will hold their own Bitcoin, but I believe that is not a realistic
option when life-changing quantities of Bitcoin are involved. We should not
trust Grandma to secure her own retirement savings via complicated computer
maneuvers. More to the point, she should not trust herself or anyone else
(sic!) to hold it unless there is a strong protection against loss events.
Right now the solution is for Grandma to avoid keeping her money in
Bitcoin. Bitcoin needs a strong backbone of insured storage options so that
Grandma can confidently participate in this new technology." This is
certainly an observation to take heed of coming from the founder of Armory
Technologies.
The protection against loss events ought to be understood in the broadest
sense. What is needed is a disaster recovery mechanism. Andreas
Antonopoulos remarks expressed this candidly last year: "Bitcoin doesn't
have a middle of the road mediocre growth model. It basically either dies,
because of a fundamental flaw in the Bitcoin system. Not an external
factor, an internal factor: We blow it up by accident. And that could
happen... Bitcoin will play out in the next three years. In the next three
years we're going to see Bitcoin arrive on the global stage and make a
substantial impact, both in financial terms and in political terms. It will
happen. Or it will die. Either way. I'm not sure. In which case we'll
reboot another currency."
A body, not entirely unlike ICANN, can manage the nexus to the physical
world, and help address Bitcoin's catastrophic failure modes. Bitcoin's
coin ownership protocol would thus join the ranks of its payment protocol,
coin issuance protocol, consensus mechanism and inflation control that pose
no lethal threat to the ecosystem. In addition to their coin-agnostic
nature, I suspect the high valuation of large Bitcoin hubs relative to
Bitcoin's market cap at this stage in its lifecycle is partly reflective of
the sneaking suspicion that a custodial bitcoin (a bitcoin attached to an
identity) may be worth more than a non-custodial one. With this in mind,
I'll pitch in for the ticket should Dr. Ito decide to join the next month's
DevCore Boston conference aimed at supporting the future development of
Bitcoin. It's an hour's walk from MIT after all.
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