Blockchain Marches On: SEC’s Bitcoin ruling won’t stop the 2017 crypto blitz

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The price of one Bitcoin plummeted last Friday by 8%, following an announcement by the U.S Securities and Exchange Commission, rejecting a proposed Bitcoin-backed Exchange Traded Fund (ETF). Prior the SEC’s ruling, the anticipation surrounding the probable “institutionalization” of the once semi-anarchic cryptocurrency, drove its price to the slightly unbelievable all time high of about $1280 per unit.

The regulator’s Nay did indeed administer a felt blow to the Bitcoin market, but not one out of the ordinary for the crypto asset, which grew to be notorious for both – its local volatility and steady macro trend. If anything, recent developments serve as a testimony for the un-patriated currency’s unyielding drive for survival.  With China’s central bank raising heavy restrictions on BTC trade, and US SEC officers reluctant to allow the cryptocurrency’s expansion, Bitcoin is still traded close to the price of an ounce of Gold, aggregating a market capitalization of about 19.4 Billion USD.

Despite the occasional alarmist headline, Bitcoin’s success story is undoubtedly carved out of the stuff movies are made of. Starting as a rebellious open source Cyberpunk project in the aftermath of the ‘08 financial crash, the “Peer to Peer Digital Cash System”, described in a seven page short whitepaper by an anonymous figure named Satoshi Nakamoto, managed to create waves that have reached even the highest windows of the established financial institutions.

The somewhat agitated interest Bitcoin has been enjoying since then among the tech, financial and business sectors and their respective regulatory watchdogs, originates mainly from the technology underlying it, called the “Blockchain”. Hailed in late 2015 as The Trust Machine by The Economist, said Machine holds the potential to eliminate functions, held very dear to the Banking sector and financial institutions, namely those of intermediaries, middleman and trusted third parties. Accordingly, the initial suspicion legacy organizations and government bodies have expressed towards blockchain is not only natural, it probably is well advised.

Albeit, this suspicion has long made way to a very wide spread if-you-can’t-beat-them-join-them attitude, with almost every major financial institution being involved in some sort of blockchain experiment. Moreover, governments around the globe are embracing blockchain more outspokenly than ever. The People’s Republic of China, not very well known as big decentralization fan, has recently included blockchain technology in its upcoming five year plan, while the European Parliament has published several reports, with extravagant titles like “How blockchain technology could change our lives”.

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One of the most recent developments in that respect doesn’t involve Bitcoin itself, but one of its most promising progeny, Ethereum. 30 tech and finance giants, including Microsoft, J. P. Morgan and Intel recently announced the so called “Enterprise Ethereum Alliance”, aiming to drive Ethereum’s blockchain technology to the mainstream business market.

The Ethereum project, in contrast to the inherently ownerless and uncontrolled Bitcoin movement, is a well funded foundation with a clear and charismatic leadership with long term goals, one of which is a decentralized, uncensorable “World Computer”. This “World Computer” uses blockchain technology to  connect a multitude of personal devices, spread around the globe, and makes them perform as one giant global computer. This computer can then execute applications, host websites, validate complex financial transactions, sign off agreements and do basically anything one could possibly think of without requiring central servers or any other kind of standard infrastructure a government could censor or a corporation could eavesdrop on.

If this sounds like a pie in the sky, it’s because it sort of is. For now, at least. The Ethereum network already exists, and does a lot of what it promises, however very slowly and rather inelegantly. However, since the project still describes itself as in alpha state, these problems are by all means tolerable. The team behind the project makes continuous efforts to improve its platform, and with the recent legacy backing, which has almost doubled the price of “Ether” (ETH), Ethereum’s native cryptocurrency, these efforts will probably increase significantly this year and bear some surprising fruit.

It should be noted that Ethereum is not alone anymore in its pursuit of the holy grail of decentralized networking. Since Ethereum’s conception in 2013, a long list of so called “turing-complete blockchains” have entered the race towards decentralized application platforms. One recent example is a Singapore-based startup called “The Qtum Foundation”, proposing a sort of hybrid between Bitcoin and Ethereum, exploiting the technological advantages of both systems and combining them.

One of the more interesting capabilities such chimera would have is the ability to access an Ethereum-styled World Computer from smartphones and tablets, a feature Ethereum itself couldn’t manage to whip into existence. With about half of all internet traffic being generated by mobile devices, and with many blockchain applications targeting emerging markets with “mobile only” internet access, this development has been crucial enough to enroll the support of legacy consultant giants like PwC, demonstrating once again what the leaders of the world economy really think about the future of blockchain and Bitcoin-like initiatives.

In light of all of this, 2017 begins as an exceptionally promising year in the short history of blockchains. So exceptionally in fact that the SEC’s rejection of a Bitcoin backed investment fund will hardly be recorded in future reviews.

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