Author - Paul Schatzkin

Wither Bitcoin?

Nice token, but it's not really a "coin"

Nice token, but it’s a “coin” in name only.

Unless you’ve been living under a rock for the past few weeks, the word “bitcoin” has probably shown up on your radar.

With bitcoin, the Internet is now attempting to redefine the very concept of money.  And why not?  The Internet has redefined just about everything else in the past 15+ years.  Why shouldn’t the greatest technological innovation of the past millennium aim its Howitzers of disruption at one of the fundamental pillars of the human experience?

What exactly is “bitcoin?”  Well, it’s really several things. Its advocates like to call bitcoin a “crypto-currency” – which is to say, it’s a medium of exchange based on a highly sophisticated block of computer code that can be used to buy and sell things over the Internet.  At last measure, just getting set-up to acquire or hold bitcoins starts with downloading a block of code in excess of six gigabytes.  That’s a lotta code.  It’s like an operating system for the future of Internet commerce.

Much of the appeal of bitcoin stems from its inherent nature as an open-source ‘currency without a country.’  Unlike dollars or yen or pounds or marks or francs (or whatever the Chinese call their currency), bitcoin lives outside of the authority of national governments and central banks.  It is the ultimate form of ‘crowd funding’ – the collective creation of the funds themselves.  This stateless existence makes bitcoin a high ideal among the digital libertarian and anarchists in our midst.

It also makes bitcoin the currency of choice among liars and thieves, but that’s a different story altogether.

Bitcoin has been flipping on and off my own radar for well over a year now, though I hadn’t really paid it much heed until earlier this fall when I caught the tail end of Luke Stokes’ presentation at Barcamp, “Could Bitcoin Be More Disruptive than the Internet?’  That’s the sort of title that gets my attention. After his presentation, talking to people in the hallway, I heard Luke use a phrase that in nearly 20 years I have never heard uttered by a single soul in this city:  “Fiat money.”

Finally, somebody in this town is thinking about the underpinnings.  At that point my radar became more fully engaged.

In the investment world, a chart like this is what's known as "going parabolic."  It usually doesn't end well.

In the investment world, a chart like this is what’s known as “going parabolic.” It usually doesn’t end well.

Bitcoin gets a fair amount of attention in the mainstream media when its price as measured against conventional dollars goes through one of its periodic, parabolic run-ups to stratospheric new all-time highs.  It got some attention last spring when the price ran up to about $500.  More recently it has been in the news as the price has exceeded $1,000, and several of the earliest adopters who acquired their stash of bitcoins for single digits have cashed out to become millionaires – in good, old-fashioned, red-blooded American greenbacks.

Unfortunately, this speculative fervor for bitcoins is probably its least savory feature.

I have seen a couple of instances this week where those earliest adopters are now telling the next round of adopters that they, too, can be “early adopters.”  After, there’s still like 7-billion people on the planet, and most of them are not even on the Internet yet, right?

In conventional investing circles, this is sometimes known as the “greater fool” theory – in which any price paid for an investment is rationalized with the expectation that there will always be another buyer at a still higher price. Hallelujah, it’s not too late to “get in at the bottom!”

Unfortunately, the final destination of the “greater fool” theory is usually the “bag holder” theory – in which some poor shlub finally pays the highest-ever price for the investment, and is thus left “holding the bag” once the price has peaked and regresses to the mean.

The likelihood of future fools and bag holders aside, these recent, spectacular fluctuations in the market value of bitcoin illustrate the challenge in understanding its potential. Is it a digital currency, a virtual commodity (oxymoron alert), or a security?  Is it a medium of exchange — or an outright speculation? It is all of these things.  And, I suspect… none of them.

Here I must confess that I have no personal experience with bitcoin (yet?).  I’m not in any particular hurry, either.  I may not be Warren Buffett, but one thing I’ve learned over the years is that you do not “chase” a rising price.  Besides, I don’t really need a new “virtual currency” it at this point.  I can still buy all the crap I need/want from Amazon and B&H with the conventional virtual currency – aka “dollars” – currently at my disposal.

What interests me about bitcoin is what might be lurking within the actual technology.  I suspect that there is really much more to bitcoin than meets the virtual eye, and that our preoccupation with its surface utility – and its speculative windfalls – is concealing much more disruptive possibilities.

Here is where we have to put on our ‘Marshall’s X-Ray Specs’ – the goggles that let you see through the windshield instead of the rear-view mirror –  and try to see: what’s really going on here?

Amid all the reading I’ve done on the keyword ‘bitcoin’ in the past couple of months, I think the first clue showed up in this blog post by Naval Ravikant, who writes under the nom-de-plume of “Startupboy:

Most people are only familiar with (b)itcoin the electronic currency, but more important is (B)itcoin, with a capital B, the underlying protocol, which encapsulates and distributes the functions of contract law.

“…distributes the functions of contract law??”  Whoa, Nelly.  Forget about central banks and sovereign governments… have the lawyers heard about this yet??

If you, too, are intrigued by the prospect of an “open source currency,” there are several ways to get on the bitcoin bandwagon.  The simplest is to set up an account (better start downloading that 6GB now…) and just buy the ‘things’ at whatever price they’re going for today.

This 500-GHz/sec dedicated "Bitcoin Miner" can be yours for a mere $22k.  I'm thinking the brand label should say "Levi Strauss."

This 500-GHz/sec dedicated “Bitcoin Miner” can be yours for a mere $22k. I’m thinking the brand label should say “Levi Strauss.”

But what really intrigues me is this notion that you can get a dedicated (and expensive) computer that can crunch the code in order to “mine” for  bitcoins. WTF?

What is most curious to me though is not the technology, but the vocabulary that is being used to describe it.  With this notion of “mining” – which invokes visions of picks and shovels and holes in the ground – we see old terminology being used to grasp an understanding of new technology.  And that’s while the new technology itself (digital ‘currency’) is being used to do the work of the old (facilitate commerce). A classic McLuhan moebius.

For the past 15+ years, the Internet has proven massively disruptive to the world of commerce.  Now the beast has turned its attention to money itself.  The ultimate disruption is at hand.  And yet, here we are, putting this powerful new tool to use to do the same old things.

Is there any truly trans-formative, cultural potential for a ‘crypto currency’? Or is just another way to buy more stuff?

As mentioned at the outset, part of the appeal of bitcoin lies in its potential to circumvent the power and authority of central banks and the governments that sponsor them.

What central banking has given us over the past century amounts to a new Gilded Age, with most of the wealth of the world concentrated in a tiny sliver of its population.

What I want to know is: By virtue of its decentralized, stateless foundations, is bitcoin – or any virtual, open-source ‘currency’ – sufficiently disruptive to equalize the distortions in the global economy? Can it alter the 99% -v- 1% equation that has become the world’s dominant economic/cultural reality over the past 40 years?

My hunch is that this bitcoin revolution is real, but it is not what we presently think it is.  And there will be a lot of wreckage strewn along its path as we stumble into the realization of its real potential.

As with the Internet itself after the crash of 2000, I suspect that it will not be until after the initial bubble of speculation has burst that we will begin to see the true potential of bitcoin.

Point of reference: the NASDAQ Composite - after 13 years, almost back to it's all time high just before the Internet bubble burst.

Point of reference: the NASDAQ Composite – after 13 years, almost back to it’s all time high just before the Internet bubble burst.

Is This a Dumb Idea for a Camera…

nikonDf

…or the dumbest idea for a camera, ever?

Ming Thein  offers some insights on the just announced Nkon Df – a camera that seems to blend all the disadvantages of digital photography with all the disadvantages of film photography.

I think Ming is mincing his words here.

To be honest, I really don’t quite know what to make of this camera… I’m confused. On one hand, there are very sensible engineering choices – the sensor, for instance; but on the other hand, marketing said that you have to have AF and a full digital set of controls and a retro look, so we land up having too many buttons and knobs and a bit of an F3-collided-with-a-D600 appearance to it.

I’m not mincing mine: I think this is the dumbest thing in camera design/engineering Nikon could possibly have offered.

Starting with the same dysfunctional AF array that soured me on the D600 right out of the box.

Ming talks a lot about the viewfinder.  He’s talking about an optical viewfinder.  But based on my experience with the Olympus EM-1 so far, I think the whole idea of the optical viewfinder is obsolete.  I spent a lot of time while shooting the Barcamp on Saturday experimenting with flash settings – flash on, flash off, flash exposure plus/minus – and never had to take the camera away from my eye to make those adjustments because all the info is right in the viewfinder.  I don’t think there is any optical viewfinder that puts that much info in front of your eye.

But better than that, each time I made an exposure, it would appear before my eye in the viewfinder.  I could tell without ever looking at the back of the camera that I’d gotten the shot and move on to the next one.   You can’t do that with an optical viewfinder, either.

It seems to me that some evil twin of Marshal McLuhan is now running Nikon.  McLuhan wrote about seeing the future through a rear-view mirror – using new technology to do the work of the old.  He wasn’t suggesting that that is necessarily a good thing – but this camera is a classic example of doing just that.  It’s taking digital technology and trying to replicate the film camera experience.  Jeezus, if you want a “film experience,” just get an F3 or an F100 off eBay.

And the price… almost $2,800??  That’s the same as a D800… which is possibly the finest DSLR on the market.

I’m with Ming.  Totally confused.

Barcamp = MOMOP (#bcn13)

bcn13_theme_banner

Tomorrow’s Seventh Annual BarCamp Nashville is going to be one of those “coming around full circle” events for me.

The very first Barcamp in August 2007 was something of a “coming out” event for me.  After selling songs.com –  my early-stage, “Internet one-point-oh” business – to Gaylord Entertainment in the fall of 1999 (and spending a year watching them run it into the ground), I sorta went into seclusion for several years, during which I wrote two biographies of obscure 20th Century Scientists.

Then in the summer of 2007, I started reading about this event that was going to gather all the disparate elements of Nashville’s emerging digital arts and business communities for an “unconference” that covered a vast array of topics – the only unifying factor being some interface with “new media” and their underlying technologies.

Here, see for yourself:

I have not made it to every Barcamp since, though I have made it to several and made lasting friendships at each one.

This year, for the first time, I’ll be making an actual contribution other than my usual wandering around between sessions and heckling the presenters.  I have signed on as an “in-kind” sponsor which means that in exchange for hanging the “Cohesion Arts” logo in strategic places around the (undisclosed) location (a designation that puts me in some most-esteemed company), , I’ll be providing still photography coverage for the event.

More than just taking photos, though, I hope to engage everybody in attendance who has a cell phone / camera (who am I kidding, that’s everybody...) in the day’s photo coverage.  There will be a video screen in the front of the venue offering a continuous Instagram feed that will include not just my photos, but any photo that bears the hashtag ” #bcn13 .”

Barcamp is a hard event to describe to somebody who is not familiar with the concept.  Yes, it’s an assembly of the region’s digerati, but there is no single theme for the day.  It’s really just an excuse to get a lot of similarly minded people in a room and start bouncing ideas around.

For me, Barcamp has always been first and foremost about the people I get to meet.  It’s a welcome departure from the virtual, online experience that tends to dominate our lives these days.  Which brings me to the acronym in the title of this post, which came to mind while trying to describe BarCamp to a friend today:

You’ve heard of “mooc“s, right? That’s a “massively open online course,” those classes that universities offer for free to thousands of students around the world over the Internets.

And then there is the concept of “meatspace” –  what was once – before we all started living our lives through screens and keyboards – known as “the real world.”

So BarCamp is a

Massively Open Meatspace Opportunity

or

MOMOP

At least, that’s what I’M calling it.

Now y’all get those cell phones out and start tagging your photos w/ ” #bcn13 “

And if you see a guy with a rumpled photographers vest and a couple of cameras round his neck, stop and say hello, and I’ll make sure we get an “official” photo into the stream…

P.S. A special shout out to Kerry Woo for suggesting I volunteer for this assignment.  I’m glad they accepted the offer, and I hope I can live up the exceptional standard that Kerry has brought these events in the past.