Nocoiners Love to Say They “Like Blockchain not Bitcoin”, Fail to See Big Picture
It Is Possible To Like Blockchain And Not Bitcoin?
There are several investors and individuals that do not like Bitcoin and do not support virtual currencies. But this does not mean that they do not like blockchain. Indeed, they believe that blockchain technology has several benefits and can improve different areas.
However, according to Rene Peters, people that like blockchain but do not like Bitcoin do not really understand the fundamentals behind Bitcoin. For example, there are banks that are taking this specific approach towards blockchain technology and cryptocurrencies.
Jamie Dimon, CEO of JP Morgan, has several times explained that he hates Bitcoin but he believes in the technology behind it. And indeed, JP Morgan has already developed its own blockchain network known as Quorum. Although the network is not public, it uses blockchain technology so as to power operations among participants.
Another example is Lloyd Blankfein, Goldman Sachs’ CEO. He has several times warned about Bitcoin but he has also embraced blockchain technology.
Peters explains that Blockchain works just as a database that uses tokens. But if the blockchain network does not have a token, then it is another common database. Bitcoin is a different way of understanding how databases work. If Bitcoin would not exist, the network would not be secure anymore, since miners are paid in BTC coins.
At the moment, there is no need for decentralization in many cases since data can be perfectly stored without using blockchain technology. Additionally, other functionalities such as smart contracts do not need to be used through a blockchain platform. It is possible to create smart contracts in a few steps, for example, with the app IFTTT.
Liking blockchain, but not liking bitcoin is an oxymoron, explains Peters. Blockchain without having a game theory based incentivised token is just a slow database. People are incentivized to grow the database because there is something intrinsic that makes the blockchain useful.
Bitcoin is the reward cryptocurrency of a massive public blockchain that is used to transfer value. At the same time, Bitcoin grows in price because it has a fixed supply that cannot be modified. With an increased demand for it, the price of the famous virtual currency could grow in the future and reach new highs.
If there is not a currency that works as an incentive for individuals to spend money to mine Bitcoin, then, it is not possible to create an efficient decentralized blockchain. If Bitcoin does not exist, then, blockchain disappears.
Peters ended the article by saying:
“Blockchain without Bitcoin replicates the same financial system already in existence. There may be some efficiency gains through sharing private distributed ledger, but blockchain without Bitcoin is not one of the most important inventions in the history of finance.”