Saturday, January 13, 2018

Worries: Grandma and Bitcoin Fees

Bitcoin fees... sigh. So, is this the beginning of the end?

Fearful geek that I am, I can't begin to understand all the math and codes and tracking mechanisms that it takes to make Bitcoin work. Still, I've played with it enough to be excited by the possibility of sending packets of "cash," or even just packets of verifiable bytes of information in a ledger, to someone anywhere in the world. It's not just the get-rich-quick aspect of the "coin," but the intellectual curiosity of where the technology will lead, and how, or if it will, affect our everyday lives in the future. It could be that my understanding and love of Bitcoin is better placed in Ethereum, which I also "love."

But one of the topics on forums has been about the mainstreaming of Bitcoin. At what point would the coin enter the mainstream? On that day, users speculated, old hands would be rich on Bitcoin-as-an-asset, while everyday Joes could happily pay for Starbucks lattes with this new virtual cash, and all would be well.

And Bitcoin Wallet developers (some said) dreamed of the day that Grandma would whip out her Bitcoin wallet with the same fearless confidence she showed in the past as she unsnapped the gilded-metal catch on her little pink-leather coin purse. And all would be utopian. And this brave new coin would put nasty old traditional banks to shame, and their greedy old fees.

But now it seems that the cost of mining has grown tremendously, as was (apparently) expected. That was to be the slowdown, the stabilization of the value of the coin, and nothing for the fearful geek to fear. It was said to be inherent in the technology, the natural course of events, and not an evil thing. It was part of the genius of the original code, or so they thought.

But now the user and exchange fees have grown to monstrous proportions to outstrip the mining fees and the bank fees and all the other greedy old capitalist institutions. And it's not because the miners or the exchanges are greedy, it's because they have reaped a portion of the harvest of the blood, sweat, and tears (and hard-earned fiat cash) they have put into mining over the years. But with the tears came the insight that greedy old capitalist banks maybe had a reason for their high fees. Business has its overhead. Any business. Even the invisible-gold-coin business.

Now the naysayers are gloating, literally foaming at the mouth with crazed glee, almost true madness, as they scream, "Bubble! Bubble! Tulip! I told you so! I told you it was a Ponzi scheme!"

Well, bubble it may be, and losers many there will be, but Ponzi scheme... I don't think it ever will be.

You can't put the cat back in the bag. You can't put toothpaste back in the tube. Pandora can't put the bad stuff (or the good) back in the box.

Satoshis and the blockchain technology that supports them have been unleashed on the world. It's all open source. And yes, there are black hats. But there are white hats, and they are starry eyed. And they are a community. A community of true believers, a community of smart, hard-working developers.  And they will work to fix this. They will seek solutions. They will seek the Holy Grail. And yes, they may be seeking the thing that will never be found, the El Dorado that turns out to be a beehive of mud huts in the jungle. But they will try to solve the puzzle, try to find a way to make the fees fall in line with the transaction, try to save the blockchain for a future day.

Call me Don Quixote. Or call me Grandma. Grandma won't be happy paying a seventy-five-dollar fee on a hundred-dollar trade, getting coffee money back in change for a big bill. Don Quixote hopes the white hats have Grandma's back.

The blockchain will not fade away, but it will continue to morph and keep on morphing. Into what...? Grandma just doesn't know.