The MIT Technology Review recently published an article titled “Let’s Destroy Bitcoin,” authored by tech writer Morgen Peck. In the piece, Peck goes into three ways she sees bitcoin, the flagship cryptocurrency, be “brought down.”
A Government-Backed 'Fedcoin'
The first option is a government takeover of the cryptocurrency, through a Federal Reserve-backed cryptocurrency dubbed “Fedcoin.” Central banks and governments would allegedly be able to “improve upon the efficiencies of Bitcoin,” and presumably see Fedcon become the number one cryptocurrency.
Fedcoin’s blockchain would have verified financial institutions as authorized nodes, according to Yale undergrad Sahil Gupta, who reportedly wrote a study on how such a currency would work. The nodes, he said, could be “things like Bank of America, JP Morgan – basically, trusted institutions.” The publication notes that the Bank of Canada, Canada’s central bank, has simulated such a system using Ethereum (ETH) back in 2016.
The article reads:
"Gupta believes that transactions should be processed much faster when a central bank is behind the system (as opposed to the peer-to-peer network that currently records Bitcoin transactions). This efficiency could add up to a lot of saved money."
A Stealthy Takeover
The second option involves social media giant Facebook stealthily takeover the cryptocurrency, by first creating a bitcoin wallet for its users. Per the MIT, Facebook’s engineers would be able to integrate the wallet in its products, in a move that would give the company an outsized control over the Bitcoin network.
“For those who already use Bitcoin, the experience is so vastly superior to what they’ve previously experienced that they immediately migrate their funds to their Facebook wallet. Those who don’t yet own any bitcoins, or have never heard of them, could be given the option of earning some on the site, either by watching advertisements or by writing Facebook posts for others to see.”
Adding to its efforts, Facebook would launch a mining operation, and give users the ability to see an ad-free version of its websites by allowing the company to mine the cryptocurrency with their machines.
Once Bitcoin and Facebook were inseparable, Peck believes the company could use its influence to fork bitcoin and manipulate it in any way it wanted to. Peck admits some would create rival versions, but claims Facebook would have the cryptocurrency under its grip.
The third and final option would see bitcoin become irrelevant, as the creation of multiple cryptocurrencies, for every situation, would mean people use specific currencies in specific situations. The article reads:
“You’re in the checkout line at the grocery store. Inside your phone’s digital wallet you find not only Fedcoin and FacebookCoin but also AppleCash, ToyotaCash, and a coin specific to the store you’re standing in. There’s also a coin redeemable for babysitting services, and another that gets you rides on your local subway system.”
This last option, according to the MIT, is already happening as companies are launching their own currencies and tokens for their services. Various cryptocurrency startups, through initial coin offerings (ICOs), issue tokens that can only be used on their platforms.
At the end of her article, Peck notes that bitcoin’s semi-anonymous transactions are almost impossible to censor. This quality could be about to disappear, she implied, as the US National Security Agency (NSA) has been known to attempt to track down bitcoin users, according to leaked Snowden documents.
Peck’s piece concludes that those who aren’t using bitcoin may not care about the cryptocurrency’s early adopters’ vision of a single, free to use currency controlled by the masses. She added:
"With networks, convenience wins, and convenience is based on size.It’s the reason you’re on Facebook rather than some other social-media site—because everyone else is. If cryptocurrencies are to be widely used, it will be the habits of the masses, not the wishes of Bitcoin’s early adopters, that determine what becomes of Satoshi Nakamoto’s vision.”