The Lightning Dystopia: How Bitcoin could also become debt money

Bitcoin is designed as a strong value store and a limited good, just like gold. But just as it is impractical to use gold as a means of payment in everyday life, so it is difficult to do so with Bitcoin – the scaling problem greets with high fees and low transaction speed. Ultimately, both physical and digital gold in their pure form are at best suitable for everyday use to a limited extent.

Just as gold ultimately had to give way to more practical paper money, more and more second-layer solutions are also finding their way through Bitcoin, through which the block chain is partially left behind. These proposals, such as the Lightning Network, no longer send Bitcoin, but digital promissory notes covered by Bitcoin, which are transferred via payment channels. Doesn’t that look familiar to you? Weren’t our banknotes originally gold covered?

What could an inflation of the news spy look like?

If we continue to transfer the news spy of gold currencies to digital gold, the next step would be to expand the money supply – i.e. the issuance of Bitcoin promissory notes – at some point. Here is the review by onlinebetrug. Just as people did not withdraw their gold from the bank at some point, it could also be that the Bitcoin would remain on the blockchain and would only be traded with digital promissory notes.

At that time the goldsmiths, who were able to store the precious metals well, gradually developed into banks. If we were to invent a digital dystopia from the idea of the Lightning Network, central distribution points (possibly so-called Lightning hubs?) would also emerge at Bitcoin. Probably these distribution points would emerge from the largest payment channels. These would gradually manage all Bitcoin and might eventually be able to issue more “Bitcoin notes” than Bitcoin.

The digital notes system would be ready. Completely transparent and without annoying cash. The original Bitcoin idea would be hijacked. This would solve the scaling problem – but it wouldn’t have much to do with the basic idea of the blockchain.

How realistic is such a dystopia?

Admittedly: This dystopia is perhaps a bit far-fetched. When US President Nixon revoked the gold standard in the 1970s, it became clear that the US might not have as much gold as they originally said. Although Bitcoin has a lot in common with gold, there is one important difference. The blockchain is open to the public. No one can lock it behind a vault and claim to have more Bitcoin than his address on the blockchain. An expansion of the issuance of Bitcoin promissory notes by (still fictional) central distribution points does not seem very realistic.

Approaches such as the Lightning Network are urgently needed. When I buy a cup of coffee, it is not necessary to obtain the approval of the entire refectory for every purchase; there must be a way in which only the approval of the seller and myself is required. But with all its usefulness, it is also important to be aware of the dangers of second-layer solutions. Decentralisation and the blockchain must be retained as a basic principle.

When ICO-PR is more important than a human life

The crypto industry, rich in excesses, has been enriched by a human catastrophe. For a PR stunt of an ICO launch, a carrier of a crypto expedition died on Mount Everest. His death raises the question of how little a human life is worth between a search for sensation and an interest in profit.

When mountaineer George Mallory was asked in the 1920s why he wanted to climb Mount Everest, he replied, “Because he’s there. This is also a good answer to the question why one should deal with crypto currencies. The combination of the hunt for ever more exciting crypto PR and the real danger of the so-called death zone of the highest mountain in the world has now claimed a human life.

Bitcoin loophole: The main thing is to generate attention

The Ukrainian social media platform ask.fm undertook the highest PR stunt in the world. The company is currently preparing to launch its own Bitcoin loophole crypto currency. To ensure the necessary attention, the platform sent four Ukrainian crypto enthusiasts to Mount Everest. They were to bury a hardware wallet with ask.fms’ own tokens at the summit.

The company’s own advertising video explains why this was absolutely necessary:

“Crypto projects have to change the rules of the game. Accepting challenges. Conquer heights. Be ready for the highest token, literally.”

Later, a bearded Ukrainian can be seen in the video in bad weather. “We are now at the highest point on earth,” he says, holding a hardware wallet in his camera. Tokens worth 50,000 US dollars are now buried at the summit. The Financial Times then asked ask.fm where the money came from. The answer: the tokens after the ICO could be worth that. Real value at this point: zero.

The efforts were gigantic, as the press release from ask.fm showed:

“Two guys were stuck at a height of over 7,000 meters, without reserve oxygen. Under extreme temperatures and unable to descend, they had to call a helicopter squad to the rescue on the second day. Now they are both safe and being treated. And strong to have taken such a step.”

One in over 100 Sherpas does not return
In a Facebook post, Taras Pozdnii, one of the mountaineers, holds his connected hand in the camera, smiles and writes about the frostbite and how he lost 10 kilos. The mail was sent from the capital Kathmandu. This was at a time when Sherpa Lam Babu, a member of the ask.fm troop, had already disappeared at over 8,000 meters between the summit and Camp IV. Lam was an experienced mountaineer. But it is clear to every connoisseur that one is not “lost” at this altitude without being in absolute danger of death.

As the Financial Times researched, team members were already talking about Lam’s death when ask.fm still wrote that one of over 100 Sherpas had not turned up yet and you had no information. While the ask.fm team was flying to Kathmandu by helicopter, Everest chronologist Alan Arnette asked in his blog why nobody came to Lam’s aid.

Jemima Kelly of the Financial Times noted: “The company is still encouraging climbers to look for digital tokens that have no verifiable value, even though a person has already lost his life for them. By the time Lam died on Mount Everest, more than 500 climbers had reached the summit in the young season and three more had lost their lives.

Ethereum wins 1st place in blockchain index from China

The Chinese Research Institute of the Ministry of Industry and Information Technology has published a blockchain index. The institute, which is tied to the government, publishes a ranking of 28 ledgers. These are evaluated according to the criteria technology, applicability and innovation. The first three places are occupied by Ethereum, Steemit and Lisk. Bitcoin is a little further behind.

After the People’s Republic of China last year provided for extensive FUD in the crypto world, the government now issued the first official blockchain index for the technologies behind crypto currencies. According to the publication, various researchers evaluated the technologies behind the crypto currencies according to the criteria of basic technology, applicability and innovation.

The Ethereum blockchain is ranked first with a total index of 129.4 points. The ranking consists of 80.3 points for basic technology (B), 23.7 points for applicability (A) and 25.4 points for innovation (I). The steemite blockchain scored 82.6 points in the basic technology, which is even better, but is lagging behind in terms of applicability (9.4 points) and innovation capability (23.9 points), resulting in an overall ranking of 115.9 points. This puts Steemit in second place. The German company Lisk ranked third with 104.8 total points (B: 64.4, A: 20.9, I: 19.5).

The complete list of the Bitcoin news can be found here:

As you can see, Bitcoin news only appears in 13th place. As a pioneer in the blockchain area, the crypto currency receives the best rating with 35.6 points, at least in the area of innovation. The winner in the field of applicability is NEO with 26.6 points. IOTA and Cardano share seventh place.

As you can also see from the list, the publication of the figures stops abruptly after 15th place. Although the ranking is visible, the score is not. Ripple occupies 17th place here, the taillight is NEM.

Criteria in blockchain index not entirely transparent

According to local sources, the index should help to capture the status quo of the development of global blockchain technologies. The aim is to identify trends in good time and, if necessary, promote them.

The exact evaluation criteria and the entire research process are not yet fully visible. Whether and to what extent the ranking is meaningful remains to be seen. The fact that the Ethereum blockchain with its Smart Contracts is at the forefront of basic technology will come as no surprise in this context. The first place for Bitcoin in terms of innovation is also evident here.

Part of the analyst team includes Chen Zhong, who graduated from Beijing University and is now Vice President of JPMorgan in London. Other researchers include Wei Xu of Tsinghua University and Gan Guohua of Microsoft China.