Head of MIT’s Digital Currency Initiative Says Bitcoin is Being Built to Last For Centuries
The issue of Bitcoin and its place in the cryptocurrency industry was a widely-discussed one during Messari’s Mainnet conference. Earlier this week, Messari organized a virtual event where influential voices from the industry came together to give their take on the current state and the future of our growing market.
Neha Narula, the head of the Digital Currency Initiative at the Massachusetts Institute of Technology (MIT), gave one of the most memorable keynotes, discussing the aspect of Bitcoin very few seem to focus on nowadays—the technology.
“People often talk about bitcoin as an asset class,” she said. “But we also need to talk about it as a technology. That’s what bitcoin was originally, what it always will be, and what bitcoin as an asset class depends on.”
However, approaching Bitcoin from the perspective of technology has its own unique challenges. Unlike most other cryptocurrencies, where development is focused on increasing the amount of on-chain data and functions, most changes to Bitcoin focus on minimizing its design. Only a minimalist network that can easily be replicated across thousands and millions of nodes can be widely used, Narula said.
With complexity being the enemy of security, a simple and efficient base layer needs to be created that will serve as a foundation for a network that will potentially be used by millions.
“We’re building bitcoin to be around for centuries and you don’t want to be constantly rewriting the base layer.”
Some of the major changes to Bitcoin that are scheduled to happen this year are the introduction of Schnorr and Taproot. But, however powerful these changes might be when implemented, bringing them to the network presents its own set of problems. As an open-source project, Bitcoin is notorious for the slow pace of revisions to its software, she said, which is mostly due to the fact that those working on developing the software are concerned with preserving the functionality of blockchain technology.
This, however, isn’t in line with what most of the financial community wants from Bitcoin.
For Narula, the interest of large financial institutions in the crypto industries, especially Bitcoin, goes against everything it stands for.
“For bitcoin, mainstream adoption doesn’t mean institutional adoption, or replicating Wall Street all over again on top of a crypto network,” she said. “If Goldman Sachs likes bitcoin, we’re doing something wrong.”
To achieve mainstream adoption, Bitcoin doesn’t just have to be used en masse, it needs to be used by a large number of everyday people as any other payment network would be used. This means that more people need to think about what Bitcoin really is and what kind of value it has for people—not focusing solely on its price and market capitalization.
The fact that most of the market is focused solely on Bitcoin’s price is visible in the lack of financing of Bitcoin developers. As an open-source project without a central governing body, few large institutions are willing to invest in Bitcoin’s development.
“When I see developers wanting to work on bitcoin core and trying to find funding year-to-year to do that, that’s a really scary situation,” she said.
That isn’t to say that there aren’t any companies carrying the torch—Narula highlighted cryptocurrency exchange BitMEX, as well as second-layer solutions such as Blockstream and the Lightning Network for employing Bitcoin developers.