BitcoinXT And Blackhawk: Bad Ideas And Biased Media

If you listen to the mainstream media, the cataclysmic event of earths history is mere moments ahead as BitcoinXT is going to be the catastrophe that ends Bitcoin and billions of dollars vanish as the world falls into a global depression and everyone starves to death while ripping mattress tags from their roots in protest.

All of this in regards to something that might happen a year from now, if even that soon. An event that is uncertain of a future existence at all. A mere proposal placed in queue for a global vote, and six months to do that. Assuming it is voted into existence, it would be followed by what could be another year before any real change in processing would actually happen (give or take 6 months).

Meaning that it is going to be fully compatible with Bitcoin core for at least another year.

This aforementioned event, as Vox put it:

"WOULD BE CATASTROPHIC"

Really? Catastrophic? This is just a proposal. It's up for a vote, it is not written in stone. 

It wasn't just Vox, here's some other headlines:

The Wall Street Journal:

"Bitcoin Price Drops on Block-Size Debate, 'Flash Crash'" 

Chicago Tribune: 

"Bitcoin's anarchists can't make up collective mind"

CNBC:

"Bitcoin might split, and it could spell its end "

SmallCap Network:

"Bitcoin XT Civil War"

Forex Minute:

"The Great Bitcoin Depression"

PCWorld:

"Bitcoin XT debate overshadowing growth"

Then there was Vox, which the aforementioned "catastrophic" statement came from. The headline there was:

"Bitcoin is on the verge of a constitutional crisis"

The negativity was so much so that some exchanges saw bitcoin's price plummet to $200, as we reported here, specifically calling out this type of reporting as part of the problem with the dip. Do you know what happened after we published that article? I got a call from a few traders asking me my thoughts. I said hold, and buy now. Needless to say, I'll be getting some nice Christmas cards this year for that little gem.

A Network With A Real Problem: Blackhawk

Bitcoin XT received all of this coverage and negativity because of something that might happen in a year. During this same time frame, the Blackhawk Network was down for three days, and it's still down right now! (at the time of this writing) Millions of United States citizens, many of whom cannot afford to have any money tied up anywhere, have no way to access, use, or spend their hard earned money, and it's been like this for days.

We haven't heard a single peep out of any news outlet about this one. Not one word.

This is affecting people right this very second, and likely millions of dollars, and quite possibly leaving people without food, utilities, and necessities, and no one has bothered to even mention it.

With 300 million daily customers plowing through their cards at $3.95 a pop, you would think Blackhawk would provide a statement, or someone might actually notice. Obvious they implemented a "hard fork", that was a few bytes short of a complete working program, because it's not working.

Three days! Not one word.

Bitcoin XT possibly next year? Plastered all over the internet as if the sky is falling. (a bit overstated in my opinion.)

Did they not know? Or are they just determined to see Bitcoin fail somehow.

A Single Group Or Individual Control

Blackhawk is exactly what happens in a "dictatorship". When one person or group has final say, to make it be. I heard this mentioned this week, comparing it to manage code similar to commercial software companies. Commercial software like Blackhawk's ReloadIT service, where someone made some stupid decision, and now they are down.

You know what happens when you implement this kind of model?

Windows Vista. 

That's the kind of crap that happens. This blackout preventing millions of people to access millions of their own dollars via the Blackhawk network on their ReloadIT system, is another one.

You can't just say "oops" when you are dealing with a public ledger responsible for billions. It's where it needs to be, in the hands of the ones who make the network possible. The miners, exchanges, and other services, around the world, that are responsible for it's daily operation.

Regulation and Private Networks (Chains)

This further alienates the entire regulation debate. We published an article last week regarding the New York BitLicense and allot of people stated that it is required for "financial responsibility". I do not disagree with this, nor do I disagree with a level of regulation, especially that of a national security nature.

However, a license does not provide a company financial responsibility or protection any more than a license to drive guarantees an individual will never be in an automobile accident.

Case in point. The Blackhawk network, and the ReloadIT service they provide, is responsible for millions of other people's money, yet, they forgot to pay their domain registration renewal!

Here it was as of this morning (8am, 8-20-2015), after days of "some other reason" it was down:

It expired on the 19th. They didn't pay the damn bill.

This is why "Private Blockhains", or their true label "AltCoins" (this is not bashing AltCoins), are a lame idea. The Blockchain works because it is a global public ledger and provides transparency without any single entities control. The second you make it private, you have all of the same problems (Blackhawk, Visa, Western Union, Etc...) in a black hole, behind closed doors, while everyone remains in the dark. No one is ever seems to be held liable other than the parties who get shafted for using their services in the first place.

Take companies like PayPal or iPayment Systems, who get away with holding merchant funds for 6 months or more without any explanation at all, and you fuel the fire against this entire concept. This is one of the points in regards to bitcoin and Blockchain technology... to get away from this garbage.

Secondly, it's become just a misused "label" rather than an actual use of technology. itBit announced it's "Bank Chain", which by the way, if they are smart, they might want to change the name before SAP wakes up and slaps them with a copyright infringement lawsuit seeing as they have been using Bank Chain terminology hard-coded in their software for over a decade.

Bank Chain, doesn't use the Blockchain. It doesn't use Blockchain technology. It doesn't use Bitcoin. So why in the hell are we talking about it? It might as well just use a database.

It doesn't seem to be making allot of sense and is a perfect example of this misuse of terminology "block chain technology" when in fact it has nothing to do with it and it may just be being used to sell software to people who really have no clue what they are buying.

This is not meant to say anything derogatory about itBit, this is one of the companies I really like. They were the first to implement FIX, which is a true structured API standard for the financial industry, and they managed to get a BitLicense, before there was a BitLicense, and then get an exemption from the BitLicense as well. That's impressive, and we reported them here a while back. Bank Chain may fall short, but we will have to see when it arrives, or I suppose we will not see when it arrives.

As far as all of the speak regarding "Private Blockchains" and "Public Blockchains", there is really just one Blockchain ... singular. Everything else, is either an AltCoin, some other concoction, or a misuse of the terminology to sell otherwise sub-par, or perhaps stellar and just unwanted, software.

However, perhaps, for a brief moment sometime next year, there just might exist ... two.

Note: ReloadIT was operational again as of 2pm CST.