*Note: Since publishing this post, I was informed that Mike Hearn late last year had joined “investment bank-coin” private company R3. From Reuters:
Five more banks have joined a global consortium working on ways blockchain technology can be used in financial markets, the firm leading the project said on Thursday, as it brought in experts from the worlds of banking and technology.
BNP Paribas, Wells Fargo, ING, MacQuarie and the Canadian Imperial Bank of Commerce will join 25 other banks including JPMorgan and Citi in the initiative, led by New York-based financial tech firm R3.
R3 has also brought in bitcoin core developer Mike Hearn, as well as fincancial cryptographer Ian Grigg and bitcoin expert Tim Swanson.
So it all makes a lot more sense now. Hearn had already jumped ship to “protect the status quo coin.” No wonder this guy is so disliked.
Yesterday, Mike Hearn published a piece on Medium aggressively attacking the current state of Bitcoin, specifically proclaiming that the project has failed. The first three paragraphs make his position perfectly clear. Quote:
I’ve spent more than 5 years being a Bitcoin developer. The software I’ve written has been used by millions of users, hundreds of developers, and the talks I’ve given have led directly to the creation of several startups. I’ve talked about Bitcoin on Sky TV and BBC News. I have been repeatedly cited by the Economist as a Bitcoin expert and prominent developer. I have explained Bitcoin to the SEC, to bankers and to ordinary people I met at cafes.
From the start, I’ve always said the same thing: Bitcoin is an experiment and like all experiments, it can fail. So don’t invest what you can’t afford to lose. I’ve said this in interviews, on stage at conferences, and over email. So have other well known developers like Gavin Andresen and Jeff Garzik.
But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly. The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins.
The lengthy article then proceeds to explain precisely how he arrived at this conclusion. It mainly revolves the failure of Bitcoin XT to take off, something he blames on various parties, from short-sighted Bitcoin developers to Chinese miners.
So what should the Bitcoin community make of all this? Although I’ve been involved in, and following Bitcoin longer than most, I am most certainly not an expert. As such, I don’t feel comfortable responding in detail to the merits or lack thereof inherent in his piece. However, what I can tell you is that all of my friends with considerable technical expertise very much dislike Hearn. While they admit many of Hearn’s prior public criticisms outlining the issues facing Bitcoin are valid, they all think Bitcoin is better off without him. That’s pretty incredible considering how involved Hearn has been in a project they love.
It is precisely this contradiction which makes the recent article so interesting. On the one hand, Hearn seems to be addressing real concerns, yet on the other hand he comes across as a man badly spurned. A bitter, resentful, and potentially questionable character, who would rather throw in the towel and start attacking Bitcoin as opposed to continuing to work out any problems. That’s certainly how the tone of the piece read to me. For those of you with an investment background, he sounded a lot like a portfolio manager talking his book.
As this story unfolds, I hope to update this post periodically by adding perspectives from additional minds in Bitcoin, but in the meantime I do have a personal, non-technical thought. I think Hearn is actually doing Bitcoin a huge service by publishing this article, although his intent was clearly the opposite. If anything, this will galvanize the community to get real and address any existential problems that are present. Bitcoin is not dead, although failure for it, just like anything created by man is always a imminent possibility. Complacency and hubris kill more ideas than anything else, and Hearn’s article is likely to lessen both of those things and make Bitcoin stronger and less likely to fail in the near-term.
This never-quit attitude of the Bitcoin community was on perfect display with the following tweet by Andreas Antonopoulos:
Best way to respond to all the drama in bitcoin is to focus. Buckle down, work, don’t get distracted. Engineering solves problems. Code On!
— AndreasMAntonopoulos (@aantonop) January 15, 2016
One that note, I’d like to direct you to the Bitcoin Obituaries, a webpage that details the 88 times (and counting) where observers have proclaimed the death of Bitcoin, or its death in the imminent future.
For related articles, see:
U.S. Government Moves to Exploit Paris Terror Attacks to Ban Privacy
By Demanding Backdoors to Encryption, U.S. Government is Undermining Global Freedom and Security
Paris Police Held Mass Shooting Training Exercise Hours Before Actual Attack
Bitcoin: A Way to Fight Back Against the Financial Terrorists?
In Liberty,
Michael Krieger
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Michael, I love all of your articles, but I believe you & your friends are wrong for attacking Mike Hearn. Mike Hearn has been one of the very few voices of reason in the Bitcoin community for the last year, and he is one of the few defenders of freedom for the individual. He is fully behind Satoshi’s original vision of keeping Bitcoin as a “peer-to-peer electronic cash system”, instead of turning Bitcoin into a “centralized bank-to-bank settlement system”. You can look back through all of his Medium posts to exactly understand his point-of-view, which are all extremely reasonable & well documented & fully in alignment with Satoshi’s original vision for Bitcoin.
The main people on the other side of the issue were paid of $21 million by Blockstream, a corporation which stands to gain if the Bitcoin network is crippled. They are a centralized, censorship-prone financial solution (i.e. exactly the same as our existing financial system — think Paypal), and worst of all, they are practicing EXTREME CENSORSHIP to try to force their agenda. They have even gone as far as censoring Coinbase, the #1 website where newbies learn about buying & selling Bitcoin. They actually removed Coinbase from the bitcoin.org website for daring to suggest that Bitcoin should continue growing so that it can bring financial independence to all individuals on the planet. (In other words, Satoshi’s original vision for Bitcoin).
In fact, it looks like every single tactic that the anti-Hearn, Blockstream crowd is taking is straight out of the CIA’s handbook for beauracratic sabotage, as explained in this Reddit thread: https://www.reddit.com/r/btc/comments/411kyx/reading_mike_hearns_description_of_bitcoin_cores/
So it looks like there might be a deliberate CIA-backed attempt to discredit Hearn, to permanently cripple the Bitcoin network as a peer-to-peer network which brings financial freedom to all, and to keep all open discussions about Bitcoin censored. For example, the “bitcoin” community on Reddit has been heavily censored over the last year (they have deleted thousands upon thousands of valid posts, which are being tracked on unreddit.com), and over 8,500 people have moved over to the “btc” community on Reddit to start a freely-open community to openly discuss Bitcoin without censorship.
Similarly, both Bitcoin.org and bitcointalk.org are heavily censored, because they are run by the same guy who is in bed with the Blockstream folks. However, bitcoin.com is a place where free speech is allowed, so bitcoin.com is another open forum for free discussion.
Thank you Scott. This is the sort of commentary I hope the post generates, from all sides.
I don’t have a dog in this fight, since I am simply not qualified to. However, I didn’t like Hearn’s tone in the article.
The technical friend of mine I most respect agrees Hearn makes valid points, but he doesn’t like or trust Hearn.
I respect that you take the opposite side, as I want to hear as many perspectives as possible.
Best always.
Yeah, I think Mike was at his wit’s end when he wrote that article, which may explain his anger. Always great reading your work — you may be my #1 favorite writer ever!! 🙂
That’s an incredible compliment Scott, thank you.
I did just find the following out, which in my opinion makes Mike Hearn look so much sleazier.
R3 has also brought in bitcoin core developer Mike Hearn, as well as fincancial cryptographer Ian Grigg and bitcoin expert Tim Swanson.
http://www.reuters.com/article/us-global-banks-blockchain-idUSKBN0TZ1MF20151216
Here’s the main fallacy of digital “currencies”. Everyone who creates one of them (over 600 last time I checked at coinmarketcap.com) demands that you must exchange some of a government created fiat paper currency or electronic bookkeeping entries for it. Why is that? Unless you set up your own super expensive computer system to create some of your own and pay whopping electric bills for the power to “mine” these digits and store them, you are out of the game! Where is the advantage of creating some digital blips if it costs you more in the real world than there is benefit in the virtual world?? And what do you do when the electrical grids go down and your computer goes dark? Who ya gonna call, Bitbusters??
Digital “currencies” are just the latest scam invented to separate the fools from their government issued scrip for “something” which has absolutely NO measurable value to it. WHERE is the substantial amount of human labor in that fictitious medium of exchange in order for it to maintain its perceived purchasing power? WHO gets to say how many hours of your life is worth a certain number of the digital ripoff units??
Randy