Mixed weather is expected on the Basque coast, and will Surfin’Bitcoin 3rd release participants look grey? The most famous cryptocurrency is trading at just half of its January price and is trading at around $21,600 this morning. According to one of the speakers on the show, “Bitcoin is now obsolete, overtaken by many other cryptocurrencies that have adopted some of its general principles, while correcting its shortcomings and surpassing its capabilities. Now it is just a kind of “minitel” of cryptocurrencies. Jean-Paul Delahayer, emeritus professor of computer science at the University of Lille, writes about this in a book published this week (Beyond Bitcoin, published by Dunod). He won’t have many friends, of course, but that’s to be expected. The event, taking place in Biarritz until Saturday, is attracting those who call themselves bitcoin maximalists. They will make up a significant portion, if not the vast majority, of the 1,850 people who have already purchased tickets.
Jean-Paul Delahayer criticizes, first of all, the bitcoin blockchain’s “proof of work” mode of operation, i.e. competition between minors, those who ensure the reliability of the blockchain and who are rewarded in return. This process is very energy intensive, while there are other technologies such as “proof of stake” based on a reduced number of miners selected (for example) if they place an amount in escrow.
Ethereum in ambush
However, the Ethereum blockchain has scheduled an update for September 19 called “Merger”. [la fusion]to switch from proof of work to proof of stake. So the whole question is, will Bitcoin lose its superior mastodon, unable to reform itself in favor of more innovative protocols? Could this also explain its recent decline?
The debate about proof-of-work energy consumption is divisive, with some arguing that it is the price to pay for a security process that has, in a sense, “proven itself” and guarantees the decentralization of power. But no more and no less than “proof of share,” their opponents answer.
News is always dissuasive
According to Jaran Mellerud, an analyst at Arcan Research who will also be present on the Surfin’Bitcoin scene, the bear market we have been seeing for several months is not due to the obsolescence of the most famous of the cryptocurrencies: “The macroeconomic landscape has changed. worsened since January due to higher interest rates […] leading to a decrease in risk sensitivity in financial markets, but bitcoin and other cryptocurrencies are no exception. He then concludes that industrial accidents, such as the collapse of the Three Arrows Capital hedge fund or Terra tokens, have affected all crypto assets. “Fortunately, it looks like the worst is over, but the macro still looks bad. »
Conversely, he says, “Bitcoin’s biggest strength is that it’s a ‘boring’ protocol that doesn’t change much over time. In an ocean of thousands of ever-changing cryptocurrencies, Bitcoin stands out for its robust code, which is not easily counterfeited. »
Bitcoin on a fresh start
Claire Balva, director of blockchain at KPMG, agrees: “The added value of bitcoin is its stability. She also notes that the mother of blockchain is still experiencing innovation, even recently. “The course is not representative of what is happening in terms of technology. Last year there was an update again (Taproot). And a new technical improvement is in the works: Tarot, which aims to make the creation of tokens possible. Essentially, tokens that will be based on the Bitcoin protocol, not passing through it directly, but through an overlay called the Lightning Network (on which the Taro protocol will be implemented). Specifically, this would open up Bitcoin to innovations that have so far mostly taken place in Ethereum, such as issuing stablecoins.
Claire Balva, like others before her, sees the Lighting Network as the way to save Bitcoin: scalability. While the blockchain itself only allows 7 transactions per second, the overlay could theoretically be in the millions. “I am convinced that scalability will come through ‘layer 2’ and not through blockchain multiplication,” she adds. But not necessarily on a Bitcoin strategy versus an Ethereum strategy. “Other overlays also exist on Ethereum, but “they are more experimental and more complex due to the existing tokens and smart contracts. [programmes informatiques créés sur la blockchain, NDLR] “, according to Claire Balva. “In Bitcoin, we will first look for scalability before developing tokens. ”
Coinbase talks about the potential “momentum” of the Lightning Network, despite some “hurdles” that still exist. The total value managed by this second network hit an all-time high of 4,500 bitcoins (nearly $100 million) in August, up over 35% year-to-date. “It should be noted that this rise occurs during a bear market when bitcoin is relatively low,” wrote Connor Dempsey and Sam Newman, analysts at Coinbase.
The merger on Ethereum, however, aims to make transactions smoother and without overlaps, but Claire Balva believes that “it’s a bet: if everything goes well, it could increase adoption, otherwise the consequences would be disastrous. »
However, Jean-Paul Delahaye prefers this kind of progress: “Instead of abandoning decentralization and other fundamental properties of the Bitcoin protocol by patching it where we are not even sure it can work properly and at scale, it seems to me that It would be wiser to take advantage of the research and progress made in the development of other blockchains. » Bets are open at Casino de Biarritz.