Woz’s Technological Optimism Suggests Promise for Bitcoin, Blockchain 2 3605

The earliest Macintosh PowerBook was chunky and dark gray. It featured a built in trackball, where the touchpad is on today’s Macbook, and little rotating peg legs to elevate the keyboard at an ergonomic tilt. The screen was black and white. You could open it on your desk at school, and tuck it into its special carrying case to sling it over your shoulder when Mom came to pick you up.

Going to school with Steve Wozniak’s kids in Los Gatos, California, meant having special access to cutting edge technology, like the Macintosh PowerBook in 1992. Along with five other students from our small school in the Santa Cruz mountains, I went to after school classes at Woz’s office to learn about Apple computers and emerging technology.

The first day, Woz taught us to dismantle and reassemble a desktop Macintosh, showing us all the pieces and what they did, with diagrams on the whiteboard. We learned the difference between random access memory (RAM) and the storage space on a hard disk, between a hard disk and a floppy disk. We learned how to navigate the innovative GUI that used windows (while PCs were still using DOS) to access the Apple utilities and adjust the settings for peak performance.

A great advocate for the intelligence and capacity of children, Woz challenged us with sophisticated knowledge and trusted us with expensive equipment, eager to see what creative uses we would put them to. He showed us the first version of Adobe Photoshop, a new technology that shook the public into doubting the integrity of photographs. Along with it, we had early model digital cameras called Canon XapShots, which used tiny floppy disks to store around 50 pictures at a time. The day he brought in America Online version 1.0, we were ecstatic that we could chat with each other from different rooms.

Woz was childlike himself, especially in his enthusiasm for developing technology. When laser pens were new, you could always find one clipped to the collar of his Hard Rock Cafe tshirt. He seemed to like them more for playing tricks on people than for any practical purpose.

Me (in the awesome blue sweatshirt) with Woz at his office in the early 90s. Photo courtesy of Gretchen King.

Early Techs Championed by Woz Became Familiar Names

Most of the technologies Woz championed have evolved. Some went big. As dial up AOL gave way to internet browsers like Netscape, I remember sitting in our middle school’s Wozniak Library Media Center learning how to use a world wide web page called Yahoo!, the novelty of which I put to work looking up David Letterman’s recent Top 10 lists.

America Online set the original chatroom model, complete with primitive emojis. It grew so big that in 2000, the year we kids were graduating high school, it bought Time Warner for $165 billion and became AOL Time Warner, then the world’s biggest media conglomerate. Now, estranged from Time and Warner after a decade and a half of new mergers, AOL is part of the Verizon subsidiary Oath, which also owns Yahoo! and, believe it or not, Netscape, which is still around.

The success of Photoshop, of course, positioned Adobe to set industry standards, now untouchable as king of the Silicon Valley’s creativeware. Macintosh PowerBooks evolved into Macbooks. Digital photography sure became a thing. And there are exceptions, too. Those laser pens, well, occasionally you still see someone using one to disrupt their cat.

Woz on Bitcoin

Wozniak hasn’t taken his finger off the pulse of emerging tech. Still full of wonder for the promise and possibility of technological advances, he’s been outward about his enthusiasm for Bitcoin, calling it “pure digital gold,” and placing his faith ardently in its mathematical integrity.

“I believe so strongly in mathematics and purity and science as defining the world,” he told CNBC in June.

“Bitcoin is mathematically defined. There’s a certain quantity of Bitcoin,” he said, “and it’s pure. There’s no human running it. There’s no company running it, and it’s just going and going, and growing and growing, and surviving! That, to me, says something that is about—something that is natural. And nature is more important than all our human conventions.”

His journey with Bitcoin is well documented. He tried to buy some around $70, ended up not getting any until they hit $700. Then he lost a few to fraud, and when prices soared “way up in the sky,” he said he “got scared, and sold everything but one Bitcoin.”

Woz stresses that he isn’t an investor. Still a man who loves laughter, he puts a premium on happiness, not wealth, and only holds his single Bitcoin for the sake of experimentation. “Part of my happiness is not to have worries, so I sold it all — just got rid of it — except just enough to still experiment with,” he told CNBC last year.

He said he agrees with Twitter founder and Square CEO Jack Dorsey, that Bitcoin could be the first global currency. At New York’s Consensus, a blockchain conference last May, Dorsey said “the internet is going to have a native currency so let’s not wait for it to happen, let’s help it happen… I don’t know if it will be Bitcoin but I hope it will be.”

Woz responded: “I buy into what Jack Dorsey says, not that I necessarily believe it’s going to happen, but because I want it to be that way.”

By contrast, Woz has called federal fiat currency “kind of phony.”

…And on Blockchain

But Bitcoin isn’t blockchain. It’s just the first and most well known use of blockchain technology. Last month at New York’s NEX technology conference, Woz called blockchain a bubble, similar to the dotcom hype bubble of the early aughts. “It was a bubble, and I feel that way about blockchain,” he said on stage.

“Blockchain in all forms is so popular and being studied by so many people,” he previously said in June’s CNBC interview. “It may be long term. I do see it, as you said, as a bubble… There’s a huge amount of interest in it right now, but things aren’t going to change that rapidly. That’s what the internet bubble was about.”

When asked how long he expects it to take for blockchain to gain widespread traction, he referred to the lag between the dotcom bubble and today, when we’ve finally realized many of the dotcom era dreams: “I’m going to give it 10-15 years.”

Part of the reason for this is human adjustment to new technology. “People have to have their mindset change,” he said. “Culture and tradition, and status quo and the way things are doesn’t change that rapidly, instantly, when it’s that huge.”

His faith in blockchain appears to be mixed. But in a seeming contradiction, Woz has suggested Ethereum could be the next Apple. “Ethereum interests me because it can do things and because it’s a platform,” he said at a May tech conference in Vienna.

Woz’s view of Bitcoin as solid gold but blockchain as a bubble is the inverse of that held by Jack Ma, chairman of China’s Alibaba and its fintech affiliate Ant Financial. Last month Ma said that the “technology itself isn’t the bubble, but Bitcoin likely is.”

Bubble or No, the Future Still Seems to be Blockchain

Which way is it? Is Bitcoin the bubble while blockchain is solid, as Jack Ma says, or the other way around, as Woz indicates?

Woz’s hope for Bitcoin as the pure-form currency of the future could prove misplaced if demand for it suddenly falls off. Blockchain, meanwhile, has myriad potential uses in finance, logistics, travel, even the art world. Developers and entrepreneurs are testing the mettle of this new technology with fervor and abandon. If we’ve learned from the dotcom bubble not to bet all our chips on untested technology, we can watch it develop steadily, as the internet did around the turn of the century. And even if the hype around blockchain is a bubble, Woz is probably right about the technology’s ultimate staying power.

To say the least, he’s seen a lot of technologies come and go. Sometimes, like the novelty laser pens of the late 1990s, new tech is just a fun experiment. But Woz’s enthusiasm for Bitcoin and measured interest in blockchain platforms like Ethereum is an indicator. A mathematically pure ledger system that governs transactions with transparency and automation holds emergent promise for the childlike optimist in any of us, much the way the Macintosh PowerBook did in 1992.

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A tribal member of the Choctaw Nation, Brian grew up in the Silicon valley under the technological mentorship of Steve Wozniak. He's lived, worked and traveled all over the world, and now writes and makes films in the Pacific Northwest.

2 Comments

  1. Thanks, Brian. I’m surprised how accurately you captured me in this article. By the way, Brian was one of my first class of 6 students that went so well that I continued for 8 years with full-sized classes of 20-30 students. These classes were all in the local public schools, with no press allowed.

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The Block Talk Award Winners Announced 1 1039

Thanks to everyone for submitting your favorite blockchain innovators and influencers. Our editorial team had a great time learning about new projects and individuals that are building a foundation for our future with blockchain technology, and realizing amazing technological feats in the present.

While it was difficult to select just one project or individual in each category, we’re excited to announce the winners of our first inaugural Block Talk Awards.

  • Best ICO Analysis & Commentary – Tatiana Koffman, Various Outlets
  • Most Engaged Community – Rod Turner, Various Outlets
  • Favorite Blockchain Blogger – Rachel Wolfson, Forbes
  • Best Crypto Journalist – Jordan French, The Street
  • Innovative Female Founder – Amber Baldet, Clovyr
  • Best Podcast Host(s) – Joel Comm and Travis Wright, Bad Crypto
  • Favorite Blockchain Event Host – Adryenn Ashley, Loly.io
  • Top Crypto Speaker – Ian Balina, Crypto World Tour
  • Most Innovative Blockchain CEO – Trevor Koverko, Polymath
  • Top Social Entrepreneur – Evan Caron, Swytch

Winners in each category will receive a $1500 media credit on The Block Talk, access to a network of TBT Award honorees, and VIP access to TBT events in 2019.

Defrauding Crypto CEO Josh Garza  Sentenced in Landmark Case 0 55

The disgraced former CEO of fraudulent crypto company GAW Miners has reached the end of a legal saga spanning more than three years. Josh Garza has been sentenced to 21 months in prison and payments of $9,182,000 in damages. His prison term will be followed by three years of supervised release, including six months of home confinement.

US Attorney for the District of Connecticut John H. Durham announced the sentence, which follows Garza’s guilty plea to wire fraud.

How GAW Miners Lost Their Zen

GAW Miners started as a cloud mining service. Fraud allegations began to emerge in 2014, and formal charges followed. The SEC accused GAW with acting as a Ponzi scheme by selling more crypto mining power than they really had. Around that time, GAW also peddled its token, PayCoin, which they promised had a $20 ‘floor.’ That floor dropped out in 2015, to the ire of beswindled token holders. By the end of January, one PayCoin was worth less than $2.

According to the Department of Justice, Garza “stated that the market value of a single paycoin would not fall below $20 per unit because Garza’s companies had a reserve of $100 million that the companies would use to purchase paycoins to drive up its price. In fact, no such reserve existed.”

Nor did an $8 million transaction in which GAW’s parent company allegedly purchased controlling shares of ZenMiner (another company founded and operated by Garza). “Garza made multiple false statements related to the scheme,” the release states, “to generate business and attract customers and investors.”

The PayCoin collapse initiated the undoing of GAW and ultimately of Garza. GAW tried to bounce back with some unsuccessful endeavors like a crypto exchange called Mineral and a platform for making Amazon purchases called CoinStand, before the company went into default for failing to pay their power bill.

The truth eventually began to come to light after internal emails and documents surfaced, after GAW went under separate investigations by the SEC and the DOJ. A few years later, these investigations have finally resulted in Thursday’s sentence.

Justice and Fraud in CryptoSpace

The sentence is a win for the Department of Justice, which has been puzzling over how to govern the crypto world, and could set precedents for following cases, including investigations already underway.

A Bloomberg study has found that over 80 percent of ICOs are scams. Meanwhile, TechCrunch reports that over 1,000 crypto projects have failed in 2018, and $1.1 billion in cryptocurrencies have been stolen this year, according to CNBC.

The crypto landscape and the justice system clearly have some reckoning to do, but investors need to exercise serious caution in the meantime. Although Garza’s sentence sets a precedent, it’s based on a situation that’s not necessarily unique.

Garza’s Sentence May Not Satisfy Defrauded Victims

Critics of the sentence have pointed out how with good behavior Garza could be out in 18 months, a light load considering his fraudulent acquisitions through PayCoin could’ve totaled $20 million by some estimates, and considering the 20 years of prison time per infraction Garza was facing in court. The lighter sentence was part of a plea deal.

While Garza denied all charges at first, he expressed remorse about his actions in a courtroom statement Thursday, according to CoinDesk. Garza is ordered to report to prison on January 4th, 2019.

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