Woz’s Technological Optimism Suggests Promise for Bitcoin, Blockchain 2 3669

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.

Previous ArticleNext Article
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.

Leave a Reply

Your email address will not be published. Required fields are marked *

There’s an Inflatable ‘Bitcoin Rat’ Staring Down the Fed 0 82

Someone has put a giant inflatable rat outside the Federal Reserve Bank in New York.

It’s covered in Bitcoin code, printed in rainbow colors, and is apparently a piece of installation art aimed at subverting the federal institution that controls the US dollar. Or is it pale, puffed-up pariah a commentary on Bitcoin bros themselves? Or does it have something to do with Warren Buffett, who earlier this year called Bitcoin “rat poison squared”? According to CoinDesk, who first reported on the inflatable rat, the meaning is intentionally ambiguous.

The artist behind the puzzling prank is Nelson Saiers. He describes his own work as “mystifying” and “singularly original”, notwithstanding the long history of rats being inflated as protests or used as economic and political icons in art and entertainment around the world.

“It’s art, so I hope they’re entertained by it,” he said, apparently implying that art is entertainment. “It’s informative, I hope people will learn [and] I’m hoping it’ll at least help people understand bitcoin better and be kind of faithful to what Satoshi would have wanted,” he added, citing the mysterious pseudonym of Bitcoin’s founder with a touch of reverence.

A $50 Million Artist

Saiers, a phD in theoretical mathematics, was a hedge fund manager who did that thing where you give up all the money to chase your dream of being an artist.

His financial experience includes a stint as managing director at Deutsche Bank’s prop trading desk, before becoming CIO of Saiers Capital, the hedge fund that bears his name. His creative career gives credence to the theory that working as an artist is more and more a privilege of the very wealthy.

CNBC estimated Saiers’s wealth to be around $50 million at the time of he departed from the financial industry to pick up his paintbrushes.

The Rat Joins a Tradition of Sculpture-as-Commentary in FiDi

The Bitcoin rat, which stands on Maiden Lane, isn’t the first pop up sculpture to grace Manhattan’s financial district. Last year, Kristen Visbal’s 50 inch bronze ‘Fearless Girl’ statue made waves by staring down the famous ‘Charging Bull’, to the outrage of ‘Charging Bull’ sculptor Arturo Di Modica. The 3.5 ton ‘Charging Bull’ itself was left on Wall Street in the middle of the night when Di Modica originally created it, obstructing traffic and drawing the curiosity of passers by.

When Saiers placed the Bitcoin rat, he initially set it up on private property and was promptly ushered off by security guards, who he says were good natured about the situation. He expects the sculpture to be more temporary than the aforementioned Wall Street bronzes, and will probably only be around for a few days.

A Critique of the 2008 Bailouts

The placement of the rat on Maiden Lane seems to be no accident, but rather a reference to the Maiden Lane Transactions, more commonly known as that time when the Fed bailed out the big banks after they all caused the 2008 market crash. The Bitcoin crowd’s antipathy towards the Fed and the big banks is palpable in Sairs’s rat sculpture, and while a more specific meaning eludes, perhaps the success of the piece depends upon its ability to start conversations about the state of finance.

We’ll leave it to the viewers to decide who’s the rat—the Federal Reserve, or Bitcoin itself—and what that means for the future of currencies.

DApp Frameworks Will Improve the Blockchain — Here’s How 1 273

Scalability has always been a problem for blockchains, and it’s the main reason blockchain technology hasn’t reached mainstream adoption. Whether in blockchain fintech—where comparisons of the Bitcoin blockchain’s 10 TPS to Visa’s 24,000 TPS abound—or in other sectors blockchain has touched, this is holding many otherwise promising companies back from delivering new, innovative kinds of value to the public. While larger and better-resourced companies have managed to overcome this problem through sidechaining and/or sharding, there is no substitute for the real thing. DApp scaling frameworks may be a foundation to build widespread solutions to this problem.

What are DApps?

DApps (decentralized apps) use blockchain technology to deliver peer-to-peer value through product offerings, services, or new forms of value. Built on blockchain technology, dApps use its decentralized, trustless, peer-to-peer structure to let users transact between each other without a centralized authority through an encrypted medium (such as NASGO’s platform that we’ve reported on previously).

While this is an otherwise revolutionary solution to the problem of over-centralization, it comes with its own set of baggage. Imagine if every transaction or purchase you made had to be confirmed by a network of other people before completing. This, the consensus protocol—on which Bitcoin, Ethereum, and other leading blockchains are built—is one of blockchain’s greatest strengths, but also one of its greatest weaknesses. For any  blockchain to work as intended, every node participating in it has to confirm every transaction that happens on it.

On the positive side, this massively increases transaction immutability, verifiability and transparency. Unfortunately, it also makes transaction per second (TPS) speed very low. Slow processes usually don’t scale. And without scalability, blockchain technology cannot reach mainstream usage. Right now, only about 8 million people globally use any form of cryptocurrency. To reach mainstream usage, 800 million people must consistently use it.

It sounds like a chicken-and-egg problem, but the blockchain space is already developing resources to overcome this issue. DApp scaling frameworks are one way. They are bundles of code inside blockchain protocols that let distributed apps distribute themselves in a semi-scaled way, letting a blockchain scale improve its TPS and allow more transactions than ever before. Unfortunately, not many developers have access to these, and the few that do have only built the earliest versions of this technology, which brings up the question: is this really a workable solution right now?

What We Have Now

DApps are hard interact with. They’re slow, confusing, and rely on 3rd-party software which only the most sophisticated consumers can readily use. Yet the chief issue here is speed—the key performance measurement of all distributed systems is scalability, and without it, dApps have no real business case or value proposition, let alone any realistic user acquisition strategy. Yet there are fixes for this problem, but little implementation and even less progress on their collective maturation. They exist in five categories, below:

1. Low-Level Optimizations

2. Parallel Blockchains (“sharding”)

3. Homogenous Vertical Scaling

4. Heterogeneous Vertical Scaling

5. Heterogeneous Interconnected Multichains

6. Multilayered dApp development toolboxes

There’s not much to be said for the solutions in the first category. Most of them—consensus algorithms, PoS migrations, parallel processing on transactions and code optimizations in the Ethereum Virtual Machine—are low-level and impermanent band-aids to the deeper problem.

The best of the solutions in the second, third, and fourth categories are at this stage still in the proof-of-concept phase, being built almost exclusively by and for Ethereum and Bitcoin, such as projects like Plasma and the Lightning Network. These are getting the most traction here only because they’re developing out of Bitcoin and Ethereum, but are nontheless still are very early-stage.

The idea behind Plasma is to take smart contracts, give them self-governing alongside self-execution properties to let the Ethereum root chain essentially create buds or “shards”—tiny sidechains each monitoring one aspect of a transaction instead of putting that combined pressure on the root chain—to distribute consensus, letting blockchains dramatically scale their TPS. Lightning Network deals more exclusively with payments—it’s a second-layer payment protocol next to the root blockchain, using a peer-to-peer system to let users make cryptocurrency micro-payments. Both platforms are examples of how some blockchain companies are using secondary and tertiary parallel blockchains to scale their TPS.

Concepts like Polkadot—scalable heterogeneous multichains—provide foundations for later functionality in the area of relay-chains, where the goal is to build validatable, globally connected, frequently-changing data structures on top of these frameworks.

Companies like MenloOne—multilayered dApp development toolboxes—create and deploy digital tools for dApp developers to use when they’re building. They include:

  • A layer for communication.
  • A layer for governance (given lack of server admins to ban malicious users in a decentralized network).
  • A local wallet for smooth transactions (no more MetaMask popups).
  • A core layer, a network of content nodes which cache mirror versions of blockchain data.

These incorporate fragmented systems to make dApp development easier for professionals.

Together, solutions in these categories are working to help top blockchains scale TPS to thousands per second.To become adopted by the mainstream public, these frameworks will need to use a variety of different tools to make transactions effortless for blockchains to process.


What do you think about the scalability of blockchains today? Is it a problem for you or are you unaffected? And, what do you most want to see happen in this area of blockchain technology in the near future? Post in the comments below to let us know!

Most Popular Topics

Editor Picks