Bitcoin was largely shunned by the traditional financial world in its early years, as it was mostly viewed as a joke or as fake online money for people who wanted to buy drugs on Silk Road. However, as the cryptocurrency continued to exist year after year, the traditional players started to take a closer look at bitcoin — or at least the technology behind it.
By 2014, banks, fintech startups and other financial services companies were repeating the “blockchain not Bitcoin” meme at every major conference. The basic theory was bitcoin would eventually go away, and the blockchain technology behind the cryptocurrency could be implemented by traditional entities in the financial space.
Various “blockchain technology” companies began to sprout up around this time, with the most notable example being R3, which involved a consortium of large financial institutions.
These days, the narrative has become more about Bitcoin than blockchain, but those blockchain-first enthusiasts still exist, as Programming Bitcoin author Jimmy Song found out at SXSW 2019.
To be clear, there’s nothing wrong with banks improving the technology that backs the services they provide to their customers; however, that’s not really why we’re all here.We’re Not Here for Blockchain Technology
When looking back at the entire history of work by cypherpunks that eventually led to the creation of Bitcoin, it’s clear this is not something that was created to help the traditional banks become more efficient. The cypherpunks had been trying to create a form of digital cash for decades, but their previous, more-centralized attempts failed one after another.
The reason Bitcoin has been able to stick around longer than things like Digicash and Egold is that it is powered by proof of work rather than trust in a centralized entity. Decentralizing the processors of payments on the Bitcoin network makes it much more difficult for the system to be controlled by various r...