Blockchain In 2016

Nick Tomaino has started a new publication called The Control to provide “high brow” (my word not his) reporting on the Blockchain sector. If Coindesk is the TechCrunch of the blockchain sector, Nick wants The Control to be The Economist of the sector. Here is how Nick describes his ambitions for The Control.

The Control will be a largely free site so that the content can be consumed broadly on Reddit (very important for the blockchain sector), Twitter, and Facebook. But you can become a member of The Control. And you can even become a patron of The Control for $5/month. I wish that I could support The Control for 0.005BTC a month instead of $5/month. So does Nick. Maybe that will happen someday but using Medium as his publishing platform limits what Nick can do in that regard.

Anyway, all of this is context for my recommendation of Nick’s 2016 Blockchain In Review. I generally agree with all of it.

Here are the three big takeaways for the blockchain sector in 2016:

  1. Bitcoin is becoming like digital gold, or the reserve currency of the blockchain sector. We had a gold standard for a long time while confidence in fiat currency developed so this relationship makes sense to me. The conservatism of the Bitcoin core developers (good or bad depending on where your views lie) has caused much of the blockchain sector innovation to move to other Blockchains. But this conservatism builds confidence and that was rewarded by a return of the BTC/USD to the highs last seen three years ago.
  2. Ethereum had a tough year in 2016 but has emerged as the platform of choice for the development and deployment of blockchain tokens. If there is a second blockchain to bet on, I think it is Ethereum.
  3. There are some new blockchains emerging that appear interesting like Zcash and Steem. There are plenty of others that are vying to become interesting. Many/most of these blockchains are funding the development of the technology using tokens and crowdsales. This activity became quite common in 2016.

2017 is looking to be a quite interesting year for new blockchains, tokens, and blockchain based applications. I expect we will see a lot of all of that in 2017. I am most excited to see if proof of stake emerges as a viable alternative to proof of work in 2017. That would be huge for the sector.

Here are a few forward looking posts for Blockchain 2017:

From William Mougayar on Coindesk

From Andrew Keys of Consensys

I will write more about this in my twin posts at year end on looking back and looking forward. They are coming over the weekend.


Comments (Archived):

  1. kidmercury

    i don’t think confidence in a fiat currency developed so much as it was unilaterally imposed by the US circa 1971 when the US fully abandoned the gold standard, and even then the US eventually compromised by quasi-backing the US dollar with oil via the petrodollar agreement. if there is a blockchain analogy here, i think it shows the need for a central power to impose monetary standards.

    1. pointsnfigures

      Don’t agree. People valued USD prior to 1971. It wasn’t just because it was backed by gold. There were great economic reasons to get off the gold standard. They still exist today. It was a smart move by Nixon to push for it.I predict in 2017, the Bitcoin ecosystem will start to add depth that it needs to become a true store of value. Still feels a little casino like with the up move to me. But, that’s going to change

      1. Girish Mehta

        Have to agree with Kid on this (except for the terminology – what ended in 1971 was the gold exchange window at $35/oz that supported the Bretton Woods system. The gold standard ended much earlier).Sure there were good economic reasons to discontinue the gold exchange window, the end was also inevitable. Its the Triffin Dilemma, and Keynes had anticipated it back in 1944 at Bretton Woods, well before Triffin coined it.Valery Giscard D’Estaing called the dollar’s position an “Exorbitant Privilege”. De Gaulle sent the French Navy over to get their dollar reserves in gold in the mid-60s. West Germany exited the Bretton Woods system earlier in the year before Nixon’s move.”Its our currency, but its your problem”- John Connally after Nixon’s announcement in 1971.

    2. Nick Tomaino

      It’s possible – I expect to see many governments experiment with issuing currencies on the Ethereum blockchain. The Ethereum scripting language makes this very easy and we’re just scratching the surface.At the same time, I think it’s possible people want and need a currency with monetary standards that aren’t controlled by a central power and are instead determined by distributed consensus.

      1. kidmercury

        i’m hoping a digital platform with some kind of override control on blockchain coin issuance will emerge. but i think such a platform needs to be a vibrant ecommerce marketplace to have enough clout to pull it off.

  2. awaldstein

    The segment needs a topdown business channel for discussion which is missing.I don’t care about the nits and bits. I don’t want to learn a language or be told that I can only be thoughtful if I do take a course. Reminds me of the bullshit around the old wine world actually.So–I’m in and will subscribe.Thanks!

    1. Nick Tomaino

      Top down is definitely not the intention here! The intention is to create more of discussion for more people.There’s lots of discussion on R/bitcoin, R/ethereum, etc but it’s nuanced and hard for new people to jump into the discussion. Thanks for subscribing!

  3. Mike Cautillo

    Bitcoin 1st & foremost….my 2nd bet was placed on ETC in 2016, after choosing to opt out of ETH. I place a high probability on 2017 being an unexpectedly PHENOMENAL year for BTC ( not in reference to price either-but on development side which should eventually transcend to price but not the point) I believe the same for ETC…..if you’re making a bet-ETC looks good as the outlier!! Proceed with caution though;) Happy new year to all.

  4. Michael O'Rourke

    I read the article from Andrew Keys – I agree with him on his last point about Ethereum. The developer community (including myself) seems so much more excited about it than Bitcoin.

  5. Dennis Mykytyn

    Added $3k each of BTC and ETH via Coinbase, as my limit seems to be upped to $7500 per week. I have found that nothing focuses the mind on a subject more than having a financial stake in it, so as I add more $, I tend to pay more attention. Sidenote: Have to say, with all the talk about the frictionless nature of digital currencies, the 1.5% Coinbase fee for transactions seems quite high to me.

    1. Nick Tomaino

      Digital currencies are frictionless once you are using the networks. But when it comes to getting onto the network from the traditional banking system, the same friction exists as we’re used to in financial services.

      1. Dennis Mykytyn

        How so? If I deposit cash into my Chase bank account, there are no fees. Same with withdrawing cash. If I buy stocks, trade fees are around $6-8, or a fraction of a percent on small trades, and an even tinier % on larger trades. I’d understand transaction fees (like a credit card) better than deposit fees. 1.5% is similar to what buying physical gold costs, and I would think a virtual currency should have way lower costs to trade than gold.

        1. Nick Tomaino

          Trading fees are generally correlated to liquidity. Gold is highly liquid and large cap US stocks are highly liquid. Bitcoin, Ether, and others are still relatively illiquid in fiat terms. And the compliance costs are significant.I hear you on the 1.5% fee being high but right now Coinbase is the only game in town in terms of a legitimate, secure exchange service for US consumers. As liquidity increases and competition emerges this could change, but it’s the reality for now.

  6. William Mougayar

    Good luck to Nick on this initiative, because we need to continue pushing our curiosity levels for understanding how to apply the blockchain. That’s been my quest as well, ever since I started to write about the blockchain more than 3 years ago.

  7. Twain Twain

    I’m interested in PROOF OF VALUES. There’s an hybrid meta-chain that’s evolutionary and semantic in structure that’s resonated more than anything I’ve seen so far from Blockchain or Ethereum.It doesn’t have the right semantic taxonomies yet, but that’s something I’m interested in helping with.

  8. Sebastian Wain

    What is missing in Nick’s report is the importance of Ethereum in the private blockchain sector as well. There are many important implementations that are using Ethereum as the foundation and modifying the consensus protocol for private use. Some example are: Quorum (from J.P. Morgan), Ethermint, Monax, HydraChain, and Juno.

    1. Nick Tomaino

      Great point. None of these are in production afaik, but these are important for credibility of the space.On Ethereum though, I think the most important projects are public projects that can be adopted by masses (stablecoins, prediction markets, etc). Highly likely that the projects that move the needle for the space will be public rather than private implementations.

      1. Sebastian Wain

        > None of these are in production afaik, but these are important for credibility of the space.Yes, using the same technology for different use cases is a differential in Ethereum. Indeed, I don’t think there are leading cases of private blockchains in production at all, but if you take a look at some of the projects mentioned, you would see development activity in their repositories.

      2. Abhi

        Completely agree with the comment that public Ethereum projects are more important than the private one’s in driving mass adoption.

      3. Marie Leaf

        ethereum consensus mech is arguably really really not the best for private chain deployment. quorum is marginal utility when factoring in potential of something like hawk getting off-chain zsnark privacy to call on-chain actions. as the ethereum evm stands right now it’s really too slow for enterprise level business logic, but im sure the blockapps team is working on this.agree with nick on the public projects being the most important on ethereum. just important to note that there will be a myriad of slice-and-dicing tools in web 3.0. ethereum has a lot of first-mover smart contracting traction, and im sure mauve and coming roadmap improvements will strengthen it’s usability cases, but there really is such a vast world beyond ethereum — hyperledger, chain just released ivy, tendermint + monax.

        1. Sebastian Wain

          > ethereum consensus mech is arguably really really not the best for private chain deployment.Private blockchains are not using Ethereum consensus.> as the ethereum evm stands right now it’s really too slow for enterprise level business logicSlow in what sense?

      4. Sebastian Wain

        > Highly likely that the projects that move the needle for the space will be public rather than private implementations.An update about this, please take a look at the recent Joseph Lubin’s post Joseph Lubin Speaks on “Enterprise Ethereum” and answers comments~synopsis . There are a lot of stealth private blockchain projects happening.Also, regarding the “public” Ethereum, it is important to know that Ethereum has serious limits for massive adoption. For example, you can just allocate 8kb per block, this is a very small memory.

    2. Marie Leaf

      juno is no longer in active development — check out and blogpost about it. also head’s up, monax uses tendermint consensus. what specifically do you mean by ‘foundation’ here?

      1. Sebastian Wain

        Foundation means the basis of them.Can you be more specific about what do you find special in Kadena and Sammatics (the domain doesn’t exist). Also, what is the issue with Tendermint consensus?

  9. jason wright

    is being tied to bitcoin at all helpful to other emerging blockchains? when bitcoin goes up in value alt coins tend to generally go down. the capital is sucked right out of alts. it creates uncertainty and dents confidence in innovation, and innovation is the driver of the sector. being currency paired with BTC has its bitfalls.

    1. Nick Tomaino

      I think having BTC as the primary trading pair for ETH and other tokens is hugely helpful. BTC as the base currency enables fricitionless exchange via services like Shapeshift. If BTC was not around, there’s no way ETH would have been able to gain a $500M market value in less than a year like it did.Different tokens have different use cases and I think over time will continue to gravitate traditional currencies to the ecosystem for different reasons – complementary rather than competitive.

      1. jason wright

        i’m all for frictionless from fiat to crypto coins, but once inside the system the value seems to too easily flow to BTC from other coins based on little more than pump hype (as we are witnessing right now). i like the ‘baby blocks’ scene where i see more innovation and blocktech’s future.

  10. Ryan Foscaldo

    The Control and Nick are solid. On reddit, Nick was asked why he failed to mention Monero (which, according to the chart in his piece, was the asset that appreciated the most in 2016). Turns out that he is doing a specific piece on Monero. Looking forward to reading it!

  11. jason wright

    The Control – “A media brand that provides the most important information on blockchains”so if i read something somewhere else about a blockchain it will never be the most important information? that’s a bit lofty, and very centrist.

    1. Nick Tomaino

      Certainly lofty, but if you start something why not shoot high? Over time, this will either be proven true, or not.I’m not sure what you mean by centrist. The idea is to build a community of people that love blockchain tech (much like AVC has for people that love tech) rather than just being one top down source of truth.

      1. jason wright

        perhaps it’s just the name that has me spooked – big block brother. good luck with it though. i may subscribe.

        1. Nick Tomaino

          Thanks Jason. The name is a nod to the most crucial aspect of blockchains – that they shift the control of power from institutions to the people.Not implying that we have the control 🙂

          1. jason wright

            phew! 🙂

  12. Yalim K. Gerger

    This may be a little off-topic but I just hate that Medium doesn’t provide an RSS feed for publications hosted on their platform. This is really unfortunate for both readers and publications like The Control.

    1. Yalim K. Gerger

      Oh, apparently,, has an RSS feed even though the page… doesn’t have one. That’s nice.

  13. Abhi

    Good initiative by NIck. It is badly needed.After hanging on crypto reddit forums for more than 3 years, I can comfortably say they are nothing but echo chambers.Eagerly waiting for your thoughts on Blockchain, Fred.

  14. Marie Leaf

    andrew keys is badass. have you checked out — good blockchain news/layman(ish) technical dives.have you checked out PoS system powered by tendermint consensus (same consensus mech used in Monax) — heard you’re excited about PoS.also, we have the same taste in music (jaar, gambino, west, projectors, blake, chance FTW)thanks for spreading the blockchain word mainstream.

  15. Si Chen

    Hi everybody, I’d like to share some thoughts on blockchain adoption based on my experience with open source software in general: It seems open source software was most successful in new fields that were not considered mission-critical (at least at the time) and where there were no dominant incumbents. For example, the LAMP stack back in the early 2000’s — websites were a new field, not considered mission critical by a lot of companies, and the commercial alternatives weren’t dominant yet.The problem with a lot of blockchain applications is that they seem to be mission-critical with very established incumbents, like facebook, ebay, paypal, uber, and banks and currencies.One area, though, that may be a good opportunity is IOT with smart contracts and micro payments: there’s a whole new field with billions of tiny devices, and there’s no established incumbent for them to transact with each other for tiny amounts.I’m very new to this but wrote it all up: http://www.opensourcestrate…Please give me your thoughts and feedback! Thank you.