The Bitcoin Foundation’s chief scientist Gavin Andresen has given his opinions on a variety of issues at this year’s Web Summit – an annual event held in Dublin, Ireland, that attracted more than 20,000 attendees this year.
The summit has established itself as an important date on the calendars of technology investors, startups and even rock stars, like U2 frontman Bono, who attends regularly.
Andresen gave a wide-ranging interview to the Wall Street Journal‘s Lisa Fleisher, at the event’s ‘Centre Stage’, discussing the centralisation in mining, regulation by governments and the future of digital currencies.
Cycles of centralisation
Creeping centralisation, particularly among miners, is likely to occur in “waves”, Andresen said, adding that this would mirror the pattern seen in computing in general.
“Centralisation of mining is going to go in waves. Now you see economies of scale for companies that create huge mining farms where electricity is inexpensive. Once those [ASIC] chips become commodities and inexpensive, you’ll see it decentralise again.”
Andresen likened the cycles of centralisation by miners to earlier computing technologies that saw rapid cost declines over the time, leading to reduced reliance on centralised structures.
“When I was in college in the 80s, we were at the cusp of going from mainframe computers to personal computers,” he said. “I worked in tech support, and the biggest wave of tech support requests happened around the time theses were due. People from campus would send their theses to this laser printer and then come and pick them up. That’s what computing used to be.”
“It was very centralised, and then the PC revolution happened and everyone had a PC.”
Andresen graduated from Princeton University in 1988, majoring in computer science.
Nodes numbers not a concern
When asked about other weaknesses in decentralisation on the bitcoin network, such as the declining number of nodes, Andresen was similarly unbothered.
He told assembled journalists at a press conference after his onstage appearance:
“The technology is still so early … it doesn’t really concern me much. Right now we have 7,000 nodes. It’s a good number. If it was 700 or 70, I would be more worried. We’re still a couple of orders of magnitude away from where it would be a problem.”
He indicated that changes are underway on the technical side that would make it much easier to run a full node, but explained “we’ve simply had other priorities”.
Andresen also addressed the issue of regulation of digital currencies by governments, welcoming the attention that governments have given to cryptocurrencies in recent months and even expressing sympathy for regulators who have to grapple with the complexities of creating a framework for bitcoin.
“Regulators have a hard job,” he said. “They have to react to this new technology and try to fit it into laws that were passed 40, 50, or 100 years ago. It’s really a struggle for them.”
Need for balanced regulation
Andresen stressed that attention from regulators would be essential to bitcoin’s mass adoption. However, regulators will now have to be careful not to get heavy-handed with digital currency.
“Getting regulatory clarity is really important. In the last year, year and a half, we’ve seen more regulatory clarity. I think it’s been incredibly positive for bitcoin, but now we need regulation that isn’t going to kill innovation.”
Andresen singled out China and Russia as states that have approached bitcoin regulation too severely.
“Certain countries around the world take a much stricter approach … countries such as China and Russia have been really anti-bitcoin recently. Their first impulse is to ban something and, if they think it’s good, they’ll allow it,” he said.
Andresen highlighted BitX’s efforts to raise bitcoin donations to combat the spread of ebola and bitcoin ATMs as worthy ways of increasing awareness around the digital currency.
“Bitcoin ATMs are a wonderful thing. I’d love to go to a bitcoin ATM here in Dublin and get some euros … I could really see that taking off and taking bitcoin mainstream because international use of bitcoin will be the first mainstream place where it happens,” he said.
Featured image via Flickr.