A newly formed industry trade group, Blockchain Alliance, is looking to bring a new level of legitimacy to Bitcoin.
Bitcoin has been heralded as one of the greatest breakthroughs in technology and finance in modern times, but has been soiled by its popularity in online drug trade, multimillion dollar exchange collapses and hackings, and a price volatility that calls its true value into question.
Security has been constantly improving and the volatility thing seems to have sorted itself out, at least for now. The new alliance hopes to separate the good guys of Bitcoin from the bad, and that eventually, the public will see the pristine side of Bitcoin, unadulterated by the shady goings on from the other side of town.
The alliance’s formation actually makes a major statement. From the industry, you have the most successful startups: CoinBase, BitFury, BitPay, Kraken, Blockchain, Xapo, and Circle Internet Financial. Also included are organizations including MIT Media Lab and Digital Currency Initiative. Coin Center and the Digital Chamber of Commerce reportedly spearheaded the alliance. Developer Gavin Andresen joined as well.
They are joining forces with…numerous US law enforcement agencies including the Department of Justice, the FBI, U.S. Marshals Service, Secret Service, Department of Homeland Security and the Commodities Futures Trading Commission (CFTC).
Note the absence of Bitcoin Foundation, which previously stated that it is shifting focus from regulatory and related affairs to supporting Bitcoin’s technology and development. Recently, it expressed opposition to California’s proposed virtual currency regulations (eventually shelved), which were supported by several on the above list.
The list includes Circle, which was granted New York’s first BitLicense, but also includes Kraken, who doesn’t want it. But the common goal is to raise the level of accountability and responsibility, which is deemed a worthwhile pursuit even if the BitLicense isn’t.
Also note how the alliance takes on the name of Bitcoin's widely-recognized technology, the blockchain, as opposed to the more controversial currency connoted by Bitcoin.
Another Split?
The Washington office of the alliance’s director, Jason Weinstein, will serve as the point of contact for all members. “It’s really meant to be a very simple, cost-free resource for law enforcement. It’s one-stop shopping for law enforcement to get education and technical assistance on the issues,” he said, according to a Wall Street Journal report.
The inclusion of any government body is enough to disgust a good chunk of the Bitcoin community’s vocal libertarian contingent- all the more so when the list includes names like the FBI, which some despise for its investigation of convicted Silk Road mastermind Ross Ulbricht (which also involved the conviction of two federal agents for corruption).
Such alliances will undoubtedly be beneficial for the public in the long run, but are likely to create new splits in the crypto communities. The extreme libertarian elements of the spectrum, which already have companies like Coinbase on probation for their Risk Management policies, will almost certainly shun and ridicule the new body.
The community is already reeling from the split caused by Bitcoin XT, discussion of which is banned on the popular reddit Bitcoin forum. One can imagine, perhaps, new splits into “free” and “regulated” Bitcoin, although in this case, the division can be healthy.
