Professionals evaluate cryptocurrencies, NFTs, stack coins and blockchain

It is well reported that major technologies are taking Web 3 seriously and investing in blockchain technology. While Web 3 is a somewhat vague concept, the general view seems to be that, at least philosophically, it is a return to some of the decentralization that characterized Web 1, with additional benefits.

While Web 2 is now characterized as a huge centralization project, with almost everything gathered in platforms, one of the key drivers behind Web 3 is the hefty mix of blockchain technology and its role in decentralized digital currency – cryptocurrencies – and other technologies such as non-fungal tokens (NFTs). ), which promises to create monetary value in abstract objects – such as art.

What do the experts think about these technologies? It depends on who you ask, what their self-interest may be and even political persuasion. When the British government, as announced by Chancellor Rishi Sunak, declared an ambition to make Britain a “global cryptoasset hub”, BCS asked its professional membership and other IT experts for their views.

The feedback is strong: 58% do not support the Treasury’s plan to make the UK a global center for cryptocurrency technology and investment, including stack coins and NFTs. Only 29% said that working technologists should be behind the crypto project, with the remaining 13% neutral.

A large majority (77%) were not sure that another important part of the plan – recognizing and regulating stable coins – would “ensure financial stability and provide wider payment options for consumers”.

The performance of stablecoins is particularly telling, as they are a form of cryptocurrency designed to be more settled than the highly volatile value of cryptocurrencies. The idea is that by linking stack coins to another asset or currency – such as the pound – the financial risk of using them is reduced. However, according to this survey, IT professionals do not see the benefits, with 69% telling BCS that the public cannot have the same confidence in UK regulated stack coins as in commercial bank money. A similar proportion (63%) said that the Bank of England should not guarantee stable coins to cover possible risk.

The view of NFTs was even clearer: only 14% of technical experts surveyed said the chancellor was right to ask the Royal Mint to launch an NFT this summer. In fact, NFTs are an even more controversial concept than cryptocurrencies, so it was not surprising that 68% of technical specialists said it was wrong for Royal Mint to launch its own NFT this summer. Only 10% were optimistic about the potential of NFTs to do good for society, although 41% said they were positive about the potential of blockchain technology to benefit humans.

Concerns

What are the problems? Energy consumption and the impact on climate change were ranked as the biggest concerns of IT experts about the wider use of crypto; 23% chose this as the top priority for the government to consider before a broader roll-out of the technology. This was closely followed by the proliferation of money laundering and securing the security of cryptocurrencies and exchanges (both 15%), followed by regulation and training of the public (both 14%).

Energy consumption is an issue that cannot be ignored. It was recently analyzed by a BCS writer, who commented that “blockchain implementations that use the original proof-of-work (there are most of them) are a climate change disaster and should be stopped.” And the numbers are interesting.

Another issue raised by technical experts in the comments that supported the poll was the view that cryptocurrencies and NFTs are reminiscent of pyramid schemes or Ponzi schemes and should therefore be avoided by the public and decision makers. Regular Twitter followers of IBM’s Grady Booch, the creator of unified modeling language, are often treated with ironic thoughts and prayers for cryptocurrencies – especially in recent weeks as so many of their values ​​have fallen. BCS interviewed him recently.

The second main issue is trust. Ironically, while blockchain is seen as a trust mechanism, the comments to this BCS survey reveal that IT professionals clearly believe that more education and a robust regulatory framework around these technologies are needed to create real trust and confidence.

And what about the broader social context? About NFT, Dr Bill Mitchell OBE, director of policy at BCS, The Chartered Institute for IT, said: “Especially the upcoming launch of Royal Mints NFT must avoid beating a villain in a time of rising cost of living and industry. Action.”

Takes the temperature

So IT professionals asked by BCS have a clear view. And their views are largely in line with other respected thinkers in computing and IT.

While Sir Tim Berners-Lee has taken a somewhat mixed approach – he created an NFT of the original World Wide Web source code that raised $ 5.4 million – his current brainchild to help individuals take control of their own data – called Solid – not based on blockchain, but existing network tools and open specifications. An interesting example of one of the often cited criticisms of blockchain – that it solves problems that can already be solved in other ways, and in a far less earth-friendly way.

Security guru Bruce Schneier and other experts wrote to the US Congress in June 2022 with an unequivocal view – saying that cryptocurrencies are a “complete and total disaster”. Interestingly, he comments on this: ‘The problem is that they (cryptocurrencies and blockchains) do not do what their spokesmen claim they do. In some very important ways, they are not safe. They do not replace trust with code; in fact, in many ways they are far less reliable than non-blockchain systems.

They are not decentralized, and their inevitable centralization is detrimental because it is largely emerging and poorly defined. They still have reliable intermediaries, often with more power and less supervision than non-blockchain systems. They still require management. They still require regulation. The problem with blockchain is that it is not an improvement of any system – and often makes things worse. ‘

Regarding the issue of blockchain becoming a trust mechanism, the respected programming blogger Stephen Diehl points out that reliable third parties are an inevitable requirement in any system, and no technology offers solutions to this problem. In a practical sense, he points to the use of ‘a real database like PostgreSQL’ as always a better solution.