Mike Hearn's recent bitcoin criticism makes very valid points in terms of scalability and monopoly. However, I'd like to urge people to not jump to conclusions, and point out that Mike is loudly expressing his opinionated point of view. We should take his criticism seriously and work on improving the scalability and democratic governance of bitcoin - whether on the main or on the XT fork, depending on how core will now behave.
Even if bitcoin's price drops as predicted by Mike (which is largely a self-fulfilling prophecy, as he was a core developer - but I think we'll soon see a recover), this doesn't negate all the work we've been doing on blockchain technologies which construct consensus mechanisms upon which the redecentralized future of the Internet will be built. Several of Mike's concerns are actually addressed in newer cryptocurrencies. Decred has better bottom-up governance. His own XT has larger block size limits. Bitcoin itself is talking extensively about scalability, not just increasing the block size limit but also more fundamental and difficult, yet less politically charged, changes. Litecoin, monero, and ethereum all employ egalitarian proof of work, making Chinese or other monopolies quite harder to achieve. Bitcoin is a large experiment, and even if bitcoin itself as a currency fails, others will take its place. However, let's not rush to conclusions and let's remember that bitcoin has showed surprising resilience to problems, from long blockchain forks and core bugs to the mtgox case.
It's indisputable that blockchains will be the new primitives of cryptographic and security functions. Upon them we can base political change for a more democratized monetary, legal, and governance system. The research and teaching we've been doing, the software we've been writing, the papers we've been reading all provide useful contributions whatever cryptocurrency may dominate. Furthermore, don't forget the quote from the monero paper illustrating how a healthy market of multiple competing currencies is best for all; we don't need a single prevailing currency, and fragmentation must not be feared.
When I met Mike in Zürich, he had just left Google and I had just started working there. Luck has it that I sat at the same desk where he used to sit. Mike left Google to build blockchain technologies, and a year later I left too, with the same goal. I appreciate Mike's involvement in lighthouse, XT, scalability, bitcoinj and the Android wallet. His involvement in the bitcoin community was huge and I think we should all appreciate what he did without dismissing his work as many tend to do now that he's distancing himself from the project. Despite the fun googler bitcoin meetups we've had with Mike in Zürich, I want to make sure everyone is aware of his current involvement with 30 large centralized banks including ING, Goldman Sachs, Bank of America, and JP Morgan through his key professional position at R3. It is clear that there is conflict of interest between his blockchain work with these banks, where decentralization is undesired, and the democratized blockchain for the people in modern cryptocurrencies. His blogs and publications must be read critically and keeping this in mind, even if he denies conflict of interest. Scientific and engineering criticism must be done based on science and code, not on people credentials. The things he's pointing out on his blog are not new and they are issues to be resolved. His status as a past core developer is irrelevant in assessing the validity of his statements.
Bitcoin is never short of drama and politics. But the real technical issues must be addressed technically at their core.
Mike - thank you for your work on bitcoin. You are greatly appreciated. The community will now take over.