“The comments were spot on, but a little vague.”

While bitcoin has created an economic network without a central authority, the chief technology officer at one of its leading development firms, VC-backed Blockstream, believes the chair of the US central bank has been largely accurate in her attempts to explain blockchain.

In a morning address at CoinDesk’s Construct 2017 today, Maxwell addressed statements by Janet Yellen, commending her for acknowledging bitcoin as part of the broader blockchain conversation, even as he admitted his distaste for the broad label.

Overall, the remarks offered a high-level view of how one of bitcoin’s most esteemed and longest-tenured developers views recent developments in the ecosystem, including the increasing interest in “permissioned” versions of the technology that seek to alter its model.

Maxwell admitted to a certain amount of indecision on the matter, arguing at once that it’s impossible to overhype blockchain technology, even while arguing that there’s a risk that it is “so awesome” that its attributes could be overstated.

He told the audience:

“We have to sort through the hype. We have to understand what’s meaningful use, what changes the world and what’s boring.”

Overall, Maxwell noted that ‘blockchain’ is many things to many people, and that this broad appeal has diluted or fragmented its meaning.

Yet, he framed bitcoin as unique, calling it a “revolutionary” idea, though one he argued is proving best for issues where “dispute resolution” is a necessary component of the system.

He contends that while elements of bitcoin (like its proof-of-work consensus) aren’t necessarily optimized for networks of trusted parties, the fundamental premise that private companies are environments in which every actor is trusted is questionable.

“The notion that you can trust everyone inside your organization is a failed security practice. Any system that isn’t secure on the Internet probably can’t be secured on a private network,” he continued.

Blockstream has so far raised $76m in funding for experimental ideas like its in-development sidechains network, while inking partnerships with more traditional financial firms like PwC.

Don’t forget bitcoin

Maxwell went on to address the argument of why it might not be possible to have “blockchain without bitcoin”, illustrating how he believes the underlying innovation is diminished (or wholly different) in some ways without an incentive.

“This begs the question what the heck is a blockchain?” he said. “I don’t think the blockchain part of bitcoin is what they’re talking about when they’re using blockchain technologies.”

Rather, Maxwell positioned digital signatures as the part of the technology that most appeals to incumbents, though he said the tech is “not new at all”.

“A digital signature is more of a seal. It allows you to authorize a document. I say seal because it locks together. It’s like a wax stamp,” he said. “But, by itself it’s not that terribly exciting.”

He went on to frame proof-of-work and smart contracts (in which a blockchain uses code to automate interactions between parties), as the “next core technologies” in the system.

He said:

“Each of these technologies is interesting on its own. But in bitcoin each part works together to amplify its benefits. These tools are important and powerful and useful, but they’re not magic.”

The ultimate choice

Interestingly, Maxwell’s case for bitcoin remains largely unchanged from what it was years ago, when he detailed how he went from a skeptic to a believer in the open-source platform.

He argued today that, even in the age of blockchain, bitcoin is at once a new kind of money that arises “purely from network effect” and a novel and fragile cryptographic protocol.

“One of the challenges with bitcoin is it inspires some hard questions. If you think about bitcoin, you think about money, it begs us to ask, ‘Who do we trust?’, ‘Why do we trust them?’ and ‘What are the risk and costs of those interactions?'” he said.

He noted that, academically, the big choice is that, now that the technology is possible, it remains to be seen what users will prefer when both types of networks are operational at scale.

He asked:

“If public is given a choice, what kind of money would they prefer to use?”

Image via Pete Rizzo for CoinDesk