Dr. Adam Back, a prominent British cryptographer and CEO of Blockstream, shared insights with Forbes on Bitcoin’s evolution, his early interactions with its creator, and his role in expanding Bitcoin’s financial ecosystem.
Known for inventing Hashcash, the proof-of-work system foundational to Bitcoin mining, Back has influenced the development of Bitcoin infrastructure and its scalability as a decentralized financial tool.
Back Recalls Bitcoin Journey So Far
Back recalled his initial exchanges with Bitcoin’s elusive creator, Satoshi Nakamoto, before the cryptocurrency’s 2009 launch. Nakamoto contacted him about citing Hashcash in Bitcoin’s white paper and later asked if Back would download Bitcoin’s source code. Though their discussions were brief, Back became one of the first to be directly involved with Bitcoin’s development.
Regarding the mystery around Nakamoto’s identity, Back believes its relevance has diminished. With Bitcoin’s decentralized nature now well-established, Back compared it to “electronic digital gold,” emphasizing that the technology’s value lies in its independence from a single founder.
“The market ultimately prevailed,” he noted, citing the Blocksize Wars and other critical events that underscored Bitcoin’s adaptability to user needs over time.
As CEO of Blockstream, Back is spearheading projects like the Lightning Network and Liquid, both designed to enhance Bitcoin’s utility. While Bitcoin is widely recognized as a store of value, Blockstream is working to make it suitable for everyday transactions.
The Lightning Network facilitates quick, scalable retail payments, while Liquid focuses on trustless trades, smart contracts, and stablecoin issuance. The company even developed a crossover wallet, enabling seamless swaps between Liquid and Lightning networks, effectively merging secure storage with payment functionality.
Contribution from Blockstream’s Liquid Network
Blockstream’s Liquid network, which supports various stablecoins, is also fostering retail payment growth, especially in emerging markets where users seek alternatives to volatile national currencies.
Liquid’s use cases extend to stablecoin trading and cross-border payments, with popular options like USDT and a Mexican peso stablecoin being actively traded on the network.
Back also touched on Bitcoin-centric fundraising, highlighting the shifting focus of venture capital firms. Previously, most investments leaned toward tokenized assets on newer blockchains due to high liquidity potential.
Growing Interests in Bitcoin’s ETF
Recent trends, spurred partly by spot ETFs and market saturation in the altcoin space, have led to renewed interest in Bitcoin Layer 2 solutions like Lightning and Liquid.
Blockstream, the longest-standing company in this field, has established a hybrid model with products catering to both consumers and institutions, including hardware wallets and trading use cases.
On the risks facing Bitcoin, Back noted a decline in initial concerns over regulatory crackdowns, especially as institutional players now support Bitcoin. ETFs and sovereign wealth funds are helping legitimize it in mainstream finance, reducing the chances of restrictive policies from major economies.
Nevertheless, Back acknowledged technical challenges in scaling blockchain technology. While the Lightning Network is reliable for point-of-sale and person-to-person payments, further innovation is needed to optimize scalability.