An hour after I first heard of Bitcoin, I knew it would change the world. That was eight years ago.
Back in 2013 I first read the word ‘Bitcoin’ in a news article about a bank bail-in in Cyprus. The government was in debt and their solution was raiding personal bank accounts. The article mentioned this also led to a boon in Bitcoin—a new digital currency that existed beyond the reach of the government.
Wait, what?!
It was just an aside, but it struck me. A few years earlier I was deported from my adopted home in Ecuador after a nationalist revolution and the government froze my bank account [read more about it here]. The money in there was literally from the government since I had been working at a public university. I was already sympathetic to many anarchist ideas, but the downsides of government control of money went from theory to reality very fast. Which is all to say I was just the sort of person interested in separating money and state.
Upon reading that throwaway sentence in the Cyprus article I immediately wanted to learn more and quickly found the Bitcoin white paper – which is an 8-page explainer written by the anonymous founder. I was blown away.
I bought my first Bitcoins within a few days for $70 each on Bitfloor. The exchange was hacked and shut down the very next day. I lost everything. I was unfazed though and I think there is a lesson here. I was unfazed because I never saw Bitcoin as a way to make more dollars, I always saw it as an experiment in replacing them. That’s an important distinction that I think is lost on most people today. One of the greatest things about Bitcoin over the years is that it has given wealth to those who are not in it for profit and punished those who are. I never chased any scheme whose selling point was profit and have given away what would be equal to millions of dollars today. I’m not hodling* because I’m waiting for the right time to cash in—I already have. I have traded centralized money for decentralized and that’s the only trade I intend to make.
In the beginning I saw Bitcoin as a social movement more than a currency. It was a legitimate attempt to challenge the monopoly that states have over money. That was a revolution. I thought the design was genius but also rationalized that its failure was about as likely as success. I imagined that the state would come down hard on it—as it had on every previous attempt that challenged its monopoly. Still, it seemed worth trying and I have always believed that the best way to show support is with participation. I was so calm about hacks and giving value away because I thought there was a good chance that the project would fail, and I would lose whatever I invested anyway. That said, I wasn’t ignorant to the fact that success meant massive global adoption and if that did happen then the price would be aligned with that. It seemed the rarest of proposals, a way to make massive profit and do good. I wasn’t blind to the idea that it could one day make me wealthy but if that was my concern, I’m sure I would have sold the first time the price doubled, or the first time it halved.
There were plenty of hurdles along the way. Almost everyone misunderstood Bitcoin in the early years, thought I was fool for investing and often told me so. I had some coins on Mt. Gox when it went under, had a web wallet hacked and even ended up the subject of a major investigation in Great Britain which resulted in another government freezing my bank account permanently. (I had moved to England for a few years and was a very active user on localbitcoins. More on that here and here)
And it was never just about money. It was clear to me from day one that money would just be the first use case. The blockchain technology that underpins Bitcoin has nearly limitless potential. An indestructible, unchangeable, transparent record that anyone can create and view yet no one can control is massive. It will lead to the tokenization of a myriad of things and democratize access to information. It will also literally rewrite history—in the sense that we will no longer be able to rewrite history.
The concentration of power is the core issue plaguing humanity today and Bitcoin is our best chance to tear that all down. My vision is of a much more decentralized world and cryptocurrency is a big part of that movement.
One thing I was wrong about in the beginning was that I never foresaw the explosion of other cryptocurrencies. In the beginning I believed that since Bitcoin was adaptable it would be able to leverage its first-mover advantage and absorb any benefits another coin may pioneer into a sidechain if not on the base layer. But Bitcoin has ossified and is now extremely reluctant to change, which means that most future innovations, such as smart-contract technology being pioneered by Ethereum, will happen on other blockchains.
Another thing I was wrong about was how the status quo would try to defeat Bitcoin. I imagined it would be more obvious and oppressive. It would be through intimidation and sending people to jail. That’s happened a little but less and less with time, the real threat isn’t elimination though, it’s cooption, which is where we are today.
Bitcoin has changed a lot from those early years. Few people today enter because they want to overthrow the financial system, almost everyone entering today is after profit—and they are thinking in terms of profit in USD or some other state-sponsored currency. That is entirely missing the point. Bitcoin is NOT a method to increase your USD, it is a method to move beyond that.
It’s a strange thing for me to see people cheering Wall St. getting involved, when the whole idea was to make Wall St irrelevant. Still, I’m happy with it. My original thesis that the state would push back hard against Bitcoin has become extremely unlikely. The state will move against people like me without a second thought, they will never move against the network of people and corporations who are part of this latest wave of adoption. That danger is now past.
The present danger is cooption. Part of the genius of Bitcoin was that its creator remained anonymous and its infrastructure decentralized, which made it very difficult if not impossible to stop. There have been a number of attempts by corporations and states to create their own digital currencies. All of them have failed and all of them will fail. It misses the point. The value-add of crypto, the thing that makes it so powerful is its decentralization and the fact that no one controls it. These are all attempts to squeeze a round peg into a square hole. They are still viewing it through the lens of how the world used to be—most people are. This is a paradigm shift. Part of why so few people truly understand the immense potential of crypto is because they are viewing it from the old perspective. That no longer applies.
Everyone thinks that the price of Bitcoin is going up, few think that the price of the dollar is going down. Bitcoin is NOT a way to make more dollars, it’s a way to make dollars irrelevant.
The beauty of Bitcoin is that that core message remains, even if people are getting involved for other reasons. It cannot be ignored that the old system is sometimes successfully replicating itself and watering down Bitcoin though. It’s a double-edged sword because adoption by someone like PayPal or more traditional banks where they hold custody of your bitcoin as a ‘trusted third-party’ is both a regression to the old ways as well as a necessary step toward further adoption. I’m still rooting for Bitcoin because even though much of what attracted me in the first place has been pushed to the background, it is still there and will never go away. Besides that, Bitcoin is the gateway crypto. It is breaking down barriers today which will make it easier for even more revolutionary projects to succeed tomorrow. I’ve got my eyes on Monero (XMR) for its advances in privacy and on Decred (DCR) for its focus on decentralization and governance.
This is still early. It is the end of the beginning. Crypto will change our world is ways that we cannot yet envision and the next stage of that will be building on top of the base layers so that we don’t even realize we are using crypto. The layers on top used for currency, which is the first use case, will probably be built by a Mastercard or PayPal, and it will also be integrated into the next generation of technological advances in such a way that we won’t notice. Years from now, when two self-driving autonomous vehicles talk to each other they will probably use blockchain technology and we won’t give it a second thought. Innovations like that are closer than we realize, and they will herald the beginning of the end.
