On the 3rd of January 2009, Bitcoin was brought into the world to fulfil a prophecy: chaining blocks together in order to unchain the world from the crooked financial system, eliminating the individual and institutional middlemen from economic activities, and establishing a system of consensus and trust that is based on permanent verification. At the time, in the context of a ravaging recession, governments of the world were printing money in order to bailout the banks that caused the entire mess, while critics of fiat money were longing for the days of the Gold Standard.
Not everyone raised their eyebrows when they heard about the birth of Bitcoin, but the early adopters were definitely visionaries who decided to nourish the newborn until it reaches its full potential of becoming sound money. From father Satoshi Nakamoto to uncle Hal Finney and beyond, Bitcoin has been constantly educated and moulded by the most brilliant minds of our time. Just like John Stuart Mill has learned ancient Greek by the age of three and read most of Plato‘s works at eight, Bitcoin has taken the best of computer science, game theory, and Austrian economics in order to outgrow its teachers and bring to the world something truly new and innovative: sound and uncensorable money.
As more people discovered the virtues and capabilities of Bitcoin, they have become greedy and decided to borrow the DNA in order to clone the prodigy and create something else which serves their interests. Some uncles of Bitcoin wanted it to grow up with bigger blocks, others thought that a few privacy features would serve it better, and there are also folks who thought that our hero’s genes would be able to build a world computer which runs multiple applications in a decentralized way. One way or another they all had their cake, but when they tried to eat it, they noticed that the taste is not as sweet.
Bitcoin and the dumb money speculators
Bitcoin, just like every prodigious child, was discovered by some wealthy individuals who saw potential in it and wanted to transform it into a market commodity. They picked more convenient names such as BTC and XBT, then proceeded to play their little financial games in order to give their newly-commodified friend a proper market valuation.
It’s not that Bitcoin wasn’t thrilled or didn’t see opportunity in this scenario – on the contrary, there are so many advantages that markets can bring, and they range from a greater acknowledgment of merits to more popularity. However, Bitcoin is designed to create a parallel economy outside the world of governments, fiat, and regulated/controlled markets.
See, Satoshi Nakamoto has designed Bitcoin as a mean to fight against the crooked practices of unpredictably and arbitrarily inflationary national and international economies. There is no virtue in becoming a political mean that those in government control, and there is no point in creating a slower and more inefficient PayPal which lacks the institutional checks and balances. Bitcoin is meant to set people free, fight against oppression by helping those who are otherwise controlled by their governments, and establish truly free markets where people can act more responsibly and without the oversight of the Big Brother.
Clearly, Bitcoin is the lovechild of many of the cypherpunk ideals presented by Timothy C. May in “The Cyphernomicon“. Fundamentally, it’s all about this little concept according to which privacy and freedom are much more important than compliance with laws. A parallel economic system has to be radical, secure in relation to external forces interested to meddle with it, and (for the lack of a better word) disruptive.
And if dumb money wants to treat Bitcoin as a speculative investment, then so be it. The fundamentals can only get stronger, as new smart and talented people become interested in helping the hero of our story get ready for a stage which ardent believers describe with the “hyper” prefix.
Bitcoin and Satoshi’s Vision
At ten years old, Bitcoin has matured and isn’t bound by the vision of one otherwise smart creator. False prophets occasionally emerge and claim to have created Bitcoin, but nobody has the power to completely obliterate a decade of growth and high education. Satoshi Nakamoto was short-sighted in many regards and there are many aspects still to be improved in the original design.
As long as the vision of creating a truly decentralized and censorship-resistant parallel financial system is retained, the sky is the limit in terms of improvements. In the early days, Bitcoin was stuck in the middle of arguments between some uncles whose names might just be Gavin, Andrew, Luke, Jeff, and Pieter. As it approaches teenagehood, it’s ready to study the works of the elders. Grandfather Schnorr will teach Bitcoin a little something about scaling and privacy, while grandad Ralph Merkle will shorten the length of contracts that it signs… it’s a MAST.
As a pre-teen, Bitcoin aims to remain the first in its class and borrow all the great elements from its cousins. Fundamentally, Bitcoin will remain value because it enables financial freedom through its censorship resistance. Decentralization through enacting a strict, conservative, and rigorous methodology for changes, as well as empowering the users to run their own validating node is the key to success.
In this context, father Satoshi is a modern-day version of Geppetto: he gave life to his little boy project, but his creation has outgrown the initial hopes and expectations, and the magnitude of Bitcoin’s growth will be felt in ways that not even Satoshi’s vision would have predicted. It’s time for the wunderkind to shine, spread his wings, and take on greater challenges.
Bitcoin, teenagehood, and maturity
It’s definitely early to make plans about these advanced stages of Bitcoin’s growth and maturing as both a decentralized protocol and a form of sound money. However, the increased interest and the strengthened belief in the fundamental values make it more likely that we will be reaching that “hyper” phase. The wrongful moves of the dumb money institutions, as well as the increasing tendency to censor free speech, definitely help Bitcoin and give it somewhat of a messianic aura.
Under these circumstances, we can project that the teenagehood of Bitcoin will be filled with turmoil and pressures from the realm of governments and banks. Some will open the door for Bitcoin to step in, thinking that they can turn their competition into a trusty ally that they can manipulate, while others will simply forbid anything related to the maturing wunderkind, thinking that discouragement works. It won’t be easy for everyone supporting Bitcoin in its mission, but as long as the censorship resistance works properly, the sky is the limit.
Some may consider that Bitcoin reaches maturity as soon as that “hyper” phase kicks in and the rivalry with fiat money becomes an even more serious problem for governments. However, this can’t be possible unless real fungibility is attained: if the whereabouts of the currency can be traced in order to distinguish between Silk Road coins and newly-minted satoshis, then that’s a big limitation and roadblock for the entire project. Furthermore, real privacy is a desirable element that can only benefit the underlying cypherpunk ideals that led to the creation of Bitcoin. Without it, we cannot really talk about a mature phase where the hero of our story has fulfilled his destiny.
So happy 10th anniversary, Bitcoin! And may you always stick to your guns and make all the freedom lovers of the world happy. Your life has just begun, wunderkind.