It has been interesting to see large numbers of people pay attention to Bitcoin in the past year or so. The reason for that attention was the exchange price of Bitcoin, which made a lot of early adopters wealthy. (One of the few times when the right guys got rich.)
The idea of getting rich quick always sells, and it did this time too. Along with it came a lot of investment talk, complaints about volatility, well-publicized government raids, central bank reports, and threats from tax men.
What most of these people missed was that Bitcoin is not a traditional financial instrument and doesn’t fit into the categories of traditional finance. Bitcoin – cryptocurrency – is a new thing. It’s a radical, revolutionary thing. As long as you try to categorize Bitcoin with traditional financial tools, you’ll never really understand it.
Bitcoin Comes From Outside
Lots of people talk about “outside the box,” but many of them would run from anything that was truly outside of the box. Such people may be interested in Bitcoin because of price gains, but only because they don’t understand how radical it really is.
Bitcoin, you see, is not an adaptation based on existing currencies, nor can it be understood that way. Bitcoin is from outside – from the realm of anti-establishment radicals.
In particular, Bitcoin comes from the cypherpunks, a group of crypto-anarchists and anarco-capitalists. They began to flourish in the early 1990s, as cryptography merged with the new Internet and they realized they could “wall-off” areas of cyberspace from the coercive intrusions of governments. Here are a few quotes from these folks:
We don’t much care if you don’t approve of the software we write. We know that software can’t be destroyed and that a widely dispersed system can’t be shut down.
Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us.
Encryption, digital money, anonymous networks, digital pseudonyms, zero knowledge, reputations, information markets, black markets, collapse of governments.
A specter is haunting the modern world, the specter of crypto anarchy.
Arise, you have nothing to lose but your barbed wire fences!
These are not financial people trying to invent a new kind of currency that’s going to make them rich – these are radicals who want to build a new world. And that’s exactly what Bitcoin is: a radical tool for building a new world.
Bitcoin was birthed on the cypherpunk mailing list, by the way. One of the list members, someone named Wei Dai, outlined the structure of cryptocurrencies in 1998, ten years before Satoshi Nakamoto wrote his program.
What’s so interesting about the current moment is that the concept of cryptocurrency is challenging people to think about what they truly believe. Do they really love the status quo? Or is it just something they accepted because they saw no alternative?
Because once people really understand Bitcoin, they also understand that it is built on the opposite principle of the status quo. Bitcoin has no place for a central controller, no tool allowing an enforcer to override anyone’s transactions, no mechanism of coercion at all. That makes cryptocurrency anathema to the current monetary regime and to every ruling regime.
People who come to understand Bitcoin also learn this, and it can be a real challenge for them.
And What Now?
Well, several things are going on now, all at the same time. Here’s my list:
- The old regime – banking, law enforcement, tax-gatherers – are trying to harness Bitcoin and build tools of control into or around it.
- Military and intel agencies are figuring out how to shut down Bitcoin traffic without killing the Internet altogether. The big tech companies have become their sycophants and are following their masters’ will.
- Certain financial operators (“reasonable” types) are trying to subvert Bitcoin and make it acceptable to the powers-that-be.
- People outside the G20 financial monolith are beginning to see the utility of Bitcoin. It is much cheaper, easier, and faster than Western Union, bank wires, or credit cards. It’s also far easier to transmit over distance than cash. A cab driver in Zaire doesn’t give a hoot whether the Western banking cartel hates Bitcoin; if it works for his customers, he’ll use it.
- New projects like Ethereum, Dark Wallet, BitWasp and many others are popping up regularly. The innovations are not stopping.
What comes of this is anyone’s guess, but one thing is clear: The genie is out of the bottle; everyone knows that cryptocurrencies work, and work well. Even if Bitcoin is brought down, new adaptations will follow it in a steady stream.
The revolution is here, now. Fight it, join it, dance, mourn, or just play dumb; it’s your choice.