Easter weekend. Family reunions, liturgical services, fasting for some, feasting for others, a time for renewal, time to dispel some crypto myths!
Everyone talks about “going to the moon” in crypto but few if any really knows what that means. Cypherpunks care about privacy and censorship resistance, libertarians care about political ideology and businesses care about making money. But how many of them actually think through how to get there?
I don’t mean in a metaphoric sense, I mean pragmatically. What is the adoption roadmap? What do we mean by ‘moon’? Price? Resistance to government usurpation? Censorship resistance? Self sustaining system without any oversight?
True, most people who say “To the moon!” are just pumpers or speculators trying to incite a windfall profit from the penny stock altcoin that they purchased for the express purpose of dumping it for a profit on unsuspecting suckers. But let’s consider a moment the goal of Bitcoin –becoming a widely accepted alternate money to fiat currencies– how does Bitcoin get to there from where it is today? What challenges and obstacles must it overcome? What different stages of development and growth must it evolve through?
I’ll start with the presupposition: Getting ‘to the moon’ means establishing Bitcoin as a permanent irreversible alternative to fiat currencies, available to anyone on planet earth with an internet connection, who wishes to use it, regardless of their political environment.
To the Moon, via the Bitcoin Rocket
Let’s examine the path to the moon by way of an analogy. Yes, I know that analogies are dumb. Well, most of them are. They are dumb because most people use them incorrectly to ‘prove’ a point. For one, analogies don’t prove anything. Just because you come up with some way of rationalizing something to yourself in your mind, doesn’t mean that you have uncovered some sort of objective proof that shows that you are correct. More often than not, analogies are just generalization fallacies wrapped up in a catchy phrase. But anyway, here we go.
You have all heard of the saying that upgrading Bitcoin is like replacing the engine of a car while it is speeding down the highway. Well, I like to think of Bitcoin as being a rocket ship. A Saturn V rocket, if you will, built and designed to reach the Moon. Getting to the Moon, like real life rocketry, must be done in stages.
Stages to the moon, listed with its primary driver:
- First, the rocket is build by the crypto-geeks, cypherpunks and the engineers
- Libertarians and anarchists ideologists act as the ignition and the fuel to take the rocket off the launchpad and into the troposphere
- Speculators and pumpers push it up into the stratosphere
- Businesses and capital investments act as second stage boosters which take the rocket into the mesosphere
- +1m user adoption brings the rocket into unstable low earth orbit (current state of Bitcoin)
- Greater adoption (a developing countries worth of GDP) brings it into medium earth orbit
- Mass adoption (a G20 countries GDP) breaks it out of high earth orbit and safety coasting towards to Moon
The big misconception is about what level the network needs to be in order to reach stable earth orbit (i.e. self sustainable). Some people who say that we can afford to wait for more businesses to develop before increasing network capacity. They say that a fee market is necessary because users need to pay more for the decentralization that they have up until now been getting for free. That essentially means consciously limiting the network users to those who are currently underserved, and NEED to use Bitcoin because it would be illegal to do what they are doing with fiat currencies. Yes, a fee market means that Bitcoins biggest users will be drug dealers, pirates, ransomware hackers, pedophiles and terrorists. (of those, only ransomware hackers and drug dealers have come to use Bitcoin so far). But keeping Bitcoin exclusive to those can afford to pay for decentralization is reducing its potential user base. And that is as folly as shutting off the rocket engines halfway through its ascent — the rocket comes crashing back to earth.
Notice that I listed the final three stages to the moon all depend on user adoption. New users become the primary source of fuel for this rocket soon after the stratosphere is reached. It is users that will put Bitcoin into stable orbit (beyond reproach of the earth’s gravity). It is not scalable technology, it is not business use cases, it is not speculators. This is because the only thing that can ensure that the network is beyond the far reach of governments is mass adoption. As long as the government controls the guns, then the only thing they are afraid of is mass revolution, and negative public sentiment which affects votes (in democracies anyway).
Decentralization isn’t a goal, it is a means to an end
Most people think of decentralization as a static goal. As if it was a certain quality of the network that can be increased and decreased in by incentivizing the participants in a certain way. Central planning is the biggest hubris that some long time cypherpunk philosophy is guilty of. This is naturally due to the fact that they are paranoid of outside forces which they cannot control, so they strive to control everything.
Decentralization is not achieved via running more nodes in geographically distinct locations. It is already achieved by way of the protocol being public and open, and the network effect which incentivizes people to preserve the network functionality.
The analogy often used is TCP/IP. Is it decentralized? It is just a protocol. It doesn’t make sense to say it is decentralized. Is the internet decentralized? It certainly is. Why? Because although there are certainly datacenters that run most of the servers on the internet, this does not stop anyone from running darknets across it, or pirate media via BitTorrent.
Did that require heavy handed controls such as artificial fee-markets and resource caps by developers to achieve? Not at all. The internet just developed naturally that way. And so will Bitcoin, if the central planners would just get the heck out of its way. The fear of mining being centralized into datacenters is as silly a notion as demanding that everyone on the internet host their own website on their home computer in order to preserve decentralization, for fear of censorship.
Certainly people are free to do so, but the current level of government oppression does not warrant that level of decentralization yet. (If it did, people may just start doing just that) But to limit the bandwidth of the internet just so that it would preserve the ability of individual home PCs to be able to compete as peers to every other machine on the network would have seen the internet never catching on, and perhaps alternatives like CompuServe, AOL and Nifty would have remained the dominant place for e-commerce, and the public internet regulated to personal webpages where one would post embarrassing party pics of their college frat. Where would the internet be without Amazon, or eBay, or Craig’s List, or Mixi(ミクシィ), or Facebook? If Bitcoin is looking to ensure its own survival, then I say we need to support a set of developers who don’t try to fight the formation of these large ‘centralized’ businesses on the network, and instead welcome them. They fail to see the forest for the trees. For without the public commercialized internet, with its concentrated power hubs like Google and Baidu and Facebook, do you think we would even have a darknet?
Developers, cypherpunks, libertarians and crypto-anarchists, time to get your heads out of your collective arses and see the forest for the trees. Before you regulate Bitcoin to being just a footnote in the history of money.
As a new experiment, I am now moving my donations over to Counterparty Indiesquare Wallet. As a bonus, now when you donate to my blog I will repay you with WSTCoin (Wall Street Tech Coin) which is my personal reader rewards coin. I intend to eventually offer exclusive content to people for WSTCoin, therefore making a small market for its use. All BTC donated to WST, will go towards web hosting and translations of this blog to other languages. Thanks for your readership!