Oh, I believe the fork will happen. Eventually. Someday. Hopefully prior to the breakthough.
Until the fork occurs, there is always the risk of a secret breakthrough. Both NSA and PLA are highly motivated to execute this project. And to keep the progress secret. Ideally, they want everyone to think they’re 5-10 years away when their machine goes operational.
And it will also take time to develop the new hardware to do the mining.
I mean, sure, this fork might happen in advance. And the mining hardware might be developed in advance. And the miners might replace all their hardware in advance.
And hopefully the various nation-state actors will tell everyone way beforehand that they’re about to break internet cryptography.
Assuming they haven’t broken it already, of course.
Just boil down the schedule for us all. When will the mining hardware arrive? And when will the bits get updated? Is there already a beta? Which quantum-proof crypto algorithm have they selected?
Or is this still vaporware?
My life used to be doing projects just like this.
I guess I should start with a cost/benefit question.
Is all the cost of electricity being used around the world on social media a benefit?
Is even the fraction of the cost of electricity being used here on PP a benefit?
BTC is 11 years old. In that time 18,000 millionaires (USD) have been created. Is that a benefit? BTC has spawned over 10,000 “copycats”. Some have real world applications, most are shit coins.
It would be well to remember that BTC is an 11 year old. It is not a teenager. let alone an adult. Is it perfect? No
What problem/s does it solve ie. why is it necessary?
To even ask that question HERE is beyond ridiculous. One would assume (and probably be wrong) that everyone here is aware of the three E’s. At minimum one reading here would be aware that Chris Martenson has spent the last 13 years online delineating the problems with our current monetary system, from the Fed, fractional reserve lending, banks and banksters, etc. 11 years ago a White Paper was published which offered a solution to all those problems. https://bitcoin.org/bitcoin.pdf It offered a path to a trust less, democratic monetary system. A monetary system that issued currency democratically w/o a third party intermediary. It is a system based on mathematics. (I suggest watching the Andreas and Dan video posted above)
The system it creates is Peer to Peer (P2P) This system is the ultimate monetary system which can guarantee freedom. Anyone engaged in a fiat regime is by definition not free. BTC is OUR money.
So my next question is : What price are you willing to pay for freedom? What price are you willing to pay for establishing a Decentralized Financial system (DEFI)?
What price are you willing to pay to cut the legs out from under the banksters?
That price is the price of electricity. Some people died for those freedoms.
This is a definition of critical thinking. "
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the objective analysis and evaluation of an issue in order to form a judgment."This means one initially puts aside personal biases, prejudices, fears, and other emotions and preconceived ideas to make an OBJECTIVE judgement.As I stated BTC is not perfect but I think it is stupid to throw out the good in search of the perfect.This is Nic Carter for the umpteenth time explaining BTC energy use,One study has estimated that BTC mining uses 74% renewable energy.If somebody can come up with a better solution to the problem, which clearly if you are here you should recognize, I am all for it. Let's hear it. BTW it aint gold
As an (obvious) non-techie, my questions about bitcoin (not so much block-chain) are more based in past experience, which I grant is no guarantor of future happenings (but it’s a hint…) Someone mentioned block-chain for voting - that sounds seriously interesting, if it really is tamper-proof. Nothing in the past has ever been tamper-proof, eventually, but maybe this one is - hope so.
But back to bitcoin and its derivatives and successors. We’re still talking about a currency here, I assume? At the moment, I guess because it is tied up with the distributed ledger technology behind it, it seems to be being treated like an asset in the ““markets””. This is probably one aspect of it that I’m finding ambivalent - it’s a case of buying one currency with another currency, and in many cases having to buy it back with a more mainstream currency to be able to use it. No doubt that will even out as more people use it for purchases. But its “price” is still very volatile. Like an asset (land, gold, etc). But it’s just a record of a currency exchange, and that doesn’t feel like an asset to me.
MM placed it in the context of an ideal - what is the value of a truly P2P, no-trust, no tampering currency, and isn’t it worth the cost of the electricity. But cost in what terms? Dollars? Possibly crashing resources? I feel like we’re on a see-saw between concerns about teotwawki and technology riding to the rescue. Wouldn’t I like to “cut the legs out from under TPTB”? Sure, but my primary attention is on more down-to-earth things like helping my community survive the implosion of the current systems so that life can go on. Maybe distributed ledger technology will be part of that “going on” - probably will be integrated into many things, if those sort of systems survive at all.
Please don’t take the various doubts and questions as criticisms, so much as the back and forth of discussion. We’ve got one foot each in two (apparently) quite different scenarios here.
I purchased my first BTC back when it had “exploded” to around $1200. Bought 1/4 BTC on localbitcoins just to become familiar with the system- the major exchanges weren’t operating in HI at that time. Not too long afterwards, I traded half my 1/4 BTC for Ethereum- it was gonna be the “big thing”. Typical of my investing success…So, now I’m seriously looking at diversifying my “portfolio”. I’m considering allocating 5% to BTC, because I’m pretty much all in cash-equivalents presently- and that is a bit scary. I could absorb a 5% total loss. Everything has plausible risk. Inflation, confiscation, taxes, theft (in all its forms). This back-and-forth on BTC never seems to have a solution, besides “how much of your personal portfolio do you wish to risk on any given asset?”. Risk-Reward. I’d also be interested in DaveF’s project on mining those quantum-proof coins in the comfort of his own home. What, couple grand in hardware hooked up to the solar panels? Sounds like a fun project. More info please, Dave. Diversification, because some will go up, and others down. Rabbits, chickens, garden. Pray for rain…Aloha, Steve.
From a technical (network-architect) perspective, bitcoin is a distributed database. As such, it makes some assumptions about its operating environment:
- connectivity will “mostly” be maintained between all full nodes and the miners, with only temporary outages between segments. (let’s say less than 30 minutes for an outage between segments). Less technically: you need a functioning internet - where all the countries can talk to one another.
- the cryptography on which it is based is extremely difficult to subvert.
- no one group controls a majority of the mining power in the network.
If any of these three assumptions are violated, we have a problem. Note that these are reasonable assumptions to make. It would take extraordinary effort to violate any of these assumptions. Like what would they be?
#1: war between US and China - internet fragments in the same way that air travel is no longer permitted between countries. This has never happened. But it certainly isn’t impossible. If it happens - this is a problem.
#2: quantum computing cracks cryptography. If there is a 1-year warning, this problem can be solved. If there is little to no warning - this is a problem.
#3: that’s the 51% attack. I haven’t gone down that one.
Let me just say also, I really do like the underlying technology. Its nifty stuff. Who wouldn’t like a shared realtime distributed database where anyone can add records and anyone can make queries? Its an interesting new tool for the network architect’s toolbox.
However the core issue remains - the “network” the whole thing depends on is also a key assumption. No network = effectively, no coin. Coins exist, but you can’t move them around, nor can you validate transactions. And things get very strange if the Internet gets fragmented. You won’t like how things go if that happens. And you really wouldn’t like how things go with the “quantum surprise” scenario either.
You decide if that’s an issue for you.
If you’re interested in Bitcoin, you owe it to yourself to read the paper Bitcoin will bite the dust, by K. Dowd and M. Hutchinson, published in the peer-reviewed Cato Journal. It offers a different perspective to this Saunders, a crypto-cheerleader.
I read it a year ago, back when I was doing my research on Bitcoin. I tried to find a coherent rebuttal to the paper and could find none, so that was for me the last nail in the coffin for Bitcoin. I don’t want to own an asset that is almost sure to eventually be worth zero or close to it, and have to fret about how much longer it has before mass psychology allows it to reach its intrinsic value.
Being peer-reviewed, you won’t find obviously misleading claims in the paper like Saunders makes in the podcast, for example when he says that you cannot create more Bitcoin (yes you can, either you launch the next shit coin or Bitcoin clone from the comfort of your sofa, or you go through the trouble of creating a better digital asset that doesn’t suffer from Bitcoin’s many ailments, which is almost guaranteed to happen eventually).
I think the days of a global, free, open internet are already over. The hope in the early days was the free sharing of information and ideas would lead to a tearing down of borders and translate into global freedom. That’s happened to a certain extent.
But the desire for rulers, regulators, and politicians to maintain control, combined with their control of guns and the need for the internet to have physical access points means the eventual splintering of the internet.
Look at the differences today between the internet in the US, Australia, EU, and China. Each has separate rules for its citizens and what they may access online, and the degree of identity tracking involved. Each has separate rules for how their media is censored. The rules are largely being extended to online and social media. Look at Facebook or YouTube.
So not only is it possible the internet splinters, in some ways it has already happened, and will only get worse from here on out.
In the bigger picture, COVID-19 marks the peak of offshoring from US (and other countries) into China. The nationalism-globalism pendulum has turned the other way. Brexit and the Trump victory in 2016 were the earlier signs, but the COVID supply chain crisis made it crystal clear and had massive shockwaves. In 50 years, I bet that will be seen as the turning point.
The global economic disengagement will weaken support for a global internet, along with other factors. So countries will create or enhance electronic borders.
I don’t know in detail what shape the internet will take, so I can’t say how it will impact distributed ledgers. But I’d very certainly say the splinternet is not just a remote possibility, it is a highly likely outcome.
DaveF said,
#2: quantum computing cracks cryptography. If there is a 1-year warning, this problem can be solved. If there is little to no warning - this is a problem.As has been well described elsewhere in this thread, and as I have described otherwise recently, we are not at all near having completely scaled, error-corrected quantum computing that can complete this task. To better describe the picture of where we are, we can think of maybe three distinct phases of QC evolution.. and we just passed into phase 1, successful proof of concept using a toy quantum computer, late last year. Phase 1: Quantum supremacy: You are here. Google last year ran experiments confirming that QC is real, by performing calculations using a 54 qubit machine that did math in minutes which would otherwise have taken weeks or years on the most powerful (classical) supercomputers. Today's machines are termed, "NISQ" for noisy, intermediate scale quantum computing. Phase 2: First useful work applications are addressable. Among the first applications addressable will be chemical/pharma/materials discovery, based on first principles, i.e. modelling molecular structure vs function. I am keenly interested in the timing of this next threshold, and we are still likely 3-5 years away, at earliest. While the math behind factoring huge numbers will require what we might call, in my model, phase 3 exactitude, modelling molecules does not since this will be addressed as an optimization problem, most likely with a hybrid approach between a late stage, partially-scaled (much more than 50 qubits) machine, alongside a conventional super computer. There are already algorithms under development called variational quantum eigensolvers, or VQE, that employ this hybrid computing approach to optimization. Phase 3: Fully scaled, fully error corrected QC that can do exact math. This is where cryptography as we know it gets broken. Because this could take literally millions of qubits, with the majority of them functioning in support of error correction, we are a long way away from this. Most scientists involved in QC will swag that it's at least a decade away. So, I guess my point is.. we will see it coming. Chemical and Pharma companies that have invested early in QC will start patenting their new drugs, catalysts, and materials, and you will hear about this in the news. It won't be a secret. Once we get to phase 2.. it will be time to take a critical look at the competition and timing of phase 3.. but for now, we are not even close.
JimH-
I’m just guessing that the PLA and the NSA see this project as one of those core-mission-critical projects that they will a) not talk about and b) fund excessively. The rewards for an early and surprising success are really phenomenal. They will own the internet, if they win.
Given this behind-the-scenes very well funded top secret research effort - are you really sure that the quantum success will be telegraphed to all and sundry?
Put differently - if I had 10 billion dollars per year to spend 0n my top secret project focused exclusively on crypto - do you think I might be able to advance the state of the art a bit more rapidly?
So, when all is said, whether it’s equities, PM, or BTC, it’s time to que up Kenny Rogers.
Aloha, Steve.
I am not an expert in crypto. I have done some reading on the topic.
One thing that strikes me is: what problem is it trying to solve that isn’t solved already? Sound money, in gold and silver, is already available and has a 5,000 year track record. So is there a need to reinvent the wheel?
That led to another question: why are people attracted to it? There are likely many reasons, psychologically and economically. One I haven’t seen discussed is complexity worship.
By “complexity worship” I mean the granting of something complex the undue benefit of the doubt by virtue of it being complex. The converse of this would be dismissing something as too simple. While not definitive, one sign (and just a sign) of it is frequently dismissing something as “oversimplified” in favor of something more “nuanced.” Often it involves lots of understanding in details while missing the big picture, or failing to properly assess the risk of certain underlying assumptions.
Example: the US tax code. No income tax, or a 10% flat rate income tax, is usually dismissed as being too simple. Steve Forbes ran in the 1990s for the Republican nomination and talked about a tax form that could fit on a postcard; that was dismissed as being too simple.
The complex labyrinth of tax code we have to day is often criticized, but in details: raise this rate a few percent, remove this deduction, etc. Rarely do we step to the level of seeing the bigger picture and discussing in principle what a more efficient tax system would look like.
There’s something in the nature of the tax code being complex that conveys an emotional halo around it.
Same thing with the Fed. With hundreds of PhDs running it, putting out indecipherable academic papers, many people conclude that these are really smart people who must know what they’re doing. And that last presumption is a real folly.
A complex system (in the mathematical sense of nonlinear dynamics) is by nature very hard if not impossible to analyze. In physics, it’s the difference between a two-body system and a three-body system.
With gold and silver, the prediction of monetary value over time is as simple as it gets. Crypto and fiat currency introduce so many variables and assumptions that the likelihood of them working as intended goes down considerably.
A complex monetary system, by its nature opaque, invites manipulation. Some people are not concerned about that with crypto, but for those who are, it would take an awful lot to convince us that something so complex doesn’t have a backdoor or a flaw that could be exploited down the road. In the case of central bank digital currencies (CBDCs), I’ll be very surprised if they are not set up from day one with government access, even if they promised otherwise. (So far, I think they’ve been pretty open about having access to these accounts, at least in the US and China; I haven’t looked elsewhere.)
Simple means predictable. It means reduced risk over the long term because we can see where things will go. With complex systems (monetary or otherwise) prediction becomes guessing and gambling. I prefer simplicity, when and where its possible.
Certainly, there are complex things in life, and imposing too simplified theories on them fails. We saw that in physics with the shift from classical to quantum around 1900: lots of phenomena couldn’t be explained with the existing theories, so more complex theories were created which could explain it. The key is something like Occam’s razor: keep the theory as simple as possible to explain the data.
I think there’s a similar rule in economics: keep it simple. Keep the monetary system as simple as possible. Or: don’t make the system more complicated than it needs to be.
That gives us predictability and risk reduction.
It also gives us something talked about often around here: resilience.
The human mind prefers linear systems. A complex, nonlinear system tends toward oscillation and instability. We see it in boom-bust credit cycles and fiat currency defaults. People place big bets on their predictions, but these often blow up. If it were easier to predict the future because the system were simpler, it would be easier to assess risk and properly hedge. That makes the system more resilient.
So I don’t know the future of crypto or bitcoin, but I do know that they will not be, over the long run, more resilient than gold and silver. That opinion is based just on comparing complex and simple monetary systems.
Politically, the die is cast, and the world is heading for CBDCs as the next stage. Regardless of the ethics of it or the likelihood of it working as a stable store of value, that is what the powers that be are already working on. This is not hidden; the papers are out there for anyone to read.
So for better or worse, cryptocurrencies are in the future. I see gold and silver outside the financial system as a hedge against the risks involved, in the transition from the current system to this new one, and in the new system once it is up and running. And I’m speaking here about all manner of risks, from instability/volatility, periodic system failures, institutional failures, political manipulation, implementation of social credit scores to regulate these digital accounts, and so on.
So I have bitcoin sitting on the infrastructure of a miner who is entirely secure and has back-up renewable power. I guess I don’t understand how that helps me use my bitcoin to buy groceries if local currencies collapse. Can you explain more?
I can use physical gold and silver as long as I hold some myself in small denominations (or as was done for millenia, I can chop them into useful pieces).
So am I incorrect in thinking that in order to use my bitcoin in a collapse situation, both I and the person I need to pay must have access to a working, charged device that can connect to their satellite network without going through local ISPs or Cell towers that are down?
The reason I ask this is because in hurricanes we’ve found the infrastructure goes down and you don’t have electricity or cell towers and AT&T, at least, has lost power to switching stations that don’t have back-up generators. There goes my fiber optic internet connection along with my land-line phone. No electricity, no cell towers no working cable for internet connections.
Do I need a dedicated satellite device just to serve as a wallet? Could I transfer bitcoin to a seller using my device if they didn’t have one?
My last post here as I have no time for silliness.
If the internet goes down you will have bigger problems than BTC. Think Mad Max. Nothing will work.
When was the last time somebody bought bread and milk and eggs with gold or silver? I guess there might be a few silver coins still floating around, that said they are not $27 per oz. they are .25.
I am sure at the top of the list for everyone developing a QC is breaking crypto currency. Of course that delusion is supported by the mega doses of LSD I took in the 60’s
My guess is you might be more worried about big brother with a camera up your rectum in the morning. Maybe elections will cease to have any relevance at all. Weapons systems just might be vulnerable etc. etc. etc. In other words there are much bigger fish to fry. Again think Mad Max.
Oh btw where are you going to spend all that gold and silver? Walmart?
So somebody doesn’t want to hold an asset that can go to zero. Really. over 3,000 fiat currencies no longer exist. Most do not last longer than 300 years. Got dollars? Got dollar denominated assets? The canard is well there is no intrinsic value. Jim H and I both answered that if one were to care to look in the forums. The other canard is well it is priced in USD. That one always gives me fits of laughter such that I need to find the nearest toilet. What is gold and silver denominated in? Let me help you fiat . What is gold worth today? How much of your portfolio is allocated in gold and silver? Well if your portfolio is worth $500 k 10% would be $ 50k again priced in USD.
Bottom line there are always going to be people who are afraid of the future. This site is loaded with them. There will always be people more comfortable being a serf. It is safe and reliable. There will always be people who lack vision.
Every scenario proffered here negatively about Cryptocurrency will result in something far worse than Mad Max. So you think your garden is going to save you? Think again. You think your gold is going to save you? Think again You think your guns are going to save you? think again. All of that is nothing more than coping mechanisms for a "slight " disruption. War with China? LOL. I have used crypto to purchase goods and services. Numerous businesses accept crypto. I get it it took years before people gave up their horse and buggy.
Everyone here moans and groans about our current system and something comes along that has the chance to make a difference and through absolute fear and ignorance it get dissed. Amazing
Once again time to go on vacation wish you all well when doomsday arrives. It won’t be what you think
So a “segmented internet” is not the same thing as “the internet is down.” It is just a theoretical problem, right up until we posit a medium-hot war with China. At that point PLA hackers descend on America. Only defense is to cut them off completely from access. This results in a segmented internet. Not “internet is down” - just, you can’t send packets outside the United States. You can still email your friends, order things from Amazon, etc. But no packets to Europe. No packets to Asia. Just within the US. It will be a chaotic time for sure.
How does bitcoin operate in this scenario? Answer is: poorly. You won’t like what happens when the segments are rejoined. Or if they move in and out of connectivity - one day connected, the next day disconnected, etc. Things will be very chaotic in bitcoin world if the networks are in this state. An underlying assumption of the bitcoin architecture is complete connectivity with only transient (less than 30-minute) issues. Violate that - often enough - and bitcoin becomes unusable. That’s because on a “segment rejoin”, all the transactions that happened on the “smaller segment” are wiped out, while the "larger segment"s transactions are retained.
In this situation, the bitcoin code will still work just fine - it will be internally consistent and operate according to its rules, etc - but it will appear wholly unreliable to anyone who executed a TX in the smaller segment, since following the rejoin, those allegedly “confirmed” TX will all vanish.
If you understand databases, transactions, networking, and bitcoin’s rules, this is - perhaps not basic, but not all that hard. But bitcoin is a complex system. Lots of moving parts. “Normal people” might not understand the implications of how bitcoin handles its boundary cases.
Bottom line: if the network becomes segmented, don’t accept bitcoin for any real goods or services. A “confirmation” means nothing in a segmented internet. It only has meaning when everyone is completely connected.
If you imagine a satellite will fix this - during a hot war with China - any satellite which facilitates packets from China will be - taken out of the sky. [Hint: any satellite which provides a path for bitcoin traffic will also provide a path for chinese hacker traffic too]
As for quantum - NSA will come up with a special-purpose quantum machine to hack crypto systems using their 50 billion a year budget. Once they do, bitcoin is vulnerable. So is banking. So is https. This is the NSA’s holy grail. It is my assessment that they are bending every effort to make this happen, simply because this is their mission.
They won’t announce it when it happens, either.
Is it 10 years? 5 years? Do they have one already? I don’t know.
But if the bitcoin software gang are going to stake out the territory of “being immune to government manipulation”, then given what I stated above, the team really should make quantum proof bitcoin happen as soon as possible. They really can’t play around with this. It will take a year, maybe more, to get both software and hardware in place.
Oh - full disclosure - I’m definitely talking my book with quantum. But that’s also why I own that quantum coin. I really do believe what I’m saying about NSA and quantum. And of course, the quantum coin won’t do any better than normal bitcoin in a segmented internet world.
You need network connectivity to some set of full nodes, which in turn must have (through however many hops) connectivity to the “largest” mining pool and segment in order to safely validate a transaction for bitcoin. Validation takes roughly 10 minutes in a situation with relatively complete connectivity, but more likely, 30 minutes to be safe.
[I ran a full node for a while. It wasn’t hard. I wanted to rummage through the bitcoin transaction database to extract technical information. That all worked right up until Wall Street started to play. I digress.]
So as an end user using bitcoin to make a transaction (sending a coin, or validating receipt of a coin sent by another to you), you need power, connectivity, and more importantly, the rest of the global network needs relatively complete connectivity (and of course power) to be confident that your transaction actually ends up making it into the permanent record. You could certainly use a satellite as your ISP.
Proper validation is what starts to become problematic if/when the network starts to fracture into segments. Sending coins = fine. Its validating receipt that becomes more risky.
But this is only true in these edge case scenarios. With normal connectivity as is the case today, none of this applies.
Last point. I didn’t ever think nations would stop allowing people to travel. And after just 3 short months, it is now the normal state of affairs. Try going to Canada. You can’t.
Imagining that the global internet will remain fully connected at all times regardless of international situations - seems similarly optimistic.
We’ve seen quarantines to stop Chinese travelers. Why not quarantines to stop Chinese packets?
There are plenty of war scenarios that don’t involve tossing nukes back and forth. China killed a bunch of Indian troops a few months back. Think things might escalate there? Xi is definitely going back to Mao, with Wolf Warrior added in for good measure. Decoupling is a guaranteed outcome. We’re stopping export of high tech parts. We’re sanctioning CCP members. We’re kicking out students associated with PLA. We’re closing consulates where they do their industrial espionage.
Where will things be six months from now? Who can say.
Adam, thank you for bringing on someone who could address cryptocurrencies and Bitcoin. We BTC advocates appreciate it.
There’s no question but that Bitcoin (and other digital currencies) will remain controversial, here and in the larger world. That’s to be expected – there’s always an adoption curve involved with new ideas and new tech. In this case, the whole idea is so simultaneously disruptive and threatening that resistance and rejection are inevitable. It seems to me, though, that a great deal of the resistance and rejection reflected in this comment thread are not based in an understanding of the technology, but in imagining what the technology is, which in turn reflects the pop culture narrative about BTC. It’s that characteristic of many objections that indicates they are emotional and psychological in nature, taught by msm “experts.”
The balance of objections appear more or less dated, which indicates the purveyors did some deeper investigation at some past date, formed some conclusions based on some facts on the ground at that time, and made a determination that they still cling to, even though advances in tech and objective circumstance have fully or partially obviated the stated reasons for their concerns.
Again, I think this is all to be expected; it’s certainly common to human beings; none of us like change very much, especially highly disruptive change of the kind digital currencies are now imposing – innovations that demand we completely change our understanding of money itself. Such a fundamental disruption, especially while only hazily understood, creates feelings of threat and danger that in turn call forth repulsion.
There’s also the simple fact that we cannot see what we are not prepared to see. We humans need categories within which to place our observations; our categories are shaped by our previous experiences. For some segment of us, as a people, this emergent digital world is too different from our formative experiences for us to integrate. I think it’s particularly the case for those of us in the Boomer age group that the whole concept of digitizing everything seems too alien; it’s considerably easier for Millennials and those younger to grasp the power and probability of such a world – they have lived some portion of their formative years in virtual worlds, even bought and sold digital artifacts in digital currency, as well as in real-world currency.
I think many of us have been able to adapt to online shopping (after a learning curve, and even then not all of us) because it results in materially tangible products landing on our doorstep. That allows for a comprehensible link between virtual and real. But we gloss over the facts that we paid for the product with virtual money – a digitized version of our real bank balance; which, itself, is just ciphers on a non-distributed ledger which is every bit as subject to disappearing under certain scenarios here voiced as concerns about cryptocurrencies. (More so, really, when the underlying cryptography is examined.) The idea of non-tangible products holding real value remains, for many of us, a bridge too far. Why, we have to wonder, would someone pay real money for a power talisman in an online game?
In one of his presentations on the basics and promise of Bitcoin, Andreas Antonopolous noted that the first horseless carriages used reins for steering. Why? Because our existing categories of perception influence our early development of revolutionary technology. The first horseless carriage manufacturers could only think in terms of replacing the horse with an engine; it took about 30 years to come up with the steering wheel; that is, to understand that the change from horse to engine allowed for the complete reimagining of what a carriage might look like. And that reimagination, once begun, was also subject to gradual evolution.
The lesson I take away: Grasping what a new technology permits is an emergent phenomenon that builds on previous realizations. Bitcoin is only 12 years old – too early to imagine the steering wheel, much less to design one that works. But, monetarily speaking, we are no longer in the horse and buggy age. It is very likely that we Americans will see a fully digitalized version of the dollar introduced within 2 years – perhaps, as some have it, as early as Q1 next year.
We rightly fear what that might mean, having seen China’s social credit score system and being acutely aware of Facebook’s willingness to cooperate with China on its program – even introduce elements of it here, to the detriment of free expression of ideas on its platform. Google, too, we know, is willing to not just censure information available to the massive Chinese market, but now skews search results all across the globe in order to privilege social and political views it approves over those it dislikes – all while spying on our search habits, and even studying how we scan web pages in order to better understand how to influence our content consumption, thus our perceptions of reality.
This malignant trend in digital tech is not unanticipated. Many of us have seen it coming for a long time. Among those of us who saw it coming were the cypherpunks who experimented and collaborated to bring out BTC as a counter-punch to the effort to totally manage our lives and livelihoods. Blockchain, created to allow BTC to work as an open, public, borderless, neutral, censorship-resistant alternative to increasing totalitarian State power, offers us the possibility to engage in P2P economics and interaction apart from the “permission” of some authority.
Whether it can succeed or not depends on a number of variables whose outcomes really cannot be seen, even if we believe that the predominant power rests in the hands of those who desire to be managers of the people. There are, however, two variable that I think are important:
(1) A right understanding of the technology and, especially, its highly disruptive potential – because it is in the realization and adoption of its disruptive potential that we all advance the counter-totalitarian revolt. And do so intelligently, not emotively. Emotional reaction is doomed from the outset. Informed, dispersed action is insidiously effective against colonialists of all types.
(2) Distinguishing between right use of blockchain technology and wrong use. That is to say, rightly distinguishing between what is a truly distributed, immutable blockchain and what is just a ledger with a trendy name. So far, the only true blockchain application is Bitcoin. Only in the case of Bitcoin is the blockchain itself open, public, borderless, neutral, and censorship-resistant. That’s because in every other instance what is termed a blockchain is in fact the property of some group: a company, institution, or government. That means that their so-called blockchain is not censorship-resistant, because they can censor it, either on their own behalf or on behalf of those who have oversight of them. So those wrongly-termed blockchains are not open (transparent), nor public, nor borderless, and certainly not neutral.
If you want to tilt at the windmill of totalitarianism, BTC is an essential tool and battleground. This is not something self-evident to Americans – yet – but no Venezuelan, Ukranian, Zimbabwean, Chinese, or Brazilian needs to be convinced. They have demonstrated to their own satisfaction that BTC provides a key opportunity to thwart government misbehavior and repression. We could do well to learn from them before we have to learn from our own bad experiences.
But even short of the worst case scenario, most of us PPers know that fiat currencies are not money. We know that a bail-in of banks is only a matter of time. And we know what Microstrategy’s CEO, Michael Saylor, knows – what motivated him to take a serious deep dive into BTC (after having superficially dismissed it in 2017), and then to move the vast bulk of his company’s half billion dollars of free cash into the “digital gold”: that any value held in cash and cash equivalents is (as he put it) just an ice cube melting away at the rate of 2% per year. His deep dive also taught him that BTC is a harder hard money than gold, silver, or any other precious metal.
What’s needed here is imagination. I don’t mean flights of fancy, I mean the ability to create mental images in new categories of thought. Educated thought. None of us BTC enthusiasts on this thread can make the difference for you, because your particular questions and concerns are tied to your existing perceptual categories and innate assumptions about how the world ‘really’ works. We can only offer testimonies from our own deep dives, which were (and are) anchored in our particular perceptual categories and assumptions. Even modified by what we’ve learned through our own self-education, we are only, in the end, speaking to ourselves. When something one of us says happens to have sufficient congruence with your self-dialog we can have some influence in how you think about the issue. But the real revelation for you can only come from your engagement with the wide range of material now available to you.
The crypto community is so diverse it’s inevitable that some subset of enthusiasts will speak to you in a way that enables you to grasp what all the hullabaloo is really about. Once you grasp that, you’ll still need to make a decision for yourself – but at least it will be an informed decision based in current knowledge about the project.
My appeal is that you take that deep dive. Places to start, if you need suggestions, are: the Intro to Bitcoin and Intro to Blockchain videos of Andreaus Antonopolous; the Bitcoin-related interviews from macro-economist Raoul Pal’s Real Vision Finance site; and the crypto-related interviews by podcaster Anthony Pompliano. You can also get a lot of education and perspective from financial analyst Lyn Alden, and podcaster Stephan Livera.