“We reject kings, presidents, and voting. We believe in rough consensus and running code.”
David D. Clark(24th annual Internet Engineering Task Force conference, July 1992)
In 2009 an anonymous person(s) under the pseudonym of Satoshi Nakamoto implemented a digital currency called bitcoin (BTC). Bitcoin’s issuance model relies on cryptographic proof instead of a trusted central authority (i.e., Central Banks), and can be sent from one party to another, peer to peer, without the need of a financial institution for a fraction of the cost of traditional finance transactions.
Frequently misunderstood since its implementation, bitcoin has been steadily gaining popularity and adoption, having a market capitalization at the time of writing of 209 Billion USD. With Bitcoin alongside came a revolution that gave birth to the thriving crypto-asset market that boasts a market cap of 457 Billion USD to this day.
Bitcoin’s economic properties have been tested during the past 11 years, named the decade’s best-performing asset (2010–2020), But not without wild ups and downs. Today, it is recognized by many as a legitimate inflation-proof store of value. During the current economic crisis, which we will address later in the series, bitcoin showed stellar gains again.
Institutional investors such as Fidelity Investments made broad recommendations for the asset, urging their clients to invest at least 5% of their portfolios in bitcoin. In the case of fiat blow-ups, like Venezuela’s Bolivar hyperinflation of 2020, it has pressured government officials to recommend to its citizens to hold and transact with bitcoin. This recommendation is part of why Venezuela is one of the biggest crypto economies in the world.
A recent study published by Goldman Sachs found that Millennials recognize and prefer bitcoin in their portfolios over traditional mainstream stocks, such as Netflix, Apple, or Google. Another study shows that the Millennial generation is poised to receive one of the most significant wealth transfers in recorded history. The implications of all of these facts together are massive to our way of life, and they just cannot be overstated enough.
Crypto asset skepticism and challenges for mainstream adoption
“Bitcoin is probably rat poison squared.”
-Warren Buffet, Berkshire Hathaway 2018 shareholder meeting.
The need for an inflation-proof medium of exchange/store of value has never been more evident than in recent times. The world economy is unraveling what might be one of the most complex crises on a global scale in recorded history. Cryptocurrencies were tested during these times, and their inherent value has shined, outperforming most traditional assets.
Nonetheless, the volatility present in most cryptocurrencies still hinders their usefulness as a medium of exchange/standard for deferred payments. The search for the best way to stabilize cryptocurrencies has been on the list of many of the industry’s best minds, giving rise to a thriving ecosystem.
Bitcoin has struggled to become the internet’s money as its creator originally intended. Scalability, price fluctuation, and tech innovation have now been surpassed. Adoption has been steadily rising, but there are still a lot of misconceptions around the technology, complex user interfaces, regulations, underdeveloped infrastructure at the point of sale, and other factors that add to the hindrance that the asset faces. Nonetheless it is a fact that Bitcoin has finally gained mainstream acceptance and the asset class is just at the beginning of its lifecycle.
Cypherpunks & Bitcoin’s legacy
“Crypto anarchy will alter completely the nature of government regulation, the ability to tax and control economic interactions, the ability to keep information secret, and will even alter the nature of trust and reputation.”
— Timothy C. May, The Crypto Anarchist Manifesto 1988
Satoshi Nakamoto’s gift to the world ushered into fruition the cypherpunks’ and early computer science and internet engineers ideals regarding autocratic control, privacy, and neoliberalism’s shortcomings.
With decentralization, open-source code, inclusion, and other highly enlightened ideals at the heart of the technology and the community, the crypto asset space has flourished in an age where advancements in technology are shifting the world towards more centralized control, monopolization, censorship, and surveillance. These factors have continually and deceptively invaded the lives of the majority of the population worldwide.
As a new kind of social contract and remodeling of the world economy is being pushed at an alarming rate by incumbents worldwide, the crypto community and space may very well be the final frontier for freedom, individual rights preserved, private property rights, and other enlightenment ideals. As mentioned in the past essay, the crypto asset revolution is a referendum on traditional institutions and their flaws.
This is part of a series of essays we are constantly sharing. Follow us on social media and stay tuned for more information on decentralized finance, crypto assets, and blockchain technology.
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