I have known about bitcoin for nearly 10 years. I thought I understood what it was back then, but I completely missed the emergent nature of this technology. I thought it was for anonymous payments, nothing more. While that may be a feature we desire of our money, it turns out there are all these other emergent properties of bitcoin that will render it very useful in the future, and yet it’s not quite there yet.
“Should I buy?”
I often talk about bitcoin with people I know, and they ask me: “should I buy bitcoin?”, often without letting me finish my first sentence trying to explain why I think it will change the world. I’ve decided to start giving them a real answer:
You are not ready for bitcoin and it is not ready for you. Seriously, don’t buy any. Do you understand what it’s purpose is beyond “anonymous” money for the black market? Why you should never keep crypto on exchanges? How you should store your seeds? Are you okay with price volatility? Do you lack trust in your government to manage your monetary system? Or your bank?
If you have answered “no” to any of the above, don’t buy bitcoin.
“Do your own research. This is not financial advice. Never invest more than you are prepared to lose.”
It’s too early right now. The wallets aren’t ready for the mainstream. The volatility is too high to keep a large amount of your money in. Even the bitcoin network itself is not ready for the type of global transaction volume handled by credit cards today.
While these things are all improving all the time, we still aren’t ready for you. So where does that leave us?
My goal from writing is to persuade you. Not to buy bitcoin mind you, instead, to start learning about it. I truly believe that no matter what you and I do right now that bitcoin tech will alter our society in such a fundamental way, that we are still struggling to see what it will look like and it would be advantageous to everyone to understand it as that happens.
Also, there are ways to get bitcoin without buying it.
If you want to actually participate in the bitcoin network, all you have to do is download a free wallet app, write down your seed and store it safely, and then you can simply share your bitcoin address anywhere and anyone can send you money. When an opportunity comes along to accept bitcoin from someone in exchange for something, it will be as easy as a few taps on your phone.
You might accept it online for content you create, or at a yard sale. If I know you personally, I’d be happy to send you a small amount to play around with (don’t be shy!). You might setup a small mining rig and contribute to a mining pool and earn a bits of coins that way.
Bitcoin is like the internet, but for Money
The internet is a great analogy for bitcoin, they both evolve and scale as new features become necessary. They are decentralized and developed in open-source ad-hoc fashion. They connect people on opposite ends of the world. They should be completely open and neutral.
Like bitcoin, the early internet did not have widespread use in it’s early years, many people did not see the value. The majority didn’t wish to invest the time and money in buying modems and internet service, learning about email and web pages and networking. It was hard to use back then, web pages were constantly “under construction”. Of course today, it’s difficult to imagine life without it.
As a young person, my house was filled with computers, and I watched the internet unfold in front of my eyes. Though only in my early teens, I thought a lot about technology. As soon as I understood what the internet was and how it would scale, I knew that it would change the world.
I could identify certain features becoming available (I remember downloading a song for the first time and realizing that bandwidth scaling would allow us to move HD video around the world instantaneously eventually), but I couldn’t predict the prevalence of things like wikipedia or google and it’s plethora of free apps like google docs.
We can’t predict what the future will look like exactly because technology builds on itself and evolves as we discover new features and ways to solve problems. And that’s what bitcoin is, a global network of computer nerds innovating on money.
What excites me about crypto is the new things that it can do that our traditional money will never be able to accomplish (consider phone/fax VS the ‘net). These new features of money will open up all sorts of possibilities and we will build tools that utilize emergent properties of the new features of money found in bitcoin and other crypto currencies. On top of those tools we will build even more things that we couldn’t even imagine before the first set was built and working.
One random example is IOTA, a crypto currency with zero fees. They aim to engulf the “internet of things” in digital money. Allowing robots to pay each other sounds kind of weird, but one use-case is that this will enable the smart distributed power grid by allowing individual solar panels and individual batteries to exchange electricity and money, creating a vastly decentralized network of power generation and distribution. We’ve been trying to figure out how to decentralize our power grids for a long time, and this is a massive leap in the right direction, and would give birth to the internet of electric power.
And zero fees means you can pay fractions of a penny to use someone’s WiFi, or charge your phone. Other projects are aiming to allow us to share our computing power or hard disk space creating a distributed supercomputer accessible across the world. A new sharing economy can develop where we all benefit by sharing our unused resources, more resources are available when we need them, and compensation is all handled in the background for us automatically.
Why is it taking so long?
Bitcoin has been around for about 10 years. Despite that, I believe it is only really starting to creep into the public consciousness. And even there, it’s really only discussed as a speculative instrument, like a stock to be traded and profited from. The public aren’t yet talking about the benefits to our society this tech could bring.
I have already gone over some of the things holding bitcoin back, and I think the biggest factor is actually the technology itself. Software and hardware development takes time, but when it’s securing money, it needs to be solid. NASA can’t develop critical systems as fast as google can launch a new app, not because google has better engineers, but because NASA has very high standards for performance and reliability. In the same way, bitcoin first and foremost has to actually be secure. We can’t afford to mess this up, it’s too important to our entire global civilization.
And because bitcoin is on the open public internet, it’s open-source code, everything that happens on the network is known to everyone, and it secures many billions of dollars of wealth, if there was a way to successfully hack money from the network itself, someone would have done it (and we would all know). And because it’s open, it’s constantly under attack and evolving to become more secure.
After 10 years no one has hacked bitcoin, the tech works, but we have to build it in a way that’s easy to use while remaining secure (which takes a lot of time to do right). In the mean time there are many organizations working on ways to help merchants accept crypto-payments in different ways. Similarly, people are putting more and more money into bitcoin as the years go on, more people trusting it a little more, more people learning a little more about it. Subsequently is volatility decreasing as it becomes more liquid, useful, trusted, and understood. All the pieces are starting to come into place.
Bitcoin may not be ready for you yet, but when it is, you’ll know.