Image by Albert-Paul from Pixabay
It's not Bitcoin. It's decentralization.
Bitcoin is the visible part of a far superior philosophical and cultural revolutionary concept today, which changes the system of governance that humanity has had since the Egyptians, based on hierarchies and the so-called "economic socialism", which consists of manipulating economic variables from the government, intervening in the markets, to realize at the end of the road, that nothing behaves as it was designed by bureaucratic politicians from a desk.
The change and the revolution is decentralization. Bitcoin is not the change.
The revolution is a long road that has twists and turns, because it finds the nooks and crannies that the enemies of the revolution prepare for it. A system like the current one that allows someone with certain characteristics to come to power, is obviously a system that will continue to allow the same thing over time. Those who come to power will do everything that must be done so that the system does not change.
That is why Satoshi Nakamoto's White Paper marks a milestone in that revolution, the elimination of intermediaries. That is, the elimination of politicians. But we cannot naively say that everything is over and that we have won. We have won nothing, because there are still politicians, governments, central banks, international organizations, regulations, wars, famines, pandemics, global warming, and other niceties since 2009. We have not won anything yet. We are not even at “set point”, in tennis terms. And we are still a long way from “match point”. Furthermore, saying that we already have everything to win is another fallacy. It would be like saying that we can face an army made up of tanks, stealth planes, missile-launching submarines, and nuclear warheads strategically distributed throughout the planet, with a very good gun. This is absurd. As absurd as believing that with Bitcoin we will win the battle of the final revolution of decentralization.
Now, surprisingly, the cryptosphere, instead of being inhabited by dynamic and courageous individuals, seems to be inhabited by cowards who are afraid of everything that happens. They are complaining all day about how badly Bitcoin is doing, and some say, all tearful, that “we have failed Satoshi Nakamoto.” Instead of crying like pigs, what they should do is study a little.
The new fear, the most current of all, is what Trump said in Nashville, and, displaying brutal ignorance, the exposition of his project to support the dollar with Bitcoin.
Let's continue with a brief comparison with weapons.
The 9mm Luger, invented before World War I, is one of the most famous and oldest weapon calibers in history. It has served in all conflicts until today, and curiously, today it is more dangerous than ever, due to innovations in ammunition that generate greater performance in the projectile. In the 1980s, when pistols ended the dominance of revolvers and large-caliber pistols, the 9mm became the standard caliber for NATO members and many armies. The Glock 19 released in 1988 is recognized by handgun enthusiasts as the top Glock model. It was adopted by Navy SEALs and US Army Rangers.
The revolution in this case was the design and manufacture of a very powerful weapon, with advanced ammunition, and that can be easily concealed, in contrast to the previous larger caliber contraptions.
Are we facing the end of the weapons industry? Will this product not be surpassed? Two stupid questions without a doubt.
Can anyone buy all the Glock 19s in circulation? It would certainly be a big idiot.
Can any government ban the manufacture of weapons? This question does not even deserve an answer.
The difference between a Glock 19 and a Bitcoin is that with a computer you can do much more damage than with the 15 projectiles of a Glock 19.
Bitcoin cannot serve as a backup for anything, because it is not an asset like any other. It is a totally different asset from the assets that humanity has known until now, with which it forged the current system of governmental and economic controls throughout the planet. This arises from understanding how a blockchain works, how a PoW consensus protocol works, and how a program based on incentives for miners like the one designed by Satoshi Nakamoto works. As long as there is an incentive to mine Bitcoin, there will be new Bitcoin.
Those who follow me on this blog know that I maintain that a currency that does not circulate, or that has prospects of not circulating, has no value. For this reason, I see no danger in all the Bitcoin issuance being bought by a giant player like an unscrupulous whale that wants to own all the Bitcoin produced so far. If that were to happen, several things would happen. First, massive purchases would drive the price to such a high value that it would make those of us who do not plan to sell our BTC reach fortunes never dreamed of. In this case, we should thank them. But, with everything in the hands of just one person, what would be the use of a currency that is not going to circulate? The price would fall to zero. The whales who invested so much money in buying all the BTC would see that, in reality, they lost all that money, and they would have to explain it to their partners and shareholders. Thirdly, with all the Bitcoin in the hands of a single entity, the miners would have no more incentive to continue securing the most secure blockchain in the world, and then, Bitcoin would fall to zero. Again, investing all that money to have nothing at the end would be very unwise.
Fears arise from ignorance of not understanding how the ecosystem works, and thinking that Bitcoin is just another asset to trade on Wall Street. If you don't understand, excuse me, I don't have time to eliminate your fears. Stick with the shares of blue chip companies, and put your money in the bank, where it is safe.
From fear of government regulations, we moved on to fear of ETFs, and from there we moved on to fears of Q-Day (which reminds me of Y2K, remember how the entire planet was going to collapse on January 1st, 2000?), and from there to fear of Trump. If you are going to be so afraid, you might as well not go through the trouble of having to understand what a PoW mechanism, a hash, a nonce, and a UTXO are. You might as well put your money in a highly respectable company like a bank.
“When the enemy advances, we retreat; when he camps, we harass him; when he tires, we attack him; when he retreats, we pursue him.” — Mao Zedong
Look, Bitcoin is the state of the art of a much larger, far superior philosophical and cultural concept called decentralization. The materialization that decentralization found, for the moment, is called “blockchain,” and this device allowed the creation of Bitcoin, and all the DeFi paraphernalia that came after to speculate like on Wall Street. Bitcoin is not the end, but the beginning. We do not know how the concept of decentralization will evolve, what we do know is that the political landscape of the coming years will be totally different from the one we know, because a series of nerds discovered that you can do everything you usually do, but without politicians or intermediaries.
If someone destroys Bitcoin, whatever happens, those same nerds, or their children, will find another way, because I repeat, what changed is the philosophical concept of governance of a society. And this is the true revolution. And the path is neither straight nor uniform. For now it is called Bitcoin, and what any politician would do when seeing the degree of acceptance that a digital asset like Bitcoin has in the world population, is to try to take advantage of it in their pre-election speeches to attract votes. Nothing more than that. Afterwards, there is nothing that even God can do with a distributed network incentivized to mine new Bitcoin. Nothing at all. Look for it wherever you want. But there is nothing that anyone can do.
The revolution began more than 40 years ago. Blockchain technology was not born in 2009. Bitcoin was born in 2009, but the technology that made it possible is a consequence of several decades of research, which refer us to the base technology that is the Internet, because Bitcoin, for the moment, is the money of the Internet.
In the first half of the 20th century, the technical foundations of cryptography were laid by the military industry. Then the algorithms were developed that allowed the creation of “public key cryptography”, which is the basis of blockchain. The paradigm shift is the elimination of the intermediary figure to validate transactions, that is, decentralization. For now, the visible face is Bitcoin. But tomorrow we don't know. Cryptography is the heart of blockchain. Information is shared in an encrypted form by huge computer networks without any hierarchy.
In 1976, Diffie and Hellman created the algorithm that bears their name, with which they proposed breaking the encrypted keys into two, so that there was one public and one private. With the public key you can encrypt a message, but to decrypt it you need the private key. Another decisive advance was the creation of Merkle Trees by the American Ralf Merkle. The three are considered the creators of public key cryptography.
In the 90s, Tim May's crypto-anarchist manifesto appeared, one of the reference texts in this whole story. All of this was framed within a prevailing philosophy of those years called “cyberpunk,” a movement that defends freedom of expression, access to information and privacy as basic elements that must be protected and promoted through technology and cryptography.
Stuart Haber and W. Scott Stornetta had the vision of blockchain in 1991. They worked on a cryptographically protected blockchain in which no one could tamper with the timestamps of documents. In 1992, they incorporated Merkle trees that improved the efficiency of their blockchain, allowing more documents to be recorded in a single block.
The breeding ground was being created for someone to come up with Bitcoin. There were very remarkable precedents. Digicash, Hashcash, B-Money, Bitgold, the latter from a key figure, a blockchain pioneer, Nick Szabo, who, at the time, without anyone having any idea what he was talking about, proposed the concept of smart contracts.
On October 31, 2008, Satoshi Nakamoto published the paper he had been working on, a peer-to-peer electronic money system, independent of intermediaries. On January 3, 2009, the first block of the Bitcoin blockchain was generated, called the Genesis block, which marked the beginning of the Bitcoin network.
Those who only care about Bitcoin and how politicians and whales can take over all the stocks are missing a very important movie. Politicians are ignorant by nature, that's why they become politicians, otherwise they would look for a decent job. There is no politician in the world who knows how a blockchain works. They barely know how to read polls. What they see is the most visible, which is Bitcoin and its massive acceptance, and that's where they go, to be in tune with the polls.
Bitcoin was born in 2008 as the first application of Blockchain technology.
When we study and investigate thoroughly everything that has happened after the milestone of the Bitcoin genesis block, we realize that this is just beginning, and that only those who see Bitcoin as another Wall Street asset to speculate and get rich in the very short term can be afraid. Each madman with his own theme.
In 2013, Phase 2 of Blockchain began, with the development of Ethereum.
Vitalik Buterin began working on what he thought would be a flexible blockchain that could perform several functions in addition to being a peer-to-peer network. The new feature expanded Ethereum's functionalities from being a cryptocurrency to a platform for developing decentralized applications as well, creating the Ethereum Virtual Machine EVM, with the ability to support smart contracts.
From that moment, until now, we have learned a lot of things that are part of the revolution, in a non-straight and non-uniform path, as nature usually advances in its constant search for increasing entropy in the universe.
We have learned about asymmetric cryptography, game theory, and especially the deep philosophical concept that means the practical resolution of the Byzantine generals' problem.
We have met a series of unique digital assets, which anyone can create, store, and sell, called NFTs. There are huge markets dedicated to this type of business that can only exist thanks to blockchain and the ability of devices like smartphones to give everyone the ability to create their own money. This is decentralization.
That very decentralization, (and this is probably the biggest step the revolution has taken so far), has planted the issue of the nefarious functioning of the traditional banking system in the minds of ordinary people. Until very recently, ordinary people did not know how they are obviously humiliated and crushed by banks. Today, thanks to the development of blockchain, there are many people who do. That is an important step for the revolution. What is the importance of Bitcoin if people do not know how they are robbed by banks? Bitcoin is nothing more than a step towards accessing a new decentralized system of value transmission.
Noblesse oblige, there are many sectors of knowledge that we have successfully incorporated into our daily lives, thanks to the revolution that Bitcoin started, exposing blockchain technology to the general public.
We have learned to use 2FA, something we did not know 15 years ago. We have learned to configure and use virtual wallets, to pay for things without intermediaries, to send money without intermediaries. All of this was unthinkable 20 years ago. For those who love speculation and devote their lives to money and finance, blockchain provided them with DeFi, to obtain returns on their digital assets, taking money from unsuspecting people who enter the system with the promise of getting rich in a very short period of time. Since there is consent, we cannot speak of a crime. But well, more or less. Thanks to DeFi we have learned how CEXs and DEXs work with their algorithms to create markets that, unfortunately, end up with the same people always winning and the same people always losing. In this sense, memecoins are a speculative tool par excellence, which attracts a large number of unsuspecting people. But well, it is not the technology's fault that these monstrosities exist, but the speculators who create them.
We have learned from Airdrops, Faucets, play-to-earn, playing chess, killing Martians and Nazis, and walking and answering surveys.
As for the philosophical-conceptual revolution, we have learned about crypto-asset mining, consensus protocols, and the energizing and elusive hash function. We have developed new programming languages, and we have delved into the various layers that make up a system architecture, such as L0, L1, L2, and L3.
Thanks to the emergence of blockchain technology, we have learned the difference between Web 1.0, Web 2.0, and Web 3.0. As a result, we have learned to develop new computer security systems to prevent hacking and scams.
We have learned to use the fiat money ramps created to enter the crypto ecosystem. We have learned to use the different networks created in the crypto ecosystem to move the same asset between wallets or exchanges. We have learned to convert cryptocurrencies with a click on our phones.
We have learned about distributed, decentralized, and centralized systems. In recent years, the world has spoken more about the so-called Austrian school than the founders of this sect created at the end of the 19th century.
Unless you worked in systems, all of these concepts were completely unknown 15 years ago to most cryptoasset users today.
We owe all this learning to the development of blockchain technology. Not to Bitcoin. That is the revolution that is advancing in a chaotic way until it reaches an end that we cannot imagine, but that surely will not have international bureaucratic hierarchies as protagonists.
Conclusion
The revolution is not Bitcoin. It is Blockchain.
Being afraid of what might happen to Bitcoin is similar to being afraid of the obsolescence of a 9mm pistol. Aren't they going to invent another one?
Wanting to kill Bitcoin is like cutting off one head of the Lernaean Hydra. The Hydra was a giant snake with many heads that grew back as they were cut off, thus resisting all efforts made to eliminate it.
But if you are a coward by nature, in that case, there is no solution. Bitcoin is not for you. Don't waste your valuable time.
Thank you for visiting me. Decentralize as much as you can in all your daily actions. It is not about waiting for a revolution that will take many years to come. It is about decentralizing as much as possible starting today. I am not interested in having any relationship, not even a conflict, with centralized systems. It's about starting today. Remember, being rich is having money, being wealthy is having time.
