Bitcoin, you are now 16 years old, well into your adolescent years. These years are typically when, for many individuals without even consciously realizing it, one often makes the choices that influence the trajectory of the remainder of their life. It’s exceptionally uncommon for someone to have a “do-over” to reverse decisions that confine them to a specific path in life.
I am concerned that you, or more precisely Bitcoin enthusiasts, are in the midst of making one of those significant errors that will result in drastic repercussions for the duration of your existence.
At this moment, we are witnessing unparalleled expansion. The price is approaching all-time highs, finally surpassing 100k, major countries are discussing the possibility of establishing strategic reserves of bitcoin, and we are achieving escape velocity. In light of this, individuals have become entirely reliant on the narrative that the victory is already ours.
They cannot fall asleep at night without reassuring themselves, “we have already triumphed.”
However, Bitcoin is entirely unscalable. If the world awakens tomorrow and acknowledges the necessity of bitcoin, everyone will find themselves relying on custodying their coins with Coinbase or JP Morgan, because the infrastructure cannot accommodate everyone holding their own coins. All these individuals will be monitored, will possess no freedom, and their coins may be arbitrarily confiscated at any moment via government decree. They won’t have the ability to establish a business or create anything innovative, nor can they spend their money as they please, without government authorization.
“Oh well, sovereignty isn’t suitable for everyone; it carries a responsibility. They would not have desired it anyway.” Those few “elites” won’t enjoy a significantly better scenario either. They may not be able to appropriate a self-custodial user’s coins as effortlessly as a custodial user’s, but they don’t need to. They can simply apprehend you. They possess the capability to track you, surveil you at all times, and when they perceive an inkling of you attempting to engage in something they disapprove of, off to prison you go. That will linger over the heads of anyone attempting to innovate or create in a manner that isn’t sanctioned by the government.
Stablecoins are even actively promoting new avenues of demand for US Treasuries as our adversaries have started reducing their purchases of them. The elements Bitcoin has spawned within this ecosystem, out of necessity to aid the market for bitcoin itself to persist, I might add, are actively contributing to the preservation of the dollar. They are doing the contrary of the long-standing promise of displacing the dollar.
That’s the course we are currently on. One where Bitcoin facilitates governmental surveillance and control. Where it indeed contributes to those aspects. Why are we pursuing that path? Bitcoin doesn’t scale adequately, and there are no incentive-compatible and sustainable tools for privacy (i.e., those that are straightforward and not prohibitively costly to dissuade individuals from actively seeking them for privacy’s sake).
At this moment, the path we are taking is one where individuals willing to simply concede, abandon any hope of Bitcoin creating transformative change, and comply with the government’s desires will become affluent. Beyond that, not much will fundamentally alter regarding people’s financial situations and their relationship with the government. We must recognize these challenges, and genuinely support solutions to mitigate their impact, rather than simply lull ourselves to sleep with “Bitcoin has already succeeded.”
Bitcoin holds the potential to initiate significant positive transformations in the world, but it won’t happen if we merely become overconfident, arrogant, and indifferent to resolving issues we would prefer to ignore. Listening solely to the hubris of youth seldom ends well for the involved party.
Bitcoin is too vital to jeopardize by repeating the same types of rash mistakes teenagers make. So, let’s avoid that.
This article is a Take. The views expressed belong solely to the author and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.