It’s a fresh year, and along with this new year comes all the typical social media self-congratulating focused on forecasts of “what will unfold in 2020!” I intended to expand that a bit and examine the upcoming decade. But initially, I wanted to take a moment to review the previous year (yes, I realize I’m a year behind, blah blah) to truly emphasize how much progress has been made.
Mining and Network Security
In 2010, the network was safeguarded by hobbyists’ desktop CPUs, easily overshadowed by any significant resourceful entity. At the dawn of 2020, it is secured by billions of dollars in hardware demanding the total energy consumption of entire small nations, provided to the operators by various companies valued at billions of dollars (sure, these are lofty valuations, but still). In a decade, the security mechanism of the network transitioned from consumer hardware and hobbyist efforts to specialized ASIC hardware and professionally managed data center operations.
Protocol Development
In 2010, you could send Bitcoin to public keys (or IP addresses), timelock transactions (ONLY the transaction, not the UTXO), execute raw multisig which were cumbersome and costly even to initiate, and oh yes: anyone could utilize any coins via OP_RETURN due to a glitch. And yes, I’m aware the script system had much more back then; I’m referring to what was practically achievable for an ordinary individual. In 2020…well, I think I need to present this in bullet points:
- Employ P2SH to facilitate sending funds to more intricate scripts (like multisig) at a lower cost for the sender.
- Timelock an actual UTXO to a specific blockheight or UNIX timestamp.
- Timelock an actual UTXO to a relative blockheight or UNIX timestamp interval from its creation.
- Formulate transactions that do not have malleable TXIDs for second layer protocols/chained transactions due to Segregated Witness. (Also, we can now upgrade scripts more efficiently thanks to SegWit having its own versioning. There are a limited number of undefined OPs in Bitcoin script that can be defined to incorporate new script functions to Bitcoin script. SegWit versioning provides the capability to add new functions by utilizing new Witness versions rather than consuming very rare undefined OPs.)
- Use a basic in-development version of the Lightning Protocol, a second layer enabled by the malleable fix introduced in SegWit.
- Have genuinely deployed sidechains where more advanced and/or experimental features can be launched and examined more effortlessly.
In ten years, an impressive array of primitives has emerged to build on the core infrastructure of Bitcoin’s foundational network and blockchain. Particularly noteworthy is the complexity and challenge of attaining consensus on upgrades, and then executing and launching such upgrades if they exist.
Political Significance
In 2010, Bitcoin was merely a negligible blip on the radar. The CIA had only recently noticed and shown interest in it. Their reaction was to bring in a developer for a discussion, resulting in the disappearance of Satoshi Nakamoto. Aside from that, individuals weren’t paying attention, politicians were oblivious, and most agencies were not monitoring it (except for Alphabet entities that we might not be aware of now). Bitcoin was an obscure nonentity.
In 2020…Bitcoin has generated an entire market and industry valued in the hundreds of billions of dollars. Exchanges have garnered billions in revenue from transaction fees. Miners have collectively earned billions of dollars in return for their operational expenditures. Tens of millions, perhaps hundreds of millions, of individuals hold Bitcoin (metrics here are quite ambiguous and challenging to extract significant information from). We have transitioned from the CIA showing minimal interest, to essentially every significant government globally regularly convening legislative or committee meetings to deliberate on Bitcoin and its far-reaching macro-economic and geopolitical effects, and how to address them. Countries have introduced cryptocurrencies. Countries have sanctioned cryptocurrency addresses. They are officially engaged. Back in 2010, only one agency notorious for its pervasive attention was aware (that we know of); now the entire world is paying heed.
Conditions have evolved. As the saying goes, good luck halting the train.
(This is merely Part 1 of 4, read the subsequent part tomorrow).
This is a guest contribution by Shinobi. Views expressed are solely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.