Underlying many of the recent articles about Bitcoin, particularly those which hold it in a negative light, is a funny feeling on behalf of the authors that for something like Bitcoin to be successful, something must be wrong.
Something must be secret, someone must be fooled, but most importantly, somebody must lose.
As humans, we have certain weaknesses when it comes to material wealth. It clouds our judgement. It can make us feel smart, or angry – but most often – it makes us envious of others who have it; particularly those who get it quickly.
Many people when they are first introduced to Bitcoin take a look at the price history. Then they try to relate Bitcoin to something that they know. “Goodness, this thing isn’t even real!” Even Dutch tulips were more real than Bitcoins. At least you could grow them in your back yard.
It makes sense to many that if something that isn’t real has grown so quickly in such a short period of time, that something is wrong, and somebody is going to lose. Somebody is being scammed, and somebody is lying, cheating, or stealing.
We humans will always have these weaknesses – using heuristics to judge the world around us, and filtering out information that contradicts our view. However strongly it may be believed, Bitcoin won’t crumble like a Ponzi sceme, and the last person holding the potato won’t be the loser.
In the short term, the price of Bitcoin will go up and down. It will go way up and way down. It will go sideways too. People will buy and balk, and sell and talk, and bet and argue. And many of those who try to time the market will lose their shirts.
To those of us who were introduced to Bitcoin years ago, the ones who value Bitcoin on its real benefits* and not its price, these price swings are not new. We’ve seen Bitcoin double in a day. Our coins are safely tucked away, and we’re comfortably sitting in the back of the movie theater eating popcorn. If Bitcoin went to zero – and there would have to be a pretty good reason for it, such as an unforeseen fatal protocol flaw or some outlandish global legislation – we would watch it go down with a salute, shed a tear, be thankful that we had been a part of it, then go find a bar.
But if Bitcoin doesn’t go to zero, as time goes on, more people will join us in the back of the theater. They will change their minds about what they want in a currency. They will dump their dollars for Bitcoin, buy some popcorn to watch the show (with Bitcoin of course), and never look back.
The reason that everybody can win with Bitcoin is that it’s designed to increase in value over time, independent of its adoption rate. What that means is that in the interim, we will see the noisy price swings up and down as people learn about Bitcoin, and purchase them (whether they properly do their homework or not), but what we don’t notice is the slow yet steady groundswell of value increase – the incentive to save and invest over that to borrow and spend.
When the last person on earth to adopt Bitcoin gets his or her coins, they won’t be the fool left holding the bag, they will simply be the latest adopter of an incredible new technology – and they’ll be met with open arms.
- Cannot be counterfeited
- Limited in supply
- Cannot be confiscated
- More cryptographically secure than banks
- No counter-party risk
- No or extremely low transaction fees
- Dormant payment mediation, escrow, and assurance contracts capabilities