It takes time to for an innovation to take off, especially one that is as large as an alternative global decentralized digital currency. January 2017 marks eight years since the first Bitcoin block was mined. In monetary systems, eight years is not a long time.
Also read: Bitcoin 2016: The Year of a Different Rise
An 8 Year Uphill Climb
When looking at how this past year went for perhaps the most disruptive fintech development to date, it’s important to acknowledge the uphill climb Bitcoin has faced since day one. Perhaps you read Jim Harper’s recent opinion piece in Coindesk and were a little put off about the state of Bitcoin development to date. Earlier this year, Bitcoin.com put together a ‘Top Ten Moments in Bitcoin’ video. Take three minutes to watch, and you will see that Bitcoin is not on the decline but continually reaching new highs.
Let’s just take a moment to consider the challenges any new emerging technology faces, let alone a global groundbreaking financial innovation. Bitcoin challenges the economic ecosystems of all nation states. From the first Bitcoin block mined with the message “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”, to Satoshi’s early writings, Bitcoin challenges centralized financial structures.
With Bitcoin’s disruption comes a powerful solution, global financial inclusion. Bitcoin is competing with not just one country’s currency but all fiat currencies globally and is community driven, eliminating the backing and authority of governments and vested interests. Bitcoin is poised to take away power from multinational financial institutions and governments and will give financial power back to the people.
So what do we expect from a digital, decentralized disruptive technology? Do we expect that standing financial institutions will gladly accept a competitor that is highlighting many pain points of their current struggling system? Do we expect those who grasp Bitcoin’s potential to accept a digital currency issued by the same old centralized organization that is characteristic of fiat currency?
A ‘Yes’ to a centralized digital currency is akin to drinking cheap box wine now when you can wait a little bit longer for a bottle of 1787 Chateau d’Yquem.
Bitcoin’s Diverse Social Capital
The Bitcoin community of members, innovators, investors, developers, dreamers and users is global and does not discriminate based on race, gender, ethnicity or geographic location. Anyone can get involved and start using Bitcoin as there is such a low barrier to entry. In his opinion piece, Harper states, “Gold has literally thousands of years of social capital built up around it: Everyone knows what it is. A lot of people own or covet gold”.
In comparing Bitcoin to gold, he continues “By comparison, bitcoin has almost no social capital”. Although Bitcoin and gold do share some similar traits, Bitcoin’s reach extends far beyond that of gold in the areas of security, usability, and opportunity.
Let’s take a step back for a second. Globally, there are close to fifty official Bitcoin exchanges, and that is not even including many brokerages, ATMs and LocalBitcoins in countries around the world. Bitcoin is a viable Plan B for individuals who happen to have been born in countries with less developed financial systems.
In Venezuela, Bitcoin is coming to the rescue as hyperinflation sweeps through peoples savings. Demonetization is ravaging Indian citizens with Bitcoin being a viable alternative form of payment and store of value. Businesses struggle in Argentina with overbearing government authorities as Bitcoin enables enterprises to continue to operate. In Europe, Switzerland has a vibrant ATM network to enable citizens to buy and sell Bitcoin. Tech innovators have also gathered for the first Blockchain Summit in Botswana.
For the unbanked population across the globe, Bitcoin offers a ‘Plan B’ with promises of removing the ties to one’s national fiat currency and opening a gateway to global commerce and trade.
Global Community Debate Is Healthy
Discourse and dialogue around critical developments in an emerging technology are healthy. In Harper’s opinion piece, he refers to the scaling debate as a way of “putting people off.” Frankly, the fact that such a diverse group of individuals can debate and discuss numerous technical options before working together to come to consensus is a far superior outcome for those who traditionally have no input into the decisions of the monetary authorities. Would a centralized system without transparency be better?
Decentralization Takes Work, but it is Better than the Alternative
Who said that a decentralized peer to peer network wouldn’t take work? What work is involved? Protecting ‘one of a kind’ innovations like Bitcoin from the weakness of centralization. It’s easy to come to conclusions about a new payment network when comparing it to centralized systems that do not have the same potential and diverse array of features, opportunities, and individuals involved.
Bitcoin represents an opportunity for you and I to reclaim our financial freedom and work together to provide greater opportunity for those who have been neglected by the current system that has failed to deliver opportunity and progress for large parts of the world.
As we close out 2016, let’s briefly look back at how far we have come, then look forward at the work still to be done and the ways to achieve these goals and objectives.
2017 is the year for Bitcoin.
Images Courtesy of Wikimedia Commons, Pixabay
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