What Happened to the Promise of Bitcoin?
Ever get the feeling that cryptocurrencies failed to fulfill their promise to change the world, replace the banks, get rid of the men in the middle, etc? But who promised this? Were cryptocurrencies actually designed for that purpose, and how are they supposed to bring those changes to the world? Is the world aware of it? Does the world want these changes? Is changing the world still on the table for crypto? In this article, we will observe the evolution of the narrative surrounding the revolutionary potential of cryptocurrencies. We’ll figure out how the world has changed cryptocurrencies.
- Bitcoin’s Politics and Philosophy
- Where Are We Now?
- Did the Cryptocurrency Mission Fail?
- Final Thoughts
Bitcoin’s Politics and Philosophy
On the one hand, Bitcoin is just a technology or a piece of code if you please. Undoubtedly, a fine piece of code. But we can’t ignore that Bitcoin has always been something more than a P2P network. The technology brought with Bitcoin was accompanied by a political message.
Remember the text attached to the Genesis block? It quoted the London Times newspaper headline released the day when the block was created, January 3, 2009. It says, “Chancellor on brink of second bailout for banks.” This short string of words gives us a commentary on a then political-economic state and an insight into the reasons for the Bitcoin creation.
The quote belongs to the times of a global economic crisis. It is supposed to highlight the fiasco of the centralized financial system, fiat money’s weakness, the priority that the government gives to banks rather than the people, etc.
These views are reflected in the Bitcoin white paper that saw the light of day earlier, on October 31, 2008. According to the white paper, Bitcoin was put to fight the trust involvement (trust to a third party, financial institutions) in economic activity. So, the creation of Bitcoin had a distinct political-economic purpose. Bitcoin was both progressive and retro. On the one hand, it was developed as a solution to long-standing problems, and on the other hand, it was an attempt to recreate such an old-school institute as gold.
Bitcoin was designed to be decentralized, deflationary, free of governmental control, knowing no boundaries, pseudonymous, and fully transparent. The idea was to remove the intermediary between the parts of transactions. No one can print additional BTC coins or block your Bitcoin transaction, and it doesn’t matter if the transaction participants are sitting next to each other or are on opposite parts of the globe. You don’t depend on anyone beyond yourself and your counterpart while sending and receiving Bitcoin.
Where Are We Now?
As of the spring of 2023, we are still miles (or even light years?) away from considerable cryptocurrency adoption. Skeptics state that most cryptocurrency owners are interested only in speculation, while genuine believers are only a tiny piece of the crypto community. We can argue, however, that any cryptocurrency use experience is a movement towards embracing decentralized money per se. Trading creates many new crypto owners ready to start spending cryptocurrencies like regular money as soon as the opportunity appears.
What’s more interesting is that the anti-government and privacy-cherishing technology (cryptocurrencies) is now fully absorbed by the pre-existing system tolerating no privacy nor illegal actions. Crypto exchanges require KYC procedures and don’t provide services in certain jurisdictions. The global network with private transactions got tamed by economic and political institutions. Modern-day cryptocurrencies are full of middlemen, data mining, and centralization. Many crypto owners store their private keys on third-party platforms. The fees and transaction speed on most crypto networks are still far from game-changing.
Looking at this, some might think that the early spirit of Bitcoin has died, and we are watching the turning of cryptocurrency into something else. Some even think cryptocurrencies will fade away after a while (probably a long “while”). But things are not so well-defined for cryptocurrencies. In the final part of this article, we’ll figure out the paths through which cryptocurrencies continue to drive us into a better economic realm.
Did the Cryptocurrency Mission Fail?
The idea that cryptocurrencies failed to stay close to their roots is not hard to grasp. Yes, the world changed cryptocurrencies. We still hear the narrative about the disruption and giving control over money back to people. Still, at most, it looks like customary talk or a distraction from the “real things,” like growing your wealth through trading/staking/whatsoever.
Yes, cryptocurrencies took a different direction, not something Satoshi Nakamoto aimed to achieve. Nevertheless, we can’t deny, they are shaping the new financial realm, separate from everything we knew before.
Many people already take advantage of the cryptocurrency benefits. Some say we should expect the cryptocurrency revolution to start in Africa first, as in several African countries, the unbanked population opts to use cryptocurrencies that serve as banks in their location. Another use of cryptocurrencies is private donations to the opposition forces in authoritarian countries and avoiding sanctions.
The DeFi sector resembles centralized cryptocurrency platforms in terms of functionality (to some extent) but provides decentralized algorithmic solutions, which make them a bit closer to the original spirit of Bitcoin.
Some crypto platforms provide rich sets of functions that allow you to receive, send, grow, borrow, trade, stake, spend, and swap crypto funds. Brands like Revolut and XGo put a broad spectrum of the actions one can perform with cryptocurrencies into a single mobile app. Yes, they are yet to replace the traditional financial system, but they set the alternative co-existing system where people can grow their wealth, get loans, make effortless cross-border transactions, and do many other things without much hassle.
Final Thoughts
To sum everything up, we can agree that cryptocurrencies bring relative financial independence, not as radical as one can think reading the early crypto manifests, but still. Cryptocurrencies introduce new opportunities, and people already use them. On top of that, the development of crypto platforms continues, and with time, digital money will become stronger rivals of modern banks.
