The World Bitcoin Was Created For

The World Bitcoin Was Created For
By Adam Sharp
Date January 4, 2019

Ten years ago this week, Satoshi Nakamoto mined the first block on the Bitcoin blockchain, the Genesis Block.

He included a small text note in this block. It was the title of a recent headline in London-based newspaper The Times.

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

Bitcoin launched in January 2009, at the height of the last major financial crisis.

Nakamoto wasn’t pleased with the financial situation at the time, so he created a radical new form of money: bitcoin.

It was a tumultuous time. Stocks were bottoming, banks were about to be bailed out and the Fed was frantically injecting trillions of dollars of cash into the financial system.

U.S. banks wound up getting $1.2 trillion in secret emergency loans, which weren’t reported until around 2011.

Today, the big banks are bigger and more dangerous than ever. JPMorgan Chase, for example, is twice the size it was before the 2008 crisis. This one bank now has an incredible $2.5 trillion of assets.

Debt has piled up rapidly since the last crisis at the corporate, government and personal levels.

The global financial situation has gotten only worse in the 10 years since bitcoin was born. The Wall Street Journal just reported that total global debt has tripled in the past two decades and is approaching $250 trillion.

Fiat money is starting to falter. Governments and central banks are proving once again that they cannot be trusted with the power to create unlimited money.

This world – today’s world – is the world bitcoin was created for.

Decentralized and Uncensorable

Unlike fiat money, bitcoin is scarce. There will only ever be 21 million bitcoins, while there will be seemingly endless dollars.

An equally important quality of bitcoin is that it is uncensorable. No entity can stop a bitcoin transaction from going through, unless they literally seize the person making it.

For example, in 2010, Visa, Mastercard and PayPal cut WikiLeaks off from receiving donations through their networks.

WikiLeaks turned to bitcoin for donations and started receiving them in July 2010, when bitcoin prices were around $0.06. Founder Julian Assange claims it made a 50,000% return on the donated funds. Talk about unintended consequences…

I suspect the uncensorable aspect of bitcoin will become even more important in the future.

Bitcoin offers an alternative that is more than just sound money. It’s money liberated from the ideologies and views of particular groups and individuals. As it should be.

The Lindy Effect

The Lindy Effect is the idea that the longer something has been around, the longer its life expectancy is.

It’s a real effect that can apply to anything. Restaurants, technology standards, people and, yes, bitcoin. The longer something has been in existence, the longer it is likely to exist.

Bitcoin has been around for 10 years now, so it’s likely that it will last another 10 and so on.

In those 10 years, bitcoin has been battle-tested. Hackers, governments and private groups have all tried to ruin, hack and destroy it. They have failed.

The bitcoin network is more robust than ever. It distributed more than tens of thousands of servers all over the world. The Lightning Network is making incredible progress and has the potential to make bitcoin transactions nearly instant and free.

Bitcoin is in a fantastic place today. The world simply doesn’t understand what it is yet. It’s a monetary revolution in the making, and most people are still eyeing it like it’s a strange, speculative toy.

The general public will come to understand bitcoin with time and, unfortunately, this will accelerate as more financial crises arrive to sharpen its attention.

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