A Birthday Letter To Bitcoin

Bitcoin, you are 16 years old now, well into your teenage years. These are usually the years during which, for many people without even being aware of it consciously, one usually makes the decisions that shape the course of the rest of their life. It’s incredibly rare that someone gets a “redo” to wind back choices that lock them into a certain path in life.

I fear you, or rather Bitcoiners, are in the process of making one of those monumental mistakes that will have severe consequences for the rest of its existence.

We are seeing unprecedented growth at this time. The price is near all time highs, finally breaking 100k, major nations are debating the prospect of creating strategic reserves of bitcoin, we are hitting escape velocity. In the wake of that people have become totally dependent on the narrative that we already won.

They can’t get to sleep at night without telling themselves “we have already won.”

Meanwhile Bitcoin is totally unscalable. If the world realizes tomorrow they need bitcoin, everyone will be stuck custodying their coins with Coinbase or JP Morgan, because the system does not scale enough for everyone to hold their own coins. All of those people will be surveiled, will have no freedom, their coins can be arbitrarily seized at any moment by government order. They won’t be able to start a business or build anything innovative, they won’t be able to spend their money how they wish, without government permission.

“Oh well sovereignty isn’t for everyone, it’s a responsibility. They wouldn’t have wanted it anyway.” Those few “elites” won’t have a much better situation either. They might not be able to seize a self custodial user’s coins as easily as a custodial user’s, but they don’t have to. They can just seize you. They can track you, surveil you everywhere, and when they get an inkling of you trying to do something of which they disapprove, off to jail you go. That will hang over the head of anyone trying to innovate or build in a way that is not government approved.

Stablecoins are even actively facilitating new roads of demand for US Treasuries as our enemies have begun scaling back their purchasing of them. The things Bitcoin has birthed in this ecosystem, out of necessity to help the market for bitcoin itself to survive I might add, are actively helping maintain the dollar. They are doing the opposite of the long held promise of unseating the dollar.

That’s the path that we are on. One where Bitcoin enables government surveillance and controls. Where it actually helps those things. Why are we on that path? Bitcoin doesn’t scale far enough, and there are no incentive compatible and sustainable tools for privacy (i.e. that are simple enough and not cost prohibitive to disincentivize people not actively seeking it for privacy’s sake).

Right now the path we are on is people willing to just roll over, give up on any future of Bitcoin creating formative change, and do what the government wants will get rich. Beyond that, nothing much will fundamentally change as far as people’s financial lives and their relationship with the government. We need to acknowledge these problems, and actually support solutions to lessen their severity, not simply chant ourselves to sleep with “Bitcoin has already won.”

Bitcoin has the potential to bring about so much positive change in the world, but it won’t if we just get overconfident, cocky, and apathetic about solving problems we would rather pretend don’t exist. Listening exclusively to the arrogance of youth very rarely goes well for the relevant party.

Bitcoin is too important to mess up making the same kinds of impetuous mistakes teenagers do. So don’t. 

This article is a Take. Opinions expressed are entirely the author's and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.