Ad astra per aspera* — is Bitcoin the ultimate solution?
Brought to you by Hyde
The Western world has many supporters of Bitcoin. Despite the current market situation, the number of people who own at least 1 BTC has recently reached its ATH, and the same applies for those who own at least 0.1 BTC. The amount of BTC leaving centralized exchanges has also peaked, while the amount of BTC held by retailers is at ⅓ of the total supply.
The level of awareness, willingness for self-custody, and independence from the traditional financial system is increasing. At the same time, a new dystopian financial system is emerging on the horizon: central bank digital currencies — aka CBDCs. Almost all advantages — maybe except for universality and ease of use for many people — will be on the side of governments who issue this kind of money.
As people who believe in Bitcoin’s ideals, we dream of breaking away from the traditional system. We dream about being independent from it, from intermediaries, from institutional control, from blocked accounts, and from being a client… We want to take matters into our own hands and do not want to ask for access to our money. We want it to be permissionless, with no other authority over it than ourselves. We see Bitcoin as the mechanism that makes this possible.
It must not be forgotten that there are those who perceive Bitcoin through a speculative prism, which distorts the perception of the ideals behind Bitcoin and has a real impact on its adoption. Unfortunately, many are convinced of the speculative nature of Bitcoin. Crypto as a whole plays a large role in that.
Is this dream of independence from institutions possible to realize? Short answer — YES! Always! But is it an easy road? No. We cannot give up. Never. There is no better alternative. There is no better chance for humanity.
The idea of hyperbitcoinization, of widespread Bitcoin use — due to the scale of this effort — is not easy and fast to implement. Numerous factors must be taken into consideration, and even mentioning all of them is hardly possible, as for sure we will discover and learn some things as we go.
The adoption curve of Bitcoin, or the crypto industry in general, indicates that there is still a very long way to go — a decades long road ahead. But the positive thing is that we’ve already come a long way! And even efforts taken in other cryptographic spaces beyond Bitcoin — in the systems built to compete with it — can be a valuable lesson with a lot of bold ideas that may help pave a new way for Bitcoin hyper-adoption.
Awareness and habits of people
In different parts of the world, the situation regarding Bitcoin or crypto adoption is radically different. And the perception of Bitcoin and crypto from the perspective of a comfortable life with a wide variety of different accessible services and goods is quite different from other parts of the world. The typical experience of inhabitants of the northern hemisphere, or rather the wider Western World, who are already familiar with traditional financial markets and crypto with its ups and downs — is extremely different from people in other parts of the world.
From the point of view of many inhabitants of the other parts of the world, everyday functioning requires a more pragmatic approach. Try to walk in the shoes of people living in poor and developing countries or people in countries which experienced economic collapse over the last few decades (or are experiencing it now). Try to take a perspective of those people whose income is low and uncertain. They naturally have less room for idealism, wishful thinking, or naivete. They cannot afford the luxury of thinking about the distant future. They need to focus on the here and now. Can we leave these people alone?
What in principle seems to be guaranteed and generally available in the Western world looks completely different for many people who already on a daily basis are forced to use cryptographic payments. We should not forget that there are places where inflation is ridiculously high and the usefulness of the local currency is questionable. There are places where the financial infrastructure does not allow free use of traditional means of payment in places where they fail completely.
There are many very interesting places on the world map in terms of crypto adoption — especially in South America or Africa. But what is important — the values of particular payments used on a daily basis from the perspective of the West are rather small there. That is why they are often overlooked by those who tend to use much larger funds. This fact alone creates an illusion trap into which the Western world seems to fall. It is worth noting that the direct use of Bitcoin is very limited there, because for many it is too unpredictable and too unstable, not to mention the time and infrastructure needed to make a payment.
Another thing to consider is that in a lot of places worldwide, people are used to the dominance of the dollar and rely on it as the universal unit of value. The purchasing power of the US Dollar has fallen over time, especially since 1971. This is well documented although maybe not common knowledge (https://wtfhappenedin1971.com/). But those are the facts, and it is a long term effort needed to change how people perceive the Dollar — as it is not going to change overnight. We have to accept that from their perspective, the Dollar is stable, and a determinant of value. This is also the reason they choose centralized stablecoins like USDT or USDC over any other assets including Bitcoin, not even considering the potential risks that are attached to them.
Use of stablecoins is very convenient in direct transactions — regardless of whether people know what Bitcoin is and how it is currently valued. One dollar will always be one dollar for them. People prefer to use those, because from their perspective this is the cheapest, fastest, most convenient, and most reliable method of payment.
And we should keep in mind that even the price of Bitcoin is expressed in US Dollars. Are we able to reach these people with the message contained in the Bitcoin Whitepaper? Or is it better to take a good look at how it works organically and draw conclusions from it?
And we ought not to forget that the vast majority of people around the world are, like in the Matrix, stuck in the system. Take a walk on a busy street and try to guess how many people out there use Bitcoin? How many use other crypto assets? What can they know about it? How many of them learned how to safely enter this space? Very often their knowledge of the new world that is being created is negligible. The mere awareness of the possibility of something else is difficult for them to accept.
This fact alone is a reason why we should consider Bitcoin or crypto adoption to slowly grow over decades yet to come. Maybe this is one of the reasons Satoshi Nakamoto designed Bitcoin as he did — with the last block being mined around the year 2140.
The Blockchain paved road
For hyperbitcoinization to become a fact, for us to free ourselves from the shackles of the current system, we need to educate people stuck in it (there are still many of them even in Western countries!). But above all, we need convenient and useful tools that will help overcome the initial difficulties for people in switching to new tracks. We really need to take a lot of small steps, we have to be patient and everyone in this industry has a role to play. As Ovid said “dripping water hollows out stone, not through force but through persistence.”
Concepts and processes that are normal and easy for people who use Bitcoin on a daily basis are hard-to-cross barriers for those who don’t. We tend to forget that there are people in different situations out there. We need to overcome the limitations of Bitcoin while staying true to its original ideals. We need DeFi on Bitcoin. We need stablecoins. We need to operate in a decentralized, uncensored environment. We need every possible tool, which will help in achieving our common goal.
Hyperbitcoinization cannot be done directly on the first layer of Bitcoin — at least for as long as there is no broad consensus on changing some of its core features (which is very unlikely to happen). After all, we are not in an ideal environment. Bitcoin, despite its undeniable advantages, also has its limitations. Layer 2 solutions are needed, which enable scalability, zero-knowledge rollups, and other useful features and tools convenient for most people.
At the end of the day, we still need even centralized stablecoins, which provide gateways through which people can enter this world, soak into it, and slowly evolve towards Bitcoin. But what we also need are new stablecoins that are as decentralized as Bitcoin… at least until people start to express value in Sats instead of Dollars.
* Ad astra per aspera — to the stars through difficulties.