Polar thinking leads to paradoxes, where feeding one end of a pair, we give rise to the opposite. Similarly, in times of the biggest optimism, there is this unintuitive counter-force, which hides in the bushes, like a tiger. This natural cycles were proven many times by history - enlightenment caused romantics, and they caused critical realists. Fall of communism preceded the biggest capitalist debates within the former Soviet union, and Third reich didn't last for 1000 years, but led to the fall and debasement of the aryan race. I dare to identify possible predators waiting in the Bitcoin space right now.
Bitcoin hard forks
There is this notion of One truth, which is a consensus of blockchain. But if you hard fork, are there more Truths ? This is very distressing idea to the fundamental design of Bitcoin. This distress might have caused prolonging the scaling debate, because there was an assumption that truth must only be One. Why not fork right away ? A compromise happened in the form of Segwit2X, but it seems it was bitter for all parties. You could not feel the satisfaction of such resolution. Bitcoin Cash happened, pre-Segwit chain. If there was a force, big enough to stall the development for 3 years, then it could keep the chain alive.
Second notion is this of deflationary Bitcoin, hard cap of mineable amount. But if you hard fork, does it cause inflation ? Distribution of hash power and capital flowing to multiple chains. Thats another distressing idea to the fundamental design of Bitcoin.
This two problems were solved by labelling any other coin an Altcoin. But what if an altcoin has “Bitcoin" in its name, and has capitalisation as one of the top 10 cryptocurrencies ? What if an altcoin could have a network effect of the top players ? Usual requirement is total work done, or the longest chain, but I remember times when Ethereum was heavily mocked by Bitcoin fans.
The third notion is of Bitcoin being apolitical. Consensus rules are not due to political whims, but mathematics. But is that so ? As rules might seem mathematical, the proposals of rules are actually political, therefore Bitcoin was never apolitical. Nice analysis here.
ICO hype
Tokens. Tokens everywhere. The lowest possible price of an asset is somewhere in the ballpark of its real world value and usefulness. Even those whitepaper creators have hard time defining that. ICO as an equivalent to IPO are supposed to disrupt the VC market. But there is a reason why IPO is one of the later stages of company not first. In the beginning you want to have smart money, a strong partner with network and industry experience. This will not be provided by an anonymous mass. If you look at it through these lenses, ICO can disrupt the crowdfunding space. You can more easily sell your token than a participation on Kickstarter. Without some entanglement to the real world, there is no guarantee it’s going to withstand the tough times. And when those times will come, will ICOs be hodlers or not ? They have to eat and fuel their runways, and that would probably involve some FIAT.
Legislation
Overall capitalisation is growing, which can not go under radar. If they can ban it in China, they can do it anywhere. If not straight ban, then regulation. In the upcoming adoption phase, we need to focus more on how to merge our legislative systems with blockchain. And that means merging with upcoming legislation. Blockchain and blockchain applications which want to survive, will need to be legally compliant, or they could provide advisory how to make a proper legal space. I think that Vitalik with Putin might get that. Another interesting cases are Estonian cryptocurrency proposal or Maltese music blockchain initiative.
There are things like Moneros anonymity or overall decentralisation of crypto space, but these phenomena will not overcome the regulation of internet providers and their physical cables. You could enforce usage of decrypting software on internet connection points, and allow encrypted information only for licensed channels.
Be your own bank
Another popular notion of Bitcoin is being your own bank. A peer-to-peer network of banks, where everyone wants be a full-fledged autonomous entity. If we look at the history, majority of people don’t want to have full responsibility and freedom. Eventually, they will outsource that responsibility either to other person, or to an abstract entity, like the Bank. Keeping your private keys is a nice idea, but i’m not sure if most people are comfortable having their pension funds under their beds, and I mean that literally, in Trezor.
All of these phenomena are more or less disputed in the Bitcoin space, but they are mostly belittled by cheering the new all time highs. Every Bitcoin hodler knows that price went always up, but do they know that every hype cycle did burst ? So far Bitcoin believers were tested with multiple bursts, but there was never a test whether you bet on the right Bitcoin truth. Because if there are going to be multiple truths, you will have to deal with that first on personal psychological level, and then on technical implementation level. And if you look at how complex living systems evolve, it is never a single solution. If something has to go to the moon, it is not Bitcoin, but the whole ecosystem of crypto solutions, which will find their specialisation.
Great article! I see the situation much brighter, but I like your "positive" scepticism.
Interesting read! Check out my article on why q4 will be a 🐻 market!
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