With the launch of Bakkt’s bitcoin futures market and Binance’s revamped U.S. exchange, there’s been a lot of talk in the space about institutionalization and traditional money flowing into crypto. It’s almost as if some believe that Bitcoin can’t scale as a purely peer-to-peer electronic cash system and that third parties and regulators must be introduced to save the day, and help Satoshi’s hobbled vision stumble along. As custodial arrangements increasingly become the norm, Bitcoin’s two main value propositions are now in danger of being lost.
Also Read: Software Engineer Reveals Oracle Creation Platform for Bitcoin Cash
The Use Case Elephant in the Room
In a recent video posted to Twitter, CTO of Context Vin Armani emphasizes: “If you use a tool in the way that the tool is best used, you will derive the most profit from the tool. And if we want to know what Bitcoin is, the first and best place is to go straight to the creator … If we go to the whitepaper the very first sentence says what Satoshi Nakamoto believes a bitcoin to be.”
What gave Bitcoin its appeal in the first place was that it was:
- Permissionless
- Limited in supply
Of course there are other qualities that lend to its market potential, but those are the big, revolutionary ones. Should those two qualities be denigrated or chipped away at in any way, the market valuation stands to fall. As libertarian economist Jeffrey Tucker stated this week on Twitter:
My crypto prediction is as follows: anyone who imagines some market valuation independent of an actual use case for consumers will be humbled by market forces.
Armani makes a similar case in his video, implying that if investors just hodl and wait around for “institutional,” network value can’t grow. At least, not in the sense of an innovative currency catching on to bring financial freedom to the world. This requires active participation. Even though payment protocols like BIP70 (recently removed by Bitcoin Core devs) enable myriad transaction types to be engineered as purely peer-to-peer exchanges, it seems many prefer to abide by whatever rules regulatory bodies issue, and allow custodians like Coinbase and Binance to completely invade privacy in the hopes of racking up more money via fiat-dependent assets.
No Better Than Gold
Some in the Bitcoin Core camp actually discourage adoption and use cases, which awkwardly stifles Satoshi’s whole peer-to-peer cash thing. In recent Reddit discussions on potential merchant onboarding in France, some have openly lamented the development, saying “Why do we want 25000 stores accepting bitcoin in France, etc … that will just clog the network, right?”
Others pointed out that purely peer-to-peer transactions are the ones that make the most sense and the proposed initiatives in France are not good because they essentially involve a payment processor making an exchange to fiat for the buyer. Redditor Steven81 maintained “Those methods would make sense if no 3rd parties were involved (selling your BTC for you) … I cannot fathom many spending BTC like that, in the same manner that I don’t know many buying things with gold.” The user went on to note:
Yet another Redditor quipped:
Nobody will pay $60usd trx fees for a $2 usd coffee. Edit: Why the hate, I am pro bitcoin but I am being realistic, in 2017 when trx volume when up, the trx fees went up a lot.
Gold is great, but it’s not really revolutionary. It’s been hoarded by corrupt powers for thousands of years now, been divorced from the dollar, and is certainly no longer a big threat to the status quo. The allure of Bitcoin in the beginning was its potential to upset such unfair hierarchies. Should hodlers forget this, and go along sheepishly with each progressive infringement on any utility divergent from legacy systems, they’ll end up with a new store of value with capabilities they are mostly too afraid to use, and whose market price will ultimately stagnate for the very same reason. Or, whose market price will indeed skyrocket, but be held in the hands of the few, via violent laws and unfair regulations.
The Bitcoin Cash Solution
As much flak as the Bitcoin Cash community gets in the space and on Twitter from BTC maximalists, there’s ultimately no substitute for action. In line with the original Bitcoin whitepaper, the Bitcoin Cash network serves as a monetary system everyone can use. A peer-to-peer version of electronic cash that allows payments to be sent directly without going through a financial institution. The BIP70 protocol is still alive and well on the BCH network, and makes possible the privatization and removal of third parties from even complex transaction arrangements.
Further enriching the ecosystem are developments for the execution of smart contracts via oracles, such as detailed in a recent report by news.Bitcoin.com. BCH developer Gabriel Cardona has recently announced the launch of his new project, Oracles.cash, opening doors for greater development and network flexibility. What’s interesting about all of these innovations and potential solutions is that custodial relationships (those compromising Bitcoin’s original value proposition) are not required. And the tech is waiting and ready, right now. Not perpetually 18 months away.
The only requirement is a market of individual actors engaging freely. This is in stark contrast to many so-called Bitcoin-friendly services offered, which require a wealth of private information harvesting and intrusive surveillance before allowing value holders to trade.
Economic Sovereignty Is Not ‘Extreme’
The word ‘disobedience’ makes many uncomfortable, and for good reason. There can be very real consequences for upsetting the apple cart of legacy finance. There are many terms that could sub for disobedience in this context: “dissent,” “non-compliance,” “counter-economics” and even “autonomy” are among them. It’s ironic that the term’s negative connotations could sully something as pure and simple as a non-violent, peer-to-peer monetary transaction. As Armani said, Bitcoin is a tool. This particular tool potentiates a great economic leveling, where individuals are valued by the market, and not devalued by politicians. Without its utility for permissionless exchange, however, it loses all of its bite.
Should tomorrow bring about a governing regime that demands KYC registration and taxes before clothes can be worn (after all, shirts and belts can be used to strangle people), people would rightly laugh it off as silly and not comply. Should that governing regime start caging and violating people for clothing themselves, however, many would soon be naked. It may seem a far-fetched example, but it’s equally silly to have to report on the ins and outs of one’s private financial dealings to complete strangers. Should Bitcoin’s original value proposition be abandoned in compliance with central regulators — and with it economic sovereignty — the market will surely correct somewhere down the line, and not for the better.
What are your thoughts on economic sovereignty? Let us know in the comments section below.
Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.
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