Bitcoin has been left for dead… hundreds of times in the last 5 years.
But it’s still here between us, in better health than ever and there’s no sign it’s going to leave us anytime soon. The question is: why so many experts keep failing at declaring it dead ahead of time? We’ve invited Mr. Andreas Antonopoulos to share with us his view on the matter, and what he thinks about the solidity of the Bitcoin system itself at the current time.
The Death That Never Happened
Since Bitcoin started to gain popularity around 2010, economists, politicians, bankers and financial experts, time after time asserted the death of Bitcoin, failing along for 5 years now.
The Wikipedia Bitcoin obituaries section only hosts some examples:
Forbes declared bitcoin "dead" in June 2011, followed by Gizmodo Australia in August 2011.
Wired wrote it had "expired" in December 2012, Ouishare Magazine declared: "game over, bitcoin" in May 2013, and New York Magazine stated bitcoin was "on its path to grave" in June 2013.
Reuters published an "obituary" for bitcoin in January 2014.
Street Insider declared bitcoin "dead" in February 2014, as did The Weekly Standard in March 2014, followed by Salon in March 2014, and Vice News in March 2014, then the Financial Times in September 2014.
In January 2015, USA Today states bitcoin was "headed to the ash heap", and The Telegraph declared "the end of the bitcoin experiment".”
But these are really only a drop in the sea.
Website 99bitcoins.com also set up a collection of all the Bitcoin “early deaths” quotes they can find. The page lists 83 posts at the moment, and they only keep track of english news. This collection, of course, only represents a fraction of the whole.
Even after the MtGox “scandal” in December 2013, which spawned countless death sentences, Bitcoin emerged victorious: it was priced around 130$ before the bubble, and after it exploded at its top of 1100$, the Bitcoin price only slowly declined, reaching 450$ after 6 months. It has never fallen below 200$ since.
MtGox was a bad thing for many, but surely it wasn’t Bitcoin’s death. If anything, MtGox was for Bitcoin a huge advertising campaign (Bitcoin was cited together with MtGox on media everywhere) that pumped its value like nothing ever did before.
One of the last “expertises” I found was released just a couple of weeks ago from J.P. Morgan Chase CEO Jamie Dimon who stated that:
“Bitcoin is going to be stopped!”
Thus declaring a war from banks to cryptocurrencies (like nobody was expecting this).
The Point Of View Of Bitcoin Evangelist Andreas Antonopoulos
As time passes by, Bitcoin keeps penetrating the financial system and human society, and while it’s still not mainstream, its solidity grows day by day thanks to capital being invested, infrastructures built for its use and more people becoming aware of its existence and reliability as an ever growing, quick, economic method of payment.
We are giving you the point of view of Bitcoin evangelist Andreas Antonopoulos, a California-based information security expert, tech-entrepreneur, author of the book Mastering Bitcoin, and renowned speaker at important conventions, about the resilience of Bitcoin:
Cointelegraph: Hi Andreas, thank you very much for your time. I know you are very busy, so let’s start: why do you think so many experts in the field of finance, politicians and journalists keep giving Bitcoin for dead, month after month? Where do they fail at interpreting the system? Is it a problem of ignorance, of lack of technical competence or just plain fear of the new? Or is it a mix of these or something else?
Andreas Antonopoulos: Bitcoin works despite breaking all the "rules" of orthodox currencies. For those steeped in an institutional understanding of finance, the idea of network-centric money can't possibly work.
The fact that it does work forces many to undergo uncomfortable cognitive dissonance. If this works then the dominant economic hypotheses must not be correct.
CT: I love the fact that you cite cognitive dissonance, it’s a mechanism that often prevents people from accepting a reality that is too different from the vision they have already in their minds.
Leaving apart the Blockchain technology, what do you think are the main factors of resilience of Bitcoin? Why even with such a small user base in relation to world population and, after all, big “hits” like criminality scandals, bans from countries like China and Russia, BTC value still holds well up and Bitcoin keeps spreading?
I have identified three main points that are of good importance for why Bitcoin is holding up:
(1) Almost 800 millions of dollars have been invested in it to build infrastructures for its use, and the trend seems to beat investments that were made on the Internet at its beginnings.
(2) Bitcoin is not only kept as a medium of speculation, but it’s actually used because it gives advantages that nothing else gives.
(3) As a consequence of (2), there will always be somebody that will want Bitcoin, for the simple reason that it works, because it brings an advantage to the user in respect to traditional methods of payment and it definitely has a value because it has a use.
What do you think about these and what are other possibly important factors?
AA: Bitcoin is useful. It has intrinsic utility. It does things no other currency or payment network can do. It's also architected as a dynamic, adaptable and de-centralized system which makes it “anti-fragile”. As long as bitcoin serves a need and can be used by simply installing an app, it will refuse to go away, no matter what the price or the legal environment. In the longer term, that very resilience will emerge as a basis of value.
CT: Do you think Bitcoin has already reached a “point of no return” where only dramatic events could really kill it, or do you think there’s still a certain percent of chances that the system will just collapse and make it disappear?
AA: Bitcoin is the proof-of-concept for decentralized network-centric money and finance. That concept is now established and shown it can scale and thrive. Whatever form it takes in the future, whether it is Bitcoin, something different called Bitcoin or something called something else, the concept of network-centric money happened. It will continue to disrupt the global financial system for decades. In the long run it cannot be stopped because it is an idea based on math that can't be uninvented.
CT: Do you think that the fact that governments are taking measures against Bitcoin after the Paris attacks and following ones represents a menace?
AA: No, these measures are misguided, ineffective and ultimately damaging only to the countries that take them. The currency of terrorism is oil and the biggest funding source is our "ally" Saudi Arabia. Every time there is an attack, the same cynical authoritarians roll out the same tired and ineffective measures and try to persuade us to give up more freedoms, hoping we ignore the fact that the last round of "measures" failed to stop attacks or even lead to more extremism. While they're busy blaming Snowden, encryption, civil rights, refugees and Bitcoin, we should all focus on the real causes - endless western wars in the Middle East, drones, state terrorism, funding of militias, coddling of dictators and alliances with brutal religious fanatics like Saudi.
If governments try to ban or suppress bitcoin, they are only feeding the development of far more stealthy systems.
CT: By another point of view, some people talk about a “lack of adoption of Bitcoin”, that killed it (again) or companies that simply reconfigure their position about it. Do you find this right, or are these people expecting too much? After all, Bitcoin was introduced to the mainstream around 3-4 years ago, it’s a new monetary system, something never seen before, and it’s unnatural for many to accept that money can be different, and on top of this, the real point of power of Bitcoin: the fact that it’s not controlled by a central authority makes people think that it’s not reliable. But I wouldn’t call Bitcoin dead, when a single operator like Bitpay is making one million a day of traffic since 2014, and was founded in 2011, while eBay was founded in 1995 and is making 89 million a month now.
AA: We're in the 6th year of this technology. It's like giving up on the Internet in 1992 because there were not enough users. It's ridiculous to expect a six years old radically disruptive technology to simply become an "overnight success". The secret of overnight success is 10-20 years of development. The important trends in Bitcoin are all showing fantastic results: innovation, tech development, investment, transaction volume etc. People need to have more realistic expectations and a bit of patience. The blockchain bandwagon is about as interesting as the development of corporate intranets in the late 90s. It doesn't lead anywhere revolutionary, it's just a distraction for banks trying to avoid disruption by taking half-measures.
CT: I couldn’t have said it better, Bitcoin is still spreading, slowly maybe, but not shrinking. The fact that these companies struggle with it and widen their field of action probably only shows that there was a bit of market saturation.
But what do you think is the biggest danger for the Bitcoin ecosystem? What could really damage it so much to destroy its reputation and sink its value to zero? For example I was a bit scared by the recent block size debate that spawned a fork of the Blockchain. That seemed an internal fight that damaged the reputation of Bitcoin, to me.
AA: I don't think anything can take the value to zero. As long as bitcoin works and is useful, it will survive. It's funny but we no longer wonder if the Internet can "fail", but in the early days that was a common fear. Now it's embedded everywhere. Bitcoin is following the same path. If its reputation suffers a catastrophic problem, we will invent a new name for it or move to a new currency on the same model. You will of course be able to buy this new currency... with Bitcoin. I don't see any scenario that creates a dead-end. Too many people invested in time, skills and money in it, it means that any problems will have plenty of motivated people trying to solve them. Centralized systems are much more prone to collapse. We should be worried about the Euro and USD…
CT: Now give me a number: the chances you think Bitcoin has to disappear at current time, at current status of things. The real, effective risk percentage that Bitcoin will disappear before 2020.
CT: Ahah I kind of expected it!
AA: That's just 4 years from now…
CT: Yes that's only 4 years. But if it holds up these 4 years, it will become completely armored and invulnerable.
AA: It already is. Bitcoin became inevitable and unstoppable once it went over $1.
CT: Considering I’m a big supporter of Bitcoin and the whole technology, I still have some doubt, however small, about its invulnerability, I’m scared of banks and governments.
AA: They are far more fragile and powerless than they want us to believe.
CT: That’s much possible! Thank you for this chat, I’m sure our readers will have a cue to think about what really is going on with Bitcoin and possibly review their worries about its future.
This is all for now. However, Cointelegraph will write another article interviewing an expert of the traditional financial/banking system that does not believe much in Bitcoin. This too could be a good cue to see Bitcoin from a different point of view.