COVID-19 continues to wreck everything, but this will change sooner than you think. At that point, bitcoin will have a choice to make.
Photo by Austin Distel on Unsplash
“The global bastard,” COVID-19, continues to wreck everything, but this will change sooner than you think.
Since the outbreak began, the world has ramped up its production of medical supplies, tests, and personal protective equipment. Scientists now have several promising vaccine candidates, effective treatments, and drugs that help people get less sick, need less care, and die less often.
It may take another year to get these interventions into the hands of everybody who needs them, but it’s no longer a question of if. Now, the only question is when. I’ll bet sooner than later.
Once we tame COVID-19 and life starts to get back to normal — whatever “normal” means in the post-COVID-19 world — humanity will have massive problems to deal with.
Minorities and poor people will realize how much they’ve suffered under COVID-19 while white people and white-collar workers largely did ok. Governments will have massive budget deficits. Central banks will carry trillions of dollars in worthless assets on their balance sheets. Pensions will fall short on their obligations.
All that on top of all the problems that existed before COVID-19.
The global economy may take a very long time to recover.
For many bitcoin advocates, this gives bitcoin a chance to show its true value.
What is that value?
An anti-fragile and anti-inflationary money system. An impartial and unbiased payment network with a fixed and predictable monetary policy, based on open and accessible protocols.
Money for all.
Is that why my chat groups have exploded with humblebrags about bitcoin gains, price targets, and DeFi’s latest hype-coin? Obviously, they’re all about the vision.
What did Paul Tudor Jones say about bitcoin? Oh, Dave Portnoy’s into it now? Wait, we hit $12,000?? Aunt Sally asked me whether to buy it???
Bitcoin’s price is going down? Buy the dip, we’re going back to all-time highs!
Oh, wait, its price is going up? Screw the bankers, we’re going back to all-time highs!!
Bloomberg said something nice about bitcoin? Here comes the mainstream — we’re going back to all-time highs!!!
And I thought they were in it for the tech. Silly me.
The number of bitcoin users keeps growing. Source: Statistica, September 11, 2020.
True, it’s going mainstream. My friends have started asking me about it again.
While most people sat on their hands as bitcoin’s price zoomed this spring and summer, institutional bitcoin funds added $5 billion in new investments, quadruple the amount of all previous years combined. Bitcoin ATMs have grown at a parabolic rate.
After telling investors cryptocurrency is not an asset class, Goldman Sachs hired a new director of digital assets.
(Which is like saying “cars are useless” and then hiring a director of automotive technology.)
Some corporations have pulled bitcoin into their financial reserve funds. The total number of bitcoin wallets continues to grow. Buying, selling, and using bitcoin is easier, safer, and better-regulated than ever before.
Lightning Network, a payment system built on bitcoin’s blockchain, recently reached all-time highs in the number of participants and payment capacity. People in Lebanon and Argentina report trusting bitcoin more than their nation’s currencies.
Do bitcoiners brag about any of that?
No. I’ve never seen anybody bring those up in a chat group.
Once in a while on Twitter (maybe), tucked in with dozens of tweets about when to short and how we’re going to get rekt or go back to all-time highs.
Bitcoin’s price will go up.
That’s not a hope or mere speculation. Every metric, data point, and historical correlation predicts bitcoin’s price will go up for several more years, as it’s done since the beginning of 2019.
The question is what will we do with all those gains?
Will we just recycle them from one lending platform to another to max out our returns? Or dump them into some DeFi scheme?
Will we use cheap cash to pump up the price so we can sell our stakes to somebody dumber or more greedy than we are?
In the post-COVID world, where humanity struggles to find its path forward, how can bitcoin grow if its biggest advocates talk only about its price? If its biggest selling feature is “price go up?”
What happens if we never give people a chance to care about the true revolution — open, permissionless financial networks that nobody can manipulate, defraud, or deceive? What happens if they don’t care about that?
Worse, what happens if we don’t care about that, either? Moonshots do strange things to people . . .
Photo by Javier Allegue Barros on Unsplash
Undoubtedly, bitcoin’s in the middle of a big, multiyear upswing. Today, the price may have fallen, but the trajectory is clear: up.
When bitcoin’s price goes up, attention always follows.
Will this renewed attention lead to better, freer, more equitable money systems? Can we use this moment to make finance and commerce accessible to everybody, not just a lucky few?
We can, but only if we choose to.
No matter how gloomy the future seems, humanity always wins. We have an amazing capacity to learn, change, and persist. We embrace new concepts when they make our lives better and reject old concepts when experience shows us a better way.
To succeed, bitcoin needs to do only one thing: give humans a better way.
This is the next challenge. Who will accept it?