Bitcoin and the Promise of Independent Property Rights

A framework for skeptics, part 3



By Su Zhu and Hasu

Photo by Thought Catalog on Unsplash

In the second part, we showed how Bitcoin is a novel social and economic institution. But the question remains: Who is going to use it? Is there a place for Bitcoin among other institutions, and if so, where is it? Is Bitcoin just a terribly inefficient competitor to PayPal and Visa, like the media wants you to believe, or something more?

To put Bitcoin on the map with other institutions, let us first understand why humanity built social institutions in the first place.

Humans don’t scale. Sure, we can learn, but we can’t upgrade our brains and bodies like we can upgrade the hard drives and processors in our computers and machines. In fact, our physical and mental capacities have remained virtually unchanged since we roamed the earth as hunter-gatherers. Instead, we scale through cooperation. All scientific breakthroughs, all increases in productivity and prosperity, can be traced back to our ability to cooperate with each other.

Cooperation has a Scaling-Problem

But because our world is fundamentally uncertain, cooperation doesn’t come easy for us. We spend massive amounts of efforts on predicting how other people are going to…