There is no shortage of bias in today’s discussion of digital currencies such as Bitcoin. There is frequent disagreement on what it represents, where it is going and how it should be improved. Even worse, social media produces digital echo chambers that magnify opinions and polarize discussions beyond any reasonable outline of what Bitcoin actually represents.
Historically, discussions of value and economics have been so inexact that society had to build political factions around the subject to drive any meaningful action forward — much before social media and cryptocurrencies even existed. Topics such as inequality and capitalism have today become entirely weaponized and driven by opinion to push an agenda.
Tomorrow
So how can you collect your thoughts on the past, present and future of money, economics and Bitcoin, with all the misinformation going around? How can you predict the movements and trends of emerging decentralization towards an economic system that actually works?
The answer is simpler than you think, and it is right under your nose.
Eternal truths
There are patterns and trends that govern any system with moving and interacting parts. The universe is such a system. So is a rainforest, and so are the cells in your body.
Other such systems that are entirely man-made are the economy, the concept of “countries”, and central banking.
So, what exactly can the rainforest tell you about cryptocurrencies? What do the stars say about banks?
I present to you the first such pattern to aid you in your quest for truth.
Hyper-localization
Our first universal pattern is hyper-localization. It takes light a whooping 8 minutes to reach us from the sun. It takes 4 years to the nearest star that is not the sun.
Due to physics, all systems primarily act on a local scale. Environments and circumstances are so different from country to country, parsec to parsec, that any systems that are in place will have their largest impact if precisely tuned to the particular environment they are in.
Naturally, this also applies to any currencies that are created for the purpose of trade. You don’t want the neighbouring village to control how you trade. You don’t want China or the US to dictate what is valuable and what isn’t. Because of this strong drive to protect and control your own interests, countries all published their own versions of currencies.
Emergence
But, for the first time in history, we have witnessed the emergence of hyper-localization in value. With Bitcoin you are fully in control of your own units of value. Short from robbery nobody can take that away from you by printing more or freezing your assets, not even your own countrymen or villagers.
The decentralized nature of Bitcoin has already given us the best performing asset in all of history. Information wants to be free. Value wants to be free. Bitcoin allows all of that.
Clones
So what’s next? Because of the hype surrounding this fantastic achievement, many entities are underway to create their own digital currencies. China wants to create their own version. Facebook is eager to get on with their CorporateCoin.
These attempts represent a wish for freedom on behalf of the creator. China wants to be free from sanctions and dollar control. Facebook wants to be free from the same.
What they don’t realize is that their freedom and centralization is our restraint and oppression. They will become the oppressors they seek to abolish.
Manifestation
Therefore, the only way I see hyper-localization happening in the crypto space is by bootstrapping onto Bitcoin. Hyper-localization and “niche” patterns have already emerged in the past in the form of altcoins, but these alts suffer from similar centralization problems as any central bank coin does.
Thus, to allow freedom to a creator but also to users, I expect there will be attempts to publish coins and systems backed by Bitcoin. Just like cold hard cash used to be backed by gold — only that this time it’s possible to algorithmically prove your reserves.
It only takes one central bank to admit they will start collecting Bitcoin reserves, and what follows will be an avalanche of world value trying to be preserved in what few coins remain.
This backing phenomenon brings us to our next pattern — compositionality and layering.
But that’s for next post!
Conclusion
All in all, despite much uncertainty many things remain certain. These things will inevitably be connected to the way our universe is naturally organized. By drawing inspiration from these patterns we can make universal predictions of any newly emerging complex system, such as Bitcoin.
