Bitcoin is Alien Technology (part 3)
and it’s not meant for our time
Bitcoin has dawned on us and it is here to stay. When faced with an alien technology (not necessarily from outer space) there are always two major camps of people who react in opposing ways: there are those who welcome it (the welcomers) — because they have nothing to lose and all-bets-are-off is the only way to win or gain, and the others who have ignored it long enough and are now forced to face it with disbelief and distrust (the distrusting others).
Among those “distrusting others”, some see Bitcoin as a nuisance, while some see it as a menace that should be contained (the containment camp). This latter group knows that Bitcoin is not like anything they viewed as a threat before. It can’t be banned, it can’t be killed (unless it kills itself due to some higher order rule of the universe) — it might be contained though.
In other words, the distrusting ones do respect Bitcoin as if it is some kind of alien technology. Many from the containment camp noticed that, studying this technology, and using what’s learned to improve their own (clumsy) technology might be beneficial. Some among them even realized that they can’t afford not to — these are the people who think they made a significant discovery: the blockchain, a Bitcoin containment tool.
Blockchain is a mental reduction of Bitcoin that mellows its perceived threat. It is a mindset that’s the equivalence of vaccine to the Bitcoin plague (or cryptocurrency plague). Similar to developing vaccines, we’ve seen several approaches in containing Bitcoin through blockchain.
One is similar to the inactivated vaccine (killed vaccine) approach. For example, extracting what they think is the key potent ingredient of Bitcoin, DLT (distributed ledger technology), while discarding everything else. The problem with this approach is also similar to the killed vaccine approach in immunology — it is just not very potent in killing the virus (or Bitcoin and cryptocurrency). I have to admit that this analogy is actually quite weak — inactivated vaccine is a proven effective immunologic technique but DLT is not. The premise of DLT, even a `hyper` one at that, is actually a fake advertisement to ease the fear of the financial establishment. When taken out of a cryptocurrency context, a distributed ledger is just an append-only data store that achieves nothing that has not existed already; it brings more problems than perceived benefit. The financial industry has all kinds of DLT already deployed, as well as clumsy and heavily centralized apparatus beside DLT to keep utilizing systems up and running. The claim that Bitcoin “inspired” DLT bringing many Bitcoin-like benefiting features without the `anarchist` side effect is completely bogus and misleading. This approach is nothing more than a sham and the customers (financial establishments) aren’t really buying it.
Another approach is similar to the attenuated vaccine (live vaccine) method. These are the ones that create and launch cryptocurrencies under the centralized control of a singular entity: a private company (such as Ripple or Tether) or even government (like the Venezualan Petro Coin). These “cryptocurrencies” are not really cryptocurrencies like Bitcoin or Ethereum. “Toxic” features such as decentralization, censorship resistance, and trustless consensus are completely removed; they are but a shell, and hiding beneath the shell is a centralized, access-controlled blackbox — some kind of private money. Ironically, many financial establishments had banked on people’s distrust on these private money schemes that call themselves `cryptocurrency` to promote bank or state issued (and regulated, supposedly) digital currency backed by their own version of blockchain technology. Many governments are attracted to this approach and setup of the so-called `sandboxes` for companies to experiment with some blockchain technology implementation. Some defended this approach by claiming that these centralized `cryptocurrencies` can be a bridge between the decentralized cryptocurrency and the digital currency (traditional fiat money in digital form). Of course this latter claim (bridge explanation) did not take into account a decentralized economy, and the real purpose of the bridge approach is still to reign in cryptocurrency under centralized control.
Are those alternative `cryptocurrency` / blockchain approaches successful? Well, in terms of `containment`, NO. So far none of them have taken over Bitcoin as THE cryptocurrency, but some of those centralized `cryptocurrencies` (such as Ripple and Tether) are quite popular among some crypto population; thus they did succeed to some degree in sowing misconception as well as confusion in the cryptocurrency community.
True believers of Bitcoin and cryptocurrency don’t think those “containment” tactics work in the first place. YES they gained some ground, but not enough to win and crush Bitcoin or truly decentralized cryptocurrency. However, this kind of thinking completely misses the point.
As we have discussed in previous posts — thinking in terms of “fighting” and “winning” is wrong; it feeds into the centralized trap and the result is mega chaotic confusion, like the loud din of STOs, Bitcoin ETFs — what a disastrous mess!
The main thesis of this series is that Bitcoin and truly decentralized cryptocurrency are not compatible with our currently centralized world; actually they have no real use in our world. In that sense, Bitcoin and cryptocurrency can’t win in our centralized world, and winning is not the point at all. Building a decentralized world and future is what matters.
Yet there is a caveat.
A catalytic force is still needed to trigger a dualistic phase shift between centralized world and a decentralized one. That catalytic force is silent but powerful.
Actually beside the two camps of people we mentioned and discussed earlier regarding the reaction facing the emergence of alien technology that is Bitcoin, there is a third group of people.
They are the gold rushers: speculators, miners and opportunists. They are mostly silent and faceless in mist of history. Yet history is often shaped by their stampede; castles were overrun by them; continents were settled and populated by them. They are the unwilling force that forges history and future. They are the catalytic force we seek.
And Bitcoin has already made a plan to call for them.
The unfathomable brilliance of Bitcoin is best manifested by a single masterstroke; it has embedded a genie in a bottle to move this silent group to move mountains. A Pied Piper with a tune of CPU/GPU/ASIC cooling fans that has called an entire army of crypto miners and speculators to do its bidding.
Well done Bitcoin, you awed us and we have learned!
The other two camps all wanted to lure this silent group. They all know its power instinctively. I don’t want to explain the dynamics of crypto mining, miners and speculators here; there’s a lot of material explaining and analyzing them, just google that. We do know that miners need speculators to liquidate their harvests through crypto exchanges. This whole setup is Bitcoin’s way to latch onto and feed off an alien world — our centralized world (Bitcoin is alien technology to us, and our world is an alien world to Bitcoin. Quid pro quo.)
Yet dualistic forces are constantly playing and double-crossing all sides.
Those speculators are a double-edged sword. On one hand, overheated crypto market speculation killed many interesting ideas in the crypto space and made their reign no more than a flash in the pan. On the other hand, the periodic speculative cleansing of the crypto space is also a Darwinian driving force for innovation. Bitcoin should have died long ago in a burst bubble (many so called altcoins did go extinct) but it hasn’t — in fact Bitcoin price crashed many times — yet every time someone announced Bitcoin’s death only to see it come back and proliferate even further — looks like something didn’t kill you made you stronger. Bitcoin is like those fire poppies in the California woodlands — they sprout and thrive through wildfires.
Meanwhile with overheated speculation something else is also growing — the centralized crypto exchanges. They also feed and thrive through the wildfires of speculation. They are Bitcoin’s evil twin. They are a rogue counterforce pulling away Bitcoin’s growing alien influence. Crypto exchanges are becoming an unexpected accomplice of centralized financial establishment. It is obvious why they need each other: financial establishment needs collaborators to contain Bitcoin and cryptocurrency; crypto exchanges need help to contain extreme volatility endemic to crypto markets for long term survival and legitimacy. The collusion is accelerating these days. If we compare extreme volatility in crypto markets to a swelling cyst waiting to burst — then a healthy crypto market is the day that it staves off flatlining at the ICU; or a casino where the only game to play is the Russian roulette. No wonder crypto exchanges want to get out of this sordid family business and go legit. No wonder financial establishment can’t wait to get in and make a killing. That’s also why you see all those “news” (/rumor) pieces pop up from time to time about STOs, Bitcoin ETFs and Nasdaq opening a crypto exchange. Just don’t let such hocus pocus fool you though — the convergence of centralized financial establishment and crypto exchanges can only mean one thing — the total rendition and annihilation of Bitcoin’s core alien virtue — decentralization, censorship-resistance, trustless consensus.
Nonetheless taming Bitcoin and true cryptocurrency is just futile — Bitcoin is alien technology, after all. That said, it is time for the cryptocurrency revolution started by Bitcoin to evolve into the next stage — building a new decentralized world. And building this new world we shall, regardless of crypto exchanges. But crypto exchanges had an indigenous origin story just like Bitcoin — and they have not become establishment yet. Abominable creatures as they are, crypto exchanges did help spread the word of Bitcoin in the early days. Whatever sins we see in crypto exchanges, they are but a reflection of our lack of grasp of a superior alien technology (Bitcoin and a decentralized world), a foolhardy juvenile play of a cargo cult imitation game. It’s time we say goodbye to them.
So crypto exchanges, hear my plea: you’ve had your fun, now it is time for you to go; please self-destruct. It shall be an honorable death for you. And then, from ashes you may rise again. Remember to renounce the past and transform yourself, and we will show you the way in a new world -
The world of decentralization.
Here are part 1 and part 2 of this series. Please come back to check out my next series — what does a decentralized world look like?
