Bitcoin Is in the 3rd Phase of the Journey Followed by Any Revolution That Eventually Triumphs
By successfully passing this stage, Bitcoin will then be in a position to triumph.
“First they ignore you, then they laugh at you, then they fight you, then you win”
I imagine you’ve heard this quote from Gandhi at least once before. It’s very famous, and it is a perfect translation of the phases that all revolutionary movements go through before finally triumphing.
In fact, it is an apocryphal quote since Gandhi is not the original author. The first to utter this sentence was a certain Nicholas Klein who was an American labor union advocate at the beginning of the 20th century.
Whoever is the author of this quote, I think it is very apt to describe the journey of Bitcoin since its creation in 2009 by Satoshi Nakamoto.
According to this quote, Bitcoin is now in the third phase of any revolutionary movement as it is being fought on all sides. In this story, I propose to go back over the journey of Bitcoin since its inception, and explain why Bitcoin will be in a position to triumph if it passes this third phase.
Bitcoin Was at First Totally Ignored
When Satoshi Nakamoto officially created Bitcoin on January 3, 2009, hardly anyone was interested. Bitcoin was totally ignored, and only a few cryptography enthusiasts joined Satoshi Nakamoto in the Bitcoin adventure.
Cypherpunks, as they are called, were among the first to put Bitcoin and its revolutionary Blockchain-based system to the test.
By being totally ignored, Bitcoin was able to grow at its own pace block after block. Little by little, a few innovators joined the Bitcoin adventure.
These innovators were people with a passion for technology who immediately found the characteristics of Bitcoin unique:
- True decentralization
- No leader
- An open source code
- Limited quantity and controlled inflation slowing over time would make Bitcoin really scarce.
Nevertheless, the powerful people of this world gave little importance to Bitcoin at that time.
Their attitude was either pure ignorance or a haughty reaction. Indeed, how could a mysterious stranger have invented a payment system that would allow people to do without the control of states, and thus of any third party authority to validate transactions while securing the network.
For the powerful of this world, the revolution advocated by Bitcoin was mission impossible. Bitcoin was at most an invention of a few wacky developers.
Bitcoin Was Then Mocked
On November 28, 2012, Bitcoin experienced its first Halving in history. The reward for miners adding a block of transactions to its Blockchain was decreased from 50 BTC to 25 BTC.
Everyone was in anticipation. Indeed, it was not known what the consequences of this first sharp reduction in supply would be for Bitcoin price.
The strong bull market that started at the beginning of 2013 was a first response to all the innovators in the Bitcoin market. These innovators were then joined by a new category of people: early adopters.
Early adopters are also technology enthusiasts, but they take longer to get started than innovators. However, once they get into a technology, it starts to really take off.
This is what happened with Bitcoin, which reached $1,000 for the first time on November 28, 2013 on the Mt. Gox trading platform which was the leading platform at the time.
A first craze was formed around Bitcoin with the beginning of media coverage. Among the many articles published at the time, very few took seriously the revolution that Bitcoin wanted to build for the future.
Most of the articles were negative. They denigrated the dreamy side of the Bitcoin community. The few positive articles focused instead on the Blockchain, which is the technology on which Bitcoin is based.
The powerful of this world took the side of making fun of Bitcoin by attacking it from two angles:
- Bitcoin had no intrinsic value.
- Bitcoin was used to launder dirty money.
Former U.S. Federal Reserve Chairman Alan Greenspan was one of the first to fire on Bitcoin:
“You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.”
— Alan Greenspan.
It would have been amazing if someone who was at the heart of the monetary and financial system had come to approve the Bitcoin revolution.
The famous American economist Ben Bernanke, who claims to be a New Keynesian, also looked down on Bitcoin when he said:
“Bitcoin is an attempt to replace fiat currency and evade regulation and government intervention. I don’t think that’s going to be a success.”
— Ben Bernanke
Despite these mockeries, Bitcoin continued to move in the right direction. Block after block, Bitcoin continued to work and show the resilience of its system.
This resilience is reflected in its uptime since inception, which stands at 99.98%.
Not bad for a totally decentralized, leaderless payment system that was only supported by a few wacky developers according to the powerful of this world.
Bitcoin Is Now Being Fought on All Sides
Bitcoin’s second Halving occurred on July 11, 2016. The reward given to the miners was decreased from 25 BTC to 12.5 BTC. This new shock in the creation of the Bitcoin supply finally produced the same consequences as the first Halving.
A strong bull market was established in the Bitcoin world within 18 months after the second Halving.
This strong bull market allowed Bitcoin to make daily headlines in the press from mid 2017 onwards.
It must be said that its price began to worry the powerful of this world. Bitcoin passed the $2,000 mark in May 2017, the $3,000 in June, the $4,000 in August and the $5,000 in September.
This phenomenal growth in the price of Bitcoin made it an enemy for politicians, central bankers, and economists.
In short, everyone at the heart of the current monetary and financial system.
Everyone went out of their way to denigrate Bitcoin to the general public. The largest investor ever in the traditional financial markets, Warren Buffett explained that Bitcoin was “probably rat poison squared”.
The American Nobel Prize winner in economics Joseph Stiglitz also gave his very negative view of Bitcoin:
“When you regulate it so you couldn’t engage in money laundering, there will be no demand for Bitcoin.”
— Joseph Stiglitz
Joseph Stiglitz showed his complete ignorance of Bitcoin by stating that if it became impossible to launder money with Bitcoin, then there would be no demand for Bitcoin.
All this did not prevent Bitcoin from reaching $20K at the end of 2017 before the speculative bubble that had formed around its price burst in 2018.
Its opponents took the opportunity to take up the criticism again. Worse still, Bitcoin has already been announced dead 379 times since its creation.
Each time, Bitcoin has risen stronger.
After the terrible year of 2018, when its price dropped to around $3,500, Bitcoin has recovered in 2019 by going back well above $10K.
Realizing that they couldn’t beat Bitcoin simply by criticizing it and denigrating it to the general public, the major economic powers have now taken it upon themselves to create their own state-backed digital currencies.
The movement was started by China, and most of the other major world powers will follow suit in the coming months and years.
Nevertheless, I don’t think that this umpteenth attempt to stop Bitcoin will work any better than the previous ones.
These state-backed digital currencies are a contradiction of the revolution represented by Bitcoin, and people will find no real interest in them compared to Bitcoin.
Bitcoin May Well Be in a Position to Triumph
Bitcoin is a revolution with multiple facets: technological, industrial, social and ideological. Like any revolution, the last phase to be reached is that of triumph.
In order for Bitcoin to triumph in completing its revolution, Bitcoin will need to continue to overcome all the attacks it receives daily from those threatened by its system.
The people most threatened by Bitcoin are those who benefit the most from the current monetary and financial system.
So it was not surprising to see Donald Trump tweeting this about Bitcoin in the summer of 2019:
“I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
— Donald Trump
Need we remind Donald Trump that since the end of the convertibility of the U.S. dollar into gold, the U.S. dollar is no longer based on anything tangible either?
Bitcoin is at least as legitimate as the U.S. dollar. Nevertheless, Bitcoin scares all these people because its leaderless system aims to give power back to the people.
The fact that Bitcoin is able to separate the management of money from the state is a prospect that frightens all the leaders of the major economic powers.
At this point in time, I am not in a position to say with certainty that Bitcoin will be able to triumph. No one can.
I can only tell you that Bitcoin follows the normal journey followed by all the revolutions that have ever had the chance to triumph. So Bitcoin is on time in facing all the attacks it has been undergoing on a daily basis for months now.
The coming years will be crucial and will tell us more about Bitcoin’s ability to be part of those revolutions that eventually triumph.