Bitcoin and the Internet

Aleksandar Svetski
Dec 3, 2019 · 6 min read

A comparison.

**Note**
This comparison is more conceptual in nature, than functionally accurate — but it’s designed to help with creating a mental model or reference point for understanding Bitcoin as an open network.

Understanding where economic activity congregates is hard.

It’s hard because people are blinded by their biases, their egos get in the way and instead of focusing on what can be built on top (where the real opportunity is) they’re focusing on owning the network or layer.

But here’s a revelation for you:

What made the internet special is that the phone companies didn’t “own” it.

The reason AOL failed was that it was the pre-meditated, managed, corporate solution, with all the bells and whistles, that assumed what people wanted in and on this new “information superhighway”.

They learnt the hard way, that no amount of market data or corporate experience and foresight can predict what a new communication modality (for the commons) would become — because just as free markets always trump centrally governed ones; open networks are a requirement for free speech and that’s exactly where all the innovation goes.

Now; AoL wasn’t the worst of them.

At least they were trying to reimagine how this new communication network might function — and the things it may enable us to do.

The phone companies — they were the funny ones.

They controlled all form of non-face to face communication at that point, and their question about the internet was:

“How many phone calls will this internet thing do?”

(Sound familiar???)

They assumed what the internet was going to be used for (i.e.; phone calls and video conferencing), based upon their current biases and problem
sets. This is low level skeuomorphic thinking and design.

The internet on the other hand assumed NOTHING, and it won because it had the basic, robust, open, building blocks upon which all the innovation actually occurred.

The same thing will happen with Bitcoin (or if I steal a term from Andreas — The Internet of Money**)

Why?

Because strong, simple stable foundations will always work best.

That’s just physics.

“FIRST THEY IGNORE YOU, THEN THEY LAUGH AT YOU, THEN THEY FIGHT YOU, THEN YOU WIN”

Ghandi

And if we look at the internet; the story is no different:

  1. The phone companies first dismissed it, because they measured it’s capability through the same lens via which they measured themselves (# of phone calls; quality of phone call).
  2. When they saw it taking off; they asked “How do we buy this internet thing”
  3. When they realized they couldn’t do that, they tried to replicate it, they built AoL
  4. And then the internet won…and here we are — those phone companies have merely become on- ramps and off-ramps for the internet — something that’s larger than all of them combined.

They wanted to own it and have it dependent on them; but they’re now dependent on it.

All of their services now run on the internet. So not only did the internet win, but an entire infrastructure inversion took place!

And if that wasn’t enough — this inversion paved the way for new innovation and new opportunities. Opportunities the phone companies could not capitalize on, and as a result; opened the door for new, global giants to emerge.

Giants, who built on the internet.

I don’t know about you, but there’s an eerie similarity to Bitcoin (as a money and monetary network) and the current financial institutions.

And whilst I know it sounds far fetched to think that today’s financial institutions will one day be on ramps for Bitcoin; remember

that 30yrs ago it was also completely insane to think that the phone companies would merely be connection points for the internet.

This is happening — right now.

Whilst the silly people are trying to reinvent the wheel, The smart people are building on Bitcoin.

The Dorsey’s, Stark’s, Lopp’s, Rochard’s of the world get it.

This is the future. Instant, unstoppable routing of value. Not just information.

Inversion & Opportunity

This kind of inversion happens once in a lifetime.

It’s like getting on the ground floor of Amazon in 1995. Bitcoin is the opportunity that everyone is looking for — and whilst it’s staring us right in the face, we’re all running around yelling “blockchain”, trying to fit circles into squares.

What you can’t replicate about Bitcoin is that it’s an uncensorable, unstoppable monetary network, whose growth compounds with every unit of value that’s stored on there.

Bitcoin’s long term future doesn’t lie in it just being a “speculative asset”, but lies in its network being used as the common fabric upon which value transfer occurs.

If you can anchor into that fabric, the same way as we do with the internet
for information packets to be routed, then you can get all the benefits of a decentralised, immutable, secure financial network, without all the downsides, e.g; slow speed (and longer term; volatility).

This will all happen in layers — and the layers are where all the commercial opportunity exists. Not in trying to build and “sell” a new version of bitcoin.

That might last for a while, and because nobody really understands anything in this space, people will let their greed get the better of them, and buy into pointless narratives to make the “next bitcoin” or the next pot of gold.

Good luck with that. Good luck with your information superhighway, that nobody is going to use, and that you’ll need to maintain.

We’re building on the living, breathing, autonomous network which started off worth nothing, and is today securely storing almost $100bn worth.

The lindy effect will only continue to compound here, and its self-reinforcing effect will only get stronger. The result is more capital held, which in turn strengthens not only the trust in the network, but the incentive for more validators to expend real world cost to maintain and verify this ledger — which in turn makes it more robust, more decentralised, more secure and more immutable — and so it continues.

I scratch my head and wonder why one would want to compete with that? These not-so-intelligent, short sighted and non-creative people are all wasting time trying to reinvent the wheel, while the smart ones are out there building the car. They’re putting the wheel to use.

It’s the story of the internet all over again.

Whilst AOL set out to rebuild the internet in their eyes, Google and Hotmail took those building blocks, recognised it was the most robust network to build
on, then created useful applications which in turn made the internet more useful — and in the process, changed the world.

You can’t beat an open foundation that everyone can build on top of.

Today, we have a monetary network that has all the ingredients upon which we can build a secure, modern, digital financial infrastructure.

The smart people, the true visionaries, know that; and are doing just that.

The deluded / greedy / and those with a veneer of an understanding, who’ve bought into an ideology
or concepts they don’t understand will run around getting money from people for a while, but it’s a game that’s losing steam.

The future is being built here, on Bitcoin, with Lightning.

Blockchains and DLTs are hub caps applied in vain by those trying to make a faster carriage. Bitcoin is the motor vehicle.

And although the motor vehicle was initially used by crooks, was slow and really hard to use on roads built for horses; it ultimately drove the transformation of society and transport was built around it.

I could pull similarities, metaphors and analogies all day — I think you get the point.

The Inversion is happening, and Bitcoin is the new paradigm.


In the next chapter we’ll review some Network fundamentals, without much math, so you can better appreciate how fast & non-intuitively a network such as Bitcoin can grow.

It will also help put into context the ferocity of Bitcoins growth since inception.



The Bitcoin Times

Facts over Fiction.

Aleksandar Svetski

Written by

CEO @ www.amber.app. Editor @ https://bitcointimes.news. Bitcoin, Money, Philosophy, Business, Startups & Entrepreneurship. https://tippin.me/@AleksSvetski

The Bitcoin Times

Facts over Fiction. Practice over Theory. Timeless, Limited edition content, news, & information on Bitcoin. https://tippin.me/@timelessbitcoin

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