Bitcoin Adoption Has Taken Some Unexpected Twists
By Hodl Hard on The Capital
There is little doubt that Bitcoin’s rise from a quirky experiment in decentralized digital cash to what it is now, was surprising. The way Bitcoin was adopted throughout this journey had some unexpected twists.
From illegal activity — that is still easier to carry out using cash — to mainstream media reports, passing through the development of economic activity, Bitcoin’s history is full of interesting events. Here are three that stand out in particular for how they affected adoption.
Infamous Silk Road Drug Sales Taint Bitcoin
One of the most infamous instances in which Bitcoin adoption became contentious, was the Silk Road saga. Simplistic viewers, especially those who did not understand Bitcoin, blamed the new currency for fueling a large-scale market for drugs, weapons, and other illegal services. From the way US authorities dismantled Silk Road and the kind of sentence that its creator — Ross Ulbricht — got, it is clear that there was a disconnect between mainstream opinion, media reports, and the facts on the ground.
After the arrest, Bitcoin’s reputation was tainted. Somehow it became the currency of choice for illegal activity online. This myth was debunked several times, including through reports on mainstream media. CNN even ran a piece describing what Bitcoin adoption and usage entails:
· Bitcoin is not anonymous
· Unlike traditional money, blockchain records present a detailed money trail of all the money in the system
· For criminals, there is an advantage in using cash over Bitcoin
· To increase anonymity, users must recur to more sophisticated measures that Bitcoin in itself doesn’t necessarily offer
Investors Brought the Asset Class Concept with their Brand of Bitcoin Adoption
Bitcoin’s transparency and the ease with which people can follow the money on the blockchain, doesn’t only serve as a deterrent for criminals. It also fueled the interest of investors in part because they can see others moving their money around the system. This allows people to see when and which kinds of coins are moving where.
That means price discovery is easier to understand than with a stock or with other commodities for which asymmetry of information is greater. In fact, investor-driven Bitcoin adoption is probably responsible for more recent price increases. Nevertheless, Bitcoin was never designed to become an investment asset.
Satoshi called it “a peer to peer electronic cash system,” not the first digital asset in its class that thanks to blockchain, reduces information asymmetry. This was a completely unexpected twist in Bitcoin adoption, that permeated mainstream economic and business indicators. For instance, CNBC now tracks Bitcoin prices on several exchanges, feeding that information to mainstream investors, which shows the magnitude of the impact of investor adoption.
If Usage is a Key Component of Bitcoin Adoption, Gambling is the Pillar it Rests On!
Going back to Bitcoin’s virtues as a peer to peer electronic cash is critical to ensure adoption is sustainable. After all, investors will not hesitate to dump BTC as soon as they think it is appropriate. Without a real source of economic activity behind it, Bitcoin risks becoming the most glamourous pump and dump scheme in human history.
That is why Bitcoin gambling is so important. Maybe Satoshi had international commerce in mind when he created Bitcoin. It makes sense to have P2P electronic cash especially as e-commerce becomes an ever more dominant force. Nonetheless, gambling — largely thanks to SoftSwiss casino growth — became one of the most important pillars of economic activity fueling Bitcoin adoption.
What will be the Next Twist in Bitcoin Adoption?
This unexpected twist in Bitcoin adoption sparked a whole host of BTC denominated services that are now thriving. As unexpected as Bitcoin adoption through gambling has been, it is already part of the DNA of the space. What is the next unexpected twist in this 11-year old story?
Many would say that adoption will continue to go the investor’s way. There are also some hopeful hodlers that see BTC becoming the world’s reserve currency, especially now after the response to the COVID-19 pandemic has pumped so much money into the market out of thin air. The truth is no one knows where the next big Bitcoin adoption twist will come from, but judging by its history, there is no doubt that it is bound to surprise us all!
