Getting Bitcoin wrong (a lot) is part of finally understanding it
Getting Bitcoin wrong (a lot) is part of finally understanding it
Bitcoin deceives you, humbles you, but offers a true alternative once you get it.
This is a guest post.
Yaël Ossowski is a Canadian-American writer, journalist, and consumer advocate living in Vienna, Austria. You can follow him @YaelOss.
I’ll admit that I was wrong about Bitcoin. Perhaps in 2013. Definitely 2017. Probably in 2018-2019. And maybe even today.
Being wrong about Bitcoin is part of finally understanding it. It will test you, make you question everything, and in the words of BTC educator and privacy advocate Matt Odell, “Bitcoin will humble you”.
I’ve had my own stumbles on the way.
In a very public fashion in 2017, after years of using Bitcoin, trying to start a company with it, using it as my primary exchange vehicle between currencies, and generally being annoying about it at parties, I let out the bear.
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In an article published in my own literary magazine Devolution Review in September 2017, I had a breaking point. The article was titled “Going Bearish on Bitcoin: Cryptocurrencies are the tulip mania of the 21st century”. It was later republished in Huffington Post and across dozens of financial and crypto blogs at the time with another, more appropriate title: “Bitcoin Has Become About The Payday, Not Its Potential”.
As I laid out, my newfound bearishness had little to do with the technology itself or the promise of Bitcoin, and more to do with the cynical industry forming around it:
In the beginning, Bitcoin was something of a revolution to me. The digital currency represented everything from my rebellious youth.
It was a decentralized, denationalized, and digital currency operating outside the traditional banking and governmental system. It used tools of cryptography and connected buyers and sellers across national borders at minimal transaction costs.
…
The 21st-century version (of Tulip mania) has welcomed a plethora of slick consultants, hazy schemes dressed up as investor possibilities, and too much wishy-washy language for anything to really make sense to anyone who wants to use a digital currency to make purchases.
While I called out Bitcoin by name at the time, on reflection, I was really talking about the ICO craze, the wishy-washy consultants, and the altcoin ponzis.
What I was articulating — without knowing it — was the frame of NgU, or “numbers go up”. Rather than advocating for Bitcoin because of its uncensorability, proof-of-work, or immutability, the common mentality among newbies and the dollar-obsessed was that Bitcoin mattered because its price was a rocket ship.
And because Bitcoin was gaining in price, affinity tokens and projects that were imperfect forks of Bitcoin took off as well.
The price alone — rather than its qualities — were the reasons why you’d hear Uber drivers, finance bros, or your gym buddy mention Bitcoin. As someone who came to Bitcoin for philosophical reasons, that just sat wrong with me.
Maybe I had too many projects thrown in my face, or maybe I was too frustrated with the UX of Bitcoin apps and sites at the time. No matter what, I’ve since learned something.
I was at least somewhat wrong.
My own journey began in early 2011. One of my favorite radio programs, Free Talk Live, began interviewing guests and having discussions on the potential of Bitcoin. They tied it directly to a libertarian vision of the world: free markets, free people, and free banking. That was me, and I was in. Bitcoin was at about $5 back then (NgU).
I followed every article I could, talked about it with guests on my college radio show, and became a devoted redditor on r/Bitcoin. At that time, at least to my knowledge, there was no possible way to buy Bitcoin where I was living. Very weak.
I was probably wrong. And very wrong for not trying to acquire by mining or otherwise.
The next year, after moving to Florida, Bitcoin was a heavy topic with a friend of mine who shared the same vision (and still does, according to the Celsius bankruptcy documents). We talked about it with passionate leftists at Occupy Tampa in 2012, all the while trying to explain the ills of Keynesian central banking, and figuring out how to use Coinbase.
I began writing more about Bitcoin in 2013, writing a guide on “How to Avoid Bank Fees Using Bitcoin,” discussing its potential legalization in Germany, and interviewing Jeremy Hansen, one of the first political candidates in the U.S. to accept Bitcoin donations.
Even up until that point, I thought Bitcoin was an interesting protocol for sending and receiving money quickly, and converting it into fiat. The global connectedness of it, plus this cypherpunk mentality divorced from government control was both useful and attractive. I thought it was the perfect go-between.
But I was wrong.
When I gave my first public speech on Bitcoin in Vienna, Austria in December 2013, I had grown obsessed with Bitcoin’s adoption on dark net markets like Silk Road.
My theory, at the time, was the number and price were irrelevant. The tech was interesting, and a novel attempt. It was unlike anything before. But what was happening on the dark net markets, which I viewed as the true free market powered by Bitcoin, was even more interesting. I thought these markets would grow exponentially and anonymous commerce via BTC would become the norm.
While the price was irrelevant, it was all about buying and selling goods without permission or license.
But now I understand I was wrong.
Just because Bitcoin was this revolutionary technology that embraced pseudonymity did not mean that all commerce would decentralize as well. It did not mean that anonymous markets were intended to be the most powerful layer in the Bitcoin stack.
What I did not even anticipate is something articulated very well by noted Bitcoin OG Pierre Rochard: Bitcoin as a savings technology.
The ability to maintain long-term savings, practice self-discipline while stacking stats, and embrace a low-time preference was just not something on the mind of the Bitcoiners I knew at the time.
Perhaps I was reading into the hype while outwardly opposing it. Or perhaps I wasn’t humble enough to understand the true value proposition that many of us have learned years later.
In the years that followed, I bought and sold more times than I can count, and I did everything to integrate it into passion projects. I tried to set up a company using Bitcoin while at my university in Prague.
My business model depended on university students being technologically advanced enough to have a mobile wallet, own their keys, and be able to make transactions on a consistent basis. Even though I was surrounded by philosophically aligned people, those who would advance that to actually put Bitcoin into practice were sparse.
This is what led me to proclaim that “Technological Literacy is Doomed” in 2016.
And I was wrong again.
Indeed, since that time, the UX of Bitcoin-only applications, wallets, and supporting tech has vastly improved and onboarded millions more people than anyone thought possible. The entrepreneurship, coding excellence, and vision offered by Bitcoiners of all stripes have renewed a sense in me that this project is something built for us all — friends and enemies alike.
While many of us were likely distracted by flashy and pumpy altcoins over the years (me too, champs), most of us have returned to the Bitcoin stable.
Fast forward to today, there are entire ecosystems of creators, activists, and developers who are wholly reliant on the magic of Bitcoin’s protocol for their life and livelihood. The options are endless. The FUD is still present, but real proof of work stands powerfully against those forces.
In addition, there are now dozens of ways to use Bitcoin privately — still without custodians or intermediaries — that make it one of the most important assets for global humanity, especially in dictatorships.
This is all toward a positive arc of innovation, freedom, and pure independence. Did I see that coming? Absolutely not.
Of course, there are probably other shots you’ve missed on Bitcoin. Price predictions (ouch), the short-term inflation hedge, or the amount of institutional investment. While all of these may be erroneous predictions in the short term, we have to realize that Bitcoin is a long arc. It will outlive all of us on the planet, and it will continue in its present form for the next generation.
Being wrong about the evolution of Bitcoin is no fault, and is indeed part of the learning curve to finally understanding it all.
When your family or friends ask you about Bitcoin after your endless sessions explaining market dynamics, nodes, how mining works, and the genius of cryptographic signatures, try to accept that there is still so much we have to learn about this decentralized digital cash.
There are still some things you’ve gotten wrong about Bitcoin, and plenty more you’ll underestimate or get wrong in the future. That’s what makes it a beautiful journey. It’s a long road, but one that remains worth it.
Yaël Ossowski is a Canadian-American writer, journalist, and consumer advocate living in Vienna. You can follow him @YaelOss.
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Appreciate the honesty & introspection, Yaël!