As Bitcoin approaches its 10th anniversary, its community, old and new, has begun taking stock of how a decade has come to alter or define the cryptocurrency — and what Bitcoin has done to alter or define the decade.
Ten years has invited room for undeniable change. Bitcoin has seen roughly half a dozen market cycles, spawned a secondary market of more than 2,000 altcoins and laid the foundations for a surging blockchain industry. It has evolved from the obscure interest of cypherpunks and crypto anarchists to a viable, private currency that has provided a financial lifeline to underbanked, underprivileged populations in floundering economies.
There are few voices so well equipped to reflect on the changes as Andreas Antonopoulos. One of Bitcoin’s chief evangelists and arguably its most vocal educator, Antonopoulos has spent the years following his industry entrance in 2012 traveling around the world to share his knowledge on the subject. His books, which include Mastering Bitcoin, The Internet of Money, Vol. 1 and 2 and the forthcoming Mastering Ethereum, are praised as some of the space’s most thorough and informative reads.
His impact on the space is something of a widely-recognized truth, one that has made him one of the industry’s most-respected and definitive thought leaders. While others were getting rich, he was enriching the community, reminding others that bitcoin is about much more than lambos and moon memes. A testament to his influence, the community rewarded him with donations amounting to about $1.6 million during the last bull run upon learning that he held little — if any — bitcoin.
In the following interview with Bitcoin Magazine, Antonopoulos reflects on the metamorphosis the ecosystem has undergone, the lessons learned from these myriad changes and why, after 10 years of challenge, the ethos of Bitcoin itself has doggedly persisted.
This interview is part of Bitcoin Magazine’s retrospective series for Bitcoin’s 10th anniversary. Starting from the white paper’s birthday on October 31, 2018, to Bitcoin’s launch on January 3, 2019, we’ll be publishing a series of interviews, op-eds and think pieces that reflect on where we’ve come from, where we are and where we’re going.
Bitcoin Magazine: Just going straight into it, what has changed?
Antonopoulos: So many things have changed. Where do I start?
Back in the day, when I first got involved, this was a very small community, a very tight-knit community, a very focused community. There was a lot of commonality of purpose, and it felt very tight-knit. And I remember at the time, the main thing I wanted to explain and persuade people about was that this was bigger than payments. This isn’t just PayPal; this is bigger than that. It’s not just a payment network.
And so, in order to express that, I said that it’s a platform. You’ve got to think of this not just as bitcoin but broader: the blockchain. That backfired badly. I wanted to broaden it a bit to give people vision, but what happened then, over the next three years, was that people took hold of the word “blockchain,” rammed it right over, and threw everything and the kitchen sink in there — a lot of things that have nothing to do with it. So, in four years, I came full circle and released a talk called “Blockchain vs. Bullshit,” which is my number one talk.
So are you talking about the altcoin ecosystem?
And even broader than that. The distributed ledger technology, private blockchain, bank-chain, business-as-usual, slap a word on it, “pretend it’s decentralized when it’s not” type of ecosystem. Trying to embrace, extend and diverge — derail even — this industry by hijacking it. Subsuming it completely.
At the first conferences — even the first 2013 conference I went to — the suits had shown up and it was beginning to get that vibe. By the end of 2013, when the fourth or fifth bubble happened and the price hit $1,000, that’s when the suits really descended.
So it felt like a tight-knit community and then the sharks started circling around, and they were all trying to grab a bit of this grand phenomenon and monetize your influence. And there was all of this shilly, shitty, disengenuous, fake “Hey! I’ve got a project. We’re going to revolutionize real estate, we’re going to revolutionize exchanges, we’re going to revolutionize medicine.” And most of it’s bullshit. Most of it is completely naked profiteering.
So I had to turn it around and refocus it, try to figure out what is real, what is the real “killer app,” what are the real things that are happening.
And did you come to the conclusion that it’s bitcoin?
It’s not necessarily bitcoin. It’s about decentralized money and other decentralized things. But, of course, the core is decentralization. And money is a killer app in itself, if it’s decentralized.
So that changed.
The other thing that changed was that one of the things that attracts people to this space is the fact that it gives them the feeling of belonging to this kind of adventure — that goes against the grain, that is outside the mainstream, that is niche, and a bit of feeling that we’re the underdog fighting the great forces.
But as always happens in movements like that, eventually, you get divisions within, and then you have people who are fighting as the “underdogs” against “the establishment bitcoiners.” Like suddenly, Bitcoin is establishment and people will say, “Hey, this is Bitcoin 2. This is better than Bitcoin. This is an alternative chain that solves all the problems in Bitcoin.” So then you have a fragmentation, a splitting within the Bitcoin community.
So you think the space is cannibalizing itself?
Because some people feel the need to be the underdog and to always be fighting something. That drives their personalities. So it’s funny because when what you’re fighting for is suddenly getting recognition and IBM is doing it and whatever, the people who are insiders are now a part of it.
You have to find a new machine to rage against.
Exactly. And that’s what’s happened in the crypto space. So now there’s all this fragmentation, all these internal battles, both within Bitcoin but also between Bitcoin and other systems and between themselves.
No sooner had Ethereum raised its fist, like, “We will replace Bitcoin and the flippening will happen,” then, before you know it, they were looking over their shoulder because there are five wannabe-Ethereums that are like, “Ethereum’s the old guard and we want to be the solution.”
So it’s the Trotsky phenomenon. The counterrevolution starts within weeks of the revolution. Some revolutionaries can never settle down. And that’s not bad: having principles, being ideological, having political conviction. A lot of people see this as aggression, kind of disingenuous behavior. But, honestly, I see a lot of these people who I’ve known for the past four years who are raging against the new machine. I think they’re acting mostly in good faith.
To play on these dualities you’ve been talking about: It’s fighting a two-front war, in some regards. It’s fighting against a front of outsiders and it’s kind of fighting a war against itself.
Yes, which is typical; it’s human behavior. Ironically, to the outsiders, we’re all one bunch of weirdos. They don’t differentiate between the more business-friendly weirdos or the less business-friendly weirdos. We’re all weirdos. Because the system exists, it’s been running for hundreds of years and you’re not going to come and change it.
Of course, that’s what every system that got changed says. There is a simple way out of this: At some point, there is going to be a massive backlash. At some point, “the system” that we’re disrupting is going to fight back hard, but it hasn’t happened yet.
The funny thing is that, the day the system starts fighting back, those people will not differentiate between bitcoin cash and bitcoin, bitcoin and ethereum, ethereum and ripple, monero and zcash — as far as they’re concerned, we’re all a bunch of weirdo anarchists who are trying to help terrorists and drug lords defeat the financial order. They’re not going to differentiate. They’re going to backlash against all of us, and that’s going to be the great uniting moment.
As soon as we get attacked from the outside, everyone will circle the wagons and everyone will be friends again. You see this in divided countries, where all they need is an external enemy to refocus, and suddenly they’re all on the same side.
Talking about these forces from without, how have you seen governments respond to the space, especially in North America? Are we seeing any growth in the right direction or is it just pomp and pageantry?
I don’t think it matters. It’s all pomp and pageantry. They want to appear hip and relevant and “of the time” and be pro-business or pro-innovation — and it’s all bullshit. Because, first of all, these systems are not yet having an effect that’s big enough to start disrupting established industries, at which point we’re going to start seeing governments realign, knowing where their bread is buttered, knowing who is paying the bills. And we’re not the ones paying the bills, right?
At that point, we’re going to see some overt hostility and disinformation against us. For the time being, they’re just playing the part of magnanimous regulators who are sober and considerate, but not hostile to innovation because they want the jobs. It’s all pageantry. It doesn’t mean anything.
And so, in the U.S., you’ve got an incredible amount of fragmentation — because you’ve got 15 federal regulators and then 50 state regulators and half of them are screaming, “I don’t want this, you regulate it!” and the other half are screaming, “It’s our domain! Step out!” And the same thing is happening across the world.
Is there any government that you think is doing a good job?
Does it really matter in the end? This isn’t the domain of government. The fundamental invention of governance by algorithm in a decentralized system, the first thing it disrupts, is regulatory compliance.
It disrupts regulators before anyone else because it says, “We’re regulating this way, so we don’t need to be regulated by institution, by committee, by whatever.” And people think that when I say things like that I’m questioning their authority. I’m not questioning their authority; they have all the authority in the world. I’m questioning their ability to enforce their authority.
And you’re questioning whether or not there’s even a place to enforce that authority.
So, in your opinion, the space would be better off left alone to its own devices. You don’t need to try to find something to regulate with this.
Exactly. It’s already regulated; it’s regulated by math. It’s regulated in the most deterministic, predictable and highly-defined manner. This is a system in which the fact that it doesn’t have rulers doesn’t mean it doesn’t have rules. It has a lot of rules, and those rules are very specific.
What it doesn’t have is the ambiguity of human regulation. And people need to realize that the reason we don’t need to regulate cryptocurrencies is not because they don’t need regulation; it’s because they’re already regulated — regulated by algorithm.
If you want algorithmic regulation, this is the space to play. If you want human regulation, we already have that. That’s not new, and, in fact, that’s what we’re trying to fix.
I look at it in a very simple way: Most of the institutions we have for governance today are fundamentally creations of the industrialized era, the industrial revolution. That means they’re creations of the late 18th and 19th centuries. And they don’t scale anymore for a planet in which the shit that was spewing in the atmosphere in one place causes a hurricane across the ocean in another place.
We’re too interconnected to govern as little fiefdoms in separate jurisdictions with human governance and decision making. If you try to take the industrial era governance models and you try to simply scale them up and make bigger agglomerations — the European Union, the Russian Federation, the United States — very soon they become either corrupted, indifferent, incompetent or too slow to make decisions because they can’t scale to that size.
But the problems we’re facing require them not only to scale to that size but to scale to a transnational size. Which is horrifying because then it’d be one world government, and if my national government is not already working, then how bad is a transnational government going to be? We need a different model for governance. The industrial revolution will no longer fit our planet. So, that’s how I look at these systems.
Now, once governments realize that’s the game, that this is about changing the way we do governance and offering alternatives, I think we’re going to have some very different responses, some pushback, some resistance.
One more thing: I think we overestimate how much interest governments have in any of this. Their problems are so big and they’re so not related to what we’re doing. The dollar has its own problems, which are enormous.
That’s a good transition into another question. A lot of people — and they’re mainly retail investors, mind you — are looking for the next spark for the next bull run. People point to the ETF and say “Once we get that, we’ll get institutional investors and this will flood capital into the market.”
Be careful what you wish for.
This is exactly my point. You know, the majority of gold traded on the market today isn’t actual gold — it’s certificates. It’s fractional reserve lending. And with ETFs and bitcoin futures, you’re inviting the same thing.
You’re diluting the value.
Right. You’re trading contracts. So, is something like an ETF or bitcoin futures too antithetical to Bitcoin’s ethos?
It’s completely antithetical. Because what you’re talking about is centralized custodian holders who give you a fraction of the rights that having your own keys gives you. You have exposure to the monetary fluctuation. You don’t have any of the autonomy, empowerment, voting ability, participation ability, authority, and independent validation of transactions that you have as someone who holds the keys and uses bitcoin or any other cryptocurrency directly. This is a direct participation system.
When you’re investing in a secondary market like an ETF, you’re not a direct participant in this very direct participation system. You’re a second-hand citizen. You’re a second or third class citizen. You’re only getting one part of the rainbow of attributes of this system and capabilities.
And who has the rest? The custodian has the rest. The custodian now gets to decide which fork is the real fork — not you. The custodian gets to decide how to vote on the next soft fork decision — not you. The custodian gets to decide whether you want to switch to a different cryptocurrency or not or how to disperse them. All of these things dilute the value proposition.
Now, that doesn’t mean they damage cryptocurrency.
If this was about investment, then the idea of bringing in more investors would make the thing better. But this isn’t about investment. This isn’t an investment; it’s a technology. And bringing more people into a technology, especially when that technology isn’t ready for another influx of people, it doesn’t make it better; it makes it worse (temporarily). Because all of the problems are magnified by a whole influx of newbies.
When AOL joined the internet, AOL called it a “golden moment.” The internet called it “Black Monday,” because they dumped 3 million noobs right into the middle of our nicely defined internet, which had “netiquette” and common standards of behavior and useful applications — all of which broke because it wasn’t ready for the scale of people or for the new culture of people who are not trained in the culture.
In a recent talk, you say the idea of a “personal bank” looks ridiculous right now (in hindsight) because of gaps in user experience, usability and technical gaps. And you said complexity is the greatest user vulnerability. But once we have more intuitive designs and secure applications, then we will see the adoption we’ve been asking for.
It’s not so much that we’ll see adoption. At that point, it’ll be possible to help the people who actually need this technology. We have to remember: Not everyone needs this. There is 5-10 percent of the human population that already has representative democracy, working institutions and working banks. We’re the privileged ones — we’re not the primary focus. We need it long term because our democracy is eroding faster than we can save it, but we don’t need it in the short term to buy coffee.
So, in the long term, what do developers and educators need to do? What does the community need to do to guide cryptocurrency through this growth spurt?
First, recognize that not everybody needs it and don’t try to sell to people who don’t need it. Not everybody is ready or should be part of this, right? I mean, I know I’ve evangelized a whole bunch of people. My friends got involved. And maybe they made some investments. Maybe they’re happy today, maybe they’re not happy today with me. That’s a double-edged sword.
But the real impact of this technology is on the other 6 billion: the unbanked, the underbanked, the politically oppressed. And it’s using this as a tool that magnifies personal power, especially defensive power, to help people defend themselves against large, corrupt institutions, whether state institutions or private institutions. That’s the power: It’s giving people freedom.
Now, not everybody needs that right now, and we’re not ready to just bring a billion people on board a system that isn’t ready to scale.
You said that not everyone needs it. Do you think that there will be a time when everyone is using cryptocurrency?
Do you think that will come in the form of private currencies or nationally backed currencies?
All of the above. Every form you can imagine: nationally backed, private-backed, government-issued, privately issued. I think that, fundamentally, nationally issued cryptocurrencies are business-as-usual. They don’t change the fundamental problem. The fundamental problem is centralized control and no government is going to issue a cryptocurrency that is not centralized. So they are just moving around the deck chairs.
And they’re certainly not going to release one that has a cap on supply.
Right. Exactly. Or one where they can’t censor or control borders and do verification of identity. Because surveillance is more important.
So those things will happen. They’re just not particularly interesting. The thing that is interesting is the open, borderless, neutral, censorship-resistant, global system or systems that give people choices even if their own government doesn’t want them to happen.
The whole borderless thing always takes me back to Marxism, this idea that Bitcoin is borderless, it denies centralized control, and it gives purchasing power and voting power back to the people.
I think people tend to reflect onto Bitcoin their preconceived politics. And that’s because it has this mirror-like capability to be what you want it to be or look like what you want it to be. In the end, it’s not Marxist or capitalist. It’s crypto. And that’s interesting because both Marxism and capitalism and all of the systems we have today were invented in the late 19th century. They are systems that are fundamentally born of the industrial revolution.
Bitcoin is post-modern. This is something that doesn’t fit into any of the existing buckets because we’re making new buckets. Because this is redefining governance and political systems. So the fact that to some people it looks Marxist, to some people it looks capitalist, to some people it looks Libertarian, to some people it looks anarchist is because they are trying to slap one of their traditional labels on it.
Your frame of reference has to be reinvented in order to label this thing. Is it an asset, is it a bond, is it a currency, is it stock? It’s a cryptocurrency. And what is that? It’s the new thing that isn’t any of those but all of those simultaneously. It has characteristics of precious metals, bonds, stocks, currencies, contracts — it has all of those characteristics. But it’s not any one of those things.