I have had a long arc view of crypto that I have kept mostly to myself.
With the froth of the past two years, precipitating the slump and gloom of today, I feel I should share what I think:
The blockchain and bitcoin models are vastly more disruptive than even the most ardent HODLer thinks. It is truly a genie that is out of the lamp.
It breaks down national, regional, legal, institutional barriers. No permission, no mediation.
All it requires is that people keep their computers on and run a piece of software.
Unbelievable.
That is why it will do for value what the Internet did to information – make it vanish into the ether. Everywhere and nowhere.
But that means it is going to take a lot longer for this to percolate through the world. The tsunami is much, much more massive than people think it is, but it is also farther away from the coast. It is the sun, not the moon. They may look the same size, but one is unimaginably larger and farther away from the other.
When we draw parallels of the blockchain with the Internet we start the clock in the late 80s, early 90s. And debate whether we are in 1995 or 1998.
But the Internet began as ARPAnet in the late 60s. We are still in the late 60s, maybe. And although the blockchain may not take another fifty years to ubiquity, it is certainly a much longer way than we think from its most powerful form.
The problem is money.
Not only is the blockchain about the dematerialisation of value, it has also been born into an era when value – in the form of fiat money – was created in unlimited amounts for a decade plus.
There is too much money chasing too little innovation. The money needs to be made back too quickly, unlike the military and academic funding for ARPAnet. The innovation is taking place in too constrained an environment, regulatorily, socially, technologically, environmentally.
Now, like with renewable energy, we can recognise and incentivise what the blockchain makes inevitable. But we also must recognise and acknowledge the tradeoffs – free, fair, limitless, unfettered exchange of value will only take place in a world free of the constraints of geography, identity, energy.
We are far, far from there.