Don’t Put Bitcoin in a Box

In 2017, the question everyone asked was “Can I buy a cup of coffee with bitcoin?” suggesting it was useless if you could not.

Nowadays, in early 2021, everyone wants to say Bitcoin is just a store of value, an inflation hedge like Gold. 

It is as if Bitcoin has to be only that one thing at that specific time and that’s it.

But Bitcoin is far more dynamic than just any one thing. Much like paved roads spread across the globe after the automobile was invented and fiber optic high speed internet cable was laid and wifi routers were installed in every household decades after the internet was invented, there’s no telling how much of our lives Bitcoin and blockchains will permeate, but you can be assured it won’t only just be what we think it is today.

The key term to understand here is Reflexivity, which happens with all paradigm shifting technologies. Meaning, as Bitcoin gains in value for one reason, say as a store of value due to its finite supply relative to infinitely-printable government currencies, it will inevitably attract more attention. This attention then translates to more capital allocation to the network, both financially and intellectually, which grows the value and progresses the technology even further. And so on, attracting more human capital as it continues in this self-fulfilling virtuous cycle of evolving itself as more and more people follow where the money flows and the technology grows.

What we see now is only the tip of the iceberg relative to what’s to come in the wake of this new digital money technology. One can imagine a world where self-driving cars can negotiate premiums to get the right of way, micropayments are sent instantaneously to your favorite artist when you play their music, and professional sports players get paid their contractual rate in real time per second of playing time. The point is, the whole world is getting a monetary policy, payment, and settlement system upgrade. We do not yet know what the total effects of streaming internet money can do, but the world will continue to get more efficient, expressive, and economically inclusive as a result of such free flowing capital to all parts of the world. 

In other words, don’t put Bitcoin in a box because it may very well be the box that everything else gets put into.