My Dinner with Adam Back
I’ll do my best to summarize the topics of conversation over those four hours, although I’m sure I will miss some important points.
Firstly, Adam Back, Kristov, and myself share very similar end goals. We each want to see a world in which Bitcoin rivals, and then supplants the Dollar, the Euro, and the Yen. None of us signed up to create Paypal 2.0. We all want to see a world in which individuals have complete control over their own money, and there is nothing anyone can do to stop them. The conflict arises because we have very different strategies on how to best achieve that goal.
Strategy #1
This strategy is supported by myself, and I think many of the other big block supporters.
If I’m to be very generous with the numbers, I think we can say that Bitcoin currently has about 10M users.
This trivially small compared to existing organizations like Bank of America, Wells Fargo, What’s App, SnapChat, FaceBook, etc.
Because Bitcoin is currently the largest cryptocurrency, we have the strongest network effect, the most attention, the most developers, and the best chance of growing to become a currency used all over the world. Bitcoin also currently has most of the properties that make its use attractive to me, and make it far superior to the traditional financial system that people are using now.
Bitcoin’s supply is limited, it can’t be controlled, it can be decently private, and is accepted at a some number of companies around the world, etc. But we can’t rest on our laurels, the world is looking closely at Bitcoin and block chain technology, and it is just a matter of time until someone else decides to enter the space in a big way.
For all we know, the Federal Reserve is already planning how to make sure they don’t lose control of the money supply, and I think the best way for them to do it would be to partner with someone like any of the companies I mentioned above. They would create their own crypto-coin with properties individualists like myself won’t be a fan of. They will have the ability to monitor people’s transactions, perhaps blacklist certain coins, or prevent certain transactions, or do who knows what.
They would then launch this service as an integrated wallet with Snapchat, Twitter, Facebook, a bank, or just about any major company, and then instantly have ten times the network effect that Bitcoin has. Bitcoin would lose all of its momentum, it would lose its first mover advantage, it would become relegated on the sidelines due to the new cryptocurrency that has more than ten times as many users, and a much more powerful network effect because of it.
The crypto anarchists among us would still be able to use Bitcoin, or crypto-anarchy-coin, but the rest of the world will have moved on to government-controlled-spy-coin. This is a nightmare scenario for me in which we have squandered our opportunity to move the entire world in a positive direction by supplanting government money with Bitcoin. Today, Bitcoin is so much better than the traditional financial system that we have a very good chance of drawing the rest of the world into using it, but if another government approved coin comes along and manages to get the world using it, Bitcoin will only have some modest advantages, and likely not nearly enough to get the world to switch.
To avoid this scenario in which some government approved coin supplants Bitcoin, we must grow Bitcoin as quickly as possible, until it will be impossible for anyone else to supplant our network effect.
I understand that there are some risks to growing so quickly via on-chain scaling. The blockchain will take up more space, and the hardware to run a full node will be more substantial. As I’ve mentioned previously, I think there are lots of reasons to think that the number of full nodes around the world will increase even if the blockchain is much larger due to on-chain scaling. The short version is that if more people are using Bitcoin, there will be more companies involved, and if there are more people and more companies to draw from, a larger absolute number of full nodes will be running on the network. Even today, for less than $100 USD, anyone can easily run a full node.
A few months ago I also said that the absolute number of full nodes is more important than the percentage of people running a full node.
More:
https://news.bitcoin.com/dinner-adam-back-roger-ver/
