Why Utility Wins: Bitcoin as An Infrastructure Layer?
Even after 13 years of network growth and research there is still so much to learn about the capabilities of Blockchain Technology. Over the course of the last 3 years, the world has seen new innovative ideas and use-cases for Bitcoin and blockchain technology that hardly anyone even realized was possible. For this reason, I do not like to classify Bitcoin in the traditional technology category. Many people attempt to compare Bitcoin and Blockchain to traditional market spaces, monetary systems, and networks. I believe this to be a fatal mistake in understanding the future of Bitcoin.
It may be true that under current market conditions, the average business model does not necessarily require utility in its field to succeed. Obviously utility is always an advantage for ushering in any new concept or technology. However, I believe Bitcoin will be a far larger part of life than most understand. You cannot compare something like Bitcoin to something like an iPhone. It is more synonymous to nuclear energy or modern database infrastructure. Coincidentally, Bitcoin shares characteristics with both of those markets which are also both categorized as “utilities.”
I believe the reason why so many people fail to understand the scope and scale of the future of Bitcoin is because most are driven by this idea that they are supposed to actively participate in Bitcoin more so than let’s say the power grid or DNS servers. I argue that this idea is not only wrong but it is actually holding Bitcoin and blockchain technology back from its true potential. Bitcoin should be treated as an infrastructure layer. Infrastructure is not controlled by a society’s population, it is controlled and regulated by governments. We do this in every major country for a very good reason. Organized government has proven to be the best way(pretty obvious) to manage large-scale infrastructure in every developed nation on Earth.
If we think about Bitcoin in terms of infrastructure, it begins to make sense that the logical outcome based on history will be that governments and corporations begin to facilitate the network using or even extending our current frameworks for regulation and moderation. I find it plausible that future generations of tax payers will be paying into the network just as they do for nearly every other layer of modern infrastructure today. Craig Wright has recently spent a noticeable amount of time emphasizing the fact that a IPv6 Bitcoin implementation will create a new level of network security that has never been achieved before. This adds even more promise to the idea of Bitcoin as a global infrastructure layer rather than just an asset, commodity, store of value, and even a currency.
“Cash” Vs “Cash System”
Despite the sparse amount of information left behind by Satoshi involving the intended configuration and usage of Bitcoin at scale, much can be inferred from literal interpretations of his writings. One bit in particular that can change one’s perspective is sitting right there in the Title. “Bitcoin: A Peer-to-Peer Electronic Cash System.” It’s quite amusing to see how the words “Electronic Cash System” turned into “Digital Currency” over the course of 13 years and Trillions in market value. The two are very similar but they are not the same thing. Cash as we know it today, exists in the form of notes and coins. This is the reason the real concept of Bitcoin is so misunderstood. It is more than just a token, it is more than just a ledger, and it is more than just a distributed network, it’s more than just cash. Bitcoin is not digital gold either, it’s not even a “Cryptocurrency.” There aren’t actually any cryptographic functions in Bitcoin as it is an unencrypted, publicly distributed ledger. Cryptographic algorithms such as the Signature generation algorithm are merely borrowed from the cryptographic algorithm AURORA, a cryptographic hashing family developed in Japan by SONY in 2009, the same year Bitcoin was released.
The dictionary definition of CASH is “money or its equivalent (such as a check) paid for goods or services at the time of purchase or delivery.” The issue with applying this definition to a concept like Bitcoin is that it encompasses more than just cash. Bitcoin itself is an entirely self-sustainable, economically incentivized, CASH SYSTEM. The accounting, remittance, regulation, tokenization, and throughput functionalities in Bitcoin are entirely automated in stark contrast to our current financial system which require millions of human hours and trillions in resources(mostly tax payer money) to manage annually around the globe. This is the very reason that the BTC anarchists hijacked Bitcoin and turned it into a cash system that operates outside of government control; because it doesn’t rely on third parties or central entities like large corporations to operate. To make Bitcoin work, obviously you don’t need banks but that doesn’t mean creating a lawless cash system is a good thing. In my opinion it is quite the contrary, but that is beside the point of this article. The bottom line is that if the world is ever goin to adopt Bitcoin, the industry must become complicit with stringent regulations just like our current financial system. The idea that Bitcoin can succeed as a lawless dark-web tech is a childish fallacy rooted in a deep misunderstanding of human nature and economics.
Will Bitcoin Destroy Jobs?
The entire basis of the Bitcoin economic theory relies on automation and efficiency that can only be realized through large scale layoffs and job re-appropriation. This will carve a new path for culture and economics as the average leisure time increases exponentially. The reason for this is that careers in fields such as accounting, banking, cloud storage, DNS, payment processing, and so much more, simply cannot compete with the efficiency of Bitcoin. Bitcoin at scale can out-compete every one of those industries by at least 1000:1 because of the massively reduced overhead due to automation. This is the unfortunate truth of realizing a true Bitcoin economy; Business that can be disrupted by Bitcoin must adopt the technology to succeed. Otherwise, Bitcoin will eventually outcompete and bankrupt every one of those companies. This tends to be the case with disruptive tech and thus, large scale propaganda campaigns tend to precede major advancements in technology.
Will Bitcoin Create Jobs?
Bitcoin at scale will certainly displace a large portion of the active workforce and drive companies out of business but most of those jobs can appropriate their knowledge to migrate into the exponentially growing industry. The economic model of Bitcoin allows for maximum efficiency of any informational business model that needs large volume or throughput. This will allow businesses to focus on reallocating human resources to more human needs such as customer service and public relations as they scale. A Bitcoin economy would certainly usher in a complete re-definition of the customer service industry. The demand for server/network administrators and managers will increase exponentially as miners scale their businesses to accommodate a new influx of demand. The architecture of Bitcoin is designed in a way that naturally embraces competition and free-market capitalism. This will be the driving force behind reaching maximum efficiency. If miners want to scale so they can continue to compete, they will certainly hire more people.
Okay Ser, But Wen?
Let’s quickly take a look at the History of The Power Grid. The first alternating current line was built to connect Niagara Falls to Buffalo, NY in 1896. It wasn’t until 1935 (39 years later) that the first federal regulation of the electric power industry — the Public Utility Holding Company Act (PUHCA) — was signed by President Roosevelt. Every major disruptive technology in history has been met with an unproportionate amount criticism before reaching mass capitulation and eventually global adoption. These things take time and they take dedication from architects and pioneers in the industry to keep going in spite of all the criticism and sometimes out-right attacks. I think the fact that the Biden administration is already working on Legislation regarding Bitcoin just 13 years after its release is a good sign that adoption is moving faster than nuclear energy. A lot of people expect Bitcoin adoption to happen fast, that assumption is pure speculation and has zero academic substance to it. There is absolutely nothing in history that indicates this will be the case. Trying to time or guess how long adoption will take is a fool’s game. The only thing I can be truly certain about is that Bitcoin has the capability to completely change life as we know it. Most people on Earth find extreme value in that and I can only hope that you do too.
