Bitcoin Is Far More Than An Investment

Over the past few years, huge numbers of people have come to see Bitcoin as an investment… as a stock. That’s because a significant percentage of the populace – certainly a good percentage of the investing class – knows someone, at least a friend of a friend, who has done very well with Bitcoin. That’s the kind of thing that people notice, and not unreasonably so.

The truth, however, is that Bitcoin is more and better than an investment… much more and much better.

We’ll get to some detail on this later, but before I start on the story of Bitcoin, I should at least say that rather than being an investment (even though its exchange price does rise dramatically), Bitcoin is actually a new societal model. It is fundamentally different from the old model, being both more efficient and morally superior.

It Came From Outside

Now, let’s spend a few minutes on where this thing came from. And the short version is that it came from outside.

Bitcoin, you see, is not an adaptation based on existing currencies, nor can it be understood that way. Bitcoin is from the realm of radicals.

In particular, Bitcoin came to us from the cypherpunks, a group of cryptography advocates. They began to flourish in the early 1990s, as they realized they could “wall-off” areas of cyberspace from the intrusions of governments. Here, to give you some flavor, are a few quotes from these people:

Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us.

We don’t much care if you don’t approve of the software we write. We know that software can’t be destroyed and that a widely dispersed system can’t be shut down.

A specter is haunting the modern world, the specter of crypto anarchy.

Arise, you have nothing to lose but your barbed wire fences!

These were not financial people, cobbling together a new investment that would make them rich: These were people intent on building a better world.

Impeccable Foundations

Perhaps more important is that Bitcoin’s foundations are just about the firmest imaginable; immeasurably firmer than government money, and even firmer than gold.

The foundation of Bitcoin, that is to say, is mathematics, which is built into the very structure of our universe.

Cryptography is math, involving the multiplication of large prime numbers. It gets more complex from there, but that’s the core of it. And Bitcoin is built with cryptography; it uses cryptographic keys and hashes (you can think of a hash as a signature) to secure the transactions. And to grasp the power of this, consider that Bitcoin hashes are 16 to the 40th power (1640). That’s a completely astronomical number; it’s not going to be guessed.

Cypherpunks used to say that “You can’t put a bullet through a math problem,” and they were quite right to do so. Fundamentally, Bitcoin’s foundation is as strong as the proposition that two plus two equals four.

More concretely, Bitcoin it is a computer program that operates on tens of thousands of computers simultaneously, running math problems: All the “blocks” of Bitcoin transactions, chaining one-to-another, are simply math problems that have been solved. The first computer to solve the current problem – a Bitcoin mining computer – is allocated a reward for doing so.

And here’s the crucial thing about Bitcoin – the stroke of genius that makes is so terribly important:

There’s no way to determine which of the thousands of Bitcoin miners will get to the answer first. That gives us trustworthy transactions, without a trusted party.

So, what we’re seeing with Bitcoin is trust (16 to the 40th power trust) with no center and no boss. That is revolutionary; it negates centralization, the great god of the political ages.

People who come to understand Bitcoin also come to understand this.

The Genie Is Out of The Bottle

Given that Bitcoin is being talked about world-wide and is held by millions of individuals (I’m told that 46 million Americans own at least a little), this genie is pretty well out of its bottle. It has existed, under hostile conditions, for almost 14 years; everyone knows that it works, and works well. If by some dark miracle it was completely destroyed tomorrow, thousands of very smart and very motivated people would immediately begin rebuilding it. And by “immediately,” I mean, “after a few minutes.”

Bitcoiners, and crypto advocates in general, are intelligent, hard-working and self-directed. They are producing improvements and adaptations in a steady stream. This will not be stopped.

And so, “the revolution” is not someday; it is right here, right now. (A far more challenging thought!)

You can join it or you can fight it; you can dance or you can mourn. Or, I suppose, you could ignore it.

The choice is yours.


Paul Rosenberg