Globally, people are losing faith in our institutions. Our financial institutions, our governments, our media, our medical systems, even democracy as a concept in many cases. And for sound reasons. Proposed upgrades to Bitcoin's protocol would enable use of the chain (and L2s) for things aside from just money. On the world's most secure document: the bitcoin ledger. It will change everything and here's why.
The root problem is that we are building systems which rely on trust and time and time again, that trust has been broken. We have to trust that the people elected or appointed to those positions will do their jobs faithfully. But, of course, like us, they are humans and fallible. Subject to stupidity, greed, misdirection, and error whether through malice or accident. Take money, for example. Money has to be trust-able, so it is entrusted, for all its faults, to the most stable and neutral institutions humanity has ever created: the state. And yet, the state often abuses that authority to print money they shouldn't leading to inflation and hyperinflation, particularly for unpopular wars of conquest. Every failed state ends in hyperinflation, because it's a tool in the state's toolbox and they will use it when they have no other options. They'll turn on that money printer if they need to. And time after time, they have. There are ways to create trustless systems, where we do not have to trust individual actors to administer them faithfully, only for them to be mostly rational actors subject to the same laws of math and physics as the rest of us. Instead, the system administers itself according to some form of protocol. Bitcoin did this for money 15 years ago, it was created by Satoshi in the wake of the nearly total collapse of the global financial system (2008 financial crisis) to create a system which could not suffer the same fate. We all had to bail the banks out because they were "too big to fail", which was true, Bernanke won a nobel prize in economics for his analysis of this and the bailouts likely prevented the worst economic period since the great depression had the entire banking system be allowed to fail. You may not know who Bernenke is, but if you were alive during this time period, you know his face, he was the guy who had to sell the bailouts to the world as an idea. The reality is, fractional reserve banking is a ponzi scheme, and had the banks failed and people realized it, it would have stopped functioning. Our debt-based world order would have collapsed. No credit could be issued to build roads or fund schools or do anything because there would be no money in the banks to use as collateral and nobody would trust it. Just like in the US great depression. You can argue it's a sneakily beautiful ponzi scheme which drives the engine of human progress if you are a die-hard capitalist, but you can't argue it's not a ponzi scheme.
The crazy thing is, Bitcoin worked. It has kept every promise it made. For 15 years, it has faithfully administered a financial system with a known, transparent, limited supply of 21 million coins which can be transferred across the globe in seconds for pennies in fees. And it has continued to grow no matter which metric you measure it by. Through pandemics, wars, international conflict, attempted bans by major world powers, tick tock, next block, the blockchain continued to function. Not a single hour of downtime, not a single bank holiday, not a single hack or breach of security or protocol. Now, it has a market cap of over 1 trillion USD, which is bigger than the GDP of Israel, the Netherlands, Turkey, or Switzerland, countries with tens of millions of people. It's been consistently over 800 billion for a while now. It moves hundreds of millions of dollars of value on the regular. I can send a transaction to anybody on the planet with a cell phone and halfway reliable internet for under a cent in under a second.
Nobody can make Bitcoin print money it's not supposed to print. Nobody can transfer money without the private key of that coin. Nobody can force the network to do anything outside of its protocol, even if they bought every Bitcoin in existence. Even if they had a trillion dollars and 1,000 people with AKs ready to die for it. It's mathematically, computationally, financially, and logistically infeasible. I think the question is, long-term, how can be we build political and social systems which are equally trustless where we don't have to put people in positions of power. Just like democracy did to monarchy in spreading power around and reducing the damage one corrupted individual could do, we can now do that again in an order of magnitude greater in the same direction towards greater democratization. Whether you're a capitalist, a communist, or a member of the federation of planets, this tech has serious promise for making your ideal global vision come true. It's a matter of setting up the system correctly and getting adoption of it. It can be used for voting systems, for the collection of taxes, for the administration of public funds, goods, and markets. It can be used for a lot more than just money. With smart contract functionality, Bitcoin will be the ledger upon which all this is built.
I'm excited to be here with all of you. We are early. Most people I know don't own any crypto. The future is coming. Thank you Satoshi for your gift to the world.
