With BTC having failed to deliver the promise of a Bitcoin economy, it’s up to Bitcoin SV (BSV) to carry the torch. And with Satoshi Nakamoto’s original vision restored to the protocol as of February 2020, it’s time for some of Bitcoin’s past critics to take another look. One of those is billionaire entrepreneur and investor Mark Cuban, who was recently asked by Anthony Pompliano what it would take for him to him to reconsider his past Bitcoin skepticism. Cuban’s reasons probably sound familiar, but it’s useful to look at them through the BSV lens to see what’s still valid… and what isn’t.
Cuban’s critique of Bitcoin, on the surface, is very money-centric. He’d like it to be easier for people to use in daily spending, and wants to see more places where you can actually use it. He considers owning Bitcoin to still be a gamble—because unlike gold, it has no “intrinsic value” or physical presence, and its fluctuating value makes it risky. To the average person it offers few advantages over digital fiat currencies, so barring a collapse in those currencies there’s no real need for people to have Bitcoin. And while he believes blockchain is a promising technology, there needs to be more applications built on it to show benefit.
It’s difficult to refute any of Cuban’s points here because… he’s right. But we do need to clarify a number of things. Bitcoin could definitely use supporters like Cuban if he changes his mind—not as a holder, but as someone whose business interests rely on massive data throughput.
Money is a tangental benefit, not the big idea
Given the context and questioner, we’ll assume that when Mark Cuban refers to Bitcoin in his comments, he’s thinking about BTC. This is part of the problem. BTC as it exists today indeed offers little in the way of utility and intrinsic value. It’s touted as “digital gold” despite lacking most of the properties that have made gold valuable for thousands of years.
Gold is pretty, physically attractive and heavy to hold, and can be made into jewelry. BTC can’t. Gold is solid and durable—Bitcoin’s data has no physical presence, and that data is only durable and permanent when backed by a stable protocol and proof of work by transaction processors. BTC’s protocol is not stable; it can and has been changed to suit the business interests of its large backers. BTC isn’t even useful as digital money these days thanks to its congested 1-4MB transaction blocks, meaning transactions need to include huge fees to be confirmed when activity is high.
But the time where we think of Bitcoin as primarily a cash-transaction system is over. Bitcoin as BSV now has a protocol that’s stable and unchangeable, and—without hyperbole—the capacity to process enough data to support the entire world economy. You can also use it to buy a coffee with zero-confirmation times and with barely noticeable fees, but that’s almost an afterthought at this stage.
BTC is BTC, and Bitcoin is BSV. Let’s clarify that. When we say “Bitcoin”, we mean BSV.
Understand data and you know Bitcoin’s intrinsic value
Most people, even in 2020, have no concept of what Bitcoin can be used for, or how. They do, however, understand how data has grown in importance over the past few decades, and now dominates the economy.
Our money is data. Our health records are data. Our shopping habits, leisurely pursuits, media production and consumption, travel, work routines and communications—all data. Even fixing a car, using a household appliance or expressing an opinion these days is hard to do without processing data.
Mark Cuban once said Bitcoin is less useful than a banana, because at least you could eat a banana.
As a technology, sports and media investor, Mark Cuban understands data better than most. He understands its significance and, most importantly surely knows that intangible data does have intrinsic value—if it’s used properly.
That value increases if the data stored (and processed) is secure, verifiable, auditable, and immutable. That’s Bitcoin’s advantage over today’s internet, where data is anything but those things. Bitcoin may not be “digital gold” but, backed by the proof of work of transaction processors spending hundreds of millions to run their operation and motivated by profit, it’s as solid as data-as-a-commodity gets.
Bitcoin BSV’s value proposition is data processing “transactions” on a global scale, each paying micro-fees. This is the profit model that motivates the processors, making BTC’s model (paying higher fees for a miniscule number of transactions) laughable by comparison. Transaction processors’ proof of work is Bitcoin’s intrinsic value.
Bitcoin BSV is the only blockchain protocol currently in existence that delivers on this promise, and also has the scaling capacity to handle everything. Satoshi’s Vision always extended far beyond today’s use cases and technological capabilities. He was thinking decades, even centuries ahead when designing Bitcoin and what it could be used for. If that sounds far-fetched, think of how technology has advanced exponentially even in your own lifetime.
The need to build, and invest in building
Here’s the point where Cuban was most correct: there needs to be more blockchain applications. The same chicken-and-egg dilemma faced the early internet. The infrastructure was there, but it needed new applications to prove its worth. It suffered many doubters in its early days. It relied on those with vision and understanding of its meaning, with an appreciation of how technology would advance, to build those applications.
The website BSVDEVS currently lists 198 active Bitcoin projects—there are likely many more in the works. Of that number, 63 are in the “APIs and Dev Tools” category. That’s a sign Bitcoin application development is still nascent. No-one is going to blow anyone’s mind with a Bitcoin killer app in 2020, but hints have already begun to emerge. These hints will lead to ideas, ideas to applications, then to a Cambrian explosion.
Applications need talented developers and visionary investors. Both of these exist. They need to come together in the right ways.
Don’t buy Bitcoin… just help build it
We’re not recommending that Mark Cuban—or anyone else for that matter—simply buy Bitcoin coins as an investment. That “buy, HODL, and watch price go up” mentality has done Bitcoin one of its greatest disservices. Bitcoin is foundational infrastructure, and without users and use cases that infrastructure does nothing. A skyscraper is useless without tenants; a sewerage system is useless without a city; a road is useless without traffic. As mundane as infrastructure may seem, the difference between good and bad examples is stark.
Mark Cuban and his co-visionaries in the business world need to see past the old “Bitcoin as money” paradigm. Bitcoin is data, technology, work, and talent all combined. They need to pop open the hood to examine what it really can do, and apply their capabilities. They also need to understand that Bitcoin is BSV.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.