I took some space to clear my head. I’d been building on Bitcoin for 18 months straight, and my original plan wasn’t working.
What did I get wrong?
Timing really is everything, and being early to the party is the same thing as not showing up.
My original goal with Bit.sv was to enable creators to make a full-time living using Bitcoin.
I had an “aha moment” when building Open Directory, a Reddit-style link aggregator on Bitcoin. At scale, Open Directory wouldn’t just replace Reddit, but Patreon too.
This was a major wake up call. I realized the Internet had been playing with one hand tied behind its back. The Internet was broken, in a way that not many people understood, but surprisingly almost everybody in BSV did.
I ran as fast as I could in the direction I thought best. I built Bit.sv in a way that’s still underappreciated today. Bit.sv solves de-platforming. It solves owning your data. It enables a federated service provider model, where customers get to decide which provider they use with 1-click. Everything is encrypted. Bit.sv is the only consumer application on the Metanet.
It turns out, none of this matters…. at least not yet.
What I got wrong is we don’t live in that world yet.
Almost nobody knows about BSV. Even fewer have BSV they can spend. Onboarding is still a significant problem.
The BSV ecosystem debates endlessly consumer vs prosumer vs enterprise adoption—but the reality is after 12 years Bitcoin still hasn’t had a breakout app. If we’re being fair, a store of value is the closest thing, and DeFi is the second.
But people in BSV know better, they understand what an entire world running on Bitcoin would look like, a better, more fair world.
Which is why I’ve been so excited to be a part of what’s happening in BSV.
From the outside, people think BSVers are scammers. They think by supporting BSV, they’re supporting Craig’s claim to Satoshi, and they’re enabling him. They’re complicit. They think everybody is being financially supported by Calvin (this one might actually be true 😜).
What those people don’t understand is you can have two completely different opinions about Craig/Calvin and Bitcoin, and they don’t need to intersect. After all, Bitcoin enables you to work with people you don’t trust.
If people had to be accountable for everybody using their favorite blockchain….we’d be in trouble.
The reality many don’t want to accept is, Craig is pitch-perfect on Bitcoin. You may not like it, but I bet you couldn’t steelman his view. Almost nobody outside BSV understands BSV, because if they did, they’d instantly join once they understood the implications.
There’s this big debate whether Calvin saved Bitcoin. Does it matter? I’d say so, if he did, he should get the credit. Would Bitcoin have survived without him? Definitely. Would we be in a far worse off spot? Definitely. Calvin has made a significant contribution to Bitcoin, and that’s super respectable.
There’s a lot of people building incredible things on Bitcoin. Bitcoin really does bring out the dreamers.
And for the dreamers, Bitcoin is packed full of surprises.
It’s a software meme that every app evolves until it’s a social network that supports messaging and money—but with Bitcoin, you start there.
A stable protocol is the single most underrated feature of any distributed blockchain. Decentralization is about the decentralization of power, which means removing control from everyone, especially developers. Segwit and Replace-By-Fee fundamentally broke Bitcoin, and if you don’t understand why, you don’t understand Bitcoin. Bitcoin is a balanced economic incentive system, if you change the economic incentives, you’ve changed the system.
0-confirmation is safe and works so well it forces you to readjust your mental model for how global connectivity will evolve when the networking layer is incentivized. Payment channels provide additional off-chain scalability techniques. Instant & realtime Bitcoin is a solved problem. And unlike Lightning, 0-conf helps reduce fees over time, doesn’t reduce the security model of the network, isn’t a strangle fig, doesn’t turn you into an unauthorized money transmitter, doesn’t erase the trail of money laundering, doesn’t need custodial apps, never “fails to route” transactions—it actually works. Lightning was never needed.
The fairest way to scale Bitcoin is to say the market should determine the block size, not a tiny group of developers. Welcome to BSV, happy to have you. Bitcoin scales like nothing you’ve seen before. In 10 years, it bootstrapped a mining industry out of thin air. Creating profit motives to optimize miner performance is something Bitcoin does extremely well.
On BSV, almost all wallets support privacy features like “no address re-use” and some even support more advanced features like “Output Bills coin-splitting”, ways to legally keep your privacy while using Bitcoin without mingling your funds with criminals (what do you think mixers do? or where do you think DeFi yields are coming from?). For a privacy-conscious bunch, BTC sure doesn’t take many measures to protect the privacy of its customers. It’s common to have a single Bitcoin address you re-use over and over, revealing your entire transaction history publicly, and many don’t have any of the privacy features supported by most BSV wallets.
Bitcoin is Turing complete (Craig, right again), which means Bitcoin can run any computation, any smart contract, anything. We never needed Ethereum. Bitcoin is the World Computer. Hope you’ve been brushing up on your Forth.
UTXOs are a brilliant software design that allows Bitcoin transactions (scripts) to be processed in parallel. Ethereum’s global state means every action needs to be performed on every node. Bitcoin could always scale from day one. It initially had a block limit because satoshis didn’t have any value, which made market-based block sizes a DDoS attack vector. This hasn’t been a problem for over 10 years, but it took BSV to push the system (aka use the damn thing).
Proof-of-Work is a consensus model where winners must continually reinvest profits to stay at the bleeding edge to stay competitive. It ensures anybody can join the system, with any consensus changes happening through hard-fork. Proof-of-Stake is a consensus model where winners with the most money determine the rules of the system. As the basis for a global system, one of those sounds fair and one of those doesn’t.
Whatever your political affiliation, Bitcoin has something for you, it’s the socialism that capitalist want and the capitalism that socialist want. It’s a fair system, that enables free trade between private citizens, with the ability to solve the tragedy of the commons-style game theory problems commonly associated with public goods. Bitcoin adds an Oracle to humanity.
Everybody in cryptocurrency is talking about incentivized social media, de-platforming, fair news, scaling, low tx fees, world computers—hello, wake up. It’s 2020 and Bitcoin is not what your grandma thinks it is. Actually, respect to grandma, she has a better chance of understanding Bitcoin in 2020 than most crypto investors. It’s a global optimization machine that sucks energy wherever it’s least useful and provides a socially scalable way for humanity to connect, collaborate and level up.
Bitcoin is a fair playing field.
BSV is the best place to be building, anywhere in the world. Any country. Any platform. Any blockchain. Anywhere.
Despite this overwhelming promise and Bitcoin still being a multi-disciplinary breakthrough, some of my idealism has faded. Maybe the shine has started to wear, or maybe it’s just being on the field for 18 months without a win.
But there are many hidden corners and sacred cows of Bitcoin, like:
- The stable protocol narrative builds as people whisper of hard forks.
- Storing data on-chain is still a hotly debated topic.
- VC vs Bootstrap vs Angel Investors (with LPs?) funding models ….who cares? put up or shut up
- “Bitcoin Incentivizes Connectivity” but almost no apps work together
- “Open Collaboration” turns to patent farming, land grabs and memetic competition
- Platforms trying to commoditize you rather than supply chains trying to magnify you, meet the new boss, same as the old boss
- BSV decoupling is great for the ecosystem until the rest of crypto starts pumping then FOMO
- Tokenmania. Suddenly we need scammy ICO projects
- Championing weird Bitcoin projects turns resentful as devs don’t pump the price and don’t break the law.
- BSV consumers are actually investors looking to primarily increase the price of BSV, not use your app
- Traditional commerce is disincentivized while BSV price is low, for HODLing, and the opportunity to pump price with free content rather than sell it and explore new monetization models.
- Every app is running into The Onboarding but nobody is solving The Onboarding because we are all building the killer app that will make customers jump through hoops …except, that’s not how it works, especially when you’re decoupled from major on-ramps.
Along the way I realized despite my interest in Bitcoin, there are some significant hurdles to building the kinds of apps that I think can make a lot of money and change the world, without dipping into scammy ICO style mania (or worse, Enterprise 😜 I kid I kid)
I grew tired of always having to say positive things about Bitcoin. Yes it’s great, yes it’s going to change the world, but there are some bumps along the way.
People on Twitter say “the market will figure it out” while they’re watching the market trying to figure it out.
I understood better what Quarterbacks go through on Monday morning.
People who have never started a business, never created a product, never written a line of code, never talked to a customer, never made a sale, are “investment and product strategy experts” because they invest in shit coins—welcome to the Internet.
As a bootstrapper, it is very difficult to simultaneously bootstrap a network like Bitcoin while building your own company. It takes an incredibly long-term approach, especially if you’re trying to grow a new market rather than building for an established one that happens to use Bitcoin.
This is one area VC shines today, being able to remain in markets full-time while they’re still developing.
The reality is despite all the promise, as a bootstrapper, Bitcoin is not a good market to build for, yet. Cashflow is King, and Bitcoin doesn’t have a lot of wallets yet. But things could quickly change.
A few major improvements could break Bitcoin into the mainstream. The three biggest are:
- Threshold Signatures — Never write down a mnemonic again. Never worry about losing your keys. Still non-custodial.
- Stable Coins — Use your local currency digitally, without worrying about Bitcoin price swings.
- Fiat On-Ramps — Buy Bitcoin as easily as Stripe, Apple Pay, Google Pay or using the App Store — anything less is a significant disadvantage for Bitcoin apps.
This is “all” it will take for mainstream Bitcoin adoption.
The good news is, it’s coming. I know a lot of teams are working hard on these problems.
Of all the solutions, I’m most excited about HandCash.
I’ve been pretty vocal about HandCash’s vertically integrated approach. If they are Apple, there is an Android waiting. I lean open-source with Bitcoin and the Planaria model fits with how I want to build apps. The Linux/WordPress of Bitcoin is coming.
But make no doubt, HandCash is going to crush it. They’ve put together an incredible team, and if they can build an ecosystem that solves the three problems above, devs will flock to the platform. I will.
Bitcoin in 2020 is like the Internet in 1995.
I was optimistic that we can fast-forward the infrastructure phase. The formerly-great VC known as Union Square Ventures (before they became a central bank) had a good theory: because blockchain apps are based on open infrastructure, we’re simultaneously creating the app and infrastructure layers at the same time.
But I don’t think this is true.
In this case the “infrastructure layer” isn’t the servers, networking, software or even the smart contracts—it’s the key management and financing layer.
To that end, and I hate to say it, price pumps and DeFi have a legitimate shot at attracting consumer adoption.
One of the biggest things people get wrong in BSV is how they dismiss things that look like toys.
PHP was a toy, now it powers 80% of the web.
Ruby on Rails was a toy that “didn’t scale,” now it’s used in countless successful startups and Enterprises.
Drones were a toy, now they’re flying themselves and delivering groceries.
3d printers were a toy, now they’re printing guns.
GPUs were for toys, now they’re training Artificial Intelligence.
Game engines were toys, now they’re modeling our whole world, and increasingly spending more and more of our time in them
YouTube was a toy, now A-list Hollywood stars chase YouTube subscribers
SoundCloud was a toy, but launched the careers of more rappers than any other platform.
Twitter was a toy, but the President of the United States uses it as his primary communication method.
Both ICOs and DeFi have a legitimate shot at cleaning up their act and becoming something truly transformative.
“Worse is better” is a phenomenon that happens over and over again. What hackers are working on nights and weekends will be mainstream in 10 years.
Bitcoin is many things. But because it’s been restricted, there’s been an explosion of creativity on other blockchains.
What it will take to attract significant attention is people making serious money.
What that will take, is getting as many people through The Onboarding as possible, using the 3 issues above as the wedge.
The people in BSV are the strangest, weirdest, most ambitious, talented, idealistic people I’ve ever worked alongside.
Bitcoin offers a once-in-a-lifetime chance to make an impact in the areas you care about most while making a ton of money.
It allows our world to be more connected while empowering the individual like never before. It makes it profitable to do the right thing.
And despite all my criticisms, I remain incredibly bullish. Bitcoin really does have the power to change the world.
Sometimes criticism can be considered as negativity in BSV, because it muddies the narratives. It’s hard enough to get people inside, so we shouldn’t make that job any harder.
But for people building at the edge of Bitcoin, they need to be able to throw problems around openly. This isn’t negativity, it’s the way to find solutions.
After I wrote my piece on the problems with Storing data on Bitcoin SV, Attila announced MatterCloud will support archiving Bitcoin TXs as a service. No contracts. No phone calls. No sales meetings. No future plans. An API and a credit card field—exactly what hackers want.
Bitcoin has a healthy culture of proof of work, where you don’t talk too much, you just do. If you believe something could be better, you go create that solution and make a bunch of money.
I love it. The only thing I’d add is that if Bitcoin actually incentivizes connectivity, we are all headed towards doing what we do best.
To that end, we still need to communicate. Constructively criticizing Bitcoin is a significant value add to the ecosystem, as businesses and developers can spot new opportunities for solving problems the market is demanding.
If Bitcoin is what I think it is, what comes next is not just a technological, financial, software, marketplace and information system revolution—but a social one where the best aspects of humanity are magnified by people who have realized what Nakamoto Consensus really means.
A group of people are headed to the high-ground. To join them, you just have to stand up, declare yourself a Byzantine General, and take the power already given to you.
Craig Voice The power is in Bitcoin.
Bitcoin enables an explosion of creativity larger than the original Internet.
And if you’re not paying attention, you might not be anticipating what comes next.
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.