What Really Matters In Bitcoin and the Crypto Ecosystem
It's just the internet... Except it transmits value.
In the late 1990’s and early 2000’s setting up a home internet connection wasn’t easy and it was slow. To configure the routers, hubs, and switches you had to be a “nerd” or at least be curious about what the smartest people were doing on the weekends.
Before the Online Era
Bottlenecks were abound. That’s a lot of what you got when trying to get online in the early days. Even if you decided to create a web page that entailed learning some form of a “programming” language, figuring out how traffic routes over the internet, and then banging your head against a wall trying to configure your webpage through a hosting service. And that’s all before you get to the DNS configuration for email among other things needed to run a site or business online. Today, what’s going on in crypto with individuals configuring payments is not all that different from configuring DNS tables.
Somewhere around 2010, give or take a few years, all of these things became much easier. Because of integration and interoperability, many of the newer services began offering all of the above, packaged and readily available in a few simple clicks.
Fast forward to now, post API adoption and in the age of Bitcoin and Cryptocurrencies, we are seeing this all play out again in almost the exact same fashion.
The hobbyists have led the charge for the better part of a decade. Recreating the same internet infrastructure but with some added benefits. One with more security, more decentralization, and more readily available to any individual on the planet with an internet connection.
*caveat, as with all systems there are downsides if used wrong too. See the cautionary tales of Central Bank Digital Currencies (CBDC).
The Internet Then - Transfer Information for Value
Basic Internet infrastructure and connectivity of the components and users.
How traffic (text, images, and content) routes from Alice to Bob over the network. Do you notice Alice and Bob? They were there in the 90s / early 2000s too.
The rules, filtering, and sniffing of packets of information. Light levels of security and mostly open.
The Internet Now - Transfer of Value
The node infrastructure and routing of traffic (transfer of monetary value) across the Bitcoin, Lightning, and other Crypto networks, connecting users and devices.
Not by accident, Alice and Bob made a reappearance but this time communicating value through money instead of information.
Rules for mixing to avoid the sniffing and tracing in an attempt to maintain privacy and security.
There’s Nothing New Under the Sun
While the FOMO and excitement of something new is contagious, most of what we are seeing is the same concepts rehashed in a slightly different manner than we’re accustomed to seeing. There are new terms and a number of more tedious steps, but didn’t the traditional internet start this way? After all, aren’t the foundations broadly the same?
This wave of internet innovation is different in that its intent is to transmit value over the internet rather than displaying information and things that can be sold for value. Additionally, it’s providing the opportunity to deconstruct the silos that have become bottlenecks of profit and power that have turned out to not benefit the masses. But, that’s for another blog and a completely different angle. My aim is to keep it clean here.
Today’s Bitcoiner and Alt-Coiner
We are early for sure and today’s bitcoiner likely resembles that of the individuals that hacked away on DNS tables and early web pages in the late 90’s / early 2000s.
By 2010, these same Devs (previously nerds) ruled the world. Anyone with a business needed their service because in order to profit there was a need for a website and web related tools. In order to scale and reach markets previously untapped, there was a need for individuals that knew how the backbone of the internet worked.
I can only imagine in the next 10 to 15 years those “smartest people” who are devoting their weekends to understanding how Bitcoin and other crypto networks, work, will be the same ones sought after once businesses catch on. They will be driving valuable bitcoin businesses much like they drive global brands today from the seat of the Chief Technology Officer (CTO).
Over the next few decades, I expect a transition from selling value to delivering value over the new crypto networks. In 15 years, it would not shock me in the least for the backbone of the internet to be reliant on crypto networks.