Balaji Srinivasan on Bitcoin

As the decade ends, the biggest unicorn of the 2010s wasn’t Uber, Airbnb, or Snap. It was Bitcoin.

Bitcoin will become the flag of technology. Not every flag represents a geographical entity. Some of them represent movements, like the rainbow flag or the Gadsden flag.

Bitcoin becomes a flag in this sense, as the encoding of technology's values: internationalist, capitalist, decentralized.

A flag is something to align around. Bitcoin is many people's first choice and many people's second choice, which means it will become the community's first choice.

The closest analogy is Linux. Google & Facebook are tough competitors, but cooperate on Linux.

That’s because it's a demilitarized zone where one party cannot deprive the other of their contributions. Bitcoin serves a similar role. All can profit from it, none can corrupt it.

Tech will align behind Bitcoin as part of the political realignment of the 2020s. Not traditional right vs left, but rather:

- Land v Cloud
- State v Network
- Centralized v Decentralized
- Nationalists/Socialists v International Capitalists
- Hamilton v Satoshi
- MMT v BTC

Bitcoin represents the explicit encoding of previously implicit values of the tech community. It's not just software — it is a Schelling point and a symbol. As such, it will become widely recognized as the flag of technology over the course of the 2020s.....

I believe that over the 2020s, the technology industry will end up aligning behind Bitcoin and crypto as part of a broader international realignment. Cryptocurrency simultaneously reflects many fundamental American values (like freedom of speech, freedom of contract, freedom of association, protection against unreasonable search & seizure, the right to privacy, and so on) while also demonstrating broad international appeal to millions of people around world.

1) Bitcoin alone now routinely moves hundreds of millions of dollars per day
2) Yet some say there are “no use cases” for crypto

Key point: not all of that volume is trading. At least some is for paying remote workers, international remittances, etc.

By 2040, everyone under 30 will have never known a world without Bitcoin. It may as well be gold. That’s the long-term case for replacement.

Bitcoin is as different from the wire transfer system as the modern Internet is from phone lines. You wouldn’t expect the phone lines of 1988 to easily accommodate hundreds of millions of tweets and likes per day, nor multi-gigabyte file transfers or P2P apps. Moreover, the primary use of Bitcoin may not be doing “better wire transfers” anymore than the primary use of the Internet was VOIP.

Instead we should expect totally new kinds of applications, because Bitcoin is good for transactions that are very small, very large, very fast, very international, and/or very automated — unlike the legacy payment rails. It probably starts with low stakes, digital goods that the dollar can’t colonize right now due to the requirements of credit card companies … basically business models that are just too low stakes, or too weird, or too international.

[Mt. Gox] will be viewed as a historical speedbump. Bitcoin is an international phenomenon and the momentum behind it is just so strong....

One metric that we’re tracking is the number of users. If you look at blockchain.info you can see the number of wallets. Coinbase has disclosed some numbers. Probably the number of worldwide users of Bitcoin is on the order three million, maybe like five million. It’s still very early days. Ultimately you’re going to get to like ten million then like hundred million and then maybe like a billion users. So there’s still room for 1000x growth yet.