Theorizing is one thing; doing is quite another. No matter how good you think your theories are, applying them to the real world is always a revelation. More than that, actually doing is far more fun that theorizing. And right now hundreds of thousands of young people (and a lot of older ones too) are building the economy of the future. It's a magnificent thing to be part of.
The sanitarium is well on its way to becoming a Bitcoin House. The renovations proceed apace and the musicians currently living there, and their friends, are thoroughly intrigued not only by Bitcoin, but by the concept of decentralization. They're writing songs about it.
At the same time, the members of our little group have their own projects blooming: decentralized exchanges, drone delivery, biohacking,, and of course lots of ridesharing and apartment sharing.
I think Johnny and his uncle are about to launch a crypto-based certification agency for home remodelers. Municipal regulation of construction has gone insane over the past two decades, adding thousands of dollars to even the smallest construction projects. And so, a workaround that still delivers quality is something people are willing to take a small risk on.
The New Plaque
You may recall that there was a rather depressing plaque that used to hang on the wall of the sanitarium. As several of our group reviewed the remodeling work last week, they decided that a new plaque would be nice. And as it happened, Nikos had stumbled upon something just days before.
At one point, as we sat at Jay's bar discussing books and authors, I mentioned that I enjoyed the work of Eric Hoffer, the "Longshoreman Philosopher." Later, Nikos remembered the conversation and started checking into Hoffer. One of the things he found was an interview Hoffer did in 1967 with Eric Sevareid. (Sevareid was a famous broadcaster of that era.) In the interview, he talks about a poem that he found written on a wall at Pier 35 on the San Francisco docks. He recited it in the interview:
Build yourself a city; found yourself a state.
Do not cry for pity; grab a master fate.
Grab a swamp and drain it;
cut a log and plane it.
Make the hills and valleys fields.
And on the manmade plain,
breathe your last complaint.
Slay your shame;
forget your name.
Do not strive for pity; build yourself a city.
That of course is what's going onto their plaque – a large plaque – and that's exactly what these young people are doing.
"It'll go back down"
The day after Nikos sent me the link to the interview and told me about the plaque, I received an email from an old friend. This guy has seen dozens of hotshot investments come and go, and so I think he can be forgiven for thinking that Bitcoin is just another of them. In this email he said something about it going up, then coming back down. And that got me thinking: Could Bitcoin really crash back to the ground?
But before we can address that question, we have to specify something: Bitcoin is not an investment. Rather, it's a revolution in currency. That's a fundamental difference. Here's what I wrote back to my friend:
Honestly, I don't think this one's "going back down" in any permanent way. There will be choppy times for sure, but the underlying technology is simply not going anywhere. This is not a company or a strategy; it's just a protocol.
That's a very different thing from past "hotshot investments."
Bitcoin has withstood endless attacks from people who hate it (more or less none of whom have taken the time to understand it). And more than that, it has survived its friends acting stupidly.
I think it's important to stop and think about this for a moment.
Bitcoin has survived under extremely hostile conditions, taking blows from both enemies and friends, and has remained standing. And the core reason is its central feature: It's decentralized. There is no center to grab and no controller to be corrupted. Cryptocurrencies are simply protocols… protocols that establish trust via applied mathematics.
A protocol doesn't disappear when some ruler declares it a danger to nation and motherhood. It doesn't even disappear if people ignore it. It just is. Using a protocol as money is a new and different thing and utterly unlike any investment of the past.
Here's how I finished the email:
It's hard to imagine how Bitcoin could actually "go to zero." There is no center to kill, and it's simply better at doing what currencies are supposed to do. A demand for it will remain, no matter what.
To actually kill Bitcoin would involve breaking the encryption (which is really unlikely) or for governments to kill every person caught using it. (And that's pretty unlikely as well.)
Bitcoin is simply different. It's not really an investment. It has no center. It has operated for almost fifteen years under hostile conditions, starting from nothing at all. It was born into a world that rejected it from the outset and has attacked it nonstop.
In addition, it has survived the foolish behavior of some of its advocates.
Bitcoin is, in the end, a decentralization protocol. It provides no privileged position from which controllers can control transactions or take money by force. It has no tools for setting interest rates. No one is forced to use it.
With apologies to Ecclesiastes, this really is a new thing under the sun.
My young friends are embracing this, and they're spreading the concept to their friends, who are spreading the concept to others. And now Bitcoin Houses, Institutes of Cryptoanarchy, innumerable Bitcoin, cryptocurrency, and blockchain meetups, and God knows what else are spreading everywhere. We're actually moving quickly through the "new concept" pattern attributed to Arthur Schopenhauer:
All truth passes through three stages.
First it is ridiculed.
Second it is violently opposed.
And third it is accepted as self-evident.
And so a new world is taking shape. Slowly, erratically, even sloppily… but sinew is joining to sinew… and we are building ourselves a city.