I’ve been doing a lot of thinking about Bitcoin recently.
Here are some of Bill Gates’ thoughts that I’ve pulled together:
“[Its] unique position arises from a number of elements. TCP/IP protocols that define its transport level support distributed computing and scale incredibly well. The Internet Engineering Task Force (IETF) has defined an evolutionary path that will avoid running into future problems even as eventually everyone on the planet connects up.”
“Most important is that [it] has bootstrapped itself… It has enough users that it is benefiting from the positive feedback loop of the more users it gets, the more content it gets, and the more content it gets, the more users it gets.”
“[It] is the most important single development to come along since the IBM PC was introduced in 1981. It is even more important than the arrival of the graphical user interface (GUI).”
“Another unique aspect of [it] is that because it buys communications lines on a commodity bid basis and because it is growing so fast, it is the only “public” network whose economics reflect the latest advances in communications technology.”
“Eventually you will be able to find the name of someone or a service you want to connect to… and rerouting your call to temporarily be a point-to-point connection will happen automatically.”
“[It] is at the forefront… and developments on [it] over the next several years will set the course of our industry for a long time to come.”
Okay, I haven’t been completely forthright. These are indeed Bill Gates’ quotes. But they’re from his 1995 memo to his Executive Staff, “The Internet Tidal Wave”. Every time Bill referenced “The Internet,” I replaced it with the pronoun “[it]”, forcing myself to consider these same properties, when applied to the Bitcoin network instead of the Internet.
I have found it to be a productive exercise to look at the opinions around the Internet in the early days to understand the current state of Bitcoin. It has many similar properties:
- Confusion – how can consumers and businesses rely something that’s decentralized?
- Dismissal – we haven’t seen the killer popular applications built on top yet, so we don’t “get it”.
- Fear – the famous early uses have been scary – “hackers” using it for governmental or subversive purposes, and incredible volatility.
The more we see sites like Coinbase make Bitcoin understandable to the general public, and the more mainstream merchants we see accept Bitcoin as a currency, the less we’ll see of the confusion, dismissal, and fear.
Bitcoin is a platform in need of killer applications. The very principles that made the Internet so disruptive to every facet of life – decentralization, lower barriers to value-creation, and ease of value-transfer – are mirrored in Bitcoin. We’ve seen the global revolutions with the PC in 1981 and the Internet in the early 90s – will we see another in 2014 with Bitcoin? Time will tell, but I’m bullish.