My friend Brock Pierce told me 3 years ago that Blockchain was going to be bigger than the Internet. I didn’t believe him. Like others, I figured Bitcoin would be quickly outlawed, or put in such a tight straightjacket that normal people would not want to get anywhere near it. Furthermore, the ease of creating “alt-coins” would mean nobody would value any one coin over another. They would all be equally worthless.
My opinion has now changed.
Bitcoin is starting to have it’s Netscape moment. Even though everybody has heard of Bitcoin now, very, very few people have wallets and really understand the implications of this technology. And the implications are huge.
For the bottom 30%, information technology is something bad — something big governments use to keep track of you. Fingerprints + retina scans at airports, digitized consumer credit reports, improved law enforcement databases that allows the state to control dissent… Lots of negatives, not a lot of positives.
And even for the top 70%, living in a world where the government knows exactly where you work, how much money you make, what you buy, and what is stored in your cloud storage (if it views you as enemy of the state) means that on one level you are far from free.
This comes at a time when clearly, Big Government can barely pay its own bills. The deficits of every major industrialized country are soaring and debt is approaching (or may have exceeded) the point of no return. In order to protect its own existence, the state will have to raise taxes and tighten control even further.
It’s a bleak scenario. Fortunately, it may never come to pass.
The promise of crypto, which is now being fulfilled at a breakneck speed, is that money and information will both be decentralized. Instead of having money in banks, we will keep our own cryptography keys to a number of e-currency deposits. Transacting, moving money, settling debts, passing inheritences will all be done via the blockchain, not through banks, credit card companies, notaries, escrow agents and a complex legal system.
It’s hard to quite see it now. But it was hard, in 1998 to image the scale that Amazon has killed retail. The combination of great technology, network effects and feedback loops make real change happen much faster and deeper than we expect once a true disruption occurs. This is one of those times.
How will the state react?
I think lawmakers are only going to truly understand what hit them when it is too late. Once everybody in America has a Wallet along with their Browser, people of all ages will be moving around crypto, making purchases, effectively living in a shadow economy. The old economy, with it’s bloated military and entitlements programs will crumble just like the old Soviet Union.
Not everybody will be happy. But the voters with wallets, fully encrypted decentralized data, and transportable net worths will vote for less government, more freedom. If the state clamps down they will move, like the protestants moving to Holland in the 16th century. The new golden age belongs to countries that embrace this new technology