What can we learn from the first billion Bitcoin transactions?
Keep your eye on the ball, and that ball is the Fed
In the broader conversation about Bitcoin and cryptocurrency, it's easy to get lost in all the noise with altcoins. But let's remember the origins of Bitcoin. It emerged from the desire to eliminate central trust.
This is nowhere more obvious than the secret message Satoshi embedded in the Coinbase transaction of the Genesis block. That Times of London headline from January 3, 2009 is a reminder for posterity that Bitcoin has emerged from the ashes of the financial crisis. In my view, the main target is and always will be the central banks.
Store of value versus medium of exchange
Bitcoin technologically dominates gold as a private store of value. And I can see it getting closer to the market capitalization of private gold holdings, which is currently $3-5 trillion (more if you include jewelry). Replacing more than $2 trillion in public gold, mostly by central banks around the world, is a bigger step forward. It may take time before central banks decide to hold the very assets that caused them to go bankrupt.
I am often asked whether Bitcoin will become the world's reserve currency, and my honest answer is that there is no way to know. There is a lot of distance to go from store of value to medium of exchange. And speculating when and how this will happen is, in a sense, no different than central banks trying to speculate on how the macroeconomy will play out.
My view is not that Bitcoin will win, but that it should win. It is the best monetization technology we have, and therefore something civil society should embrace. We need to see Bitcoin not as inevitable but rather as Satoshi did: a deliberate design and collective effort. I believe that this shared responsibility for the future of Bitcoin is existential for its future success. Bitcoin will win if we want it to win: it's as simple as that.
Bitcoin education remains a contrarian bet
Universities respond to incentives like other schools, and they follow government and market priorities. Today, that priority is AI, where every resource flows. I am disappointed that universities feel the need to follow the herd, because the market will encourage investment in AI. This stems from a reliance on federal research funding, which inevitably follows the latest trends. In my view, educators need to invest in more progressive technologies that the market is not yet responding to. Bitcoin is one, but not the only one.
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