Turning the Counter-Revolutionaries

Obi Nwosu is the CEO and co-founder of Coinfloor, the UK's longest-running Bitcoin exchange. He has over 20 years’ experience building online marketplaces and bringing virtual currencies to tens of millions of people. Obi writes The Road to Bitcoin Hegemony, a weekly recap of some of the most impactful developments in Bitcoin.

Bitcoin abounds in sound bites from otherwise smart people lazily regurgitating inaccurate anecdotes. Take tulips, for example. Bitcoin’s dizzying rise to hegemony is, apparently, nothing more than a modern day version of the “original bubble” in 17th century Holland.

The most astonishing thing about the Tulip Mania analogy is that respected watchers of the financial world still make the comparison, referring to Bitcoin as a risky speculation rather than a proven hedge. This claim appears more ridiculous with every major financial institution that climbs aboard the Bitcoin bandwagon.

Still only a speculation? Tell that to Fidelity, BlackRock, Citibank, and MassMutual. Preach the Gospel of the Bubble to Paul Tudor Jones, or any of the other institutional investors who have turned their gold orange. These people didn’t get wealthy by falling for get-rich-quick schemes.

If you want a better comparison than tulips, spool forward a century and a half to the Age of Revolutions, beginning with steam. Because that’s what Bitcoin is: a technological revolution that makes everything that came before obsolete.

You’re not reading this because you need convincing about Bitcoin’s benefits. We’ve all moved on from that. What’s far more interesting is to look at the counter-revolutionaries—including the ones who are supposedly on our side.

All the great earthquakes of history have faced a counter-revolution. Martin Luther and the Protestants had the Jesuits; the Industrial Revolution had the legendary Ned Ludd, and the (much more real) saboteurs; Lenin and his Red mob fought a civil war against the Whites.

But the most dangerous enemies don’t come from outside the revolution, but from within. Bitcoin’s biggest challenge today doesn’t come from the naysayers, the mockers, or the tulip-obsessed “experts.” It’s the institutions that, having bought into Bitcoin, seek to apply the defunct rules of old-school capitalism to the revolution.

These organizations, steeped in the culture of traditional finance, are happy to invest in Bitcoin while acting as cheerleaders for rules that stand directly contrary to Bitcoin’s ethos. This includes championing the erosion of such important foundational concepts as privacy and pseudonymity.

I don’t want to call these organisations fifth columnists: that’s overly-emotive and inaccurate. They don’t wish deliberate harm on Bitcoin or the wider crypto ecosystem; their openness to restrictions is instinctive rather than cunningly calculated. But if it’s tulip buyers you’re after—people who don’t understand the true value of what they’re getting into—then look no further.

As I say, the big institutions don’t see themselves as counter-revolutionaries. And we should not see them as the enemy. They’re not... but neither are they allies of and contributors to the revolution. Not yet, anyway.

Because the Bitcoin revolution is still in its third phase—the most dangerous one yet. For the first five years after its birth, people ignored Bitcoin. Then they mocked it. Since the price began its sustained climb in late 2018—having refused to die as many of the establishment have consistently predicted—we’ve been in the attack phase, with a barrage of slings and arrows coming from the tulip fanatics and, more insidiously, the pressure to overregulate from institutions that just don’t get it.

That brings us to today. The bevy of big businesses climbing aboard the Bitcoin bandwagon is already accelerating, and in the next few weeks, it will go from a stream to a deluge. This is great in the short term, but it must be understood that the fight is just getting going.

Luckily, Bitcoin has amassed a formidable philosophical fighting force, the likes of which would make Ozymandias, Genghis Khan, or any Caesar quake in their boots. Fight they must, and fight they will. With words, memes, and source code, this battle of bits will be waged and won.

The Orangequake would be far less rewarding without the challenge of turning the counter-revolutionaries. Their error and ignorance is a necessary and welcome obstacle to overcome, because it gives us the opportunity to keep making the case for Bitcoin while battling to make it ever-better.

Just remember, Bitcoin is a revolution, not an evolution. Everyone—including the old guard—is welcome to join, but it must and will be on Bitcoin's terms.

The Third Follower

Dance like nobody’s watching. And we did. We grooved to the Bitcoin boogie long before it was cool. Most ignored us. Some stared; others pointed and laughed. We didn’t care.

And then the moment of magic: someone in the crowd ignored the mockery and started dancing along with us. Every revolution flows from that first follower: the one who turns the mad loner into a leader, who has the guts to endorse the crazy fool everyone else is laughing at.

The second follower turns these two madcaps into a crowd, and then we’re on the verge of something special. But it’s with the addition of that crucial third follower that things start to snowball. Suddenly it’s a movement, and now everyone wants to be in on the act. They know that if they join in, they won’t be the odd ones out. In fact, they’ll be ridiculed if they don’t start dancing.

As banks, funds, and other institutions rush towards Bitcoin, it’s impossible to escape the conclusion that Bitcoin has won its all-important third follower. The first were ordinary people like you and me who got bitten by the bug immediately; the second wave comprised macro investors like Raoul Pal and Mike Novogratz.

Et, apres nous, le deluge: MassMutual, BBVA, Standard Chartered, and all the other institutions I’ve chronicled on these pages. These are the third followers that signal the cryptocult is turning into a mass movement.

It’s a milestone every bitcoiner should celebrate, but not without a rueful smile. Because it marks the moment Bitcoin stopped becoming our own, private dance, and instead became the beat for the rest of the world.