You really can forgive the Wall Street Journal on this one. Bitcoin is a powerful financial innovation that is in the process of reinventing and disintermediating the business models of a huge proportion of their readership. Further, Bitcoin has been experiencing some growing pains that are currently making it look like the ugly duckling – a little tough to love.
Basically, the article posted today by Yuliya Chernova makes the case that Bitcoin has not gotten traction as a replacement for credit cards and that some Bitcoin startups are having trouble keeping afloat despite a fairly large VC inflow over the last few years.
She’s right. Merchant and consumer adoption are lackluster. Bitcoin has been riven by internal squabbling (perhaps largely settled now) and revelations about the founder (an apparent scam artist trying to position himself to cash in on the blockchain trend currently underway). Further, one of Bitcoin’s biggest potential markets, remittances, has proven to be far more challenging that first thought.
All of these things are true. And, all of them fail to take into account one salient point that many even inside the Bitcoin space fail to appreciate. Bitcoin wa never going to success solely on the basis of its own ineluctable logic. No. As long as the current financial and political system appear to be running fine, there would be only fringe use cases for Bitcoin and it would probably never achieve anything more than cult status.
No. Bitcoin is an underdog story. And it’s an underdog that will win not because it beats its opponent, but because its opponent will beat itself. The financial and political elite have so twisted themselves up in their own corruption and lies that they can no longer themselves tell what reality is. They are prideful, arrogant, and feel they are entitled. And as the saying goes, pride goes before the fall.
The faults in the political and financial systems were not fixed after the crash of 2007. The rot still festers, and when the next crash comes, there will be no bailout rich enough to stop the plunge. The dollar Euro, Dollar, Yen, and every other major currency will fail. Bitcoin will suddenly be seen for what it truly is – money not backed by the full faith and credit of corrupt institutions, but by math. Logical, immutable, undeniable, honest.
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People will flock to Bitcoin as it will be a safe haven in the storm. And in that context, merchant and consumer adoption, remittances, and all the other use cases of Bitcoin will suddenly become realities.
Bet on it.