Each ingot of gold has always existed independent of every other ingot. Bitcoins, on the other hand, were designed to live within a cleverly constructed, decentralized network, just as all the websites in the world exist only within the decentralized network known as the Internet.
Technology clearly gave individuals unprecedented new powers. The nascent Internet allowed these people to communicate with kindred spirits and spread their ideas in ways that had previously been impossible.
Money is to any market economy what water, fire, or blood is to the human ecosystem—a basic substance needed for everything else to work.
The search for a better form of money has always been about finding a more trustworthy and uniform way of valuing the things around us—a single metric that allows a reliable comparison between the value of a block of wood, an hour of carpentry work, and a painting of a forest.
If a farmer is going to accept a dollar bill for his hard-earned crops, he has to believe that the dollar, even if it is only a green piece of paper, will be worth something in the future.
The gold standard was the most popular global monetary system at the start of the twentieth century. Not only did gold link paper money to something of physical substance; the standard also served as a mechanism for imposing restraint on central banks. The Federal Reserve and other central banks could print more money only if they managed to get their hands on more gold. If they ran out of gold, no more money and no more spending.
In a conversation right before the crash he had said something that would become a standard line for him: “Bitcoins are the most important invention since the internet itself. They will change the way the entire world does business.”
His wardrobe was heavily reliant on T-shirts with puns about programming languages.
But for Ross, Silk Road was an application of the ideas advanced by the philosophers and economists whom Roger Ver and Erik Voorhees also loved—the ones who prized freedom above all else. According to this moral code, people should be allowed to do anything they please as long as it didn’t hurt others.
It was no coincidence that these technologies did not emerge from a place with a weak government and bad educational systems.
In March 2012, a month before Charlie found his investors, the Federal Reserve had held a daylong conference about consumer-payment systems at which there was a lot of grousing about the fact that despite all the technological innovation going on in the world, the infrastructure for moving money around the country was still based on technology from the 1960s and 1970s.
Do your best to keep your phones in your pocket. It is anti-social—borderline rude—to be doing emails, twitter, etc. during dinner.
In America, the dollar seamlessly serves the three functions of money: providing a medium of exchange, a unit for measuring the cost of goods, and an asset where value can be stored.
It was the next step in the evolution of money. He tried to explain his recent discoveries about the ledger as the foundation of all money. With Bitcoins, unlike pesos or dollars, everyone using them knew exactly how many existed, and they were not tied to one country. Unlike gold, which was universal but difficult to acquire and hold, Bitcoins could be bought, held, and transferred by anyone with an Internet connection, with the click of a mouse.
“Bitcoin is the first time in five thousand years that we have something better than gold,” he said. “And it’s not a little bit better, it’s significantly better. It’s much more scarce. More divisible, more durable. It’s much more transportable. It’s just simply better.”
Dixon explained that he had gotten excited about the importance of the blockchain protocol as a new way of moving value around the world, just as the Internet protocol had provided a decentralized way to move information.
All the gold in the world was worth around $7 trillion. If Bitcoin became even half as popular, that would put the value of each Bitcoin at around half a million dollars—or about fourteen thousand times more than its $34 value that day in March.
Wences agreed with Hoffman that Bitcoin was unlikely to catch on as a payment method anytime soon. But for now, Wences believed that Bitcoin would first gain popularity as a globally available asset, similar to gold. Like gold, which was also not used in everyday transactions, Bitcoin’s value was as a digital asset where people could store wealth.
All the panelists compared Bitcoin in its current form to the Internet in 1992 or 1993, before the first web browser. Back then, there had been lots of excitement in a small circle of technologists about what the Internet protocol could do, but the programs and infrastructure did not yet exist to make it accessible to ordinary people.
Many bankers had begun to understand what Gavin Andresen had seen back in 2010 when he first became entranced by the idea of a financial network with no single point of failure. For banks that were terrified of cyber attacks, the idea of a payment network that could keep running even if one player, or one set of servers, got taken out was incredibly attractive.
“I think it’s very obvious to all of us that cryptocurrencies are inevitable.”
“We all hear the store of value. Here’s a way to move money and to buy things outside the law. Maybe it’s a competitor to fiat currency. Is it a disrupter to the traditional banking sector; an enabler of e-commerce and remittances; a superior internal ledger system for multinationals? That’s not what all the reporters are asking about but that’s another possibility that we see. “By the time I felt like I really understood it I was really excited to share that knowledge, and discuss it with a wider audience,” she said. “You want everyone to understand it too so that they’ll really appreciate the really massiveness of this innovation. “It’s not just a thing, it’s a phenomenon.”
In the current system, financial institutions were given the power to determine what sorts of businesses could live and die