This article comes fromorange book，This article comes frombyNic Carter
introduction
, Translation: Eric, reprinted with authorization by Odaily.
introduction
Bitcoin has gone through nearly ten years since the birth of the genesis block. During this period, although people continued to praise and criticize Bitcoin, and the development of Bitcoin was bumpy and difficult, it always attracted the attention of the world in the most dazzling way and shocked people with the most subversive ideas. All living beings in economic turmoil.
Also as Whitman said in "Song of Myself": I am as huge as a Kunpeng, and I can hold the body of a hundred people. Bitcoin has grown stronger and stronger in the tortuous development, and has gradually integrated payment, reserve, database and other functions in one.
We have reason to believe that in the future, Bitcoin will more actively absorb the human order, integrate into the existing system, and become a force that truly changes the world!
first level title
How Bitcoin narratives have changed over time
—Hasufly and Nic Carter
Am I contradicting myself?
Yes, good. I am contradicting myself.
——Walt Whiteman，Song of Myself
I am as big as a Kunpeng,
The body of a hundred people.
With no recognized leader, Bitcoin fans will refer to founding documents and early forum posts in an attempt to find out what Satoshi really wanted for the currency. This is no different than the way the United States Supreme Court justices take the Constitution and apply its ancient wisdom to contemporary cases. Others, however, reject such wordplay and instead focus on the analysis of specific applications in the context of the time.
Entities with opposing visions have led to conflict within the Bitcoin community — and when those visions do not reconcile, friction arises. Bitcoin’s vision is not set in stone either. Technological developments, practical realities, and real-world events shape public opinion. This article attempts to summarize the various mainstream functional narratives (Bitcoin narratives) that Bitcoin has exhibited in its 9-year history. The content of this article is based on an excellent previous article by Murad Mahmudov and Adam Tache. We recommend adding it to your reading list.
secondary title
Functional narrative of change
Here, we wish to explore in more nuance the prevalence of Bitcoin's key functional narratives. We identified seven distinct themes. These themes have once dominated the minds of Bitcoin fans throughout Bitcoin’s history. Note that these are not necessarily the most influential feature narratives - we are more focused on portraying the mainstream views of Bitcoin users.
In order of appearance, they are roughly summarized as follows:
The Proof of Concept of Electronic Cash: The main functional narrative of the first generation, and a general view of Bitcoin's early days. At the time, cypherpunks and cryptographers were still evaluating the nascent project and judging whether it would work, if at all. With all previous electronic cash initiatives failing, it took a while to become convinced of its technical and economic viability and move on to the broader concept of the Bitcoin protocol.
Inexpensive p2p payment networks: a very popular and pervasive functional narrative. Some believe this was the original intention of Satoshi - a currency for direct peer-to-peer Internet transactions. It could even be a decentralized Paypal or Venmo, if you will. Because small transactions have become a key part of Internet commerce, proponents of this view generally believe that low fees and convenience are the basic characteristics of such currencies.
Censorship-Resistant Digital Gold: Contrary to the p2p payments functional narrative, the idea that Bitcoin represents an immutable, non-inflationary, non-seizureable intergenerational store of wealth free from interference by banks or states . Proponents of this view de-emphasize Bitcoin's use in day-to-day transactions, instead arguing that security, predictability, and value preservation are more important in its development. We roughly lump the believers in sound money into this camp.
Private, Anonymous Dark Web Currency: Bitcoin is useful for anonymous online transactions, especially to facilitate black market online transactions. This is not necessarily incompatible with electronic gold status, as many proponents of the digital gold positioning see fungibility and privacy as important attributes of Bitcoin. This was a popular functional narrative before chain analysis companies deanonymized Bitcoin users.
Reserve currency for the cryptocurrency industry: This view holds that Bitcoin has an important role to play as the base currency for cryptocurrencies/cryptoindustry more generally. That’s the view held by traders denominated in bitcoin — the currency in which other digital assets are priced. Moreover, traders, businesses, and distributed networks holding BTC de facto support this view.
Uncorrelated financial asset: This view treats Bitcoin strictly as a financial asset and finds its most important characteristic to be the distribution of returns. In particular, its low or non-existent correlation to various indices, currencies and commodities makes it the most attractive diversification portfolio. Backers are generally less concerned with owning physical bitcoin and more interested in having access to the asset. In other words, they want to invest in the risks associated with bitcoin, not necessarily bitcoin itself. The concept has found success as Bitcoin has become more financialized.
In the chart below, we weigh different feature narratives according to their popularity at the time.
image description
This isn't modern art — it's a representation of Bitcoin's ever-changing trends
In this chart, we list the relative impact of the seven functional narratives proposed above. As you can see, the e-cash proof-of-concept was the dominant view from the start, although people supported things like p2p payment networks and digital gold at the time. Later, Bitcoin became popular on Silk Road as an anonymous dark web currency. To this day, this view never really died, and Bitcoin is still used on the dark web, although other privacy-oriented alternatives exist.
With the rise of ICO and the proliferation of a large altcoin market, Bitcoin became the reserve asset of this larger economy, especially in the bull market of 2014 and 2017, which has become an important factor for Bitcoin. feature. We note that the idea of p2p payments remained influential until mid-2017, when most of these supporters migrated to Bitcoin Cash (some have gone to Litecoin and Dash). However, with the emergence of the Lightning Network (Lightning) in 2018, people's enthusiasm for online microtransactions and free online payments has gradually picked up.
After Bitcoin emerged from the bear market of 2014-2015, analysts began to consider its status as a differentiated commodity currency again. In November 2015, Tuur Demeester published an investment note titled "How to Position for the Rally in Bitcoin" and argued that Bitcoin has unique qualities as a portfolio asset. In mid-2016, Burniske and White made a far-reaching point: Bitcoin represents an entirely new asset class. These analysts noted the low correlation between Bitcoin and traditional assets. And as this continues, the idea that Bitcoin can serve as a diversified portfolio is gaining popularity among certain forward-looking sectors of the asset management industry. Today, this is a prevailing view, driving much of the demand for financial products and exposing traditional investors to Bitcoin.
In all these regimes, the idea of digital gold still holds weight and is now a consensus view. The subordinate p2p petty cash faction has basically disappeared with the emergence of Bitcoin Cash. Today, after years of strife and infighting, this is the prevailing view. However, not all Bitcoin users are ideological Bitcoin fans, and this is reflected in the chart. Many Bitcoin holders see it as a way to diversify their portfolios, and some still use it for anonymous dark web transactions. At the same time, p2p petty cash pies are also making a comeback with the emergence of the Lightning Network.
secondary title
tension and release
If you carefully analyze the chart above, you will see that some of Bitcoin's visions are completely incompatible. For example, as Spencer Bogart has emphasized, the vision of (Bitcoin as) a global on-chain payment network is opposed to its positioning as digital gold. By separating them in a diagram, we show the conflict between these worldviews.
While the heated discussions started long ago, the conflict really broke out with the release of BitcoinXT in 2015. Coupled with the fuel of Bitcoin Classics, this conflict intensified without limit. It peaked in mid-2017 - when Bitcoin Cash finally forked. In the ensuing bull market in 2017, the transaction fee of Bitcoin reached an extremely high level, which directly led to the departure of the Bitcoin Cash camp. Since then, however, fees have stabilized and the need for large blocks seems less urgent.
Furthermore, in early 2018, the Lightning Network project was implemented, and Bitcoin-based micropayments followed. As a result, tensions eased and both camps were able to pursue their goals. We note an increase in the number of cheap payments school of thought among the Bitcoin community in 2018, as optimism about Bitcoin’s payment functionality resurfaces due to the emergence of second-layer solutions.
As the chart shows, Bitcoin's vision of anonymity and fungibility (often preferred by the digital gold camp) is at odds with the growing popularity of financialization and transparency. Individuals who want to interoperate between financial assets and Bitcoin tend to choose Bitcoin that is AML/KYC compliant, rather than placing too much emphasis on privacy and fungibility. Many pundits believe this will be the next big battle for the soul of Bitcoin.
In the end, both conflict and peacetime matters. Conflict reveals where power structures lie and sends messages about how key stakeholders really feel. Only under coercion can businesses, individuals, and developers be forced to stand together and speak their true voice for the development of Bitcoin.
Big Events Timeline
in conclusion
We know that much of our analysis is based on subjective interpretations of previous BitcoinTalk posts. If you disagree, we welcome your alternatives. To make subsequent analysis easier, we follow its historical trajectory and integrate key Bitcoin events in time (we heavily refer to 99bitcoins' annotated price charts for this work). We recommend viewing the timeline below alongside the colorful "Changing Tides" chart, which should help clarify why we're making these judgments.
in conclusion
Through an analysis of posts on BitcoinTalk, and a series of discussions with early Bitcoin fans, and based on our sane, cautious approach to Bitcoin history and a review of mainstream opinion over the years, we organize Bitcoin's changing features narrative. (We believe) anyone who has been around Bitcoin for a long time should be able to do a similar analysis.
In the end, a sane, cautious approach to Bitcoin's history is a necessary starting point for any attempt to define Bitcoin. Its connotation is not single, and Bitcoin fans can have different understandings. Bitcoin is diverse and it is important that we remind ourselves of this at all times.
(over)
