June 4th, 12,000 people from around the world gathered in Miami, FL for what is by far the largest Bitcoin conference in history. When I attended on behalf of the Canadian Blockchain Consortium, on a mission to promote Canada’s blockchain ecosystem to the international community, my perceptions of the importance and impact of technology by the end of the event were, in some ways, radically different.
Since Bitcoin’s Genesis block was mined in 2009, the world’s first cryptocurrency has changed the way we see value – of energy, time and money. Like a living ecosystem, its decentralized, encrypted network has quickly spread across borders and industries, developing new skills and scaling it to the more than one million miners who support its growth.
According to encryption pioneer Ralph Merkle, the lifelike qualities of Bitcoin are to be taken literally. “Bitcoin is the first example of a new way of life,” he said. “It lives and breathes on the Internet.” What I find fascinating – and what Bitcoin impressively demonstrated in 2021 – is the intersection of this organism with human culture and economic systems, a unique symbiosis that could lead humanity on a new path.
Alexis Pappas participates in Bitcoin 2021
Bitcoin 2021 was full of ideas about these potential changes. The day before the official conference, the Canadian Blockchain Consortium team attended a one-day seminar from DR. Saifedean Ammus, the community’s leading economic theorist and author of The Bitcoin Standard: The Decentralized Alternative to Central Banking.
His lesson covered the historical and financial reasons for Bitcoin’s adoption, as well as some new insight into its impact on human behavior.
In one of his slides, he pointed out the algorithmically set amount of Bitcoin as the first time in history that human demand had no impact on the production of an asset – more gold can be mined and fiat can be quantitatively brought into existence, but BTC will never be completely more than 21 million coins.
In his view, this is programmed scarcity and the tight price adjustment of Bitcoin Stock-to-flow Models that divide the current float by the annual BTC production result in the world’s first “economic constant” – a mechanical measure of value that leaves people with all our unpredictability and irrationality out of the equation.
It represented fiat money as the financial equivalent of sugar. Eroded by inflation by 10 percent a year, it has become a “recipe for instant gratification” that encourages debt, mad consumption, and poor investment decisions. In a post-seminar interview, I asked Saifedean what he thought the future would look like if Bitcoin became the global standard.
“Everyone is wealthier and can save the wealth they create,” he said. “This leads to people with a much smaller time preference and a much greater ability to care about the future.” Speaking to Bitcoin’s environmental critics, he said that all human progress requires energy and, in his opinion, safe and inflation-proof savings many times that of energy consumption worth of BTC.
Time preference, or the relative value of money now to money in the future, is an important factor in human behavior and a great indicator of success. As shown in the famous Stanford “Marshmallow Test”, where children have been given the opportunity to have a marshmallow or two future treats, those who can delay gratification have better long-term results in life, work, and relationships.
He made a fascinating point: Can the intrinsic properties of Bitcoin lead humanity towards a future orientation, a mindset that pushes value into the next five, 10 and 20 years as opposed to our current culture of instant gratification?
Considerations on a global level
This very human focus was repeated on the first day of the conference – many of the panels and discussions focused more on the benefits of technology for global problems such as the 2 billion without bank details than its investment potential.
This must have come as a surprise to the many investors in the crowd – easily recognizable by their business casual attire, rather than t-shirts and shorts – trying to figure out what the opportunities are in this new market. The discussions I had with them focused on Bitcoin’s environmental criticism – and something that the conference wanted to bring up over and over again.
In a fireside chat between longtime BTC champion Max Keizer and MicroStrategy CEO Michael Saylor, who recently announced that his whale status has been achieved 100,000 coins, the discussion focused on Bitcoin as the highest value use of renewable energy such as solar energy, and borrowing from the most recent Square white paper, as an incentive for developing new projects.
However, many in the community disagree with attempts to allay criticism of Bitcoin’s carbon footprint. On the second day, one of the most controversial panels of the conference, entitled “Toxic Maximalism: A Feature Not a Bug”, took place. It garnered some of the most ardent voices for Bitcoin as the exclusive global currency.
Aleksander Svetsky defended the maximalists’ intolerance to changes in BTC or the use of other currencies and described their role as “the network’s immune system”; the white blood cells that fight off pathogens and attacks on the integrity of the organism.
One of the “Maxis” on stage, BTC Lerk, made a point reflecting Saifedean’s belief in Bitcoiners as people better able to pass the marshmallow test. Before Bitcoin, he spent money on things he didn’t really need or want – but investing in BTC changed that mindset towards a lesser time preference, a belief that is worth saving for in the future. “If it doesn’t change your life, you’re doing it wrong,” he said.
“Stacking sats” instead of spending money is a community mantra. Having the right kind of time preference – the ability to believe in future value – is a crucial quality of freedom for Bitcoiners and an important element of their belief that it is the solution to some of the biggest challenges developing countries face, such as prosperity -Destruction of the forces of state corruption and hyperinflation.
A crypto economy in the works
The MC of the conference had hinted at an important announcement for the final panel discussion of the second day, and I was fortunate to be able to keep my seat in the crowded hall. Jack Mallers, CEO of crypto payments company Zap, burst into tears as he spoke about the struggles of 70 percent of citizens without access to banking services and the underdevelopment of the crypto economy as a solution to widespread poverty.
When the country’s president, Nayib Bukele, came on the stage via webcam to announce that El Salvador had a pending bill that would become the first country in the world to accept it Bitcoin as legal tenderthe crowd burst out cheering. There is real trust in the community that BTC really “fixes everything” and despite a lot of international criticism Countries like Tanzania They are reportedly considering following in El Salvador’s footsteps.
When the Bitcoin network is an organism, it grows deeper and finds fertile soil all over the world, both in unstable developing countries and among people disaffected with the erosion of values in the conventional financial system. The dialectic between its mechanical, programmed nature and the effect it has on human behavior has fascinating potential.
Could Bitcoin, as BTC Lerk and many others in the community have seen, catalyze a shift towards a preference for the future – a kind of long-term thinking that could benefit our personal security, our environment and global economic stability? While I’m not a dedicated bitcoiner, it’s always important to consider disruptive ideas – and this would be a shift that could really create a new world.