by: Dustin Watchman
Bitcoin hasn’t always been for everybody.
You’re probably saying I’m wrong right about now. You may have even fallen victim to the often quoted catchphrase that “Bitcoin is for everybody, even your enemies!”, but has that always been true? Let’s take a step back and turn back the clock to Bitcoin’s humble beginnings. As they say, zoom out and you will see that Bitcoin tends to closely follow a 4 year cycle since 2011. Three years of a bull market followed by one year of the bear market, on average. So, let’s dive into each cycle and see who Bitcoin was actually for during that time. You will notice that each cycle has a specific driving force of adoption that carries it through into the next cycle, but there are also the few, the futurists per se, that see the potential well before the masses that enter the following cycle. Looking at the breakdown of the cohorts for each cycle allows us to possibly project forward a cycle or two to truly see Bitcoin’s full potential. Let me tell you that what one day may be, is going to melt faces, rightfully so. It’s been a long strange trip, but we are just getting started!
2009-2010
The first two years of Bitcoin were probably two of the most nerve-wracking years. Unfortunately, most bitcoiners will never know, as they weren’t around back then. Bitcoin had been introduced to the cypherpunks cryptography mailing list, and was welcomed by those that saw its potential early on. To say that most were in it for the tech would be correct as it hadn’t even registered an actual value in the early days. However, word slowly started to spread amongst the techies, and that led us into the beginning of the four year cycles. If you weren’t a part of this cypherpunk movement or had very little computer know-how, Bitcoin probably wasn’t for you at this point in time.
2011-2014
This initial cycle was still dominated by techies and cypherpunks, but expanded out to include friends, as well. There were multiple predecessors to Bitcoin that had failed, most likely due to their centralization built around known founders. Bitcoin was this cool decentralized digital money that was outlined in the white paper written by the mysterious person or group known as Satoshi Nakamoto. (To be clear, this is NOT Craig Wright, AKA Faketoshi. He would enter the scene much later). If you happened to be part of the cryptography mailing list or were an uber-techie, then you had the opportunity of a lifetime to get involved with Bitcoin in its infancy. For some, it was as easy as clicking on the websites known as Bitcoin faucets that were giving out 50+ Bitcoin to anyone that clicked on it. Since Bitcoin now had a value attached to it, everyone involved in this cycle got to experience the insane volatility and All Time Highs. With all the attention it had garnered in this cycle, word started to spread fast to friends, and friends of friends, but the circles were still small and the meet-ups were even smaller. The friends could be considered retail investors, and that is who would usher in the next cycle. If you weren’t about three degrees of separation from someone that fully grasped how to purchase and store Bitcoin during this cycle, then Bitcoin probably wasn’t for you.
2015-2018
For the few, the bear market of 2014, that watched Bitcoin plummet -56%, squeezed them out of HODLING their bitcoin for having weak hands. For the retail investors that had caught wind of the wild price swings in Bitcoin, this cycle would solidify Bitcoin as an asset class, as well as create many diamond-handed Bitcoiners. At a young 6 years old, Bitcoin was being seen as a Store of Value (SOV). This was the dominating headline for the news and media stations that finally started to discuss the potential of Bitcoin to the masses on mainstream financial news channels. Online exchanges sprung up all over the internet to accommodate retail investors salivating at getting their hands on some Bitcoin. The collapse of Mt. Gox and the subsequent loss of many early adopters Bitcoin had long been forgotten about by the greedy masses, if they had even ever heard of it. It was outperforming every asset class and retaining value much better than any global currency. It was the antithesis of investing. It seemed the rules were to NOT diversify, go all in, and don’t rebalance your portfolio, ever. As usual, retail investors were the main drivers of this cycle, but a few institutions started to get in on the action this cycle as well. As most financial institutions were not allowing their companies or financial planners to own or recommend Bitcoin, there were only a few smaller businesses willing to proudly display a “Bitcoin accepted here” sign in their window. Per the status quo, there are always a few futurists leading the masses into the next cycle. This was when bitcoin, as a currency, really started to become more widely acknowledged for legal purchases, and not for criminals using the Silk Road website (#FreeRossUlbricht). Bitcoin was not solely looked at as just a SOV, but rather a SOV and a currency. Unfortunately, or fortunately if you were front-running the institutions, most businesses were not willing to trust Bitcoin as an asset or SOV with such little regulation and governmental oversight. If you happened to be a business that needed clear regulation or didn’t want to risk losing your financial planner’s licenses, Bitcoin wasn’t for you.
2019-2022
Coming off another massive retrace of the Bitcoin value to the tune of -73% in 2018, global discussions around Bitcoin not only persisted, but grew even louder. For those that had HODLed long enough, Bitcoin as a SOV had proven to be profitable. This cycle would be when the Layer 2 Lightning protocol would experience massive growth which pushed bitcoin as a currency throughout many small Bitcoin community startups. El Zonte (Bitcoin Beach), in El Salvador, was the original community built around using bitcoin as a currency and has inspired many others to spring up, such as Bitcoin Beach Philippines, Bitcoin Beach Brazil, El Ekasi South Africa , Bitcoin Lake Guatemala, and Bitcoin Jungle Costa Rica, to name a few. There seemed to be no end in sight. As communities bloomed, so did the institutional investors. Michael Saylor continued to inspire businesses to look into Bitcoin as an SOV. At this point, cypherpunks, techies, retail investors, and institutional investors were all taking part in Bitcoin. And, of course, there are always the few that join in the cycle, which will push further adoption in the next. This forward looking visionary was Nayib Bukele of El Salvador, where he made bitcoin legal tender for his entire country. So, will the next cycle be the cycle that brings in more countries to accept bitcoin as legal tender? That is to be determined but we are starting to see some hints. Many countries were fighting it and attempting to block their citizens from using or accessing it, but that has proven to be a losing battle each time. After learning this lesson the hard way, governments around the world finally started to lay down the foundation for adoption as they wrote new laws into existence that catered to Bitcoin. Any Bitcoin early adopter would find these rules and regulations absurd and against the ethos of Bitcoin. In my opinion, for continued adoption for the masses that don’t want to take self custody of their Bitcoin, it’s a necessary step. Heading into the next cycle, Bitcoin seems as it has almost reached its full potential and is for everybody, even your enemies.
2023-2026
As you can guess, 2022 saw a predictable sharp decline in Bitcoin value, but this time around, bitcoiners were generally unfazed. There were 14 years of data and educational articles to lean upon to know that the growth in Bitcoin happening in every corner of the world meant there was so much more to Bitcoin than just the price. So what’s to come this cycle? Most likely more governments will make Bitcoin legal tender in their respective countries. Who may be the next to do so? It’s hard to tell, but with the recent developments and growth in the BRICS+ countries, Bitcoin is the best contender for a just and fair currency to accommodate their trading needs between member countries. The US dollar hegemony is slowly coming to an end as Bitcoin continues to grow worldwide. It’s the next logical choice in a digital world to use a digitally native monetary system that has been running smoothly for 15+ years. Obviously, countries prefer to use their own currencies and are quickly launching Central Bank Digital Currencies (CBDCs) to update their currency systems, but Bitcoin continues to prove its worthiness year after year. Whether this happens this cycle or next cycle is to be determined. This cycle may simply continue to push forward adoption by businesses looking to save money on high credit card fees. Retail investors may continue to HODL it as a SOV in countries that they can afford to do so. In countries that are suffering from hyperinflation in their native currency they may use it as a stronger currency to transact everyday. The foundation has been laid for most people around the world to use it in one way or another. They now have choices on how they can interact with Bitcoin in a way that betters their lives.
However you decide to engage with Bitcoin, there is space for you in the Bitcoin community. Now, the use cases for bitcoin are as diverse as all the people globally that are using Bitcoin. There is no right or wrong way to use Bitcoin; just use it how it best suits your life.
So, is Bitcoin for everyone, including your enemies? Yes, now it is, but it hasn’t always been. Is it too late for you to get into Bitcoin now? Absolutely not! We are still so early.
Bitcoin Ebooks: http://dustinwatchman.gumroad.com
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Note from Stackchain Magazine: No Bitcoin (or inferior monies) were exchanged for this article. This article was written by Dustin Watchman a regular contributor to Stackchain Magazine. We heard he’s a total fucking chad with an enormous unit. You can find him on X @dustinwatchman and apparently he’s got some Bitcoin Ebooks you can find them here at Bitcoin Ebooks: http://dustinwatchman.gumroad.com