Opinion Bitcoin as a Means of Avoiding instead of Complementing Financial Institutions

Bitcoin as a Means of Avoiding instead of Complementing Financial Institutions

February 2, 2019

In its essence, bitcoin represents a movement that has deep roots in the anti-establishment movement that is generally known as cypherpunk. From its very start a decade ago, the entire movement based on the concept that Satoshi Nakamoto created was a vision of digitally-based money with no connections to the traditional economic systems.

Since then, many outcasts, tech-enthusiasts and those hell bent of decentralization took upon themselves to push its use with almost a religious determination. For them, the fact that Satoshi never revealed its personal identity or the identity of the team that worked on it does not by any means degrade the project – in fact, it only makes it more exciting and true to itself.

The same goes for the numerous voices that have stressed their opposition to the entire project of bitcoin or those moderate critics that simply listed its many potential issues and problems. Both groups are simply blind when it comes to the believers and another reason why bitcoin should circumvent the legal and financial system completely instead of trying to find common ground with it and even merge itself into the wider setup. However, in spite of the drastic nature of their views on bitcoin, could they be ultimately the right perspective on the whole interaction between these two systems?

The White Paper that started it All

In 2008, Satoshi released the white paper on bitcoin, using a small cryptography mailing list, located in the sparsely populated corners of the internet. Today, for the bitcoin puritans, his vision has been practically lost. In recent years, many crypto startups, including those of bitcoin, have tried hard to somehow appease the Wall Street and the government and regulatory representatives. The impulse to do this is clear and for many in the crypto community, the only way to provide bitcoin with a chance to expand its adoption capacity.

Without recognition by the governmental bodies, many are certain that bitcoin will forever end up on the sidelines and not be able to reach beyond a small group of users. The investors, at the same time, will completely vacate the domain according to those who see government regulation as the only way forward. However, there is one cryptographer who is looking to take the crypto community right back to its original roots. Its outcome of the mission is a long shot, but the voice he represents still carries a lot of significance.

Avoiding Regulatory Boxes

Johnathan Corgan, who is a contributor to bitcoin Core client and the founder of Corgan labs has recently used Twitter to state a warning to the crypto industry and its recent desire to push for a regulatory recognition. According to Corgan, this whole intent is completely irrational and does no good to the overall ecosystem of this cryptocurrency. This US-based developer sees himself as a part of the cypherpunk movement and he noted that every time the domain tries to fit into the regulatory boxes, its collective eyes go away from the actual goal.

He stated further that the bitcoin field does not need any regulatory framework to attain success, noting that the cryptocurrency already had a lot of accomplishments without any oversight. He also added that the current successes came without any Main Street investors that were absolutely needed to push the entire project further up. He explained that all of the needed oversight mechanisms are already embedded in the network and that no additional elements and especially those coming for the US government or Chinese political system should be seen as necessary or even desirable.

Corgan also underlined that cryptocurrencies are both self-organized and self-enforced, which is why they are not subject to any whim or desire coming from the national regulator or any representatives of, as he states it, the legacy financial system. This is reminiscent of many early days philosophy of systems like initial esports tournaments, collaborative information-sharing platforms and other purely digital ventures that did not want or care for official support.

A Strong System

Corgan flatly rejected the governmental line in so many regions of the world that bitcoin is flawed. According to him and similar to many other from the cryptocurrency field, bitcoin has been able to function as a borderless, decentralized and stable system that is free from any third-party meddling. Instead of meandering towards regulators the cryptocurrency should, Corgan believes, double down on these features and accept that bitcoin must be left to its own devices.

Bitcoin was not designed to merge with the regulatory framework but to circumvent it using mutual and voluntary agreements that its participants are making with each other inside of the network. Naturally, Corgan is also a staunch opponent of trying to use the White House to further the bitcoin’s governmental recognition agenda. He thinks that this is by no means going to catalyze the development of bitcoin, especially when things like the Lightning Network, bitcoin-based loans, and many functional exchanges are taken into consideration.

All of these came about years after the network started working and without any major investor support or regulatory oversight. In closing, Corgan summed up his ideas in a very precise manner: the concept of bitcoin is not to complement the current financial system, but to avoid and ignore it while it becomes more and more relevant in its own right.

The Tug of War

The stance of Corgan and many others in the cypherpunk community is completely valid but is also a direct opposition to the desire of many in the crypto community to see their product reach a mainstream audience. With the cypherpunk movement, bitcoin would need to have decades to slowly grow with enthusiast and gradually reach a level where ordinary people would see it as a useful tool, based only on its benefits.

However, the tug of war in this regard appears because those developers who want to see faster progress know that higher adoption will come only through regulatory blessings. The same would, in turn, allow for the insane levels of volatility to ease up a bit and attract more ordinary users. In this sense, both sides are right but neither completely, which is why they will continue to pull the community in these conflicting directions over the coming years.