Ah, the wild west. John Wayne, the Man with No Name, Billy the Kid and Jesse James.
The frontier has a way of capturing everyone’s imagination – young and old. The cowboys, the outlaws, the gold prospectors. A land of opportunity and harsh cruelty. Unforgiving yet irresistible.
Bitcoin was once such a frontier. The early days were rife with scams, “criminals” and underground markets. The underbelly of the internet embraced it first. It was an agora filled with foreign and obscure figures. It thrived as a counterculture, void of any rules and regulations. No government to protect you from yourself. No KYC, no AML – only your name, your PGP key, gribble, and the Web-Of-Trust. Fortunes were made, and fortunes were lost. A beautiful chaos where only the authority of the Bitcoin blockchain reigned supreme. True anarchy.
Along the way, entrepreneurs & VCs intervened and the siren song of mass adoption invited the lawmen into our territories. Fast forward a decade and the prospect of a new world where the individual stands at the center appears grim. Markets have been institutionalized, businesses regulated and consumers are now “protected”. Anti-establishment has been replaced by dogma. Tradition & sovereignty were traded for religion, lured by the prospect of gold and dollars. The bold dream of an underworld economy has faded.
That is until you start looking abroad, far east, where a new frontier has surfaced.
Wild Wild East
I haven’t a particle of confidence in a man who has no redeeming petty vices whatsoever. – Mark Twain
Boarding the plane for Hong Kong last week, it was interesting to reminisce on the timeline that had brought me there.
Some will argue the sun started setting on the Chinese Bitcoin empire following the famed block size war in 2017. Its golden child, Bitmain, and close associates suffered then an embarrassing defeat at the hand of Bitcoin users. Some never financially recovered from the ordeal. Certainly, the blanket industry ban a few years later put the final nail in its coffin. Miners were exiled and exchanges folded. A region once a juggernaut in the ecosystem withdrew to the shadow realms.
These dynamics forced many market actors into some awkward positions. While NgU maximalists in the West were being lulled into KYC marketplaces, Chinese Bitcoin users had to lean into unregulated crypto platforms to serve their needs. Two forks that would set the tone for the years ahead.
For better or worse, the outcome of this divergence was on stark display at Bitcoin Asia 2024. Sure, there was complete vaporware on display everywhere you would look. At least a few were probably scams or will flame out in ways that make them indistinguishable from one. Most were silly ideas. What was noticeably missing though? Centralized exchange booths and the customary fiat operators. A new frontier!
Of course, the usual suspects are already throwing accusations around and trying to shame everybody involved.
You have to understand that immense energy was exerted in the last 10 years trying to clean Bitcoin up. Venture capitalists and Western entrepreneurs rolled out the red carpet for the fiat establishment to feel right at home here and this pesky Chinese market is making them rather uncomfortable. Their ideological border has been breached. The degens are crossing en masse and challenging the common NgU tropes. Foreigners are declared a nuisance for they do not align with the doctrine du jour.
They are losing the narrative game, control is slipping away, and they are terrified.
Yin and Yang
What is the most rigorous law of our being? Growth. – Mark Twain
Myself, I have chosen to embrace the emerging chaos. At a time when the regulatory noose is tightening around our neck, the return of our prodigal eastern brothers is a welcome sight. A good dose of anarchy is, perhaps, just what the doctor ordered to remedy the compliance disease that has taken over.
I can’t tell exactly what will transpire but I know change when I see it. Those are unpredictable times but the excitement around the potential of a new technological era around Bitcoin is palpable. In over a decade, I have never seen such an intense interest in Bitcoin development coming from this part of the world. I think it’s pretty cynical to assume that nothing good can come out of it.
The “Bitcoin L2” category grew so big so fast that most people think it’s all just a scam now.
Almost all of them are scams.
But moving from “nobody tries to build on Bitcoin” to “most of these new Bitcoin projects are scams” is an incredible improvement.
Bitcoin is back.
— Zack Voell (@zackvoell) May 13, 2024
Similarly, the appetite to put Bitcoin capital to work is unprecedented. Some might sneer at the notion but the prospect of Bitcoin-native financial markets has awoken a sleeping giant and there is no putting him back in the bottle. There’s no sugar-coating it, this speculative stampede will surely bring its share of lies, fraud, and deception but Bitcoin was never immune to those.
One thing is for sure, we are far beyond the point of no return. Bitcoin culture, as we all once imagined it, is obsolete. It was a vision destined to fall apart. Much too vain and far too narrow. The pendulum had swung too far.
Bitcoin, like many complex systems, is an exercise in balance. Good and bad. East and West. The yin and yang.
As we enter this new cycle, pushing against the forces driving it appears futile, if not misguided. Bitcoin is not changing nor is anyone trying to change it. Rather, the world around it has evolved and it seems better advised to channel this energy into something productive than fight it.
风向转变时,有人筑墙,有人造风车
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