A look at the evolving face of the world’s #1 digital currency.
What is bitcoin? A borderless currency? Cash for the darkweb? An uncorrelated asset class? All of these and more, in different proportions and at different points in its history. That’s the conclusion of an intriguing study entitled ‘Visions of Bitcoin’ that takes a look at the different narratives about bitcoin that have existed within the community in the years since its launch.
Because bitcoin doesn’t arise from a company and doesn’t have a formal brand or marketing department, what it is and how it is perceived largely depend on the community. What they use it for, what they want it to be — that’s what it is. And that has changed over time.
Back in 2014, bitcoin was a fantastic tool for e-commerce. With transaction fees of just a few cents, it was the ideal way to purchase goods online from anywhere in the world, without the charges, restrictions and chargebacks associated with credit cards. That vision ran aground when transaction fees spiked as high as $20 last year, at which point ‘digital gold’ — the idea of bitcoin as an investment-grade commodity — came to the fore.
Overall, the authors of the study pinpoint seven different narratives, which have varied in their impact over the years:
- E-cash proof of concept
- Cheap p2p payments network
- Censorship resistant digital gold
- Private and anonymous darknet currency
- Reserve currency for the cryptocurrency industry
- Programmable shared database
- Uncorrelated financial asset
You can see the part that these elements have played in the overall bitcoin narrative over time in the chart. What’s perhaps most interesting is the evolution of different narratives that lie in tension (like cheap payments vs digital gold), and if and how they are resolved. The next tension, it seems, is the transparent financialisation of bitcoin vs its use as an anonymous currency — though with so many looking forward to an ETF, and so many privacy coins now in existence, that battle is all but over.
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