It’s a cliche at this point to compare bitcoin to the “early days of the internet” since they are both examples of emerging technologies.
But does the cliche actually hold true?
If we work with a vague definition of the World Wide Web going live in 1991, then within the first decade that ecosystem grew faster and had more demand for compliant use cases than bitcoin arguably has today, one decade in.
In 1994, the New York Times reported companies were “rushing” to set up shop via the World Wide Web, although the user experience was still “slow” and “crude.” Just like blockchain technologists, early internet companies ran into scaling issues. The 1994 Times report described the web as “already showing signs of suffering from its own success, as crowds compete for access to popular databases.” Yet, people were already starting to think about subscription paywalls for content distribution.
Industry insiders were so bullish on the commercial potential that in the December 1995 issue of Wired magazine, Sun Microsystems CEO Scott McNealy predicted the rise of “disposable word processors and spreadsheets” priced per use and delivered via Java software.
Within the first decade it was clear the internet could be used for commerce, interpersonal communications, marketing and education. There were established companies using it to turn a modest profit.
Blockstream alumnus and founder of the Blockchain Commons, Christopher Allen, said he is “concerned” about the lack of bitcoin adoption at this stage, which is why he is so optimistic about scaling solutions like the lightning network.
“Lightning does have the potential to be where you buy your steak and bread,” Allen said. “Until you buy your bread or steak with bitcoin, you’re going to have to convert to some other currency, no matter how good it is as a censorship-resistant medium.”
To be fair, cryptocurrency has already proven its usefulness through cross-border collaboration. For example, the Decred treasury has distributed roughly $3.5 million worth of cryptocurrency to more than 60 contributors, according to the community’s press representative. Roughly 30 percent of these contributors hail from Latin America and 15 percent are from Africa, a more global distribution than comparable Silicon Valley startups.
Even so, such experiments are a far cry from the “mainstream adoption” many fans predict bitcoin will undergo in becoming a global, self-sustaining currency.
Community roots
Bitcoin may be behind the internet’s timeline in terms of commercial use cases, but it has already achieved comparable social functions.
By 2001, the New York Times was describing internet services like email as a platform for relationship-building with former coworkers and classmates, while startups pioneered video and music streaming services.
One such Yahoo group reportedly included 600 people “exchanging hundreds of messages a month about the bankruptcy proceedings, health insurance and the fate of their retirement plans.” This may be comparable to crypto communities today, which rely on forums, GitHub and social networking platforms like Twitter.
According to Allen, who focused earlier in his career on core internet protocols, the internet was also designed to offer more freedom of choice to the users – even though, through big-tech consolidation, the industry eventually failed to reach that vision.
Zcash co-creator and Electric Coin Company CEO Zooko Wilcox agreed that the early software projects he worked on were supposed to offer “freedom” and “end wars,” because people would just talk things out over the internet.
Wilcox said, looking back at his time in the 1990s working on bitcoin’s predecessor, Digicash, that he idealistically underestimated the importance of economic incentives.
“What I would tell myself, if I could use a time machine, it just being compatible [with commercial use] isn’t good enough,” Wilcox said. “This was a fatal flaw in the overall design of the [open software] movement, that is relied on ongoing volunteers or donations. It didn’t have a built-in economic feedback loop.”
Listen to Leigh’s full interview with Zooko Wilcox
In this regard, bitcoin has a great track record during this first decade. Yet, it remains to be seen if bitcoin’s ecosystem provides a self-sustaining model.
Similar risks
Some coders believe early advocacy for strong legal frameworks that protect freedom, coupled with forward-thinking precautions, could help the decentralized “Web3” avoid or minimize early mistakes.
“Protocols would have a lot of flexibility in terms of what types of security you need, etc., and along the way we ended up creating the central Certificate Authority (CAs) business … not quite realizing that 20 years later all the CAs all got consolidated,” Allen said. “We were supposed to be able to choose which CA we trusted. Centralization crops up in odd ways.”
Marco Peereboom, a Dell alumnus and Linux veteran who is also currently the Decred community’s New Systems Development Lead, agreed with Allen that the internet was built by idealistic young men who wanted to “uplift humanity.” (Not unlike crypto adherents today.)
“I’m extremely disappointed with where we are today,” Peereboom said. “The amount of snooping the government is doing, I didn’t anticipate. … More cryptography early on would have done the internet a lot of good, and more advocacy as well.”
Along these lines, Allen is focused on work related to user-friendly-yet-secure key management and blockchain identity standards. Meanwhile, Peereboom is working to refine Decred’s open source funding experiments, which is how he earns a salary today.
Much like the altcoin project Dash, Decred pays freelancers through public votes and grants collected from the network itself. Plus, Decred developers can earn money anonymously based on the merits of their contributions.
“Until the internet moves away from the ad-sponsored model, it will only get worse,” Peereboom said, referring to potential surveillance and corporate dominance via upcoming Web3 models.
“I think anonymous payments are a must-have feature for any cryptocurrency to be around,” he said. “I hope I’m not making the same mistake twice. But I really do believe cryptocurrencies have the potential to change the world.”
Beyond bitcoin
From the perspective of veteran bitcoiners like Peereboom, many of whom are now focused on altcoin projects, bitcoin’s weakness is how difficult it is to update the software.
He said there must be a middle ground between constant changes and nearly impossible changes.
“Writing bug-free software just doesn’t happen,” Peereboom said. “You need a mechanism to deal with consensus changes.
Plus, bitcoiners like Peereboom and Wilcox are both prioritizing the privacy-enhancing aspects of cryptocurrency. Is it possible for governance mechanisms to resist centralization over several decades? That’s what Wilcox is trying to figure out.
“It would be dishonest and overselling to tell people this is inevitable,” Wilcox said.
He added Linux failed, in his opinion, because the movement “redefined success” to match corporate adoption rather than broader social change. As larger institutions profit from or leverage bitcoin, just like with the internet, the risks to users’ personal freedoms increase.
“There’s going to be a lot of challenges along the way, and harm. I’d like to mitigate the harm as much as possible,” Allen concluded.