I’ve been thinking about Bitcoin for 12 years, and it took that long for this insight to finally click.
We love to frame it using familiar financial labels:
- gold 2.0
- internet cash
- alternative asset
- inflation or macro hedge
- non-sovereign money
- emerging asset class
- cross-border settlement layer
- digitally native collateral
- store of value
- strategic reserve asset
- etc.
While these labels make it easier to discuss Bitcoin with normies and people in TradFi or government, they’re ultimately just attempts to pigeonhole it. It’s far less an extension of the current financial system and far more a groundbreaking, entirely new technological paradigm.
Remember, Bitcoin had little to no financial value for years after launch, even though it was fully functional. People eventually began ascribing value to it because they recognized it for its technical merits.
While Bitcoin can easily be defined as “money” today, most other financial definitions and analogies fall well short of capturing its true nature. To explain it, we need to begin by defining it precisely, just as we might describe gold by outlining:
- molecular composition
- physical characteristics
- prevalence in nature
- cultural significance (e.g. Midas, Roman Aureus, the gold standard)
Similarly, Bitcoin should be described in terms of:
- a computer network running open-source code
- miners calculating and securing blocks
- block rewards issued at fixed intervals
- addresses, transactions, validators
- cultural significance (e.g. Satoshi, Block Wars, U.S. strategic reserve)
An examination of Bitcoin has to start not with the premise that it’s a modernization of current monetary frameworks, but rather as a new internet-native system rooted in math and cryptography.
Whether you respect Bitcoin as a technology or not, this framing is absolutely necessary before you can have an honest conversation about where it fits within the global financial system, and why.