Search for Bitcoin on Google is up again in recent weeks. In fact, according to a colleague at CryptoCompare, search for Bitcoin is surging by three times the amount compared to 2017, with the question what is Bitcoin? as the main query.
It touches upon a point I’d like to make about this peculiarly contagious asset.
The curiosity and criticism surrounding Bitcoin is significant, because more than a technological and monetary phenomenon alone, Bitcoin is a discursive one, held together and imbued with value through ongoing conversation.
The Power of Stories
The most impactful social forces of our times are those grounded in powerful narratives, from the great world religions to political ideologies that still evoke the passions of the masses.
We may be impulsive creatures, tempted by short term gains and quick gratification, but we are moved en masse by big ideas – the speeches that cite history and promise a bright future, generational change or pivotal advances in technology that unleash new capabilities in our species.
While gold and diamonds may evoke romantic imagery or carry a sense of mystery, Bitcoin and other digital assets tap into a different web of meaning and derive much of their value from a narrative around social change as well as people’s understanding of and perceived need for that particular change.
Anyone who searches online or queries friends about what Bitcoin actually is will quickly move from curious discussions about some anonymous founder on a forum, the double spend problem, mining and the coin’s price history, to a much deeper and more interesting discussion around the nature of money, markets, capitalism, trust and the distribution of power in society.
We might forget that beyond simply holding some coins in a wallet, a whole media landscape has formed around the digital asset economy, with debates stretching into academic disciplines as well as regulatory circles, and the idea that this all started in one of the corners of the Internet and has now entered the mainstream space as an object of enquiry is something that shouldn’t be overlooked.
Warren Buffett or even Donald Trump may claim the coin is backed by nothing, whereas advocates might argue the asset is backed by the protocol and the degree to which it is able to incentive miners to maintain the blockchain’s integrity, but the overriding factor that gives life to this otherwise dormant technology is the conversation around it.
In that sense, both naysayers and believers are participants in the social construction of Bitcoin and its market trends, rendering the asset increasingly liquid as more and more people come to a view.
Enacting The Narrative
When investors in Bitcoin refer to the asset as a hedge against inflation, it’s not just a consequence of Bitcoin’s limited supply and a sense of pending scarcity, in the same way that gold might be perceived. Bitcoin is not digital gold, it’s a commodified notion of economic justice that places confidence in the belief that technology can solve social issues in an increasingly tech-dependent society. The latter is arguable, but maybe better to keep that for another discussion.
“Bitcoin is not digital gold. It’s a commodified notion of economic justice.”
Investing in Bitcoin is an affirmation that digital currencies are a logical upgrade to our current system. More than that, it’s an investment in the expectation that as our lives continue to digitalise and tensions around privacy, ownership, trust and freedom become more prevalent, Bitcoin provides an answer. Its underlying technology may be our best bet to maintain our ability to recognize and establish truth and reach consensus in an increasingly confusing digital landscape.
In a way, this can be compared to investing in Tesla when it’s done not just on the basis of the company’s performance, but also because of a shared vision of what the future of transportation and energy might or should look like.
In the early days of Bitcoin, despite much focus on scammers and Ponzi schemes, the conversations driven by the increased popularity of Bitcoin were much more ideological in nature than what we are seeing today. But to those who only look at the price, part of what makes Bitcoin so appealing is its ability to make people feel that they are part of something bigger, a social transformation that may take decades or a century to unfold. And it’s true.
For this reason, I believe education is critical to the success of this asset. Not education as a marketing tool to get people hyped up, but the type of education that generates meaningful conversations across the web and among friends – so that instead of price driving superficial adoption, it is real world change that comes to drive price.
About the author
Ben Caselin is Head of Research & Strategy at AAX. Drawing from experience working with various blockchain companies as well as development initiatives seeking to drive transformational change, and with a background in social theory, Ben supports the overall efforts at AAX to advance a critical discourse, shape the narrative, and build out an educational body of accessible knowledge around digital assets to promote adoption.