Ah, the Wild West. John Wayne, The Man With No Name, Billy the Kid and Jesse James.
Borders have a way of capturing everyone's imagination – young and old. Cowboys, outlaws, gold diggers. A land of opportunity and harsh cruelty. Ruthless but irresistible.
Bitcoin was once such a frontier. The early days were full of scams, “criminals” and underground markets. The underbelly of the internet embraced it first. The Agora was full of foreign and mysterious characters. It has flourished as a counterculture, devoid of any rules or regulations. There is no government to protect you from yourself. No KYC, no AML – just your name, your PGP key, strangeAnd the network of trust. Fortunes were made, fortunes were lost. A beautiful chaos where only the authority of the Bitcoin blockchain reigned supreme. Real chaos.
Along the way, entrepreneurs and venture capitalists stepped in, and the song of mass adoption invited lawmen to our lands. A decade on, the prospect of a new world in which the individual stands at the center seems bleak. Markets have been institutionalized, businesses have been regulated, and consumers are now “protected.” Anti-establishment has been replaced by orthodoxy. Tradition and sovereignty were exchanged for religion, after the lure of gold and the dollar. The bold dream of an underworld economy has vanished.
That is until you begin to look outward, to the Far East, where new frontiers have emerged.
Wild Wild East
I have not an ounce of confidence in a man who has no compensation for small vices at all. – Mark Twain
When I boarded the plane to Hong Kong last week, it was interesting to remember the timeline that got me there.
Some might argue that the sun is beginning to set on China's Bitcoin empire following the famous block size war in 2017. Its golden child, Bitmain, and its close associates suffered an embarrassing defeat at the hands of Bitcoin users. Some never recovered financially from the ordeal. The ban on the blanket industry a few years later certainly put the final nail in its coffin. The miners were exiled and exchanges ceased. The region that was once a tyrant in the ecosystem has retreated into the shadow realms.
These dynamics have forced many market players into some awkward positions. While NgU extremists in the West were drawn to KYC markets, Chinese Bitcoin users had to rely on unregulated cryptocurrency platforms to meet their needs. Two forks that would set the tone for the coming years.
For better or worse, the result of this divergence was on stark display at Bitcoin Asia 2024. Sure, there were full steamrollers on display everywhere you looked. It's likely that at least a few of them are scams or will flare up in ways that make it difficult to tell them apart. Most of the ideas were ridiculous. What was noticeably missing though? Central exchange kiosks and traditional currency operators. New frontiers!
Naturally, the usual suspects are already throwing accusations and trying to expose everyone involved.
You have to understand that tremendous energy has been expended in the last ten years trying to clean up Bitcoin. Western venture capitalists and entrepreneurs have rolled out the red carpet to make the paper establishment feel at home here, and this pesky Chinese market is making them a little uncomfortable. Their ideological boundaries have been breached. The lineages collectively intersect and challenge common NgU tropes. Foreigners are considered a nuisance because they do not conform to the doctrine of the day.
They lose the narrative game, control slips away from them, and they feel terrified.
Yin and yang
What is the strictest law in our existence? growth. – Mark Twain
I have personally chosen to embrace the emerging chaos. At a time when the regulatory noose is tightening around our necks, the return of our extravagant Eastern brothers is a welcome sight. Maybe a good dose of chaos is just what the doctor ordered to cure the conformity disease that has taken hold.
I can't say exactly what will happen but I know change when I see it. These 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 great interest in Bitcoin development coming from this part of the world. I think it's naive to assume that nothing good can come out of it.
The “Bitcoin L2” category has grown so quickly that most people think it is all a scam now.
Almost all of them are scams.
But going from “no one is trying to build on Bitcoin” to “most of these new Bitcoin projects are scams” is an amazing improvement.
Bitcoin is back.
– Zack Voell (@zackvoell) May 13, 2024
Likewise, the willingness to put Bitcoin capital to work is unprecedented. Some may scoff at this idea, but the prospect of financial markets based on Bitcoin has awakened a sleeping giant that cannot be put back into the bottle. There's no hiding it, this speculative stampede is sure to bring its share of lies, fraud and deceit, but Bitcoin has not been immune to these.
One thing is certain, we are well past the point of no return. Bitcoin culture, as we all once imagined it, is outdated. It was a vision destined to collapse. So much in vain and so narrow. The pendulum has swung too far.
Bitcoin, like many complex systems, is an exercise in balancing. Good and bad. East and West. Yin and yang.
As we enter this new cycle, pressure on the forces driving it seems counterproductive, if not misguided. Bitcoin doesn't change and no one is trying to change it. Rather, the world around him has evolved and it seems better to channel this energy into something productive than to fight it.
When the wind direction changes, some people build man-made walls and windmills