Bitcoin is not a cult
Opinions of bitcoin tend to skew strong. On one end of the spectrum you have Bitcoin “maximalists” (used both pridefully and pejoratively), who view bitcoin as the absolute and ultimate solution to money. On the other side are Bitcoin “haters,” a subset of no-coiners (people who don’t own bitcoin) who believe that bitcoin in it of itself is a problem with no legitimate use and will ultimately be banned to death. The problem is that, although these two factions are overwhelmingly the loudest in the broader bitcoin community, they are actually the minority. Today, the silent majority of bitcoin holders lie somewhere in the middle of these two camps, where bitcoin and the traditional financial system can co-exist; where the former can even make the latter better.
But can they? I think not.
*Queue gasp*
There's an ongoing joke that bitcoin is kind of like a cult. While I wholeheartedly disagree with the statement, I surrender that certain groups in the bitcoin community exhibit cultish behavior. A lens we can use to observe this is by defining a cult as: A system or community of religious worship and ritual.
First off, bitcoin is a community. Of course, it's much more than that, but generally speaking it would not exist if not for the people who use it. Saving, spending, hodling, bitcoin is a community.
Between community, religion and ritual, I think that religion is the least viable reason to characterize bitcoin as a cult. However, there is an arising group of bitcoiners who compare their faith in God with their faith in bitcoin as something that shines a light, exposing the bad and illuminating the good, on the financial system we use today. Especially since moving to Texas this as become apparent to me. Books like Thank God for Bitcoin by OG Bitcoin Developer Jimmy Song also make the case for this.
But I think the real tell that bitcoin can be compared to a cult is in the ritual. Definitions of "maximalists," vary by individual, but most subscribe to the theory (this word chosen intentionally) that bitcoin is inevitable and will solve all of the worlds problems. All follow similar tenets, that are critical to the definition of bitcoin maximalist itself. Some of which even come with their own mantras.
Attending local meetups to be amongst their community ("Strength in numbers")
Distrusting the Government; or most people for that matter ("Don't trust, verify")
Self-custodying their bitcoin ("Not your keys, not your coins")
Being grateful that we have an open and permissionless way to store our energy across space and time without being censored or debased, where success is granted based on merit versus inheritance. Recognizing that, even in bear markets, bitcoins monetary schedule and strict adherence to a four-year market cycle, provide hope and the predictability to plan our future around ("Stay humble, stack sats")
Believing that money is the coordination tool for all economic activity, and thus, using better money will result in most other global geopolitical and economic problems beings solved (“Fix the money, fix the world”)
With the rise of 10,000 cryptocurrencies, set to replace bitcoin as a “better, faster, more energy efficient” solution, it’s no surprise that maximalists have been railed for there strong belief in bitcoin, but not the broader ecosystem. For the record, I like Sam Callahan’s definition the best:
Anyways, I was reminded of this over coffee with a friend when I was in Houston this last week to support the local meetup: not everyone falls into one of these two camps. Which sounds silly, but after spending so much time around bitcoiners since working in the industry, it can be easy to forget. In fact, most people believe that bitcoin won't only co-exist with fiat currencies, but that it can even make other forms of money and ultimately financial systems better.
There's a good reason to believe this, considering that bitcoin already coexists among fiat currencies all over the world. In the U.S., investors use bitcoin to escape the relatively rampant inflation caused by quantitative easing through money printing. In Venezuela, citizens use bitcoin to preserve their savings from daily debasement. Turks convert their Lira to Bitcoin so their government cannot seize it from them. The people of Africa use bitcoin because they don’t have access to the traditional banking system. They can be there own bank and send money around the world without getting raped by fees from Western Union. In El Salvador, the government declared bitcoin as legal tender so they didn't have to be slaves to the U.S. dollar system. All of this happening generally unrecognized and unreported in an era of dollar supremacy complacency.
Because bitcoin and dollars compete on the open market as a monetary good, they will naturally be stacked up against one another on their properties that make them a good form of money. As new information becomes available to market participants, demand for between currencies will change. Some of the advantages that the Bitcoin Network have over the dollar system are:
Durability
Portability
Transferability
Divisibility
Scarcity
Censorship Resistant
Known inflation rate
Realistically, the only ways that the dollar can adapt to compete with bitcoin are through the first three. The digitization of the dollar in the form of a Central Bank Digital Currency (CBDC) would make it generally just as durable, portable, or easy to send as bitcoin. However, they are all cloaked in the expectation that their government would not seize their wealth, which they 100% can and will in a CBDC world. But if anything’s for sure, it's that inflation is pivotal to growth in a neoclassical Keynesian model, AND that central bankers have zero incentive to release control of their monopoly on money by undermining their ability (and necessity) to print more money to keep the economy going.
Currently, bitcoin has the edge over the dollar on pretty much every monetary property minus acceptability. So while it’s an optimistic view to believe that bitcoin could incentivize fiat currencies to “be better',” it’s naive to think so. In reality, it’s very unlikely central bankers will try to make the U.S. dollar more scarce, transparent, censorship-resistant, or fixed. Why enrich others at your expense when you can do the opposite?
Like email, bitcoin is a demand side phenomena. Meaning, the more people who use it, the more valuable it becomes. The one (and only) thing that the dollar has on bitcoin right now is its acceptability. But as more people choose to accept bitcoin as a form of purchase and savings, the questions then become:
What percentage of people never opt into a new form of money no matter how much better it is?
What lengths will the banking cartel and governments go to to protect fiat currencies (negative interest rates, stimulus checks, etc)?
In what ways will the dollar innovate to incentivize people to continue to use it.
Many bitcoiners share the belief that bitcoin's outcome is a binary function. It either absorbs all economic activity, denominated in bitcoin as a global reserve currency and unit of account, or it fails. In the meantime, regardless of the ultimate outcome, an exoperative (opposite of cooperative - yeah, I made it up) relationship exists where people will choose the money that works best for them based on their particular circumstance.
Email grew from 100,000 users in 1983 shortly after it started, to 1,000,000 by 1989 and to 400,000,000 just ten years later. We will act surprised when bitcoin does the same thing (currently around 400,000 based on BuyBitcoinWorldwide).
Bringing it home
Despite a few similarities with a small group of people, bitcoin is most definitely not a cult. Expressions like “bitcoin is a cult” have been thrown around and will continue to be created as long as people think value is subjective.
The only truth about bitcoin is that it exists. It exists as a set of rules that no one person can control so that we can use it as a tool in our lives. So long as that bitcoin stays this way it will continue to exist. If it does not, it will fail.
From a moralistic lens people will form ethical committees and governing bodies based on subjective belief of how these rules should work. It’s true today, and will be true years from now. Fortunately for us, bitcoin doesn’t care what you or I think about it. To me, that is so refreshing.