Note: This post has been written by a WazirX Warrior as a part of the “WazirX Warrior program“.
Imagine a new start-up whose founder left the company in its very early stage. The same happened to Bitcoin when Satoshi Nakamoto, the creator of Bitcoin, left the project in the very early days. Any startup on this place will go south in this case, but Bitcoin is different, it’s decentralized. Bitcoin is not dependent on any one person or group. It does not need to change much.
“Bitcoin is dead”, we see this almost on every mainstream media, but it has always proved to be served as a promotion. The list is big but here are a few examples of these promotions:
- Paul Krugman’s “Bitcoin is Evil“
- Augustin Carstens “My message to young people: stop trying to create money“
As of today, Bitcoin has gone through a number of crashes, bans, regulations, attacks, and whatnot though Bitcoin has touched an all-time high. Just like Bitcoin, there are attacks on other cryptocurrencies as well but nothing has changed their way of being true decentralized money and store of value. What does this mean? Bitcoins and other cryptocurrencies not only aren’t hurt, but they seem to be getting stronger with every media attack from the establishment. Cryptocurrencies are anti-fragile.
Lindy Effect – Validity of Time
Its been a decade where cryptocurrencies like Bitcoin existed, and no one has been able to attack Bitcoin successfully. While eight years isn’t much for a new type of asset, it is a testament to its anti-fragility. Over eight years have passed, with Bitcoin code being 100% open to public/hacker scrutiny. The probability of long-term success is by far the highest among cryptocurrencies, applying the logic of the Lindy Effect.
Private Money Initiatives
The above two are initiatives of private money crushed by the state government, but cryptocurrencies still stand strong. The government would have crushed it till now if they knew how to.
Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.— Nassim Nicholas Taleb
Post-traumatic growth and Forks
Bitcoin faces continued stresses, and these have made it stronger, which is known as post-traumatic growth. Difficulty adjustments happen every two weeks as moderate stresses, and the halvings are major stressors that occur every four years. Government attempts to regulate it are turned away and end up being confined to exchanges and on-ramps regulation. Forks have not diverted it or slowed it down. Frauds on exchanges may affect perception, especially externally, but they ultimately reinforce the value of secure private money to those in the know.
When people watch Bitcoin standing strong against hackers, state governments and other sources of potential disorder, they start building trust in Bitcoin. Trust builds when people realize that it is impossible to change Bitcoin fundamentals.
The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.– Satoshi Nakamoto (February 11th, 2009)
Above image shows the difference between a fragile centralized network and an anti-fragile decentralized network.
Cryptocurrency – the anti-fragile idea
An idea survives if it is a good risk manager, that is, not only doesn’t harm its holders but favors their survival… More technically, it needs to be convex and reduce fragility somewhere.– Taleb, An Expert Called Lindy
It’s easier to copy features and add in layers/app on top of the open-source code like Bitcoin than what makes this blockchain project win ?
The properties mentioned above. A conservative, risk-averse core protocol layer. Resistance to change and the increased trust is coming from this. Bitcoin will scale and add many altcoin features in the layers above. It might not be now, and the speed of execution might not satisfy all people. Security and trust preservation will be prioritized more.