The Bitcoin whitepaper, authored by the enigmatic Satoshi Nakamoto, celebrated its 17th anniversary on October 31, 2023. This pivotal document, titled “A Peer-to-Peer Electronic Cash System,” emerged during the global financial crisis and established the groundwork for the world’s first cryptocurrency. Within its nine pages, Nakamoto articulated a vision for a decentralized financial system reliant on cryptographic proof instead of third-party trust. The primary aim was to address the issue of double-spending, enabling online transactions without the need for banks or intermediary entities. “We have proposed a system for electronic transactions without relying on trust,” Nakamoto stated succinctly.
Seventeen years later, Bitcoin’s reach has far exceeded its humble beginnings in cypherpunk communities. Recently, U.S. spot bitcoin ETFs have made headlines, amassing over $62 billion in net inflows and exceeding $150 billion in total net assets in less than two years, according to SoSoValue data. The cryptocurrency has made its way into mainstream discussions, infiltrating governmental circles, including the White House under the current U.S. administration.
Former critics have shifted their positions dramatically, most notably former President Donald Trump. Initially dismissing Bitcoin as a “scam against the dollar” in 2021, he has now advised his followers to “never sell your bitcoin” and even signed an executive order to establish a bitcoin strategic reserve as the 2024 presidential election approaches. Similarly, Larry Fink, CEO of BlackRock, who once labeled Bitcoin an “index of money laundering,” now promotes it as one of his firm’s most successful ETF offerings, viewing it as a safeguard against instability in sovereign debt. On the other hand, figures like Michael Saylor, CEO of Strategy, have transformed from skeptics into fervent advocates for Bitcoin, consistently acquiring BTC through stock and debt offerings. Saylor had previously cautioned that “Bitcoin’s days are numbered,” suggesting it might meet a fate similar to online gambling.
While many in the financial sector have embraced Bitcoin, JPMorgan’s CEO, Jamie Dimon, remains skeptical about its future and sustainability, even though his bank has entered the cryptocurrency space—recently allowing clients to use bitcoin as collateral.
The rise of Bitcoin, particularly through ETFs and corporate adoption, has drawn parallels to the mortgage securitization boom of the 1970s, a period known for skyrocketing asset prices. However, this transformation has incited discontent among early Bitcoin advocates who argue that the cryptocurrency’s foundational ethos—a form of money independent of state control—has been compromised by institutional involvement. For many within the cypherpunk movement, the integration of Bitcoin into Wall Street and government landscapes represents a paradox: a rebellion co-opted by the very establishment it initially sought to disrupt.
Concerns loom regarding Bitcoin’s sustainability. Average transaction fees per bitcoin block have plunged to their lowest levels since 2010, leading to apprehensions about long-term viability. While low fees are attractive to users, they diminish incentives for miners tasked with maintaining network security, particularly as block rewards halve every four years.
Originally developed as a peer-to-peer electronic cash system, the narrative surrounding Bitcoin has increasingly shifted towards it being a “store of value.” Phrases like “never sell your bitcoin” have gained traction, supported by many, including the Trump family and Saylor. At the same time, debates continue within the Bitcoin developer community, particularly between factions such as Bitcoin Core and Bitcoin Knots. A significant issue revolves around whether the network should permit the inclusion of non-monetary data, like Ordinals, or impose stricter regulations. Advocates for regulation cite the necessity of preserving the network’s integrity, while opponents view such restrictions as censorship that undermines Bitcoin’s foundational principles of openness and permissionlessness.
Additionally, the looming threat of quantum computing poses an unresolved risk to Bitcoin’s security, with the capacity for future quantum machines to potentially undermine existing cryptographic standards. No clear solutions have been proposed to mitigate this concern.
“Bitcoin has undeniably arrived and gained acceptance on Wall Street, with its sustained period above $100,000 serving as a hallmark of its success,” remarked Bitcoin veteran Nicholas Gregory. He emphasized the clear transition of Bitcoin from a medium of exchange to a store of value, asserting that its future trajectory remains uncertain. He expressed hope that maintaining its identity as a medium of exchange, along with addressing the quantum threat, will be crucial for its enduring relevance.
