Whether Bitcoiners like it or not, large-scale Bitcoin adoption is not coming this decade or next. It’s simply going to take a number of generations to filter into society.

This is an opinion editorial by Aleksander Svetski, author of “The UnCommunist Manifesto,” founder of The Bitcoin Times and Host of the “Wake Up Podcast with Svetski.” It is part four of his “Remnant Series.”

Bitcoiners are notorious for their over-estimation of how quickly Bitcoin is going to “take over the world” and become “widely adopted as money.” I’ve sat squarely in that camp for a long time now, but have come to think differently of late.

Before you accuse me of giving up, or call me a flake, I ask that you read on and reserve your opinion until the end.

I like to think that I am maturing in how I view Bitcoin. Call it temperance, patience or a dose of humility — but I am trying to add some realism, or a “lower-time preference” to the often overhyped perception of Bitcoin among some of us. But, as you’ll note, I think on a longer time-scale, none of us are “bullish enough” (hat tip CK).

Let’s dive in.

Bitcoin Is A Techno-Socio-Economic Transformation

People are very quick to project technology adoption curves onto Bitcoin. But the problem is that Bitcoin is not just a technology.

It’s not just a smartphone, or a computer, or a social network, or a new stock or security, or a new payment method, or a search engine, or a messaging platform, or any other new product, app or service.

Bitcoin is an entire techno-socio-economic transformation. It’s a reinvention of money from the ground up, incompatible with any prior primitives.

So, it’s not only orders of magnitude larger as a shift, but it’s also completely different in a paradigmatic sense. These are massive benefits and massive hurdles.

Benefits because:

Bitcoin has the most significant upside possible. If it is fixed in supply, and the market it’s going for is global money — implying that it will be the measure against which every stock, property, business, vehicle, handbag or thing that exists on the earth is evaluated — then it follows that Bitcoin will, in time, be the single most liquid and valuable “unit of value” on earth. If it’s incompatible with the old, it is truly a paradigm shift. And if it’s superior (which it’s proven to be across every dimension important for money), then it will not just “compete” with the old guard, but it will completely replace it. This is not a “carving out of a new market,” but a winner-take-all and, fundamentally, “change-the-nature-of-the-game” kind of transformation. It’s much bigger.

Hurdles because:

Such a transformation is a big deal. Becoming global money will not be a walk in the park, it will not come easy, it will face many, many headwinds and corpses will line the path along that journey. Change is hard at the best of times, and with the most willing of counterparts. We’ve got neither on our side.The nature of paradigm shifts is that most people don’t see them, and even when they do, they rarely understand them. As such, it takes a while to achieve critical mass (whatever that measure even means), and a much, much longer time to arrive at so-called “mass adoption.” Not only that, but people don’t like to be wrong, especially incumbents, so other than the time factor, you have the push back and ridicule from everyone.

These are both real hurdles and necessary to recognize. You can’t just close your eyes and ears, tweet that “Bitcoin fixes this” and pretend it’s all going to be OK because NgU always happens. No.

We need to understand that we’re playing the “greatest game” as Jeff Booth would say, with the greatest stakes, for the largest winnings, against the greatest foes — both external and internal. We’re fighting both the establishment and the very cultures we’ve been brought up in.

There is more change that needs to occur than any of us could possibly fathom.

I don’t say this to discourage you from Bitcoin, or to make you feel like, “Damn — I’m going to die before I see the upside,” but to a, inspire you that this is probably bigger than you thought, and to b, dose you with some realism so that you can prepare yourself mentally and quit playing short-term games. You have to pace yourself.

Bitcoin is a marathon, not a sprint.

The Three Generations Theory

Large-scale, socio-economic shifts take generations to settle in and normalize. The old guard needs to die, so to speak, so that those born into the new paradigm can lead.

Each generation is a paradigm shift in and of itself, and each successive such change brings with it a completely new understanding of and relationship to Bitcoin.

Let’s explore these…

Generation One: The Infection Stage

We are in the first generation of Bitcoin. Call it the first chapter, or the first “era.” This era or generation will span 20 years and will form the “infection” stage for Bitcoin.

I call it that because, in this stage, Bitcoin is infecting the system. It’s a virus of sorts that latches onto hosts who then act in such a way as to cause it to spread further. Its intent is to infect key infrastructure, key minds, key levers and key systems in the current paradigm. It needs to initially creep in as unnoticed as possible, then form some sort of symbiosis with the host as it grows, so that there emerge mutual benefits for both the ever-expanding set of hosts and the virus (in this case, Bitcoin).

We’ve seen this happen.

In this stage, Bitcoin had to prove that it was something someone would trade for money (or pizza). It had to show a significant, commercial “proof of concept,” which it did with Silk Road. It needed to proceed through an early stage of monetization (Mt. Gox) and it had to then inspire an entire industry of copycats because what it did was so transformative — which we’ve seen with shitcoins.

With this comes a whole lot of speculation, until we finally reach significant enough saturation in total market capitalization or liquidity that we can make a phase transition to a new paradigm.

We’re right in the middle stages of the speculation mini-era of this first generation, or infection stage of Bitcoin’s early life.

While some of us radicals view and use bitcoin as money and our unit of account, the rest of the world generally views it as a speculative asset, or something you “trade” for more USD. There’s a reason why it’s correlated with markets, and while there may be some signs of decoupling, it really is still early and people will continue in the near term to treat it as a “risk-on” asset.

Some people call this a “bad” thing, and argue that it takes away from what the promise of Bitcoin was in the beginning — but I think they’re missing the point. Money makes the world go round, and never more so than in the modern, material world that we live in.

Therefore, to have the greatest impact and ensure the most effective symbiosis, Bitcoin has to be an economic and financial animal. To fix the debauchery, Bitcoin must subsume the debauchery and then slowly, like a virus (or in the case of Bitcoin, an anti-virus), infect the hosts and begin to change them.

The lowering of time preference, and the subsequent adaptation and maturation of people’s behavior is an oft-sighted example of this effect. If you’d like to learn more about that, see Saifedean Ammous’ article in the “Austrian Edition” of The Bitcoin Times: “Making Time Preference Low Again.”

So, there you have it. Generation one, a 20-year time span. We’re 15 years in and very much on track. We have another five years to go before the next generation, and in these five years we will see two more halvings, an enormous amount of speculation and a real acceleration toward that liquidity or saturation of market capitalization I mentioned earlier.

At the same time, behind the scenes, things will be built to set the stage for the next generation. Which of course brings us to…

Generation Two: The Infrastructure Stage

Imagine being born in 2009, the same year that Bitcoin was.

You grow up and come of age in a world where Bitcoin has always existed. For you, as a kid growing up, you just took it as a given that money is a digital thing, and this convoluted idea of opening up bank accounts, or walking around with printed paper bills and plastic cards just seems foreign or strange to you.

In 2029, you’re turning 20 and perhaps speculation hasn’t really been on your mind yet. Perhaps, instead, you see a problem that needs to be solved, and you simply view Bitcoin as a tool to help you solve it.

Keep in mind that at this stage, bitcoin’s price would be significantly higher and the volatility lower. Things like the Lightning Network will be more advanced, alongside other abstracted layers anchored in Bitcoin. As such, you view all of this early, emergent infrastructure as a toolbox — not so much a speculative asset. In fact, you might view other things that way, and choose to gamble with them, but because a, Bitcoin has matured and the volatility has dampened a bit, and b, so many services now offer bitcoin as a funding option, you decide that it’s the standard against which you’ll measure your gains. It’s no longer the speculative asset first.

There’s even a chance that your parents were Bitcoiners of the first generation and they taught you principles or passed bitcoin over to you and you grew up immersed in it. So, not only is Bitcoin something that’s just “always been around,” it’s something you deeply understand.

Neither are far-fetched ideas, given the era you’ve grown up in. Imagine how you and those in your generation will view Bitcoin and how you’ll all use it. Completely differently, yes.

That’s why I see this next stage as the tooling or infrastructure stage.In this era, Bitcoin will finally move on from the speculators and into the hearts, minds and hands of the builders.

The 20 year olds who are raising capital and building businesses in this era will use Bitcoin, Lightning, and other layers as tools that give them such a significant edge in the world that we will see an entire array of products and services that integrate money into their operations, in much the same way that communication has been embedded in everything we use today.

The incentives will evolve in such a way that having Bitcoin and its abstracted layers in your tool kit will give you superpowers.

But… keep in mind that for much of this era, the generation beforehand will still be pulling the purse strings. There will still be a cultural, normative element that views Bitcoin as foreign or speculative and despite “everything that’s going on,” will fight to hang onto the past.

This era will be the clash of the new builders and generation one Bitcoiners on one side, versus the remaining elite of the old world who still own much of the fiat wealth (stocks, bonds, property, enterprise, shitcoins, etc.). Generation one and two Bitcoiners, especially in the early innings of this era, will still be outnumbered. But of course, no great man ever backed down from a fight — no matter the odds.

You take this period out 20 years, to 2049, and I don’t think any of us can begin to fathom the kind of infrastructure, products and services that will come from it, and how much the tide will shift. Which of course brings me to…

Generation Three: The Mass Adoption Stage

This is the generation of mass adoption. This is where our children’s children come of age. They will truly not know of a world in which Bitcoin didn’t exist, and may actually enter adulthood without even knowing what fiat is.

The end of this era is when the last remnants of our generation will begin to die off, and whatever duct tape was holding any of the old infrastructure together will melt away. The city of fiat will be abandoned and we’ll enter the true mainstream adoption phase.

You might be thinking, “No man. It will happen faster because look at all the tech that’s going to be built by then.”

But I’d counter that: “Sure, lots of tech will be built then, but I’m pretty certain that a significant number of people will still hesitate to sell their homes, their cars, their products or services for magic internet money.”

That number will have shrunk significantly, but if you think that governments, large corporations and people who have succeeded in life from one method of operation are going to go all in and trust a 40-year-old money over things like property that have been around for thousands of years, then you’re kidding yourself.

Bitcoin is where we’ll end up, but the wealth needs to change hands first and that will take time. This is why I believe this third generation is where the mass adoption phase occurs. They will come of age in a world where we have superior financial technology and an economic infrastructure that will allow them to use bitcoin as capital. The most liquid, the most widely-accessible, the most significant, trusted form of capital available.

Take this to 2069, and you’re talking about a completely different world. This is when Bitcoin truly comes of age. It’s the stage when fiat either dissolves, dies or becomes some relic of the past, while Bitcoin becomes both a global settlement layer and the global money.

It’s the point in which Bitcoin or some abstracted application layer anchored into it forms an integral part of almost all technological applications used by people from all around the world.

At this point, Bitcoin is no longer the virus, but has united with and created a new host.

What happens beyond that, I do not know. But it’s exciting to think about. We’ll be in a very new paradigm by that point.

For Our Children’s Children

You’ll note by my language that my certainty about what happens at each stage diminishes as we get further out. I’m pretty sure of what the next five years hold, and I have a level of confidence for at least the first half of the second era, but beyond that I can only assume and give broad strokes as to what’s likely.

This is because I’m human and humans always underestimate compound effects, while Bitcoin is subject to more compounding effects than just about anything else we know of (at the very least as an asset, if not other things). With each day that passes and each new satoshi held by each new user, with each new miner that plugs in, each new merchant that accepts bitcoin, each new node that runs and each new Lightning channel opened, Bitcoin compounds and grows.

None of us are ready for what this means across three full generations, and sadly, a lot of us won’t live to see it. But that’s the straw we’ve drawn.

Our generation has bestowed upon us both the gift of being the founding fathers of a new world, and the curse of enduring clown world for this privilege. While we may not get to really enjoy the fruits of this labor, we will have been the generation that goes down in the history books as the one that changed it all.

I don’t know about you, but that’s a trade off worth making.

First generation Bitcoiners are like those who laid the foundation and the first stones for the cathedrals of the ancient and feudal eras. They’d never live to see these structures finished, but they would forever be memorialized as their founders.

And who knows — perhaps we’ll look down from the next realm and admire what we’ve done, like those greats who came before us did for their creations.

I don’t know.

What matters, and I will leave you with this, is to recognize that Bitcoin is a multi-generational phenomenon. It’s not Google, Apple, Facebook, Twitter, a smartphone, PayPal, Visa, a stock or a mere commodity. It’s so much bigger than all of these combined and, because of how fundamentally significant this is, it will take people time to adopt it.

It will take a few generations to normalize. It will take our deaths to see it reach its potential — not that we need to be round up and shot, but that our generation needs to give way to the next and the next for the new paradigm to truly take hold. Once we’re gone, Bitcoin will truly flourish.

I hope you keep that in mind when thinking about Bitcoin.

We need to be careful about projecting technology adoption curves on it, and through disappointment, attempt to tinker with it. What is not broken doesn’t always need to be fixed or upgraded, and in fact, perhaps Bitcoin’s number one feature of all is the fact that it will not change, or change very little in the timescales I’ve referred to in this essay.

If Bitcoin’s consensus rules have remained unchanged and it has “tick-tock, next block’d” for three, four, five decades, then people will naturally have developed the thing that matters most for a new socio-economic standard and paradigm: trust.

And as much as Bitcoiners hate that word, trust matters — the truth is that you most trust that which you can verify. This is why Bitcoin will ultimately be the most trusted monetary, economic, and communications layer on earth, after a few generations.

I hope you enjoyed this piece, and that I’ve challenged your thinking. Follow me at SvetskiWrites on Twitter for more, and keep an eye out for my new book “The Bushido Of Bitcoin,” which will be available for pre-order on Geyser.fund in March.

I’m also trialing a new Bitcoin app called “OpenTip” where you can tip Bitcoiners for work you value. You can check that out here:

This is a guest post by Aleksander Svetski. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Filed under: Bitcoin - @ February 25, 2023 1:00 pm