The Acceptability of Bitcoin

The Story we Tell About Money

I watched a movie about the founding of McDonald’s recently. The movie is called “The Founder” and it tells the story of how a businessman turned McDonald’s into an internationally recognized restaurant. There was one scene in particular that I’d like you to watch. It is the scene where Ray Kroc, the CEO of McDonald’s, explains to the founder Richard McDonald what made them different from any other restaurant trying to do something similar.

It’s the Name.

The name matters. The story behind the money matters. What the name, and the story makes us feel, will determine how we perceive it. It will ultimately determine whether or not we accept it.

Other restaurants can have better food, better delivery time, better service, cheaper prices, or anything else. But they will never have the name McDonald’s, and the golden arches behind it.

We can observe the exact same phenomenon playing out in the world of cryptocurrency. Dozens of coins have a faster blockchain, with more bells and whistles, and cheaper transaction fees. They have smart contracts, and sidechains, and borrowing and lending built in. They have instant transfers, at no cost, and the ability to create NFTs. You can use one to buy flights, and another to buy merchandise from the Dallas Mavericks. But none of those cryptocurrencies carry with it the name “Bitcoin”.

As Ray Kroc puts it

“It could be anything you want it be. Its limitless, it is wide open”

The Story of Bitcoin

Bitcoin is a name that virtually everyone is aware of. It’s like McDonald’s, Coca-Cola, America, and Apple. Whether or not you know what Bitcoin is, you know about Bitcoin. In the 12 years since it has been around, it has somehow made its way into the cultural zeitgeist, and cannot be removed.

Bitcoin is the first cryptocurrency. The first internet money. Bitcoin is the creation of a mysterious founder(s) who has since left the world to figure out what Bitcoin can be. It has grown from pennies on the dollar, to become a trillion dollar asset. It is controlled by no one, and mutually owned by everyone. It’s a public utility, and a thorn in the side of central banks. Bitcoin is rat poison¹, and a ponzi scheme. It’s a tool used by criminals, and a tool of financial liberation for people in the poorest of countries. It’s money for your enemies, and money for your friends. Bitcoin is censorship resistant, self-sovereign, borderless peer to peer cash. Bitcoin is the lifeblood currency of the internet. Bitcoin is digital gold. Bitcoin is money.

Bitcoin is anything you want it to be, and this is what makes it stick as an idea in your head. What you think of it is irrelevant, the point is, you’ve thought of it.

Six Properties of Money; One Matters More

There are six properties of money.

1. Portability

2. Divisibility

3. Uniformity (Fungibility)

4. Durability

5. Limited Supply (Hardness)

6. Acceptability

Without a money being universally accepted, it’ll have a hard time of actually being money. Just because there are 1 million other people in your community that uses your obscure cryptocurrency, doesn’t make it money. A true money would be something that you can use outside of your community. You need to be able to take that money anywhere in the world, and be confident that the locals will accept it as such.

Admittedly, Bitcoin is not yet to the point of universal acceptability; but we’re close. We’re over the first hump of recognizability. The next challenge is to overcome the technical challenge of teaching people how to accept it.

How I Chose to Integrate this Knowledge

I didn’t learn these lessons until 2018/2019. I was convinced there was a better cryptocurrency out there that would dethrone Bitcoin. I was convinced that I could find “the next Bitcoin”. I simply couldn’t find another cryptocurrency with a set of compelling attributes comparable to Bitcoin. In particular, the story behind Bitcoin is one that is irreplicable.

I am open to the possibility of a project overtaking Bitcoin in the long run, but I think Bitcoin will first sweep the world. Bitcoin is the nexus through which the world will be indoctrinated into self-sovereign money. A liberation much needed in a time when we are experiencing a high in the manipulation and meddling in our economies by incompetent (or competent) centralized entities.

There may come a time when we discover something better than Bitcoin, that has better optimized across the 6 properties of money. Until that time, I have no other choice but to recognize one simple fact.

There will never be another Bitcoin.

Regards,

Keegan

1. Warren Buffet Rat Poison