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If Bitcoin is better than fiat why is adoption slow?

Bitcoin adoption is not slow. On the contrary a few million people use it just after 9 years after it was introduced. The people actually love the idea of Bitcoin, but they're scared to have to store Bitcoin for themselves. Even with all the bank scandals in the world, even with the Cyprus haircut and the Greek capital controls, the people still prefer to have the bank handle their money.

In a sort of sense they are right. It is difficult to handle fiat currency safely and securely. If one has $50,000 in savings, it's not considered the safest bet to store them at home, even in an unbreachable vault. For what it's worth, for $50,000 thieves are willing to break the wall surrounding the vault and carry the entire vault with them until they can find a way to open it. Similarly, the other kind of thieves -banks and politicians-, can simply pass a law that decides that all deposits bigger than $5,000 will be used to bailout the bank institutions or the government. Magically in a forthnight, $45,000 or 90% of your fortune, become dust. As if it never existed. As if you've never worked to earn it. In 2013, this actually happened in real life, in a strange touristical and beautiful island called Cyprus.

In Cyprus, as the people found out a week after the newly elected president was sworn in, their two main banks (Bank of Cyprus and Popular[Laiki] Marfin Bank), were insolvent. The reasons they were insolvent boiled down mostly to bad loans. You see, the banks always think they can make a good nice profit into each monthly payment they receive on a loan, even though they didn't really loan any money out in the first place. Due to the fractional reserve miracle of the 20th century, banks can loan out up to 90% more money than they own. In theory, as long as not everyone comes to the bank asking to withdraw all their money, the bank is secure in continuing operations and making profits from loaning the 90% of money wich they don't have. However, in the case of  a bank run, the banks are presented with a problem: people want their money and the banks don't actually have them. What I am writing here is a well known fact and it is true of any bank in the world. Actually, very few banks, if any at all today, hold any gold to back their loaning powers. Even worse, central banks of each country do hold some gold in reserve. But instead of using the gold reserves to back their money supply, they back it with reserving just fractions of what they receive in deposits.

This leads us into trouble. The way the banking system works is as if it was designed to be a problematic and everfailing contraption. Of course, it wasn't designed so it can fail forever and ever. They designed it as such so it can be exploited recursively only by those who already have a greater capital than the others in the reserve scheme. When hearing about this, many people think of deep conspiracy theories. They start believing that one day, the world's bankers woke up and decided to implement this plan of reserve banking. But it wasn't built like that. In the financial sector it is more probable that people just get to work and try to make money. As they go along, opportunities and ideas present themselves. Many are legal and as many may be illegal. Most often the illegal or the ones that have no laws pertaining them yet, are more profitable. From there on, the banksters will lobby and bribe and connive and blackmail and do everything in their power to influence the lawmakers to convert the illegal into legal. Entire systems that worked for centuries have changed so someone or groups of people can bust a buck. And once they make a few bucks, they keep stepping on each opportunity they see in front of them in order to keep winning. It is however, time that they lost. It's time for true democracy and true capitalism to grow up.

While the capital was concentrated in the form of an easily manipulated currency, it was easy to deceive the people and have them live on the bankers' terms. This is the reason big banks such as JP Morgan's are trying to manipulate the crypto market while they buy in to huge amounts of cryptocurrencies. JPM's Jamie Dimon called Bitcoin a fraud - immediately the price drops. Doesn't it make sense to think that he then bought in at the new lower price as it would make economical sense that the price would pick up again after the "bad' news cleared up? It was all manipulated and this happens on a daily basis.

The seemingly slow adoption of bitcoin will be bypassed by enabling more ways to spend it at all places that fiat currency is accepted. For this the banks are not needed. We only need to integrate and cooperate with the payments processors such as Visa and Mastercard. This is actually already happening with prepaid cards (see Bitwala and a few others). Here's my own card from Bitwala. I top it up with Bitcoin and spend in whichever currency I need to. Since it's a Visa it is accepted at 99.99% of establishments.

Things like this will help the adoption process. In turn the price will keep climbing up but at a steady rate. It will not be so easy to exploit the markets. The banks will have less powers. If peer to peer lending also makes some breakthroughs, we can kiss the banks goodbye. What they tried to build in the last couple of centuries will be destroyed because of a single idea and an incredible community.

Money is the beginning of civilization. Bitcoin is only the start for uniting all civilizations of the world, but not under a globalized manner - instead all the different communities and cultures, with all our similarities and differences will be able to do what the first humans sought to do: TRADE with other tribes. For the first time in history after the Sea Peoples we will do it in a decentralized and non-government controlled fashion. The times that we've relied on central banks and government support for currency and trade are beginning to end.




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The Bitcoin white paper before Satoshi decided to call it "Bitcoin"

The below is probably not the original PDF, however it contains what I and a few others consider to be the original writing (based on review from Wei Dai possibly).

Edit: As confirmed by Gwern this document's source is from another fake Satoshi. As it was emailed to me anonymously from someone that keeps sending me stuff like this anonymously (possibly an encounter I had on a forum or mailing list), the best source to verify such a document would be from the people who have already done some research on this. Have a read on Gwern's page about the ecash.pdf document and the Nakamot/Dai emails

About this site

I'm a politically minded hacker. I like, follow and try to be involved in the cypherpunk movement. I have been involved in cryptocurrencies since 2011, small-time mining and trading, as well as coding on altcoins and some bitcoin APIs. At the end of the day, I think that cryptography can enable our civilization to thrive as private individuals or private groups of individuals. It can not only allow us to put out our thoughts freely without having to worry about government oppression or oppression by anyone else. Even for communities that cannot freely exercise their human rights, they can use cryptography to move messages of freedom within their people, support revolutions and organize the unorganized masses against oppressive regimes.

Cryptography is our way out. Where progressivism and conservatism fail on the moral and economic nature of the 21st century, technology and cryptography provide a way out of these archaic thought methods that define our political realm in a dogmati…