Beyond the Hype: How Bitcoin Stays True to Its Values – The Clear Crypto Podcast | Episode 2

Beyond the Hype: Crypto as a Cultural Movement

When you first dip your toes into the world of cryptocurrency, it’s easy to get caught up in the numbers, the technology, and the financial speculation. But as you go deeper, you discover something more profound: a vibrant and diverse culture. Gareth Jenkinson, a seasoned journalist who has navigated countless crypto conferences, describes it as a collection of passionate communities.

“You can go to a Bitcoin conference, and it’s all Bitcoin. You can go to an Ethereum event, it’s all Ethereum. You can go to a Solana event, it’s all Solana,” Gareth explains. Each of these ecosystems has its own set of believers, its own “tribe.” While this tribalism can sometimes lead to friendly rivalries, it’s a testament to the powerful sense of community that crypto inspires. The hope, as Gareth notes, is that these different groups will increasingly collaborate and support one another as the industry matures.

These communities are not just confined to conference halls and meetups; they thrive online. In a world where many decry the isolating effects of social media, crypto has fostered incredibly collaborative and creative online spaces. This became especially apparent during the COVID-19 pandemic. While the world was in lockdown, the crypto community was already well-equipped for remote interaction. For many, these online groups provided a vital sense of connection and belonging when physical interaction was impossible. The pandemic era, in fact, saw the rise of many of today’s most prominent crypto influencers and commentators who built their audiences by providing valuable content and fostering online communities when people needed them most.

 

The Core Values of Bitcoin: More Than Just Code

So, what are the foundational ideas that hold these communities together, particularly the Bitcoin community? Charlie Spears, who has spent years reporting on the technical and cultural aspects of Bitcoin, offers a nuanced perspective. “If you ask three different people what the core values are, you’ll get five different answers,” he jokes. However, some common threads emerge.

At its heart, the Bitcoin culture is built on a set of core values that stem from the Cypherpunk movement of the 1990s and early 2000s. This movement was comprised of forward-thinking individuals who believed in using cryptography and mathematics to build a more free and private world. From this foundation, several key principles have become central to the Bitcoin ethos:

• Decentralization: This is perhaps the most fundamental value. As Gareth explains, decentralization means removing the need for a central authority, like a bank or government, to act as the single source of truth. In the Bitcoin network, this is achieved through a vast, distributed network of nodes — computers all over the world running the Bitcoin software. Each node holds a copy of the entire transaction history, the blockchain, and they all work together to validate new transactions. This ensures that no single entity can control the network or alter the records.
• Building a Permissionless Economy: The goal is to create a financial system where anyone can participate without needing permission from a gatekeeper. You don’t need to apply for a Bitcoin account; you just need an internet connection. This opens up financial services to people around the world who may be excluded from the traditional banking system.
• Verifiability and Transparency: While transactions are pseudonymous, the blockchain itself is completely transparent. Anyone can view the transaction ledger, and anyone can run a node to verify the state of the network for themselves. This creates a system where trust is not required because everything is verifiable.

Of course, Charlie acknowledges that the crypto world has also seen a significant amount of financialization and speculation. There’s a “Silicon Valley effect” and a playful, sometimes “degen” (degenerate) culture of speculation that coexists with the more idealistic principles. Even the most ardent believers in the technology can’t deny the thrill of the market’s wild swings.

 

Why Bitcoin’s “Slowness” is a Feature, Not a Bug

One of the most common criticisms leveled at Bitcoin is its transaction speed. Compared to a credit card network that can handle tens of thousands of transactions per second, Bitcoin’s network processes only a handful. This leads many newcomers to wonder why a modern technology would be so slow. The answer lies in the principle of decentralization (read more on our decentralization roadmap).

As Charlie explains, this “slowness” is a deliberate design choice, a feature, not a bug. Think of it like a democracy versus a dictatorship. A dictator can make decisions instantly, but a democracy, with its debates, votes, and checks and balances, moves much more slowly. We accept this slowness because it ensures that power is distributed and decisions are made with the consensus of the people.

The Bitcoin network operates on a similar principle. To make any changes to the protocol, you need to achieve consensus among a diverse group of participants:

• Users: The individuals and businesses who use Bitcoin for transactions.
• Miners: The companies that run the powerful data centers that secure the network and process transactions.
• Developers: The global, distributed group of coders who maintain and propose improvements to the Bitcoin software (go to our Developers Hub).

Getting all of these different parties to agree on changes is a difficult and time-consuming process. This makes the network incredibly resistant to censorship and unauthorized changes. “It’s simple,” Charlie says. “You might call it the comparatively most dumb blockchain, but it’s very, very good at doing the things that it’s doing. It has done this for 16 years, and I think it’ll do it for another 16, 50, a hundred years more.”

This deliberate pace ensures the network’s security and stability, making it a reliable foundation upon which to build.

 

 

Scaling Bitcoin for the Future: A Return to the Original Vision?

While Bitcoin’s base layer is designed for security and decentralization, its limited capacity means it can’t serve the daily needs of everyone in the world. This is where the concept of scaling comes in.

Charlie is quick to differentiate scaling from simply making something faster. “When I think of scaling Bitcoin,” he says, “I think of increasing the number of people who can actually access Bitcoin directly… empowering more individuals to access Bitcoin directly without having to go through an intermediary.”

This leads to the development of Layer 2 solutions. These are protocols built on top of the Bitcoin blockchain that can handle a much higher volume of transactions quickly and cheaply. Think of the Bitcoin blockchain as the ultimate court of settlement, and Layer 2 solutions as the local courts that handle everyday disputes. This approach allows for massive scaling without compromising the security and decentralization of the base layer. A crypto bridge can be used to move assets between Bitcoin’s main layer and these faster, more scalable Layer 2 networks.

Is this vision of scaling a departure from Bitcoin’s original purpose? Gareth argues that it’s a natural evolution. He points to early writings from figures like Hal Finney, one of the first Bitcoin users, who envisioned a future where Bitcoin would serve as the world’s base settlement layer, a kind of global central bank.

Adam Back, the inventor of the hashing algorithm that Bitcoin uses, often talks about Bitcoin being both digital gold and electronic money.

• Digital Gold: Because of its fixed supply and the difficulty of mining new coins, Bitcoin serves as an excellent store of value, much like physical gold. It’s a hedge against inflation and economic instability.
• Electronic Money: Because it is digital, it is far more portable and easier to transact with than physical gold.

The current push for scaling solutions is an attempt to fully realize this dual nature. The base layer remains the secure “digital gold,” while Layer 2 solutions enable it to function as “electronic money” for everyday transactions, like buying a cup of coffee.

Charlie adds another fascinating layer to this discussion. He compares interpreting Satoshi Nakamoto’s original writings to interpreting historical texts like the writings of the US founding fathers. “We have things that they said many years ago and we’re trying to see what that should look like today. And there’s a lot that is actually open and unclear.”

Interestingly, some of the proposed upgrades to the Bitcoin protocol are not new ideas at all. They are features that were included in the original Bitcoin software but were later removed as a precautionary measure. Now, with over a decade and a half of the network running successfully, developers are feeling more comfortable reintroducing these features to expand Bitcoin’s capabilities.

Ultimately, Charlie leaves us with an empowering message: “Bitcoin is in the hands of you, and you get to decide what Bitcoin should be just as much as someone did 15, 16 years ago.” 

Crypto Stories to Watch

As we look to the future, Gareth and Charlie highlight two major stories that everyone in the crypto space should be monitoring.

1. Corporate Bitcoin Adoption

Gareth points to the aggressive Bitcoin acquisition strategies of two major companies: MicroStrategy in the United States and Metaplanet in Japan. Both companies have made it their corporate strategy to convert their fiat currency reserves into Bitcoin, believing in its long-term value appreciation. They are even taking on debt to buy more Bitcoin.

This is a bold and controversial move. Critics worry about the risks involved, particularly if the price of Bitcoin were to experience a significant downturn. However, proponents see it as a sign of growing institutional conviction in Bitcoin as a legitimate treasury reserve asset. As more companies and even nation-states begin to understand the properties of Bitcoin, we could see a significant increase in demand and, consequently, its value.

2. The Rise of Stablecoins

Charlie’s story to watch is the adoption of stablecoins. These are cryptocurrencies pegged to the value of a fiat currency, such as the US dollar. Stablecoins offer a way to transact on the blockchain with the stability of a traditional currency.

This has massive implications for the global financial system. For the United States, the widespread use of dollar-pegged stablecoins could extend the reach and influence of the US dollar. Charlie points to Tether, the company behind the largest stablecoin, as one of the most profitable companies in the world, demonstrating the immense potential of this market.

While Charlie admits that using crypto as rails for the US dollar wasn’t what initially excited him about the space, the pragmatist in him sees the undeniable momentum behind this trend. The growth of stablecoins is set to be a major, and likely controversial, storyline in the coming years.

As we’ve seen, this is a world of passionate communities, powerful ideas, and constant innovation. Tune in next time as we explore the specific technologies being developed to scale Bitcoin. In the meantime, stay curious and stay safe.