There’s a dangerous tendency to judge Bitcoin by whether or not we think it can replace the fiats, the answer dictating how serious we takes the whole project. But this fixation on the plausibility of Bitcoin as the new international reserve currency blinds us to the bigger picture of Bitcoin as a globally scaled opportunity for experiential learning and a catalyst for social change.
Bitcoin pushes the boundaries of our knowledge in a number of areas.
In computing, the Bitcoin network has already achieved the distinction of being the world’s first exascale computer with more computing horsepower than the world’s 500 fastest supercomputers combined. This is no small feat given the first purposely created exascale computer isn’t expected until at least 2020.
Among economists, the project incites either cheers or ridicule depending on one’s theoretical perspective. But for proponents of competing currencies, Bitcoin may provide a real world test of ideas that no government economist would touch with a ten foot poll. Normally, co-circulation isn't seen outside of monetary basket cases like Zimbabwe where a ruined currency is simply replaced by another, but Bitcoin might eventually provide examples of co-circulation within relatively stable monetary climes.
Beyond the range of natural experiments Bitcoin could produce, it could spur innovation of the social kind.
Humans are not the perfectly rational creatures of the classical economist's chalkboard. We have a deep proclivity for the familiar, what researchers call status quo bias, which wires us to prefer default settings over unfamiliar alternatives; whatever the merits of those alternatives might be, the deck is always stacked against them.
This bias applies to everything and can be hard to shake, especially when the default setting is the concrete reality we are accustomed to experiencing everyday and the alternative is some abstract reform.
An excellent example of this is the assumption by many that money is simply something produced by the government and, at least in the U.S., made “real” by the federal government.
To the extent that Bitcoin provides a visible example of an alternative way in which society might provide for its money, it opens the door to seriously considering alternatives far beyond just itself. And regardless of Bitcoin’s long term success as a currency, it’s already changing the world by making reasonable what seemed ridiculous, and making questionable what once seemed the natural state of things.
Whether or not Bitcoin succeeds in becoming the world’s first apolitical, international reserve currency no one can really say; but whether or not we think that’s even possible should have no bearing on whether we take Bitcoin seriously.
Just by being, it represents a massively scaled collaborative experiment spanning both natural and social sciences as well as a catalyst for social change. Before the future can be built, it must be imagined and regardless of our opinion on Bitcoin’s ability to capture the markets, one thing we can’t argue against is it’s ability to capture our imaginations and drive us toward even greater depths of knowledge while we experiment and dream.
This article is part three of a four part series exploring the political, economic, and social implications of Bitcoin. Part four will be a live blog of “Bitcoin 2013: The Future of Payments” in San Jose, Ca, May 17th-19th.