Knut Svanholm

@knut.svanholm

Schrödinger’s Gold

By now you’ve probably experienced, or at least heard of, the fees of the Bitcoin network. Different Bitcoin wallets have implemented different ways of calculating the estimated fee and the fees themselves have been going up and down depending on the price and the amount of activity on the network. As the improved Segregated Witness addresses get adopted more and more we can expect fees to stay at reasonable levels in the short run and even more so as the Lightning Network and other layer two scaling solutions get of the ground. Bitcoin scaling isn’t completely solved however and we can expect the network to always have some form of fee structure.

Now imagine Bitcoin as a product you buy on the internet. As with all goods and services, there’s probably a shipping cost to be paid, either directly via a shipping fee or indirectly, added to the price of the product. So where can you get your Bitcoin shipped to? The answer is everywhere, at once. A Bitcoin exists in all places at all times. If there’s an internet connection, you can access your Bitcoin. You can carry it in your head if you so wish. You can cross any border with any amount without letting anyone know about it. This feature is very underrated. Imagine ordering a gold bar from amazon or whatever that gets shipped to absolutely everywhere for a fee of less than a dollar. If you look at it this way the system doesn’t seem as broken any longer now, does it?

Just like Schrödingers famous cat that is both living and dead until an observer comes along and determines the state of the cat by looking at it, the value and new owner of a certain amount of Bitcoin isn’t determined until a user decides to use it. Until then it exists in a sort of superposition, just like the cat. The value of a Bitcoin is fleeting and no one but the seller can determine what it’s worth to them. If you own Bitcoin you can always choose to not sell and as long as every owner grasps this concept the value will rise.

Explanations for what Bitcoin is and what it isn’t, what it ought to be and what we can do about it have been around for almost as long as the protocol itself. It is important to remember that an analogy is an analogy and that the only thing that actually explains Bitcoin is the code itself. It is there, free for anyone to read and interpret. Analogies have a purpose but they can also give people the wrong impression and therefore the wrong expectations. The whole “With Bitcoin you’ll be able to send money instantly, for free to anyone in the world” narrative is an example of a misrepresentation of the source code. Bitcoin is not what you expected it to be when you first encountered it. It is its own thing and it spawned out of a new way to collaborate and make decisions. It is very unique and it has virtually nothing in common with the seemingly endless horde of clones and rip-offs that follow in its wake when it comes to immutability. Schrödinger’s Pandora’s box has been opened and inside it we found a whole new cat, very wild and very much alive.

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