Bitcoin and Trust

 I’ve noticed people claiming that Bitcoin has a fatal flaw. The flaw will prevent it from being a reserve asset and ultimately lead to its downfall.

The reality though, is that this isn’t a fatal flaw, its a key feature. In reality, if you remove replicability of Bitcoin, you remove decentralization. The beauty of Bitcoin is in its simplicity. Anyone can create a Bitcoin replica with minimal effort. Is that a problem? I don’t think so. Bitcoin is a societal movement (backed by a lot of speculators) with a network of individuals behind it.

The key here is really trust. A reserve asset is really only a trusted asset. If Bitcoin gains enough trust, no reason why it can’t be a reserve asset. Trust however is dynamic. To truly stay as a reserve asset, Bitcoin must also be antifragile. I believe Bitcoin has the needed characteristics to be both trusted and antifragile.

The commodification of trust has already started (see Airbnb, Uber, etc..). Why can’t it extend to Bitcoin? Why can’t Bitcoin be antifragile? It’s easy to say people will never trust Bitcoin. Almost as easy as saying that nobody will stay in a random persons house or get in a random person’s car. Trust moves quickly and in unexpected directions.

I’m not sure if Bitcoin will gain trust or if it will be antifragile. But I am definitely not ruling it out.