Using metaphors from biological evolution at a recent talk in Milan, Bitcoin guru Andreas Antonopoulos dissected the anatomy of today’s financial system, explaining that the “new species” of money such as Bitcoin doesn’t directly compete with “dinosaur” banks.
The Bitcoin ‘Meteor’
Speaking in front of Milan’s Bitcoin Bitcoin Meetup community in March 2016, Antonopoulos sees the invention of Bitcoin — in the wake of the 2008 financial crisis — as analogous to a cataclysmic event. Much like a meteor striking the earth, it can not only wipe out much of the incumbent “dinosaurs,” but also create a completely different environment that could foster an entirely new type of species.
“On January 3rd, 2009, a meteor appeared in the sky of our society,” he quips. “Until that time, banks were the kings of this planet like giant, lumbering dinosaurs, completely dominating for hundreds of millions of years with complete disregard, even contempt, for the tiny little fury mammals that they routinely step on.”
Many millennia ago, the dinosaurs reached a point of “equilibrium” where the pace of evolution was at a standstill. Following the analogy, today’s financial system has reached a similar ceiling, resulting in a stagnant, oligopolistic system — one that’s all but impenetrable to any new “species” or competitors.
But evolution is not linear. It works through so-called “punctuated equilibrium,” explains Antonopoulos. “Things have equilibrium for a long time and then suddenly there is a great rush of evolution as lot of things change, new environments open up,” he adds.
This great rush is enabled by a disruptive meteor-type event — a black swan — that opens up a new niche where new species can adapt better than the dominant players of yesterday.
Bitcoin Doesn’t Compete with Banks
But must “new species” of money even directly compete with traditional finance? Antonopoulos explains:
In this new environment, we don’t compete against banks with Bitcoin because Bitcoin has adapted to a different environmental niche. Bitcoin is not the money of the physical space, it is the money of the internet. Bitcoin is not the money of the nation state. It is the money of the world. Bitcoin is not the money of the current generation. It is the money of generations to come.
In other words, Bitcoin doesn’t need to directly compete or defeat the dominant players of today. The locomotive or the automobile didn’t exactly defeat the horse and the stagecoach. Though they did make it a lot less relevant as a form of transport, they, more importantly, gave rise to new infrastructure, industries, jobs, and related markets.
Thus, perhaps we need to reconsider Bitcoin and other emerging currencies in a completely new light. This is because this new “niche” is fostering real innovation in the technology of money and beyond. Antonopoulos calls this “an explosion in the ecology of money.”
This is precisely why we’re seeing Bitcoin taking root in environments where traditional players are falling short; this is why we’re witnessing innovations such as The DAO, Ethereum, Dash etc. springing up along with a myriad of new platforms that simply couldn’t exist prior to 2009.
“On January 3rd, 2009, there were 194 currencies. Today there are more than 3,000 currencies and of those, all but 194 are digital, decentralized internet monies,” he explains. “They’re the new species that live on the internet. And most of them will go extinct. Most of them will disappear. But they will continue to evolve independently.”
You can check out the full talk below:
What do you think of the evolutionary biology analogy? Does Bitcoin compete with banks or is it creating its own environment?
Images courtesy of study.com, antonopoulos.com