Early Bitcoin advocate Eric Voorhees has said that “by holding Bitcoin, you are ultimately trusting open source code” in a dig at political systems all around the world.
Political trust levels are currently plummeting. In countries like Venezuela, we can see political turmoil spilling into the lives of citizens who are now fleeing in droves across the borders. Also highly ranked on the list of politically unstable countries are Brazil, Ukraine, and Turkey, who have all seen major surprises in their recent elections.
By holding dollars you are ultimately trusting politicians. By holding Bitcoin you are ultimately trusting open source code. Trust in politicians tends to fall over time. Trust in open source code tends to rise over time. And so, with time, which system likely advances?
— Erik Voorhees (@ErikVoorhees) April 11, 2019
Coin Rivet recently covered the story of Turkey burning through its foreign reserve holdings to the tune of $10 billion in an attempt to support the price of its national fiat currency – the lira – ahead of local elections.
Voorhees pointed out that “trust in politicians tends to fall over time” while “trust in open source code tends to rise over time”, calling out holders of the world reserve currency by saying that “by holding dollars, you are ultimately trusting politicians”.
Looking back at the 10-year journey of Bitcoin and the subsequent boom in economically decentralised platforms that have all been created as open source projects (using the FOSS standards), we now know that this industry has reached a scale where it can demand trust, having reached close to a trillion dollars worth of collective value during the 2017 mania.
Apart from the industry just scaling towards market cap goals, we are also seeing a regular and growing number of people transacting payments on the Bitcoin protocol. Data analyst Kevin Rooke has recently pointed out that Bitcoin has now achieved over 500,000 payments a day twice in the last 10 days, compared to the last time this happened over a year ago in January 2018.
Bitcoin has done 500k+ payments/day twice in the last 10 days.
Jan 18, 2018 was the last time Bitcoin did 500k+ payments in a day. pic.twitter.com/QgNmlaFxfh
— Kevin Rooke (@kerooke) April 10, 2019
The ShapeShift boss was challenged on his logic relating to his lack of trust in the US dollar by someone pointing out that according to “3,000 years of human history and currency, option 1 [the dollar] has history on its side”.
Voorhees replied by saying that in the history of all fiat currencies over the last 3,000 years, all of them have eventually seen their demise. He mentioned that the dollar is only really “50 years old” given that in 1971 President Nixon unilaterally cancelled the direct international convertibility of the United States dollar to gold.
With the dollar being a true fiat currency over the last 50 years, only time will tell if trust in 10-year-old protocols can one day garner more confidence than money.
The word ‘fiat’ has Latin connections to the saying ‘by decree’ or ‘because someone said so’. In the world of open source software and protocols, technically no one can say so.
Disclaimer: We do not give advice on financial products.