Jimmy Song is a bitcoin developer, an instructor for Dev ++ and the owner-operator of his own in-depth technical seminar on bitcoin called Programming Blockchain.

The following article is an exclusive contribution to the CoinDesk 2017 edition.

As Bitcoin approaches $ 20,000, continuing to create new millionaires along the way, it's easy to go wrong and think we could all see it happen. It's hard to remember now, but the mood that was announced in 2017 was far from the optimism that we see in the bitcoin community after something like rising prices of 20x.

SegWit was not activated yet. The New York Accord, the UASF, the bitcoin money, let alone the bitcoin, did not exist. The community was struggling to find a way forward in its technical roadmap and many people were arguing over what to do and complaining about the toxic atmosphere. OK, maybe some things have not changed, but still, the community at the beginning of the year was very different from what we are now.

In this 2017 review, I'm going to focus on what we learned about bitcoin, how we got to the euphoria we have now and what all this means for the future.

Phase 1 – Uncertainty

The year began with a lot of uncertainty. Only about 30% of miners reported SegWit, while Bitcoin Unlimited, a competing software, attracted 35% support. Nothing seemed imminent about scaling up. Many developers, users, and businesses were frustrated with the lack of progress, and there were terrible warnings about how a fork like Bitcoin Unlimited would totally ruin bitcoin.

Yet despite all this, bitcoin has gone up in the year. Bitcoin broke the $ 1,000 mark for the first time since 2013, and the bear market really felt like the bear market had turned the corner.

It would not be the first time that uncertainty and rising prices would coincide in 2017, and in fact, both correlations are a major learning for the community this year.

Uncertainty gained momentum as the "expansion blocks", the UASF and the NYA, all came on the scene over the first half of the year. ;year. There was a game of cat and mouse of different bitcoin factions making threats, some credible, some not, to get what they wanted. The first half of the year has been a period of crazy new developments almost daily.

Bitcoin to separate? Could Bitcoin survive a hard fork? Will people be afraid to buy bitcoin?

Instead of a drop in prices, we saw, during the period from January to June, that the price had actually risen 3 times despite the threats of forks and "cartels" for the benefit of those who signed it.

We saw during this period that Bitcoin was not like the other assets. The uncertainty around a company usually depresses its price. The uncertainty around bitcoin seemed to increase it. What happened? Why was uncertainty correlated to a higher price?

Phase 2 – Fear

The New York accord at the end of May and the three months that followed until August 1 were a time of great fear in the bitcoin community. Many, including myself, feared that Bitcoin would die from the confusion of brands, divided communities and reduced network effect. Many have seen the inevitable divorce between "big blockers" and "little blockers" as a deadly blow waiting to be delivered.

There was some relief when the NYA managed to lock Segwit on the network via BIP91. Bitcoin Cash quickly evaded the community, which announced its intentions to fork out shortly thereafter. August 1st would become the day that bitcoin would change forever.

As of August 1, many thought that a hard fork would be a terrible thing for Bitcoin in general. There would be two different bitcoins, two different communities, a split network effect and a lot of other things. Many expected the price to adjust to these realities and that the crater would reach much lower levels. Instead, what we saw was the beginning of a bull run, which we have not seen since 2013.

The price of the day before the hard fork was about $ 2,700. The following week, bitcoin rose to $ 3,700 and the bitcoin money had surprisingly a value that was not zero. What was happening? How did the two forks get larger than the sum before the fork? Such calculations now seem obvious, but it was not the expected result and most thought that the ranges would reduce the overall value, not the gain.

Again, we saw during this period that bitcoin was not like the other assets. Bitcoin acquired from social / technical / economic disorder. In other words, bitcoin is anti-fragile.

Phase 3 – Confidence

Despite the relative tranquility of the hard fork on August 1, there was another fork coming that was sure to be more controversial – the Segwit2x hard fork planned for three months after Segwit's activation . The community had already learned a little more about the hard pitchforks at that time and there was less consternation about the harm that a split would cause.

But Segwit2x turned out to be a disaster and supporters of the agreement ended up giving up the effort a week before its scheduled range. The code that was to create the split was not working, and it was obvious that the effort simply lacked the developmental power required to make it a success.

Why?

We discovered this year that the developers give the bitcoin network a technological anti-fragility. Whenever there is a messy event like the bitcoin cash hard fork, the developers of the entire Bitcoin ecosystem are forced to handle it. More software is written, more cases of attack are processed, the software improves. As a result, all the bitcoin ecosystem, not just the part on which the developer works, improves.

Bitcoin is technologically anti-fragile because developers have the ability to react and strengthen the network whenever vulnerabilities are found.

We also discovered this year that the HODLers give the bitcoin network an economic anti-fragility. HODLers will hold through fear and uncertainty. There is no panic selling with this group. They went through a bear market of three years. It's not easy to shake their confidence in what Bitcoin can do. Traditional media can warn us of bubbles, technologists can warn us of how they can not evolve, even leading developers can warn us of how we are doomed.

Holders. Do not. Care. They believe in bitcoin. They are not shaken by some warnings and rely on bitcoin as healthy currency.

Finally, we discovered this year that the bitcoin community gives the bitcoin network an anti-social fragility. The community will not bend to corporate interests. The community will punish those individuals and businesses that it believes do not act in their interest. Many people and businesses have been punished and have suffered because of the application by the community of what they think is good for bitcoin.

The accusatory network has developed a moral standard for what is good behavior and bad behavior is punished and avoided.

Conclusion

Bitcoin continues to grow and increase its price for a reason. 2017 was the year when people began to see real evidence that Bitcoin is not something that can be stopped. Many other critics seem to be disappointed with the way that bitcoin did not do X, Y, or Z. I see the fact that not only did it survive, but flourished as proof that their company characteristic or their development is not so important.

So what does it mean for 2018? We can expect more fear and uncertainty in the future. True, HODLing people are probably very different in composition than earlier this year. Maybe the community is a little weakened by all those who have not gone through a bear market or a 70% correction.

What is certain is that Bitcoin is unpredictable and Bitcoin will develop unexpectedly. I can only hope that so much fear and uncertainty await us in 2018.

Chain in the sky via Shutterstock

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