On January 10th, 2017, I wrote a script for a video for my Youtube channel, which I never published. But now that events have… evolved, I am inclined to share my thoughts from then, which have largely come to transpire now. I’ll keep this post as brief as possible.

Here is an excerpt from the script(again I wrote this on January 10th, about 2 1/2 months ago, before the fees skyrocketed off):

“The core devs think they’re doing what’s best for Bitcoin — and that’s pretty simple, what they’re saying is they don’t want a contentious hardfork (though ironically they are creating the main energy behind any contention), but lets assume for a second they weren’t- so what they’re trying to do is prevent a network split, because in a hard fork, you have 2 chains, presumably the old chain should just die out and be abandoned but maybe some people want to cling on to it, that’s what they’re trying to prevent. OK, so you offer a soft fork solution, what this does it allows people running older versions of bitcoin to still be compatible with the newer version (rather than a hard fork where the old version would be incompatible). OK, it sounds well and nice right? The problem is, they’re ignoring the asteroid in the sky. The asteroid in the sky (akin to the asteroid which wiped out the dinosaurs) is rising fees, the rising costs of doing transactions. I think its very naive to think that people are still going to be using Bitcoin as much when fees pass $1 or say $10 or more for a single transaction (fees are currently around 15 cents a transaction). Bitcoin and cryptocurrency have about 10 million users right now, the space is growing at around 70–100% a year depending on what you’re looking at, so in about a year were expecting users to double. Are we expecting 10m more people to fit into the Bitcoin system as it is? which is nearly maxed out on transaction capacity already? I don’t see it happening with the rising fees, I see people flocking to altcoins and some people just disregarding Bitcoin and cryptocurrencies all together (maybe they have had a bad experience with blocks being full and had transactions delayed, and don’t realize there’s other alternatives to Bitcoin). Sure some would accept higher fees, but more and more as the price goes up, Bitcoin community growth would slow, or even start dying off.

Well they have an idea to solve this problem, the solution they’re proposing is off-chain transactions, specifically the lightning network. Now one of the biggest things I look for in cryptocurrency is “the test of time,” I learned this a long time ago, outside of crytocurrency. The problem is, we don’t have a public release of lightning or anything, it’s in alpha, very much unreleased in any livenet form.”

OK, fast forward to today, to build on that point, I will say that I could see lightning networks being a solution, though I would strongly like to see it in a decentralized form (and not centralized entities privately storing ledgers) — and I think this is possible, I imagine it as blockchains, within a blockchain. However the point is, this would take time to catch on. And the problem is, Bitcoin has very much run out of time. Working and effective lightning network implementations should have been released years before blocks were full to allow for sufficient ramp-up time. I think it is naive and very risky to assume any lightning network implementation would be adopted to any significant degree (say >50% of user base) in anything less than 2 years of being released.

Once again I emphasize, the problem is, we have run out of time now, and right now, Bitcoin is suffering HARD and will continue to, until fees come down. In the intermin, I believe users will continue to migrate en masse to other cryptocurrencies/altcoins — or leave the space altogether. To add on this, I think one the major problems many people have in the Bitcoin community right now is disappointment in the incumbent leadership and development team who have failed to properly recognize this problem years ahead of time and be adequately prepared for the events that have now come to pass (read: we should have HAD lightning network at least 2 years ago, especially if they knew they were not going to be OK with doing a hard-fork).

This type of lack of foresight and failure to prepare would cause a loss of faith in the leadership of any type of organization, especially in internet-technology companies in this day and age. It’s not as if this issue blindsided us, there were plenty of warning signs, and thousands of people voicing their concerns about this years ahead of time.

Anyhow, it is what it is. Now we are left with the market evolving around these events as Bitcoin has been rapidly losing market share in the past month, down from ~85% dominance a month ago to as low as ~65% in the past few days, reaching all-time lows. I believe it is only a matter of time until Bitcoin’s dominance is below 50%, and on. One of the greatest losses I see in this is the significant damage to Bitcoin brand recognition now that Bitcoin is ineffective, 8 years of organic growth and marketing is being burned away. However in the big picture of things, I think it will only set us back ~ a year (if that), in regard to worldwide cryptocurrency adoption.

I will add that I am not a maximalist or attached to ANY cryptocurrency — and I believe in the long-term future we will have a variety of cryptocurrencies, with a handful of dominant ones at any given time, but the space will be constantly evolving. This is not comparable to Myspace/Facebook which were direct competitors for a single market but perhaps more comparable to Facebook/Instagram/Linkedin/Twitter/Reddit , different channels fine-tuned for different purposes — this is the direction I see cryptocurrency going. It is important to remember, the true power is in the underlying technology of cryptocurrency — decentralized money free from the monopoly of governments, giving power back to the people. The technology cannot be stopped by these types of events and I feel it is likely we will look back on these current events as trivial matters in the coming 5–10 years.