Where Is Bitcoin Heading in 2036? | Bitcoin Magazine 2036 Issue

We went pretty quickly from a world where we sort of assumed truth in the things that we see online to a world that's becoming almost exactly the opposite. >> Things are coming together with Bitcoin at the center of more things than in any years prior. I hate using the phrase this time is different, but if there ever were a time for this time to be different, we're probably not a million miles away. Hi everybody, I'm Shinobi, the editor of the print magazine at bitcoinmagazine.com, and I'm here to announce the 2036 issue. I like to think of this as an anthology issue, collecting some of the voices from the brightest minds in this space thinking outward to the next decade. What are the challenges that we're going to face? How are things going to evolve? What is the Bitcoin ecosystem going to look like a decade from now? So, if you'd like to see what those people have to say about that, grab yourself a copy of the 2036 issue at bitcoinmagazine.com. Your data is everything that defines who you are in the world, and that's identity. People think of it as sort of like a an ugly thing, but really I think people are learning that it's it's not a bad word. It's just it's just who you are digitally. What's very interesting about the time we're in, highlighting the importance of identity and digital identity is AI. Um I think more than any other thing that's happened in the world, it's sort of put a fine point on why decentralized and digital identity is important, because we went pretty quickly from a world where we sort of assumed truth in the things that we see online to a world that's becoming almost exactly the opposite, where we assume false. All that is rooted in identity problem. There's a land rush for identity solutions finally, uh whether it's for agents or people. If I think about technologies that truly empower individuals, um we have Bitcoin, so money, that's a necessity, but it's necessary, but it's not sufficient. There's a couple other areas. Identity, like you owning the root of your identity, and your personal data. If we don't win on all three, we're not going to have that more decentralized future that I think we all want. I think the next 10 years will be transformative. One area that we're going to see, probably more of, is credentials. And then I think the other point of AI that I think will really drive it is agents acting on your behalf. We're already in kind of in this weird world where who's responsible for an agent? Other services will demand agents identify themselves and say, "Hey, like if I allow access to this, who's really controlling you?" And that's all going to be rooted in identity. You need the person to have an identity to delegate authority to others. Reality is technology is just going to progress. So, the question isn't whether we're going to have it. The question is, are we going to have a good system that protects us and defends us, or are we going to have one that's really dystopian? Everything in a system like this, an economic system, happens at the margins. And if we made custody a little bit better with a soft fork change, then some coins would move from uh custodial model to self-custody. We could really make improvements to the challenges Bitcoin faces by relatively simple consensus changes. For the past several years, there hasn't been any leadership inside of the Bitcoin core development community towards making improvements to the underlying protocol itself. The last time we had a protocol improvement was Taproot, 5 years ago, and nothing right now is obviously even the next thing. That kind of guidance just doesn't happen without a lead maintainer. So, that's I think the two things that are that are happening. A little bit of fear, and a little bit of organizational challenge. For one reason or another, I think Bitcoin is going to be necessarily making consensus changes over the next several years. With the state of mining centralization, that makes BIP54 connective cleanup more important. So, that might be a thing that we we consider urgent enough to to bite the bullet and do. But, the I think the point is, there's going to be a consensus change at some point here. And it's going to be an opportunity for new leaders with the right kind of mix of caution and let's say wisdom and stoicism to to emerge to help shepherd those things that are necessary forward. You know, if you want to have success in moving Bitcoin forward, write the code, respond to the comments, ask for help. Um and and if if you don't like someone else's politics, just ignore that. That's not the point. If there's politics and you play the politics, you've already lost. I've gone through my schizophrenic journey with stable coins myself. After Libra when I started really building in earnest on top of Bitcoin, I was like, you know, we cannot like offer a surface of attack that's centralized because like otherwise bad things will happen. But the reality is I was thinking of stable coins in the wrong way in my opinion. And we've worked for 4 years to connect like fiat payment systems in 65 countries. And so why not also connect digital fiat networks to a Bitcoin account and make the Bitcoin account more useful because it's actually more connected than it was before. When I started thinking about it that way, it uh really changed my perspective on how we needed to build the the best possible product for people who want a Bitcoin account. I am now convinced that the only way that we make Bitcoin everyday money and enable people to actually use it is by giving them the most powerful types of accounts that so happen to be Bitcoin accounts. Things are coming together with Bitcoin at the center of more things than in any years prior. Bitcoin is not only this ideology, it's also an amazing technology that if we can collectively like harness it in the right way, we can actually build mainstream products that are really, really going to improve the lives of billions of people and millions of businesses. I feel that change and I really feel it more this year than I felt it in in years prior. Whether it's going to be uh more decentralized or less decentralized in the mining space, I think it'll be less decentralized. But, as a Bitcoiner, if you had to make a choice between the money being decentralized or the mining being decentralized, I think you would take the money being decentralized and take a little bit less decentralization in the mining world. is is what I think is going to happen. So, for that piece, what I really had to start with was where I saw Bitcoin being in 10 years because mining is obviously just downstream of that. Thinking about what we all think Bitcoin is going to be, truly global macro level asset, I think one of the more under discussed topics of Bitcoin is its role in global trade. It will truly become digital gold in that regard as there's a bifurcation between the monetary systems between the US dollar and the the Chinese yuan and that Bitcoin will be the bridge between those. And so, if Bitcoin becomes important at that level, uh then there's no way that states won't become extremely interested in mining. And I think more and more nations will see that the extra energy, the trapped and wasted energy that comes from variability of renewables or lack of transmission, can be used for Bitcoin mining. The irony is for a Bitcoin to stay freedom money for individuals, there has to be more state involvement, not necessarily state capture, but state involvement on the mining side. And that it'll be a highly regulated industry just like energy is today. Most of the countries that we talked to, uh they have a massive currency problem and so they're looking at this as as a way to make dollars. That's all they care about from day one and it's just a it's a gradual function over time uh, for them to get orange peeled. Why didn't we have this like big blow-off top, this big rally when we were seeing all the comparable assets, you know, rally to new all-time highs and we were almost stagnating. Bitcoin to some extent als- almost suffered from success this cycle. Post ETF launch and especially with treasury companies buying tens if not hundreds of thousands of Bitcoin in a very short space of time, it almost provided sufficient liquidity for these OG investors who maybe had thousands, tens of thousands, hundreds of thousands of Bitcoin. It provided this buffer that allowed a lot more aggressive profit taking without having a huge detriment in price action. If you look at the cumulative amount of Bitcoin that was transferred in this most recent cycle, it was far exceeding previous markets. Around 7 and 1/2 million Bitcoin was transferred from these long-term holders cumulatively from the bear market lows to the bull market peak. Now, that's a huge amount of Bitcoin. It gives us good indications of, you know, how long it might take for Bitcoin to start getting to this 1%, 2%, 5% of global wealth because right now it's still only around a quarter of a percent, which is amazing to go from, you know, just this niche cypherpunk tiny experiment to multi-trillion dollar institutional asset. Well, we're still fairly early and I know it doesn't seem like that at times, but if you look at Bitcoin and look at the potential for just small [music] parts of rotation from these other markets, equity markets, private capital markets, pension funds, etc. If even just a small percentage of those rotate into Bitcoin, which again, I think we all are kind of in agreement that it's an inevitability at this point, then the potential for Bitcoin is absolutely monumental. I I hate using the phrase this time is different, but if there ever were a time for this time to be different, we're probably not a million miles away. I mean, Bitcoin is now getting to a point of illiquidity in terms of long-term holder incentives. I mean, the supply of Bitcoin held by long-term holders is close to 80%. That's 16 million Bitcoin nearly being held by people who don't have a short timeframe horizon. So, things can move very, very quickly, and I think at some point the scale's going to tip in our favor, and this kind of realization that there just isn't enough to go around is is really going to hit home for a lot of people.