At Cointap, we stick closely to our beliefs. Our experiences have taught us that being authentic is a key driver to long term success.

Being true to yourself makes us feel better and happier. This creates greater and more effective creative output. Relationships will last longer as they are based on true intentions. Most importantly, we can connect with our customers and deliver products and services that will make their lives better.

What does this have to do with Bitcoin? Well it is pretty simple. These guiding beliefs are why we choose to focus on Bitcoin. We believe that Cointap’s greatest value lies in expanding and improving the Bitcoin ecosystem. We’ve learned over the years that Bitcoin itself is where the most effort and important work has to keep occurring.

We focus on Bitcoin because we think that it is the future of money and can potentially become the worlds reserve currency.

Here are some of the reasons why we believe this conviction to be true:

The Story

It may not seem relevant for successful technology or money to have a compelling back story. However, money is a shared belief system. Having a clear foundational story and principles facilitates Bitcoin’s strength. Without a guiding belief system, co-operation among large groups of human beings is near impossible. Countries, religions, and businesses are a gathering of people around common purpose and belief in a way the world should work to achieve an intentional goal. Bitcoin is no different. Global participation in an internet-based, decentralized, deflationary monetary system requires millions (billions) of people to believe that this system is an improvement for society. Even with an unproven concept, having strong conviction encourages people to try, experiment and get through the challenges of building a better future.

So what exactly makes the back story of Bitcoin so compelling? Bitcoin was created under the pseudonym Satoshi Nakamoto. The original “white-paper” or document explaining Bitcoin was released onto a cryptography mailing list, metzdowd.com on October 31, 2008. The title Bitcoin: A Peer-to-Peer Electronic Cash System outlined the structure for how Bitcoin would work.

Satoshi shared this idea and invited feedback and participation in getting the concept off the ground. Satoshi mined the first blocks of Bitcoin and the first transaction was sent to Hal Finney, a fellow programmer and early cypherpunk, on Jan 12, 2009. After running, testing and continuing development of Bitcoin, Satoshi decided to back out of the project in 2010. He handed the private keys and control of the code base to Gavin Andresen and “went to work on other things”. A few emails were sent back and forth from Satoshi to other programmers, and in 2011 Satoshi disappeared. We still don’t know the real identity of Satoshi.

Without a live figurehead for Bitcoin, the network was set up to function without a centralized power. The foundational groundwork of Bitcoin was then forever locked into code. Everything after that is up to the network, marketplace and world to decide how to use it.

It would be impossible to recreate Bitcoin. The timing and pieces all came together at a perfect moment in time after the 2008 financial crises. A full decade of development later, Bitcoin was primed for a world wide battle between central banking and decentralized money. With Satoshi as a mysterious founding father, strong underlying beliefs with the cypherpunk community brining the project to life and millions of supporters worldwide, the currency of the internet has a perfect story and founding document to guide the the internet money.

Trust

Bitcoin was created to deliver a massive network of trust. Not trust in the counter-parties you are working with, but trust in the underlying network. No matter what, you can rely on the authenticity of Bitcoin transactions occurring on the network. Trust is constantly being place and reinforced on Bitcoin. The longer the networks keeps working, resisting attacks and attracting more users that trust is solidified and reinforced. Trust is a fleeting commodity in our present systems and institutions. Bitcoin continues to gain respect the longer it last, the more it overcomes challenges all while sticking to its principles.

Bitcoin is open source. Anyone can audit and contribute to the code. Transactions are broadcast instantly and set in stone once confirmed, backed by encryption and energy. There are a number of critical, known factors the system must follow (total coins, inflation rate and future halvings, difficulty adjustments, block times, etc.) that are constantly verified by network participants. See here for running network statistics so you can verify it all yourself.

These factors have been built to enable network participants to all transact and work together without needing anything other than the network itself to enable participation. The Bitcoin blockchain is a giant trust system. Hundreds of billions, trillions or any other dollar (or satoshi) figures of economic activity can occur seamlessly. That is incredible. Don’t take our word for it though, see the number of billionaires, technology companies, financial institutions all vouching their confidence in how trustworthy this system is. Bitcoin Treasuries is a good starting point to see the faith companies are placing in Bitcoin. These businesses are holding Bitcoin as a reserve asset on their balance sheets! That is a huge amount of trust to place in Bitcoin. Many of these institutions are publicly traded and under intense scrutiny from regulators and investors and have chosen to adopt Bitcoin anyways.

Long Term Value

To build a business, make an investment or any significant life decision is an exercise in long term thinking. Any of these activities is a preference to sacrifice something today in exchange for greater future value. If you buy a house, you likely want it to last for a large portion (if not all) of your life. A business that generates decades of future cash flow will command a higher share price. Same with Bitcoin. Building a business and investing in Bitcoin is a longer-term bet than you might think.

Bitcoin was built for long term value. The inflation schedule of new Bitcoin’s being released was calculated so that the final Bitcoin will not be released until (at current estimates) the year 2140. Further, Bitcoin was built to have rock solid security, it is tamper resistant and its data will last forever on the blockchain. Betting on Bitcoin is actually a bet on very long term growth.

To extract the most value from Bitcoin, we encourage you to increase your time preference to multiple decades, not months or years.

Getting the Basics Right

Do you remember hearing the phrase “Walk before you can run”? It’s a good reminder. This advice is infrequently followed. Naturally we all want to be good at something right away and receive a dopamine hit. Luckily for the world, Bitcoin learned to walk first. The birth was was the Bitcoin whitepaper, which beautifully outlines the framework for a digital cash system. For many years after the whitepaper was released, many small steps were taken to build Bitcoin.

With varying degrees of fanfare, the community kept running nodes, mining coins, putting in development hours, starting businesses and telling their friends about it. Test after test, hurdle after hurdle, this volunteer run network kept learning lessons and growing.

To this day, Bitcoin’s pace is slow and steady. Little by little, new features are proposed. Some ideas are abandoned, the good ones rise to the top and go through a systematic vetting and voting process before being implemented. This process of slow growth is all a feature, not a bug. Without getting the basics right, not just right but absolutely nailing them, Bitcoin wouldn’t have made it this far. A global monetary system needs to be managed carefully. It cannot stray from sound principles. Ironing out the wrinkles takes time and careful thought.

Bitcoin got the basics right. It will keep adding in the necessary features as the market demands them and when they can be implemented properly.

Scale, Distribution and Network Effects

As the old saying goes, “the more the merrier”. Network effect is a technological or business concept similar to this classic saying. As more users begin using a product or service, the value each user derives increases. More people means more feedback, revenue, sharing and knowledge that is spread throughout the system. Once a system reaches a critical mass of support it will experience exponential growth and can potentially become ubiquitous across society.

The internet is a perfect example of this. It was seldomly used at first. It took many years (decades) of iterations, technical improvements, lowered costs and thousands of individuals writing blogs, posting videos and sharing cat memes via chat rooms and emails before the internet reached a critical mass of users that almost every person can find value in using the internet.

How long varying technologies took before they were fully adopted into society.

Right now, Bitcoin and the decentralized economy is in its early internet stages. Awareness of Bitcoin is high. The most recent Bank of Canada [2018] report analyzing Bitcoin in Canada noted an 85% “awareness rate” among their survey respondents. Ownership, however hovered around 5%. I believe the ownership figure is on the high end as Bitcoin ownership is hard to track directly. Let’s assume that in 2021 that “awareness” is over 90% and ownership doubles to 10%. We are still a massive growth curve away from complete market penetration. The time when the majority of the value created in a network is between the “early adopters” and the “early majority” (see chart). If Bitcoin is able to cross this difficult to measure gap, we will see the network grow at such a compounding rate and become so useful that everyone will want to use the network for all the value it provides them.

“Crossing the chasm”. From experiment to everyday life

Luckily, Bitcoin has been a technological tortoise for over a decade. Market participants have been continually building businesses, creating content, writing code and heavily investing billions of dollars in Bitcoin infrastructure globally. When the tsunami comes, the Bitcoin network is ready for billions of surfers to ride its waves.

Community and Support

A lot of people ask why Bitcoin can’t go to zero. In all honesty, there’s a small chance it could. If there is a major problem with the underlying code, Bitcoin could face failure. Low probability, but still possible. The only other ways Bitcoin would go to zero would be a cataclysmic event such as a solar flare, a simultaneous global internet disruption, or an astroid hitting earth while also knocking out all the satellites circling the globe at the same time.

Unless one of these events occur, Bitcoin will not go to zero. Why? There are thousands upon thousands of hard core Bitcoin ehnthusiastics (commonly known as maximalists) that will fight to the death for the orange coin. It is not always an admirable trait to hold a conviction so strongly you are unable to accept alternative view points. However, Bitcoin maximalist will never let Bitcoin go to zero. The other actors that are incentivized to keep the network running are miners. Miners across the globe have invested billions in equipment, leases and have inked decade long energy contracts for cheap, unused electricity from the grid. Businesses also rely on Bitcoin revenue from point of sale terminal sales, trading fees on exchanges and selling hardware wallets. The decentralized Bitcoin economy is built. It is supported by business people, technologists and believers in a better world. Its an extremely difficult place to be successful and the weak don’t survive here.

The community and support is extremely strong. The rewards are high but the sweat, challenge and grind balance them out. I’d argue that unless you are driven by more than just money, you wouldn’t build in Bitcoin. This kind of community support is crucial to keep Bitcoin moving forward. More contributors will bring in more people to get excited and help the community grow further. This feedback loop based on a rock solid, rag tag crew of long term thinkers will prove to the world that we are serious about what we’re working on here.

Why does this reinforce our belief to work on Bitcoin? We feel strongly that the Bitcoin community will not bail for some shiny object. They are here to stay and contributing to this century long project will be for the betterment of society.

In conclusion

We chose to focus on Bitcoin. It is a strong and reliable system. The lifespan is designed to be long and it has massive and growing support. We want to help get the basics right and set the next generations up for success. This work is deeply important to us. This passion will help get Cointap through the highs and lows that are bound to come.

To be clear, we do explore other areas of the cryptocurrency ecosystem and will continue to do so. There will be interesting trends, technological developments and communities that help our overall industry grow. There will also be unethical, un-contributing, negative and useless developments that are important to avoid and learn from. Our advice and strategy is to observe what is occurring. We will learn and apply what the market demands but remain focused on the goal of expanding Bitcoin.

We never would’ve gotten here without the great minds that have mentored us to the place we are at today. Luckily the guiding voices for our path extolled on us the great care and moral compass set forth by the early Bitcoin community. As a show of respect to our teachers, we chose to continue sharing these values with the future generations.

If you’d like to read more about other factors of what make Bitcoin so unique and important, stay tuned to our blog here and on Medium.

Keep on coining!

-Cointap