As a long-time advocate of web3, I always recommend readers to experiment and advocate various methods of practicing freedom through technology. I've received feedback and sometimes faced criticism from fundamentalists who argue that my suggestions are not truly decentralized. I've also heard from other OGs who lament the difficulty of changing people's nature to prefer centralized systems, custodial services and customer support. They use this as an argument against the feasibility of decentralization.
Indeed, human nature tends to be lazy. Even if bottlenecks like blockchain's price and speed are resolved in the future, most people will probably still choose centralized services. In today's widespread internet usage, assuming 5% of internet users own personal domain names and websites (which is likely an overestimate), it could be roughly deducted that even when blockchain becomes widely adopted, the population that manages their own wallets and assets might not exceed 5%.
The original design of the internet was inherently decentralized. In the early days of the internet in the 1990s, many services required self-setup. Building a website needed installations like LAMP (Linux, Apache, MySQL, PHP), using email required configuration of sendmail, SMTP, and POP3 services, binding to personal domain names. These were just the software aspects. In the era before cloud services and mature virtual machine rentals, even hardware had to be handled individually. Many internet users at that time acted as nodes, connecting with one another, much like what the environment blockchain now aims for. It was a time of exciting decentralization.
Fast forward to the present day, very few people self-host websites, and self-hosting email servers is even rarer. Even those who criticize others for relying on established organizations might not self-host basic services like email. This is not a mock on inconsistency but rather an illustration of reliance on others for services as a normal division of labor in society. It efficiently uses resources and enhances overall efficiency. Rather than blaming human nature, we should focus on avoiding excessive dependence on a few organizations to prevent single points of failure.
Blockchain advocates should recommend solutions of varying degrees of decentralization, explaining their pros and cons. Whether users adopt these solutions and to what extent should be left to their own discretion. It's great if the majority adopt decentralized options. But if reliance and custodianship remain mainstream, as long as highly decentralized options exist, users' freedom of choice remains intact, preserving the essence of blockchain advocacy. Happiness lies in choices, allowing each individual to decide their suitable path and taking responsibility for it. This is closer practice of freedom and aligns more with the spirit of decentralization, compared to following a single "best" way dictated by opinion leaders.
Taking the example of advocating self-management of assets, I will provide three options based on technical proficiency.
Install the hot wallet Keplr, use web3auth and manage the wallet with a Google account.
Install the hot wallet Keplr or Metamask, etc., generate a mnemonic phrase to manage the wallet.
Purchase and activate a cold wallet like Ledger, generate a mnemonic phrase to manage the wallet.
Some might object to option one, arguing that relying on web3auth and Google to manage the wallet is not a truly decentralized action. I also struggled with this dilemma for a long time until recently, which is also where I recommend beginners to begin with.
"Decentralization" is indeed a spectrum, with varying degrees of centralization and decentralization. Even option three has relative centralization, relying to some extent on wallet providers. Option one has its flaws, notably the risk of losing assets if Google blocks the user account and the user hasn't saved their private key. However, the chances of Google suspending accounts are low. In regions like China where Google is restricted, the chance of losing assets due to being suspended is far lower than the chance of beginners losing their mnemonic phrases.
I have hesitated to recommend option one for a long time, mainly because of concerns that it might lead to a mistaken impression of high decentralization. However, recommending direct use of mnemonic phrases as a beginner step also has its drawbacks. Balancing these pros and cons, I'd rather start with the minimal step, suggesting an easy-to-use solution for newcomers, while continuously advocating and recommending more decentralized options.
Similar considerations apply to advocation of Bitcoin.
I've read numerous arguments for and against Bitcoin, often overlooking the middle ground between usage and non-usage. The Bitcoin maximalists portray endless use cases for Bitcoin, while critics might highlight unsuitable scenarios. Rather than focusing on this binary debate, advocates can break down "usage" into smaller steps, considering what scenarios to use Bitcoin in and to what extent. Referencing the three main functions of money – store of value, medium of exchange, and unit of account – we can split the degree of Bitcoin usage into three levels.
Storing value with Bitcoin. This is the most accessible level and, simply put, is analogous to what we often hear – considering Bitcoin as digital gold, a vessel for holding your surplus assets, a hedge against phenomena like quantitative easing and currency collapse.
Storing value with Bitcoin means that, as exchange rates fluctuate, those rooted in a fiat currency mindset will experience short-term ups and downs in their asset value. Over the past decade or so, however, the long-term trend has been upward. This instability is not a bug but a feature. If Bitcoin had a stable exchange rate with fiat currency, it wouldn't have the effect of hedging against governments' excessive issuance of currency. Storing value with Bitcoin is similar to investing in stocks, making it easily understandable with a low entry barrier. Even if users don't care about Bitcoin's characteristics and ideals, treating it as a stock known as BTC wouldn't be too far-fetched. Those promoting it can confidently say, "Pocket it first."
Although value storage doesn't involve everyday applications, it is an immensely crucial function, albeit not easily appreciated by individuals in financially developed nations. Our fiat currencies are relatively reliable, and even if they depreciate over the long term, they generally don't collapse. Moreover, apart from fiat currency, we have various investment tools like stocks to store value. However, for many countries in regions such as South America and Africa, citizens often have no choice but to deal with fiat currencies that could collapse at any moment. Bitcoin offers an alternative option for these communities to store the rewards of their hard work, embodying financial freedom.
Taking it a step further involves transactions with Bitcoin, which also largely represents my own personal usage of Bitcoin.
The definition of transactions with Bitcoin here doesn't necessarily mean the other party receives Bitcoin; the focus is on us paying with Bitcoin. We cannot dictate what others accept, but we have the right to decide what we offer. At first glance, this might seem perplexing, but similar situations permeate everyday life. For example, when you travel to Japan and make purchases using a credit card, the pricing is in Japanese Yen, and the recipient receives Japanese Yen. However, for you, the basis of your purchase decision and the payment you make are in your local fiat currency, such as Hong Kong Dollars or New Taiwan Dollars.
The same mechanism applies to Bitcoin. In most cases, when buying daily necessities, paying bills or rent, the recipient may request the local fiat currency. However, we can make payments using Bitcoin. Previously, I used a TenX credit card from Singapore. Similar to the example above, when making card transactions, I would exchange an equivalent amount of Bitcoin at the current exchange rate to pay the local fiat currency to the recipient. Presently, credit cards popular in Taiwan and Hong Kong like Crypto.com require pre-conversion of Bitcoin into fiat currency. Though slightly less convenient, the effect is essentially the same.
Of course, accepting Bitcoin when we are the recipients, other Level 2 users can directly pay with Bitcoin. Both sending and receiving sides use Bitcoin, which could be considered as Level 2.5, taking a step closer toward Level 3.
On April 2, 2019, I had a dinner at IKEA for HKD130 and made the payment using my TenX Visa card with Bitcoin.
Pricing in Bitcoin, the endgame, a comprehensive Bitcoin standard.
Don't underestimate this transformation; although it may appear small, in reality, it turns the entire worldview around. It demands high requirements from both buyers and sellers. Not only do they need to bear the uncertainty brought by exchange rate fluctuations, but they also need to counterbalance the value system that revolves around oneself daily, conceptually engaging with it, or at least continuously exchanging thoughts to interact with the world of fiat currencies. [1]
Here's a real story. Whenever I'm in Taiwan, passing by street vendors or walking into a 7-Eleven, in a burst of impulse, I buy braised dishes, mochi, nuts and Yí Měi chocolates. After paying, I tally up the cost on my fingers and wonder what I was thinking just now. I didn't spend so much on snacks in Hong Kong. Of course, part of the reason is my own gluttony, but if these snacks were priced in Hong Kong dollars, I would surely consider my purchase more carefully. I frequently travel back and forth between Taiwan and Hong Kong, and the exchange rate between New Taiwan Dollar and Hong Kong Dollar is relatively stable. I can easily divide by four to get a rough estimate. Even with this stability, my decision-making is influenced, let alone for Bitcoin, exchange rate fluctuations are much more significant, and the units are from all fiat currencies.
To say that Bitcoin's units are significantly different from all fiat currencies is not entirely accurate. Those who have some understanding would know that the smallest unit of Bitcoin is the satoshi (sats), equal to 1/100,000,000 BTC. When we say we're buying one Bitcoin, we're actually buying 100,000,000 sats. The notion of "Bitcoin is too expensive, can't afford it" is similar to saying "Can't afford 1000 shares of AAPL." Who said you have to buy that much all at once?
At the current Bitcoin price of about $30,000, 1 sats is approximately $0.0003 USD, about 0.0024 HKD, or 0.01 TWD. In other words, 1 sats is roughly equivalent to 1 TWD cent. When combined with Level 1 applications, when you earn 1 TWD in labor income, you can consider whether to store it in the form of 1 TWD or 100 sats. With Level 2 applications, when you face a 35 TWD braised pork rice dish, you can ponder whether to use 3500 sats of savings to fill your stomach.
When comparing with fiat currencies of even smaller unit prices, sats are even closer in magnitude to "dollars". Currently, it's about 1 THB = 100 sats, 1 JPY = 23 sats, 1 KRW = 2 sats. On the other hand, 1 VND, 1 IDR (Vietnamese Dong, Indonesian Rupiah) are even smaller than 1 sats. Those who believe that Bitcoin cannot be used for transactions need to first recognize this objective fact. Looking at more than a hundred fiat currencies globally, you will find that most have exchange rates of single, tens, or hundreds of sats per unit, whereas familiar currencies like the USD, EUR, GBP, have exchange rates in the thousands of sats per unit, which are the minority.
A more interesting comparison is that LIKE is also in the same order of magnitude as sats, with 1 LIKE currently being about 4 sats. NFT Ordinals running on Bitcoin directly count and trade in BTC or sats; Liker Land's community is similar, Civic Likers give 1 LIKE with a clap, Writing NFTs are priced in LIKE, the cheapest selling for 8 LIKE. However, for user convenience, credit card payment options are also provided, where users pay in fiat currency, and authors receive LikeCoin. This is the opposite of the Level 2 example but still involves platform-mediated exchange, matching buyers and sellers.
In daily life, the threshold for Bitcoin to serve as a currency encompassing all three functions is very high. Before a substantial population exists for Level 1 and Level 2 in society, practices similar to the above-mentioned coin standard can only appear in digital communities or blockchain-believer cohabitation communities.
As advocates of blockchain, we must understand that change takes time. We shouldn't demand too much at once. Instead, we should provide minimal steps for users to adapt gradually. Even if certain web3 services are not fully decentralized, they shouldn't be disregarded. Each step taken is progress.
If you know what I've advocated over the years, you might notice that I'm to some extent contradicting myself. Advocating minimal steps doesn't require users to understand many new concepts or change habits overnight. It's about taking one small step at a time. This perspective is based on my experiences over the past five to six years of pushing and resisting, and it's a profound realization and reflection.
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