In ancient Greek mythology, the Chimera was a monstrous, fire-breathing hybrid creature made up of the parts of more than one animal. It was a bizarre beast of divine origin that ravaged Lykia’s countryside in Anatolia. Classical depictions of the chimera usually depict it as a lion, with the head of a goat protruding from its back and a tail that ends in a serpent’s head. The chimera was deemed “almost invincible” because it had the strength of a lion, the cunning of a goat and the venom of a serpent. However, his most unusual and deadly weapon by far was his ability to breathe fire.
Today the term “chimera” describes anything that is made up of disparate parts or perceived as extremely imaginative, implausible or dazzling. It is a concept that lives in the mind of its host and is interpreted differently depending on the circumstances and preconceptions of the individual.
Bitcoin is the pipe dream of the financial world. While his attributes seem deceptively simple at first glance, one of his greatest strengths is that he represents many different things to different people. A Syrian refugee may embrace Bitcoin as the primary means of preserving the savings wealth she chooses to transport her wealth as she sets out on a precarious journey across borders and settling in a welcoming European country. The owner of a bodega in Argentina can use Bitcoin as a store of value and medium of exchange because the Argentine peso depreciates rapidly. Wealthy people may view Bitcoin as a higher beta game on gold which has qualities greater than shiny rock. In addition, it is increasingly seen as a hedge against monetary and fiscal irresponsibility destabilizing the global monetary system by the largest macroeconomic asset managers, insurance companies and state-owned enterprises.
As Bitcoin grew, its community rallied around various narratives that have transformed over time. Starting as a speculative digital collector’s item, moving to a new form of peer-to-peer digital currency, evolving into digital gold now and potentially transforming into a base currency and a base for digital capital markets in the world. future, Bitcoin gains credibility as it goes through different stages of maturity.
This ability to redefine itself in the minds of its users provides Bitcoin with its best defense mechanism. How can someone destroy a system that is constantly remodeling itself to freeze with the last narrative of the day? Especially a system that allows its users to appropriate their assets by memorizing a mnemonic phrase, thus literally living in the mind of the user.
Visionaries and dreamers are the guardians of technological and societal change. In its early days, the development of the Internet was derided by the cynics of the mainstream media and commercial institutions. Even tech pioneers and entrepreneurs were skeptical of the early Internet takeoff. In 1995, Robert Metcalfe exclaimed, “I predict that the Internet will soon dramatically fall into a supernova and in 1996 will collapse catastrophically.” The internet demanded visionaries and early adopters to look beyond its initial limits and push technical development forward, even though they would hardly have predicted killer apps from Amazon.
Financial operators are changing their tone
Major financial gurus and business leaders were right to be skeptical of Bitcoin in its early days. No one could have predicted that an embryonic digital currency born under a pseudonym of the marginal Cypherpunk movement would challenge dominant sovereign currencies and the global storehouse of valuable assets.
However, financial services operators who poked fun at Bitcoin have recently started to change their minds, signaling wider acceptance and openness to the potential of the digital asset. Quantitative strategists at the world’s largest bank, JP Morgan Chase
While showing tremendous promise, Bitcoin still has a myriad of technical and social issues that it faces if it is to realize its potential and continue on its current growth path. Bitcoin and other digital assets still have many attack vectors both internally and externally from a technological, policy and regulatory perspective. They are still very early in their lifecycle and their primary use cases will continue to solidify over time.
2020 was the year Bitcoin entered public consciousness. As it flourished while our public institutions faltered, people began to view it as a real safe haven. 2021 will bring new challenges, and an uncorrelated non-sovereign wealth preservation vehicle can help us face the uncertainty of the future.