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I'm still not sure how far I should be stretching the metaphors, but it feels like we might be able to learn a lot about the future of Bitcoin from the history of the Internet.
Feedback and links to things I should read would be greatly appreciated. Having said that, I believe that there are many parallels between the Internet and Bitcoin and there are many lessons from the Internet that can help provide guidance in thinking about Bitcoin and its future, but there are also some important differences.
The similarity is that Bitcoin is a transportation infrastructure that is decentralized, efficient and based on an open protocol. Similarly, you can use the blockchain protocol to create alternative bitcoins or alt. This allows you to innovate and use many of the technological benefits of Bitcoin, but you are no longer technically interoperable with Bitcoin and do not benefit from the network effect or the trust that Bitcoin has. Also like the beginning of the Internet, there are competing ideas at each of the levels.
AOL created a dialup network and really helped to popularize email. It eventually dumped its dialup network, its core business, but survived as an Internet service. Many people still have AOL email accounts. There are technologies and services being built on top of the infrastructure that use the network for fundamentally different things than transacting units of value, just as voice over IP used the same network in a very different way. In the early days of the Internet, most online services were a combination of dialup and x.
Many services like The Source or CompuServe used x. I believe the first killer app for the Internet was email. On most of the early online services, you could only send email to other people on the same service.
When Internet email came to these services, suddenly you could send email to anyone. This was quite amazing and notably, email is still one of the most important applications on the Internet.
This allowed applications that ran on your computer to use the Internet to talk to other programs running on other computers. This created the machine-to-machine network. It was no longer just about typing text into a terminal window. The file transfer protocol FTP and later Gopher, a text-based browsing and downloading service popular before the web was invented, allowed you to download music and images and create a world wide web of content.
I remember twenty years ago, giving a talk to advertising agencies, media companies and banks explaining how important and disruptive the Internet would be. Back then, there were satellite photos of the earth and a webcam pointing at a coffee pot on the Internet. No one in these big companies believed that they had to learn anything about the Internet or that the Internet would affect their business -- I mostly got blank stares or snores.
We are in the process of inventing eBay, Amazon and Google. My hunch is that The Blockchain will be to banking, law and accountancy as The Internet was to media, commerce and advertising. It will lower costs, disintermediate many layers of business and reduce friction. Our job was to listen to everyone and create an inclusive and consensus-based process so that people felt that the benefits of the network effect outweighed the energy and cost of dealing with this process.
In general we succeeded. It helped that almost all of the founders and key technical minds and technical standards organizations that designed and ran the Internet worked together with ICANN. One argument about why it might not be the same is that ICANN fundamentally had to deal with the centralization caused by the name space problem created by domain names. Domain names are essential for the way we think the Internet works and you need a standards body to deal with the conflicts.
You could argue that the Internet requires a degree of decentralization, but it has so far survived its relationship with ICANN. It also coordinates the policy conversation between the various stakeholders: Any technical changes that the developers want to make to Bitcoin will not be adopted unless the miners adopt them, and the developers and the miners have different incentives. Having said that, one of the first publicly traded Bitcoin companies is a miner. The core developers are different as well.
The founders of the Internet may have been slightly hippy-like, but they were mostly government-funded and fairly government-friendly. Cutting a deal with the Department of Commerce seemed like a pretty good idea to them at the time. At some level, Bitcoin was designed to not care what regulators think. What helped make the Internet successful was the lack of regulation and the generally inclusive and permissionless nature of innovation.
This was driven in large part by free and open source software and the venture capital community. I think ideas like the five-year moratorium on Bitcoin regulation proposed by US Representative Steve Stockman are a good idea.
We really have no idea what this whole thing is going to turn into, so a focus on dialog versus regulation is key. I also believe that layer unbundling and innovation at each layer, assuming that the other layers will sort themselves out, is a good idea.