When I was growing up, the mark of an old fart, was ineptitude in using a computer. Even now, the older generation marvels at the idea of using a GPS on a smartphone (they're too scared to try to use one themselves). I've found a whole article dedicated to the anxiety the elderly have towards technology

In the present day, people wonder how all the win conditions of Bitcoin can be met. Meanwhile, the adoption at all costs for adoption's sake crowd shake their fist at the idea that there is a win condition other than "adoption"

In this article, I would like to address a Bitcoin adoption fail condition, the normalization of custodians. Then, I want to bring it back to how Bitcoin overcomes this fail condition and wins instead.

In another post, I've written that using a custodian becoming a norm in Bitcoin is a fail condition. Let's think about why for a moment. To help with this, I'm going to first ask the question all the Bitcoin haters who love hard money ask. "WHY NOT GOLD????". If we consider the normalization of custodial payment apps to be a win condition in Bitcoin, you'll see me asking the same question. Why did we bother with all this cypherpunk stuff if we could have just been using vaulting companies this whole time! Heck, I could just open up the old Robinhood app, buy up a gold ETF, and send it to other Robinhood users right? The thing is with Bitcoin, the need for custodians are a problem we're trying to solve for.

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." -Satoshi Nakamoto

"What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party" -Satoshi Nakamoto (The Bitcoin Whitepaper)

Now I understand of course the problem with quoting Satoshi as some authoritative source. Bitcoin is a social construct and whatever purpose the human action behind it wants to use it for, is what it's going to be. However, if the social construct were to change to see custodians as normalized, I would point back to the gold model and ask why we even bothered.

To break down what the actual problem with custodians actually is, lets break down a few fail conditions of custodians.

Whereas wallet of Satoshi (I prefer to say Bank of Australia) does not solve for 3, Chaumian E-Cash in many ways does solve for it. However, it falls completely and utterly on its face in regard to 1 and 2. Federated Chaumian E-Cash, provides better assurances, but it does not solve the problem. To understand how Chaumian E-Cash makes matters worse, lets look at these fail conditions a little closer. Say you have 3 federated Chaumian E-Cash banks in a region. One is a federation of all the stores in a shopping mall, another is a federation of all the fast food restaurants, another is a small school project maintained by the school IT director oh and not federated as there is no distinction between a federated custodian and a non-federated one when it comes to accepting payment or the user interface, the look and feel that what you're using is supposed to be money.

So let's make an assumption and it isn't a stretch as it is in line with how people use custodial payment apps already. Since this is an economy of many banks with their own bank issued Bitcoin certificates in likeness to those of old, lets assume, people withdraw from the payee's bank to their trusted bank of choice at the point of sale/place and time of payment. All should be well. if someone's bank does some sketchy stuff, I'll be fine. I'll have all of my money with my trusted bank. Maybe I don't use a bank at all and therefore I don't have to worry about these sketchy things these banks are doing.

Understanding inflation by Milton Friedman. There's a couple of neat tricks that are going to happen to you dear careful and frugal Bitcoin user. First, you might notice prices are going up. People all around you are going to try to convince you that its just that your region is more productive. Just look at all the buildings popping up and all the jobs being created. Its just a result of prosperity you see. There's no reason to doubt the banks you loony. However, since you are an absolutely loony conspiracy theorist, an elitest who self custodies (eww) you don't believe such things. You know one of these custodians is printing money! What are you going to do? What will happen if you just hold Bitcoin? Well, you're already spending more sats than you would be if these malicious custodians weren't printing money. Why? Because there is no distinction between Bitcoin certificates (e-cash) and the Bitcoin you have in self-custody, resulting in Gresham's law. You want to spend off those certificates (or withdraw) as soon as you receive them.

Well how about you just move out? That way you can live somewhere prices haven't risen. By doing so, you prevent yourself from becoming a victim of the Cantillon effect. In that old place, the bank gets to use the new money to buy up all the things you need or want. To move out would mean only competing with people who are playing a fair game. Now look at what was required to come to this realization. You had to be labeled a conspiracy theorist, you had to be wise enough to recognize what was really going on, and all the rest of these people who don't realize what's going on, still have to go through what you already know will happen.

Thankfully, this model can not be perpetuated for a full 10 years (not without a central bank and a very very deeply ingrained expectation to never withdraw as well as an agreement between banks to credit each other rather than bankrupt each other), but what does that all result in? Nothing less, than the pain of consequences is what happens.

So what happened in our little thought experiment? Surely it was the IT director's Bitcoin bank that was causing these problems right? They were the only bank that wasn't federated! No, this is how people can be surprised sometimes. As it turns out, the mall was getting unpopular, and the federated bank mall was left with the choice to either have all the stores agree to inflation, or to go out of business, and all 300 companies in this mall chose themselves over their customers, because it meant they could hang on just that much longer.

pretty sure the path to hyperbitcoinization is constant rugs until most people self custody -Matt Odell

I'm aware of the problems with quoting Matt Odell as some authoritative source in the same way that I'm aware of the problems with quoting Satoshi as an authoritative source lol. Let me put it this way, he said a thing I agree with and I'm mentioning he said it just so that I'm not accused of plagiarism, not because I'm quoting him as an authoritative source.

We need to only look at Bitcoin culture for evidence of this. It was the Mt. Gox, victims who taught the Bitconnect victims, who taught the FTX victims and everyone else in between who may have been rugged or didn't get rugged that you have to take self-custody or else even grifters know to preach this in order to fit in with the cultural norms

In software engineering, we often refer to what we create as a "solution". What I have come to argue (because I obviously woke up this morning and chose war) is that there are many Bitcoin software engineers today who are building "problems". So, what's the better way to build? A problem for someone else to solve? Or a solution that a front-end dev can build on top of? It seems to me that its more productive to build on top of solid foundations that it is to build crumbling structures we'd have to tear down later, even at the cost of the rate of "adoption"

The next thing I want to talk about is cultural norms and generational change. I'm looking at the size of what I've written and I know I should make this a separate post, but its actually the main thing I wanted to talk about, but I had to address the problems with building the wrong way first rather than the right way first to get here.

So, refer ALL the way back to the start of the article. "When I was growing up, the mark of an old fart, was ineptitude in using a computer." It wasn't always that way. For the very early computer users, everyone else was the inept computer user who had to adapt to the culture of the internet communities that had already formed. That was until September 1993.

For these people it was like a flood of Facebook moms had suddenly decided to jump onto tiktok and post mundane minion memes, completely flooding out all of the tiktok dances pure boomer humor. Yet, I remember there was a time, where Facebook was the smug thing the old farts couldn't figure out how to use, and only the young and cool knew how to use. So, I've already pointed out shifting cultural norms and increasing technical capability among users at large across 3 generations. Now, a UI designer would come out and say "that's because of UX improvements!" and they would be kidding themselves. The resistance the old farts used to have towards Facebook was not about how easy it was to use (when they did get on, they forced themselves to go through the required learning curve). They didn't like Facebook because it was a new thing they didn't understand and they didn't like the culture around it either, but the promise of being able to talk to their children resulted in motivation to get on. It was motivation that drove the adoption of Facebook by the older generation, not UX improvements.

In this article by Vox Ignore age—define generations by the tech they use the author shows that technology is a culturally shared memory among generations

In this article by Norton Digital generations: The technology gap between seniors, parents, and kids the author demonstrates the behaviors of internet and computer usage across generations and portrays that the younger the generation, the deeper the dive into available technology.

In this article by Martech Generational Marketing: How Each Generation Has Adapted To and Utilizes Technology the author demonstrates the attitudes of technologies across generations.

I've sourced 3 rather than 1 source for this just to ask, are the technologies that gen Z are using, really need to be modified, to work so hard to appeal to the older generations? Do VR or smartphones really need to be easier to use so that generation X starts diving into it? I'm here to argue that you don't worry about the older generation. They're old. They don't want to fundamentally change their lives especially their money. They worked their whole lives to get things the way they are for themselves. The new generation however, is another matter entirely.

In the Bitcoin Beach Whitepaper, it mentions "Kids can pick up new technology up relatively quickly, and they’re the best teachers for their parents. They are also in the best position to benefit from the mindset shifts bitcoin enables (importance of saving and investing, long time preference, etc)."

What we can take from all of this, is that we need to:

The rest is just follow through. All of that networking you have to do along the way.

This way, its possible to avoid pain, have a smooth path to adoption, and build and use things as they become ready.

(P.S. Man I really decided to write all of that without any pictures huh? Yeah I guess I didn't really know what to include to break it up this time around. Sorry about that.)