This short piece was prompted by a recent discussion I had on why artificially constructed international auxiliary languages, such as Esperanto, have not reached the global adoption goals of their creators during the 20th century. What was truly interesting was that throughout the conversation it became increasingly apparent that Bitcoin is faced with similar hindrances to global adoption. If the digital currency cannot find suitable solutions to these obstacles it may suffer over a century of marginal utilization like Esperanto.
Outlined here are key definitions and explanations pertaining to the comparison between Bitcoin’s and Esperanto’s circumstances.
Esperanto
In the late 19th century a Polish-Jewish ophthalmologist by the name of Ludwik Lejzer Zamenhof created the first reason-based constructed international auxiliary language (IAL) known as Esperanto. He wrote that the need for such an IAL was made obvious by the surroundings he endured during his upbringing in Bialystok (now part of Poland but then part of the Russian Empire):
Like other common IALs at the time (e.g. French), Zamenhof created Esperanto to provide a means of communication between parties that did not share a native language, promoting understanding and cooperation. Unlike the other common IALs, Zamenhof purposefully constructed the language using reason and mechanical order making it extremely intuitive and easy to learn.
Esperanto was designed to be the official second language of the world, promoting peace and understanding between nations, and with its intuitive linguistic design it should have been.
So why did Esperanto not achieve its goal? It must be noted that 130-ish years later more people speak Esperanto today than ever before (i.e. roughly 2 million worldwide). However, it appears that the overwhelming majority of us “Earth dwellers” know very little about it, let alone tried to learn it as a second language.
Esperanto’s Obstacles
Over the last century the global adoption of Esperanto as a second language has struggled to overcome several obstacles. The three most often discussed in combination are outlined here.
Firstly, the Esperanto language lacks a history and a culture. Esperanto speakers may argue against this point. However, when compared to European, or Asian, countries with thousands of years of beliefs and legends it lacks the draw on aficionados that these other cultures possess. Most individuals learn the language in which their culture of interest is rooted as it provides a deeper appreciation of its history. Since learning Esperanto does not provide this, its appeal did not reach as far as it should have, resulting in a stunted user base during the 20th century.
Secondly, Esperanto’s growth was stifled by various nations’ protectionism throughout the 20th century. In the early 1920’s Esperanto was banned from being taught at French schools. Around this time the French delegate to the League of Nations also halted the implementation of Esperanto as the organization’s official working language for fear that it would replace French as a dominant IAL. In the 1930’s and 1940’s, Nazi Germany and the Soviet Union outlawed all Esperanto organizations, arresting many of the language’s leaders and speakers for fear of social rebellion. This prejudicial protectionism by 20th century nations for their own language and culture also stunted the growth of the Esperanto user base.
Thirdly, even with all its irregularities English gained more traction as a dominant IAL in the 20th century. With a naturally occurring and much larger user base than Esperanto’s, English’s network effect was, and still is, simply too large to overcome. The one-sided competition between these two languages again resulted in a stunted Esperanto user base during the last hundred years.
In the absence of a history and culture, the prejudicial protectionism from nations, and the competition from the English language, the Esperanto user base found it extremely difficult to increase further than a relatively small collection of supporters around the world during the 1900s. The lack of a large user base has led not only to a past absence of ample learning material, and educators, but also a diminished utility from speaking the language. Why try to learn and use Esperanto as an IAL if 99% of other people do not?
Perhaps the parallels between Esperanto’s journey and Bitcoin’s future are becoming more evident at this point.
Bitcoin
The original 2008 Bitcoin whitepaper written by Satoshi Nakamoto outlined an international digital peer-to-peer payment system that escaped reliance on a costly third party (e.g. the traditional banking system). Much like Zamenhof’s Esperanto, it can be said Bitcoin was created to ease interactions (e.g. social & commercial) between individuals within and across borders who otherwise may find it difficult to engage one another.
While awareness and use of Bitcoin has grown immensely since inception, it is still far from becoming the world’s “go to” platform for personal/commercial intra-national and international financial activities. To achieve this status it needs the support of the large user base, and developer community, that Esperanto failed to establish. How Bitcoin overcomes the obstacles that stunted the Esperanto community’s growth may determine its future success.
Bitcoin’s Obstacles & Solutions
Like Esperanto in the 20th century, Bitcoin finds itself without a robust history (i.e. less than 10 years old) and this threatens initial user, and developer, adoption.
With any new replacement technology, draw on early users is often slow because of a lack of trust in the new system. This is especially true in Bitcoin’s case where users must put their own personal finances at risk. And, in all honesty, the Bitcoin community has, and still is, facing its share of problems including threats of mining centralization, increasing transaction fees, and associated crime (e.g. ransomware payments, exchange hacks, & money laundering). Likewise from a development perspective an established history of utilization provides developers with reassurance that the effort invested towards a technology will not be wasted.
So the question becomes; has the Bitcoin community found a suitable solution to overcoming the stigma associated with new technology since its inception less than a decade ago? I believe it has, and the solution lies in the nature of technology and todays connected world.
Unlike Esperanto proponents in the 20th century who could not create the type of history that their target language aficionados sought after, the Bitcoin community can do just that for their target users and developers. Bitcoin’s missing history of utilization is created by providing Bitcoin success stories. When evidence of successful utilization, and system development, is coupled with social media’s free information distribution network, the Bitcoin community can start to snow ball the necessary system trust that is needed for global user, and developer, adoption.
While this modern day approach to a lack of history has increased the global awareness of Bitcoin, especially in 2017–2018, global adoption is still far below the critical user mass needed to push the world over the tipping point. The Bitcoin community must keep producing, and disseminating, success stories and updates in order to achieve true global acceptance by individuals, businesses, and organizations.
In addition to a lack of history, Bitcoin is also at risk from unfair acts of protectionism from national governments around the world. And, as it turns out, since Bitcoin’s inception world governments have indeed imposed cryptocurrency regulations restricting how those living within their borders engage (e.g. use & purchase) with the new digital asset. As with Esperanto, these acts of protectionism have resulted from governments’ fear of losing control. Bitcoin is unlike regular government issued fiat currency and cannot be controlled (i.e. issued or restricted) by an individual nation’s monetary policies.
So as with the lack of history, the question becomes; has the Bitcoin community found a suitable solution for overcoming crippling government regulations around the globe? And again I believe the answer is yes, although the resolution is somewhat more natural this time.
As I am writing this Bitcoin has a market capitalization of roughly $116 billion with the entire cryptocurrency market capitalization sitting around $272 billion. In 2016 crypto startups raised around $101 million, in 2017 around $4 billion, and in 2018 crypto startups are forecast to raise around $20 billion globally. No government in their right mind would intentionally regulate themselves out of participation in such economic activity.
For the most part this logic has held up. The economic incentives outweigh the monetary control issues. Out of the world’s countries only 8% have either restricted or made illegal Bitcoin and cryptocurrencies.
Of those countries that allow the use of Bitcoin the battle is now being waged over how digital currencies are taxed (i.e. currency vs. property). To support continued cooperation between regulatory and cryptocurrency communities lobbying organizations such as the Digital Chamber of Commerce in the United States have been established.
It seems therefore that for the most part the Bitcoin community has been able to capitalize on governments’ wishing to not be isolated from the growing cryptocurrency movement and its economic incentives. When this is coupled with a strengthening dialogue between the two communities it would appear that the Bitcoin community has found a suitable, and natural, solution to the prejudicial protectionism experienced by Esperanto in the 20th century. At least for now!
Perhaps the largest obstacle to the global adoption of Bitcoin is a potential competitor. Just as English defeated Esperanto in the race to be the dominant IAL, there are several extremely plausible scenarios where Bitcoin falls in competition to another type of digital currency (please read MIT Tech Review for a great in-depth explanation).
Firstly, it is plausible that governments start to issue their own “cryptocurrencies” and make use of non-government controlled cryptocurrencies illegal. A government controlled coin, let it be called “Statecoin”, could be a Bitcoin clone except that supply is not finite and the blockchain network security (e.g. mining) is centralized to government, or pre-approved, institutions. Implementation of Statecoin would simultaneously allow a government to control their monetary policy, tightly govern taxation, and satisfy their population’s fascination with digital money.
And, in fact, the world is already starting to see the emergence of Statecoins with Venezuela’s 2018 launch of the extremely contentious “oil backed” PETRO.
Secondly, what if a tech giant, such as Facebook or Google, decided to create a private version of the Statecoin described above? Facebook and Google, with their 2.2 billion and 1.2 billion users respectively, could take advantage of their already established user base just as the English language did in the 20th century IAL race.
Imagine if Facebook users around the world woke up one day to find an easy to use “Facebook Coin” Wallet and exchange embedded in the social media platform’s user interface. Utility from such a “cryptocurrency” would outweigh that of Bitcoin’s almost immediately because of the tech giant’s user base network effect.
The question therefore becomes; how can the Bitcoin community position themselves advantageously in the event that such centralized “cryptocurrencies” emerge (e.g. the PETRO, Facebook Coin, etc.)? Note that I put quotations around these controlled and centralized “cryptocurrencies” because if you ask any Bitcoin purist these would not constitute real cryptocurrencies. These digital currencies would be akin to a wolf disguised as a sheep, using buzzwords such a blockchain to appear like Bitcoin while quietly going against the core principles of Bitcoin’s system (e.g. open, trustless, & decentralized).
And perhaps highlighting this is the Bitcoin community’s best preemptive defense against such a false cryptocurrency. There is a need to educate potential users on why Bitcoin was created, why Bitcoin is designed the way it is, and why it is preferable to government controlled, or privatized, digital currencies. Once a basic understanding of Bitcoin is established throughout the world, potential users will be more resistant towards alternative centralized digital currencies.
To conclude, I believe the Bitcoin community is in a better position now than the Esperanto community was during the 20th century. Today’s connected world facilitates information sharing in ways not possible seventy years ago. This, coupled with a strong dialogue between Bitcoin and regulatory bodies, is helping to educate people on the benefits, and goals, of the Bitcoin community.
However, the war is by no means over! Bitcoin, like Esperanto before it, is at risk from not developing the user base needed to move adoption beyond enthusiasts towards mainstream acceptance. The Bitcoin community must continue to utilize all possible outlets to share system success stories and to educate potential users on Bitcoin’s benefits.
It is also important to note that the Esperanto community has itself moved into the 21st century. Language websites such as Duolingo are now offering learning material. If interested, I definitely recommend checking it out!
