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The_Rise_and_Rise_of_Bitcoin

Review ‘The rise and rise of Bitcoin’

The rise and rise of Bitcoin (TRARB) follows the path from the invention of Bitcoin and its the rise in the early years (until 2014) through the eyes of documentary maker Nicholas Mross. His brother Dan Mross is a Bitcoin enthousiast and computer scientist. He is the main person in the documentary, interviewing important names in the Bitcoin world and participating in events like Bitcoin conventions. The double ‘Rise’ title can be explained due to the volatile nature of Bitcoin, where more than once Bitcoin seemed to go definitely down, only to re-emerge with a higher price and bigger importance.

In 2012 Dan understands that the developments around Bitcoin could become important enough to start documenting them. Dan is followed through his personal involvement: mining Bitcoins. Mining is the process of earning a Bitcoin reward by offering computer processing power enabling the Bitcoin transactions. By the end of the documentary it is becoming clear that the days for mining are over for the ‘hobbyist geeks’. The market has become highly competitive and Dan decides to stop mining and sell his mining rig.

Throughout the actual developments and interviews the documentary is very useful to watch for people who are new to Bitcoin because with clear visuals its roots and the technology behind Bitcoin are being explained. A counter in the lower side of the screen reminds the viewer of the US dollar price of the Bitcoin of that moment in time during the documentary. Usually it fluctuates in the range of $1 to $250. It is not until the latest shots of the documentary that it passes the $ 1.000 landmark.

Bitcoin was invented as an alternative to the banking system and especially its 2008 collapse when worldwide banks needed to be bailed out at the expense of the taxpayer. The idea behind Bitcoin was that it couldn’t be manipulated by a central authority. Only a fixed amount of coins are issued, following a fixed set of rule.This is structurally different from how the fiat system works, where printing takes place in accordance to policies from a central bank. Satoshi Nakamoto was the mysterious person behind the Bitcoin principles and until now his identity is unknown. His 2008 white paper was a brilliant vision on bringing together technologies (like cryptography, peer-to-peer networking and proof of work) that would lead to the design and implementation to the world’s first cryptocurrency.

The Cyprus crisis in 2013, where consumers were cut off from their bank deposits gave Bitcoin for the first time an excellent use case: if the consumers had deposited their money in Bitcoin then it would have stayed out of reach from authorities, instead of being deprived from their deposits. Also in later cases (Zimbabwe, Venezuela) and in countries where there is no tradition of private banking, Bitcoin would prove to be an excellent reason for consumers to turn to Bitcoin.

An interview with Gavin Andresen is one of the interesting pieces in this documentary. Andresen kept a close (business) relationship with Nakamoto. Nakamoto gradually disappeared from the Bitcoin community around 2010-2011. In one of his last postings he regrets that his invention is now being used by the likes of Wikileaks to accept anonymous contributions. Andresen would be become the most influential developer until 2016 (when Andresen himself stepped down).

One aspect about Bitcoin would be a constant factor through the years: the very tense relationship with authorities. Mt. Gox, originally a trading card platform before it was transformed to become the world’s largest exchange would be subpoenaed by American authorities. A hack of the exchange in early 2014 send Mt. Gox into insolvency prematurely. The Mt. Gox episode is a very crucial element in early Bitcoin history and the documentary is probably the only filmed material from inside the company. The ‘dark web’ website ‘Silk Road’ would be very early on the radar of authorities. Silk Road made it possible to buy  drugs and medicines online. Payment could be settled only by transferring Bitcoin. In 2014 the website was dismantled by authorities and leading engineer Ross Ulbricht was arrested and send to jail.

Charlie Shrem (CEO of BitInstant) can be seen explaining his fear of going to jail or becoming a martyr. His company needs to spend large sums on lawyers to stay legally compliant. Besides these legal trouble it becomes clear that due to the popularity of Bitcoin his company has increasingly difficulties in handling the client transactions in a properly manner. Ultimately Shrem would also be arrested in 2014 and sent to jail on charges of money laundering.

Consumers would have their own struggles to keep their investment safe because of the many attempts of hacking exchanges, the worst example being the already mentioned Mt. Gox exchange. Throughout the documentary it becomes clear that after the wild first years the Bitcoin was becoming a more professional, streamlined industry. Many companies from the early years would be forced to stop (BitInstant, Tradehill) and be replaced by companies backed by large investment parties (like BitPay and Coinbase).

After the documentary was released there would be another development in the Bitcoin industry: the rise of alternative coins and hard forks from Bitcoin (like Litecoin and Bitcoin Cash). Vitalik Buterin appears as the lead writer for the Bitcoin Magazine. He would later become the founder of Ethereum, the largest competitor of Bitcoin. Roger Ver is portrayed in the documentary trying to convert Japanese retailers to use Bitcoin for client payments. Ver would become the man behind the Bitcoin Cash hard fork.

TRARB is a must see documentary for anyone who is interested in the short and turbulent history of Bitcoin and wants to know more of its origins. It will give a good insight to the big names in crypto. Throughout the documentary I felt an often returning feeling how fast all developments have gone in just a few years. This documentary will remain an important document on how a technological development revolutionised the financial-economic world. Maybe in 10 years we will look back at it as a fad that faded in oblivion or as a starting point of a technological development like the rise of internet in the mid 90’s.

Nootdorp, March 2018