Thread by @BMBernstein

People in crypto need more Sowell

His insight between constrained & unconstrained visions underlies the main differences between BTC and other cryptocurrencies

BTC represents ideas of the American Revolution. Other CC's represent the French revolution..

Constrained vision sees evils as derived from inherent limits to choices. The unconstrained sees evils as institutional failures

Inequality for ex:

Constrained vision sees hierarchies as inherent. Unconstrained posits better institutions would lead to equality of outcome

The scaling debate is the best example in crypto

BTCers believe there are inherent limits to how many transactions can go on chain for a new monetary currency

Whereas other chains believe this limit is a failure of innovation and better coders can create infinite L1 scalability

The same with on chain features. BTCers view limits on blockchains computability and security as inherent and fixed

Whereas ETH, for example, thinks that better code -- "formal verification" for example -- can reduce any security drawbacks from a larger feature set

The 2 revolutions in the 1700s represent this

French idea was that if the right people and institutions were in power all problems would go away

American idea OTOH, assumed that there are few things you can do and above all you need to protect against the flaws of human nature

BTC represents the American revolution. All other cryptocurrencies are the French revolution

BTC tries to maximize social scalability a la @NickSzabo4, by minimizing institutional trust

Other cryptocurrencies believe that the right leaders--or Messiahs -- can solve all problems

John stuart mill: "an absurd sacrifice of present ends to antiquated means". We need to update law, and past constraints are absurd. Remind you of something?

"Why do we need the constraint of a fixed supply?"

"Cheap full nodes aren't important bc we trust leaders"

The US has layers of coordination to reconcile differences: Family-->town--> church--> federal government

@nntaleb puts this well: "I am, at the Fed level, libertarian; at the state level, Republican; at the local level, Democrat; and at the family and friends level, a socialist

The only possible way to reconcile these moral differences in crypto is through different layers too:

"limited block size & software coordination around 1 implementation at L1, multiple implementations at L2, unlimited block size / turing completeness on Drivechains, etc"

I don't think these differences can ever be reconciled at layer 1 because they are moral / axiomatic in nature. They are faith based beliefs

Splits and forks are inevitable...but money benefits tremendously from coordination and too much competition is pareto suboptimal

Ultimately, crypto users will need to reconcile their moral differences and congeal around a shared vision. The US dominated because we used multiple layers to agree on morals

The reemerge of the unconstrained vision at the federal level today is concerning

Yes, competition is beneficial and antifragile to a certain extent. But competition needs to be at the *right level*. In the US families, businesses and states competed.

Crypto competition should be at L2 and higher.

Competition at L1 can be a net negative and reduce liquidity