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panek @panekkkk
, 17 tweets, 4 min read Read on Twitter
1/ Challenge accepted!

First, I'd never say never. Only a Sith deals in absolutes. That aside, let's address your hypothetical: can BTC succeed ETH as a decentralized, smart contract (SC), token issuance, privacy friendly platform?

Thank you for acknowledging ETH is ahead btw.
2/ For starters, BTC is not a meaningful SC or token issuance protocol today. ETH has perhaps 10-50x+ more contracts written and contract devs than BTC and 1000s of tokens.

So asking why being 50x+ behind the leader of a race would make it hard to win should be obvious.
3/ And neither ETH nor BTC have L1 privacy. BTC is contra HFs so L1 privacy seems unlikely. Whether they should have L1 privacy is for debate. IMO, there's societal good to having L1 open.

My belief is ETH's L1 & L2 privacy research is further ahead but I could be mistaken.
4/ On decentralization, PoW is centralizing. The barrier to entry is too high. And there are no econ incentives to run a full node (FN). PoS incentivizes FNs and under current specs, barrier to entry is far lower (but still costly) which should increase node distribution/dec.
5/ PoS is not w/out issue. If a PoS coin becomes dom $, he who forever stakes cannot be removed. This is a wealth inequality prob but 1) matters not for foreseeable future (cryptos are not dom $s) and 2) is not dif than a PoW whale forever holding a defl. dom $ and lending it.
6/ In other words, does a working model of a free society where the wealthy don't get wealthier exist? I haven't seen one.

If these base tokens are to serve as global commodity monies, they must be evaluated from a global economic perspective, not only a protocol one.
7/ Taking a step back, here are the key issues I see for BTC competing long-term:

* L1 throughput is near capacity and too limited (L1 throughput constrains L2 capacity)
* LN is an experiment that requires solving near impossible engineering feats in routing

* PoW is centralizing/costly
* L2 featurization (e.g., adding SC to L2 sidechains) is centralizing/limiting/inelegant
* zero inflation may not be feasible, particularly in PoW
9/ Each of these topics requires a deep dive and get complex quickly so I'll get to the point: just as ETH is an experiment, so is BTC. Neither are final form. Both have unknowable futures. One is more ambitious and thus might be viewed as riskier but the reward is higher.
10/ How you view them ultimately depends on your design philosophy but these philosophies were not fully telegraphed in advance, they have emerged as their protocols and communities have emerged. And there's nothing inherently wrong with either approach.
11/ If BTC's end state is only digital gold or a reserve currency held by hybrid central miner/bank/exchanges w/ fractional reserve or otherwise hyper-centralized/WS-financialization of the circulating supply, it's not that exciting or dissimilar from today's system IMO.
12/ SCs however are exciting. Just as blockchains increase the social scalability (SS) of distributed ledger management, truly decentralized and expressive SCs further increase the SS of value transfer.

SCs make money infinitely more programmable.

They give it more utility.
13/ SCs also add complexity and increase risk to an economy that depends on them. Whether that risk will be higher than in today's system is hard to say. A programmable money can for example be more transparent and potentially more governable. Regardless, it is more exciting.
14/ I'll end with this:

Where the pro-BTC/anti-ETH/Twitter hodlconomists fail in their critiques is simple intellectual honesty. The critiques are largely superficial and poorly researched and they fail to apply the same rigor (which isn't saying much) to their beloved.
15/ “BTC is fine as is. In the extremely unlikely event that it’s not fine, its future roadmap will be executed timely and without fail. All other cryptos are not fine. Their future roadmaps will fail.”
16/ “Oh and those other features that BTC lacks aren’t really important. However, in the extremely unlikely event that they are important, BTC will have them. Timely. And without fail.”
17/ I always find it amusing when the Tuur's of the world simultaneously hold the belief that tokens and contracts are worthless while also claiming that BTC will eventually have them (you know, just in case they turn out to be important). End rant.
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