1/13 Todays start of the year discussion with my beloved Bitcoin Maximalists made me realize something I never understood before:
Why did Bitcoin become so toxic?
Why do Bitcoiners seem to take pride in being toxic?
Why so little rational discussions?
Why did Bitcoin become so toxic?
Why do Bitcoiners seem to take pride in being toxic?
Why so little rational discussions?
2/13 Thesis:
Toxicity is the consensus mechanism in Bitcoin.
Toxicity is the consensus mechanism in Bitcoin.
3/13 Let me explain...
While proof-of-work is a great mechanism to reach consensus in the distributed ledger for ALREADY AGREED upon rules, it is terrible to reach consensus for RULE CHANGES.
If not most of all miners and users agree on a rule change it will lead to a fork.
While proof-of-work is a great mechanism to reach consensus in the distributed ledger for ALREADY AGREED upon rules, it is terrible to reach consensus for RULE CHANGES.
If not most of all miners and users agree on a rule change it will lead to a fork.
4/13 Forks lead to a fracturing of the user base WITHOUT solving future conflicts. The BTC/BCH fork was such a case. The BCH/BSV fork shows that a fork doesn't solve that problem permanently.
Forks are economically bad (fracturing of user base, uncertainty for new users, etc.).
Forks are economically bad (fracturing of user base, uncertainty for new users, etc.).
5/13 So basically the only good rule change mechanism Bitcoin has is to reach nearly 100% consensus between miners and users UPFRONT, which makes it extremely hard to make even very desirable upgrades.
This solidifies the Bitcoin protocol and makes it attackable by altcoins.
This solidifies the Bitcoin protocol and makes it attackable by altcoins.
6/13 So an economically sound consensus mechanism (for rule upgrades / governance) is toxicity.
Toxicity keeps the community together and bashes all outsiders (e.g., terms like "Bcash" and "shitcoins").
It reduces the likelihood of disagreements that could lead to more forks.
Toxicity keeps the community together and bashes all outsiders (e.g., terms like "Bcash" and "shitcoins").
It reduces the likelihood of disagreements that could lead to more forks.
7/13 However, toxicity alienates outsiders and prevents upgrades, making Bitcoin effectively the orthodoxy of cryptocurrencies.
So either the BTC protocol is good enough as it is (there won't by any major changes) to build all innovation on top of it or it will be outcompeted.
So either the BTC protocol is good enough as it is (there won't by any major changes) to build all innovation on top of it or it will be outcompeted.
8/13 New coins like @decredproject put a consensus mechanism in place which is extremely fork resistant:
medium.com/decred/detaile…
Maybe that's why the discussions over there seem to be much more civil, they actually can resolve disagreements without a fork.
medium.com/decred/detaile…
Maybe that's why the discussions over there seem to be much more civil, they actually can resolve disagreements without a fork.
9/13 @tezos is also innovating on the governance layer, but I'm not so familar with the details over there as with Decred.
10/13 In @scritcash we'll start with a governance layer based on Codechain (github.com/frankbraun/cod…) that allows mints to coordinate by quorum vote, but Scrit is more of a layer 2 solution and pure value transfer system. Users will probably vote by trading different Scrits.
11/13 @ethereum also seems to be able to move much faster than Bitcoin, because it more resembles a monarchy lead by kind @VitalikButerin and the Ethereum foundation, which leads to faster decisions, but not necessarily good ones.
12/13 So overall I'm less bullish on Bitcoin due to its "toxicity consensus", even though it has the strongest brand recognition and first-mover advantage.
It will have to compete with other coins only one layer 2 with a mostly solidified base protocol and fixed block size.
It will have to compete with other coins only one layer 2 with a mostly solidified base protocol and fixed block size.
13/13 But the dominant layer 2 technology that is pushed for Bitcoin (the #LightningNetwork) seems to suffer from similar toxicity problems as the base layer, for reasons I don't understand. Maybe it's just culturally inherited...
