Thread by @ElonBachman

1\ So the guy that discovered that solar doesn't work and that electric cars don't make money just discovered that $BTC is slow and expensive

Let's talk about why his proposed "fix" won't work

https://twitter.com/elonmusk/status/1393738154889338884

2\ A distributed network is only as safe as the cost to attack it, which means that miners/validators must be paid to be honest by users via transaction fees and/or seigniorage (inflation)

Crypto fans don't want inflation so let's assume Musk's dream coin will only have fees

3\ Let's also assume we want a $100B annual security budget. That's 2.5x $BTC's current security budget (but still paltry compared to the US' $700B military spend)

Musk proposes 100x more transaction throughput than $BTC, or ~10B transactions per year

4\ Note that even 10B transactions per year is a joke; that's only enough for everyone on earth to make 1.25 transactions per year

Further: a $100B security budget from 10B transactions means a $10 fee per transaction

So forget paying for coffee with crypto

5\ Before moving on, a word to those who will reply that "Second Layers like Lightning will solve this! ElonCoin will just be a settlement layer!"

Then you just recreate the same problem one layer up. It's turtles all the way up.

Anyway, moving on...

6\ As with all his business endeavors, Musk assumes there weren't good reasons for his predecessors to choose the tradeoffs they chose

Specifically, he proposes to improve $BTC by making block sizes 10x bigger and block speed 10x faster

7\ There's a tradeoff between block speed and network distribution for proof of work chains: slow blocks allow a dispersed network to all be on the same page, fast blocks mean that those who discover a block also get a head start on discovering the next block

8\ So speeding up block time isn't a free lunch; it gives you a faster network at the expense of decentralization. But if we wanted that, we could just run things off private Oracle databases, which is how the world currently works

9\ I think faster block times also makes it harder for the network to maintain consensus, which makes an attack cheaper. But I'll defer to an actual expert to answer that question.

10\ Then there's block size. Musk wants 10x larger blocks to fit 10x more transactions per block.

Bigger blocks take longer to propagate through a network, which gives a head start to whoever discovers a block, *especially* with sped up block times.

Again, more centralization

11\ $BTC is already pretty concentrated; two thirds of hashpower are in China (cheap hydro power)

So Musk proposes something even *more* concentrated and that still requires $10 transaction fees to have a minimal security budget

It's a joke

12\ Now, it's possible that Musk will propose a proof-of-stake coin to replace what he views as $BTC's wasteful proof-of-work mining

(proof of stake has no mining)

PoS has it's own problems, so I'll just wait to see what Musk proposes

End.

13\ The rest of this thread is just crypto bros realizing that Musk is an idiot:

14\ More dunking:

15\ More dunking:

16\ More dunking: