Oleg Andreev
Month
Yesterday I was bored and tweeted that people flood reddit and blogs with concerns about the block limit in order to buy as many coins as possible before July’s halving that will trigger a huge price increase and expose to the whole world how important and valuable Bitcoin has become.
Seriously speaking, I don’t see another explanation for seemingly inconsistent behaviour on part of some people than either outright stupidity or participation in a mild short term conspiracy aimed at supressing the price until the next mining reward drop.
1. If someone’s business model is really at stake, they’d be coding real scalability solutions rather than debating opinions and appealing to authority.
I can understand how respectable Bitcoin businesses such as online exchanges and payment processors earn fees from the users’ activity. They obviously would like to process as many transactions as possible in order to earn as much commission as possible. Nothing wrong with it. However, if that’s really the case, then these companies should really invest into better codebase, improved block propagation techniques, better wallets etc - in order to be able to say “hey, we’ve improved the overall infrastructure and now we can raise the stupid limit” .
However, the only people who actually fix the infrastructure are those who care about long-term value of Bitcoin which is self-consistent and does not need any conspiracy theory to explain.
2. Some people point to ETH pumping as an evidence that people sell BTC for ETH.
This is total bullshit. Ethereum is much harder to scale. Dumping BTC for ETH because of scaling concerns makes no sense.
3. Some think that miner’s hashrate should decide hard fork matters, but yet do not like miner-enforced soft fork that improves Bitcoin in multiple ways
If miners “should” decide some matters, wouldn’t it be easier to just implement whatever you want using their existing powers (soft forks) rather than demanding that they have more power?
These inconsistent arguments can be explained either by total stupidity, by a big conspiracy theory (“USG wants to sabotage Bitcoin”) or by a small conspiracy theory (“Bitcoin is going to eat the world in a few months and we need to win some time to improve our position in it ahead of Chinese/Russians/Americans”).
Ok, here’s a rant in favor of so-called “bitcoin maximalism”.
TL;DR: Bitcoin will win the “cryptographic gold” title and every other altcoin imaginable will die. All fancy features like higher capacity, smart contracts etc will be bolted on top of Bitcoin as long as it’s safe to do with all excessive demand satisfied by commercial blockchain networks, separate layers and protocols on the side and on top of Bitcoin.
Why I’m so sure? Lets bust some myths.
“Bitcoin must scale to accomodate more users and more transactions, otherwise it will be dumped for another system”
If another system demonstrates how it can offer the same level of safety as Bitcoin (e.g. not being highly centralized and vulnerable to opinions and politics) while allowing higher capacity, it will immediately be implemented by Bitcoin via soft or hard fork with full support from major holders. It will be much less risky than to replay 7 years of market price discovery. We’ve already have seen examples when bugfixes and improvements are smoothly deployed via soft forks.
“Bitcoin must support fancy features like Ethereum has does in order to not lose to ETH”
If stakeholders are seriously considering this, they’d rather hardfork into Aethereum preserving all their balances than buying into a corporate offering which Ethereum is and aspires to become to an even bigger extent.
Also, Ethereum is much-much harder to scale and harder to upgrade to better privacy options than BTC. So if Bitcoin cannot survive because “it does not scale”, then Ethereum could not for sure as well.
“If the miners adopt a hard fork to boost capacity, Big Holders will be required to follow the larger hashrate”
No. Big Holders tolerate existing mining cartel only as long as it behaves. The mining cartel knows very well that Big Holders are those who give the value to BTC that’s converted into their daily earnings and that these holdings are well-protected by tons of irreversible proof of work. Should the mining cartel decide to play dirty, a different proof of work algorithm will be adopted (still cheaper than to buy into a completely new blockchain) and someone else will get paid for mining all blocks after the block N. Coins will be immediately dumped on the legacy chain and safely kept on the new chain with a different PoW.
But most importantly, and above all these specific issues, there’s one fundamental property of Bitcoin:
Should there be a precedent of a market abandoning one consensus in favor of another without all possible attempts to maintain it, that would become an eternal proof that such consensus is not safe long-term and can be sabotaged infinite number of times to satisfy politics du jour.
And that’s the main reason why Bitcoin will not go away after multi-billion dollar capitalization achieved over 7 years of expensive market activity. If miners want to stay in the game, Bitcoin will be infinitely extended with soft forks to address real concerns (those that put on-chain value at risk, not somebody’s business model). And if miners decide to fool around, they’d be hard-forked out of the game, not the other way around. In the worst case a bad precedent hurting stakeholders will trigger a nuclear war: everyone will lose money and all decentralized blockchain experiments will be considered irredeemably failed.
None of the above are due to specific design decisions. Bitcoin is the civilization’s consensus first of all, no matter how beautiful, ugly, efficient or inefficient it is. Should we prove just once that we can’t reach consensus, we will not deserve a second chance.