I'll clarify that i've been in the crypto space for a few years and i've already said that personally, I prefer BCH as the proper Bitcoin chain. However that's not the discussion here so i'll limit myself to discussing BTC's properties without making direct comparisons to other projects. You're very level headed about the discussion and hopefully we can continue it for others who may not be as well versed on the technical side of things (and how it may relate to the economic side of things).
bitcoininthevp wrote: ↑
Mon Aug 30, 2021 12:16 pm
This isnt quite true in the sense I think you mean or imply it. Miners have some degree of control but only within following Bitcoin's protocol rules. For example, if a miner, or even most miners decide to reward themselves more bitcoins than the rules allow, the other nodes will reject that miners block, regardless of how much work was put into that block, and regardless of how many blocks other miners mine on top of it.
What do you mean "even if
most miners decide"? If by most miners you mean most hashrate, then they are
the Bitcoin chain. Other chains rejecting their block puts those that have rejected on the minority chain, not the other way around. That is enough to create serious
rifts in the essential question of "which chain should be followed".
So within Bitcoin's rules what can miners do?
Miners can censor transactions, as "censorship" isnt really detectable/enforced at the protocol level.
Miners can mine empty blocks (no transactions in the block). This is similar to censorship mentioned above.
Miners can NOT add to bitcoins supply, steal funds, etc and still be complying with the Bitcoin protocol.
Again, in a 51% attack or majority shift in miner sentiment, it's not that they're not complying, it's that you're not complying. Code is law.
What would happen if miners started breaking with Bitcoin protocol rules? Well really it comes down to economic activity. Essentially there would be a fork, say 21M (original chain) Bitcoin and then 22M (22 million coin miner chain). Everyone who had coins at the time of the fork would have the equivalent coins on each chain.
So what could an individual person do? You could sell your 22M coins for 21M coins at the going exchange rate as your "vote" for 21M chain. Driving UP the price of 21M coin and DOWN 22M coin. Others might do the same.
This is basically what happened when the 2017 fork occurred, creating Bitcoin Cash. There were believers on each side of the fork that sold the opposing chain coins. The result? BTC/Bitcoin won out from a price perspective over BCH/Bitcoin-Cash. You could get 4 BCH for each BTC early in the fork. Now you can get nearly 80 BCH for each BTC.
I believe the BTC side won that battle as the economic majority wanted a monetary policy that changed LESS. BCH wanting to increase the block size was, IMHO for the majority, more risky option and thus gained less market traction. For more on the block size saga/war, this is a great book: https://www.amazon.com/Blocksize-War-co ... B08YQMC2WM
I know. My point was less about the technical aspect of a chain split and more about the weak argument of "BTC has value because it has a capped supply." Anyone can make a carbon copy of the chain with less Bitcoins and have every quality Bitcoin has down to a T, but with less supply, thereby being objectively "scarcer" with the same qualities (well, except network effect, which i'll address at the end).
This was a nice unbiased recap of the chain-split. Unfortunately the book, while presented well, is not very unbiased and is good at "nudging the reader". People can read it for the main overview, but I recommend people interested in the subject to look at other sources as well.
I'll only say that while most people ultimately didn't want a block increase, it was less about their actual preference and more about "trusting the experts to make the best decision." Satoshi had clearly stated increasing block size would make sense when it was needed and Adam Back was originally in favor of steadily increasing the block size as well. Why it was slowly ignored as the preferred scaling solution is a different discussion...
I think risks of forks will almost alway be won in the future by the more "conservative side" for this reason. Miners are aware of this risk of deviating from the protocol and I think risks of such miners going rogue are less, but of course not eliminated.
Definitely agree here. That being said, miners ultimately do whats in their financial interest (even if users won't be happy about it) and can also be influenced by larger forces (that may or may not materialize, but the CCP telling some of their biggest businesses to "help out" with fiscal duties and their compliance with those demands isn't reassuring).
Given whats happening in the world, the future concern about atoms (humans, gold) moving seems greater than the concern about bits (bitcoin) moving. Lockdowns, physical restrictions, etc.
Disagree here. If things ever get real bad
I think running away with smuggled gold makes a lot more sense then relying on lightning network hubs to broadcast transactions. Even if you did, who would provide you the physical things? We take it for granted, but we're still very, very reliant on the physical world. Your paradise in VR means nothing if you don't have a roof over your head IRL.
There is code that codifies the finite supply of Bitcoin, so in a "code" sense, the scarcity is clear. But at the end of the day, humans are the ones running that code (or not). People could decide to go run 22M bitcoin, its entirely possible, in theory. But the game theory and incentives here are against such changes as I outlined above. It would be like saying that silver could be better money than gold some day or some such argument. Sure it could happen but that doesn’t stop me from investing in gold.
The difference is silver and gold have physical properties you can use. Whether their values go up, down, flip or whatever is less relevant... the point is that they can do things people eventually need.
But Gold and Silver have real differences and "bit coins" and other coins are all the same! See below:
Ill keep repeating it. Value is subjective. Whatever "utility" means is just a subset of what humans value based on their preferences and environments. Controlling some # of digital tokens sitting in a ledger IS utility for some people. The ability to send such tokens is utility, etc.
subjective. But it doesn't mean the term is totally meaningless when trying to justify/not justify the merit of things. Controlling some # of digital tokens isn't utility to people, the transfer of their perceived value is. The ability to send such tokens isn't utility, the transfer of their perceived value is. The great irony is that most people enthusiastic about crypto don't even hold their own coins. They like to say they can if they want to
, but they don't. But that's the point of the decentralized, permissionless ledger in the first place! So what value are they really interested in? The properties of Bitcoin or the "perceived value and reflected dollar price" of the properties of Bitcoin?
I'm not belittling the strides crypto is making- to the contrary, i'm very excited about it, but there's a present reality people like to ignore. Instead of addressing the issues head on, they use vacuous statements like "we're still so early" and "few understand this" to keep the momentum of the narrative alive and well, which leads me to my next point...
I think network effect is special too. But I think you are missing the bigger picture I mentioned before: the credibility of the monetary policy. Scarcity of the units is only part of monetary credibility. A HUGE super set of limited/unchanging supply is monetary policy.
A monetary policy that limits changes seems to be preferred over one that changes often. Not changing block sizes, not inflating (or DEFLATING!) units, adding in a bunch of features with potential security issues, has a large proof of work to secure it, etc.
Don't get me wrong, I also think the network effect is special. In fact, it's almost unbelievable.
But the network effect being special is not an inherent property of BTC, it's a startling outcome of the amalgamation of factors that have helped push BTC to the moon. Whether that push continues or not is anyone's guess, but such a strong network effect (when the underlying fundamentals are competitively weak) are both a blessing and a curse.
In cases where Bitcoin does add features, it is done in a backward compatible way, a way that preserves and increases decentralization, and also it is done in a way that enhances Bitcoin's monetary properties (decentralization, fungibility, security, privacy, etc).
Predictability in project direction is certainly comforting, but I don't think it's enough to make BTC the "clear winner" as far as a future money or future store of value amongst the competition. Time will tell.
Parting words: I'm not trying to tell people what to do, i'm playing devils advocate and so long as people stay diversified for changing macro conditions they should be fine.