jitters1254 on Nostr: How the monetary system works conceptually and how bitcoin is distinguished from it. ...
How the monetary system works conceptually and how bitcoin is distinguished from it.
When I initially got into bitcoin, I thought of it as inferior to other cryptocurrencies because of reduced privacy (as compared to zcash and monero) and centralization risk due to need for ASICs for mining (unlike Monero).
I put Bitcoin off for a while until I started listening to podcasts like the Bitcoin Dad podcast that went into the economic arguments for the strength of Bitcoin. Now I see the limitations of bitcoin in terms of reduced privacy and higher barrier to entry for mining as worthwhile trade offs for fixed supply, supply transparency, and settlement security.
I do want to see more innovations in privacy but coin joining and good UTXO hygiene makes privacy possible today albeit with financial cost. As for higher barrier to mining, I am hopeful that just like with general purpose computing hardware, the speed and degree of improvements in ASIC technology will decrease over time as well as cost. This would enable more people to become miners and decentralize mining over time. Stratum v2 is also a promising way to decentralize the mining process while maintaining appropriate economic incentives to keep it sustainable.
When I initially got into bitcoin, I thought of it as inferior to other cryptocurrencies because of reduced privacy (as compared to zcash and monero) and centralization risk due to need for ASICs for mining (unlike Monero).
I put Bitcoin off for a while until I started listening to podcasts like the Bitcoin Dad podcast that went into the economic arguments for the strength of Bitcoin. Now I see the limitations of bitcoin in terms of reduced privacy and higher barrier to entry for mining as worthwhile trade offs for fixed supply, supply transparency, and settlement security.
I do want to see more innovations in privacy but coin joining and good UTXO hygiene makes privacy possible today albeit with financial cost. As for higher barrier to mining, I am hopeful that just like with general purpose computing hardware, the speed and degree of improvements in ASIC technology will decrease over time as well as cost. This would enable more people to become miners and decentralize mining over time. Stratum v2 is also a promising way to decentralize the mining process while maintaining appropriate economic incentives to keep it sustainable.