AVERAGE_GARY on Nostr: From jamesob on Xitter This book by @steveinpursuit is the most interesting thing ...
From jamesob (nprofile…9mqg) on Xitter
This book by
@steveinpursuit
is the most interesting thing I've read about bitcoin since Mastering Bitcoin.
The Blocksize War? Good work but not new info, either because (like me) you were there or because you've absorbed the history secondhand, since it has become unquestioned orthodoxy.
Revisiting the other side of the story has been a revelatory process for me.
The big blockers weren't completely right. The question of how to deal with app spam given large amounts of blockspace is an important one. They also don't often acknowledge that an important limiter of bitcoin's ultimate success is a lack of organic demand for self-custody in the first place.
But, given the benefit of hindsight, they were and are absolutely right about many things, and their set of tradeoffs probably would've been better to make on net than the ones that we've made.
Understand that bitcoin's time of origin and initial use was before Venmo and Cashapp. I have a good graybeard friend whose first exposure to bitcoin was settling up a dinner tab peer-to-peer over cell phones with Roger Ver, and his mind was blown. We forget that wasn't a thing that corporations did.
Bitcoin had the chance to be a true, subversive P2P value transfer/savings platform. I'm pretty sure that chance is gone now, so in one sense this post is crying over spilt milk - but it feels important to address in the hope that we can avoid similar mistakes in the future.
Image
--
The big blockers were (and are) right about the following crucial points:
- "Node can run on my raspi" wasn't a good trade to make for capacity. The people who care to run nodes will fork over $1k and a gigabit internet connection, and everyone else will run a light client anyway. SPV-like schemes are a perfectly fine trust model for relatively low value, and there is an important middleground between "$100 computer" and "Solana datacenter."
- The BTC camp doesn't really acknowledge that there's a "Laffer curve" associated with miner fee revenue. Miners can and probably would make more in fees with larger blocks and smaller per-transaction fees. The idea that a sky-high fee market is somehow essential to miner survival in the long run is a fallacy.
- Block size, within some threshold, is not necessarily a centralizing factor for miners. We have compact blocks now as it is, and when the mempool eventually keels over -- i.e. individual mempools become wildly out of sync due to large backlog -- weak blocks can forecast which transactions are likely to be confirmed next. Weak blocks are in miners' interest, because no miner wants their block orphaned due to slower propagation time.
- Second-layer scaling has not yet proven to be a workable way to scale trustless self-custody to more than a small fraction of users. It's not only that this stuff isn't implemented - we don't even have workable sketches that check out, given the current consensus rules.
--
I still own bitcoin but my ownership is largely nihilistic. I no longer think Bitcoin as BTC will actually challenge the fiat order meaningfully, though I'm pretty confident number will still go up on the basis of narrative, momentum, and the US gov't seeing an opportunity to transmute debt via pump.
I strongly suspect that BTC in its current form (which likely means its permanent form) cannot meaningfully scale to a high enough rate of self-custody to actually obviate fiat animals like stablecoins. And I think its capacity for the kinds of changes that would enable that are gone, thanks to circumstance, leadership failures, "success," and the kinds of false narratives that are highlighted in Steve's book.
Core as an implementation and leadership structure will not likely be unseated - the incentives for an alternative just don't pencil out. It remains a crucial control point.
Maybe obviously, I hope I'm wrong about those things.
--
For those whose main goal is to challenge the fiat order, there remain two positive outcomes of bitcoin:
1. Enrichment of a fiat-hostile class, and
2. A technological legacy that provides "ingredients" for another system to emerge that can actually facilitate real P2P value transfer, once it becomes more obvious that BTC will not accomplish its stated objectives.
For that reason, bitcoin is still worth paying attention to and working on. But for me it's become more about seeding the next system with the resulting wisdom and tech that this experiment has yielded so far.
Thanks to
@steveinpursuit
and probably
@rogerkver
for the wake-up call. I hope the (obviously political) legal persecution of Roger ends.
That persecution in itself is a new marker of credibility.
This book by
@steveinpursuit
is the most interesting thing I've read about bitcoin since Mastering Bitcoin.
The Blocksize War? Good work but not new info, either because (like me) you were there or because you've absorbed the history secondhand, since it has become unquestioned orthodoxy.
Revisiting the other side of the story has been a revelatory process for me.
The big blockers weren't completely right. The question of how to deal with app spam given large amounts of blockspace is an important one. They also don't often acknowledge that an important limiter of bitcoin's ultimate success is a lack of organic demand for self-custody in the first place.
But, given the benefit of hindsight, they were and are absolutely right about many things, and their set of tradeoffs probably would've been better to make on net than the ones that we've made.
Understand that bitcoin's time of origin and initial use was before Venmo and Cashapp. I have a good graybeard friend whose first exposure to bitcoin was settling up a dinner tab peer-to-peer over cell phones with Roger Ver, and his mind was blown. We forget that wasn't a thing that corporations did.
Bitcoin had the chance to be a true, subversive P2P value transfer/savings platform. I'm pretty sure that chance is gone now, so in one sense this post is crying over spilt milk - but it feels important to address in the hope that we can avoid similar mistakes in the future.
Image
--
The big blockers were (and are) right about the following crucial points:
- "Node can run on my raspi" wasn't a good trade to make for capacity. The people who care to run nodes will fork over $1k and a gigabit internet connection, and everyone else will run a light client anyway. SPV-like schemes are a perfectly fine trust model for relatively low value, and there is an important middleground between "$100 computer" and "Solana datacenter."
- The BTC camp doesn't really acknowledge that there's a "Laffer curve" associated with miner fee revenue. Miners can and probably would make more in fees with larger blocks and smaller per-transaction fees. The idea that a sky-high fee market is somehow essential to miner survival in the long run is a fallacy.
- Block size, within some threshold, is not necessarily a centralizing factor for miners. We have compact blocks now as it is, and when the mempool eventually keels over -- i.e. individual mempools become wildly out of sync due to large backlog -- weak blocks can forecast which transactions are likely to be confirmed next. Weak blocks are in miners' interest, because no miner wants their block orphaned due to slower propagation time.
- Second-layer scaling has not yet proven to be a workable way to scale trustless self-custody to more than a small fraction of users. It's not only that this stuff isn't implemented - we don't even have workable sketches that check out, given the current consensus rules.
--
I still own bitcoin but my ownership is largely nihilistic. I no longer think Bitcoin as BTC will actually challenge the fiat order meaningfully, though I'm pretty confident number will still go up on the basis of narrative, momentum, and the US gov't seeing an opportunity to transmute debt via pump.
I strongly suspect that BTC in its current form (which likely means its permanent form) cannot meaningfully scale to a high enough rate of self-custody to actually obviate fiat animals like stablecoins. And I think its capacity for the kinds of changes that would enable that are gone, thanks to circumstance, leadership failures, "success," and the kinds of false narratives that are highlighted in Steve's book.
Core as an implementation and leadership structure will not likely be unseated - the incentives for an alternative just don't pencil out. It remains a crucial control point.
Maybe obviously, I hope I'm wrong about those things.
--
For those whose main goal is to challenge the fiat order, there remain two positive outcomes of bitcoin:
1. Enrichment of a fiat-hostile class, and
2. A technological legacy that provides "ingredients" for another system to emerge that can actually facilitate real P2P value transfer, once it becomes more obvious that BTC will not accomplish its stated objectives.
For that reason, bitcoin is still worth paying attention to and working on. But for me it's become more about seeding the next system with the resulting wisdom and tech that this experiment has yielded so far.
Thanks to
@steveinpursuit
and probably
@rogerkver
for the wake-up call. I hope the (obviously political) legal persecution of Roger ends.
That persecution in itself is a new marker of credibility.