jimmysong on Nostr: Drivechains Won't Eradicate Altcoins -------------------------------------- There's a ...
Drivechains Won't Eradicate Altcoins
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There's a prevailing belief among advocates that drivechains will spell the end for altcoins. The logic is simple: if drivechains exist, they can replicate any function of an altcoin on Bitcoin itself, eliminating the need for the altcoin. For example, if an altcoin boasts privacy features, those could be integrated into Bitcoin using drivechains, making the altcoin redundant.
Technically, this perspective has merit. Many altcoin innovations can indeed be integrated into Bitcoin via sidechains. For example RSK is a Bitcoin sidechain that uses Ethereum's scripting language to copy its "features."
However, this viewpoint misses a fundamental point. Altcoins don't thrive purely due to their technical features. In fact, their primary purpose isn't technical at all. Altcoins mainly serve to profit their founders and early investors.
Take ZCash and ZClassic as examples. They are technically identical and the only difference is political. ZCash had a premine and a dev tax, ZClassic did not. They are completely redundant, yet, their coexistence remains undisturbed.
At its core, the altcoin world revolves around profit and politics, not technical features. Most of these "features" are not just dubious but actively harmful, as can be seen in the many different exploits of their bad designs. Technical features are significant only if they attract new investors. In essence, they serve more as promotional tools than as core functionalities.
Many mistakenly see Bitcoin's value solely in its technical attributes. While these are crucial, Bitcoin's real strength lies in its monetary nature and the decentralized scarcity it creates. Overemphasizing its technical aspects risks overlooking this foundational economic characteristic.
Drivechains are an intriguing technological development, but they're not going to suddenly stop new altcoins from launching or even succeeding in getting new people to buy in. People don't buy altcoins because of features, they buy altcoins because they want to gamble.
Besides, if it was just technical features, wouldn't other sidechains like Liquid and RSK be more popular than the thousands of altcoins out there? The past seven years suggest that drivechains won't change this.
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There's a prevailing belief among advocates that drivechains will spell the end for altcoins. The logic is simple: if drivechains exist, they can replicate any function of an altcoin on Bitcoin itself, eliminating the need for the altcoin. For example, if an altcoin boasts privacy features, those could be integrated into Bitcoin using drivechains, making the altcoin redundant.
Technically, this perspective has merit. Many altcoin innovations can indeed be integrated into Bitcoin via sidechains. For example RSK is a Bitcoin sidechain that uses Ethereum's scripting language to copy its "features."
However, this viewpoint misses a fundamental point. Altcoins don't thrive purely due to their technical features. In fact, their primary purpose isn't technical at all. Altcoins mainly serve to profit their founders and early investors.
Take ZCash and ZClassic as examples. They are technically identical and the only difference is political. ZCash had a premine and a dev tax, ZClassic did not. They are completely redundant, yet, their coexistence remains undisturbed.
At its core, the altcoin world revolves around profit and politics, not technical features. Most of these "features" are not just dubious but actively harmful, as can be seen in the many different exploits of their bad designs. Technical features are significant only if they attract new investors. In essence, they serve more as promotional tools than as core functionalities.
Many mistakenly see Bitcoin's value solely in its technical attributes. While these are crucial, Bitcoin's real strength lies in its monetary nature and the decentralized scarcity it creates. Overemphasizing its technical aspects risks overlooking this foundational economic characteristic.
Drivechains are an intriguing technological development, but they're not going to suddenly stop new altcoins from launching or even succeeding in getting new people to buy in. People don't buy altcoins because of features, they buy altcoins because they want to gamble.
Besides, if it was just technical features, wouldn't other sidechains like Liquid and RSK be more popular than the thousands of altcoins out there? The past seven years suggest that drivechains won't change this.