The bitcoin scaling debate has driven many people in the bitcoin community to assume a cult-like viewpoint, an observation Vinny Lingham makes with despair. In a blog titled, “Satoshi’s Choice,” Lingham observed that the bitcoin community has failed to maintain a level attitude aimed at achieving the greater good for the community. Hence, he doesn’t see a resolution to the current impasse on bitcoin scaling in the short term.
Without a reasonable resolution to the current impasse, it will be difficult to avoid “exogenous pricing pressure” or another external catalyst for change.
Lingham noted that the replies to his tweets have been emotive and insulting. When emotions get the upper hand and people can’t communicate with decorum, they suffer from impaired judgment.
Most bitcoiners care about bitcoin’s price, he noted. Emotionally, they are invested in bitcoin as a digital currency and a store of value.
Lingham once believed a bitcoin price under $875 would push parties to reach an agreement. He did not expect the price to stay above $1,000 for an extended period since the incentive to go beyond this did not exist. But he was wrong about this, and market forces are affecting the price, which he believes is not necessarily a negative development in the near term.
While he believes there are pros and cons to all sides of the scaling debate, one path that Lingham says should be avoided at all costs is a contentious hard fork resulting in a minority chain.
Bitcoin is still viewed by the public at large as a negative entity, thanks to Silk Road and other misadventures. One indication is the current set of issues dealing with getting fiat in and out of bitcoin exchanges.
Satoshi made a choice, Lingham noted, to leave the bitcoin community to its own devices. He did this to give the community a gift, but one that came with a curse. The more the community loves bitcoin, the more greed emerged within the community and outside of it.
Lingham’s question now is: why does the community need a leader if bitcoin is a decentralized, peer-to-peer currency? The answer is that bitcoin is not yet a decentralized, peer-to-peer currency.
For bitcoin to be immune to manipulation, it must be decentralized at every layer. The bitcoin community, however, has focused on the price, scaling and other issues to the degree that bitcoin is the most secure but least innovative cryptocurrency.
Lingham would agree that immutability gives bitcoin its strength if the immutability was by distributed choice, not by default since decisions are centralized.
But instead of decentralized mining and decentralized exchanges with hefty volumes, the community has a few exchanges at the mercy of the banking system, as well as large mining pools controlled by a few operators, manufacturing controlled by two firms, and development that is run by one group of individuals.
Where capital formation has become decentralized, bitcoin is not making progress in removing monopolies.
Diversification is what leads to positive outcomes, Lingham claims.
He wants a world with multiple chip manufacturing and mining hardware providers competing for business from thousands of miners if not millions distributed worldwide. He wants to have a choice of dozens of mining pools with different bitcoin philosophies focused on the greater good but acting on their own accord.
He wants to see the market choose the best clients and BIPs, where dissenting voices find groups to join and not feel ostracized.
He wants to see each layer of decentralization working to make it more accessible to others as opposed to trying to fork bitcoin contentiously.
In the short term, people could start being more respectful of each other.
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Last modified: March 4, 2021 4:56 PM