The idea of Bitcoin, correctly understood from the cypherpunk/Austrian.economics lens has never changed, there is no need whatsoever for an “update”.of any of the core tenants of its original value proposition.
While some people, including Satoshi, have made mistakes along the way.on the technical side (famously about the potential of SPV wallets),.nothing of core importance has really changed.
While the same Bitcoiners/Austrians got caught up with the S2F wishful thinking,.mistaking this as the ultimate vindication of their theory.(the theory correctly understood neither gets vindicated nor falsified by this).
I have criticized my Bitcoin Maxi friends on this throughout the bull cycle.
I believe fundamentally their mistake was, like the goldbugs before them,.in not appreciating the implications for BTC price manipulation.(also on the upside) in a world that is truly on a fiat standard.
Newly printed dollars together with large scale market manipulation.(after Wall Street came on board) pumped the BTC price up far above any current market demand.(yet still far below its potential value to the world.if this will ever be generally understood, which it is not today – there is no opposition between these views).
XMR clearly has better privacy than Bitcoin,.it is however using less mature cryptographic primitives, while perhaps there are no problems with them,.it is not ready to become the base layer for a better financial system for the world,.while Bitcoins primitives are mature enough for this role.
In my opinion privacy improvements in Bitcoin are the most critical thing in order.to position us better in the coming war,.I don’t really see this happening so I think we are heading for a rather.weak position with low but not nonexistent odds of winning.
Setting the human faults of personal gain in pumping one’s own coin through less.well thought through arguments aside.(which I tend to believe has been a sad driver in the public debate),.the real question always comes down to economics:
Economics always trumps technology.
At its best technology provides a strata that is as frictionless as possible.for economics to be expressed upon,.it is important to always remember this for understanding technology in its proper place. Economic laws can only be broken at one’s detriment.and to the detriment of the system as a whole.
There is an open question whether Bitcoin could have worked without the trust.implicated in being able to verify the transactions publicly.
And mind you I say this as something of a privacy maximalist.
The existence of Monero does not settle this question as it appeared.in the shadow of Bitcoin already being established.
The idea of Bitcoin for anyone that spent the time required (like 15 minutes).to calculate its scaling properties, from the beginning it was always understood.that ultimately it could only be used as a low tx volume system.existing as the basis for other systems built on top of it.
Basically the system in a multi-polar world that could function as the lowest.common denominator and arbitrator of trust between parties.who normally would not trust each other.
Simply put the proposition was a settlement layer for the central banks.and the world’s largest economical institutions that would kill off inflation.and in addition provide an open system thereby significantly reducing the friction,.freeing the world’s economies of their shackles.with significant economical activity as a result.
I cannot overemphasize how from an Austrian economics perspective important this above point is, its real world implications overshadow even all implications of privacy on a purely economics level.
This has to be acknowledged from the outset for putting the Bitcoin/Monetary debate in context.
Again, it is an open question and perhaps even doubtful that Monero could work on this level, heck it’s even doubtful Bitcoin will be able to, but simply put it is our best hope.
The Lightning Network experiment potentially adds even more potential goodness coming out of the system but even if it would fail if we get the above, even if it means pricing out most small scale owners form affording to pay the tx fees (assuming now that it’s actually successful, a point we are still far from reaching) that would still be the economic equivalence of freeing the world from a tyrant and everything else fades in comparison.
There is one further argument coming out of Austrian economics: The question of the economical implications of having multiple monies.
From the outset it is clear that if it were possible to have one money that solves all of the properties of money it would be maximally beneficial to the economy as a whole.
One of these properties is fungibility, this one Bitcoin does not have as each UTXO comes with its own unique history.
As blockspace finds its true value (my assumption: very high), Bitcoins monetary property of ease of moving also suffers, like gold before it.
The debate on these topics among Austrian economists will likely go on for some time but ultimately what works will be the real indicator.
To round off I will say that I have come to appreciate the existence of Monero as it is a tool for being able to do things that need to be done that are currently not possible in the Bitcoin network (and unfortunately likely never will be).
It will likely never overtake Bitcoin and it is not likely that it will have what it takes to solve the problems Bitcoin attempts to solve, it is therefore not playing in the same league as Bitcoin.
Author: Digital Ghost