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Many people, myself included, believe that this downturn is only temporary. But as new data rolls in, it is time to take seriously the alternative theory: This is a direct challenge to the logic of network effects. Furthermore, many of Bitcoin strongest defenders have jumped ship, and a few of these are even socially secure enough to admit so openly. Roger Ver, indefatigable promoter and angel investor, owner of the Bitcoin. Furthermore, services ShapeShift, Poloniex, et al have evolved to make these markets user-friendly and liquid.
These days, if you can accept one crypto, you can accept them all. They also offer permissionless innovation. Certain ideas, such as Monero, Siacoin, Namecoin, and Zcash, cannot efficiently be tested in any other way. Of course, these experiments should have been done on sidechains which we will turn to in a moment. As to the first value proposition cheap payments , much has already been said. I have written an article with my nuanced views on the subject.
More important is to discuss the second value proposition. For, while the Altcoins try new ideas a day, most bad, but occasionally one or two good 2 , Bitcoin instead has retreated into an overcautious and highly-pretentious paternalism. It is not so much a passenger-laden plane, but a flight simulator virtual-reality videogame.
The Altcoin ideas are judged, appropriately, by the user. Bitcoin, in contrast, is now tending to choose its ideas based on how impressive they are to other members of a pseudo-academic pseudo-bureaucracy.
A scientific environment requires certain features, including: Altcoins represent one method of falsification — trying the idea and watching to see if it fails. Sidechains are an even better method.
Otherwise, peer review becomes a self-referential popularity contest. The point, since so pervasively and consistently misunderstood, bears repeating: It is not a popularity contest! Unfortunately, for the significant questions 3 , the atmosphere of science is departing from Modern Bitcoin. One smoking gun is the reaction of both LargeBlockers and SmallBlockers to the idea of fork futures.
For that very reason, they have the unique ability to singlehandedly predict the fate of any fork 4. Despite this, there was no interest in creating such markets. When they were created anyway, the losing side refused to acknowledge them as legitimate. When I proposed a way of making them more legitimate , the losing side was not interested!
This is a root and branch rejection of the value of experimental testing. It exploits the power in the remaining network effects, and uses it to enable a monopoly — in other words, uses it to ensure that dissatisfied customers have no recourse. As the scientific atmosphere declines and, please, do not confuse science with engineering , standards of discourse have declined as well. Clever Altcoiners have noticed these deficiencies and the insecurities they inspire and exploited them.
One can dismiss these maneuvers are mere campaigning, but they are only possible because of real flaws that actually exist in the Bitcoin community.
No one alive is in a better position to answer than I. After Blockstream gave up on sidechains in 6 , I wrote my own idea in November of that year.
It remains, to this day, the only concrete proposal for P2P sidechains, let alone the only implementation. My view is that the scaling conflict is important, and that sidechains are the best way to resolve it. In fact, my current view is that sidechains are the only way to resolve the conflict. But since each person is different, there is a limit to how large a community can grow before there is infighting.
Sidechains resolve these issues. Despite this, interest in Drivechain has consistently been low, among Democrats and Republicans alike. But they are not interested. MimbleWimble, originating deep in Republican territory bitcoin-wizards , now plans to launch as an Altcoin.
Perhaps sidechains are just a bad idea? I think that the causality here is reversed: Instead, there is profound evidence of bad claims that sidechains are a bad idea — most critics admit that they made no effort to understand the idea before criticizing it 7. However, more fundamentally, even if drivechain were bad, it is a soft fork.
So, it can be freely and completely ignored by disinterested users. And it actually cannot be prevented if miners decide to use their hashrate to unilaterally activate it. If bad, it should be talked about, because it is unpreventable. But this explanation would apply equally well to every new idea. And drivechain is a very old idea, it is much older than SegWit and the spec was published in Nov I can get principled developers to review the code, if I pay them.
Disinterested third parties have also offered to pay for drivechain code review, with some success. So the potential for interest in sidechains is there, but the inherent interest is just disproportionately low. And sidechains, along with their benefits, do present a scary new risk.
These risks are freedom-enabling, and entirely opt-in. For existing Bitcoin Core developers specifically, the above position might be taken even further. It is a clear conflict of interest — if society adopts the pill, the doctors will be out of a job. Even though by the time that absolute safety is established, many people will have likely died needless deaths. Since sidechains take control away from current elite Core developers, we would expect them to oppose sidechains.
Human disputes, of all kinds, will reliably collapse onto a single dimension. This is simple math: If you join one of the two major groups, your influence will be very small. But if you join neither it is likely to be zero. A LargeBlock sidechain is a competitor to both the LN favored by Republicans and a hardfork blocksize increase favored by Democrats.
Thus, to support a largeblock sidechain would be to oppose the party leadership. So commentators wisely downplay their interest in a sidechains solution. Today, nearly every person, and every media outlet, has allowed themselves to be captured exclusively by one party. This one is very simple. The free rider problem is a one of immense practical importance.
For Altcoins, of course, there is no free rider problem, because there are alt-owners who profit disproportionately to everyone else from the success of the Altcoin. But with sidechains, we have a situation where someone must do the work, at some cost to themselves, and yet the benefits are diffused across all Bitcoin owners.
Miners, Users, and [Republican] Developers. My point is that incentives do not always align. For better or for worse, the dumb people of the world form an intransigent minority , because they literally cannot appreciate good ideas.
English is the international language, despite being awkward and hard to learn — Esperanto, in contrast, is very easy to learn but is spoken by no one. If you disqualify Esperanto, then consider French: Yet today they all speak English in Quebec. The fact of the matter is that anything with network effects is going to ultimately be ruled by the middle of the bell curve: In these analyses, timing is important: But as time goes on, the project will attract more users, and so the network effects will become more important.
Eventually, the network effects outweigh the meritocratic effects. And, if the playing field is too ambiguous, these un-knowledgeables are going to glue the future to whatever shiny object can attract their attention first Secondly, the marginal meritocratic effects do not seem to be that significant. Someone who needs financial sovereignty must abandon modern fiat currencies, but whether they transact in BTC or LTC or ETH will make no difference to them, and investors will need to invest in whichever money is the most recognizable.
The differences in node cost, or in privacy, are not as relevant most lay users care about neither But he did not advise me to also add drivechain to Bitcoin Gold or Diamond etc. And perhaps we only stop at 2 for a short time, before returning back to 1 for example if sidechains do, in fact, eliminate Altcoins. He argues that a system can become healthy, as long as the losing team becomes desperate upon their loss, and willing to take risks and make changes.
It had pros and cons relative to mine, some of which the two of us discussed together at Scaling Milan in late he definitely helped improve our work. It also occured to me that working on sidechains is probably perceived as disloyal to Bitcoin. For trivial, non-controversial matters , we may still see some scientific features. It was always better than nothing but highly flawed, as I discuss in the Fork Futures article. I feel it necessary to explain that Blockstream has two projects which it repeatedly claims are sidechains but which actually are not.
But most people made a strong effort to mask their disappointment. Jorge Timon still does not understand that sidechains are supposed to be optional — these are sidechain paper co-authors! And I do not believe that that is the case.