Adam Back recently claimed on Twitter that the Bitcoin Core development team is “decentralized“.
However, that’s a dubious assertion at best, and a disingenuous one at worst. Mr. Back is the President of Blockstream Inc. His startup company is financed by $70M from traditional bankstas who could give a shit about billions of unbanked/poor people being given the ultimate tool to: bootstrap themselves out of poverty, participate in commerce with merely a cell phone, and dramatically increase the world’s GDP.
Here is a snapshot of some of the most influential and vocal members of the core development team directly employed by Blockstream. The big guns are Adam Back and Greg Maxwell. Interestingly, Mr. Back, who is now an” executive“, but somehow still strangely thought of as a major technical contributor, doesn’t seem to be actively involved in the design/coding effort. That’s because his presidential title makes him responsible for Blockstream’s financial performance over all else.
Admittedly, not all Bitcoin Core developers are paid by Blockstream, but some are contracted out by the private, for-profit, company. But, as the presented evidence shows, the Bitcoin Core development team cannot be claimed to be DECENTRALIZED.
Startup investors, especially bankstas, expect a high ROI on their risky investments ASAP. Regarding Bitcoin, their investment returns can only come from centralized technologies, known as L2 tech, layered on top of Bitcoin. L2 technologies are to Bitcoin like web sites are to the TCP/IP protocol. That’s where real big money is made. By design, Blockstream is an L2 technology product company that must use the Bitcoin protocol to build on top of.
Hence, by implementing and promoting the SegWit improvement to the Bitcoin protocol before a deterministic, time-dependent, dynamically increasing maximum block size policy raises suspicion in the Bitcoin community that Blockstream is out to freeze Bitcoin L1 on chain scaling growth after SegWit is activated in order to get money-making L2 technologies deployed as fast as possible. Again, suspiciously, there is no unified, visible, commitment from the Core development team as a whole to pursue an on chain scaling improvement next as priority one to relieve network pressure and allow a marginally increased onboarding of a cluster of new, less well off, users. No room to breathe.
Meanwhile, the Bitcoin network is becoming more exponentially saturated as new users (Venezuela, Mexico, Greece, Cypress, China, Japan, Africa, India) try flocking to Bitcoin to use as cash but are turned back by wildly rising transaction fees and confirmation times – a massive decrease in usability to large swaths of people. The flight from Bitcoin to alternative cryptocurrencies resulting from the poor stewardship of the Bitcoin protocol by the Core development team is vividly visible in this market share chart:
Satoshi Nakamoto, the genius creator of Bitcoin, said something to the effect of:
In the future, there will either be massive BTC transaction volume, or zero volume.
Ironically, the anti-fragile Bitcoin system proven to be indestructible by powerful external forces over 8 years of 24 X 7 operation, may end up instantaneously imploding due to internal forces caught in the throes of a bloody death match.
I won’t disclose which open source code base contains this C++ code because I don’t want to injure any fragile egos. However, I’ll give you a hint. This sloppy code runs a $20 billion, bleeding edge, financial system. The stewards of this code base think they walk on water.
Over time, all fiat currencies are either slowly or quickly debased by governments who mandate them as legal tender for paying taxes. When it suits their political agenda, central authorities dilute the value of their fiat currency by cranking up the printing presses to spew out new paper notes. Thus, fiat currencies have never been a good long term store of value.
Gold, on the other hand is much more scarce than paper that can be printed on a whim by central authorities. It’s much more expensive and time consuming to dig gold out of the ground than loading ink and wood pulp into the printing presses and pushing the ON button. Thus, relative to fiat currency, gold is an excellent store of value over the long term. However, due to physical constraints, using gold for day to day transactions is not as practical or fluid as using fiat paper currencies.
Bitcoin, unlike any monetary system invented over 5,000 years of human history, has the potential to function BOTH as a great store of value AND as a seamless medium of exchange for day to day transactions without any centralized, elitist, “supervision and control“.
The figure below shows the ideal scenario for Bitcoin to destroy the existing, entrenched, archaic, global financial system run by bureaucrats and rich, elitist bankers who can crash a financial system while suffering no consequences themselves.
As more and more “regular people” like you and me become aware of Bitcoin’s unprecedented potential to kill two birds with one stone without any centralized authority meddling in our affairs, more and more people will try to start using bitcoin for daily transactions AND to store their wealth.
Assuming (and at this point in time it’s a huge assumption) that the decentralized Bitcoin system can naturally scale in parallel with an explosive rise in the number of enlightened users, the path to billions of willing new users worldwide as shown in the above figure is a slam dunk.
But alas, as currently designed and implemented, the decentralized Bitcoin network cannot support exponential growth to billions of users. The base protocol must be changed somehow to accommodate layer two applications for a graceful, timely, move from millions to billions of world wide users. The bottom line is that Bitcoin needs to change to scale.
Because of a nasty, 2+ year old, scaling war being waged between two internally polarized factions of the Bitcoin community (SegWit vs. XT/Classic/BU armies), the lack of change in the system software has imposed a hard ceiling on the number of users the system is providing value to – stunting the growth and uptake of one of the world’s greatest inventions. Keeping the system software unchanged as more users attempt to come on board has led to: network saturation, increasing average per-transaction fees of up to $1, and per-transaction confirmation times on the order of days.
As the figure below depicts, the lack of a consensus scaling solution has at least temporarily suspended movement toward the holy grail envisioned by Bitcoin’s creator, Satoshi Nakamoto: the use of Bitcoin by billions of people as “a peer-to-peer electronic cash system“. The rising fees and confirmation times have turned off millions of newbies initially attracted to the system because of its potential to satisfy the requirements of the payment use case.
I’m into Bitcoin for the long haul. If it crashes to $0 or stays stuck in the million user niche of solely serving as a “a peer-to-peer electronic store of value system“, I’m in. What about you?
Here’s my personal take on the SegWit (fixed, small block size) vs. Bitcoin Unlimited (dynamically determined block size) war of attrition that keeps raging on within the Bitcoin community:
- SegWit => Steers Bitcoin off of the “electronic cash” path Satoshi Nakamoto originally started it on, and towards an “electronic gold” niche that hard-limits the number of people that can use Bitcoin gainfully.
- Bitcoin Unlimited => Keeps Bitcoin on the “electronic cash” path, providing 2 billion “unbanked” people with the opportunity to bootstrap themselves out of poverty, participate in commerce, and boost the global economy.
The bitcoin core development team chose to implement the top option. The bitcoin XT, Classic, and Unlimited development teams chose to implement the middle option. Sadly, no team chose to implement the bottom option.
Two years ago, the XT, Classic, and BU camp(s) saw the high Tx fees and long confirmation times we have in place today – it was clear as day. But rather than paying attention to their concerns and incorporating a max block size increase into their SegWit design, the majority of the Core team and their backers chose to ignore, censor, and ostracize anyone who didn’t agree with their chosen path. As a result, we now have an existential crisis going on within the bitcoin community which may lead to the total collapse of the ground-breaking cryptocurrency. Bummer.
..and here’s why fees are skyrocketing as more and more “unbanked” people try to escape the tyranny of governments that continuously debase their fiat currencies…