In a recent interview with Tuur Demeester, Paul Sztorc made the interesting claim that “non-Bitcoin blockchains are disrespectful to Satoshi.” He has elsewhere and for a long time criticized non-Bitcoin digital assets of all forms. He generally refers to anyone not building exclusively with Bitcoin as a scammer, including me.
Sztorc, while clearly a brilliant technical thinker and a man who has made great contributions to Bitcoin and blockchain theory, is misguided in his vilification of all things non-BTC.
At least, he is partly misguided. He is right to be skeptical and suspicious of alts, generally. Indeed, many (most?) have existed somewhere between horrible idea and outright scam. When he refers to the “giant graveyard of projects,” he’s right. There are hundreds of failed and failing blockchains, and good riddance to the vast majority of them.
Unfortunately, Sztorc’s antagonism ventures beyond healthy skepticism into the tribal and religious. He is not opposed to alternative assets due to their specific flaws, necessarily (for that requires thoughtful analysis of each individual case). Rather, he is opposed to the very idea that utility can exist on an alternative blockchain. He believes all use cases, and all possible utility, can and should be crafted only upon Bitcoin proper. That is more religious, than academic. I get it, I used to believe similar notions.
So let’s examine this “Bitcoin maximalism,” as it’s known.
On a high level, it seems odd to me that an industry built on the principle of decentralization should be so afraid of the existence of a constellation of blockchains. Even if Bitcoin’s chain was “the best for all possible purposes in all situations at all times” (which it’s not), wouldn’t there still be value in an environment of interlocking assets, as opposed to all structures being built upon one monolithic chain? That seems almost self-evident. Removing central points of failure is a tenant of this technology, and that means avoiding anything monolithic, including the “one chain to rule them all” model. That doesn’t mean every alternative chain should be welcomed and embraced “just because decentralization,” but it does mean a world of 1 blockchain may be fundamentally less resilient than a world of 1+X blockchains.
More fundamentally, though, the notion that Bitcoin’s blockchain is “the best for all possible purposes in all situations at all times” is demonstrably false. Let’s start with the issue of time, and opportunity cost.
Of all the features and tools that could theoretically be built upon Bitcoin, most don’t yet exist today. You have a use-case requiring fast blocks? Bitcoin can’t help you, today. You have a use-case requiring true untraceability? Bitcoin can’t help you, today. You have a use-case requiring 20 txs per second? Bitcoin can’t help you, today. Transaction fees of $0.20, or $0.50, or $0.10, or $unknown make your project infeasible due to cost and uncertainty? Bitcoin can’t help you there, and won’t any time soon. You have a use-case that really isn’t related to money at all and has very little need for Bitcoin’s structure? Sztorc believes you should still use Bitcoin. You want to build smart-contracts? Bitcoin is very awkward for that, today. It might be better in the future, so Sztorc thinks you should wait. You want a different security mechanism than proof-of-work (maybe for centralization fears, economic inefficiencies, or environmental considerations)? Well, Bitcoin can’t help you there right now, either. (For the record, I like Bitcoin’s proof-of-work, but alas I’m only one market participant).
Yes, some day, all the myriad virtues sought by market participants may exist in beautiful production-ready form on Bitcoin. But not yet, and there is no guarantee that they all will, or that any will, or that they all should, or that they can all fit together. And those virtues that do come about may take years. The blocksize debate has certainly cast a pall in some peoples’ minds that Bitcoin can (or that it even should) adapt to new features and functions. Whatever your opinion, Bitcoin moves slowly, carefully, and along a certain path. That path, and that timeframe, are not appropriate to all market participants in all cases.
That is why alternative chains exist, and the industry is better for it.
Sztorc suggests that it’s “hubris” to believe you can build something useful outside of Satoshi’s temple. Perhaps, instead, it is hubris to believe you can understand all possible use cases and utility functions and declare them appropriate for your preferred platform, exclusively?
But Bitcoin can do it!
Are there whitepapers out there explaining how smart-contracts can work on Bitcoin? Yes absolutely. In fact, I’m wearing my beloved Rootstock shirt right now (thanks, Rodolfo and Diego!). I’ll be thrilled when smart-contracts can be efficiently built upon Bitcoin. Today, they can’t. And yet, on Ethereum, smart-contracts can and are being built, right now. ShapeShift is working on a couple smart-contract based projects, and from our review, they just weren’t feasible upon Bitcoin. That doesn’t mean Bitcoin is inferior to Ethereum (indeed, the DAOsaster demonstrated the virtue of a simpler, more cautious, and more immutable ledger in Bitcoin), but it does mean that right now, today, we as a company have found economic utility in both Bitcoin’s blockchain, and its structure, and also in Ethereum’s blockchain, and its structure. Both are useful, both enable unique tools and utility to be realized, and thus both exist, with merit and purpose.
As a concrete example, let’s consider the topic of privacy, for we all know Bitcoin is not very anonymous. This is a problem for that portion of economic participants that desire fuller privacy. Along come projects like Monero, like Dash, and like the upcoming Zcash (which reveals not even the amount sent in a transaction, how cool!) These are non-Bitcoin blockchains, though they’ve all been inspired by, and further inform, Bitcoin’s own technology. Ought they be dismissed as useless scams, because they aren’t the one true chain, as Sztorc laments?
Can Bitcoin someday be upgraded with better privacy features? Sure. But today, all manner of surveillance software is viewing down upon that blockchain, and is it not fortunate that more private alternatives exist? Sztorc believes, due to his loyalty to a flag, that the world today would be better off with fewer privacy options when it comes to cryptocurrency, merely because his flag may someday be as private as he feels is sufficient. That is not decentralization. That is the path to monolithic stagnation.
And if Bitcoin ever changes to truly become anonymous, it may indeed tank the market for alternative anoncoins. Fine, that’s a healthy competitive market at work. But should we scorn the existence of innovative alternatives in the meantime? Should we assume that Bitcoin will be the best of all things to all people? Do we “know” that Bitcoin will inevitably possess the best privacy in the industry? Is that not hubris, Mr. Sztorc? I try to avoid such assumptions. Markets are too complex. There are too many needs, nuances, and unknowns. I don’t pretend to know the development path that Bitcoin will take, and I don’t assume it can follow every path for every person, regardless of the clear innovation and value of sidechains.
We could look at other features, but the principle remains: Bitcoin, while it has proven “very good” at a set of cryptocurrency demands, is not perfect in every way. Nothing is. As a form of money, and as a technology platform, Bitcoin has specific attributes (excellent attributes, imho). These attributes are not, however, universally ideal for all possible use cases of blockchain technology. And changing one attribute to improve Bitcoin in one way, may plausibly change another attribute to diminish Bitcoin in another. That’s okay, but it means the concept of Bitcoin as the monolith is flawed.
With respect to the work Sztorc has done, dismissing all the various chains in existence as “scams” just because he believes feature x, y, or z could be built better upon Bitcoin someday is presumptive, centralizing, and intellectually lazy. A vast swath of this industry is not content to sit around and wait for every possible feature and attribute to be crafted carefully into Bitcoin’s protocol. First, not everything will be. Second, not everything should be. And third, that which will be, and should be, may not arrive upon a timeframe congruent with market demand. And that’s okay.
Is Satoshi a Bitcoin maximalist?
Finally, let’s address the Satoshi comment, directly. Are alternative chains “disrespectful” to Satoshi? This is a weird appeal to authority, but in any case, Satoshi’s motive was to free the world from a centralized, censorable financial system; to build a non-state peer-to-peer money. He succeeded, and Bitcoin continues to grow and develop, furthering that motive.
And yet, Satoshi’s invention was so profound, that it not only spawned one new protocol and product, but a growing galaxy of technological, economic, and social experimentation. How can that be anything but the highest praise for his work? Think of the industry Henry Ford spawned. Is Maserati an insult to his work? Did Maserati put Ford out of business? Did Maserati set the auto-industry back, or move it forward (and outward)? Should Maserati try to be Ford? Should Ford try to be Maserati? Would the world be wealthier and more prosperous if Ford was the only automobile platform? (but think of all the efficiencies gained if mechanics didn’t have to know dozens of systems!)
The myopic view of Bitcoin as the only valuable blockchain technology is deficient. It dismisses the nuanced desires of market participants. It dismisses the opportunity costs of change. It overly simplifies the interworking attributes of any chain, falsely assuming a specific map of complex pieces will be optimal for every demand. It fails to grasp the industry as an industry, instead of a single product. And indeed, it needlessly falls into the same pattern so unfortunately common in our world, tribalism.
Nothing suggested above implies that every blockchain should be equally respected. Not at all. Most chains and digital assets, both historically and into the future, may rightly be dismissed. But, their dismissal should rest upon examination of their specific attributes, not wholesale dismissal as something alien, and not on appeals to the monolith. And indeed, while most may rightly be dismissed on their attributes, most =/= all.
The variations and patterns of this expanding technology deserve critical examination and thought, not wholesale vilification upon a declaration of non-conformity. There is no benefit in stoking crypto-xenophobia. It does not help the industry, nor Bitcoin, nor certainly Satoshi’s legacy.