Btc, specialization, and ecological niches \ stacker news ~bitcoin

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Btc, specialization, and ecological niches

14k sats \ 7 comments \ @elvismercury 4 Dec 2023 bitcoin

(The sixth post in the meta-experiment series of the Broken Money book club, part 5. Check out the fifth.)

Bitcoiners, as a group, have been waging a famous quasi-war with other coins for a decade or more. Bitcoiners contend that altcoins come up short, with regard to btc's design choices, on a number of important metrics, the most crucial of which are probably the coin's degree of decentralization, and its consensus mechanism.

Lyn talks about an ironic technique that proof-of-stake systems can use to overcome the absence of an unforgeable history:

As an attempt to solve this dilemma, a proof-of-stake blockchain could create regular checkpoints, so that if the system goes offline, they can restart from the latest checkpoint. But that creates a new question: Who determines what checkpoints to use and where to store them? Why should others trust those checkpoints? So far, the best (and most ironic) solution to this dilemma has been for proof-of-stake systems to regularly insert their checkpoints into the Bitcoin blockchain, and thus rely on the unforgeable history of decentralized proof-of-work. (p. 365)

In this example, btc, which has made extreme design compromises in service of decentralization and censorship resistance, is being used as an anchor for a coin that has not made those compromises. The pos system is, in a sense, 'hitching a ride' on its more heavily armored alternate.

If btc succeeds as digital sound money, it will necessarily mean that it's deeply integrated into the world. A consequence of being a foundational technology is that an entire ecosystem will grow around it, including things that bitcoiners don't like, like altcoins, or stablecoins, or even institutions like banks or other government structures. All of them will take btc's unique properties for granted, and compose btc in different ways as part of their own design assumptions.

Division of labor implies, down the road, the existence of hyper-specialized roles: giant basketball players who can barely dribble; engineers who can barely communicate in natural language or feed themselves; species that can survive in only a narrow ecological niche. In just this way, will btc serve as a crucial organ system for other 'life forms' that are not viable on their own? What might that look like?

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881 sats \ 1 reply \ @Bitman 4 Dec 2023

I'm pretty sure you'd like us to come up with our own hypotheses on this.

However, as you threw us an H.G. Wells curveball at the end (my head's still spinning) can I ask your speculation if altcoins find a narrow evolutionary niche?

Surely as the game plays out these are more likely just to rise and fall in time it shouldn't harm their host at all...

0 sats \ 0 replies \ @elvismercury OP 5 Dec 2023

Surely as the game plays out these are more likely just to rise and fall in time it shouldn't harm their host at all...

That seems likely to me, too.

A result of doing this book club is that the differences -- not just the technical differences, but the emergent social differences -- btwn btc and other crypto projects has become more vivid than it used to be. This has produced two interesting changes in how I think about the matter.

First, the idea that some other thing -- e.g., Ethereum -- would replace btc seems absurd. It's just another kind of thing. It's like talking about replacing your blender with an air compressor.

The second, though, is that some number of these alts will exist, in symbiotic relation. I used to think that they would disappear. I now believe that some purpose can be served by the particular niches that they occupy.

Now that I write this, it reminds me of what Christian fundamentalists, threatened by evolutionary theory, used to say when they wanted to deliver a sick burn on evolutionary biologists: what use is half an eyeball? And the answer, in that case, was: quite a lot. Intermediate steps toward the evolution of the eye were hugely useful in the contexts in which they appeared.

So yeah, I expect we'll see crypto project "creatures" that exist all along the gradient of decentralization, and the only reason they'll exist, ironically, will be because btc enables them to. It's even stronger, actually: btc's success will demand that they exist, in the same way that the automobile demands that Tires Plus exist.

No idea which ones exactly, or what they'll be worth, though.

881 sats \ 1 reply \ @siggy47 4 Dec 2023

My prior response did not directly address your question. I tend to default to the idea that the bitcoin base level remains simple and secure, with all the functionality being built out in layers. In your scenario, though, there is nothing preventing the proliferation of clone btc networks. It would take a lot more work, though, reinventing the wheel to add specialized functionality. By then it would probably be easier to piggyback onto specialized layer 2s and 3s that have already proven to be viable.

0 sats \ 0 replies \ @elvismercury OP 5 Dec 2023

One of the key questions, to me, is to ask: what does it mean to be a "layer" vs a totally other project? I'm not clear on the matter. For LN, the layer-ness is that transactions are grounded in the same asset, which seems preferable when the affordances work out.

But consider the shittiest of shitcons, Tron, which now seems to have genuine utility, as a kind of transport layer for Tether. It's an abuse of the term to say it's an L2 for Tether; but also you can't deny that you know what I'm talking about when I say that.

I expect more stuff like this, except that intersects w/ btc. Actually, Tether itself is irrevocably bound up with btc's fate. I'm still not sure how much this is because of the nature of technology unfolding (e.g., an alternate kind of determinism) and how much is bc of the strategic choices of USDT leadership.

That would be a fun thing to dig into, but I sadly don't know enough about the nuances of Tether to take it on.

1056 sats \ 2 replies \ @siggy47 4 Dec 2023

All I could think of while reading this was how often I rely on the NixOS roll back when I screw up my configuration file.

395 sats \ 1 reply \ @elvismercury OP 4 Dec 2023

Could you connect the dots a little more explicitly?

228 sats \ 0 replies \ @siggy47 4 Dec 2023

Yes. I'm not a computer whiz, and yet I switched to NixOS about 6 months ago. Every time I get too overconfident I screw up my configuration file. Luckily, the os makes it easy to "go back in time." It just so happens that I screwed everything up this weekend. Today I read Lyn's ironic quote in your post. I should have posted "it's okay for computer idiots, but not for money."