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The OG Bitcoin business model is broken

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Avatar for TobiasRuck
Written by   94
1 month ago

In 2020, the FED prints 22% of all USD ever created. Clearly, the USD is headed for a big inflation.

Number go up

If people ask me what they should invest in, my answer, right now, is always: gold and silver.

But not Bitcoin, and not Bitcoin Cash, nor any other cryptocurrency.

Why not?

We’ve already had 11 years of Bitcoin, yet it and its forks by no means is a viable replacement of the best money ever created—the USD.

For non-tech savvy people, the USD is

  • faster, with credit cards and PayPal feeling instant,

  • cheaper, SEPA payments are literally free, for customers credit card and PayPal payments also feel free

  • and more reliable, as it’s backed by the government, quite stable, it’s basically accepted everywhere and there’s always someone you can call to get your transaction handled.

Bitcoin could have easily out-competed the existing traditional financial services, as the technology is vastly superior (UTXO based chains are actually really scalable), the big question though is: Why hasn’t it?

The answer, for me, is profit.

Or rather the lack thereof.

There simply is no money to be made directly from replacing the USD with Bitcoin.

So far, the OG “business model” for that has been: Buy Bitcoin, adopt/develop for Bitcoin, Bitcoin increases in value, profit.

Roger Ver, the first investor into Bitcoin startups and the most prominent supporter of Bitcoin Cash, is a proponent of this model. And that’s understandable, because this business model drove initial Bitcoin adoption.

But this is a really, really terrible business model. It doesn’t work. It suffers from the free-rider problem, it turns Bitcoin adoption into a public good. It’s basically the same model as one of those Marxist cooperatives, which always eventually fail.

It doesn’t matter whether you work hard or slack off in that model, you get the same reward. Even worse, for Bitcoin, if you were not an early bird and didn’t get in early, you will profit much less than people who did get in early. So this way we basically remove all the future talent from the pool of people who would help replace the USD.

I will talk more on models that actually work in a future post, because I believe we can replace the USD quite quickly if we just adopt an incentive aligned model, but first let’s examine this one in more detail.

If we use the OG “Buy Bitcoin, Adopt Bitcoin, Profit” model, we artificially turn Bitcoin adoption/development into a public good. Right now, adoption/development is mostly done by people who selflessly approach businesses/write code (or are paid by selfless people, in form of donations). In return, the price of Bitcoin increases, and every holder, including them, profits. But other than that marginal increase in Bitcoin’s price, they get nothing in return.

That’s the mechanics of a public good.

Nobel prize winner Elinor Ostrom

There’s actually a way to make public goods work. Nobel prize winner Elinor Ostrom guides us on how to “govern the commons” with her 8 principles:

  1. Define clear group boundaries.

  2. Match rules governing use of common goods to local needs and conditions.

  3. Ensure that those affected by the rules can participate in modifying the rules.

  4. Make sure the rule-making rights of community members are respected by outside authorities.

  5. Develop a system, carried out by community members, for monitoring members’ behavior.

  6. Use graduated sanctions for rule violators.

  7. Provide accessible, low-cost means for dispute resolution.

  8. Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system.

If we go through that list, we quickly realize that none of them work for the OG Bitcoin business model, because it is a permissionless system. Just look at the first principle: Define clear group boundaries. How on earth should be we define group boundaries for Bitcoin? By definition, we can’t exclude anyone, because everyone is free to participate and there’s nothing we can do to stop them. And don’t get me started on the 6th principle.

It seems like the Global Network Council proposed by Bitcoin ABC to solve the funding problem of the public good “infrastructure development” is a good attempt at “governing the commons”, and the people designing the rules there should pay close attention to those 8 principles by Ostrom. It definitely fulfills some of those principles already, especially principle 1.

But back to the OG Bitcoin business model.

It means there will always be exactly two outcomes, after sufficient time:

  • Selfless people will continue adoption/development or donate for it exactly until they feel exploited or burnt out and then leave in frustration

  • Someone else comes along with a sound business model and “takes over”

And we’re seeing this over and over again:

  1. Small blockers appeared on the scene in Bitcoin, presented a viable business model, Liquid, and eventually took over the entire chain while big blockers went onto their own chain, Bitcoin Cash.

  2. In 2014, Dash came along with a viable business model, the Treasury, and took a lot of the peer-to-peer electronic cash people.

  3. In 2015, Vitalik came up with Ethereum which presented a viable business model, the Ethereum Foundation, and took basically all of the people focused on smart contracts.

  4. In 2018, Bitcoin SV came along and presented a viable business model, direct funding from miners, and took a good portion of the “data-on-chain” people.

  5. In 2019-2020, AVAX is coming along and is presenting a viable business model, Ava Labs, and is taking a lot of people from the current Bitcoin Cash community which are focused on fast and reliable payments.

  6. In 2020, Bitcoin ABC, the lead implementation of Bitcoin Cash, is coming along with a viable business model, the Global Network Council, funded by the Coinbase Rule. They aim to take all the people focused on peer-to-peer electronic cash. You can read my thoughts on their initial proposal here.

A lot of people in Bitcoin Cash currently are unhappy with Bitcoin ABC and the Global Network Council, and want to continue with the OG Bitcoin business model, with a new node called BCHN. And it will be very easy to predict the outcome of that effort, given economic reasoning and historical precedent: People will either be burnt out and leave, or someone will come along with a viable business model and “take over”.

To make matters worse, a lot of prominent people supporting the OG Bitcoin business model are actively hostile to the very idea of profiting off the protocol:

Collin Enstad, host of the “Collin’ It Like It Is” show, in a recent video said “After November [...] Bitcoin Cash will continue its quest to peer-to-peer cash for the world as it sheds yet another team who wants to use the protocol for their own profit”.

Imaginary Username, author of Reusable Addresses, in a recent tweet said about Amaury Sechet, the lead developer of Bitcoin ABC: “How about ‘who wants to loot the protocol’?”

A similar sentiment is shared by many people who unironically call the Coinbase Rule a tax, proposing it is theft.

In other words, the very idea of replacing the OG Bitcoin business model is to be opposed.

This, of course, will end very badly. Either people will leave in frustration or people with a sound business model will take over.

Wheel of death

How long will the wheel of death of the OG Bitcoin business model continue spinning?

Instead, we need to embrace the profit motive, and come up with business models that actually work, models that incentivize participants correctly.

Stay tuned for a future post about my thoughts on that.

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Avatar for TobiasRuck
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Comments

Well written. The BSV model solves this.

$ 0.00
User's avatar TOG
1 month ago

Every business model has to profit in some ways eventually. The peer-to-pear network does not seem to work well with the donation model though. On-chain incentive seems to be the way.

$ 0.00
1 month ago

Wow, great article , I got a lot of things

$ 0.10
1 month ago

Hlw sir it's very new information for me I am grateful to read this message I really appreciate it thank you

$ 0.00
1 month ago

Great article!

$ 0.10
1 month ago

The most efficient system known to man is a centrally controlled tax bearing system without market forces at play. If you do not understand this, then you do not understand Bitcoin.

$ 1.00
1 month ago

I do totally agree about the donation model burn out the only logical conclusion.

$ 0.00
1 month ago

I agree the "OG business model" is not viable.

However, I think you don't understand the value proposition of Bitcoin (the concept). The main advantages bitcoin has over the USD are:

  • Censorship resistance: it is hard to censor transactions.
  • Inflation resistance: it is hard to create new units and debase the currency.

Therefore, the main goal of Bitcoin is not to be the most cheap, fast and reliable currency, although these characteritics help a lot (that's why I support BCH and not BTC). We do not need another Paypal.

For me, introducing this arbitrary rule (sending 8% of the subsidy to one address) is very dangerous. It drastically reduces the inflation resistance of Bitcoin Cash by centralizing governance around Amaury/ABC: on the ABC chain it will be quite clear that the man in charge is Amaury, and changing emission schedule will become easier for him. This arbitrary rule also lowers the censorship resistance of the chain (less hashrate) which is already quite low.

Finally, refusing to cancel this plan is really damaging for the whole coin itself (market doesn't like uncertainty). If you want to work for a coinbase-funded cryptocurrency, go to another coin (Dash, ZCash, Decred) or create your own coin, don't support this sneaky soft fork by ABC.

$ 0.35
1 month ago

It drastically reduces the inflation resistance of Bitcoin Cash by centralizing governance around Amaury/ABC: on the ABC chain it will be quite clear that the man in charge is Amaury, and changing emission schedule will become easier for him.

Another false troll-army created argument. This suggests doing something good now means he can do something bad later and we will all accept the bad change. It sounds so reasonable if you assume bad intent or want to hate ABC or just do not like the Bitcoin dream.

There are also other flawed arguments built on false assumptions in this comment but I do not have the time to go through them all again and again. The dishonesty on these issues is so common most voices of reason give up like the anti-BCH forces hope we will.

$ 0.10
1 month ago

Maybe my point was not clear enough for you to understand that I am not a troll.

I don't believe in the "let's centralize things today and decentralized them later" argument.

This suggests doing something good now means he can do something bad later and we will all accept the bad change.

And yet, when Amaury unilaterally decided to change the protocol multiple times, it was hard to oppose these change, as most of the ecosystem was relying on ABC. IMO the IFP would make things worse that they are today.

$ 0.00
1 month ago

The trolls and the community are on the same side and using the same flawed arguments created for them by the social engineering teams. So, I am not saying you are a troll, just fooled by them. Of course it is really hard for smart people to believe they have been fooled and saying so tends to enrage them further as desired by the social engineering efforts. Regardless I am saying your side is fooled.

Amaury has been running BCH for 3 years. That imperfect decentralization was not great. I saw it as something to move away from in the future once the protocol was "finished" and BCH could scale for massive worldwide adoption. Then the trolls weaponized the status quo as if it was something new to block serious funding of development (their worst nightmare). I agree Amaury giving up on the troll-army inspired community is a sad move, but I assume he is trying to fulfill the dream of Bitcoin as intended and you guys are making that impossible for him.

Most of the troll arguments rest on an assumption that Amaury is anti-Bitcoin-dream. People do love to hate him and love to believe that. The social engineers found they needed no real evidence of it to make you all assume it to be true and argue based on that unproven and unlikely assumption.

$ 0.00
1 month ago

To really increase adoption the only real way to do that is incentive. The trick again is how to fund incentive. Incentivizing protocol development does not do this. Yes it creates a better base to build the tools to increase adoption but the tools will only be created if there is a demand.

Any sort of funding should go to driving adoption. Once there is more demand for new and different capabilities money would then be put towards developing that.

If a portion of block reward goes somewhere it should be distributed to people and businesses that actually use and accept BCH as a p2p cash.

An app could be built with a wallet address that receives the portion of every block reward then every x number of blocks the funds are distributed based on that time periods use. See it as getting paid to spend or saving money by spending. However I'm sure there is a way to abuse this system and safeguards would need to be put in place to minimize it.

$ 0.00
1 month ago

Any sort of funding should go to driving adoption. Once there is more demand for new and different capabilities money would then be put towards developing that.

That is good but focusing on it exclusively would be a distraction from achieving the dream of Bitcoin (sufficiently decentralized (un-stoppable) peer-to-peer electronic cash for the world's people) anytime soon. To make it happen we need to develop scaling (fund development) that allows massive worldwide adoption. Then we can work on making it go viral and adoption will flood in.

$ 0.00
1 month ago

This doesn’t work for many reasons

$ 0.00
1 month ago

Your article is great !!! I have recently entered the world of cryptocurrencies, so all this information is very useful to me!

$ 0.00
1 month ago

Excellent overview. You really hit the nail on the head with this one.

People are going to read this however, except not actually read it, because it will go over their heads. I wish there was easier ways of explaining what you are saying to the people in BCHN, because its basically pointing out that the "Roger Ver Model" of spend to make price go up clearly is subject to market-failure, like in all communist/marxist models.

Its basically "If everyone does this, then it works. Okay, now you first."

If we cant get to the endgame through following our own self interest, then we ABSOLUTELY will not get there. ESPECIALLY since Bitcoin is a system of INCENTIVES.

$ 0.51
1 month ago

This is very recommended

$ 0.00
1 month ago

A few points:

  1. Gold, silver, and other commodities have no business model or profit-seeking development group. Why on earth would you recommend people invest in them?

  2. Small blockers/Blockstream did not sell anyone on the idea of Liquid during the block size debate. They planned to profit off Liquid, but the solution they were selling at the time was Lightning, which they should have and probably did already know would fail as a scaling solution.

  3. What does ABC have to do in order to profit off the IFP that early adopters and free riders don't? Absolutely nothing. They can choose to do work to hopefully create more value for BCH, but they don't have to. It's the same for the early adopters you mention as being unhelpful.

$ 2.00
1 month ago

The strategy is again how to fund incentives. Stimulation of protocol development does not do this. Yes it makes it better to make tools to increase acceptance but tools will only be made if there is a demand.Which should go to fund. If any part of the block award goes elsewhere, it should be distributed to people and businesses who use and receive BCH as PH cash. See it as spending or paying for saving .The most effective system for humans is a centrally controlled T-loading system without market forces in the game. If you don’t understand it, you can’t understand Bitcoin.

$ 0.00
1 month ago

Well said.

$ 0.10
1 month ago

In 2020, the FED prints 22% of all USD ever created. Clearly, the USD is headed for a big inflation.

This was the libertarian talking point in 2009, too, and it failed to materialize. What is different? There should be a qualitative difference to justify the claim of a different outcome, not just quantitative.

People have been making this quoted simplistic argument since at least the 1970's.

I believe we can replace the USD quite quickly if we just adopt an incentive aligned model

This is a great talking point for the libertarian faithful (ideologues) but clear-thinking people recognize it as over-promising.

we need to embrace the profit motive

That is what the current model is. Build a business with Bitcoin Cash.

You pulled out one post of one person in an attempt to strawman the ecosystem.

The "global network council" does not rely primarily on the profile motive but on the insider leverage Amaury thought he had so he could get a guaranteed 4-8% or more of the block reward every 10 minutes.

Wrapping yourself in the flag is a time-worn tradition but people recognize it for what it is these days.

$ 0.60
1 month ago

I like the general idea of IFP, but lets be precise here. Bitcoin didnt replace the USD because of theymos. he was offered craploads of money to drop the censorship. He refused. Same story with blockstream and changing one number in the code. Your whole premise is wrong.

now, adoption/development is mostly done by people who selflessly approach businesses/write code (or are paid by selfless people, in form of donations)

no, they are not paid by selfless people, they are paid by bitcoin shareholders

unironically call the Coinbase Rule a tax, proposing it is theft.

attempting to implement the IFP without seeking agreement of the shareholders is embezzlement, a theft and a betrayal. The only viable path for amaury how to get rid of that labels is to drop the forking attempt until after the shareholders vote for it (through the council, BMP or otherwise)

The funniest thing however is that what you call the "donations model" is exactly the answer the anarcho-capitalists (which amaury is a passionate promoter of) give as to how the society will work without governments. Instead of cheering for finally having the opportunity to prove that it works, they call it communist/marxist shit and ask for a tax instead. Hilarious.

$ 0.51
1 month ago

A few points where I think you are mistaken:

There simply is no money to be made directly from replacing the USD with Bitcoin.

I don't know how you reach this conclusion. Have you actually tried? There seem to be plenty of people earning money from Bitcoin in various different ways. Brian Armstrong, Roger Ver, Erik Voorhees and Jihan Wu would probably disagree with you.

So far, the OG “business model” for that has been: Buy Bitcoin, adopt/develop for Bitcoin, Bitcoin increases in value, profit.

The names listed above are all people who have made direct profits from the services they provide, not simply from the increase in price of their holdings. An increase in Bitcoin's price is a multiplier for sure, but companies like Bitmain and Coinbase did not "Buy Bitcoin" when they started, they earned Bitcoin.

Some contradiction here:

this business model drove initial Bitcoin adoption.

and then in the next paragraph:

this is a really, really terrible business model. It doesn’t work.

Perhaps you mean it doesn't work "any more". Or perhaps it's just become a bit more difficult and you wish you'd had it easy like them.

It suffers from the free-rider problem.

Investors are not free riders. They contribute capital. They are the source of the increase in price. They are the customers to the mining companies. They send a price signal to the world.

It doesn’t matter whether you work hard or slack off in that model, you get the same reward.

No, your reward is proportional to your investment and therefore to the amount of price signal you contributed. You're getting suspiciously close to the exploitation of labour argument here.

Even worse, for Bitcoin, if you were not an early bird and didn’t get in early, you will profit much less than people who did get in early.

This is a feature of markets, not a bug. It incentivises investors to search for and identify promising companies or technologies, to invest in them and to send a signal to the world, which is exactly what folks like Roger did for many years.

So this way we basically remove all the future talent from the pool of people who would help replace the USD.

I don't know what you mean by this. There is loads of talent here, yourself included.

If we use the OG “Buy Bitcoin, Adopt Bitcoin, Profit” model, we artificially turn Bitcoin adoption/development into a public good.

Easily refuted by example: Coinbase, Bitpay and Bitmain are all examples of companies which produce private goods that "make it useful to people in commerce". I'd like to see be.cash join their ranks!

Right now, adoption/development is mostly done by people who selflessly approach businesses/write code (or are paid by selfless people, in form of donations).

Not true. Just because they're the loudest on social media doesn't mean they're doing the most. The contributions of profit-seekers to development and adoption is huge.

But other than that marginal increase in Bitcoin’s price, they get nothing in return.

I think you're talking about something along the lines of:

  1. Start with almost nothing but buy what little Bitcoin you can afford.
  2. Work on Bitcoin full time and for free.
  3. Expect increase in price of your holdings to provide your primary source of income.

I agree this model is not feasible or smart as a day job or main source of income. I also don't think it's what Roger was suggesting. I don't know any people doing this apart from perhaps ABC. Most others in the community have some other source of income. If they were early-birds they have crypto savings, if not they have a paying job.

There’s actually a way to make public goods work. Nobel prize winner Elinor Ostrom guides us on how to “govern the commons”.

This is not really compatible with the Austrian school of economics. See Hoppe's refutation of public-goods theory and Block's refutation of Ostrom. I'm not saying you have to buy into the Austrian school but, well, you do have Mises as your mascot.

If we go through that list, we quickly realize that none of them work for the OG Bitcoin business model, because it is a permissionless system.

Correct, so please tell me you're saying we should dispense with Ostrom rather than we should modify BCH according to her system?

To make matters worse, a lot of prominent people supporting the OG Bitcoin business model are actively hostile to the very idea of profiting off the protocol.

This is a disingenuous straw-man argument. For example those folks have no problem with miners profiting off the protocol. Their issue is with a change to the protocol that lacks consensus and which they see as benefiting some at the expense of others.

A similar sentiment is shared by many people who unironically call the Coinbase Rule a tax, proposing it is theft.

This is known as a metaphor ("a figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable") or simile ("a figure of speech involving the comparison of one thing with another thing of a different kind, used to make a description more emphatic or vivid"). Since you've drawn comparisons to Bolshevism and Marxism you surely can't be making this point unironically?

Instead, we need to embrace the profit motive, and come up with business models that actually work, models that incentivise participants correctly.

And here's the problem with the IFP: even accepting that it's not a tax, just a business model, you're still left with the problem that it's a bad business model. Or perhaps I'm wrong and there are lots of customers (miners) who can't wait to purchase this new product on the 15th of next month.

$ 1.26
1 month ago

I don't know how you reach this conclusion. Have you actually tried? There seem to be plenty of people earning money from Bitcoin in various different ways. Brian Armstrong, Roger Ver, Erik Voorhees and Jihan Wu would probably disagree with you.

They make money by providing a specific service or product—which all have a sound business model.

I paid my brother 8€ in BCH yesterday for the subs he bought and everyone on your list made pretty much 0€ from that transaction, apart from miniscule miner fees.

The names listed above are all people who have made direct profits from the services they provide, not simply from the increase in price of their holdings.

Yes! I agree with that! That’s the entire point of my article. We need to take the OG Bitcoin business model and throw it into the fire, and replace it with business models that actually work. And you gave me a book to be able to do that, which I greatly appreciate.

Perhaps you mean it doesn't work "any more". Or perhaps it's just become a bit more difficult and you wish you'd had it easy like them.

Socialism works great until it doesn’t. For me, that means socialism doesn’t work. Seems like that’s debating the meaning of words though.

No, your reward is proportional to your investment and therefore to the amount of price signal you contributed. You're getting suspiciously close to the exploitation of labour argument here.

If you buy Bitcoin on an exchange, I don’t see how this gets any more brick-and-mortar merchants to accept Bitcoin, therefore it definitely is not an investment into Bitcoin adoption. I think you’re mixing up a lot of points here.

This is a feature of markets, not a bug. It incentivises investors to search for and identify promising companies or technologies, to invest in them and to send a signal to the world, which is exactly what folks like Roger did for many years.

Yes, and it cuts out all the people who want to make money on-boarding merchants. Great feature.

I don't know what you mean by this. There is loads of talent here, yourself included.

Flattering, but compared to companies like Apple we pretty much have nobody, while our goals are more ambitious than those of Apple.

I think you're talking about something along the lines of: ...

No that’s not my point. I’m making a quite general point.

This is not really compatible with the Austrian school of economics. See Hoppe's refutation of public-goods theory and Block's refutation of Ostrom.

I’d love to see a refutation of my points using Austrian logic.

Correct, so please tell me you're saying we should dispense with Ostrom rather than we should modify BCH according to her system?

I’m saying the OG Bitcoin business model doesn’t work. The IFP does modify BCH for that, but there are many places where people still apply the OG model which doesn’t require modifying BCH.

This is a disingenuous straw-man argument. [...] Their issue is with a change to the protocol that lacks consensus and which they see as benefiting some at the expense of others.

I asked Collin whether he’s serious with his statement and he affirmed, I asked him whether he’s opposed to me adding OP_REVERSEBYTES for my own profit and he didn’t reply. If it is a strawman, people should be more clear in their statements, but nobody clarified what they meant thus far.

Is it a strawman if I actively ask people to clarify and then present their reply the best I can?

This is known as a metaphor ("a figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable") or simile ("a figure of speech involving the comparison of one thing with another thing of a different kind, used to make a description more emphatic or vivid"). Since you've drawn comparisons to Bolshevism and Marxism you surely can't be making this point unironically?

I don’t understand. Do you deny there are people who unironically call the IFP theft? There are people who invoke the term “hashpower violence”.

And here's the problem with the IFP: even accepting that it's not a tax, just a business model, you're still left with the problem that it's a bad business model.

I think it’s great!

$ 0.00
1 month ago

We need to take the OG Bitcoin business model and throw it into the fire

Who is "we"? If the model doesn't work for you, stop using it. If it does work for you, keep using it. There are loads of models and every individual or firm can choose its own. The "OG business model" works great for those with large holdings but it's a terrible idea if you're broke. So yes, ABC needs to throw it into the fire, but who are you to stop BU or BCHN or anyone else from using it?

If you buy Bitcoin on an exchange, I don’t see how this gets any more brick-and-mortar merchants to accept Bitcoin.

True story: I used to buy Bitcoin on an exchange and used it regularly to buy coffee from Westland Coffee in London. That encouraged Paul, the owner, to continue accepting Bitcoin. Then I told my friends about Bitcoin and they bought some too. They did not spend it on coffee or anything else, they were "selfish" and decided to just hold it. But here's the catch: they bought just when Paul was selling so he could pay wages, and so he got a good price from them which made him some extra profit. That further encouraged him.

This is the "invisible hand" discussed by Adam Smith or, to quote Bastiat: "By virtue of exchange, one man’s prosperity is beneficial to all others."

Flattering, but compared to companies like Apple we pretty much have nobody, while our goals are more ambitious than those of Apple.

A wise and wealthy man once told me: have patience, and be modest in your ambitions. Apple started from modest ambitions, in a garage, with almost no money. But two very smart people was enough, and we have many more than that.

Is it a strawman if I actively ask people to clarify and then present their reply the best I can?

Yes. Because you chose OP_REVERSEBYTES for comparison, which is only superficially similar the IFP. Steelmanning would involve thinking about what it might be that has him against IFP but fine with OP_REVERSEBYTES (which you can surely assume he is), other than hypocrisy. See https://en.wikipedia.org/wiki/Straw_man.

Do you deny there are people who unironically call the IFP theft?

No. I just hadn't formulated the metephor / simile point previously. It occurred to me recently and this seemed like an appropriate place to slot it in.

I think the thing that's I'm still trying to work out with your reasoning is that you talk about both public goods theory and profit seeking and I'm not clear on how the two fit together. Also there's public goods vs common-pool resources, and we've even mentioned club goods in some of our discussions.

Going to think about this some more and come back with an attempt to put it all together.

$ 0.00
1 month ago

Who is "we"? If the model doesn't work for you, stop using it. If it does work for you, keep using it. There are loads of models and every individual or firm can choose its own. The "OG business model" works great for those with large holdings but it's a terrible idea if you're broke. So yes, ABC needs to throw it into the fire, but who are you to stop BU or BCHN or anyone else from using it?

Oh I meant, if we want to stop the wheel of death, we need to do that. If you’re fine with the outcome, nobody is going to stop you.

$ 0.00
1 month ago
$ 0.00
1 month ago

I think some noteworthy points were made in this essay, and that people that care about merchant adoption should give it a read. I liked the point you made about burnout. There are so many ways to spend ones resources to further bitcoin cash adoption. The problem is, how do you know which actions will be the most effective in furthuring adoption and which plans will not be as worthwile? When profit is tied more directly to the venture, it acts as a mechanism to signal which efforts will be most effective and similtaneously fuels them. This is my conclusion too after talking with many people on Bitcoin Cast about BCH adoption, and even being a leader of it in SoCal.

As far as criticism goes, you pointed out different business models in the crypto space, but failed to mention the business model of the Bitcoin Cash Node company, which has a similar business plan to AVAX. (Raise investment capital. Deliver. Profit.) What makes one business model more profitable than another? Maybe you could argue that charging a fee for a provided service is better business model.

$ 0.00
1 month ago

As far as criticism goes, you pointed out different business models in the crypto space, but failed to mention the business model of the Bitcoin Cash Node company, which has a similar business plan to AVAX.

How are investors rewarded? In AVAX, investors receive AVAX for their investment.

It seems like the BCHN company exactly has the OG Bitcoin business model.

$ 0.00
1 month ago

And as a Part 2 to my other comment below, this is exactly why I left for AVAX. This chaotic mess of nobody in charge of anything leaves nothing getting done, and vigilantes and bad actors coming to power.

I can see AVAX potentially suffering from not having an IFP, but i am glad we have a Foundation and a strong team thats well paid.

But there is a different incentive advantage to AVAX that you may or may not have thought of, and thats its hyper-deflationary nature.

Through fee burning, externally incentivized staking (via subnets), and a hard cap on supply, we have a system that rewards holders from the value generated by applications and usecases built on top.

An actual store of value, an actual reason to adopt AVAX. Buy AVAX, and if others use AVAX for its utility as a platform, the price of your AVAX should increase.

But then again on the IFP, even if AVAX had an IFP, it would dry up because inflation is temporary. So maybe its just an alternative means to an end. But we can do an IFP on a token built on AVAX, if we can find a way to justify demand for that token. Who knows.

I hope to see more collaboration between Bitcoin ABC and AVAX. Maybe cross chain atomic swapping of all assets? Hey, its possible. Two blockchains, one POW, one POS, and lets clear out all the weak projects clogging up the top.

$ 0.25
1 month ago

Yes looking forward to integration with AVAX, especially if we get something like Mitra.

It’s great to have all sorts of chains with all sorts of emission schedules. AVAX’s definitely is interesting. One recent one I heard that’s quite interesting is one where PoW difficulty = reward, this way soft pegging the coin’s value to electricity cost, 1 hash = 1 coin.

$ 0.00
1 month ago

"yet another team who wants to use the protocol for their own profit”

ABC doesn't want to "use" the protocol for their own profit (that would be fine). They want to control the protocol for their own profit. I'm sure if the world needs an Amazon-coin then Amazon will make one. How will ABC-coin ever hope to compete with it?

$ 1.35
1 month ago

They want to control the protocol for their own profit.

That would be a proper alignment of incentives. They want funding to do development that makes BCH grow in value so they can make money by owning BCH. That's what we should want our developers to want.

$ 0.00
1 month ago

how will any coin compete?

$ 0.00
1 month ago

A form of money that isn't controlled by anyone and isn't tied to any particular company or nation. There's potential in that.

$ 0.00
1 month ago

So, you see an "Amazon coin" is nothing like the ABC-BCH. That refutes your earlier claim.

$ 0.00
1 month ago

it sounds like it’s worse at competing with Amazon-coin

$ 0.00
1 month ago