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It's been a crazy time in the Bitcoin Cash community. As a long time observer and someone that wants to see peer to peer cash succeed, it has been a trying time for years now.
In this post I try to explain why I sponsored BitcoinABC, supported other node projects and my view on the current state of Bitcoin Cash. I'm sure some will see this as potentially controversial, I'm the opposite: I generally don't like conflict, but feel the need to share my views to be a responsible and communicative community member.
First, peer to peer cash was hi-jacked and subverted on BTC. Through censorship and intimidation, we ended up with digital gold. Digital gold isn't necessarily a bad thing, but its a far different path than what Satoshi proposed with creating a token used for casual transactions. BTC went from a fairly proven and low risk project to extremely high risk in my opinion relying on an experimental fee market and the lightning network. As fees rise, more UTXOs will be unspendable as the fee will be higher than the output amount.
I admire BitcoinABC for the following:
Making BCH exist - I watched over the years as many implementations attempted to get majority hash power with BitcoinXT, Bitcoin Classic and Bitcoin Unlimited. With Bitcoin Unlimited it was extremely close during the miner voting of 2017, however a few crashing bugs were found and exploited and pretty much ruined the possibility that billions of dollars of Bitcoin should rely on the code. While I would have preferred that large blocks became the standard on the majority chain, I'm content with at least having a functioning large block minority chain (minority for the time being I hope).
Sticking with it - How many projects come and go in crypto and technology in general? The fact that BitcoinABC has consistently stuck with the project for almost 3 years and maintained/updated the code goes a long way. It's easy talking a big game, but sitting at your computer hours and hours per week fixing tiny bugs isn't much fun or glamorous. But it's required to make the system function. Many people forget that successful projects/companies are a marathon and not a sprint. Simply keeping going and making progress for long periods of time usually adds up.
Dealing with crap - There is a nearly unlimited amount of fighting, disagreements, opinions, egos, emotions that happens in any project. However crypto has its own issue now that there is big money involved. Now that stakes are 10x higher as the interests grow. Clearly Mike Hearn, Gavin Andresen, and many others decided that there was too much emotion in being involved with the project and it was easier to take a quieter approach. I totally appreciate their conclusion and don't fault someone for not wanting to constantly be at the center of the arena.
Semblance of a roadmap - I like there's been some clear goals and trajectories over the years on the ABC roadmap. For me all three pillars are key: scaling, speed, and more features. I appreciate the organization's vision for electronic peer to peer cash generally matches my own.
With ABC bringing the issue of the Bitcoin Cash Infrastructure Funding Plan (IFP) to the forefront, I think it was helpful for the community. Many think it's a miner tax and would be wasted by an opaque, bureaucratic organization. It's definitely a concern for me as well. However the question remains, how to fund a group of developers?
We could rely on venture capital (VC) funding the developers like Blockstream, but then their interest is no longer with the network but with them selling their Tabware software. So what are the choices:
Pros - Ensures the developers have a consistent funding stream
Cons - Could be considered a tax. Are there checks and balances to ensure the money is spent properly? Who exactly decides who gets the money?
Pros - Supports the voluntary spirit which I very much enjoy. Allows hard work to be rewarded with funds
Cons - Unreliable. Turns into the free rider problem where some people will contribute but others will be free riders and enjoy the benefits others have contributed.
Cons - Extreme conflicts of interest. Are you in it for the greater good of the network or the benefit you can derive for your company and investors?
For me the IFP was a wakeup call that I, an interested member of the community, should do something. Sitting on the sidelines hoping that things will work might not be enough. In the past few months I've done the following (dollar values at approx. time of transaction)
Honestly I have no idea. I'm not in the middle of all the Telegram groups, Twitter messages or other communication circles (nor do I really want to be). But since I BitcoinABC brought the funding issue rightfully to the forefront, I decided I had to try to at least do my part to fund many of these talented developers.
Certainly it's nothing compared to the financial contributions of Marc De Mesel, Roger Ver or other large BCH holders. However it seems that everything adds up. If I contribute, hopefully it will encourage others to also contribute their funds, time or energy. We are a community pushing for a similar (I think) goal. So all contributions add up. And hopefully by writing an article outlining my thoughts it would encourage others to contribute in whatever way they find meaningful (i.e. financial contributions, building their own software, creating content etc.)
What's it in for me?
I don't have a website or YouTube channel that I'm promoting, so nothing directly. However I take a look around and see the following:
BTC - If the blocksize had been raised in some reasonable manner, we'd really be in a king BTC world. Crypto transactions large and small would flow through this one network and we'd be on the way to a real international world money. For reasons that I would describe as a combination of greed, fear or could be described as external meddling took it from something extremely sound to something experimental.
When I recently asked an extreme BTC supporter that if BTC doesn't currently function as described in the white paper "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution" then what is BTC?
His answer caused me to laugh so incredibly hard. He said BTC is based on a "shifting social consensus." I mean, what does that even mean? What is the rallying point or goal of BTC? If something like BCH can be both a store of value and a payment system, why does BTC need to exist?
"If fees go to $1,000 per transaction like many BTC supporters hope, then will the average person open one/many lightning channels? And if they don't, won't they just deposit their funds in a giant lightning hub like Coinbase, Chase, Binance etc? If the user deposits fund, doesn't that just lead us back to Banking 2.0?"
I still haven't gotten any answer to that other than "Lightning is early, it will improve." I hope so, lightning seems like it will just become centralized in giant hubs at its extreme conclusion.
ETH - Could be king of the hill, but completely based on ETH 2.0 working. I've been hearing about the switch to PoS for Ethereum from the very first day I heard about ETH in ~2015. Here we are 5 years later and it's still potentially moving in that direction, but years off. Also ETH suffers from a non-fixed supply which has been inflating much more rapidly than BCH.
However Ethereum is having tremendous success recently with
ZEC/XMR - Real competitors if they can handle scaling. However not knowing if there is an inflation bug is a serious crimp on their utility. Perhaps I am wrong on this. Also governments will probably try to keep the influence of these coins lower.
Every other "new" coin like Avalanche, Polkadot, Algorand, Cardano, Tezos, EOS, and every other Blockchain 2.0/3.0/4.0 coin - Honestly I have no idea. Crypto "geniuses" keep releasing new coins on new technologies every 6 months or so. Do these make sense or work, are they the future? I don't really know enough to say.
It's a true modern miracle. For a very long time currencies (other than gold or certain commodities) have been tied to a government (Roman, Spanish, British, American, Japanese etc).
For the first time in history, the past ten years has given mankind the opportunity for a world currency that isn't sponsored by a government that can't be inflated, seized, censored or taken away. This is an enormous improvement for people around the world. Instead of spending enormous fees on Visa, Mastercard, PayPal, Western Union, banks or other intermediaries, people can directly transaction with each other anywhere in the world for an incredibly low price. This is powerful and amazing.
In startup terms, any product needs to have something users want. I can see some of the product/market fit that other coins have
Bitcoin - Store of value. If it works, the concept is useful if can save money that isn't inflated away.
Privacy coins (ZEC, XMR, etc) - Keep your transaction's info limited to you and your counter-party.
Stable coins (USDC, DAI, USDT, USDH, etc.) - Ability to send fiat cheaply, internationally and quickly.
Bitcoin Cash - I'm starting to question if there is truly a desire/need for peer to peer cash? I originally thought so and still think so.
But are people truly dying to pay with a non-governmental token or do people simply want crypto stable coins?
Will Bitcoin Cash taken over the "store of value" from BTC?
Will ETH 2.0 allow scalability on ETH and simply make Bitcoin Cash a weaker subset of uses than ETH can provide?
Is there another use case where BCH is superior that hasn't started working yet (such as the Stamp encrypted messaging system)?
Why haven't daily transactions picked up much? Meanwhile ETH transactions are nearing record levels.
Did peer to peer cash have its chance? But as peer to peer cash in the form of BTC got derailed, will a 2.0 blockchain now take the mantle?
Is Avalanche or nearly instant final settlement the killer potential feature of BCH? Or does its design violate the PoW principles of BCH?
I heard grumbles from a friend who is a neutral-BCH supporter recently. He received a payment that took forever to confirm due to the DAA. Safe to say he didn't have good things to say about using BCH as a reliable and fast payment system. He said just use ETH, it's fast and still relatively cheap.
It seems to me we have to make a general choice as a community
Have someone/a few people in charge that overall makes the best decisions they can and the community can generally rally behind.
Have proposals that are voted on the blockchain and that vote actually implements the the new code as I've seen on compound.finance and I believe how Tezos works. Then everyone gets to vote based on some system. Then after a vote occurs we all agree to embrace it and move forward.
And that's exactly where we are and continue to be today. The BSV split took BCH, which had a fighting chance, and reduced its stature and brand significantly. If we have another split, I think it would be nearly game over for any chance of creating peer to peer cash in the form of Bitcoin Cash.
What We Need
The one thing BTC got right is stability. Stability could have happened by adopting the adaptive blocksize proposal from BitPay back in 2016, which would have set a sensible path for an increased blocksize going forwards.
Instead, BTC decided that by changing very little and in my opinion basically giving up saying "it works, don't ever mess with it else we might break it." In a sense it's good that nobody can change it, but also the only way to keep competitors in check is through fighting them through other means.
BCH needs stability for
Holders to feel comfortable that adoption will continue and price will hopefully gradually rise.
Exchanges not to worry they will have to deal with the headache of another hard fork and distributing coins.
Merchants knowing BCH is money that won't change tomorrow.
Developers making new apps/games/payment systems feel comfortable the system is stable and will endure the coming years.
I don't really know the best solution. But I do know that constant fighting won't get us to worldwide uncensorable peer to peer cash.
At end of the day I appreciate that BitcoinABC has done a lot to bring us where we are today. So coming back to the article title: "Why I sponsored BitcoinABC" the answer is I feel the need to do something if we collectively want to make peer to peer cash happen. Is it the right or best move? I have no idea. But it certainly seems better than doing nothing. And it seems we need to rally around something and BitcoinABC has been seemingly technically competent so far.
As an ordinary user, I can contribute to developers/causes that seem worthy and be part of a hopeful solution. It seems better than being a mere bystander that only hopes for a certain future but does nothing to promote it. If we don't work together to make this dream a reality, I feel we should all just our support behind Ethereum or another coin and move forward to making peer to peer cash happen one way or another.
This article isn't for me to "prove" any strong points, its more of an exploration of my thoughts and the current state of Bitcoin Cash as a long time observer. Feedback and thoughts on points I raised are indeed welcome. Any thoughts or viewpoints that I'm not considering are useful as I think through the potential futures of Bitcoin Cash.