The name’s Quesne, pronounced ‘Cane’, and I am here with a logical, straightforward method of picking a winner in the clash of slogans that I’ve observed in the near half-decade I’ve spent delving into Bitcoin, related technologies, their various whitepapers, promotional material, and community forums.

What is Bitcoin? What Bitcoin promised to be was ‘trustless’ AKA unstoppable computer money, made possible by cryptography. Over the dozen years or so since its inception, however, a divergence of viewpoints has emerged over what that really means. What is the ‘true’ value provided by a ‘cryptocurrency’? Is it valuable because it has or has gained properties analogous to “digital gold”, or because it fulfils an original promise of “p2p cash”? Due to apparently incompatible engineering priorities (more on those later), flame wars have erupted repeatedly over this fundamental fault line. The result is a major schism that now extends all the way across the Bitcoin ecosystem, dividing developers, merchants, and users alike, and rendering the two camps’ software stacks non-interoperable.

All of which begs the question. Do these community slogans carry any weight? Does either one hold up? Or neither one? Or is it actually possible that both could be true and/or both need to exist at the same time? Read on and find out, as I expose both sides of Bitcoin’s most notorious conflict. But first, let’s have a paragraph to let you know where I’m coming from:

Crypto first caught my eye about four years ago. By 2018 I had collected what was, to me, a reassuring amount of Bitcoin (BTC), as well as its closest competitor, Ethereum (ETH), and its closest variant, Bitcoin Cash (BCH). Sadly, a stretch of personal illness, followed hard upon by this pandemic, turned out to be a one-two punch that drained most of my holdings. I eventually did find work in Vancouver as a warehouse picker, on a seasonal contract that concluded before I could re-accumulate much more, so I’ve only a modest long position in BCH remaining. Though not under this username, I’ve been an active member (I may even tell you which one if you ask nicely) of the /r/btc subreddit, from time to time, since 2017.

Without further delay, here come the pre-game biographies of the two main contestants in the Clash of the Slogans…

The Incumbent: “Digital Gold”

In one corner, we have the idea that Bitcoin has a special property that makes it “digital gold”, usually referring to the fact that it has canonical scarcity to match gold’s natural scarcity. (By design, only 21 million ‘bitcoins’ are permitted to exist in total throughout the lifetime of the Bitcoin blockchain.) This ‘rare as gold’ attractor is markedly different from Bitcoin’s original sales pitch, but it has steadily gathered proponents until it became culturally dominant, especially after Nathaniel Popper borrowed it for the title of his widely referenced 2015 account of Bitcoin’s creation. The “digital gold” narrative has gained so much steam since then, it is now the only one picked up on by most institutional players stepping onto the field. You hear it from everyone. You even hear it from Citibank.

I urge you to watch this surprisingly frank description of the paradoxical appeal of “digital gold” from a 2018 interview where Peter Thiel points out approvingly, “We’re not talking about a payment system; it’s too cumbersome.” As if an Achilles heel for payments is the one thing that sets Bitcoin above the crypto competition. He also claims Bitcoin resembles gold in that, “It’s not clear what the intrinsic value is.” Putting aside that there are some philosophers who make that claim (by their ‘logic’ you can rob absolutely anything of its ‘intrinsic value’: try it!), let’s recall for a moment that, scientifically, gold is an element on the periodic table, in a unique position that is inalienable from its atomic structure, from which it derives every single one of its many amazing nuclear, chemical, and physical properties (see below). Thiel wants us to think it’s not any clearer than with crypto what the intrinsic value of that is. What do you think?

Late as it was to capture wealthy bigwigs and therefore Bitcoin, the idea itself of “digital gold” has much deeper roots, dating back at least to Nick Szabo’s “Bit Gold” research started in 1998 (based on George Selgin’s ideas about ‘free banking’) and commonly cited as one of Bitcoin’s intellectual precursors. Szabo was the original promoter, not only of a Bitcoin-like “gold”, but also of a plan that was very unlike Bitcoin, and yet has ended up adopted wholesale as the roadmap for BTC by its ‘Bitcoin Core’ developers: the plan is that Bitcoin should not operate as a currency for everyday usage by the masses, but rather as a “backing” reserve currency sitting largely unmoved in digital vaults for the filthy rich to settle accounts with, like gold used to do. In this scenario, the common folk will only be able to afford to trade using second-class, promissory tokens like the ‘Lightning Network’ (Szabo calls them “trust-minimized”) that must be batch-processed through an intermediary. This is all very familiar from what happened with gold, and not in a great way. It seems bizarre to me that this is what Bitcoin (BTC) has become, but in the end, it has a crushing logic to it. It is simply where the “digital gold” narrative ultimately leads, and Szabo deserves credit for having recognised that and moved on it as a development opportunity, ten years before its time – even if the seemingly inexorable absorption of Bitcoin into Bit Gold’s paradigm may have come down to a self-fulfilling prophecy.

While never a Bitcoin developer, Szabo was quite familiar to fellow cryptographer and PGP developer Hal Finney, who also became the first Bitcoin hobbyist, bug tester, and code reviewer. Here he is advocating in late 2010 for a more explicit version of Szabo’s settlement plan. And here’s a fascinating Twitter thread in which Nick himself lays out the entire chain of intellectual influence that led to this remaking of Bitcoin into something “trust-minimized” rather than trustless. Finney doesn’t seem to have written much code for Bitcoin, either – he was already suffering from ALS within a year of the project starting, and passed away due to complications of the disease in 2014. But the roadmap that he and Szabo had managed to impress upon the BTC development community is the one that turned Bitcoin into “digital gold”. (Szabo once lamented with some irony the “misguided reaction” he received from “gold bugs” who “didn’t care for Bit Gold because we already have real gold rather than mere bits”. Maybe he should have offered the ‘Peter Thiel’ gambit by solemnly informing these gold bugs that it is also unclear what gold’s intrinsic value is. But I kid.)

It’s worth noting here that Szabo and Bit Gold – as well as Finney, who had published his own experimental proto-cryptocurrency research in 2004 – were conspicuously missing from the citation list in the original Bitcoin whitepaper written in 2008 by its inventor, the mysterious Satoshi Nakamoto. In fact, the word ‘gold’ itself is only mentioned in that whitepaper twice, as a clarifying analogy buried in the 4th-page section on ‘mining’. But that hasn’t stopped “digital gold” sloganeers from claiming it as one of Bitcoin’s founding tenets. A perfect example of such motivated reasoning is Tuur Demeester’s rather aspirational view that “Satoshi called Bitcoin ‘gold’” when he compared it in a forum post to “a base metal as scarce as gold” but “boring grey in colour… not a good conductor… not ductile or easily malleable… not useful for any practical or ornamental purpose [except communication]”. This passage was explicitly a “thought experiment”, but even so, contrary to Demeester’s wild interpretation, it seems a lot like Bitcoin’s own inventor was describing it as something almost, but not quite, entirely unlike gold.

While amusing from the perspective of seeing Orwell and Adams both constantly proven right (you should see what the latter had to say about the BitFinex leaf logo), none of this necessarily falsifies the applicability of “digital gold” to Bitcoin. Why couldn’t Nakamoto have had the right technology, paired with the wrong communication strategy? No one is infallible, especially in skills unrelated to their core competency. Maybe Szabo’s roadmap has simply turned out to have been the most traversable one all along – and why not? He had been working on Bit Gold for ten years before this anonymous upstart called ‘Bitcoin’ arrived on the scene to steal his thunder in the span of what might have seemed like five minutes. (In some ways, Szabo reminds me of a Salieri to Bitcoin’s Mozart.) It can’t be denied that Nick Szabo’s views on how to architect a global, peer-to-peer cryptocurrency, and which sort of ‘peer’ would be directly involved in using it, have gone much further than Nakamoto’s did in winning converts among later generations of BTC developers and attracting the biggest ‘whale’ investors. I can’t dismiss such a fruitful strategy simply because it was given a miss by the product’s original dev. This isn’t a clash of whitepapers. This is the Clash of the Slogans…

The Challenger: “P2P Cash”

And in the other corner, we have this idea that Bitcoin is the long-awaited ‘holy grail’ solution to the problem of how to build a truly permissionless “p2p cash” – ‘P2P’ in the original sense of a decentralised peer-to-peer computer network and not in the bastardised sense specific to this bogus Wikipedia page in which a ‘peer-to-peer transaction’ is “made from one person to another through an intermediary”, requires no decentralisation, makes no mention of Bitcoin, was spuriously “originated” six years before Bitcoin in 2002 by PayPal (co-founded by Mr. Peter Thiel himself of the ‘unclear intrinsic value’), and yet did not have a Wikipedia article written about it until 2016.

I am not saying Thiel is trying to take false credit for “p2p cash” while intentionally gaslighting Bitcoiners away from using it for payments. What I am saying is that while he and other centralised payment honchos have been busy framing Bitcoin as exclusively “digital gold” in a way that serves only their interests, somebody has been committing resources to try to memory-hole the true origin of “A Peer-to-Peer Electronic Cash System” (which is the actual title of the Bitcoin whitepaper). Somebody has been retroactively claiming primacy for a revisionist form of “peer-to-peer transaction” that falsely begins with PayPal, and I don’t think it’s difficult to guess at ‘their’ motives. Of some relevance might be this tweet by Bitcoin.com CEO Roger Ver video-quoting Michael Saylor: “PayPal’s gonna move transactions a million times faster than the blockchain, and anybody that wants to move transactions fast into and out their wallet will use Square cash or PayPal, Apple Pay…Google Pay, [and others].” It’s fascinating the way incentives keep lining up to try to deprive Bitcoin of the permission to be permissionless, or indeed, to have ever been.

Of course, there can be no reasonable doubt that the truly permissionless form of “p2p cash” is what Bitcoin was intended to be. The whitepaper repeatedly rejects “trusted third parties” and points to the “inherent weaknesses of the trust based model”. There’s not a lick of wiggle room in the clarity with which the intro lays out Bitcoin’s objective: “What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” Any two willing parties. For richer or poorer, there are no qualifiers on that. Even when a more promotional tone was called for, such as in the original announcement of Bitcoin to the cryptography mailing list, Nakamoto insisted in describing it as “a new electronic cash system that’s fully peer-to-peer with no trusted third party,” emphasising that “participants can be anonymous” and pointing to similarities with Adam Back’s 1997 “Hashcash”. The inventor’s answers to on-list questions went even further, expressing a wish to count Bitcoin among “pure P2P networks like Gnutella and Tor” rather than “centrally controlled networks,” the heads of which, “governments are good at cutting off”. (Let anyone throwing a smokescreen over Bitcoin’s founding mission to shield the masses against government overreach, read these words and weep.)

Bitcoin was looking like a solid idea, and its creator was saying all the right things, so open sourcers and mailing-list cypherpunks began joining the development effort. It was a smashing start to Bitcoin’s quest to become “p2p cash”, and even when the attention-averse Nakamoto abruptly retired from the public eye in 2010, the P2P cause didn’t immediately falter. New ‘lead maintainer’ Gavin Andresen took up the torch with a passion, treating it as his adopted mission to solve “a problem with the way we pay for things” adding that, “The root cause of the problem is that we’re trusting somebody else with the keys.” Further, “Bitcoin is like cash. Merchants that accept bitcoin ask you to send coins to their address – you never give them permission to reach into your account.” It was well played: a clear and compelling, public-facing argument for “p2p cash”, and written almost a year after Nakamoto’s disappearance. But there were signs already that Andresen was feeling some pressure to alter his message, such as a tendency to argue with himself. And then there was this 2012 blog post, in which Andresen appeared to throw some support to the ‘store of value’ refrain that keeps arguing for “digital gold”, and yet ended up raising so many fatal-sounding objections along the way that the slogan was damned with faint praise. He may as well have started, ‘Lend me your ears!’

So Bitcoin’s need to be “p2p cash” was already experiencing enough of a challenge from the lure to be “digital gold” that the project’s lead maintainer felt the need to play both sides, at times. Luckily, Andresen’s and Nakamoto’s founding principles still had key members of the dev team in support, particularly former Google dev Mike Hearn, and also former Red Hat Linux dev Jeff Garzik. After Andresen stepped down as lead maintainer, he and Garzik co-authored the 2015 article “Bitcoin is Being Hot-Wired for Settlement”, which went belatedly on the offensive against the opposing camp, focusing not on their outer messaging – it was too late for that – but on their throwing open of the inner gates to the Trojan Horse of Szabo’s and Selgin’s theories. The result was, they said, “a shift of bitcoin from a network for P2P cash payments to a settlement system for as-yet-incomplete technology such as side chains, or payment channels, pushing out businesses that bought into the original ‘P2P electronic cash’ vision.”

This attempt by two outgoing team members to rescue “p2p cash” from a cadre of developers who had joined that effort only to oppose it, came too little, and far too late. They and other holdouts had already been all but marginalised by the rapid growth of the winning narrative, and with Popper’s biography of “Digital Gold” already stacking the book store aisles in hardcover, and excerpts from it littering the newsfeeds, a tidal wave of treasure hunters had been unleashed that no handful of open source devs is likely to have withstood. The remains of the original team that gave us Bitcoin could hardly be blamed for not managing to hold the line against this. What they needed was something hard to replicate but which their opponents had already acquired: an army of mainstream-ready media hacks, highly invested yet light on ‘technobabble’. Writing privately in 2016 after quitting Bitcoin development, Hearn despaired, “Bitcoin-style cryptocurrency has structural flaws that mean it cannot ever achieve the goal of true decentralisation (defined as the absence of ruling authorities), because deep down, the idea of ‘digital gold’ is too attractive to people who simply don’t agree with that goal…even if they may claim they do.”

There is really no denying it, and plenty of literature out there confirming it, that the entire philosophy behind Bitcoin as well as its capabilities have been effectively subverted from what was originally intended on the part of most who joined during the Nakamoto years. Not one of the people who actually developed for the original BTC is still interested in doing so, nor have any of the Satoshi-era development team signed off publically, that I can find (aside from Finney), on Bitcoin being subsumed under the auspices of Szabo’s research. The original driving impetus to aim directly for “p2p cash” has left the Bitcoin building, departing with the original builders, and been replaced by Szabo’s and Finney’s second-order goals instead. But so what? Them’s the breaks, right? To the winner, the spoils. And anyway, the final winner will not be determined by a clash of signatures, any more than it was by a clash of whitepapers. This is the Clash of the Slogans, and I simply want to know which careening crypto campaign comes closest to actually describing the observable properties of Bitcoin.

The Coins: BTC - ETH - BCH

Bitcoin is no longer an island. It is now just one crypto province in a nation of many. Market differentiation has become as important as avoiding false advertising, if not more so, so let’s find out how each of the “digital gold” and “p2p cash” slogans stacks up against not only Bitcoin (BTC), but also its closest rivals. I have chosen the same two alternates I’ve invested in the most, and for the same reasons: one is Bitcoin’s closest solid competitor in the marketplace, which is Ethereum (ETH); and the other is Bitcoin’s closest viable cousin in architecture, which is Bitcoin Cash (BCH). The point is to have useful comparisons with which to evaluate BTC’s message. As the coin that arguably has the greatest number of potential real-world uses, Ethereum might have a better argument that it deserves the title “digital gold”, and that would be relevant information here. And since Bitcoin Cash is a dissenting fork of Bitcoin’s (a closely related offshoot), having branched off back in 2017 to preserve Bitcoin’s original focus on “cash”, could BCH finally regain BTC’s old “p2p cash” momentum, giving “digital gold” a run for its money? I need to know the answer to this.

THE CASE FOR “DIGITAL GOLD”

The trouble with comparing the things people value is, values change. Gold, however, has remained valuable throughout the ages even as different needs have governed the uses to which it has been put. Local supplies may vary, with short-term consequences on the price, but the resilience of the demand for gold over the long haul has been a direct measure of its versatility as a substance. The more methods of fulfilling our needs with gold have become available, the likelier it has become that this precious metal’s value to humanity survives any sudden decrease in the popularity of one or more of those methods. In recorded history, the value of gold has had ups and downs, but has never had a “single point of failure”. The full history of the needs fulfillable by gold, therefore, is what we should be comparing to Bitcoin – or rather, to a parallel-universe past where ancient peoples somehow had access to Bitcoin (or Ethereum, or Bitcoin Cash), and find out if crypto could have fulfilled similar needs. And by ‘similar’ I mean that full metaphorical licence will be given, to account for nobody actually claiming that Bitcoin is literally gold: it is merely believed to exhibit gold-like properties. So let’s find out directly, by historical investigation of gold’s physical properties, and their discernible ‘digital’ analogues (heh), what and how numerous Bitcoin’s correspondences to gold might be. Bring on the first of the trials! Bring on the ancient history…

An Ancient History of Needs Fulfilled by Gold

2,000,000 BC: Try to eat something that will non-toxically pass right through you.

Did they do it with … GOLD? Yes. Very likely. Not that eating random things is an actual need fulfilled by gold; more like surviving it is. That far back in our evolutionary history, our ancestors would still have been trying to eat all sorts of newly encountered things they didn’t understand, with frequent tragic results, but since gold is non-toxic and chemically inert, anyone young or foolish enough to try to eat bits off it would have come out fine.

Could they have done it with … BITCOIN? Yes. In ‘paper wallet’ form.

Could they have done it with … ETHEREUM? Yes. In paper form.

Could they have done it with … BITCOIN CASH? Yes. Enjoy.

Gold-alike scorecard… btc 1 : eth 1 : bch 1 / Au 1

80,000 BC: Collect something with unique intrinsic properties as a status symbol.

Did they do it with … GOLD? Yes. Unusually for a metal, gold tends to be found in a relatively pure state, in the form of nuggets, which would have certainly been collected from at least as early as any other decorative objects. It’s also shiny. When polished, it reflects. It won’t hurt you. And as one of the softest metals, it can be dented and messed with relatively easily.

Could they have done it with … BITCOIN? No. Wealth in bitcoins can indeed confer status, but only due to purchasing power, not intrinsic properties.

Could they have done it with … ETHEREUM? No. Not intrinsic status.

Could they have done it with … BITCOIN CASH? No. Not intrinsic.

Gold-alike scorecard… btc 1 : eth 1 : bch 1 / Au 2

8,000 BC: Shape something into socially significant medallions and jewellery.

Did they do it with … GOLD? Yes. Our ancestors had probably already been hitting gold with rocks for millennia, but around this time is when people started pounding metals into actual jewellery and other trophies of art. At some point after this, they also learned to apply heat during the process, rendering the goldwork that has been found ever more articulate and precise with each passing century in the archaeological record (the earliest gold-specific finds dating to around 4,600 BC).

Could they have done it with … BITCOIN? No. Not that BTC’s core developers couldn’t make it easier to ‘shape’ digital trophies of art. They just haven’t bothered, and as a result, BTC has no real availability of such tokens to speak of. But it was not always so. There was once some excitement around some tokens of art called Colored Coins, and consequently, an elaboration of the principle into a platform called Counterparty, but the effort was stifled by internecine politics and/or BTC’s ever-inflating transaction fees. It’s hard to know where the truth lies sometimes, but the proof is in the pudding, and since gold isn’t made of excuses, I don’t think we can give BTC a win on this.

Could they have done it with … ETHEREUM? Yes. Since ETH aims to be a full network computer for decentralised applications, that gives it plenty of flexibility to create a wide variety of ‘smart contracts’, including ‘non-fungible tokens’ of art or property (dubbed “NFTs” by the Ethereans). Trading NFTs with ETH has become harder these days because, as with BTC, the transaction fees on Ethereum have started to climb out of control, but they are not as serious an obstacle to trading status symbols as they may be to other uses.

Could they have done it with … BITCOIN CASH? Yes. BCH developers have come up with the Simple Ledger Protocol (SLP), which can be used to enable the creation and trading of an assortment of basic and very affordable financial tokens, including NFT SLPs, without involving the complexity of abstractions like the Ethereum Virtual Machine.

Gold-alike scorecard… btc 1 : eth 2 : bch 2 / Au 3

3,000 BC: Shape something into a non-reactive surgical instrument.

Did they do it with … GOLD? Yes. It started in the Middle East, with gold tweezers for removing splinters and thorns, eventually moving on to fashioning forceps, probes, and scalpels, in Greece, Rome, and beyond. Since gold is a biochemically inert ‘noble’ metal, it makes a great tool for working with the body.

Could they have done it with … BITCOIN? No. Bitcoin is an over-reactive instrument.

Could they have done it with … ETHEREUM? No. It’s reactive.

Could they have done it with … BITCOIN CASH? No.

Gold-alike scorecard… btc 1 : eth 2 : bch 2 / Au 4

2,600 BC: Use something as a standardised measure of exchangeable value.

Did they do it with … GOLD? Yes. By this era in history, we had already learned how to form gold easily, simply by melting it over an open flame, into all sorts of things to wear and carry, and the resulting implements were so safe that you could literally have performed invasive surgical procedures with them. It’s hardly surprising, then, that this is when we find gold first emerging as a standard measure of exchangeable value, in Ancient Egypt. There was no evidence found, however, of it being used as any ‘store’ of value.

Could they have done it with … BITCOIN? No. A recent 12.8% price swing over the course of 30 days was considered a ’volatile month’ for gold. For a decentralised cryptocurrency, that would be practically stable. There is a theory that crypto prices will get less volatile with time, but Bitcoin’s price has not been any steadier recently than even much younger competitors, so evidence for this theory has yet to materialise. In the meantime, Bitcoin can’t be used as a standard of value because how much it is valued is not self-resembling. Not yet, anyway.

Could they have done it with … ETHEREUM? No. It is not self-resembling. Yet.

Could they have done it with … BITCOIN CASH? No. Not self-resembling yet.

Gold-alike scorecard… btc 1 : eth 2 : bch 2 / Au 5

2,500 BC: Mix something in a salve to treat measles, smallpox, and skin ulcers.

Did they do it with … GOLD? Yes. In China, early physicians used gold to treat the symptoms of the smallpox virus, the measles virus, ulcers, and other skin diseases. The biological applications of gold have exploded ever since, eventually making up about half of the total number of use cases.

Could they have done it with … BITCOIN? No. However, if your digital system ever gets infected with a computer virus…also no.

Could they have done it with … ETHEREUM? No. Crypto cannot remove a virus.

Could they have done it with … BITCOIN CASH? Nope. No antivirus involved.

Gold-alike scorecard… btc 1 : eth 2 : bch 2 / Au 6

650 BC: Forge something into a long-lasting dental replacement.

Did they do it with … GOLD? Yes. The “gold tooth” is a well-known feature of both hip hop culture and old adventure tales. In fact, the use of gold to fill and replace teeth has been a known standard of dentistry since 1530, and dates all the way back to the gold incisors sported by ancient Etruscan women in the 7th Century BC.

Could they have done it with … BITCOIN? No. (Maybe spend some BTC to hire food choppers?)

Could they have done it with … ETHEREUM? No. (Hire food choppers.)

Could they have done it with … BITCOIN CASH? No. (Food choppers.)

Gold-alike scorecard… btc 1 : eth 2 : bch 2 / Au 7

630 BC: Forge something into a widely used medium of exchange.

Did they do it with … GOLD? Yes. Gold excels in all the characteristics of good money described by Aristotle 300 years after the metal was first pressed into coin in Lydia. Gold is durable; in fact, as they were discovering around this time, it can be repeatedly melted down and reshaped with little or no wastage. Gold is portable in the form of coin; it’s divisible even without melting, since it’s such a soft metal, and fungible in that there is no way to differentiate one piece of gold from another by substance alone. In each case, gold’s essential transformability plays a key role: an intrinsic value from which it derives its aforementioned properties.

Could they have done it with … BITCOIN? No. Though strong enough in some ways, the BTC blockchain does not have the available blockwidth to be a ‘widely-used medium’ of any sort, exchange or otherwise. As a result, the only way to get immediate access to your BTC most days is to pay incredibly exorbitant fees, which destroys both portability and divisibility. This may surprise you, seeing as a medium of exchange is undeniably what Bitcoin was intended to be. If the BTC developers were even trying to scale fast enough to keep pace with demand, they might have had a chance here, but they are not. Instead, they are imposing exclusive access as the preferred state of things, and directing people to use the Lightning Network instead. So let’s treat Lightning as the natural extension of Bitcoin (it’s not – it’s an independent altcoin, but for the sake of argument), and see how it measures up to gold, although it needs to be said here that I’m doing the BTC camp a huge out-of-school favour by even allowing any substitution…

Could they have done it with … LIGHTNING? Not a chance. After you turn your Bitcoin into Lightning, constant vigilance is required preserve it, because Lightning has no built-in durability. To avoid loss of funds, says Bitcoin Unlimited developer Dr. Peter Rizun, Lightning users “need to be online to receive money, hire watchtowers to monitor for channel fraud, subscribe to source-routing services to send payments, and dynamically back up their channel states against data corruption”. Lightning doesn’t fare any better at portability nor divisibility, requiring consumers and merchants alike to lock up funds in shared ‘channels’, each requiring expensive on-chain transactions to open and then close, trapping funds inside. Each channel has a different carrying capacity according to its funding, which makes the ability to transact large quantities unpredictable, so Lightning tokens “have position-dependent value,” as Rizun puts it, and are therefore not fungible. Given all these failings, the idea that the design of the Lightning Network could be counted on for any intrinsic value seems absurd.

Could they have done it with … ETHEREUM? No. Although ETH offers much more transactional bandwidth than BTC, making it almost credible as a gold-like medium of exchange, it still tends to fall behind Bitcoin and especially Bitcoin Cash on qualifying for Aristotle’s ‘good money’. Sure, ETH is durable, as long as you’re careful not to tie much of it up in smart contracts known to get hacked, or in ERC-20 tokens known to get ‘lost’. And it’s as portable and divisible as BTC – meaning not. Despite its size, Ethereum is now up against the limits endemic to its design, resulting in congestion and a hefty surcharge for priority access, which resembles more BTC today than the gold coinage of ancient Greece. On fungibility, Ethereum fares even worse, having dispensed with the privacy afforded by both BTC and BCH of never using the same receiving address twice (a sacrifice made by ETH developers for the sake of stateful smart tokens). As for whether Ethereum has intrinsic value, I would have to say, ‘No,’ because the ownership of Ether has been shown to be editable (more on this later).

Could they have done it with … BITCOIN CASH? Yes. Bitcoin Cash has the durability of good money, using proven blockchain design principles well-tested for over a dozen years. Bitcoin Cash offers superior portability and divisibility, with a development community committed to keeping usage costs low by scaling well ahead of bandwidth requirements. On fungibility, BCH simply thrashes as a coin-mixing platform because mixing is usually relatively expensive, but you could mix at the rate of several rounds per hour for less than a dollar a day (USD) on Bitcoin Cash, and further, the availability of groundbreaking CashFusion technology puts coin privacy on BCH a cut above. And Bitcoin Cashers have also managed to offer tokens using SLP without sacrificing the privacy of a full HD wallet and its multiple receiving addresses. And I do believe Bitcoin Cash has intrinsic value, the uses derived from which are of a more limited variety than gold’s, but valuable in their own right. Anyway, BCH performs well enough on the previous four points, at least, to give it the win on resembling gold as a medium of exchange.

Gold-alike scorecard… btc 1 : eth 2 : bch 3 / Au 8

50 BC: Mix something in cosmetics to improve skin tone and elasticity.

Did they do it with … GOLD? Yes. Although scientific confirmation has been lacking, it is not in question that gold has been valued as a cosmetic for centuries. There is plenty of evidence already that it can treat a variety of skin disorders, and the claim from beauticians has been that gold increases dermal blood flow and keeps the skin hydrated, resulting in a “youthful and glowing” look. Maybe Cleopatra was onto something?

Could they have done it with … BITCOIN? No. Crypto can’t improve anyone’s appearance, physical or otherwise. It would have been popular far earlier if it could! Try photoshop?

Could they have done it with … ETHEREUM? No. Try photoshop.

Could they have done it with … BITCOIN CASH? No. Photoshop.

Gold-alike scorecard… btc 1 : eth 2 : bch 3 / Au 9

Intermission

And that brings us to roughly the halfway mark in the case for marketing Bitcoin as “digital gold”, and to the end of the trials of ancient history. At one, two, and three, out of nine possible points of similarity to ancient gold, I have to say, it’s not looking great for Bitcoin, Ethereum, or Bitcoin Cash. But it’s not over until McAfee sings! Let’s move on. And I don’t want to sound biased against gold or anything, but… c’mon cryptos, you can do it! Now let’s have the second set of trials of the champions of “digital gold”. Hold onto your hats though because this time, they’ll be the ever-accelerating trials of modern history…

A Modern History of Needs Fulfilled by Gold

1787: Forge something into a long-lasting low-resistance conductor of electrical power.

Did they do it with … GOLD? Yes. In 1787, a British physicist named Abraham Bennet built a gold-leaf ‘electroscope’ to detect electric charge. Gold has been use in electrical applications ever since, particularly on air-exposed connectors where the precious metal’s invulnerability to corrosion is a big advantage.

Could they have done it with … BITCOIN? No. While Bitcoin’s presence on a memory chip, or in a CPU instruction path, could be interpreted as ‘conducting’ electricity, its output cannot conveniently be used to power any devices. Rather, Bitcoin converts the electricity.

Could they have done it with … ETHEREUM? No. It converts electricity.

Could they have done it with … BITCOIN CASH? No. It’s a converter.

Gold-alike scorecard… btc 1 : eth 2 : bch 3 / Au 10

1935: Inject something in a solution to treat arthritis and inflammation.

Did they do it with … GOLD? Yes. Ever since the publication of an influential 1935 paper about injecting gold salts into inflamed joints by a Parisian doctor named Jacques Forestier, gold has been used to treat arthritis and joint pain, an effectiveness it owes to its inhibition of inflammatory enzymes called ’cytokines'.

Could they have done it with … BITCOIN? No. BTC is more likely to be a cause of inflammation. By keeping its transaction processing so constricted that it is only tradeable quickly by those who can afford to bid extravagantly enough to take priority, BTC’s developers have ensured that the memory pool of pending transactions gets regularly ‘inflamed’ with transactions in waiting, sometimes for days, weeks, or even months. Ironically, in its attempt to resemble gold in its exclusivity, BTC has become less like gold in its utility, i.e. the way it actually fulfils people’s needs. You might even say this is a classic anti-pattern.

Could they have done it with … ETHEREUM? No. ETH inflames its own memory too.

Could they have done it with … BITCOIN CASH? No. It’s just a coin, bro.

Gold-alike scorecard… btc 1 : eth 2 : bch 3 / Au 11

1950s: Forge something into low-resistance contacts for electronic information.

Can it be done with … GOLD? Yes. Starting with experiments in the 1950s, gold has played a key role in electronics, for reasons similar to its usefulness as an electrical contact: it doesn’t corrode, and it’s a great conductor. Gold offers lower resistance to electricity than silver or copper, without the tarnish. It is this low resistance, along with pliability for forming small shapes, that made gold exceptionally useful in the advent and design of microelectronics.

Can it be done with … BITCOIN? No. I mean, yes, BTC is a contact point for the electronic information that is encoded in a transaction, but no, it cannot qualify as a ‘low-resistance’ contact because the rate at which that information gets validated would be far too attenuated, resulting in days-or-longer waits for a large portion of the userbase. It would be hard to find another cryptocurrency – or indeed, any other communication software today – as resistive to being traversed by information as BTC. So here we have another instance where the confined blockspace of BTC serves to make it behave less like gold, rather than more. Kind of makes you think!

Can it be done with … ETHEREUM? No. Even though ETH offers much more sophisticated ‘smart contract’ support than BTC, sophistication is not the key driver of this particular need fulfilled by gold. The simplest crypto transaction still qualifies as a transfer of electronic data (and Ethereum’s data/bytecode field can be used to pass arbitrary information independently of contracts). And yet, as with BTC, the long waits and steep fees that have been increasingly plaguing ETH cannot plausibly qualify as ‘low resistance’. Not for the purpose of basic information transfer, which is needed by rich and poor alike.

Can it be done with … BITCOIN CASH? Yes. As it turns out, BCH can sometimes do what its cousins can’t, because it never has abandoned Bitcoin’s original, minimalist scaling plan (the way BTC did), nor did it lose its focus and try to compute everything (like ETH). Despite having matched and exceeded BTC on transaction counts, BCH still boasts near-instantaneous payments and tenth-of-a-cent transaction costs, with no sign of hitting a ceiling anytime soon. This makes Bitcoin Cash a particularly good, low-resistance contact point for sending any electronic information with a financial aspect.

Gold-alike scorecard… btc 1 : eth 2 : bch 4 / Au 12

1956: Use something as a weld-resistant lubricant in engineering applications.

Can it be done with … GOLD? Yes. Mechanical engineers began prizing gold from this time forward, including in space exploration, for use as a solid lubricant in applications where non-metallic lubricants or films might be lost due to damage from friction, radiation, or chemical reactions. Gold is a superior metallic lubricant because its small particles and low shear strength prevent it from ‘cold welding’ to itself, which would cause the whole machine to seize up due to friction.

Can it be done with … BITCOIN? No. Granted, BTC could and should have helped ‘lubricate’ plenty of engineering applications by experimenting with their financial incentives, but given how reserved the right to have BTC quickly validated has become, I don’t think it would ring true to describe it as ‘lubricating’ anything, nor overcoming any friction. Indeed, if you were to insert today’s version of BTC into an engineered workflow, you would be far more likely to be adding friction to that workflow than removing it. Your whole software stack might just seize up for the entire course of the next crypto bull run.

Can it be done with … ETHEREUM? Yes. And various types of engineering applications are another area where ETH’s extensive smart contract capabilities shine. That advantage has now been curtailed by the same lengthy queues that have made simply sending data prohibitively costly, but engineering workflows are more tolerant of paying additional rents, because to an engineer, carrying charges are not necessarily an obstacle. They can be taken into account as the price of doing business, and maybe minimised by workarounds. So despite the self-crippling fees, I think ETH can sneak by on this one.

Can it be done with … BITCOIN CASH? Yes. BCH’s design and development ecosystem shows a dedication to both maximising capacity and controlling cost, making it a strong candidate for involvement in any kind of engineering. While it will likely never be as versatile as Ethereum’s, Bitcoin Cash’s native user-scripting engine has been liberated from unnecessary limits held in place by latter-day BTC devs, serving as a good support for two new BCH-specific high-level contract programming languages: Spedn and CashScript. As a result, BCH now supports a number of complex and ‘DeFi’ use cases, outclassing BTC’s native support in key aspects of in-Script functionality like: handling structured data; tracking simulated state; an ability to verify any signature or message; consulting external oracles; and automating ‘convenant’ contracts like last wills, recurring payments, decentralised hedging and derivatives plaforms. Thus free of the technical debts of both BTC’s dependence on ‘Layer 2’ and ETH’s lofty goal of ‘Turing completeness’, BCH is a lean, no-nonsense, building machine for engineering applications.

Gold-alike scorecard… btc 1 : eth 3 : bch 5 / Au 13

From the mid-20th Century on, the combination of gold and high technology started to exponentially increase the utility of atomic element Au 197 to new dizzying heights that no mere cryptocurrency could ever touch, even at a metaphorical stretch. I’m afraid the case for “digital gold” is going to be a humiliating rout for Bitcoin and its variants from here on in, so I will double time it for you. But I wouldn’t skip this! It’s educational…

1959: Forge something into non-toxic, anti-bacterial, inner-ear and other implants.

Can it be done with … GOLD? Yes.
Can it be done with … BITCOIN? No. Maybe in a cyberpunk future?
Can it be done with … ETHEREUM? No. In a cyberpunk future.
Can it be done with … BITCOIN CASH? No. In cyberpunk.

1965: Use something to shield planes, spacecraft, & visors from radiation & heat.

Can it be done with … GOLD? Yes. (And it beat Bitcoin to the Moon.)
Can it be done with … BITCOIN? No.
Can it be done with … ETHEREUM? No.
Can it be done with … BITCOIN CASH? No.

1971: Use colloidal nanoparticles to diagnose malaria, hep, HIV, syphilis, cancer.

Can it be done with … GOLD? Yes. We can ask it medical questions!
Can it be done with … BITCOIN? No.
Can it be done with … ETHEREUM? No.
Can it be done with … BITCOIN CASH? No.

Gold-alike scorecard… btc 1 : eth 4 : bch 5 / Au 16

After the discovery that gold remains unoxidisable even at the size of a nanoparticle, nano-scale gold research took off and eventually became a scientific field of its own, with exponential results in the rate of increase of uses for gold…

2004: Inject nanoparticles into tissues as radiation sources for treating cancer.

Can it be done with … GOLD? Yes. Gold literally helps fight cancer.
Can it be done with … BITCOIN? No. (Not even against blog cancer.)
Can it be done with … ETHEREUM? No.
Can it be done with … BITCOIN CASH? No.

2013: Incorporate nanoparticles into solar cells to improve energy efficiency.

Can it be done with … GOLD? Yes.
Can it be done with … BITCOIN? No. (As if.)
Can it be done with … ETHEREUM? No. Eth2 only improves its own efficiency.
Can it be done with … BITCOIN CASH? No.

2016: Plate something onto mirror arrays to build a deep space telescope.

Can it be done with … GOLD? Yes.
Can it be done with … BITCOIN? In Musk’s wet dreams.
Can it be done with … ETHEREUM? Um…no.
Can it be done with … BITCOIN CASH? No.

2018: Assemble something into alloyed retinal nanowires to make the blind see.

Can it be done with … GOLD? Yes.
Can it be done with … BITCOIN? Ha ha no.
Can it be done with … ETHEREUM? Nope!
Can it be done with … BITCOIN CASH? No.

Gold-alike scorecard… btc 1 : eth 4 : bch 5 / Au 20

A VERDICT ON “DIGITAL GOLD”

Out of 20 points of possible similarity with the use of gold, literal or metaphorical, the use of Bitcoin (BTC) has only qualified for one, and only because you can eat it. That’s pretty a poor showing! Gold-wise. Given the weird history of how it came to be, I expected the whole “Bitcoin is Digital Gold” schtick to be bogus, but not that bogus. Ethereum managed to triple Bitcoin’s performance in goldface with a whopping three points of similarity out of 20 – this is embarrassing. Only Bitcoin Cash’s surprising five points of similarity with gold seems even halfway respectable. Let’s break these numbers down by percentage achieved of the available points of similarity…

Bitcoin (BTC):
…1/20 = 5% gold.

Ethereum (ETH):
…3/20 = 15% gold.

Bitcoin Cash (BCH):
…5/20 = 25% gold.

Counterintuitively, it appears that the developers focusing on “p2p cash” have turned out to have created a more genuine “digital gold” than the latter slogan’s supporters have achieved with far more time and dominance. Let’s have a look at the results in infographic form…

Objection: What about ‘STORE OF VALUE’?

“But wait!” cries a plaintive voice, lost in the wilderness of Bitcoin marketing. “None of those things are why I bought BTC. I acquired it as a ‘store of value’. Like gold. So why isn’t that on the chart?” Okay, let’s talk about that. (Not that it would make much difference in the results if it were on the chart, as it’d be just another use case among twenty.)

‘Storing value’ with something cannot be counted as part of its ‘useful value’, because the ability of any substance to ‘store value’ is based on the value that it possesses, and not vice versa. (Vice versa is circular reasoning: You hold gold for the value it has of storing the value it has of storing the value it has of storing… you get the picture.) Gold cannot logically get its usefulness from its value. This can only proceed the other way around. Gold gets its value from its usefulness. Thus, ‘storing value’ with gold is just another way of saying that you will keep it around for its value in future trade. To count the ‘storing’ of that ‘value’ as an additional usage over and above eventually trading for that ‘value’, would be a double counting of the same intended use case.

So I’m sorry, ‘store of value’ people. You are going to have to find another way to shore up the case for “digital gold” after the pounding it has taken here. The good news is that falsely pretending to own something gold-like is not your only option as a marketable theory for the value possessed by crypto. Which brings us to the case for “p2p cash”…

THE CASE FOR “P2P CASH”

Despite the modern trend toward words like ‘decentralised’ and ‘trustless’, ‘P2P’ is still the catchy buzzword to rule them all. Recent history is littered with the corpses of failed attempts to create “p2p cash” that merely kicked the can down the road by displacing trust mechanisms without eliminating them. (That is still the case for a great majority of so-called ‘altcoins’.) So what made Bitcoin’s technology different? Trustless canonicity. Bitcoin preserves a self-consistent historical ‘canon’ of valid transactions, a complete world ledger going all the way back to the day of its inception. As with literary canons, once accepted as valid, no information is ever discarded from the canon. What Bitcoin brought to the table is that it can decide which transactions are canonical without reference to any trusted authority.

Bitcoin builds this permissionless canon through essentially a game in which so-called ‘miners’ compete to try to generate a random number with their computers that falls within a particular range. The miners will keep trying (though some of them will drop out, and new ones join) until there is a winner, and then that winner gets to confirm the next ‘block’ of transactions to be linked into the canon (AKA “the blockchain”). The winner also collects a ‘block reward’, which is how new bitcoins are ‘mined’ (some would say ‘minted’), along with any transaction fees, also denominated in bitcoins. These rewards are necessary because significant resources must be expended in equipment and energy costs to play this game. Bitcoin’s ‘miners’ convert energy into canonicity. The fruit of their labours is what gets sold in the marketplace to pay their costs. So they are all highly invested in the canon being perceived as inviolable, and regardless, any attempt to strongarm the energy vote would be far more expensive, and less profitable, than simply participating in the process and continuing to profit from playing the game as intended. That is why the real-world energy expenditures involved in Bitcoin mining cannot be avoided: they are the only thing grounding the whole cryptocurrency game and keeping it ‘honest’. This is called “proof of work”.

That original Bitcoin model that Nakamoto envisioned as bringing the world “p2p cash” is nothing like PayPal. It offers canonicity in a bottle, or as if rubbed from a lamp. No registration required. As a result, all the things traditional currencies did with their trusted authorities (who could never offer canonicity because a canon is self-consistent – ba-dum tish), we can now hope to do instead with trustless canonicity using “p2p cash”, if that slogan is as good as it claims to be. So let’s find out, shall we? Bring on the final set of trials on this Clash of the Slogans. Bring on the CASH…

A Classification of Needs Fulfilled by Cash

TRADE LOCALLY: Teleport ACTUAL VALUE through TIME by DELAYED and trusted transfer of the trusted TERMS of exchange.

Can we TRADE LOCALLY with … CASH? Yes. My definition of ‘local trade’ is that no permission from distant authorities is needed. It still counts as trusted trade though, because it tends to occur on the premises of a local market – let’s call it ‘the house’ – that can stop any trade by kicking out either party. The ‘cash’ here need only be something with natural scarcity, like decorative seashells, or trusted scarcity, like stamped paper, as long as it is stamped and/or distributed by the house, which is what lends ‘house cash’ its trusted authenticity. Unlike with gold, the purpose of trading house cash is never achieved upon acquiring it. It’s delayed, the house cash serving merely as an intermediate step toward acquiring whatever it can be traded for. Another way to think of this is that house cash is a vehicle carrying the terms of an exchange, thus enabling an amount of actual value to be teleported through time without traversing the time in between. The potential value of house cash can remain unrealised even as it facilitates the teleporting of actual value, as long as that potential is agreed upon.

Can we TRADE LOCALLY with … BITCOIN? No. Well… people do tend to get more excited about BTC due to media hype being focused on it almost exclusively, but it’s difficult to find anything unconditionally positive to say about actually using present-day BTC when it comes to local trade, because the artificially pumped-up levies for rapid service have made it clear that BTC developers are no longer interested in it. Local trade is the one use case where neither fast nor cheap are ever optional. I suppose that’s why BTC users are more and more driven to custodial wallets, sacrificing the trustlessness that supposedly makes Bitcoin special, or worse, the Lightning Network, which is so faulty it operates as a euphemism for custodial wallets too, because they are the only way to use it in a fire-and-forget fashion. Don’t believe me? Buckle in, because this next paragraph is a doozy…

Can we TRADE LOCALLY with … LIGHTNING? No. As a way of spending Bitcoin locally, the Lightning Network is simply too pricey, inconvenient, and unreliable to be practical. The protocol itself requires locking up funds in channels with multiple merchants, which is like a collection of tolls paid in lost liquidity, and that’s in addition to the usual eye-widening excise tax on the BTC transactions that are needed to open and close each channel. Worse, the swollen rents owed for using the BTC layer ‘leak’ onto the Lightning layer, because enough funds for a BTC closing fee must be reserved in each Lightning channel, to keep it ‘safe’. The risks inherent in the sheer complexity of all this, meanwhile, degrade the useful value of any bitcoin you invest: a Lightning payment can’t move any more funds than are locked in the most poorly funded channel on the route between payer and payee, and only when the payee’s address is ‘online’ and a route to it is even available. If your app’s saved channel state gets out of date, it can lead to total loss of funds in the channel. Keeping anything of value in Lightning is so fraught with risk, it’s often left to custodial wallets. But even a custodial wallet cannot secure an insecure protocol, as demonstrated recently when researchers from Luxembourg, Norway, England, and the United States showed that people’s channel balances can be publically viewed without difficulty, due to privacy flaws endemic to the Lightning Network.

Can we TRADE LOCALLY with … ETHEREUM? No. ETH’s uneconomical, crammed-full situation has become almost as bad as BTC’s lately. While BTC’s developers have been celebrating the approach of their intended thousand-dollar fee market, Ethereum’s developers have at least been acknowledging that it is a problem. ETH’s original design took on board so much complexity that it could never scale to the level of local trade without changes. There are plans underway to migrate ETH to an allegedly more scaleable framework called simply, ‘Eth2’, but they are already years delayed.

Can we TRADE LOCALLY with … BITCOIN CASH? Yes. Bitcoin Cash has maintained sub-penny fees consistently for years, despite repeatedly surpassing BTC’s traffic. With scaling efforts ongoing and showing plenty of signs of success, there is no reason to think BCH developers won’t continue to push that envelope. As for speed, Bitcoin Cash is 0-conf-ready by which I mean it can be sent and then spent instantaneously. ‘0-conf’ is a system for instantly accepting small payments described in the original Bitcoin whitepaper. It has since been abandoned by BTC devs in favour of marking payments ‘not final’ by default so that they require at least one confirmation to proceed, but BCH has kept the default behaviour as it was in the original Bitcoin, which means payments are considered ‘final’ right away, allowing merchants to be relatively confident that any BCH payment can be accepted with zero confirmations and little risk of a double spend, unless there is collusion from some corrupt miner with significant hashrate. A lot of thought was invested by the original Bitcoin inventor and his or her early cryptopunk advisors into making sure this system would be secure enough for fast, often in-person, small-scale spending, which is why I call Bitcoin Cash 0-conf-ready. It’s one of several ways it finds itself at an advantage due to having preserved more of Bitcoin’s original design, keeping BCH ready to be relied on for local trade.

Cash-alike scorecard… btc 0 : eth 0 : bch 1 / $$ 1

IMPORT/EXPORT: Teleport ACTUAL VALUE through SPACE by CONVEYED and trusted transfer of the trusted TERMS of exchange.

Can we IMPORT/EXPORT with … CASH? Yes. It is hard to come to agreement on the potential value of a currency that is expected to cross a border, when it is only redeemable on one side. It inevitably becomes necessary for the leaders of ever larger governments to issue ‘house cash’ of their own, until the ‘house’ is the entire state, and the ‘cash’ becomes the coin of the realm – what some like to call ‘fiat’, but what I will call, for clarity’s sake, ‘crown cash’. The natural or trusted scarcity of house cash tends to evolve into a trusted scarcity that is managed exclusively by the crown. The trusted authenticity of house cash gets progressively upgraded until it’s the trusted authenticity of the crown. And the trusted trade of transacting in-house has developed into the trusted trade of being subject to enforcement from the crown. If these don’t sound like ‘upgrades’ to you (aside from the expansion of places to trade, people to trade with) then you aren’t alone. A lot of different thinkers have noticed that crown cash tends to simply upsize trust issues rather than solving them (although there is a key loophole in this effect which I will write about in the section on ‘freeing markets’, below).

Can we IMPORT/EXPORT with … BITCOIN? No. For cross-border trade, the greatest issue with using Bitcoin (among many) is the blockwidth. There simply isn’t enough of it on-chain to support any sizeable purchasing industry. The developers have seen to that, which means they aren’t very interested in having the bulk of international trade on Bitcoin, either. It would be like… stuffing clowns into a car. But hey… maybe these particular clowns can fit onto the Lightning Network instead? You know they’re gonna suggest it as if by rote, even without having tried it themselves (ask them), so if for no other reason than to humour the clowns, let’s take a look at Lightning again, this time for the purpose of bulk, cross-border trade…

Can we IMPORT/EXPORT with … LIGHTNING? No. For any international trade situation where one is likelier to be moving larger amounts, special attention needs to be paid to systemic risk, and this is an area where using the Lightning Network, however airy, in combination with an asphyxiated BTC underlayer does not appear to be a viable option. In addition to all the risks of trading locally with Lightning described above, a merchant accepting Lightning may need to close channels unilaterally if a channel partner tries to cheat or exploit the system, or simply gets held up by network outage. According to the Lightning protocol, this will cause a channel to be frozen along with all funds for a lengthy ‘dispute period’. More worryingly, the tendency of Lightning hubs to centralise has led to a state where knocking out a single hub could split or collapse the network. Multiple papers published within the past year have shown attacks leveraging congestion to isolate Lightning hubs, make fraudulent refund claims or denials, and trap liquidity. A February 2020 paper concluded that “it is possible to disrupt the Lightning Network by locking most of its liquidity.”

Can we IMPORT/EXPORT with … ETHEREUM? No. Although, with all of its flexibility to build specialised terms of exchange directly into cross-border commerce, and more than triple Bitcoin’s available transactions per second, Ethereum might have had an edge in this category, were it not suffering nevertheless from bandwidth insufficiency problems similar to Bitcoin’s. Even though bulk purchasing agents might be able to afford the current damage for using ETH, they need to keep margins thin and so will not be crowding onto the Ethereum chain anytime soon.

Can we IMPORT/EXPORT with … BITCOIN CASH? Yes. Where other coins have relinquished this field, experiments in scaling on-chain with Bitcoin Cash have been intensive and ongoing by multiple node development teams. As a result, there is plenty of room for more activity on-chain, an ever expanding ceiling, and no reason for any international trade operation not to consider rebasing on BCH or at least accepting it as tender. Especially attractive is the power of Bitcoin Cash transactions to include a variety of time-delayed smart contracts for recurring payments. This came as a result of re-enabling opcodes that had been disabled in BTC, and adding the new opcode OP_CHECKDATASIG. These changes give Bitcoin Cash’s smart contracts a good deal more native power than the current Bitcoin’s, at a tiny fraction of the computational overhead of something like Ethereum.

Cash-alike scorecard… btc 0 : eth 0 : bch 2 / $$ 2

FREE MARKETS: Teleport ACTUAL VALUE permissionlessly by trustless PEER-TO-PEER transfer of the trusted TERMS of exchange.

Can we FREE MARKETS with … CASH? Yes. This use case is about the promotion of trustless trade, which is genuinely possible with cash. One of the beneficial (though largely unintended) side effects of crown cash was freeing up markets again that had formerly come under the control of one ‘house’ or another. Technically, if you are anywhere within the realm beholden to the crown, you are still on ‘house premises’ when you trade in crown cash (not to mention relying on the crown for both its trusted scarcity and trusted authenticity), but ‘the realm’ is typically too big for anyone to physically monitor your every move. Thus, when crown cash took over the world, trustless trade received almost as big a boost as the trusted kind, due to the increase of anonymous, in-person payments – that is, until the electronic payment revolution brought identity back into play, through credit cards, debit cards, and then documented online accounts. The better the technology of crown cash has become, the worse it has nerfed trustless trade, so that the originally beneficial yet apparently unintended side effect that most of us call ‘financial freedom’ can now be systematically destroyed.

Can we FREE MARKETS with … BITCOIN? No. ‘A free’ market can occur naturally, as in the old seashell trade, but ‘to free’ markets, from the increasing encroachments of crown cash, is a separate use case of its own, and this is a distinction that I’m not sure Bitcoin’s latest dev team is still into making. The obstacles discussed above with regard to using BTC to replicate the other uses of crown cash are equally applicable here. If you can’t often trade with it, you can’t often free any trade with it, either. If you can’t afford to support it as a merchant because it comes saddled with the complexity and technical debt of the ‘Lightning Network’, then you can’t free trade with it as a merchant. All of the original Bitcoin’s philosophy and marketing – it’s cultural canon – must have been sounding hollow to BTC holders for a while now. There are dozens of rhetorical ways they steer around saying it, but I think most Bitcoin gurus are well aware that the BTC developers have fumbled the ball on ‘let’s bring freedom to payments’ and have ceded that play to others.

Can we FREE MARKETS with … LIGHTNING? No. The Lightning Network is a very poor tool which with to try to free markets, because it is elitist, semi-custodial, and sharply centralising in effect. It’s elitist because one cannot open or close a Lightning channel without paying a BTC-size penalty, reducing both your personal freedom and your network effect. As Dr. Rizun said, “Most ‘wealth states’ are not reachable via Lightning transactions.” Rizun has also pointed out that Lightning payments are semi-custodial and cannot possibly be ‘trustless’ for amounts below what is affordable to transact on the BTC base layer. And Lightning is in fact sharply centralising, because the disproportionate onramp/offramp tariffs for channels that are fund-capped anyway, make well capitalised central hubs the only ones worth opening a channel to. Like so many ‘altcoins’, Lightning plays a shell game with centralisation, disfiguring what should be a horizontal mesh network into a set of incentives that inevitably evolve into a hub-and-spoke system. Lightning creates second-class netizens.

Can we FREE MARKETS with … ETHEREUM? No. Speaking of all that technical debt, trying to free markets with Ethereum is something akin to trying to break monkeys out of a cage with a grenade launcher. To be fair, it is not really intended to compete in that ‘niche’, so it’s no surprise that ETH hasn’t been comparing well as a currency to those with a lot less computational overhead on the part of nodes. And of course, the excessive rates imposed these days for using Ethereum are an even more pressing issue when it comes to liberating trade. Trustless trade cannot compete with the trusted kind if it costs an arm and a leg. People will just think, ‘Maybe blind trust in authority is what’s necessary to protect me from all this highway robbery!’

Can we FREE MARKETS with … BITCOIN CASH? Yes. There are so many things I haven’t said yet about the enormous value of Bitcoin (Cash) to the cause of liberating trade at all levels, and I will have said a lot more about this before I’m through, but there is no clearer argument for the suitability of BCH as a platform for free markets than the foundational strengths I’ve already described. Its Aristotelian strengths; its unstrangulated speed and resulting low-fee accessibility; its high-functioning toolset for a low-overhead ecosystem: all of these speak toward maximising Bitcoin Cash’s potential to give over a functional financial infrastructure to the masses. And here is the kicker: about half of BCH’s strengths existed in the original Bitcoin, yet have been occluded in the BTC version due to questionable decisions on the part of BTC’s current devs. Building on those overlooked strengths, Bitcoin Cash has been bringing the power of Bitcoin’s original fundamentals into the 2020s, replacing crown cash’s trusted authenticity with its own form of trustless authenticity, and crown cash’s trusted scarcity with its own form of trustless scarcity (the 21 million bitcoin limit, still enforced by protocol on the Bitcoin Cash chain). And most importantly, Bitcoin Cash ensures cheap and easy trustless trade online, without requiring permission from any intermediary, custodial, semi-custodial or otherwise. That is how you free markets.

Cash-alike scorecard… btc 0 : eth 0 : bch 3 / $$ 3

These next two needs fulfilled by cash exist in asymmetric symbiosis with each other – closely related, but not identical – so I’ll deal with them in tandem. It may not be obvious at first why they both apply to cash, but they do…

GIVE IOUs: Grant PROMISE OF VALUE by giving natural or trusted tokens of DEBT.

KEEP TABS: Trust PROMISED VALUE by accepting natural or trusted tokens of CREDIT.

Anyone can make a promise that everyone disregards, but the moment a token of the sentiment ‘I owe you’ is accepted, a form of currency leaps into being. Those two acts, of giving IOUs (borrowing value) and of keeping tabs on IOUs (lending value), fulfil distinct needs and involve different risks, but can only exist in cooperation. Historically, the borrower required a way to establish that their claims were authentic, through the natural authenticity of personal familiarity, or the staked authenticity of secured collateral, or the trusted authenticity of someone to vouch. For the lender, each of these involved risk, plus an additional risk of relying on a trusted promise that the IOU would be redeemable when agreed upon, which depends not on the borrower’s authenticity, per se, but on their future ability to pay.

Can I GIVE IOUs with … CASH? Yes.
Can I KEEP TABS with … CASH? Yes.

Oh come on, that’s preposterous! Cash is not an IOU. I mean, sure, I could always take a dollar bill and use it to write somebody an IOU, but if I just pay them fully in cash, then I don’t owe them anything further of value, because I’ve already given it to them. Or have I? Since this is a great section for it, let’s finally talk a little more in-depth about what is the actual value of crown cash.

Let’s say I owed you something of actual value and I gave you, instead, a mere piece of paper with printed on it, “Here Be An Hundred Crown Note of the Kingdom of Elves.” Would you say the debt is paid? I think not – not even if I told you it was “backed by Elven gold”. Only if I could absolutely guarantee you that a mythical ‘Elfqueen’ exists to magically appear and redeem this fancy note, could the debt be considered paid. And even then, who’s to say she wouldn’t be deposed by some tyrant King of Elves who would then refuse to honour her hundred crown note, or debase its value by ordering the Bank of Elves to print enough crowns to fund a war on trolls? Since the redemption of crown cash is neither guaranteed nor unstoppable, it cannot move actual value but rather potential value, or more specifically, promised value. Another way to say exactly the same thing is that the only value of crown cash is as a means of exchange.

Fortunately, the crown cash we use, unlike Elven cash, is guaranteed by governments which tend to reliably… exist. But the difference, trust-wise, is only a matter of degree. Crown cash is only ever stable because it is controlled by ‘fiat’ – it has arbitrary scarcity – but in the long run… your cash is IOUs. Your bank card accesses a tab the bank keeps for you, of their IOUs. Your ‘credit’ card adds to a separate tab the bank keeps for themselves, of your IOUs. And then you settle your tab with the bank’s tab by cancelling your IOUs with an equal value of their IOUs. At no point is anything of actual value relocated, neither physically nor digitally: only promises.

Cash-alike scorecard… btc ? : eth ? : bch ? / $$ 5

Can I GIVE IOUs with … BITCOIN? No.
Can I KEEP TABS with … BITCOIN? No.

Unfortunately, in order to function well as an IOU, a cryptocurrency would need the kind of smart contract functionality that BTC doesn’t natively possess, so it would not be a good choice for this. (There are those who claim otherwise, but they are usually talking about sidechains rather than native support.) Whether Bitcoin is inherently an IOU, like crown cash, is a thornier, but more interesting question. Since an individual bitcoin transfer proves its canonical authenticity trustlessly, and since this system was intended to be guaranteed and unstoppable, when you send someone a bitcoin, you are supposed to be sending not a promise of value, like crown cash, but the value in the thing itself. In theory, the value that is transferred is based on its allegedly unbreakable membership in the canon into which it has been ‘confirmed’. But there have been serious challenges to the validity of the Bitcoin model of creating value, most of them coming through BTC’s development process, which is the coin’s single point of failure. That process has settled on a path of prematurely curbing capacity, and the mathematics of that can serve only the few, not the many whose transactions have been known to die of waiting. The timely redemption of their bitcoins is not guaranteed, which means BTC transfers, it turns out, are stoppable if you’re poor: they are not practically completable within a useful time frame. It’s hardly better than an IOU, maybe even worse, and there is certainly a point where it crosses a line and becomes mere promised value again, rather than actual value. That line is poverty. Bitcoin has become super-sonic jet money for the rich, but fenced-off tar-pit money for the poor.

Cash-alike scorecard… btc 0 : eth ? : bch ? / $$ 5

Can I GIVE IOUs with … ETHEREUM? No.
Can I KEEP TABS with … ETHEREUM? Yes.

Unlike BTC, Ethereum has the kind of smart contract support necessary for decentralised lending, borrowing, and other financial instruments collectively known as “decentralised finance”, or DeFi. This sort of activity had its origin on Ethereum in the crypto world, but these days, borrowers especially may find the stiff overhead of transacting ETH more difficult to swallow than lenders, who tend to be more capitalised and may not need to lend to the poor, so I have given ETH a split score here. I feel duty-bound, however, to put a mental asterisk on that result for you, because Ethereum’s canon has been redacted. Yes, the Ethereum codebase has been actually edited to counteract an exploit of an investment platform’s smart contracts. (This was not like what happened back in 2010 to Bitcoin’s canon, which had to be rolled back and replayed to remove a fatal, exploit-caused inconsistency. Ethereum’s exploit was consistent with its canon but got edited out anyway, adding inconsistency.) Whatever one may think of ‘The DAO’ exploit or its reversal, it rendered the claim untenable that, “Once it’s deeply confirmed in the Ethereum blockchain, it’s canon.” The Etherean canon has been instructed by its ‘Elves’ to sing a different tune featuring retroactive continuity – and there are few things a fanbase hates worse than that! So I would have to say that the value of Ethereum seems almost as IOU-like as crown cash, if not more so.

Cash-alike scorecard… btc 0 : eth 1 : bch ? / $$ 5

Can I GIVE IOUs with … BITCOIN CASH? Yes.
Can I KEEP TABS with … BITCOIN CASH? Yes.

BCH has been expanding its smart contract abilities ever since the two main Bitcoin canons diverged in 2017, and can now handle a number of smart contracts natively on-chain, without additional custodians, that the more popular BTC version can’t. Covenants allow any Bitcoin Cash application to lock up the use of funds in a contract until a variety of possible conditions have been met. Application suites have been built to take advantage of these BCH-native tools and the opportunity they represent for delayed or recurring payments platforms, or for generalised DeFi protocols like AnyHedge. With these capabilities available, along with a much wider transactional highway than Bitcoin’s and a near-fanatical commitment to continuing to push its scaling limits on-chain, I think Bitcoin Cash deserves the win here. It makes for the most actually useable crypto in this category.

As for whether Bitcoin Cash is itself an IOU like crown cash, all of the indicators pointing to ‘Yes’ in the cases of BTC and ETH above, point to ‘No’ in the case of Bitcoin Cash. BCH inherits the same ability to generate trustless canonicity that BTC once did from the original Bitcoin dev team, without the forbidding drag of BTC’s policy of deliberately choking performance. Further, BCH’s canon has never been ‘retconned by Elves’ the way ETH’s has (neither before nor after it diverged from BTC’s), so Bitcoin Cash is the only cryptocurrency of our three test subjects that appears to still have a legitimate claim to be both guaranteed and unstoppable. It might just prove out to have actual value, after all, – it’s that unbroken canonicity that’s the key, and there are valuable use cases for the purity of that, beyond exchange, like authenticating a persistent online identity, and proving its presence in the record as witness to important physical or virtual events. No, I do not think Bitcoin Cash resembles an ‘IOU’ at all.

Cash-alike scorecard… btc 0 : eth 1 : bch 5 / $$ 5

Objection: How can a fork remain ‘canon’?

“But wait!” cries that plaintive voice again. “How can Bitcoin Cash ‘inherit’ canonicity from something it has duplicated? Isn’t that contradictory? How can it still consider itself ‘canon’ if it has broken with Bitcoin’s canon? Where does it end?” These are good questions.

Perceiving the singular value in Bitcoin’s canonicity brings clarity to many things, including why these common objections keep cropping up. But that self-same clarity also suggests an answer, for in reality, every canon, whether biblical, literary, or other, has always given rise to dissenting views, and then a collection of the strongest of those, along with some inherited from upstream, has always become codified in a dissenting canon. This is the way canons work, and no, it doesn’t mean it never ends. It takes a lot of energy to establish a dissenting canon: multiple works, usually from multiple contributors, widely subscribed to over a long period of time. But once established, an alternate tradition is hard to root out, and there always comes a steady supply of people who will subscribe to a well-established dissenting canon.

The parallels between cultural canons generated by human written work, and blockchain canons generated by crypto proof of work, are striking, and not an accident. They are a feature ‘inherited’ by Bitcoin and its variants from its free and open source development model. The MIT licence, under which Bitcoin’s OG dev team published, is the most permissive of all common free and open source licences. Its roots were in the open-sourcing of X Window versions 6 through X11, which ended up playing a central role in the GNU/Linux ecosystem. It can hardly have been a coincidence that the most permissionless open source licence was the one chosen by the inventor of the first truly permissionless cryptocurrency.

In open source, any developer can ‘fork’ any project’s source code at any time, adapt it, and distribute it for their own needs, but they can’t force anyone to run it. It requires a much more arduous, community-wide effort, with lots of energy sunk in, to turn a fork of an open source project into a viable product with a userbase. The road to open source freedom is paved, like Bitcoin’s, with the bones of ‘forks’ that barely got off the ground. But every once in a while, there is a fork that addresses a genuinely ignored need that the community is willing to divert resources to fulfilling. Right now, that need is for a regrounding in the original “p2p cash” architecture, and building anew, from a well-founded fork, a network of roads that can route around the damage done by the failed scalers who’ve gone before. By circumstance or by happenstance, that duty has fallen to Bitcoin Cash.

Objection: What if it happens again?

“But wait!” cries that plaintive voice a third and final time. “How do we know Bitcoin Cash won’t be taken over at some point, or hasn’t already been, or there isn’t some secret plot afoot to depose the developers and turn my bitcoins cash into IOUs, like all the rest? Couldn’t it all just happen again?” These are also logical questions about governance, and I will lay out briefly the ‘Bitcoin Cash’ way below, but they are mostly out of the scope of this document. If all goes well, I may get further into this topic in a future article.

The ‘Bitcoin Cash’ theory of off-chain governance is not currently found in any governance document, but rather emerges naturally from the interactions of free market forces with the aforementioned principles of free and open source licences, kept largely in check with each other by key elements of modern crypto’s founding protocol, like Nakamoto consensus and proof-of-work, which act as a common playing field for the mutual team-building investment of human energy required to build a healthy development ecosystem. The notions are entirely rejected that the evolution of the protocol should either be set in stone, or changed radically, by any single node’s dev team past or present. Hence, to secure the actual value of Bitcoin Cash, the community has cultivated a diversified ecosystem – there are five or six different teams making versions of the base node software alone – rendering radical protocol changes difficult to impose unless these teams manage to meet in the middle, which is one of the reasons, I think, Bitcoin Cash has preserved its essential qualities for so long.

A VERDICT ON “P2P CASH”

Okay, that does it for the last in this set of trials in the Clash of the Slogans. This one was a grind, I’ll admit – but to figure out which slogan’s flagship crypto can carry actual value as opposed to promised value seemed worth the time. Let’s tally it up. Out of five points of possible similarity with the use of cash, the use of Bitcoin (BTC) has not qualified for… any?? I suppose that should be no surprise, as it’s not really trying to be “p2p cash” anymore so much as failing to be “digital gold” – but to be surpassed as cash by even Ethereum, with its single point of similarity out of five, seems especially ironic. Bitcoin was originally intended to be a “cash system” whereas Ethereum was explicitly not. Of the three candidates, it is only Bitcoin Cash, with its time-tested, untrammelled, classic design, and an astounding five points of cash similarity out of five, that appears to still have the chops to successfully carry the “p2p cash” philosophy forward into the next decade. Let’s break these down again by percentage achieved of the available points of similarity, and then show the results in infographic form…

Bitcoin (BTC):
…0/5 = 0% cash.

Ethereum (ETH):
…1/5 = 20% cash.

Bitcoin Cash (BCH):
…5/5 = 100% cash.

There’s more to say about these results, of course, but given that all the data is now in, I’ll move straight to the final assize in this Clash of the Slogans…

MATH OF THE SLOGANS

That, then, concludes the case for “p2p cash”. It was a decidedly better showing for crypto, plausibility-wise, than trying to portray it as some kind of “digital gold” – four times better, to be precise-ish, if we base our comparison in the coin that represents both slogans best: which is, in a shocking upset, Bitcoin Cash. At 25% gold and 100% cash, BCH has topped the field on both counts…

Bitcoin (BTC) is:
…5% gold…0% cash.

Ethereum (ETH) is:
…15% gold…20% cash.

Bitcoin Cash (BCH) is:
…25% gold…100% cash.

Bitcoin (BTC) is not “digital gold”. That marketing slogan of theirs is just smoke. The most charitable thing I can say about it after some study is that at 5% gold and 0% cash, BTC is infinitely more gold-like than it is cash-like, but only because you can eat it, and division by zero error. Even Ethereum (ETH), trying to be neither gold nor cash, has a better claim than BTC to both titles, at 15% “digital gold” and 20% “p2p cash”. In the end, it’s Bitcoin Cash, by avoiding distractions and fool’s quests and focusing on preserving and building on category-defining fundamentals, that has not only trounced the field at being “digital gold” (as far as that goes, at 25%), but achieves a perfect score when considered for Bitcoin’s originally intended use case of “p2p cash”. Bitcoin Cash serves every major use case of cash well enough, and it doesn’t get much better than that. Bitcoin Cash is 100% “p2p cash”.

It looks like Nakamoto knew what he or she was doing in choosing to focus on making the original Bitcoin “p2p cash” instead of adopting Nick Szabo’s by-then 10-year-old and largely inapplicable concept of “digital gold”. And it’s not just the artificial bandwidth limits and consequent fees imposed by the current BTC devs that have hollowed out Szabo’s (and Finney’s) vision. Even if BTC removed all of its bandwidth throttling tomorrow, and tried to backport all of BCH’s on-chain scaling improvements in one day, BCH would still have the edge due to its pro-adoption building of a token ecology and superior smart contract support. Bitcoin Cash’s useful on-chain capabilities have simply been pulling ahead of BTC’s, and far more cheaply than Ethereum’s.

And while it won’t beat Ethereum on smart contract sophistication, Bitcoin Cash is certainly the best poised of these three contenders to seize the brass ring of being ’unstoppable currency for the masses’, regardless of what happens to BTC, so BCH is a good long-term bet at any price. Bitcoin Cash doesn’t even need to ‘unseat’ BTC, because its superior value proposition will keep it alive, regardless, but the difference in the truth content of their respective popular slogans is so extreme – 5% versus 100%! – that I wouldn’t count out the possibility that Bitcoin will just go down in embarrassing public flames for its failures to resemble “digital gold” at some point, creating so much blowback that it burns that marketing approach permanently.

In the final analysis, it’s important to note that BCH doesn’t just match the best properties of physical cash – it brings those properties to electronic cash. When engineered to be “p2p cash”, Bitcoin – in the form of Bitcoin Cash BCH – is not only as good as cash: it’s better. It fixes cash online. That was the whole point. When ‘engineered’ to be “digital gold”, however, Bitcoin – in the form of Bitcoin BTC – is absolutely terrible compared to gold, extremely lacking in many of its best qualities. Bitcoin is weak-ass gold. But Bitcoin Cash is kick-ass cash.

After seeing the cases for these crypto characterisations rise and fall on their own merits, it’s hard not to perceive why Roger Ver threw the full support of Bitcoin.com behind Bitcoin Cash as an additional option to Bitcoin within months of its first forking. Here he is recently comparing BTC and BCH in the context of the $1.9 trillion “COVID relief package” passed by the U.S. House of Reprentatives, and I think it’s a great note to finish up on.

And to sum it up in meme form (hat tip: Shibinator)…

Epilogue

Which brings to a close this Clash of the Slogans (the first of that name, perhaps – there may be others) and also my debut article here on read.cash. I intend this to launch a career pivot on my part into crypto-related penmanship under this pseudonym. Toward that end, I am currently accepting commissions, so if you have anything that needs written about, or even a quick rephrase, email me at [my read.cash username]@gmail.com.

Provisionally, I can give this new direction about sixty days before I will need to re-assess my plans if they aren’t bearing enough fruit, so I will lay out the roadmap for you of the types of value I plan to create on spec in that time…

SHORT-TERM GOAL:

I will post medium-sized pieces here on read.cash investigating the most interesting cash-based use cases I can perceive on the horizon for crypto, tracking them as they are/were proposed, and either focusing on who’s developing them for BCH, or comparing them with the existing tech on BCH, aiming for an output rate of one such tech feature per week. I may republish in other outlets.

MEDIUM-TERM GOAL:

Since late last year, at first between warehouse workshifts, and now more intensively due to underemployment, I’ve been writing chapters of a philosophic novel examining the ethical free-market underpinnings and near-future ramifications of Bitcoin (Cash). I intend to polish and publish those chapters, one at a time, for the first time, here, on read.cash.

LONGER-TERM GOAL (depending on funding):

I may write another long-form exclusive for read.cash like this one, by approximately the end of my sixty-day trial (if I believe it to have been successful), and then continue producing such pieces indefinitely. The next one could be “P2P Cash” vs. “Satoshi Vision”, or “Proof of Work” vs. “Proof of Stake”, or something else. I’m open to suggestions so please do leave a comment!