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Issue #349: Bitcoin-Is-Worse-Is-Better

Oct 29, 2018
Marty's Ƀent

Issue #349: Bitcoin-Is-Worse-Is-Better

Feeling a little groggy after the weekend, freak? Feeling spritely? Either way, you should make like our friend Nic here and read through Gwern's classic piece, "Bitcoin-Is-Worse-Is-Better". In it, Gwern does an incredible job of highlighting that Bitcoin is an extremely novel system because it combines things that many experts in rigid, specialized fields like cryptography might not think to because they see them as inefficient or unnecessary. The novelty of Satoshi's invention can be found in its ugliness of piecemealed technologies that enable a very narrow use case; distributed, peer-to-peer censorship resistant transactions. This is hard to grasp for a lot of people that are "experts" in very specialized disciplines like cryptography, who often believe they can design better systems from scratch.

What a lot of these "experts" fail to realize is that Bitcoin is more of a monetary phenomenon than a cutting-edge breakthrough in cryptography. And this fact, when it isn't fully understood by said experts, seems to fly right over their heads. If it's not the most efficient system from a tech perspective, it certainly can't be a cutting-edge technology that should be used as the reserve currency of the world. However, there are many different facets that have contributed to Bitcoin's survival. Most importantly, I would argue, is the way Bitcoin was launched, by an anonymous founder in the throes of an incredibly bad financial crisis. The timing of this, as Dan Held points out in Part 2 of his series "Planting Bitcoin", was imperative for Bitcoin's bootstrapping period and is one of the driving forces of its continued success.

This is hard for a lot of really smart people to grasp. They think they can remake Bitcoin in a better way that makes it scalable, distributed and non-volatile out of the box, but this is an impossibility. Since Bitcoin is a monetary phenomenon and we are currently in the midst of witnessing a monetization event (the likes of which has happened very few times throughout the course of human history), getting these functionalities out of the box is impossible. Money has more to do with psychology than tech and psychologically coming to grips with a new money will take time. It will not be provided to us out of the box. Bitcoin is worse is better. More people need to understand this.

Final thought...

Writing is a struggle some days.


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