How do you feel about these companies that are trying to implement private blockchains? Will they be productive or will it just be another altcoin? Maybe it will just be another form of coinage. Or a fork like Ethereum Classic and Bitcoin Cash. Will they achieve broader use in the financial system?
Very good questions. I will first take the first one and then I will try to tackle the second one.
To the first question, what happens when private companies make private ledgers, private blockchains, and private coins?
Have you ever worked at a company that has an intranet, that uses an internal network and internal wiki and internal email system?
How cool is that?! It is not cool… And yet, when the internet started, a lot of companies thought: “That is great! But… the internet is going to be full of perverts, criminals, fraudsters, hackers and weirdos… and ANYONE can publish, which is terrible because most of it will be crazy ideas. So how about we take that technology and make a closed system instead, where we control who can connect and publish? And that way make a nice system that is suitable for all ages, kind of a Disney version of the internet.”
CompuServe, AOL, and Prodigy… All of these systems that companies built, they failed, and the reason they failed is because they misunderstood what was the value of the internet.
It wasn’t the ability to send and receive data. It was the equalization of everyone as both producer and consumer. It was about the opportunity to have an open online environment where everyone has the freedom to speak and be heard by anyone, anywhere, without any controls or censorship.
That was the real value of the internet, and it is the real value of Bitcoin, is a borderless, global, uncensorable, open system that allows anyone to innovate and access it without asking for anyone’s permission.
If you take that and turn it into a closed, bordered, censored, controlled system, it is BORING. It might generate profits for some, but it is not interesting in the broader sense.
Once you create all of these little systems, you would still have to connect them together.
Bitcoin is the internet of money. If you build an INTRANET of money, eventually you will want to connect it to the internet of money, and you will connect it through Bitcoin.
Bitcoin is the interesting blockchain. Others may be interesting for narrow purposes, just like a JustinBieberCoin may be interesting to Justin Bieber fans. A JPMorganChase coin will be interesting to JPMorgan Chase executives… and very few other people. It certainly won’t be as successful as a JustinBieberCoin.
When it comes to the Core versus Classic client, I think it is important to understand that Bitcoin is undergoing a constant debate. In traditional systems of money, when a debate lasts for too long, the boss stands up and say: “Enough! Here is what we will do.”
But there is no boss in Bitcoin. So no one can say: “That is enough debate. Here is what we will do. We need to all agree.”
Bitcoin is difficult to change. The process of changing Bitcoin is full of loud and noisy arguments, accusations, and drama.
Where I come from, we call that democracy. You may not have seen democracy in financial systems before. it may be a new phenomenon, but that is not a problem for Bitcoin. That is its greatest strength.
The fact that no one can impose a decision on everybody else. Core can’t, even if it appears so that they can. Classic can’t either. They each hold a veto over each other.
Consensus is much more broader and nuanced than we understand, and democracy looks messy.
If you want efficiency, then put one company or person in charge, and you will get efficiency. The price is freedom.
We buy freedom, by paying the price of inefficiency, and I will make that choice every single time.