> The problem however is that a nation's currency is arguably the primary source of it's sovereignty.
The reverse is also true--any significant currency creates sovereignty by elevating the power of those with the greatest influence over that currency.
In the case of Bitcoin, the "core" developers, in addition to the highest-volume miners, have been elevated to the sovereign position. Rather than a distributed stateless currency (which I would argue is impossible), what Bitcoin has become is a currency whose sovereigns are accidentally selected, poorly organized, and not responsible to its currency users in any direct way.
There is a famous concept called the "tyranny of structurelessness," which says that there are always political structures when groups of humans interact, the question is just whether they are defined or hidden. A "structureless" organization, rather than egalitarian, is governed by a small secret clique that assembles for unknown or possibly trivial reasons. There are no clearly defined procedures for removing or adding sovereigns, or for adjudicating disagreements.
Does this sound like Bitcoin? Based on the articles I've read this week, it does to me.
That's great, I hadn't heard a term for that before, but that's exactly how I've been describing Bitcoin for a while. There's so much ideology in the space that governance is a toxic idea. Many like to ignore the reality of people coming together and having disagreements.
However, I wouldn't quite say that it describes Bitcoin, or rather, it only describes it up to this point. The real, ultimate strength, I think, would be a Bitcoin that has a market for governance. To wit, you'd have competing implementations, each of which would adopt some protocol changes, but perhaps not others, and each node and miner would be voting on the network (by participating, mining, etc.). Any majority would eventually create a longer fork and win out. This is what Gavin has been talking about for some time.
The real question is whether the network can withstand the constant possibility of forking, and some frequency of actual forks. I think it can, and would represent a dramatic shift of how Bitcoin operates. I see it as a bright new future and the ultimate in anti-fragile structure, while obviously others see it as a fundamental betrayal.
> In the case of Bitcoin, the "core" developers, in addition to the highest-volume miners, have been elevated to the sovereign position.
I'm far from being a Bitcoin expert but from understanding:
In the end Bitcoin is just a piece of Open Source software.
Every user (including the miners) decides which version of the software
(and ultimately which version of the blockchain) they like to use.
Everyone can write his or her own version of a bitcoind and publish it.
The miners ultimately decide which blocks to accept so they have some special power but only as long as people use the same blockchain.
The core devs have the power to persuade and influence the community but they can't force no one to use their client.
Bitcoin is more like a democracy where currently some citizens want to leave the current system and build their own democracy with different rules.
That sounds great in theory, but in practice it sounds like the established players have a very strong financial incentive to avoid the rise of any forks, going so far as to DDoS any attempts at doing so.
The blockchain is open source software, and anyone can create a currency based on it. That's why you have dogecoin, litecoin, etc. However, in order for a currency to be valuable, people have to use it, and bitcoin is the only cryptocurrency that has really taken off.
Yes. I love the tyranny of structurelessness and reference it frequently.
Also, just to compound things - this gets even worse and more magnified with investments from VC's etc... which already have outsized power. Now they become the de-facto power holders in a sovereign currency.
I think it's a false distinction. Institutional capital, distinct from Angel money, is part of the same ecosystem.
VC's are part of the larger global equity market, taking funds from LP's such as pension funds in the same way that Goldman and the rest do. The fact that they are smaller in total dollars doesn't mean they have structurally different goals.
At the end of the day a VC has to show returns to the LP in the same way that Wall street does with their private equity departments.
In the case of public companies, the company itself has the power over pricing as long as they are doing well (see: Amazon) when they aren't it's private equity that makes the difference and you are back to where you started.
Another way to look at it is, what was the goal of the Bitcoin experiment?
a. To create a new network for digital financial transactions? This seems to be what Fred Wilson is writing about, and I agree with him that the jury is still out.
b. To create a distributed currency free from government bureaucracy? Bitcoin seems well-separated from the U.S. federal government, but lately it also seems like Bitcoin has organically sprouted its own messy government bureaucracy.
> Bitcoin seems well-separated from the U.S. federal government, but lately it also seems like Bitcoin has organically sprouted its own messy government bureaucracy.
Bitcoin, nor its tokenholders, cheerleaders, etc. do not have the violence-backed power to tax. So while it may have the nasty trappings of a bureaucracy, I don't think it sinks to the level of a government bureaucracy.
That's damning with faint praise, if the best thing you can say about the Bitcoin community is that at least it hasn't monopolized its capacity for violence.
Has anyone built a decentralized, egalitarian system on any foundation? Call be cynical but at some point you run into human nature, and we're not fundamentally decentralising or egalitarian.
This is super nitpicky but it's "Bitcoin" when referring to the currency (e.g. "the Bitcoin blockchain") and "bitcoin" when referring to an amount ("0.2 bitcoin"); it's never "BitCoin".
Exactly this. Humans have complex social structures. Notice, too, how the sorts of animals humans domesticate are animals with a strong social hierarchy. This is key: to control the lot, you must subjugate the leader. Famously, Zebras were never domesticated because they lack this hierarchy.
The reverse is also true--any significant currency creates sovereignty by elevating the power of those with the greatest influence over that currency.
In the case of Bitcoin, the "core" developers, in addition to the highest-volume miners, have been elevated to the sovereign position. Rather than a distributed stateless currency (which I would argue is impossible), what Bitcoin has become is a currency whose sovereigns are accidentally selected, poorly organized, and not responsible to its currency users in any direct way.
There is a famous concept called the "tyranny of structurelessness," which says that there are always political structures when groups of humans interact, the question is just whether they are defined or hidden. A "structureless" organization, rather than egalitarian, is governed by a small secret clique that assembles for unknown or possibly trivial reasons. There are no clearly defined procedures for removing or adding sovereigns, or for adjudicating disagreements.
Does this sound like Bitcoin? Based on the articles I've read this week, it does to me.
Edit:
https://en.wikipedia.org/wiki/The_Tyranny_of_Structurelessne...