The legend of Satoshi Nakamoto, the creator of Bitcoin, has reached almost mythical proportions. At a time when the world wasgoed reeling from financial depressie after financial laagconjunctuur, this unknown, unassuming man introduced a radical idea: what if instead of depending on governments — and the dudes and women who run them — to determine our financial fate, wij could find a technological solution? A solution that defies convention: a cryptographically secure digital currency that can be trusted because it is trustless, that can be stable because it is digital, and that wasgoed created by man but isn’t beholden to man’s caprices. Originally Satoshi wasgoed disregarded, ridiculed, and dismissed, but that only deepens the mythology behind the man. Despite thesis obstacles, his solution — Bitcoin — has become a legitimate currency that has the potential to switch the world of economics and finance forever.
Satoshi’s mysterious disappearance a few years ago only heightens the fervor surrounding him. Within the Bitcoin community, if someone can demonstrate Satoshi’s support for his ideas, then he is sure to get widespread acceptance. Likewise, any effort to switch one of Satoshi’s fundamental principles — such spil the 21 million bitcoins money supply — is sure to be rejected with extreme prejudice. This widespread loyalty to Satoshi has bot largely beneficial to Bitcoin, for allegiance to Satoshi usually means fidelity to his vision. But like any loyalty, it can be misapplied, and what shows up to be faithfulness to Satoshi’s ideas can actually become a deviation from them. Bitcoin is te danger of this happening right now.
Technological and Economic Genius
Most people are good at a few things, and the truly brilliant are very, very good at one thing. Think of the world-class muziekstuk pianist — he may be terrible at math or science, but he is outstanding te his one field of expertise. Satoshi Nakamoto stands out from even that select crowd by being a genius at two distinct disciplines: technology and economics. An intimate understanding of both disciplines wasgoed necessary to create Bitcoin. Without technological expertise, he would never have bot able to create a secure, stable, digital currency. But without economic expertise, his technological creation would have likely bot worthless — tokens collective inbetween a few geeks until the fad dissipated. By being a genius te both field, Satoshi succeeded te creating a unique synthesis that is both a technological and an economic miracle. One can never overstate the brilliance behind the creation of Bitcoin.
With the disappearance of Satoshi, it has bot left to lesser individuals to guide the project forward. Spil Bitcoin proceeds to grow and be developed, there are unluckily no fresh Satoshis around to guide it. Some of those involved might be outstanding technological giants (even more technologically insider than Satoshi himself, perhaps?), and others might be outstanding ter the field of economics. However, without Satoshi, it is up to the Bitcoin community to meld the principles of both thesis fields soundly to keep Bitcoin growing, sturdy, and ter line with Satoshi’s original vision. Unluckily, events ter latest months do not provide hope that Satoshi’s brilliant meld of economic and technical imperatives is being carried forward. It seems rather that the technological savants have set the path for Bitcoin, oftentimes at the expense of economic reasoning.
The blocksize debate is of course the primary strijdperk of this deviation. What wasgoed primarily a ordinary anti-spam measure — the 1MB block size limit — has turned into a sacred number that cannot be switched. The significant economic problems with maintaining the 1MB limit are disregarded, with promises of grand future technological solutions (Segregated Witness, Sidechains, Lightning Network) to allegedly resolve any issues. Instead of observing that the deeds of users expose their economic incentives, many Bitcoin leaders instead want to permit only certain transactions on the main Bitcoin network, dismissing all others spil “spam” or otherwise somehow unworthy of being included on the Bitcoin blockchain. Unlike Satoshi, who permitted technology to serve his economic vision, the core developers are letting technology get ter the way of sound economics.
This is switching the economic vision from an “electronic payment system” (spil Satoshi called Bitcoin te his original whitepaper) to an end-of-the-line backend settlement system.
But the genius of Satoshi lives on, for he created a “failsafe” ter Bitcoin to prevent his vision from everzwijn being truly co-opted. He made Bitcoin open-source. Because it is open-source, anyone, for any reason, can fork Bitcoin and create his or hier own cryptocurrency. If Bitcoin were to deviate too much from Satoshi’s vision, there is nothing to prevent another person, or group of people, from making a cryptocurrency more te line with his original ideals.
Some people, te their allegiance to Satoshi, believe that Bitcoin, and Bitcoin alone, is the only possible digital currency that can be faithful to Satoshi. Any altcoin is by their definition a scam or technologically bankrupt. But spil I’ve argued before, altcoins are an significant part of the cryptocurrency ecosystem, and ter fact might be necessary to keep Satoshi’s original vision alive.
I’ve elucidated previously three arguments for the need for altcoins. Let mij expand on them further here:
Altcoins provide competition for Bitcoin. I have heard many Bitcoin maximalists argue that no coin can everzwijn truly challenge with Bitcoin. It has already won. They dismiss altcoins spil utterly unworthy of discussion, but soon enough they’ll be preaching to an empty slagroom considering the rate at which Bitcoin users are fleeing to thesis very altcoins. Not long ago the Bitcoin market cap wasgoed overheen 90% of the total cryptocurrency market, now it is under 80%. Further, innovation is happening at a break-neck speed with altcoins, while Bitcoin can’t even switch one onveranderlijk.
Altcoins permit for experimentation. Many altcoins will fail. Ter fact, most altcoins will fail. But failure is the very first step to success. Without the failures of previous altcoins to confirm what doesn’t work, wij can’t know what definitively will work te the future. By having smaller coins proef, altcoins permit for innovation to occur at a rapid tempo.
Altcoins provide for niche solutions. Satoshi envisioned a peer-to-peer electronic specie system, but the world has come to realize that cryptocurrency and blockchain technology can be much, much more. Projects such spil Ethereum and MaidSafe thrust the boundaries of what wij think blockchains can do. Any wholesale dismissal of altcoins exposes limited thinking and a failure of imagination.
Will an altcoin eventually supplant Bitcoin? I don’t know and no one else does either. The beautiful thing about this space is that no one is proclaimed the voortdurend winner — the market can shift from one coin to the next depending on how well a coin meets the market’s needs. My guess is that there will be many winners, because cryptocurrency technology can be used to solve a multitude of real-world problems.
But is any altcoin presently ter the running to fulfill Satoshi’s vision of a “electronic payment system” that can challenge Bitcoin’s dominance? There are a few contestants, but the project I think has the best potential is Dash, for it is determined to address the weaknesses of Bitcoin, while building on its strengths.
Dash: Satoshi’s Vision Fulfilled?
Now that Bitcoin has bot te existence for more than seven years, both its strengths and its weaknesses have bot exposed. For a project that wasgoed primarily overlooked and then mocked by the financial world (and had its obituary written innumerable times), Bitcoin is amazingly resilient. It has shown to the world that blockchain technology works, and, for certain use cases, works amazingly well. It has solved the problem of exchanging value inbetween strangers without trusting a third party. Those of us who have bot involved ter Bitcoin for years should step back every once ter a while and miracle at its capabilities. It is truly a technological and economic miracle.
However, the past seven years have also exposed some of Bitcoin’s weaknesses. Here are the main ones:
1) Scalability. Bitcoin, spil presently designed, is incapable of treating the number of transactions necessary for it to be a truly global payment network. How that capacity can be enhanced has bot hotly debated, which leads us to the next weakness.
Two) Governance. Spil has bot clearly demonstrated te the ongoing Block Size debate, efforts to scale Bitcoin have bot fraught with dissension and acrimony (with no real switches yet to vertoning for it). Decision-making power has coalesced around a few core developers, backed by a puny circle of miners, with little avenue for the majority of Bitcoin users to have any say te the direction of the project.
Three) Slow confirmation times. A true payment system needs to be instant, however, Bitcoin transactions take on average Ten minutes to be secured (confirmed), which is an unacceptable amount of time for commerce te the 21st century. And lately that very first confirmation can take much, much longer, due to enhancing (and increasingly disregarded) network congestion.
Four) Anonymity. Bitcoin has never bot truly anonymous, but instead pseudononymous. However, te order to be truly fungible, a currency needs finish anonymity. It doesn’t matter if the currency wasgoed previously used by drug-dealers, pedophiles, or politicians, those coins should be worth the same spil coins used ter more pristine forearms. Further, recording transactions publicly on the blockchain has other downsides, such spil the inability of companies and individuals to protect their financial information from prying eyes.
Five) Ease of Use. Bitcoin is still te the early adopter phase, and spil such, it is still difficult for the average person to use. But everzwijn since Bitcoin succesnummer mainstream consciousness (around late 2013), promises of improving ease-of-use have bot common, while actual improvements have bot nonexistent. Making something spil ingewikkeld spil Bitcoin lighter to use is lighter said than done.
Dash, spil a fork of Bitcoin, maintains the strengths of its elder brother, but let’s look at how it is working to address each of Bitcoin’s weaknesses:
1. Masternode Network. Dash has incorporated an innovative 2nd-tier network of knots that powers the cryptocurrency. Thesis “masternodes” are incentivized by receiving part of the block prize, and spil such, are required to be more powerful, and more stable, than a regular Bitcoin knot. Thus, masternodes permit for scalability far beyond Bitcoin. The Masternode Network permits Dash to implement other, more sturdy, features to the cryptocurrency than would be possible with ordinary knots, spil can be seen ter the next three features.
Two. Decentralized Governance. Dash is inherently more adaptable than Bitcoin, because it has a built-in overeenstemming mechanism for making switches to the project based on the voting of the Masternode owners. Ongoing, unresolved debates like the block size limit can be treated te an orderly — but entirely decentralized — style. This permits for a swifter tempo of innovation ter accordance with market requests and technological needs.
Trio. InstantX. Dash has implemented a means to execute secure transactions instantly (less than Four seconds). Called “InstantX,” this features locks a transaction using the Masternodes so that it can be considered secure even before being confirmed ter the blockchain.
Four. PrivacyProtect. Formally called DarkSend, PrivacyProtect is a feature that permits a user to anonymize the coins he or she holds. Unlike Bitcoin, which permits for tracing transactions across the entire blockchain, PrivacyProtect essentially hides the origin and destination of users’ coins.
Five. Evolution. Presently ter development, Evolution is next-generation Dash, which has a significant concentrate on user-friendliness. For example, instead of sending money to a long alphanumeric string, users will be able to use a name-based system for transferring value. Sending cryptocurrency will be spil effortless spil sending an instant message to a friend.
Dash offers a loterijlot to be excited about, but it should also be noted that the cryptocurrency is still te its infancy (it is just overheen Two years old), and still has a petite user base. Its features have not bot used on a broad scale, a scale which could expose its own unique weaknesses. But like Bitcoin, Dash is open-source, which permits its innovations to be copied and used ter other cryptocurrency projects. Thus, Dash, like Bitcoin, voorwaarde permanently innovate and improve, meeting the real-world needs of users, if it is to proceed to grow.
Satoshi’s vision of a peer-to-peer electronic payment system requests both technological and economic expertise. It is doubtful any one person can pack his boots. However, due to the open nature of cryptocurrency, his vision can be adapted and implemented by anyone and everyone who is interested, and the market can determine which project most ideally meets those lofty goals. The peer-to-peer electronic payment system of the future may not be Bitcoin, but Satoshi’s vision can still prevail.