In this important conversation (https://fountain.fm/episode/HW751CSpd243KXhrA1wQ), matt (npub185h…wrdp) and MartyBent (npub1guh…6hjy) point out the risk that Bitcoin will lose one of its most important properties, censorship resistance unless we Bitcoiners do something about mining centralization.
I think Bitcoiners allowed this to happen because of what I would call the "1 BTC = 1 BTC" fallacy. People praise Bitcoin's ability to transport value through time. They claim that all I need to do is buy and store Bitcoin in cold storage. This notion seems naive.
The value of the Bitcoin in cold storage is bound to evaporate by gradually altering Bitcoin's properties. Introducing effective censorship through miner centralization, as detailed in the TFTC episode, is one way of devaluing Bitcoin. Only if (Bitcoin value evaporation < FIAT inflation) do we have a better store of value. As Erik Voskuil brilliantly points out in Cryptoeconomics (https://voskuil.org/cryptoeconomics/cryptoeconomics.pdf), it is humans, willing to resist control and accept the risk of punishment, that secure Bitcoin. Therefore, the risk-sharing features are essential for Bitcoin, making this risk bearable for individuals.
Decentralization is another word for risk-sharing.
MariusFebruary / Marius
npub18km…xwnr
2024-04-25 12:13:47
Author Public Key
npub18kmu5s4gaq7qf02je6pk4xqckm5s2t5782596gkzk0r3tufpl9hs3gxwnrPublished at
2024-04-25 12:13:47Event JSON
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"content": "In this important conversation (https://fountain.fm/episode/HW751CSpd243KXhrA1wQ), nostr:npub185h9z5yxn8uc7retm0n6gkm88358lejzparxms5kmy9epr236k2qcswrdp and nostr:npub1guh5grefa7vkay4ps6udxg8lrqxg2kgr3qh9n4gduxut64nfxq0q9y6hjy point out the risk that Bitcoin will lose one of its most important properties, censorship resistance unless we Bitcoiners do something about mining centralization.\n\nI think Bitcoiners allowed this to happen because of what I would call the \"1 BTC = 1 BTC\" fallacy. People praise Bitcoin's ability to transport value through time. They claim that all I need to do is buy and store Bitcoin in cold storage. This notion seems naive.\n\nThe value of the Bitcoin in cold storage is bound to evaporate by gradually altering Bitcoin's properties. Introducing effective censorship through miner centralization, as detailed in the TFTC episode, is one way of devaluing Bitcoin. Only if (Bitcoin value evaporation \u003c FIAT inflation) do we have a better store of value. As Erik Voskuil brilliantly points out in Cryptoeconomics (https://voskuil.org/cryptoeconomics/cryptoeconomics.pdf), it is humans, willing to resist control and accept the risk of punishment, that secure Bitcoin. Therefore, the risk-sharing features are essential for Bitcoin, making this risk bearable for individuals. \n\nDecentralization is another word for risk-sharing.",
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