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Bitcoin: Why There Can Only Be One

Liz Louw
Liz Louw
4 April 2019
 

Please note: No doubt what I’m about to say will be uncomfortable if you’re a supporter of a variety of blockchain projects. I implore you to hear me out, as the future of the entire crypto community depends on cutting through the myths to get back to the core utility and intention behind the creation of Bitcoin.


When the Bitcoin whitepaper and its Genesis block saw the light a little over ten years ago, cypherpunks and techies did a double-take trying to gain an understanding of what the technology is, how it can be applied, and what it means for society.

For most of its 10-year history, adoption trickled in slowly but steadily. In 2015, things took a turn when Vitalik Buterin created the Ethereum blockchain — his response to a lack of agreement in the Bitcoin community over the need for a scripting language for application development (or so it is told). From here on app development started to snowball, with tens, then hundreds, and eventually, pushing 2,000 (1,719 at present) cryptocurrency projects launched.

It didn’t take long for whitepaper descriptions to grow like a tall tale, from the humble suggestion of more efficient computing mechanisms to extraordinary tales of “interoperable blockchain ecosystems” and “supercomputing mechanisms”.

For a while there, we’ll admit, the Bitstocks team had our hair blown back by the promises. When we looked into the mechanics and infrastructure that was supposed to enable the revolutionary applications, however, we came back down to earth rather suddenly. It was all hot air.

Once marketing narratives and ideologies are scraped away, the mechanics of blockchain technology reveal why there really can only be one crypto — the Original Bitcoin project.

Bitcoin: One Protocol, Many Applications

At this point, there are many in the community that might accuse me of ‘Bitcoin maximalism’, a term often used to shut down critique of shitcoins. But, believe you me, this matter is nothing personal, it’s not about jockeying for position, a crypto coup, or the attempt to secure a crypto monopoly.

What we’re talking about is a matter of life or death for the survival of a public blockchain network. In future, there will either be one public blockchain with many applications built on top of it, or there will be none at all.

To explain the basic principles behind my statement (one or none), I present to you some explanatory comments by the Bitcoin creator himself, Craig S Wright (aka Satoshi Nakamoto).

Why Only One Bitcoin? By the Very Nature of Blockchain Tech!

In a February 2019 interview with Ran Neuner, CNBC Crypto Trader, Craig S. Wright brings us back to the nature and intention of blockchain technology:

“(My submission to the CFTC describes) what blockchains are and how they work. Now, this is an area that a lot of people try to use to confuse people. The whole ICO world is really a scam world. It’s bringing back the usenets and penny stocks scams that existed in the 80’s and 90’s, but in a new format. The only thing they’re doing is bringing out new coins and new ICO’s — not one of them has ever created anything. They are purely a way of getting around the controls that stop people from scamming others, enabling people to take money, do nothing, and not return a cent. That’s all they are, and they have to end.”

When asked about the claim that Ethereum tokens provide access to the power of a type of ‘supercomputing mechanism’, Wright doesn’t beat around the bush:

“There is no such thing as a token for a supercomputing mechanism. That’s a scam and a lie. There isn’t one. There is not one token that gives you a single compute cycle for less than a million times the cost of something now. You would actually be more efficient to buy a Raspberry Pi than you would be to buy a thousand compute cycles on Ethereum.”

When asked if the only use for the blockchain is the transfer of value like Bitcoin and Bitcoin SV are doing, Wright goes into educational mode (paraphrased):

“Yes, there can only be one blockchain. This is the whole nature of it: if you have various competing systems, they are all competing for a limited volume of transactions. The (globally available) volume is insufficient to sustain them all which means that either only one will survive, or they will all collapse. There is no middle ground here, it is the nature of the protocol. It is either one, or nothing.”

Why Only One Bitcoin? A Business Perspective

Though there’s a diversity of opinion over whether to unite around one blockchain or invite and support an ever growing number of projects, most of us agree that none of our use cases can survive without the transaction volumes of mainstream adoption. Market adoption, in turn, can only become a reality if businesses and merchants are incentivised to make the switch from the traditional financial system to cryptocurrency.

So then, let’s take an honest look at the matter from a business perspective. How does the current ecosystem of 1,700 (give or take) independent crypto projects affect business operations?

To answer the question, Bitstocks CEO and Founder, Michael Hudson, turned to developer and Bitstocks CTO, David Arakelian:

Michael: “David, from your perspective as developer, how difficult is it to keep up with all the public blockchains? Let alone if you’ve got an exchange and you’re working with a thousand, a hundred, or even twenty different coins. How difficult is it to operate a business under these conditions?”

David: “It’s a constant battle. Things happen very quickly in the development world. This includes updates that you need to be aware of way in advance. You need to follow up to make sure you’ve integrated the changes into your business to make sure you’re not impacted by any downtime or security breaches.

The more coins you’re managing, the more chance there is of system hacks, and you have to be aware of them straight away and apply the necessary patches (if there are any). There can be different ways of interacting with each blockchain, which happens to be the case for almost every blockchain. Even though the majority of them are just clones of the Bitcoin blockchain, they change how you communicate with them and what you extract as data and the data you use.

It boils to staying on top of what’s going on with every coin on a 24/7 basis. If you’re trying to run a business and you have to build and fix things on the development end at the same time, it’s a nightmare. Even if you’re just trying to stay on top of three blockchains, it’s still a nightmare.

Now imagine for an exchange that has to monitor more than twenty blockchains. They need to know how every one of those blockchains works to make sure they don’t run into unexpected hurdles or threats. A good example is when three or four people recently hacked Bitcoin ATM’s with the double-spend feature included in the RBF toolkit. It’s a prime example of how low the level of education in the sector is when it comes to the integration of blockchains. In this case, the business model was to distribute Bitcoin ATM’s to sell and buy crypto. It sounds like a great idea. The problems arose in the implementation.”

Michael: “There was also recently the situation that BlockCypher had with the Ethereum blockchain. They tried to get a complete backup of the Ethereum blockchain, and they discovered that not even Vitalik Buterin, the creator of the Ethereum blockchain, has a backup. Not even the Ethereum Foundation was able to help BlockCypher to reconcile their data. What’s the point of having a public blockchain if the data isn’t immutable and accessible to use for reconciliations. The point of using a public blockchain is that, even if a company running on it goes out of business, the company’s clients don’t lose their data or operational model.

 

Bitcoin: One Blockchain, Many Applications


We’ve watched the imaginations of developers and business owners flow from Bitcoin into new projects, and we wanted it to be viable. We tried to keep an open mind on the broadening industry and really looked into new projects like Ethereum. When we considered the concept of this inter-operable blockchain acting as a foundation for a ‘world of things’, we couldn’t help but see the holes immediately.

This brings us to the topic of Bitstock’s Gravity project. We had been monitoring development for years, and as time went by we started gaining a clearer perspective of the agendas and hidden motives operating behind the scenes. It was around three years ago that Bitstocks’ view of the space started changing drastically. Bitstocks’ CEO, Michael Hudson, came to the realisation that this inter-blockchain world wasn’t going to happen. The masses of crypto projects don’t actually work as promised —  it’s a utopian fantasy.

We decided to ignore the ICO hype and start building an ecosystem on the original Bitcoin infrastructure. Once we saw the infrastructure that people like Craig Wright were building under the Bitcoin SV project, we knew we could stop worrying about the stability of our business foundations and focus on building out our real-world applications. For us, it’s Bitcoin SV or nothing.

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