Is bitcoin dead? An interview.

This is adapted from some real conversations following the cancellation of the Segwit2x fork:

Is Bitcoin dead?

Interviewer: Is bitcoin finished? Is bitcoin cash the new thing?
Humble: I’m not an authority, but I don’t think so
Interviewer: Why not? Sell btc and buy btc cash? Or not??
Humble: I’m not going to do it, but it may be wise to diversify a bit.

Interviewer: How come?
Humble: Well first of all BCH over doubled, so it’s expensive now 🙂
Humble: Second I think that everyone reaching a consensus to not fork BTC again was an amazing show of community unity
Humble: And I think it’s a buy signal, but that’s my personal opinion

Interviewer: But isn’t it a problem that the network will remain slow?
Humble: Clearly other people disagree with me, but here it goes: it will remain expensive in the short run, not slow
Humble: There’s a difference
Humble: So certain stakeholders would like an easy increase in block size so that their operating costs go down

Interviewer: Hasn’t the BTC blockchain changed recently?
Humble: Just now, no, unless i completely missed something

Interviewer: Aren’t there two wallet types, from about 1.5 months ago?
Humble: there’s the soft fork called segwit that was mutually agreed to by many BTC stakeholders
Humble: but that was a soft fork
Humble: Since it was a soft fork old blockchain is still compatible, the legacy stakeholders people can migrate over, but they can do it at their own pace
Humble: There were also number of incompatiable offshots as well (hard forks) like BTC cash and BTC gold.

Interviewer: Hmmm, didn’t that soft fork (segwit) help with cost and speed?
Humble: yes, that did help, and it did so without creating disruption
Humble: that is why i think that was a good development
Humble: I think that in the mid-term the community will find a way to increase blocksize and add lightning which would add crazy scale
Humble: The community wants to wait and do it in a coordinated way
Humble: instead of holding people hostage, and breaking stuff. This Segwit2x cancellation could be seen as a soft of failed coup, maybe…
Humble: long term BTC may even change from proof of work to a different type of mining algo that doesn’t waste so much electricity
Humble: but since BTC is so big they have to do things a slower pace so that the whole community can reach consensus and then upgrade their stuff. It’s secure, battle tested, tried and true right now, many people & orgs find that useful, anyway, that’s just my opinion

Interviewer: K
Humble: they don’t make changes without agreement
Why are some pro BTC cash?

Interviewer: I don’t get why some are so pro btc cash, then, what do you think?
Humble: haha, idk, maybe they have money in exchanges or some payment processor, or stand to profit in some other way
Humble: If they control exchanges or payment processors their cost could half if block size doubled
Humble: maybe the theory is that the BCH community is more likely to increase block size so they will be way cheaper to transact on long term
Humble: but without the support of core developers I don’t think it will work well
Humble: as BCH moves more and more away from BTC, the code for BCH will be harder and harder to maintain
Humble: BCH supporters will need to find a way to persaude developers to take up the BCH cause, not sure if that is happening
Humble: also BCH is not listed on most major exchanges
Humble: if i was a betting man i would say the price @ 2300 is some sort of wierd short term top, but who knows

Interviewer: Mr. Servant, what do you think of the recent article on cointelegraph? https://cointelegraph.com/news/bitcoin-classic-shuts-down-as-staff-claim-bitcoin-cash-will-rule-in-6-months
Humble: It is interesting that the alt-community is consolidating around BCH and it makes sense if they want to be a rival
Interviewer: What about this interview with Roger Ver https://m.youtube.com/watch?v=ClMkFIsYYw0
Humble: Roger Ver, aka “Bitcoin Jesus”, is a very smart gentleman. Totally agree with a lot of what he has to say. Public distributed consensus may turn out to be one of the greatest human inventions. The first widespread implementation of this technology is Bitcoin. He seems to have a very liberatarian bent. He is also a strong supporter of Bitcoin Cash.

Interviewer: At minute three?
Humble: Yeah
Humble: Could be some some flawed logic i think, but I see why he thinks its more aligned with the original vision of BTC, but perhaps he saw BTC as more of a cash payments system.  Satoshi’s whitepaper is titled “A Peer-to-Peer Electronic Cash System”
Humble: the reason why BCH “market cap” is so high is a couple reasons
(1) most of the BCH is actually locked up right so you can’t move it, because its under the control of massive players, as well as a lot of people & orgs who probably don’t know they have it, or lost access to it.
(2) there was a huge speculative jump out of BTC into BCH immediatly following the cancellation of the fork, as you can tell the price of BCH has over halved from ATHs
Humble: so only a tiny percentage is actually trading causing a leverage effect

Interviewer: Take a look at https://www.forbes.com/sites/laurashin/2017/11/12/bitcoin-cash-skyrockets-bitcoin-price-drops-as-civil-war-continues/
Humble: I don’t know if I’d call it a civil war :). But, yeah there are definitely several stakeholders that stand to profit from this, including miners, traders, and others. If you thought you could move the price, caught the moves just right, and bought some swap contracts on bitmex you could be a very rich person today, literally overnight.
Humble: I haven’t looked into it but I would guess that BTC cash is very insecure right now since the hash rate is so volitile as miners move to the chain that is most profitable for them to mine. Notice that they are at block number 503998 wheras BCH is on 494133. That means they have not been able to maintain a stable 10min block time on BCH.

What is BTC?

Interviewer: There is a big question to what is Bitcoin is, is it currency, a commodity, like gold, or property, like real estate, what do you think?
Humble: This is a really tough question to answer… I think it’s a new asset class, and the start of a whole new set of asset classes.
Humble: But to answer your question simply today I think that it most closely resembles something like gold, but has features that let it function like currency and property and probably a number of other things no one has thought of yet.

Regulation & Central Banking

Interviewer: Roger Ver mentioned regulation in that video, what do you think of regulation? Isn’t Bitcoin all about avoiding regulation?
Humble: I think regulation is good
Humble: Some people think its a little over the top right now
Humble: but it will evolve, there will be a new normal and its not going to be a free for all

Interviewer: Could this whole thing be a very serious problem for central banks?
Humble: i think it may give them new things to consider, which may be a good thing

Interviewer: Money supply banking may have to change?
Humble: The greatest way to increase availability of money is velocity, no? Not sure if you have to create actual new money…

Interviewer: What do you think about the inflation targets? Don’t they create bubbles and erodes value of savings…
Humble: i think maybe the CPI is the wrong way to compute inflation in the new economy. I think that what we are seeing is that assets are becoming more important to production

Interviewer: 2-3% target is an idea that hasn’t changed in a while…
Humble: i think you need inflation, but i don’t know if it is computed correctly today

Interviewer: You don’t think the target should be zero? A zero growth model for industrialized economies?
Humble: No, I think think so. I think that developed world productivity is actually increasing, it is just hiding behind our outdated models.
Humble: you need inflation, debtholders need relief, and new earners need to make more money, that’s what moves the world forward

Interviewer: Because of productivity gains don’t you need lower inflation target is need to prevent bubbles?
Humble: I think we just need to compute inflation in a different way
Humble: but i think we are in agreement, central banks may have created too much new fiat money. Bitcoin and other cryptocurrencies, as well as real assets are a hedge against that

Interviewer: K
Humble: i think inflation is useful though
Humble: 0% inflation will cause a greater rich : poor gap.   If this continues unchecked it may lead to revolution

Interviewer: Well thank for talking to me today.
Humble: Always a pleasure 🙂

Attributions

We borrowed the cover photo from http://bandwidthblog.com/business/bitcoin-cash-price-soars/, if you guys are not okay with that let us know and we’ll replace it.

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