What Ethereum’s upcoming fork can teach us about governance, stablecoins, centralization bottle-necks and the ever-important U.S. dollar system.
This is an opinion editorial by Mark Goodwin, director of print editorial at Bitcoin Magazine.
You might claim Bitcoin suffers from lack of features, but what it gains in simplicity is a far smaller target for centralizing forces to exploit. Could a bottomless coffer such as the Federal Reserve dollarize bitcoin or any of its layers in a similar fashion? Luckily, Bitcoin consensus is fork-adverse by nature, as opposed to being pro-fork by nature; the approach of the majority of today’s smart contract platforms. Can an entity backed by the dollar pervert mining incentives enough to capture a large enough hash share to successfully censor transactions? Can an entity backed by the dollar create perverse incentives enough to dissuade proper custodial use of bitcoin? Can an entity backed by the dollar create malicious nodes in order to leak open-topographical network data to remove avenues for increased anonymity sets? Can an entity backed by the dollar scare developers enough into no longer publicly working on privacy tools? You bet they can.
For those that think “It can’t happen here,” consider how sure the foundation must have felt in their kingdom; even a 70% pre-mined headstart wasn’t enough to keep the greenbacks at bay. Bitcoin simply does not suffer from the same consensus failures as Ethereum; it suffers and strives uniquely on its own.
Being leader of the pack is a comfort for sure, but as we look back at the oncoming U.S. dollar system, we see yet another rider completely and utterly consumed by the gluttonous beast. We can see how they zigged when they might have zagged. We can see how the beast positioned itself, how it clawed and gained its ground. We spent so much time looking for CBDCs, we missed the private-entity stablecoin monster right in front of our eyes.
This is a guest post by Mark Goodwin. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.