On 1/4/25 16:52, Luke Dashjr via cfarm-users wrote:
[...]
Bitcoin itself is an important tool for freedom. We are in an era
where governments regularly abuse their power over currencies, and
even private banks and money transmitters regularly abuse their
position for financial censorship. It is so bad, that if Bitcoin fails
(which is a high probability risk), I fear for my children's futures.
I would have left this project entirely by now (the death threats are
numerous), if it were not for the world's dire need of Bitcoin succeeding.
Well, grieve then, because Bitcoin is doomed. Bitcoin intentionally
eschews two features that any long-term-viable blockchain cryptocurrency
MUST have, and I have seen Bitcoiners enthusiastically proclaiming that
any system with these features would not be Bitcoin.
Those two features are: (1) demurrage and (2) inflationary issuance.
Demurrage is an *absolute* *requirement* for any long-term-viable
blockchain system because it allows a limit to be set on the size of the
blockchain structure. Tokens MUST eventually become worthless, which
allows the blocks beyond some horizon to be dropped from the ledger.
Bitcoin refuses to do this, and therefore the Bitcoin blockchain
structure grows without bound. Storing the entire structure will be
eventually (perhaps after we are all dead of old age) become
impractical. This is even more morally outrageous, because we are
setting some future generation up for disaster if Bitcoin becomes widely
used. Bitcoin, as it stands today, *will* inevitably collapse /eventually/.
The most likely outcome is that demurrage will be effectively *forced*
onto Bitcoin, as "miners" set their own limits for how many blocks they
will store and simply drop transactions that they are unable to verify
because the sources are farther then /N/ blocks back in the chain.
(There is no way to stop a "miner" from "sifting" the transaction pool
however they want because there is no way to know what transactions a
"miner" *has* in its local pool.)
Inflationary issuance is similarly mandatory for a long-term viable
system. Even without demurrage, tokens will inevitably "leak" from the
system as wallet keys are lost, transactions erroneously sending tokens
to the bitbucket are issued, etc. Eventually, the tokens remaining in
the system *will* be insufficient to transact the amount of business needed.
Further, one of the functions of money is a stable unit of account. As
the use of a currency grows, its supply MUST increase, otherwise it
starts to look less like a currency and more like a pyramid scam. The
early adopters make out like the proverbial bandits---*if* they can keep
fooling people to buy in.
(It is possible that Bitcoin's "diminishing block reward" model could
work, but the parameters locked into Bitcoin are a bad fit for its
actual growth.)
Admittedly, finding a way to properly implement those features in a
trust-free distributed network is not easy, but punting on those issues
does not make them go away---it only makes your system a
limited-lifespan prototype. Bitcoin is therefore a limited-lifespan
cryptocurrency prototype.
-- Jacob
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