These were my prepared opening remarks on the Ossification Debate I had with @lopp at the Lugano Plan B Forum. It is published here for posterity.
Thank you to Plan B, the city of Lugano and everyone here for this opportunity to speak about this very important topic. It's an honor to be here and I hope to do my side justice.
Since the beginning people have had two predominant and wrong views of Bitcoin. The first is economic, that Bitcoin is not money for one reason or another. This error is usually made by economists and their followers, some even of the Austrian school. They reject Bitcoin because it does not fit their conception of what money is supposed be. Bitcoin obviously is money, and the 15 years of history disproves their theories so we don't need to refute this error here.
The second is that of Bitcoin primarily being a technology. This error is usually made by technologists because the innovations that they've seen in their lifetime are generally technical in nature. They are the proverbial hammer wielder thinking everything is a nail. Like other technologies they've seen, say mobile phones or apps, they think that it's a race to build new features and to win is to beat the competition through changes.
But this is a serious error and indeed is the main argument given by altcoiners and their ignorant investors thinking that a better mousetrap is what will win. 13 years of altcoin history also dispels this myth. Faster block times, different proof-of-work algorithms, more expressive but more buggy smart contract languages, alternative consensus systems, and much more have been tried but none of these features have gained much long-term traction let alone threaten to dethrone Bitcoin. More features are not what make money better.
To illustrate, go through this thought experiment with me. Imagine that the Federal Reserve added technology features into the dollar, for example, faster settlement times, expressive smart contracts, and even privacy, would those features make it better than Bitcoin? Would you switch to it? Obviously not because they can and do change the monetary policy all the time. In other words, features are not what make Bitcoin better. Bitcoin is better money, not just better technology.
Bitcoin is money first and technology second and it neither needs centralized management nor new features for adoption. Indeed, it's better for money to not change. The reason why the classical gold standard worked so well was because gold didn't change. In fact the properties of gold are such that it's fairly hard to change it, either at a macro level, where its supply expands at around 2% per year, or at the micro level where it's non-reactive and extremely durable. Money that doesn't change is better because people who own it can plan more effectively for the future. Nobody likes a game where the rules keep changing, particularly if it's designed to pick winners and losers.
This principle that money is better when it doesn't change is the basis of my stance in this debate. We want money to be predictable, so that when the unpredictable happens, we can use the slack afforded by our savings to get us out of unpleasant situations. So my bias toward ossification is derived from this principle. Bitcoin's value proposition is that it is sound money and sound money works best when its properties are known and predictable.
That's not to say that I don't want anything to change or be built. Just do them on other layers. It's for this reason that I don't like the word ossification. Ossification is a weird word to be using because the mental picture you get is of a fossil, something old, worn and no longer living. I think a better picture is that of a house foundation. We are building a whole new monetary system, and for that it's important to have a trustworthy and stable foundation to build on. And indeed, that's how I view the layer 1 of the Bitcoin protocol. It's the monetary foundation. You can build other things on top like Lightning, eCash, Sidechains, Ark, Statechains and the rest. The foundation underneath all of these layers must be stable and predictable for those innovations to mature.
We don't want to be changing the foundation because at this point millions of people are depending on it. The threshold for changing a house's foundation should be fairly high because it is a very difficult process and you may be damaging things built on top. Similarly, Bitcoin's foundation needs to be set so that other layers can have a chance to be built, to mature and to refine.
That said, I will concede that there are some really cool things from a technological perspective that you can build if you add a new OP code, for example. But that's not enough for me. It's not enough for a feature to be interesting, I need to see why a feature is imminent and necessary. If some critical cryptographic primitive is broken, that would necessitate change because the compromise of the system is imminent and presumably there are no other ways to fix the problem. To further my analogy, such an event would be like a destabilizing crack in the house's foundation, and though it's an invasive and difficult task, a destabilizing crack would justify repairs. But as I said, that's a massive cost to the entire ecosystem and should only be considered in a situation where there's grave danger to the entire system.
What is not enough is something that's necessary but not imminent. For example, we will need something to take care of the timestamp block header problem, but that's not until 2106. We don't have to solve that problem right now. What's also not enough is something imminent but not necessary. Some regulation that bans exchanges from sending to certain addresses may be imminent, but unnecessary. For me, imminent and necessary are the criteria.
In conclusion, what I view as important are Bitcoin's properties as money and the bar for change at this point, given how much value the network has, is pretty high. And I get the developer's perspective. They want new toys to play with, new primitives to work with. But the design space of Bitcoin hasn't been close to explored yet with features we already have. Between Segwit and Taproot, we have a crazy array of possibilities, as is being shown through BitVM, Ark and FROST. Changing things to satisfy the developers is the wrong motive, just as changing things to satisfy the Bitcoin businesses during the blocksize wars of 2017 was the wrong motive. Our priority should be Bitcoin as money. Not Bitcoin as art gallery, or decentralized exchange or digital archive.
I mentioned earlier that the error of many people that approach Bitcoin from an economics angle is to dismiss Bitcoin because of loyalty to an economic belief. Such an attitude comes from not just wrong economic beliefs, but also technical ignorance. I would implore you to not make the opposite error, which is to dismiss the economic and monetary reality of Bitcoin in favor of perceived technical benefits.
Bitcoin belongs to the community of people that own Bitcoin, not the economists and not the technologists. It is this community, you in this audience that Bitcoin belongs to and it is your needs are what Bitcoin need to serve. Setting a firm foundation is the path to doing exactly that.
Saying we don't need covenants because we can do them on a layer 2 is a gross misunderstanding of the entire point of covenants.
Covenants main benefit (in my opinion) is to enable multi party protocols / layer 2s. Without them we can only build 2 party protocols (lightning) without putting huge complexity and availability requirements that defeat the whole purpose.
This argument comes from the block size wars where it actually made sense, we don't want every transaction to happen on-chain, we want them on higher layers. Advocating for covenants is actually a continuation of this, we don't want to do an on-chain transaction to on-board every user onto bitcoin, ideally we can group hundreds to thousands of users into a single utxo and have them be onboarded in an infinitely cheaper way.
We can't do covenant functionality on a higher layer because we need covenants to be able to build the higher layers.
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Great post Jimmy.
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The White Paper was very specific in what Bitcoins purpose is- primarily a censorship resistant P2P payments protocol. That primary payments purpose was backed up by a 'hard money' strictly limited issuance never totaling more than 21 million Bitcoins, which protects holders from debasement and thus enables saving.
However the legacy fiat powers have observed this new money and responded slyly - at least in liberal western democracies not imposing an outright ban, which would result in an underground Bitcoin market that would be hard to control, but rather allowing limited CEXes and imposing KYC to enable tracking and tracing of ownership and use.
Secondly they have designated Bitcoin as a commodity- in direct defiance of the white papers very clear description of Bitcoin as a P2P payments system. By arbitrarily designating Bitcoin as a commodity it has been captured by tax obligations which make use of Bitcoin as a P2P payments protocol effectively impractical for anyone wishing to remain within the law. This has resulted in MoE use of Bitcoin being hugely obstructed and use of Bitcoin as a speculative commodity becoming by far the predominant use and perception. This has in turn evolved into ETFs and increasing institutional custody, which even further erodes the potential for P2P payments.
The subtle but relentless and progressive capture and control how Bitcoin is used prepares the protocol for an effective shutting down of Bitcoin as a P2P payments protocol. When institutional custody and KYC tracking has captured the greater majority of Bitcoin held then an Order 6102฿ would be most effective. They do not have to gain custody of all Bitcoin, but by gaining the majority it would be effectively captured and controlled.
So the development of Bitcoin is being steered away from its primary founding purpose and moved toward a model where it can be captured and controlled. The need is for pressure upon elected representatives to remove the obstruction of Bitcoin for MoW payments. The need now is for users to demand and apply their right to use Bitcoin as a P2P payments protocol.
This requires Bitcoin hodlers to become users of the protocol for both of its original intended purposes not just as a SoV but also as a MoE payments.
If we do not demand and apply use of Bitcoin as a payments protocol it is endangered and there is no apparent mechanism via any change to the protocol internally that can remedy that. It is a case of requiring Bitcoiners to understand and respond to the attack that is being mounted by legacy fiat monopolists- the banks and governments.
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The need is for pressure upon elected representatives to remove the obstruction of Bitcoin for MoW payments. The need now is for users to demand and apply their right to use Bitcoin as a P2P payments protocol. This requires Bitcoin hodlers to become users of the protocol for both of its original intended purposes not just as a SoV but also as a MoE payments.
This.
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How does owning a majority of tokens help control the system? That sounds like proof of stake.
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ETFs do not own Bitcoin token but they do hold custody of them. CEXes do not own Bitcoin tokens deposited by traders but do hold custody of them and KYC the custody when/if it is transferred to a trader. ETFs and CEXes deliver institutional custody at zero cost and sometimes profit to the institutions. Institutional custody means that those institutions control which fork they would follow in the event of a hard fork- all the ETFs explicitly declare they will decide which if any fork they would accept. Don't take my word for it see how Andreas Antopoulos explains it here-
Beyond giving these institutions the power to decide which fork to follow in the event of one in the case of an Order 6102B institutionally held Bitcoin would be either allowed, or would almost certainly comply with a confiscation order.
The original Order 6102 was highly effective because so much gold was already held by banks on behalf of citizens who had been entrusted with its custody by customers. The higher the level of institutional custody the more effective any confiscation ban on private custody can be expected to be.
An E.O. 6102B may well allow institutions to hold custody and only ban private citizens to hold. This would effectively end any lawful use of Bitcoin as a P2P payments protocol. They could frame it with AML FUD and protecting the USD.
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The fork scenario sounds a lot like the bcash fork. I'd imagine in such a case the price of each side would provide the necessary feedback to show that the institutional coin was inferior.
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If the institutional coin has taken the majority of the 21 million with it you might still have a problem... ETFs will hold custody of more than 50% of the Bitcoin ever issued within a decade at current rates of acquisition.
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From an anon-random pleb with a node... agree 2000%
  • "It's not enough for a feature to be interesting, I need to see why a feature is imminent and necessary."
Imminent and necessary. In other words immediate and unavoidable... as in immediate and unavoidable danger.
Imo Bitcoin doesn't need more 'features'... it does more than the vast majority of the world is using it for currently. It needs more education my 2 sats
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The conservative approach
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