TL;DR: Few ideas within the Bitcoin Cash (BCH) community are considered orthodox, but holding to how Bitcoin Core (BTC) developers have fundamentally misunderstood economics, especially in the quest to keep BTC blocks artificially limited, might be one. Bitcoin ABC’s Amaury Séchet recently took the opposite perspective, arguing BTC devs do indeed behave as rational economic actors.
Bitcoin Cash Lead Developer Amaury Séchet Drops Rhetorical Bomb
“The Bitcoin Core developers have demonstrated via their behavior,” Amaury Séchet concluded in a rhetorical bomb of an essay published on increasingly popular BCH-based blogging platform Read.Cash, “that they understand their economic incentives and are able to act as rational economic agents by making choices aligned with these incentives.” And while it might appear to be on the generous side, in a kind of praise or tip of the hat way to Bitcoin Core devs, Séchet’s formulation amounts to a kind of heresy for some in the Bitcoin Cash community.
At issue is the heart of what’s known as the scaling debate. For years, Bitcoiners passionately argued about the size of blocks and the implications of raising capacity. Arguments degenerated into a contentious hard fork of the protocol, and by August 1, 2017, the large block movement, as it was loosely known, had its coin: Bitcoin Cash. A key concept to better understand why BTC devs were so intransigent, so dogmatic in their refusal to raise block size, was to ascribe them a certain amount of economic illiteracy.
“On the other hand, people accusing them of being economic [ignoramuses],” Amaury Séchet continued, “have demonstrated an inability to understand the plurality of economic incentives that exist in the ecosystem, which is the [basis] of every economic [school of] thought.” By name, he pointed to perhaps BCH’s best-known advocate, Bitcoin.com Founder, Roger Ver as a particularly egregious violator.
Tight Leash and Collar
Ver and Séchet have been going back and forth on social media and via crypto news outlets and podcasts for months, disagreeing mostly about developer funding. By the beginning of this year, however, CoinSpice reported something of a thaw in their relationship was happening, that the two were engaged in active, productive dialog again. That thaw quickly iced back over with the Infrastructure Funding Plan for Bitcoin Cash (IFP) a few days later, authored by influential mining pool operator Jiang Zhuoer.
Ver and Bitcoin.com ultimately decided not to support the IFP. In fact, Ver was vocal in campaigning against it. Amaury Séchet and Bitcoin ABC attempted to rework the proposal, dulling some of its harder-to-swallow aspects for the community. The effort seemed to have the opposite impact, and opposition soon proved overwhelming. By early March, even Zhuoer vowed to help defeat the IFP in the immediate term.
And while Séchet’s recent polemic makes no mention of the IFP, its presence looms large, and so does Roger Ver. “On the other hand,” Séchet mused about the wisdom of certain Bitcoin Core dev decisions viewed as irrational at the time, “[had] they made an alternative choice, they’d have to deal with community leaders such as Roger Ver who [would] consider [placing them on a] tight leash and collar.” The leash and collar reference is to Ver quoting favorably from off-and-on crypto pundit Deryk Makgill (Derek Magill) back when the IFP was announced.
The quote in Séchet’s context served to underscore his contention Ver and those like him were the economic illiterates after all, and that BTC devs were wise to avoid outside constraints imposed by irrational investors. To Séchet, the economic irrationalism came as more demands were made by Bitcoin Cash big blockers upon development teams and yet no one wanted to fund such efforts in any serious way. BCH devs were expected to act against their own economic interests.
Séchet also referenced BCH community donation-only model funding campaigns that arose in response to the IFP’s perceived heavy-handedness such as Flipstarter. “On the other hand,” Séchet explained, “the larger block community just closed a funding round of roughly $500k that must [be] shared across 6 node software [teams] – and this has largely been reported from within the community as a success. My guesstimate is that it is more than an order of magnitude smaller than what is provided to the Bitcoin Core project – and for 6 projects. It is therefore not reasonable for Bitcoin Core developers to have found an alternative source of funding allowing them to make more than what they do now.”
His immediate summary ended by comparing the glibness of those who claimed to be Austrian School of Economics devotees. Citing Hayek’s pretense to knowledge on that score, Séchet linked Bitcoin Core devs to the institutions that support them, one commercial (Blockstream) and one academic (MIT Media Lab). Keeping blocks small made all the sense in the world, leading to business for Blockstream products and endless tinkering for MIT scientists. “We can therefore conclude that they made the rational choice by keeping [blocks] small when it comes to money,” he insisted.
Reaction to his heterodox contentions drew comments across three platforms: Read.Cash, Twitter, and Reddit. Roger Ver responded directly below the original post, stressing, “Like the Core developers, it seems like you also overlooked the easiest path to profit: Buy Bitcoin. Make it useful to people in commerce. Price goes up. That is a much more effective, safe, and simple strategy to earn a profit than Blockstream’s raising $100M+ from traditional finance, strangling Bitcoin, and then trying to sell products that fix the problems caused by the strangulation. Not only do Core developers not understand economics, but they are poor business strategists as well.”
IFP TIMELINE THUS FAR
- 01222020 Infrastructure Funding Proposal
- 01222020 BCH devs react
- 01232020 Jiang Zhuoer AMA
- 01232020 Amaury Séchet addendum to IFP
- 01242020 Bitcoin.com releases statement in support of IFP
- 01242020 Jonald Fyookball’s position on the IFP
- 01252020 Justin Bons, Tobias Ruck suggest voting on IFP
- 01252020 Antony Zegers support of IFP
- 01262020 Early market reaction to IFP
- 01262020 Anon dev imaginary_username’s reaction to IFP
- 01262020 Peter Rizun’s reaction to IFP
- 01272020 Opposing Miners Group
- 01272020 BUIP143: Refuse the Coinbase Tax
- 01282020 Bitcoin Verde’s reaction to IFP
- 01282020 Bitcoin.com drops support for IFP
- 01282020 BCHD’s reaction to IFP
- 02012020 Jiang Zhuoer heavily amends IFP
- 02032020 Ethereum’s Vitalik Buterin, Zcash’s Zooko Wilcox-O’Hearn react to IFP
- 02072020 More Miners Voice Skepticism at Bitcoin Cash Infrastructure Fund Proposals
- 02102020 Giving Bitcoin Cash a Fighting Chance
- 02102020 imaginary_username Speaks: He’s Working to Build a Developer Funding Alternative
- 02122020 Lockdown: From Mainland China, Bitcoiner Talks Coronavirus and Fallout for Crypto
- 02152020 Flipstarter: BCH Voluntary Commons Funding
- 02152020 Bitcoin ABC Will Implement Bitcoin Cash Infrastructure Fund of 5% During May 15, 2020 Upgrade
- 02162020 Roger Ver on Bitcoin Cash Infrastructure Fund Update: Too Controversial, Not Worth it at This Point
- 02162020 Bitcoin Cash Infrastructure Funding Update: BTC.TOP Founder Proposes 2/3 Hash Voting Threshold
- 02172020 Bitcoin Cash IFP Author, Influential Mining CEO to Chinese Bitcoiners: Decentralization is Key
- 02192020 Two Notable Bitcoin Cash Developers Announce Opposition to the IFP
- 02202020 Bitcoin Cash Developers Fork ABC Reference Implementation Client, Create “BCH Node”
- 02212020 First Bitcoin Cash Developer Meeting After IFP Proposal
- 02272020 Bitcoin Cash Node v0.21.0 Formally Released
- 03012020 Wrapping Our Heads Around the Infrastructure Funding Plan for Bitcoin Cash
- 03032020 Bitcoin Cash Node Team Releases General Roadmap Through November
- 03042020 Author of the Bitcoin Cash IFP Vows to Vote Against It, Using Personal Hash in Opposition
- 03242020 Brain Drain: BCH Dev Leaves for AVA and Has Choice Words for Community
- 04012020 Bitcoin ABC Launches $3.3 Million Fundraiser
- 04162020 Trustless, Non-custodial Assurance Contract Platform Flipstarter Launches Five Node Campaigns
- 04252020 PODCAST Bitcoin Cash Reference Client Looks to Raise Sustainable Funding
- 04262020 Bitcoin Cash Node is First to be Fully Funded on Flipstarter; $372,000 Pledged Across 5 Campaigns
- 05092020 PODCAST Amaury Séchet, May 2020 Upgrade Part 2: The IFP and Why it Remains in the Code
- 05142020 BTC TOP & CoinEx CEOs Join BCH Community During 3.5 Hour Pre-Upgrade AMA Livestream
- 05152020 Bitcoin Cash May 2020 Upgrade Completed: Controversial Funding Plan Rejected by Miners
- 05172020 Bitcoin ABC, ViaBTC & CoinEX CEO Publicly Consider a Bitcoin Cash Foundation
- 05252020 Notable Bitcoin Cash Business Owners Launch SLP Foundation
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