Bitcoin Cash Lead Developer Amaury Séchet Drops Rhetorical Bomb: BTC Devs as Rational Economic Actors

Amaury Séchet

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.

Amaury Séchet
Amaury Séchet

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, 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.

Amaury Séchet
F.A. Hayek

Ver and 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.

Three Platforms

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.”


Bitcoin Cash

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