Is Bitcoin Dying?

in hive-185836 •  2 months ago 

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With the Ethereum Merge behind us and successfully (so far...) done without too much fuss and hassle, it is interesting to see if the currently leading altcoin will flippen Bitcoin. More than one commentator in the space has already been sounding out the warning signs about the long-term Bitcoin security model with declining block rewards leading to vulnerability as miners start to desert the network. The only bulwark against that is IF (big if...) Bitcoin ends up being widely adopted as the internet money/reserve currency of the world.

Ultimately, this doesn't HAVE to be a problem... except that the social and governance layers have proven to quite resistant to serious upgrades and evolution to the core client. In some ways, this is quite okay... as you have a network with quite stable properties. But it does beg the question about how fast can it move if it really came down to it... if not for the long-term security problem, then for any potential attacks from outside... either through network dominance, or the inevitable decline classical asymmetric cryptography. Meanwhile, the highly idealistic social layer has essentially ostracised any potential voices that might be interested in helping to evolve the network in favour of those who share an equally ideological almost puritanical belief in the flawlessness of the network.

Ethereum (the next largest cryptocurrency) has attracted many of the original idealists that believed in cryptocurrency as a means for change int eh existing power structures and as a way of potentially providing the tools for humanity to better equip itself of a fully digital future.

So, the ground is set for a test of the two largest cryptocurrencies. With different consensus models, different user-models (UTXO vs accounts), differing use-cases, divergent communities... both are likely to be coming under quite a severe test of their respective strengths and weaknesses in the coming years. The OFAC blacklist of the Tornado Cash project was the first of many coming broadsides against the two public decentralised networks... it is possible that Ethereum will face a potential split if OFAC decides that it will pursue this path of blacklisting smart contracts and then forcing regulated entities to comply.

Meanwhile, Bitcoin will have to deal with its future problem in the event that the rosy assumption that it becomes the dominant world reserve currency... and even then, it will need to figure out a consensus model that will allow it to easily repel and drain attackers without resorting to the nuclear option of continual forking.

I think that both will have different tests... and as both have different strengths and weaknesses, it is quite likely that we will need both of them in the future to bring the vision of Satoshi to reality. Who knows which will succeed... or if it will be a third dark horse that proves to be the survivor... the only thing that is certain is that nothing is certain, and although Bitcoin has proven to be resilient to date... it hasn't needed to face the direct attention of a large nation state.

I have more faith in the Ethereum community and developers to bend and reform around any potential attacks, I fear that the current rigidity of the Bitcoin network is something that might prove to be too brittle when properly tested. But I'm not brave enough to put everything in one basket (plus, that is just not prudent in such a wildly unpredictable space...).... so, as per usual, I will have a bet both ways... and still keep an eye out for that dark horse, if it exists!

Meanwhile, I'm still interested in looking at interoperability, privacy, and floating "stablecoins". A touch of infrastructure, and a bit at the app level... now seems like a good itme to have a long shot bet!

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