None of the Bitcoin projects are actually Bitcoin. I can say that simply and categorically because 'what Bitcoin is' was laid out clearly and simply in the Bitcoin white paper entitled "Bitcoin: A peer to peer electronic cash system". The clue is in the title. It's electronic cash.So why is BTC, BCH, BSV etc etc not electronic cash? Well, let's take a look at the properties of cash. Wiki lists the properties as being Fungibility, Durability, Portability, Cognizability and Stability.So let's look at fungibility. Fungibility means all coins are of equal value. If a coin/address can have a history then it isn't fungible. Fungibility in Blockchain requires privacy by default at the base layer.People mistakenly use fungibility to mean 'cleaned'. But if you think about it, the fact that coins might need to be cleaned (ie they weren't of equal value) shows the currency to not be fungible.Do any of the Bitcoin projects pass the fungibility test? No, categorically and emphatically no. We've already seen freshly minted BTC commanding a higher price than circulated BTC. Also we've seen circulated BTC trade for less than market value on DEXs like Bisq.Why is fungibility important? Well, fungibility ensures that a merchant can confidently accept a coin, and that when he goes to spend it, he isn't told that actually that particular coin is tainted and is infact worth significantly less than market value (or confiscated outright).So why don't any of the Bitcoin projects switch to private by default to become sound money?Well a number of reasons. Firstly, it would require a hardfork, something a lot of OG bitcoiners would consider an action of last resort. A change like this would break a lot of the existing infrastructure (wallets etc) that have been built on the transparent blockchain technology.Secondly, people are fearful that a 'private by default' Bitcoin would become a target for regulators. That it would be banned. "But surely the whole cypherpunk ethos of Bitcoin is decentralized censorship resistance?" It was in it's beginning, however over the years (and the increase in price) it has become more centralized, and more utilized as a speculative vehicle than an actual government resistant currency. A lot of people's fortunes and security are tied up in Bitcoin continuing to raise steadily in value. Even the hint of a regulatory crackdown wouldn't sit right with them at all.So the outcome? We have multiple projects that all claim to be Bitcoin, while infact none of them are. And while they all still might give you a return during the next speculative bullrun, the underlying utility that promised their future value is missing and unlikely to ever be reclaimed.
Submitted December 16, 2019 at 08:25PM
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