A recent column by the Financial Times’ Jemima Kelly demonstrated some misunderstandings about Bitcoin’s decentralization and singularity.
This is an opinion editorial by Stephan Livera, host of the “Stephan Livera Podcast” and managing director of Swan Bitcoin International.
Financial Times Columnist
“On Tuesday, MicroStrategy announced that it had bought another 301 bitcoins, meaning this company alone now holds almost 0.7 per cent of the entire supply.”
Kelly claims to “steelman the argument” in this article, but unfortunately, she does a poor job steelmanning on the question of bitcoin ownership. If she grasped the libertarian and cypherpunk ethos of Bitcoin, she would understand that the point is to create a monetary system without coercing people into it. So, of course given this, there will be some people who get it before others do. Those who get it will buy, earn or mine coins before others do. The fact that one company owns 0.7% of the circulating supply of bitcoin is not an issue.
So, Bitcoin remains far more decentralized than the “crypto” coins.
“Third, a ‘first-mover advantage’ does not always last.”
That’s true in a general business context, however to understand why Bitcoin is distinct, we have to understand just why and how far it beats alternatives, be they fiat money, gold or altcoins. Generally, in order to displace another product, you have to come up with something ten times better. But with Bitcoin, it’s doubtful that ten times better is even possible. Here, I’ll quote my friend Gigi in his recent Twitter thread:
The design space of money is limited, and a ten-fold improvement on the monetary properties of Bitcoin is simply not possible. You can marginally improve one thing, but only by dramatically worsening trade-offs in other ways (verifiability, scalability, robustness, accessibility).
Kelly then writes again about the incentive of Maximalists:
“The real reason bitcoin maximalists want to separate bitcoin from the rest of crypto is to create the illusion of scarcity in a world where there is none.”
It’s fair to say that Bitcoin Maximalists have an incentive and want to distinguish bitcoin from “crypto.” But the real question is: Are they right? Yes, they are.
Bitcoin is rightly distinguished from altcoins, but it just takes a lot of research and reading to understand why. Unfortunately, Kelly has not done the research required and presents only a shallow surface level misunderstanding.
This is a guest post by Stephan Livera. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.