The assault on Bitcoin is an issue which in itself deserves a treaty. What motivates you ? How it is being executed? What are the forces in conflict? What factors favor it ? What factors counteract it ? How it repels ? When asked on each of these points opens before us a range of disciplines that would have delighted Carl von Clausewitz .
We watched last month to try to anticipate what awaits us. The assault on Bitcoin has triggered a sequence of events that, in our opinion, is as predictable as the phases of the moon. Many wonder when it will be each one of those-particularly the last events: the fall of Blockstream-. That, of course, we know not; no one can know. The "how", however, can itself be glimpsed; and that we will work today to try to identify some processes that guide and modulate the contending forces in this new battlefield.
A common mistake often committed by supporters of Bitcoin Core, is to confuse the inertia of the status quo with the massive and enthusiastic adhesion of Bitcoin users. The premise can be reduced to the following argument: "The market reveals the preferences of people. Core is now the most used customer. Therefore, now the market prefers Core ".
Although syllogistically valid, the argument contains two errors: one in the initial proposal and another in the conclusion.
First, it should be noted that in the absence of mechanisms for the market to efficiently express user preferences, it is not possible to know "what the market prefers" now. Under current circumstances (absence of a futures market forks Bitcoin, among other catalysts), infer that "the market prefers Core" is to infer that a gagged woman is tacitly condoning acts of her rapist, or the inhabitants of East Berlin that did not risk their lives to cross the wall were under Soviet policies.
Second, although the use of personify concepts to explain certain phenomena can be pedagogically useful, it should be recalled that the market is not a man who makes decisions. "Market" is a highly abstract concept that serves to bring to an understandable level the extremely complex interaction between supply and demand for goods and services in a large order. If the demands of users (savers, investors, consumers, merchants, payment processors, etc.) are not taken into account (because they are irrelevant in view of the central planners), the market, by definition, is not being given account.
To illustrate the characteristics of the assault on Bitcoin, as well as the challenge of organizing effective resistance, best analogy I can not think of a people that invaded and occupied by a foreign army. Assuming that the vast majority of people want to expel the invaders, and the invaders are properly incentivized to impose their will on local, what options do the latter?
Launch a massive frontal assault may be tempting. But if the attack on the invading forces is not simultaneous, determined and persistent, the chances of success are practically nil. In Bitcoinlandia, this would be equivalent to throwing a fork untimely.
Again, that people are not rebelling actively and explicitly does not mean that everyone is satisfied with the presence of the invaders. Although the villagers invaded have a common goal (to expel the invaders) may not end the occupation if they do not act simultaneously, determined and persistent. We have, then, a problem of sicronización.
Once infiltrated local institutions, the great advantage of the occupying army is what you would call social inertia. In other words, the occupants have in their favor the force of the convention, or simply the force of precedente-. Under the new government, if a person has to make a municipal process, it will head to the same building in which he had previously made a similar process, although all city employees are now -a reluctantly or not at the service of the invaders.
To understand the social dynamics that has facilitated and sustained assault on Bitcoin, as well as obstacles faced by attackers, you need to become familiar with the concept of point Schelling.
Schelling point is that place in which naturally converge and scattered social forces are enhanced. In the above example, the municipality brings together people with pending proceedings and despite his displeasure with the new government, do not find a safe and effective way to communicate your preferences or to coordinate their actions to enforce their preferences. The power of the occupiers is thus reinforced.
This explains why Blockstream has set its sights on Bitcoin and not in any other cryptocurrency: for the same reason that an invading government seeks to assault the institutions of a society already established, rather than venturing into the virgin forest to face many dangers with the difficult, remote and improbable goal of building a productive society that can be despoiled. Control of local institutions without great effort allows access to the wealth created and accumulated in the conquered territory.
The invaders are attracted by Schelling points because these are foci in which the productive efforts are already concentrated. For Bitcoin, the gravitational power Schelling point is a function of the network effect; and the net effect is the great promoter of economic growth that has been deployed around Bitcoin over the years. Strictly speaking, the goal of the invaders is not Bitcoin, but the resources that Bitcoin has attracted thanks to its potential as a universal currency resistant to manipulation.
Stung by an unshakable ideal, one day ventured Satoshi Nakamoto, machete in hand, in the unexplored jungle. Alone and ignored if not despreciado- by his peers, he grappled for years in the hostile wilderness with all kinds of poisonous creatures, unforgiving insects and stealthy predators, until finally managed to clear the land on which founded the city that today we all inhabit .
Potential invaders know how much easier it is to hijack the network effect to play starting a new project. Thus, the inhabitants of Bitcoinlandia have to get used to living with the threat of invasion -before and after the fall of Blockstream-, while we perfect the science and art of repelling invaders.
Now let's see what advantages has the resistance to the occupation:
Bitcoin lacks a governing center from which it is possible to force people to hand over their wealth. In that sense, it is more like the backwoods that a people whose institutions may be subjugated.
Bitcoin users can act against the interests of Blockstream without compromising (in fact, strengthening) the network effect, but Blockstream can not act against Bitcoin users without compromising network effect.
The resistance is strengthened as abuses of occupants increases the incentive to mount an effective local rebellion. And we can count on it, because Blockstream need to squeeze increasingly Bitcoin users to keep their investors happy.
When the interests of users ultimately converge on a new point of Schelling, inertia happens to play for change and detrimental to the status quo.
Remember, Bitcoin is not a sprint but a marathon. If you prepare for the first intending to compete in the second, you lose your patience very fast and your money.