Sometimes I feel I know a lot about Bitcoin, blockchain, how the crypto space properly functions, and how it will most likely evolve.
From time to time, I even consider myself an expert. But then reality strikes when you happen to have a chance to speak to a Bitcoin community superstar like Jimmy Song.
Jimmy has been a programmer for most of his life and joined the Bitcoin space in 2013. He’s a lecturer at the University of Texas and the author of the awesome book Programming Bitcoin: Learn How to Program Bitcoin from Scratch (which you should definitely read if you’re into Bitcoin technicalities).
The conversation was really amusing and Jimmy was quite transparent and straight to the point, as he usually is. Check out a clip from our talk below.
Private vs public blockchains
Due to the fact I’m constantly being bombarded with private blockchain-related questions, I made sure to start by asking Jimmy his views on the subject. Can there be private blockchains? His logic cut straight through the fog of doubt. As he put it:
“There can certainly be private blockchains […] but there’s no real point to it if there’s a central point of failure or somebody who controls the whole thing, whether you call it an ordering service or some sort of central coordinator.”
Plus, what is the purpose of having decentralised technology being run by a strict group of people? As I usually say, if one thinks of Bitcoin as the internet of money, one can think of private blockchains as the ethernet of money. Does it still sound amazing? I have my doubts. Try doing an exercise I like to do to make sure I understand the definitions of words. For instance, we could say a blockchain is a public distributed ledger. Does it make sense to have a “private-public distributed ledger”?
Maybe it does for some unknown reason. I see a case where companies might want to integrate a distributed ledger-type solution to promote transparency among themselves, but when you make such data public to a blockchain, it cannot be removed, so you better hope whatever you’re putting there isn’t sensitive or might fall under GDPR compliance, for example.
How will Bitcoin evolve?
When we started discussing Bitcoin, one of the things I wanted to understand is why Jimmy is considered a Bitcoin maximalist. A Bitcoin maximalist is someone who believes Bitcoin to be the ultimate form of cryptocurrency, given its properties and community.
Jimmy started by explaining why he fell in love with Bitcoin.
“Bitcoin is the only [cryptocurrency] that is decentralised – everything else has a central point of failure. Bitcoin, to me, is the only one that is decentralised and digital, and we didn’t know we could have that until Satoshi Nakamoto did it. People buy these other cryptocurrencies because they do not understand the value preposition [of Bitcoin] and what money is.”
Although I consider myself an altcoin investor, as I do own altcoins, I completely understand (and agree) with Jimmy’s assertion of Bitcoin and the crypto space. It is true that there’s no other cryptocurrency as decentralised as Bitcoin. Even though in some metrics some other cryptos like Ethereum for example might appear decentralised, I don’t think it would be fair to say they can match Bitcoin, simply because the network effects of Bitcoin have played a huge part in connecting people financially worldwide.
And no, I’m not forgetting the hundreds of tokens that exist thanks to Ethereum, nor the brilliance of gaming dApps and DeFi, which gave rise to CryptoKitties and MakerDAO respectively.
Still, I consider Bitcoin to be above all else in terms of real utility. What it does, it does so well there is no way to stop it.
No regulation, law, government, or company can stop Bitcoin, and that is its value preposition.
On a similar topic, I did ask what Jimmy thought of adding privacy features to Bitcoin, as it could probably increase confidentiality for users:
“There’s already a bunch of stuff like bulletproofs and zk-SNARKS that give you full privacy […] but people usually don’t care. The problem is that privacy is kind of hard. You can’t have perfect hiding and a fixed supply at the same time.”
The fact your math may break and you may never notice it means you cannot have a fully-private currency where you guarantee the supply is fixed, for the simple fact that transactions are private – meaning if someone manages to break the algorithm and effectively change the supply, you may never notice it.
The Lightning Network
I asked Jimmy about how Bitcoin could scale, and he touched on the subject of micropayments and the Lightning Network (LN) and how it could improve Bitcoin’s usability.
“Lightning allows you to do payments really fast, and it also allows for micropayments – things we never had in the economy until now. It’s hard to say. We know BTC is a really great store of value. Micropayments? You can sort of do it in other platforms, so I guess that will increase competition, which is a good thing in the end. But the real value purpose of Bitcoin is store of value.”
I personally believe the LN could be a great tool for people to see Bitcoin as a currency as well as money, as up until now the major issue with Bitcoin was transaction times. Because the LN allows for micropayments, e-commerce platforms could properly use Bitcoin with minimal hassle.
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— Jimmy Song (호들놋) (@jimmysong) November 16, 2017