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RE: Crypto Fungibility and the Rise of Anonymous Coins

in #dash6 years ago (edited)

The ideal money should function as a medium of exchange, a unit of account, and a store of value.

The above is fundamental and tends to get lost in the mania and community division a lot of the time.

Some detractors of cryptocurrency may argue that assets like BTC are not a true "store of value" due to their volatility

This argument is — precisely as you write — no good, but a better one would be regarding the changed transaction parameters and fees on the BTC chain. While BCH may be a controversial alternative, it does return to the roots of what Bitcoin was created to be; A cheaply transferable e-cash, comparable in money function to gold coins.

When the fees can rise and fall wildly, when they are expected to rise to compensate for lost block reward, or when it becomes accepted that transactions must wait to be timestamped before being accepted as payment and may not be timestamped for days unless you hold a lot of economic or other power in the ecosystem (as if it were a typical fractional reserve based system), the fungibility of the individually transacted coin is seriously degraded and hence also the performance in each of the previously mentioned areas associated with good money. (Satoshi made a big point about this in the Bitcoin design and in several of his letters, but today it has become all too common to simply brush aside such reminders as "argument from authority" when it instead actually is a very important realization to make.)

BTC is leading a trend where it is considered unnecessary to have a chain with enough throughput and second layer solutions such as sidechains are counted as part of the main network itself. "Bitcoin is not a timestamp server" has become an increasingly popular position to hold, which misses the point of what nodes and timestamping meant and were intended for in the first place.

There was a time when Bitcoin was considered decentralized by default, when 3-4 anonymous network nodes (hashing nodes, or operators) were understood to be plenty, and when scaling at the pace of evolving computational power using SPV was known to be both safe enough and fully sustainable. None of this has been thoroughly refuted as no longer viable, but the crypto currency culture has changed to such a degree that it is hardly recognizable anymore.

As always, time will tell what works and what doesn't.

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"None of this has been thoroughly refuted as no longer viable, but the crypto currency culture has changed to such a degree that it is hardly recognizable anymore."

That's a very interesting observation, @the-ego-is-you - personally, I never thought about this as couched in cultural terms as opposed to technological ones. Many of us here at Exodus are fans of Electrum so we're no strangers to SPV! :D

We appreciate the resteem, we're now following your account and looking forward to checking out more of your thought-provoking content.

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