What makes a cryptocurrency work? What makes a traditional currency work? Do they even work, and if so, for whom? As you might have noticed if you followed the so called “scaling debate” in the Bitcoin space during 2017, Bitcoin is very resilient to change. Some people think that this is a sign of weakness. They argue that the consensus mechanisms of the Bitcoin protocol makes upgrading slow and tedious and that the protocol won’t be adaptable enough when better techniques are implemented faster in competing protocols. This is a huge misunderstanding of how blockchain technology works. It works because its decentralized. This is the one single property that sets Bitcoin apart from the rest. Software can always be altered or changed. No program is completely immune to this. Even Bitcoin’s famous 21 million coin creation cap could be changed at some point in the future but only, and this is a big only, if there was 95% consensus among users that doing so would be a good idea. Bitcoin was invented as an alternative to fiat currencies whose supply can always be increased by the whims of politicians, central bankers, counterfeiters and other criminals. In other words, changing the protocol has to be hard. If it was easy to alter the rules of the system it would be easy to cheat the system.
No other cryptocurrency has achieved a level of decentralization even close to that of Bitcoin. All the other cryptos have inventors or spokesmen who influence software decisions. Some even claim to “follow Satoshis original vision” with their Bitcoin clone, forgetting what’s at the very core of satoshis idea — decentralization. Satoshi didn’t want to rule Bitcoin. Satoshi wanted Bitcoin to be governed by its consensus rules and to get out as soon as decentralization was achieved. Ethereum was split in half when a bug destroyed a couple of million dollars. Ripple is a company. IOTA is a foundation. Dash developers have economic incentives hard-coded into their blockchain. Monero and other privacy focused coins are impossible to track and could therefore be pre-mined to any extent. The only example of an altcoin that tries to signal that they value decentralization would be Litecoin. Its inventor, Charlie Lee, recently claimed that he sold his share, arguably both an admirable and a clever thing to do if you want your coin to be regarded as legit for a long time. But even Litecoin is a lot easier to tamper with than Bitcoin. Segregated Witness, the big protocol upgrade of 2017, was activated in Litecoin well before it was activated in Bitcoin. Litecoin even markets itself as “the silver to Bitcoin’s gold” which gives a hint at what goes on under the surface.
Whatever properties an “alternative cryptocurrency” claims to have doesn’t matter as long as they’re not firmly grounded in decentralization. This is no easy task and you can’t just conjure up decentralization out of thin air as you can with paper money, tokens or altcoins. There is one invention here, not many. The invention is called the blockchain and its underlying technology is called Bitcoin, which is the token native to the blockchain that makes it tick and keeps it decentralized. Not the other way around.
Three Coins for the Ether-kings in their gassy cloud,
Seven for the Airdrop-lords, whose rules weren’t set in stone,
Nine or more called Mortal Alts doomed to die,
One for the future that could not be dethroned
In the Land of the Internet where the fake news lie.
One Coin to rule us all, One Coin to find us,
One Coin to bring us all, and in consensus bind us,
In the Land of the Internet where the lol-cats lie.