Kraken down? I'm astonished to see there hasn't been any panic selling yet.
We only panic now if Elon tells us to panic on Twitter...
Well seeing as his "defacto layer 2" just failed, I imagine he will be telling us to shortly.
Actually this Elon/Doge/Defacto Layer 2 (banks) topic is extremely important to me so you are all going to get an exposition of exactly why Elon is a clown-fool even though he is really close to the truth. (So skip now if that would irritate you lol) The other real possibility is he is actively trying to destroy/subvert bitcoin, which would require him to be acting on a level HIGHER than what he is saying and therefore might just be as smart as many thought he was, but also evil. I bet on the fact he is massively lucky rather than smart, and his recent actions have been an ignorant showing of his ass rather than a well planned manipulation of things to gain control of the world's emerging financial network. Occam's razor, if you ask me. The former is just way more likely.
If you have read any of my tomes in the past, you would know I often speak somewhat positively of "Bitcoin Banks". This is a contentious position with OGs like us (and even the newcomers) because of the idea that banks are the enemy and Bitcoin banks would take part in all kinds of abominations such as fractional reserves, rehypothecation and all kinds of other shenanigans.
This whole issue strikes at two fundamental issues in Bitcoin which are often discussed, and though might be tiresome to continue to rehash (harhar) are important enough that we continue looking at them until we are clear of the sort of subversion that the smart/evil version of Elon could be up to. (doubt it)
1. All of this finds it's roots in our favorite block size debate. For bitcoin to scale it has two fundamental paths it can choose from - with exceedingly different tradeoffs. The direction Elon is suggesting Doge should go is (correctly pointed our here by Wuckert) already well under way in the big block vision for bitcoin. Complete with centralizing patents, lol
2. The vast majority are going to need to hire people to help them manage their wealth in Bitcoin. There is just no way around this. One argument could be that the tools to self-manage will get SO MUCH better that most could pull it off, but I have a hard time imagining this. Simple holes in this theory like the $5 wrench attack just can't easily be overcome. Sure we can use multi-sig and time locks etc to improve this but in the end MOST people (including most SMART ones) are going to need to hire someone to manage their BTC. Grayscale, Coinbase, Kraken etc. obviously have the right idea (in SOME ways) in establishing themselves as the sorts of trusted third parties you can really trust! (tm).
So why is Elon wrong? That's exactly what he is saying, right? That exchanges will be the de facto layer 2, and working on scaling on the base layer is a worthy idea in light of that.
No.
The problem does not lie in the fact that banks are centralizing forces. That is close, but not exactly there. The problem is if you centralize on the base layer, like Kurt wants us to do, then yes, ultimately bitcoin banks do not take anything away from you. Because we are never decentralized at all. So using a centralizing service on top of a centralized protocol is moot. It does not make any difference.
Whereas starting with a DECENTRALIZED protocol allows us to CHOOSE to use a centralizing service or NOT. That CHOICE is only available if we keep the base simple enough (and free of patents) to allow people to actually "be their own banks".
This is the distinction. It is not that we MUST "be our own banks". It is that we
CAN. That is the important detail. And that is what is worth fighting for.
That is also the proof to me that Musk is a fool.
Because his moronic vision for how "crypto" should work is already being patented by nChain. Though this is meaningless to Bitcoin... Wuckert has a point that Elon is just trying to reinvent the same retarded wheel that his project it staking claim to.
The other option, that Elon is being used by the
Powers that Be is a paranoid fantasy in my opinion. He is inadvertently fighting for those powers, and I am sure they are pleased with his contributions. It is just a matter of time before Carstens or LeGarde reaches out to him to slyly say "Boy... you seem to understand 'crypto' better than all the rest, perhaps you could help by being the face of our CBDC projects?".
These two approaches to the same thing look remarkably alike to an observer who is not keen enough to see the nuance. Just as a huge set of black and white concentric rings is going to look almost EXACTLY like the set of white and black ones. To Elon: "What's the difference?" To people that understand, the are fundamentally night and day.
This is why I think it is so important to keep talking about the fundamental reason that Bitcoin matters at all.
It is not so we can have fast, cheap digital payments. Even Satoshi almost seemed to miss this. And this is the main reason I also think Hal was not him, because Hal got it from the top. The whitepaper definitely describes the key element in Bitcoin's invention being the lack of need for trusted third parties, but the subtitle of the damn thing muddies the water, just because Satoshi had not gone enough levels deep in his understanding to know that it would be the FOUNDATION for decentralized (AND centralized) CASH SYSTEMS, but necessarily not that system itself, just as the engine is not the car. Maybe he did realize this, but did not recognize that he would need to be ultra clear about it. I doubt that though. However, I have little to no doubt as to what his opinion would be on where we are NOW in the wake of mining centralization and the blocksize debate.
So... Let's hope Elon finally figures out why he is showing his ass. Yet, let's also make sure to watch him carefully. Because he is very powerful (for better or worse) on the world stage and could definitely throw a $5 wrench into the works, purposely, or just by bumbling around - as he appears to be doing.
In the end. The REAL THING cannot be defeated. But the more clarity we have on what matters - the quicker that inevitable victory is fully realized.
Carolina.
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