We do the research, you get the alpha!
Vitalik Buterin has hurt a man's feelings. It all started when he tweeted this:
“Kinda disappointed @Deconomy_forum is again giving airtime to BSV shills, this time a panel of them,” Buterin had written. “At least there's some hilarious quotes...my favorite was that Segwit is bad because separating signatures from transactions ‘has legal ramifications.’”
He was referring, in part, to a man named David Lancashire, the founder of a blockchain project called Saito. Lancashire’s crime, apparently, was to bring up Bitcoin SV—the widely maligned hard fork of Bitcoin Cash—on a panel about Bitcoin scaling at a popular conference. Bitcoin purists and non-purists alike were aghast at the man’s presence, with Bitcoin educator Andreas Antonopoulos calling it “disappointing.”
Rather than being a shill, however, Lancashire maintains he was invoking the hated cryptocurrency because of its alternative approach to so-called “free riders” on the Bitcoin network.
In a vast treatise dispatched to Decrypt, Lancashire mounted his defense.
“I was caught red-handed,” he began. “It’s all there in this tweet from Vitalik Buterin, which shows me on stage at Deconomy, arms outstretched and shilling BSV with all of my God-given might. Except that isn’t what happened at all.”
What did happen, he said, was “a discussion of collective action problems in bitcoin.”
“For those unfamiliar with the term,” he explained, “collective-action problems are a type of market failure and the most significant impediment to on-chain scalability.” An example of a collective action problem is the “free-rider problem,” where users cost a network more than they make it.
All he was doing in bringing up SV, he said, was drawing reference to the currency’s solution to this problem—to incentivize miners to collude with one another to push free riders off the network.
“Far from shilling BSV, one of my points at Deconomy was that this has serious consequences: for miners to be able to punish defectors by denying them transaction flow requires a certain amount of collusion in the network. Will BSV hit the sweet spot? Is there even a sweet spot?”
“So simply taking offense at the mention of BSV is silly,” he continued. “We all understand that Vitalik has an ongoing feud with [Bitcoin SV cheerleader/lead developer] Craig Wright. But like Craig or hate him, the BSV position is important because it articulates an economic solution: the classic proof-of-work insistence that miners will sort it all out.”
The only cryptocurrency Lancashire is shilling? His own.
“This is why I am working on Saito, an application platform that fixes these underlying incentive issues on the most fundamental level,” he said. “And I mention this merely so there is no confusion that when I shill, I shill Saito.”
It’s worth noting: Lancashire definitely is biased toward SV, which he described in a blog post on last year’s fork as “essential for the security of proof-of-work as a governance mechanism,” while slamming Bitcoin Cash proponent Roger Ver.
But so what? As Farmville developer James Young told me at ETHDenver, shilling is in fact a virtuous affirmation of the free markets.
So, in that spirit, read my newsletter.