Bitcoin vs blockchain: why does anyone care more?
What began as a daring idea to create an alternative to the current monetary system is now beginning to turn into a full-fledged industry with its main players, basic ideas and rules, jokes and disputes about future development. The army of followers is gradually expanding, low-quality and staunch cadres are gradually being eliminated, a community is being formed that is more serious about projects of this orientation. As a result, two main fronts have now formed - those who see victory through the blockchain and try to improve the current reality through decisions on the blockchain; and those who see victory through cryptocurrencies and the formation of a new reality. Among the latter, it is important to highlight such a category as bitcoin maximalists, which are one of the strongest trends in this direction.
Quite often, the gaze of the war veterans turns not to the side of creating means and solutions for the victory they have chosen, but to the side of their fellows for moralizing about the adequacy of their approach. There are more loyal and soft articles in the direction of one of the approaches that do not try to denigrate the other side. There are more aggressive articles that are already trying to prove that their approach is more important and consistent. But there are those who are trying to reveal the cunning position of another author to convey their vision of the situation. I deliberately chose articles with almost the same headline so that you can clearly see how only one statement “who is important” can be presented differently.
The questions “who is important” and “who has brighter prospects” begin to turn into a kind of local taboo, because in addition to intellectual disputes like the above articles, they can also start a full-blown sracha that turns into a stupid argument “which is better: console or PC ”local sewing.
In this article I am not going to drown for one of the parties, but rather to show the pointlessness of this dispute. I don’t know what will come of it, I only hope that it will lead to a constructive dialogue, from which I can make important points for myself for the future.
Okay, stop pickling you with these preludes. I'll start with a couple of theses, which for some reason many forget.
Yes, bitcoin has a technological basis in the form of a blockchain, a large number of restrictions, built-in algorithms, the use of cryptographic functions and other things. Further improvement in bitcoin will most likely also be of a technological nature (the emergence of second-level networks of the Lightning Network type, the introduction of Schnorr signatures), and not economic (a change in the number of coins in circulation, a strong change in complexity to adjust the average block generation speed). All this is a feature of the Bitcoin network and the conditions in which it exists.
Bitcoin itself in the form of cryptocurrency is more of an economic category. The concept of bitcoin was originally created in the form of an alternative electronic transaction system, which will not need centralized moderation. And on the basis of this concept, bases have already been formed and infrastructure has been created that allows us to carry out our plans. As a result, we got a system that should solve the issue of trust in third parties. And where is there a significant degree of dependence on third parties and a requirement to trust them? In economics.
If the state pursues an unstable monetary policy, as a result of which “money” turns into a useless piece of paper, then such a state loses the support of its users, and they look for other ways to save their funds. Bitcoin's value is that it challenges a well-established system and provides a partial alternative to those who are looking for it. I do not want to delve into this topic now, as I have already written an article in which this question is revealed in more detail. But it was important to speak.
I think everyone has met articles where it is written that the implementation of the blockchain can change the whole industry. How blockchain will change life, the transportation industry, science, medicine, accounting, content making, the automotive industry and other joys. This is the first thing I got in a search engine.
Having read such articles, some people begin to imagine that blockchain is such a magical prodigy that can redraw our life far and wide. But, in truth, many of the proposed blockchain solutions can be implemented using a centralized system, it can even be more effective. There are projects that are a kind of blockchain analogue of an existing centralized solution. Using blockchain for the sake of blockchain is an so-so idea. Sometimes a blockchain can, on the contrary, become a problem and turn into a kind of Goldberg machine . I think it would look something like this on a blockchain.
I’m not saying that blockchain is a useless technology, you just don’t need to make any aspirin out of it. Blockchain at least proved its worth by the fact that on its basis a working protocol was created in the form of bitcoin. This is one type of application that can be created thanks to the blockchain. And in this case, it is the right technology for Bitcoin to work and ensure its concept, and not built-in ... just like that.
Blockchain is not only suitable for producing endless varieties of cryptocurrencies. It can also be used to create other applications, but only where it really is needed.
Now we will dwell in more detail on comparisons between blockchain and bitcoin.
Blockchain and Bitcoin are two different categories, so it makes no sense to compare between them who is more important and promising. For example, can you say which invention is more important - a car or a gearbox? It’s hard for me personally to answer him.
Bitcoin is not a technology, but a combination of technologies that forms a new category - an alternative monetary system. The car is also a combination of technologies that together created an alternative vehicle. In this case, the blockchain is a gearbox, since it is precisely the technology that helps the device (application) work according to a certain principle.
If you get the gearbox out of the car, you need not say that the car is now a meaningless bucket of bolts that cannot go anywhere without a box. A gearbox outside the car also has no value. What is the use of hanging out on your balcony? Thus, the value of each of the participants can be traced only in the case of joint work, and not separately.
But one does not need to think that these are mutually exclusive categories. You can create a car without a gearbox, like electric cars, where there is only one gear. In this case, we are just changing the approach. If the box principle is not used in the car, this does not mean that it is no longer a car. He is just different.
No one is stopping you from creating a cryptocurrency without a blockchain. The first thing that comes to mind is a directed acyclic graph or DAG, which is used, for example, in the IOTA cryptocurrency. They often try to sculpt IoT from the blockchain, which it is not designed for, in principle (although I do not deny it if someone succeeded). In turn, DAG is already more loyal to those who want to blind a cryptocurrency IoT, but it may require some features that are characteristic of the blockchain.
At the same time, the principle of the gearbox is used not only in cars or other vehicles. There is such a thing as a gearbox, and it is quite common in various machines. I have never worked in production, so I can not fully describe the importance of the gearbox for machines and its impact on the quality of manufactured products. I just think that it plays an important role for manufactories of different directions, because you cannot go far at the same speed and this greatly limits the capabilities of the machine.
And blockchain can be used not only for the idea of cryptocurrencies. Now they are trying to put the blockchain into the “machines” of different industries with the slogan: “Look at how many possibilities, how much it increases the transparency of the workflow, how it reduces the cost of storing and processing information, you no longer need to have 5“ machines ”at different speeds, you can use one universal “machine". Time will tell where this “machine" is really useful and for what purposes.
Remember the gearbox that is lying on the balcony? So, one of the main current arguments of its usefulness is that it can be used and converted for other, similar cars. I mean, a large number of current blockchains are very similar to the Bitcoin blockchain, as it is used as a template.
What does bitcoin do well? It decentrally and smoothly generates a block approximately every 10 minutes and conducts transactions, ignoring international borders and regulators. And in a way, that's all he does. There is a transaction - we send the transaction, and it is unchanged. It may seem to some that this is somehow not enough to be called a revolutionary technology or idea. For others, this is quite enough, because few can provide the same.
Here you can give an example of a hammer and hammering nails. Our Bitcoin will be the so-called standard hammer, and hammering nails into the wall is an ongoing transaction.
Some may think that some bitcoin is too simple, has a “truncated” functionality, or a slightly irregular shape. And what are they doing? Different hammers are stamped for every taste and color: someone changes the size of the hammer or pen (hi, Bitcoin ... something there); someone makes specialized hammers for certain jobs; someone attaches an ax or a nail clipper to the hammer on the other hand, trying to make it more functional; someone just adds rhinestones, because the hammer seems to him somehow sullen. And everyone says that his hammer is the best and most progressive. This is what Coinmarketcap looks like.
Sometimes it comes to a funny point when nails are hammered with a shovel (hello, ether), and then lovers of shovels rejoice, claiming that their adaptation is still capable of much. Um, guys, as if no one was stopping you from hammering nails with a shovel, but it was not created for this. It can really be useful when you need to build something new, but you do not need to state that, because of its simplicity, a standard hammer is flawed. Let every tool do what it was created for.
I think everyone will choose what is most convenient and important for him. Choosing users than hammering nails will be a good indicator of what is the best option for this task.
But the point is not that the Bitcoin blockchain or the concept of Bitcoin is used as a template that is borrowed to create its own solution. The dilemma is that many are equal to Bitcoin and its blockchain.
Bitcoin is a concrete idea and a concrete way to achieve it. And instead of creating your own ideas and your own path, or suggesting ways to improve bitcoin, someone just makes “your bitcoin”. The choice is, of course, good, but do we really need so many “our bitcoins”? As for me, the approach of “equal to bitcoin” limits the view, both on bitcoin and cryptocurrencies, and on the blockchain technology itself. Although, maybe I'm wrong.
But since the cryptocurrency community has more or less decided on the basic concept of how the cryptocurrency should look, then drawing further parallels with the automotive industry, we can say that bitcoin is a kind of Ford Model T. Although it can not be called the first car, since they were before, but it was he who first solved the main problem that prevented the initial mass adoption - cost.
The idea of cryptocurrencies was also in the air back in the 90s and there were attempts like Bit Gold, B-Money and Hashcash, but they all had one problem - centralization. And Bitcoin solved this problem, which gave him initial support among those to whom it was important.
And now the question is: does someone see Model T everywhere on the streets now? I think it’s unlikely that many of us saw at least one of these cars live. If anything, this is not a stone in the Bitcoin garden and not a statement that it will be irrelevant over time.
Those concepts and principles that we lay in modern cars are the evolution of the Model T. idea and design. The bitcoin that we know now will move away with time. Many basic principles will be modified and revised. The bitcoin of the future may be very different from the current bitcoin. It may lose some of the modern flaws, but it may well get new ones that we do not think about yet. Even that bitcoin that is now is not the same as it was 10 years ago.
It is not known what evolution process the original bitcoin itself will go through. Maybe the base will remain almost unchanged, and its second and third level networks will already undergo changes and development. Maybe we will constantly change only the base itself. Or he will remain that very ancient Model T, which will be collected and used as a store of conservation of value.
It is not necessary to immediately predict Bitcoin oblivion or success, because we do not know the future vector of its development. Speaking of oblivion: criticizing bitcoin and its blockchain is now very easy. And for those who like it, here is a small present in the form of a guide on how to do it right . I hope he helps you and simplifies your work.
The main thing is that criticism of Bitcoin and its ideas does not come down to a simple thought: “This carriage does not have a horse.” How can we be sure that it will take us, and how will we control it? Why come up with a complicated and incomprehensible mechanism to move around if we can just ride a horse? What makes you think that we will ride this if we have been riding horses for thousands of years? But what if it breaks? These are all important questions. Perhaps someone will partially be able to answer them if he does not just look under the hood, but tries to understand how “this” works and what it gives in the end.
Yes, a horse is an excellent and convenient centralized solution, but this does not mean that we will use it forever.
Since blockchain is technology, it’s easier for him to take over the world. It can be implemented, and then quickly enough to understand what it gives the results. You can constantly try and double-check until you find the best option, or do not discard it as unnecessary. No need to create a new reality and radically change the perception of people, you can just modify what is. Because of this, the blockchain seems more real, and therefore more promising.
Ideas like bitcoin are a little trickier. If technology is objective, then the idea is intersubjective. That is, its influence and credibility grows with the number of those who support this idea and see the point in it. Money, the state, religion, human rights, the idea of progress - these are all intersubjective ideas and myths, and the systems that were built around them are much more powerful than any technology.
Ideas are always stronger than technologies, but not always more promising than them. The idea can be implemented by various technologies, we just choose the approach. It recalls the words of Nassim Taleb: “Bitcoin will go through the ups and downs. And he may fail. But we can easily reinvent it, because now we know how it works. ”
Yes, now Bitcoin can become a kind of insurance policy, but I do not think that someone would like to get into a situation where a person will be forced to use Bitcoin, as is the case with Venezuela. Better when a person wants to use it. And you need to strive for this, dear cryptanarchists.
Although blockchain and bitcoin have the same sources, they have different development paths. No need to argue with the allies who is better and more important. It’s better to direct this energy to developing solutions that will allow everyone to triumph not in words but in deeds. Peace for everyone.
Quite often, the gaze of the war veterans turns not to the side of creating means and solutions for the victory they have chosen, but to the side of their fellows for moralizing about the adequacy of their approach. There are more loyal and soft articles in the direction of one of the approaches that do not try to denigrate the other side. There are more aggressive articles that are already trying to prove that their approach is more important and consistent. But there are those who are trying to reveal the cunning position of another author to convey their vision of the situation. I deliberately chose articles with almost the same headline so that you can clearly see how only one statement “who is important” can be presented differently.
The questions “who is important” and “who has brighter prospects” begin to turn into a kind of local taboo, because in addition to intellectual disputes like the above articles, they can also start a full-blown sracha that turns into a stupid argument “which is better: console or PC ”local sewing.
In this article I am not going to drown for one of the parties, but rather to show the pointlessness of this dispute. I don’t know what will come of it, I only hope that it will lead to a constructive dialogue, from which I can make important points for myself for the future.
Okay, stop pickling you with these preludes. I'll start with a couple of theses, which for some reason many forget.
Bitcoin is not a technology, but an economic idea
Yes, bitcoin has a technological basis in the form of a blockchain, a large number of restrictions, built-in algorithms, the use of cryptographic functions and other things. Further improvement in bitcoin will most likely also be of a technological nature (the emergence of second-level networks of the Lightning Network type, the introduction of Schnorr signatures), and not economic (a change in the number of coins in circulation, a strong change in complexity to adjust the average block generation speed). All this is a feature of the Bitcoin network and the conditions in which it exists.
Bitcoin itself in the form of cryptocurrency is more of an economic category. The concept of bitcoin was originally created in the form of an alternative electronic transaction system, which will not need centralized moderation. And on the basis of this concept, bases have already been formed and infrastructure has been created that allows us to carry out our plans. As a result, we got a system that should solve the issue of trust in third parties. And where is there a significant degree of dependence on third parties and a requirement to trust them? In economics.
If the state pursues an unstable monetary policy, as a result of which “money” turns into a useless piece of paper, then such a state loses the support of its users, and they look for other ways to save their funds. Bitcoin's value is that it challenges a well-established system and provides a partial alternative to those who are looking for it. I do not want to delve into this topic now, as I have already written an article in which this question is revealed in more detail. But it was important to speak.
Blockchain is not a panacea
I think everyone has met articles where it is written that the implementation of the blockchain can change the whole industry. How blockchain will change life, the transportation industry, science, medicine, accounting, content making, the automotive industry and other joys. This is the first thing I got in a search engine.
Having read such articles, some people begin to imagine that blockchain is such a magical prodigy that can redraw our life far and wide. But, in truth, many of the proposed blockchain solutions can be implemented using a centralized system, it can even be more effective. There are projects that are a kind of blockchain analogue of an existing centralized solution. Using blockchain for the sake of blockchain is an so-so idea. Sometimes a blockchain can, on the contrary, become a problem and turn into a kind of Goldberg machine . I think it would look something like this on a blockchain.
I’m not saying that blockchain is a useless technology, you just don’t need to make any aspirin out of it. Blockchain at least proved its worth by the fact that on its basis a working protocol was created in the form of bitcoin. This is one type of application that can be created thanks to the blockchain. And in this case, it is the right technology for Bitcoin to work and ensure its concept, and not built-in ... just like that.
Blockchain is not only suitable for producing endless varieties of cryptocurrencies. It can also be used to create other applications, but only where it really is needed.
Now we will dwell in more detail on comparisons between blockchain and bitcoin.
Car and gearbox
Blockchain and Bitcoin are two different categories, so it makes no sense to compare between them who is more important and promising. For example, can you say which invention is more important - a car or a gearbox? It’s hard for me personally to answer him.
Bitcoin is not a technology, but a combination of technologies that forms a new category - an alternative monetary system. The car is also a combination of technologies that together created an alternative vehicle. In this case, the blockchain is a gearbox, since it is precisely the technology that helps the device (application) work according to a certain principle.
If you get the gearbox out of the car, you need not say that the car is now a meaningless bucket of bolts that cannot go anywhere without a box. A gearbox outside the car also has no value. What is the use of hanging out on your balcony? Thus, the value of each of the participants can be traced only in the case of joint work, and not separately.
But one does not need to think that these are mutually exclusive categories. You can create a car without a gearbox, like electric cars, where there is only one gear. In this case, we are just changing the approach. If the box principle is not used in the car, this does not mean that it is no longer a car. He is just different.
No one is stopping you from creating a cryptocurrency without a blockchain. The first thing that comes to mind is a directed acyclic graph or DAG, which is used, for example, in the IOTA cryptocurrency. They often try to sculpt IoT from the blockchain, which it is not designed for, in principle (although I do not deny it if someone succeeded). In turn, DAG is already more loyal to those who want to blind a cryptocurrency IoT, but it may require some features that are characteristic of the blockchain.
At the same time, the principle of the gearbox is used not only in cars or other vehicles. There is such a thing as a gearbox, and it is quite common in various machines. I have never worked in production, so I can not fully describe the importance of the gearbox for machines and its impact on the quality of manufactured products. I just think that it plays an important role for manufactories of different directions, because you cannot go far at the same speed and this greatly limits the capabilities of the machine.
And blockchain can be used not only for the idea of cryptocurrencies. Now they are trying to put the blockchain into the “machines” of different industries with the slogan: “Look at how many possibilities, how much it increases the transparency of the workflow, how it reduces the cost of storing and processing information, you no longer need to have 5“ machines ”at different speeds, you can use one universal “machine". Time will tell where this “machine" is really useful and for what purposes.
Bitcoin kids
Remember the gearbox that is lying on the balcony? So, one of the main current arguments of its usefulness is that it can be used and converted for other, similar cars. I mean, a large number of current blockchains are very similar to the Bitcoin blockchain, as it is used as a template.
What does bitcoin do well? It decentrally and smoothly generates a block approximately every 10 minutes and conducts transactions, ignoring international borders and regulators. And in a way, that's all he does. There is a transaction - we send the transaction, and it is unchanged. It may seem to some that this is somehow not enough to be called a revolutionary technology or idea. For others, this is quite enough, because few can provide the same.
Here you can give an example of a hammer and hammering nails. Our Bitcoin will be the so-called standard hammer, and hammering nails into the wall is an ongoing transaction.
Some may think that some bitcoin is too simple, has a “truncated” functionality, or a slightly irregular shape. And what are they doing? Different hammers are stamped for every taste and color: someone changes the size of the hammer or pen (hi, Bitcoin ... something there); someone makes specialized hammers for certain jobs; someone attaches an ax or a nail clipper to the hammer on the other hand, trying to make it more functional; someone just adds rhinestones, because the hammer seems to him somehow sullen. And everyone says that his hammer is the best and most progressive. This is what Coinmarketcap looks like.
Sometimes it comes to a funny point when nails are hammered with a shovel (hello, ether), and then lovers of shovels rejoice, claiming that their adaptation is still capable of much. Um, guys, as if no one was stopping you from hammering nails with a shovel, but it was not created for this. It can really be useful when you need to build something new, but you do not need to state that, because of its simplicity, a standard hammer is flawed. Let every tool do what it was created for.
I think everyone will choose what is most convenient and important for him. Choosing users than hammering nails will be a good indicator of what is the best option for this task.
But the point is not that the Bitcoin blockchain or the concept of Bitcoin is used as a template that is borrowed to create its own solution. The dilemma is that many are equal to Bitcoin and its blockchain.
Bitcoin is a concrete idea and a concrete way to achieve it. And instead of creating your own ideas and your own path, or suggesting ways to improve bitcoin, someone just makes “your bitcoin”. The choice is, of course, good, but do we really need so many “our bitcoins”? As for me, the approach of “equal to bitcoin” limits the view, both on bitcoin and cryptocurrencies, and on the blockchain technology itself. Although, maybe I'm wrong.
Why Bitcoin is Model T
But since the cryptocurrency community has more or less decided on the basic concept of how the cryptocurrency should look, then drawing further parallels with the automotive industry, we can say that bitcoin is a kind of Ford Model T. Although it can not be called the first car, since they were before, but it was he who first solved the main problem that prevented the initial mass adoption - cost.
The idea of cryptocurrencies was also in the air back in the 90s and there were attempts like Bit Gold, B-Money and Hashcash, but they all had one problem - centralization. And Bitcoin solved this problem, which gave him initial support among those to whom it was important.
And now the question is: does someone see Model T everywhere on the streets now? I think it’s unlikely that many of us saw at least one of these cars live. If anything, this is not a stone in the Bitcoin garden and not a statement that it will be irrelevant over time.
Those concepts and principles that we lay in modern cars are the evolution of the Model T. idea and design. The bitcoin that we know now will move away with time. Many basic principles will be modified and revised. The bitcoin of the future may be very different from the current bitcoin. It may lose some of the modern flaws, but it may well get new ones that we do not think about yet. Even that bitcoin that is now is not the same as it was 10 years ago.
It is not known what evolution process the original bitcoin itself will go through. Maybe the base will remain almost unchanged, and its second and third level networks will already undergo changes and development. Maybe we will constantly change only the base itself. Or he will remain that very ancient Model T, which will be collected and used as a store of conservation of value.
It is not necessary to immediately predict Bitcoin oblivion or success, because we do not know the future vector of its development. Speaking of oblivion: criticizing bitcoin and its blockchain is now very easy. And for those who like it, here is a small present in the form of a guide on how to do it right . I hope he helps you and simplifies your work.
The main thing is that criticism of Bitcoin and its ideas does not come down to a simple thought: “This carriage does not have a horse.” How can we be sure that it will take us, and how will we control it? Why come up with a complicated and incomprehensible mechanism to move around if we can just ride a horse? What makes you think that we will ride this if we have been riding horses for thousands of years? But what if it breaks? These are all important questions. Perhaps someone will partially be able to answer them if he does not just look under the hood, but tries to understand how “this” works and what it gives in the end.
Yes, a horse is an excellent and convenient centralized solution, but this does not mean that we will use it forever.
A bit about the prospects
Since blockchain is technology, it’s easier for him to take over the world. It can be implemented, and then quickly enough to understand what it gives the results. You can constantly try and double-check until you find the best option, or do not discard it as unnecessary. No need to create a new reality and radically change the perception of people, you can just modify what is. Because of this, the blockchain seems more real, and therefore more promising.
Ideas like bitcoin are a little trickier. If technology is objective, then the idea is intersubjective. That is, its influence and credibility grows with the number of those who support this idea and see the point in it. Money, the state, religion, human rights, the idea of progress - these are all intersubjective ideas and myths, and the systems that were built around them are much more powerful than any technology.
Ideas are always stronger than technologies, but not always more promising than them. The idea can be implemented by various technologies, we just choose the approach. It recalls the words of Nassim Taleb: “Bitcoin will go through the ups and downs. And he may fail. But we can easily reinvent it, because now we know how it works. ”
Yes, now Bitcoin can become a kind of insurance policy, but I do not think that someone would like to get into a situation where a person will be forced to use Bitcoin, as is the case with Venezuela. Better when a person wants to use it. And you need to strive for this, dear cryptanarchists.
Although blockchain and bitcoin have the same sources, they have different development paths. No need to argue with the allies who is better and more important. It’s better to direct this energy to developing solutions that will allow everyone to triumph not in words but in deeds. Peace for everyone.
Do not offend horses