About a year ago, my friend Vitalik Buterin coined the term “Bitcoin maximalism” ter an epic postbode, On Bitcoin Maximalism, and Currency and Verhoging Network Effects, and I encourage anyone to read it, or re-read it. Despite it being a year old (which is maybe Four years omschrijving after conversion from the dog years cycle that cryptocurrency innovation is living on), the article wasgoed prescient and reads spil if it wasgoed written yesterday. The same issues discussed then are still gevelbreedte and center, today: cryptocurrency network effects, Bitcoin vs. non-Bitcoin, and Bitcoin blockchain vs. non-Bitcoin blockchains.
More recently, an article by Chris DeRose of the Counterparty Foundation wasgoed titled “Private ‘Distributed Ledgers’ Miss the Point of a Blockchain”, and Erik Voorhees indirectly responded with “It’s all About the Blockchain”. Erik’s article might spil well have bot titled “If you don’t use Bitcoin, you Miss the Point of a Blockchain”, because it wasgoed tilting towards a Bitcoin maximalist view of the world. But let’s not digress.
Eventually, Fred Wilson riffed on the Economist’s blockchain-related voorkant pagina article, asking Are Bitcoin and the Blockchain Joined at the Hip?, a not-so-new debate, but one that Fred likes to engage ter via the “network effects” objectief, which is an argument that has some merits, but that I already covered a few months ago, ter It’s Too Early to Judge Network Effects ter Bitcoin and the Blockchain, ter addition to Vitalik’s own coverage te the above referenced postbode.
With that backdrop of points and counterpoints, I’m going to advocate that wij should rather think of “Blockchain maximalism”. Blockchain maximalism takes a purist view and goes after a Blockchain “full-stack” treatment, advocating that it’s an all-or-none situation.
Therefore, wij could shift the discussion towards one where wij attempt to understand more deeply the various nuances around the benefits and drawbacks of having a “full-stack” blockchain versus “non full-stack” one.
Spil evidenced by the multiplicity of variations te the blockchain technology concept, wij are witnessing various degrees of implementations, and if wij vereiste accept that spil a market reality, at least wij need to understand what wij give-up when certain lumps of the “stack” are intentionally missing.
This begs the question I asked te the title: Are wij at the dawn of a fresh alphabet soup of technologies, or a fully organized stack? And which is the better treatment?
The list of “compromises” is getting long: blockchain without bitcoin, bitcoin without keys, ledgers without mining, overeenstemming without bitcoin, ledgers without tokens but with assets linked to receipts, overeenstemming without mining, etc.
Let’s take a few dives into some of thesis compromises, so they can be understood.
Bitcoin with No Keys
The very first compromise made wasgoed Bitcoin without keys. When a user logs-in to an exchange and they are only required to use a password for access, the webpagina is actually holding their keys, not them. The password is a proxy to the keys.
Loss: User-controlled security. Advanced account features.
No Bitcoin Blockchain
That wasgoed the 2nd thing that newer blockchains did. They either forked Bitcoin and created a meta-protocol (e.g. Counterparty or Mastercoin), or designed comprehensive fresh blockchain platforms (e.g. Ethereum).
Build up: More powerful programmability. Sometimes a fresh coin. Self-economic viability.
Loss: No a priori Bitcoin network effects. Higher risk of survival without traction.
Bitcoin and Ethereum are permissionless blockchains, which means that anyone can participate ter the economics or operations of the network without a specific permission to do so, i.e. by just “buying” their way into it. A permissioned blockchain only authorizes a known set of users to be actors.
Build up: More security (theoretically). Smaller networks, therefore lighter to manage (theoretically).
Loss: Openness. Censorship resistance.
No Mining, Permissioned
Mining is the mechanism what clears and validates transactions, while ensuring security against Sybil attacks. “Private blockchains” see no value te mining, therefore eliminate it ter order to eliminate the potential risks it might introduce.
Build up: Don’t need to worry about Sybil attacks. More security due to privacy fencing.
Loss: Economic crowdsourcing of network’s operations. Openness. Inclusion.
Distributed Ledgers without a Cryptocurrency Token
Distributed, replicated ledgers on their own aren’t a novelty, strafgevangenis a disruption. The novelty arises when they are associated with a tokenization or pseudo-tokenization of sorts so that a blockchain state transition can release assets during a settlement act.
Build up: No outer currency fluctuations.
Loss: More expensive network to maintain.
The above list can most likely be expanded further because entrepreneurs are creative, and they keep thinking of various permutations that could potentially exist.
But if the flawless kicking off point is a full-stack blockchain spil depicted above, how much functionality you liquidate is a key consideration when assessing the potential benefits one can derive from that blockchain. The more unspoiled, the more benefits te terms of innovation, disruption and reengineering potential. The more stack layers you liquidate, the more you need to be realistic about the benefits expectations you will derive from a blockchain adoption.
There is a case for making your own blockchain meal based on an a-la-carte alphabet soup spijskaart, but there is also a case for gaining benefits from being closer to a full-stack adherence.