What are the handwavy claims and inaccuracies? I make it a point to not write in an academic way because I cannot stand the way most academics write. I say this as someone who used to be in academia. I don't want to torture my reader.
Discussion
“I cannot stand the way most academics write” <- will not argue on this point to stay on the topic.
NOTE: I neither support nor care for the garbage coins that keep popping up. My arguments assume academically sound systems.
a couple of representative examples:
1. The article is hand wavy regarding Bitcoin’s decentralization. It claims, without evidence, that Bitcoin has no concentration of influence. The issue here is that gathering such evidence, despite the weaker privacy (pseudo-anonymity) on Bitcoin (and other similar pseudo-anonymous currencies) is not trivial. A couple of graph analysis studies suggest that the same lopsided influence exists in Bitcoin. And this sounds likely too, considering that Bitcoin ecosystem involves large mining operations and mining pools. Moreover, Bitcoin (and any PoW blockchain) will always require more computing power than a PoS (or other lottery mechanism) blockchain. This is because the node has to solve the PoW puzzle in addition to the work of maintaining a ledger. CPU/GPU era of Bitcoin mining ended in early 2010s. Nowadays one requires significant investment in a mining rig. Your argument should have been that Bitcoin, despite the lopsided influence that most probably exists, is less susceptible attacks/bad-behavior because of its superior market adoption. It’s not because running a Bitcoin node is cheap. Regarding true decentralization of influence, it is a hard problem. The real world influences find a way to be reflected in decentralized systems too. The property is certainly desirable and should be researched into.
2. In its passion for bashing blockchain, the article makes the strange statement that blockchain is “inefficient” and that any “centralized” solution will be “cheaper, faster, more reliable”, and “more maintainable”. This statement is a mix of incorrect claims (e.g., a centralized system is *not* more reliable) and correct but misleading claims (e.g., centralized systems are faster) because these distract from the real reasons one would choose a decentralized system over a centralized one e.g., Trustlessness. What’s worse, if one were to take these misleading claims on face value, then Bitcoin itself is a bad system because It’s not faster than Visa (25,000 tps vs. < 10 tps), it’s inefficient (requires more computing power and storage than a centralized system), and it’s not cheap (the energy cost to keep the system running is more than that of many small countries). The value of Bitcoin cannot be judged on these metrics, the benefits it brings (Trustlessness, Reliability, Ease, etc) are what make it a superior solution to the centralized Visa/Mastercard systems. It’s like saying insecure traditional programs are faster, more power efficient, and reliable compared to secure multiparty computation (MPC).
Blockchain is an instance (specific problem) of the State Machine Replication or SMR (the general problem). It is most definitely not “just a linked list”. Someone who says so has probably never read anything on Consensus. "there’s nothing inherently magical about a blockchain”. Yes! There’s nothing magical about any science. The excitement doesn’t stem from seeing magic, it stems from the possibility of a solution to a previously hard problem.
A final note, the article (at least how much I read) reads like Bitcoin is panacea for all ailments. There are significant issues in Bitcoin—Low throughput, Inefficiency, lack of privacy, etc—that others are trying to solve. The extremely misleading statement on blockchain betrays that if the author of the statement (not sure if it were you or someone you quoted) were presented with the idea of decentralized payment system before Bitcoin’s boom, he would have exactly the same talking points against Bitcoin that he is now using against Blockchain and other cryptocurrencies on it. It’s also probable that the author will sing praises of Blockchain as soon as it has its Google or YouTube or Spotify moment. Till then, one should not become dogmatic when discussion man-made technology.
Barak Allahu feek. Thanks for taking the time to write this all out.
We disagree about Bitcoin having the same centralized influence as other cryptocurrencies. There is no one single entity that can change the monetary policy or force a hardfork. This has already been tried during the blocksize war and it failed miserably. I recommend the blocksize war by Jonathan Bier.
I will say that privacy is definitely one of the downsides right now in the Bitcoin space, but there are tools that are actively being developed to address this. The base layer of Bitcoin is optimized for transparency, so solutions for true anonymity will have be made on the higher layers, or exchanging btc peer to peer largely addresses this as well.
And you don't need a big investment to start a mining rig. There are very cheap options for people that want to mine at home. See bitaxe as an example.
And I also disagree with your point about bitcoins security as it relates to running a node. It's not because of "market adoption". The more people that are running nodes, the more distributed the network, the harder the network is to attack. Again, see the blocksize war for a real life example for how this played out, where the node runners ultimately prevailed over the big mining companies that wanted to force a block size increase.
Regarding the second point, perhaps reliability isn't the correct word here. But by design, updating and upgrading a centralized system is far easier and more desirable than trying to coordinate the upgrade of thousands of separate entities that are running and deploying the same service. And no, I honestly wouldn't care if "blockchain" had its Google moment or whatever. Literally changes nothing about Bitcoin dominating all other forms of money. I still fail to see the application of blockchain besides money.
The biggest disagreement I have is with the comparison of Bitcoin's tps to visa's tps. This doesn't take into account settlement assurance which is a concept that's described further down in the essay. Visa transactions are easily reversible and take weeks to finally "settle". Bitcoin on the other hand takes around 10 minutes to settle. Bitcoin's base layer settlement is better compared with swift or international settlement systems. But bitcoins higher layers, like the lightning network, can be compared to visa, since they're both payment networks.
“Barak Allahu feek” <- Wa Iyyakum.
I disagree with everything in this reply, but don’t have the time to refute :-) Fi Amaanillah.