Crypto community: everything is like people

Over the past eight years, the Bitcoin community has engaged in local and internecine battles that have reached epic proportions this year. Competing protocols, mining apocalypses, punches in the gut with incriminating evidence and the catastrophic airing of dirty laundry in the media. Everything underscores one indisputable fact: Bitcoin adherents are definitely not in the mood for peaceful coexistence at the moment.

Ask sacramental questions “Who is to blame?” and "What should I do?" we won't. Because the answer, in our opinion, lies on the surface.

It is not financial tycoons, not evil journalists, not greedy developers and not government regulators who are to blame. The culprit is the system that underlies Bitcoin, which is both its strength and its weakness. Namely: Bitcoin does not belong to anyone and belongs to everyone at the same time.

And the experience of building communism in one particular country already exists, and everyone knows what this led to.

On the one hand, a distributed network provides enormous advantages for creating a currency that cannot be controlled and “put into circulation.” But on the other hand, an unbalanced system of incentives (rewards) leads to a natural result - the hungry begin to rebel. This is the so-called “tragedy of the commons,” the tragedy of the commons.

How is the division of the pie implemented in Bitcoin society? 

Miners get everything, everyone else gets nothing. Anyone can buy or use Bitcoin, and anyone can theoretically contribute to its code, but no one has ownership rights in Bitcoin. This means that you can invest millions in development, millions in promoting the technology, invest all your savings into it, but this will not give you a say in how the project will develop further. You can work tirelessly to write the best code to solve all of Bitcoin's problems, thereby ensuring that its continued development goes smoothly; but your work as a developer will not be paid. You will make a profit only if you store Bitcoin on your device, and its rate is growing - on a par with any coin buyer who has done nothing for the network.

That is, the people and teams who invest the most intellectual and physical effort in the development of the Bitcoin project end up receiving the least. Those who profit the most are those who manage the network efficiently or not, that is, miners. They also have priority voting rights in the Bitcoin system, so the problems of other community members are of little concern to them. They are quite happy that the cost of the commission is high, and the transaction speed is approaching the speed of a snail.. As long as the price for coins rises, miners do well in this community. And the fact that the commission is too expensive for other users means, as they say, “the sheriff doesn’t care about the problems of the Indians.” Miners lose interest in the system only in one case - if their commissions do not cover the costs of mining.

Now let's see what incentives exist for Bitcoin developers.

The main factor is that they are not paid. This is not working “for someone else” or even working “for yourself”. This is work for the benefit of the entire community. On the one hand, they cannot fire the developer; no one hired him. But on the other hand, those who are not satisfied with his place when cutting the pie may well “resign” himself. But not just quit, but create a competing enterprise. What we, in fact, have been observing for several years now: altcoins and forks with different life expectancies and with varying degrees of success are multiplying like mushrooms.

Now about the Bitcoin community as a whole. In principle, this community includes anyone who holds cryptocurrency in their wallet, who pays with it or purchases it, or even those who express their positive opinions about cryptocurrencies on social networks. But the problem is that any member of a community has a minimum number of obligations to this community. And if desired, any of the members can sell their savings, transfer it to another cryptocurrency, or completely leave the project. And there will be no consequences for him, regardless of how this affects the community as a whole.

The exception to this “tragedy of the commons” today is, perhaps, only the Dash project.

Dash miners receive 45% of the blog’s mining, masternodes receive 45%, and “tithe”, that is, 10% is allocated to the development of the network. At the same time, in order to become a masternode, you need to make a deposit in the amount of 1000 Dash (which today amounts to over a million dollars) and, accordingly, masternodes receive the right to vote in the decision on what purposes to allocate 10% of the block (for development, improvement of the project, for payment of administrative resources, for renting premises, etc.) That is, the development team is paid by the network, and the network is an employer that can fire someone who does not cope with their responsibilities..

That is, masternodes and miners have great power in the network, but they also have great vulnerability: the long-term price of Dash is important to them. Pay the wrong development team to create terrible code? Dash price is falling. Are you making decisions that hinder miners too much? The network suffers, the price falls. Arguing with your development team? Valuable personnel may leave, the price will fall.  The Masternode operator, like any other participant in the Dash ecosystem, is motivated to ensure that the coin and its community become strong, healthy, productive and exist, as far as possible, without any shocks and cataclysms. Harmonious relations within this system directly depend on the material dependence of its members on each other.

Therefore, our vision today is that, in terms of the long term, Dash has an undeniable advantage over Bitcoin.

(The opinion of the editors may differ from the opinion of the author of the article)