This is a reply to Giacomo on twitter who wrote to me that while he doesn't think all of us who support Bitcoin Cash are liars, he does think we are all stupid. Especially anyone claiming to be an anarchist or libertarian.
------------ Most of the people on the small block side don't strike me as libertarians. Most are people who just got attracted to the large gains and bought into the promise that if they support the Core devs the gains will continue. These people come from many different political ideologies, but I see a good deal of left wing ideology in some of them.
Of the few genuine libertarians/anarchists that remain committed to Bitcoin (many, MANY have left), most of their views seem to look something like this: Bitcoin makes a great "base money". Similar but better than gold. As long as you have sound base money then you can always build financial systems on top of it that can facilitate things like transfers. Thus it doesn't matter if transactions fees blow out to $100 or $1,000 because most people never interact with the base layer, but rather the upper layers. In this view the main innovation of Bitcoin is "sound base money".
My view is the world was not in need of another sound base money when Bitcoin came along. Nor is that the main innovation Bitcoin brings to the table. The world has had sound base money for thousands of years... gold coins, silver bars, etc. They are as decentralized as you can get, scarce, and difficult to counterfeit. And one could make a strong argument that they even make better base money than Bitcoin due to the absence of the technological risks that Bitcoin possesses. But regardless, the world wasn't in need of "sound base money" when Bitcoin came along in 2009.
In fact the main problem with Gold was precisely that it required a "layer 2" system transact with (since transacting directly with gold coins is cumbersome and unwieldy). If you know the history of the gold standard, particularly in the US but also elsewhere, the "layer 2" (the banks and financial institutions) fell victim to cronyism. The banks themselves engaged in regulatory capture to pervert the system in their favor to increase profits while undermining the soundness of the base money. And governments were all too eager to oblige them as long as they got their cut as well.
So the layer 2 system ended up being too easy to control and manipulate and became the cause of the downfall of gold standard. What libertarian Bitcoiners who hold the views above are fundamentally advocating is to build the exact same type of gold-standard-like two layer system that failed so hard in the 19th and 20th centuries. Only this time with a digital asset instead of a physical asset as the base money.
My view is that the primary innovation of Bitcoin is not sound base money (it has that property but again, given the presence of gold, it's not really an innovation), but rather censorship resistant value transfer. The ability to transfer value WITHOUT going through the same corruptible middle men that brought down the gold standard system. Bitcoin is a money that was designed to be unregulatable and that property is fundamentally threatened by a system that says "you can only make an unregulated censorship-resistant payment if your payment is large enough and you can afford the $100 transaction fee".
Now you can say, "well that would be great if every payment could be censorship-resistant but the tech can't handle it". But I fundamentally disagree. Or at least I disagree at the scales we're talking about and are likely to see any time in the next 10 years. Again, the laptop I'm typing this on can fairly easily process 100mb blocks and possibly up to as much as 1GB blocks with some optimizations. Let's not pretend that every technical person believes Bitcoin cannot handle more than 1mb blocks. That is simply not true. I'm only one example of many, both inside and outside of academia. I actually think that view is the minority in the cryptocurrency technical community at large.
My goal is censorship-resistant unregulatable money. If we're not going make the optimizations needed to make that happen for everyone (not just those who pay the $100 fee), if we're just going to push payments off on to platforms that require middlemen, then I don't see a point. Rehashing the failed gold standard experiment, this time in digital form, isn't going to produce a different outcome.
 

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Gold's problem was that it got abstracted due to usability - hence it was replaced by the layer that abstracted it. Never allow your sound base money to be abstracted.
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"In fact the main problem with Gold was precisely that it required a "layer 2" system transact with" - excellent point.
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Spot on. If you are streaming Netflix all day you should not complain about bigger blocks than 1mb. That is absurd.
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Terrific analogy.
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Thanks for this straight forward explanation ! I'd be really grateful for an explanation on how the lightning network doesn't fix the fees problem. I'm not sarcastic, I would genuinely like to see some light shed on this for my own personal enlightment !
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Yes. Making gold digital adds no value unless you take advantage of the one thing digital has over physical - portability!
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This again. Increasing the block size is NOT a solution.
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The problem is that he hug his heels in too much - there is no backing down for him anymore without losing credibility and face.
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@oriol
>Network latency scales slower than bandwidth
Good news! We don't need the latency to scale much because transaction can be pre-propagated. Did you know even Core implemented Compact Blocks?
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@samvouga I plan to write an article on LN but I want to give it some time to spread its wings in the interest of fairness. Maybe around July or August I'll write a six month review. @oriol here's a direct rebuttal https://www.yours.org/content/can-bitcoin-cash-scale-on-chain--4c977e7218cb
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On future bookshelves...
Letter Concerning Toleration (Locke) Reply to Giacomo (Pacia) ...
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