This is the second part of a conversation with Giacomo Zucco.You can find the first part here.In the second part, we will talk about Maximalism and Bitcoin Tokenization.BTC-ECHO: Let’s talk about you a little bit.
On Twitter you are known as Bitcoin Maximalist and notorious.
Some call you toximalist, which makes you say that you are an ex-toximalist.Why are you taking this position?
Giacomo Zucco: For “the ex-ex-toximalist”: It’s more than a gag.With my presentation on toxic “maximalism”, which I held at the Balic Honeybadger conference in 2018, I have many followers of Shitcoin against me.That’s why I thought that this year I would take a different approach to the Baltic Honeybadger.With a wink of eye, I took the position of an “apologist for Shitcoin” and became an “ex-toximalist”.
As the joke got older, the old toximalist was coming back – I became “the ex-ex-toximalist”.BTC-ECHO: What do you expose to other crypto-currencies?
Giacomo Zucco: There are two reasons against other crypto-currencies.One of the reasons for my radical maximalist position is economic theory.The numerical limitation is complex and fragile.
This is only when the market gives an exclusive value to the original digital asset that a digital version of hard money exists.This hard money requires a limited supply and a well defined and unmodifiable emission curve.Any copy of this first digital asset, that is, any old coin, should be really marginal in favor of digital currency.Then they can also do what they want, for example regarding the emission curve.
So I think that a world with a lot of old equal coins where the market attaches value to countless clones of bitcoins is dysfunctional.Not only the demand but also the supply and inflation are absolutely unpredictable in this multi-company scenario.
On the other hand, a world with a single cryptocurrency would work: the market would see real value in a single cryptocurrency and supply and inflation rates would be determinable.
I am glad that the difference in the valuation of bitcoins and thousands of clones is already huge.It is to be hoped that the domination of bitcoin will continue to increase.Free markets seek monetary convergence, not diversification.The fact that there are different forms of currency today is only a consequence of state intervention.
Before the relatively young fashion of fiat money, world markets have always opted for the better, more stable, and “hard” form of money.BTC-ECHO: And what is next to the economic reason as a second argument?
Giacomo Zucco: In addition to this strong monetary network effect, new Bitcoin-related problems are emerging: Bitcoin is far superior to other cryptographic currencies in terms of hardware infrastructure, software infrastructure and financial ecosystem.The development of Bitcoin brings another network effect: Bitcoin brings together the most talented developers who prefer to work on the global standard than on plagiarism and cloning.Which is a positive effect for Bitcoin causes a vicious circle with the set of Shitcoins: with the departure of a good developer for Bitcoin, the quality of the software base of a clone decreases more and more, so that the Shitcoin itself worsens.At one point, it only has marketing to show.
Ethereum is an example of this development.Ethereum is only a collection of old ideas that Bitcoins developers have long denied.Now they have received a new brand image and are sold as “innovation”.BTC-ECHO: The RGB protocol concerns the numbering of resources.
The focus surprises something with a maximalist.How can ideas such as digital asset segmentation align with the maximalist position?
Giacomo Zucco: I think that here you have to differentiate something.What exactly are the chips? The first, seen in the light, was little more than unregistered sales of securities.
They should be traded beyond the world of conventional financial regulation.
It would not be bad.The problem is that the idea behind this is completely unrealistic.Decentralizing a digital good but rare, like Bitcoin, is difficult enough.Something like this with titles is currently impossible.
What made the projects “tokenized”? They centralized.
Suddenly, companies, CEOs and marketing teams found themselves behind a single chip.During the process, the “titles” suddenly became “public services”.So they wanted to escape the regulatory arm of the SEC, and so on.The set of “utility tokens” and “pieces of application” is however an economically complete nonsense.
To buy services, no matter what you need, you need money.Conventionally, in accordance with legal requirements, but centralized, the Fiat would be new, decentralized and beyond the current regulations on Bitcoin.Now, creating an “ad hoc payment system” for every application besides Bitcoin is completely crazy.
Then all the “app parts” failed.The managers of these projects are now talking about “regulated securities”.
However, they forget that the search for full regulatory recognition loses all the benefit of a decentralized and censor-resistant standard like Bitcoin.In the end, a “regulated ICO” is nothing more than an IPO with technical hurdles.
In addition to these economic problems are technical.The issue and governance are often big problems, and mistakes were also made in the Bitcoin ecosystem.Omni and Counterparty have created big privacy and scalability issues.
These problems are even worse when it comes to Ethereum ERC-20 chips.After all, with the ERC-20 tokens, no space is lost in the Bitcoin blocks.But they help poor Bitcoin clones survive and therefore poor resource allocation.BTC-ECHO: And the RGB protocol can be a solution here?
Giacomo Zucco: Technical problems can solve the RGB protocol.
However, neither the RGB protocol nor complementary approaches such as liquid confidential assets can withstand economic problems.The appcoins are still ridiculous on RGB, the “securities in the form of tokens” are also ridiculous on RGB titles, technically inflated.
Of course, there may be cases of use for the chips.Digital collection objects such as RarePepe are one example.Tether himself is also an example.This is a good example of legal arbitration: a centralized company and, despite all the criticisms and regulatory requirements, the company generates a barely sustainable asset on the secondary market, which is a good bridge between Bitcoin and Fiat.BTC-ECHO: To return to the short space in blocks: what is there exactly to say against that? Lots of space to waste Blockspace does not allow maximum size of OP_RETURN commands in Bitcoin …
Giacomo Zucco: You just have to realize that Blockspace is a very small size! each Bytes of data do not simply result in fewer transactions in the block, but require verification of each node.First and foremost, the hosts of Bitcoin Nodes want to simplify transaction validation as much as Bitcoin is resistant to censorship.
For this reason alone, there is a conflict between node hosts and meta-journal users such as OMNI or Counterparty.
And again to mention the problem of privacy: on Timchain of Bitcoin remain information forever.For assets, this means that this extra information, which is extremely poor for the fungibility of bitcoin, will still be discoverable.
RGB solves this problem by storing all off-line data.The Lightning network is used to transfer relevant data.Bitcoins Timechain will be only used to prevent any attempt of double donation.To this end, the “zero footprint commitments” with real bitcoin transactions are written in timechain.The underlying technology is known as “pay to contract”.
Of course, there is still a lot of work to be done so that everything goes well.On the one hand, we have to finalize some RGB protocol updates planned last year and so provide something really useful.
On the other hand, the Lightning Network protocol should also do some of the homework mentioned above.So, there is a lot to do.Dear Giacomo, thanks for the interview! Related.
