The Ethereum Cartel

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Cartel meme

What makes bitcoin successful? It’s design, or the technology, or the inbuilt incentives, or an idea whose time has come? Or was it a cartel?

Theymos, the top mod of r/bitcoin, said before he instituted a policy of unfettered censorship in 2015 that bitcoin is actually very fragile if certain ideas spread.

The context of course was the blocksize, and what he meant was bitcoin could break or centralize if people are happy to let the blocksize grow because history in the bitcoin blockchain is unbounded.

Whether he was right or not, still remains for time to say, but during those debates the infamous “Dragons’ Den” was set up to basically propaganda market the small blocks side of the debate.

In a coordinated fashion, they attacked anyone who disagrees and even went on smear campaigns to keep in line the so-called silent majority and to pressure all others.

That coordination of mainly marketing professionals working for different companies or bitcoin holders who engage in “marketing” for free, is called by some as the cartel.

It was fashionable during the “debate” to point out the “cartel,” but arguably it was an exaggeration. A somewhat imperfect comparison might be to say Republicans are a “cartel” over the government. They’re not. Democrats can be voted in as can, with much difficulty, any other party.

In crypto terms, there’s BCH and any other chain, so the term cartel is very imperfect to describe coordinated marketing. It is more correct to call it a group united by a few key ideas, but otherwise with diverse views and fluid membership.

The Cartel

Or it can just be described as the cartel for short, with that here meaning an attempt to control communication channels for propaganda purposes.

The aim would be to create an echo chamber that has the effect of “brainwashing” especially newcomers by drowning criticism, pressuring through even boycott any divergence from the echo chamber, by waving away any negative aspect (or preferably by hiding it so it’s not seen at all), and by coordinating to have a sort of united front.

Whispers of the “need” for such cartel for ethereum have even publicly been made for some time now, with active participants so forming a group of sorts with their own private chatrooms and so on.

It’s some sort of “decentralized” marketing department, to put it charitably, through which some sort of “official” line is communicated with “politics” not necessarily being the aim but more the selling of the asset or the provision of hopium and confidence so that people buy and so that people don’t sell even if the price is falling.

It’s not necessarily a bad thing if it is seen for what it is: marketing. It’s set-up, however, is somewhat deceiving because at times they appear to be sort of neutral “community leaders” or “peers” instead of self interested participants with a marketing job.

Yet that aspect is now probably far less pronounced than when such coordination first begun in 2015 for bitcoin, but the echo is strong because in 2015 bitcoiners realized they needed some sort of “marketing” department, and in 2019 ethereans seemingly reach the same realization.

Can it Work for ETH?

It is an a priori that everything is good for bitcoin. Yet whether what is good for bitcoin is also good for other cryptos as well, is something a bit in doubt.

There’s only one data point. The bitcoin chain-split to BCH on August first 2017 was arguably the best thing ever for bitcoin as it mooned in price and BCH mooned too with the world somewhat amazed at the time that you can just do this.

When BCH had a chain-split to BSV, however, there was calamity in the entire crypto space. Why?

There are specific aspects, including that the chain-split was in a bull, instead of bear, market, that there was a genuine dispute for bitcoin, that the “leaders” of the BCH split commanded at least some respect, and so on.

Yet it could also be the case that bitcoin is just different. It’s the first. It has a far bigger audience. It commands attention. It’s almost synonymous with crypto.

In addition, when this “cartel” was instituted there was at least some reason for it. A certain section of bitcoin had a strong belief that the blocksize should not be increased and they saw an increase, in the circumstances back then, as a threat and even an attack, thus they went to all “reasonable” lengths.

You can say it was a wrong thing to do, but you can also say there was a somewhat legitimate reason for it provided they did genuinely hold those views, which they probably did.

What would be the reason for ethereum to have such cartel? There is no “political” difference of opinions of the blocksize sort. There aren’t ethereans arguing it shouldn’t Proof of Stake or whatever. There is no split among developers. And criticizing any ethereum aspect was already way more “costly” than criticizing bitcoin because bitcoin doesn’t quite have a figure head.

Plus the bitcoin “cartel” was somewhat natural and organic, developing in response to specific circumstances.

While in eth it’s more kind of a response to the price action instead of something principles based like big blocks are bad or whatever.

Then of course there’s the fact that ethereum rose primarily because of the perceived bitcoin cartel. Plenty did not even take a look at eth until they became somewhat unhappy with how things were being handled in bitcoin.

If ethereum now basically becomes bitcoin, then what’s the point of eth?

That aspect could be one reason why the BCH split led to doom instead of moon. People were arguing some BCH client had become same as Blockstream or whatever. So for them the question was what’s the point of BCH.

That may be one reason why eth in particular is performing atrociously. When bitcoin was at $11,000 last time, eth was at $1,000 or more. Now, it can barely keep $200.

Devs and others in eth have basically not quite heeded the lessons from bitcoin. Now some ethereans are basically just copy pasting bitcoiners.

How that will play out exactly remains to be seen, but it is somewhat easy to forget bitcoin exists, and to forget things like eth are an alternative to it.

If they’re not an alternative, then what’s the point of them? If we have some ethereum “cartel,” how is that better than the bitcoin “cartel”? If we have limited capacity in eth, then how is that better than bitcoin? If we have promises this will change, how is that different than bitcoin’s promise that it will change?

In bitcoin at least they don’t have committees to decide some change of proof of work without uproar. They’re not told deep in some thread some completely new unproven chain will be launched without any consultation or anything, and with that being met without a word by ethereans. They don’t have some phone call to decide whether more eth will be printed or less. And they don’t set up cartels for the fun of it in a mockery of the entire project.

If people wanted unresponsive devs who do as they please they have them already in bitcoin where they have actually learned and so have become more responsive.

Likewise if people wanted some coordinated propaganda group that pressures others they would find that too in bitcoin where at least there are counter propaganda groups to limit the hyenas.

Alas, incremental is change. Man does not evolve in a day.

Editorial Copyrights Trustnodes.com

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Heng Cheong

My book at http://www.etsy.com/listing/709911852/a-beginners-guide-to-generational-wealth will tell you why Ethereum is better than Bitcoin.