Part of what many watchers expect was seen in the Bitcoin (BTC) dialogue on Wednesday with Ark Invest CEO Cathie Wood, Tesla and SpaceX CEO Elon Musk, CEO Square and Twitter Jack Dorsey, a debate on the deserves the multi-layer strategy of Bitcoin to scaling in comparison with the transactional capacity-increasing various in the primary blockchain.
While this head-to-head confrontation between “The B Word” panelists did not truly happen, Wood and Musk’s conflicting feedback illustrate the foremost areas of disagreement on this technical debate and why Musk’s Dogecoin (DOGE) experiment is unlikely achieve success.
How did Cathie Wood speak about Bitcoin at The B Word conference?
At the begin of the livestream on Wednesday, Wood was requested by Square Crypto’s Steve Lee to clarify what initially her in Bitcoin. In her response, Wood recalled that her former mentor and economist Arthur Laffer (well-known for the Laffer Curve) referred to Bitcoin as the kind of “rules-based monetary system” he had developed all through his profession.
Later in the speak, Wood added, “The role that Bitcoin plays is actually a store of value given the rule of numbers of 21 million units.”
In different phrases, the foremost function of the Bitcoin blockchain in the context of the usefulness of the Bitcoin asset as a retailer of worth is to allow “pre-established” financial coverage (as Bitcoin inventor Satoshi Nakamoto put it). earlier than) and can’t be corrupted by a trusted third social gathering similar to a central financial institution.
Wood additionally talked about the indisputable fact that varied functions round the use of Bitcoin as a medium of change can construct on the underlying Bitcoin blockchain, though prime quality transactions have additionally taken place on the base chain.
Immediately after Wood’s clarification of the foremost use of the Bitcoin blockchain as the basis of a brand new forex community, Musk was requested about his ideas on the scalability of Bitcoin as a method of cost. Although Musk has obtained heavy criticism from some Bitcoin lovers for his statements about Bitcoin’s scalability, his views turn into clearer in stay broadcasts.
“Bitcoin itself can not scale into the world’s forex system on the base layer. But this will occur with a second layer, relying on how this second layer is carried out. “
Musk added that he owns extra BTC than Ethereum (ETH) or DOGE and that he needs to see Bitcoin profitable. However, he additionally sees worth in pushing the limits of on-chain scaling with Dogecoin.
Musk didn’t try and argue in Wednesday’s dialogue that altering the base class of Bitcoin, significantly in a approach that will increase the value of operating a full node, undermines the credibility of Bitcoin’s guidelines. To get again to Wood’s view of the worth proposition of the Bitcoin blockchain, main modifications at the base tier can have an effect on the credibility of financial coverage and the usefulness of the asset; cryptocurrencies as a retailer of worth. In the previous, the market has been reluctant to threat Bitcoin’s utility as a retailer of worth in favor of the perceived advantages related to transactions of lesser worth, because it did when SegWit2x failed.
As Lee rightly factors out, there was a number of dialogue on the topic in the historical past of Bitcoin and it does not seem to be Musk is suggesting something new right here. Bitcoin Cash (BCH) even tried to construct on Bitcoin’s community results to implement a a lot greater block dimension restrict and failed miserably. For many individuals, a extra sensible solution to construct on Bitcoin’s present community results is to make use of secondary layer networks like Lightning Network and sidechains that do not require the creation of a brand new cryptocurrency. And to Musk’s credit score, he is additionally unlocking the potential of this scaling philosophy.
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