Published on: 2021-05-18T12:15:58+00:00
The direction of Bitcoin development should not be solely determined by those funding it, as they may have their own opinions and influence. While a position in a futures market represents a prediction about the possible outcomes of an event, it is not equivalent to funding Bitcoin development. Bitcoin developers often have a significant stake in Bitcoin, and changes in its price can greatly affect their life savings. A position in a futures market can represent an implicit threat to "fund" or "de-fund" developers based on the direction of development.The email discusses the use of futures markets in Bitcoin, acknowledging their potential benefits for hedging and collecting information, but also warning about their potential misuse. The writer agrees that development must be free to experiment and follow what is best technically, but disagrees that development must follow the market. They argue that people funding Bitcoin development can have opinions and influence but cannot impose or force anything on the Bitcoin protocol. Prediction markets are suggested as a way to negotiate between the two aspects.The email provides examples of how futures markets can be used in Bitcoin, such as hedging transaction fees or the activation of soft forks like Taproot. However, the email also warns about issues with incentives, legality, knowledge, and volume and liquidity that could lead to incorrect usage of futures markets. The inaccuracies of prediction markets are also discussed, including past failures in predicting events such as Brexit and the 2016 US presidential elections.The CEO of Sid Meier's Alpha Centauri, Nwabudike Morgan, once stated that human behavior is economic behavior and competition for limited resources remains a constant. This statement holds true in the world of cryptocurrency and blockchain technology where every joule of negentropy is a carefully measured resource. While it is essential for development to be free and experiment with new techniques, the people funding the development must impose the direction of the development. The negotiation between these two aspects is difficult and often unclear, which is why prediction markets are necessary to advance the negotiation process.Bitcoin futures markets provide an opportunity to make money and filter out noise, but require money to participate. They can also be manipulated by exchanges or traders with large amounts of money and could distract from the development of Bitcoin itself. Prediction markets or tokens could help improve information about Bitcoin, but should not replace Bitcoin development. The writer suggests a chatroom requiring payments in satoshis as a better way to filter out noise while also supporting developers.In conclusion, the email acknowledges the role of futures markets in Bitcoin, but cautions against relying solely on them to decide important matters in Bitcoin. Instead, the writer emphasizes the importance of considering a wide range of sources such as the Bitcoin Dev Mailing List, GitHub repositories, IRC channels, and conversations with various stakeholders involved in Bitcoin.
Updated on: 2023-08-02T03:32:35.386426+00:00