Why Will Bitcoin Ossify?

Why Will Bitcoin Ossify?

Ossification is a very common word in Bitcoin. “The protocol will ossify.” “Ossification is good.” “Bitcoin does not need to change, ossify now.” Bitcoin users are a skeptical group of people, so they are naturally skeptical about change. There is a very good reason for this: the block size war was effectively a combination of certain developers (now thankfully gone) and influential figures trying to force and powerfully arm people to embrace damaging change through threats and misinformation. After such a major attack, it’s only natural to view any proposed change as slightly better concealed and subtle mechanisms that can be used to undermine the system as a whole.

In theory, Bitcoin is something that can be upgraded and exchanged forever; As long as the majority of participants choose to make a change and they all voluntarily adopt and implement that change, Bitcoin can incorporate it. At the end of the day, Bitcoin is just a protocol and software for implementing and interacting with that protocol. Any arbitrary change can be made to the protocol as long as people are willing to adopt and implement it.

The catch here is that people will get on board with a change? If history shows us anything, the default answer is no, there is no very convincing case for added value and no case that does not create any new externalities or negativities.

Well what does it mean?

Ossification Is Not Culture, It’s Encouragement

Ossification is often discussed as a cultural phenomenon; that is, “Bitcoin must have a culture of ossification!” I think this completely misses what the original discussion around protocol ossification pointed out in terms of social dynamics. The debate around ossification is that people deliberately create a culture of “no change” or consciously say “Bitcoin is good enough!” It had nothing to do with the decision. — it was about fundamental incentives around system growth. The more participants there are, the less people understand the trade-off of potential changes. When someone enters this space, they start learning about Bitcoin as it is now and the exchange of things as it is now. It takes time to move their understanding beyond that, to analyze the trade-offs of how things could be.

Add to this the very clear historical examples of people trying to force changes that could be very harmful to the system, and the natural tendency in a growth environment is that changes are impossible to translate into asymptotic approach. Why? “Change is bad!” not because of a culture that says Because if something is working properly to protect or grow your wealth, the natural incentive is not to mess with it until you stop doing it successfully.

People will not participate in the change until they are confident that there is a net positive for the economic value of the change being discussed. This isn’t culture or “Bitcoin maximalism”, it’s just pure economic incentives.

Rock and Hard Place

Bitcoin will eventually ossify naturally; Otherwise, the entire system is somehow influenced or controlled by a central group of people who can push changes without hesitation or doubt from the wider user base. If this is the future of Bitcoin, I would personally consider the whole system a failure.

As a result, if it doesn’t fail, Bitcoin will basically cease to be something that can be upgraded at a protocol level. There will be a point where the consensus rules no longer change and everyone has to settle for what Bitcoin is at that moment. What is the problem with that?

Currently, Bitcoin does not scale. If the next time we try a soft fork we discover that Bitcoin is ossified as it is now, it won’t scale to even a small part of the planet if everyone tries to use it under self-monitoring. So if Bitcoin ossifies today, the whole dream of money that anyone can keep to themselves and effectively avoid third-party risk is dead for most people on this planet.

Bitcoin will eventually stop changing, but if it reaches this point too soon then there are huge downsides. A Bitcoin that only 5% of the world could possibly self-protect could start a big change in the world as a neutral platform that opens competition for custody services, but it is not the real sovereignty revolution that many Bitcoin users are here. It is one thing for many people to consciously choose not to hide themselves; If most people aren’t even offered this option, it’s something else entirely.

Threading a Needle

Changes in Bitcoin should undoubtedly be approached cautiously and conservatively, but this needs to be balanced with the upcoming ossification dynamics. Bitcoin has many shortcomings, especially in terms of scalability, and these shortcomings need to be fixed as securely as possible before they get to the point of ossification. Discussion and education about proposed changes is the most important and critical aspect when pushing for improvement of a change in the protocol; Without even a basic understanding of how a proposed change works and what it does, it’s a natural reaction for people to reject it. If the system works and properly secures its values, there is no reason for any rational actor to support change without the perceived benefits to their monetary value outweigh any perceived negative impact.

This presents both challenges and attack vectors to the consensus building process. It is necessary to notify users before there is a chance to make any change, but this presents an opportunity for malicious actors to spend their time misinforming users to prevent a positive change or build support for a negative change.

Bitcoin users have to be cautious and conservative when it comes to proposed changes to the protocol, but we will also need to modify Bitcoin to address its scalability shortcomings. The only other alternative is to accept them and close the door to a Bitcoin protocol that can actually offer anyone the ability to store their own money. One day it will stop changing, and at that point, a limit will appear on how many people can interact with the system in a natural and independent way. We should not rush to set the bar early.

If Bitcoin is going to be successful, I think it will eventually ossify, and if it doesn’t, I’d personally consider Bitcoin a failed experiment. However, we should try to make the system as scalable as possible without damaging or destroying the core features that made it valuable in the first place. Time is passing; this does not mean that we should act recklessly without careful and careful thought, but the clock is still ticking.

This is Shinobi’s guest post. The opinions expressed are their own and are not their own and BTC Inc. or Bitcoin Magazine.

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