Innovation & TechCryptocurrency

Elon Musk should listen to Katie Wood on Bitcoin

3 Mins read
Elon Musk

Crypto is always trending like Bitcoin, Etherium, SHIB INU, and Dogecoin. Elon musk is always active in Crypto Market. During the discussion of bitcoin (BTC) on Wednesday, what many observers expect to see. He is a debater about the advantages of bitcoin’s multi-layer scalping approach. In which Arch Investment CEO Cathy Wood, Tesla and SpaceX CEO Elon Musk, and Jack Dorsey, CEO of Square and Twitter, compared alternatives that increase transaction capacity at the basic blockchain layer.

Although this direct confrontation between the members of the group did not actually take place. Wood and Musk’s comparative comments reflect key areas of disagreement in this technical debate, and why Musk’s Dogecoin (DOGE) experiment is not doing so well. It can be successful.

Wood Explains the Value Proposition of Bitcoin!

At the start of the live broadcast on Wednesday, Square Crypto’s Steve Lee asked Wood to explain the reasons that prompted his interest in bitcoin in the first place. In response, Wood recalled that his former mentor and economist Arthur Laffer (known as the “Laffer Curve”) called bitcoin “based on a monetary system of rules”.

In a subsequent conversation, Wood said: “Given that the rule is the 21 million unit volume rule, the role played by [Bitcoin] is actually that of a store of value.”

In other words, the main purpose of the bitcoin blockchain is to enable a “stable” monetary policy, in terms of the utility of bitcoin assets as stores of value. (As bitcoin creator Satoshi Nakamoto said many years ago) There can be no more destruction of trusted third parties like central banks.

Wood also mentioned the fact that various applications surrounding the use of bitcoin as a medium of exchange can be built on the underlying bitcoin blockchain. However, there have also been high-value transactions on the underlying chain.

Musk wanted to test bigger blocks

Shortly after Wood on Dogecoin explained the main use of the bitcoin blockchain as the base layer of the new currency network, Musk was asked about his expansion of bitcoin as a payment capability approach. However, Musk was strongly criticized by some bitcoin enthusiasts for his statement on the scalability of bitcoin. But his position appeared more subtle in the live broadcast.

“Bitcoin itself simply cannot be expanded into the basic level of the world currency system. But with the second level, this is possible, depending on how the second level is implemented.”

Musk said that he has a lot more bitcoin than Ethereum (ETH) or Dogecoin, and he expects bitcoin to be successful. However, he also saw the value of pushing the limits of expansion on the Dogecoin chain.

Elon Musk’s mistake

The main point that Musk did not try to refute in Wednesday’s discussion is this. That the core layer of bitcoin has not been changed at all. Especially by increasing the cost of operating a full node, which undermines the reliability of network rules. Looking at Wood’s perspective on the value proposition of the bitcoin blockchain. Drastic changes to the underlying layer could damage the credibility of bitcoin’s monetary policy and the usefulness of encrypted assets as stores of value. In the past, the market was unwilling to risk bitcoin’s usefulness as a store of value. Such as the failure of SegWit2x to support the perceived benefits associated with smaller transactions.

As Lee rightly pointed out, this topic has been debated a lot throughout the history of bitcoin, and Musk doesn’t make any new suggestions here. Bitcoin Cash (BCH) also tried to use the currency network effect of bitcoin to enforce higher block size limits but failed miserably. For many, a more practical way to build on the existing network effects of bitcoin is to use secondary networks. Such as the Lightning Network and sidechains, which do not require the creation of new, independent cryptocurrencies. It is commendable. That Musk is also open to the potential of this expanding concept.

It seems that the slogan “I’m a newbie to bitcoin. I’m here to fix it” is very applicable here. Of course, when he first ventured into this field, it often applied to almost everyone, and due to Musk’s celebrity image, the situation would certainly escalate in this case. In other words, it makes sense. That bitcoin users have been irritated by Musk and others recently revisiting old discussions and ideas.

However, Musk is still troubled by concerns such as the long-discredited potential oversight of Lightning Network nodes and the affair of buying coffee only through on-chain transactions. It is likely that, like everyone else, he will eventually succumb to the inevitability. Bitcoin currency network effect.

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