Jemima Kelly

Jemima Kelly, a journalist for the Financial Times, has come under fire for her claims that maximalists are wrong, and that Bitcoin is not fundamentally different from other cryptocurrencies.

Jemima Kelly does not believe Bitcoin is different from other crypto

The first thing that Jemima Kelly purports is that Bitcoin, despite what maximalists may tell you, cannot be separated from the rest of the cryptocurrency industry.

She fundamentally does not believe that there is a reasonable enough difference between Bitcoin and the rest of the cryptocurrency market, and that the incentives and outputs of Bitcoin are quintessentially the same as those in the rest of the industry.

There are many reasons for why is in incorrect.

Hard forks are extremely rare in Bitcoin

One of the things that makes Bitcoin so fundamentally different from the rest of the crypto industry is the reticence within the community make any changes to the protocol, and the difficulty that would come with making such changes.

The updates that Bitcoin does occasionally have, such as Segwit and Taproot, are soft forks, which means that they are backwards compatible.

These minor protocol upgrades are not contentious, and do not change or harm the protocol in any meaningful way. The fact that Bitcoin is so immutable and does not change precludes it (something that has also been accepted by the SEC) from being a security, and instead makes it a commodity.

There are no insiders with Bitcoin

One of the main things that differentiates Bitcoin from the rest of the cryptocurrency industry is the nature of its conception. Unlike all other cryptocurrencies that have come before it, Bitcoin does not have any insiders whatsoever.

Satoshi published the Bitcoin white paper and sent it out to a cryptography mailing list. Everyone on the mailing list (and anyone who they told) was informed in advance about the nature of Bitcoin and could have begun to mine Bitcoin almost instantaneously.

The claim that “it doesn’t matter what Bitcoin’s origins were – the people who push it have the same financial incentives as those pushing any other crypto token” is not accurate.

Unlike almost every other cryptocurrency, those who bought Bitcoin had to engage with some opportunity cost to themselves to be able to participate in the network: nobody is able to award themselves a percentage of the supply simply for having conducted the presale and managed the tokenomics that way.

Bitcoin mining pools are far more decentralised than staking pools

The claim has often been made by Ethereans that Bitcoin mining pools remain relatively centralised given that so few mining pools constitute such a large percentage of the hash rate.

To make this comparison with Ethereum validators is to misunderstand the nature of how easy it is for miners to join different pools.

Bitcoin miners are always free, if they choose, to redirect their hash rate from one pool to another at any time they choose.

Ethereum validators on the other hand, particularly those whose Ethereum is locked in liquid staking platforms such as Lido, do not have the option to move their ETH elsewhere.

This has meant that Bitcoin is more decentralised and censorship-resistant that other blockchains. Other Turing complete blockchains are even less centralised than Ethereum – Solana, for example, has a Nakomoto coefficient of just one.

Jemima Kelly: “[Bitcoin] fulfils none of the necessary criteria [to be money]”

It is quite astounding that still, in 2022, there are journalists writing for such reputable companies as the Financial Times who still believe that Bitcoin fulfils none of the necessary criteria to be money.

Ironically, the article linked to justify this claim goes on to explain many of the shortfalls of many different cryptocurrencies, such as the collapse of LUNA, rather than objectively denigrating Bitcoin.

The main components of money are that it ought to enshrine a property right that can store value over time and send value through space. Bitcoin has historically proven to be extremely adept at storing value over time thanks to the nature of its scarcity and is extremely proficient at moving value through space (at a fraction of the cost of the traditional financial system).

Not only this, but there are a growing number of people who use Bitcoin as money every day in transactions.

El Salvador and the Central African Republic have both already made Bitcoin legal tender, and there is growing support to do in other Central American countries such as Honduras, Nicaragua, Costa Rica and Mexico. In Africa, there is also a clear trend of Bitcoin being adopted as money

The reason that Bitcoin can be adopted as money and other cryptocurrencies can’t is precisely because of how it came about (without insiders), and the fact that its consensus mechanism means it can’t be changed, meaning that it is completely fair and treats everyone who uses it in the same way.

Jemima Kelly doesn’t have to be a maximalist to support Bitcoin

At the far end of the Bitcoin maximalist scale, there have always been eccentrics. Mircea Popescu, sometimes known as “The Father of Bitcoin Maximalism”, was undoubtedly not the most amiable of characters, and there remain many maximalists today who pride themselves on the fact that Bitcoin, such as Max Keiser.

However, on a protocol level, Bitcoin is fundamentally open to everyone. The whole purpose of Bitcoin is that it levels the playing field, and everyone is treated the same.

Whether one is a maximalist or not, Bitcoin is open for everyone to use. Jemima Kelly may not believe that Bitcoin is quintessentially different from other cryptocurrencies, but the results over the long term speak for themselves: Bitcoin has the longest track record of “number go up” technology and has continued to operate now for 12 years without so much as a hiccough.

Other cryptocurrencies can have use cases: ETH acts as the native coin of its ecosystem and facilitates a series of dApps to be built on top of it, but there are large differences when one is comparing an asset that has been designed for simplicity and immutability rather than functionality and utility.

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