my debate with Blockstream, over to SC or not, comes down to not who is right or wrong but rather to how you perceive Bitcoin fits into the real world financial system. in other words, it is more philosophical than technical in that i'm sure SC's can be made to exist technically in some hodge podge way. the ultimate question remaining, imo, of will it allow Bitcoin to ever have an impact on where the real problem lies that being in the fiat currency printing space of central banks? i think not.
to my mind, if you allow SC's to latch onto the MC, you will create a small, isolated trading platform off in some corner of the real financial world whereby you can choose to invest your fiat into either the currency unit or into a multitude of speculative assets offered on the platform in the form of SC's. to my view, this would be no different than WoW. popular, but simply a play thing.
but if you allow Bitcoin and its blockchain to develop as a true fixed supply currency and public good, it has a chance of becoming a bonafide global reserve currency listed on the Forex. that would be huge as it would probably be the end of central banking as we know it. once established, other speculative assets can then be bought and sold in terms of BTC, ie, denominated in BTC terms. this path forces real world change in a more fundamental manner that will have a broader, more momentous, impact on the financial world. anyone wanting to participate would have no other choice than to buy the BTC unit and take the price higher.
i understand that SC's are ultimately a matter of choice, being open source, and that ppl can simply refuse to use them. but i think the issues are more than that. allowing a for profit company to make a source code change sends the wrong message to the global community at large that a vested interested group of men can manipulate the code to their own advantage and thus alter Bitcoins greater purpose. it would imply a community approval of such a move and could be interpreted as Blockstream attempting to take over a system that has the potential to change the financial world. no one wants that including myself.
Adrian has already outlined the mining risks and changes in incentive that will occur so i won't bother to go into that.
Just for the record long ago I asked my self what made Bitcoin valuable and the simple tl;dw answer I came up with was the set of voluntary rules that were enforced through incentives.
I relate to almost all the economic concerns put forward by cypher, and I am convinced they will unfold over time and the value I see in Bitcoin could be crippled. I don't hold the view that the blockchain could only be used as money but rather it should be designed to only be used as money, and the world of creative entrepreneurs should find new and innovative uses for that money with out limit. Changing the incentives in protocol puts the long term function of better money at risk.
I don't think my view is the minority, almost every BlockStream announcement and controversial tweet has been met with a big sell off.
My thoughts regarding this recent sell off are one of a voluntary market power shift taking place, those SC proponents with the ability to change Bitcoin have been thrown a juice bone with lots of meat on it, by those who have sold off giving the new risks they intend to introduce.
I'm convinced when BlockStream release a solid business plan that doesn't involve a protocol update we'll see a big uptick in price as that fiat sitting on the side comes back in.
