“Economics should not be treated as a second-class citizen to Computer Science, but should be considered in tandem.”
Network security and privacy researcher Kristov Atlas wrote a solid piece outlining the importance of taking economics into consideration when making engineering decisions particularly with Bitcoin. Crypto-economics, he says, is severely undervalued yet critically valuable to securing the future of Bitcoin.
He pointed out specified restrictions in the original design—“points of rigidity” that worked back when Bitcoin was just starting and was known to only a few, but cannot support the ecosystem as it grows. It can be noted that the scaling war persists to this day between big blockers (Bitcoin Cash/BCH) and small blockers (legacy BTC)—who insist that the 1Mb block size limit cannot be increased even though it was clearly a temporary security mechanism that was intended to be raised as necessary. By keeping the block sizes small, the artificial and “immediate need” for second layer solutions was justified—along with the unreasonably high fees that come with it.
“One of the points of rigidity, introduced as a temporary security mechanism, has been repurposed as an economic control. In spite of Satoshi’s legacy of holding economic considerations as a primary value, this has not persisted with all of his successors.”
Consequently, other cryptocurrencies quickly gained traction, as they offered and successfully provided faster and cheaper services. Atlas points out that if we want Bitcoin to survive, the technology should be looked at not merely from a computer engineer’s perspective, but with great consideration allocated to the economic implications of any updates to the system.
“Economic research should be considered seriously and responded to… Economics should not be treated as a second-class citizen to Computer Science, but should be considered in tandem.”
Even just as important is Atlas’ point on decentralized development: development should not be entrusted to a few but opened to a community of developers. Bitcoin Cash employs this system with their open developer community.
It becomes a problem when a few developers gain influence over majority of the community for long periods of time. The community must resist this, as it most likely comes at a price. Individuals will have their own agenda at some point, which is why democratic nations have elections—in general, you can’t trust anyone with power for too long. He points out that whoever the “currently most influential regime” is, this is not—and should not be a permanent situation. We must enforce mechanisms to “protect Bitcoin from the temptations of its future caretakers.”