In his keynote at BTC Prague 2024, Jack Mallers, CEO of Bitcoin startup Strike, emphasized the need to level up the understanding of Bitcoin. He addressed the common questions about the differences between Bitcoin and other cryptocurrencies like Ethereum and Solana, as well as the possibility of a “flippening” where another cryptocurrency surpasses Bitcoin. Mallers ambitiously titled his talk “There Is No Second Best” and aimed to delve into the distinctions between Bitcoin and all other cryptocurrencies.
Mallers explained that the primary differentiator between Bitcoin and other cryptocurrencies is the use of proof of work. He highlighted that Bitcoin is the only major cryptocurrency that utilizes proof of work, a consensus mechanism crucial for ensuring trust and security without the need for a trusted third party. Mallers attributed the importance of proof of work to Satoshi Nakamoto, who deemed it as the only solution to enable peer-to-peer e-cash without a trusted third party.
Understanding proof of work is essential to grasping Bitcoin, Mallers emphasized. He described the digital era we reside in, where virtual representations are abstractions of reality rather than reality itself. Mallers drew an analogy between a map and territory to illustrate that digital tools can map out our world and offer new perspectives, but they are tools, not substitutes for the physical world they represent.
Mallers further elaborated on the abstract nature of computers and digital technologies, which reflect the significance assigned by our minds to circuits. He likened executing a computer program to an actor performing a script, stressing that hardware and computations are real, but the experiences they create are abstract. Mallers underscored that nothing in cyberspace physically exists; digital objects are abstractions that can be manipulated.
Mallers used Mark Zuckerberg as an example to demonstrate abstract power in the digital age. He explained that Zuckerberg exerts significant abstract power through social media, influencing thoughts, actions, and relationships, despite having no physical power over individuals. Mallers differentiated abstract power from physical power, which is tangible and bound by physical laws like military force or physical assets such as gold.
Transitioning from the gold standard to a fiat standard, Mallers illustrated how the US dollar evolved from a physical constraint to an abstracted reality, showing the efficiency and safety of abstract power but also its vulnerability to breaches of trust. He mentioned Adam Back, creator of hash cash, who used proof of work to tackle email spam by imposing physical costs on virtual actions. Mallers emphasized that proof of work connects the physical world to the virtual realm, making it the only physically real aspect on a digital screen.
Mallers criticized proof of stake systems, like Ethereum’s, which he argued detach cryptocurrencies from physical reality and subject them to abstract power dynamics. He highlighted how Ethereum and other altcoins, lacking proof of work, are vulnerable to manipulation by entities like BlackRock, whereas Bitcoin’s reliance on proof of work ensures defense by honest actors using physical power. Mallers concluded by asserting the equity and fairness of Bitcoin compared to altcoins with questionable pre-mining practices and rule changes, stressing the importance of education on the distinctions between cryptocurrencies.
