Jimmy Song: Why altcoins are indifferent to Bitcoin's most important Taproot upgrade

Note: The original author is Bitcoin developer Jimmy Song, who has been contributing to the Bitcoin open source project since 2013. In addition, Jimmy Song is also a very well-known Bitcoin maximalist. Therefore, the "Altcoin" in this article is translated as "copycat coin", which can also be replaced by "competitive coin".

Last week, Taproot locked in, and while Bitcoiners celebrated, Altcoiners, on the other hand, didn’t care much. I doubt they even knew what Taproot was, or what it could do. Why should they care? Altcoin developers showed no interest in adding Taproot to their project codebases.

The question is, why aren’t they interested? What’s stopping them from embracing some of the technological advances that have significant benefits? I’m going to explore three reasons today.

First, altcoins are forever lacking developers. The irony is that many of them are paid, usually through a premine or some ongoing developer subsidy, but it’s still hard to get developers to implement anything, even if it’s a port of the Bitcoin Core code. An upgrade like Taproot requires not only a good understanding of the math and computer science behind the construction, but also great testers, documenters, and adversarial thinkers who can figure out how the new feature interacts with anything available on their platform. Altcoins lack that, so they mostly just remain static and don’t need obvious user-mandated upgrades like Taproot because they don’t have the developers to do it.

Second, altcoins have their own marketing push, and coins built on proof of stake (PoS) have to make PoS compelling. Any developer resources they have are skewed toward the marketing message they want to promote (e.g. fast transactions! privacy!). These organizations are very top-down, meaning all developers are committed to a roadmap, and there won’t be non-roadmap projects like Taproot, which would hurt their marketing message too much.

Third, altcoins are centralized. So getting better block efficiency, faster signature verification, or reducing the specs needed to run a full node isn't the most interesting thing for altcoins. They already know their project is centralized, so why bother optimizing anything? Since running a full node is already hard enough, and few people are running them, why bother making it easier? In other words, altcoins don't care about features that help individuals be self-sovereign.

The upshot of all this is that altcoin projects are exposing their centralized nature. While they pay a lot of lip service to the term “decentralization,” the fact that they don’t offer features like Taproot shows that what they really like is centralization, not empowering users. In contrast, Bitcoin gives users the ability to verify, not trust. In other words, altcoins didn’t copy Taproot because they like centralization, and they have little interest in “decentralization.”

Another myth we can put to rest right now is that “altcoins are a testing ground for Bitcoin”. Litecoin did very briefly experiment with Segwit in 2017, but no other coin has actually shown interest in the features Bitcoin wants to implement. No other protocol is interested in ANYPREVOUT or cross-input signature aggregation or OP_CTV. They are not testing grounds at all and are completely incompetent to implement any of these features, let alone see if they work.

Ultimately, it’s because altcoins are indeed centralized, and these new features are too difficult for rent-seeking developers who maintain other coins to implement.

Bitcoin

Taproot locked in last Saturday morning US time, and due to the disappearance of some hashrate (probably due to China's crackdown on Bitcoin miners), the actual lock-in time was a bit longer than expected. Nevertheless, about 98%+ of the hashrate supported Taproot during the difficulty adjustment period, which means that Bitcoin is ready to activate Taproot in November this year.

Galoy is an open source community based Bitcoin wallet, the idea is to provide something between self-hosted open source wallets and closed source wallets provided by exchanges, which is a good middle step, especially in third world countries.

Congratulations to Dhruv Mehta and Jarol Rodriguez, whose Core development work is now sponsored by Gemini! It’s great to see more developers getting the funding they need.

Lightning Network

BitRefill published a post about what it’s doing in El Salvador, and among other things, they settled 10,000 lightning transactions in a single day. I hope they and other lightning companies continue to develop the right tools so people can make the infrastructure stronger in El Salvador and any other country.

Economics, Engineering, etc.

Nik Bhatia analyzes the changing narrative after El Salvador announced that it would accept Bitcoin as legal tender, as did Peter St. Onge and Hodl Onward. All three analyze it from some different angles and offer interesting perspectives on what might happen next. What they all agree on is that this is a good thing for El Salvador and that it could start a game of bitcoin supremacy with other countries.

Last week, Russell Okung also wrote a letter to the Nigerian president, aiming to spur Bitcoin adoption in the country. Bitcoin is already very popular in the country, and acceptance is only a matter of time, and I hope his voice can push Nigeria in the right direction.

Tomer Strolight wrote a great long article about art, integrity, Bitcoin, and NFTs. I found the concept of integrity in art to ring true, and as the article says, NFTs are really too easy to create, which leads to the absurd things we see. As he emphasizes in The Art of FractalEncrypt, real art has some proof of work (PoW).

Jeremy Hildreth argues that Bitcoin is like a meter that will make economics more of a science. Because of its absolute scarcity, we can use Bitcoin to objectively measure other things in economics. This idea is interesting because economics (especially macroeconomics), due to the lack of objective measurement standards, relies on ridiculous cumulative numbers such as GDP and CPI. I am very interested to see how Bitcoin performs in economics in the next 30 years.

Finally, last week Kyle Torpey took a brutal swipe at Paul Krugman for his stance on Bitcoin over the past decade. Again, Krugman, as a Keynesian economist, doesn’t actually have to be right about everything, he just has to say what the oligarchs want him to say.