Bitcoin Can Be “a Means of Resistance,” Longtime BTC Pillar Jameson Lopp

Colin Muller

Jameson Lopp, long time cypherpunk, Bitcoiner, and currently infrastructure manager at Casa, sat down with Vlad Costea of Crypto Insider for an extensive chat.

Lopp is an old hand with Bitcoin, having gotten involved in 2012, for both ideological and geeky reasons, and there was plenty of experience to draw on for the interview. Lopp had plenty to say, yet tempered and moderate.

On Bitcoin Cash

Lopp explained that Bitcoin and Bitcoin Cash occupy opposite sides in a crypto-philosophical debate; namely, is cost of transaction more important than the cost of validating the entire blockchain, or vice versa?

Bitcoin, with its much different approach to scaling (he refers here to the Lightning network), prioritizes low validation cost, whereas Bitcoin Cash prefers a low transaction/high validation cost on a much larger blockchain.

Lopp’s allegiance is to Bitcoin’s approach, but he does not begrudge the other side. He also considers Litecoin to be in Bitcoin’s camp, in that the Litecoin community is “willing to adopt these cutting-edge layer two technologies" like the Lightning network.

On Proof of Stake and Ethereum

Although a diehard Bitcoiner, Lopp is not inimical to Proof-of-Stake (PoS) methods of consensus per se. He just thinks it’s a hard road, commenting that “right now there aren’t any really great PoS systems that have been deployed” into the wild.

One thinks of Ethereum, and Lopp recognizes that “they’re on the bleeding edge [...] constantly rethinking what they’ve done”. He is most interested to see how sharding implementation will play out. Notwithstanding such concerns, he says “I personally would adopt [a good enough PoS platform]”.

Interestingly, Lopp’s ultimate prediction on Ethereum is that the protocol - the Ethereum Virtual Machine - will enjoy more adoption than an Ethereum world-computer.

On the end of Bitcoin Mining

Although the creation of new Bitcoin will not expire for “like 100 years”, mining/supply reduction will become an issue much sooner, within 10 to 20 years, Lopp says. For this reason, it is crucial that the Bitcoin community develop “a fee market and continue to offset the subsidies”, to make up for the inevitable shortfall in mining returns - otherwise, hashing power will diminish to an unsecure level.

He mused that, eventually, if the network became important enough, “we need to be paying basically millions of dollars a day” for the desired security.

On the B Foundation

Regarding his role in the new non-profit devoted to furthering Bitcoin adoption, Lopp eschewed any role dealing with “with government propaganda or perspectives of people thinking what Bitcoin should be”, continuing “I am interested in funding different projects that are trying to build on top of Bitcoin and lightning, really any other technology to build on Bitcoin...."

On Actually Using Bitcoin

For all his Bitcoin bona fides, Lopp expressed a preference - for now, presumably - for just using fiat, citing that using Bitcoin is not actually very private, that the market is at the bottom of a bear cycle - it would be selling low - and that the state of tax regulation in the U.S. remains a “huge nightmare”.

On Liquidity, Centralization

Perhaps surprisingly, Lopp does not have any specific moral qualm to centralized liquidity pools linking exchanges, pointing to the wastefulness that “a significant fraction of blockspace that is being used up doing nothing more than sending money from one exchange to another”. He does add, however, that he hopes future liquidity pools will utilize the Lightning Network.

Musing on the subject of EOS' potentially dubious governance structure, Lopp lamented that "I think a lot of the regular users don’t really worry about edge-case scenarios, and as long as the system seems to work, then they’re not really concerned with what might cause it to fail. Unless it actually fails, then they generally don’t care”.

On Individual Sovereignty

The conversation eventually veered into a very serious direction, on the subject of “Bitcoin as a means of resistance” to the power of governments.

Lopp identified an over-legalized world, in which “if you are remotely suspected of some sort of crime, law enforcement will just start digging through your entire past. And if they can find anything that is suspicious or gives them some sort of probable cause to dig into and try to start creating problems for you, then it’s pretty easy to do so."

Lopp is hopeful that privatizing money and other previously government-run necessities, will "put nation states back on their heels", forcing them to compete with private institutions in a “free market”. He sees money as a "concept that belongs to humanity in general. It is a shared agreement, it is not something that is supposed to be dictated as to how it operates”.

“But it’s not gonna be easy, either”, he concluded.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.