Bitcoiner Udi Wertheimer: “Blockchains Are Expensive, Inefficient, Unintuitive. You Need a Good Reason to Use One.”

Udi Wertheimer describes himself as a troll, adversarial thinker and toxic podcast host. He is also a coder and Bitcoin enthusiast who’s consistent critiques of the excesses of the cryptoverse make him either -  depending on who you ask - a much-needed and sharp voice of reason in an over-excited space, or a naysaying toxic maximalist (or toximalist, for short).

Regardless of your perspective, there is no doubt that he has established himself as one of the most prominent voices in the eclectic and drama-filled space that is Crypto Twitter.

I asked him a few questions...

When did you discover bitcoin, and when did you get involved?

Probably around 2013-2014.

What is your job description?

I’m an independent software developer and consultant.

What’s the biggest misconception that people have about Bitcoin?

Hard to tell what the biggest one is. One that I’m particularly concerned with is that many people think Bitcoin is some magic “blockchain application” that stands to “decentralize all things”. I don’t think it is, and I’m not even sure what that would mean. In my eyes, Bitcoin is a purely digital financial asset, and nothing more.

In your recent clash with Alex Mashinksy of Celsius, you asked “why does this need a blockchain?” Do you think the word “blockchain” has become fetishized?

Oh for sure. I think we’re finally seeing this trend declining a bit. I think anyone who’s been here long enough knows that the first question to ask any founder in this space is “what are you using a blockchain for, that you couldn’t accomplish without it”. There’s almost never a satisfactory answer to that question.

Are there any good use cases for blockchain other than Bitcoin?

Personally I can’t think of any. Again, the real question isn’t “what can you use a blockchain for”, instead it’s “what can’t you do without a blockchain”. Blockchains are expensive, inefficient, unintuitive, etc. You need a good reason to use one.

I gather you’re not a fan of Ripple, how would you summarise why?

I have nothing against ripple specifically. I think most digital assets, Ripple included, make artificial use of concepts from Bitcoin without getting any of the benefits (mainly censorship-resistance and immutability). That means that they’re inefficient and will be replaced by competitors that are more efficient (i.e. competitors don’t attempt to use a blockchain for no reason, don’t invent a token that no one needs or wants). As such they’re fundamentally not very good investments.

Bitcoin is also inefficient, however the difference is that it’s actually censorship-resistant and the asset’s financial properties are actually immutable. And I strongly believe it would be extremely hard to replicate this with any other asset (although I hope I’m wrong!). So while it is inefficient, at least it comes with some specialized benefits, which is why I’m long-term bullish on bitcoin, and long-term bearish on most of the rest of the unregistered, unlicensed securities on coinmarketcap.

What in your opinion is the worst, scammiest altcoin in the top 10 cryptos?

Next question...

Do you care about the bitcoin price?

Sure, it would be silly to claim I don’t care. But after a few years you become less and less sensitive to the volatility. I hope to become even less sensitive to it as time goes on, as it is distracting. But economically, the volatility is a big part of what could make Bitcoin really popular one day, so it’s not strictly bad.

Do you think Bitcoin needs to incorporate more privacy features?​​​​​​​

I think privacy and fungibility are likely to be the next area of contention in Bitcoin. It’s my belief that we should improve people’s ability to maintain good privacy hygiene. At the very least we should want Bitcoin not to be worse than traditional systems (like physically holding and transacting cash or gold).

But we also have to respect people’s expectations of verifiability in Bitcoin. For example, a big part of bitcoin is that anyone can count for themselves that no more than 21 million coins exist, which means amounts must be visible. It’s likely that people won’t agree to let go of that capability.

I’m very optimistic on employing privacy-preserving features in second-layer solutions though!

What do you think of the two most recent implementations of the MimbleWimble protocol (Beam and Grin)? Should Bitcoin incorporate these features?

I think it’s great that people experiment with things like MimbleWimble. Personally I found the protocol very elegant and interesting, I think anyone interested in the technical side of Bitcoin should devote some time to learn about it.

It’s good that the coins exist because that means people can experiment and we can learn from that, and maybe someday employ some of those learnings (although that’s probably very far off, MimbleWimble is very fundamentally different from how bitcoin works).

But I don’t think that the coins themselves have a strong value proposition. In other words, you can say I’m happy some people are willing to buy those and directly/indirectly fund the research, but I’m not going to buy them myself as I don’t think they constitute of a very good deal to the buyer...

Finally, on a scale of 1 to 10 how offended would you be if I described you as a “thought leader”?

I’m not easily offended but please don’t describe me as a thought leader.

I’m really just a guy who enjoys talking about this stuff, that’s all. I think that in the context of “thought leadership” it’s very important to remember that the vast majority of bitcoiners prefer to keep quiet. They don’t think that I or anyone else “represent” them. They use Bitcoin for their own needs and ignore the noise. If anyone seeks to really understand these markets, they should try to understand this silent majority… not a few loud mouths on twitter.