Incentives

How a second layer on Bitcoin is designed and functioned has implications for how it affects the base layer. That makes the nature of how a second layer functions very important.

Shinobi’s Strawman is a weekly series where our Technical Editor Shinobi challenges the Bitcoin community, aiming to stir up conversation around heated technical debates.

The broken incentives driven by fiat money props up large corporations, keeping workers unproductive and stifling entrepreneurial innovation.

By eliminating reasonable stores of value, the fiat economic system incentivizes us to seek debt, hope for luck and take on other poor habits.

Fiat money leads to a degradation of incentives, creating a society motivated only by the consumption of resources and zero value production.

Proof-of-work is the innovation that drives energy innovation. Proof-of-stake ensures the richest among us will continue their control over others.

As a digital commodity that credibly enforces monetary policy, bitcoin is an asymmetric bet in a world gone mad.

The incentive impacts that stablecoins have on Ethereum could equally arise in Bitcoin if enough value is brought into the equation.

With Bitcoin, humanity has never before had such a fair game. A truly free market ledger that anyone can access and verify if they play by the rules.

Bitcoin’s incentives are clear and fair, while proof-of-stake has contrasting incentives that are the same as the current system where the rich get richer.