This article is reproduced from the WeChat public account "TH Travel Notes", written by Tang Han, original link: https://mp.weixin.qq.com/s/Jgok2pi6kx2T4AaqDDIPzg
"With PoW as time, UTXO/Cell as space, and energy as the driving force, we can create a world."
The Bitcoin Renaissance is a topic that everyone is talking about. Many projects place themselves under this banner to explain their current actions. Currently, this wave mainly refers to the convergence of funds, consensus, and developers towards the Bitcoin ecosystem. But perhaps we can think more deeply about this wave: what is it? What will it leave behind?
I believe that the Bitcoin Renaissance is a revival of two fundamental value propositions: PoW and UTXO. The former is in contrast to PoS, and the latter is in contrast to the account model, with Ethereum being the representative of the PoS+Account model. This Bitcoin Renaissance means that after 15 years of development in the blockchain industry, it is returning from the PoS+Account route led by Ethereum to the PoW+UTXO route led by Bitcoin.
But why is this happening? What are people tired of? When people are returning to Bitcoin, how is the world they imagine different from Ethereum? (Apart from the fact that Satoshi Nakamoto's disappearance made Bitcoin a no man's land.)
The Tendency of Mimesis and Retroism#
If you carefully read the whitepapers of Bitcoin and Ethereum, you will be able to understand how these two systems are different.
Image source: Bitcoin Whitepaper
In the abstract of the Bitcoin whitepaper, Satoshi Nakamoto defines Bitcoin as "a purely peer-to-peer version of electronic cash." We can find a reference to Bitcoin in the real world: cash. The characteristics of cash are: allowing online payments to be sent directly from one party to another without going through a financial institution. This constitutes a form of mimesis. In the Ethereum whitepaper, there is no such reference. We will discuss this later in the article.
One of the reasons Satoshi Nakamoto invented Bitcoin was because this peer-to-peer electronic cash did not exist in the digital world, but it was needed. At that time, it was the year 2008 when the global financial crisis was sweeping the world, and many banks were collapsing, making it impossible for people to withdraw money from their bank accounts. Therefore, although bank transfers provided a way for digital payments, the fact that they relied on third parties made people realize: In fact, this is not my money, I am just holding a balance in the bank's ledger. The concept of "electronic cash" did not exist, let alone the concept of "holding electronic cash".
Satoshi Nakamoto did something: he successfully created a digital mimesis of real cash. How was this mimesis achieved? He used PoW, or Proof of Work, as the foundation to provide security for electronic cash (in fact, PoW may have a much greater role than this). PoW ultimately relies on real-world computing power and energy to ensure the security of the system. He also used UTXO as the carrier to simulate the physical form of cash, storing the user's money in UTXO. The ownership is resolved through the "lock" of the private key.
Bitcoin's mimesis of electronic cash is very successful. PoW unifies the security of the digital world and the security of the real world, both based on energy; while UTXO provides independent and non-interfering digital physical forms. Together, they create a deep mimesis of the real world in the digital world. If Ethereum can be called radicalism, then this digital mimesis can be called a form of retroism.
Why Return to Reality?#
This retroism implies an insight: there is a deeper wisdom behind the real world that the digital world can learn from. This insight is often forgotten because people create the digital world to surpass reality. But we can still understand this point through a few examples:
- In a game, you have a prop, such as a golden sword. However, due to the game developer's financial difficulties, they shut down the server a year later, and the golden sword disappears. Can you imagine a situation in real life where the golden sword you own suddenly disappears?
- Vitalik once loved the warlock character in a Blizzard game. One day, Blizzard suddenly decided to remove the life drain skill, and he cried and embarked on the path of resisting centralized internet platforms. Can you imagine in real life, a group of talented people suddenly having their skills drained by another company executive?
- The blog website you love is ordered to be shut down. Even the entire website can no longer be found, and two years later, there is no trace of this person on the internet. Can a book in real life disappear just like that?
- ...
We can imagine a digital world that is crazy and far from mimesis: news websites that can be 404 at any time. Cups that cannot be owned. Game characters whose abilities can be canceled at any time. You may feel that something is wrong, but what exactly is wrong?
Image source: "On the Existence Mode of Technical Objects"
The answer is: it makes us live in a fragile, sycophantic (a sophisticated means of control), and ethically inconsistent control system. The digital objects in this system have images but no solid existence, or they cannot exist freely and must rely on a third-party platform. However, we project a lot of emotions, time, and trust onto these images. The emotions we project ultimately become chips controlled by the platform.
When people love and trust digital objects that cannot exist freely and are designed by others, they lose the sense of reality.
Reality implies a certain solidity, which is the basis for the birth of ethics and morality (privacy, human rights, freedom, responsibility, sublimity). This may be the reason why the digital world is returning to reality.
Representations of Bitcoin's Mimesis Tendency#
Image source: Adobe Stock
Let's go back to Bitcoin. In the Bitcoin ecosystem, we can see a strong tendency towards mimesis. Bitcoin simulates electronic cash, and Bitcoin developers also find inspiration from different objects in the real world to simulate. Here are some examples for your reference:
- Bitcoin: electronic cash
- Lock: lock, later extended to a one-time seal by Peter Todd
- RGB protocol: Scottish land deeds (only store Commitment on Bitcoin)
- Ordinals protocol: dyed 聪 (serial number)
- Atomicals protocol: digital material theory
- Runes: viewing Bitcoin as a slate
- KeyChat: stamps, envelopes
- CKB, which follows Bitcoin's design philosophy: cells (the basic unit of data existence in CKB)
- Spore DOB protocol: can embed DNA and interpreter in cells
Each of these examples can be discussed at length, so I don't intend to expand on the details in this article. What I want to share is: although the construction of Bitcoin is very simple, different developers seem to find different perspectives in this simple construction to build their own worlds. Just like a tree, some people focus on the leaves because of their soft characteristics, so they use them to weave flower wreaths; some people focus on the branches and use them to build houses; some people focus on the bark and use it for heating. Some people are inspired by the tree and plant a forest.
Different understandings arise once something exists. Different people can create different things based on different perspectives of Bitcoin. And these different understandings of Bitcoin converge into the chain we see today, forming the largest consensus in the world.
However, it seems difficult to see this in Ethereum.
Ethereum is not Mimesis#
If you look through the Ethereum whitepaper, you will not find the same mimesis tendency as Bitcoin. From the beginning, Ethereum was function-oriented. It did not aim to simulate anything in the real world but was created to facilitate the development of on-chain applications. Ethereum has always been associated with smart contracts.
Image source: Ethereum Whitepaper
But I want to say that in real life, existences are never function-oriented. Existences must exist first and then have their functions understood and explored through practice. Just like a tree. The tree does not exist to be burned as firewood, it just silently exists there. As long as the energy does not run out, its life does not end, and it can continue to exist. It is only in the process of interacting with it that you discover its various functions.
PoS does not provide the energy foundation for assets on Ethereum to be isomorphic to reality. Although there have been countless debates on the question of whether PoS or PoW is more secure, and supporters of both sides have found their own perspectives to feel at ease, they have already headed towards two different worlds in terms of mimesis. The world of PoS is a more human-centered world, while the world of PoW attempts to achieve a unified cost structure between the digital world and the real world, that is, in order for existences to exist, energy costs must be paid.
In reality, existence is never sycophantic or easy, but laborious. Existences are constantly facing entropy. Think about it, if you don't clean your house for a week, it may be covered in dust. Maybe you don't want to clean it yourself and use a robot vacuum cleaner to clean the room, then you have to charge the robot vacuum cleaner. Another example: if you don't consume energy and don't eat, as a living being, you will die. These are basic common sense.
The existence of something requires energy support to counteract entropy. This point has been inherited in the world constructed by PoW. In order for the on-chain world to exist, the PoW chain must continuously consume energy. Supporters of PoS believe that this is environmentally unfriendly and unnecessary from a security perspective. However, energy consumption simulates a cost structure similar to reality, and this cost structure constitutes the basis for extending ethics to the digital space and confirming the reality of digital objects. I will discuss this in detail in another article.
Although Ethereum's account model is conducive to more developers developing applications, this model naturally determines that Ethereum cannot be mimesis. It is more like a relational existence, where the existence of all things is state-based and needs to find its own state and position in the world state tree. It cannot achieve the solidity and stability of UTXO. It is difficult for us to imagine a situation in the real world where an apple can be influenced by a cup thousands of miles away, but in the world of Ethereum, it is possible because there are no independent apples and cups, only one state after another. However, this state is not controlled by any third party. Contract attacks and asset theft are common events on Ethereum.
Or in other words, there is no existence in Ethereum.
To some extent, the lack of existence makes the innovation in the Ethereum ecosystem limited by the updates of the leadership's narrative. If something exists, people can explore its functions from different perspectives based on their observations and turn it into different things. For example, Peter Todd found a one-time seal on Bitcoin; Casey found a historical slate on Bitcoin. Although Satoshi Nakamoto really just wanted to build electronic cash at first, you see, once something exists, different perspectives can create different things. A tree can be used to build a house, as firewood, or as root carving...
Because there is no existence, the leadership of Ethereum must define what Ethereum is, especially constantly giving directions in terms of functionality. Since it is functional, it needs to continuously optimize this functionality, which leads to more and more aggressive parameter improvements and feature integrations... But doing so easily loses direction.
Back to NFT: Can Digital Objects Replace You?#
Let's answer the initial question of the article: what changes will occur when we return from Ethereum to Bitcoin? What will the Bitcoin Renaissance leave behind?
A natural trend is to build a true all-chain digital world, or autonomous world, based on PoW and UTXO.
Although the Ethereum community also discusses all-chain games, the worlds pointed to by all-chain games are different under two completely different world technical architectures. The architect of CKB, Jan, once said something that impressed me the most: "With PoW as time, UTXO/Cell as space, and energy as the driving force, we can create a world." PoW+UTXO itself constitutes a simulation of the real world, and this world has its own internal time and creates independent and non-interfering physical forms for digital objects in the world. People can use the "Ghost in the Shell" mode to write content into the existing physical forms to build digital objects. On the other hand, the PoS chain does not have its own internal time, and there is no independent concept of objects like UTXO in the chain. The "objects" inside are more like a relational existence, essentially a state recorded on the global ledger.
On the PoW+UTXO chain (not just Bitcoin), we can imagine a digital object that requires energy to maintain its existence, just like a physical object in the real world, and consumes the same energy. We can also imagine a relationship between the world and objects: construct a digital object that exists in terms of material structure when the world (i.e., the blockchain) exists. Its existence is not subject to anyone's will. No one can destroy or change it. In this sense, the existence of digital objects is equivalent to the existence of the blockchain in terms of security and effectiveness.
We cannot imagine that an NFT on Ethereum has the same solidity as Ethereum itself. In most cases, NFT images exist off-chain, and there is only one contract state on Ethereum, which allows programming and does not represent the object itself. It allows developers to program as flexibly as possible, which used to be a feature that Ethereum was very proud of. However, when constructing an autonomous world, this human-centered tendency actually makes the relational existence in the world fragile and not solid.
NFT was the core concept that exploded in the previous bull market's metaverse concept and the key factor for the explosion of the Ethereum ecosystem. It runs through the entire bull market. Whether it is encrypted art, PFP images, metaverse, GameFi, or later DAO and SBT, they are all inseparable from NFT. Unfortunately, developers on Ethereum tried to build chain games around NFTs but could only converge into GameFi in the end; idealistic developers tried to develop all-chain games and evolved into a set of design concepts called AW, but it was difficult to implement.
I believe that all of this will start over in the Bitcoin ecosystem, but the path to realization, people's understanding, and the final presentation will be very different. Bitcoin's mimesis tendency and retroism will accompany developers. Good developers should not think about how to quickly port the existing world on Ethereum, but should think about how to build new rules and a new world on this solid land. This may be the greatest innovation of this bull market.
I will discuss this part in more detail in another article.