TL;DR
When people think cash I want them to think Bitcoin Cash, the peer-to-peer electronic cash system.
The market is asking for an electronic cash system.
The market is getting smart contracts that look like cash.
First class tokens can give the market what it wants, and in doing so there's massive reward to BCH value, but you have to read through to see how and why.
If tokens will be flying first class, then BCH will be the airplane.
Others will wake up to this reality of smart contract cash vs hard cash, and BCH has the massive advantage in that it already owns the cash narrative and has built a cash-centered community.
Bitcoin: A Peer-to-Peer Electronic Cash System
That is the title of Bitcoin whitepaper. But what is "cash" anyway? Roger Ver likes to talk about how, after he saw cigarettes being used as cash, he learned that anything can be cash, and the importance of voluntary exchange. I like that story. People use various things as cash, they use whatever they want as cash. Wikipedia says that "cash is money in the physical form of a currency". It doesn't say which currency. It also says physical.
It hasn't been physical since 2009. Here comes that title again.
Bitcoin: A Peer-to-Peer Electronic Cash System
Notice the wording. Electronic cash system, not cash currency. Own the full title. Bitcoin is the name of an invention, not of a single currency. A peer-to-peer electronic cash system is the invention.
What if I told you that Bitcoin could be the carrier of other currencies, to let them enjoy the benefits of a peer-to-peer electronic cash system. The same benefits BCH currently enjoys alone. What about other cash, are we leaving it behind?
That's right, I'm talking about bringing other currencies on Bitcoin, the electronic cash system. Which could be the BCH blockchain, if it wants to be.
The reward to BCH value will be massive
Continue reading to find out how. Or scroll down to the "math" part to peek, but come back, please.
Smart contracts first got all the hype, but what were they mainly used for? Tokens, and what are tokens? Mostly electronic cash currencies. So ERC20 exploded. Then we had the DeFi boom happen. And what do DeFi smart contracts operate on? Cash. So ERC20 exploded again, but this time it was not ICOs but ERC20 USDT that exploded in use. See where I'm going with this?
Now everyone is talking about smart contracts. What's more interesting is that now everyone's also thinking in smart contracts so they can't see the truth in front of their face. The market is asking for an electronic cash system. The market is getting smart contracts that look like cash.
Smart contract enabled electronic cash systems suck. They don't even see it because they're thinking in smart contracts. Thank God, because there's our chance to shine and grab market share, if we will not be too late, because they will wake up eventually. This is unclaimed land I'm talking about, there's no competition, yet. We need to be the ones claiming it first.
"But what if our blockchain gets overcrowded with other cash?", I can imagine you worrying. Don't worry, embrace that cash.
This is how we win
This is what we need to want. Continue reading to find out why.
There are now two active Bitcoin Cash proposals involving tokens on the table. One wants to enable smart contracts, which could then be used to create tokens, and I'm fine with that. But that's again thinking in smart contracts. And smart contracts are meant to operate on cash, not create cash. Sure, they could operate on BCH, but what about other cash?
So we need cash. And the other proposal gives us cash. Real, hard, cash. As hard as BCH. I mean cash enforced by the same mechanism described in the whitepaper. Direct miner consensus. Not miner processing script to teach them that sum of input quantities must equal sum of output quantities. Miners ought to know what makes cash cash. That must be a hard coded rule if we want efficient cash.
This is why Andrew Stone's proposal enables first class tokens. Because they will not be enforced by secondary smart contracts but by C++, you know, the same programming language that enforces the BCH "contract".
But what's in it for BCH? Please don't say fees. No, not fees. It is much better. If tokens are flying first class, then BCH is the airplane.
The proposed design is titled Group Tokenization, but the title really undersells it.
Think of them as cash bills which need to have that fraud-proof gold-like strip made out of BCH. That's right, every cash bill must have it. You split one bill into two, the two bills need to have two strips, and the extra material needed must come from somewhere. The amount of BCH needed for one strip? Currently 546 sats.
Under the hood, those bills are used exactly the same as BCH, because every such cash bill is also a BCH UTXO. Everything that applies to BCH consensus like UTXO balance checking, SPV, 0-conf, Script, everything works with those bills. Just like that? Just like that! No smart contracts, only a smartly designed electronic cash system. Which can then be used in whatever smart contracts we want.
Now do the math
Roughly 40b USD bills are in existence. Let's just do bills, even though we're doing coins, too.
That's 40b x 546 sats, that's a total of 218,400 BCH that has to be bought on the open market and put out of circulation during the existence of those bills. And yes, any movement of those will have to pay fees in BCH, too.
The best part? If your currency becomes depreciated, you can melt those bills and claim back that BCH from those anti-fraud strips. Even if you end up holding a worthless token, you can still claim that sweet BCH that was used to carry it. Did someone say gold standard?
That's just one currency's physical cash.
What happens with hashpower if BCH value rises? What then becomes the most secure peer-to-peer electronic cash system on the planet?
Mic drop.
And what about BTC? Well, it is a "store of value", it will be that - stored. Maybe also used as cash on BCH blockchain, and requiring BCH to make it move. Wouldn't that be something?
End Note
I want you to want it! More than you want anything. If you read all that and still don't see it, then read more! I'm putting all my energy towards helping this idea "click" with people, towards bringing that sweet "aha!" moment. But everyone reaches it in a different way, so that's why I intend to continue writing. Reading eventually gets you there.
Anyway, others will wake up to this reality of smart contract cash vs hard cash, and BCH has the massive advantage in that it already owns the cash narrative and has built a cash-centered community.
Tech is not what makes a project successful, tech is just an enabler. The same tech could exist in some blockchain nobody knows about and it wouldn't get far. I'm worried about it being implemented in a blockchain people do know, and that they do it before us.
We all know Bitcoin Cash. I don't want to let it go to waste. Do you?
When people think cash I want them to think Bitcoin Cash, the peer-to-peer electronic cash system.
I don't know when we can get Group Tokenization the soonest. I know I want it yesterday, but we have to be reasonable, give everyone time to prepare. Check the design and the implementation, run it on testnet, etc. It doesn't exclude the other proposal, I just think it needs to be given the priority it deserves.
We owe it to ourselves.
Credits
Satoshi Nakamoto, for creating Bitcoin
Andrew Stone, for completing Satoshi's work by making Bitcoin the peer-to-peer electronic cash system
Copyright
This document is placed in the public domain. Attribution neither required nor desired.
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