Trying to clarify something I said

I had a big, rambling conversation with a whole bunch of other executives from companies that Digital Currency Group (one of our investors) has invested in. Meltem Demirors of DCG asked if she could quote me and I agreed, and she put together this summary of the conversation. I was the only person mentioned by name, even though the vast majority of ideas on that page were from the other people in the conversation and I said nothing on those topics. I only said one thing, which came out kind of confusing when I said it, and then Meltem attempted to summarize it at the end.

Shortly thereafter, I got private messages from one of my friends who works at Blockstream, saying my friend was disappointed that I was lending support to a contested hard-fork (which would, I suppose, split Bitcoin into two new successor currencies — Baby Bitcoins). That wasn't what I meant! So here I am trying to clarify what I meant.

(Note: I blame my own confusion, more than Meltem's attempt to summarize in a different context, for the fact that it comes out sounding confusing and/or not-what-I-meant.)

I didn't mean “You should support a split of Bitcoin into two new successor Baby Bitcoins.”. Maybe you should! Maybe you shouldn't. I wasn't trying to persuade you either way. What I was trying to say was something very general and almost philosophical:

  1. When you enter into negotiations, know what your best alternative to a negotiated agreement is.

  2. Your alternative is not as bad as you fear.

First, item 1: a typical mistake for people entering into negotiations is to go in with a feeling that they have to get their way. They haven't really taken time directing their attention at what their best fallback option is if they don't get what they want out of the negotiation. People often go in without having done this, because it is uncomfortable to direct your attention at that scenario. It can feel disappointing or distressing. It can feel like imagining yourself failing.

However, it is really useful to go ahead and prepare yourself by mentally exploring the terrain around your desired outcome of negotiation. It helps you be ready for the case that you don't reach a negotiated agreement, and also it helps you negotiate better and it increases your chances of reaching a negotiated agreement.

If you go in without having thought your best alternative through, then you'll have a feeling that "if this doesn't work then everything is ruined". Then, when you start thinking that the other party is not going to agree to your terms, you may start to panic, and try to force them to agree. That tends to make negotiations fail, and it tends to leave opposition and bitterness in its wake.

Here's item 2: Your best alternative to a negotiated agreement is actually pretty good! It's not the end of the world. It doesn't mean your life has no meaning. There are plenty of good things about your best alternative to a negotiated agreement. This is usually true, and I also think it is true in this particular case where there are two camps (at least?) with different opinions about the way Bitcoin should evolve.

So, if you're involved in that issue, think to yourself what your best alternative is in the case that you cannot persuade the other side to meet your terms. Maybe — for you — it's supporting a contested hard-fork, maybe not. Maybe it is simply dropping your terms and adjusting your strategy, either by conceding to the other side's terms and planning around that approach, by biding your time for a future opportunity to get what you want, or by pivoting away from Bitcoin to something else entirely [*].

In any case — whatever your best alternative to a negotiated agreement is — you should think carefully, in detail, about what that would be like, and you should especially focus your attention on the advantages and the good things about that scenario. That will help you negotiate more evenly and more productively with the other side.

Okay, hopefully now my friends and allies who have strong opinions on all sides of that debate will be less mad at me.

[*] Yes, yes, Zcash is an excellent option in this case, and it is my full-time job to promote Zcash, but for the moment I was trying to give advice to people who may not take kindly to having a sales pitch in the middle of their life advice, so I left out the sales pitch for Zcash when I talked to the DCG folks about this.

P.S. And I didn't mean that Bitcoin is doomed. That was dry humor. I also don't believe that death and taxes are inevitable.


In any compromise between food and poison, it is only death that can win.

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Personally, I try to avoid saying anything at all about the Bitcoin block size issue in public, because there are too many people on both sides who would be determined to misinterpret whatever I say.


And now Bitcoin is supposed to be a store of value?
How can it be a store of value when it has diminishing usefulness...

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