Generalization and Specialization

Preston Brown

2 months ago by prestonbrown

There is much talk about BTC maximalism or BSV maximalism, with proponents of both arguing one can do everything they want with a single solution, “One chain to rule them all.” Today I’d like to talk about generalization/maximalism and specialization.

Especially when thinking about economics, ignoring the natural state of scarcity is a fatal mistake. Scarcity is combatted by production combining labor, materials, and tech into consumable value. In this landscape, one is presented with two strategies, generalist self-sufficiency, and specialized optimization.

On an individual level, libertarianism is highly favorable of a kind of self-sufficiency and self-reliance. On a collective level, nationalists like the idea of an isolationist self-sufficient economy and state. Self-sufficiency has a strong case to be made in the face of economic uncertainty, but it does incur a cost. With generalization pulling target and task in all directions, there is little focus leftover on specific iterative optimizations that maximize value, preventing dominance or mastery.

Specialists focus on an extremely limited, but highly optimal mode of production. The cost incurred by a specialist occurs in an isolationist scenario, where a specialist can not produce all of the necessities on their own.

Where specialization shines is in scenarios of open trade. Multiple enterprises and individuals having the ability to achieve high levels of productivity through specialization directly raises the standard of living (technology) for those involved when enabled with trade. Based Adam Smith believed that specialization and the division of labor were the most important causes of economic progress. Total outputs increase when one worker specializes in one type of activity and trades with other specialized workers. Source

How does this apply to blockchain technology? I believe it applies in the trade-offs of scalability and feature parity between different kinds of protocols. The great economist Thomas Sowell once said, “There are no solutions, there are only trade-offs; and you try to get the best trade-off you can get, that’s all you can hope for.” A blockchain like BSV that seeks to both pursue throughput and block size scalability will inherently make protocol decisions in the form of trade-offs. Trade-offs that might not exist for a blockchain that builds for scalability for either throughput or block size, but not both. It doesn’t mean that BSV is worthless, as I mentioned earlier there are other cases where generalization can be beneficial. But I would rather live in a world with more blockchains, and greater competitive choice, than a one-stop-shop blockchain that has the same competitive landscape as a nationalized business.