1/51) BTC is fools gold
It has a broken long-term security model, lacks capacity, programmability & composability
With comparatively weak token economics
I abandoned BTC by 2017
Yet, I still believe in Bitcoin's original vision, which I first fell in love with back in 2013:
It has a broken long-term security model, lacks capacity, programmability & composability
With comparatively weak token economics
I abandoned BTC by 2017
Yet, I still believe in Bitcoin's original vision, which I first fell in love with back in 2013:
2/51) All of the qualities of Bitcoin we hold dear
Censorship resistance, immutability, decentralization & self-sovereignty
Are no longer championed by BTC but by its competitors instead
The greatest tragedy is that most people are still being misled in regard to this reality
Censorship resistance, immutability, decentralization & self-sovereignty
Are no longer championed by BTC but by its competitors instead
The greatest tragedy is that most people are still being misled in regard to this reality
3/51) All due to the dramatic shift in purpose, economics & vision which occurred during the block-size debates
Contrary to popular belief:
Not increasing the blocksize limit represented a major departure from the original vision & purpose of Bitcoin
Leading us down this path
Contrary to popular belief:
Not increasing the blocksize limit represented a major departure from the original vision & purpose of Bitcoin
Leading us down this path
4/51) Starting with BTC's security dilemma:
If BTC cannot generate sufficient fees within the next decade, the long-term security model fails!
There were two dominant streams of thought on how to solve this problem
Represented by the two sides of the historic blocksize debates
If BTC cannot generate sufficient fees within the next decade, the long-term security model fails!
There were two dominant streams of thought on how to solve this problem
Represented by the two sides of the historic blocksize debates
5/51) This is how BTC died in 2017
A failure of governance that led to the wrong choices being made
Culminating in the blocksize debates & many successions
Years later, with BTCs new flawed path set in stone; it has to face the consequences of that decision in the near future:
A failure of governance that led to the wrong choices being made
Culminating in the blocksize debates & many successions
Years later, with BTCs new flawed path set in stone; it has to face the consequences of that decision in the near future:
6/51) BTC has to double in value every four years for the next century or sustain extremely high fees
Just to maintain the current level of security
Such growth is impossible since it would exceed global GDP in 33 years based on current price
BTC's security is doomed to fail!
Just to maintain the current level of security
Such growth is impossible since it would exceed global GDP in 33 years based on current price
BTC's security is doomed to fail!
7/51) This price doubling would have to continue for another 80 years until the security budget runs out completely
If you understand exponentials & economics, you should know that this is entirely impossible
BTCs security & technical foundation are made out of sand; false hope
If you understand exponentials & economics, you should know that this is entirely impossible
BTCs security & technical foundation are made out of sand; false hope
8/51) Fees will never reach sustained extremes due to a ratcheting effect of the fee market
Paying hundreds of dollars for a single transaction is not realistic in a competitive market
When fees spike, users leave, all due to the unnecessary addition of the block size limit
Paying hundreds of dollars for a single transaction is not realistic in a competitive market
When fees spike, users leave, all due to the unnecessary addition of the block size limit
9/51) It would take more than seventy years for everyone in the world just to do a single TX
Some have proposed the Lightning Network as a solution to this problem
However, onboarding people onto the LN in a non-custodial manner actually requires several on-chain transactions!
Some have proposed the Lightning Network as a solution to this problem
However, onboarding people onto the LN in a non-custodial manner actually requires several on-chain transactions!
10/51) While high fees are also passed on to LN users during times of congestion
Congestion also renders transacting over BTC unreliable as it is impossible to perfectly predict fees which leads to failed TXs
Any significant usage of BTC is literally technically impossible!
Congestion also renders transacting over BTC unreliable as it is impossible to perfectly predict fees which leads to failed TXs
Any significant usage of BTC is literally technically impossible!
11/51) Now BTCs value proposition is no longer based on utility due to the limits on capacity
Even though BTC security now requires TX fees to grow exponentially or face a death spiral
The most realistic way to avoid such a catastrophic failure will be to increase inflation!
Even though BTC security now requires TX fees to grow exponentially or face a death spiral
The most realistic way to avoid such a catastrophic failure will be to increase inflation!
12/51) Breaking the social contract behind the sacred 21M supply limit, destroying the SoV narrative
Because once we reach this inevitable state, there will only be two choices left:
Option one is allowing censorship & double spending to occur as the network gets 51% attacked
Because once we reach this inevitable state, there will only be two choices left:
Option one is allowing censorship & double spending to occur as the network gets 51% attacked
13/51) Option two is to increase BTC's supply inflation beyond the 21M limit!
I suspect once this happens, in around a decade from now
Both options will occur simultaneously; splitting the network & causing even more chaos
All as a consequence of abandoning the original vision
I suspect once this happens, in around a decade from now
Both options will occur simultaneously; splitting the network & causing even more chaos
All as a consequence of abandoning the original vision
14/51) A ironic twist considering that a prominent argument was that the block size should not be increased;
Because it would set a precedent to increase inflation one day
Turns out that facing down the barrel of a major long-term security failure is an even stronger precedent!
Because it would set a precedent to increase inflation one day
Turns out that facing down the barrel of a major long-term security failure is an even stronger precedent!
15/51) I have been warning people about the security model of BTC for many years now
That it is unsustainable
Instead of celebrating the halvening it should be feared as it also halves security
As the price drops, so does the security budget
Just look at the last two years:
That it is unsustainable
Instead of celebrating the halvening it should be feared as it also halves security
As the price drops, so does the security budget
Just look at the last two years:
16/51) What holds BTC back from fixing these problems before it is too late is its governance & toxic culture
I extensively covered BTC governance here:
medium.com
I argued that BTC governance is systemically flawed due to a lack of long-term incentives on miners
I extensively covered BTC governance here:
medium.com
I argued that BTC governance is systemically flawed due to a lack of long-term incentives on miners
17/51) My original 2013 thesis for investing in BTC was destroyed by the very people we trusted to maintain it
There also laid the problem
I believe in the end, what we witnessed was a failure of governance
BTC's history of power struggles & civil wars is a consequence of this
There also laid the problem
I believe in the end, what we witnessed was a failure of governance
BTC's history of power struggles & civil wars is a consequence of this
18/51) In the end, it resulted in the status quo dominating BTC politics
In part due to almost all dissenting voices leaving for competing cryptocurrencies during these time periods
Combined with an extreme censorship campaign that persists to this day:
@johnblocke/a-brief-and-incomplete-history-of-censorship-in-r-bitcoin-c85a290fe43" target="_blank" rel="noopener" onclick="event.stopPropagation()">medium.com
In part due to almost all dissenting voices leaving for competing cryptocurrencies during these time periods
Combined with an extreme censorship campaign that persists to this day:
@johnblocke/a-brief-and-incomplete-history-of-censorship-in-r-bitcoin-c85a290fe43" target="_blank" rel="noopener" onclick="event.stopPropagation()">medium.com
19/51) Creating an echo chamber with a self-reinforcing selection bias for the leading personalities
Toxicity, closed-mindedness & hostility are all symptoms of BTC's deeper flaws
This is the cause of their insecurity
Which demands fictitious narratives from its supporters
Toxicity, closed-mindedness & hostility are all symptoms of BTC's deeper flaws
This is the cause of their insecurity
Which demands fictitious narratives from its supporters
20/51) As falsehoods, fantasy & wishful thinking are the only ways to keep selling BTC to the greater fool
Even resorting to tactics from the Ponzi playbook
I do not want to be associated with BTC anymore
As it no longer represents the beautiful dream, I once fell in love with
Even resorting to tactics from the Ponzi playbook
I do not want to be associated with BTC anymore
As it no longer represents the beautiful dream, I once fell in love with
21/51) The dominant personality type is now the polar opposite of when I first joined in 2013
The same collective psychological spirit that I fell in love with in 2013
Now thrives in BTC's competitors
Stop selfishly pretending as if BTC still supports its original lofty goals!
The same collective psychological spirit that I fell in love with in 2013
Now thrives in BTC's competitors
Stop selfishly pretending as if BTC still supports its original lofty goals!
22/51) BTC's competitors now hold up the torch of freedom
Serving as our new refuge from this insanity
BTC does not exist in a void; it has to compete, evolve or die
It takes centuries for an SoV to truly become established
Based on its utilitarian & Aristotelian attributes
Serving as our new refuge from this insanity
BTC does not exist in a void; it has to compete, evolve or die
It takes centuries for an SoV to truly become established
Based on its utilitarian & Aristotelian attributes
23/51) Aristotle defined good money to have four key attributes:
Durable: without long-term security, BTC fails this test
Portable: with high fees, BTC is not portable
Divisible: high fees again ruin this attribute
Intrinsic value: BTC fails without guaranteed scarcity!
Durable: without long-term security, BTC fails this test
Portable: with high fees, BTC is not portable
Divisible: high fees again ruin this attribute
Intrinsic value: BTC fails without guaranteed scarcity!
24/51) BTC is no longer a good form of money, especially when compared to the competition
Maximalists act as if BTC's decade-old history can never be overcome
While attempting to overcome the multiple-millennium history of gold
It is a delusional fantasy inspired by greed
Maximalists act as if BTC's decade-old history can never be overcome
While attempting to overcome the multiple-millennium history of gold
It is a delusional fantasy inspired by greed
25/51) Abandoning the much larger & more significant market that Bitcoin was created to compete with:
Modern fiat currency
Modern fiat currency has existed for less than a century
Before fiat, we used commodity money for the majority of human history
As money & store of value
Modern fiat currency
Modern fiat currency has existed for less than a century
Before fiat, we used commodity money for the majority of human history
As money & store of value
26/51) True cryptocurrency embraces this revolutionary aspect; combining SoV & money
Just like the historical use of commodity money
Forming an unbeatable synergy in digital form
BTC has long since abandoned this original vision, which is why I left after the blocksize debates
Just like the historical use of commodity money
Forming an unbeatable synergy in digital form
BTC has long since abandoned this original vision, which is why I left after the blocksize debates
27/51) Almost all major BTC competitors have adopted Bitcoin's original vision
A digital equivalent to the precious metal coins of our historic past
While BTC still denies its roots as P2P cash: gold as a commodity currency:
Destroying utility in favor of pure speculation
A digital equivalent to the precious metal coins of our historic past
While BTC still denies its roots as P2P cash: gold as a commodity currency:
Destroying utility in favor of pure speculation
28/51) BTC is one of the only cryptocurrencies that considers low capacity & high fees a feature
Requiring the utmost vigor in ideological defense
During the blocksize debates, I realized that this would slow down mass adoption by at least a decade
Necessitating a flippening
Requiring the utmost vigor in ideological defense
During the blocksize debates, I realized that this would slow down mass adoption by at least a decade
Necessitating a flippening
29/51) The lack of programmability over BTC is also a problem
The best-decentralized money needs decentralized finance to support it
Otherwise, it creates a reliance on custodial services to enable more complex financial products
Defeating the whole point of decentralization
The best-decentralized money needs decentralized finance to support it
Otherwise, it creates a reliance on custodial services to enable more complex financial products
Defeating the whole point of decentralization
30/51) That is why there are orders of more magnitude of wrapped (custodian) BTC on ETH compared to the Lighting Network right now
The lack of programmability explains why BTC cannot support DeFi
That is why bitcoiners will keep losing money to trusted centralized custodians
The lack of programmability explains why BTC cannot support DeFi
That is why bitcoiners will keep losing money to trusted centralized custodians
31/51) The cryptocurrency market has to now overthrow the incumbent
Before it can truly thrive again
Better to swallow that bitter pill now, as opposed to extending the pain
By propping up what has become a fundamentally flawed asset & network
That is doomed to fail anyway
Before it can truly thrive again
Better to swallow that bitter pill now, as opposed to extending the pain
By propping up what has become a fundamentally flawed asset & network
That is doomed to fail anyway
32/51) There is an understanding among major players not to expose BTC
Greed & fear of BTCs fall dragging all down motivates inaction
We are better off ripping that band-aid off now rather than later
Have some intellectual honesty, for god's sake & break the silence!
Greed & fear of BTCs fall dragging all down motivates inaction
We are better off ripping that band-aid off now rather than later
Have some intellectual honesty, for god's sake & break the silence!
33/51) I appreciate wanting to keep BTC decentralized
However, we can support 128MB blocks (VISA scale) on a decade-old laptop now
Without compromising decentralization at all
Refusing to scale for such a small trade-off has been the single most disastrous decision for BTC
However, we can support 128MB blocks (VISA scale) on a decade-old laptop now
Without compromising decentralization at all
Refusing to scale for such a small trade-off has been the single most disastrous decision for BTC
34/51) Supply is irrelevant; without demand
BTC rejected utility for the sake of SoV, ruining both in the process
The utility of blockchain is profoundly valuable
A purely speculative asset such as BTC will be left behind in the wake of assets with tangible economic benefits
BTC rejected utility for the sake of SoV, ruining both in the process
The utility of blockchain is profoundly valuable
A purely speculative asset such as BTC will be left behind in the wake of assets with tangible economic benefits
35/51) BTC is an extreme case of wishful thinking
A simple but flawed narrative, attractive to the masses
Without any foundation in utility, BTC is a purely speculative asset
Only bought in the hope that the price will go up, just like a Ponzi
That is not a real investment!
A simple but flawed narrative, attractive to the masses
Without any foundation in utility, BTC is a purely speculative asset
Only bought in the hope that the price will go up, just like a Ponzi
That is not a real investment!
36/51) What brings most people to BTC is the general promise of cryptocurrency
However, BTC is actually the worst at delivering that promise
BTC has become a purely speculative game of greater fool theory
Without utility, security, or scarcity, BTC is not competitive!
However, BTC is actually the worst at delivering that promise
BTC has become a purely speculative game of greater fool theory
Without utility, security, or scarcity, BTC is not competitive!
37/51) The world has also moved on & progressed
I remember it used to be said that BTC would just adopt the best technologies
This thesis has obviously completely failed
As BTC has no smart contracts, privacy tech, or scaling breakthroughs
To just mention a few shortcomings
I remember it used to be said that BTC would just adopt the best technologies
This thesis has obviously completely failed
As BTC has no smart contracts, privacy tech, or scaling breakthroughs
To just mention a few shortcomings
38/51) BTCs economic qualities are also incredibly weak
With an uncertain limited supply
BTC is competing with cryptocurrencies that can achieve negative inflation
Due to fee burning, high capacity & utility
Such as ETH & countless alternatives such as AVAX, NEAR, EGLD & XTZ
With an uncertain limited supply
BTC is competing with cryptocurrencies that can achieve negative inflation
Due to fee burning, high capacity & utility
Such as ETH & countless alternatives such as AVAX, NEAR, EGLD & XTZ
39/51) BTC has become a purely speculative asset
People, for the most part, only invest in BTC because they believe the price will go up
Operating on the same modus operandi as a Ponzi scheme investor
All contrary to fundamental reasons of revenue, utility & use case analysis
People, for the most part, only invest in BTC because they believe the price will go up
Operating on the same modus operandi as a Ponzi scheme investor
All contrary to fundamental reasons of revenue, utility & use case analysis
40/51) All of this adds up to BTC fundamentally being in a very sorry state
Yet many people are still treating it as if it is the greatest thing ever
None of these narratives are based on true comparative fundamental analysis
But irrational & emotional appeals to human greed
Yet many people are still treating it as if it is the greatest thing ever
None of these narratives are based on true comparative fundamental analysis
But irrational & emotional appeals to human greed
41/51) Another case is that people evaluate BTC in a vacuum
As if you closed your eyes & pretended that other cryptocurrencies did not exist
In a vacuum, BTC is actually still incredible
However, comparatively speaking it is incredibly bad
That BTC is still n.1 in market cap:
As if you closed your eyes & pretended that other cryptocurrencies did not exist
In a vacuum, BTC is actually still incredible
However, comparatively speaking it is incredibly bad
That BTC is still n.1 in market cap:
42/51) Is a testament to our own immaturity & greed
I am simultaneously ashamed & proud to be a part of this movement
The lofty ideals of Bitcoin are why I first joined
We now have to drop the dead weight of BTC in order to achieve that vision
As progress marches us forward
I am simultaneously ashamed & proud to be a part of this movement
The lofty ideals of Bitcoin are why I first joined
We now have to drop the dead weight of BTC in order to achieve that vision
As progress marches us forward
43/51) The story of Bitcoin is one of a beautiful early hope
A wonderful positive vision for the world
This dream was crushed by the very people entrusted to uphold this vision
There laid the problem as trust led to betrayal & deceit
False promises followed by broken promises
A wonderful positive vision for the world
This dream was crushed by the very people entrusted to uphold this vision
There laid the problem as trust led to betrayal & deceit
False promises followed by broken promises
44/51) Forever moving the goalposts to the point of infallibility
It is shocking & unbelievable, yet it is the truth
From censorship, cybercrime & conflicts of interest
Core gained effective dictatorial control over BTC development
Leading toward its inevitable downfall
It is shocking & unbelievable, yet it is the truth
From censorship, cybercrime & conflicts of interest
Core gained effective dictatorial control over BTC development
Leading toward its inevitable downfall
45/51) The truth is that Bitcoin Core has effectively captured BTC development, centralizing decision making
Turning BTC into a one-party system, with Core as an effective gatekeeper of all change
More than 98% of nodes use Core, which is an extreme degree of centralization
Turning BTC into a one-party system, with Core as an effective gatekeeper of all change
More than 98% of nodes use Core, which is an extreme degree of centralization
46/51) There is literally one lead maintainer who has the final say over all decisions, making it a dictatorship
Like all dictatorships, there are limits to what they can get away with
However, it is still a total perversion of the very idea of decentralization BTC represented
Like all dictatorships, there are limits to what they can get away with
However, it is still a total perversion of the very idea of decentralization BTC represented
47/51) Further abandoning BTCs cypherpunk roots
Definition of a cypherpunk:
βadvocate for widespread use of strong cryptography & privacy tech for social & political changeβ
BTC no longer fits this definition, as it cannot ever be "widespread" due to intentionally low capacity
Definition of a cypherpunk:
βadvocate for widespread use of strong cryptography & privacy tech for social & political changeβ
BTC no longer fits this definition, as it cannot ever be "widespread" due to intentionally low capacity
48/51) This also reduces the anonymity set, while mixers are rendered less usable due to congestion
Combined with a lack of any significant privacy-enhancing technologies, in large part due to the lack of programmability over BTC
BTC is a poor excuse for a "cypherpunk" chain
Combined with a lack of any significant privacy-enhancing technologies, in large part due to the lack of programmability over BTC
BTC is a poor excuse for a "cypherpunk" chain
49/51) I have witnessed BTC steadily devolving from 2015 onwards
Like slowly boiling a frog many do not notice the incremental change
BTC has become the antithesis of what the Bitcoin community used to stand for
Like night & day others carried on the banner for freedom instead
Like slowly boiling a frog many do not notice the incremental change
BTC has become the antithesis of what the Bitcoin community used to stand for
Like night & day others carried on the banner for freedom instead
50/51) BTC is on borrowed time
Hand waving away its deeply flawed design
Failing to move with the times & ideologically entrenched in a flawed technology
BTC is not exempt from the competition
The Bitcoin dream now thrives in its children, while BTC is left behind in the dust
Hand waving away its deeply flawed design
Failing to move with the times & ideologically entrenched in a flawed technology
BTC is not exempt from the competition
The Bitcoin dream now thrives in its children, while BTC is left behind in the dust
51/51) In that sense, I am still the same Bitcoiner I was back in 2013
It is BTC that changed, not me
I am certainly wiser & more knowledgeable today after close to a decade of experience
But I still refuse to sacrifice my principles, Bitcoins principles, for the sake of BTC
It is BTC that changed, not me
I am certainly wiser & more knowledgeable today after close to a decade of experience
But I still refuse to sacrifice my principles, Bitcoins principles, for the sake of BTC
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