If Bitcoin is captured, it will go to zero. That’s what makes Bitcoin unique: its intrinsic value is its separation of money and state -decentralization, self-custody, etc. So, like with mining incentives, state/state-influenced actors wanting to capture and kill Bitcoin will eventually swap their black hats with white hats, wanting to support its true decentralization as a means to preserve its intrinsic value
Very few people invested in BTC are prepared to talk about some of the risks ahead. ETF's, Strategic Reserves and Bitcoin Treasuries don't help the miners or the network in the long run with on-chain transaction fees Needing to replace the mining subsidy which with each halving trends to zero Off-chain L2 transactions drain revenue from miners and the trend towards more BTC moved into ETF's and the 'never sell your Bitcoin' mentality doesn't support the network Peter Todd was most likely announced as Satoshi in the recent HBO Documentary to seed the idea of tail end emissions. The current inflation rate of 0.84% could be promoted as low inflation but stabilizing for the miners and network in the long run. IF (when) the proposal to increase BTC supply or increase block size happens things could get very interesting for Bitcoin Cash or even BSV which retains the original protocol "set in stone" New GitHub Paper: Analyzing Bitcoin Consensus: Risks in Protocol Upgrades ( Lyn Alden has been busy educating BTC influencers about fork risks ) "Historically, changes to Bitcoin's consensus have typically followed a smooth path. However, it is essential to thoroughly explore and understand potential future scenarios that may be more contentious and could lead to a fragile network."
Agree, but that doesn’t mean we shouldn’t also acknowledge, discuss, and plan for potential risks to that decentralization. Assuming it’s all inevitable and going to work out just fine is how we lose. Mining (via pools) for example is already a lot more centralized than ideal. Will Stratum V2 and other initiatives improve that? Hopefully, but remains to be seen. Complacency is dangerous.
@@IanMajor Fair points, but never forget that humanity is desperate for things that can at least work for a few hundred years without being tinkered with unnecessarily. And there's no rule that tech has to be changed regularly 'just because'.
I keep asking myself, is MicroStrategy friend or foe?! It's more than tempting to sell BTC and buy MSTR for the greater fiat gains. This is a centralizing function and introduces counterparty risk. On the other hand it brings in massive capital to the ecosystem. Ultimately, we have to hold a large portion of BTC in self-custody, cold storage to insure its long term viability.
Ian. . . Thanks for explaining this document in more detail. Given the content in your video, what steps should be taken before upgrading software for a Start9 or Umbrel node?
Keep in mind that the vast vast vast majority of updates are going to be small performance-related things. Historically only once every couple of years is there an upgrade where you'd probably want to at least assess and understand what is changing and whether you want to run those updates. That said, a great resources to stay on top of this if you want to keep a closer eye is Bitcoin Optech: bitcoinops.org/ And I've generally found Umbrel and Start9 to both be pretty good in posting on X whenever there's a new Core release that can be upgraded and understanding what changes are included.
Plus there's the power requirement that is not addressed it seems if everyone went on board that's a lot of power being consumed just for a monetary system, yeah?
That’s a common fallacy. Power consumption does not scale with transaction volume even at the base layer. And then you have off-chain “layer 2’s” like the Lightning Network which enable nearly infinitely scalable payment throughput without the need to settle on-chain.
Probably not less in absolute terms, but an increasing share will be (and already is) from renewable energy sources. We're already seeing that with both major enterprise miners as well as smaller projects in rural parts of Africa. Monetize stranded renewable energy sources (that otherwise cannot come online at all) = good for Bitcoin and good for those local communities.
very insightful video. this stuff is very hard for me to understand. It is easy to have a false sense of understanding when you are missing nuance, and there is so much of it.
Thanks for the lesson - always wondered how upgrades were done. Scary tho. No formality/policy/approvals rtc, yet it all gets done. Has any bad-actor ever tried to get a backdoor or exploit promoted into the code?
It’s pretty remarkable. Nothing I’m aware of in terms of malicious code snippets - fortunately the codebase is not only all open source but also one of the most well-reviewed in the world and you do also typically have some diversity in opinion and disagreements even amongst core developers. But that doesn’t mean we shouldn’t remain vigilant. Thank you btw for the sats! 🙏
It is fine for Bitcoin to be a store of value and not an everyday currency for small purchases. Being a store of value is more important. Better to be slower and more secure. It allows you to more directly own and store your capital long term in a way that is safe without it getting melted by inflation with all the benefits of being digital over physical. Even if its not used for small every day purchases, its still far easier to take and use around the globe than a physical store of value.
The only reason Bitcoin is easy to move around the world is because hardly anybody's using it. A decentralized currency that everybody can use will be a much greater store value than Bitcoin. Imagine if everybody could use Bitcoin for small payments, then the price of Bitcoin would go way higher.
@nolittering9900 If that was the main appeal then other crypto would have overtaken Bitcoin a long time ago, I think you don't understand the real value proposition of Bitcoin. What makes bitcoin slow is also what makes it more secure. It's still far superior to physical capital. No other crypto can be a store of value like Bitcoin can. Every cycle so many people buy alts thinking they are superior to BTC without really understanding the value proposition of BTC and in the end the result is the same every time. BTC wins.
@moyga I do think Bitcoin will be taken over by a better coin. We expected Bitcoin to do way better than it has, but then it was crippled by the block limit. Most of the people are behind Bitcoin so it's the most valuable and many of them think things like Bitcoin cash are a scam.
@@nolittering9900 I really think that you don't get it and your ALT coin will not overtake BTC like all the other ALT coins every other cycle, but lets see who was right in 10 years. None of the other coins are a better store of value than BTC. Look at what you just said about BTC Cash. If you are right, shouldn't it have beaten BTC?
@@moygaMaybe it *will* take 20 years for the dust to settle but I can see a technology like KASPA rising up and being complementary to BTC. Maybe not "overtake" (because of its connotations 😅) but become more widely used and accomplish bitcoin's original goal? I don't even think it will be called an ALT by then.
While I appreciate that sentiment, part of what makes this a trickier discussion imo is that base layer changes can improve what L2's are capable of. For e.g. we could make Lightning (L2) way more powerful and capable in onboarding individuals non-custodially if we made some of these (e.g. covenants) changes to the base layer.
So would a wide-scale blackout followed by a state actors "recalibrating" of the blockchain pose a threat? With enough power wouldn't they be able to make several blocks, thus self-affirming
Fair point - hoping that videos like this can inspire some to be more thoughtful and deliberate though agree not realistic to expect everyone to do so.
@IanMajor that would require for there to be options first. It's only update or don't, and the updates include bug fixes, so not updating is not really an option. This talking point, that we can choose our ruleset for our nodes is completely empty. There are no options to choose from.
Thanks for the video! I was just thinking about this yesterday while researching Bitcoin Core. Throughout history, no asset has remained free from centralized control, which makes Bitcoin uniquely valuable. But, as Bitcoin becomes more mainstream, large organizations have growing incentives to centralize it, with one of the most effective ways being control over protocol development. It’s unclear how this would unfold on a larger scale, especially with state actors involved. The New York Agreement and Bitcoin Cash showed users can resist centralization, but the battle for control over ANY element of bitcoin will only intensify.. Good for the price, but is it good for the actual protocol? that remains to be seen
If Bitcoin is captured, it will go to zero. That’s what makes Bitcoin unique: its intrinsic value is its separation of money and state -decentralization, self-custody, etc. So, like with mining incentives, state/state-influenced actors wanting to capture and kill Bitcoin will eventually swap their black hats with white hats, wanting to support its true decentralization as a means to preserve its intrinsic value
Very few people invested in BTC are prepared to talk about some of the risks ahead.
ETF's, Strategic Reserves and Bitcoin Treasuries don't help the miners or the network in the long run with on-chain transaction fees Needing to replace the mining subsidy which with each halving trends to zero
Off-chain L2 transactions drain revenue from miners and the trend towards more BTC moved into ETF's and the 'never sell your Bitcoin' mentality doesn't support the network
Peter Todd was most likely announced as Satoshi in the recent HBO Documentary to seed the idea of tail end emissions.
The current inflation rate of 0.84% could be promoted as low inflation but stabilizing for the miners and network in the long run.
IF (when) the proposal to increase BTC supply or increase block size happens things could get very interesting for Bitcoin Cash or even BSV which retains the original protocol "set in stone"
New GitHub Paper: Analyzing Bitcoin Consensus: Risks in Protocol Upgrades ( Lyn Alden has been busy educating BTC influencers about fork risks )
"Historically, changes to Bitcoin's consensus have typically followed a smooth path. However, it is essential to thoroughly explore and understand potential future scenarios that may be more contentious and could lead to a fragile network."
Well said
highly underrated channel.
🙏
Control of the protocol will need the whole consensus mechanism and PoW ... They can't centralize bitcoin..
Agree, but that doesn’t mean we shouldn’t also acknowledge, discuss, and plan for potential risks to that decentralization. Assuming it’s all inevitable and going to work out just fine is how we lose. Mining (via pools) for example is already a lot more centralized than ideal. Will Stratum V2 and other initiatives improve that? Hopefully, but remains to be seen. Complacency is dangerous.
@@IanMajor Fair points, but never forget that humanity is desperate for things that can at least work for a few hundred years without being tinkered with unnecessarily. And there's no rule that tech has to be changed regularly 'just because'.
@@IanMajor 💯 that’s where I profoundly disagree with my other maxies. Nothing should be taken for granted. Never ever never .
I keep asking myself, is MicroStrategy friend or foe?! It's more than tempting to sell BTC and buy MSTR for the greater fiat gains. This is a centralizing function and introduces counterparty risk. On the other hand it brings in massive capital to the ecosystem. Ultimately, we have to hold a large portion of BTC in self-custody, cold storage to insure its long term viability.
It's high-reward but high-risk as well. I'm balancing MSTR, FBTC (a BTC ETF that's self-custodied by Fidelity), and my own self-custody Bitcoin
@@johndrake3472 foe. Like Blackrock,
Ian. . . Thanks for explaining this document in more detail. Given the content in your video, what steps should be taken before upgrading software for a Start9 or Umbrel node?
Keep in mind that the vast vast vast majority of updates are going to be small performance-related things. Historically only once every couple of years is there an upgrade where you'd probably want to at least assess and understand what is changing and whether you want to run those updates. That said, a great resources to stay on top of this if you want to keep a closer eye is Bitcoin Optech: bitcoinops.org/
And I've generally found Umbrel and Start9 to both be pretty good in posting on X whenever there's a new Core release that can be upgraded and understanding what changes are included.
Drivechain fixes a heck of a lot. One day..
Thx mate
Plus there's the power requirement that is not addressed it seems if everyone went on board that's a lot of power being consumed just for a monetary system, yeah?
That’s a common fallacy. Power consumption does not scale with transaction volume even at the base layer. And then you have off-chain “layer 2’s” like the Lightning Network which enable nearly infinitely scalable payment throughput without the need to settle on-chain.
@IanMajor So you're saying it will be less than the current absurd power consumption required is?
Probably not less in absolute terms, but an increasing share will be (and already is) from renewable energy sources. We're already seeing that with both major enterprise miners as well as smaller projects in rural parts of Africa. Monetize stranded renewable energy sources (that otherwise cannot come online at all) = good for Bitcoin and good for those local communities.
very insightful video. this stuff is very hard for me to understand. It is easy to have a false sense of understanding when you are missing nuance, and there is so much of it.
Thanks for the lesson - always wondered how upgrades were done. Scary tho. No formality/policy/approvals rtc, yet it all gets done.
Has any bad-actor ever tried to get a backdoor or exploit promoted into the code?
Sounds like you would like cardano 😊
@@qwertykeyboardwarrior I used to own/stake ADA and ya they have a nice formalized code promotion process. BTC Maxi now.
It’s pretty remarkable. Nothing I’m aware of in terms of malicious code snippets - fortunately the codebase is not only all open source but also one of the most well-reviewed in the world and you do also typically have some diversity in opinion and disagreements even amongst core developers. But that doesn’t mean we shouldn’t remain vigilant. Thank you btw for the sats! 🙏
It is fine for Bitcoin to be a store of value and not an everyday currency for small purchases. Being a store of value is more important. Better to be slower and more secure. It allows you to more directly own and store your capital long term in a way that is safe without it getting melted by inflation with all the benefits of being digital over physical. Even if its not used for small every day purchases, its still far easier to take and use around the globe than a physical store of value.
The only reason Bitcoin is easy to move around the world is because hardly anybody's using it. A decentralized currency that everybody can use will be a much greater store value than Bitcoin. Imagine if everybody could use Bitcoin for small payments, then the price of Bitcoin would go way higher.
@nolittering9900 If that was the main appeal then other crypto would have overtaken Bitcoin a long time ago, I think you don't understand the real value proposition of Bitcoin. What makes bitcoin slow is also what makes it more secure. It's still far superior to physical capital. No other crypto can be a store of value like Bitcoin can. Every cycle so many people buy alts thinking they are superior to BTC without really understanding the value proposition of BTC and in the end the result is the same every time. BTC wins.
@moyga I do think Bitcoin will be taken over by a better coin. We expected Bitcoin to do way better than it has, but then it was crippled by the block limit. Most of the people are behind Bitcoin so it's the most valuable and many of them think things like Bitcoin cash are a scam.
@@nolittering9900 I really think that you don't get it and your ALT coin will not overtake BTC like all the other ALT coins every other cycle, but lets see who was right in 10 years. None of the other coins are a better store of value than BTC. Look at what you just said about BTC Cash. If you are right, shouldn't it have beaten BTC?
@@moygaMaybe it *will* take 20 years for the dust to settle but I can see a technology like KASPA rising up and being complementary to BTC. Maybe not "overtake" (because of its connotations 😅) but become more widely used and accomplish bitcoin's original goal? I don't even think it will be called an ALT by then.
Do all this wacky **** on a l2 and leave the base layer alone
While I appreciate that sentiment, part of what makes this a trickier discussion imo is that base layer changes can improve what L2's are capable of. For e.g. we could make Lightning (L2) way more powerful and capable in onboarding individuals non-custodially if we made some of these (e.g. covenants) changes to the base layer.
So would a wide-scale blackout followed by a state actors "recalibrating" of the blockchain pose a threat? With enough power wouldn't they be able to make several blocks, thus self-affirming
If that happened, the blockchain would be forked to the point prior to the shenanigans.
"nodes can just choose not to run the latest version"
Yeahhh... That's not really realistic. We're all just hitting the update button.
Theres a reason theres eth and eth classic
Fair point - hoping that videos like this can inspire some to be more thoughtful and deliberate though agree not realistic to expect everyone to do so.
@IanMajor that would require for there to be options first. It's only update or don't, and the updates include bug fixes, so not updating is not really an option. This talking point, that we can choose our ruleset for our nodes is completely empty. There are no options to choose from.
Thanks for the video! I was just thinking about this yesterday while researching Bitcoin Core. Throughout history, no asset has remained free from centralized control, which makes Bitcoin uniquely valuable. But, as Bitcoin becomes more mainstream, large organizations have growing incentives to centralize it, with one of the most effective ways being control over protocol development. It’s unclear how this would unfold on a larger scale, especially with state actors involved. The New York Agreement and Bitcoin Cash showed users can resist centralization, but the battle for control over ANY element of bitcoin will only intensify.. Good for the price, but is it good for the actual protocol? that remains to be seen