test


Good morning gents.
It’s been just over a month since I organized my right wing job stacking group(hitherto BisBuc; henceforth The Tortuga Society), and the time is ripe for a comprehensive update on our progress and future plans.
For the past few weeks I’ve been hard at work assembling resources, building our community, developing our infrastructure, defining our brand and long term strategy, and championing our cause to the wider world.
I’ve also been cultivating a trustworthy cadre of officers and subject matter experts to whom I can delegate responsibility, and thanks to the fantastic network I’ve built here on Substack this was achieved significantly faster than expected.
Make no mistake, our organization is still in its infancy. But the men I’ve chosen as lieutenants have already demonstrated their ability to produce results, and I’m thrilled to announce we’ve started putting real points on the board.
For instance, my officers
Theon Ultima and Sesped have each secured themselves a promising Job 2, providing crucial inspiration to dozens of other buccaneers currently in the midst of interviewing, upskilling, and polishing their resumes.


What is he doing now? Trying to make a business out of it, see tortugasociety.org


he got older


wow, JQ/jewish question is an abbrevation!


is he still in his twenties?


that's soo far away from reality as politics can get...


Thats a good explanation for Charlottesville


Why martyrdom at Charlottesville? was there a split into diluted Alt-Light and more radical, but non influential Alt Right? And why was that martyrdom?


The overtone window story somehow fits, but only for 50% of polarized americans.


was the racial divided electorate memed into reality? i doubt it...


why use it? - if it had been released, it wouldn't be used for long...


Already the task of fact-checking is wrong: "I'm guessing that determining whether an ad that slams or celebrates Hillary Clinton or Donald Trump is accurate will require the sort of judgement call only a human can make."


this didn't age well, he also didn't get the relevance of a power grid infrastructure right


maybe this was true in 2018, but the twitter files show that this has completely turned in the other direction


well, algorithms don't include humans per definition; still, humans choose wether they want the algorithm or not


i could debunk this anormality: For the next 53 batches of votes counted, Biden led Trump by the same exact 50.05 to 49.95 percent margin in every single batch. - these numbers were rounded and there were not many votes


i'd like to see some references here


the same holds for lower class whites i guess; the reason for why blacks are over-representated is indeed historical and due to shrinking class-mobility


externalisation ok, but why no fixed price?


that could be a reason: more people in NIMBY activism than in europe


Why? there are loads of regulations in europe too, is there more corruption in europe?


the author's views origin from a very biased in-group view; also, his advices to form small communities can't be taken seriously since this already happens


that's clearly an in-group-bias at conferences


every western country is falling; is every catholic hierarchy arrogant? this can't be the reason


it can't be an advice to hold "correct countercultural views" if someone does that, it's preaching to the converted


people turn to counter-cultural groups for self-protection


wokeness at core means cultural self-hate, leading to identity problems


correct, and i'd say its not possible at alle with macro-economic statistics


because at ath, additionally energy prices and supply chains were stressed


..and ad inflation "is being beaten": there is still a real-loss in purchasing power, maybe not at ath, but still...


..meaning that the fed is not trusted with their expectation management


but there was still an unemployment-rise achieved, no?


real economy and GDP economy are two different things


Because the author started his career in the 2010s? - He mentions that it "broke in the 1970ies, but it got unmasked in the 2010s


do people need physical relationships for wellbeing or is it just necessary to keep away all-over distraction from politics and friends-insta-pics


Thesis: Because of the increasing gap between shithole countries and the US


There's a monetary background to that


It's a bit unfair to say "Obama did nothing" when Putin, while not being honest, declared ukrainian war 2014 as an "uprising of independance-fighters", denying he could do anything about it


The statistics here don't go along with those in "ages of discord" - there's high cooperation in the 1970, while there was a lot of discord


Labor-Business cooperation was exactly then at a high level, when there was war (40ies and 70ies), i guess it's more a "collectivity feeling indicator", so nothing to strive for


https://i2.wp.com/peterturchin.com/wp-
content/uploads/2013/06/cooperation_ngram.jpg?resize=594%2C437


It's not an american-only thing that participation in real-life cooperation as declined while participation in online cooperation as increased.


is age of first marriage an indicator of well-being?


is there any causality for these 50-year recurrance?


If there's no tension between those two, it's likely government makes economic decisions, what to produce, where to allocate resources,...


are there any examples for the unraveling of social cooperation between political and business elites?


My first Workspace


really? is medium exchange always the leading factor? does it imply „micropayments?


you cannot design a monetary good as a store of value!


This is a good summary of both viewpoints


it can also lead to over-complexity


dogmatism maybe?


How can one recognize what the incompetent opposition is? what are the heuristics?


What were the two splits after Bitcoin Cash?


I‘d argue for: No. It’s always a protocol change proposed by a market participant and lots of changes would make a protocol unreliable


Can a protocol be created by „the market“


users=economic nodes, no?


Exzerpte


“I have watched the value of my assets rise and fall millions of percent. It
has truly been a wild ride. I hope it will be clear in thirty years’ time that
the physical, mental, financial, and emotional investments put into this
industry have made the world a dramatically better place. The success of
Bitcoin and cryptocurrencies should not be measured by how expensive the coins
are, nor how rich the early investors become, but rather how much freer the
world has become by utilizing this wonderful new technology.” (Ver and
Patterson, 2024, p. 227)


“The Bitcoin Core narrative—despite its many factual errors—has inspired
millions of people who are eager to see the separation of money and state. The
concept of digital gold has proven popular; just wait until people realize
they can have digital gold and digital cash at the same time, on the same
network, with the same currency. Most people simply do not know the story of
Bitco” (Ver and Patterson, 2024, p. 226) […] “in Core. They do not know that
blockchains can scale just fine and that the Bitcoin network was intentionally
redesigned to have high fees. They do not know that Blockstream profits by
diverting traffic onto their own proprietary blockchain. They do not know
about the failures of the Lightning Network and the inevitable proliferation
of custodial wallets. They do not know that the information they consume
online has been tightly controlled and censored for years to promote a single,
dominant narrative.” (Ver and Patterson, 2024, p. 226)


“A global digital cash system must be rock solid. Once the core features are
set, they should not be changed unless absolutely necessary. There are plenty
of other cryptocurrencies that are trying to be like Ethereum and provide a
universal platform for smart contracts and other complex functionality. But
not every coin needs to be like Ethereum; we need some project(s) to focus on
simple, effortless cash transactions that can reach global scale.” (Ver and
Patterson, 2024, p. 225) […] “BCH miners will continue to have a
straightforward profit mechanism thanks to Satoshi’s original design. Simply
by scaling the user base and processing more transactions, they can get paid
well.” (Ver and Patterson, 2024, p. 226)


“One way is to reduce the number of critical parameters that developers
control. For example, all the drama surrounding the blocksize limit can be
avoided by simply removing the limit altogether and letting miners determine
the size of blocks to produce. The more decisions we can put into the hands of
miners and businesses, and not protocol developers, the better. More
fundamentally, a successful project will need to demonstrate stability over
time. Adding new features can be attractive, especially for computer
programmers, but it comes at the cost of stability.” (Ver and Patterson, 2024,
p. 225)


“The first tradeoff is between focusing our efforts on one cryptocurrency
project versus multiple.” (Ver and Patterson, 2024, p. 224) […] “A similar
tension exists between the need to have multiple software implementations and
the need for strong, competent leadership.” (Ver and Patterson, 2024, p. 224)
[…] “On the one hand, the ability to fork is a critical part of the governance
of Bitcoin. On the other hand, forks are extremely disruptive and damaging to
network effects.” (Ver and Patterson, 2024, p. 224)


“We may never know the true motivation behind Bitcoin Core’s decision to
overhaul Satoshi’s design. Maybe it happened in good faith. Maybe it happened
because Core was infiltrated. Regardless, the result is the same: a small-
block version of Bitcoin that is considerably less disruptive to the status
quo. If interested parties did not directly corrupt Bitcoin, they certainly
benefit from its corruption.” (Ver and Patterson, 2024, p. 223) […] “Software
alone cannot improve the world; humans are still required! The next generation
of digital cash enthusiasts will need to have a more sophisticated philosophy
than we had in the early days.” (Ver and Patterson, 2024, p. 223)


“Bitcoin Cash successfully fired a development team that tried to hijack the
protocol for their own gain. That’s a great sign. Bitcoin Cash is now free
from Blockstream, Craig Wright, and a disgruntled Amaury Sechet. I challenge
anybody to find a blockchain more resistant to developer capture.” (Ver and
Patterson, 2024, p. 221)


“More hashrate moved over to BCHN, and when November rolled around, Bitcoin
ABC failed to secure enough support and forked itself off the main network.
Amaury Sechet was fired, and his project took on a new name “eCash” that
exists on a separate blockchain.” (Ver and Patterson, 2024, p. 220)


“Bitcoin ABC wanted to position itself as Blockstream / Bitcoin Core 2.0 and
secure a whopping 8% of the block reward for itself indefinitely into the
future—a great financial opportunity, if the BCH network allowed it.
Researcher Dr. Peter Rizun wrote flatly, “Amaury Sechet is literally modifying
the BCH protocol to issue coins to him and his friends.”” (Ver and Patterson,
2024, p. 220)


“Bitcoin ABC added the code for the IFP into their software with a compromise:
the reward would be reduced to 5%, and a certain threshold of miners would
have to agree before the change was activated.” (Ver and Patterson, 2024, p.
219) […] “The whole idea proved unpopular and sparked the creation of a
competing software implementation called Bitcoin Cash Node (BCHN) which did
not support the IFP. The BCHN team also provided an alternative to Amaury
Sechet’s leadership, which had been weakened after attacking and alienating
the people around him. With increasing miner support behind BCHN and
decreasing support of ABC and Sechet, the IFP failed.” (Ver and Patterson,
2024, p. 219)


“Sechet had built up a reputation for being difficult to work with, and he
frequently expressed discontent with the amount of funding ABC was receiving.
In 2019, the question of developer funding was raised in BCH, and the
community responded with a fundraiser that donated more than 800 BCH to
different teams. I have personally donated millions of dollars to different
teams over the years, including around $500,000 to Bitcoin ABC.” (Ver and
Patterson, 2024, p. 218) […] “a group of miners representing the majority of
hashrate proposed an “Infrastructure Funding Plan” (IFP), which would divert
12.5% of the block reward for six months into a fund marked for development.
The fund would be controlled by an independent corporation in Hong Kong, and
they initially estimated the IFP would raise around $6 million.” (Ver and
Patterson, 2024, p. 218)


“I spent more than a million dollars renting mining equipment to ensure ABC
secured more hashrate than SV. As a further precaution, Amaury Sechet added
code that prevented re-organizations of the ABC chain that were larger than
ten blocks in size. However, this code never came into effect, as the ABC
chain accumulated more hashrate than the SV chain, and both sides ended up
existing as separate networks.” (Ver and Patterson, 2024, p. 217) […] “Since
that split in November 2018, BSV has fallen further behind BCH in terms of
price and hashrate. As a result, their strategy seems to have shifted towards
relying on patent trolling and lawsuits. I have been sued repeatedly by Craig”
(Ver and Patterson, 2024, p. 217)


“Unfortunately, some technical details of Bitcoin SV and Bitcoin ABC were
incompatible, and it did not look like either side was eager to compromise. So
in August 2018, a group of miners and entrepreneurs met in Thailand in order
to see if another split could be avoided. At that time, I thought Bitcoin
ABC’s implementation was more promising, but I was optimistic that we would
find common ground. I attended and had a reasonable discussion with Ayre over
dinner the night before the conference. But I was upset to discover that the
next morning Ayre’s media outlet published an article claiming that the miners
present at the conference had all agreed to follow the SV implementation—even
though discussions had not even started! My distrust grew when CSW stormed out
of the conference only a few hours later, preventing any further effective
discussion or compromise.” (Ver and Patterson, 2024, p. 216)


“The most popular implementation was still Bitcoin ABC led by Amaury Sechet,
the main programmer behind the 2017 BCH fork. But some people thought the
roadmap of Bitcoin ABC was too reserved and did not scale aggressively enough.
So a separate development team was formed called “Bitcoin SV.”” (Ver and
Patterson, 2024, p. 215) […] “for some time, I did think he might actually be
Satoshi. I have great respect for Gavin Andresen, and Gavin once claimed that
he thought Craig was Satoshi, even though he could not be sure. After a
handful of other respected minds within Bitcoin said the same thing, I trusted
their judgment—plus it helped that Craig was unabashedly a big blocker who
knew Bitcoin had the potential to scale massively.” (Ver and Patterson, 2024,
p. 215)


“a few self-appointed leaders tried to take full control of the software
development, but this time both attempts failed—unfortunately not without
fracturing the network even further.” (Ver and Patterson, 2024, p. 215)


“Bitcoin Cash is not the perfect cryptocurrency, and it does not have a
perfect community surrounding it. There are still real problems present, some
of which can only be managed, never resolved.” (Ver and Patterson, 2024, p.
214) […] “As a result, two more forks have happened since the split with BTC
in 2017. Neither fork was motivated primarily by technological disputes, but
rather from the personalities involved. From my perspective, the least
attractive part of Bitcoin Cash is the fact that these splits have occurred
and have splintered the big block community even further. Despite this serious
problem, the forks also demonstrated that the Bitcoin Cash community will not
tolerate attempts to hijack the protocol, unlike what happened with Bitcoin
Core.” (Ver and Patterson, 2024, p. 214)


“users can experience for themselves the Bitcoin that Satoshi envisioned, with
sub-penny fees and instant transactions. The experience is so good when
compared to other projects, it speaks for itself.” (Ver and Patterson, 2024,
p. 213)


“The controversial Replace-By-Fee (RBF) feature—that allowed zero-confirmation
transactions to be easily reversed—was removed, making instant transactions
much more reliable for merchants and payment processors.” (Ver and Patterson,
2024, p. 211) […] “Among other complexities, Segwit used a new address format,
leading to difficulties in transacting between wallets which didn’t support
Segwit and the new format. Most big blockers thought Segwit was unnecessarily
complex and not a solution for scaling, so when the Bitcoin Cash split
happened, they intentionally forked off before Segwit was activated, thus
ensuring they did not have to bother removing it from the codebase. This
decision proved to be a wise one. The developers, merchants, and users of
Bitcoin Cash remain completely unaffected by the complexity introduced by
Segwit.” (Ver and Patterson, 2024, p. 211)


“Other features that Satoshi built into the original design have been
reactivated, and other innovations have improved BCH’s capacity to create
smart contracts, seamlessly issue tokens, and maximize transaction privacy.
Entrepreneurs and developers now have more tools available for them to build
directly on Bitcoin without having to worry about their product breaking due
to the extreme limitations of small blocks.” (Ver and Patterson, 2024, p. 210)
[…] “The size of OP_RETURN was tripled in BCH, allowing it to be utilized much
more easily. Different companies have already used this feature to build next-
generation internet services like decentralized social media platforms. Early
in Bitcoin’s history, some of Satoshi’s original opcodes were deactivated as a
precaution, but the Core developers never bothered to reexamine or reactivate
them. The Bitcoin Cash developers successfully reactivated several of them in
May 2018, further expanding functionality. They also added a brand-new opcode
called OP_CHECKDATASIG which allows the software to incorporate data outside
the blockchain to be used within smart contracts.” (Ver and Patterson, 2024,
p. 210)


“Bitcoin mining is simply not that decentralized. While this is a valid
concern, the actual risks should not be overstated. Mining pools do not
directly control the miners connected to them. For any reason, the individual
miners—and the machines they operate—can switch to a different pool.” (Ver and
Patterson, 2024, p. 207) […] “one of Satoshi’s messages to Mike Hearn in 2011,
when he wrote: As things have evolved, the number of people who need to run
full nodes is less than I originally imagined. The network would be fine with
a small number of nodes if processing load becomes heavy.” (Ver and Patterson,
2024, p. 207)


“I had nothing to do with the creation of Bitcoin Cash. In fact, I supported
Segwit2x because I did not want the industry to fracture in two. My first
preference was to keep BTC together, and it was only after S2X failed that I
decided to throw my full support behind Bitcoin Cash. Even more fundamentally,
I refuse to pledge allegiance to any particular coin. I have always been in
support of a multi-coin future in which users can choose from many options.
Competition is healthy, and if BCH loses the competition to another coin—and
that project increases the total amount of economic freedom in the world —I
fully support it.” (Ver and Patterson, 2024, p. 206)


“The Bitcoin Standard is one of the biggest contributors to the confusion
because it contains some basic errors. Ammous’ claims about scaling have
already been addressed, but he also makes dubious claims about BCH. After
noting the large price differential between BTC and BCH, he writes: Not only
is [Bitcoin Cash] unable to gain economic value, it is also dogged with a
serious technical problem that renders it almost unusable. This appears to be
an exaggerated reference to the Emergency Difficulty Adjustment (EDA) that
Bitcoin Cash briefly used after its creation. Before the 2017 fork occurred,
it was unclear how much hashrate the BCH chain would have, so the EDA was
created to ensure that the blockchain would remain functional even with a
small number of miners. The downside was that the EDA could cause oscillations
of hashrate, alternating between excessively fast block production and
excessively slow. These fluctuations were not a “serious technical problem.”
They were expected beforehand, though their magnitudes were underestimated.
However, it did become disruptive, and after a couple of months, the EDA was
simply removed and replaced with a better algorithm, as planned.” (Ver and
Patterson, 2024, p. 205)


“A campaign was created to only refer to Bitcoin Cash as “bcash” to discredit
and distance BCH from the Bitcoin brand. Nobody within the BCH community used
“bcash” to refer to Bitcoin Cash, but that did not matter. They even created a
fake Reddit page called “r/bcash”—controlled by small blockers—and would
direct people to it from the popular r/Bitcoin page to mislead them.” (Ver and
Patterson, 2024, p. 203) […] “In a Slack conversation between Adam Back and
Cobra—the pseudonymous co-owner of the Bitcoin.org domain—Back tries to
convince Cobra to hand over the domain to somebody else because he accuses
Cobra of being secretly sympathetic to the big block philosophy. To make his
case, Back points out that Cobra “just said bcash has advantages and didnt
call it bcash”” (Ver and Patterson, 2024, p. 203)


“It’s hard to take seriously the idea that the small block, high fee chain
would have had any real momentum behind it. It would be fine as an experiment
or a sidechain, because it’s effectively a new idea when compared to Satoshi’s
vision. I fully support such experimentation, but it should not have inherited
the network effects of BTC—the entire industry has been stalled for years
because their experiment has largely failed from a technological perspective.”
(Ver and Patterson, 2024, p. 202)


“the higher price of BTC is almost entirely due to the inheritance of network
effects, not because people were excited about small blocks” (Ver and
Patterson, 2024, p. 202)


“it is critically important that forks can compete for the dominant ticker
symbol too. If Bitcoin Core always inherits these network effects, it’s an
enormous advantage and a substantial step toward totally capturing Bitcoin.
Within a month, the price of BCH went from around $650 to an interday high of
over $4,000! For a brief period, it looked like Bitcoin was going to free
itself from Core once and for all. The momentum did not continue, however, and
in the face of suffocating information control, the price of BCH has steadily
decreased relative to BTC for the past few years.” (Ver and Patterson, 2024,
p. 201f)


“Three days after the cancellation of Segwit2x, Gavin Andresen identified BCH
as the continuation of the original Bitcoin project: Bitcoin Cash is what I
started working on in 2010: a store of value AND means of exchange.” (Ver and
Patterson, 2024, p. 196) […] “Maximalists will insist that the battle for
Bitcoin is over, that the Core developers are now the final authority, and
that the price appreciation of BTC has vindicated the small block philosophy.
None of these things are true. Bitcoin technology is still new, and with big
blocks, it can compete against any cash system in the world. The Core
developers might control BTC, but they do not have any control over BCH. The
price of each coin depends on the quality of information within the economy.
If misinformation is currently widespread, then prices are destined to adjust
as better information becomes known.” (Ver and Patterson, 2024, p. 196)


“Jihan Wu is the co-founder of Bitmain, the largest chip manufacturer for
Bitcoin miners. He was also the first person to translate the whitepaper into
Chinese. Despite getting involved in 2011 and building one of the most
successful Bitcoin companies in the world, Wu was smeared as a monster for his
lack of total obedience to Bitcoin Core. In fact, since nearly all the miners
were supporting S2X instead of Core, the narrative quickly shifted to outright
hostility towards miners generally—as if Segwit2x was a “miner takeover” of
Bitcoin. The proper role of miners was no longer to protect, secure, and scale
the network; it was to quietly run software provided to them by the Core
developers.” (Ver and Patterson, 2024, p. 193)


“Core developer Eric Lombrozo called S2X a “serious cyber attack” and
threatened to take legal action against it. Blockstream co-founder Matt
Corallo wrote directly to the SEC to ask them to intervene and provide
“consumer protection” from the fork. Samson Mow took to Twitter, suggesting
that Coinbase was breaking the laws of the “BitLicense” in New York. Tagging
both Coinbase and the New York Department of Financial Services.” (Ver and
Patterson, 2024, p. 192)


“Bitcoin looked like it would split into three different chains by the end of
2017: the Segwit1x chain (S1X), the Segwit2x chain (S2X), and Bitcoin Cash
(BCH). The name “Bitcoin” would be assigned to whichever chain accumulated the
most hashrate, regardless of whether it was S1X or S2X. Not only was this
consistent with Satoshi’s design, it also made sense in terms of giving
customers maximum stability. While this policy was reasonable, it was also an
existential threat to Blockstream and the Core developers. By September 2017,
roughly 95% of the hashrate was signaling for S2X, practically guaranteeing
that the Bitcoin name, ticker symbol, and network effects would go with the
2MB chain. And unless the Core developers put in additional protections—like
the ones put in place when Bitcoin Cash forked off—they risked having their
chain entirely wiped out. However, putting those protections in place would
concede that they were a minority fork and had lost the battle for Bitcoin.
So, instead of admitting defeat, they became even more aggressive and tried to
get the government involved.” (Ver and Patterson, 2024, p. 191f)


“By this new accounting method, the literal size of blocks could be increased
slightly beyond 1MB—the average is currently 1.3MB—but without a substantial
increase in transaction throughput capacity. Stating that this qualified as a
2MB blocksize increase was deceptive—as if the proponents of SegWit2x simply
wanted to have blocks containing more data, irrespective of whether it allowed
them to process more transactions per block.” (Ver and Patterson, 2024, p.
188)


“Social media engineers, information controllers, and prominent Blockstream
employees started to agitate for “NO2X”—rejecting the “2X” part of SegWit2x
and keeping the blocksize limit at 1MB. The near-universal industry support
would be smeared as a “corporate takeover,” which was rather ironic since the
NYA was needed to overcome the corporate influence that Blockstream held over
the Core developers. One particularly dishonest tactic was to claim that the
SegWit upgrade was a blocksize increase, implying that Core had already
followed through on their promise made in Hong Kong. Samson Mow started this
narrative on Twitter.” (Ver and Patterson, 2024, p. 187f)


“When Bitcoin Core released the SegWit code, they required 95% of the hashrate
to signal for its activation before it would be implemented—essentially giving
veto power to a 5% minority of miners.” (Ver and Patterson, 2024, p. 183) […]
“Pseudonymous developer ShaolinFry announced his idea for a “User-Activated
Soft-Fork” (UASF) in February 2017. The drama surrounding SegWit and UASF did
have another consequence, however. It spurred on a group of miners to finally
create a backup plan. If SegWit turned out to be a bad idea, or if its
adoption caused a chain split, or if the 2X blocksize increase failed to
occur, there had to be a Plan B. So, an alternative implementation was created
to safely split off from BTC and form a separate chain, without SegWit, and
with an immediate increase of the blocksize limit to 8MB. This implementation
was called Bitcoin ABC—the “ABC” standing for “adjustable blocksize cap,”
which would allow miners to set their own limits without needing the approval
of developers. Bitcoin ABC brought about a new network, and therefore a new
coin, called Bitcoin Cash. That’s how BCH started, not as an immediate
replacement for BTC, but as a contingency plan by the biggest miners in case
the BTC upgrades failed. It turned out to be a good idea.” (Ver and Patterson,
2024, p. 186)


“By June 2017, transaction fees continued to skyrocket to over $5 on average”
(Ver and Patterson, 2024, p. 180) […] “BTC’s relative market cap also hit a
new low of 38%, as more people were choosing alternative chains like Ethereum
which offered better performance.” (Ver and Patterson, 2024, p. 181) […]
“Bitcoin Core developers were absolutely unwilling to increase the blocksize
limit at all. So, other developers would have to make it happen on a different
software repository. Jeff Garzik was chosen as the lead developer for this new
project, and the code he was working on would be called “SegWit2x” or “S2X.”
Once again, Core was at risk of being fired. If the majority of miners,
running SegWit2x, produced a block larger than 1MB, the miners running Core
would be forked off the network. Perhaps more importantly, the keys to
Bitcoin’s code would finally be ripped from Core’s hands. So, another campaign
was waged to demonize anybody supporting SegWit2x, which was simply the code
to reflect the HKA and NYA.” (Ver and Patterson, 2024, p. 181)


“At the beginning of the year, BTC enjoyed about 87% of the total market cap
of all cryptocurrencies. By May, it plummeted below 50%. The Bitcoin industry
was finally starting to feel the consequences of delaying scaling for years.
So, another conference was organized, this time in New York. The largest
economic players were invited, along with key Core developers. An agreement
was quickly reached—a conservative one, resembling the HKA that was previously
agreed upon. SegWit would be activated with an 80% miner threshold, and a 2MB
blocksize increase would happen within six months. This would become known as
the New York Agreement, or “NYA.” Famously, all the Core developers refused to
show up for the conference, so the industry had to find agreement amongst
themselves. My company Bitcoin.com signed the NYA, though I was unable to
attend personally. Had I been there, I would have objected to one glaring
problem with the whole plan: the blocksize increase was supposed to happen
after SegWit was activated. What if, after accepting SegWit, another campaign
was organized to attack all alternatives to Core? Would the miners finally
commit to an alternative implementation? It was an enormous gamble that turned
into an enormous blunder. The New York Agreement gained signatures from 58
companies from 22 different countries, representing 83% of the hashpower, over
$5 billion of monthly on-chain transaction volume, and more than 20 million
Bitcoin wallets.” (Ver and Patterson, 2024, p. 179f)


“By Cobra’s logic, even if the Core developers wildly changed the code to lose
all resemblance to the original Bitcoin, the whitepaper should be altered to
reflect those changes. Theymos immediately commented on the thread, agreeing
that the whitepaper misleads people: Interesting suggestion. The paper is
definitely outdated, and I do often see people saying “just read the
whitepaper!” as if the paper is still a good way to learn about Bitcoin...”
(Ver and Patterson, 2024, p. 177) […] “Theymos would later make another
outrageous proposal, that companies should be required to pledge their
allegiance to the smallblocker narrative in order to have their products
listed on the Bitcoin.org website” (Ver and Patterson, 2024, p. 177) […] “Two
unknown people who control the most prominent websites in Bitcoin are eager to
censor, propagandize, and even rewrite history to push their narrative. The
average user does not even know of the existence of Theymos and Cobra, much
less so the history of how they pushed a version of Bitcoin that is
diametrically opposed to the original one neither do prominent investors that
I have spoken with” (Ver and Patterson, 2024, p. 178) […] “In January 2017,
blocks were regularly running at 90%+ capacity, occasionally bumping into the
1MB limit, and by March, the average transaction fee passed $1—an increase of
more than 1,000% in less than a year.” (Ver and Patterson, 2024, p. 178) […]
“On Reddit, multiple anonymous users shared their intentions to exploit any
bugs they could find for maximum effect. They succeeded, and in the middle of
March, over half the Bitcoin Unlimited nodes were successfully brought down in
a coordinated attack. The bug did not cause much damage itself, but it did
damage the reputation of the BU developers at a critical time.” (Ver and
Patterson, 2024, p. 178)


“Amid the vitriol, censorship, DDoS attacks, and lawsuit threats, the number
of miners running BitcoinXT steeply declined. And once it became clear that
the 75% miner threshold would not be reached, Mike Hearn decided he had
enough.” (Ver and Patterson, 2024, p. 164)


“Bitcoin Core would find another way to obfuscate and delay by organizing a
series of “Scaling Bitcoin” conferences that tried to persuade miners to keep
running Core’s software. At these conferences, they agreed that the blocksize
limit had to be raised, but only to 2MB instead of 8MB. Miners were urged to
keep trusting Core and wait a little longer for more substantial upgrades. In
August 2015, the CEO of Blockstream Adam Back wrote: “My suggestion 2MB now,
then 4MB in 2 years and 8MB in 4 years then re-asses. [sic]” And later in
December of that year added: “There is consensus from developers, miners that
2MB is next step.”” (Ver and Patterson, 2024, p. 163)


“Despite the open support for larger blocks, and BIP101 in particular, some
miners started to get cold feet due to the controversy created by Core
supporters. In an interview with CoinTelegraph, AntPool—a mining pool
accounting for roughly 20% of the hashrate at the time—stated: We like the
idea of increasing the maximum block size, but if Bitcoin XT is too
contentious, we also don’t want the community to be divided.” (Ver and
Patterson, 2024, p. 162)


“In December 2015, Coinbase announced that they were running BitcoinXT on
their servers and supporting BitcoinXT, though they were still open to other
proposals. In response, the owners of Bitcoin.org promptly removed Coinbase
from their website—a remarkable move considering that Coinbase might have on-
boarded more people to Bitcoin than any other company in the world!” (Ver and
Patterson, 2024, p. 158)


“when SlushPool was hit with a DDoS attack after allowing voting on BIP101, it
affected a lot of people. On August 25th, 2015, Slushpool received a letter
from the perpetrators, telling them the attacks would continue until they
stopped supporting BitcoinXT. Another victim was the Web hosting company
ChunkHost, based in Los Angeles. It didn’t receive a message, but the attack
was focused on one customer who had recently switched the software powering a
Bitcoin ATM to BitcoinXT.” (Ver and Patterson, 2024, p. 156)


“One of the most highly upvoted threads in the forum’s history called for the
moderators to step down and be replaced. Shortly after this thread was posted
it was removed, and the very next day in August 2015, Theymos announced a new
moderation policy on r/Bitcoin that censored all discussion of BitcoinXT.”
(Ver and Patterson, 2024, p. 151) […] “The key message was that all hard forks
are illegitimate without a “consensus” of Core developers. Because of this,
BitcoinXT was not really Bitcoin and therefore could no longer be discussed on
the platform.” (Ver and Patterson, 2024, p. 151)


“BTC’s powerful narrative, repeated everywhere in the media, did not
spontaneously emerge, nor was it the result of free and open discussion among
Bitcoin enthusiasts. The two most important discussion platforms, on which the
overwhelming majority of conversations happened, were bitcointalk.org and the
r/Bitcoin subreddit, both of which still enjoy immense popularity. Both
platforms happen to be controlled by the same person, known by the pseudonym
“Theymos.” He also owns The Bitcoin Wiki (Bitcoin.it).” (Ver and Patterson,
2024, p. 149) […] “any companies siding with BitcoinXT over Core would have
their listings removed from the site. Since Bitcoin.org was, and still is,
often considered the “official” website for Bitcoin, this policy would help
create the narrative that any “contentious forks” away from Core are
illegitimate by default.” (Ver and Patterson, 2024, p. 150)


“Core had previously argued that 8MB would cause bandwidth and latency issues.
But several large Chinese mining companies—representing more than 60% of
Bitcoin’s total hashrate—signed a letter stating they were ready for 8MB
blocks.” (Ver and Patterson, 2024, p. 144)


“Several of the largest non-mining Bitcoin companies issued a joint statement
endorsing BIP101 and 8MB blocks without explicitly endorsing BitcoinXT.
Signatures included Stephen Pair, the CEO of Bitpay, Peter Smith, the CEO of
Blockchain.info, Jeremy Allaire, the CEO of Circle.com, Wences Casares, the
CEO of Xapo.com, Mike Belshe, the CEO of Bitgo.com, among others.” (Ver and
Patterson, 2024, p. 143)


“Since XT would add BIP101, and Core would not, the two implementations would
become incompatible with each other on the protocol level, resulting in the
minority implementation being “forked off” the main network." (Ver and
Patterson, 2024, p. 143)


“Mike Hearn and Gavin Andresen had previously created an alternative
implementation called BitcoinXT to make some noncritical changes to the
software. BitcoinXT was still compatible with Bitcoin Core—they both connected
users to the same network—but it allowed Hearn to work on another project
called Lighthouse, which was a crowdsourcing platform that used Bitcoin as its
currency. […] Mike Hearn and others would create BIP101, proposing an
immediate increase of the blocksize limit to 8mb, followed by tiny increases
every block, resulting in a doubling of the limit every two years up to a new
maximum size of 8GB by 2035—allowing for approximating 40,000 transactions per
second (which was several times larger than Visa’s throughput at the time).”
(Ver and Patterson, 2024, p. 140f)


“When Bitcoin Cash was released, OP_RETURN was one of the first things
upgraded and increased to 220 bytes. This additional space, when coupled with
significantly bigger blocks, enables more creative usages of the blockchain
than are feasible with BTC. Increased data usage is not a significant concern
within the big-block philosophy, since regular users do not have to run their
own nodes, and miners can easily discard this data.” (Ver and Patterson, 2024,
p. 135)


“The Core developers’ decision left a bad taste in many people’s mouths and
was considered anti-innovative. It was noticed by none other than Vitalik
Buterin, who credited the controversy as one of the reasons he created
Ethereum on an entirely separate blockchain instead of building on Bitcoin. He
wrote: The OP_RETURN drama preemptively pushed me toward building ethereum on
Primecoin instead of Bitcoin. The primecoin plan was scrapped because we ended
up getting more attention and resources than we expected, and so we could
build our own base layer... The very earliest versions of ETH protocol were a
counterparty-style metacoin on top of primecoin. Not Bitcoin, because the
OP_RETURN wars were happening at the time and given what certain core
developers were saying... I was scared that protocol rules would change under
me (eg. by banning certain ways to encode data in txs) to make it harder, and
I did not want to build on a base protocol whose development team would be at
war with me.” (Ver and Patterson, 2024, p. 133)


“Though it’s been stripped out of the BTC software and nearly forgotten about
today, Bitcoin was originally designed to handle smart contracts. […]
Counterparty was one of the first groups to take advantage of Bitcoin’s
broader technical functionality. They effectively built a decentralized,
digital asset register on top of Bitcoin. Users could mint and trade their own
tokens directly on top of the base layer. When OP_RETURN was originally
announced, it was supposed to allow for 80 bytes of data to be added to
transactions—which could then be easily discarded by miners and nodes. Working
with this 80-byte number, the Counterparty developers would build out a new
version of their platform. However, when OP_RETURN was finally released, its
size was cut in half, effectively crippling the projects that were being built
for 80 bytes." (Ver and Patterson, 2024, p. 132)


“A less charitable interpretation is that Blockstream received a large payoff
for crippling Bitcoin’s development at a critical time and fundamentally
changing it to resemble the existing financial system. A few hundred million
dollars is nothing compared to what the banks might lose if Bitcoin were
running at its full potential. […] The Bitcoin of 2024 is far less threatening
to existing powers than the Bitcoin of 2014. It is a cumbersome network that
pushes users to secondary, controlled layers to have a better experience.”
(Ver and Patterson, 2024, p. 128)


“The Digital Currency Group is another venture capital firm which has raised
suspicions after investing in a huge range of cryptocurrency projects,
Blockstream included. When the firm was created in 2015, their initial funding
came from establishment financial companies, including MasterCard—a direct
competitor of Bitcoin. […] Blockstream’s largest fundraising round came in
2021, when it raised over $200 million in Series B funding, bringing its
valuation to $3.2 billion." (Ver and Patterson, 2024, p. 127)


“Capturing all the transaction fees from the Liquid Network is not the only
way that Blockstream profits from it. They also charge a monthly fee to
companies integrating Liquid and are releasing tokens on their network. In
2020, Blockstream announced that they had become technical partners with a new
startup called Avanti, which is trying to be a cryptocurrency-friendly bank.
Avanti recently announced they were entering the lucrative digital asset
market by issuing tokens (“Avit”) that they claim will be redeemable for one
US dollar, though not fully backed by dollars. […] There is some irony in the
fact that Blockstream is integrating with banks to help them issue digital
dollars. In addition, they are even starting to integrate directly with
governments and help them with fundraising. To date, they have raised around
$300 million from investors." (Ver and Patterson, 2024, p. 125f)


“The Liquid Federation is a group of cryptocurrency businesses, including
exchanges, trading desks, infrastructure companies, game developers, and more.
The federation fulfills a number of tasks that are integral to the Liquid
Network’s operation. There are currently only fifteen members of this
federation, and if more than a third of them became dishonest, the security of
the network would break and users could lose their money. Not only is the
network centralized, but after swapping your BTC for Liquid tokens, you are no
longer using the Bitcoin network.” (Ver and Patterson, 2024, p. 123)


“The idea of sidechains has always appealed to me, and I have personally
funded their development on BTC with the DriveChain project, led by Paul
Sztorc. Like any software project, creating a working implementation has
proven much more difficult than creating a nice-sounding idea. Done correctly,
sidechains should not require any trust in centralized authorities in order to
work, which is what the DriveChain project is trying to do. Blockstream has
released their version of a sidechain called the “Liquid Network,” but it
works very differently. The Liquid Network is a “federated” sidechain, which
is better understood as a centralized sidechain or even an altcoin.” (Ver and
Patterson, 2024, p. 122)


“Their business model depends on Bitcoin not scaling its base layer. The less
Bitcoin can do, the more Blockstream can do for a fee. In a Forbes interview,
CEO Adam Back shared one part of their monetization strategy, saying,
“Blockstream plans to sell sidechains to enterprises, charging a fixed monthly
fee, taking transaction fees and even selling hardware.” (Ver and Patterson,
2024, p. 121)


“Blockstream would end up being the most influential company in Bitcoin’s
history. Its co-founders were Adam Back, Gregory Maxwell, Pieter Wuille, Matt
Corallo, Mark Friedenbach, Jorge Timón, Austin Hill, Jonathan Wilkins,
Francesca Hall, and Alex Fowler. Unlike the Bitcoin Foundation, Blockstream
was founded as a for-profit company. […] Blockstream was successful in
creating a revenue-producing business, but it turned out to be a serious
conflict of interest. Instead of building out the base infrastructure, it
crippled the base infrastructure and now offers paid solutions to the problems
it created. The fact that Maxwell would be employed to work on critical
infrastructure is ironic, given his admission that he previously thought the
key technological mechanism used by Bitcoin was not even possible: When
bitcoin first came out, I was on the cryptography mailing list. When it
happened, I sort of laughed. Because I had already proven that decentralized
consensus was impossible.” (Ver and Patterson, 2024, p. 119f)


“Another goal of the Foundation was to improve the reputation of Bitcoin with
regulators and the general public. Unfortunately, Andresen did not have much
time before the Foundation started to fall apart due to bad management, a lack
of transparency, and a series of petty scandals. By the end of 2014, the
organization was dysfunctional, with some board members getting into trouble
with the law. In April 2015, it was announced that the Foundation was
effectively bankrupt and would not be able to raise enough money to continue
funding development. So later that month, Andresen joined a new project at
MIT’s Digital Currency Initiative, where he would continue to develop Bitcoin
along with two other Core coders, Wladimir van der Laan and Cory Fields.” (Ver
and Patterson, 2024, p. 118)


“Cryptocurrency projects are especially tricky because the software is a
financial product. Any mistakes can directly affect the wallets of millions of
people. […] The earliest attempt to create a more formal organization around
the maintenance of the software came in 2012, with the creation of the Bitcoin
Foundation, which modeled itself on the Linux Foundation. The Bitcoin
Foundation accepted donations from large companies and other interested
parties. I myself donated to it and was a founding board member. Its most
important goal was to provide funding for Gavin Andresen.” (Ver and Patterson,
2024, p. 117)


“Gavin Andresen remarked, “I’ve started to suspect jdillon is a very
sophisticated troll with the ulterior motive of destroying bitcoin." […] by
far the most interesting exchange is an email between Dillon and Todd, in
which Dillon claims to be involved with the intelligence community, saying:
Just so you know this stuff about Tor has me worried... Please don’t make this
public, but my day job involves intelligence, and I’m in a relatively high
position. You know, I went into the job years ago with very different thoughts
about it than I do now. The last, well, decade really has changed a lot of
minds in this field, in totally different ways. Myself I am on the side of
Snowden and Assange, but... lets just say when you have a family your
willingness to be a martyr diminishes. The same is true of many of my
colleagues. Hopefully my support for Bitcoin can help undo some of the damage
we’ve done, but I do have to be careful and it’s tough to take all the
precautions I need to be able to communicate. If it was found out that I was
involved with Bitcoin that way I have been, let’s just say there would be
consequences...” (Ver and Patterson, 2024, p. 115f)


“As a serious Bitcoin investor I also care about the store of value, not
stupid micropayments, and I know my partners feels [sic] the same way. We also
know that Bitcoin’s value has very little to do with being a payment system...
[…] I finally got a chance to see your new video. It’s solid professional
work, you have done a great job. You’ll soon get another 2.5BTC from me by the
same method I used before. Nice to see that big 10BTC donation you got, and
from an address with 125BTC! It really says something how many of the
donations you have been getting all come from addresses with large balances of
Bitcoins, about 250BTC and counting right now. It just goes to show how the
people most heavily invested in Bitcoins are the ones with the most to lose
from centralization and regulation. Keep up the fight." (Ver and Patterson,
2024, p. 114)


“John Dillon was the man who offered to pay $1,000 to develop the replace-by-
fee patch proposed by Peter Todd. As it turns out, Dillon also supported and
paid Todd for his work creating the infamous 1mb-forever animated video.” (Ver
and Patterson, 2024, p. 113)


“Gavin Andresen said flatly: Replace-by-fee is a bad idea. Even Adam Back, who
later played a big role in derailing Bitcoin agreed: I agree with Mike & Jeff.
Blowing up 0-confirm transactions is vandalism. Yet, in late 2015, RBF was
successfully added to Bitcoin Core. At present, RBF transactions are created
with a flag, so merchants can refuse to accept them if they are careful, but
developers are currently debating whether to change this default setting. If
the flag is ever removed, zero-conf payments on BTC will effectively have zero
security. Zero-conf payments are understood to be an essential feature in
Bitcoin Cash, and developers have been actively working on ways to further
improve their security and reliability.” (Ver and Patterson, 2024, p. 112)


“Coinbase fully agrees with Mike Hearn. RBF is irrational and harmful to
Bitcoin. Jeff Garzik, an early Bitcoin Core developer agreed: Repeating past
statements, it is acknowledged that Peter’s scorched earth replace-by-fee
proposal is aptly named, and would be widely anti-social on the current
network.” (Ver and Patterson, 2024, p. 111f)


“He starts with the supposed problem of users getting their transactions
stuck, which was only an issue for transactions with extremely low or zero
fees. Though ironically, stuck transactions did become a real issue when the
blocks became full and fees spiked in 2017. When users’ transactions were
stuck, sometimes for days or even weeks, RBF was indeed used to “unstick”
those transactions. […] in his mind, zero-conf transactions aren’t safe
enough, and uninformed users just don’t realize it. So, to prevent people from
getting attached to zero-conf transactions, RBF would break their
functionality once and for all—because, in his words, if the miners decided to
implement something like RBF, zero-conf would break anyway. In other words,
Bitcoin’s instant payment functionality needed to be broken by developers at
the software level, so that miners wouldn’t end up breaking it in the future.”
(Ver and Patterson, 2024, p. 109)


“Such a policy makes double spending easy, effectively breaking the
reliability of zero-conf—which was the explicit goal of Todd.” (Ver and
Patterson, 2024, p. 108)


“Instead of the first-seen rule, Peter Todd proposed the “replace-by-fee”
(RBF) patch, which said that when two conflicting transactions are seen, the
one with the higher fee wins.” (Ver and Patterson, 2024, p. 108)


“What about transactions that have been created but have not yet been added to
a block? These are called “zeroconfirmation” transactions, or “zero-conf” for
short. Zero-conf transactions take only seconds to send and receive, though
they are inherently less secure.” (Ver and Patterson, 2024, p. 107)


“2011, when the price shot up to $30, the main discussion forum
Bitcointalk.org was flooded with spam, with bots suddenly posting endless
threads of gibberish, making it impossible to use that forum to communicate.
Somebody was paying attention and wanted to disrupt information flows, though
it’s not clear who. […]Perhaps the first undeniable sign of trouble came in
May 2013. The blocksize debate had already started, but even the most
conservative developers agreed that the 1mb limit had to be increased. The
question was when and to what level. Various schemes were proposed. Some
wanted a gradual increase to 2, to 4, then to 8mb. Others proposed an
adjustable blocksize limit that automatically adjusted itself based on the
average size of recent blocks, and still others wanted to remove the limit
altogether. But nobody thought that a maximum throughput limit of seven
transactions per second was a good idea. That is, not until the developer
Peter Todd put out an animated video entitled “Why the blocksize limit keeps
Bitcoin free and decentralized.” I consider Peter Todd’s animation to be the
first example of well-funded, blatant propaganda. It’s so outrageous that it
stretches credulity to think it was created from a mere difference in
philosophy. The narrator explains how, in the name of decentralization,
Bitcoin should cap itself to 1mb blocks forever: We have an alternative to
increasing the blocksize: off-chain transactions... you’ll still use the
blockchain for large transactions, but small exchanges will be handled by
payment processors, which means small purchases like your morning coffee don’t
clog the whole system up... Unlike a completely public blockchain where you
can’t pick who mines your transactions, or who you trust to do validation,
off-chain transactions can be both instant, truly private, and you have
complete control over who to trust. What can you do to keep bitcoin
decentralized? If you’re a miner, only mine in pools that support keeping the
blocksize limit, and ask your pool to publicly say so. If you are a user,
ignore anyone trying to change the Bitcoin software you use to increase the
1mb blocksize, and tell people you transact with that you support keeping
bitcoin decentralized and out of the hands of the existing corporate system.”
[…]it was considered ridiculous in 2013, even by vocal small-blockers like
Greg Maxwell, who wrote: I do cringe just a little at the over-simplification
of the video... maybe some people will be dogmatically promoting a 1MB limit
because they walked away from the video thinking that 1MB is a magic number
rather than today’s conservative trade-off.” (Ver and Patterson, 2024, p.
103f)


“when the El Salvador government announced that BTC was going to become an
official currency, there was almost no mention of the fact that their
government was setting up purely custodial wallets for their citizens—meaning,
the government will be able to track and censor transactions made through
their app, freeze accounts, or easily confiscate coins if they decide to.
State integration is great from the perspective of price appreciation and
hype, but it’s unclear whether the average El Salvador citizen will benefit at
all.” (Ver and Patterson, 2024, p. 102)


“Instead of being a tool for regular people—especially helpful for those in
the developing world with unstable currencies—the focus shifted towards
appealing to central bankers and encouraging Wall Street to speculate.
Blockstream executive Samson Mow captured this sentiment by flatly declaring
that “Bitcoin isn’t for people that live on less than $2 a day.” […]The fourth
era started during the first run to $20,000, when the news started to cover
Bitcoin non-stop. The hype was so extreme, I remember seeing a running ticker
symbol in the corner of CNBC broadcasts that would track the price. […]The new
narrative started to solidify with books like The Bitcoin Standard, which,
despite making blunders on several critical concepts, has enjoyed widespread
popularity. The same ideas have been uniformly repeated on all the most
important discussion channels, making the small-block philosophy the only
perspective that newcomers encounter when learning about Bitcoin. The original
vision of big blocks and universal access to the blockchain was successfully
demonized and its history obfuscated.” (Ver and Patterson, 2024, p. 101f)


“If you visited the biggest companies during that time, you would have heard
near universal criticism of the Core developers for stalling Bitcoin’s growth
and handicapping its utility. Several prominent developers even publicly
warned that BTC was being hijacked while it was happening. During this time,
the industry tried desperately to keep the community together and scale the
technology, with multiple attempts being made to bypass the Core developers,
but these attempts were ultimately unsuccessful. Several conferences were
organized to try and agree on a solution. In 2016, Brian Armstrong attended
one of these conferences and wrote an article about his impressions: […]Even
though core says they are ok with a hard fork to 2MB, they refuse to
prioritize it... They view themselves as the central planners of the network,
and protectors of the people. They seem ok with watching bitcoin fail, as long
as they don’t compromise on their principles... In my opinion, perhaps the
biggest risk in bitcoin right now is, ironically, one of the things that has
helped it the most in the past: the bitcoin core developers.” (Ver and
Patterson, 2024, p. 100f)


“I would try to persuade every business owner to accept the currency of the
future—and enjoy the benefits of a popularity boost. If they announced that
they were accepting Bitcoin online, they would immediately get a wave of new
patrons who wanted to spend their coins. Early Bitcoiners were often eager to
spend their new currency in commerce, since we all knew that if Bitcoin
succeeded as a new form of money, we would all succeed. If a well-known
company started accepting it, the community would celebrate as if our team had
just won the World Cup.” (Ver and Patterson, 2024, p. 99)


“I ended up being the world’s first investor in Bitcoin startups. […]BitPay, a
startup that allowed merchants to accept Bitcoin and immediately convert it
into fiat, eliminating the volatility risk. Their service proved crucial to
gaining mainstream adoption, and BitPay has since become one of the most
important companies in the entire cryptocurrency world. Other early
investments were in companies like Blockchain.info, which let users spend and
receive Bitcoin without downloading any software by creating an online wallet
that was accessible with a web browser. Kraken, BitInstant, and Shapeshift
made it far easier for the public to acquire Bitcoin, while Purse.io allowed
them to spend their coins on Amazon. Though the nickname “Bitcoin Jesus” has
stuck, I like to think my role in Bitcoin’s history is closer to being
“Bitcoin Johnny Appleseed” for helping to seed many of the earliest companies
with funding.” (Ver and Patterson, 2024, p. 98)


“We sold computer parts online, and to my knowledge, we became the first
retailer to accept Bitcoins for payment. […]Bitcoiners from around the world
were eager to spend their new digital currency. Not only did our sales
increase, but it was also a great way to accumulate more Bitcoin. […]Shortly
afterwards, we put up a now-famous sign in Silicon Valley proudly advertising
that “We Accept Bitcoin.”” (Ver and Patterson, 2024, p. 97)


“My experience of the first era began in late 2010, when I first heard about
Bitcoin on the radio show Free Talk Live. […]The next ten days were intense,
as all my free time was spent learning about Bitcoin. I scoured the internet
for every new piece of information. […]After ten days of this, my health
deteriorated to the point where it couldn’t be ignored. I was completely
exhausted and couldn’t even drive myself to the doctor. So I called my friend
Kevin, and he took me to the hospital. Doctors are familiar with cases of
binge-drinking, but I might be the first person admitted to a hospital for
binge-reading! They told me that I needed to calm down and sleep. They gave me
a sedative, and after sleeping for almost twenty hours straight, I felt much
better. I left the next day and decided to resume my research (at a slightly
slower pace, of course). That was the beginning of my journey with Bitcoin.
[…]To purchase my first Bitcoins, I couldn’t use PayPal, an ACH deposit, or a
credit card. Instead, I had to send a wire directly to the personal bank
account of Jed McCaleb, the website owner. Fortunately, he came through, and I
successfully acquired my first Bitcoin for less than a dollar each.” (Ver and
Patterson, 2024, p. 96f)


“In the earliest days, it wasn’t clear that Bitcoin would even work, let alone
become an international sensation. Even the original pioneers saw it as a
technology with an uncertain future. Gavin Andresen warned on his blog in
2012: DISCLAIMER: I’ve been saying this for a couple of years now, but it is
still mostly true: Bitcoin is an experiment— only invest time or money in it
that you can afford to lose!” (Ver and Patterson, 2024, p. 95)


“Once it became clear that the Core developers were refusing to increase the
blocksize limit, the industry tried to upgrade to other implementations, on
multiple occasions. But each time, these alternatives were attacked along with
the businesses that supported them. Everything from denial-of-service attacks
to [...] fake app reviews, mass censorship, and social media smear campaigns
were used to discourage people from using alternatives to Bitcoin Core—which
is why their software is run by approximately 99% of nodes in BTC today and
the people who want big blocks use alternative coins like Bitcoin Cash. The
failure to decentralize software development resulted in a project totally
dominated by a single group that maintains a single code repository on
Github.” (Ver and Patterson, 2024, p. 93f)


“Before 2013, there was no such thing as “Bitcoin Core.” Until then,
everything was referred to as “Bitcoin”—the software, the currency unit, and
the network—which caused unnecessary confusion for a project that already had
a reputation for being confusing. So, in November 2013, a proposal was put
forward to change the name of the software. […]The idea was to have multiple
implementations, not just the Core software, so that specialization could
happen. Miners, for example, might create their own version that focused on
fast transaction validation, while nodes could specialize on other features.
During an excellent interview in 2015, Andresen explained: It’s really
important for people to separate in their head “Bitcoin” the protocol—you
know, Bitcoin the system that we’re all using to transact—and the Bitcoin Core
open-source software project that lives on Github and a bunch of people are
contributing code to. They really aren’t the same thing. I call Bitcoin Core
the “reference implementation,” and I’ve called it that for years, and that
implies that there will be other implementations of the Bitcoin protocol.”
(Ver and Patterson, 2024, p. 91f)


“Once the 5 developers with commit access to the code had been chosen and
Gavin had decided he did not want to be the leader, there was no procedure in
place to ever remove one. And there was no interview or screening process to
ensure they actually agreed with the project’s goals. […]Complicating things
further, [Core developer Greg] Maxwell founded a company that then hired
several other developers. Not surprisingly, their views then started to change
to align with that of their new boss...” (Ver and Patterson, 2024, p. 91)


“In 2014, Andresen said he was shifting from the day-to-day maintenance of
Bitcoin Core to higher-level research and chose Wladimir van der Laan as his
successor. Van der Laan was an active contributor to Bitcoin’s code, but he
ended up being the most passive of the three project leaders, allowing
critical decisions to go unresolved. Mike Hearn shared his frustration with
the lack of competent leadership in Bitcoin Core in 2015. […]So Bitcoin Core
sort of devolved over the last few years into this rule-by-consensus—but it’s
actually much closer to anyone who wants having a veto, because as long as
anyone is objecting or making vaguely intellectual-sounding objections, then
there’s no consensus, and therefore change won’t happen. This has become a
huge problem, especially because some of the people who have commit access and
love to make these sorts of arguments... they enjoy coming up with complicated
theories and complicated proposals for redesigns of Bitcoin... and then what
tends to happen is the more practical day-to-day needs of developers get lost.
These issues were never fixed and eventually caused Hearn to leave the project
altogether in 2016. On his departure, he published a fantastic essay entitled
“The Resolution of the Bitcoin Experiment”” (Ver and Patterson, 2024, p. 90f)


“Andresen became the figurative “heir” of Satoshi and was the Lead Maintainer
until 2014. Unlike Satoshi, he was not the only person allowed to make code
changes, because early on, he decided to give a handful of others this power.
[…]Andresen’s decision was reasonable and well-intentioned, but unfortunately
it had unforeseen consequences and looks like a strategic mistake in
hindsight. He gave a handful of other people “commit access”—that is, the
ability to change code on the official online repository—but they were not all
aligned with Satoshi’s vision for big blocks and low-fee transactions. Some
apparently thought they could design a better system. Philosophical
differences between the developers caused extreme development delays and
factions to emerge. Eventually, one faction formed their own company, and
shortly afterwards, the different groups turned into hostile camps.” (Ver and
Patterson, 2024, p. 89)


“All the rhetoric surrounding Bitcoin development makes it sound like the
process is open and meritocratic—that if you write good code it will be
automatically incorporated into the software. […]There are strict hierarchies
that determine what code gets added to the software, and there are specific
individuals who have the power to approve or reject code changes. […]Instead
of saying, “Anybody can contribute to the project,” it would be more accurate
to say, “Anybody that agrees with the philosophy of a handful of Core
developers and their vision for Bitcoin, accepts their development processes
and hierarchies, and is socially approved by them can submit code for their
evaluation!”” (Ver and Patterson, 2024, p. 87)


“Like the concepts of “digital gold” and “store of value,” the famed
“decentralization” of Bitcoin is more of a marketing slogan than a reality.
[…]The people that maintain and update Bitcoin’s code are the people with the
most influence over the network. For most cryptocurrency projects, not just
Bitcoin, developers call the shots. And notably, software developers don’t
finance themselves. They have to get paid somehow.” (Ver and Patterson, 2024,
p. 86)


“That’s why peer-to-peer digital cash is such a revolutionary concept; it
keeps more power in the hands of regular people while giving them the
convenience of electronic money.” (Ver and Patterson, 2024, p. 86)


“Crucially, this is not a distributed peer-to-peer network, where nodes
connect directly to each other. The largest nodes become essential to the
smooth functioning of the entire network, and these huge nodes will have the
power to censor. They will be hosted by companies that are easy to regulate.
And when they are taken offline for whatever reason—due to failure,
regulation, or simple maintenance—the connectivity of the network will be
seriously damaged. Governments or malicious actors can simply target the
largest payment channels. […] I want Lightning to live up to its promises,
because if it could, then the world would be a better place. But I currently
have no reason to believe this will happen. All signs point to it being a
failed experiment, an embarrassment to the Core developers, and a
demonstration that the Bitcoin Maximalists pushing this technology as a
replacement for on-chain transactions were completely wrong and have misled
millions of people.” (Ver and Patterson, 2024, p. 83)


“Rick Falvinge, the IT entrepreneur turned Swedish politician, concluded in a
series of videos about Lightning: Mesh routing is an unsolved problem in
computer science, especially when you have adversaries in the network... I’m
considering the Lightning Network a dead end... It is not going to gain
adoption. It is going to remain a toy that will be tinkered with and
eventually left by the wayside. […] From a usability perspective, the best
possible outcome for Lightning would be to have totally custodial wallets
connected to the largest exchanges. But of course, that kind of defeats the
purpose of Bitcoin in the first place.” (Ver and Patterson, 2024, p. 79f)


“Lightning developers have tried to fix this problem by creating
“Watchtowers,” which are third parties that watch over the channel to make
sure nobody is cheating, even if one node goes offline. This new system adds
another layer of complexity, and it requires watchtowers to be trustworthy and
competent, otherwise users can lose their funds. The problem of trust is
simply pushed back one more step—i.e. the watchtowers need their own
watchtowers. In addition to the security risk, offline nodes cannot even
accept payments, nor can they route payments for other people. Lightning
requires both parties to be online at the same time, and the sender cannot
send any arbitrary amount of Bitcoin to the recipient. The recipient must
generate a specific invoice for the sender to fill hence, the requirement to
be online. The requirement to be online is also a security risk because it
means the users’ Bitcoin keys are held in a so-called “hot wallet,” meaning
it’s connected to the internet.” (Ver and Patterson, 2024, p. 78)


“Joseph Poon wrote in the Lightning whitepaper: If all transactions using
Bitcoin were conducted inside a network of micropayment channels, to enable 7
billion people to make two channels per year with unlimited transactions
inside the channel, it would require 133 MB blocks (presuming 500 bytes per
transaction and 52560 blocks per year).” (Ver and Patterson, 2024, p. 76)


“Paul Sztorc, a notable BTC supporter and developer, wrote an article breaking
down the numbers in more detail. He concluded that even if 90% of the block
space is dedicated to opening channels, only around 66 million people can be
onboarded per year—that means it would take around 120 years to onboard the
world to the Lightning network. He concludes: In other words, each year we’d
only onboard 0.82% of the world. Worse: if channels last merely one year, then
by Jan 1 2025, we will need to re-onboard the people who joined on Jan 1 2024.
In that world, only 0.82% of Earth’s population, max, can be bona fide Bitcoin
users (at any one time).” (Ver and Patterson, 2024, p. 76)


“Payment channels are a neat technology that has been worked on since the
beginning, even by Satoshi himself. However, they were not being worked on as
a scaling solution. Instead, they were being designed for tiny micropayments
and high-velocity two-way transactions, which are used in special
circumstances like machine-to-machine payments. […] The most fundamental
problem with the Lightning Network is that it requires on-chain transactions
in order to use. These channels are not permanent; they require ongoing
maintenance and are supposed to be refreshed annually. […] The most popular
Lightning wallets are either custodial which means users’ funds are controlled
by a company—or the wallet will commonly subsidize the on-chain transaction
costs.” (Ver and Patterson, 2024, p. 75f)


“Satoshi’s system was not perfect and did overlook a key problem: the
governance and funding of Bitcoin’s software development. Miners have strong
incentives. Users have the correct incentives. But developers’ incentives are
murky and can result in conflicts of interest. In the case of Bitcoin Core,
the structure of their decision-making process was flawed and ultimately
derailed the entire project. […] their new design is not an improvement. In
almost every way, other than price, it seems worse than the Bitcoin of 2013.”
(Ver and Patterson, 2024, p. 73)


“The system was designed to operate without a central authority, so nobody has
to trust any particular individual or company. But they do have to trust that
the incentives are strong enough to create a reliable network. This trust
cannot come from each individual analyzing the code for himself. It must come
from seeing Bitcoin as a whole, which includes many humans and businesses
acting in their own self-interest. When Bitcoin Core changed the incentives of
the system, they fundamentally changed its whole design.” (Ver and Patterson,
2024, p. 72)


“Bitcoin Core has been the central planning board for Bitcoin on many issues,
whether it’s imagining they know the “correct” blocksize, the “correct” level
of transaction fees, or the “correct” number of nodes on the network. This is
why Gavin Andresen said: Central planning is why I would like to eliminate the
hard, upper blocksize limit entirely, and let the network decide “how big is
too big.” […] The blocksize limit in BTC is a centrally planned supply
shortage. […] BTC users are then forced to compete in an artificial “fee
market” to get their transaction processed. The same thing happens in housing
markets when central planners prevent new construction from being built. […]
If left alone, miners will produce the best size block to meet demand.” (Ver
and Patterson, 2024, p. 71f)


“Some critical features of Bitcoin are not coded at all; they are built into
its incentive structure. […] You can use a BCH wallet on your smartphone as
easily as any other app. BTC proponents like to claim that SPV has some
theoretical security problems, but there have been no documented cases of
users losing money because of it. It has a long, successful track record, and
the most popular BTC wallet apps are actually using SPV or similar technology,
or they are custodial wallets. […] The developers had multiple opportunities
to increase the blocksize limit, but they didn’t want to risk kicking any
nodes off the network, no matter how small. In fact, there’s a whole movement
of BTC supporters putting full nodes onto Raspberry Pis—computers so small
that they cost about $30. So it’s no surprise that BTC can’t scale; every
transaction on the network can still be processed with extraordinarily cheap
equipment! From the perspective of scaling, the Core developers did the worst
possible thing. They throttled the capacity of the network to the capacity of
the smallest players and did not understand that it’s perfectly healthy to
have the smallest nodes kicked off the network as it grows. As Satoshi said,
nodes will professionalize into “big server farms.” That’s what natural
economic growth would look like.” (Ver and Patterson, 2024, p. 69f)


“If Bitcoin only requires a gigabit-level internet connection in order to run
a full node that can process Visa-level transaction throughput, the barrier to
entry is not too high. When Satoshi predicted that sending HD movies over the
internet would eventually be normal, that was four years prior to the rollout
of Google Fiber in 2012, which was the first mainstream service to bring
gigabit internet connections to home users. In 2021, researchers in Japan set
a new world record for internet speed, reaching an unbelievable rate of 319
terabits per second—around 3.2 million times the current average US internet
speed of 99.3 megabits per second.” (Ver and Patterson, 2024, p. 66)


“Satoshi gave an estimate of $18 per day—more than $6,500 per year—to
demonstrate how low the costs of bandwidth could be at scale, again revealing
that he did not expect regular users to run their own nodes. When Satoshi
wrote that email in 2008, the average US cost of bandwidth was $9 for each
megabit per second of data. Ten years later, it fell by a colossal 92% to
$0.76.” (Ver and Patterson, 2024, p. 65f)


“Ammous makes confident pronouncements about the costs of technology, yet
apparently without doing basic research on the topic.” (Ver and Patterson,
2024, p. 64)


“If Bitcoin uses 42TB per year, that’s $630, or $52.50 a month. If we want to
include the cost of a consumer-grade, 6-bay NAS device to connect the drives
together, that currently runs around $670. Added together, that’s a minuscule
$1,300 per year—just over a hundred dollars a month—for storing
100,000,000,000 transactions.” (Ver and Patterson, 2024, p. 63)


“full nodes cannot add blocks to the chain. They can only verify whether
blocks and transactions are valid.” (Ver and Patterson, 2024, p. 58)


“Hearn understood that miners are not a threat to the system. If anything,
miners are least incentivized to break Bitcoin, since their only revenue comes
from transaction fees and the block reward, both of which are denominated in
Bitcoins that must be sold on the market.” (Ver and Patterson, 2024, p. 58)


“Technically, it’s possible for anybody to set up their own email server and
connect to the global email network. But why would you? Alan Reiner, who
created the popular Armory wallet, said in 2015: The goals of “a global
transaction network” and “everyone must be able to run a full node with their
$200 dell laptop” are not compatible. We need to accept that a global
transaction system cannot be fully/constantly audited by everyone and their
mother.” (Ver and Patterson, 2024, p. 55)


“Bitcoin was designed so that regular people don’t have to run their own full
nodes. They can use lighter software. Remember, a full node downloads a copy
of the entire blockchain and validates every single transaction on the
network. This is unnecessary for almost everybody. Satoshi designed Bitcoin
with Simplified Payment Verification (SPV) in mind, which allows users to
verify their own transactions with a tiny amount of data. Using SPV, you
cannot verify a stranger’s transactions, nor can you verify every transaction
ever made, but most people have no reason to do that. Satoshi was not foolish
enough to design a cash system where every user had to download and verify the
entire world’s transactions. There’s no way such a system could scale.” (Ver
and Patterson, 2024, p. 54)


“Before the blocks became full, BTC enjoyed a market share in the
cryptocurrency industry of around 95%. Once the blocks started filling up, the
market share quickly dropped. At the peak of the network failure in January
2018, it dropped to 32%, and many users, businesses, and developers left BTC
outright. As of March 2023, BTC market share is around 40% and will likely
drop again with more network failures. If the Bitcoin Core developers had
simply increased the blocksize limit to a reasonable level, I am confident
that many competing cryptocurrency projects simply wouldn’t exist, the
industry would have remained unified around one coin, and BTC would have
continued to be the premier digital cash system for the internet.” (Ver and
Patterson, 2024, p. 53)


“While it does make sense to build multiple layers in Bitcoin, in order to
work correctly, the base layer must be scalable. If the base layer can only
process seven transactions per second, it’s not even close to being robust
enough to build additional layers on top.” (Ver and Patterson, 2024, p. 52)


“After the 2017 fee spike, the Bitcoin industry experienced anti-adoption for
the first time. When the popular gaming platform Steam announced they were no
longer accepting Bitcoin, customers seeking refunds are guaranteed to lose
money. If they are refunding a $30 game and the transaction fees cost $10
each, users can end up losing $20 and have nothing to show for it.” (Ver and
Patterson, 2024, p. 51f)


“Vitalik Buterin, the co-founder of Ethereum, publicly said: I consider BCH a
legitimate contender for the bitcoin name. I consider bitcoin’s failure to
raise block sizes to keep fees reasonable to be a large (non-consensual)
change to the “original plan”, morally tantamount to a hard fork.” (Ver and
Patterson, 2024, p. 50)


“backlogs needed to stabilize consensus progress as the subsidy declines. […]
Satoshi explained: In a few decades when the reward gets too small, the
transaction fee will become the main compensation for [miners]. I’m sure that
in 20 years there will either be very large transaction volume or no volume.”
(Ver and Patterson, 2024, p. 50)


“They euphemistically call the backlog of high fee transactions a “fee
market,” where users outbid each other for the tiny amount of space inside
blocks. This bizarre and unnecessary security model is why the Core developers
celebrate and encourage high fees and a backlog of transactions. […] when fees
rose to $25 in December 2017, Maxwell infamously responded: Personally, I’m
pulling out the champaign [sic] that market behaviour is indeed producing
activity levels that can pay for security without inflation, and also
producing fee paying” (Ver and Patterson, 2024, p. 49)


“In fact, Bitcoin Cash has already successfully had multiple 32MB blocks, and
a recent offshoot of Bitcoin Cash, Bitcoin SV, has even mined a 2GB block.
These networks have not broken. Satoshi had a simple, final answer to
questions about blocksize: It would be nice to keep the [blockchain] files
small as long as we can. The eventual solution will be to not care how big it
gets.” (Ver and Patterson, 2024, p. 48)


“In 2013, Visa was handling, on average, around 2,000 transactions per second.
To get 2,000 transactions per second on Bitcoin, the blocks would have to be
roughly 500MB, which is an entirely manageable amount. Today’s cell phones can
easily record and upload HD videos that are gigabytes in size—that is,
multiple times the size of a Bitcoin block that contains over a million
transactions.” (Ver and Patterson, 2024, p. 48)


“they changed the metric of blocksize into “block weight” and claim the new
limit is 4MB, but this is mostly an accounting trick and does not correspond
to a quadrupling of throughput capacity.” (Ver and Patterson, 2024, p. 47) […]
“Jorge Timón, a Core developer, stated, “I agree that hitting the limit
wouldn’t be bad, but actually good for a young and immature market like
bitcoin fees.” While Greg Maxwell stated bluntly, “There is nothing wrong with
full blocks... Full blocks is the natural state of the system.”” (Ver and
Patterson, 2024, p. 47)


“Andresen was chosen by Satoshi as his successor and the lead developer of the
project. Naturally, he was also a bigblocker.” (Ver and Patterson, 2024, p.
45) […] “Hearn, on the other hand, was a feistier developer who was more
outspoken against the small-blockers whom he believed were disrupting the
project. His previous work experience was especially relevant. Hearn left
Google to work on Bitcoin.” (Ver and Patterson, 2024, p. 45) […] “When Bitcoin
was originally coded, there was no explicit limit on the size of blocks that
could be produced. That changed in 2010, when Satoshi added a blocksize limit
to prevent a potential denial-of-service attack while Bitcoin was young.” (Ver
and Patterson, 2024, p. 45) […] “On July 15th [2010], about eleven thousand
bitcoin were traded at an average price of about three cents each. The block
reward was 50 BTC back then, so miners could sell a block’s worth of coin for
about $1.50.” (Ver and Patterson, 2024, p. 46) […] “Andresen noted in the
forums: The plan from the beginning was to support huge blocks. The 1MB hard
limit was always a temporary denial-of-service prevention measure. Ray
Dillinger, another early Bitcoin pioneer, said the same thing: I’m the guy who
went over the blockchain stuff in Satoshi’s first cut of the bitcoin code.
Satoshi didn’t have a 1MB limit in it. The limit was originally Hal Finney’s
idea. Both Satoshi and I objected that it wouldn’t scale at 1MB. Hal was
concerned about a potential DoS attack though, and after discussion, Satoshi
agreed... But all 3 of us agreed that 1MB had to be temporary because it would
never scale.” (Ver and Patterson, 2024, p. 46)


“The blocksize limit was not supposed to be an important parameter, and the
limit was not meant to be reached. It was supposed to stay far above the size
of the average block. The blocks were never meant to be full, except in
extreme circumstances.” (Ver and Patterson, 2024, p. 43) […] “A full block
means that there are more transactions trying to be processed than can fit
into a single block, which immediately causes fees to spike and a backlog to
develop. A BTC block can currently hold 2,000-3,000 transactions and is
produced every ten minutes. If 18,000 people try to make a single transaction
within a ten-minute period, the network must take at least six blocks to
process them all. That’s one hour to process every transaction in the queue if
nobody else uses it during that time. If 150,000 people try to use Bitcoin at
one time, it would require at least fifty blocks to process everything. That’s
more than eight hours of waiting.” (Ver and Patterson, 2024, p. 43) […]
“Raising your fee increases the chance that miners will include your
transaction in the next block, but if enough people pay more than you, your
transaction gets pushed back farther in the queue. This makes fees rise
exponentially and creates a horrible user experience.” (Ver and Patterson,
2024, p. 44) […] “During the fee spikes in 2017 and 2021, some complex
transactions cost more than $1,000 each, which I ended up paying multiple
times. A quick search of the blockchain for transactions with fees from $900
to $1,100 returns nearly 35,000 results.” (Ver and Patterson, 2024, p. 44) […]
“Imagine if email couldn’t handle 150,000 people using it and took eight hours
to send and receive messages. That would certainly be considered an
embarrassing design flaw. Yet, in the middle of these network failures,
transactions could be stuck for days, or even an entire week at the peaks.”
(Ver and Patterson, 2024, p. 44)


“Imagine a cryptocurrency with all the properties of BTC, except in addition,
it allowed instant, nearly free transactions for the entire world and was a
purpose-built medium of exchange for the twenty-first century. Its utility
would be orders of magnitude greater than one without this functionality.”
(Ver and Patterson, 2024, p. 42f)


“The Bitcoin blockchain is an online, public ledger that is maintained by a
decentralized network of computers, and Bitcoin transactions control the
entries on that ledger. This functionality can be used for various non-
monetary purposes.” (Ver and Patterson, 2024, p. 41) […] “Other applications
could be things like asset registries, new systems for voting, or identity
verification to improve online security.” (Ver and Patterson, 2024, p. 41) […]
“Satoshi understood that the transmissibility of Bitcoin was a central feature
that gave it value. Yet, that feature was intentionally destroyed by the
Bitcoin Core developers, giving BTC almost no unique value proposition when
compared to other cryptocurrencies. Not only do other coins have lower fees,
they also have superior non-monetary functionality.” (Ver and Patterson, 2024,
p. 41f)


“A “store of value” cannot literally “store” value, as if it’s a physical box
into which value is placed for later retrieval.” (Ver and Patterson, 2024, p.
37) […] “Murray Rothbard also comes to the same conclusion: Many textbooks say
that money has several functions: a medium of exchange, unit of account, or
“measure of values,” a “store of value,” etc. But it should be clear that all
of these functions are simply corollaries of the one great function: the
medium of exchange.” (Ver and Patterson, 2024, p. 38)


“A cryptocurrency must be more useful than legacy systems, and high
transaction fees immediately damage the usefulness of any coin. If BTC were
the only cryptocurrency available, then perhaps it could still work as a store
of value, but since the market has superior options to choose from, it seems
unlikely that the slowest, most expensive, and least scalable cryptocurrency
will end up being chosen as a reliable longterm store of value. For example,
Bitcoin Cash has virtually all the properties of Bitcoin Core, except you can
actually use it as digital cash.” (Ver and Patterson, 2024, p. 36) […] “I was
lucky to discover the Austrian School of Economics early in my life. Great
thinkers like Ludwig von Mises and Murray Rothbard helped me understand the
world through an economic lens, and the reason I knew that Bitcoin was going
to become popular was because I had previously read their ideas on money. I
could see that Bitcoin had the properties of extremely high-quality money,
which meant I should buy some immediately.” (Ver and Patterson, 2024, p. 36)


“Even as late as 2016, the majority of Bitcoiners were still promoting the
technology as an online currency—or as they liked to call it, “magic internet
money”—which is why there would be celebrations whenever a new company
announced that they were accepting it for payment.” (Ver and Patterson, 2024,
p. 35)


“Calling any existing cryptocurrency a “reliable long-term store of value” is
premature, considering the wild price fluctuations that are a regular
occurrence. The fact that BTC has greatly appreciated in price over the past
ten years does not mean it is a store of value.” (Ver and Patterson, 2024, p.
34) […] “Saifedean Ammous has one of the most extreme versions of “digital
gold maximalism” out there. He envisions a future in which regular people
don’t even touch the blockchain, and onchain transactions are reserved for
high-value transfers only.” (Ver and Patterson, 2024, p. 34) […] “I certainly
never signed up for this version of Bitcoin, nor did the countless other
entrepreneurs I worked with in the early days. In fact, a central part of the
beauty of Bitcoin is precisely that the blockchain is accessible to everybody
and not exclusive to bankers. Like so many other public personalities who
speak with confidence about Bitcoin, Ammous and Demeester merely assume that
additional layers will solve BTC’s usability problems without any issue. Yet,
when you actually look at second-layer technologies, their viability remains
uncertain, especially if the base layer does not scale. These problems are
generally not recognized by BTC enthusiasts, who instead believe that
engineers will fix everything in the future, despite their poor track record
so far. Furthermore, a future of “Bitcoin-backed tokens” is a guarantee that
arbitrary inflation will continue plaguing those of us who are not central
bankers. History demonstrates that currencies inevitably lose their backing
over time, and if people are forced to trade promises-of-Bitcoin instead of
actual Bitcoin, it’s only a matter of time before the promises are inflated
far beyond the actual supply of Bitcoin. Second layers only make this
inflation easier to conduct.” (Ver and Patterson, 2024, p. 35f)


“The Bitcoin.org website also marketed the advantages of using Bitcoin for
everyday commerce. An archived version from 2010 stated that, “Bitcoin
transactions are practically free, whereas credit cards and online payment
systems typically cost 1-5% per transaction plus various other merchant fees
up to hundreds of dollars.” Even as late as 2015, the website advertised “Zero
or low processing fees” and “Instant peer-to-peer transactions.”” (Ver and
Patterson, 2024, p. 33)


“Satoshi and others talked about creating interfaces for online merchants,
tools for physical merchants, point-of-sale transactions, use-cases where the
customer is uneasy about using a credit card, keeping small amounts of Bitcoin
on mobile devices for incidental expenses, and so on. There is no doubt that
Satoshi designed Bitcoin to be used for payments, even those as small as a few
cents. In fact, the original 0.1.0 version of the software contained
unfinished code for a peer-to-peer marketplace and even the basic framework
for virtual poker.” (Ver and Patterson, 2024, p. 32) […] “Successful companies
like BitPay, the largest Bitcoin payment processor in the world, had their
entire business model challenged by unreasonably high fees.” (Ver and
Patterson, 2024, p. 32) […] “BitPay was one of the first companies that
integrated Bitcoin Cash after the split. Brian Armstrong, the CEO of Coinbase,
also shared the same vision for Bitcoin as digital cash for the world, and in
a 2017 interview, he explained why BTC’s failure to scale “broke his heart.””
(Ver and Patterson, 2024, p. 32f)


“Satoshi mentioned payments more than four times more frequently than store of
value” (Ver and Patterson, 2024, p. 30) […] “Satoshi imagines Bitcoin
eventually being used for “whatever size micropayments you need,” and second,
he predicts the network infrastructure will be consolidated into “professional
server farms,”” (Ver and Patterson, 2024, p. 30) […] “Satoshi wanted Bitcoin
to be used for “effortlessly paying a few cents to a website.” Contrast this
with what Core developer Peter Todd says: I’d be very happy to be able to wire
money anywhere in the world, completely free from central control, for only
$20. Equally I’ll happily accept more centralized methods to transfer money
when I’m just buying a chocolate bar.” (Ver and Patterson, 2024, p. 31) […]
“$20 fees destroy every use-case for Bitcoin other than high-value transfers—a
kind of digital gold extremism.” (Ver and Patterson, 2024, p. 31)


“The BCH network is far less well-known than BTC, but it has already scaled
its throughput capacity to more than thirty times BTC’s, with plans to scale
exponentially into the future.” (Ver and Patterson, 2024, p. 18)


“Bitcoin was built for massive scale and did not run into inherent
technological limitations. Instead, the project was taken over by a small
group of software developers who redesigned the whole system. They
intentionally limited its capacity and functionality, and they openly advocate
for high fees and a backlog of transactions—the antithesis of the original
design.” (Ver and Patterson, 2024, p. 17) […] “the influential Bitcoin
developer Greg Maxwell has said quite plainly, “I don’t think that transaction
fees mattering is a failing— it’s success!” Mark Friedenbach, another Bitcoin
developer, stated that “Slow confirmation, high fees will be the norm in any
safe outcome.” When the network nearly ground to a halt in December 2017, and
the average transaction fee reached more than $50, they celebrated by “pulling
out the champagne” and were pleased to see the congestion, claiming that a
consistent backlog was “the required criteria for stability.”” (Ver and
Patterson, 2024, p. 17)


“By 2015, Bitcoin had built up so much momentum that it looked unstoppable.
Prominent companies, from Microsoft to Expedia, were starting to accept it for
payment, and the young industry was growing exponentially. The successes
started to pile up. Venture capital increased. Media coverage became positive.
Bitcoin was on a direct flight to the moon.” (Ver and Patterson, 2024, p. 15)
[…] “the actual usage of Bitcoin has declined since 2018, and many businesses
have dropped it entirely as a payment option. On multiple occasions, the
network has buckled and become almost unusable with huge transaction fees and
unreliable payments. In times of network congestion, the average fee can reach
more than $50 and transactions can take days or even weeks to process. And
perhaps worst of all, these failures have pushed the industry to adopt so-
called “custodial wallets,” which are simply customer accounts managed by a
company, similar to a regular bank account. The entire purpose of Bitcoin is
undermined by the mass usage of custodial wallets, because total control is
given to a third party that can censor, track, and even confiscate coins—no
different than an account balance at Venmo. Fraud also becomes easier. For
example, when the FTX exchange collapsed in 2022, more than a billion dollars
of customer funds instantly vanished.” (Ver and Patterson, 2024, p. 16)


“My first coins were purchased in early 2011 for less than $1 each. A few
months later, the price spiked to $30, only to crash back to $2” (Ver and
Patterson, 2024, p. 13)


“The reason that Bitcoin is no longer used as digital cash has nothing to do
with the underlying technology. It’s because a group of software developers
took over the project, decided to change its design, and intentionally limited
its functionality—whether due to incompetence, sabotage, or a mixture of both.
The takeover happened from roughly 2014-2017, and it ultimately resulted in
the network splitting in two and the cryptocurrency industry fracturing into a
thousand pieces.” (Ver and Patterson, 2024, p. 10)


“Bitcoin was designed to be digital cash, usable in everyday commerce, with
minimal fees and fast transactions, and it worked that way for years. But
today, Bitcoin is thought to be “digital gold,” not meant for everyday
commerce, with high fees and slow transactions—a complete reversal of the
original design. It’s discussed as a “store of value,” with little care for
its utility as a payment system.” (Ver and Patterson, 2024, p. 10)


Roger Ver and Steve Patterson, Hijacking Bitcoin: The Hidden History of BTC (Roger Ver, 2024).


“The blocksize war only bought Bitcoin time, several more years. This war may
only be dry run for the challenges to come, when the primary beneficiaries of
the centrally-controlled monetary systems finally realise the potential of
user-driven money and they may not like it. These future battles may be over
censorship resistance, rather than scaling and the blocksize limit. This time,
the financial and political establishment are likely to initiate the conflict.
They may throw considerable resources at the problem, and the pressure on the
system will be immense once again. No doubt history will repeat itself, as the
establishment fail to appreciate some of the nuances in the incentives, making
blunders on the way, providing users with potential tactical advantages to
exploit. The outcome here is far from certain. However, at least for now, the
dream of a world where ordinary people have ultimate and direct control over
the rules that govern their money, lives on.” 205


“A new form of money where the users set the rules, simply made for a better
story than a high capacity, low fee, global payment system, irrespective of
the truth of either claim. Money is ultimately a collective confidence game,
the small blockers proved themselves to be quite effective players of the game
and for this they were rewarded, with their victory.” 204


“The large blockers could have won this war, and they came pretty close.” 204


“The more patient small block approach looks to have been correct. However,
perhaps a moderate blocksize limit increase hardfork, to buy more capacity for
a few years, could also have been a good path to take. If this path was
chosen, maybe Bitcoin would have been even more successful and retained more
merchant adoption. We will never know.” 203