Welcome to Ethan to Ethan to Ethan to Ethan to Ethan to to discuss about why bit BTC is a corrupt and broken dead end. So that's quite the title, isn't it? Thought it might turn some heads. Um now let's just give it another up for free Roger. Okay.
Like free Roger Veier. He's one of my personal heroes and having joined cryptocurrency in 2013. Um I must have had like 20 plus heroes. Like psychologically I think it's important to have heroes in our lives, you know, and and Roger is one of the people that's still my heroes. I think I can count my heroes remaining on on one hand, which is a little bit sad, but I do really value the people that that stand uh for what is right.
That's what I want to talk about today. I want to talk about um Bitcoin and I want to talk about why it does not at all align with the cypher punk thesis. Because you hear a lot of people say Bitcoin is the most decentralized. You hear a lot of people say Bitcoin is the only cryptocurrency that is truly credibly neutral. You hear a lot of people say uh that Bitcoin is the most secure.
And people can say that all they want, right? Those are narratives. Those are stories. And and what I'm here to tell you is that no, Bitcoin is not the most secure. It is not the most decentralized.
Uh it is it is it is not a lot of things that people say it is. It's not even scarce in the long run in my view. So like my view on Bitcoin is completely diverging from a lot of the mainstream narratives. And I think this is very problematic uh really because Bitcoin was invented if if you really read the writings of Satoshi Satoshi Nakamoto the founder of Bitcoin right if you read his writing I think he was clear as day when he talked about Bitcoin a peer-to-peer electronic cash system. He talked about how removing intermediaries from a blockchain uh removing intermediaries from a financial system allows you to lower the cost enabling microtransactions.
This is literally in the first page in the Bitcoin white paper, right? The title says peer-to-peer electronic cash. I think look, it's fine if you agree with the route that Bitcoin has taken. It's okay if if if you believe in small blocks, you don't want to scale the blockchain, you you believe that that's going to preserve decentralization, that's all fine. But please please don't rewrite history.
Please at least acknowledge that Bitcoin has completely pivoted its its its economics, its its its use case, its vision. It is not at all this thing that people claim it to be. It's not at all the thing that Satoshi initially created. I mean, that's really difficult to that's really important to drive home. And just on a personal level, I I think it's been one of the biggest disappointments of my entire life to see the thing that that I love so much, the thing that that I adopted as a as as a young idealistic Bitcoiner in 2013, to see it become so perverted, for it to go so far from what it was originally designed to do, right?
And and just for people in the audience that don't realize how bad things really are, if everyone in the world just wanted to do one transaction, just one transaction, everyone in the world would just want to do one transaction, right? Uh and this is um a very optimistic calculation with like the most optimistic uh address stands etc. It would take more than 40 years. The queue would be more than 40 years long. Okay.
The idea that this is the future of money. I mean, the idea that this is somehow something that people on mass can use, it's just just completely wrong. It's completely wrong. Like self-custody, you know, you hear Bitcoiners talk about self-custody. Self- custody is impossible with Bitcoin, right?
Like if it takes 40 years to do one transaction, you can't self-custody your Bitcoin if you can't do a transaction. Okay? Okay. So, the only way we get mass adoptions for Bitcoin is through custodians, right? And you know how I talked about building products and how the most important thing is to build products that people actually want to use?
We can't build products over Bitcoin. Like any meaningful amount of usage, any significant amount of usage, the system just completely breaks down. So, we're in this weird situation where everyone can just everyone can kind of pretend, you know, everyone can kind of pretend that Bitcoin works because no one's using it. Everyone can pretend like Bitcoin is going to change the world because uh it it hasn't broken down because no one's using it. I mean I mean, do you see what's happening here?
Right? We're we're all feeding into this fantasy and we're playing into the hands of Bitcoin's critics, right? I I think the critics of cryptocurrency say that Bitcoin is this purely speculative casino that doesn't actually solve any real world problems. Yeah, that's Bitcoin. That's Bitcoin.
That's Bitcoin, the ultimate memecoin. And yeah, I mean I mean to see this movement be corrupted, to see so many people lose track of their north star was been just very disappointing. But if on the one hand it was my biggest disappointment, it was also my biggest lesson. Because we have to ask ourselves, well, why why did it fail? Why did it get perverted?
And ultimately, I think the real answer comes down to governance because yes, we can blame the lack of scalability, but what we really should think about is the choice not to scale. I think that's what it really comes down to. And the fact that currently the way a lot of these cryptocurrencies are governed are not through stakeholders and not through the owners of cryptocurrency. It's governed by some cabal of developers or it's governed by whoever's pulling their strings. In other words, this is old school politics.
This is real politic. And I don't think most developers are really equipped to deal with that, to actually confront the world, to confront intelligent agencies, to confront people that bribe them with millions of dollars. I don't think that's something we should be putting on developers at all actually. And the real solution here is stakeholder governance. So what I mean by that is that if you own part of a cryptocurrency, then you should also have the right of decision-m that's attached to that.
And I think that's the only way to really resolve this problem because cryptocurrencies do need to keep changing. The technology is evolving rapidly. So as long as cryptocurrencies change, we need governance. And what I see in places like Ethereum and and Bitcoin is they pretend like it's this glorious meritocracy like like everyone uh like the best ideas will rise and uh you know they they achieve consensus. guess they achieve consensus by kicking out people who don't agree with them, right?
And and and to bring it back to the to the block size debates as well. Now, I want to remind people here that during the block size debates, we had the majority of users, at least according to the polls that we carried out, the majority of stake, the majority of miners, and the majority of businesses all supporting increasing Bitcoin's capacity, right? That's that's the vast majority of the entire ecosystem. And what happened? the core developers still got their way.
What does that mean? What does that mean? If an entire ecosystem goes wants to go this way and the core developers can just say, "No, no, no, we we go this way." That's total centralized control. Right.
Right. That's centralized control of a cryptocurrency. It's it's madness. It really is madness. and uh you know so we have we have a cryptocurrency that can't be used that is not private that is not sustainable and therefore not scarce and secure and uh my my plan for this talk is not to dive into all the technical details of this I've I've justified my position enough on that but really just to drive home the point that what we're doing is we we're betraying the cipher punk movement by supporting BTC it's it's a giant distraction right like we're putting all of this energy into a technology that cannot actually support our freedom movement in any meaningful way.
Like that's what we're doing here, right? If the cipher punk movement is about the widespread adoption, the widespread adoption of privacy preserving, liberty promoting technologies, if that's what the cipher punk movement stands for, and the key word here is widespread adoption, then Bitcoin is simply completely incapable of that. completely. And when you do the political analysis, it's clear as day. It's not going to change.
It's might change once it's too late. And you know, this is what I've been shouting off the rooftops for years now. Um what it means too late means the security model collapses, right? Uh that's what it's going to look like. Then you're going to have 51% attacks, censorship attacks, you'll have multiple forks occur because not everyone is going to agree with the inflation increases that will occur.
like this is a disaster. And at the same time, if you're actually holding Bitcoin at that at this time, you will not be able to exit. Okay. Okay. You you might hate me for saying this, but it's the truth.
If every holder right now in Bitcoin just wanted to move their coins, it would take over two months. Okay. What happens when that chaos hits? Price goes down, miners leave. Now it's going to take four months, 6 months, one year just for people to move their coins.
This is literally a death spiral that I'm describing here. It's um it's total madness. And yeah, it's just it's just sad. And and in a way, it's kind of it's it's part of the um history of humankind. You know, things get corrupted.
We don't get things right on the first go, do we? I think I'd like to just bring it to questions, actually. Yeah. [Applause] That was Can you hear me? That was that was such an abrupt like so much energy, so much passion.
Thank you so much. First question was I think actually not for you. But I will leave it here and just read it out loud. Max Kaiser. Done.
I approve of this message. Question here. Why didn't Satoshi predict the block size uh the block size like he did with deflation and hving? Shouldn't he have added a parameter to change block size through usage? This is a great question because he did.
He literally did predict all of this. There's a great quote by Satoshi where he said over time people are going to become increasingly tyrannical about increasing the block size. Those were his words. And then he specifically specified how we should increase the block time. He uh sorry the block size.
He said we need to input a change on this block and then all nodes will agree to the new block and the upgrade will happen. He specifically specified this is how we do it. We should do it. The the small block size limit was a temporary uh anti-PAM measure, right? And and the history of of this is uh quite fascinating.
the way Bitcoin was captured, the way um you know over $200 million of funding went into the core developers to promote L2 scaling solutions which obviously run uh directly counter to um you know the incentives of L1 scaling and yes it's the same thing that's happening in Ethereum now which is why I've taken the position that what we're witnessing is a systemic flaw in governance okay so if you build the same system again the same problems will occur over and over again until we actually adjust the systems in such a way that it doesn't and we have a bunch of people from the Dash community here and and I would just like to point them out and say hey look this is a cryptocurrency that has that has decentralized governance that has self-unding mechanisms and had it all deployed before Ethereum was even a thing you know so I I I've been talking to some Ethereum people and they're like oh well we should test it out and it's all tested we know this it's it's been proven and again and again that we can do this and through a self-funding mechanism if you take part of the block award that that creates an L1 bias source of funding. The problem with uh big BTC and Ethereum is there's way more money for layer 2s than there is for the layer 1 and that creates a very perverse set of incentives. Thank you. Another question. Are you more worried about BTC or USDT?
Oh, that's a tough one actually. Um, am I more wor I think I think BTC makes me a I I I think I think BTC is more harmful but I think the damage is already being done. So I suppose then I would be more worried about USDT because that damage only happens when uh USDT uh goes belly up which I suspect is the biggest Ponzi in all of human history by the way. So I would advise you not to hold USDT. Not financial advice, but yes, don't do that.
I'm afraid of that black swan event. Do you think any pure proof of work coin can work? Ah, here's the thing. I I I've become very um Yeah, I I just don't believe in proof of work at all anymore. I'm sorry.
I I know I know there's a lot of people here that that still like proof of work, but just when I look at it objectively, I think it's less secure, less decentralized, and less economically sound. Um, we had some conversations last night that were very interesting where I can concede that uh, proof of work does recover better from a total takeover, but I just I I just don't prefer that over I would prefer just not to be taken over. I think once a blockchain has been like 51% attacks or once the majority of miners control the chain, I'm just like it's over. Like I don't care how it recovers from that at that point anymore. So that's the one argument I would say is still for proof of work and that's why I don't I don't believe in it anymore at all.
I think um proof of stake is more efficient by a factor of 10 in a lot of cases. So another one the claim is miners wanted large blocks. Why didn't they change five lines of source in their node code and vote with their hash power? Yeah, I think I think a lot of people in the big block camp uh myself included by the way believed kind of saw Bitcoin as a type of quasi governance system and that the miners would act as um let's say voters within a system let's say that turned out just to be completely incorrect right we were wrong about that uh that I don't think that's the case I think miners are highly mercenary and I think part of the issue as well is the time horizon of miners so miners tend to have a let's say 5year time horizon based on electricity conflicts and hardware shelf life which means miners on average are actually going to prioritize um they're going to prioritize short-term over long-term decision-m and I think that's part of what happened in that scenario where raising the block size in the short term might have been worse but obviously would have been way better in the long run so I think that's where proof of work and miners in themselves I don't necessarily consider them a particularly strong form of governance for this reason. I mean they I from my perspective they very much failed us, right?
Um I'll still take two questions. When do you think Bitcoin's overwhelming market position will begin to slide? I mean it has been it's been sliding consistently if you zoom out enough on that chart. You know when I first joined crypto it was at 96% dominance, right? You know it really started going down once it hit capacity.
I really think that like, you know, we had Bitcoin and Bitcoin was great and then Bitcoin pivoted and chose not to scale and then Ethereum came along and it was 10 times better because it scaled, right? Then Ethereum chose not to scale and then something else came along that was 10 times better and it was Salana in this case. I know a lot of you guys hate it that I say Salana, but you know that is the winner whether you like it or not. Finally, one last question. If all major stakeholders and users supported the scaling of BTC as you claim, why didn't BCH succeed?
A great question again. Um, so I think a lot of us in that camp thought that the market would route around BTC through the BTC forks. That's what a lot of us thought would happen and that's not what happened. What happened is the market routed around BTC through um alternative blockchains like Ethereum, like Salana. That's where the majority of usage goes today.
You can probably tell right now I'm far more focused on actual usage, revenue, and value as opposed to just pure speculation. Um, in the longer run, I really think the real value lies in utility and that liberty has utility. Um, cryptocurrency utility and building products is the only way we actually change the world. Which is why a blockchain like Bitcoin that you can't actually build real useful competitive products with cannot change the world. A round of applause for Justin Bond.
Thank you everyone. Thank you so much.
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