A Manual Guide to Killing Bitcoin: The Eternal Return

This article is published in Bitcoin Magazine “The Halving Problem.” Click Here to get your copy

Every morning at 6 a.m. in Punxsutawney, Pennsylvania, cynical meteorologist Phil Connors wakes up to experience the same day over and over and over. Stuck in a time loop, Connors tries everything to get his life back to normal – he gets stabbed, shot, burned, frozen and electrocuted, only to wake up the next day as if nothing happened. Connors quickly comes to the only plausible conclusion: he must be a god.

Believing ourselves to be invincible has never been a particularly smart strategy, in times of war or otherwise. If we believe in cosmology, from Nietzsche to Hinduism, time is a loop and there is a finite realm of possibilities that repeats itself ad infinitum – the only thing we can really do is change how we react. If we don’t learn from our mistakes, we are destined to experience the same things over and over again.

Although we often pride ourselves on exceptional intellect – I found Bitcoin early, I must be very smart – it seems that learning from mistakes is difficult even for the most experienced “Bitcoin lawyers”. The public discourse seems to have shifted from discussing technological challenges and limitations to Deutsche Bank’s after-work talks – Anything is possible, we’ll just need returns to stay on track.

When Bitcoin was first discussed in the German Parliament in 2014, “experts” highlighted the ease with which bitcoin payments could be de-anonymized through network analysis, talking about the risks of widespread bitcoin adoption leading to total financial surveillance. Today, ten years later, as Bitcoin returns to the German parliament, the “experts” have been replaced with influencers who propose Bitcoin as CBDC alternatives. The current “Bitcoin political debate” can’t help but remind us of Bart Simpson running around in circles banging a frying pan on his head.

As we continue to approach the echo chamber of the opportunist, we have successfully traded academic debate for cheerleading squads. Things will be great as long as you are willing to bare your breasts. – We win! has long become the prevailing meme – Between ETF approvals, stablecoin issuances, and possible nation-state adoption, we’re so confident in Bitcoin’s success that we seem unable to realize that this is exactly how you lose. Arrogance comes before most declines, and its exploitation has always been by design. By sowing manic delusions of invincibility, even the most trained commander will lead his sheep to the slaughter.

Groundhog Day

A long time ago, in a galaxy far, far away, we connected our computers to landlines to access the three big W’s. For anyone who hasn’t lived alone, this practice was often doomed to wreak havoc – Get off your computer , my mother is waiting for a phone call.

So we can all agree that this sucks. But due to the lack of technological advancements and accessibility to wirelessly communicate over distances (think your favorite network here), it was the most convenient option we had. The only problem: it led to a monopoly on web access points with telecom providers. Fast forward 20 years, and we now know that telecommunications providers monitor, analyze and report everything we do on the Internet to government authorities under the guise of national security. A technology considered invincible for the liberation of the people quickly turned into its worst enemy.

Now we can’t really talk about the success (and downfall) of peer-to-peer technologies without talking about Linkin Park. The music of Linkin Park, then still Hybrid Theory, was widely circulated on the first P2P music file sharing network Napster. Downloaded from other people’s computers, accessing Linkin Park music was completely free. Their first studio album, Hybrid Theory, however, remains one of the top five best-selling records in the world, with 15 million copies sold in the first three weeks alone.

Napster was a real internet revolution – and the music industry was furious. As people happily infected their devices with potential computer AIDS, bands, rappers and singer-songwriters like the Arctic Monkeys, Dispatch or EMINEM were building fan bases before even breaking their first record releases, and the music establishment wasn’t having it . When Metallica sued the P2P platform for copyright infringement, clearly unhappy that their cult status and subsequent returns were threatened, peer-to-peer music file sharing didn’t exactly die, it was quickly incorporated into more corporate-friendly formats – from buying music through iTunes to streaming music through Spotify.

While it seemed unimaginable to put a technology like Napster back into the box, convenience, once again, became king. Today, most listeners do not own the music they listen to, but instead subscribe to corporate databases that benefit neither artists, record labels, nor producers. Instead, the music file-sharing industry’s big winner has once again proven to be surveillance. Just last week, when Spotify updated its cookie policy, a push notification informed EU users that 695 data brokers would have access to their information. Downloading files like ClapYourHandsSayYeah.mp3.exe (RIP) was clearly risky business, but the risks of surveillance capitalism reach much further than a ruined computer.

Essentially the same thing happened with search engines. Going online in the early days of the World Wide Web was like being left in the middle of Yellow Stone National Park without a map. There were thousands of places to go, but you had to know where they were. With comprehensive link collections, platforms such as Yahoo, AskJeeves or Google have provided tremendous value to the less literate on their way to the WWW. Instead of asking your colleagues where something cool is on the internet, you simply asked Google. But once we moved away from word-of-mouth formats, we reached what today has been called the great enshittification. The first links are paid affiliate sites, and the ones after that are the ones that have figured out how to effectively play Google’s SEO formats, of course all packaged and tailored to your supposed needs. Today, Google is one of the most valuable surveillance companies in the world. Software meant to help liberalize free information has essentially become a tool of censorship.

Time and time again, thinking that “technology has won” has only exacerbated its demise. We choose what is comfortable now only to stab us in the back down the road. And before you know it – BING! It’s the navel whistling at the high school talent show when the meteor strikes again. To be clear: we fucked up.

It’s the filters, stupid

In Bitcoin discourse in today’s pop culture, ignorance is rife. Lightning works until it doesn’t, let’s spend millions to put the Dollar on Bitcoin; It’s called priorities baby, look it up.

When Ordinals hit Bitcoin – think of them what you will – we suddenly realized we were in trouble. In the global south, people quickly became unable to transact without custody. All the people you told DCA suddenly found themselves facing exorbitant transaction fees, unable to move their funds. For those who value their privacy even for lower expenses, participating in coinjoin rounds has become prohibitively expensive. No matter where we look, we still have a scaling problem. This problem does not exist because of ordinals. It exists because we were so convinced we won that we lost track of keeping our ignorance in check.

For the past four years, most have been more concerned with developing their own narrative—everything is great and Bitcoin is the best currency on earth—than confronting uncomfortable truths. We then proceeded to respond with an exorbitant amount of myopia: it’s the filters, stupid.

Ordinal transaction filtering is a short-term solution to a long-term problem. Sure, locking arbitrary data on the blockchain will necessarily reduce fees, but if global Bitcoin adoption is what you want, you’re not doing yourself any favors by proposing selective solutions to systemic problems. The thing is, getting mad at JPEG is easy. Addressing the issues that challenge the “greatness of Bitcoin” that some seem to have turned into their whole persona is not. For every tweet that claims Bitcoin is bringing peace to the world—clearly through pure magic, or what Wall Street losers have turned Bitcoin economists into a reverse form of game theory—a small part of the system dies.

We don’t need your hopi; We need real-world solutions to real-world problems. This includes laying down the crack pipe and talking about the uncomfortable stuff: we don’t win – we do the opposite, because our “long-term preference” trickles down to our investment portfolios. You can kill Bitcoin. And it’s easier than you think.

Embrace, expand, extinguish

Over the past few years, the debates over Bitcoin “earnings” have looked pretty much the same. Senators Embrace Bitcoin: See, We Win. BlackRock Embraces Bitcoin: See, We Win. First they ignore you, then they laugh at you, then they realize that all you want is a pat on the back before the police come to take away your toys. The laughter hasn’t stopped, it’s just happening behind your back.

The most plausible death of Bitcoin would happen less in name than in its full embedding, at a point where the technology is simply not yet ready for “mass adoption” – just like we killed all technology peer-to-peer that came before it. . The death of Bitcoin is not the death of the technology, but the death of its usability.

At the heart of Bitcoin’s demise, at least in essence, continues to be the scaling debate. When Gigablocks were first proposed, it seemed pretty obvious that a blockchain that takes 10 years to sync would lack decentralization. The Lightning Network came along, which seemed to solve all our problems: off-chain scaling, on-chain security. Intelligent. Except we can only fit about 5,000 channel opening and closing transactions into a block – barely enough to allow 8 billion people to use Bitcoin without custody.

Unfortunately, that hasn’t stopped influencers – or anyone for that matter – from proclaiming their Hail Mary of Despair; Bitcoin scaling is obviously a problem for my future. Too great was the thrill of finally being able to sit at the corporate table and soften me up with the obligatory “I told you so.” Putting the unbelievers in their place simply had to come first; if Bitcoin doesn’t exist to feed our fragile egos and pump up our sad bank accounts, what was the real point of it? Freedom, Carajo! Welcome to your involuntary conversion to the church of Satoshi’s Witnesses, where we give speeches about saving the world from tyranny more often than Biden changes diapers.

So here we are. Six years after we bought our first stickers from the Blockstream store — the only thing you could buy when the first Lightning implementations came out besides beer — and we’re still rocking it. Instead of promoting broad discussion of proposed agreements, which come with real trade-offs and risks, we’re busy labeling anyone who doesn’t want to ossify a scare, when ossifying right now in Bitcoin will surely be the safest way to kill him.

Sometime in the near future we’ll want to go back to a few hundred vBytes in fees. Until then, we will have no choice but to use Bitcoin in custody. Say goodbye to freedom money: Bitcoin as we know it will be dead unless we stop making the same mistakes.