Bitcoin needs to massively change its ethos

This is an opinion editorial by Michael Matulef, an electrician, Austrian independent student of economics and member of the Mies Institute.

Bitcoin needs to change! In the realm of bitcoin heresy, before you prepare to hang me for that statement, allow me to express my final thoughts. Allow me to provide a brief introduction – I’m not a galaxy-minded, fuzzy super coder. I must admit my relative ignorance in the field of computer science and cryptography. I do not work in the bitcoin industry. Instead, I am a simpleton, working hard to build something to meet my needs, while maintaining humility and striving to gain a broader understanding of the true nature of bitcoin. So, why do I say that bitcoin needs to change?

Let us begin by considering the adage, “not your keys, not your coins,” which resonates as one of the loudest mantras in the bitcoin community, and rightly so. When your private keys are held on your behalf by a centralized exchange or custodian, you effectively give up control of your funds. This situation introduces counterparty risk, as you become dependent on the security practices and integrity of the third party entrusted with your keys.

The underlying philosophy of “not your keys, not your coins” aligns with the broader principles of decentralization and censorship resistance. These principles seek to empower individuals with financial sovereignty and eliminate the need for intermediaries. It underlines the importance of individual responsibility, security and self-reliance in this digital age where governments are increasingly using technology as a tool to control individuals.

Now, you may ask what is the matter? Well, the truth of the matter is that, under the current implementation of the bitcoin protocol, there is no measure of self-custody. Many bitcoin enthusiasts choose not to critically analyze this reality. However, we cannot ignore the consequences of ignoring reality.

More recently, the BRC-20 mint issue has brought this challenge into the spotlight within the community. This event triggered an explosion in the base layer fee market, resulting in exorbitant costs for verifying transactions. Regardless of your opinion on BRC-20, this event has given us a glimpse into the future if the network continues to expand. In all honesty, try to imagine the enormity of this situation with 8 billion users. As activist Anita Pausch told in this tweet, custodial solutions will become the only means of onboarding new network participants. Although there are federal protocols that aim to reduce arbitrage risk by spreading it among multiple custodians, this solution is fundamentally different from self-custody.

More recently, human rights activist Alex Gladstein presented a thought experiment focused on the issue,

To my dismay, over 54% of respondents to their scenario deemed it a success. This sentiment is dangerous, as such a scenario undermines bitcoin’s ethos of self-sovereignty and censorship-resistance. However, this may come as no surprise; This survey may indicate that more people prioritize “the number going up (NGU)” over individual liberty.

Whenever the issue of scaling arises, a common response is to invoke the notion that bitcoin scales in layers, and the base layer may ossify while additional layers facilitate the onboarding of the global population. however, as shinobi reminds us“Layer Two is not a magic wand. To optimize and improve Layer Two, new functionality is needed at the base layer. Layer Two is literally things built on the functionality of Layer One. Layer Two’s limitations are a direct result of Layer limit of one.”

This reality can be hard to accept, especially for someone like me who is not a computer science expert or a cryptographer. We love bitcoin, and the prospect of change can be intimidating because of what we don’t know. There is not zero chance that any change could cause bitcoin to fail. As a result, many of us stubbornly stick our heels in the sand and in our minds advocate the fracturing of the base layer to ensure that bitcoin remains intact.

If you, like me, believe that “not your keys, not your coins” should be an option for all current and future participants in the network, then we should embrace bitcoin’s resilience before it’s too late. . In Jameson Lope’s words,

“Bitcoin is cool money. But it’s not just digital gold. Bitcoin is programmable money. Unlike gold, it’s a technology that can be upgraded. We don’t need to throw that asset out the window. There is still much about bitcoin that can be improved without violating its soundness… The nature of how volatile network protocols are means that change must happen sooner rather than later; It becomes impossible to coordinate changes once a protocol is adopted at a mainstream level.

and to quote the omission once again,

“Ossification is a side effect of evolution, not a clear decision in itself. There’s really no way of knowing when we’ve gone too far until newly proposed changes stop gaining any traction. Now, the real problems with ossification have become clear: once we cross an invisible line into the future, bitcoin will be ‘set’ as it is, with practically no further updates possible.

“Before that happens, developers and users need to think about what the final code base for bitcoin should look like. We can see from past debates around things like the SegWit fork that bitcoiners are divided and passionate on many issues, and there is almost certainly no answer to this question that everyone will agree on. This is, of course, part of the problem driving ossification in the first place.”

Only time will tell whether we have already crossed that invisible line of base-layer ossification. However, until that day arrives, it is important for all users to open-mindedly accept bitcoin for its attributes of sovereignty and censorship resistance, as well as its ability to truly separate money from the state. . Join various discussions within the developer community. apply the principle of charity in your observations and discussions. personally, as a participant ChiBitDevsI can attest that the people in the developer community are extremely welcoming and enjoy helping non-technical users understand the complex engineering matters at the forefront of development.

let me leave you one last quote from shinobi To ponder: “What if the spies (government) want you to vehemently protest against any further changes to bitcoin so our only viable long term scaling option is the banks which they can try and regulate and take over ?”

Tik tok, next block.

This is a guest post by Michael Matuleff. The opinions expressed are solely his own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.