There's a new Bitcoin civil war brewing over ordinals, and privacy! 🪖

We may even see another fork 😱

I'm going to break down as concisely as possible how we got here, why we got here, and how we can avoid this sort of thing moving forward.

Buckle in! 🧑‍🚀
1/16 Up until 2017 there were two camps: big blocks and small blocks.

Everyone uses the blockchain (L1) for all payments, few run a full node

vs.

L1 is for large payments and settlement while small payments happen elsewhere, everyone should run a node.

The second camp won.
2/16

I see so many friends fall into the trap of listening to the wrong people, both in crypto and beyond.

And, sorry for the scammy-sounding language, but I have "oNe EaSy TrIcK" 🤣 for filtering out who you should not be listening to.

I call this "builder vs. loudmouth" 🧵
1/7
It's PAINFULLY easy to become an "expert" these days.

Information is everywhere.

It's so easy to start posting intelligent-sounding critiques, absolute statements, etc.

"Subscribe to my newsletter!" 😅

But actual WISDOM in how to apply this knowledge must be earned.
2/7

Yesterday I came to an epiphany on how to solve crypto's scaling problems! 🤯

Bitcoin and Ethereum's development got captured by outside interests, and both chose not to scale!

But an innovation from @THORChain and the @Maya_Protocol actually prevents this from happening!
1/11
Both of the top-two cryptos got co-opted by layer-two solutions.

In order to make money, companies like Blockstream and the ETH L2s influenced development AGAINST on-chain scaling.

Forcing unnecessary "solutions" to become necessary for regular users to use the network.
2/11

The crypto crackdown is here. 🚨

Not tomorrow, not 10 years from now. Right now!

We had it easy for too long, but now we have to get into hard work mode.

Here's a quick guide on how to get ready for the "then they fight you" stage of crypto's growth to mass adoption.📖
1/12
BIG DISCLAIMER! ⚠️

Legal and moral can be two very different things.

But I'm never going to tell you to do anything illegal.

Agorism and civil disobedience are great freedom tools, but YOU and YOU ALONE are responsible for the risks they carry.

Be smart!
2/12

YOU DON'T NEED TO RUN YOUR OWN NODE

This one lie has caused untold damage to crypto. 😩

Both Bitcoin and Ethereum elected to not scale under this pretense.

What's actually important everyone being able to feasibly transact with the base layer.

Let's go over why 📜
1/9
First, let's be clear about one thing: regular nodes do NOT secure the network!

Miners/staking nodes/etc. do.

Running your own node purely lets you broadcast your own transactions, and verify the state of the blockchain.

Important, definitely, but not to network security.
2/9

Crypto has a serious dishonesty problem.

We're never going to supplant the fiat currency and central banking system if we can't even tell the truth about what we're building and how it works.

I'm sick of it. Keep reading. Don't worry, I'm naming names! 🌶️
1/12
In 2009, Bitcoin did something amazing.

Decentralized, censorship resistant money.

No company behind it, well-distributed supply, almost scam-free design.

Many copied its design with fraudulent representation to make a quick buck.
2/12

Few ideas have damaged crypto as much as the "scaling trilemma" 😵

This has split Bitcoin and Ethereum into many competing chains, and delayed mass adoption by years!

There's a grain of truth to the idea, but here's why it's wrong, and even dangerous 🧵
1/9
What is the scaling trilemma?

Basically it's the theory that no crypto can be all three of the below:

1⃣ Scalable
2⃣ Decentralized
3⃣ Secure

This idea has made Bitcoin and Ethereum's developers restrict the chains, and users have fled to other chains, or left entirely.
2/9

"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."

The first sentence of the Bitcoin whitepaper, which changed the world forever. But where are we now?
1/12
The second sentence:

"Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required..."

Sadly, almost 15 years in, we still haven't achieved this. We've even moved backwards! 😬
2/12

Another critical Lightning Network exploit was just discovered.

It was so bad that the dev who discovered it quit Lightning altogether! 😵‍💫

Here's how this affects Bitcoin and changes the future of how it'll scale 👇
1/10 Here's a good thread on the exploit:

Basically, it allows you to steal funds by exploiting a timelock contract timeout.

You can partially mitigate this, but there's no way to completely avoid the risk of an exploit!
2/10

https://twitter.com/mononautical/status/1715736832950825224

Ten years ago I moved to New Hampshire for the @FreeStateNH, looking for freedom, purpose, and a better life.

It was the single most important decision of my life, and I've been immeasurably better off since then.

Here's a quick recap of my last decade.
1/9 In 2012 I came across the Free State Project from a liberty think tank list from @AtlasNetwork.

I watched with some interest from a distance, but when a Democrat state rep specifically called out Free Staters as a threat, I knew I had to move ASAP!

2/9freekeene.com/2012/12/25/fre…

People are starting to give up on #Bitcoin's #LightningNetwork. It's too clunky, complicated, and difficult to use to work for regular people. 😵‍💫

But if it doesn't work for regular people, what does it work for? Great question! Let's dive in. 🤿
1/9 First, before maxis cry FUD, just do a cursory look around Twitter. Ignore people who don't care about Bitcoin.


Prominent maxis are acknowledging the truth that, from the end-user perspective, it's difficult to use, even many years post-inception.
2/9

https://twitter.com/fiatjaf/status/1700738369683161126

Why do #Bitcoin and other cryptocurrencies act more like religions than tech projects? ☦️🛐

Because anyone can buy into the religion, and actually make money from growing it. 💰

Here's why most cryptocurrencies' incentives promote cult-like behavior.
1/9 DISCLAIMER!!! I am NOT advocating for crypto to play this role, the opposite actually! I want the tech to be used dispassionately by billions around the world to live better and freer lives.

I'm merely making sense of this bizarre social phenomenon
2/9

Crypto is going mainstream, and as a result, more of the same old characters who run legacy systems are taking control.

Banks, big tech, and government are all getting involved, and they will have a say in how it's run. 😬

How much of a problem is this though? Quick 🧵
1/8 Decentralized crypto is an open and permissionless system. This means anyone can get involved.

If cypherpunks can use it, governments and banks can as well. Only they have a lot more money and power to participate with.

They will control much of crypto. It's inevitable.
2/8

The recent Tornado Cash arrests show the government is cracking down on privacy and open-source tech in a terrifying and unprecedented way! 😱

But it may not (yet!) be as bad as it sounds. Yes, we need to fight back, but it's not time for all-out panic quiet yet.🧵 on why
1/9 First let's get the bad out of the way: three developers of the open-source project and smart contract @TornadoCash were arrested and charged with money laundering and evading sanctions, both in the US and the Netherlands.

It's open-source code no one controls.
2/9

One of the biggest innovations in crypto's history happened over the past couple of years, yet almost no one is talking about it! 🤯

The cross-chain #DeFi ecosystem being built by @THORChain is the missing link crypto has been waiting for. 🔗

Here's why 🧵

1/12 Decentralized money needs decentralized finance.

The elephant in the blockchain room is that the cryptospace HEAVILY relies on centralized exchanges to do just about everything imaginable: buying, spending, staking, even holding, you name it!

This is a big problem!

2/12

The @Bitcoin Twitter account changed its bio to describe #Bitcoin as "trackable digital gold"! 😱

This came as a surprise to many, but it's absolutely true. Bitcoin is easily trackable. 🔎

This can be very bad, but it can also be good. Quick thread 🧵

1/10 First, Bitcoin, and most cryptos, are public, though pseudonymous. This means transactions aren't linked to your identity, and anyone can create new wallets.

But every single activity is public on-chain. Just check a block explorer like @Blockchair:


2/10blockchair.com/bitcoin

The #Bitcoin #LightningNetwork adoption is stalled out and at a crossroads. It just isn't being used the way people thought. However, a new method using splicing and one channel per user could fix things.

But it could put Bitcoin on the path to censorship! 😱

1/12 First some data. @BitcoinVisuals and 1ML show either decrease or stagnation in Lightning channels, total capacity, and virtually every other metric.

Yes, it's still not a bull market, but on-chain fees are sub-dollar, which is a great time to open channels.

Not happening.

2/12

Today I learned that @IoniaPlatform left the crypto business. 😱

This is very sad because their products #DashDirect and Cake Pay (the US-only @cakewallet in-wallet gift cards, not Cake Pay Web) were some of the best adoption tools in all of crypto!

🧵on what this means

1/6 Ionia's a US-based company interfacing with both crypto and the banking system. The US is NOT a place to run a crypto company, especially if you need to deal with banks!

Crypto users and projects should take care to not be US-reliant until the regulatory climate improves.

2/6

Now that the SEC has officially gone after Coinbase, it's clear that it wants to drive the crypto industry out of the US. 🚫🇺🇸

This is definitely bad, but it has some silver linings as well. Let's go over 5 reasons this is good, and 5 why it's bad. 🧐

1/12 BAD #1: Cuts off one of the largest economies

The US is a huge global economy with hundreds of millions of people.

Cutting them off from one of the greatest tech and financial innovations hurts them, and hurts the industry as a whole.

2/12

I critique the #LightningNetwork as substitute for regular payments, but what is it actually good at? 🤔

Answer: interconnected closed-loop ecosystems 🌐

Quick 🧵on some ideal uses cases for Lightning

1/8 First, what ia Lightning LESS efficient at?

-P2P payments to new parties
-Capital-efficient routing (only need $5 to send $5)

Where is it MORE efficient?

-Repeat payments to known parties
-Many small payments (the more and smaller the better)
-Fast confirmations

2/8

I've been living on crypto since 2015. I know exactly which coins work best as digital cash ⚡️💵

But people ask me which ones will work long-term 🤔

🧵on what I call the "adoption churn". Keep reading if you want to know if your favorite coin will make it!👇

1/10 First, there's a bunch of different reasons a #Crypto will or will not get enough users to make it. Some data chains can only get one killer app and still be okay!

I'm talking about money, about currency that's used by the end user to buy stuff.

2/10