Is this the beginning of the end of BTC?

Oct 13, 2018 · 5 min read

Leadership in the BTC community has been making some very curious statements lately, and it does not bode well for their coin.

I should first point out that the title of this article is not that it’s the end for Bitcoin. For you see, Bitcoin is a Peer to Peer Electronic Cash System described by Satoshi Nakamoto, and BTC stopped being Bitcoin a long time ago. (Arguably, Bitcoin Cash continues this system, but we’ll come back to that.)

The proper definition, operation, and functionality of Bitcoin is very much at the heart of the matter here, and to explain the issue we need to rewind and review the history.

Bitcoin began as a cash system (this is in the title of the original Bitcoin whitepaper). This meant that anyone could send money to anyone else, anywhere in the world, almost for free, without permission, and without central banks or authorities.

Basically, its one of the greatest inventions ever.

Satoshi Nakamoto’s first email to the world was to unveil the whitepaper. His second email, though, was also very important. To quote Nakamoto Studies:

“The following email is perhaps one of the most important of Satoshi’s emails as it predicts the natural development of a professional mining industry and notes that Bitcoin can scale on-chain to the transactional volumes of the Visa network. Bitcoin Cash proponents cite this email often as evidence for their case to increase the Bitcoin block size.”

From 2008 to 2013, all was well in Bitcoin (for the most part). But in 2013, the “small block movement” started. A growing number of people began to express doubt in Satoshi’s plan. They didn’t like this idea of allowing the size of the Bitcoin blocks to grow bigger. They said it would cause too much centralization of the network.

So instead of allowing the blockchain to grow directly, the small blockers proposed the idea of using alternative “layers” on top of Bitcoin. There have been 2 main proposals for such auxilliary layers. One is the use of sidechains, the other is the Lightning Network.

The initial thought leaders of the small block movement include BTC developers Gregory Maxwell and Peter Todd. One of the earliest expressions of their ideas came in this Bitcointalk thread:

Who Wants to Stop Bitcoin Being Used as Money?

I’m not here to start conspiracy rumors, but here are relevant facts:

1. Peter Todd seems to have been a CIA contractor at one point, and perhaps was even threatened by government agents. Source

2. Greg Maxwell, Adam Back, and others started a company called Blockstream that raised $75M in order to pursue ideas for scaling Bitcoin on second layers. Blockstream appears to have hired or contracted with the most senior developers on the BTC project, including Pieter Wuille, Luke-Jr, Jorge Timón, Patrick Strateman, Peter Todd, Cory Fields, Gregory Sanders, Mark Friedenbach, and Matt Corallo. Source

3. The largest investor in Blockstream is AXA Strategic Ventures, an arm of a French multinational insurance corpration. AXA has ties to the Bilderberg group. Source

4. Another prominent Blockstream investor is the Digital Currency Group, which has been accused of having ties to the US governement. Source

Is There a Grand Conspiracy to Stop Bitcoin?

It should be obvious that a purely peer to peer form of money that supplants central banks is a huge threat to the current establishment power structure. It would be hard to conceive of a scenario in which The Powers That Be stood idly by, doing nothing about this. But rather than drawing attention to it by outright banning it (and creating a “forbidden fruit” appeal), cunning forces would seek to subvert it, to marginalize it, to render it irrelevant and unusable as money.

This is exactly what has been happening, and if you were going to stop Bitcoin in such a fashion, you would do exactly what has happened with Blockstream: Hire the top developers, and put things in place to prevent Bitcoin from being usable. The most obvious was taking advantage of the fact that Satoshi had left a 1mb limit (originally for spam protection) in the code. From this, an entire “scaling debate” was concocted.

In addition, the BTC community is infamous for censorship, shutting down all dissent for their plans.

The other explanation, rather than a geo-political conspiracy, is that the BTC Core devs (who are also Blockstream founders) are simply stubborn and want to do things their way… and if they create a business based on the need for second layers, then obviously it is in their interests to reinforce that need by preventing scaling from happening on the base layer.

Perhaps the truth between these 2 theories is “somewhere in the middle” with elements of both happening.

Lightning Network

I have been speaking out against the lightning network for a long time because it simply doesn’t work as p2p cash, and it introduces economic censorship.

One good thing for the opponents of Lightning is that the system is so unusable that it is self defeating. The liquidity challenges are so fundamentally bad, that its almost impossible to route payments anyway, and the fact that users need to run full Bitcoin nodes and be online all the time makes the user experience terrible even in the best of conditions.

End Game

Things seem to be really coming to a head in the last few weeks.

There’s been a very bizarre narrative coming out of the BTC camp
which is that people should not be using BTC at all!

Why are they doing this? Perhaps they just realize just how screwed Lightning Network really is. I had heard through the grapevine by one of the LN devs
that the whole system really needs to re-engineered.

So, as a result, these people are doubling down on the nonsensical “store of value” meme (Bitcoin’s value proposition was always based on the fact that it
was a superior payment method. Without an actual usage, “store of value”
becomes nothing more than a ponzi scheme).

Now comes the latest announcement, Blockstream has finally released their “Liquid Bitcoin” sidechain product, which has its own token: LBTC.

This product is supposed to be for exchanges to trade and settle BTC, but it seems that Blockstream is now openly pushing for INDIVIDUALS to convert their Bitcoin into “Bitcoin Liquid”

So it’s finally come to this: even the leaders in BTC want you to stop using BTC (and instead use LBTC).

This is alarming. When even Blockstream is saying don’t use BTC, I think it’s the end for BTC.

Bitcoin Cash and the Future of Real P2P Money

Thankfully, there is a way out of this for Bitcoin. It’s called Bitcoin Cash. It’s not an altcoin… It’s a legitimate fork of the Bitcoin ledger from August 2017, when enough people had enough sense to realize what was happening, and were able to act in time to preserve the ledger.

The Blockstream gang has thrown Bitcoin off its course for several years, but you cannot stop an idea whose time has come. Peer to Peer Electronic Cash is here to stay, and no amount of deception can stop it.

Jonald Fyookball

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