Why Bitcoin’s Weird, Wonderful Culture Matters

Though the panelists of bitcoin experts I’m listening at Bitcoin Park for the Energy and Mining Summit in Nashville are wearing clothes and speaking words in my language (English generously littered with industry jargon), they bear little resemblance to the people I encounter in my day-to-day life. After two years of cautiously observing these unique humans and their odd behavior like an anthropologist, I now consider myself one of them. I once brought my fiancé to a local Bitcoin Meetup in Lexington, Kentucky (my home base), and she’s never quite looked at me the same since.

This bitcoin subculture exists not just in the U.S. but in slightly varied forms all over the world, and other than the revolutionary technology itself, it’s this “cultural layer” — along with the game theory underpinning it — that I find most interesting about bitcoin. One panelist said that hardcore bitcoin adherents comprise “the most consequential subculture in the world” and likened it to being present at the CGBG Club in 1974 for the emergence of the punk rock scene.

Just as one couldn’t understand artificial intelligence without understanding the people who create, maintain, and attempt to control it, one can’t understand bitcoin without understanding bitcoiners. What can we read into their idiosyncrasies? What are the incentives that drive them? And, most importantly, how do they make critical decisions about proposed changes to the software code that is bitcoin? All these questions are essential for anyone interested in understanding bitcoin.

Bitcoiners are accustomed to facing off with political and institutional opposition forces and other FUDsters (those who spread fear, uncertainty, and doubt), and this only serves to unite them. The critiques often verge on the ridiculous, like when Jamie Dimon, the CEO of the largest American bank, said, “I think there’s a good chance, when we get to that 20 million bitcoins [sic]…Satashi [sic] is going to come on there, laugh hysterically, go quiet, and all Bitcoins [are] going to be erased. How the hell [do] you know it’s going to stop at 21 [million]?” It’s almost impressive — in a maddening kind of way — that someone could speak so ignorantly about a subject but do so with the same level of conviction as those of us who’ve spent countless hours learning about bitcoin.

Outside criticisms are taken seriously among bitcoiners; however, internal divisions are occasionally even more existential. I previously wrote in Bitcoin Magazine (online version) about the “culture wars” springing from divisions within the community over Casey Rodarmor and others exploiting recent changes in bitcoin’s software (Segwit and Taproot) to create inscriptions, ordinals, Runes, and BitVM. The purpose of this latest article is to provide an update on where these debates stand today, highlighting the importance of bitcoin’s “governance”.

I put governance in quotes, because as brilliant as a technical invention that bitcoin represents, an in-depth understanding of the various incentives and disincentives within bitcoin’s ecosystem makes one appreciate the game theory behind it as equally brilliant. Indeed, bitcoin’s pseudonymous creator, Satoshi Nakamoto’s ability to think through the game theory underpinning his invention matched their technical cryptographical expertise, their historical understanding of digital cash, and their proficiency in C++ coding (given that bitcoin’s creator remains anonymous to this day, I use “they” rather than “he”).

To provide a better understanding of this governance, we need to look no further than the Taproot Wizards (TW for short), the group of pro-ordinal activists that I highlighted in my previous article. Recently, the TW minted their first collection of ordinals (akin to PFP NFTs) which they’ve dubbed Quantum Cats. What’s most interesting about Quantum Cats isn’t their bold-neon, eye-catching designs or even how the designs evolve on the blockchain over time (way cool) but rather the way the TW are attempting to motivate their followers to educate themselves and others about bitcoin governance, particularly as it relates to one of the bitcoin improvement proposals (BIPs) called Op_Cat. For all the obnoxious trolling of TW founders, Udi Wertheimer and Erik Wall, their strategy of obligating those wishing to get whitelisted before the minting to produce educational videos and other content extolling the benefits (in their view) of Op_Cat was commendable, if not ingenious. So what are those benefits?

According to Ethan Heilman and Armin Sabouri, the developers behind the proposal, their refreshed version of OP_CAT would provide general-purpose functionality to bitcoin’s base layer such as file hosting and decentralized exchanges, as well as relieving network congestion and making layer-2 networks easier to build on top of the base layer. In many ways, the fate of BIPs like Op_Cat and OP_CTV, which enable “expressive” base layer technologies like soft staking and timelock transactions can be seen as a litmus test for whether bitcoin was designed solely as a store of value and medium of exchange (currency) or whether the blockchain should allow for additional functionalities such as NFTs, meme coins, covenants, and smart contracts.

Excluding the “monetary maximalists”, most bitcoiners see these changes as beneficial and relatively minor. However, consensus isn’t easily achieved in the land of Bitcoin. It requires all the major participants from developers, miners, exchanges, node operators, end users, and even wallet providers and custodians to fall in line to varying degrees. Miners are largely incentivized by basic economics. They spend a lot of money and effort minting new bitcoin and reap transaction fees; so, generally, if they think a BIP will likely increase their bottom line without causing them to jump through too many hoops, they’re likely to support it.

Precisely how this array of voices expresses their viewpoints is complex and beyond the scope of this article (here’s a great rundown). Suffice it to say, it involves a dynamic power struggle of participants in which checks and balances (the aforementioned ingeniously designed game theory) prevent any group from imposing their will on the others. Once a formal BIP is introduced (on github), developers openly discuss and debate its pros and cons, and those eventually reaching a threshold of community support stand a chance of getting adopted via soft forks. Bitcoiners take great pride in just how decentralized the network is and, thus, how difficult it is to make changes to the code.

While I don’t expect this article to win over the FUDsters, it should at least give them an appreciation for the highly democratic, deliberative, and some would say — exceedingly cautious — process required to make changes to bitcoin core’s code. It would behoove them to educate themselves, because we Kool-Aid drinkers aren’t going anywhere anytime soon, and we’re gaining new adherents each day. When high-profile former skeptics like Larry Fink, CEO of BlackRock, turn into proselytizers, it’s time to watch out. As one of the Nashville panelists put it when asked about the current state of bitcoin, “My head hurts from so much winning” (on the day I’m writing this bitcoin’s price reached an all-time high of $69,324 before plummeting to $59,224 and finally settling around $63,000).

As someone who’s been steeped in the subculture for a couple of years (“orange-pilled” in bitcoin parlance), I’m still intrigued by my strange tribe of humans. We might as well be Nanook of the North, the Inuk man from the Canadian arctic who wowed audiences in the first ever commercially released documentary in 1922. “An enthralling documentary and a visual feat [that] fascinates with its dramatic depiction of life in an extremely hostile environment”, according to Rotten Tomatoes.

Like the punk rockers and cypherpunks that preceded us, we’re accustomed to operating in hostile environments and wear our criticisms — intended to be pejorative — as badges of honor (toxic users of rogue money, for example). Through X (formerly Twitter) memes, we communicate with remarkable efficiency using slang that’s indecipherable to the uninitiated. Our in-group consists of plebs, degens, and maxis and our out-group normies, maxis, boomies, shitcoiners and no coiners. It’s true that the internal splits that inevitably arise within the community occasionally add an element of “Us versus Us” to our typical “Us versus Them” mentality, like the checks and balances of the judiciary, legislative, and executive branches of American government; this is good and healthy for bitcoin’s ecosystem.

Sound money has an intrinsic value to our species that’s hard to overstate. In an era when over 90% of all dollars that have ever existed have been printed in the last few years, bitcoin is an idea and technology whose time has come. I maintain that it is arguably the largest force for good in the world to come along in a very long time as a more equitable, accessible, and inflation-resistant store of value for the wealth we accumulate over our lifetimes than the increasingly precarious fiat currencies we’re all forced to endure. My desire to understand both bitcoin itself and its most ardent followers as both participant and observer stems from the belief that it’s a revolutionary technology with the potential to disrupt modern society in the next thirty years as much as the internet has over the previous thirty.