Hijacking Bitcoin

1. Bitcoin Was Designed as Peer-to-Peer Digital Cash, Not a Store of Value

"Bitcoin was designed to be digital cash, usable in everyday commerce, with minimal fees and fast transactions, and it worked that way for years."

Original Vision of Digital Cash. Satoshi Nakamoto's original whitepaper explicitly positioned Bitcoin as a peer-to-peer electronic cash system designed for everyday transactions. The fundamental purpose was to create a decentralized payment network that could operate without intermediaries, enabling fast, cheap, and reliable transactions globally.

Key Design Principles:

• Minimal transaction fees
• Fast settlement times
• Universal accessibility
• No reliance on third-party financial institutions

Historical Context. In the early days, Bitcoin enthusiasts celebrated the technology's potential to revolutionize financial transactions, particularly for individuals in regions with unstable banking systems. The vision was to create a truly democratic monetary system that could empower people worldwide by providing an alternative to traditional financial infrastructure.

2. Blocksize Limit Was Deliberately Used to Throttle Bitcoin's Potential

"By artificially limiting the blocksize, the Bitcoin Core developers found a way to completely change the dynamics of the system."

Technical Manipulation. The blocksize limit, initially introduced as a temporary security measure, was transformed into a deliberate strategy to restrict Bitcoin's transaction throughput. By keeping blocks small, developers effectively capped the network's ability to process transactions, creating artificial scarcity and driving up fees.

Consequences of Small Blocks:

• Limited transaction processing (3-7 transactions per second)
• Extremely high transaction fees
• Reduced utility for everyday transactions
• Pushing users towards centralized solutions

Strategic Implications. The blocksize limitation was not a technical necessity but a calculated move to reshape Bitcoin's fundamental purpose from a payment system to a speculative asset, benefiting specific stakeholders and existing financial institutions.

3. Developer Capture Transformed Bitcoin from a Revolutionary Technology to a Speculative Asset

"On its current trajectory, Bitcoin will not empower the average person."

Systemic Transformation. A small group of developers, particularly those associated with Blockstream, systematically redirected Bitcoin's development away from its original vision of being a universal payment system. This transformation effectively neutered Bitcoin's disruptive potential, turning it into a speculative instrument more aligned with traditional financial interests.

Key Shifts:

• From digital cash to "digital gold"
• Prioritizing price appreciation over utility
• Encouraging holding over spending
• Creating artificial barriers to widespread adoption

Economic Implications. By restricting Bitcoin's functionality, developers created an environment that primarily benefited early adopters and financial speculators, contradicting the original vision of providing financial empowerment to a global audience.

4. Centralized Control and Censorship Undermined Bitcoin's Decentralization

"Bitcoin looks the most decentralized when observed from a distance. Upon closer examination, it becomes clear that there are a small number of critical positions that have overwhelming influence over the network."

Information Control Mechanisms. Key online platforms like Reddit's r/Bitcoin and Bitcointalk.org were strategically controlled to suppress alternative narratives and critical discussions about Bitcoin's development. Moderators like Theymos wielded significant power in shaping public perception.

Censorship Strategies:

• Removing posts discussing alternative implementations
• Banning users with dissenting views
• Coordinated social media campaigns
• Manipulating key informational websites

Power Dynamics. Despite claims of decentralization, Bitcoin's development was effectively controlled by a small group of developers who could veto changes and shape the narrative through strategic communication and platform control.

5. Bitcoin Cash Emerged as the Continuation of Satoshi Nakamoto's Original Vision

"Bitcoin Cash is what I started working on in 2010: a store of value AND means of exchange."

Preserving Original Design. Bitcoin Cash was created to maintain the core principles of Satoshi's original Bitcoin design, focusing on scalability, low transaction fees, and utility as a payment system. It represents an attempt to restore the revolutionary potential of cryptocurrency.

Key Differentiators:

• Larger block sizes
• Lower transaction fees
• Preservation of original opcodes
• Commitment to on-chain scaling

Philosophical Commitment. Bitcoin Cash developers prioritized creating a cryptocurrency that could genuinely serve as digital cash, maintaining the original vision of a peer-to-peer electronic payment system accessible to everyone.

6. Transaction Fees and Network Scalability Are Critical to Cryptocurrency Utility

"A penny for an average on-chain transaction is probably too expensive to be competitive."

Economic Accessibility. Transaction fees are a critical factor in determining a cryptocurrency's practical utility. High fees effectively exclude small transactions and marginalize users with limited financial resources.

Scaling Considerations:

• Block size impacts transaction throughput
• Lower fees enable micropayments
• Scalability determines real-world usability
• Technology must accommodate global transaction volumes

User Experience. Cryptocurrency networks must prioritize creating an environment where transactions are affordable, fast, and reliable to achieve widespread adoption and genuine economic impact.

7. The Cryptocurrency Industry Requires Constant Vigilance Against Corruption

"No cryptocurrency project is beyond corruption, no matter how promising the technology."

Systemic Vulnerabilities. Cryptocurrency projects are inherently susceptible to manipulation due to their reliance on human-developed software and governance structures. Continuous monitoring and adaptive mechanisms are essential to prevent capture by special interests.

Risk Mitigation Strategies:

• Multiple software implementations
• Transparent governance models
• Community-driven oversight
• Regular protocol audits

Philosophical Imperative. Maintaining the core principles of decentralization and individual financial empowerment requires ongoing commitment and active resistance to centralized control.

8. Governance and Funding Models Critically Impact Technological Innovation

"The governance and funding of Bitcoin's software development" is a key challenge in maintaining technological integrity.

Developmental Challenges. How developers are funded and governed directly influences a cryptocurrency's direction, potentially creating conflicts of interest that can compromise the project's original vision.

Funding Considerations:

• Transparency in developer compensation
• Alignment of economic incentives
• Preventing corporate capture
• Maintaining developer accountability

Structural Integrity. Successful cryptocurrency projects must develop robust mechanisms to ensure that development remains aligned with the community's broader interests.

9. Forking Provides a Mechanism to Protect Cryptocurrency Projects

"Forking is a way for each side to develop its own project independently."

Evolutionary Mechanism. Cryptocurrency forks represent a critical governance tool that allows communities to diverge when fundamental philosophical or technical disagreements emerge, preventing a single group from monopolizing development.

Fork Dynamics:

• Preserves multiple development paths
• Allows community-driven innovation
• Provides an exit strategy from captured projects
• Maintains competitive pressure

Philosophical Flexibility. The ability to fork demonstrates the adaptive nature of decentralized technological ecosystems, ensuring no single group can permanently control a project's trajectory.

10. The Future of Digital Money Depends on Maintaining Core Principles of Freedom and Access

"Whether Bitcoin ends up being a peer-to-peer cash system or a control system within a dystopian nightmare depends on what decisions we make going forward."

Technological Ethics. Cryptocurrencies have the potential to either enhance human financial freedom or create more sophisticated mechanisms of economic control and surveillance.

Critical Considerations:

• Preserving user privacy
• Maintaining low-barrier access
• Resisting centralized control
• Prioritizing individual economic empowerment

Transformative Potential. The ultimate success of cryptocurrency depends on maintaining a steadfast commitment to technological principles that prioritize individual freedom and economic accessibility.

Last updated: January 22, 2025