The ultimate success of the Bitcoin project will be gauged by the degree to which it scales monetary sovereignty.
Discussion
Define "monetary sovereignty," particularly in the context of what that practically looks like on Bitcoin.
Some purists would say it means the ability to self-custody your own UTXO and transact on the base-chain.
I think the definition will have to evolve. At this point I don't know what that looks like in a hyperbitcoinized world.
How would you define it?
Because an individual can run a miner with access to electricity and can use bitcoin permissionlessly with access to the internet. If the institutional class tries to shut down electricity and/or the internet then the world as we all know it falls apart. “Mutually assured destruction” doesn’t seem like an attractive tactic to be used by the institutional class.
I don’t think there is a world where the bureaucracy can enforce any “regulations” they try to impose. The cost of imposing themselves on bitcoiners will be far too high.
In that way, we’re already in a hyperbitcoinization phase … it’s just a slower adoption timeline than a lot of us would like AND are used to with obvious market arbitrages staying open for years on end…
Even if we look at what it means to have sovereignty on Lightning, that in some way means having shared custody of a UTXO with a channel partner, so I am not sure if we have any solutions for end users to have monetary sovereignty as Bitcoin scales to 8B people.
The main solution I keep hearing about right now is ecash, which in the best of cases would involve federated custody. Effectively monetary sovereignty for small local banks, but not for the end user.
That said, we often innovate solutions as the problem becomes more immediately painful. As we reach the breaking point where it becomes near impossible for individuals to hold and transact Bitcoin in a sovereign way, unless they have very large amounts, we will naturally have more people with motivation to come up with a new solution.
I don't have any ideas about what that solution will look like, but it will likely be different from what anyone today has conceived, or else we would have it in the works already.