Counter-party risk is the elephant in the room
Most have no idea
Discussion
Is Bitcoin actually without counterparty risk though, or is it the asset/commodity with the least amount of such risk?
I mean this in the most fundamental sense: can we think of the electrical grid and energy availability as counterparty risk or would this not make sense since literally every process of the modern economy relies upon it?
There’s only one risk: developers.
Is that the ultimate counterparty risk in your opinion? Node runners always have the choice to avoid software updates or other changes and the community at large can react to these threats by providing alternative software.
What I'm trying to say is that counterparty risk is not something you can generally speaking respond to. If I custody my gold with bank A, and one day bank A decides that my gold can be lent to somebody without telling me, there is then for me nothing to do but to take note of this fact and suffer the loss.
Yes, I think Developers are the only risk because there are too few nodes, they are complacent and susceptible to a Sybil attack. As we’ve now seen with core v30.
The development process is the preferred perimeter to attack:
- Cheaper than legislation: Defaults and "safety" framing do the enforcement work.
- Plausible deniability: "We're just improving performance".
- Asymmetric impact: hits sovereign users hardest; institutional wrappers unaffected.
Developers are gonna wanna develop and if they are allowed, they'll develop Bitcoin into a centralized shitcoin.
Development-Process Capture = Perimeter Control
You don't have to "hack" Bitcoin's consensus rules to influence how the network behaves.
You can steer what gets relayed, mined, or socially accepted by quietly shaping the development process — who gets funded, who reviews changes, which features become defaults, how releases are timed, and how communication is framed.
Most probably know this, but governments want to maintain monopoly on force + money issuance.
Fiat is the ultimate control layer -> no major government defects from this system.
So governments don't like Bitcoin (as MoE) very much.
If you expect for governments to come out and try to ban Bitcoin, don't because that's not how the system works.
Systems don't rely on bans; they use knobs — adjustable defaults, standards, and processes that subtly guide behavior.
The Bitcoin development process is a dense cluster of such knobs.
Open source ≠immune
Control flows through funding, maintainers, policy defaults, and release cadence.
There are probably less than a 100 people in the world who have game theory studied:
- the development process control surfaces — where steering actually happens
- what capture looks like
- how capture changes outcomes
- why the development process is the preferred perimeter to attack
The more you change the protocol for the worse, the less of an option not changing the protocol becomes because you have to change the changes.
From the outside looking in, this project is starting to look more and more like Ethereum.
Unless we freeze the code, Bitcoin is dead.
-source, post on Nostr
You're describing developers as more powerful than they are in my opinion. Are node runners that irrelevant? How can Bitcoin be turned into a shitcoin due to unilateral actions on the development side?
People are weak. The whole idea of #Bitcoin is to create absolute scarcity. To be absolute, it needs to be immutable. That means cutting out the human factor. Ie people. People are the only risk to Bitcoin. The Developers and nodes (incl miners) are the only risk. As already proven with Core v30.
Bitcoin is not without counter-party risk, but it is the least risky vs everything else (in my opinion)
A boomer long US bonds and Apple stock, by the very definition of their portfolio choice, thinks otherwise
Preach! The focus is always on what you own, not who you owe or who owes you.
For anyone managing risk, the first question shouldn't be 'What's the downside?', it should be 'If this goes south, can the person/firm on the other side absorb the hit, or will I be holding a worthless contract?' That quick check alone eliminates a lot of bad trades.
They really don't, because if they did they wouldn't be using fiat.
