You probably can't even say that on Twitter.

(Fight me)

“We should change Bitcoin now in a contentious way to fix the security budget” is basically the same tinkering mentality that central bankers have.

It begins with an overconfident assumption that they know fees won’t be sufficient in the future and that a certain “fix” is going to generate more fees. But some “fixes” could even backfire and create less fees, or introduce bugs, or damage the incentive structure.

The Bitcoin fee market a couple decades out will primarily be a function of adoption or lack thereof. In a world of eight billion people, only a couple hundred million can do an on chain transaction per year, or a bit more with maximal batching. The number of people who could do a monthly transaction is 1/12th of that number. In order to be concerned that bitcoin fees will be too low to prevent censorship in the future, we have to start with the assumption that not many people use bitcoin decades out.

Fedwire has about 100x the gross volume that Bitcoin currently does, with a similar number of transactions. What will Bitcoin’s fee market be if volumes go up 5x or 10x, let alone 50x or 100x? Who wants to raise their hand with a confident model of what bitcoin volumes will be in 2040?

What will someone pay to send a ten million dollar equivalent on chain settlement internationally? $100 in fees per million dollar settlement transaction would be .01%. $300 to get it in a quicker block would be 0.03%. That type of environment can generate tens of billions of dollars of fees annually. The fees that people pay to ship millions of dollars of gold long distances, or to perform a real estate transaction worth millions of dollars, are extremely high. Even if bitcoin is a fraction of that, it would be high by today’s standards. And in a world of billions of people, if nobody wants to pay $100 to send a million dollar settlement bearer asset transaction, then that’s a world where not many people use bitcoin period.

In some months the “security budget” concern trends. In other months, the “fees will be so high that only rich people can transact on chain” concern trends. These are so wildly contradictory and the fact that both are common concerns shows how little we know about the long term future.

I don’t think the fee market can be fixed by gimmicks. Either the network is desirable to use in a couple decades or it’s not. If 3 or 4 decades into bitcoin’s life it can’t generate significant settlement volumes, and gets easily censored due to low fees, then it’s just not a very desirable network at that point for one reason or another.

Some soft forks like covenants can be thoughtfully considered for scaling and fee density, and it’s good for smart developers to always be thinking about low risk improvements to the network that the node network and miners might have a high consensus positive view toward over time. But trying to rush VC-backed softforks, and using security budget FUD to push them, is pretty disingenuous imo.

Anyway, good morning.

It draws on my years of research but almost all of it is new content. Not a book of essays.

The chapter on bitcoin energy usage and the chapter on Lightning are the two chapters out of thirty that mostly draw directly from my articles.

nostr:note1kgjq86499cslrys20j222ldu6dcrtvrq53qqx3x9c4h2f9j2feqqqhkpxc

nostr:note1kgjq86499cslrys20j222ldu6dcrtvrq53qqx3x9c4h2f9j2feqqqhkpxc

This is truly a must read book. nostr:note12q0gunzwvht025v8345yk50k2ylwcvtyc76zhhrf7n4ydlmjdersdker2w

strike’s account tab got an upgrade. check it out 🤙

lightning address is more present, payment methods and settings cleaner, and much more

we think a commitment to design in bitcoin will help adoption in a big way. it will take time, patience, and listening but it will be worth it and very helpful in making bitcoin useful to many

we’re shipping new stuff multiple times a week nowadays, catching a bit of a rhythm. shoutout to the team. lots more coming. let us know what you think!

Just went through a big follower list and followed everyone based on their latest note, but only if it was less than a week old.

Looking for more follows from people who are actually sort of active up here. Which good ones am I missing? 👇🏻👇🏻

good morning nostr, stay humble and stack sats 🫡