Hijacking Bitcoin: The Hidden History of BTC (2024)

By Roger Ver – 40 Q&As – Unbekoming Book Summary

In 2008, Satoshi Nakamoto unveiled Bitcoin, a decentralized peer-to-peer electronic cash system designed to enable fast, low-cost transactions without reliance on financial intermediaries, promising a revolutionary shift in global monetary freedom. The whitepaper outlined a scalable network where transaction volumes could rival Visa’s, with lightweight SPV wallets for users and specialized nodes handling blockchain verification, ensuring accessibility and efficiency. This vision, rooted in the cypherpunk ethos of cryptographic empowerment, captivated early adopters like Roger Ver, who saw Bitcoin as a tool for economic sovereignty. Yet, as Catherine Austin Fitts recalls in her review, Hijacking Bitcoin by Roger Ver, the initial excitement of decentralized digital money—once dubbed “Just in Time Money” in her firm’s discussions with cypherpunk Eric Hughes—gave way to a stark divergence. By 2014, Bitcoin’s development had been captured by a cadre of Bitcoin Core developers, primarily tied to Blockstream, who imposed a 1MB blocksize limit, transforming Bitcoin into a high-fee, low-capacity settlement layer marketed as “digital gold.” Fitts notes this shift turned Bitcoin into a “pump-and-dump” financial product, prioritizing capital gains for early investors over its original utility, a betrayal of its foundational promise.

The mechanisms of this hijacking were methodical and multifaceted, as detailed in Ver’s Hijacking Bitcoin: The Hidden History of BTC. Control over key communication channels, notably by Theymos, who moderated r/Bitcoin and bitcointalk.org, stifled dissent through censorship, ensuring only the Core narrative reached new users. Supporting articles, such as Bitcoin and CBDC, highlight how this centralization of discourse mirrored broader efforts to align cryptocurrencies with state-controlled digital currencies, undermining Bitcoin’s anti-establishment roots. Concurrently, Blockstream’s $300 million in funding from traditional financial institutions, including AXA Strategic Ventures with ties to the Bilderberg group, introduced conflicts of interest, as their Liquid Network profited from Bitcoin’s constrained capacity. Fitts’ Plunder Capitalism warns that this corporate influence may now extend to a “Bitcoin Strategic Reserve,” a potential government-led buying scheme to inflate Bitcoin’s price, allowing insiders to exit into real assets like land and minerals while retail investors are left holding speculative digital tokens. Ver’s account reveals how miners, despite their hashpower-based governance role in Satoshi’s design, were sidelined through social pressure and DDoS attacks, ceding control to developers who vetoed scaling agreements like the Hong Kong and New York Agreements. Ver exposes the broken promises of Core developers who claimed technical barriers to larger blocks, despite evidence that consumer hardware could handle 256MB blocks efficiently.

Amid this capture, Bitcoin Cash emerged in 2017 as a counterpoint, preserving Nakamoto’s vision of low-fee, reliable transactions through larger blocks, as Ver champions in his book. Fitts underscores its potential to rebuild a global payment network, contrasting it with Bitcoin’s current trajectory toward a dystopian control grid, as discussed in eRupee, where digital currencies risk becoming tools of centralized surveillance. The hijacking of Bitcoin, Ver argues, was not a technical inevitability but a deliberate reengineering, driven by economic incentives and information control, a view Fitts echoes in her call to resist such manipulations. “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,” Ver asserts, a sentiment that grounds this historical narrative in a provocative challenge. This introduction contextualizes Hijacking Bitcoin: The Hidden History of BTC (2024), inviting readers to explore how Bitcoin’s promise was subverted and what paths remain to reclaim its original intent.

With thanks to Roger Ver.

Hijacking Bitcoin: The Hidden History of BTC: Ver, Roger, Tucker, Jeffrey, Patterson, Steve

Deep Dive Conversation Library (Bonus for Paid Subscribers Only)

This deep dive is based on the book:

Discussion No.95:

23 insights and reflections from “Hijacking Bitcoin”

Thank you for your support.

Analogy

Think of Bitcoin as a revolutionary new highway system, originally designed to be free-flowing with unlimited lanes that could be added as traffic increased. The original blueprint called for smooth traffic flow for everyone from bicycles to trucks, with minimal toll fees just to prevent spam traffic.

Then imagine a small group of engineers gained control of the highway's development. They decided to artificially limit the highway to one lane, creating massive traffic jams. When users complained about the gridlock, these engineers said the traffic jams were actually beneficial and that people should either pay extremely high tolls or use their private side roads (which they owned and profited from).

To maintain control, they stationed guards at all the main information centers and billboards, ensuring that new drivers only heard their version of why traffic jams were good. When other engineers tried to build alternative routes following the original plans, they were attacked and their roads sabotaged. Their signs were torn down, and their names were smeared in all major transportation newspapers.

Eventually, some builders managed to create a new highway system (Bitcoin Cash) following the original blueprints, proving that multiple lanes could work just fine. But by then, most people had been convinced that single-lane highways with massive traffic jams were normal, even beneficial, and that anyone suggesting otherwise was dangerous or naive.

This reflects how Bitcoin transformed from a revolutionary payment system into a restricted settlement network, not due to technical limitations, but through deliberate changes by those who gained control of its development.

12-point summary

1. Original Vision vs. Reality: Bitcoin was explicitly designed as a peer-to-peer electronic cash system with low fees and fast transactions. This vision was later altered by Bitcoin Core developers to become a "digital gold" settlement system with high fees and limited transaction capacity.

2. Development Capture: A small group of developers, primarily employed by Blockstream, gained control over Bitcoin's development. Their business model depended on Bitcoin having limited on-chain capacity, creating a significant conflict of interest that influenced protocol decisions.

3. Information Control: Control of major communication channels, particularly by Theymos, enabled systematic censorship of scaling discussions and alternative implementations. This censorship played a crucial role in shaping public perception and maintaining Core's narrative.

4. Technical Deception: Claims about technical limitations of scaling through larger blocks proved false. Research showed even basic hardware could handle much larger blocks, with bandwidth and storage costs consistently decreasing over time.

5. Corporate Influence: Blockstream raised approximately $300 million from traditional financial institutions, including connections to the Bilderberg group through AXA Strategic Ventures, raising questions about external influence over Bitcoin's development.

6. Failed Agreements: Multiple attempts to increase Bitcoin's capacity through industry agreements (Hong Kong Agreement, New York Agreement) failed despite widespread support, demonstrating Core developers' effective veto power over protocol changes.

7. Economic Model Inversion: Bitcoin's economic model was fundamentally changed from high volume of low-fee transactions to low volume of high-fee transactions, contradicting Satoshi's original design and pushing users toward custodial solutions.

8. Miner Disempowerment: Despite having the technical ability to upgrade the network through hashpower voting as Satoshi designed, miners were reluctant to exercise this power, effectively ceding control to Core developers.

9. Attack Tactics: DDoS attacks, social media harassment, and threats were systematically used against individuals and businesses supporting scaling alternatives, creating a climate of fear and intimidation.

10. Business Impact: High fees and unreliable transactions forced many businesses to stop accepting Bitcoin, including Steam, while payment processors like BitPay had to look for alternatives.

11. Bitcoin Cash Creation: Bitcoin Cash emerged as a continuation of the original Bitcoin design, maintaining low fees and reliable transactions through larger blocks, demonstrating the technical feasibility of on-chain scaling.

12. Governance Failure: The lack of effective governance mechanisms and sustainable funding models made Bitcoin vulnerable to capture by a small group of developers, highlighting the importance of resistance to centralized control in cryptocurrency projects.

40 Questions & Answers

Question 1: What was Satoshi Nakamoto's original vision for Bitcoin according to the whitepaper?

Bitcoin was designed to be digital cash for everyday internet commerce, with fast, cheap, and reliable transactions. The whitepaper's very title describes it as "A Peer-to-Peer Electronic Cash System," and its first sentence discusses enabling "online payments to be sent directly from one party to another without going through a financial institution." This vision was consistently reinforced throughout Satoshi's communications.

Satoshi specifically designed Bitcoin to handle massive scale, stating it could process more transactions than Visa. He envisioned a system where regular users would simply use lightweight SPV wallets while specialized server farms would handle the heavy lifting of processing transactions. The goal was to create inflation-proof digital money that would increase global freedom and economic prosperity.

Question 2: How did Bitcoin's intended purpose shift from a payment system to a "store of value"?

The shift occurred gradually between 2014-2017 when Bitcoin Core developers decided to maintain a small blocksize limit, which caused transaction fees to rise dramatically. As fees increased and transactions became unreliable, Core developers began promoting Bitcoin as "digital gold" rather than digital cash, claiming high fees were actually beneficial for the network's security.

This narrative change was reinforced through heavy censorship on major discussion platforms and aggressive social media campaigns. The original vision of peer-to-peer electronic cash was reframed as naive or dangerous, while the new "store of value" narrative became dominant. This shift fundamentally changed Bitcoin's economics and user experience, pushing everyday transactions onto second layers or custodial services.

Question 3: What is the blocksize limit and why was it originally implemented?

The blocksize limit was a temporary measure implemented in 2010 to prevent potential denial-of-service attacks while Bitcoin was young. Initially set at one megabyte, this limit allowed for approximately 3-4 transactions per second. The limit was intended to be well above actual usage and would be increased or removed entirely as Bitcoin grew.

Ray Dillinger, an early Bitcoin pioneer, confirmed that Satoshi, Hal Finney, and himself all agreed the 1MB limit had to be temporary because it would never scale. The limit was meant as a security measure when Bitcoin's mining reward was worth only about $1.50, making attack costs negligible. It was never intended to be a permanent feature of the system.

Question 4: How did transaction fees evolve from Bitcoin's early days to present?

In Bitcoin's early days, transactions were virtually free, with optional fees of around one cent. This aligned with Satoshi's vision of Bitcoin being practical for even small micropayments. The system was designed to sustain itself through high volume of low-fee transactions rather than low volume of high-fee transactions.

By 2017, due to full blocks and artificial supply constraints, fees skyrocketed to more than $50 per transaction, with some complex transactions costing over $1,000. This dramatic increase was celebrated by Core developers like Greg Maxwell, who claimed that "fee pressure is an intentional part of the system design." This shift effectively priced out many users and use cases that Bitcoin was originally designed to serve.

Question 5: What role do miners play in Bitcoin's ecosystem and how has their influence changed?

Miners are essential to Bitcoin's security and operation, investing millions in equipment to process transactions and secure the network. According to the original design, miners were supposed to have significant influence over protocol changes, as they have the strongest financial incentives to ensure Bitcoin's long-term success. Their revenue comes from both transaction fees and block rewards.

However, Bitcoin Core developers worked to diminish miners' influence, portraying them as potential threats to the system rather than essential participants. Despite miners showing overwhelming support for bigger blocks (over 90% at times), their preferences were overridden through various means including social pressure, DDoS attacks, and the threat of protocol changes that would reduce their revenue.

Question 6: What significance do full nodes versus SPV have in Bitcoin's architecture?

Full nodes download and verify the entire blockchain, while SPV (Simplified Payment Verification) allows users to verify their own transactions without processing everyone else's. Satoshi explicitly designed Bitcoin so that regular users would not need to run full nodes, stating "the design supports letting users just be users." SPV was intended to be the primary way most people would interact with Bitcoin.

Bitcoin Core developers inverted this design, claiming that regular users must run full nodes to keep miners honest. This philosophical shift was used to justify keeping blocks small, as larger blocks would make running a full node more expensive. However, this fundamentally misunderstood Bitcoin's design - users can verify their own transactions through SPV without needing to verify everyone else's transactions.

Question 7: How did Blockstream influence Bitcoin's development trajectory?

Blockstream, founded in late 2014 by several core developers, became the most influential company in Bitcoin's history. While initially vague about their business model, they later revealed plans to profit from Bitcoin's scaling problems by offering their own proprietary sidechain called the Liquid Network, which would process transactions for a fee paid directly to Blockstream.

The company raised around $300 million from investors, including traditional banking interests. Their influence over Bitcoin Core development led to policies that kept on-chain transactions expensive and unreliable, effectively pushing users toward second-layer solutions like their Liquid Network. This represented a significant conflict of interest, as their business model depended on Bitcoin not scaling on-chain.

Question 8: What was the Bitcoin Foundation's role and why did it ultimately fail?

The Bitcoin Foundation was created in 2012 to provide funding for Bitcoin development, particularly supporting Gavin Andresen as Chief Scientist and Lead Maintainer. Modeled after the Linux Foundation, it accepted donations from companies and other interested parties to support Bitcoin's development and improve its public image.

The Foundation ultimately failed due to poor management, lack of transparency, and various scandals involving board members. By April 2015, it was effectively bankrupt and unable to continue funding development. This failure left a vacuum in Bitcoin's development funding and governance structure, which was later filled by corporate interests like Blockstream.

Question 9: How did online censorship shape Bitcoin's narrative?

Online censorship played a crucial role in controlling Bitcoin's narrative, primarily through the actions of Theymos, who controlled the main discussion platforms including r/Bitcoin, bitcointalk.org, and the Bitcoin Wiki. In August 2015, Theymos implemented strict censorship policies that banned all discussion of Bitcoin XT and other scaling solutions that competed with Core.

This censorship was explicitly intended to influence public opinion, with Theymos stating that moderation affects people and that banning XT from r/Bitcoin would hurt its chances of success. The control of information flows helped establish the small-block philosophy as dominant, while alternative views were systematically suppressed. New users were left unaware that they were only seeing one side of the debate.

Question 10: What were the key differences between Bitcoin Core and Bitcoin XT?

Bitcoin XT was an alternative implementation created by Mike Hearn and Gavin Andresen that would increase the blocksize limit to 8MB through BIP101. It required 75% of miners to signal support before activating, providing a clear upgrade path for Bitcoin to scale. XT represented the original vision of Bitcoin as a payment system with low fees and reliable transactions.

Bitcoin Core maintained the 1MB limit and opposed any significant blocksize increase, claiming it would harm decentralization. Core developers argued that Bitcoin should scale through second-layer solutions instead of increasing the base block size. This fundamental difference in scaling philosophy led to the first major attempt to route around Core's development control.

Question 11: Why did the Hong Kong Agreement fail to resolve the scaling debate?

The Hong Kong Agreement, signed in February 2016, was meant to be a compromise where Core developers agreed to implement both SegWit and a 2MB hard fork blocksize increase. Miners pledged to run only Bitcoin Core-compatible software in exchange for this compromise. The agreement specified a timeline: SegWit in April 2016, hard fork code in July 2016, and activation in July 2017.

However, Core developers missed these deadlines and ultimately never delivered the promised blocksize increase. This failure reinforced the perception that Core could not be trusted to follow through on agreements. Some developers even mocked the agreement, with Greg Maxwell referring to the participants as "dipshits" who were locked in a room until agreeing to propose a hard fork.

Question 12: What is the Lightning Network and why is it controversial?

The Lightning Network was proposed as a second-layer scaling solution that would allow for fast, cheap transactions without increasing the base blocksize. However, it has several critical design flaws: it requires on-chain transactions to use, nodes must remain constantly online or risk losing funds, and routing payments becomes extremely complex when scaled to millions of users.

Most problematically, Lightning Network requires high-cost on-chain transactions to open payment channels, making it impractical for widespread adoption with Bitcoin's 1MB blocksize limit. Even the Lightning whitepaper acknowledged that global adoption would require 133MB blocks. The network has largely failed to deliver on its promises, leading to increased centralization through custodial solutions.

Question 13: How did the concept of "developer consensus" affect Bitcoin's evolution?

The concept of "developer consensus" was used by Bitcoin Core to prevent changes they disagreed with, effectively giving them veto power over protocol changes. They argued that any controversial changes were too risky, requiring near-unanimous agreement among Core developers. This requirement for consensus became a tool to maintain the status quo, as any developer could block changes by making them "controversial."

This approach fundamentally changed Bitcoin's governance model. Instead of miners voting on changes with their hashpower as Satoshi designed, a small group of developers could prevent changes regardless of industry or community support. This was particularly evident in the blocksize debate, where even 90% miner support for larger blocks was insufficient to overcome Core's opposition.

Question 14: What role did Theymos play in controlling information flow?

Theymos controlled the primary Bitcoin discussion platforms: r/Bitcoin, bitcointalk.org, and the Bitcoin Wiki. He used this position to implement strict censorship policies, particularly against scaling solutions that competed with Core. He openly admitted to using his "power over certain centralized websites" for what he believed was "the benefit of Bitcoin as a whole."

His censorship extended to removing major companies like Coinbase from bitcoin.org for supporting competing implementations. He even stated that if 90% of r/Bitcoin users disagreed with his policies, he wanted them to leave. This centralized control over information flow proved crucial in shaping the narrative around Bitcoin's scaling debate and development direction.

Question 15: How did DDoS attacks influence Bitcoin's development path?

DDoS attacks were systematically used against anyone running or supporting alternatives to Bitcoin Core. Mining pools, businesses, and individual nodes that signaled support for Bitcoin XT, Classic, or other scaling solutions were targeted with attacks that disrupted their operations. Some attacks were powerful enough to take down entire rural ISPs.

These attacks created a climate of fear and intimidation that discouraged support for competing implementations. Mining pools would often withdraw their support for scaling solutions after being attacked. The combination of DDoS attacks and censorship proved extremely effective at maintaining Core's control over Bitcoin's development.

Question 16: What was the significance of the New York Agreement?

The New York Agreement (NYA) represented the industry's final major attempt to increase Bitcoin's blocksize through the SegWit2x proposal. It gained unprecedented support, with signatures from 58 companies across 22 countries, representing 83% of hashpower and $5 billion in monthly transaction volume. The agreement would implement SegWit followed by a 2MB blocksize increase.

However, after SegWit activated, an aggressive campaign branded SegWit2x as an attack on Bitcoin, despite having widespread industry support. The Core developers refused to attend the conference or support the agreement. Eventually, the 2MB increase was canceled due to controversy and threats of chain splits, marking the end of attempts to scale Bitcoin through blocksize increases.

Question 17: Why did major companies like Steam stop accepting Bitcoin?

Steam and other companies stopped accepting Bitcoin due to high fees and transaction unreliability. When Steam implemented Bitcoin in 2015, transaction fees were around $0.20, but by 2017 they had risen to $20. The high fees made refunds particularly problematic, as customers could lose significant money in transaction fees even if refunded the full purchase price.

These issues affected many businesses that had integrated Bitcoin payments. BitPay's CEO stated that "the Bitcoin blockchain has stopped working for us" and they had no choice but to start using a fork of Bitcoin. The exodus of merchants demonstrated the practical implications of Core's high-fee policy on real-world Bitcoin adoption.

Question 18: What led to the creation of Bitcoin Cash?

Bitcoin Cash was created in August 2017 as a contingency plan by miners after multiple failed attempts to increase Bitcoin's blocksize limit. It preserved the original vision of Bitcoin as peer-to-peer electronic cash, removing the 1MB limit and allowing for larger blocks. This enabled fast, reliable transactions with low fees, as Bitcoin had originally functioned.

The creation of Bitcoin Cash represented a decisive split in the Bitcoin community. While Bitcoin Core continued with small blocks and high fees, focusing on being a store of value, Bitcoin Cash maintained the original focus on being a payment system. This split allowed both visions to be tested in the market independently.

Question 19: How did the SegWit2x proposal affect Bitcoin's community?

SegWit2x represented both the height of industry cooperation and the depth of community division. While it gained support from most major Bitcoin businesses and miners, it faced fierce opposition from Core developers and their supporters. The proposal led to increasingly hostile rhetoric, with some Core supporters threatening legal action and reporting companies to regulators.

The failure of SegWit2x marked a turning point in Bitcoin's history. After its cancellation, it became clear that Bitcoin Core's control over the protocol was complete, and any significant protocol changes would require their approval. This led many businesses and developers to shift their focus to other cryptocurrencies that remained committed to scaling.

Question 20: What is the relationship between block size and network centralization?

The relationship between block size and centralization was a central point of contention in the scaling debate. Core developers argued that larger blocks would lead to centralization by making it more expensive to run a full node. However, this argument fundamentally misunderstood Bitcoin's design, which never intended for regular users to run full nodes.

Satoshi explicitly stated that as Bitcoin grew, nodes would consolidate into specialized server farms, while regular users would use SPV wallets. The cost of running a full node with larger blocks would still be minimal compared to the revenue potential for businesses that need them. The centralization argument was used to justify keeping blocks small, despite evidence that this limitation pushed users toward centralized solutions like custodial wallets.

Question 21: What are the fundamental differences between Bitcoin Core and Bitcoin Cash's scaling approaches?

Bitcoin Core opted to keep blocks small and force transactions onto second-layer solutions, believing this would maintain decentralization. This approach led to high fees and unreliable transactions on the main chain, pushing users toward custodial solutions. Core developers actively celebrated high fees and full blocks as features rather than bugs.

Bitcoin Cash maintained the original vision of scaling through larger blocks, allowing for more transactions while keeping fees low. BCH has already scaled to 32MB blocks, thirty times BTC's capacity, with plans for further increases. This approach allows all users to access the blockchain directly without requiring trusted third parties or complex second-layer solutions.

Question 22: How did economic incentives shape Bitcoin's development path?

Blockstream's business model relied on Bitcoin having limited on-chain capacity, as this would drive users to their proprietary Liquid Network. They could profit from transaction fees on their sidechain while simultaneously controlling Bitcoin's development through their employed developers. This created a clear conflict of interest in Bitcoin's scaling decisions.

Early Bitcoin businesses, however, needed low fees and reliable transactions to remain viable. Companies like BitPay, Coinbase, and others supported increasing the blocksize because their business models depended on Bitcoin functioning as a payment system. This conflict between different economic incentives ultimately led to Bitcoin's split.

Question 23: What role did Chinese miners play in the scaling debate?

Chinese miners, who controlled a significant portion of Bitcoin's hashpower, generally supported larger blocks. Several major mining companies signed a letter explicitly stating that even with China's "Great Firewall," they could handle 8MB blocks. They represented over 60% of Bitcoin's total hashrate at the time.

However, miners were reluctant to take decisive action without broader consensus, fearing their actions might damage Bitcoin's value. Despite having the technical ability to upgrade the network through their hashpower, they consistently deferred to Core developers, even when it went against their own interests. This demonstrated a psychological barrier to exercising their power in the system.

Question 24: How did the "digital gold" narrative emerge and gain prominence?

The "digital gold" narrative emerged as a way to justify Bitcoin's high fees and limited transaction capacity. Rather than acknowledging these as problems, Core supporters reframed them as features that made Bitcoin more like gold - expensive to transact with and primarily useful as a store of value rather than a medium of exchange.

This narrative represented a complete inversion of Bitcoin's original purpose. While early adopters compared Bitcoin to gold because of its sound monetary properties while still being easy to transact with, the new narrative focused on gold's limitations as virtues. This shift was reinforced through controlled communication channels and aggressive social media campaigns.

Question 25: What was the significance of Replace-by-Fee (RBF) in Bitcoin's evolution?

Replace-by-Fee was a change to Bitcoin Core that allowed transactions to be replaced with higher-fee versions, effectively breaking the security of zero-confirmation transactions. This feature was explicitly added to discourage merchants from accepting instant payments, with developer Peter Todd receiving a $1,000 bounty to implement it.

The introduction of RBF demonstrated Core developers' willingness to break Bitcoin's functionality to force changes in user behavior. They believed instant transactions were dangerous and needed to be stopped, even though merchants had successfully managed any risks for years. This change made Bitcoin less useful for everyday commerce.

Question 26: How did Bitcoin's governance model differ from Satoshi's original design?

Satoshi designed Bitcoin with miners voting on changes through their hashpower, creating a system where those with the most invested in Bitcoin's success would have the most say in its development. This aligned incentives between miners, users, and the network's long-term success.

Under Core's leadership, this was replaced with a model of "developer consensus" where a small group of developers could veto any changes they disagreed with, regardless of support from miners or the broader community. This centralized control over the protocol went against Bitcoin's decentralized nature and led to development capture.

Question 27: What role did corporate funding play in Bitcoin's development?

Corporate funding significantly influenced Bitcoin's development direction. After the Bitcoin Foundation's collapse, Blockstream became the primary source of funding for many Core developers. Their business model depended on Bitcoin having limited on-chain capacity, creating an incentive to prevent scaling solutions that would make their products unnecessary.

The company raised around $300 million from various investors, including traditional banking interests and AXA Strategic Ventures, whose parent company's CEO was chairman of the Bilderberg group. This funding structure raised questions about potential conflicts of interest and the influence of traditional financial powers over Bitcoin's development.

Question 28: How did different communication channels influence Bitcoin's community split?

The control of major communication channels played a crucial role in Bitcoin's community split. Theymos used his control of r/Bitcoin, bitcointalk.org, and the Bitcoin Wiki to systematically censor discussions of scaling solutions and alternative implementations. This censorship was explicitly intended to influence public opinion and prevent support for competing solutions.

New users could only see one side of the debate, creating the false impression of consensus around Core's roadmap. Alternative discussion venues emerged, but they never achieved the same reach as the censored platforms. This information control proved crucial in maintaining Core's dominance over Bitcoin's narrative and development.

Question 29: What were the key arguments for and against increasing the block size?

Proponents of larger blocks argued that Bitcoin needed to maintain low fees and reliable transactions to achieve mainstream adoption. They pointed out that computer hardware and bandwidth costs consistently decreased over time, making larger blocks increasingly feasible. This aligned with Satoshi's original design and vision for Bitcoin.

Opponents claimed larger blocks would lead to centralization by making it more expensive to run a full node. However, this argument ignored that Bitcoin was never designed for all users to run full nodes, and the actual costs of running nodes with larger blocks would remain minimal compared to the potential benefits and revenue opportunities they would enable.

Question 30: How did Bitcoin Cash handle the challenges that led to its own forks?

Bitcoin Cash demonstrated its resistance to developer capture through its handling of subsequent fork attempts. When Bitcoin ABC, led by Amaury Sechet, tried to implement an 8% developer funding tax, the community successfully rejected this change and maintained the network's integrity, despite ABC being the dominant implementation at the time.

This showed that BCH learned from Bitcoin Core's capture, creating a community more resistant to centralized control. While these forks did fragment the community further, they proved that no single development team could control the protocol against the community's wishes, unlike what happened with Bitcoin Core.

Question 31: What was the rationale behind Bitcoin Core's fee market?

Bitcoin Core developers argued that high fees were necessary for network security once the block reward diminished. Since miners would eventually rely solely on transaction fees, they claimed that artificially limiting block space would create a "fee market" where users would bid against each other for block space, ensuring miners remained profitable.

This marked a fundamental change in Bitcoin's economics. Instead of miners earning revenue through high volume of low-fee transactions as Satoshi designed, Core's vision required low volume of high-fee transactions. This change effectively priced out most everyday users and use cases, pushing transactions onto second layers or custodial solutions.

Question 32: How did early Bitcoin businesses respond to network congestion?

Early Bitcoin businesses were severely impacted by network congestion and rising fees. Steam stopped accepting Bitcoin when fees rose from $0.20 to $20, making refunds impractical. BitPay's CEO stated they had "no choice" but to start using a fork of Bitcoin because the network had stopped working for them. Coinbase and other major companies supported various scaling proposals.

The business community overwhelmingly supported increasing the blocksize limit, recognizing that high fees and unreliable transactions threatened their business models. Many companies signed the New York Agreement in a final attempt to increase capacity, but after its failure, some businesses either stopped accepting Bitcoin or began exploring alternative cryptocurrencies.

Question 33: What role did pseudonymous figures play in Bitcoin's development?

Pseudonymous figures like Theymos and Cobra wielded significant influence through their control of key information channels and websites. They actively shaped Bitcoin's narrative, with Cobra even suggesting rewriting the Bitcoin whitepaper to align with Core's vision. Their true identities and potential conflicts of interest remained unknown.

Another mysterious figure was John Dillon, who funded Peter Todd's work on Replace-by-Fee and the anti-scaling propaganda video. In leaked communications, Dillon claimed to hold a high position in intelligence work, raising questions about potential state influence in Bitcoin's development. These pseudonymous actors played crucial roles in Bitcoin's transformation.

Question 34: How did the concept of "consensus" evolve in Bitcoin's governance?

Originally, consensus in Bitcoin meant hashpower voting on changes, with majority hashpower determining the network's direction. This aligned with Satoshi's design where miners, having the most invested in Bitcoin's success, would have the strongest voice in its development.

Core developers redefined consensus to mean near-unanimous agreement among their developers. This effectively gave any Core developer veto power over protocol changes, regardless of support from miners, businesses, or users. This redefinition of consensus became a tool to prevent changes the Core team opposed, particularly regarding scaling.

Question 35: What impact did the Bilderberg connection have on Bitcoin's development?

Blockstream received significant funding from AXA Strategic Ventures, whose parent company's CEO, Henri de Castries, was chairman of the Bilderberg group. This connection raised concerns about traditional financial powers potentially influencing Bitcoin's development through corporate funding.

While the significance of this connection remains debated, it demonstrated how Bitcoin's development became increasingly intertwined with traditional financial interests. The $300 million raised by Blockstream came largely from established financial institutions, creating potential conflicts with Bitcoin's original purpose of bypassing such institutions.

Question 36: How did Bitcoin Cash differ in its approach to smart contracts and tokens?

Bitcoin Cash reactivated and expanded original Bitcoin opcodes that had been deactivated, enabling more sophisticated smart contracts and token functionality. This included increasing the size of OP_RETURN and adding new opcodes like OP_CHECKDATASIG, allowing for more complex on-chain applications while maintaining low fees.

This approach contrasted with Bitcoin Core's restrictive attitude toward on-chain functionality. While Core discouraged using Bitcoin for anything beyond simple transfers, BCH embraced expanding Bitcoin's capabilities while maintaining its primary focus on being peer-to-peer electronic cash.

Question 37: What were the technical limitations of scaling Bitcoin's block size?

The technical limitations of scaling through larger blocks proved far less significant than Core developers claimed. Research demonstrated that consumer hardware could handle much larger blocks, with a Raspberry Pi successfully processing 256MB blocks in under two minutes. Network bandwidth and storage costs continued declining, making larger blocks increasingly feasible.

Even at Visa-level transaction volumes requiring 800MB blocks, the storage and bandwidth requirements would remain manageable with consumer-grade hardware. The real limitation wasn't technical but political, as Core developers opposed increasing the blocksize regardless of technical feasibility.

Question 38: How did different Bitcoin implementations approach development funding?

Bitcoin Core's development became largely funded through Blockstream and other corporate interests, creating potential conflicts of interest. The Bitcoin Foundation's attempt to provide independent funding failed due to management issues. Bitcoin ABC later attempted to implement a mandatory developer funding tax, which the BCH community rejected.

These different approaches highlighted the ongoing challenge of sustainably funding protocol development while avoiding capture by specific interests. The failure of various funding models demonstrated the difficulty of balancing development needs with decentralization.

Question 39: What role did social media play in shaping Bitcoin's narrative?

Social media became a battleground for controlling Bitcoin's narrative, with coordinated campaigns promoting Core's vision while attacking alternatives. Suspicious patterns emerged, such as numerous new accounts with similar behaviors aggressively promoting small-block ideology and attacking dissenters.

The UASF campaign demonstrated social media's power, with matching hats produced by Blockstream becoming symbols of resistance to scaling. However, the online support often appeared manufactured, as real-world meetups showed far less support for these positions than social media suggested.

Question 40: How did Bitcoin's original economic model differ from its current form?

Bitcoin's original economic model relied on high volume of low-fee transactions, with miners earning revenue through processing many transactions efficiently. Satoshi explicitly stated that miners would be rewarded through "very large transaction volume or no volume," never suggesting high fees as an alternative.

Core's model inverted this, requiring high fees and low transaction volume to sustain the network. This fundamental change pushed regular users toward custodial solutions and second layers, effectively recreating the trusted third parties Bitcoin was designed to eliminate. This shift represented not just a technical change but a complete transformation of Bitcoin's economic model.

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