Since its creation more than 15 years ago, bitcoin has captured the imagination of libertarians, anarchists, and a variety of other advocates of individual freedom and financial sovereignty. For them, bitcoin represented a revolutionary challenge to state-controlled money and authority. As such, it has come to symbolize a disruptive shift towards greater freedom and autonomy for individuals in modern society.
However, as bitcoin gains ground, there are increasing signs that it may be shedding its revolutionary roots. The exponential growth in users and market value has corresponded with a dilution of the freedom-oriented spirit that initially defined the technology. In a future hyperbitcoinized world, will bitcoin continue to embody the libertarian ideals that sparked so much enthusiasm among its early followers? Or will it simply become another financial asset compatible with and absorbed by the existing global monetary order?
This question goes beyond the philosophical debates surrounding cryptoanarchism and speaks to tangible decisions that developers, miners, and users will face in the next decade of bitcoin. Difficult trade-offs remain between the cypherpunk vision of total financial freedom and the compromises necessary for scalability. Navigating these options will determine whether bitcoin realizes its disruptive potential or succumbs to the government forces it originally sought to evade.
In contemporary society, adopting the libertarian mindset is often considered radical in contrast to the permissible mainstream view, a perspective recognized by many within the libertarian community. The predominant challenge lies in the widespread acceptance of the superstition of statism, an ingrained belief system that defenders of freedom conscientiously confront. Despite the formidable nature of this challenge, many libertarians remain committed to advancing freedom through diverse and strategic initiatives. Their collective efforts aim not only to challenge the status quo but also to instigate a profound change in social attitudes toward freedom.
Fighting the prevailing acceptance of statism is an ongoing journey and, as dedicated advocates, we recognize the need for multi-faceted approaches. From engaging in public discourse to fostering educational initiatives, their efforts are grounded in the conviction that the principles of liberty are essential to a flourishing society. This commitment extends beyond ideological boundaries and encompasses a shared vision of a future in which individual freedoms are valued and defended.
As a defender of freedom, the discovery of bitcoin marked a turning point for me. As I began my journey down the rabbit hole, I couldn't help but feel exhilarating enthusiasm for the project. This cryptographic protocol offered a clever and indirect way to separate money from the State, providing a practical new way to promote freedom in our lives. bitcoin embodies the principles of individual sovereignty and financial autonomy. It became a beacon for those seeking alternatives to the state's centralized coercive systems.
The concept summed up in the meme “bitcoin is a Trojan horse for freedom” resonated deeply. He suggested that people, previously indifferent to the principles of freedom, might unknowingly embrace them as they seek personal financial gain through bitcoin. The idea that “number-increasing” technology is, in essence, a covert “freedom-increasing technology” underscored bitcoin’s transformative potential within the broader context of promoting individual freedoms and challenging traditional power structures. This aspect added another layer of importance to my appreciation of bitcoin's role as a revolutionary force within the broader freedom movement.
bitcoin has demonstrated its ability to empower people to bypass authoritarian regimes. Organizations like the Human Rights Foundation and the Oslo Freedom Forum have effectively highlighted personal stories of how bitcoin has positively transformed lives around the world. It has given people the ability to transact using currency free of government debasement and censorship. This sentiment resonates within the bitcoin community today, expressed through slogans such as “not your keys, not your coins,” “be your own bank,” and “we are separating money from the state!” There is a wealth of educational content dedicated to promoting these principles and emphasizing the greater freedom that comes with monetary sovereignty.
Additionally, bitcoin enhances individual freedom by allowing people who are able to save to store their value in a savings technology that is not subject to the government's fiat money Ponzi scheme. Individuals can exchange a currency that the government cannot censor, providing a secure, censorship-resistant means for financial transactions. While these achievements are notable and deserve recognition, there is an inconvenient truth that is often not discussed or even ignored: the challenge of increasing the number of sovereign users on the network.
As you delve deeper into the world of bitcoin, you will gradually adopt a more technical perspective. While some consider this understanding intuitive, others may face challenges. However, you will eventually face the reality of blockchain scalability. Due to block size limitations, there is a transactional throughput limit for each new block. The consensus solution adopted by the network was a layered scaling approach. Enter the Lightning Network, a second-layer solution designed to improve the economic density of on-chain transactions. It allows two parties to participate in a multi-signature channel, facilitating a multitude of payments for each of the few transactions required on the chain, including opening, splicing, and closing channels. Despite issues such as liquidity management and online requirements, this engineering marvel significantly expands the network's transaction processing capabilities, almost without limits. The only drawback: custodians will be necessary for most users.
Despite the current implementation of the Lightning Network, there is still a limitation on the number of sovereign users the network can accommodate. Despite improvements in payment scale, the bitcoin network can only support 10-100 million sovereign users who update Lightning channels several times a year, whether they are individuals, sole custodians, or federated custodians implementing eCash systems. In a hyperbitcoinized world with over 8 billion people, it is easy to understand the implications. The uncomfortable reality is that less than one percent of the world's population will have the ability to use bitcoin sovereignly.
Achieving sovereignty with bitcoin implies having exclusive control over a UTXO. Expanding the number of sovereign users on the network requires additional engineering efforts and consensus changes. It is essential to establish trust-minimized mechanisms for users to share a UTXO and address disputes over partial UTXO ownership without imposing excessive economic costs for their resolution. There is currently an ongoing debate within sectors of the development community about how to activate pacts could begin to address these issues, particularly how CTV can help scale bitcoin as an initial component for solutions to these sovereignty scaling issues.
The seriousness of this issue and the urgency it entails goes back to how much the principle of separating money from the State is really valued. We find ourselves at a crucial moment, reflecting on the course and importance of what a world completely immersed in hyperbitcoinization really entails. Without intervention, we could find ourselves in a future where 99% of the population needs some form of custody to navigate the complexities of the bitcoin network.
This potential scenario raises legitimate concerns about the state being able to exert control over the network in the future. The question of urgency becomes paramount. While I refrain from advocating reckless behavior and hasty implementation, there is a discernible sense that a metaphorical window of opportunity is approaching us.
Reflecting on the history of bitcoin, it becomes clear that triggering consensus changes on the network becomes increasingly challenging as it expands. Network growth introduces complexities, making it exponentially more difficult to persuade an overwhelming majority to adopt a protocol upgrade unless there is immense demand for such a change. This nuanced view highlights the need to carefully and quickly consider the evolving dynamics of the bitcoin ecosystem.
My concern revolves around the pressing need for most participants to genuinely value individual freedom, recognizing its importance in implementing crucial improvements and addressing these prevalent issues of scale. Having ventured into the realm of bitcoin from a libertarian point of view, I am painfully aware of the lack of respect for freedom that prevails among the majority of society. There is a genuine fear that bitcoin, initially a cornerstone of the freedom movement, may gradually lose its essence and be relegated to just another financial asset, first gradually and then suddenly.
Facing today's reality requires a pragmatic perspective and recognizing it for what it is, rather than an illusion. To those who share the weight of my concerns, I passionately implore you to remain firm and unwavering in your commitment to defend individual freedom. Embrace, with genuine conviction, the critical role bitcoin plays in advancing this cause. The path ahead is formidable and requires a joint effort deeply connected to our collective purpose. Let us face the challenge of expanded sovereignty with authenticity, fully aware of the crucial work ahead. Each of us has a unique and indispensable role in this organic effort; Let us embrace it with true strength and unwavering determination.
This is a guest post by Michael Matulef. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
