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A lot of consensus-change proposals for bitcoin are on the table at the moment. All of them have good motivations, whether it’s scaling UTXO ownership or making self-custody more tractable. I won\u2019t rehash them here, you\u2019re probably already familiar. Some have been actively developed for years.<\/p>\n
The past two such changes that have been made to bitcoin successfully, Segwit and Taproot, were massive engine-lift-style deployments fraught with drama. There have been smaller changes in bitcoin\u2019s past, like the introduction of locktimes, but for some reason the last two have been kitchen sink affairs.<\/p>\n
The reality not often talked about by many bitcoin engineers is that up until Taproot, bitcoin\u2019s consensus development was more or less operating under a benevolent dictatorship model. Project leadership went from Satoshi to Gavin to\u2026 well, I\u2019ll stop naming names.<\/p>\n
Core developers will likely quibble with this characterization, but we all know deep down that to a first order approximation that it\u2019s basically true. The \u201cfinal say\u201d and big ideas were implicitly signed off on by one guy, or maybe a small oligarchy of wizened autists.<\/p>\n
In many ways there\u2019s really nothing wrong with this – most (all?) major open source projects operate similarly with pretty clear leadership structures. Oftentimes they have benevolent dictators who just \u201cmake the call\u201d in times of high-dimensional ambiguity. Everyone knows Guido and Linus and the based Christian sqlite guy.<\/p>\n
Bitcoin is aesthetically loath to this but the reality, whether we like it or not, is that this is how it worked up until about 2021.<\/p>\n
Given that, there are three factors that create the CONSENSUS CONUNDRUM facing bitcoin right now:<\/p>\n
(1) The old benevolent dictators (or high-caste oligarchy) have abdicated their power, leaving a vacuum that shifts the project from \u201cconventional mode of operation\u201d to \u201cnovel, never-before-tried\u201d mode: an attempt at some kind of supposedly meritocratic leaderlessness.<\/p>\n
This change is coupled with the fact that<\/p>\n
(2) the possible design space for improvements and things to care about in bitcoin is wide open at this point. Do you want vaults? Or more L2s? What about rollups? Or how about a generic computational tool like CAT? Or should we bundle the generic things with applications (CTV + VAULT) to make sure they really work?<\/p>\n
The problem is that all of these are valid opinions. They all have merit, both in terms of what to focus on and how to get to the end goal. There really isn\u2019t a clear \u201ccorrect\u201d design pattern.<\/p>\n
(3) A final factor that makes this situation poisonous is that faithfully pursuing, fleshing out, building, \u201cdoing the work\u201d of presenting a proposal IS REALLY REALLY TIME CONSUMPTIVE AND MIND MELTING.<\/p>\n
Getting the demos, specs, implementation, and “marketing” material together is a long grind that takes years of experience with Core to even approach.<\/p>\n
I was well paid to do this fulltime for years, and the process left me disgusted with the dysfunction and having very little desire to continue contributing. I think this is a common feeling.<\/p>\n
A related myth is that businesses will do something analogous to aid the process. The idea that businesses will build on prospective forks is pretty laughable. Most bitcoin companies have a ton on their backlog, are fighting for survival, and have basically no one dedicated to R&D. The have a hard enough time integrating features that actually make it in.<\/p>\n
Many of the ones who do have the budget for R&D are shitcoin factories that don\u2019t care about bitcoin-specific upgrades.<\/p>\n
I\u2019ve worked for some of the rare companies that care about bitcoin and do have the money for this kind of R&D, and even then the resources are not sufficient to build a serious product demo on top of 1 of N speculative softforks that may never happen.<\/p>\n
—<\/p>\n
This kind of situation is why human systems evolve leadership hierarchies. In general, to progress in a situation like this someone needs to be in a position to say \u201calright, after due consideration we\u2019re doing X.\u201d <\/p>\n
Of course what makes this seem intractable is that the Bitcoin mythology dictates (rightly) that clear leadership hierarchies are how you wind up, in the limit, with the Fed.<\/p>\n
Sure, bitcoin can just never change again in any meaningful way (“ossify”). But at this point that almost certainly resigns it to yet another financial product that can only be accessed with the benefit of a large institution.<\/p>\n
If you grant that bitcoin should probably keep tightening its rules for more and better functionality, but that we should go “slow and steady,” I think there are issues with that too.<\/p>\n
Because another factor that isn\u2019t talked about is that as bitcoin rises in price, and as nation-states start buying in size, the rules will be harder to change. So inaction \u2014 not deciding \u2014 is actually a very consequential decision.<\/p>\n
I do not know how this resolves.<\/p>\n
\u2014<\/p>\n
There\u2019s another uncomfortable subject I want to touch on: where the power actually lies.<\/p>\n
The current mechanism for changing bitcoin hinges on what Core developers will merge. This of course isn\u2019t official policy, but it\u2019s the unintended reality. <\/p>\n
Other less technically savvy actors (like miners and exchanges) have to pick some indicator to pay attention to that tells them what changes are safe and when they are coming. They have little ability or interest to size these things up for themselves, or do the development necessary to figure them out.<\/p>\n
My Core colleagues will bristle at this characterization. They\u2019ll say \u201cwe\u2019re just janitors! we just merge what has consensus!\u201d And they\u2019re not being disingenuous in saying that. But they\u2019re also not acknowledging that historically, that is how consensus changes have operated. <\/p>\n
This is something that everyone knows semi-consciously but doesn\u2019t really want to own.<\/p>\n
Core devs saying \u201cyes\u201d and clicking merge has been a necessary precursor every time. And right now none of the Core devs are paying attention to the soft fork conversations – sort of understandable, there\u2019s a bunch to do in bitcoin.<\/p>\n
But let\u2019s be honest here, a lot of the work happening in Core has been sort of secondary to bitcoin\u2019s realization. <\/p>\n
Mempool work is interesting, but the whole model is more or less upside down anyway because it\u2019s based on altruism. For-profit darkpools and accelerators seem inevitable to me, although that could be argued. Much of the mempool work is rooted in support for Lightning, which is pretty obviously not going to solve the scaling problem.<\/p>\n
Sure, encrypted P2P connections are great, but what\u2019s even the point if we can\u2019t get on-chain ownership to a level beyond essentially requiring the use of an exchange, ecash mint, sidechain, or some other trusted third party?<\/p>\n
My main complaint is that Core has developed an ivory tower mindset that more or less sneers at people piatching long-run consensus stuff instead of trying to actually engage with the hard problems.<\/p>\n
And that could have bitcoin fall short of its potential.<\/p>\n
\u2014<\/p>\n
I don\u2019t know what the solution to any of this is. I do know that self-custody is totally nervewracking and basically out of the question for casual users, and I do know that bitcoin in its current form will not scale to twice-monthly volume for even 10% of the US, let alone most of the world.<\/p>\n
The people who don\u2019t acknowledge this, and who want to spend critical time and energy wallowing in the mire of proposing the perfect remix of CTV, are making a fateful choice.<\/p>\n
Most of the longstanding, fully specified fork proposals active today are totally fine, and conceptually they\u2019d be great additions to bitcoin.<\/p>\n
Hell, probably a higher block size is safe given features like compactblocks and assumeutxo and eventually utreexo. But that\u2019s another post for another day.<\/p>\n
—<\/p>\n
I’ve gone back and forth about writing a post like this, because I don’t have any concrete prescriptions or recommendations. I guess I can only hope that bringing up these uncomfortable observations is some distant precursor to making progress on scaling self-custody.<\/p>\n
All of these opinions have probably been expressed by @JeremyRubin<\/a> years ago in his blog. I\u2019m just tired of biting my tongue.<\/p>\n Thanks to @rot13maxi<\/a> and @MsHodl<\/a> for feedback on drafts of this.<\/p>\n