Vlad Costea on Bitcoin Maximalism (PoW Summit, Prague, September 2023)

Bitcoin maximalism is one of the most interesting ideologies of our time. It emerged sometime in the first half of the 2010s, in a time when the Bitcoin codebase was being replicated by a myriad of developers to create worthless carbon copies. Then it got bigger after 2015, when projects with different designs such as Monero and Ethereum emerged to threaten Bitcoin’s supremacy. Today, Bitcoin maximalism is at its peak – with proponents presenting ideas about monetary purity, network-level exclusivity, and soft fork improvements.

As a political science graduate, I find a lot of fascination in Bitcoin maximalism: it borrows elements from Austrian economics, it takes a lot of the gold bug mentality, and then adds a little bit of cypherpunk culture to the entire mix. However, due to the broad spectrum of elements of influences, there are plenty of inconsistencies and incomplete bits which are neither Austrian, nor cypherpunk – mostly because Austrian economics and cypherpunk literature have no concept of “one money to rule them all”.

Nonetheless, I consider myself a Bitcoin maximalist. It’s because I believe that Bitcoin is the most robust and decentralized network, so therefore all money-related projects should be built on top of it. Furthermore, the immaculate conception, the ideological drive of the community, and the monetary properties of the BTC token are superior to anything else out there. However, there are small points of contention that I have with the average Twitter/X Bitcoin maximalist: I believe that all altcoins/shitcoins are free market experiments which introduce to the world some interesting technical ideas and also test both the human and the financial demand for these networks and features. After all, everything started from Bitcoin and I believe that it will come back to Bitcoin on a secondary or tertiary layer. It’s the flavor of Bitcoin maximalism to which I adhere.

So when Bob Summerwill of ETC Cooperative asked me to speak at the Proof of Work conference, I didn’t think twice. I think that anything that is Proof of Work, has a fixed market cap, and benefits from a fair launch can be regarded as benevolent and legitimate. Sure, it can still turn out to be a scam – but in the era of Proof of Stake virtue signalling, sticking to the more honest and decentralized Proof of Work security and distribution model is a good sign. This is why I regard Litecoin, Monero, Grin, and Ethereum Classic as interesting and useful experiments in the space. There’s a lot of noise out there, but at least these four are technologically interesting while they test features first proposed for Bitcoin.

For the purpose of this presentation, I’ve distinguished between two main branches of Bitcoin maximalism: the network level side which takes its teachings from cypherpunk literature, and the monetary side which is rooted in Austrian economics. Both of these branches have positive and negative approaches to them, as well as internal and external perspectives: for example, the network-level maximalism can claim that everything should happen on the Bitcoin network (which is an internal and positive line of thought) or else it can claim that “scams” don’t belong to Bitcoin (external and negative, basically an indirect legitimization of other blockchains).

Thanks to the organizers from the PoW Summit, my talk has been recorded and is now available to watch online. So even if you couldn’t make it to Prague in late September, you get the chance to listen to the talk. Also, I want to say that it’s been an honor to speak in between Jameson Lopp and Amir Taaki. Honestly, I couldn’t ask for a better booking.

If you don’t have the time to watch the entire video and only want to skip to the part that you find interesting, here are the time stamps from the Proof of Work Summit 2023:

Vlad Costea’s Background [00:01:11] Vlad discusses his background in political science and his initial skepticism towards Bitcoin.

Contributions to Litecoin and Ethereum Classic [00:02:22] Vlad talks about his involvement with the Litecoin Foundation and his contributions to the Litecoin community. He also mentions his attempt to contribute to Ethereum Classic.

Bitcoin Maximalism and Classification [00:08:03] Vlad explains the concept of Bitcoin maximalism and provides a classification of different types of Bitcoin maximalists. He discusses the network level and monetary level perspectives of Bitcoin maximalism.

Maximalism and the Purpose of Bitcoin [00:10:18] Discussion on the different approaches to Bitcoin, including building on a secure network versus relying on altcoins and custodians for scaling.

Bitcoin’s Immaculate Conception [00:12:23] Exploration of how Bitcoin’s initial lack of value and slow adoption contributed to its development and distribution.

Competition and the Role of Maximalism [00:15:45] Examining the importance of competition in the cryptocurrency space, the benefits of Ethereum’s contributions, and the regulation of speech on social media due to maximalism.

Bitcoin maximalism and its impact on adoption [00:22:02] Discussion on whether Bitcoin maximalism hinders adoption and triggers stubbornness in some individuals.

Financial challenges for Bitcoin developers [00:24:26] Exploration of the lack of funding for Bitcoin development and the need for more financial support.

The value and usage of Bitcoin [00:28:00] Debate on the significance of Bitcoin holders not using their coins for payments and the impact on the social layer of Bitcoin.

Satoshi Nakamoto’s bitcoin as a standing bounty [00:32:59] Discussion about the concept of Satoshi’s bitcoin as a standing bounty for the security of the network and the effectiveness of its game theory.

BlackRock ETF excitement [00:33:33] Conversation about the excitement among Bitcoin enthusiasts regarding the potential impact of BlackRock ETF on the market and its implications for institutional involvement.

Wall Street and Bitcoin derivatives [00:35:21] Exploration of the role of Wall Street in the Bitcoin space, particularly in terms of derivatives and the potential for deriving value from Bitcoin.

Full transcript of Vlad Costea’s speech from the Proof of Work Summit, Prague, September 25th 2023

Michael Parenti (00:00:00) – Uh, next up we have the Vlad Costea from the Bitcoin Takeover podcast and Open Source magazine coming up to do some supercycle FUD busting some very nerdy stuff. One of the one of my favorite smiling, energetic young faces in the space. I think this guy’s amazing. Looking forward to his talk.

Vlad Costea (00:00:27) – Good morning. It’s really good to see that you woke up for this event, because I know that some of us partied hard last night. There was that speaker’s dinner, and then some of us went to parallel Nepalese, and that’s where the fun took place. And there were there was a lot of beer. I don’t find the. Oh it’s here. Thank you. So we’ll set this up. I just want to ask you if there is anyone in this room that likes Litecoin. Raise your hand. So I count about 1011. What about Ethereum Classic? Do you like that one? Oh. More hands. I guess you guys are better represented. Anyway, I’m happy that you raised your hand and you expressed your support.

Vlad Costea (00:01:11) – Is this going to switch to my presentation? Because I’m going to talk about Bitcoin maximalism. But before you throw eggs and tomatoes at me, I need to talk a little bit about my background and how I got invited here. And since my background is in political science and I spent way too much time there, I even pursued a PhD and then I dropped out. But I think from a political philosophy point of view, it’s very interesting to analyze this movement and explain its origins and its purpose, because it’s all over the place right now. And I’m trying to bring some clarification. So basically, who’s this guy? It’s a good question. I’m not sure if many of you know me. I spend most of my time arguing with people on Twitter about Bitcoin. But I first read about Bitcoin in 2013 and I thought it was a very stupid idea. I mean, I was 21 years old at the time and my thought process was I own a bank account, I can send money to whoever I want, so why do I need this internet money that’s mostly used on the Silk Road? So yeah, I was I was also a bit afraid of it and I wrote a magazine about it.

Vlad Costea (00:02:22) – You can check it out later if you want. It’s also open source if you want to download it. Well, I will try to minimize the shilling here and focus on the main point. I have been doing the Bitcoin Takeover podcast for almost five years and it seems like a long time, but I haven’t lost passion for it, so I’m still doing it. And I created the magazine. I told you about it, but I’m a bitcoin maximalist and today I’m going to explain to you what this means. Basically before I was a Bitcoin maximalist, I worked for the Litecoin Foundation, and I got invited by Charlie Lee in 2017 to join the Litecoin Slack, which I thought was amazing at the time because there was this guy who was famous and rich and he was in the news, and basically he acknowledged my existence by adding me to a slack group like he was aware of my email address. I thought it was amazing. And then I wrote some articles for the first 4 or 5 newsletters of the Litecoin Foundation.

Vlad Costea (00:03:20) – I was actually surprised that they were getting published, but I read them again five, almost six years later and I was like, they’re not that bad. I mean, when you think about yourself and you’re younger, you think you’re naive and you didn’t know anything. But I read them and I was like, this is pretty good. I mean, I’m proud of myself. At the time, I did some beta testing for LiteWallet, and I think Kerry Washington is here. Basically, I reported some bugs to him. I was just testing the features in the wallet, and I found some suboptimal features in it. And I was telling him and he was happy to get feedback. And I also wrote an article in all of the free issues of a community magazine of Litecoin that was called Light Life. I’m not sure if anyone remembers that. And I tested Lightning Network on Litecoin in 2018, and at the time it was, there was this hacker spirit of people testing stuff, and I burned my SSD doing it.

Vlad Costea (00:04:18) – And I also had other stuff on that SSD, and I lost the data. It was my boating accident moment, I think, but I’m not here to talk about that. Basically. I also did some extension block Mimble Wimble stuff for testing. And yeah, this is a screenshot of the first article that I wrote. If you are subscribed to the Litecoin newsletter, you can find it. Otherwise, I’m not sure how, but I also try to contribute to Ethereum Classic. In 2018, I wrote an email to Igor Artamonov, who was the lead developer at BTC dev and he was one of the main guys in the project. I’m not sure if he is around anymore. If anyone remembers him, maybe you do. And I also covered the ETC Dev versus ETC Labs drama back in 2018. It was pretty interesting to see how there was this new team of developers who are trying to take over the project, and it was a struggle. I always felt ideologically aligned with the original Ethereum chain because it’s proof of work, because it did not compromise immutability, and it also has a fixed supply, which means that you guys have better intentions than the proof of stake.

Vlad Costea (00:05:38) – Pro Banker guys and I interviewed Donald McIntyre on the first episode of my podcast. I think it was in December of 2018 that we did that, and I published it in January of 2019, and what he did at the time was incredible because he summarized the work of Nick Szabo, and I know that they worked together for a while, and he’s a big fan, and he read a lot of his blog posts. And what he did on my podcast was to summarize some of them, which was very good. It still is if you listen to it. But how can I still call myself a Bitcoin maximalist given that description? Because we have this classical Baltic honey badger 2018 presentation from Giacomo Zucco, who presented the four universal truths of Bitcoin maximalism that claim: everything which is not Bitcoin is a scam. Every attempt at changing Bitcoin is a scam. Every attempt at pushing people to spend Bitcoin is a scam. We shouldn’t be nice to scammers. So what the hell am I doing here? I think if some people on Twitter are going to see my presentation, they’re going to cancel me.

Vlad Costea (00:06:47) – But I fight with them for a living. I think at this point. So my understanding of Bitcoin maximalism is that you have this very secure proof of work network, which has the soundest money, and you want to build stuff on top of it. But if you want to build stuff on top of it, you need to experiment with it. First. You need to see if there’s market demand for it. You need to have market incentives for it, and you need to make sure that you’re not going to break the code base. And that’s very important. I mean, of course, every attempt at changing Bitcoin is a scam, but I believe that Bitcoin still needs to scale better and to have better privacy. And I think I said all of the points here, features are not mature enough to be added to Bitcoin until they get released on altcoins. And use cases require market demand and liquidity to incentivize contributors. So yeah, this is my approach to Bitcoin maximalism. But initially, Bitcoin maximalism was named by Vitalik Buterin in this 2014 article where he basically was arguing with a Reddit post by a guy who said that Counterparty, which is a layer on top of Bitcoin, is going to add the smart contracting features that were planned for Ethereum.

Vlad Costea (00:08:03) – And basically, the argument at the time was that Bitcoin was going to have everything that Ethereum has. But apparently that was not the priority among developers, and a lot of the activity ended up moving to Ethereum. But I’m not sure if anyone around this room remember the Bitcoin 2.0 debates and all of those projects that were being proposed with omni layer, which was mastercoin before it, and NXT, which was, I think aetherium before Ethereum came out. Anyone know? Yes. If you’re into Bitcoin history, you should look into that. Because all of these ideas with Ethereum were first proposed for Bitcoin. And you can still find some prototypes of stuff. So I did a classification of Bitcoin maximalism. And I think in the next slides I tried to zoom in because I was not sure of the site size of the projection, but I think this is pretty good. I basically identify two main types. There is the network level Bitcoin maximalism, and there’s the monetary level Bitcoin maximalism. And you have the internal network level type and the external one internal refers to the network, external refers to other networks.

Vlad Costea (00:09:16) – And there’s positive and negative. I mean I’m not sure if I can call them that. That’s why I just put them in different colors. There is Bitcoin will scale on chain through soft forks. That makes transactions smaller. I think that’s the most conservative Greg Maxwell type of statements that you can find. You guys know who Greg Maxwell is, right? Okay. I’m using the right references. And the other one is Bitcoin is only for the people who can afford it. And this is the more extreme one. This is the original toxic maximalist point of view that Bitcoin is a scarce resource and there’s going to be a race to the bottom for it, and people are going to be willing to pay thousands of dollars to get into the next block, which I’m not yet convinced that everyone is going to do that. But let’s see if that happens. But I hope we scale better until that happens. There is the external network level toxic maximalism, which says, let’s build Sidechains and layer two. And I think I identify the most with this idea.

Vlad Costea (00:10:18) – You want to build stuff that’s robust on a network that’s secure. To me, that makes sense. And there is the other approach. Altcoins and custodians are scaling layers are fine, and I think anyone who works for an exchange or BitGo. No offense, Jameson, but yeah, anyone who works for these companies and probably is pro-government is going to be like, yeah, it’s fine to keep Bitcoin like this. Don’t improve it ever. Ossify it. And let’s have these exchanges to be the main scaling layers, which I think defeats the purpose. I’m not a big fan of that. But then you also have the monetary type of maximalism which says if it’s positive, it says that Bitcoin is the hardest, most honest money known to man and all use cases, tokens and types of property will be traded for BTC and there is no wrong way to use it because it’s money. It’s yours. It’s your personal sovereignty. Not anyone on the internet can tell you what you can do with it and what you can’t.

Vlad Costea (00:11:19) – But there’s also the negative side of it, which says that everything that is not Bitcoin is a bitcoin and it’s going to zero. Don’t ever spend it like just hold it like it’s some sort of collectible. To me, that doesn’t make much sense, but people genuinely believe that they’re going to store generational wealth. I mean, that might be the case, but if you don’t use it, you’re not going to increase the demand for it. And if there is not much demand, how do you expect the price to go up? It’s an interesting paradox, and I basically try to explain why maximalism makes sense. That’s my picture with laser eyes from two years ago. I was using this on Twitter. It makes sense to build on the most secure, decentralized and politically resilient money network. Bitcoin, the currency, has the fairest free market driven distribution of all cryptocurrencies. I’m not sure if there is anyone in this room who’s going to disagree with this, but Bitcoin had this immaculate conception and it’s unlikely that anyone will be able to replicate that.

Vlad Costea (00:12:23) – Because when Bitcoin launched, nobody really expected it to be successful and nobody gave it any sort of value for a couple of years. And that was useful for development and for distribution of coins. Now, if you deploy something else, I think we had Monero, which had a similar launch, but it was within an industry and it gained market value instantly. So the fact that it’s exposed to markets means that there’s more pressure on development, there’s more pressure to mine, it’s entirely different and it’s very hard to replicate that. I think green also tried to do it and now they’re struggling to get funds. And that’s that’s unfortunate. But I hope they succeed because they had a pretty good launch. And there’s also the argument that being a maximalist protects newbies, but I’m not 100% sold on it. I think that it’s the exact opposite. People are going to buy whatever they want. They’re going to buy dog money or monkeys or frogs, and then they’re going to lose 99% of their value, and they’re going to be frustrated and unhappy, and they’re going to be like, oh, I wish I just bought Bitcoin because that one is only 45% down.

Vlad Costea (00:13:34) – That’s I think the thought process that leads people to Bitcoin y maximalism is excessive. And this is why I’m going to get cancelled on Twitter today. Basically, it’s an interesting ideology, but it’s inconsistent. And I’m saying this because, for example, there’s this book, the Bitcoin Standard, which is being sold. The arguments are very weak. If you actually read Austrian economics, you’re going to stumble into this guy named Hayek, and you’re going to discover the concept of private currencies that compete with each other on a free market. And somehow this concept of monetary Bitcoin maximalism was constructed by cherry picking some ideas from lots of different. Austrian economists, but it’s super inconsistent. If you actually read the works directly, you’re going to realize, okay, this doesn’t make much sense, but this guy Saifuddin was able to do this very successfully. And he he was able, I think, to build an entire lifestyle out of it. There are people who pay for steak dinners, just sit next to him and eat and ask him about economics.

Vlad Costea (00:14:41) – I don’t know, it’s strange. I don’t identify with that side of the community, and it doesn’t make much sense, because if you don’t have financial incentives, you can’t really have proper experiments. There are network level bitcoin maximalists who say, why don’t you do this on the Bitcoin test net? But first of all, not everything is compatible with that code base. Secondly, how do you expect people to contribute out of the goodness of their hearts and put actual effort into it? If you don’t have any incentive? I think an example is with Litecoin and this is a positive one. In 2017 when you guys activated SegWit, I think Charlie put $1 million in a SegWit address, and that was a bounty for anyone to break. And to this day I think the money was not moved. It’s still there. It’s a proof that that type of system is secure. And it actually helped with integrating SegWit into Bitcoin. It was one of the factors that contributed to that and it could not happen, I think, if it wasn’t for Litecoin.

Vlad Costea (00:15:45) – So we owe it to you guys and it’s incompatible with free markets. The idea of maximalism you need competition I think. So I dislike Ethereum philosophically, and I mean the unoriginal team, the one that’s being co-opted by bankers right now and it’s proof of stake. But I still think that competition is healthy. And the fact that I think the best part about it is that they pushed cryptography research, and they’re doing some stuff with zero knowledge proofs, which wasn’t experimented before. And for all of the monkey tokens and whatever, they actually poured some money into development, which I give them credit for that, and I hope some of it ends in Bitcoin, unless everyone is against it, because it was built on Ethereum first. But that’s a stupid primitive anyway. What I think that Bitcoin maximum is I can’t talk anymore. Maximalism does is that it regulates speech on social media because people meet at conferences. They’re like, yeah, I want to buy your token. I want to invest in your company. But they’re not going to say it on Twitter because they know they’re going to get cancelled.

Vlad Costea (00:16:53) – So it’s just a facade. There’s not much depth to this ideology, except for a few cases of people who make a living out of promoting a lifestyle. And yeah, I said this. It’s more of an ideology and lifestyle than a positive mindset because it’s not really building anything. It’s too conservative. And this goes back to this struggle with and Bitcoin between Austrian economists who don’t want to change anything, and Cypherpunks who actually desire to bring more features. And I think it’s the cypherpunks that build stuff. And I have a lot of respect for this. And I think you guys, the guys who are building stuff for doing what you’re doing, and I also made this slide, which is going to be also controversial and probably get me canceled on Twitter. Who benefits from maximalism? I mean, who also benefits from it? The governments have figured out how Bitcoin works, right? So they don’t want it to change because if it changes, they have to catch up. And if it remains like this, they can tax it.

Vlad Costea (00:17:54) – They can overregulate ramps and off ramps. They can ask you to ban certain IP addresses on your nodes, or they can make that list for banned addresses that you’re not supposed to mine if you’re a miner. I think there was only one mining pool that complied so far it was called marathon or something. Is anyone from marathon here? Good. Anyway. Surveillance companies also benefit from Bitcoin not improving. There is Chainalysis which is a famous example. I think Brian Bishop was in the back, was invited to audit their code and they they called you incompetent or something. They were like, yeah, you’re not good enough for our code base because they don’t want to show it. They don’t want to get exposed for how that works. And they make a lot of money from the fact that Bitcoin doesn’t add any type of privacy, at least not on the base layer. But there is the coinjoin stuff, which is pretty great if you look into it. Financial institutions that play the pump and dump game, while they sponsor podcasters who tell their listeners to never sell or spend.

Vlad Costea (00:19:02) – These guys make a lot of money, and there they make up their memes and they tell you don’t sell until 100 K and then they sell it 68 and you end up holding the bags and they sell and they make their money and they play this game and they benefit from this ideology of never selling. Large custodians and KYC compliant exchanges also make a lot of money because, first of all, they issue their own tokens and the experiment with different networks, and they benefit from the fact that Bitcoin does not really change. And of course, toxic influencers who sell seats at steak dinners, they make a lot of money from this lifestyle. My final message to you. And I see that I have 13. No, I’m over time by 15 seconds. So I think I timed this well. Never stop improving Bitcoin. I think it’s a very solid monetary network. You don’t want to break it. I agree with that. But don’t stop coming up with proposals and thinking of better ways to accomplish this. What the mission of this project is to make payments really trustless and enable peers around the world to exchange money without any third party in the middle, without the permission of any government, and preferably in a scalable, scalable and affordable way.

Vlad Costea (00:20:23) – So thank you.

Michael Parenti (00:20:30) – So one of my favorite things is the Bitcoin community. I think that actually bitcoin and crypto in a larger sense as a community of of of communities. Do you feel that Bitcoin maximalists have have gained or lost in two places, one public messaging mindshare. And secondly, you know, in in terms of a broader influence that’s outside of our communication bubbles.

Vlad Costea (00:21:12) – Let me explain the concept through this lens. I spent a lot of time asking myself if I’m part of a cult. And I ask myself, does money need to become a religion for it to be successful? And does the US dollar need this sort of advertisement? And they do, but with governments because that’s how they operate. For Bitcoin to succeed doesn’t need to become a religion. Does it need all of these memes and all of these advices advice? It doesn’t have a plural advice about how you should use it. I don’t think so, but this seems to work with some people. There seem to be these guys who dedicate their entire lives to defending Bitcoin at any cost, and by defending it also means making sure that there is never any sort of change unless it comes from about three developers that they trust.

Vlad Costea (00:22:02) – And I also think that’s a bit dangerous. It’s it tends towards a single point of failure, but that’s not up to me to evaluate. I think they did a good job so far. So I’m not in a position to criticize themselves, but the situation. Did Bitcoin maximalism hurt adoption? I don’t really think so, but in some people it triggers that stubbornness and they say, you know, I’m not going to do what you tell me to. I’m going to do the exact opposite. So to rebels, it’s I guess off putting it makes you not want to get involved in the community. But there are I guess most people are not like that. And it’s unfortunate, I think, because at least in the US right now, Bitcoin is sort of the compliant and the clean coin and they don’t want to be associated with, you know, the past of Bitcoin which was Silk Road or just rebels trading.

Michael Parenti (00:22:59) – So I think that the, the, the strongest place or the most prominent place that we see Bitcoin maximalism being active is in scaling solutions and in developing on top of Bitcoin.

Michael Parenti (00:23:15) – Our most recent debate is drive chains. And you dive often into these, you know, into these hornet’s nest of of of discussion. So do you think that Bitcoin maximalism really actually has an effect on building on top of Bitcoin or not. Is it, you know, noise in the in the ether.

Vlad Costea (00:23:42) – I think there are a lot of ideologically driven guys work on Bitcoin for the simple reason that they want to work on Bitcoin, but I think they also do pretty well financially and they can afford to take losses over the short term. Were developing projects. There is this guy who is building RGB on top of lightning and he’s very driven. I think he’s going to speak here tomorrow. Maxim Orlovsky.

Michael Parenti (00:24:05) – He is.

Vlad Costea (00:24:05) – Yeah, very nice fellow. I’m a big fan of his work, but at the same time he he sacrificed many years of his life just burning money out of his own pocket, developing that protocol. That’s not even getting the kind of reception that he wanted. So it’s tough. I gotta admit, there’s not much money in Bitcoin.

Vlad Costea (00:24:26) – There’s a lot of money being thrown at Ethereum projects. But for for Bitcoin developers, there’s not as much.

Michael Parenti (00:24:34) – So where do you think that money can come from in the ecosystem to support Bitcoin development? You know, where would you like to see more activity that we have development happening like we see on proof of stake chains.

Vlad Costea (00:24:48) – Well in proof of stake chains, most of the money comes from exchanges, which are the most profitable businesses in the space. In the case of Bitcoin, sometimes it comes from exchanges, but most of the times it’s a mix between VCs and early whales who just want stuff to get built. And I think the whales are the ones with the best intentions. They don’t care about anything except for improving something that they want to be improved. I think these guys are actually the best kind of investors in development, but I think right now Bitcoin is lagging in this department mostly. I think we’re stuck in a cultural paradox where simultaneously you’re supposed to not spend your Bitcoin ever, because that’s supposed to be passed on to your children and it’s your generational wealth.

Vlad Costea (00:25:38) – But at the same time you’re supposed to increase demand for it. And how are you going to increase demand unless, you know, someone actually sends their coins to someone else. And I don’t know how that’s going to play out. But I do agree that there needs to be more money in development. I think lightning right now, which is the biggest second layer, is under funded. It was a big deal when Lightning Labs raised the money back in 2019. It was all over the news and they were so happy. But it seems like VC money also perverts the development. I think Lightning Labs, for example, switched from wanting to make lightning super efficient and scalable to wanting to add stablecoins and basically the US dollar on top of lightning. And I can understand that there’s market demand for this. But at the same time, not only that they diverged from the initial plan, but also it seems like this is the influence of their financers.

Michael Parenti (00:26:41) – And so there’s always there’s always trade offs with, with finance.

Vlad Costea (00:26:44) – And this happens a lot in the space. So if you’re an OG whale and you want to see sidechains or whatever, you can contact guys who build stuff.

Michael Parenti (00:26:53) – Does anybody have a question for Vlad? Because I really think he’s a wealth of cultural information and, and a very solid observer about what’s happening out there in the Bitcoin land. Otherwise, okay. We’re not done yet. We got a question back in the corner. Who is it to raise their hand? Oh, okay.

Speaker 3 (00:27:27) – Hi, Vlad. Just a quick question. I saw some reports that were saying that around 17% of the Bitcoin, which is held is not being used for payments and transfer and financial interaction. So do you think that this is like a cause for a cause down effect for the social layer that Bitcoin has?

Vlad Costea (00:28:00) – So 17% of the Bitcoin supply is not moving. Is that the argument? I mean, as a libertarian, I’m going to say that it’s none of my business and it’s somebody else’s money if they don’t want to use it.

Vlad Costea (00:28:12) – That’s fine. It’s also a deflationary system. So in a sense, this benefits the price and it makes everyone else’s coins more in demand, which I think is good. It’s not up to me to decide how they should be using their coins. It’s there is just like there’s that debate about Satoshi’s coins, supposedly because it’s very hard to prove that the addresses are his or hers or theirs, whatever. There was this early mining stage when the difficulty was low, and there’s only an assumption made by Sergio Lerner, who said that Satoshi owns 1 million coins. But there are people on the Bitcoin Talk forums that came out and said, you know, I mined at the same time, and some of these addresses are actually mine. So it’s interesting when you think about it. I think many of these coins that you’re referring to, I think Satoshi owns supposedly 5% of the supply. That one never moved except for that one transaction to hell. Fini. And if it ever moves. Maybe it could be Satoshi returning, but my theory about it is that this is basically a bounty, and it’s a way to prove that for as long as the funds in these addresses don’t move, the cryptography cannot be cracked and you can’t steal.

Vlad Costea (00:29:37) – So if these funds are safe, it means that yours are also safe. This is my personal understanding of the situation. This can change, but I think also that the market is mature enough at this point. If all of these coins ended up being sold, someone would buy them even if the price impact would be great. There is always someone on the other side who’s willing to take the risk to buy the Bitcoin dip, and I think that’s a positive side of the whole money cult situation. There is this belief that Bitcoin is going to be very valuable in the future, and it turns out to be a self-fulfilling prophecy in a sense, because you project that energy and you present Bitcoin as a good form of money and other that creates demand for it, other people are going to want it more. But to be more direct, I don’t think it’s my business to tell others what they should be doing with their money. If they don’t want to move it, that’s fine.

Michael Parenti (00:30:33) – So next question. Our last question will be from Frank Holmes.

Frank Holmes (00:30:37) – Thank you Vlad. Frank Holmes, the co-founder of Hive Digital Technology for crypto mining company. And I thought your presentation was very thoughtful and balanced. And I’ve come from the world of gold gold funds. And I found the gold fanatics, the gold bugs, very similar to the maximalists that really they have a deep down anti-government thesis. And I found that most of them own little gold. They really just want to vent. So I’m just wondering the same thing with the Bitcoin real hard core Maximus. Do they really own that much Bitcoin?

Vlad Costea (00:31:20) – Honestly, I think it’s the opposite. But Bitcoin is a very special case where it doesn’t matter how much you own, people are going to defend it. They’re going to say yes, I don’t want this to be overregulated. Even if they own like $100 of bitcoin, they’re going to care about it. It’s different from any other monetary system in this regard. But in my experience, the guys who own a lot of bitcoin, they’re also invested in other projects. I think the ones that are the most toxic and the ones that argue with you on social media are the ones that came after 2017 and were brought up in this school of toxic maximalism, which I highlighted here, which has these universal truths.

Vlad Costea (00:32:02) – Right? These are. What do you call them? The Ten Commandments. But there’s only four of them. I remember at one point there was a conference I’m not going to name which one. And one of the organizers said, can we allow these people on stage because they ask you to spend your Bitcoin and you’re not supposed to spend your Bitcoin? And I was like, what? It’s it’s not anyone’s business what others do with their money. It’s it seems like to some extent this ideology gets towards hating free markets. And I think that’s where I disagree the most with it.

Michael Parenti (00:32:37) – Yeah. My favorite way to put it is, is Bitcoin is money for enemies. And that’s kind of like pretty much the whole point is that no matter what it is that you think, you can’t control the network, nor can anybody else tell you how or what you do or don’t do with Bitcoin. And I think that one of the things I.

Vlad Costea (00:32:57) – Think Amir has a question.

Michael Parenti (00:32:59) – Okay, cool. Let me just finish my statement and then I’ll run over to to Amir.

Michael Parenti (00:33:04) – This is also a key point about the standing bounty. Right. So the Satoshi coins being being a bounty for the security of the network. And I’ve always thought that that’s pretty much what, what what Bitcoin is, is a standing bounty to fuck it. And. Remain pretty secure. The game theory is has been pretty good.

Vlad Costea (00:33:28) – I just want to say that it’s an honor to speak before Amir. He’s a legend.

Amir Taaki (00:33:33) – No. Your talk was very nice. Thank you. I saw a lot of Bitcoin people now is talking about Blackrock ETF. They’re very excited about that. Maybe you can offer some comment commentary. Everyone’s going oh Blackrock ETF. It’s the new bull market coming in.

Vlad Costea (00:33:55) – I think that’s just the new Coinbase for excited I guess also some of the influencers tweet about ETFs. But it defeats the purpose. This is not why Bitcoin exists. That’s paper money. It just means that some institution is going to be able to buy and sell contracts that are not necessarily backed by proof of work verified bitcoin.

Vlad Costea (00:34:20) – So we don’t even know if that’s going to create inflation. And I don’t mean inflation in the Bitcoin network. I mean inflation in the financial markets where institutions are going to buy this paper Bitcoin without ever actually verifying or touching the real coin. That’s a bit frightening if you ask me, but it’s beyond anyone’s control. They can submit ETF proposals. They can. So far, I think about 17 of them got denied. Maybe if Blackrock does that it’s more special and they get approved, I don’t know, but it’s beyond anyone’s control at this point. There’s also a rumor circulating that Blackrock might release their own ESG compliant fork of Bitcoin, which is switching to proof of stake. I don’t know about that.

Speaker 6 (00:35:09) – But some people are excited that they that’s yeah, a real good one.

Vlad Costea (00:35:15) – Some people are excited that they can sell some coins because if there’s a fork they can dump something.

Michael Parenti (00:35:21) – Well, the thing that Wall Street is best at is derivatives. And I’m sure they’re going to do whatever it is that they can derive from from Bitcoin.

Michael Parenti (00:35:30) – Vlad, such a thoughtful, charming, wonderful person in our community. Thank you so much. The best part for me about about moderating conferences such as this is really to be on stage with people that I know, love and respect. The next one up is Amir Taki, who I’ve had numerous arguments and disagreements with over the years.

Vlad Costea

I'm here for the freedom, censorship-resistance, and unconfiscatability. What about you?

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