The Cynics and Idealists of Bitcoin

There is something to the stereotype of naive dreamers and idealists, or cold hard realists and cynics. Stereotypes don’t just come into being baselessly, there is a kernel of truth to them, otherwise they would not have spread virally as an idea in the first place. But they, as well as the worldviews they espouse, are also exaggerated beyond that kernel.

Bitcoin is currently stuck in a game of tug of war between the naive idealists and the jaded cynics.

On one hand, the idealists argue that we already won. We don’t have to do anything, Bitcoin is magically guaranteed success. It’s already going to take over the world, everyone is going to own it, it is the best store of value ever. That’s all it needs to win and succeed. No improvements needed.

On the other hand, the cynics argue that we’ve lost, or are going to. That short of a total overhaul changing Bitcoin drastically, there is no way Bitcoin can succeed in the world. It will become captured and useless. “Who knows where to start?” is the response to asking for what improvements are needed.

Both of these extremes dominating the public dialogue sweeps attention away from two important things, the reality of what can already be done with what we have, and how substantially that reality can be expanded with even very small and simple improvements.

As things stand right now, Bitcoin to have any degree of censorship resistance and privacy for a big portion of the world would depend on custodians. The best we can do in that regard is lots of small and local chaumian ecash mints, but to run an ecash mint requires running a Lightning node.

Lightning is complicated, and screwing up and losing the most recent channel state can lose all of your money. The design allows your counterparty to steal all of your funds if you try to use an old channel state after updating it. CTV + CSFS would give us LN-Symmetry, a type of Lightning channel giving a new way for channels to work. Instead of using an old state allowing the other party to take all your money, LN-Symmetry channels would allow them to just “cut through” all the intermediary states and spend your old state into the most recent one on-chain, ensuring everyone gets the correct amount of money.

That one small change (and that is by no means all CTV + CSFS enables) would radically change the landscape of who would be capable and willing to run a local ecash mint. The risk of losing everyone’s money through incompetence would almost disappear.

This one small new functionality would heavily improve Bitcoin’s odds of staying private and censorship resistant. Does it scale self custody to the whole world? No. Does it drastically improve Bitcoin’s value despite store of value maximalists’ claim improvement isn’t needed or possible? Absolutely.

Bitcoiners need to stop focusing solely on the extremes and poles when it comes to possibility in this space, there is a wide open field mostly unexplored between them. If we really want to know our odds of success, the limits of what we actually can and can't do with Bitcoin, then we need to explore that field. 

This article is a Take. Opinions expressed are entirely the author's and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.