Whenever concerns emerge regarding Bitcoin’s long-term prospects trending in a negative direction, a common dismissal refrain is, “Well, tell us what to do then.” This is used to dismiss any concerns about regulation leading to regulatory capture, about deeper involvement of certain entities leading to greater risks to the consensus process, about any kind of failure modes involving Bitcoin censorship resistance, and the ability to allow a real erosion of freedom.
“Well, what’s your plan?”
Use Bitcoin. The consensus on Bitcoin revolves around two important variables: economic actors and miners. Economic actors decide whether a set of consensus rules has value by deciding whether to honor their part of a transaction based on validity according to their consensus rules. Miners decide within which set of consensus rules they will mine, choosing the one that presents them with the highest value.
Users who actually use Bitcoin—that is, to transact and run businesses, services, and other protocols for using the blockspace—gain influence through both mechanisms. A set of consensus rules needs two things, users who will appreciate it and miners who will mine it. Users who purchase blockspace attract miners with increased revenue beyond that created by the block subsidy. To the extent that fees constitute miners’ revenue, the users who generate those fees have some sort of commensurate “power” over the miners. They decide, in case of disagreement on the consensus rules, to which party to allocate the revenue, meaning that miners would have to follow those rules to earn it.
The threat of institutional adoption and regulatory encroachment poses a long-term risk to Bitcoin if people simply stop doing anything with Bitcoin but hold on to it. In this type of environment, regulations can affect miners and brokers and greatly influence events related to consensus changes. They may attempt to veto changes that are useful and valuable and try to promote those that are useless or harmful.
So what do we do to counter it? We actually use Bitcoin for more than just holding and investing. That that’s why scalability is so important. Because it allows more people to directly interact with the system in this way, to directly exert their influence. The more we actually use Bitcoin, the more influence users collectively will have to exert on consensus in the future.
If Bitcoiners relegate bitcoin to nothing more than an asset to be held, something to be left idle, we will eventually lose it. We will lose our say and influence in the markets facilitated by bitcoin, we will lose our influence over the consensus rules that miners choose to mine, we will lose everything.
Bitcoiners need to be active, not passive. We need to transact, we need to build more assets, consume more blockspace. With payment networks like Lightning or Ark, uncensorable derivatives markets using DLC, even stupid things like Ordinals and Subscriptions. Demand for blockspace must come from distributed and diverse sources, not just large institutions and companies easily subject to regulatory and government influence.
Bitcoin is a “use it or lose it” thing. I’d rather not see it lost due to apathy for people who truly care about freedom.
This article is a Take. The opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.