I posted the most common Bitcoin misconceptions in this article ( 
).
Now, more people than ever are paying attention, so it's a good time to recap.
1) “There can only be 21M coins.”
Reality: Protocol caps base units at 21M BTC. Markets can (and already do) create synthetic claims (ETFs, futures, swaps, rehypothecated custodian balances) that exceed 21M. Price discovery then reflects claims supply, not just on-chain supply.
Implication: Paper-share ↑ ⇒ realized vol ↓; upside rallies capped; custody proof matters.
2) “Stock-to-flow proves long-term targets.”
Reality: S2F ignores synthetic supply, demand substitution (stables), and policy gating. Narrative comfort, not a pricing model.
3) “Hashrate up = security up, full stop.”
Reality: Pool control and policy clients determine censorship risk. Top pools ≈ majority of hashrate; pools, not individual miners, decide templates in most cases. DATUM/Stratum V2 are not ubiquitously enforced.
Implication: Watch pool policies, OFAC filtering, template standardization — not just hashrate charts.
4) “Miners can’t censor; the network routes around it.”
Reality: With a few pools coordinating templates/filters, effective censorship windows are feasible (delay/confiscate fees, exclude sets). Economic pressure (insurers, exchanges) makes templates converge.
Implication: Throughput is less of a limit than who writes the block template.
5) “51% attacks are unrealistic.”
Reality: A sustained double-spend is unlikely; policy-driven soft censorship via pools is very realistic and cheaper.
Implication: The live risk is transaction selection bias, not sensational double-spends.
6) “Protocol is immutable. It’s like TCP/IP.”
Reality: Consensus changes are rare, but policy-level changes (relay/size/standardness) shape what’s practically allowed.
Implication: “Immutability theater” can coexist with effective governance via defaults.
7) “User-activated soft forks prove ultimate user power.”
Reality: UASF worked in that instance with massive social coordination + aligned miners/exchanges. Don’t generalize; future coordination may face legal/app-store/bank choke points. Past upgrade processes (e.g., BIP9, BIP8, “Speedy Trial”) revealed that miners and coordinated developers can accelerate or block changes faster than ordinary users can veto. Power concentrates among aligned institutional actors.
(👆️ This was the entire premise for why BIP-110 was going to work.)
8) “It can’t be censored.”
- Reality: The perimeter censors (banks, app stores, exchanges, cloud), not necessarily the base layer. That’s enough to throttle adoption.
Implication: Watch wallet distribution policies, travel-rule hubs, blacklists.
9) “ETFs ‘legitimize’ Bitcoin.”
Reality: They paperize exposure, centralize voting/custody, and let Wall Street set the tape via derivatives basis and inventory.
Implication: Vol suppression ↑; adoption ↑ (in accounts); self-custody share ↓.
10) “If it’s better tech, people will adopt it.”
Reality: Convenience beats truth. Stables with KYC + superior UX win Medium-of-Exchange until incentives flip.
Implication: Bitcoin Store-of-Value containment is the base case; Medium-of-Exchange adoption requires mass incentives or policy failure.
11) “Education will fix it.”
Reality: Behavior follows defaults and rebates, not whitepapers. Policy can make stables default, apps can hide Bitcoin; outcomes follow.
12) “Institutional adoption = censorship resistance success.”
Reality: Institutionalization usually means perimeter compliance, paperization, and template steering.
These are just a few.
View quoted note →
What made me sell most of my Bitcoin a few months ago
I am not bearish on Bitcoin's fiat-denominated price. I am bearish on Bitcoin's odds of becoming mass MoE, and I am pricing the coordination tax.
