Thread - Nostr Hypermedia

Why Bitcoin Core's v30 update is a potentially-deadly attack on Bitcoin. This is Bitcoin's most important fight, but very few people realize. The Bitcoin Core devs don't like filters, but they want to filter you out of the conversation with appeals to authority ("You're not a dev, therefore you can't have an opinion"), and this aims to misdirect from the potentially deadly consequences for Bitcoin's main selling points - decentralization and security. Bitcoin Core v30 removes the long-standing ~80 B OP_RETURN relay default, effectively making large OP_RETURN payloads easy by default and allowing multiple OP_RETURNs per tx. Let's think about the implications, and let's think in terms of who benefits from more, larger, easier on-chain data and who pays the externalities. 1) Regulatory honey-trap - If the chain becomes an easy host for arbitrary blobs, the next scandal (e.g., illegal content embedded, possibly child p--n) gives lawmakers pretext to reclassify full nodes as "content distributors/publishers". That paves the road for licensing, KYC for node operators, takedown obligations, or "registered node provider" regimes. Winners: compliance vendors, "approved node" cloud services, analytics firms. Losers: pleb nodes, self-hosters. "Node = Publisher" is the obvious consequence. Legislators/regulators classify full nodes (or relays) as content hosts subject to: registration, record-keeping, geo-blocking, lawful-order response, and civil/criminal liability for stored/relayed contraband. 2) Centralization by cost - Bigger payloads -> higher bandwidth, storage, and relay complexity. That prices out low-end hardware and nudges operators into cloud + professional node providers. Once nodes centralize, policy steering (terms of service, geo-fencing, block filters) becomes trivial. Hardware/storage/bandwidth creep + legal fear -> pleb nodes switch off; reachable network centralizes in a few jurisdictions/clouds. Propagation degradation follows. Big OP_RETURN payloads cause mempool churn, higher orphan risk for small miners, and more policy divergence (rejected tx sets). Cloud bans are a given. Major cloud providers update AUPs (Acceptable Use Policy); ban default Bitcoin full nodes or require approved builds with content filters and logging. 3) Narrative containment via reputational torpedo - If Bitcoin is publicly associated with offensive embedded data (e.g. child p--n), the average institution deems it tainted and un-brand-safe. That pushes mainstream flow into ETFs/custody wrappers ("you can have price exposure without touching the messy network") - "hold paper Bitcoin, not sovereign money". "Bitcoin hosts illegal content" headlines will go mainstream. Enterprises’ risk committees will freeze direct chain integrations. VCs will pressure wallets to gate content or drop base-layer support. The "digital cash" brand morphs into "ETF commodity with a messy chain only weirdos run". 4) Fee engineering for aligned incumbents - More non-monetary data -> fatter blocks and intermittent fee spikes. Miners, large pools, and indexing/ordinals marketplaces monetize that; base-layer Medium of Exchange users get squeezed. Indexers, ordinals marketplaces, analytics, and miners want the payloads and their fees. Capture today, externalize tomorrow. Lightning channel management costs rise, discouraging grassroots payments. Higher, spikier base fees + greater policy divergence -> worse confirmation predictability for merchants and channel ops. Lightning payment UX deteriorates (more expensive opens/renews), so retail sticks to KYC wallets and custodial L2s where operators can implement content gates. Merchants and payroll providers pull back from native chain integrations; Medium of Exchange stalls, Store-of-value-in-wrappers dominates. 5) Make "money-first" resistance look like "censorship" - If a minority runs stricter policy (e.g. Knots), they can be framed as censors. That optics battle helps consolidate Core-default policy hegemony and marginalizes filter-heavy peers. 6) Strategic ambiguity -> de facto policy power - Turning off a guardrail without a crisp replacement invites policy shopping: pools, relays, infra middlemen step in with private standards (block-lists, fee tiers), shifting power from open-source repos to commercial choke-points. 7) Supply ordinals markets - Whether you like them or not, inscriptions are a lucrative niche. Default-easy OP_RETURN makes commercial indexing and data-markets cleaner to build (and sell) than witness hacks. 8) Preemptive positioning for "responsible chain" legislation - Once problems surface, the coalition can say: "We tried neutrality, now we will ship safety-by-default with industry partners". That locks in approved filters, approved node providers, and paid audits. 9) UTXO optics jui jitsu - Moving data from witness/UTXO tricks into OP_RETURN lets maintainers claim they are reducing UTXO bloat while ignoring legal surface expansion; technically true, but politically combustible. 10) Tempo warfare - Pushing this quickly is the only way it passes. It relies on people assuming that Bitcoin Core devs and Bitcoin plebs are incentives aligned - which is clearly not the case. It also gives Core devs an out - we might've rushed the change and not accounted for unforeseen consequences. This is Pre-crisis positioning: Land defaults before a scandal, so the post-scandal "fix" can be centralized filtering stacks run by approved partners. This move also aims to Sync with upcoming CBDC/ID roll-outs and ETF growth-channel demand into supervised rails, keep base layer messy enough to be professionally intermediated. 11) Money-transmitter bleed-over. Some jurisdictions conflate node/relay ops with financial services; "unlicensed operation" cases follow. An unlicensed money transmitter refers to a business or individual that transmits money without the required legal authorization. In the context of a Bitcoin node, if it facilitates transactions or transfers of Bitcoin without adhering to regulatory requirements, it could be considered operating as an unlicensed money transmitter. So how bad can it really get? 1) v30 ships, payloads climb, first high-profile illegal blob incident occurs (e.g. child p--n). 2) Cloud bans default nodes; insurers exclude coverage, exchanges move to approved relay providers. 3) A "Safety Act" passes in one big jurisdiction, others copy. Registered node providers become a thing, home nodes risk non-compliance. 4) Node count falls, mempool policy homogenizes around commercially filtered relays, self-run sovereignty shrinks. 5) Base-layer fees remain elevated/noisy, MoE adoption slows; ETF/custody exposure grows -> containment complete. What should you do? Run Knots or don't upgrade to Bitcoin Core V30. Just look at who the beneficiaries of the change are - the beneficiaries are the rails: analytics/compliance (chain surveillance), approved node providers, miners with scale, ETF/custody platforms, policy-aligned cloud vendors, and all fiat-horny governments. Who are the losers - the wallets that rely on broad unfettered relay, small miners, and grassroots payment businesses. It's not complicated: - If you wanted Bitcoin to become a supervised financial asset rather than a grassroots medium of exchange, you'd normalize big, default-relayed data, wait for the predictable scandal, and then usher in licensed nodes, filtered relays, and custody dependence - all while saying it's just "free market mempool policy". Do you remember when "Elizabeth Warren" (of course it's not her, its the deep State central bankers) attacked Bitcoin nodes - painting them as unlicensed money transmitters. This happened in December of 2023. She argues that Bitcoin's decentralized nature allows for unregulated activities, including operating as an unlicensed money transmitter. She argues that without proper oversight, Bitcoin can facilitate illegal activities and evade traditional financial regulations. Well this is Bitcoin Core's solution to Bitcoin's decentralization and security "problem". Problem -> Reaction -> Solution. This is how the deep state pushes the "Bitcoin node unlicensed money transmitter" narrative into laws and regulations. Bitcoin is in the fight of its life. You can still get fiat-rich without decentralization and security, but in my eyes, without them Bitcoin dies.

Replies (4)

Control-Plane Capital . 3 months ago

Some additions: - The big losers are: sovereign node-running plebs, self-custody payment startups, small miners/relays (regulatory and infra friction crush unit economics). - On the Warren "nodes = unlicensed money transmitters" push: * Problem: immutable data + AML narratives -> "unregulated gateways". * Reaction: sensational incidents (illegal content, sanctions-evasion headlines). * Solution: classify certain node roles (providers/relays/miners/validators) as financial institutions -> licensing, KYC, logging, take-down obligations, and approved node providers. The OP_RETURN default loosening gives policymakers fresh material to argue nodes are distributing content, not just validating money. It raises the price of running a home node and soft-forces centralization into clouds and registered operators. That’s exactly how you’d operationalize containment without bans. - Higher resource floor -> pleb nodes attrition; policy homogenization around commercial relays; miners adopt template blocks and soft blacklists. Standardized "safe node" stacks. A small set of approved client builds and hosted relays becomes the norm; home nodes dwindle. - "Bitcoin hosts illegal content" narrative sticks; most people and corporates retreat to ETFs; developers optimize for KYC rails and EVM-style platforms for "utility", not base-layer BTC payments. - BTC evolves toward a regulated commodity with capped blow-offs and violent liquidations; upside captured by rails, downside weaponized by structure. My base case Bitcoin fiat price prediction around these events: 1) Illegal content shock: headline embeds -> "nodes = content hosts?" -> cloud/AUP (Acceptable use Policy) scares -> compliance FUD -> Bitcoin Price drops significantly (e.g. 15-35% from pre-headline level in days-weeks). 2) Relief / "Clarity" pump: Bills/agency guidance sketch a registered/filtered-node path; ETFs = "safe exposure". Governments start to introduce more rules/regulations, the Bitcoin price recovers and significantly increases because of 'regulatory clarity'. The Bitcoin price pumps into new all time highs, e.g. 30-80% off the local low over weeks-months as ETFs absorb flows and "policy certainty" narratives hit TV. This price increase makes Bitcoiners not want to fight the regulation. 3) Managed plateau: derivatives + ETF plumbing keep upside orderly; self-custody payments stagnate. The containment phase: range-bound, capped rallies into options walls; cycles continue but blow-offs fade faster. This scenario fits state incentives (domesticate, don't destroy), matches market-structure (CME/ETF dominance), and leverages the scandal to cement licensed infrastructure without overt bans. It's the elegant path: use scandal to legitimize licensed infrastructure, then market-structure (ETFs, options gamma, weekend liquidations) keeps price in a pen. Holders feel wealthier and resistance evaporates. Who wins/loses: - Winners: ETF issuers/custodians (BLK/BK/STT), CME/ICE, cloud & ID rails (MSFT/AMZN/GOOGL), surveillance/compliance, miners with scale that play ball. - Losers: home-node culture, privacy tooling, small miners/relays; L1 MoE (Medium of Exchange) UX deteriorates at the margin. The Warren-style "nodes = money transmitters" push is the exact pretext pipeline: Problem (immutable blobs) -> Reaction (public outrage) -> Solution (licensed/filtered nodes). It doesn't have to criminalize everyone, it just needs to raise the cost until approved providers dominate. Core's policy shift - intended or not - expands the surface for that play.

ManyKeys manykeys@npub.cash 3 months ago

> That paves the road for licensing, KYC for node operators, takedown obligations, or "registered node provider" regimes. Most pleb nodes run behind TOR, good luck enforcing licensing. > Centralization by cost - Bigger payloads -> higher bandwidth, storage, and relay complexity. That prices out low-end hardware and nudges operators into cloud + professional node providers. The chain can't bloat beyond the max block size, the limit is still intact and doesn't chnage. > The "digital cash" brand morphs into "ETF commodity with a messy chain only weirdos run". People are already morphing into ETFs rather Rohan tang self-custody, we can't influence the paths people take yo bitcon. > Indexers, ordinals marketplaces, analytics, and miners want the payloads and their fees. Capture today, externalize tomorrow. The marginal added value to miners from ordinals/inscriptons so far is negligible, there's no incentive for them to ruin #Bitcoin because of that negligable upside. > Make "money-first" resistance look like "censorship" - If a minority runs stricter policy (e.g. Knots), they can be framed as censors. Nobody can decide for the plebs winch nodes/versions to run, it's the plebs' choice to make. Time will show that all this fiasco is a nothing burger. Cleaner code with less filters lead to more use cases, which in turn leads to better security and higher decentralization.

Control-Plane Capital . 3 months ago

Let's debunk the most common Bitcoin Core v30 arguments that I've seen circulate. Sadly, we are sleepwalking off a cliff. I keep seeing this Andreas Antonopoulos clip in which many assumptions are made and is taken out of context. The TLDR statement he makes that I'm going to address is: - "If you pay the fee, your transaction is legitimate. There is no spam transaction, there is no such thing as an illegitimate transaction. There are only transactions that did get mined and transactions that didn't have enough fee to get mined." And here @Stacking Functions asks a very important question: - "What happens when 'the market' is being distorted (and possibly attacked) by state actors with an infinite money printer? Is that a 'free market'?" To say that "if it pays a fee it's legitimate" is a market-purist general truth, but it ignores adversarial demand with non-economic motives (a state actor willing to burn money to shape outcomes). 1) Why "fee = legitimacy" is incomplete A free market doesn't only include utility-maximizers. It also includes strategic buyers whose objective is not settlement utility but congestion, legal traps, and narrative damage. The fee market can't distinguish between: - a million normal, pleb payments and - a million high-fee, low-utility writes whose sole purpose is to raise the global fee floor, bloat the chain, or embed toxic payloads. If someone with deep pockets (e.g. state actor) wants a persistent 200–400 sat/vB floor to price out MoE (Medium of Exchange), they can try to buy it. 2) Concrete economics of a fee-floor attack - Rough vBytes per block ≈ 1,000,000 vB. - At 50 sat/vB, the cost to fill one block ≈ 0.5 Bitcoin. - At Bitcoin $114k, that’s ~$57k/block; ~$8.2M/day (144 blocks). - At 200 sat/vB, ≈ 2 BTC/block; ~$228k/block; ~$32.8M/day. A major state could sustain this for weeks/months if the policy goal (cripple retail MoE, force users custodial, create "Bitcoin hosts illegal content" headlines) is valuable enough. Miners would happily include these transactions (fees up, revenue up); small-payments get crowded out; most users slide toward custodial L2s or stable-coins (CBDCs). That's containment by price, not protocol. 3) The usual counter-claims - and why they don't fully save you - "But the attacker is paying a real cost; Bitcoin wins on miner revenue" - True; miners profit. But if the policy win (killing retail MoE, justifying compliance clients) is worth $30–50M/month to a state, they can keep burning. - "Market adapts; fees settle back" - Yes, fee spikes mean-revert. The question isn't spikes; it's a new fee floor (e.g., 50 -> 150 sat/vB median) that permanently prices out low-value payments and normalizes custodial pathways. - "Users move to Lightning/Fedimint; problem solved" - Those centralize at the edges (big custodians, popular guardians), where legal and policy pressure is easiest. Great UX, easier to KYC/blacklist - mission accomplished (for containment). - "We'll counter with node filters" - Per-node filters just shift the politics to who runs whose filter. If enough pools embrace policy templates (insurer/utility pressure), miners - not your node - decide settlement norms. The Andreas Antonopoulus statement that's taken out of context ("fee = legitimacy") is neat for peer competition but naïve in an adversarial, policy-driven world. If default policy makes large arbitrary data easy (Bitcoin Core v30), you've just lowered the attacker's operational cost and raised the political payoff for compliance clients and app-store/cloud choke-points. That's not a protocol break; it's a governance win against MoE. 4) Why v30-style policy loosening (OP_RETURN large payloads) matters "State actors can attack the network right now, so how does Bitcoin Core v30 change things?" Bitcoin Core v30 removes the long-standing ~80 B OP_RETURN relay default, effectively making large OP_RETURN payloads easy by default and allowing multiple OP_RETURNs per tx. Before vs after (at the policy layer) - Before: Standard mempool policy discourages very large arbitrary data in policy (nodes won't relay non-standard forms by default). You could still stuff data (e.g., Taproot/witness tricks), but you have to work around policy filters, custom peers, or miner relationships - more work, more obvious. - After (if defaults relax): Arbitrary-sized OP_RETURN payloads become "standard enough" to relay by default. That: * makes spam cheaper to coordinate operationally (no special peering, no boutique scripts); * reduces attribution (looks like "enthusiast data" rather than an obvious custom exploit - e.g. by a state actor); * and widens the "liability channel" (malware/CSAM-in-chain is one broadcast away for anyone with a wallet kit). The effect under a Core v30-like default: - It's easier for a deep-pocket actor to spam-attack: less custom infra, fewer "nonstandard" hurdles, more plausible deniability. - Consequences: sustained high fee floors, node-operator legal risk, centralization pressure (compliance nodes, policy-pools), and stronger MoE suppression (push to custodial/stable-coin [CBDC] rails). That's exactly the containment corridor I've described in my previous posts. So what about Bitcoin Core v30 makes the attack surface bigger? 1) Congestion efficiency: - OP_RETURN outputs are provably unspendable, so they don't bloat the UTXO set - but they do bloat block bytes and mempool memory/bandwidth. - For a fee-floor attack, OP_RETURN is an efficient "pure byte" filler: maximum congestion, minimal future state; attackers aren't "paying" with future UTXO pressure. In other words, to push up the minimum fee ("fee floor"), an attacker can flood the mempool with transactions that use OP_RETURN outputs - these are just data bytes that fill blockspace and cause congestion, but they don't create UTXOs (they're provably unspendable). So the attacker maximizes congestion per sat paid today while leaving no long-term UTXO bloat to "pay for" later. 2) If large arbitrary payloads propagate by default, it's trivial to get contraband onto-chain. Then you can run the playbook: - "Nodes relay illegal content -> node = publisher" - "Clouds hosting nodes violate AUPs (Acceptable Use Policy) -> mass evictions" - "App stores delist non-filtering wallets" Net effect: chill self-custody and self-hosted nodes, push usage into KYC custodians. 3) Narrative cover for policy clients: - Once headlines say "the chain hosts harmful content", pools adopting filtering templates (policy clients) get social and insurer cover: "We're just blocking abuse". - That's the fast lane to politically steerable settlement - without a single consensus change. 4) Operational deniability for the attacker: - With big payloads accepted by default policy, spam waves look like speculative mania or "digital art" booms. It's harder to finger a single adversary, easier to sustain the fee floor. The fact that most Bitcoiners still haven't figured out that we don't live in a free market, the largest companies are State-subsidized, the State picks winners and losers, and that Bitcoin as a MoE is a direct competitor to CBDCs/stablecoins, is shocking. ================================== The other day I saw Peter Todd (Bitcoin core developer) begging for donations again for his projects. How it is even possible to be an OG Bitcoiner, to be in Bitcoin cycle after cycle and to still beg for money is something I can't comprehend. These are the people you are outsourcing your Bitcoin decision-making to. From anecdotal observations, these Core developers aren't exactly ballin'. This doesn't conclusively mean anything of course - I just ask you to use your critical thinking abilities and to not blindly appeal to authority. ================================== More context on how Bitcoin Core's v30 Update is an attack on Bitcoin's decentralization: View quoted note → View quoted note →

4 replies ↓

GLACA glaca@nostrplebs.com 3 months ago

Last part: if bitcoin can't survive this level of attack from the State then it failed big time and there is nothing you can do to stop it.