The Future of Bitcoin

Whenever concerns surrounding Bitcoin’s long-term prospects arise, a common dismissal is, “Well, tell us what to do about it then?” This is often used to downplay worries about regulatory capture, deeper involvement of certain entities increasing consensus risks, or any failure mode threatening Bitcoin’s censorship resistance and ability to uphold freedom.

The Plan

Use Bitcoin. Bitcoin consensus relies on two main actors: economic participants and miners. Economic actors determine the perceived value of a consensus rule set by choosing whether to honor transactions based on their consensus criteria. Miners decide which consensus rules to mine, opting for the ones that maximize value for them.

Users who actively transact with Bitcoin—running businesses, services, and utilizing blockspace—gain influence through both mechanisms. A viable consensus rule requires users who value it and miners willing to mine it. Users purchasing blockspace enhance miners’ revenue prospects beyond the block subsidy. The fees represent miners’ revenue, thereby granting users a proportional influence over miners. When consensus rules conflict, users can decide where to direct their transaction fees, compelling miners to adhere to popular rules to earn that revenue.

However, institutional adoption and regulatory pressures pose serious long-term risks if users solely hold Bitcoin without active engagement. In such scenarios, regulations may target miners and brokers, significantly impacting consensus decisions and even attempt to veto beneficial changes while promoting detrimental ones.

Counteracting Risks

To mitigate this, we must actively utilize Bitcoin beyond investing. This is where scalability becomes vital, allowing broader direct participation and influence within the system. Increased Bitcoin use empowers users to affect consensus future collectively.

If Bitcoiners treat Bitcoin merely as a stagnant asset, we risk losing our say in the markets Bitcoin offers and our influence over the miners’ consensus choices.

Call to Action

Bitcoiners must adopt an active stance: we need to transact, build businesses, and maximize blockspace utilization. Whether through payment networks like Lightning, uncensorable derivatives markets with DLCs, or even engaging with innovations like Ordinals and Inscriptions, demand for blockspace should arise from a distributed array of sources instead of a few major institutions vulnerable to government oversight.

Bitcoin is fundamentally a “use it or lose it” proposition. We must remain engaged to prevent it from slipping away from those who value freedom due to apathy.

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