My friend Harry Sudock has a bet with Danny Knowles of What Bitcoin Did brings fame to the prospect of a 50 BTC block reward in this new era. Setting aside some big fingersthe last time this happened was over 4,000 days ago.
Late last Friday night, his bet almost reached the first half blocka staggering 40,751 BTC.
Ironically, the miners were the big winners at this turning point in the era, gaining just over a year. 100 million dollars in total revenue that day – nearly five times the previous all-time high.
Days around the halving, visualized as flat rates.https://t.co/FP3PfGHAIB pic.twitter.com/xcS22GPw79
– softsimon (@softsimon_) April 21, 2024
Beyond the numbers, this time it was different. Although halving is usually a reminder of Bitcoin's reliability, this year's event was anything but predictable. On and off-chain, important narratives converged and culminated in an unprecedented climax. I wasn't there during the first half but the two previous events seemed inconsequential. Somehow, Block 840,000 felt like it ushered in a new era.
Culturally, Bitcoin appears to be approaching its escape velocity. Four years ago, you would have been hard-pressed to find a Bitcoiner who didn’t rally under the flag of maximalism. Right after the block war and a brutal bear market, orthodoxy reigned supreme.
Today, the landscape is unrecognizable. Piety is openly mocked and most of the high priests have been exiled. Apostasy is in fashion. We have broken out of the insular mold: everyone is a Bitcoiner.
Money for enemies
Of course, with the fall of the dominant cultural institution, the barbarians are at the door. The holy blockchain is plundered and no Bitcoin node is safe. At the risk of using yet another analogy, this is a true Berlin Wall moment. Speculative mercenaries have passed through here and found the place quite comfortable. Ordinals, BRC20, Runes. It's a degenerate world and we all live in it.
As expected, this degradation of the sanctity of Bitcoin does not sit well with the old guard. They worked to denounce this behavior, insisting that heretics should be filtered ostracized. “Bitcoin should not be associated with scams.” By brandishing their Bibles, they appear to have little respect for the permissionless ideals of the system. Sinners should repent or burn in hell. Their culture must prevail, otherwise Bitcoin will fail.
Not since the Silk Road has a use case for Bitcoin been so controversial. Blasphemous, I know, but hardly surprising. The free market has the power to expose the hypocrisy of its most ardent supporters.
I sympathize with the idea that this widespread speculation is detrimental to most of its participants. Fiat has so disrupted the financial incentives of the average person that gaming is now seen as EV+. Memecoins are the lottery tickets of Gen Z and Bitcoin memecoins are the new meta.
If you've dedicated your life to freedom money in hopes of keeping yourself and your loved ones away from this exact behavior, it's pretty depressing to see it rearing its ugly head on your turf. Indeed, those who seek to create value should hate nothing more than seeing others throw it away. On the other hand, Bitcoin makes no moral or ethical judgments. Salvation is neither promised nor expected of anyone who embraces it. This is both for the best of us and for the worst.
The scale loophole
The halving also highlighted the delicate technological state of Bitcoin. Unless you're one of the lucky few with existing Lightning cash, Bitcoin was virtually unusable as a payment method over the weekend. You can imagine the dunk festival on Twitter when LN nodes were suggested disable routing to avoid costly forced closures.
I will not pretend that there is an easy way out of this difficult situation. Of course, we can bury our heads in the sand and pretend that current activity is unsustainable. We can jerk about UTXO and channel management.
Another option is to meet users where they are. Abandon ideological arrogance and accept that some compromises are acceptable, even necessary, to build a reliable, global payments system. It's a tough pill to swallow, but trust-based alternatives are both viable and, for all intents and purposes, probably superior to the gymnastics currently required by “no-trust” alternatives.
This is why I choose to remain optimistic about the road ahead. THE progress around cash mints is impressive if you ask me. This allows us to leverage Lightning's strength while solving the last mile problem that's plaguing him. This opens up a world of possibilities for manufacturers to improve existing conservation solutions and move them out of the silos they currently operate in.
In the meantime, we can continue to work on more ambitious proposals and attempt to reduce or remove assumptions of trust. The properties of Bitcoin should not be easily conceded in the name of mass adoption. That said, the devil is in the details and complexity often comes at the expense of user experience. Not all payments are the same and probably shouldn't be burdened with the cost of resisting on-chain censorship.
At least from a technical point of view, this is not a Bitcoin renaissance. Rather, it is a case of everything old becoming new again.
From Satoshi Dice to Magic Eden.
From the counterpart to the runes.
From Digicash to Fedimints.
We've seen this story before, but this time it's different.
This time we must pay the bill for our success and the pride that comes with it.
We can't afford to be cute anymore. This time, we will have to do even better.