Month: December 2024

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Bitcoin is its own network state, to borrow a term from Balaji Srinivasan. That is, while Bitcoin proponents aren’t bound to one geographical region (quite the opposite, actually) they have collective power and can enact change.

We just saw some version of this power exercised in the U.S. political sphere, as the Bitcoin (and crypto) lobby fiercely supported pro-Bitcoin candidates in the recent U.S. election cycle. Because this lobby was so strong, many pro-Bitcoin candidates were elected or re-elected into positions of power.

One could argue that Trump won the election because he embraced Bitcoin, while Harris could only seem to muster up the ability to make lukewarm, offbeat statements about being pro-crypto (statements that some at Bitcoin Magazine found inauthentic and even borderline offensive).

Now, there’s another opportunity for the Bitcoin community to rally behind a candidate. For the first time in the history, a country has a presidential nominee who’s running on the notion of putting her country on a bitcoin standard. That country is Suriname and that candidate is Maya Parbhoe.

Parbhoe understands the transformative power of bitcoin and believes that making it legal tender can help get Suriname’s 600,000 citizens out of “survival mode,” as she puts it.

So, my question to you as a Bitcoin enthusiast is this: Do you want to watch as Parbhoe attempts to make history or do you want to play a role in helping her make it?

In other words, are you going to contribute to her campaign — as Bitcoin allows you to do from anywhere in the world permissionlessly — or are you going to be a spectator?

🚨 Corruption has no place in our future!

We can’t keep trusting a system that deceives us.

It’s time to act!

Verifying every action is the key to a Suriname free of corruption.

Your support is crucial. https://t.co/rBQxhqq7zm #maya2025 #bitcoin pic.twitter.com/hkXZislsAl

— Maya Parbhoe (@MayaPar25) November 23, 2024

(You can track how donations are spent here.)

You can also reach out to Parbhoe’s campaign via info@bitcoinsranan.com to offer support in other ways if you feel so inclined.

The election takes place in May 2025, and Parbhoe and her team are currently gearing up for campaign season (including obtaining the funds to campaign). It’s hard to say just yet how much of a shot she has at winning, but she’ll likely have less of one without your support.

So, if you’d like to see the Bitcoin network state include another nation state, you have the opportunity here to play a part in potentially making that happen.

(Author’s note: Please keep in mind that this piece is not necessarily an endorsement of Parbhoe but a call to action for those who support her.)

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

The public discussion around scaling in the last few years has become poisoned and captured by an incredibly toxic and defeatist attitude: “Why bother?”

“Why bother trying to scale? Basic napkin math shows it’s impossible no matter what we do for everyone to self custody.”

“Why bother trying to scale? People are stupid and lazy anyway, even if we did people would just use a custodian anyways.”

“Why bother trying to scale? I’ve got mine, I’ll be rich enough for self custody, who cares about the stupid and lazy plebs anyways?”

This attitude is permeating the entire space more and more as time goes on, with a plethora of different rationalizations and reasons for it depending on who you talk to. It is a completely defeatist, dystopian, and pessimistic view of the future. I say that as someone who is incredibly pessimistic about a large number of issues that I see in this ecosystem.

Talking yourself into losing is one of the fastest ways to wind up losing. Bitcoin as a distributed system depends on being dispersed enough, and having enough independent system participants, that it can resist the coercive or malicious influence of larger participants. This is critical to it continuing to function as a decentralized and censorship resistant system. If it cannot remain dispersed enough in its distribution then natural tendencies in networks will likely gravitate towards larger and more dense participants until they effectively have an outsized control over the whole network.

That will ultimately very likely spell the end for Bitcoin’s most important property: censorship resistance.

What is mind boggling to me is, even though we aren’t in a perfect place, we have made massive progress in the last decade. Ten years ago we had people screaming about raising the blocksize. Now we have the Lightning Network, Statechains, and now Ark. We have people experimenting with wildly improved federated custodial models using BitVM. We even have a vague inkling of ways to implement covenants without a softfork if some new cryptographic assumptions pan out and prove practical to implement in a usable way.

Even if we do bump into a ceiling eventually we can’t get around, every bit of ground we gain means room for more people to self custody. It means more room for more custodians, allowing more numerous small scale ones to enable people to custody with people they trust more than disconnected corporations, for that more numerous herd to impose greater competitive pressure for custodians in general. To maintain that wide dispersion of entities directly interacting with the network that it needs to maintain its decentralization.

Why are so many Bitcoiners willing to throw up their hands and give in to defeatist sentiment? Yes, we have more problems to solve than we did ten years ago, but we have also covered a massive amount of ground in expanding scalability in that ten years. This isn’t a binary situation, this isn’t a game where you win or lose with no middle ground. Every improvement to scalability we can make gives Bitcoin a higher chance of success. It entrenches and defends Bitcoin’s censorship resistance that much more.

I’m not saying that people should naively buy into every promised solution or hyped thing, there are definitely problems and limitations we should remain cognizant of. But that doesn’t mean throw in the towel and give up this early. There is so much potential here to actually reshape the world in a meaningful way, but that won’t happen overnight. It won’t happen at all if everyone just gives up and kicks back expecting to get rich and apathetically stops caring about it.

Blind pessimism and blind optimism are both poison, it’s time to start looking for a balance between the two rather than picking your drug of choice and sinking into delusion. 

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

For centuries, self-custody has symbolized financial autonomy, enabling individuals to secure their wealth—from gold to cash—without intermediaries. Bitcoin extends this principle into the digital realm, offering a censorship-resistant, decentralized way to hold assets. Yet, upcoming European regulations under the Markets in Crypto-Assets Regulation (MiCA) and the Transfer of Funds Regulation (TFR) threaten to complicate self-custody for Bitcoin users.

A New Regulatory Era

MiCA, adopted in April 2023, aims to regulate crypto-assets comprehensively in the EU. The revised TFR applies the “Travel Rule” to Bitcoin transactions, requiring detailed sender and recipient information for compliance. These changes will come into effect in 2025, making it harder for Europeans to interact with Bitcoin self-custody wallets without cryptographic proof of ownership.

One proposed solution is the “Satoshi Test,” where users verify wallet ownership by sending a small amount of Bitcoin (e.g., one satoshi) from their wallet to the exchange. While simple for existing holders, this process creates a paradox for new users: they need Bitcoin to verify ownership but cannot acquire Bitcoin without passing the test. This “catch-22” risks alienating new adopters, steering them toward custodial solutions that compromise Bitcoin’s ethos of decentralization and financial sovereignty.

Privacy and Security Risks

In an effort to comply with the new regulations, some exchanges are exploring alternatives to the Satoshi Test; These involve using end-to-end encrypted messages signed using the private key to confirm ownership of the wallet cryptographically for example via the WalletConnect Network. This preserves privacy and yet helps institutions to be compliant.

The core ethos of Bitcoin technology and cryptocurrencies is decentralization and privacy. Centralizing sensitive user data not only creates attractive targets for cybercriminals but also contradicts the principles that have driven the adoption of cryptocurrencies. The recent history of data breaches in the financial sector underscores the dangers of storing large amounts of personal data in centralized repositories.

“Not Your Keys, Not Your Coins”

The adage “Not your keys, not your coins” serves as a reminder of Bitcoin’s core philosophy: control over private keys equals control over assets. Users must carefully evaluate exchanges’ self-custody support, as cumbersome processes or centralized data storage undermine Bitcoin’s promise of financial freedom.

The TFR is only the beginning. Future legislation, like the proposed Payment Services Directive 3 (PSD3), signals growing regulatory scrutiny of Bitcoin self-custody. To preserve Bitcoin’s core values, the industry must proactively develop solutions that comply with regulations while protecting user privacy.

This is a pivotal moment for Bitcoin in Europe. Users should advocate for exchanges that prioritize self-custody and privacy-preserving measures. Exchanges, in turn, must innovate to comply with regulations while staying true to Bitcoin’s decentralized principles.

As Europe tightens its regulatory framework, the choices made by Bitcoin users, exchanges, and regulators will determine whether Bitcoin continues to empower individuals or becomes entangled in centralized systems. By championing privacy and self-custody, we can ensure Bitcoin remains a tool for financial sovereignty and freedom.

This is a guest post by Jess Houlgrave. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.