There is a massive propaganda war being waged in the Bitcoin community. The latest salvo comes from a stickied post at the top of /r/bitcoin claiming that Bitcoin Unlimited is an “attack” on Bitcoin:

With every wave the counter-revolutionary re-centralization movement is getting louder and stronger. This one has been exceptionally smart in attracting big miners / pools to it by telling them that they can outcompete and eat the smaller ones. But with every wave Bitcoin is getting stronger and more resilient as well and it has given us the ultimate tools to fight off these attacks: actual, factual decentralization and immutablity of the ledger. That is what Bitcoin stands for. No compromise on that, sorry!

The imagery here of Bitcoin Core as some kind of “guardian of the revolution” is, in a sad way, actually quite ironic as we will see below.

Many new people coming to bitcoin for the first time inevitably find themselves reading /r/bitcoin or bitcointalk.org, and come away with the impression that the vast majority (or even vast super-majority) of bitcoiners stand with Bitcoin Core against these attacks from an extremely tiny minority hell-bent on introducing centralization into Bitcoin.

But they develop these obviously incorrect opinions only through the process of being exposed to grotesque amounts of censorship and the outright manipulation of the narrative by people with an agenda to push.

The truth of the matter is: Bitcoin has already been attacked. And the attack has mostly been a success.

A Brief History of the Scaling Debate

For the benefit of people who have only recently joined the Bitcoin community and who are not yet familiar with the years-long history of the scaling debate, let’s review how we arrived here and the specific ways in which Bitcoin has been attacked.

One of the first questions asked of Satoshi Nakamoto about his creation is how can it possibly scale? This is certainly a valid question as it intuitively seems like a global broadcast system will not scale well at all.

Satoshi responded by saying he spent years thinking about every little tiny detail of Bitcoin before he even wrote a single line of code. He went on to say if he felt Bitcoin couldn’t scale he never would have written any code.

Satoshi’s Vision

Specifically Satoshi outlined his vision for scaling Bitcoin which was something like this:

1) Bitcoin can already handle much more transaction volume than it is currently processing so there is plenty of room to ramp up on-chain transactions before any bottlenecks are reached.Note that this was certainly true in Satoshi’s time and is still true today.

2) Technology is becoming faster and cheaper every year. He cited Moore’s Law (where CPU capacity doubles every 18 months) and (implicitly) Nielsen’s Law which shows a similar (though slightly slower) trend in bandwidth. The implication of this growth in computing and network resources is that, at minimum, Bitcoin could scale transaction volume at the same pace as these underlying resources. In other words, if the cost to process a transaction falls by 40% in a given year, Bitcoin could increase on-chain capacity by 40% without increasing the cost of running a Bitcoin node and without creating any centralization pressures.

3) Average users are very unlikely to want to run a server full-time on their home computers (and doing so is not possible on mobile), so he specifically designed the protocol to enable something called “simplified payment verification”. In this configuration users can receive strong cryptographic proof that the transactions they receive are valid without needing to download, process, and store large amounts of data. He also mentioned a half baked idea of his to provide what have become known as “fraud proofs” to SPV clients, which would further increase their security. To date fraud proofs have not been implemented, though SPV nodes are arguably still around 95% as secure as a full node and to date no one has reported being defrauded by using an SPV client.

He specifically stated his view that in the future, it would likely be power users (such as exchanges, payment processors, bitcoin-accepting business, extreme bitcoin enthusiasts, etc) that would run full nodes with the average user just using SPV. This prediction has been completely accurate.

So this is the vision that was laid out for Bitcoin and the one which nearly everyone who joined Bitcoin in those early years supported.

Dissenters

It was only a tiny handful of curmudgeons, led by Greg Maxwell, who rejected this vision and insisted that Bitcoin cannot scale. Maxwell himself has a history of bringing a poisonous, disruptive attitude to the projects he works on. You can still read the comments his colleagues wrote about him during his time at Wikipedia. They called him out for “acts of vandalism” and acting “like Wikipedia is Greg Maxwell’s personal web site”. Basically, he took a “Greg against the world” attitude, insisted that he alone was right and everyone else was wrong. The same attitude he brought with him to Bitcoin.

It’s instructive to note that in this pre-Lightning era, the main “off-chain” solution pushed by this fringe group was to basically re-create the banking system. How do you transact in Bitcoin if the blockchain is too clogged up and too expensive to use? Well by depositing your bitcoins with a third party bank (think coinbase, etc) and then using these centralized institutions to transact. To the extent you wanted to pay someone who had an account at a different “bank”, the banks would use a clearing and settlement system, just like they do today.

And the purpose of all this is to, ironically, “keep Bitcoin decentralized”. They believed that increasing the on-chain transaction capacity would increase the cost of running a node, which would cause fewer people to do it, which would cause centralization.

So we need massive centralization to save decentralization!

And, of course, this notion that larger volume means more centralization is demonstrably false as noted in point #2 of Satoshi’s original vision. If on-chain volume is tuned to rise at approximately the same pace as the underlying computational and network resources, the cost of running a node will not increase. Despite being demonstrably false, this line is still peddled to this day.

In an ideal world there wouldn’t be that much of problem with a bank-like system. But we don’t live in an ideal world. As Satoshi addressed this in his very first post introducing Bitcoin:

The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.

In other words, this tiny minority of Bitcoiners wanted to completely rid Bitcoin of its raison d’etre by forcing people to use the very type of system Bitcoin was created to thwart.

Hostile Takeover

When Satoshi left, he turned the leadership of project over two Gavin Andresen who did an admirable job of shepherding Bitcoin through its early years. The only problem was Satoshi never asked Gavin if he wanted the job. Gavin did it for several years but then decided he wanted to spend more time writing code and doing advanced research. So in 2014 he stepped down from his role, not to leave Bitcoin entirely, but just to re-direct his efforts.

Gavin’s departure left a power vacuum in the Bitcoin Core open source project ― which at the time was the only real implementation. Unfortunately, this power vacuum was quickly filled by Greg and his like who were all too eager to run Bitcoin “their way”.

Upon seizing power they proceeded to behave in ways typical of communist revolutionaries who recently seized power ― they went on a purge. It was made clear, either implicitly or explicitly, that people who did not agree with their agenda of soaring transaction fees and off-chain centralization are no longer welcome to contribute to the open source project.

Up until this point the development community was united around a single codebase. Gavin had the tough task of trying to manage conflicts and difficult personalities but he made it work.

But that was no longer to be. Long time Bitcoin contributors like Jeff Garzik were politely (and sometimes not so politely) pushed aside. Gavin was unceremoniously stripped of his access to the Core repo. Having no other way to contribute to Bitcoin, many long time Bitcoiners had no other choice but to fork the code base creating alternate competing implementations for the first time in Bitcoin’s history.

It Gets Worse

Around this same time Maxwell formed a company called Blockstream, ostensibly to develop these centralized off-chain “solutions” they were peddling. Blockstream would go on to raise nearly $100 million from … you’ll never guess ― one of the largest banks in the world, AXA, whose CEO also to happens to be head of the Bilderberg group.

With this new infusion of AXA money, Blockstream was able to hire up the vast majority of the talented developers in the Bitcoin space and unite them under the Maxwell vision of soaring transaction fees and off-chain centralization. It’s instructive to note, that most of these developers were not 1MB extremists prior to joining Blockstream. Even Blockstream’s present CEO, Adam Back, was a reasonable man with reasonable block size proposals at one point in time. But money certainly changes people.

Not wanting to be labeled as “backwards” or technically illiterate, a portion of the remaining community started going along to get along.

Our Very Own Goebbels

No “revolution” could be complete without a propaganda minister. In order to see to it that the new regime would remain in power and have the political support to ram through its agenda, a bitcoiner named Theymos (Michael Marquardt) started carrying the water for Blockstream and Core, doing their dirty work. Somehow this person managed to get himself into positions of ownership of most of Bitcoin’s key communication channels, including the Bitcoin subreddit and bitcointalk forums.

He’s uses his control over these forums to ruthlessly censor criticism of Core, Blockstream, and the off-chain centralization agenda. Any users who are critical of the new regime, have their comments deleted and are banned from ever commenting again. If a user complains about the censorship their comments are deleted and they are banned. If comments obviously shilling for Core are downvoted, he will change the sort order so they appear as if they were the most upvoted comments. Only posts praising the regime or denouncing any alternatives are allowed, thus creating a highly manipulated view of the world. The stickied post I referenced at the top calling one of these alternatives an “attack” on the network, is a perfect example of this type of extreme manipulation.

And unfortunately, given the amount of new users joining Bitcoin each day, the only thing they encounter is rank propaganda supporting the regime.

Theymos would certainly make a fascist proud.

The Lightning Network

In 2015, a paper was presented showing how off-chain transaction could possibly be done without needing to turn over control of your bitcoins (as in the banking model). This system was called the lightning network. Fairly quickly the regime adopted it as it’s plan to scale Bitcoin.

In all fairness to the inventors of the lightning network, it’s a fairly clever use of Bitcoin payment channels and likely will find a number of real world use cases. A reasonable person would have to remain skeptical, however, that the lightning network would be a viable generalized payment layer. Not only do we have no practical experience with it, but the technical underpinnings suggest it may be difficult to reliably make generalized payments given that each “hop” in the system needs to have the correct value in the outgoing side of the channel ― something that could prove unlikely more often than we would like.

In either case, the bigger concern with the lightning network is still off-chain centralization on large scale payment hubs. This concern is even move apparent when one considers the exponential increase in Bitcoin transaction fees ― currently increasing at about 15 cents per month. At the current trajectory, we aren’t just looking at $1 fees in the near future, but $10 or higher.

At those levels, users will be forced to use a single large payment hub for all their transactions as it will be way too costly to open and close channels with the frequency needed to make a more decentralized lightning network topology work (which it’s not clear would be feasible in the first place).

But the regime doesn’t care. Like in the case of the banking layer, they simply do not care if the only way to use Bitcoin is through highly centralized institutions. The more centralized, the better for Blockstream’s bottom line.

Segwit

There is a problem implementing the lightning network, however: it’s not compatible with today’s network. They need to fix something called transaction malleability to make it work. You’ll find very few bitcoiners, on either side of the debate, who oppose fixing transaction malleability.

The problem, however, is the malleability fix ― known as segregated witness or segwit ― is an incredibly complex change to the core protocol. Typically such a change would need to be done as a hardfork, but the regime has spent years and enormous amounts of political capital propagandizing against hardforks in the name of trying to kill any and all attempts to increase the block size.

So they couldn’t, on the one hand, relentlessly push the idea that hardforks are “dangerous” while on the other hand propose a hardforking change.

So for purely political reasons they decided to implement segwit as a softfork. The issue is that to make segwit work as a softfork, they had to do the protocol equivalent of cramming a square peg in a round hole. That is, make an absolute mess out of the protocol in the name of making it work as a softfork.

Typically when protocols are designed the engineers try to design it to be as “clean” and neat as possible. There is not a single developer who would ever design a new protocol to look and function the way segwit does. It’s a massively ugly hack. And needlessly so as a cleaner hardfork version would have had 100% community support. Again it’s the result, not of careful protocol design, but of regime politics.

So it turns out that even something as benign as fixing malleability has become contentious because of this group. And, of course, Theymos has spun it as anyone against the bastardized version of segwit is “anti-bitcoin” or “against progress”.

Their plan was to try to ram segwit through over the objections of large portions of the community. Because it’s a softfork, it only needs miners to support it, rather than the support of the entire Bitcoin community. They set a (rather arbitrary) threshold of 95% miner support to activate segwit, but, surprise surprise, they can only muster about 25% miner support.

In a bout of massive hypocrisy they’re now scheming to do a “flag day” activation ― which is at least as risky, if not more risky, than the hardforks they’ve been demonizing so hard, with none of the benefits (we still get the shit protocol design).

SPV

There has been a strong concerted effort by these people to write SPV out of the spec. After all, you’re not a “true bitcoiner” if you don’t have a heavyweight server grinding away on your laptop all the time. Their entire roadmap is designed around promoting a “full node or nothing” vision of Bitcoin. Maxwell has told people that, in the future, Bitcoin Core will be the only wallet they use.

Of course, this mentality is cringe-worthy for anyone with experience designing consumer-oriented products and should give investors pause to think.

In this line, SPV has been branded “horrifically insecure” despite not a single person ever being defrauded using it. The lack of fraud proofs is cited as a reason why no one should trust it, despite fraud proofs only being useful in the event of a 51% attack (which is to say an extremely unlikely event and one that full node’s cannot handle either).

Fraud proofs would certainly be a nice to have, not necessarily for SPV, but because they could potentially be used in sharding the blockchain ― an optimization which would increase on chain scaling capacity by leaps and bounds. Of course sharding is nowhere on the regime’s roadmap as it would render centralized off-chain solutions irrelevant.

Conclusion

So this is where we are today and how we got here. It’s absurd to suggest that following the original vision of Bitcoin is an “attack” on Bitcoin. The fact that it can even be spun that way by the regime’s propaganda minister is because Bitcoin has already been attacked.

And at this point Bitcoin will certainly fail as a decentralized currency if the regime is not overthrown.