It feels a little strange to say this out loud because AI is obviously real. I use it. Most people I know use it. I think AI will matter a great deal:

I do not think that the market understands what kind of story it is pricing as it relates to AI.

When most people think AI, they see software. They picture a chatbot. That is understandable. Most people encounter AI through a screen. They experience it as software, so they naturally think about it in software terms. That is not where my mind goes first.

I have spent a lot of time around Bitcoin mining at scale. I spent more hours than I can count talking with utilities, grid operators, and people in and around the TVA region about power, interconnection, curtailment, substations, and what large electrical demand actually looks like once it has to leave the spreadsheet and become real. I have also mined Bitcoin on CPUs, GPUs, FPGAs, and ASICs. I have seen what happens when a computational task moves from broad and flexible hardware toward narrower and more efficient hardware.

AI will not trace Bitcoin mining in a one to one way. The workloads are broader. The end markets are broader. But time in mining does leave you with particular instincts. It teaches you to take load seriously. It teaches you that efficiency matters more than the market usually assumes. It teaches you that broad compute often dominates first and specialized compute often dominates later. Most of all, it teaches you that physical infrastructure stories and software stories are very different things even when they get wrapped in the same narrative.

So when I hear AI, I see the system as a whole.

I see load. I see transformers, cooling, networking, land, financing, and years of capital commitments made against assumptions about the future that may or may not be true. I see the complex underneath the story.

Because of my perspective, I think the market is making several mistakes at once.

The first mistake is about the machine itself. Investors may be extrapolating the wrong compute curve. They may be assuming that the broad and power hungry layer of compute will remain the dominant path longer than it should.

The second mistake is about valuation. A large part of this buildout is still being discussed like software and valued like tech, even though it increasingly behaves like financed real estate and infrastructure.

The third mistake is about economic moats. AI may be strategically important and still trend toward tighter pricing margins, wider distribution, and thinner capture than the market currently expects.

If those misunderstandings begin to break at the same time, I think the unwind may be painful. I think it becomes a bailout and capital rotation story. I think a lot of money will eventually go looking again for something simpler, scarcer, and less dependent on someone else’s projections coming true. All roads come back to Bitcoin.

What is an LLM?

If you have never spent time with this topic, it is worth taking a little time to understand Markov chain math and why prediction systems work the way they do. Veritasium has a great explainer on this and the history lesson is very fun. Don’t get lost in the math. Understand that large language models are prediction machines.

Huge Buildouts

Being a consumer today means complexity is abstracted away as a service. That has a tendency to separate us from the process.

Compute is not abstract. Power is not abstract. Cooling is not abstract. Interconnection is not abstract. A transformer is not abstract. A substation is not abstract. These are all very real parts of the puzzle.

Every time an AI CEO casually chuffs the notion of building out several hundred megawatts of hyperscalers an unappreciated army of utility engineers quietly cries themself to sleep at night.

If you have spent time around industrial load, the word megawatt starts to mean something different. You stop hearing it the way an analyst hears it. You start to see feeder constraints, switchgear lead times, land procurement, cooling density, queue risk, and capital expenditures that have to become concrete, copper, and steel before they can become revenue.

McKinsey estimates that by 2030, data centers may require about $6.7 trillion globally to keep pace with compute demand, with roughly $5.2 trillion tied specifically to AI processing loads. Morgan Stanley argues that credit markets will be critical to meeting more than $1 trillion of data center financing needs through 2028.

The story here is very physical, more capital intensive financing dependent than people presume when they imagine AI as software disruption.

The Compute Curve May Not Be What Investors Think It Is

One of the important lessons Bitcoin mining taught me is that broad hardware tends to win early and narrower hardware tends to win later.

At first, flexibility matters most. Then efficiency starts to matter more. In Bitcoin, that path ran from CPU to GPU to FPGA to ASIC. Each step narrowed the field and improved the economics. When a workload matures, or when some layer inside the workload matures, economic pressure usually builds toward specialization.

I think the market may be drawing too straight a line from today’s GPU heavy AI world into the future. It is looking at current demand and assuming that the same broad compute layer will remain the economically dominant one for much longer than it probably will.

AI needs huge compute today. The important question is whether future inference will continue to require the same degree of broad, generalized, and power hungry compute that the market is currently capitalizing.

The research base here is more supportive of specialization than many people realize. A recent survey of LLM inference hardware explicitly compares CPUs, GPUs, FPGAs, ASICs, and other hardware paths. That by itself is revealing. The field is not behaving as though inference has permanently selected its final home.

There is also specific evidence that narrower paths can materially change the economics. The paper LUT-LLM designed an FPGA based language model inference system around memory based computation and reported 3.05 times to 6.60 times higher energy efficiency than selected GPUs in its tested setup, along with 1.10 times to 3.29 times faster generation speed in certain conditions. And these are very early improvements. The serving layer is still being re-architected in ways the current capex story may not be fully pricing or planning. And that serving layer is being attacked from several directions at once.

Quantization lowers the amount of precision needed for useful output. Speculative decoding lowers wasteful serial decode steps. Custom silicon reorganizes hardware around specific bottlenecks. Model routing can push simpler tasks toward cheaper paths. Edge and local deployment can peel some demand away from the most centralized clusters.

This is not just academic theory. The hyperscalers themselves are already building toward a more specialized future.

Microsoft’s Maia 200 is explicitly described as an inference accelerator built to improve the economics of AI token generation inside what Microsoft calls a heterogeneous AI infrastructure. Google’s eighth generation TPU line splits into TPU 8t for frontier training and TPU 8i for inference and reinforcement learning, with Google saying directly that the infrastructure requirements for pre training, post training, and real time serving have diverged. AWS says speculative decoding on Trainium can accelerate token generation by up to 3 times for decode heavy workloads by reducing serial steps and improving utilization.

The energy story is also very nuanced. A 2026 paper in Joule argues that many public estimates of inference energy are overstated by 4 times to 20 times because they rely on non production assumptions, and that model, software, and hardware improvements together could reduce per query energy by another 8 times to 20 times.

So my question is this: If we are massively scaling GPU data centers based on assumptions that might not hold true regarding the hardware end state and actual load, what happens when the industry pivots to narrower compute for significant portions of the load? How much sunk CAPEX is now stuck? Were the models generated able to recoup the investment?

Cheaper inference can produce more inference. Better efficiency can widen adoption. Longer reasoning traces can consume far more energy even while baseline serving gets cheaper. The future demand curve is not linear. It is not mechanically tied to today’s GPU intensity. Investors may be capitalizing a world in which the current compute path economics will allow.

Even if inference does not migrate down the stack as quickly as I suspect, impairment risk can still emerge at the GPU level because the hardware is improving fast enough to turn long-duration infrastructure bets into a shelf-life equation. Right now we are still deep inside compute scarcity, and hardware prices reflect that. I have spent my whole life around hardware, and I have never seen price dislocations like these. But supply meets demand. Manufacturing scales. Innovation compounds. And when that curve flips, a lot of assets financed at scarcity-era assumptions may suddenly look far more burdensome than they did on paper. Every economic incentive is pushing engineering progress forward at a blistering pace. The real question is whether these builds were financed for that reality, and whether the market can absorb the disruption if they were not.

That is the first misunderstanding.

The Market Is Still Talking About Tech While Financing Infrastructure

This is the deeper mistake. A lot of investors still seem to be asking whether AI is another dot com bubble. It is the obvious historical comparison. There is excitement. There are huge valuations. There is a race to own the future.

I have only recently become a hedge fund manager professionally so I spend a lot of time looking up to managers with deep experience. The piece that sharpened the financial piece for me most was The Second Derivative: Why No One Understands the AI Boom. The force of that essay is not that it says “bubble.” Lots of people can say bubble. Its force is structural. It argues that markets focus too much on the level of growth and the first derivative of growth while missing the second derivative, meaning whether growth itself is still accelerating or beginning to decelerate.

What does that mean? A system designed to be refinanced does not only need growth. It needs growth to keep arriving at a pace that satisfies the assumptions embedded inside the structure. Once that acceleration starts to fade, the machine can be in trouble even while the headline numbers still look healthy.

This is what made 2008 so widely misunderstood in real time. The clean story is that people were unable to pay their mortgages at a large enough rate and the market started to collapse. The harder story is that the refinancing treadmill began breaking before the public story had fully caught up with the sequence.

I think that frame is useful for AI than the cleaner dot com comparison. Dot com, in broad terms, was an equity multiple event. Too much optimism got priced into too many companies. The damage was real. But much of that damage lived in equity repricing.

What I see now looks very physical and much more financing dependent. It looks like land, power, cooling, racks, memory, networking, chip procurement, and increasingly large capital outlays financed through a mix of operating cash flow, debt markets, private infrastructure capital, and securitized structures. The AI buildout increasingly behaves like an infrastructure project with a software multiple attached to it.

The question becomes who is lending against what assumptions, which balance sheets are quietly carrying which risks, and what happens if future demand or future pricing evolves differently than the buildout requires?

A large part of the buildout may be functioning as a disguised loan book. Capex gets celebrated as confidence. Backlog gets celebrated as demand. But if those long dated commitments are being financed against assumptions that later weaken, then some of what the market is pricing as growth will date poorly.

A financing structure tied to hard assets can impair and likely will. It can strand capital. It can reveal, very late in the game, that the thing being valued was actually just a bet on continued acceleration.

That is the second misunderstanding.

Strategic Importance Is Being Confused With Durable Pricing Power

AI is clearly important. Some of the systems already available today are extraordinary. They are useful today and they will become much more useful.

That does not guarantee that every layer around them will enjoy software style margins the market is used to.

The competitive field is widening and the economics are already shifting under the surface. One of the clearest signals of that comes from open and open weight models, especially out of China.

A Stanford HAI issue brief, Beyond DeepSeek, puts the point plainly: Chinese made open weight models are now unavoidable in the global competitive AI landscape. The brief goes beyond DeepSeek and shows a deeper ecosystem that is prioritizing computational efficiency, flexible downstream deployment, and broad adoption.

Software companies are used to the economics of control. If a capable model can be downloaded, fine tuned, adapted, and deployed into private environments, then the premium attached to closed access and central dependence gets harder to defend across the market. Priced too high, and you incentivize independence which carries even more advantages above just cost. Closed models do not disappear. But the range of viable alternatives expands, and that alone changes the pricing conversation.

I think the user base is already splitting into distinct groups. There are power users and sovereignty minded builders who want control, lower dependence, and ownership over their data environment. There are enterprises that care about compliance, reliability, integration, and cost discipline. There are light consumers who mostly want cheap convenience and output that is good enough. It’s a race to the bottom on all fronts. This weakens the fantasy that every token will continue to be delivered through a highly centralized and permanently premium model.

The light consumer is used to software being cheap or free. The power user increasingly wants sovereignty. The enterprise buyer wants a procurement decision that still makes sense after the next cost decline. None of those groups are naturally preserving software style monopoly margins for the whole stack.

The pricing data supports this. A 2026 paper, Tiered Super-Moore’s Law, documents an approximately 600 fold decline in token prices and argues that the market has shifted from technology driven to competition driven price acceleration. Even more striking, the paper argues that software and architectural innovation are doing more of the cost reduction work than hardware advances alone.

That should matter a great deal for investors. A lot of people still seem to think about AI the way markets think about early software platforms: winner take most, high margins, high upside to scale compared to low capex requirements. I think a meaningful portion of AI may end up looking more like a utility layer than investors currently want to admit. I think AI business models become a strategically vital service whose economics get pushed steadily toward lower prices, wider access, harsher competition, and thinner capture across large parts of the stack.

That is the third misunderstanding.

When the Air Comes Out

This is where Bitcoin comes back into the frame.

I do not think Bitcoin and AI are direct competitors. Bitcoin is the best money humanity has and likely will ever create. AI is a sprawling mix of intelligence, infrastructure, services, and increasingly commoditized capability. They are different things.

They do compete for narrative oxygen and capital.

AI has clearly absorbed an enormous amount of both this cycle. The market has been trying to digest what AI is, who actually gets paid, and where all the excess capital sloshing around the system should go. Bitcoin may not really start to hum until the AI market is digested more fully.

The AI mania may be bigger than dot com. Oversupply and misallocation are real possibilities, and that the people rotating out of Bitcoin into AI may eventually discover that a technology can succeed while the current investment vehicles built around it can still fail badly.

“The first mouse gets killed. The second mouse gets the cheese.” — Luke Gromen

I think a lot of first mice are about to get killed.

AI is a debt financed, high expectation sector that may be especially vulnerable if tighter conditions, weaker growth, or a policy mistake force the market to price risk back into a system that has been behaving as though little can go wrong.

If AI is real but mispriced, and if the infrastructure and financing wrapped around it prove more fragile than the market expects, then a correction will not simply destroy capital. It will also dislodge capital. Some of that money will go looking for a new home. If the macro response to the correction includes rate reductions, easing, or more direct liquidity support, the question becomes where that capital flows next.

Bitcoin stands apart from the part of the market likely to be repriced. Every risk above is defined by counterparty failure. I think an AI bust might likely teach the value of carrying no counterparty risk.

Closing Thought

AI will likely prove every bit as important as the bulls say. It may reshape research, medicine, design, logistics, coding, and countless other fields. I suspect it will. The underlying technology is real.

I think the market is treating AI like a broad software miracle with tech style economics. What I see instead is a messier machine. I see hardware specialization attacking the assumption that today’s compute path is tomorrow’s compute path. I see a physical buildout that increasingly behaves like financed infrastructure. I see open weight competition applying pressure to pricing and control. I see a technology that may be profound while still proving economically harsh.

Bitcoin has taught me that a real thing can be mispriced. The question is, what side of the fence are you on right now?

A serious exploit has been discovered in Coinkite’s COLDCARD firmware.

I want to begin with my personal conclusion first. Genuine self custody is still a worthy pursuit. With great power comes great responsibility may sound cliché, but it applies here. If you told someone to spend a week learning how to take full control of their wealth, that would sound like a very good trade. The truth, though, is that most people do not accept that trade. I would like to think that is mostly because of a lack of knowledge. This space is still young. These are still uncharted waters.

COLDCARD is a device that has long been respected by many of the most technical people in Bitcoin. That is part of what makes this so painful. The core idea of the exploit is simple. A wallet is only as secure as the randomness used when it creates the secret. If the randomness can be reproduced, the keys can be reproduced. People who used a COLDCARD believed they were buying a device that created sufficient randomness. A bug revealed today showed that assumption was wrong.

At the technical level, the issue is that certain COLDCARD firmware versions did not rely fully on the hardware random number generator when creating a seed. Instead, the process could fall back to a more predictable path. On some affected devices, that may mean the secret was generated from device data and timing information that could be modeled or constrained. This matters because if the randomness going in is narrower than people think, the range of possible wallet secrets is narrower too.

I have been able to reproduce the exploit myself. I have no desire to share even a semblance of a guide on how to do it. Everyone with the skill to perform this kind of work has a choice to make. A long time ago, I chose to study these things from the white hat side. So I will only say this plainly: from my point of view, this is a staggering oversight on behalf of Coinkite.

My father told me something a long time ago: “Treat everyone like a criminal. Honest people will not mind.” Bitcoin taught me: “Don’t trust, verify.” Today was another reminder of something every serious security engineer already knows. Do not build your security around a single point of failure. Do the work to do it right.

To everyone who lost funds today, I’m so sorry. I hope you can find solace in remembering how early things are and see clearly for the long term.

Later edit: After publishing this, Hodlonaut went into remarkable depth on the attack. His piece, The Paranoid Wallet, is the most thorough breakdown I have seen.

When people go to war, almost no one thinks of themselves as the bad guy. A new ideological war has been unfolding in Bitcoin, and the problem is that both sides are right.

The controversy centers on BIP 110. If you have followed the online debate, you have likely encountered two irreconcilable narratives. One side describes an immune response: the network defending its purpose as money against parasitic acts. The other describes a coercive minority takeover that breaks legitimate use cases and risks a chain split. Having listened to both camps for the better part of a year, I believe this battle of ideals is much closer than people realize. However, one side edges out a victory in my book, and after sufficient due diligence, I want to share that perspective.

Before going further, I must acknowledge the intellectual heavyweights on both sides of the aisle, most of whom I deeply respect. Like any conflict, there are tragedies; I have lost respect for or drifted from people I once looked up to in this one. But a battle of ideas is about the ideas themselves, not the people presenting them. This is about securing the best future for Bitcoin, and regardless of the outcome, I believe Bitcoin will emerge stronger.

So, let us examine this properly.

What BIP 110 Actually Does

BIP 110 is a temporary consensus soft fork lasting 52,416 blocks, or roughly one year. During this window, enforcing nodes treat any block containing a rule-violating transaction as invalid. When the window closes, every restriction automatically lifts.

The proposal introduces seven specific constraints:

• Rule 1: Caps new transaction outputs. Any new output script larger than 34 bytes becomes invalid, excepting those beginning with OP_RETURN (up to 83 bytes). Since modern outputs are just short hashes committing to future spending conditions, 34 bytes accommodates all modern address types, including SegWit and Taproot. The 83-byte OP_RETURN exception restores a decade-old limit removed by Bitcoin Core version 30—the decision that ignited this entire war. This rule shuts down oversized data outputs and the older trick of stuffing data into fake addresses.
• Rule 2: Limits contiguous data pushes. Single data pushes or witness items larger than 256 bytes become invalid. Actual scripts defining spending conditions (e.g., redeemScripts, witness scripts, and Tapleaf scripts) are exempt because they are code, not payload. The 256-byte limit comfortably accommodates monetary transaction signatures while preventing compressed images from fitting in a single push.
• Rules 3 & 4: Secures undefined spaces. Spending from undefined witness versions and transactions carrying a Taproot annex become invalid. Because these areas are reserved for future upgrades, they currently accept unlimited data. BIP 110 temporarily boards them up, reasoning that no legitimate use currently exists and any actual upgrade would take longer than a year to coordinate.
• Rule 5: Caps Taproot control blocks. Control blocks—proofs that a script belongs to a Taproot output’s tree—are capped at 257 bytes, limiting script trees to a depth of seven (128 script leaves). While ample for nearly every wallet on earth, it creates a hard ceiling for frontier protocols like BitVM, forcing more thoughtful engineering.
• Rule 6: Invalidates OP_SUCCESS opcodes. Any Tapscript containing an OP_SUCCESS opcode—Taproot’s upgrade mechanism—is invalid, even if it never executes. Under current rules, any script containing one is automatically valid, making them useful for soft forks but a wide-open door for arbitrary data today.
• Rule 7: Invalidates OP_IF / OP_NOTIF executions. This rule directly targets the “inscription envelope” (OP_FALSE OP_IF <data> OP_ENDIF) exploited by Ordinals to shovel images into witness data wrapped in branches that never run. While conditional logic is technically redundant in Taproot, this rule collides hardest with existing tooling.

Two overarching design features frame these rules:

1. Grandfathering: Every UTXO confirmed before activation is permanently exempt, spending exactly as it always did regardless of its script.
2. Expiration: The ruleset expires on its own after one year unless the network affirmatively renews it.

Mechanically, BIP 110 activates via a modified deployment with a 55% miner signaling threshold, rather than the traditional 95%. If miners fail to reach this, a mandatory signaling window opens in early August 2026, during which enforcing nodes will reject non-signaling blocks. This guarantees activation from the perspective of enforcing nodes and sets a fascinating precedent for a User-Resisted Soft Fork (URSF). If a contentious and truly malevolent fork appears in the future, the network now knows the best way to respond to block it.

The Edge Case BIP 110 Breaks

There are known tradeoffs and issues of how BIP 110 moves forward and is worth understanding on a technical level.

• Pre-signed, Timelocked Transactions: Grandfathering protects existing UTXOs but cannot protect transaction chains signed in advance, such as an inheritance vault designed to remain unmodifiable until a future date. If such a transaction confirms during the enforcement year and violates a new rule (like the 34-byte rule or spending through a leaf below depth seven), the network will reject it. The keys to fix it may be lost or destroyed. While no production case has surfaced, pre-signed transactions are invisible until broadcast, making it impossible to prove the affected set is entirely empty.
• Miniscript Compilers: Today’s Miniscript compilers routinely emit Tapleaves containing OP_IF for complex custody policies (e.g., “two of three now, or a recovery key after a year”). Under Rule 7, these become unspendable for post-activation coins. While workarounds exist by decomposing branches into separate leaves, tooling must be rewritten first, imposing real transition costs on complex custody.
• Pay-to-PubKey (P2PK): A compressed key P2PK output is 35 bytes—one byte over the new cap. Though nothing modern uses P2PK and existing coins are grandfathered, it remains the original transaction type used by Satoshi. Bitcoin has never adopted a consensus rule that outright invalidates the creation of its original transaction style. I actually am not a fan of this limitation.
• Upgrade Hooks: Rules 3, 4, and 6 disable Bitcoin’s upgrade machinery (like OP_SUCCESS, designed to make future soft forks confiscation-safe) for a year. Ironically, a proposal defending Bitcoin’s integrity temporarily disables the very tools built to protect it, though proponents fairly argue that no real upgrade could successfully coordinate within a year anyway.

Standard transactions (P2PKH, P2SH, native SegWit, ordinary Taproot, and Lightning) comply fully and remain untouched. Furthermore, existing coins are exempt without any deadline, and the entire ruleset self-destructs after a year. This temporary measure is mostly a demonstration of what the network demands for Bitcoin.

The strongest technical argument against BIP 110 asserts that spam cannot be stopped. Technically competent actors can embed data regardless of these rules. And, this is true. Peter Todd demonstrated this by embedding the full text of BIP 110 into a compliant transaction, and Runes—the highest-volume token protocol on Bitcoin—already fits perfectly inside an 83-byte OP_RETURN and sails through untouched.

Squeezing data limits also risks a second-order effect: UTXO bloat. Determined spammers may not give up; instead, they spread payloads across thousands of dust-holding outputs. Unlike OP_RETURN data, which nodes can prune, unspent outputs live in the UTXO set—the network’s working memory that every node must keep fast and cannot discard. Even an address holding next to nothing must be tracked forever. This is exactly why OP_RETURN was created in 2014 as a designated “trash can” to lure data away from fake addresses. The technical crowd accurately argues that building an ideal trash can is preferable to encouraging UTXO bloat.

However, the purely technical argument misses the mark and falls short of the bigger picture.

The Value of Constraint

Stability is born from limits, and meaning is born from consequence. Counter-intuitively, freedom requires limits because a life without constraint dissolves into meaninglessness.

This matters deeply in shared systems. When everyone must play on the same board, fairness depends on stable rules; the moment the board tilts for one player, everyone else is affected. Large systems separate decision from consequence, hiding costs in complexity or delaying them into the future. Power hates constraint and often arrives speaking the language of care, arguing that old boundaries are too rigid or crises are too urgent. Eventually, the system forgets that rules were placed there to protect everyone from power.

Because money is the shared board beneath every other game, sound money is a tool for progress. If the measuring stick can be stretched by those closest to power, interactions become less honest. Constraint here becomes more than a political idea; it becomes a moral one. Rules that frustrate us and slow us down are the very same rules that protect the weak from the certain that wants to tilt the board.

Developers forgot this wisdom when they implemented Taproot. To enable complex smart contracts and simplify validation, they removed the strict 10,000-byte script size limit that SegWit had previously established. They assumed economic irrationality would prevent abuse, but they were wrong. The removed limit, combined with the SegWit witness discount, created an arbitrage opportunity. The inscription angle (OP_FALSE OP_IF trick) allowed anyone to stuff megabytes of data into a single Taproot transaction at a fraction of the normal fee rate.

This wasn’t a brilliant use case as the name Taproot Wizards would imply; it was an exploit of removed constraints that birthed the spam-as-a-service industry inside Bitcoin. Tens of millions of dollars in venture capital were raised to abstract away technical complexity so that the least competent and respectful users could do whatever they pleased, so long as they paid the tollmasters.

Enabling bad behavior is not a strategy for incentivizing good behavior. Trash can logic assumes spam demand is fixed, but demand responds to friction, cost, and signal. Reintroducing base-layer constraints naturally pushes data-heavy use cases to higher layers or other blockchains, substantially better locations than on base layer Bitcoin. Neutral systems can still recognize bad behavior; I will defend freedom of speech for everyone, but still know justice seeing someone being a jerk face consequences for their actions.

Historically, spamming Bitcoin required real technical competency, which acted as an unappreciated filter for decency. The best martial artists are usually the last to take action. They understand the damage they can impose. Just because they can doesn’t mean they should. Just because a competent user can spam doesn’t mean they should. The OP_RETURN expansion created a perverse incentive where companies built businesses entirely around abstracting that complexity away. Spam-as-a-service is not a business model Bitcoin should tolerate, and we should take any reasonable action to thwart it. Bitcoin deserves to be treated better.

A Battle of Ideals

Judged purely through a technical lens as a spam filter, BIP 110 is somewhat weak. No solution is perfect. But judged as a representation of displeasure against the spam-as-a-service industry, it is aimed exactly right. The threat was never the competent individual; it is the VC-funded companies and NFT marketplace raising absurd figures on the premise that Bitcoin’s node operators will store their content forever, for free, without permission. BIP 110’s real victory is the demonstration that a tragedy of the commons will not be tolerated so easily here.

The other side is defending a vital principle, too: that your use of Bitcoin should not be subject to a vote, and that money for enemies means defending usage you find distasteful. Both sides are defending the same value—credible neutrality—but disagreeing about what threatens it more. One side sees neutrality dying by capture through spam and developer drift; the other sees it dying by precedent of censorship. Almost no one in this war thinks they are the bad guys, and genuinely, almost no one is—though a few suspicious actors have emerged that are worthy of future pause.

For me, the philosophical argument carries more weight. The edge cases BIP 110 breaks are narrow, disclosed, and temporary. The incentive structure it confronts is broad, compounding, and permanent if left alone. A Bitcoin that cannot express displeasure to spam-as-a-service is a Bitcoin whose priorities will eventually be set by the businesses monetizing goodwill against itself.

Part of what makes Bitcoin uniquely beautiful is that true consensus gives everyone a real voice. I don’t pretend to know which future arrives, but my node will be signaling for BIP 110 with clear eyes about what that means for me. I know I will be in the minority on this one, but standing up for what I believe is right in the face of the many is exactly where Bitcoin began for me. I’m in familiar territory.

The terrain of this emerging battle of ideals is unfolding. Bitcoin has survived many civil wars that looked existential from the inside, but every battle left the network more resilient. Whichever side prevails in August, the fact that a decentralized network of node runners is still willing to go to war over what they believe Bitcoin should be is actually a really beautiful thing. Even if BIP 110 only ends up being a small group expressing discontent, the fact that people are looking is important. BIP 110 is an important social voice demanding better for Bitcoin. BIP 110 is a reduction, and thoughtful constraint. There is wisdom in constraint.

That is why I am running BIP 110.

BIP 110: The Network Answered Editorial Follow-up

June 12th 2026·Block 962,200·$64,048.58

When I wrote about BIP 110 a few weeks ago, I said something that I still believe: the fact that Bitcoiners were willing to fight over the purpose of their money was a beautiful thing.

I also said I would signal my node for BIP 110. I knew I would be in the minority. I did not expect the outcome to remain ambiguous for long. I thought a small but meaningful group of people might show up, make their displeasure known, and then we would see where the network wanted to go.

For a brief moment, that is exactly what happened.

When the mandatory-signaling period began at block 961,632, the first non-signaling block from AntPool continued on the dominant chain. An enforcing BIP 110 block appeared on the other side. Then came the strange few blocks where you could watch both paths form in real time. F2Pool extended the dominant chain. OCEAN produced another block on the non-BIP 110 side.

For a minute, it was honestly fun to watch. It felt like a living demonstration of what Bitcoin is supposed to be: people choosing which rules they are willing to accept.

I want to give OCEAN credit. Pooled mining has a way of obscuring who is really making a choice. A pool signals, the block says a pool’s name, and the rest of the world can forget that a large amount of individual hashpower sits behind that label. OCEAN made the BIP 110 question more visible to miners and gave people a clearer path to express where they stood. I think the industry should keep moving in that direction. Miners should have meaningful representation when pools take positions on controversial changes.

BIP 110 did not achieve the coordination required to become Bitcoin’s shared rule set. The enforcing branch quickly lost ground and stalled while the main chain kept producing blocks normally.

The market spoke.

A group can be right to express displeasure without having earned the ability to impose a new consensus rule on everyone else. That is the lesson I take from BIP 110.

A real group of people showed up to say that they do not like spam on Bitcoin. The spam-as-a-service industry should understand that there are people on this network who see its business model as parasitic. They are willing to do work, run software, take social heat, and bear real cost to say so. That is not nothing. In fact, I think it may be the most enduring part of this entire episode.

But a social message is different from consensus.

I will no longer run my node against the chain that the overwhelming network has chosen. Bitcoin is the most-work chain under the rules that people broadly coordinate around. That principle matters even when the outcome disappoints me. Bitcoin has to remain a representation of consensus. That is what makes it special.

For me, continuing to follow a fork after the network has given its answer would undermine the most important part of what Bitcoin is.

The original BIP 110 essay argued that there is wisdom in constraint. I still believe that. We should not be so quick to expand capability on the base chain. Taproot has shown how quickly an unintended consequence can become an industry.

But this episode also reinforced another kind of restraint: once the network has given a clear answer, we have to have the discipline to accept it.

BIP 110 did not become consensus. The social signal remains. Both matter.

It has been interesting watching Saylor on his journey. He is incredibly intelligent and has in several ways furthered my thinking on Bitcoin. Whatever criticisms I have here should be read through that lens first. He clearly learned something real. And like all bitcoiners who stay around long enough, some of that understanding was earned the hard way. That being said, I feel like he is learning lessons we all learned before he was involved with Bitcoin.

In the earlier days of the project, there was rich debate around how best to handle the knowledge gap of the broader market. The truth is, it will take a long time for the idea of Bitcoin to fully penetrate the zeitgeist of our modern fiat era. It’s been incredibly fun watching this shift happen slowly over time. One of the unfortunate truths, though, is that people cannot be herded like cattle by sheep dogs in order for Bitcoin to win. The knowledge gap is the bridge that everyone must cross on their own time. And, when Bitcoin becomes big enough to be impactful on a personal level, that will force reflection. That’s the idea behind the previous article — “Bitcoin is on a need to know basis”.

Some of the early tinkerers in the space would create new projects that would derail from the very things that make Bitcoin special: Decentralization, immutability, the instantiation of money for all, the inability to be changed by the few. What was interesting about these projects is that they would often have the same funding mechanism: Bitcoin. The ICO craze was polluted by these projects. The pattern of “I love Bitcoin, buy my Sh*tcoin” became a real phenomenon.

Strategy is not dead, and Saylor has not become an idiot overnight. In fact, if you ran the simulation a hundred times, I think Strategy probably walks out alive in most of them. Maybe 95 out of 100. Focusing on odds of survival though kind of misses the point.

My primary concern is misalignment. Saylor has built products for a market in a way where there has to be winners and losers. And from what I can tell, Strategy will likely be one of the winners over a long enough time horizon. So who exactly are the losers in this game?

The earlier version of Strategy was actually fairly simple. The company had Bitcoin on the balance sheet and basically raised money in two primary ways:

At-the-Market (ATM) Equity: The company issued common equity. In plain English, if the market was willing to pay a high enough price for Strategy shares, the company could print a new share, sell it into the market, take the cash, and buy Bitcoin. While dilutive because it increased the share count, if the economics worked, it was still accretive in Bitcoin terms because the company increased its Bitcoin-per-share ratio.

Convertible Debt: Strategy issued near-zero-coupon convertible bonds that converted into equity at a premium to the current stock price. For example, if the stock traded at $10 and a convertible was issued up 30%, the holder would convert at $13. Strategy effectively sold future equity at a premium, took the cash immediately, and bought Bitcoin. Then, the debt was settled.

This structure allowed the company to raise large amounts of capital without building large, current cash obligations into its framework. The company itself was not a massive cash-producing machine like Microsoft or Amazon; its operating business was relatively small and did not throw off the kind of cash flow required to comfortably support large recurring payments. Because of this, the cheapness of their early capital mattered immensely.

There was no interest burden of real significance. The convertibles matured. They converted into equity if the trade worked. The company did not have to keep feeding a massive cash obligation every month just to keep the machine alive. In that earlier world, there was no obvious scenario where they would be forced to sell Bitcoin.

This is why I believe the earlier version of Strategy was much more aligned with the spirit of what Saylor had spent years preaching: Bitcoin as superior money. Bitcoin as the answer to the melting-ice-cube problem. Never sell your Bitcoin.

At some point, Strategy outgrew the convertible market. He could have said the trade had reached its natural limit. In many ways though, the market prices growth projections forward. It’s tricky because once you genuinely see the light of what Bitcoin actually is, you want to turn the world upside down to get as much exposure as possible. Surely, if you have seen it, others will soon follow. Almost everyone gets out over their skis the first time they truly grok Bitcoin. This is another piece of earned Bitcoin wisdom.

Strategy then entered a new chapter: preferred stock. This is where the conversation starts to get fuzzy. The preferred stack can be broken down into four products, totaling roughly $15 billion in obligations:

Strike (STRK): 8% convertible preferred (~$1.4 billion outstanding)

Strife (STRF): 10% senior preferred (~$1.3 billion outstanding)

Stride (STRD): 10% junior preferred (~$1.4 billion outstanding)

Stretch (STRC): The flagship variable-rate perpetual preferred (~$10.5 billion outstanding with a current dividend rate of ~11.5%). This is the one that really matters.

These products create a recurring debt that must be fulfilled against either income or capital gains. Given that Strategy lacks a substantial operating business, this leaves only one realistic option: Strategy will have to sell Bitcoin in a substantial way in the future to meet its obligations.

The other glaring issue is that perpetual preferreds have no clear end date; they last forever. It bothers me that there is no mechanism for the company to clear this off the cap table. Does that not incentivize hyperinflation?

As someone who professionally manages debt-based leverage inside a fund, I can honestly say I would not want Strategy’s obligations. Their stack is genuinely impressive. However, the more debt you accrue, the narrower your window for “being right” becomes.

Strategy’s bet is that Bitcoin, as a whole, will likely yield a 30-40% CAGR over the next decade. I personally think it will land around the low end of 30%. However, another piece of earned wisdom is that Bitcoin follows no one’s timeline. It does not care about the clock. It will be absorbed at whatever pace humanity can process it—which is anyone’s guess.

When you speculate with leverage on Bitcoin, you are effectively guesstimating the rate at which humanity will digest and understand the asset. The end state is obvious to me, but the path is not. When I take leverage, I give myself the widest window possible. I also generally do not recommend that everyday people take leverage, as 99% will fumble the ball along the way. The vast majority are better served simply storing their excess value in Bitcoin long-term.

This brings me back to my primary issue with products like STRC. Strategy’s ability to pay you back depends entirely on Bitcoin’s appreciation outperforming their capital obligations. This means you will always be better off buying Bitcoin directly rather than a product like STRC. In this arrangement, you are the product. Living beneath your means, storing value in BTC, and financing your life conservatively over a long time horizon will easily beat a perpetual preferred. And if it doesn’t, Strategy wouldn’t be able to pay you anyway.

Look at the competing interests across their capital stack:

The Debt Holders: Sitting at the top, they care about asset coverage and seniority. Their core belief is that assets will always exceed liabilities, and they will get out first if the structure unwinds.

The Preferred Holders: They are not backed by Bitcoin in any direct sense. If they want out, Strategy isn’t handing them Bitcoin; they must sell their security on the secondary market. They care about the dividend and market confidence. Their core belief is that the dividends will keep flowing.

The Common Equity Holders: They are buying the upside story. They care about Bitcoin-per-share accretion and the premium to net asset value. Their core belief is that Bitcoin’s appreciation will keep the equity attractive enough for the machine to keep running. However, their upside is capped because Strategy will dilute them in both up and down markets.

The Bitcoiners: The wider market now cares whether Strategy will ever be forced into becoming a meaningful seller. Their core belief is that Strategy will never dump Bitcoin. Yet, make no mistake: by equipping themselves with perpetual preferreds, Strategy has become a forced seller.

Individually, each of these beliefs can hold for a long time. Collectively, I do not believe they can hold together because the incentives are hopelessly misaligned. Someone in this stack is going to be the loser.

The company does not produce $1.7 billion of annual operating cash flow to service that burden in the ordinary way. So where does the money come from?

One option is to sell Bitcoin (making Bitcoiners nervous).

One option is to issue more common stock (diluting common holders).

One option is to let the preferreds suffer and forego distribution (the pitch wasn’t quite what they thought).

One option is to rely on continued balance sheet strength and sheer confidence long enough for the whole machine to clear itself.

Strategy is stressed right now. They will likely survive this stress and then they will look like geniuses in the next run up. But at the end of the day, they still have a misaligned capital stack that is basically “I love Bitcoin, buy my Sh*tcoin”.

When someone borrows Bitcoin’s credibility only to sell something adjacent to it, I find it unsettling. Bitcoin is the source of trust. It is the asset that those in the know understand truly matters. Instead of helping people understand and own Bitcoin directly, Strategy built something next to it and asked people to buy that instead.

I am not saying Strategy is the same as an ICO. It obviously is not. The quality of thought is higher. The seriousness is higher. The legal reality is different. But I do think there is a parallel worth naming.

Part of Bitcoin wisdom is learning that the market wanting something does not make it aligned. Markets want convenience. They want yield. They want exposure without custody. They want upside without responsibility. They want to feel close enough to Bitcoin to benefit from it without having to do the work. But by monetizing that desire Strategy pushes people away from what would ultimately make its success happen sooner.

That market demand will get met – and people will continue to seek this out for a very long time. To Strategy’s credit, their offering is light years better than their predecessors. But the complexity has probably added too much misalignment. This is why I keep coming back to the same place. Strategy will likely survive and if they do they will be a megalith. But it does bother me understanding that it’s off the backs of those who would have been better served owning Bitcoin.

I respect the original insight. I respect the boldness. I respect that Saylor likely learned many real lessons and that Strategy’s stack is beyond impressive. In a perfect world, I wish they hadn’t gone down the perpetual preferred path. What Strategy has done does not remove the burden of understanding. It delays it. It moves it. It hands it to somebody else for a time. Are the newer products being sold around this structure aligned with the people buying them? I do not think they are. And if that is right, then the real mistake here is not intelligent financial engineering. It is forgetting that Bitcoin’s revolution was always going to require society to do the work. There was never going to be a shortcut.

I do not think that framing gets to the heart of the idea.

The point was never that the fight had to be fair, or that each individual had to stand on equal footing with a collective force in order to matter. The point is that power behaves differently when it confronts defense. Injustice tends to arrive in the presence of defenselessness. Friction forces thoughtfulness. And when it is carried out in human terms, man versus man, it becomes harder to carry through. Bureaucracies can hide it. Institutions can sanitize it. Governments can rationalize it. Yet in the end, one side acts and the other side either has some capacity to resist or it does not.

Humanity seems to do its worst when the other side cannot do anything.

That is the spirit I am trying to get at. The Second Amendment, in its essence, speaks to the danger of defenselessness. It reflects the belief that people should retain some meaningful ability to push back when power becomes concentrated and abusive. Whether one agrees with that politically is almost beside the point here. The underlying human observation still matters.

There is a monetary parallel.

So long as we allow ourselves to remain defenseless within the monetary system, we are choosing to trust that concentrated power may restrain itself indefinitely. History gives very little reason for that confidence. Trust is routinely abused. Power corrupts, and absolute power corrupts absolutely.

Monetary discretion expands when it can. The incentives run that way. A debt based system intensifies the problem because each round of intervention creates the conditions for the next one.

The abuse does not stay still. It compounds.

That is where Bitcoin enters the picture for me.

When I say Bitcoin is the Second Amendment of money, I am not trying to make the discussion more theatrical than it needs to be. I am trying to describe its function. Bitcoin gives the individual a form of monetary self defense. It gives people a way to hold value in an asset that is far harder to dilute, seize, censor, or politically manipulate than the alternatives most people rely on.

That matters because almost every conventional store of value carries a large attack surface. Real estate can be taxed, regulated, restricted, financed, rezoned, or made uneconomic by policy. Equities live inside legal, custodial, and market structures that depend on institutional continuity. Bank deposits are claims inside a fractional reserve system. Cash can be seized and already faces tremendous friction in large quantities. Gold has enduring monetary qualities, but it is heavy, visible, difficult to move at scale, and vulnerable at the points of custody and transport.

These assets may still be useful. Some of them may remain excellent investments. That is not really the issue. The issue is how easily they can be compromised.

Bitcoin is different because the core of it is governed by constraint.

That point matters. One of the strongest signs that a system is working well for citizens is that there are real limits on what those in power are allowed to do. Constraint is not weakness. It is often the feature that keeps a system healthy. The more loosely a government can act, the more the citizen is forced to rely on the character of the people in charge. That is a fragile basis for freedom.

Bitcoin benefits from design constraint. It is a governing protocol for money with narrow boundaries. Its supply is constrained. Its rules are constrained. Its monetary policy is constrained. No committee can decide that a difficult quarter calls for more units. No political class can quietly vote itself relief. No central banker can improvise away the discipline of the system because reality became inconvenient.

That narrowness is the beauty.

People often prefer systems that seem flexible, because flexibility sounds practical and humane. In reality, flexibility often means discretion, and discretion in money often means unequal treatment. It means insiders move first. It means those closest to power absorb the shock differently than everyone else. It means the rules for me and not for thee.

Bitcoin does not have any parts to negotiate with. It is not threatened by anyone. Bitcoin does not care. It simply sits there with rules that are incredibly difficult to alter and ownership that is similarly hard to override when held properly.

The value is that it changes the terms of power. A defenseless person is easier to abuse. A population built to enable individualism collectively outgrows the slave state. The same is true in money. A population forced entirely into state aligned financial rails is exposed in one way. A population with access to an asset beyond intervention imposes a better path.

Bitcoin changes those terms. Bitcoin separates money and state. The separation of money and state will be a force for good in humanity that will surpass the separation of church and state.

It does not create a perfect shield. Nothing does. Governments can still try to tax it. Access points can still be burdened. People can still make mistakes in custody. Friction can still be introduced. Yet even after conceding all of that, Bitcoin remains unusually hard to attack when its users opt out. The asset has legs. Anyone holding it can relocate themselves and avoid friction that other assets face. And there is an even harder edge to that reality: if someone kills a holder without getting the secret, the Bitcoin is gone to them forever. The secret dies with the person. With Bitcoin, the pressure lands first on the surrounding infrastructure. Change your infrastructure if you are mistreated. This incentivizes cooperation over coercion.

That difference matters.

For me, that is the heart of Bitcoin.

"Speak softly and carry a big stick" is a useful way to think about Bitcoin. It does not scream for attention. It does not ask permission to exist. It does not rely on the goodwill of policymakers to maintain its integrity. It simply offers the individual a credible monetary defense in a world where defenselessness has a terrible track record.

As long as the paycheck shows up, the card clears, the bank wire lands, and the savings account still feels intact, money stays in the background. It feels settled. People notice prices rising, houses drifting out of reach, and the quiet pressure to take more risk just to stand still, but they rarely stop to ask what money is, who controls it, or how it came to be.

Bitcoin enters the picture differently. It tends to arrive first for people who do not have the luxury of comfort. The people closest to monetary pressure often encounter it earliest. That pressure can take many forms. It can look like inflation, debanking, censorship, sanctions, capital controls, frozen accounts, broken banking rails, or the simple realization that saving in the local currency is a slow form of surrender. Whatever shape it takes, the effect is similar. Necessity sharpens perception.

That is why I think Bitcoin is on a need to know basis.

There is something quietly beautiful about that. The people who need Bitcoin most often get an earlier chance to see it clearly. I do not mean that in a triumphalist way, and I do not mean it as an insult to people who have not needed it yet. It is simply one of the quieter poetic qualities of Bitcoin's adoption curve. In many cases, the people least protected by the present system receive the earliest invitation to see beyond it.

This also helps explain one of Bitcoin's most misunderstood features. Early adoption by dissidents, criminals, sanctioned actors, and people operating at the edges of the system is usually treated as a reputational stain. I think it is more revealing than that. A censorship resistant monetary network will be discovered early by people living under censorship. A money that can move outside broken rails will be discovered early by people trapped inside broken rails. A tool that preserves value will be discovered early by people whose money fails them.

That does not make every early use admirable. It does tell us something important about the tool.

Money becomes visible when dignity is violated. When people say money is just a neutral instrument, they usually mean they have not yet watched it fail in a way that reaches into daily life. Money is stored time. It is stored effort. It is stored energy. It is stored sacrifice. When the money is diluted, manipulated, frozen, or politically redirected, something intimate is being violated. People feel that reality at different speeds. The people who feel it first will find Bitcoin first.

There is another side to this story, and I think it matters just as much.

The pattern cuts both ways. Many of the early people who touched Bitcoin were lucky. Some were brilliant engineers. Some were curious internet natives. Some were libertarians, cypherpunks, or financial skeptics. Some simply stumbled into the right room at the right time. Yet even among those early adopters, very few fully understood the magnitude of what they had found. They saw a technology project, a weird internet coin, a libertarian experiment, a sharp trade, or an asymmetric bet. They often did not zoom out far enough to see the deeper human innovation that is Bitcoin.

So they sold.

Everyone sold.

They sold because no one really got it. They got pieces of it. They got the code. They got the novelty. They got the anti bank instinct. They got the upside. They did not get the full significance. Very few people saw Bitcoin clearly enough, early enough, to hold it through the kind of volatility and social ridicule required for it to change their life. The lucky ones who held long enough often did so with a mix of conviction, stubbornness, accident, or lost passwords later recovered.

That is part of what makes Bitcoin so difficult to understand in real time. Early access was never the same thing as deep understanding. Being first did not mean seeing furthest.

Max Keiser is the earliest person I know who really seemed to grasp the magnitude of it. There were others who got close, but even many of the earliest participants treated Bitcoin as something to trade around rather than something to hold as the discovery it was. That does not diminish their contribution. It simply shows how rare genuine comprehension was. If almost everyone sold, then almost no one understood it deeply.

This is why I think the social path of Bitcoin has looked so strange for so long. The privileged dismiss it because they do not need it. The early technical classes often underestimated it because they zoomed in too close and saw cool technology where something much deeper was taking shape. One group was too insulated to care. Another was too close to grasp the bigger picture. In both cases, the deepest truth of Bitcoin remained hidden.

That truth only becomes legible when you widen the lens. Need widens the lens.

Bitcoin is a monetary discovery that sits outside the channels of human discretion. That matters because most people still live inside systems they believe can be repaired, managed, or trusted long enough to keep functioning. If your life is going well inside the present order, Bitcoin can feel unnecessary. If your attention is captured by the technical layer alone, Bitcoin can feel smaller than it is. Yet for the invisible many, Bitcoin is hope.

Over time, this circle widens.

The people at the edges have the chance to learn first. Then the lesson moves inward. It reaches the saver who realizes cash is melting. It reaches the family priced out of owning a home. It reaches the business owner facing more red tape. It reaches the institution that begins to understand that payment rails are political objects. Bitcoin starts as something only a few people need to know. Over time, everyone will need to know Bitcoin.

That path may feel unfair. It may feel messy to observers who want adoption to arrive soon. It may even feel offensive to people who assume the most important ideas should be recognized first by the most educated. Reality tends to work differently. Sometimes the people with the clearest view are the people under the most pressure. Being high up does not offer a better view of Bitcoin.

There is a soft kind of justice in that. Some take it and hold on. Many touch it and let go. Others arrive years later after the surface level red flags have faded and the social permission structure has improved. Whatever shape it takes in your life, it will touch you. That is just part of Bitcoin's strange journey.

To our readers,

Every few years, the hunt for Satoshi Nakamoto comes back into fashion. The latest version arrived through The New York Times. Adam Back belongs on any serious list of people who mattered to Bitcoin's intellectual ancestry. He invented Hashcash. He was cited in the original whitepaper. He was present in the cypherpunk circles where the ideas that became Bitcoin were being worked out. The article gets the atmosphere right. It gets the evidentiary standard wrong.

That surface plausibility is where the piece gets most of its strength. The New York Times walks the reader through a series of biographical and stylistic parallels: Back's timing, his technical background, his communication patterns, his presence in the right communities at the right moments.

Those parallels sound persuasive because each one is true in isolation. The trouble begins when the article asks the reader to treat their accumulation as proof. It does not earn that conclusion.

This is the central methodological problem. The article treats environmental overlap as if it were identity evidence. In a community as small and interconnected as the early cypherpunk and cryptographic research world, shared context is not a distinguishing signal. It is the background condition. Almost everyone who was close to Bitcoin's creation would share most of these traits.

That matters because the Satoshi question has always been polluted by narrative seduction. Once a suspect fits the right profile, confirmation bias takes over. Details that support the theory feel significant. Details that cut against it get minimized or explained away. The New York Times piece is not immune to this dynamic. The article openly leans on that type of reading when it gives weight to Back's discomfort and body language. That may work in a profile. It should not carry much weight in attribution.

The same issue appears in the article's use of phrase hunting and textual pattern recognition. The accessible coverage of the piece shows a method built in part around collecting unusual words and expressions from Satoshi's emails and posts, then searching for suspects who used similar language. That sounds rigorous until one remembers the setting. Bitcoin emerged from a small technical culture with shared reference points, shared reading lists, and shared obsessions. Inside a narrow cryptographic and cypherpunk community, lexical overlap is expected. It is the context, not the resolution.

The author's supporting materials also point out that stylometric analysis tied to coverage of the story was inconclusive, with other candidates reportedly appearing close when the method changed. If that is true, then one of the more formal looking pillars of the argument is weaker than it first appears. Once stylometry stops carrying decisive weight, the case slides back toward biography, atmosphere, and coincidence.

What is missing is more important than what is included. A serious attempt to identify Satoshi should place enormous weight on primary technical artifacts. Code matters more than adjective choice. Implementation style matters more than a reporter's intuition about facial expressions. System design decisions matter more than broad biographical alignment. Historical timing matters more than a stack of suggestive parallels. If the strongest evidence does not live at that level, the case remains speculative.

That is where the critique of The New York Times piece becomes sharper. The article seems far more interested in constructing a compelling suspect than in testing whether the suspect survives the hardest standard. The hardest standard is not whether Adam Back resembles the kind of person who could have built Bitcoin. He clearly does. The harder question is whether the evidence uniquely points to him once one filters out all the traits that were common in the exact milieu from which Bitcoin emerged. On that question, the article appears paper thin.

One of the more interesting counterpoints raised concerns code style. Robert Graham argues that Back's available code and Satoshi's code do not look remotely similar in programming style. He describes Back's code as that of an academic Unix programmer who also hacked for Windows, while Satoshi's Bitcoin code looks more like the work of a professional Windows programmer who also wrote for Unix. Whether one accepts that conclusion in full, it is the kind of evidence that deserves more attention than many of the softer clues emphasized by The New York Times.

That distinction gets to the heart of the matter. Higher value evidence lives in code style, implementation habits, architecture choices, technical tradeoffs, historical timing, and primary source artifacts. Lower value evidence lives in body language, shared political instincts, shared jargon inside a niche field, and the general atmosphere of a well told mystery. The New York Times piece spends too much of its persuasive energy in the second category and not enough in the first.

There is also a larger point here, one that says as much about media as it does about Bitcoin. Institutions like The New York Times are drawn to mysteries they can close with a face, a name, and a satisfying reveal. Bitcoin resists that instinct. Its origin story invites projection because its inventor disappeared, left behind a body of text, and never returned to claim ownership of the myth. That vacuum encourages journalists to convert probability into narrative closure before the evidence justifies it.

In that sense, the article succeeds as storytelling. It fails as proof. Adam Back remains an important figure in Bitcoin's prehistory and development. He remains a plausible suspect in the broad and ordinary sense that he was close to the ideas, close to the people, and technically capable enough to fit the era. That is not a small observation. It is still far away from establishing that he was Satoshi Nakamoto. And, if you've read my thesis, you know who I deeply believe to be Satoshi.

For readers trying to think clearly about the question, the right takeaway is modest. The New York Times assembled a long list of reasons Adam Back belongs in the conversation. It did not close the case. The article's strongest contribution is reminding people how rich Bitcoin's intellectual ancestry really was. Its weakest move is suggesting that a pile of circumstantial environmental overlap can do the work of decisive evidence.

Bitcoin deserves a higher evidentiary standard than that. So does the Satoshi mystery.

To our readers,

The conversation around quantum computing and Bitcoin has become louder in recent months. That is understandable. If a machine were ever built that could reliably break the mathematical defense that most of the world leans on, the consequences would be serious. Ownership itself would come into question for a class of coins. A subject with that kind of downside deserves thoughtful attention.

What it does not deserve is panic.

The current discussion often moves too quickly from theoretical possibility to practical threat. That leap is where the distortion enters. Quantum risk is real as a category. The claim that Bitcoin is facing an imminent quantum emergency is something else entirely. Those are very different judgments, and the evidence for the second one remains weak.

Where the threat actually sits

The first place to slow down is at the level of what quantum computing would threaten inside Bitcoin.

The primary issue is digital signatures. A sufficiently powerful quantum machine could attack elliptic curve cryptography and derive private keys from exposed public keys. This is an ownership problem. It is not mainly a mining problem. It is not mainly a proof of work problem. It is not a claim that Bitcoin's entire structure suddenly evaporates in one instant. The issue is more specific, which is helpful because specific problems can be reasoned about clearly.

That distinction matters because public debate often blurs layers together. When people hear "quantum breaks Bitcoin," they imagine the whole system collapsing. Reality is more granular. Some coins would be more exposed than others. Some address types are more vulnerable than others. Migration paths matter. Output design matters. Timing matters. Once you make the problem more precise, the conversation becomes far less theatrical.

The strongest reason the quantum threat is overstated today is simple: people keep confusing progress in theory with progress in physical implementation.

A paper that reduces the number of logical qubits needed to attack elliptic curve cryptography is meaningful. It moves the academic discussion forward. It can even move the planning discussion forward. What it does not do is produce a machine that can be built, scaled, powered, cooled, error corrected, and operated reliably enough to attack Bitcoin in the real world. That physical gap remains enormous.

Quantum computing research continues to produce intellectually impressive work. Yet the history of the field is proving physics far harder than expected. A toy system is one thing. A machine capable of breaking meaningful cryptography is another. The public conversation often treats the first as if it is only a short walk from the second.

There is little evidence for that confidence. If an architecture were truly marching toward cryptographic relevance, we would expect to see repeatable scaling on the same architecture over multiple generations. We would expect the path from one level of coherent performance to the next to look more like engineering refinement and less like starting over inside a new problem space. We are not there. That does not mean the risk is imaginary.

Bitcoin should prepare without surrendering to urgency theater

Preparedness is not the same thing as panic. In fact, panic is one of the worst possible ways for Bitcoin to respond.

Bitcoin cannot afford to make cryptographic decisions the way a software company ships a patch. Mistakes here would be expensive, difficult to reverse, and deeply social in their consequences. Wallets, exchanges, custodians, multisig setups, Lightning tooling, watch only infrastructure, hardware support, and user behavior would all be affected by a rushed migration. Bitcoin's conservatism exists for a reason.

Even if quantum timelines are uncertain, Bitcoin's own adaptation timeline is slow. Migration will take years. Testing takes years. Social coordination will likely be quick, however, once the threat is demonstrable. So the right conclusion is that Bitcoin should already be working on credible options.

That balance matters. A system this valuable should be hard to change. Every change brings a trade-off. There is also a subtler cost to overstating the threat. When people start talking as though Bitcoin's current cryptographic stack is about to become obsolete, they discourage meaningful work being built on top of it today. That would be a mistake. If the evidence pointed to a near term break, that caution would be rational. The evidence does not point there. So Bitcoin should keep building while also preparing its next set of tools.

This is where BIP 360 becomes important.

In its current direction, BIP 360 appears to be one of the most credible response paths being explored for Bitcoin. I think it is likely the network's best reaction implementation if the quantum conversation continues to mature and deserves action. The reason is not that it solves everything. The reason is that it looks like a practical first step that respects how Bitcoin actually changes.

BIP 360 is best understood as a structural improvement. It aims to give Bitcoin a tapscript native output path that removes the quantum vulnerable keypath exposure associated with current Taproot style designs. In plain language, it reduces a known class of risk without pretending to deliver full quantum invincibility in one stroke.

That is exactly the kind of response Bitcoin should prefer.

A serious network response should reduce exposure where it can, preserve as much existing utility as possible, and keep future optionality open. BIP 360 appears to do that better than most of the louder rhetoric around the subject. It looks incremental. It looks compatible with Bitcoin's conservative temperament. It looks more like a bridge than a forceful push.

Just as important, the evolution of BIP 360 itself is evidence that Bitcoin is taking the subject seriously in the right way. The proposal has already been refined around real engineering constraints such as verification cost, block space, algorithm choice, wallet compatibility, and multisig implications. That is what real preparation looks like. It is slower than panic wants. It is also far more productive.

BIP 360 should not be described as a final answer. It does not solve the migration problem for every vulnerable coin already sitting on the network. It does not eliminate the broader challenge of choosing and deploying post quantum signature schemes. It does not remove the social difficulty of getting the ecosystem to move in an orderly way. Still, if the question is whether Bitcoin has a sane direction available, the answer is yes.

The real lesson

The quantum discussion is useful when it teaches humility about cryptography. No signature scheme should be assumed eternal. Over long enough time horizons, every security assumption deserves re-examination. Bitcoin should absolutely internalize that lesson.

What Bitcoin should reject is the desire to rush a solution to a problem that isn't there yet — which would likely bring costs greater than a perceived threat. This network was built to operate under adversarial conditions. That includes technical threats, social pressure, and narrative distortion. If Bitcoin can be pushed into major protocol decisions by fear ahead of evidence, then fear itself becomes an attack vector.

The right posture is steadier than that. We should continue to monitor the physical reality of quantum computing, not the headlines that surround it. We should continue to research migration paths, test candidate designs, and improve the menu of available tools. We should also remain disciplined enough to admit that current public discussion is often outrunning current evidence.

At some point the quantum threat will become real and this will no longer be my position. However, this is where I stand today.

Quantum is a subject worth preparing for. It is worth serious engineering work. It is worth watching closely. It is also, in my view, a fairly overstated reason for present panic around Bitcoin. Time matters here, just as it does everywhere else in Bitcoin. Time for technology to prove itself. Time for evidence to accumulate. Time for the network to prepare carefully. Time for the strongest solutions to emerge.

Bitcoin needs the same thing it has always needed: to stay true to its design and react logically when virtually everyone agrees on the path and the time.

Bitcoin and the broader markets have had a rough start to February. The announcement of Kevin Warsh as President Trump's nominee for Federal Reserve Chair sent a wave of uncertainty through the system. Warsh is, by reputation, an inflation hawk. So why would a president who has relentlessly demanded lower rates nominate a hawk?

To understand what is happening, we need to look at three things: who Kevin Warsh is, the mathematical reality facing the Federal Reserve, and the political incentives facing the president.

Who is Kevin Warsh?

First, some context. Kevin Warsh is not a typical Fed nominee. At 55, he has already served as the youngest ever Fed governor (appointed in 2006 at age 35), where he was a key player in the response to the 2008 financial crisis. He is a Stanford and Harvard educated lawyer with a background in Morgan Stanley's M&A department. He is also married to Jane Lauder, an heiress to the Estée Lauder cosmetics fortune. He is, in short, a member of the establishment.

But his policy positions are an enigma. After leaving the Fed in 2011, he spent a decade as a vocal hawk, criticizing the very policies he helped implement. In the last two years, however, he has pivoted, echoing President Trump's calls for lower rates. Watchers are left asking: which Warsh will show up?

The truth is, it doesn't matter which Warsh shows up. The Federal Reserve is trapped by simple arithmetic. There are four doors to deal with the national debt, and three of them are locked.

1. Austerity (Locked): Neither political party will ever cut spending enough to make a difference. The political will simply isn't there.
2. Raise Taxes (Locked): This is not only unpopular, but it's also ineffective. As we've seen in states like California and New York, the wealthy simply leave. Furthermore, high taxes stifle productivity, leading to diminishing returns.
3. Default (Locked): A sovereign nation will never voluntarily default on debt denominated in its own currency.

This leaves only one door open: Print Money.

The US has over $10 trillion in short-term debt that must be rolled over in the next year, on top of adding $1-2 trillion in new deficits annually. There are not enough buyers for this debt. The only way to service it is to create new money and ideally at a cheaper rate.

The Scapegoat

This brings us back to Warsh. Trump knows the Fed must print. He also knows that printing without justification is untenable. So how does he get the stimulus he needs without taking the blame?

He nominates a hawk. He picks the one guy with a reputation for being tough on inflation. Then, when the Fed inevitably has to print, Trump can throw up his hands and say, "Don't look at me. I nominated a hawk. If he has to print, it must be serious."

Warsh becomes the perfect scapegoat. His hawkish reputation provides political cover for a dovish reality. He is the fall guy for a policy that is already baked into the cake.

This idea is strengthened by the political calendar. President Trump has been explicit about his fears for the upcoming midterm elections, stating that if he doesn't win, he will be impeached. This creates a powerful incentive to do whatever it takes to pump the economy in the short term, even if it means long-term pain.

A booming stock market and a sense of economic optimism are his best defense against a hostile Congress. He needs the stimulus, and he needs it now. The Warsh nomination allows him to get it while distancing himself from the downside.

What This Means for Bitcoin

For Bitcoin holders, this political theater is just noise. The signal is the math. The Fed must print. The dollar will be debased.

Bitcoin is the sponge that will absorb this liquidity. It is the only asset in the world that cannot be controlled by politicians or central bankers. Every dollar printed makes Bitcoin scarcer. Every political game played to obscure that printing makes Bitcoin more necessary.

The recent downturn is a classic example of the market reacting to headlines instead of fundamentals. The nomination of a hawk spooked the markets. The signal is clear: more printing is coming. This is not a time for fear. It is a time for conviction. The political games will come and go. The math remains the same. And Bitcoin is the only asset that will cut through the noise.

Information travels at the speed of light. Understanding does not.

This is the opportunity in front of us. In the digital age, anyone can access the tools to understand Bitcoin, but to truly understand its significance takes time. It requires a deliberate effort to unlearn what we have been taught about money and to see the world through a new lens.

This gap between the availability of information and the pace of human understanding is where the asymmetry lies.

The Monetization Timeline

Gold took millennia to monetize. From its first use as a collectible to its eventual status as a global store of value, the process was slow, spanning likely tens of thousands of years. People adopted it because it worked. Its network effect grew generation by generation, culture by culture, until it became the global standard for storing value.

Bitcoin is monetizing in a hyperconnected world, but the process is still measured in decades. We are roughly 15 years into a 30 or 40 year journey. The store of value phase, which is the longest and most arduous part of monetization, is still in its early stages.

Global adoption, in any meaningful sense, remains in the single digit percentages. Most people who own Bitcoin hold a trivial amount. The number of people who have a significant portion of their savings in Bitcoin is perhaps 1 or 2% of the global population. We are early.

The process cannot be rushed. Understanding why Bitcoin is superior money requires time to study, time to question, and time to internalize. Gold had thousands of years for this understanding to spread. Bitcoin will have decades. We are positioned at the beginning of this process.

The Moat of Network Effects

Incumbents are protected by powerful network effects. Gold has a brand built over 5,000 years of recorded history. The US dollar is the default for global trade, embedded in contracts, central bank reserves, and the psychology of billions of people. These do not disappear overnight, even in the face of a superior money.

To unseat a strong network effect, you do not need a marginal improvement. You need a massive, order of magnitude advantage. A 10% better product will not overcome the inertia of an established network. You need something so superior that the friction of switching becomes worth it.

Bitcoin has that advantage. Its absolute scarcity cannot be replicated by gold or any fiat currency. Its portability makes gold look primitive. Its verifiability makes trust unnecessary. Its neutrality makes it immune to political manipulation. These are not small improvements. Bitcoin is in a field of its own.

But the world will take time to recognize this. The network effect of the old system creates a protective moat. People continue to buy gold because everyone else buys gold. Central banks hold gold because other central banks hold gold. The dollar remains dominant because it has always been dominant. This inertia is real, and it is powerful.

Yet Bitcoin is inevitably crossing this moat. Every person who comes to understand its superiority weakens the old network and strengthens the new one. This is a slow process, but it is a one way process. Once someone truly understands what Bitcoin is, they do not go back.

The Psychology of Path Dependence

Human psychology works against understanding. People anchor to past prices and past narratives. "I cannot buy at $100,000 because my friend bought at $100" is a flawed line of reasoning. This is path dependence. It is the fallacy of judging an asset's future potential by the path it has already taken, rather than by its fundamental properties.

Bitcoin has no obligation to follow anyone's model or timeline. Volatility is inevitable in the monetization of a new asset with no cash flows (a common value assesment framework) and no central authority to stabilize its price.

Path dependence creates noise. It causes people to sell at the wrong time, buy at the wrong time, and lose conviction when the price does not behave as expected. We leverage this emotional disconnect, but the fundamentals do not change. Bitcoin is still absolutely scarce. It is still the best technology for storing and transferring value. It is still being adopted, slowly but surely, by more people every year.

Our goal is to primarily focus on the destination. The price of Bitcoin is a function of its understanding. As more people come to understand its superiority, the price will reflect that growing demand against a perfectly inelastic supply. The timeline is uncertain, but the direction is not.

Our conviction is high because we are not betting on a price cycle. We are investing in a multi decade monetization event, driven by the slow, inevitable process of human understanding.

Time is on our side.

As we begin 2026, it is worth reflecting on the year that has just passed. By every metric of previous cycles, 2025 was an incredibly interesting year, except for one: price. The euphoric predictions of a "super cycle" failed to materialize. While other assets reached new highs, Bitcoin's price remained stubbornly range bound, defying the expectations of many. We will not sugarcoat this reality. The price action was underwhelming.

However, this environment is not a setback. It is a dream opportunity. We are entering the market at valuations that reflect widespread skepticism, which is exactly what we leverage. Our understanding of this asset versus the market's lagging pace of learning. This divergence between short term price and long term fundamentals is where high conviction is forged and where asymmetric opportunities are found.

Our conviction in Bitcoin is not, and has never been, derived from four year cycles or price predictions. It is built upon a foundation of first principles. The past year did not weaken this foundation; it solidified it. While the market fixated on price, the pillars of our thesis grew stronger.

First, Bitcoin's monetary properties remain superior and unchanged. Its absolute scarcity is a mathematical certainty in a world of mathematically assured fiat debasement. The ability to hold a bearer asset that cannot be seized, censored, or diluted is more critical today than ever before. The problems that Bitcoin was created to solve — runaway sovereign debt, persistent inflation, and the erosion of financial freedom intensified in 2025. The need for sound trustless money has only increased.

Second, Bitcoin is a positive sum game in a zero sum world. This is the most misunderstood aspect of Bitcoin's value proposition. Fiat systems extract. When governments debase currency, they are transferring wealth from savers to asset owners. Every unit of new money created dilutes the value of existing units. Someone's gain is someone else's loss. This is zero sum by design. This influences everything and even warps morality.

Bitcoin inverts this dynamic entirely. Its fixed supply means that value creation within the network benefits all participants without extraction. Each participant contributes to and benefits from a harder, more resilient form of money. The incentives are aligned. Bitcoin is positive sum. The implications are profound. In a fiat system, you must constantly defend your wealth from debasement. In a Bitcoin system, the protocol defends your wealth for you. Bitcoin is a fundamentally different incentive structure that will redefine human motives and align us in a more cooperative way.

Third, 2025 was a year of quiet but important structural integration. This is what most outsiders looking in missed. While price stagnated, Bitcoin was being woven into the very fabric of the traditional financial system. It continued its evolution into a foundational collateral layer for global credit markets. Institutions deepened their involvement. The regulatory landscape, while still evolving, matured significantly. Bitcoin is being integrated into the legacy system, preparing to become the next foundational monetary layer.

Viewed through this lens, 2025 was not a failure. It was a year of maturation. The divergence between a flat price and accelerating adoption is the strongest evidence yet that Bitcoin is evolving beyond the self fulfilling prophecies of four year cycles. It is becoming a macro liquidity sponge. For us, this is the thesis. We are not investing in a price chart (though the irony is Bitcoin will win on price versus almost every other investment play). We are investing in the multi decade process of a new monetary asset becoming the base layer of global capital.

The current market offers an entry point based on the price disappointments of the last year. We see it as an opportunity to build a position based on the fundamental realities of the next decade. Our conviction is high because we know where the global financial system is heading. Time is on our side.