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Is Wall Street Hijacking Bitcoin? | Simply Originals · Simply Bitcoin

• 0:00
  Bitcoin is supposed to be the peaceful revolution, right?
• 0:03
  Well, apparently the peaceful revolution just turned into a
• 0:06
  full blown civil war. We've got Bitcoin Core on one
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  side funded by Jack Dorsey, loved by Larry Fink, super
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  friendly to Wall Street ETF's, and on the other side we've got
• 0:18
  Bitcoin knots. Basically a group of plebs and
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  OG devs saying Nah bro, stop turning Bitcoin into a data
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  dumpster and keep it about money.
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  And now people are asking, is this the biggest threat to
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  Bitcoin since the 2016 block size wars?
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  Are we about to have a hard fork?
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  Who the hell is Luke Dash Junior and why the hell is he suddenly
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  the Che Guevara of Bitcoin? Don't worry, we're going to
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  break it down, roast everybody, and then let you decide why you
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  ask. Cuz come, that's why cuz.
• 0:53
  Come. That's why.
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  I'm Sophie. This is Bitcoin.
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  Simply let's go segment one what the is the Bitcoin civil war all
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  right, this isn't just another bullish Newsday.
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  We've got civil war brewing inside of Bitcoin and no one's
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  really even talking about it. On one side you've got Bitcoin
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  core backed by MIT, Jack Dorsey and apparently Larry, you will
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  own nothing. Fink 83% of the network is
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  running it. On the other side, a growing
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  army of plebs running Bitcoin. Not that's basically the rogue
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  rebel version of core that's saying Nah bro, no jpegs, no
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  spam. Bitcoin is money.
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  Knots went from 5% to above 17% of all nodes in a few months.
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  That's a rebellion. Core side is like stop spreading
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  FUD. All transactions with fees are
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  valid. Go touch grass.
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  And the knot side is like Bitcoin is under attack by
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  scammers. Compromise core devs, bad miners
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  like Mara. If we don't fight back, our kids
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  will be Fiat slaves. And this isn't just a dev
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  disagreement. It could be a block size war, 2
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  point O. Except this time the question
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  isn't big blocks versus small blocks.
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  It's are we building sound money or are we turning Bitcoin into a
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  data dumpsters so Larry Fink can pump his ETF fees?
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  All right, let me break this down like you're 5 or like
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  you're one of those ma NFTS bring adoption Bros.
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  Imagine Bitcoin is a giant Google doc we all share Bitcoin
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  core lets you post gifts, memes and random junk into the margins
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  as long as you pay the fee and Bitcoin knots deletes the junk
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  and says hey man this is a Ledger, not Instagram.
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  Both core and knots validate the exact same Bitcoin blockchain
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  time chain for the based. They both follow consensus
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  rules. The only difference is what they
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  we choose to relate to other nodes.
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  Core is more inclusive. Imagination.
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  OK, permissive. Everything with a fee is valid.
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  Knots is strict. Only monetary transactions.
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  Take your jpegs and shove it you're.
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  Trying to jab the network starts getting really expensive really
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  fast, which brings up an interesting question.
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  What is a spam transaction? What is a legitimate
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  transaction? What is an illegitimate
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  transaction? There are two ways to answer
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  this. One is a paternalistic top down
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  approach that says this is what is allowed, this is what is not
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  allowed, and by making a list we will prevent the network from
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  filling to capacity. But that breaks the fundamental
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  capability of Bitcoin, which is net neutrality.
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  Bitcoin doesn't care who the sender or the receiver is, what
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  the application is, what the value of the transaction is.
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  All it cares about is that you pay the fee, and if it you pay
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  the fee, your transaction is legitimate by definition because
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  you thought it was legitimate enough.
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  To attach that fee. The very act of paying the fee
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  legitimizes the transaction because if we start making
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  decisions about what is spam and what is not, we are now choosing
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  the future of Bitcoin and constraining it into a set of
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  applications that we can imagine.
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  And the brilliant person who creates the application, we
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  can't imagine that may look like spam to us, doesn't get carried
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  across the network because we made a top down decision to say
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  that transaction is legitimate. And the other way of doing this
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  is to say how about we use a market to solve this problem.
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  We have a market, We have a currency.
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  Use the market to solve this problem and allow the market to
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  establish the minimum. Fee.
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  That meets the requirements of supply through the miners and
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  their need for propagating blocks fast and the demand of
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  the users for the applications they care about.
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  And if you pay the fee, your transaction is legitimate.
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  There is no spam transaction. There is no such thing as an
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  illegitimate transaction. There are only transactions that
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  did get mined and transactions that didn't have enough fee to
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  get mined. And so this is how Bitcoin is
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  going to play out. And this is not going to be
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  solved. It's not going to be solved
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  because we will have the scaling discussion every year for
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  decades into the future, hopefully.
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  And every year we will fail to scale for the next application
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  and succeed to scale for the previous ones.
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  And as soon as we do better, people will invent new
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  applications and we will fail to scale again.
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  The Internet failing to scale gracefully for 25 years.
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  Bitcoin let's keep failing to scale gracefully.
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  And. Bitcoin is not yet dead.
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  Thank you. And yes, before anyone gets
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  triggered, Knotts is still basically 99% core code, it's
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  just patched by one dude. Luke Dasher.
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  Dasher. Dasher.
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  Luke Dasher. I am so up that name.
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  I'm sorry. Luke Dasher.
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  A few moments later. Luke dash junior?
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  Is it Luke dash junior? I'm sorry I'm new here.
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  It's like Fight Club and he's coding in his basement with a
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  broken GPG key and a tinfoil hat.
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  Core devs then respond with that classic herder.
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  You plebs don't understand the protocol while conveniently
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  forgetting that core itself has filtered spam for over a decade.
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  There's a suspicious new kind of attack that sits in this sweet
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  spot of three different ways, the three main ways you can
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  store arbitrary data in Bitcoin. You can either use the
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  inscriptions hack, which is amazing for people trying to
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  store Jpegs and stuff because they're storing so much data
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  that they can sneak into the witness section of a transaction
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  and they and witness data gets a 75% discount in Bitcoin and they
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  get to make disproportionate use of that.
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  But these guys aren't using that much, but they're also using too
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  much to use Opera turn. So they create fake pub keys,
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  which are the most harmful form of spam in Bitcoin.
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  And this is where it starts to contradict itself.
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  They can't use Opera Turn because there's a bunch of spam
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  filters preventing them from using Opera Turn.
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  And they in theory really want to use Opera Turn because it's a
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  bit cheaper than creating fake pub key outs.
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  And the gas lighting comes in the shape of, well, we need to
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  get rid of the filters on Opera Turn because then they'll use
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  that in the context of having said for years there's nothing
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  we can do about spam because spam filters don't work.
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  So that is the contradiction here That's being so annoying
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  for everyone to win witness because it feels like we can
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  only ever acknowledge they work in service of relaxing filters
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  to help spammers out. We can never acknowledge they
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  work to prevent spammers from coming and destroying the whole,
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  you know, blowing up the UTX outset in the 1st place because
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  even witness discount abuse still blows up the UTX offset.
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  It's not with fake pub key outs, but they still create millions
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  of outputs. And they took us from, what was
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  it, 80 million outs to 200 million outs in two years and
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  just blew up the UTXO set. And suddenly a whole bunch of
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  hardware couldn't run nodes anymore.
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  And that was like an unmitigated attack that created a lot of
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  problems. That was self declared.
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  The people that did it said we want to create as much damage as
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  possible. A lot of that was like, if I say
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  that, it will annoy people and my video will blow up.
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  So it's outrage marketing. But it was still true and it
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  didn't do that. So yeah, you've got those three
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  types of arbitrary data storage. And one of them is that the, the
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  theory is that one, they will shift from doing 1 to the other,
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  which is less harmful. But the, the one level below
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  that is why aren't they doing that already if the filters that
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  are preventing them from doing it are so ineffective?
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  And then there's a bunch of, you know, just then there's like a
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  laundry list of reasons that are offered, none of which work.
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  But it's sort of that psychological thing where if I
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  give you 50 bad reasons, you like, you just sort of go, all
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  right, I'll let you do it. Like even if you had one good
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  reason, that would be enough. But none of them are good on
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  their own. They don't stand up.
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  Like, oh, your fee estimation on your note won't work right if
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  you don't go along with it. And small mining pools will
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  struggle. And what's the other one they
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  have? Well, the other one, the only
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  really legitimate 1 is blowing the UTX O set.
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  But I don't think anyone's really buying that because the
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  UTX O set is blowing up anyway with no one caring about it.
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  It's just convenient in this case.
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  So you have this new company, Citria, which is existing in
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  this sweet spot, right? It's not using Opera Turn, it's
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  not using the inscription tag, it's using fake pub keys and
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  it's very convenient because that means now we get to Nuka
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  filter for the good of Bitcoin and anyone that complaints about
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  it doesn't like Bitcoin or is too technically unsophisticated
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  to understand what's going on here.
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  But the implications of it basically mean we just need to
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  work with spermers and modify Bitcoin as necessary to suit
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  them, otherwise they will hurt us.
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  And this is just pathetic and not true and completely.
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  It's a ridiculous precedent that was never satisfactory before.
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  Bottom line, this isn't entirely a software debate, it's a
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  philosophical one. Are notes supposed to maximize
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  minor profits or protect the rules of sound money?
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  Look, spam attacks aren't new. Back in 2016, we had Roger Vert,
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  Jihan Wu and be Cash Gang flooding the chain with garbage
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  to force bigger blocks. Spoiler, Bitcoin survived, but
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  now we're dealing with a new loophole.
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  Spammers are injecting arbitrary data into the blocks.
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  It's just small enough to avoid using the filters, but big
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  enough to bloat the UTFO set and push node cost through the roof.
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  That means hardware goes from $200 a pie to $1000 plus for a
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  server. Initial block download goes from
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  a few days to multiple weeks. You know who loves that?
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  Larry Fink, The guy who literally said we will force
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  behaviors. You now make a point of that's
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  that's an investment criteria for you.
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  Well, behaviors are going to have to change and this is one
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  thing we're going to, we're asking companies, you have to
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  force behaviors. And at BlackRock we are forcing
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  behaviors. 54% of the incoming class are women.
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  We, we added four more points in terms of diverse employment this
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  year. And it you know, what we are
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  doing internally is if you don't achieve these levels of impact
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  is your compensation could be impacted.
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  OK, we're doing the same thing. So it's just you have to force
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  behaviors. And if you don't force
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  behaviors, whether it's gender or race or just any way you want
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  to say the composition of your team, you're going to be
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  impacted. And that's not just not
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  recruiting, it is development as Ken said.
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  And ultimately it's still going to take time.
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  But I am just as much shocked as Ken is that we have not seen
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  more opportunities and we're going to have to force change.
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  And if that's not enough, the BIS wants to start grading sats.
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  Literally marking your Bitcoin with a reputation score like a
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  social credit system. Yikes.
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  Low score equals tainted coins. Can't spend them.
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  High score equals nice clean, friendly CBDC coins.
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  How about you grade these nuts? Let's be crystal clear, Bitcoin
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  was not built to negotiate with attackers, it was built to
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  ignore them. Once you start bending the
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  protocol, every time you find a new spam vector, it stops being
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  trustless and turns into a negotiation table.
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  And that is not why we're here. In economics, there's no such
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  thing as a free lunch. If you're not paying fees,
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  someone's paying. Fees you're either.
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  Paying them in terms of inflation, they're paying them
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  in terms of giving cartel advantage to a monopoly by
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  centralizing access. And control.
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  Or you could just pay fees. If we have to decide how
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  transaction gets into block and which transaction should and
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  which transactions shouldn't get into a block because we have
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  limited space, there's really only two ways to do that.
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  One is to specify in the software which are good
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  transactions and which are bad transactions, what I
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  euphemistically call a dictatorship of developers.
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  Think about it. If developers gets to decide
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  what is a valid transaction that should be prioritized versus
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  which transaction is wasteful or spam, or for an irrelevant
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  application that they don't particularly need, we just
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  created a dictatorship with developers.
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  They decide which applications are now allowed on the network
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  simply by controlling that function.
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  There's only one way to correctly.
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  Price, the scarce resource. Of transaction space or block
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  space in a way that doesn't give anyone control, and that is a
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  market. So fees operate as a market in
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  order to give the freedom of the sender of each transaction to
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  decide for themselves how important this transaction is
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  and how much of A priority it has in their perspective.
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  Let's connect the dots real quick.
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  BlackRock now controls over 700,000 Bitcoin.
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  Larry Fink just became the interim Co chair of the WEF
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  Bitcoin Core. The dominant client is mostly
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  funded indirectly by Wall Street and MIT.
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  You still think it's just a coincidence that Core wants to
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  be more permissive with spam? Meanwhile the guys running not
• 15:55
  are basically screaming if we let them normalize spam jpegs
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  and ordinals next they'll normalize marked coins and and
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  then Bitcoin becomes just another KYC chain controlled by
• 16:09
  the same people who ruined the dollar.
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  And honestly, they might be right.
• 16:14
  Because if nodes stop defending what Bitcoin actually is, Wall
• 16:20
  Street will happily step in and define it for us.
• 16:24
  Not with a hard fork, but with a slow cultural drift.
• 16:28
  One GitHub pull request at a time.
• 16:31
  One spam filter removed, one ETF friendly update, and then one
• 16:40
  day we wake up and realize, oh shit we're running BlackRock
• 16:44
  Core version 34 point O Not on our watch.
• 16:48
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  minute consultation today using that link in the show notes.
• 18:10
  So where does this leave us? It's simple.
• 18:14
  If you want Bitcoin to become a Wall Street compliance chain
• 18:17
  where miners chase cheap profits and Larry Fink decides which
• 18:22
  sats are clean, run Bitcoin Core 30 and pray they don't drop Core
• 18:27
  31 ESG Edition. But if you believe Bitcoin is
• 18:31
  supposed to be sound money, permissionless, controllable,
• 18:36
  and incorruptible, run Knots or any other version of Core before
• 18:40
  30. Build your own template with
• 18:43
  Ocean or Datum. Run a node that actually
• 18:46
  protects the rules, not sells them out.
• 18:49
  Because Satoshi didn't build Bitcoin so that we could
• 18:52
  negotiate with attackers, he built it so we could ignore
• 18:56
  them. Nodes enforce the rules.
• 18:58
  So spin one up, run what you believe in, and if someone
• 19:02
  doesn't like it, do it anyway. Why?
• 19:06
  That's. Why?
• 19:07
  Oh, and if you want to talk about this in person, catch us
• 19:11
  at Mining Disrupt 2025 and get a taste of what the future holds.
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  revolution. From sovereign mining to AI,
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  plus Bitcoin integration, meet a lot of the people you saw in
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  today's video and prepare to have your mind blown.
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  Grab those tickets today. Come to see the simply Bitcoin
• 19:44
  team on the news desk and don't forget to use promo code simply
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  Bitcoin for 20% off. That's it for today's show.
• 19:51
  Don't forget to like, subscribe and share this video with your
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  friends and set those notifications for the best in
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• 20:01
  I'm Sophie. This is Bitcoin, simply and as
• 20:04
  always. Please happy stacking.