One of the most prolific contributors to Bitcoin’s development warns that the leading blockchain network is on a dark path toward global regulation.
In a blog post On Saturday, Matt Corallo said Bitcoin’s long-standing mission as a private, scalable, trustless monetary tool was now in question as years of effort failed to realize this vision. practical way.
“Unfortunately, any ideas to make Bitcoin (or any other cryptocurrency) actually useful for transactions tend to have an unreliable party in the flow of funds,” Corallo wrote. “We simply haven’t been able to create cryptocurrency payment rails without an (untrusted!) party being involved.”
The end result will be regulatory capture, he predicts, a world in which government authorities succeed in restricting or controlling crypto for their own purposes.
“I’m not saying these things aren’t great or don’t offer scalability, they often are and do,” Corallo said. Decrypt“but they rely on intermediaries, often of a centralized type”.
Bitcoin scaling technologies used today, such as sidechains like Liquid or Rootstock, enable faster and cheaper payments, but also require users to trust a company or federation to not not steal their funds. Meanwhile, adds Corallo, the most popular Lightning Network has a notoriously poor user experience, forcing custodians and Lightning Service Providers (LSPs) to build front-ends for practical use.
Corallo’s criticisms also extend to accumulations, a newer form of Bitcoin scaling technology that draws inspiration from other blockchains. In fact, the developer believes that trustless scaling remains elusive for cryptocurrencies as a whole, as even more programmable blockchains like Ethereum have failed to crack the code.
“The point of emphasizing that this is cryptocurrency-wide and not specific to Bitcoin is that this cannot be solved with some sort of soft fork to increase expressivity,” Corallo said. Decrypt. “This is not to judge whether or not we should do a specific soft fork to increase expressiveness, but to point out that this is largely an unrelated issue.”
Obstacles in these areas have contributed to a visible change in how Bitcoin is perceived by its users. Many new participants, Corallo wrote, “are only interested in a 21 million coin limit and view any form of non-KYC payment rails as hostile to the value of their investment.”
Over the past year, some of Bitcoin’s most ardent institutional supporters have outright rejected the asset’s role as a medium of exchange.
David Marcus, co-founder of Paypal and CEO of Lightspark said in September, BTC “is not the currency that people will use to buy things”, saying that fiat currencies on the Lightning Network will be the preferred payment method for the masses.
Earlier this year, MicroStrategy Executive Chairman Michael Saylor has touted Bitcoin’s role as a store of value while calling its role as a “distraction” currency that is “controversial” with regulators.
Indeed, the US government recently arrested the developers of Samourai Wallet, a Bitcoin wallet designed to facilitate private transfers via CoinJoin transactions.
Samourai’s software never took control of user funds, even though it required a centralized server to coordinate mix of transactionsmaking it a single point of failure that regulators can target.
The repression caused a “last warning” by famous US government whistleblower Edward Snowden, who pushed developers to implement a privacy change to the Bitcoin protocol.
According to Corallo, the crypto industry has already squandered its chance to provide regulatory protection to non-custodial crypto intermediaries, instead focusing its efforts on securities law reform.
What’s worse is that the current state centralization of the mining pool left even Bitcoin’s foundational layer “ripe for regulatory capture.”
“With Bitcoin’s current situation, it’s hard not to see a bleak vision of the future,” the developer concluded. “If Bitcoiners want to preserve what we’ve built and fight for it, the focus must be on drastic improvements in default wallet privacy across the entire ecosystem, aggressive investments in regulatory change and leveraging scalability solutions across the globe.”
Edited by Ryan Ozawa.
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