⚔️ Bitcoin Wars 2.0

This week on Supply Shock, Pete Rizzo presses Blocksize War author Jonathan Bier on Bitcoin’s new fault line: what constitutes “spam” on the network.

Bier’s view: Trying to ban “spam” just drives users to miner-direct fast lanes like Slipstream — exactly the kind of centralization everyone says they don’t want.

Core vs. Knots is, at its heart, a debate about policy.

Bier walks through why Core loosened its relay parameters (relaxing the OP_RETURN limit from 80 bytes to 100 KB) and why both camps still consider themselves to be “small blockers.” 

The north star is the fee market. If users want to pay to use the network, they should be able to.

"Personally, in my opinion, ensuring mining incentives and transaction fees are probably one of Bitcoin's biggest problems,” Bier told Rizzo. 

Bier reasons the best way forward is to align software with reality and avoid paternalistic limits that create side doors and privileged pipes.

It could be that Knots’ “money-only” push risks shrinking usage and strengthening private relay.  And perhaps Core’s current path keeps fees and miners honest, at least in Bier’s view.

Full episode on YouTube, Spotify, Apple Podcasts and X.

This newsletter was created with assistance from AI tooling.

• About 20% of discoverable Bitcoin nodes are running Knots (4,791), up from 17.4% (4,006) three weeks ago.

• PayPal has launched PayPal links, which streamlines sending bitcoin, ether and PYUSD payments via messaging apps.

• In Europe, digital bank Openbank has rolled out retail trading of bitcoin, alongside a few other cryptocurrencies, to German users.