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Books Economics Hijacking Bitcoin
Hijacking Bitcoin
The Hidden History of BTC
by Roger Ver
4.26 100+ ratings
Economics Technology History
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Key Takeaways
1. Bitcoin Was Designed as Peer-to-Peer
Digital Cash, Not a Store of Value
"Bitcoin was designed to be digital cash, usable in everyday
commerce, with minimal fees and fast transactions, and it
worked that way for years."
Original Vision of Digital Cash. Satoshi Nakamoto's original whitepaper
explicitly positioned Bitcoin as a peer-to-peer electronic cash system
designed for everyday transactions. The fundamental purpose was to
create a decentralized payment network that could operate without
intermediaries, enabling fast, cheap, and reliable transactions globally.
Key Design Principles:
Minimal transaction fees
Fast settlement times
Universal accessibility
No reliance on third-party financial institutions
Historical Context. In the early days, Bitcoin enthusiasts celebrated the
technology's potential to revolutionize financial transactions, particularly for
individuals in regions with unstable banking systems. The vision was to
create a truly democratic monetary system that could empower people
worldwide by providing an alternative to traditional financial infrastructure.
2. Blocksize Limit Was Deliberately Used
to Throttle Bitcoin's Potential
"By artificially limiting the blocksize, the Bitcoin Core
developers found a way to completely change the dynamics
of the system."
Technical Manipulation. The blocksize limit, initially introduced as a
temporary security measure, was transformed into a deliberate strategy to
restrict Bitcoin's transaction throughput. By keeping blocks small,
developers effectively capped the network's ability to process transactions,
creating artificial scarcity and driving up fees.
Consequences of Small Blocks:
Limited transaction processing (3-7 transactions per second)
Extremely high transaction fees
Reduced utility for everyday transactions
Pushing users towards centralized solutions
Strategic Implications. The blocksize limitation was not a technical
necessity but a calculated move to reshape Bitcoin's fundamental purpose
from a payment system to a speculative asset, benefiting specific
stakeholders and existing financial institutions.
3. Developer Capture Transformed
Bitcoin from a Revolutionary
Technology to a Speculative Asset
"On its current trajectory, Bitcoin will not empower the
average person."
Systemic Transformation. A small group of developers, particularly those
associated with Blockstream, systematically redirected Bitcoin's
development away from its original vision of being a universal payment
system. This transformation effectively neutered Bitcoin's disruptive
potential, turning it into a speculative instrument more aligned with
traditional financial interests.
Key Shifts:
From digital cash to "digital gold"
Prioritizing price appreciation over utility
Encouraging holding over spending
Creating artificial barriers to widespread adoption
Economic Implications. By restricting Bitcoin's functionality, developers
created an environment that primarily benefited early adopters and financial
speculators, contradicting the original vision of providing financial
empowerment to a global audience.
4. Centralized Control and Censorship
Undermined Bitcoin's Decentralization
"Bitcoin looks the most decentralized when observed from a
distance. Upon closer examination, it becomes clear that
there are a small number of critical positions that have
overwhelming influence over the network."
Information Control Mechanisms. Key online platforms like Reddit's
r/Bitcoin and [Link] were strategically controlled to suppress
alternative narratives and critical discussions about Bitcoin's development.
Moderators like Theymos wielded significant power in shaping public
perception.
Censorship Strategies:
Removing posts discussing alternative implementations
Banning users with dissenting views
Coordinated social media campaigns
Manipulating key informational websites
Power Dynamics. Despite claims of decentralization, Bitcoin's development
was effectively controlled by a small group of developers who could veto
changes and shape the narrative through strategic communication and
platform control.
5. Bitcoin Cash Emerged as the
Continuation of Satoshi Nakamoto's
Original Vision
"Bitcoin Cash is what I started working on in 2010: a store
of value AND means of exchange."
Preserving Original Design. Bitcoin Cash was created to maintain the core
principles of Satoshi's original Bitcoin design, focusing on scalability, low
transaction fees, and utility as a payment system. It represents an attempt
to restore the revolutionary potential of cryptocurrency.
Key Differentiators:
Larger block sizes
Lower transaction fees
Preservation of original opcodes
Commitment to on-chain scaling
Philosophical Commitment. Bitcoin Cash developers prioritized creating a
cryptocurrency that could genuinely serve as digital cash, maintaining the
original vision of a peer-to-peer electronic payment system accessible to
everyone.
6. Transaction Fees and Network
Scalability Are Critical to
Cryptocurrency Utility
"A penny for an average on-chain transaction is probably
too expensive to be competitive."
Economic Accessibility. Transaction fees are a critical factor in determining
a cryptocurrency's practical utility. High fees effectively exclude small
transactions and marginalize users with limited financial resources.
Scaling Considerations:
Block size impacts transaction throughput
Lower fees enable micropayments
Scalability determines real-world usability
Technology must accommodate global transaction volumes
User Experience. Cryptocurrency networks must prioritize creating an
environment where transactions are affordable, fast, and reliable to achieve
widespread adoption and genuine economic impact.
7. The Cryptocurrency Industry
Requires Constant Vigilance Against
Corruption
"No cryptocurrency project is beyond corruption, no matter
how promising the technology."
Systemic Vulnerabilities. Cryptocurrency projects are inherently
susceptible to manipulation due to their reliance on human-developed
software and governance structures. Continuous monitoring and adaptive
mechanisms are essential to prevent capture by special interests.
Risk Mitigation Strategies:
Multiple software implementations
Transparent governance models
Community-driven oversight
Regular protocol audits
Philosophical Imperative. Maintaining the core principles of
decentralization and individual financial empowerment requires ongoing
commitment and active resistance to centralized control.
8. Governance and Funding Models
Critically Impact Technological
Innovation
"The governance and funding of Bitcoin's software
development" is a key challenge in maintaining
technological integrity.
Developmental Challenges. How developers are funded and governed
directly influences a cryptocurrency's direction, potentially creating
conflicts of interest that can compromise the project's original vision.
Funding Considerations:
Transparency in developer compensation
Alignment of economic incentives
Preventing corporate capture
Maintaining developer accountability
Structural Integrity. Successful cryptocurrency projects must develop
robust mechanisms to ensure that development remains aligned with the
community's broader interests.
9. Forking Provides a Mechanism to
Protect Cryptocurrency Projects
"Forking is a way for each side to develop its own project
independently."
Evolutionary Mechanism. Cryptocurrency forks represent a critical
governance tool that allows communities to diverge when fundamental
philosophical or technical disagreements emerge, preventing a single group
from monopolizing development.
Fork Dynamics:
Preserves multiple development paths
Allows community-driven innovation
Provides an exit strategy from captured projects
Maintains competitive pressure
Philosophical Flexibility. The ability to fork demonstrates the adaptive
nature of decentralized technological ecosystems, ensuring no single group
can permanently control a project's trajectory.
10. The Future of Digital Money
Depends on Maintaining Core Principles
of Freedom and Access
"Whether Bitcoin ends up being a peer-to-peer cash system
or a control system within a dystopian nightmare depends
on what decisions we make going forward."
Technological Ethics. Cryptocurrencies have the potential to either
enhance human financial freedom or create more sophisticated
mechanisms of economic control and surveillance.
Critical Considerations:
Preserving user privacy
Maintaining low-barrier access
Resisting centralized control
Prioritizing individual economic empowerment
Transformative Potential. The ultimate success of cryptocurrency depends
on maintaining a steadfast commitment to technological principles that
prioritize individual freedom and economic accessibility.
Last updated: December 24, 2024
Review Summary
4.26 out of 5
Average of 100+ ratings from Goodreads and Amazon.
Hijacking Bitcoin received mostly positive reviews, with readers
praising its informative content and fresh perspective on Bitcoin's
history. Many found it eye-opening and thought-provoking,
appreciating the author's insights into the cryptocurrency's original
purpose and subsequent challenges. Some readers criticized it as
one-sided or lacking balance, but overall, reviewers recommended it
as essential reading for those interested in understanding Bitcoin's
evolution and the forces that shaped it. The book sparked
discussions about decentralization, blockchain technology, and the
future of digital currencies.
About the Author
Roger Ver is a prominent figure in the cryptocurrency world, known
as an early investor and advocate for Bitcoin. He later became
involved in founding Bitcoin Cash, a fork of the original Bitcoin. Ver's
background includes facing legal challenges, including allegations of
tax evasion. His book presents his perspective on Bitcoin's history
and development, offering insights into the events that led to the
split between Bitcoin and Bitcoin Cash. Ver's views are often
controversial within the cryptocurrency community, but he remains
an influential voice in discussions about digital currencies and their
future.
