Mischa

Bitcoin Lightning payments have something special about them: your own coins on your own server, payment in seconds, near-zero fees and the product still arrives at your door as usual. The flow feels familiar, but the feeling is different: direct, private, with no middleman taking a cut.

Bitcoin works because humanity as a whole creates the most value. The chain with the strongest economic incentives attracts the most miners, gets most hashrate, and therefore becomes Bitcoin. Long term, Bitcoin is a collective decision: It is whatever people choose to store value in. That’s why it must be protected early. Money and power is concentrated today, and Bitcoin must remain decentralized until power is decentralized again.

Why a restrictive consensus fork can gain traction even without explicit miner support. One of the main reasons this could work lies in the asymmetry of consensus rules. The current rules are broader, while the fork tightens consensus. A block that follows the fork rules is valid on the current chain, while a block that follows the current rules may be invalid on the fork. This creates a situation we have never seen in Bitcoin before. Before the fork actually happens, once the rules of the potential fork are in effect, a miner can choose to mine blocks that are accepted on both chains. By doing so, the miner earns rewards on both sides, avoids the risk of mining on the wrong chain, and retains the option to later sell coins on one chain after the fork while keeping exposure to the other. If a miner instead produces blocks that are valid only under the current rules, a chain split occurs and the miner earns rewards on only one chain. Up to this point, there is a clear economically dominant strategy: following the stricter rules minimizes risk and preserves optionality. As long as it is not completely clear which side would ultimately prevail, there is no economically rational incentive for a miner to take the first step and realize the chain split. Triggering the split would forfeit optionality and introduce asymmetric risk. Once the split actually occurs, this dominance disappears. From that moment on, the outcome remains uncertain at first, and miners can no longer rely on a risk-free strategy. They must instead estimate future fees, liquidity, and market value, and choose accordingly. In my view, this makes the initial activation of the fork economically unattractive, unless expected fees or external incentives become large enough to compensate for the added risk. As a result, it is entirely plausible that miners will voluntarily align with the fork’s stricter rules even without an explicit chain split.

Many people currently view Bitcoin negatively because too few users practice proper self-custody. I fully agree that this is a real issue and it is something we need to address. I want to highlight a positive development in this area by sharing a project I have been following for the past few years. I am not involved in it, but I believe it deserves much more attention. The team is building trustless swaps between Ethereum and Bitcoin, aiming to extend the Lightning Network model across multiple blockchains through what they call the Lithium Network. The idea is simple. The Lightning Network can be linked to the Lithium Network, enabling off-chain swaps between stablecoins such as USDT on Ethereum or any EVM chain and native Lightning BTC. No centralized custody is required, and users remain in full control of their wallets at all times. The only centralized element is the orderbook used for matching swaps, and the long-term plan is to have multiple independent orderbook providers competing with each other. In other words, this approach enables fast cross-chain, self-custodial, off-chain swaps between EVM assets and Lightning. One of the most exciting aspects is that it already works. It is currently live on testnet and open for anyone to try. I find this approach extremely promising, especially as a way to increase self-custody adoption while still giving users access to the stablecoins and assets they rely on. If the future includes widespread stablecoin usage, a decentralized mechanism that connects those assets to Bitcoin could become a major breakthrough. I am curious to hear what others think. Link to the documentation are included below.

Hydranet Documentation

Introduction - Hydranet Documentation

Welcome to the world of Hydranet!

People’s savings always try to find the safest place. In a potential Bitcoin fork, the chain whose rules offer the strongest long-term protection for stored value will naturally win. That chain will have the higher Bitcoin price, higher transaction fees, and therefore higher miner revenue, which means miners will always gravitate toward it. In the end, the rule set that best protects money becomes the chain that people recognize as Bitcoin.

Many Bitcoin OGs may not be selling out of fear or profit-taking, but for strategic reasons. If a fork occurs, they could position themselves on the chain they believe is correct and strengthen it economically. The noticeable increase in OG selling began around the same time Bitcoin Core introduced its controversial change. Many long-time Bitcoiners seem to disagree with the direction Core is taking. Which chain prevails is ultimately not determined by miner signaling or online debate, but by which chain is economically more attractive. The chain with the higher Bitcoin price and higher fees attracts pools, and miners always follow wherever the economic return is greatest. If they don’t, the hashrate will simply flow to the pools offering better economic incentives. The theory, is that some OGs are selling now in order to build large positions on the alternative chain in the event of a split. By buying there and paying fees, they increase the economic pressure on that chain and draw miners toward it. In this way, OGs could indirectly influence which chain wins in the long run by directing their capital toward the version of Bitcoin that aligns with their vision and protects their wealth more effectively. Now we just need to identify the rule set that maximizes Bitcoin’s decentralization and economic robustness, informed by the new insights we’ve gained from recent spam dynamics. And then develop it..