Part 1: The Bitcoin Core vs. Knots Civil War | This Week in Bitcoin | BitcoinHardTalk Episode #96

Hey hey Bitcoin Wealth Builders!

This blog is a deeper dive into the first part of Bitcoin HardTalk Episode 96. For those of you new to my work, I've spent 14 of the last 25 years dedicated to Bitcoin—I spoke at the first-ever Bitcoin conference, wrote the first published book in the world to include Bitcoin, and have spent my career fighting for your financial sovereignty. That experience is crucial for understanding the internal battles now shaping Bitcoin's future.

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The Bitcoin Core vs. Knots "Civil War": An Internal Struggle for Bitcoin's Integrity

There is an internal struggle happening in Bitcoin right now between Bitcoin Core and an alternative implementation called Knots. For those who didn't experience the block size war that led to the 2017 hard fork, this presents a similar ideological challenge, and it is a dynamic I view as essential for the health of an anti-fragile network.

The debate, which some are calling the "spam war," is about how much data should be allowed in a Bitcoin block. Public mining companies like Marathon Digital are concerned that storing large amounts of data could expose them to legal and reputational risks if that data contains illicit content. This is a valid concern. If a bad actor can claim illegal content is stored on your node, it creates a vector for attack.

Some developers within Core are proposing a significant increase to the data filter, which could lead to node runners storing what I would term "toxic digital waste." This could disincentivize people from running nodes, which is a direct threat to decentralization. I believe Core could be playing with fire here. The enduring principle of "don't trust, verify" is paramount, especially given any potential for developers to be compromised.

This ideological fight is an extension of the previous block size war, questioning if Bitcoin should be more than just money. The existence of competing development teams is a feature, not a bug, of a truly decentralized network. For this reason, I intend to run Knots on my own node.

This week in Bitcoin: Wall Street's Encroachment: The Two-Tier Bitcoin World

While we debate internal integrity, the "banksters" of Wall Street continue their strategic encroachment. Public companies now collectively own 1 million Bitcoin, approaching the holdings of Satoshi himself. Firms like Goldman Sachs are disclosing massive Bitcoin exposure, and venture funds with links to deep state actors are raising billions to acquire more.

This aggressive accumulation is creating a two-tier Bitcoin world.

1. The Wall Street Tier: They seek to control Bitcoin through treasury companies, ETFs, and custodial services. Their goal is to insert themselves between you and your Bitcoin, complicating what is a simple, fixed-supply monetary system.
2. The Sovereign Tier: This is the tier I advocate for. It is Bitcoin held in self-custody, making you immune from the banksters and allowing you to boycott the existing Proof-of-Weapons Network.

I have always advised against using the stock market to access Bitcoin. It introduces unnecessary key person risk and defeats the entire purpose of this technology.

Stablecoins and the Banks' Monopoly Defence

In the stablecoin realm, Tether has announced it will launch USDT on the Bitcoin blockchain using RGB technology. This is a significant development, allowing users to hold digital dollars alongside their Bitcoin in the same wallet, with potential privacy enhancements.

However, this innovation is being met with fierce resistance from US banks. They are actively lobbying to prevent stablecoins from paying yield because they know it could trigger trillions of dollars in deposit outflows from their institutions, challenging their monopoly within the financial industrial complex. This is nothing less than a defence of the corrupt system they engineered.

Global Adoption: Nation-States Accumulating Bitcoin

Globally, we are seeing a clear shift in national reserve strategies. Nations like Thailand and Japan are reportedly considering Bitcoin strategic reserves. The Kingdom of Bhutan is already mining Bitcoin with hydropower to build national sovereignty.

Most significantly, the United Arab Emirates (UAE) has confirmed it is mining Bitcoin through Citadel Mining, an operation controlled by the Abu Dhabi royal family. This action positions the UAE as a major player and demonstrates a strategic understanding in the Middle East of Bitcoin's role in a transitioning global landscape.

Concluding Thoughts for Part 1

The internal debates, the calculated moves of Wall Street, the regulatory battles, and the strategic adoption by nations all point to a rapidly evolving world. Understanding these dynamics is essential for navigating the path to financial sovereignty.

To truly protect yourself, the strategy remains the same as I’ve been advocating for 14 years. It is a peaceful resistance against a system that profits from carnage:

• Boycott the Federal Reserve with Bitcoin.
• Boycott BlackRock by holding your assets in self-custody.
• Boycott the banks by aiming to be debt-free.
• Boycott global corporations by spending locally.

Own more Bitcoin every month, learn self-custody, and run a node to make the network stronger.

Next Steps

With these insights from "This Week in Bitcoin," you are now prepared to delve deeper. I highly recommend you now proceed to Part 2: The New Shanghai Proof-of-Weapons Network Threatens Dollar Dominance | This Week in Macro, and then to Part 3: Analysing the shocking leaked Tony Blair & Trump Gaza plan | This Week in GeoPolitics to complete your understanding.

Important Disclaimer

Please read this disclaimer carefully before engaging with the content of this blog post. This blog was generated by an AI assistant based on transcripts of commentary and analysis provided by Simon Dixon. While structured to reflect his views, it is an AI's interpretation and is intended for educational and informational purposes only.

The information presented herein does not constitute, and should not be interpreted as, professional advice of any kind. This includes, but is not limited to, financial, investment, legal, or tax advice. All investments, especially in the digital asset space, carry significant risks and are not suitable for every investor. For any financial, legal, or tax-related matters, you should always consult with a qualified and licensed professional who can provide advice tailored to your individual circumstances.

The views and theories expressed are the personal opinions and analysis of Simon Dixon and are not presented as universally accepted facts. By engaging with this content, you acknowledge that you are solely responsible for your own decisions and actions. Neither Simon Dixon, the AI assistant, nor any affiliated entities shall be held liable for any consequences that may arise from your reliance on the information presented. We strongly encourage all readers to conduct their own independent research.