Bitcoin's Fatal Flaw: Why Financial Surveillance Is Inevitable Without Privacy
substack.com
substack.com
The author makes it sound like you need to be tech-savvy to use the Lightning Network.
That is not true.
Using the Lightning Network is just like using any other software. Lightning is just a protocol. The user is not exposed to it. Just like a user is not exposed to SSL, HTTP and TCP when using a website.
Payment channels are useful for some things, but you have to admit they are pretty much abandoning the typical cryptocurrency use case of just sending money to an address, even if the recipient is offline.
If we use this HTTP/email protocol comparison, an ordinary SPV wallet is like a web browser and a lightning network node is like a web server. Actually an email client/mail server is a better example.
Do it with a reputable node, and they will not maliciously close it just to steal a few dollars from you by closing the channel with an outdated state. They will want to keep their reputation. Just like your internet provider does not deny you service after a day when you paid for a month.
My point is that you need to constantly have your lightning node running to service the channel. Whereas before with SPV or something you don't need a constant connection to the bitcoin network, and you can just receive transactions offline. That basic use case is necessarily gone in lightning.
>just to steal a few dollars
It's never just "a few dollars" because the amount in the channel needs to be much greater than the fees to open and close it. It is always a serious amount of money. This is the type of issue that gradually gets worse as bitcoin becomes more widely used, which it won't (because of issues like this).
The thing about payment channels is that bitcoiners use them to make up for the low transaction throughput caused by bitcoin's outdated 1MB block size, but payment channels are most efficient when the fees to open and close the channel are low, and there is little risk associated with closing a channel.
Want to break the lightning network? Just open a massive number of channels, then maliciously close them all at the same time. Because bitcoin's transaction throughput is so low, you can create enough channels such that not everyone will be able to close the channel at low enough fees.
you need to constantly have your
lightning node running to service the channel
It's never just "a few dollars" because
the amount in the channel needs to be
much greater than the fees
Connect to a node that processes a million dollars worth of transactions per day, without securing the channel on the other side and congratulations you've invented a bank (albeit fractional reserve spending is more difficult).
Not that that's a terrible thing, I mean it's better than most banks: I've used it before as a means to transfer money from exchange to exchange: it's competitive and has low fees compared to SWIFT. But the problem is that if people rely on some centralized payment processor you will eventually get vendor lock-in.
You have that now with Coinbase commerce: before it was the case that they would just give you an address and you could pay with LTC or whatever, now they want you to download an app and link it with their system. That's the direction all this LN stuff is generally going.
If you go offline for a week, you can't
receive transactions for a week.
you've invented a bank
But I think the better comparison when it comes to the LN is Visa, not a bank. And again, there are many differences. One is that Visa can reverse transactions. Making payments costly for vendors because of fraud. LN nodes can't.
Your solution is to centralized transactions on a few large payment processor nodes?
The core problem of LN remains, which is that in order to operate a LN node you must keep it always online or risk having your coins stolen. The entire point of creating a L2 network in the first place was because Bitcoin Core decided that scaling the base layer with larger blocks would harm decentralization by making it more difficult to operate a Bitcoin node. Well anyone who has ever operated a server can tell you that maintaining near 100% uptime is a much much higher technical bar than buying a larger hard drive.
The alternative for LN users if they don't want to operate their own LN node is to give up custody of their coins to someone who does operate a node, but this goes against the core premise of cryptocurrencies.
Say I sell you a meal. You pay for me for it with a L2 transaction. I use that L2 transaction to pay the taxi driver for my ride.
In that very short story the value representing stuff (the meal) was moved onto L2, and then out of L2 in exchange for a taxi ride. Neither move involved L1.
The problem is that opening an L2 channel is an L1 operation. And closing L2 channel is an L1 operation. So if an individual want to use BTC L2 as designed, it would involve a lot of L1 operation plus tax the network with every transaction.
This all is absurd as it is sounds. The hardest problem with discussing Lightning Network is to choose which idiotic design decision to dismantle first :) .
So eventually the system evolved and ditched stupid decentralization (sarcasm alert) and centralized in a few big entities (Lighthouse iirc) and the full L2 network is no longer needed, every user and merchant opens one single channel to the central bank, and then all operations happens inside the central bank via IOUs. This removes the need to most of the channels, and gets rid of unneeded decentralization. But even then, with 1 single channel operation per user life, it would require 10-15 years of L1 anemic performance to even onboard everyone to LN.
In what way is bitcoin on the Lightning Network fake virtual tokens?
But here’s the twist: TCP/IP was built open and insecure by default, forcing us into decades-long battles (SSL, VPNs, Tor) to claw back privacy.
Bitcoin risks repeating history if we treat transparency as a minor inconvenience rather than a systemic flaw.
The point isn’t whether Lightning is easy (or hard) to use. It’s whether privacy should ever be optional at all.
Privacy, like security, isn’t a feature you bolt on later; it must be foundational, invisible, and unavoidable from day one.
Otherwise, we’re just building a prettier front-end on a fundamentally flawed architecture.
The uncomfortable truth? Absolute privacy sounds appealing until it hits the cold, political reality: total anonymity is kryptonite to regulators, institutions, and mass adoption.
What I didn't fully acknowledge earlier is that transparency, despite its risks, is Bitcoin’s Trojan horse, its necessary concession to widespread legitimacy.
Monero might promise a purer dream, but purity without pragmatism risks relegating cryptocurrency to irrelevance.
The solution isn't blind faith in either extreme but a strategic synthesis: Zero-Knowledge Proofs, Taproot, and advanced mixing technologies layered onto Bitcoin’s transparent base.
Privacy shouldn't replace transparency…it should refine it.
Navigating this paradox is where the real genius lies, and that's what's needed to push my argument from compelling to undeniable.
Monero is the last stand. If privacy doesn’t become the default in digital finance, it will soon be criminalized and erased.
The internet made the same mistake: TCP/IP was built for openness, not privacy. Now, decades later, Tor and I2P are playing catch-up against mass surveillance. Monero is trying to fix Bitcoin’s mistakes before history repeats itself.
We are at a crossroads. If Bitcoin remains transparent by design, financial surveillance will become irreversible. If Monero gets crushed, there is no Plan B.
I wrote a deep dive into this issue—how we got here, what happens next, and why this moment is critical. Would love to hear your thoughts.
I am optimistic about GNU Taler (clearly it has superior privacy and throughput versus cryptocurrencies), but you have to be aware of the possibility of re-creating the existing financial system.
Issues like surveillance and insecurity are largely political and by the time they are realized on an individual level they are too late to solve. It is pretty easy track down protestors when the government has access to the network of all their transactions. Not to mention control: payment processors are private companies and can simply choose not to do business with you, locking you out of the market.
With a typical bank, your money is protected by "open source" information like your name, address, and such. If you can copy information from a credit card you have everything you need to authorize a transaction: skimming is a major issue. When this security inevitably breaks down, it's called "identity theft" and the responsibility is pushed onto the consumer who has no agency to secure themselves.
In a cryptocurrency, it's a keypair so the information needed to authorize the transaction (private key) is separate from the information needed to verify it (public key). And the end user has ownership of the keypair so they can take initiative in their own security. If they want to use a certain hardware token, they can do that. If they want to outsource some security to a third party, they can do that voluntarily with a multi-signature scheme.
> In lots of corners of capitalism you gave two parties fighting over who pays what. And that's a good thing.
Yes, the goal of cryptocurrency is to fight against rent-seeking payment infrastructure in this manner.
Another failure of crypto.
This sounds stupid and most people usually think "there must be something more to it, but I don't understand". Well, there isn't. Money is just made up numbers that we use to do accounting. The only thing that is real is physical (houses, food, minerals, energy etc.)
To attempt to reign in the stupidity, governments have created layers upon layers of regulation to the extent that much of finance is basically working out how to keep legally creaming off the top of the money supply. They play silly games with each other where they trade bits of paper until one of them is left holding the bag. The trouble is the silly games end up affecting everyone else because we actually use this money to do real finance, like paying for food and shelter, insurance, savings etc.
Read up on the 2008 financial crisis. There's a very entertaining book and subsequent film called The Big Short which is highly recommended. Bitcoin was started as a direct response to the events that played out around 2008.
Monero has no proof of supply, and so I would have little confidence in storing my value in it.
I wouldn't store your value in a cryptocurrency. They're currencies not gold bars or value generating assets. They require a value transfer to the miners in order to be secure.
The bitcoin base layer is not pseudo-anonymous because chain analysts have access to data from exchanges and can de-anonymize the rest of users and transactions from this data. So it is transparent, but only for powerful institutions and not society at large.
The lightning network is not private. I mean it's private, but only in the sense that you are still broadcasting your transactions publicially but without paying others to permanently record them.
Using centralized services like paypal to send bitcoin is just recreating the existing financial infrastructure bitcoin was meant to solve. It is self-defeating. There is no purpose to bitcoin unless people can practically self-custody and use it for transactions.
Would you mind explaining how I might do a full audit of the total Monero supply using range proofs?
> I wouldn't store your value in a cryptocurrency. They're currencies not gold bars or value generating assets. They require a value transfer to the miners in order to be secure.
bitcoin on the Bitcoin network is not really a currency - the transaction fees are independent of the transaction size making small value exchanges extremely expensive, and large value exchanges extremely cheap. It's a crypto-asset that's optimised for storing large amounts of value of large amounts of time (similar to gold, but much improved).
> The lightning network is not private. I mean it's private, but only in the sense that you are still broadcasting your transactions publicially but without paying others to permanently record them.
The lightning network does not use public broadcasting of transactions. It works in a similar way to the Tor network, with an onion protocol.
> Using centralized services like paypal to send bitcoin is just recreating the existing financial infrastructure bitcoin was meant to solve. It is self-defeating. There is no purpose to bitcoin unless people can practically self-custody and use it for transactions.
No it doesn't recreate infinite money printing, which is the problem bitcoin solves, and why it will ultimately suck all the value out of fiat currencies. People can already practically self-custody, there is no need to use it for everyday transactions - it will have enormous success simply as a savings tool. In addition, it is fully auditable, meaning you can have your bitcoin fully or partially custodied by a third-party but have full access to the public keys for the bitcoin wallet, proving your money is where the custodian says it is. Something that's practically impossible with gold/fiat.
The range proofs are verified by monero nodes or the transaction is invalid, so it is sort of like asking to audit that all bitcoin transactions are correctly signed. The cryptography for Bulletproofs and its implementations are audited by cryptographers, which you can read. Just run a monero node and count up all the inputs from the block reward, which are public. That's the supply.
>It's a crypto-asset that's optimised for storing large amounts of value of large amounts of time (similar to gold, but much improved).
The low block size and resulting high fees aren't an intentional design decision. It's not "optimized" for anything except the network conditions of 2010, because that's the last time satoshi changed it. Satoshi clearly intended for the block size to be raised[0][1].
The difference between gold and bitcoin is that gold doesn't require a constant value transfer to miners (in the form of inflation or fees) in order to be secure, gold can just sit in a vault. In 10 years down the line if the mining reward is too low (coinbase keeps getting cut in half, transaction fees will need to increase to accommodate), miners will sell off equipment and attackers can buy them up.
it recreates money printing unless you are using lightning. If it is just some payment processor you don't have a payment channel with (like PayPal as you suggested) there is nothing stopping them from doing fractional reserve banking on the other side and giving out loans.
People can self custody now because fees are low. If more people use bitcoin, the fees go up and it becomes impractical. Using bitcoin for everyday transactions is the whole point bitcoin was created in the first place.
>In addition, it is fully auditable, meaning you can have your bitcoin fully or partially custodied by a third-party but have full access to the public keys for the bitcoin wallet, proving your money is where the custodian says it is. yo This will just give you proof that the custodian hasn't moved the outputs, which is sort of flawed. It doesn't tell you anything about ownership.
[0] https://bitcointalk.org/index.php?topic=1347.msg15366#msg153... [1] https://bitcointalk.org/index.php?topic=149668.msg1596879#ms...
Thanks - I'll investigate this further
> The low block size and resulting high fees aren't an intentional design decision. It's not "optimized" for anything except the network conditions of 2010, because that's the last time satoshi changed it. Satoshi clearly intended for the block size to be raised[0][1]
Bitcoin is what it is. It makes no difference what Satoshi had envisioned for it. It turns out that it's an excellent savings tool/reserve asset - an (ideal?) store of value. It's optimised for large size and long duration because the transaction fees are independent of size, and it has a capped supply with predefined issuance curve.
> The difference between gold and bitcoin is that gold doesn't require a constant value transfer to miners (in the form of inflation or fees) in order to be secure, gold can just sit in a vault. In 10 years down the line if the mining reward is too low (coinbase keeps getting cut in half, transaction fees will need to increase to accommodate), miners will sell off equipment and attackers can buy them up.
It's not true that bitcoin requires continuous fees to remain secure. Any transactions more than a few blocks deep in the current blockchain will remain secure forever - even if the network shuts down. If it doesn't shut down, there will be transactions, and the small blocks (~7 txn/sec cap) see to it that transaction fees increase with demand for transactions. The more new transactions there are, the more secure those new transactions are - a positive feedback loop. The only way the transaction fees would be too low is if bitcoin has already failed and there is no demand for it as a store of value. The incentives will actually be for the wealthy (individuals, companies, countries) to use it all the time, as the fees become insignificant for large transactions.
> it recreates money printing unless you are using lightning. If it is just some payment processor you don't have a payment channel with (like PayPal as you suggested) there is nothing stopping them from doing fractional reserve banking on the other side and giving out loans.
Correct, but they will run the risk of an old-fashioned bank run, so there will be a lower limit to the reserve fraction, unlike with fiat central banking where there is no reserve requirement (infinite money supply)
> People can self custody now because fees are low. If more people use bitcoin, the fees go up and it becomes impractical. Using bitcoin for everyday transactions is the whole point bitcoin was created in the first place.
Again it makes no difference why it was created. It is what it is, right now. If regular people can't afford to onboard, so be it. Rich people, large companies and countries will be able to, and it's this large injection of wealth that will make it extremely valuable, rather than piggy banks etc. In fact the banks used by the masses would likely store those people's wealth in bitcoin behind the scenes, even if they don't offer bitcoin accounts to the customers themselves. The reality is that if banks don't provide on-boarding, higher-level networks like Lightning (with channel factories), fedimint (https://river.com/learn/terms/f/fedimint/) will offer a path for the masses to onboard in the future.
> This will just give you proof that the custodian hasn't moved the outputs, which is sort of flawed. It doesn't tell you anything about ownership.
It tells you a lot about ownership - you would be able to see your own transactions on chain. You can't transfer ownership of bitcoin without a transaction and that would be visible to the legal owner (the customer) and would immediately trigger a run on the custodian - likely putting them out of business, never mind the legal consequences, which is a great incentive for custodians not to rehypothecate it (understatement...)
I'll give you a couple of references if you are interested. "Zero to Monero" (https://web.getmonero.org/library/Zero-to-Monero-2-0-0.pdf) is a good guide, but it may become outdated with the upcoming "FCMP++" upgrade. You might also be interested in Ring signatures and confidential transactions (CT) which were the original privacy improvements suggested for bitcoin.
>Any transactions more than a few blocks deep in the current blockchain will remain secure forever - even if the network shuts down.
No it won't. You get 51% attacks if the hash power of an attacker is high relative to miners. Bitcoin's security assumes that there are always miners so an attacker can't catch up. Monero (and a couple other cryptocurrencies) use a tail emission: The emission rate is constant, which sounds bad until you realize that it still means that inflation is always decreasing asymptotically as a % of the total supply. At the same time, you get a constant subsidy for miners.
>the transaction fees are independent of size
Every cryptocurrency I'm aware of uses this model. It's because the actual computational cost for a cryptocurrency network to process a transaction is independent of the amount of cryptocurrency transacted.
>the small blocks (~7 txn/sec cap) see to it that transaction fees increase with demand for transactions
You are assuming that there will be demand for bitcoin transactions. But if the purpose of bitcoin is to be a store of value and not a medium of exchange then this will not be the case. Not to mention you have all these layers like the lightning network that are ultimately designed to decrease the amount paid out to miners and redirect them to intermediaries instead. Clearly the total mining reward from fees increases as the transaction throughput increases, and vice versa: eventually fees just get so high that they are prohibitive to certain classes of commerce.
Why is bitcoin a store of value, is it a useful instrument for trade? No, in fact the high fees are somewhat prohibitive to its use as a store of value. Bitcoin's value as a "store of value" is predicated on circular reasoning. You will eventually learn that self-fulfilling prophecies like these are also self-unfulfilling prophecies by the same manner.
Imagine that there is another cryptocurrency that becomes an effective instrument for trade at scale (monero wouldn't work because of its large transaction sizes, but maybe Bitcoin Cash or Litecoin or something) and at the same time is sound enough to provide a "store of value". This new cryptocurrency would out-compete Bitcoin in usefulness, and Bitcoin would no longer be an effective "store of value".
>If regular people can't afford to onboard, so be it. Rich people, large companies and countries will be able to, and it's this large injection of wealth that will make it extremely valuable, rather than piggy banks etc.
It would represent a wealth transfer to the lower class. These large institutions would be investing in an asset that is ultimately valuable "because it is".
As a thought experiment: If one person bought up all the bitcoin in the world and monopolized it, would it be valuable or worthless? The answer is clearly "worthless".
It's not the same as gold in this sense. If you monopolized gold somehow, you could set a much higher price based on its intrinsic usefulness as a material. Cryptocurrencies, like real currencies are only useful insofar as you can use them as an instrument of trade. There is a network effect involved.
This is a good place to highlight where we fundamentally disagree.
Assuming this is just an temporary situation (i.e. miners are still operational) and the person with all the bitcoin was committed to selling it slowly, the bitcoin would be extremely valuable. There would be enormous demand for the time-proven, hardest asset mankind has ever seen and hardly any supply of it coming onto the market.
Most of the value in the world is stored. It is always looking for a better home, and there is no better home than bitcoin.
Gold isn't valuable because of any usefulness as a material - it's because of its fundamental attributes relevant to being a store of value: divisible, extremely robust, non-fungible, portable, easily to assay/recognisable, scarce etc. It is the optimal physical substance for use as a store of value that requires divisibility and liquidity (relative to say, real estate).
Bitcoin is the digital counterpart, and being digital has numerous benefits: perfectly scarce (above-ground gold doubles every ~40 years), way more portable (you can store it in your head and send it around the world in minutes), you can buy/sell it in any quantity 24/7 from a phone, the node you connect to assays it automatically, it can be better protected from theft (multisig etc). This is why it is demonetising gold over time - it's beating it at its own game. It's beating real-estate as a store of value, bonds. Soon pensions. Not only that, but with higher-level payment rails, it can beat fiat at it's own game.
When I say bitcoin is what it is - I'm talking about these fundamental monetary qualities. How Satoshi envisioned we'd make use of them is irrelevant.
Also, I should add that an asset has to first find it's potential as a store-of-value before it has any shot at being a medium-of-exchange or unit-of-account, because otherwise it's value will change too much, while it grows, to be of use for those things.
The reason fiat currencies never went through this process to become a medium of exchange is because they are tokens, boot-strapped into value by representing the existing time-proven, market-saturated hard asset and taking on its stabilised value, and established status as unit-of-account, similar to what Tether has done (what a house of cards that is! - a token representing a token representing....nothing anymore)
The key to understanding the bitcoin proposition is to understand why and how gold became so valuable thousands of years ago (and it's not because it's shiny and electrically conductive). Bitcoin is following the same path, albeit in a much-accelerated way due to our increased knowledge and communication ability nowadays.
So according to your superior reasoning of stock-to-flow, if someone owned all the food in the world, with no means of further production, food would be worthless?
If not, how is food (commodity with large demand, driven by need to nourish ourselves) different economically to bitcoin (a commodity with large demand driven by need to store value)?
You’re assuming that auditability prevents fraud. But let’s be real—Bitcoin’s transparency didn’t stop Mt. Gox, QuadrigaCX, or FTX from losing billions. It didn’t prevent wash trading, exchange manipulation, or fractional reserves.
The only entities that have truly benefited from Bitcoin’s transparency? Government agencies (who use chain analysis to track transactions). Surveillance firms (who monetize the data).
Monero’s cryptographic approach ensures users can verify the supply without exposing transaction details. That’s privacy done right. You don’t need the entire world to verify a global balance sheet—just a mechanism to ensure nobody is inflating the supply. Bitcoiners accept this principle for Lightning, but somehow reject it when Monero applies it natively.
> "Bitcoin is optimized for storing large amounts of value over long durations. The transaction fees are independent of size, and it has a capped supply with a predefined issuance curve."
A store of value is only as good as its security model.
Bitcoin’s security relies on mining incentives, which depend on: Block rewards (shrinking over time) Transaction fees (which must rise dramatically to compensate)
If mining incentives collapse, what happens? Attackers buy up cheap hashrate and reorganize the chain. If that happens, Bitcoin’s “store of value” narrative dies instantly. The argument that “fees will just rise” assumes demand remains constant, but history shows that rising fees reduce adoption.
> "The difference between gold and Bitcoin is that gold doesn’t require a constant value transfer to miners (in the form of inflation or fees) in order to be secure, gold can just sit in a vault."
Gold doesn’t have an ongoing security budget, but it also isn’t programmable money. The analogy breaks down the moment you realize Bitcoin needs continuous incentives for miners to secure the network. Bitcoin's security becomes fragile if transaction fees alone don’t sustain mining, especially in a state-level attack scenario.
> "If more people use Bitcoin, the fees go up, making self-custody impractical. But that doesn’t matter—Bitcoin will still win as a savings tool for the wealthy, corporations, and countries."
What was the point if Bitcoin’s final form is just a savings tool for the rich? If most users can’t afford on-chain transactions and have to rely on intermediaries, we’ve just recreated the banking system with extra steps. And since Bitcoin’s ledger is public forever, it’s not just a savings tool—it’s a perfect surveillance database.
Will Bitcoin actually stay decentralized and usable? Or is it just becoming the world’s best compliance-friendly, trackable savings account?
Because right now, the trend isn’t looking great.
There can't be a financial system if there are no taxes, because financial system is maintained by some form of government, which needs money to operate, and both are function of scaling up human societies.
Therefore, financial system and financial privacy are mutually exclusive in practice.
Are taxes – any taxation at all – a good idea? I would say yes – funding common infrastructure and services as charities or private companies seems doomed to fail. Making all financial transactions secret would make tax evasion rampant.
What about money coming from criminal enterprises, ie. money laundering. What about extreme concentration of money, having an outsized and untraceable influence on our political system and increasing regulatory capture to the extreme.
I'm not against disruption of our financial system in principle, but it seems we'll first need to also come up with good answers on how we organize society. A society of working poor, with a small but extremely wealthy elite doesn't seem like a good deal – even for the extremely wealthy.
https://en.wikipedia.org/wiki/Land_value_tax
I think that in this century we've become accustomed to the existing credit card payment systems that have access to all of our payment data and are allowed to do with it what they wish (and by extension, the government also can subpoena our payment data in investigations). But if you look back in history this is a pretty new idea. Giving the government access to every single payment you make is pretty dangerous if you have a change of regime into something more authoritarian like in the case of China.
I think that if cryptocurrency can provide about the same level of fungibility and privacy as ordinary cash, that would be fine. You can track marked bills with some level of effort (kind of analogous to an EAE attack in the cryptocurrency world) but the general principle is that not every transaction is automatically logged in some easily inspectable database and sold to the highest bidder.
At least physical cash though put a constraint on the scale of the mafia.
A global, secret, digital currency will inevitably lead to organized crime on the scale of the currency. It is just an absolutely terrible idea.
The appeal is in the abstract because it is easy to ignore the downside risks in the abstract.
PS: but cudos where they are due - at least Monero folks have a clear purpose, a clear vision and they are executing according to it. Unlike slimy gamblers from BTC and other tokens, who all pivoted to scams and frauds and completely abandoned any notion of the original whitepaper about decentralized private currency.
People assume Lightning fixes this, but that’s just history repeating itself. Lightning is the financial equivalent of a VPN. It improves individual privacy for those who use it, but it doesn’t change the fact that the underlying system remains transparent and traceable. Chain analysis still works. State surveillance still works. Just like ISPs can fingerprint VPN traffic, financial surveillance firms can (and already do) identify Lightning channel activity.
What’s happening here is more than a technical debate. It’s a battle over whether financial privacy will follow the same path as internet privacy—something theoretically possible, but practically abandoned by 99% of users. Bitcoin is TCP/IP. Monero is I2P. One is dominant because it was first. The other is superior for privacy but struggles because mass adoption cements early design choices. If you think Bitcoin’s privacy can be solved later, look at the internet. The window for embedding privacy at the base layer always closes faster than expected. If Monero doesn’t win this battle soon, it will follow I2P—technically superior, ideologically correct, but too late to matter.
Bitcoin’s biggest flaw isn’t scalability—it’s surveillance baked into the protocol. The transparency that once made it revolutionary is now its Achilles' heel, setting the stage for financial panopticons controlled by governments and corporations. The Lightning Network? A band-aid on a bullet wound. It adds a layer of obfuscation, but at its core, Bitcoin remains an open ledger ripe for tracking and control. It’s like using a VPN on an unencrypted connection—marginally better, but still fundamentally exposed.
Monero gets privacy right, but it’s stuck in the shadows, largely ignored by the mainstream. And here’s the real problem: the world is sleepwalking into a future where every financial move is monitored, logged, and controlled. If privacy isn’t embedded at the protocol level now, it never will be.
Bitcoin changed the game, but if it doesn’t evolve, it risks becoming the trojan horse for financial surveillance. The cypherpunk dream isn’t about “number go up”—it’s about financial freedom.
And without privacy, there is no freedom.
Bitcoin is the only truly decentralised digital asset that governments can't control or stop.
You can self-custody it by keeping 12 words secret. You can even add multiple passphrases so that you can split the "keys" to your bitcoin across multiple locations with plausible deniability that the passphrases even exist.
The options are endless. You can store your 12-word mnemonic in the physical domain, and the passphrase(s) in the digital domain. You can even store it in your head if you like (12 short words are surprisingly easy to remember)
BTC is also a very poor choice to be used private and anonymous because every transactions is tracable forever by design, again unlike monero.
The node you connect to defines bitcoin, not the miners.
If you want to mine, you can do that with a single ASIC and join a pool. The main obstacle is finding free/cheap energy, and the beautiful thing about bitcoin is that demand-based price of said energy automatically repels miners from each other geographically.
This was demonstrated in the block-size wars.
You seem to be spinning in a circle
As for centralisation of mining - you're mistaking ASIC farms with mining pools. Miners can switch mining pools in milliseconds if a mining pool goes rogue.
There are all types of miners, those with a single ASIC miner to those that have a warehouse full. Its completely untrue that the only people who own ASICs are farms. Anyone can buy and run a single ASIC miner competitively if they have a source of cheap (i.e. unwanted) energy.
As I mentioned earlier, mining is inherently decentralised geographically, because as the demand for the cheap energy in any one location increases, so does its price. Miners are therefore effectively geographically repelled from one another.
Pools mean that groups of individual miners with just a small number of ASICs each, are creating hash-rates that compete with large companies who own vast swathes of ASICs.
It allows clear, reliable audit of the supply to detect any inflation bugs and acts as a Trojan horse into institutions that don't want an fully-anonymous asset.
Anonymity can be obtained if you really want it (non-KYC on/off ramps, conjoin etc), and is also provided on higher layers/networks like Lightning
If you believe Monero is superior, the market thinks otherwise: https://imgur.com/a/YfvuLWW
It's also not trivial to "deanonymize" bitcoin. Especially if it was acquired through non-KYC and/or takes steps to add privacy (such as conjoin or non-KYC on/off ramps).
So i just need to jump through dozens of hoops that maybe kind of work or just use a superior currency that does it all much better provable by default for much higher threat model?
Monero has a place - to increase the privacy of bitcoin when required. But I'd never store value in it for any length of time, I'd only use it temporarily.
The transaction graph is the main problem. It's currently broken on monero according to the chainalysis leaks until something like FCMP++ is implemented
also I think XMR does have some scriptless scripts. The atomic swaps are one example