If Bitcoin is captured and millions are being spent to influence it, splitting a significant group of users onto a competing chain could turn out to be one of the worst decisions for those trying to maintain that control. A competing chain creates a real-world test. If price suppression, rehypothecation, or other forms of capture actually exist, the alternative chain could attract more capital by offering stronger monetary properties. If the capture thesis is wrong, the competing chain may simply lose relevance. But if it is right, the split could expose exactly what the capture was supposed to hide.

Don’t try to capture Bitcoin. You’ll just lose money.

The most powerful thing about Bitcoin is that you can always fork it. If Bitcoin ever becomes truly captured, users can fork the system, change the rules, or even change the PoW algorithm and rebuild outside the captured structure. Someone can spend enormous amounts of money trying to capture the chain, only to watch the network evolve around their control and make that power irrelevant. Then the market decides. The chain with more self-custody, more independent nodes, more decentralized mining, no money creation, less rehypothecation, and no group able to enrich itself through control of the protocol has the stronger monetary properties. Capital will ultimately flow toward the system people trust most. I don’t think Bitcoin is fully captured today, but we are seeing tendencies. A Bitcoin chain can be captured. The idea of Bitcoin cannot.

Did Foundry stop mining as soon as mandatory signaling started, or only after Antpool found the first block? It would be interesting to know whether Foundry initially signaled BIP110 and then, after seeing Antpool’s block, pivoted, stopped mining, and waited or whether they stopped right when mandatory signaling began. It’s possible that it was simply chance that determined which chain won. I’m still unsure why they didn’t prevent a chain split.

Probably the best listen for understanding the debate and preparing for today’s event. It explains what could happen and why. https://youtu.be/-or58xeQeXU

My prediction for today: Small miners can’t really decide on BIP110 themselves; they have to follow the big miners. If either Foundry or Antpool flips the bit while the other doesn’t, the one that doesn’t could be in serious trouble. If both flip it, they’re safe. In that case, they would benefit from mining blocks with less competition for some time, until the smaller miners catch up and follow them. On top of that, by flipping the bit, they serve 100% of nodes. With the majority of the hashrate, the BIP110 chain will grow faster and overwrite legacy blocks. No permanent chain split, and all economic value remains on one chain. I think both Antpool and Foundry will flip the bit. In that case, they can’t really lose. They benefit from less competition until all miners converge on one chain. There will probably be a temporary split until all miners start signaling BIP110.

What if the allegations against Adam Back were true, and the mining operation was in fact a Ponzi scheme? The implications could be significant. If many developers associated with Bitcoin Core, companies, or other prominent figures had lent money to finance that operation, Adam’s inability to repay those loans could expose them to substantial financial losses. In the worst case, some companies could face serious financial distress or even insolvency. Under that hypothetical scenario, one possible explanation for the strong opposition to BIP110 would be that they believe Blockstream’s Simplicity smart contract project could generate enough value to help close that financial gap. If BIP110 were to succeed, there might be no realistic way to recover those funds.

Almost everyone loses unless BIP110 activates without a chain split. For leveraged companies with significant debt, opposing BIP110 without a successful URSF is like shooting themselves in the foot. A split would divide capital between two chains, reduce miner revenue, put downward pressure on Bitcoin’s price, increase the risk of a leverage cascade, create technical challenges for Lightning, add operational costs for exchanges, and damage Bitcoin’s reputation. Every company operating in the Bitcoin ecosystem stands to lose from that outcome. So why are they pushing so hard against BIP110? If Bitcoin is used as money, most users wouldn’t even notice whether BIP110 activates. But everyone would notice the consequences of a chain split. So what do they believe they would lose if BIP110 activates?

The best outcome for everyone would be for BIP110 to activate without a chain split. If that happens, it would still be possible to revisit the change in a year. The opponents of BIP110 failed to build enough momentum for a URSF. Instead of engaging with the concerns raised about the changes introduced in Bitcoin Core v30, many dissenting voices were ignored, blocked, or dismissed. This is the result of that approach. For leveraged companies, promoting opposition that could lead to a chain split is a highly risky strategy. I’m prepared for any outcome. If the Bitcoin price drops significantly, i don’t care. Whether every company or miner can afford such a scenario is another question. I’m ready and have no reason to be anxious. My bitcoin is in cold storage and secure. At what point leveraged companies will realize this, I don’t know. But for their own sake, I hope they do before it’s too late.

With over 15% of the network’s nodes, the longer it takes for a block to be found on the BIP110 chain, the higher the transaction fees rise. That attracts more miners, increasing the risk of the other chain being wiped out. Don’t be fooled by debt-ridden companies. They don’t pay you, they simply benefit from Bitcoin’s price appreciation. But in the event of a chain split, they would likely have the most to lose if the price falls. It seems they underestimated the risks. If they don’t reconsider their opposition, they may end up paying the highest price.