There are those who say Bitcoin doesn't scale, and build blockchains with more throughput at the cost of more centralization (generally in the form of it being way harder to run a node), and then also...
🚩 Scaling, Fees, and Custody
1. “The limiter … is not how many people can self-custody bitcoin. It’s how many people want to.”
✘ Misleading: The actual limiter is both technical (running a node, limited throughput, UTXO set growth) and user preference. It’s not just a matter of willpower — scaling constraints are real.
2. “Bitcoin currently processes about as many transactions per year as Fedwire.”
✘ False.
• Bitcoin: ~350,000 transactions per day → ~130 million/year.
• Fedwire: ~200 million/year.
✔ She’s right they’re in the same order of magnitude, but Fedwire clears $1 quadrillion vs Bitcoin’s ~$12 trillion annual settlement. That’s almost 100× higher per dollar volume, and the average Fedwire tx is ~$5 million vs Bitcoin’s ~$90,000.
3. ”…open-source global Fedwire with low fees despite it being a $2T network.”
✘ Misleading. Bitcoin isn’t equivalent to Fedwire:
• Fedwire is final settlement for banks with virtually no reorg risk; Bitcoin is probabilistic settlement.
• Bitcoin fees are currently low mainly due to demand not exceeding blockspace, not inherent scalability.
⸻
🚩 Custodial Layers and “Paper Bitcoin”
4. “Paper bitcoin holders add to stability and network size without clogging it.”
✘ Misleading/False.
• Custodial IOUs don’t strengthen Bitcoin’s security model; they introduce counterparty risk, weaken censorship-resistance, and often end in blowups (Mt. Gox, FTX).
• Hal Finney did speculate about Bitcoin banks, but that was not an endorsement that custodial Bitcoin was good for the system.
⸻
🚩 Market Size and Capitalization
5. ”$2T network.”
✘ Misleading. Bitcoin’s market cap ≈ $2T at times, but the network value ≠ Fedwire settlement throughput. Fedwire moves orders of magnitude more in annual settlement volume than Bitcoin.
6. “Entering into a global fiat network of hundreds of trillions.”
✘ Misleading. The “$hundreds of trillions” claim lumps M2 money supply, credit, bonds, and derivatives together. Bitcoin is not directly comparable.
⸻
🚩 Technical Development
7. “The technical foundation is good … scale has reached institutions.”
✘ Misleading. Institutional adoption of custodial Bitcoin products (ETFs, exchanges, custodians) ≠ scaling of the base layer. The base protocol itself still has the same throughput limits (7 tps theoretical, ~350k/day).
8. “Low base-layer fees” as a permanent feature.
✘ Misleading. Fees are only low during periods of low demand. During the Ordinals / BRC-20 craze in 2023, average fees spiked above $30.
⸻
🚩 Government & Privacy
9. “The real battle is government crackdown on privacy.”
✔ True that privacy crackdowns are real, but ✘ misleading to imply Bitcoin is in a “good technical place” on privacy.
• Bitcoin’s base layer offers very weak privacy (pseudonymous, chain-analytic vulnerable).
• It’s incorrect to suggest the only issue is regulation; the protocol itself leaks data massively.
⸻
🚩 Rhetorical Framing
10. “We live in a sweet spot … golden age.”
✘ Subjective, but misleadingly dismisses structural risks: centralization of mining, mempool congestion, reliance on custodians, and fee market sustainability are unresolved.
⸻
✅ In short:
• She overstates Bitcoin’s parity with Fedwire,
• confuses market cap with settlement volume,
• downplays real scalability and privacy limitations,
• misrepresents custodial IOUs as beneficial,
• and frames low fees as intrinsic rather than demand-driven.
1. “The limiter … is not how many people can self-custody bitcoin. It’s how many people want to.”
✘ Misleading: The actual limiter is both technical (running a node, limited throughput, UTXO set growth) and user preference. It’s not just a matter of willpower — scaling constraints are real.
2. “Bitcoin currently processes about as many transactions per year as Fedwire.”
✘ False.
• Bitcoin: ~350,000 transactions per day → ~130 million/year.
• Fedwire: ~200 million/year.
✔ She’s right they’re in the same order of magnitude, but Fedwire clears $1 quadrillion vs Bitcoin’s ~$12 trillion annual settlement. That’s almost 100× higher per dollar volume, and the average Fedwire tx is ~$5 million vs Bitcoin’s ~$90,000.
3. ”…open-source global Fedwire with low fees despite it being a $2T network.”
✘ Misleading. Bitcoin isn’t equivalent to Fedwire:
• Fedwire is final settlement for banks with virtually no reorg risk; Bitcoin is probabilistic settlement.
• Bitcoin fees are currently low mainly due to demand not exceeding blockspace, not inherent scalability.
⸻
🚩 Custodial Layers and “Paper Bitcoin”
4. “Paper bitcoin holders add to stability and network size without clogging it.”
✘ Misleading/False.
• Custodial IOUs don’t strengthen Bitcoin’s security model; they introduce counterparty risk, weaken censorship-resistance, and often end in blowups (Mt. Gox, FTX).
• Hal Finney did speculate about Bitcoin banks, but that was not an endorsement that custodial Bitcoin was good for the system.
⸻
🚩 Market Size and Capitalization
5. ”$2T network.”
✘ Misleading. Bitcoin’s market cap ≈ $2T at times, but the network value ≠ Fedwire settlement throughput. Fedwire moves orders of magnitude more in annual settlement volume than Bitcoin.
6. “Entering into a global fiat network of hundreds of trillions.”
✘ Misleading. The “$hundreds of trillions” claim lumps M2 money supply, credit, bonds, and derivatives together. Bitcoin is not directly comparable.
⸻
🚩 Technical Development
7. “The technical foundation is good … scale has reached institutions.”
✘ Misleading. Institutional adoption of custodial Bitcoin products (ETFs, exchanges, custodians) ≠ scaling of the base layer. The base protocol itself still has the same throughput limits (7 tps theoretical, ~350k/day).
8. “Low base-layer fees” as a permanent feature.
✘ Misleading. Fees are only low during periods of low demand. During the Ordinals / BRC-20 craze in 2023, average fees spiked above $30.
⸻
🚩 Government & Privacy
9. “The real battle is government crackdown on privacy.”
✔ True that privacy crackdowns are real, but ✘ misleading to imply Bitcoin is in a “good technical place” on privacy.
• Bitcoin’s base layer offers very weak privacy (pseudonymous, chain-analytic vulnerable).
• It’s incorrect to suggest the only issue is regulation; the protocol itself leaks data massively.
⸻
🚩 Rhetorical Framing
10. “We live in a sweet spot … golden age.”
✘ Subjective, but misleadingly dismisses structural risks: centralization of mining, mempool congestion, reliance on custodians, and fee market sustainability are unresolved.
⸻
✅ In short:
• She overstates Bitcoin’s parity with Fedwire,
• confuses market cap with settlement volume,
• downplays real scalability and privacy limitations,
• misrepresents custodial IOUs as beneficial,
• and frames low fees as intrinsic rather than demand-driven.
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