Supply Shock Bitcoin's Crisis of Stagnation, Upgrades, & Control | Paul Sztorc
Oct 21, 2025
Paul Sztorc, Founder and CEO of Layer2Labs and an insightful Bitcoin researcher, dives into the complexities of Bitcoin governance and development. He critiques the Lightning Network, discusses the divide between users and developers, and highlights the issues with Bitcoin Core’s authority. Sztorc also explains the importance of informed consent in upgrades and the inevitable competition among implementations. With a keen focus on Bitcoin’s future, he explores the role of fees and user adoption in driving sustainable growth.
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Politics Drove A Decade Of Stagnation
- Bitcoin development politics split into factions after the block-size wars, producing stagnation.
- Paul argues V30 drama showed social fear exceeded technical impact and highlighted governance issues.
Lightning's Sacred-Cow Problem
- Paul says Lightning became a sacred cow and resembles mass delusion with repeated patches.
- He compares Lightning's continual fixes to Theranos-style grand claims that later require many bandaids.
Relay Policy Versus Fee Reality
- Paul calls the relay policy a mistake because it ignores who pays for block space: the fee-payer.
- He stresses miners economically want the highest-fee transactions, making punitive relay defaults illogical.