The Themes That Will Define Bitcoin in 2023

Here are some themes I see for Bitcoin in 2023. These are the themes I see for Bitcoin in 2023.Regulatory overreachThe Financial Action Task Force (FATF) Travel Rule forces exchanges and service providers to share more information about customer transactions. Elizabeth Warren, a politician, is publicly slamming Bitcoin. Even though her proposed digital asset AML bill has no chance of passing, it does indicate that there will be future battles. On the other hand, it is important to remember that governments initially opposed voice over internet protocol (VoIP), technologies such as Skype. They now use VoIP. It will be the same with bitcoin. Some countries will adopt it as legal tender, keep bitcoin in reserve, offer Bitcoin services to citizens, and encourage entrepreneurs and investors to invest in bitcoin. CBDCs and the War on CashThe war against cash proceeds has many countries taking high denomination cash notes out of circulation or banning cash transactions above a certain threshold. Many countries are discussing central bank digital currency (CBDC), but I believe that not all will have the technical and economic ability to set up a functioning CBDC by 2023. In preparation for future CBDC rollouts, 2023 will mainly be about trials and rhetoric. People can be forced to use CBDCs by governments in countries with high welfare states. The understanding is that if you want your welfare check, then you’ll take it as CBDC. It will be like Darth Vader’s “Star Wars”: “Pray that I don’t alter the deal any further.” While CBDCs were once viewed as a conspiracy theory, they are now a threat to privacy and financial freedom. Unfortunately, most people won’t see the threat until it’s too late. CBDCs are upon them. But it is also the pain caused by CBDCs that will drive more people to use Bitcoin and the Lightning Network. Maxis Being Minted and Resurgence in Self-Custody InterestBitcoin Maximalists have been minted as casual crypto “crypto” enthusiasts get rekt on platforms like Celsius, BlockFi. FTX. Voyager. Vauld. It’s cyclical in some ways. The 2014-2015 bear cycle was after the collapse Mt. Gox, and during 2018 to 2019 bear cycles, we saw the collapse of QuadrigaCX — so it’s just another round of people learning the hard way. We will see a stronger culture of self-custody in 2023 as the pain from 2022 is much more recent. This does not mean that there will not be future adoptions and waves of people who are less careful. Yield and shitcoin scams are likely to return in a different form sooner or later. However, it will be a new group of people who succumb. Self custody is gaining more attention. For example, I hosted some self custody 101 webinars with Swan Bitcoin. These webinars attracted the most interest and registrations of all Swan webinars. A simple auto-withdrawal option or being 100% non-custodial is an important feature for Bitcoin on ramps in 2023. Miniscript Wallets and FeaturesPer Pieter Wuille’s website: “Miniscript (a subset) of Bitcoin Scripts can be written in a structured manner, enabling analysis, composition, general signing, and more. Miniscript allows you to express different spending conditions or scripts for bitcoin. This could be integrated into different wallets to facilitate cross-hardware compatibility. At first, you might wonder “Why should I care?” You might ask yourself that question at first. This will allow for more sophisticated self custody, enterprise, and even inheritance planning scenarios over time. You can have a three of three multisig setup that will eventually degrade to a two of three multisig setup in 90 days. Or you have different “backout” conditions depending on the business context. Miniscript makes it easy to do all of these things and allows people to use their existing software and hardware to accomplish them. While some of these things are possible with Bitcoin script, Miniscript makes them more technically feasible and easier to do in practice. Although it will take some time to develop these solutions, the functionality seems promising. This could be of interest to both enterprises and businesses, as it could make self-custody more accessible for key holders and employees. Liana, by the same team as Revault, has Miniscript support. Ledger has also announced Miniscript support for its hardware. Specter DIY had already enabled Miniscript support in 2021! Rob Hamilton also spoke about Miniscript’s use in the insurance industry. I expect more support in 2023. This could push bitcoin usage into self-custodial direction, away from the “old” model of financial services, where you have more trust in banks, government, and fiat financial institutions to keep their word or not debase wealth. Lightning FirstIt’s high time to create a Lightning-first model that can handle two types of bitcoin transactions: low value transactions and in-person transactions. The mempoolfullRBF debate exploded towards the end of 2022. But the real solution for most of us is promoting Lightning first, wherever possible. A quick story: Giacomo Zucco was talking to me about his experience in El Salvador, where he used bitcoin to pay for groceries. The Chivo terminal defaulted to Bitcoin on chain at that time, and the people behind him had to wait to confirm, which was very awkward. This could be contrasted with a Lightning-first experience, which could look more like the following: We should show people the best Bitcoin, and for in-person, lower value commerce, we should go Lightning first. This will be driven and encouraged by more local communities and Bitcoiners in 2023, I believe. Expanding Bitcoin-Only Communities and EventsWe will see more events in different countries and smaller conferences around the globe. Contrary to those who believe there are too many Bitcoin conference, the issue is not so much about attending all of them. Instead, you should attend conferences and events that are relevant to your interests and/or geographic location. As long as the conferences are cost-effective and efficient, it is a good thing to have more conferences. The Bitcoin bush bash is an example of a model that may be replicated around the globe. It is free to attend, is held in a hall, or other cheap area, and there are no recordings. It is also smaller-sized and more cost-effective. Bitcoiners can increase their local scene and meetups by lowering expectations about things that usually cost a lot more (e.g., fancy professionalized operations, live streaming or lots of international speakers). This is not meant to diminish the importance of larger Bitcoin conferences and events. However, I see a “middleground” that can be occupied by local events at a low cost. I don’t have a crystal ball but I believe bitcoin will continue to trend in a sideways direction. Don’t listen to bull-hopiumers talking about what they are doing. They are often chasing engagement or too caught up in their echo chambers. It takes time for the cycle’s bottom to drop. It takes time for the cycle to bottom out. But, let’s not forget the bright side. It’s a great time to stack sats or build something. Remember that it wasn’t clear in previous cycles that Bitcoin would return, but now the world is slowly realizing that Bitcoin will be around for the long-term. Stephan Livera contributed this guest post. These opinions are not necessarily those of BTC Inc.


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