Where I Stand

What Happened

The Iran war

BTC was more stable through the conflict than I expected. Surprisingly, it was less volatile than a lot of other asset classes. That's a point in BTC's favor as an asset. It's not a point about what BTC is, and that distinction is the rest of this page.

The Coldcard flaw

On July 30, Coinkite disclosed that Coldcard hardware wallets had been generating seed phrases with far less randomness than advertised. Thieves have been regenerating those seeds offline and sweeping the wallets. This site recommended Coldcard. It doesn't anymore. If a Coldcard generated your seed, treat it as compromised and move your coins — even if you use a passphrase. The self-custody page now explains how to make a seed with dice that two devices can verify. Source: Coinkite's advisory.

The fork

BIP-110 was a proposed rule to limit how much non-money data can be stuffed into Bitcoin blocks. People who wanted it ran software called Bitcoin Knots. On August 8 the rule switched on for those nodes. Miner support was about 2.5 percent. The two biggest mining pools kept building the chain without the rule, and the chain that enforced it stalled almost immediately.

The people who wanted the rule didn't give up. At the end of August they changed the mining algorithm so the big pools couldn't touch their chain. That chain now trades as XBT. Timeline and details: Start9's BIP-110 page.

What I Believe Now

I believe BTC has been captured by the miners and by big-government influence. Here's the argument in plain English, and it's the one Bitcoin Mechanic has been making better than anyone.

Owning your keys only matters if a miner will put your transaction in a block. Today two mining pools find most of the blocks, and the computing power behind them belongs to regulated companies that do what their lawyers tell them. So a couple of companies decide which rule changes happen, and they could decide whose transactions confirm. Bitcoin was designed so that nobody could be in that position. It was not designed on a promise that whoever ends up there will be nice.

The fork proved it. The miners didn't reject BIP-110 or propose an alternative. They ignored it. Meanwhile, by my read, there was a Sybil attack using old Core software to make the opposition look bigger than it was, and even so, by my count 20 to 25 thousand pleb nodes were running BIP-110. A subset of those, I believe 5 to 10 thousand, now run XBT and are working to secure it.

"Not your keys, not your coins" is still true. It's still necessary. It's just no longer sufficient.

What This Means for Everything on This Site

Everything on JTB is accurate as written. STRC still pays. MSTR still amplifies BTC. The tax treatment still works the way the tax page says. I built this site around Strategy's products because the mechanics are real, and I still think they're well engineered. Michael Saylor didn't change. My read of what BTC is did.

I still believe all of these products follow a number-go-up pattern, because inflation is unstoppable. However, these products and equities are built on BTC, and the Bitcoin ethos and principles are no longer characteristics of BTC. BTC has network effects thousands of times larger than XBT. The idea of Bitcoin is what gives it its value. Time will tell.

About STRC

STRC saw a huge drawdown when BTC dipped. The FUD was massive. It rebounded. Here's my read: Strategy is buying STRC back rather than raising the rate, and it's still struggling to get back to par. I think they oversold it at launch and it wasn't ready for the volatility. They should have sold less at the onset, since they're just buying it back now. That deserves its own deep dive when I have the time.

What I'm Doing

Not financial advice. This is what I'm doing with my own money, and your risk profile is yours to determine.

I'm reducing my BTC exposure over time: selling BTC, IBIT, MSTR, and the preferreds. I'm growing my exposure to XBT. How to actually get XBT is its own topic. The exchange I'd point you to is Neoxa, and Matthew Kratter has a good video walking through it.

I'm not playing both sides. There are pros and cons to each. I'm not saying XBT is the future. I'm not saying BTC will fail. I'm saying the thing I joined Bitcoin for is now being fought for on XBT, and that's where my energy goes.

The Personal Part

Right as I launched JTB I could feel unease in the BTC space, and the vibes from the big accounts on X were weird. I couldn't name it then. I can now.

I don't know why there's so much name-calling from the BTC crowd toward XBT. I've never minded being an outsider. I'm the guy floating away with the balloon in those memes. I'm okay being isolated. I'm okay doing what I believe is right.

I've been pulled in a lot of directions the last few months, between family, work, and passion projects, but my focus is resolute: we need to fix Bitcoin, and while BTC as I knew it has been captured, hope remains for XBT.

What Changes on JTB

• Nothing gets deleted or rewritten. The pages and the newsletter archive stay as they were published, with dated notes like this one added where they matter.
• The Coldcard recommendation is gone. See the self-custody page.
• Updates will be sporadic. I'm scaling JTB back to put my energy into my other businesses, including POW Advisory, my consulting practice for the XBT economy: strategy, systems, data and growth, paid in XBT only.
• Join Team Bitcoin is still an idea. I'm still on Team Bitcoin. The team just moved.