Its time to stop 'pretending'. You don't own Bitcoin. Now can we stick together?
You don't own Bitcoin. There, someone had to say it. Might as well be me. Owning Bitcoin was a great meme. Had an awesome run. But you don't own it, and never did. Sound delusional? Nope. By the end of this article, you will probably agree. 

What was once once a simple equation has become far more complex. And with that complexity comes a new understanding of what it is you bought: a UTXO.

If you know what a UTXO is - skip this paragraph, and continue on to the next one. If you don't, read on. Bitcoin uses a 'triple ledger accounting system'. What you know as 'your balance' (say, "3 bitcoins") is actually a collection of 'checks' made out to your public address. When you spend 'a bitcoin', you broadcast a check of your own. Your check allocates Satoshis from the unspent checks you hold, as the source of the funds for the next guy. That check you wrote out to the next guy? That check is now an unspent transaction output (UTXO). He can use this unspent check to repeat the procedure. This process of new checks written by sourcing unspent checks continues on indefinitely. Still confused? Here's an ancient presentation where I explain this process in greater detail. If you're a Bitcoin investor, you should understand what risk you own.

Now it's time to have a sober discussion about the ramifications.

Unlike 'pennies' or 'gold bars', every UTXO is different. Every single one is unique. Like checks, no two are identical. As such, each UTXO represents a different articulation of risk. Some UTXOs might be 'tainted' with a black market origination. These UTXO's will be hard to redeem at an exchange, and may be better suited for sale on Selling the UTXO there, has the benefit of maintaining secrecy. This benefit will make that UTXO more valuable.  Or, maybe, you want to try your luck at tumbling these UTXOs. For a fee, someone will jumble your check up and obfuscate its origin. You can redeem this newly obfuscated check on an exchange at a small total net loss. This form of UTXO risk is generally labeled 'fungibility' risk. We've had this risk for years, and by and large, it's a well understood problem. But there's a more relevant kind of UTXO risk in 2017.

I don't know what to call this newer risk, if not 'consensus' risk. See, your UTXOs were formed at a certain block height. And as a general rule, the older your UTXO, the less consensus risk that UTXO has. For example, if your UTXO was formed prior to the Bitcoin Cash fork, it can be redeemed on both Bitcoin blockchains. Depending on how old your UTXO is, it may even be redeemable on one or more of the following Bitcoin blockchains: XT, Classic, Unlimited, and even Clam. (Assuming buyers for these Bitcoins are still around.)

If you're skeptical that some UTXOs are riskier than others, ask yourself what you'd want: A older UTXO that can be spent on all bitcoins? Or a newer one, that's only available on your favorite bitcoin? The correct answer, is the UTXO that can be redeemed across all bitcoins. It's more valuable, for the simple reason that it can be spent on all networks. And many people are proud to claim the 'Bitcoin Cash' value of their UTXOs for value on the... well, Bitcoin-that-is-not-Cash. 

So what you thought was 'a Bitcoin' is actually a UTXO, formed under a Bitcoin ruleset. And your UTXO is redeemable under one or more other Bitcoin rulesets. These rulesets have version numbers. And you know what? They even have names.

In fact, its kind of annoying to keep talking about the Bitcoin-that-is-not-Cash. Hell, I'd like to talk about the Bitcoin-that-is-not-Cash-and-not-xt-and-not-classic-or-unlimited-or-clams-either quite frankly. And you know what? I think investors would too. So I polled them. And that seems to be what they said.

So, I went to, and I wanted to see what they would call this bitcoin, that so many people seem to want unnamed. And they call it this:

There. That wasn't so hard. Download Bitcoin Core.

The benefits of articulating what risk we want to bear when holding UTXOs are manyfold. Take the bitcoinj, btcd, and bcoin rulesets. I know what you're thinking: they're all the same! Nope. You're completely wrong. Here's another ancient video I did. This time with Peter Todd. Peter Todd wrote  a lot about the difficulties that can cause ruleset implementations to come out of sync with Bitcoin Core. There are so many, that exchanges don't bother running those implementations at all. Or when they do, they only do so to ensure that all versions of all rulesets are in sync. If you're skeptical, run a little experiment with yourself. If a weird bitcoin transaction came into a block, that caused implementations to go out of sync, which implementation would you proceed on? Do you have an answer? I bet it's Bitcoin Core. Or hey, maybe its Bitcoin Cash. But the point is the same: Consensus implementations are named and numbered. And both of those labels impact the risk of the UTXOs they produce. 

Still in disbelief about the difficulty of consensus? Here's another great article on the subject. There are many others. This is an old topic, settled long ago.

And you know what? I think that's great. I love Bitcoin Core. So do most bitcoiners. Articulating our consensus risk lets us solve problems like this without government intervention. Similarly, exchanges won't want to bear the legal liabilities associated with making guesses over what consensus risk their depositors want exposure to. You may still be reluctant to stand in solidarity with your most trusted Blockchain team. I get that. I too resent that the community has fractured to the degree that it has. Blockchain ain't what it used to be.

If you thought this article was complicated, well, no one wants to have this discussion with the courts. And over time, you can expect more organizations to begin declaring this too. So, I think we should just embrace the elephant in the room. Rather than wear hats. Change our twitter handles. And do whatever crazy thing it is we do to express solidarity with a team, why not just start calling our favorite Bitcoin by its name? That seems like a reasonable way to tell the people who hold our UTXOs what to do when there's an emergency.

Belonging to a team isn't shameful. It's worked well enough for most blockchains. And really, we don't have a choice. Be proud to declare the Bitcoin you want to hold, and maybe you'll drown out those that wish to take it from you. If we stick together, maybe that will address the problems that caused us to be afraid of labeling our bitcoin to begin with. Who knows? Maybe that can even get a non-contentious hardfork out the door one of these days.

All this discussion does raise a greater question though: What is the true Bitcoin? Some people like Vinny Lingham, think it's ruleset with the largest amount of work. That's been my view. But it's a tough view these days as relations between Bitcoin Core and its miners have deteriorated. I still lean toward energy-expended as the best metric. But I don't think anyone really knows what to do. Maybe the 'true Bitcoin' is the Bitcoin with the highest market cap. Or highest volume. Or highest node count. Or... maybe we don't have a true Bitcoin. And the best that we can do is have the market asses the risk of competing rulesets.

I love core. They're great. But there's nothing more political than rulesets. We seem to be in a partisan era in the story of Bitcoin. Some people are engaging in denial. Others look forward to the ability to express solidarity with a group of specialists they trust. 

What do you think?