Why Bitcoin Changes Only Under Extreme Pressure

Bitcoin's original scripting language, Script, was intentionally limited for security but stifled innovation. For a decade, proposals for more expressive smart contracts (like MAST) were debated but stalled by miner veto power and community fear of change. This created a governance deadlock where any upgrade required near-unanimous consent, a bar almost impossible to clear.

Taproot (BIP 340, 341, 342) bundled multiple improvements—Schnorr signatures, MAST, and Tapscript—into a single, elegant package focused on privacy and efficiency. Its genius was offering something for everyone: privacy for users, fee savings for miners, and future flexibility for developers. It passed by making the change opt-in and non-disruptive, achieving ~99% miner signaling within months.

Taproot's relaxed data limits and new scripting power created a loophole. In 2023, developers realized they could inscribe arbitrary data (images, text) onto satoshis, creating Bitcoin-native NFTs. This Ordinals protocol exploited a technicality in OP_PUSH opcodes, leading to a fee market implosion as users competed for block space, doubling average transaction fees and igniting a civil war over Bitcoin's purpose.

The Ordinals crisis forced a long-avoided debate on Bitcoin's block space economics. While core developers proposed client-level filters to stop inscriptions, the market voted with fees, demonstrating sovereign demand. The outcome proves Bitcoin's ultimate governance mechanism: changes happen only under extreme pressure (stalemate, fee crisis), and the network's rules are defined by what users are willing to pay for, not just what developers decree.

Bitcoin Script is not Turing-complete by design, preventing complex smart contracts. This forces builders to innovate within a sandbox of ~200 opcodes and a non-stateful execution model.

• Key Constraint: No native loops or dynamic calls.
• Key Benefit: Eliminates reentrancy bugs and gas estimation nightmares inherent to Ethereum-style VMs.

Significant protocol upgrades require near-unanimous consensus, making on-chain innovation glacial. The only path for scalable, expressive applications is building atop Bitcoin via layers like Lightning Network, Stacks, or Rootstock.

• Key Constraint: Must inherit Bitcoin's finality and security.
• Key Benefit: Enables ~1M TPS (Lightning) and EVM-compatible DeFi (Rootstock) without touching L1 consensus.

Bitcoin's simple, batch-processing mempool and lack of a rich state make traditional MEV extraction (like on Ethereum) difficult. This creates a more predictable and fairer environment for users.

• Key Constraint: Limits sophisticated DeFi arbitrage bots.
• Key Benefit: User transactions are less vulnerable to front-running and sandwich attacks by searchers and validators.

Bitcoin's ~10-minute block time is a security feature, not a bug. It allows for global propagation and deep reorganization resistance. Applications must be designed for asynchronous settlement.

• Key Constraint: Poor UX for real-time interactions on L1.
• Key Benefit: ~100 block finality (~16.7 hours) provides cryptographic certainty unmatched by probabilistic finality chains.

The Taproot upgrade (Schnorr signatures, MAST, Tapscript) is a rare consensus win that enables complex spending conditions to appear as single-signature transactions. This is the foundation for Bitcoin covenants and discrete log contracts.

• Key Constraint: Requires new tooling and developer education.
• Key Benefit: Enables privacy-preserving complex contracts and reduces on-chain footprint by ~30%.

Building on Bitcoin means accepting that core protocol development is decentralized and slow, akin to updating TCP/IP. Success requires leveraging its $1T+ base layer security as a settlement guarantee, not a smart contract platform.

• Key Constraint: You cannot petition for protocol changes to suit your app.
• Key Benefit: Your application's security is backed by the world's largest and most battle-tested decentralized network.