Peter Todd tells Permissionless why people don’t care about Bitcoin
Do stablecoins validate “crypto” beyond Bitcoin?
Bitcoin developer Peter Todd | Permissionless IV by Ben Solomon for Blockworks
This is a segment from the Supply Shock newsletter. To read full editions, subscribe.
Bitcoin is everything, everywhere, all at once.
Yes, Bitcoin has reshaped the financial order. It has also altered the way money and value move in developing economies, either directly or indirectly. But Bitcoin is also pragmatic in its simplicity, compared to other blockchain networks and the projects built on top of them.
Those hardboiled sensibilities are at odds with what could be Bitcoin’s endgame — a global, trustless settlement layer and eventually, hyperbitcoinization.
At Permissionless IV in Brooklyn, Pete Rizzo, the Bitcoin Historian, sat down with Peter Todd to hear how he squares these dynamics and more.
Todd is a veteran Bitcoin developer, having worked on Bitcoin Core on and off since as early as 2011, still the Satoshi era.
He’s also played key roles in RGB (a tokenization protocol built on top of Bitcoin), Zcash and enterprise blockchain platform R3. Todd founded OpenTimestamps, a leading example of a non-financial use case for Bitcoin.
So who better to contextualize innovation within the Bitcoin and blockchain space?
Polymarket success
Todd pointed to Polymarket as one example of a successful crypto app outside of Bitcoin. “Well, it’s a successful application because they managed to use things about blockchain tech to navigate the regulatory arbitrage necessary to stay in business. And I don’t think you can deny that Polymarket as a business is successful.”
“Now, you know, did they go build on Bitcoin? No, but I’m still not likely to say it’s not a success. I mean, the amount of money bet on Trump is an example.”
Todd highlighted that this does come with downsides. Polymarket is not as actually as decentralized and self-custodial it could be. But in assessing those characteristics, it’s important to look at it from Polymarket’s perspective.
“They’re trying to run a business that does something specific. Because they’re running a betting market, a lot of that is very inherently centralized, because in reality all the bets go through a relatively small number of people in a relatively centralized way.
“Now they may disagree with me, but, you know, that’s kind of the truth of how this really works. And their client-side software, the way you get it, is relatively insecure. It’d be very cool to build all this in Bitcoin, but it requires so much more engineering effort to do well.”
In terms of Bitcoin’s primary utility — peer-to-peer payments — Todd sees Lightning as the default mode to achieve that, rather than direct onchain transactions. “Matter of fact, I just had a talk two days ago by someone from Costa Rica talking about their main point-of-sale payment solution — basically, they’re just dropping onchain Bitcoin support because it’s pointless. Everyone uses Lightning, end of story. There’s just no reason to do anything else.”
Global Tether
But stablecoins on other more centralized networks have grown to be more ubiquitous in many places, particularly tether.
“I think Bitcoiners often underestimate how popular USDT is…A couple of years back I was in Macedonia, the capital, just visiting, and sure enough, every single currency exchange booth, they accept USDT or similar things,” Todd said. “And I actually wound up sitting down at one of them for a good half hour, because the guy behind the booth was new at his job and just interested in how Lightning worked and we struck up a conversation. And sure enough, every five minutes he had another person coming in, either selling cash or buying cash. And most of them were just using Binance.”
Rizzo asked: “But that’s competitive against Bitcoin, right? These are transactions that could otherwise have been in bitcoin.”
“Well, but the point is: All these people, they don’t care about Bitcoin — they care about moving value around. And what they care about is that they’re moving something that’s fairly stable,” Todd replied.
“Another more recent example is Kiev. Someone I know was buying a new laptop, and it just happened [that] the easiest way for them to buy a laptop was to give USDT to the laptop store — which is actually a very standard thing these days in that part of the world. And I’m sure the laptop store turned around and sent the USDT straight off to one of their suppliers the next day. You know, could they have done that with Bitcoin? Yeah, sure. But right now USDT is a more stable currency with regard to laptop prices.”
You can play back the rest of the chat, which covers the development arc of Bitcoin layer-2s, DeFi and more, via the Permissionless IV day one livestream on X.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
