TFTC: A Bitcoin Podcast — Episode #702

Title: The State of Bitcoin Protocol Development in 2026 with Coinjoined Chris
Date: January 10, 2026
Host: Marty Bent
Guest: Coinjoined Chris

Episode Overview

In this insightful episode, host Marty Bent sits down with the ever-provocative Coinjoined Chris to reflect on the state of Bitcoin protocol development, industry trends, and narratives heading into 2026. Together, they cover a range of topics including protocol ossification, quantum FUD, self-custody trends, legal uncertainties, the growth of second-layer solutions, and the underappreciated power of stablecoins and prediction markets. Throughout, both maintain their trademark directness and irreverence, blending technical depth with real-world anecdotes from Bitcoin’s maturing global ecosystem.

Key Discussion Points & Insights

1. State of Bitcoin Protocol Development (2025–2026)

• “Crab Year” Reflections & Narratives

  • 2025 described as a “crab year”: price mostly ranged, which led to frustration and the rise of distracting narratives.
  • Notable narratives included the lifting of the OP_RETURN limits, BIP444, Bitcoin Knot debate, and quantum FUD (“I tried to make light of the filter situation... very happy that we moved on now to the quantum FUD.”—Chris, [01:57]).
  • A critical bug in Bitcoin 30.0 deleting legacy wallets is humorously referenced.

• Quantum FUD & Its Cyclic Nature

  • The recurring quantum computing threat is critiqued as mainly boredom-driven FUD rather than immediate concern.
  • “Some people suffer from main character syndrome... It’s just boredom I think because not that much happens and everything has been going too well.” — Chris [02:48]

• Real Technical Progress & Challenges

  • Little actual signaling seen for new protocol upgrades (e.g., BIP444) despite much discussion.
  • Consensus among both host and guest that debates often distract from genuine protocol improvements.

2. Industry Maturation & Individual Adoption

• Bitcoin as Store of Value vs. Medium of Exchange

  • Chris notes despite advances, medium-of-exchange use is still limited compared to expectations a decade ago.
  • Significant progress in merchant adoption in places like the US with Square terminals, but EU lags in everyday use (“I wish more people would use it as a medium of exchange, but that simply is not the reality.”—Chris, [05:27]).

• Institutional & Sovereign Involvement

  • Luxembourg’s sovereign wealth fund buying 1% IBIT ETF lauded as a milestone ([06:54]).
  • Germany’s “toxic” maximalist community contrasted with the more pluralistic/altcoin-friendly “meetups” in France.

3. Self-Custody, Privacy, and New Security Models

• Changing Attitudes Toward Self-Custody & Node Operation

  • Self-custody is on the rise even among newcomers, with wallets like Liana making node operation accessible.
  • “No, we're not a dying breed. Not on my watch.” — Chris [14:13]

• Wrench Attacks & Physical Security

  • Physical (wrench) attacks are a growing concern (52+ globally in 2025, per Jameson Lopp).
  • Main technical security risks (hacking) are considered solved via hardware wallets and multisig, but “$5 wrench” risk remains (“I could not figure out what I would do in the event somebody kicks in my door…” — Chris, [16:47]).

• Emergence of Bitcoin Insurance

  • Insurance solutions like Bitsurance are developed as an “escape valve” in wrench-attack scenarios, indicating market maturity ([17:11]).

4. Impact of Regulation and Geopolitics

• Luxembourg & German Perspective

  • Luxembourg adopting Bitcoin via sovereign fund is pivotal but Germany provides more individual tax advantages (e.g., no capital gains after one year) ([61:15]).
  • Guest notes these legal benefits are more accidental than intentional, with looming threats of regulatory rollback.

• Global Political Turmoil & Bitcoin

  • Venezuela’s rumored 600,000 BTC stash is discussed as an example of both Bitcoin’s value as a sovereign escape valve and the rumor-driven discourse that can distract from technical focus ([24:26], [28:47]).

5. The Rise of Stablecoins & Tether

• Stablecoin Adoption Outpacing Bitcoin Utility in Some Regions
  • Paolo Ardoino (Tether/Bitfinex) credited for his “product market fit” understanding over Michael Saylor in driving global crypto adoption:

    “He [Paolo] has probably driven crypto adoption and with that also bitcoin adoption more than any other person.” — Chris [31:17]

  • Tether’s discreet, massive profitability and operational prowess praised; stablecoins are key to onboarding outside of pure Bitcoin use cases.

6. Second Layers, Protocol Upgrades & Coveted Features

• Layers: Lightning, ARC/Arcade, Liquid, Spark

  • Layer 2s (Lightning, ARC/Arcade, Liquid, Spark) are reaching maturity and making sci-fi-like sovereign banking stacks possible ([34:45]–[35:46]).
  • Ease-of-Use Challenge: Lightning’s inbound liquidity model is still a significant onboarding barrier, whereas emerging protocols like Arcade offer better UX ([36:05]–[36:49]).

• The Need for Covenants (e.g., CTV, OP_VAULT)

  • Advocacy for covenants—permissioned spending and velocity limits—as essential for both personal security and nation-state adoption.
    • “Covenants essentially solve everything. They would make lightning better, they would make self-custody better… Just fucking ship CTV now, please.” — Chris [42:24]
  • Challenges: ossification advocates like Saylor slow development; social gridlock (“rough consensus”) is a double-edged sword ([49:01] B, [49:06] C).

• Quantum-Resistance: Timeline and Challenges

  • Rushing quantum upgrades riskier than slow, deliberate adaptation.
  • The technical overhaul required for quantum-resistant signatures and addresses would be massive—completely remaking wallets, nodes, miners, and QR codes ([54:24], [56:15]).

7. Emerging Trends: Prediction Markets & Framing the Narrative

• Prediction Markets

  • EVM-like layers and tools such as Citria poised to enable robust prediction markets on Bitcoin, which Chris sees as highly valuable for collective truth-finding ([70:31], [73:51]).

• Importance of “Framing” Privacy & Upgrades

  • Advocacy for better communication to regulators, users, and institutions:

    “We need autism to ADIQ translation services… If communication can be improved, lots of trauma can be avoided.” — Chris [68:29]

  • Exchanges should frame things like CoinJoin as mandatory privacy protection, not just for privacy’s sake but for compliance and efficiency.

Notable Quotes & Memorable Moments

• [02:48] On Protocol Discourse:
  “Some people suffer from main character syndrome. And then it's a good angle to remind people hey, I'm still around… it's just boredom I think because not that much happens and everything has been going too well.“
• [05:27] On Bitcoin’s Utility:
  “I wish more people would use it as a medium of exchange, but that simply is not the reality.”
• [14:13] On Running Nodes:
  “No, we're not a dying breed. Not on my watch.”
• [16:47] On $5 Wrench Attacks:
  “I for the life of me could not figure out what I would do in the event somebody kicks in my door.”
• [31:17] On Tether’s Influence:
  “He [Paolo Ardoino] has probably driven crypto adoption and with that also bitcoin adoption more than any other person.”
• [42:24] On Covenants:
  “Covenants essentially solve everything. They would make lightning better, they would make self custody better… Just fucking ship CTV now, please.”
• [68:29] On Bitcoiner Communication:
  “We need autism to ADIQ translation services… If communication can be improved, lots of trauma can be avoided.”
• [73:51] On Prediction Markets:
  “In a truly free market, I think instead of trading, it's just called trading.”

Important Timeline Segments

• 00:36–01:57: Introduction; reflecting on the 17th Genesis Block anniversary, the 2025 “crab year,” and the year’s key narratives.
• 01:57–04:07: Quantum FUD and recurring community distractions.
• 05:27–06:39: Store-of-value vs. medium-of-exchange debate; EU vs. US adoption perspectives.
• 14:13–17:11: Self-custody trends, privacy, and the challenge of wrench attacks.
• 28:47–31:53: Venezuela’s theoretical 600,000 bitcoin stash and sovereign use cases; the transformative role of stablecoins.
• 34:45–37:49: Second-layer developments; Lightning’s UX challenges, Arcade and Spark innovation.
• 42:24–48:58: Covenants (CTV, OP_VAULT) as a security/recovery solution, and the challenge of achieving soft forks in a maturing ecosystem.
• 54:24–57:11: Risks and logistics of quantum-resistant upgrades, signing delays, and the scope of required software overhauls.
• 68:03–69:15: The need for better “framing” and translation for mainstream, regulatory, and institutional audiences.
• 70:17–75:32: Growth of sovereign, decentralized prediction markets and their real-world, information-discovering impact.

Closing Thoughts

Chris and Marty paint a nuanced picture: Bitcoin development is steady but gridlocked by social process; narratives come and go; while beneath the surface, real innovations in custody, insurance, privacy, and second layers are moving the goalposts forward. The episode is peppered with candid industry stories, global perspectives, and an undercurrent of hope that—despite inevitable drama—2026 will see Bitcoiners focus less on fruitless infighting and more on robust, extensible solutions for real-world use.

Follow the guest:

• X (formerly Twitter): @oinjoint
• bitshurance.io
• seedor.io

Host:

• Marty Bent (TFTC)

For more episodes: TFTC Podcast