The Failure of Dormant Coins: Why Value Creation Matters

At its core, Bitcoin was designed to be a dynamic, thriving system of commerce. Yet, the vast majority of BTC remains locked away in dormant unspent transaction outputs (UTXOs), unmoved for years and only valued by fiat measure sticks and paper derivatives held by globalist bankers and their custodians.

In previous installments, we explored how the HODL culture has eroded Bitcoin’s privacy and squandered its potential as a global medium of exchange. Now, in Part 3, we examine the long-term consequences of discouraging real economic activity on the blockchain.

When Bitcoin’s network is locked in a state of dormancy, with small blocks designed to limit usage, it doesn’t just slow growth—it cultivates a toxic ecosystem driven by rent-seeking behavior and gatekeeping. With few opportunities to create new value, the network’s dominant players become more focused on controlling the narrative, extracting fees, and consolidating power, all while strangling the very innovation that Bitcoin was meant to unleash.

The decision to artificially limit Bitcoin’s block size is not just a technical choice but an economic and cultural decision. By capping capacity, the network has deliberately suppressed opportunities for value creation, forcing stakeholders into a zero-sum game. Instead of fostering vibrant commerce, where businesses and individuals generate wealth through productive activity, Bitcoin (BTC, but also the other split assets, to varying degrees) has become a battleground of middlemen. These actors position themselves to capture value, not by building anything new but by controlling access to information, liquidity, or network participation.

What has emerged is a kind of aristocratic hierarchy with distinct classes:

At its core, Bitcoin was designed to be a dynamic, thriving system of commerce. Yet, the vast majority of BTC remains locked away in dormant unspent transaction outputs (UTXOs), unmoved for years and only valued by fiat measure sticks and paper derivatives held by globalist bankers and their custodians. The lack of transactional activity is not just a missed opportunity—it’s a liability. Dormant coins provide no value to the network, no opportunity for wealth creation, and no spillover benefits of economic growth.

When Bitcoin operates this way, it serves only those who profit from inertia: the aforementioned influencers, custodians, exchanges, devs and home node operators. Each group benefits from a network that discourages use because their rent-seeking activities—whether through trading fees, subscription models, or advertisement opportunities—depend on Bitcoin remaining a stagnant, speculative asset rather than a vibrant tool for global commerce.

For example, here’s Peter McCormack explaining that he has to sell ads in the wake of one of his biggest advertisers (BlockFi) exit scamming and going bankrupt on their customers.

If, instead, Bitcoin were used for daily transactions, the incentives would shift toward fostering innovation. Entrepreneurs would build businesses on the blockchain, generating economic activity that drives demand for block space and fuels network growth. This is where the magic of Bitcoin lies—not as a store of value that gathers dust but as a platform for wealth creation that benefits everyone connected to it. The real power of Bitcoin is not in hoarding coins but in enabling frictionless commerce, identity solutions, and data integrity systems. When coins move, businesses grow. When businesses grow, so does wealth. And when wealth grows, society prospers.

The toxic culture that permeates BTC today is a direct result of the failed “Hodl” economic model. When productive business activity is stifled, all that remains is power struggles over who controls access to the shrinking pool of opportunities. The influencers who once promoted Bitcoin as a tool for freedom now act as gatekeepers, ensuring that anyone with new ideas that might challenge their influence is quickly labeled a threat. Innovation is discouraged, suspicion reigns, and the culture becomes increasingly hostile to outsiders.

This behavior mirrors the dysfunction of a failing aristocracy, where those in power cling desperately to their privilege, knowing they have no new value to offer. The purity tests, social shaming and ideological rigidity that dominate BTC’s public discourse are the natural outcomes of a system that no longer creates wealth—it merely shuffles power among a few entrenched players.

At the same time, exchanges and liquidity providers benefit from the confusion, raking in profits from retail investors lured by speculative narratives and false promises. The result is a toxic ecosystem where real innovation is seen not as an opportunity but as a threat to the status quo, and anyone advocating for meaningful change is treated as an enemy to be purged.

I mentioned briefly that Satoshi Nakamoto warned in the Bitcoin white paper that a system governed by “1-IP-1-Vote” could be easily subverted by those with the most IP addresses. Today, we see this warning come to life. Full node operators, who run the software that determines Bitcoin’s rules, have become a shadow governance layer, signaling changes to the network without bearing the cost of mining. This undermines the integrity of PoW, which was designed to ensure that only those who expend real-world energy have a say in Bitcoin’s consensus.

In a network driven by commerce, the miners—those who secure the blockchain—would be incentivized to prioritize growth and efficiency. But in the small-block, HODL-centric version of Bitcoin, power rests with home node operators who resist any changes that could disrupt their grip