Game Theory: How Governments could delegitimize Bitcoin Maximalism

Oct 13, 2025

Objective (one line)

Shrink “Bitcoin-as-movement” into “Bitcoin-as-managed-product.” Don’t ban it; brand and bound it.

Incentives > ideals. Defaults beat sermons.
Perimeter > statute. App stores, banks, clouds, pools, ISPs do the work.
Reputation > reason. HR, insurers, and boards move faster than courts.
Clip tails, buy consent. Cap upside, dampen zeal; pay people to prefer the supervised rail.

Illicit-content anchoring
Play: Push “node = distributor” via large payloads (inscriptions/OP_RETURN blowouts); seed test cases with sympathetic victims.
Why it works: Corporate counsel/insurers flinch; hobbyist base chills.
Tells: Cloud Acceptable Use Policies (AUPs) naming full nodes; enterprise “no-self-custody” HR policies; app stores flagging “content risk.”
Terror/sanctions oath
Play: Tie tiny terror flows to Bitcoin, force “with AML or with terror” pledges.
Why: Social risk dominates technical nuance.
Tells: Exchange “clean coin” flags; bank questionnaires adding “wallet provenance.”
Toxic avatar injection
Play: Amplify loud “maxi” grift/racism/cult personas; make them the face.
Why: Identity contagion; moderates exit.
Tells: Media packages with the same 3 faces; conference sponsors pull.

Node = money transmitter (opinion letters)
Play: State AG opinions; no federal statute needed—perimeter enforces.
Tells: Insurers exclude “validation activity”; banks freeze node-adjacent accounts.
App/store/device gatekeeping
Play: De-list non-KYC wallets “for safety,” require device attestation, throttle background sync.
Tells: iOS/Android policy diffs; hardware-secure-signing only for “approved” wallets.
Civil liability honey-traps
Play: Use duty-of-care/CSAM statutes for one landmark damages award.
Tells: Plaintiff bar whitepapers; cloud indemnity carve-outs.

Paperization corridor
Play: Scale ETFs/notes/futures; promote basis trades; use weekend illiquidity to cap blow-offs/force liquidations.
Tells: ETF OI up while on-chain velocity flat; richer contango into weekends; perps funding squeezes.
Selective ramp friction
Play: Periodic exchange/bank freezes “for compliance.”
Tells: Coordinated “maintenance” during stress; slower fiat rails, faster stable rails.
Carbon/energy squeeze
Play: Carbon surcharges, demand-response curtailment; “policy clients” for pools (OFAC templates).
Tells: Utility tariffs for Proof-of-Work; miners migrating to policy-friendly grids; pools publish filter policies.

Governance wedge (Core vs Knots - False Dichotomy by the way)
Play: Push mempool/policy changes that divide.
Tells: Competing client defaults; incompatible wallet UX; “responsible Bitcoin” pledges.
Clean-coin caste
Play: Travel-rule attestations and provenance badges; gray UTXOs price worse.
Tells: Maker/taker spread by “taint” level; OTC demanding chain-of-custody PDFs.
Co-opt elders
Play: Seat OGs on “safety boards,” fund “standards”; shrink Overton window.
Tells: Grants tied to compliance deliverables; elder vetoes on privacy talk tracks.

Digital-gold ETF meme
Play: CIOs everywhere: “Spend stables, hold BTC (in your brokerage).”
Tells: Brokerage ads with gold-analog copy; payment apps hide native BTC send.
Quantum-risk drip
Play: Time “PQ panic” with NIST milestones; pitch CBDC/stables as “quantum-ready.”
Tells: Cyclical headlines → wallet vendors delay signing infra upgrades.
Public-safety moral frame
Play: Self-custody linked to scams/ransoms/elder fraud.
Tells: AG pressers; banks auto-block “unhosted” withdrawals for “safety review”.

Benefits on supervised rails
Play: UBI/rebates/transit → KYC wallets or tokenized deposits.
Tells: Gov portals default to stable wallets; non-KYC gets “manual processing.”
Merchant advantage
Play: Merchant Discount Rate (MDR) cuts/instant settlement only on supervised rails; BTC pay gets surcharge + tax friction.
Tells: PSPs add “compliant fast-lane”; BTC checkout hidden 2 clicks deep.

Professional risk ↑ → dev/node attrition; fewer credible stewards.
Upside tails clipped → converts zeal to fatigue; recruitment dries up.
Identity cost ↑ → affiliation turns status-negative.
Medium of Exchange (MoE) withers; Store of Value (SoV) wrapped → movement collapses into a portfolio debate.

App-store/cloud AUP diffs explicitly naming nodes/unhosted wallets.
Pool policy clients and insurer-driven filter templates.
Clean-coin premia and OTC provenance packs.
ETF OI/flows rising while UTXO age distribution stagnates (no new spenders).
Civil suits against node ops; insurer exclusions published.
Synchronized headlines: “quantum risk,” “CSAM on chain,” “node MTL” aligned to legislative calendars.
Gov disbursement pilots on stables; “instant VAT split” rollouts.

Legal wrappers/insurance for infra runners; pool into protected co-ops.
Proofs everywhere: PoR for treasuries/custodians; wallet-side proof of clean provenance (without centralized lists).
Device/app redundancy: alt-store routes, router-level light clients, hardware diversity.
Low-profile MoE niches: B2B/FX corridors where supervised rails are clunky.
Decouple from avatars: rotate credible, boring spokespeople; remove single-point reputational failure.

Goal: Brand Bitcoin maximalism as risky/toxic; steer usage to supervised rails; keep BTC as a wrapped SoV.
Method: Reputation taint + perimeter enforcement + price discipline + culture fracture + saturation narrative + cash carrots.
Proof it’s live: AUP updates, pool filters, clean-coin premia, ETF OI ↑ vs on-chain velocity ↔, civil suits, quantum/CSAM headline waves, gov disbursements on stables.
Principle: Don’t ban it; bound it. Defaults, devices, and distribution do the work.

None of this should be considered investment advice.

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