Bitcoin Core Cabal (Hodlonaut, Part 3)

[00:00:00]This is Matthew Crowder's Bitcoin University. Today I want to cover the Bitcoin Core Cabal and we're going to be looking at Hollow Knots part three of his series. We already examined article one and article two and I'll put a link to both videos in the description notes below. The most recent one, how Brink destroyed Bitcoin Core Hodlin part two which takes off from this article. But today we're going to be talking about article three which just came out and is absolutely fantastic. Hodlonaut is one of the few people in the Bitcoin space doing actual investigative journalism rather than just writing puff pieces and hive pieces. And it would seem that the people on the other side are a little scared by this. I'll put a link to this tweet in which Hollow Knots talking about how unhinged Adam back is and uh how he's trying to debunk the article calling it AI slop without having read it as well as groups like BitMX Research, Jonathan Beer and a lot of people who are on the Bitcoin core side.

[00:00:57]Hollow not asking Jonathan Beer, why are you so hellbent on people not finding out what's going on inside of Bitcoin Core? I'm not. I'm just saying if you think something very bad is going on inside, just don't run the code that results from that. It's so bizarre how these people circle the wagons and the gaslighting they do. So, one thing I think is very helpful if you want to decide which side is right, just read Hollow Knots part three and then take a look at the reactions to it from people like Adam Bach and BitMEX Research and Matt Carlo and Casey Rodmore and other of these uh bad actors in my opinion on the Bitcoin core side. See what they say about it and see if it really is AI slop as they claim or rather actual very deep journalism which they're unable to debunk and they just call it some LLM hallucination. But that will tell you a lot about which side is lying and which side is honest. So the basic summary this surrounds the blowing open operator turn in June of 2025. In other words, the uncapping of data carrier size. And the argument that hollow makes which I think is the right one is that this needs to be viewed in context. It was a culmination of over two years of minations and funny business from Bitcoin Core where each action helped to justify the subsequent action that followed. So the first thing Bitcoin Core did, we've talked about of this on the channel, they changed the definition of data carrier size. Then they used that change definition to block Luke Dasher's proposed patch for the incriptions exploit in early 2023. And then later in 2025, they asserted that blowing open upturn wouldn't matter that much because spammers and scammers would just use the incriptions exploit, the very exploit that core had refused to close uh the previous or two years before. And the argument that spammers and scammers would use it is correct that it's 75% uh 75% cheaper though of course there's no guarantee a lot of these people are not economically motivated and there is this motivation to put a large CSAM operturn in the place of oper but this is the basic this is a basic series of actions which built on each other and culminated in blowing open data carrier size last year in 2025 and throughout this whole process I mean I thought things were bad but they're they're even worse than I thought so much funny business, so much gaslighting, so many private meetings that resulted in public decisions that were presented as fate plea and which could not be questioned because quote unquote you're not technical enough. And we can see the GitHub here back from May 2nd of 2025.

[00:03:18]How controversial this was that there are 138 thumbs downs and 73 thumbs ups.

[00:03:23]And this in spite of the fact that HA said many years ago that Bitcoin Core would never merge anything that was contentious. That all changed in 2025.

[00:03:31]And the actually the original reason for rejecting L Luke Dasher's inscriptions patch was that it was too contentious.

[00:03:38]Uh it was not as contentious as blowing open operturn obviously. And so the problem here is that Bitcoin Core they don't tell the truth and their changes always trend in the direction of more and more spam and more and more compromise and then they don't want to hear from any anyone else. Here's the CEO of Chain Code Labs, Adam Jonas, writing here about Bitcoin core governance in his p in this passage from uh the working groups best practices. He writes, "No requirement to seek consensus for from those not actively contributing to the work. Thoughtful review and criticism should be taken into account no matter the source. But those with skin in the game should ultimately have the loudest voices."

[00:04:16]Well, this is a problem when your organization becomes compromised. And that's when it's very important that immunes that Bitcoin Bitcoin's immune system namely everyone watching Bitcoin core uh is able to step in and have an opinion. So here's how the attack was carried out. Bitcoin Core changed the definition of data carrier size so that it would apply only to transaction outputs not to transaction inputs which is where inscriptions data is stored and where the BRC20 exploit and the Bitcoin NFT in other words incriptions exploit took place. We can see here here's a typical uh bitcoin transaction with the inputs on the left and the outputs on the right. The output turns always on the right. And then we can see here here's an inscriptions uh input. The input for inscriptions is always or inputs are always on the left. And that's where the inscription data is embedded. We talked about this in Bitcoin Core's original sin last year.

[00:05:08]But what Hodlon has done is really to expand on it and to document it in a much more thorough manner. and he describes in the essay like this. The change itself changing data carrier size was surgical. The data carrier size option had described its scope as quote unquote data carrier transactions. In other words, any transaction in Bitcoin that's non-monetary that's intended to carry arbitrary data. This is what a data carrier transaction is. Uh poll request 27832 narrowed the document description to data carrying raw script pub key which can only happen on the right side of this in terms of of an output. witness data which tap routt incriptions use was excluded from the settings operative description. Again, we saw that here where all that data is on the left side. It's on the input side. Falcon, Marco Falcon, in his June 2026 reply to this investigation said the amendment was a documentation update to match existing code behavior that had been in place since 2015. The amendment did not change what that option did. And then Klanak goes on to write what had changed since 2015 was the context around the options. SegWid and Taproot had introduced new data fields where the options original scope no longer reached because these are on the left side of the transaction rather than the right side. The amendment locked in narrower public-f facing language at the moment that context shift had made the option's original scope incomplete for the data venues where inscriptions had moved.

[00:06:29]Anyone relying on the documented scope to argue for restoring the option to those new venues would henceforth be arguing from a foundation that had shifted. This, as I call it, is Bitcoin Core's original sin and everything builds on it. We get some other interesting facts from Holland's essay here. For example, Casey Rodomore, who invented this whole exploit, he seemed to be pretty certain for some reason that Bitcoin core would lift the standard limit. In other words, allow these large opera returns to be circulated and relayed from node to node. And this suggests, although not I'm not go into it here, but if you read this, he suggests that this is part of the overall conclusion uh uh collusion I should say. As we all know, data carrier size did end up being uncapped and the PR was merged. Halon not describes it here. Regardless, the harm reduction justification offered at the time of the merge did not hold up. Citria's 144 by payload remained cheaper via the existing tap routt witness workaround, so the company continued using it. The promised switch to a cleaner, prunable operturn channel never occurred for the very case used to justify the policy change. In other words, the concern about fake pub keys. What the merge did accomplish was send a clear signal.

[00:07:35]Bitcoin core is willing to accommodate large-scale non-monetary data quote unquote use cases. That signal specifically benefits the broader category of encryption ecos systems and ZK roll-ups regardless of Citrius specific trajectory. So what he's arguing here is this thing has large repercussions for Bitcoin core and the sort of data that's contained in transactions. Even if it was originally targeted for Citro, it's going to end up causing all these problems because other crypto and Bitcoin affinity scam startups will be using it. As he concludes in this essay, Bitcoin's worldchanging mission is to separate money and state. The signal the operturn uncap set was unmistakable. Bitcoin Core is open for business for non-monetary use cases to the point that the project will preemptively facilitate them while refusing any attempt to curb spam.

[00:08:24]Inscription ecosystem, ZK rollups, and corporate non-monetary use cases take time and funding to develop. A Bitcoin core that prioritizes curbing spam does not invite the investment. A Bitcoin core that has signaled the opposite does, and that's where we are today. The refusal to close the inscription loophole with Luke's filter patch and the merge of the institutional uncap PR pull request sent a clear signal that the future non-monetary activity in the Bitcoin mele and blockchain from entities like Citria can proceed with confidence. This is the real damage that Bitcoin Core did last year and over the past three years. And here's the thing.

[00:09:01]If a core cabal of core devs can make unilateral changes like this, like they did with uncapping data carrier size with operturn, if they can do this without getting checked and smacked in the face by a soft fork like BIP 110, which is the network fighting back, then Bitcoin has a huge problem on its hands.

[00:09:18]if core devs can do something like this and get away with it. When it came to offer return, Bitcoin core devs made up their minds behind closed doors and then presented the community with their conclusions and made it very clear that push back would be blocked, censored, and mocked. Make no mistake about it, if the upcoming BIP 110 software fails, which to be very clear, I do not expect it to fail. But if this upcoming temporary soft fork fails, I believe Bitcoin Core will feel emboldened to push through other terrible changes like uncapping data carrier size in a misguided attempt to make Bitcoin more and more like Ethereum as Citri sought to do. For this reason, BIP 110 needs to be activated and the core cabal of Bitcoin core devs need to be deactivated. Bitcoin core needs to be routed around and made irrelevant this year in 2026. And here's the funny thing. And the funny thing is that when BIP 110 activates, Bitcoin core nodes will cease to be full Bitcoin nodes that are enforcing the full consensus rules.

[00:10:12]And that is because Bitcoin Core devs are so irresponsible or lazy or whatever it is that they haven't even bothered to update their software to prepare for BIP 110 activation and they've actually rejected poll requests from Bitcoiners urging them to do so. So after BIP 110 activates, Bitcoin miners are not going to be able to mine using Bitcoin core as node software. So they will probably all all end up running Bitcoin knots or ironically their own version of Bitcoin core that rejects large op returns and blobs of data in inscriptions. The great news for us though is that Bitcoin core non-mining nodes will still accept our BIP 110 chain as valid if there is a chain split. But anyone still running core in early August will no longer be running a full node. Again, that enforces Bitcoin's full consensus rules.

[00:10:58]And this is again because uh Bitcoin Core just wants to bury their heads in the sand, pretend like this thing is not going to activate when it's quite clear that we are going to be successful. So let's make sure this happens because Bitcoin core really really deserves to be deactivated and wrecked as you'll conclude too if you read this whole essay. And it's very encouraging to see every day there are more and more Bitcoin node runners running RDTS reduced data temporary softwork which is another name for BIP 110. currently 13% of the network over 12,000 nodes. BIP 148 only had about 500 nodes out of 100,000. We have 12,000 nodes out of 100,000 today in 2026. So, we should be confident, but we should not be complacent. If you're not running a node yet to support BIP 110, I'd really encourage you to download Bitcoin Knots, the latest version, which is compatible and includes BIP 110 enforcement. You can just download it here for your operating system. Or you can also spin it up uh spin up a Bitcoin knots node on a Start 9 personal server. That's how I personally like to do it. You can just Google that. If you want to read more about BIP 110 and how it protects Bitcoin's purpose as a monetary network by temporarily limiting the size of data fields at the consensus level, I'll put a link to this this resource in the description notes below as well as my summary. What does SPI 110 actually do so you can catch up. All of this is a reaction to what HollowNot has documented documented happened over the past three years. And so this is not just an effort to push back against spam, but it's an effort to push back against Bitcoin core and demonstrate once and for all that core cannot get away with things like this without getting completely wrecked by the community. This was an amazing article.

[00:12:33]It was very long. It's worth reading every word. And when you read that, you're going to realize how much work put into this. So I'd encourage you to send some stats his way. He has a I believe this is a bull 12 address. Sippy koala 95monabitcoin.com.

[00:12:48]So it looks like an email address, but it's actually a lightning address. You can send him some SATs. I sent him some SATs using the Lexi app, the Lexi wallet, and it worked fine. You just basically type in his what looks like that email address right here, and you can send the SATs. And you can also, I assume you can use Mono Bitcoin because that's what Hodlin is using as well. So in this sort of value for value method, I would definitely encourage everyone who listens to this and ends up reading the essay and realizes the contribution that Halon has made, send him some sats, buy him some beer, buy him some stakes that he can enjoy while he's working on part four. And I imagine all this will eventually end up as a book or if not it will definitely go down his history in history as one of the most important documentations of Bitcoin Core going rogue from 2023 to 2026. If you enjoyed this video, be sure to hit the subscribe and like buttons. Hit the notification bell if you want to be notified when I publish my next video. And let me know your questions and comments in the comment section below. Thanks a lot for watching and I'll see you in the next