Control-Plane Capital

I rarely get surprised by anything anymore, but a while back when I started researching AI governance, it shocked me how many institutions are actually aware of where the world is moving without divulging much information. 1) How many market participants already know about the AI governance regime (rough estimates): - High-level "AI governance is coming" awareness: ~60–70% of institutions. - Deep understanding (admissibility, provenance, attestation, court-survivable artifacts): <10%. - Positioned in mispriced bottlenecks (T&D, transformers, legal-evidence tech, attestation silicon): ~5%. 2) How coordination happens without a "smoking gun" Standards + perimeters. - Standards (NGOs, fora, regulators) emit the same verbs: attest, revoke, trace, prove, rollback. - Perimeters (banks, clouds, app stores, ISPs, card networks) flip Acceptable Use Policies; law becomes optional. In other words, financial institutions read the standards, and people don't. That's what's reflected in financial markets, not the media screaming "AI bubble" which is a very surface-level take. Just to give you 1 example (of many), look at EU's AI Act ( https://digital-strategy.ec.europa.eu/en/policies/regulatory-framework-ai ) . And before you say "it's just the EU". It's not, it's also the US and the entire world. The US governance template (de facto global) is also being rolled out. - The NIST AI Risk-Management-Framework plus the Generative AI profile (NIST-AI-600-1, Jul-2024) is the check-list legal, audit, and vendor teams are implementing (regardless of DC politics). It maps controls for provenance, evaluation, and traceability. So a large share of institutions knows AI governance is coming — you see it in dated laws, Cloud Solution Provider SKUs, silicon roadmaps, enterprise console updates, and financial markets. I have to admit, it is a well-kept secret. While the plebs are busy food fighting, governments are rolling out the next regime. More context: https://controlplanecapital.com/p/why-we-arent-in-an-ai-bubble-top

The twitter thing where the Homeland Security account is being run out of Israel is so scripted, it's actually sad that so many people are falling for it. Twitter and Elon Musk are actually the government. They don't usually let things 'slip' or make silly mistakes. You can write a 5-minute test to ensure that something like this doesn't happen when rolling out these features (and they have). They want you to talk about this account being supposedly run out of Israel (which is possible, but nonconsequential) and not talk about the stealth digital ID rollout. Before you know it, they're gonna ask you to full-on KYC for reach, and every non-KYC'd account is going to get throttled into the abyss. It's not very important whether Israel is running the Homeland security account, what matters is the upcoming AI governance regime that these platforms are slowly implementing. I'll write more on what AI governance is but you're seeing the implementation of "Content provenance": - C2PA-like (Coalition for content provenance and authenticity) signing at OS/camera/browser; unsigned content rate-limited or downranked. - CDN filters: provenance + policy tags required for distribution at scale. Everyone knows how poisonous Israhell is at this point, but the coming AI governance regime is what they don't want you to talk about.

Governments love the "Honeymoon → Normalization → Harvest" playbook because the plebs always fall for it. New financial tech follows the same arc: big sweeteners at launch, normalization once everyone is on board, and then the quiet fee/tax/regulation harvest. Where Bitcoin is: We finished the honeymoon (ETFs, easy brokerage access). We're deep in normalization (more rules, fewer wild spikes). Harvest is next (nickel-and-diming self-custody; paper exposure everywhere). The incentives flip as soon as enough users are corralled. Watch for "for your safety" rules that raise the cost of running your own node.

I've got a few more Bitcoin-related topics I'd like to write about and then I'm going to be done with my Bitcoin research and focus on AI. If any influencer wants to steal my Bitcoin homework, feel free to. The odds of someone with my background spending the amount of time I've spent doing research is very close to 0. Hope we manage to address some of these issues.

I've been doing some research on the biggest mistakes we Bitcoiners made as a community — and obviously we got very complacent over time. Instead of listening to podcast hopium and alienating people with "have fun staying poor" narratives, we should've focused on game theory and patched up at least some of the holes. It was always inevitable that Bitcoin was going to get attacked, and things like having close to 100% of nodes run on a single implementation was just silly in hindsight. People are doing more harm than good when posting charts of hashrate going vertical without the context that 2 pools (Foundry and Antpool) are close to 50% of hashrate and for more than 98% of cases, pools, not miners decide which transactions get added to the blockchain. You had most of the Bitcoin community cheering price over payment share; we welcomed ETFs as victory. Paper share rose, self-custody fell. The entire community also cheered Square's surveilled "Bitcoin payments" where every payment generates identity-linked transaction data: buyer, location, device, and amount. All transactions flow through Square/Cash App's KYC/AML perimeter, meaning both sides of the payment are verified. That data fuels risk scoring, fraud models, blacklist propagation, and targeted marketing. Exactly this surveillance value is Square's enduring moat, not the 1% fee. We just got too complacent. I'd say the 5 main mistakes we Bitcoiners made are: 1. Letting arbitrary data compete with money on the base layer (witness discount abetted it). For Medium-of-Exchange you need predictable fees; underpriced junk data is a Denial-of-Service subsidy. 2. Treating privacy as an "expert mode". That guarantees surveillance wins by default. Make privacy invisible and automatic. 3. Under-investing in operational safety (backups, recovery, liquidity UX). Normal users pick custodians when scared. 4. Relying on norms over policy. In a low Gross Consent Product world, policy beats culture. If your mempool policies are naïve, adversaries will price you out. 5. Ignoring perimeter levers (app stores, banks, clouds). If you don't plan redundant routes, the other side will plan your failure. The uncomfortable truth is that Bitcoin's defense can't be "hope users pick hard mode". Defaults decide outcomes. If Bitcoin wants to be mass Medium-of-Exchange, privacy, finality, recoverability, and predictability must be invisible and automatic — and the perimeter must be treated as hostile by default. Until then, paper wrappers will dominate, regulators will "clarify", and L1 will be priced as store-of-value with supervised access, not as everyday cash. The good news: all of that is fixable — but only if it's designed, not preached.

The only thing I am bullish on in regards to Bitcoin is its fiat-denominated price (which is a weird thing to say). Old regime: retail perps set price → parabolic tops, −70% to −85% busts, halving-clock "3 years up / 1 year crash". New regime (post-ETF): CME + ETFs + dealer gamma set price → longer, flatter upcycles, faster but shallower draw-downs (−30% to −55%), macro/liquidity > halving, mean reversion > parabolas. We're already ≈31% below the ATH with constant stop-hunts and very little leverage. Instead of the Bitcoin is "arbitrary data storage" movement, I would've liked to see changes that (1) harden fee predictability, (2) make privacy and self-custody defaults, and (3) blunt perimeter levers. In other words, changes that keep Bitcoin useful as money. However, these are exactly the changes that Bitcoin's developers aren't prioritizing. Instead, we're letting arbitrary data compete with money on the base layer. For Medium-of-Exchange you need predictable fees. Underpriced junk data is a Denial-of-Service subsidy. I was excited about these changes that improve Bitcoin as money, but then I started digging into what Bitcoin Core has been up to and at this point, I'm like "Just stop changing things. You're making everything worse." 😂 More context: https://controlplanecapital.com/p/how-bitcoins-developers-are-attacking-2a5

David Bailey's company $NAKA missed quarterly earnings filing and their losses exceed $80 million. Meanwhile David Bailey's rough comp estimate exceeds $9 million a year 😂 The other execs are also absolutely crushing it. The only ones who aren't crushing it are Nakamoto's shareholders as the stock is down ~99% from the recent top. There is probably a lesson to be learned from this. Try to stay away from obvious scams. Also, David Bailey absolutely knew this was going to happen and continued to promote the stock. Nakamoto's PIPE investors got in at $1.12 with no lockup and bought ~455M shares and then dunked on retail while David Bailey and co promoted the stock on all kinds of Bitcoin podcasts.

I keep hearing about this "AI race" which is supposedly between the US and China 😂 The "AI race" is really the AI governance race. The US and China are not competing against each other, instead, our One World Government used China as the testing ground and is now expanding. And I keep hearing about this "AI bubble" which mostly doesn't exist. The only way the media and low IQ influencers will talk about an AI bubble and be correct is after the bubble has already burst. The main purpose of the media is to line up the exit liquidity for the big guys. Since there mostly isn’t an AI bubble right now, the purpose of the media is to create Value-at-Risk shocks and entry liquidity for the big guys. https://controlplanecapital.com/p/why-we-arent-in-an-ai-bubble-top

1) A while back I wrote how Michael Saylor's role in Bitcoin was to: - normalize paper exposure (MSTR), - push "BTC = Store of Value (not Medium of Exchange)" narratives, - refuse to normalize Proof-of-Reserves that would discipline the entire paper stack If Larry Fink was tasked with this job, he'd probably get a lot more pushback. https://controlplanecapital.com/p/why-microstrategys-best-days-are 2) Jack Dorsey's role seems to be to normalize permissioned, surveilled "Bitcoin payments" with Square. With Square, every Bitcoin payment generates identity-linked transaction data: buyer, location, device, and amount. All transactions flow through Square/Cash App's KYC/AML perimeter, meaning both sides of the payment are verified. That data fuels risk scoring, fraud models, blacklist propagation, and targeted marketing. So the surveillance value, not the 1% fee, becomes Square's enduring moat. https://controlplanecapital.com/p/squares-bitcoin-payments-supervision 3) I also wrote about how Bitcoin Core's developers have been attacking Bitcoin's sovereign/MoE use for a very long time now. From the outside look in, Bitcoin Core is a well-oiled machine. There's barely any dissent. It seems they all embrace the "Bitcoin is arbitrary data storage" narrative. They are solving the problem no Bitcoiner knew they had: "How to store your pictures on other people's computers". https://controlplanecapital.com/p/how-bitcoins-developers-are-attacking-2a5 4) 99.9% of Bitcoin influencers seem completely captured or delusional. I tried listening to a bunch of different podcasts recently and 5 minutes in, I end up wondering if I'm taking crazy pills or something. So what's the lesson? The lesson is don't trust, and verify. Do your own research and don't be a sheep. People prioritize their own interests, not yours. Some people are corrupt, most are fallible, and some are both.

Why OG Bitcoin Whales are suddenly selling their coins https://controlplanecapital.com/p/why-og-bitcoin-whales-are-suddenly

Why prolonged Bear markets are no longer allowed (the Playbook) Turned out to be my best article to date. https://controlplanecapital.com/p/why-prolonged-bear-markets-are-not

I wonder how many Bitcoiners have a good understanding of who holds the actual power and who sets the rules. And this is a topic I'll have to write about but I already alluded to it in ( https://controlplanecapital.com/p/how-bitcoins-developers-are-attacking-2a5 ). And namely, governance activations show who sets the rules. Past upgrade processes (e.g., BIP9, BIP8, "Speedy Trial") revealed that miners and coordinated developers can accelerate or block changes faster than ordinary users can veto. So power concentrates among aligned institutional actors. Net effect: - Technical ideals matter less than coordination leverage. - Future upgrades will likely follow similar political dynamics. 1) What actually happens in upgrades: - Rule changes need coordination. To activate, you need miners to mine the new rules, big pools to signal, exchanges/custodians to accept deposits, wallet/infrastructure teams to ship updates, and users to run them. - BIP9/BIP8/“Speedy Trial” are coordination levers. They set thresholds and timers that, in practice, let miners + core devs + major infra decide when something flips on — or stalls. 2) Who really has leverage - Miners/pools: Control signaling and block production. If they don't play ball, activation drags. If they coordinate, it can move very fast. - Core maintainers & lead devs: Control what's merged, what binaries ship, and which activation method/warnings land in the "standard" client most people run. - Exchanges/custodians/Payment-Service-Providers: Control where coins flow. If they choose a side, liquidity follows them. That decides practical reality more than forum votes. - Ordinary users: Matter in aggregate, but only if they can withhold liquidity or hash in a coordinated way — which is rare. 3) Why this concentrates power - Coordinating thousands of small users is hard; coordinating a few dozen institutions is easy. - Activation schemes with time windows and thresholds reward actors who can move in lockstep (pools, large infra, top client maintainers). - "User veto" exists in theory (run your own rules), but without miners and exchanges you're on a minority chain with no liquidity. 4) What this means in practice - Technical purity loses to coordination. The "best" design doesn't win; the most coordinated coalition does. - Messaging is part of the game. Activation method choices ("Speedy Trial", LOT=true/false, flag days) are politics encoded in software defaults. - Future upgrades repeat the pattern. Expect negotiations between dev leads, pools, and big venues; users mostly ratify by upgrading after the fact. 5) Bitcoin's upgrades aren't decided by abstract ideals — they're decided by who can coordinate miners, code, and liquidity fastest. That's why power tends to cluster with aligned institutional actors, and why future changes will follow the same political playbook. States would like to keep their monopoly on money issuance and aren't fond of permissionless money. Bitcoin's survival and adoption, as censorship-resistant money, depend on whether its most committed users can detect, coordinate, and counter inevitable policy, market, and social attacks. This is tough to do if you're oblivious to what's happening. It doesn't help that Bitcoin mining is awfully centralized ( https://controlplanecapital.com/p/bitcoins-mining-centralization-problem ). The solution of course is a more vigilant community and more decentralization everywhere: - miner-selected templates (DATUM/Stratum V2), - more viable client implementations, - privacy and self-custody defaults and better non-custodial payments UX, - routing around perimeters (App-store independence, Cloud independence, ISP resilience, etc), - routine, verifiable Proof-of-Reserves across custodians (anti-Paperization).