According to a recent poll conducted by Alex Thorn, head of firmwide research at Mike Novogratz’s Galaxy Digital, institutional investors could not care less about the ongoing Core vs. Knots debate within the Bitcoin community.
Most institutional investors either don’t care, haven’t heard of the debate, or are neutral. Nobody seems to actively support the Knots camp.
Inventing a problem that doesn’t exist
Thorn argues that the “Bitcoin Knots” camp is inventing a problem that doesn’t exist. He calls their concerns “hypothetical.”
At the same time, real capital, service providers, and regulators see no actual issue.
The legal concerns these proponents raise are outdated “mumbo jumbo”, according to Thorn. They echo old debates about permissionless systems that Bitcoin already solved.
The Knots advocates are effectively trying to roll back the freedoms of Bitcoin’s decentralized system because they are overly cautious or ideologically statist.
Possible outcomes
Thorn believes that the Knots crowd will most likely fade into irrelevance.
However, he doesn’t rule out that the Knots supporters might end up scaring people about hypothetical problems and creating panic. However, their fork will still fail.
According to Thorn, it’s unlikely that the adoption of Bitcoin will be harmed long-term by the Knots camp.
“These people are scared statists who fear permissionless systems and will do great damage to bitcoin if they are taken seriously,” Thorn said.
Nature of the debate
Some Knots proponents argue for changes to address security, legal, or operational concerns that most of the community sees as theoretical.
Essentially, the debate is less about actual risk and more about philosophical differences over the potential dangers of decentralization and permissionless systems.
Core supporters see Knots as creating artificial problems and unnecessary forks
The Knots project is led by controversial Bitcoin developer Luke Dashir.
He’s very protective of Bitcoin’s “monetary integrity” and is suspicious of non-financial data being embedded on-chain (inscriptions and ordinals).