The pandemic has shown just how much power governments around the world are willing to flex. It’s almost a given that governors can make rules on gatherings that don’t involve them, or rules pertaining to who can do what when. In places like the US, many of these rules are not going through any legislative body, let alone popular approval. In other words, these are rules implemented unilaterally without any consent of the governed.
Violations like this are what led to the American Revolution in 1776. Specifically, the colonists wrote down how England was violating their Natural Rights. That is, the rights that they already had by being born. They listed three examples in particular: life, liberty and the pursuit of happiness. They further wrote that these were unalienable, or not something anyone had the right to take away.
Violation of our natural rights is obvious when it pertains to something like our right to assemble. It’s not so obvious when it comes to money. In particular, our right to property has been consistently violated since the establishment of central banks. At least taxes theoretically have the consent of the governed. Monetary expansion, or classical inflation, is worse because there is no consent whatsoever. Inflation is an act of a tyrant, seizing property without legislation, popular approval or even popular knowledge.
This is why Bitcoin is so important for our rights. Bitcoin allows us to protect our property from theft by the government. Not just in straight seizure of the asset, but in being immune to the fiat money expansion.
Bitcoin
Trezor and Unchained Capital have made multisig a little easier. Trezor devices will now display the multisig addresses on the device. This means that any inserted malware won’t be able to fool the user quite so easily on sends. This sort of security is especially important after a user got hacked for 1400 BTC recently using an old Electrum client.
Casa has published an easy-to-understand piece on what you’re holding when you’re HODLing. This is a good article to send to those that don’t really get what Bitcoin’s blockchain is and what private keys are.
Christopher Allen is looking for a new online cohort for his Blockchain Commons program. Blockchain Commons creates free open-source software for the Bitcoin ecosystem. If you want some experience in Bitcoin, this is an excellent place to get it.
Lightning
An interesting zero-conf payment channel proposal has popped up. The idea being that anyone could on-board to Lightning before an on-chain confirmation, making things faster. Obviously, the security properties are very different as the on-chain confirmation doesn’t yet exist. However, for small payments, like coffee, for example, zero-conf payment channel openings might make sense. Matt Corallo comments that this would be especially useful for 1-way channels where the money is going to a merchant. I hope this gets explored and a different class of payments that aren’t quite as concerned as being cheated comes along.
Economics, Engineering, Etc
Nic Carter has published a great defense against the argument that Bitcoin will have to introduce inflation. Essentially, Bitcoin as defined requires the capped supply and anything that forks to add inflation would be something else. The assumption that the Bitcoin community will change something so fundamental is pretty much impossible to people that have been in Bitcoin a while, but from outside this community, especially those that are used to being able to change “fundamental” values, this seems absurd. The level of social engineering that will be required to change this is higher than they think, though it’s probably lower than we think.
Another company has decided to use Bitcoin as a reserve asset. Snappa is an online graphics app company that works in the SaaS model. The argument for why they’re using Bitcoin is familiar to anyone that’s been holding for a long time. It’s a scarce asset that’s harder than any other asset. Good on them for continuing this trend.
The Winklevoss Twins have published their case for a $500k Bitcoin. Their argument boils down to every other asset being inferior and Bitcoin taking Gold’s traditional place as a store of value. They expect this to happen on a similar adoption curve as something like the mobile phone, which would put that in the next decade or so. The main thing I got out of it was their argument against Oil. Good on them for recognizing that Oil has been monetized since 1971.
Fidelity is starting a Bitcoin fund according to a filing with the SEC. As Bitcoin investment products are in high demand, it’s no surprise to see Fidelity create such a fund. That said, I always wonder how anyone can justify paying fees to a fund when just holding Bitcoin is less risky and usually gets better returns than any fund.
A new paper shows that Ethereum has a serious smart contract bug. There are 7000 specific smart contracts with over $1 billion in value that are vulnerable to a “fake deposit” attack. The remedies for making sure exchanges don’t fall for this are in the paper. This once again shows just how difficult writing secure smart contracts can be, especially on Ethereum.
INX has been getting a lot of flak over issuing their token on Ethereum. Jameson Lopp has published his thoughts as an advisor. It looks like the path of least resistance from a regulatory perspective was to use an ERC20 token on Ethereum and still, that took almost 3 years. I don’t think this is setting a good precedent as any other security token offering will now have to use Ethereum in order to get regulatory approval. I’m sure it would have cost a lot more time and money to do something else, but I get the disappointment many in the Bitcoin community are feeling over INX going in this direction.
Podcasts
My podcast this week was with Stephan Kinsella, Austrian economist and IP lawyer about intellectual property and Bitcoin. It was a pretty in-depth discussion about what property actually is and the history of intellectual property.
I went on Tone’s channel to discuss INX, Samurai and Wasabi.
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Jimmy, your view of government is primitive because you fail to acknowledge the importance of who controls the government. Please read and encourage your readers to read Democracy in Chains by Nancy MacLean. We will always need government for projects that require coordination among large groups of people, like highways and dealing with global pandemics. When billionaires control the government, as they currently do, every crisis is an opportunity for them to further enrich and empower themselves.
There is and has always been a struggle, many struggles between those who would expand the rights of ordinary citizens and those who would create oligarchy. Right now, we are being pushed towards a police state. Bitcoin has many wonderful attributes to protect individuals from billionaire controlled government. But make no mistake, if fascism is the path, when they hold a gun to the head of someone you love, you will surrender them. Bitcoiners cannot avoid either empowering the fascists, or fighting for democracy. And yes, democracy implies government.
As always, insightful, informative and the credibility of the source is without question. Amazing Jimmy
Jimmy, your view of government is primitive because you fail to acknowledge the importance of who controls the government. Please read and encourage your readers to read Democracy in Chains by Nancy MacLean. We will always need government for projects that require coordination among large groups of people, like highways and dealing with global pandemics. When billionaires control the government, as they currently do, every crisis is an opportunity for them to further enrich and empower themselves.
There is and has always been a struggle, many struggles between those who would expand the rights of ordinary citizens and those who would create oligarchy. Right now, we are being pushed towards a police state. Bitcoin has many wonderful attributes to protect individuals from billionaire controlled government. But make no mistake, if fascism is the path, when they hold a gun to the head of someone you love, you will surrender them. Bitcoiners cannot avoid either empowering the fascists, or fighting for democracy. And yes, democracy implies government.
A must read newsletter. Thank you, Jimmy!