Bitcoin Tech Talk #286

Welcome to the new format for Bitcoin Tech Talk! This is a work in progress and I’m striving to inform you of all the interesting stuff that’s going on in the space. This week’s edition goes to everyone since it’s the first week of the month, but you will need to be a paid subscriber to get the other newsletters this month.

For open source contributors to any Bitcoin projects, just email me (jimmysong@substack.com) with your contribution and you’ll get a complimentary subscription.

Let me make it clear again: starting next week, you won’t get this newsletter unless you’re a paid subscriber.

What I'm working on

1. A New Column - I’m publishing at Bitcoin Magazine with the aim of being more fun and punchy. This week, I wrote about VCs as monetary gatekeepers. The article’s main course is why they’re so greedy to capture so much value with a good side dish of their narcissism and self-importance. Last week, I wrote about how DeFi, NFTs and such are big nothingburgers. The article is meant to be sent to your friends that are thinking about investing in this stuff by inducing some reasonable doubt. If they giggle, all the better.

2. MuSig2 - I wrote an implementation for the buidl-python library that I’ve been maintaining. I’m grateful to meshcollider’s library for the inspiration.

3. More writing - I’ve been publishing some other articles which aren’t Bitcoin related. Yes, I do have a life outside of Bitcoin.

4. Junseth podcast - I recorded one of the funnest podcasts I’ve ever done. If you enjoyed Bitcoin Uncensored back in the day, this one was similar.

What I'm up to

1. Thank God for Bitcoin 2022 on Wednesday, April 6 - My panel will include Jesse Sullivan (Candidate for Governor of Illinois), Blake Masters (Candidate for Senate for Arizona) and Bruce Fenton (Candidate for Senate for New Hampshire). Tim Tebow will also be making an appearance. Tickets are unfairly cheap, especially compared to other satellite events, so come hang out with Christian Bitcoiners.

2. Bitcoin 2022 Thursday and Friday (April 7 and 8) - I’ll be on the Open Source stage to discuss Soft forks: Benefits and Tradeoffs with Paul Sztorc, Jeremy Rubin and BTC Sessions on April 7, 12:15 PM - 12:55 PM and I’ll be signing books on April 8, 9 AM-10 AM with my co-authors for Bitcoin and the American Dream. Watch as we show off how quickly we can sign books (thanks CJ!).

3. Robert Breedlove’s event on Friday April 8 at 5:30pm - The guy opening for the special guest is JP Sears and I think you can guess who the special guest is. Seriously, come so you can check the item off your bucket list.

Tweet of the Week

Bitcoin

1. Silent Payments - Ruben Somsen has proposed an interesting protocol for private transactions. The system is reminiscent of BIP47 in that it uses the Diffie-Hellman exchange to add privacy. Instead of communicating the public key needed to figure out the tweak to the private key, the protocol just calculates every possible public key for each transaction. This cannot be done ahead of time as the public key from the input is used, but has some strong privacy properties. Imagine having a donation QR code, but each donation goes to a different address and no one knows how much you’ve raised. The cost of scanning every transaction is pretty high, but the tradeoff may be worthwhile for privacy.

2. Seed Phrases - Jameson Lopp addresses a very familiar topic. He goes through the threat models of each kind of backup and ends where you would expect. Multisig is the best because it removes the single point of failure while making it hard for an attacker to get your coins. I do like the way he thinks about everything, especially the 25th word option, which is really a 2-of-2. The piece of advice that I think is most useful in his article is to test your backups. Too many Bitcoiners are too clever by half and end up with treasure maps that they can’t follow when disaster happens. Bitcoin treasure hunts are a lot less exciting and way more stressful than Treasure Island.

3. FROST - There’s now a IETF draft standard. FROST is like MuSig but allows for threshold signatures (k-of-n) versus aggregate signatures (n-of-n) like MuSig and its variants. The flexibility around FROST is why there’s a lot of excitement around it and the publication of a standard is a great step in the right direction. The main drawback is that FROST requires the component private keys to be generated together. This is probably my next project to implement in the buidl library.

Lightning

1. Blind Signing - DevRandom explains why private key devices should not blindly sign, particularly on Lightning. The post explains the difference between Blind Signers and Validating Signers and notes that most setups right now are monolithic, requiring both the node and Lightning key to be in the same place. The two can currently be separated, but only at the cost of making the Lightning private key sign blindly. This is much less secure than validating and then signing. He’s reviving the Validating Lightning Signer project to make it possible for a Lightning private key to validate what it’s signing. All I want for Christmas is a Validating Lite Lightning client.

2. Open-source banking stack - Galoy details how you can run one. They made the Bitcoin Beach wallet and now, anyone can make something similar to really integrate Bitcoin in a community. This really is like a community bank and hopefully, people can move to their own infrastructure over time. The concept is a nice in-between step for communities without digital banking services. Make banking fair again.

3. Kraken Lightning integration - This is great news not just for people who want to take advantage of Lightning goods and services, but also for the arbitrageurs to keep the prices between Kraken and other Lightning-enabled exchanges similar. Liquid was supposed to be the main conduit for this, but I suspect Lightning is too much of a juggernaut for Liquid to catch up. Too bad most exchanges are more interested in ripping off their customers with chimp jpegs.

Economics, Engineering, Etc.

1. Mining Profitability - Braiins explains their newest calculator. Most calculators I’ve seen on the web are very linear, using the current difficulty and fees to figure out how long it will take to break even, for example. The Braiins calculator adds difficulty changes as a variable and how long you plan to hold and what the appreciation/depreciation of the actual equipment will be. This is simply the most sophisticated and comprehensive mining profitability calculator I’ve seen.

2. Chris Larsen’s Bitcoin Changes - Chris Larsen proves how little he understands Bitcoin. Either deceivingly or due to sheer ignorance, he treats Bitcoin as centralized as Ripple. His proposal is laughable in that he thinks moving to proof-of-stake and giving the miners the coins they would have made would be a good solution. The idea that Bitcoin users would stand for a free subsidy being given to miners who do nothing is completely laughable. He revealed this week that he’s the guy behind the ESG narrative against Bitcoin. Marco Falke has a brilliant troll for April Fool’s day to “comply” with Larsen’s demands.

3. European Parliament bans self-hosted wallets - Much like Chris Larsen, European Parliament is also ignorant of Bitcoin. EU is making self-hosted wallets illegal, which seems as likely to succeed as making liquor illegal. They are a regulatory body and they see regulation as the hammer to hit all nails. The crazy thing with a governing body like that is that it’s not entirely clear how easy it is to vote them out of power. Perhaps this is Europe’s equivalent of the Infrastructure Bill moment in the US.

4. Bitcoin is changing Ukraine - Bloomberg reports on how there’s nothing like war to show how critical money transfer is. The most interesting quote is how nobody wants cash now because it’s too easy to take away. Bitcoin by contrast is a lot more flexible, easier to transfer and least bureaucratic. I got a real sense of how bureaucratic money is everywhere and when it stops working, how helpless you feel. Thankfully, the escape valve of Bitcoin seems to be working there.

Quick Hits

• Syncing Bitcoin 0.5.0 - Andrew Chow synced and it took two weeks.

• Poilievre for Prime Minister - He encourages financial innovation instead of stifling it.

• A New level of cringe - Mark Karpeles of Mt. Gox fame makes NFTs.

• Altcoin loses $625M - Another week, another coin shows how insecure it is.

What I’m Shilling

• Books

  • Bitcoin and the American Dream

  • Thank God for Bitcoin

  • The Little Bitcoin Book

  • Programming Bitcoin

• Unchained Capital is a sponsor of this newsletter. I am an advisor and proud to be a part of a company that’s enhancing security for Bitcoin holders. If you need multisig, collaborative custody or bitcoin native financial services, learn more here.

Fiat delenda est.