Bitcoin Tech Talk #334
Interesting Stuff
Chinese View of Dollar Hegemony - I’ve written a lot about the Dollar Hegemony, but it’s always interesting to see how people in other countries view it. China, being a pretty major power these days, has their somewhat slanted opinions here, but it’s well worth reading over. For those in the west, especially, a lot of their accusations will not even be familiar, let alone believable. For me, the smoking gun in their accusation is that in many ways, they’re imitating how the US uses the USD for foreign policy, especially with the Belt and Road initiative.
Phones and Depression - The article argues that phones are causing less social interaction and thus causing a lot of loneliness and social anxiety, particularly for teens. There is something to this idea that our status within any social setting is volatile and we can see it in real time on our phones. Much like how daytraders are on edge during trading hours, we have the same anxiety with our phones, except we can’t sell or get into a neutral position with our own reputation.
Pemmican for 30 days - A carnivory advocate tries 30 days of just pemmican, with some interesting results. What you would expect, like significant palate fatigue, is not what happens. If I could get my hands on enough of it, I would try this diet, if only just to understand what my body can run on. The main thing lesson for me is that we can often give up a lot of which we think necessary.
What I'm up to
Nation-level Incentives - My article for Bitcoin Magazine this past week was about nation-level incentives and how the role of government changes drastically as a result of fiat money. The moral obligations that the government takes on and the fiat money printed to stay in power are some of the many results. Consequently, we’ve seen a much bigger government that’s become all-consuming in every aspect of life. I’ll finish off this series later this week with an article on global incentives.
Satsconf Talk - My talk from Satsconf in Sao Paulo is up. The talk is about how fiat ruins everything and how Bitcoin starts reversing some of its destructive effects. The main thing to understand in this article is that fiat is at its core a very stagnant and conservative system. All the players with power want to keep things the same and keep out all the would be innovators and entrepreneurs. Thankfully, we have a new system based on merit in Bitcoin.
Kuala Lumpur Meetup - I’ll be in Kuala Lumpur on Friday to hang out with some Bitcoiners there. It should be a good time and I’ll answer some questions as well as have some Malay cuisine. Please stop by if you’re around!
Nostr Note of the Week
Books I’m Shilling
Bitcoin
Understanding Miniscript Part 2 - benma continues the series from part one. The post explains how the policy language works and how it’s a lot simpler than the equivalent in Script. Parsing miniscript is thus much easier, and the details left to a compiler. For a developer this is a godsend as it allows much more complex construction without wondering if there’s a more efficient construction or if there are bugs. I’m looking for part 3 which will apparently write a parser in Go.
UtreeXO - Calvin Kim recently asked about using network bit 24 to signal UtreeXO support and it seems that this project is getting ready for a power-user beta launch soon. The idea has been around for many years and I’ve been waiting for something to come out, but never actually looked at the source code until now. It looks like the repository is a fork of btcd and written in Go. The project has so much potential for making the storage requirements dramatically less than even pruned mode, so it’ll be interesting to see just how big the database has to be when it comes out.
Mempool Analysis for Tracing - A new paper uses unconfirmed transactions in addition to chainanalysis to de-anonymize Bitcoin transactions. The technique is clever and we can no longer call this chainanalysis since unconfirmed transactions don’t necessarily make it on chain. In particular, the authors found that RBF transactions are very useful for tracing as the output which reduces in value to accommodate a larger fee is likely the change output. This is probably not something people have in mind as they increase fees on their wallet but given this technique, it probably should be.
Lightning
Core Lightning Community - There’s now a place to discuss building on CLN and it’s pretty well done. Having good tools and community are two of the most important aspects of getting something to be popular and I applaud their community engagement and the focus on building. Incidentally, if you want to get started on playing with the CLN RPC calls, you can do so in Python using some of their recipes.
C= - TBD from Square has a launched C-equals, a Lightning Service Provider. The name comes from the fact that c is a constant referring to the speed of light. What I find very interesting about their effort is that they very clearly understand that there are different classes of lightning users, from ordinary consumers who are using Lightning for payments, merchants who are using Lightning to receive payments and lightning network routers who are getting paid to connect different nodes on the network. I am really curious to see what sort of products they provide for each class of users.
LSP ROI - Speaking of LSPs, Breez has an interesting post up about the returns on Bitcoin for routers. The main claim here is that by putting your Bitcoin toward routing, you can have custody of your coins while generating yield. Their projections based on channel usage are interesting indeed. If there is a lot of usage, you can get upwards of 5% on your Bitcoin! That said, I’m a little skeptical of this model as that requires a scarcity of channels which I don’t think will be the case. Also, generating this yield is a lot of work managing channels and so on. Like mining, I see this task as one that will require special skills and it’s likely the people that are really good at it will generate yield, but those that think it’s free money will fail.
Economics, Engineering, Etc.
Why Nostr Matters - Jameson Lopp writes an article with echos to the seminal article that Marc Andreesen wrote many years ago about Bitcoin. As he points out, the real feature here is decentralization and this changes the game for our identities online. The fact that there’s no central authority that can censor you is the big feature that’s getting a lot of people on board, but for me, the bigger more long-term benefit is being able to own your own network. The synergies with Bitcoin are obvious, but the project is very interesting because it’s so different than the default way web things are built these days.
Money != Monetary Policy - Jeff Diest makes the very important observation that these are not the same thing and that politics has murked the waters of understanding money. The public dialog about money has thus become much more esoteric and about monetary policy rather than about money itself. Obscuring the two has led to “trusting the experts” who are not experts at all, but rather grifters who benefit from being in control. Worth explaining to the no-coiners who don’t understand Bitcoin.
Implications of Open Networks - A wonderful long-read from Lyn Alden about open monetary and information networks, probably inspired by the advent of Nostr. The most interesting point here is that as monetary networks become more private, taxes become more difficult to collect. Thus, government strategy around tax collection has to change or those technologies that add privacy get banned. This is a battle that looms on the horizon for everyone as the implications for government surveillance are profound depending on which way we go.
Quick Hits
Silvergate is in a lot of trouble - They may not last the year and their stock is dropping like a stone. As one of the only banks servicing exchanges, this will put some pressure on the fiat ramps that exist.
ETH L2 uses Proof-of-Work - The irony is delicious since they moved to Proof-of-Stake for the sake of efficiency and have to re-introduce hashcash so they can have fairness in block distribution.
Sue the devs! - Biden administration is looking to place the blame on software vendors rather than the companies that get hacked.
Xapo Bank and Lightspark - According to David Marcus, Xapo Bank customers will be able to use Lightning for payments. Does this mean you can receive as a merchant as well? It’s hard to tell, but it sounds pretty good, at least in theory.
Binance Strategy for Avoiding US Regs - They were planning to avoid regulations the whole time, according to this piece.
Fiat delenda est.