Bitcoin Tech Talk #347
Interesting Stuff
How DAs Became Political - One of the more troubling recent trends has been the complete politicization of DAs, where they’ll ignore laws they disagree with and vigorously enforce laws that they like. As the article points out, this wasn’t the case until recently and is genuinely a new phenomenon. I have some suspicion that a lot of the politicization is a result of fiat money, where votes mean the right to print money and that is playing out. Unlike the writer, I think conservatives will figure out how to get theirs once the inevitable backlash occurs.
South Pole Experience - A real-life look into what it’s like to be in Antarctica and who actually goes there. It really does seem like a very different world and it’s crazy that people can survive there. Yet they do, despite temperatures that never go to the positive side in Fahrenheit terms. What was particularly surprising was the number of people that sacrificed a lot of status and wages to be there.
Different Legal Systems - A fascinating look into different historical legal systems and what look like very quirky laws given the relative homogeneity of laws that are in the world today. For example, 18th century England had no public prosecutors and instead, government would offer bounties for successful convictions. What’s interesting in a lot of these systems is that they incentivized private settlement rather than public disputes. I suspect that reduces costs for everybody and reduces rent-seeking. Our current system of law very well may be convoluted and badly incentivized because of fiat money.
What I'm up to
Swan Salon - Thanks for everybody that made it to the Salon in Santa Monica! These are really amazing events and shout out to Cory and the Swan team for putting one on! I’d love to see something like this happen on a regular basis in Austin. Video isn’t out yet, but I’ll be posting it when it comes out.
9 months abroad - The last time I was in Austin was August 31, 2022, so getting back into the swing of things and adjusting back to life in the US is going to be interesting. I’ll write up something soon-ish about what I’ve learned having met Bitcoiners in over 20 countries during this trip.
Shopping for a car - I sold my cars before leaving Austin last year, so I now need to get a couple of vehicles. After thinking about it, I’m more convinced than ever that I really shouldn’t be buying a car as that’s too much capital being sunk into a depreciating asset. Unfortunately, the supply of cars is still pretty low, at least compared to demand, and it’s a bit of a conundrum as to how to lease a used car, so I’m a bit stuck. I’d love to hear suggestions on how you handle this rather necessary part of life. Please send me an email with suggestions by replying to this newsletter.
Nostr Note of the Week
What I’m Shilling
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Bitcoin
Darkpool - Tarpit is the implementation name of this privacy-preserving protocol that uses OP_CTV. The main idea is that it changes the state of a Taproot UTXO by cooperation of all participants that essentially share it. The privacy has similar properties as Chaumian e-cash but state transitions require interactivity in the form of n-of-n signatures where n is the number of participants. Obviously, we don’t have OP_CTV, but this is a very interesting way to use Taproot and a particularly private use of a coinpool.
Ark Explanation - Ruben Somsen has a really nice diagramed explanation of how Ark works. The main idea is that you swap potential UTXOs that could be published on-chain, but aren’t in the cooperative case. To me, this is essentially similar to the whole idea of a coinpool, except that there’s a clever mechanism which lets you use a central coordinator for managing the coinpool rather than a massive interactive signing that’s required of coinpool designs before. The Op Tech Newsletter also has a nice explanation which is worth reading. I look forward to seeing Ark Service Providers coming online and providing this service, especially as a way to open lightning channels.
Interactive Payjoin and Batching - Payjoin is one of those techniques that defeat Chainalysis that’s in my opinion, criminally underused. In this post, Dan Gould goes through a practical way to keep adding to a payjoin to reduce fees while adding privacy to payments. If exchanges cooperated in using this technique, I imagine they could add a lot more privacy for their users while simultaneously saving on fees.
Lightning
Staking Credentials - Antoine Riard has an interesting idea presented on the Lightning Devs mailing list about Staking Credentials. The main idea is to mitigate jamming attacks. The basic mechanism seems to be some sort of signed credential that gets sent over with the payment, which can then be accepted. How those credentials are issued and by whom is ultimately up to the users and recipients on the network. It’s an interesting way to solve for some of these denial-of-service attacks and it’s done in a way that makes sense in the lightning context.
Recurring Payments - Alby has introduced ZapPlanner, which is a way to do recurring payments on Lightning. This is done is through using a LNURL which this app queries on a regular interval to do the recurring payment. The idea here seems to be to reward content creators with something like a patreon-like model of supporting them regularly. The most useful thing here that I don’t see is the ability to pay a fixed dollar amount and not sats.
Nix Lightning - For Nix fans, there’s now a project to create a lightning node from nix packages. The reproducibility of these builds makes for really predictable and stable systems and help in debugging whatever problems that you might get. For developers, setting up this sort of environment is a huge plus for testing, among other use cases.
Economics, Engineering, Etc.
Self-Sovereignty Identity Toolkit - Published by TBD as part of its Web5 initiative, the kit is meant to be a way for users to control their identities online. Instead of relying on a trusted third party (login with Google, Facebook, Twitter, etc) the dream of self-sovereign identities has always been to allow users to control it themselves without a middleman. Honestly, something like this is way past overdue and I really hope that a login-less and public-key based interaction becomes the norm on the decentralized web.
Interest Rate Games - Arthur Hayes has a contrarian analysis of the interest rate hikes by the Fed. As he points out, the market does not want long-term treasuries as can be seen by the inverted yield curve of the 30-year vs the 1-year. As a result, the interest expense on the short-term treasuries continues to grow. The printing required to service that debt completely nullifies the quantitative tightening that the Fed has been engaging in. In other words, money supply continues to expand even as interest rates continue getting hiked.
Bitcoin in Bali - This sort of saber rattling against Bitcoin usage is surprisingly common, but it’s in many ways understandable. For countries that have inflating currencies, dollarizing is a sensitive topic. Many try to pass laws on how usage of other currencies is illegal and Bitcoin, of course, gets swept up in that. That said, it’s very hard to enforce laws like this without some overarching digital structure, such as a CBDC or large centralized payment networks like credit cards, so it’s really more a threat than anything else.
Quick Hits
Debt Ceiling lifted - In an unprecedented move, the debt ceiling no longer exists for the next two years! I honestly wonder if they’re expecting to spend so much that they didn’t want to put a number on it.
Sad Tweet Thread - A reminder of the dark outcomes of altcoin trading.
Atomic Wallet “Hack” - Hard to tell whether this was internal or external, but the closed source software wallet can now be considered completely insecure.
Mysterious Altcoiner Death - Hard to tell if it’s related to his altcoin launches and trading, but there is a rather weird pattern.
CBDC in Nigeria - St. Onge notes how hard central banks are pushing CBDCs with an example from Nigeria, which has had riots over the resulting policies.
Fiat delenda est.