Bitcoin Tech Talk #369

Interesting Stuff

1. Confessions of a Rent-seeking Engineer - If you’re a software developer, the story is just way too familiar. There’s a department that is supposedly cutting edge and creating lots of value, but is actually a giant money-sink. Nobody seems to want to get real work done and the work itself is a giant mess of spaghetti code that doesn’t actually do anything. What’s worse, everyone pretends the emperor’s new clothes are awesome and no good deed goes unpunished. It’s the epitome of fiat stupidity and sadly, most large corporations and all governments have something like this. It’s what happens when the money printer bails out stupidity.

2. Asians and Standardized Testing - One of the uncomfortable truths of the neo-liberal order is the fact that Asians are way over-represented in the elite universities. A large reason for Asian success is the history of the region, China in particular, which this article analyzes. Specifically, standardized testing was a big part of China starting around the 6th century and having bred a culture that specializes in this for the next 1400 years, there’s a lot of people from these cultures who excel in standardized testing. Sadly, the advent of standardized testing is generally a leading indicator of authoritarianism, and we’re definitely seeing a lot of that. The effects of fiat money, such as talented people going into rent-seeking fields was very much a prominent feature of East Asian history. This is a large reason for why the East did not progress nearly as quickly as the West.

3. IDF and Gaza - Now that the events that transpired in Gaza are about a month out, there are some very uncomfortable questions that are being asked. For example, this is a military that trains for 5 minute response times to threats normally. How did this attack take 7 hours to reply? This is also a surveillance state that knew exactly where each infected person went during the Coronavirus epidemic. How did they not know about what was going on inside Gaza or what happened near it during the attack? The article itself is from someone that thinks this was an inside job, and given the capabilities of the Israeli military and the meager means at the disposal of the Palestinians, why is the US sending aid? Fiat makes for some weird incentives, and this may be one of them.

What I'm up to

1. Hidden Repression - I spoke with Alex Gladstein about his book and we discussed the role of the IMF and World Bank in creating dependency. Alex laid out what monetary colonialism looks like and how it operates through fiat money to essentially enslave these countries to produce raw materials for the first world. The system is horribly unjust and too few are aware of how the system works. Take a listen to understand what’s really going on.

2. Crypto Town Hall - I battled some altcoiners and took them to task for their enabling of the SBF fraud. There were some seriously cringey takes from the altcoin investors, saying stuff that was debunked years ago like “blockchain technology is super useful for all kinds of things.” Anyway, if you want to listen to me making arguments against the altcoin industrial complex, this is one to listen to.

3. What is Money - I was on Robert’s show to talk about the new book where we discussed belief, value investing, socialism, families and much more. The conversation was about an hour and a half and we discussed the philosophical roots of fiat money and the Marxist suspension of reality which causes so much of this spoilage. The conversation was a fun one and hopefully, this becomes one that gets people to read the book!

4. eBook and audiobook - Speaking of which, the eBook and audiobook versions of Fiat Ruins Everything are now out on Amazon! It took a while, but both are ready and if you like reading on a device or listening to the audio, you now have no excuse. If you have read (or heard) the book, I would really appreciate a review. There’s only 4 at the moment and though it’s selling well, I guess most people aren’t inclined to review it just yet.

Nostr Note of the Week

What I’m Promoting

• Books

  • Fiat Ruins Everything

  • 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.

Bitcoin

1. BitEscrow - This is an escrow contract that is implemented through pre-signed transactions and agents. The idea is that the agent becomes the judge for the escrow and the process can be a way to do something like a smart contract but with some human involvement for the trickiest part of determining whether the spirit of the contract was filled. It’s a different model than, say, a DLC, as the agent plays a more prominent role, but at the same time, the agent can’t run away with your coins. The agent can only publish one of the two outcomes.

2. Payjoin History and Explanation - This is an excellent article on the benefits and technical details of how PayJoin works. It’s sad that this isn’t something used more often, especially when payment is done in a synchronized way. It does require more rounds, but there’s a lot of potential for privacy if wallets would incorporate this feature and make it more prominent from a UX perspective.

3. Durabit - This is something like incentivizing Bittorrent with Bitcoin, though in practice, this completely obviates VC-funded altcoin projects like Filecoin, Storj and many other alt projects as they don’t have any scammy tokens. It does require someone watching to make sure that the Torrents are continuously seeded, and there’s a clever bond design that lets the issuer take back the coins if the seeder doesn’t do its job.

Lightning

1. AcceptLN - This is the PayPal business model all over again, where you can now send any email address Bitcoin over Lightning. The idea is that there’s a custodial service that holds the coins until the amount is redeemed. It’s really not very different than what PayPal was, except that taking custody is much easier. As people start valuing Bitcoin properly, transactions like this will become much more common.

2. Lightning eSim - During my travels, finding mobile data for a given country was a bit of a chore, at least until I found airAlo, which lets you buy eSims for the country using PayPal. Now you can get the same functionality through Lightning using this service. Traveling to El Salvador for a week? Buy an eSim, install using wifi and enjoy! They have many other countries besides El Salvador, and though the rates are a tad higher than airAlo, the non-KYC nature of it may make it worthwhile.

3. EagleSats - Lightning Ads is something that has been around, but this is the first service that makes ads to lightning nodes more systematic and with a nice UI. Marketing to Bitcoiners in this way is a lot less dependent on trusted third parties by using this protocol. I wonder if the node-in-a-box providers will add this as an option. I would love to see different tiers that nodes advertise, which would send certain ads to the node owner’s email.

Economics, Engineering, Etc.

1. Tether Balance Sheet - Tether now has issued $85B of USD but their treasury is the really impressive part in that they hold $86B worth of assets. What’s crazy to me about this story is just how incredibly profitable banking can be without the fraud of fractional reserve banking. Of course, the real customers of Tether are getting debased at double-digit percentages on a yearly basis, so they’re willing to be debased less in USD. The other bit that was interesting is that they hold over 60k BTC.

2. SBF guilty - Michael Lewis’s obviously biased account withstanding, the scammer is going to jail. This brings to an end some very public altcoin failures from the last cycle, including Celsius and Luna. Of course, altcoin scamming has been around during other cycles (BitConnect!) but the mainstream coverage is unprecedented. Will we get something similar in this coming cycle? Or have people finally learned?

3. Mining Profitability - As we approach the halving, we are getting reports of pretty good profits for the major mining companies like Marathon and Riot. As is usual during this part of the cycle, we’re starting to get mainstream concern about the halving and how the profits will spiral down. I suspect that the profits now are what these miners need to survive through the halving and the price appreciation to come a year after. We should expect the mining death spiral fears any day now.

Quick Hits

• The Fed Sues BM - What an own goal. The Fed claims copyright infringement for FedNow and BM takes advantage by telling everyone about it.

• Mastering Bitcoin 3rd Ed - David Harding has sent to print the latest edition of this classic. Given his technical expertise, I expect this to be a more than worthy successor.

• Whitepaper Day Reflections - Jameson Lopp talks about what is and isn’t a part of the original whitepaper released 15 years ago.

• Taiwan BTC Legal Tender - Taiwan is apparently the second country after El Salvador to recognize BTC as legal tender.

• Bitcoin Pope - I laughed.

Fiat delenda est.