Bitcoin Tech Talk #378
Interesting Stuff
On Caesar and Taxes - Jordan Bush has an excellent explanation of what the passage in the bible about rendering onto Caesar means. As he explains, this proclamation is not a call for all Christians to pay taxes regardless of rate, but a much deeper exposure of what Pharisees were doing. There’s sadly been a strain of statism that’s been a part of the church since the establishment of the Federal Reserve, and it’s unfortunately been conflated with the gospel. This type of clear thinking about the moral and ethical issues at hand are what’s needed to get the church to understand the evils of fiat money.
Mathlete - A rather depressing account of a successful guy who went to Stanford and the sacrifices he made during high school, particularly engaging in math. What was striking to me about the story was how many incentives there were to keep the fiction going. As happens in a lot of fiat systems, the ability to suspend reality is there for the taking, at the cost of some form of debt going forward. It’s hard not to feel something for the author, whose life still seems to be embedded in a fiat daze.
Having Children - Scott is a great writer, so his thoughts about having kids and particularly, his experience with his new twins were a delight to read. There’s a lot of food for thought here, particularly about the sheer numbers involved and the crazy first months where you hardly get any sleep. Sadly, he’s a bit infected by the fiat mentality, and the way he frames the story is a bit indicative of it, but it’s still a great read.
What I'm up to
Decentralized Future - I talked to Dhruv Bansal about his origin story, the things that he expects to change as we move toward a decentralized future. He had some really good insights into how things will change because of the presence of Bitcoin and the diminishing of fiat money. As the scale of things change, we’ll see different products and services that will be more personalized.
Bitcoin Now - I was on Luke Broyles’ podcast to talk about my origin story and what the early days were like. We talked about the first couple of Bitcoin pumps in 2011 and 2013, how I got into development, and the dollar anchoring problem that prevents a lot of people from buying Bitcoin on its way up. We also talked about traveling in hyperinflationary economies. Finally, we discussed how fiat money has brought technological progress, at least the outward facing ones, to a halt.
Icelandic Bitcoin Show - I talked with these guys to talk about all kinds of stuff including my origin story, programming and the new book. We talked about inflation, the IMF and the way monetary imperialism works. We also touched on socialism, government dependence and family formation and how all those things are affected by fiat money. Fast forward to about the 50 minute mark to hear the actual interview.
Nostr Note of the Week
What I’m Promoting
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Bitcoin
v3 Transactions - Peter Todd has a detailed review of the new proposal for different types of transactions. The motivation is that the anchor output solution is pretty ugly and requires Child-Pays-for-Parent (CPFP) to change fees in a high fee environment for lightning channel closes. As he points out, the proposed solution is an ephemeral anchor output of zero value, but requires some level of altruism from miners to accept these. His recommendations are to avoid this as it’s not really solving for much. Well worth reading to understand the way Bitcoin is being used today.
Ordinals Analysis - This is a detailed look at how ordinals, BRC-20, inscriptions, etc. have been affecting the Bitcoin blockchain. There’s a lot of detail here but the site’s name says it all. WTF happened in February of 2023? Early on, it was inscriptions that took a significant amount of block space, but later, it’s become BRC-20. The post also goes on to answer some popular narratives being pushed by ordinals proponents and points out that it’s not censorship to refuse to relay non-monetary transactions. For more current stats, Murch has a dashboard.
CTV tradeoffs - There’s a lot of buzz around covenant proposals as they allow for UTXO sharing (see Carman’s post under Lightning). But there are other considerations that we all need to take into account and John Carvalho does this in the post on X. As he points out, the more functionality you offer, the larger the attack surface gets.
Annual Review - Jameson Lopp has published his annual review of statistics about Bitcoin, including mainstream interest, Bitcoin dominance, Lightning stats, contribution graphs and much more. I always appreciate these statistics and it’s a great way to get an idea of what the entire ecosystem is up to. He concludes that this was a year of building and that 2024 is likely to be pretty exciting.
Lightning
Carman on Lightning - Ben Carman has written an honest assessment of Lightning and its prospects for the future. The fundamental thing he is wrestling with in the post is about ownership of Bitcoin and what that actually means. In a sense, the inability to settle in a high fee environment brings into question the foundational property rights of the amount in Lightning. His conclusion is that to scale lightning requires some sort of covenants proposal.
Aqua Wallet - Jan3 has released this lightning-based wallet. The main benefit here seems to be a bigger usage of Liquid for cheaper fees, but that’s not the only thing the wallet is doing. It’s promising trading of other assets, in particular Tether, so that atomic swaps on lightning become possible. Of course, this is also what RGB, Taro Assets and others are also trying to do, but this is launching earlier. The fee pressure has definitely put more impetus on entrepreneurs to find solutions, so it’s good to see products like this come out, even if it doesn’t end up with wide adoption.
Lightning Companies - Muzz of Lightning Ventures has outlined what their portfolio companies are doing. There’s a lot of activity and a lot of growth and fundraising, despite what you might have thought over the past 12 months. That said, the portfolio choices show why it’s so hard to be a VC in this space. There’s just not enough viable investments, so they’ve gone into things like Ordinals.
Economics, Engineering, Etc.
Milei and Bitcoin - Blink has a post on what they expect from Milei with respect to Bitcoin. Given how much of his platform was about the reform of the collapsing Argentinian Peso, there’s some expectation that there would need to be some embracing of Bitcoin. As the post points out, there’s a range of futures, and it’s hard to predict exactly how it’ll play out. However, there are some reasons to believe that Bitcoin will start to play a role as the central bank is phased out and dollarization comes on the horizon.
Fiat Transfers Suck - Hilarious account of how difficult it is to get money transfer stuff set up with the current monetary system. The author was given a bonus, which took a lot of effort to actually deposit into his account. It’s easy to forget that this messed up system is what we’re coming from and even if Bitcoin transactions take some getting used to, it’s miles better than the stupidity that you have to deal with in the fiat system.
Plato and Bitcoin - This article references Plato’s Allegory of the Cave and likens it to the current state of things in the Bitcoin world. The ETF in this analogy is sort of a half-measure to get people interested in the real world. The sound money revolution is really like trying to describe the outside to people only used to analyzing shadows. Perhaps this is the year when things really go mainstream.
Quick Hits
Millions to Satoshi - Someone just gave over a million dollars (26.9 BTC) to the genesis address.
Reports over $10k - In the US, you are now required to report gifts over $10k in cryptocurrency.
China clamping down on Tether - The link is in Chinese, but there’s some pressure to prevent capital outflows, it looks like.
Designing with Strategy - Will Cole has written part 2 of his product management series.
Alternative to ETF? - Apparently, something called Bitcoin Depository Receipts could be done without SEC approval.
Fiat delenda est.