Bitcoin Tech Talk #385
Interesting Stuff
Social Isolation in Korea - This story from NPR is about the broader trend of isolated young men in Korea. These are young men around 19-34 who shut themselves in and don’t leave their rooms, usually in their parents’ house. This is not an unknown phenomenon as Japan and China have similar issues. Undoubtedly, these are symptoms of a much more fundamental cause, and sadly, the article doesn’t touch on the general unfairness of these societies toward young people. Years of money printing and rent-seeking older people who won’t leave their jobs have crippled entire generations where even finding a permanent job is extremely difficult. Fiat money ruins people.
Professional Bridesmaids - I did not know there were such things, but so there is. This woman makes a pretty decent salary being someone’s hired bridesmaid, taking on many roles, such as party organizer, crisis manager and dance starter. As the article points out, the cost of weddings and all the associated costs (bachelorette parties, dresses, makeup) are significant for the wedding party. As if there aren’t enough barriers to marriage, the cost of weddings seems to be a big one.
Banking Technology Mess - This article is about how a bank works from a customer services perspective, and it’s pretty frightening that these people have control over your money. I’ve always wondered what the 240,000 employees of JP Morgan Chase do, but after reading the article, I’m starting to understand why. One of the most interesting parts for me was the filing of Suspicious Activity Reports (SARs) which customers are not supposed to know about by law. That banks manage to operate despite the giant mess of technology that they have seems to me a miracle.
Lack of Cousins - This aspect of a declining fertility rate is not often discussed, but important, just the same. Most kids growing up today have far fewer cousins, and by implication, a much smaller extended family, than in times past. As a result, most kids grow up with a much weaker sense of identity and sadly go where the propaganda takes them. What’s horrible is that so much of the low fertility problem comes from costs associated with kids, including real estate. Fiat money has decimated families, almost literally.
What I'm up to
Don’t Die with Zero - I didn’t do this podcast, but Andy used a clip of me talking on Saifedean’s Podcast about how Fiat debases families to make his point that dying with zero is a terrible and stupid thing. The deep selfishness of the Boomer generation is what he’s railing against and I agree with him. That generation, more than any other, benefited from the significant money printing of the last 50 years and has little desire to leave wealth to next generations.
Advancing Bitcoin - I’ll be at this conference in London in a few weeks and will be talking about FROST. Come learn about the different parts of the Bitcoin tech stack and connect with other developers on March 14-15! I’ll be there the whole week and enjoying the many fun things London has to offer. If you have suggestions, please let me know!
BitBlockBoom - I’ll be attending this Texas mainstay April 11-14 in Dallas! The talk I’m planning to give is around rent-seeking and how that’s making things worse for everyone. The conference is generally smaller and there will be more opportunities to connect. If you’re in Texas in this time, I would encourage you to go.
Nostr Note of the Week
What I’m Promoting
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Bitcoin
Cashu Blind Signatures - The post on Delving Bitcoin describes essentially the entire eCash scheme. It’s a great learning resource as it adds intuition for how the whole thing works by using asymmetric problems, such as Discrete Log. What’s remarkable about the scheme is that you really only need Public Key Crytography and hash functions with a centralized issuer called the “mint” to work.
BitKey Source Code - As with other hardware wallet projects, this one from Spiral has published their source code. The wallet is an interesting tradeoff between self-sovereignty and recovery features in that it’s optimized more for recovery. There’s a lot of code in their repository, including both mobile apps, the firmware code for the hardware device itself and even the API server code. I don’t think I’ve seen this level of transparency in a hardware wallet vendor before and they should be applauded for doing so.
Implementing RBF - Liana wallet goes through all the different gotchas they encountered during implementation of replace-by-fee. Among other things, the bumping of fees may very well require the selection of additional UTXOs, and adding them manually is a UX challenge and doing so automatically can lead to some loss of privacy. There’s also the corner case of having no change output which can be tricky to code around.
Lightning
SwapRoot - Phoenix wallet has implemented swap ins that use Taproot to increase channel size. When they introduced splicing, they used Segwit transactions to do swap ins to the single channel. Now, by using Taproot and descriptors, they now change out addresses with each splice in and make them indistinguishable from normal p2tr key-path spends by using MuSig2. Hopefully, more lightning wallets add these privacy features as Lightning matures.
Liquidity Optimization - Providing liquidity on the Lightning network is an interesting business already, given that many users want inbound liquidity and will pay for them. But wallets thus far don’t optimize for this type of Lightning node and this post on Delving Bitcoin goes through what such a wallet might look like. Among other things, proactively refilling channels that are nearly depleted during low fee times, seems to be a desirable feature. As the Lightning Network matures, we’ll need more specialized wallets for use cases like this.
Mass Exit Attack - This is a Lightning Network attack paper with two scenarios. The first is controlling a bunch of routing nodes that suddenly go offline and are unresponsive at once, causing payments to fail. The second is a mass exit where evil nodes try to get away with previous states and give no time/room for justice transactions. The authors conclude that watch towers will need to be watching very carefully to mitigate these threats.
Economics, Engineering, Etc.
BitFinex Hack Chain Analysis - This paper goes through what actually happened to the 119,754 BTC that were stolen from the BitFinex exchange in 2016. As can be seen in the paper, it was not an easy operation to stay anonymous with that much Bitcoin and indeed, they got caught years later through a cloud account. The whole thing shows just how hard it is to steal and try to get away with it.
Transaction Acceleration - Marathon now has a transaction acceleration service, meant to guarantee that people can get ordinals, inscriptions and non-standard transactions into the blockchain. I get why they’re doing it, but it’s generally a bad thing to have off-band payment methods for pools because the pool members can’t verify how much in off-band payments a pool received. As such, this sort of thing is ripe for abuse and I suspect that in the long run, such services will be shunned by pool members as it costs them revenue.
Fake Exodus Wallet Hack - A fake version of the Exodus wallet has been used by people and it’s resulted in 9 BTC or so of funds. Sadly, the supply chain for wallet software is vulnerable and the attack surface is relatively large and allows for this sort of thing. App stores of various kinds have not thought through the implications of these types of things as they are essentially now a trusted party.
Quick Hits
Capital One acquires Discover - Banking consolidation continues, even among the gigantic players.
Adam Back and Satoshi - The email back-and-forth from 2008 is now public record.
Reddit acquires BTC - This is with their treasury. It seems they want a hedge against massive inflation.
Trump softening on Bitcoin - He says he likes the dollar, but he’s definitely more open to it, it seems.
Boris Johnson asked for Bitcoin - At least according to Tucker Carlson.
Fiat delenda est.