Bitcoin Tech Talk #396
Interesting Stuff
Economics of Chip Fabs - If you’ve ever wondered about microchips and how complicated the process of manufacturing them is, look no further. The article is more about constructing a chip fabrication facility, but it touches on a lot of different things, like how precise everything has to be and how little things like the vibrations caused by footsteps can affect the manufacturing process. It’s an incredible feat of engineering to even build these super-clean and precise factories for silicon and it makes you wonder how much further we could have gone if we put this sort of effort, towards, say, nuclear.
Bill Hwang - I wasn’t aware of this story of a 60 year old Korean Christian hedge fund manager who lost $36 billion. The whole thing is just really bizarre between the charitable foundation where a lot of his former employees continue making 6 to 7 figures, the insane amounts of debt that led to the collapse of Credit Suisse and the claims of being a “Christian capitalist.” He got in really deep into the fiat system and seems to have done some terrible things that ended up affecting the lives of so many people. His trial starts in Manhattan soon. What was really frightening for me was that I grew up in the same culture and can see how someone could end up in that sort of place.
Cruelty of Atheism - I’ve been fascinated with Communist societies for a long time, and this is one of the best spiritual/moral explanations for the cruelty and injustice that are so common to these regimes. The article is about Russian Literature and how faith influenced it, but there’s a really insightful point made about how under a system where the good of the state trumps all, the default morals are to be cruel to victims, not to pity them. Thus, we get some truly cruel and destructive actions like Stalin’s purge of inner party members in the 30’s. Marxism is a truly horrifying system in more ways than one.
Why Everyone Makes Wallets - Great article on the business of making digital wallets and why everyone makes them (Apple, Google and Samsung, among others). There’s so much Cantillon juice to be squeezed, it seems, from debit card fees, credit card signup bonuses, credit card interchange fees and so on that every wallet soon becomes the do-everything app for financial services quickly enough. This is one of the many reasons why I don’t think the UX for Bitcoin payments is going to catch up too fast, because there’s just so much competition and these companies are making billions with their payment rails.
What I'm up to
Fiat Food - I talked to Matthew Lysiak about his new book, the conspiracy around typical American food and how we should think about food to better our health. We talked about Matthew’s background as an investigative reporter and his journey exploring modern food and its relationship to health. He also talked about how most health care providers know very little about nutrition and his recommendations for a better diet.
Tyro Experience - I did an over 2 hour podcast with this guy, talking about Bitcoin, the church, fiat ruining everything and the non-committal middle that everyone in a fiat economy likes to be at. We talked about how Bitcoin works, how to think about it, why fiat money is so corrosive, the nature of rent-seekers and the middlemen who handle the money.
BTC Prague - I’ll be at this conference June 13-15 next month. It’s Europe’s largest and should be a great time.
Slovakia - The details will be coming forth, but I’ll be speaking in Chateau Valca in Slovakia June 16-18 about how Bitcoin changes incentives.
Nostr Note of the Week
What I’m Promoting
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Bitcoin
Decentralized Coinjoin - Supertestnet has a three round protocol for doing a coinjoin transaction that does *not* need a coordinator! There are three rounds and a short-lived private key for ring signatures, and should be reasonably difficult to grief/troll. There’s no implementation yet, but the idea is great because it lets you identify the trolls at every step. Obviously, a larger anonymity set is desirable which increases the probability of trolls, but the mitigations seem reasonable. I look forward to seeing this implemented.
Lamport Signatures in Script - File this in the “neat trick” category of stuff you can do in Script, but you can do Lamport signatures using p2sh and ECDSA. The key is that ECDSA signatures vary in length, and that can be used to indicate which private key signed it. Lamport signatures are pretty big, but as Poelstra points out in the thread, they enable covenants. Unfortunately, the OP code limit in Script prevents such usage.
Random Delay Block Propagation - A new paper looks at how secure a block is if it’s affected by some random delay in propagation. Previously, the security of a block’s position in the Bitcoin blockchain depended on bounded delays, but this paper shows that even with random delays, which are more realistic, mean a great deal of security.
Lightning
Zeus Management - Lightning Node management is a long-term endeavor and failures that happen once every 5 years are starting to pop up. As Lightning matures, there are certain failure modes that need documenting and this is a post that gets into that. It’s a good tutorial on some of the many things you need to take into account to be a good manager of your node and reads a bit like an instruction manual on what to do in case of disaster.
TicketBot - Concert tickets have many rent-seekers, from issuers like TicketMaster to resellers like StubHub all getting in between the artist and the fan. Wavlake has taken the direct bilateral relationship between artists and fans to the next level by introducing this protocol for artists to be able to sell tickets to their concerts to their most loyal fans. The main mechanism is the same as Wavlake’s other product, in that fans can zap the artist for tickets over Nostr, instead of music that they’re listening to. This is honestly long overdue and a great experience here for the artist will bring in a lot of people to both Lightning and Nostr.
Taproot Asset Demo - Lightning Labs is making headway into their vision for stables on Lightning with this demo of using Taproot Assets to swap two different assets. The main use case here is atomic swaps, which allow for the exchange of two different assets without any trusted third party. Decentralized exchanges have been around, but this should make things a lot faster and more liquid. I hope to see something on mainnet from them soon.
Economics, Engineering, Etc.
Evangelism is Done - Roy Sheinfeld blogs that we’re now at a saturation point for Bitcoin awareness and that more is needed. His premise is that most people nowadays are aware of what Bitcoin is and the low hanging fruit of making people aware of Bitcoin is not enough to get them into it. The next step then is to show, not tell, which in this context means to make stuff that people will use. This is an important realization as Bitcoin’s now been in existence for 15 years and most people are at least aware of its existence. Instead of trying to chance their view of Bitcoin, we’ll be better off proving its utility.
Precarious Bitcoin - Matt Corallo is sounding the alarm for what he sees as the next great battle for the soul of Bitcoin. The main attack vector he sees is the KYC requirements of governments being enforced at the mining pool level. Despite Stratum V2 being now available, his contention is that pools will get regulated, transactions censored and ultimately prevent the usage of it in non-regulator-approved contexts.
Enterprise Cloud Mining Service - Swan has a new twist on an old product. Cloud mining has been around a while and it’s been a known vector for scamming in the past. The idea is that you provide capital for someone to run the mining operation on your behalf. The interesting part of Swan’s offering is that they’re targeting institutions that want some mining exposure. It’s much less likely to be a scam as these contracts are going to be heavily negotiated, and it does allow much more capacity to come into their control quicker.
Quick Hits
Social Engineering Hacker - Junseth interviews a 13 year old social engineering hacker that would have gotten millions from Swan, had it not been stopped in time.
Circular Economy Grants - Geyser has a fund specifically to help out Bitcoin circular economies.
Argentina Stranded Gas to BTC - Looks like Milei’s government is taking this very low hanging fruit for revenue.
Why Bitcoin, not Crypto - Block’s 2024 Q1 Shareholder letter is a deep dive into their business and a good look into how deeply this company is in on Bitcoin.
Fiat delenda est.