Bitcoin Tech Talk #410
Interesting Stuff
AI Bust? - The hype around AI has been brewing for a few years now, and the big tech companies have all spent enormous sums on GPUs and software engineers to take advantage. But is it living up to the hype? According to investors, it's not. Yes, you can get answers to general knowledge questions quicker and you can produce some cool images for a blog without needing to pay for stock footage, but those aren't use cases that produce profits for the hundreds of billions that are being spent on it. I suspect that this, like many other hyped tech in fiat, is another cycle of malinvestment that needs unwinding.
The Value of Morals - The article is about anxiety and there's no lack of it today for most people. But no it's not yet another condemnation of social media or beauty standards or societal pressure. This article asserts that the anxiety people feel is because of a lack of morals. Much like how government overspending's presenting symptom is inflation, a lack of moral values' presenting symptom is a deep anxiety. Perhaps this is why there's a trend among younger people seeking religion.
Creativity is not Scarce - This long read is about what we label as creative versus what actually is creative. And as such, the author here asserts that creativity is everywhere, it's just that we either don't see something as creative unless it's by a certain type of person with a certain type of rank or credential. And that's because the creativity doesn't get past the gate keepers to be actualized in a real product or service. In a sense, creativity seems scarce because we're now organized in a way as to only allow it from a certain set of people, usually people higher up in a large organization. Such are the follies of fiat organizations, and I suspect that in a free market, more and better ideas come to fruition simply because of less bureaucracy gatekeeping them.
Interestingness is Overrated - Follow your Passion! I want to be fulfilled in my work! The underlying assumption is that interesting things will lead to something productive, even if it's not right away. The article here throws cold water on that concept, showing that what's interesting to most people is almost entirely social and that pursuing what's interesting is in that sense very overrated. The defining feature of fiat money is that it lets certain people suspend reality for a time, and this fulfillment of a desire to do what's only interesting fits that bill. What builds civilization is not what's the most interesting, but what's useful.
What I'm up to
Bitcoin Pioneer - I was on this podcast a few months ago to talk about my journey into Bitcoin. We talked about the early narratives around Bitcoin, what happened to all those early Bitcoiners that had massive amounts of Bitcoin and the siren song of altcoins and how they've wrecked a lot of lives.
On Toxic People - I wrote this essay after seeing a lot of influencers online denigrating Bitcoin culture. It's sad but so many of these people are snarky and sarcastic to cut you down. If you're reading this newsletter, you'll have to deal with these types of people in the coming years. Do yourself a favor and have a plan for them now.
Shepherds for Sale - I just finished this book about “Big Eva" or the current state of Evangelical Christian organizations, particularly the celebrity pastors and influencers like Tim Keller, Andy Stanley and Rick Warren. There are some pretty explosive allegations, particularly of the money trail leading to so many of these pastors so that they'll go left on political issues like immigration, abortion, BLM and much more. It was a sobering read, especially because the author brings all the receipts.
Review of Fiat Ruins Everything - This article is a reflection on the role of money after the author read my newest book.
Nostr Note of the Week
Inspired by this article.
What I’m Promoting
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Bitcoin
L2 Definitions - The BitMex blog has an article on CoreDAO and its non-custodial staking system. But the more interesting part for me was its attempt at defining what a layer 2 is. In one sense, it can be as broad as the IBIT ETF or as narrow as the Lightning network. Their definition has a lot of merit, which is whether the system has a custodian or not determines whether it qualifies as an L2. The weird staking system is interesting as well, and I suspect CoreDAO tokens to plummet just from this system.
Timewarp on testnet4 - Testnet4 was launched not too long ago, but there’s already an attack on the difficulty adjustment algorithm that’s similar to the time warp attack. An attacker can, with 51% of the hash rate, adjust the difficulty down significantly over a period of 16 weeks to be minimal. It’s not a big deal, given that it’s testnet, but it’s illustrative how hard it is to secure every attack vector even with seemingly well reviewed minor changes.
BitVM2 - The whitepaper for the second version of this provable program-style smart contract is now up. The main differences with BitVM are that there’s a permissionless challenging that can now take place and a reduction in the on-chain footprint for dispute resolution. As there are still many variations on this type of smart contract, it’s hard to know which will gain the most traction, but the state of this particular art is definitely moving fast.
Lightning
Highly available LN node setup - Most lightning nodes are not necessarily set up for high availability, so this is a tutorial to set up three nodes that share certain resources, like the bitcoin node. For any sort of commercial use, this type of setup is needed for good redundancy. As LN evolves, I expect this type of robustness to come to consumers as well.
TaprootAssets Uptake - The link is to a blog post written by Ryan of Lightning Labs, so take it with a slight grain of salt, but the Taproot Assets protocol seems to have traction in the rest of the ecosystem. The main use case seems to be atomic swaps using some stablecoin to enable decentralized exchanges of some kind. I don’t know if any memecoins will be launched on this protocol, but I hope to God that this one avoids that stupid contagion.
Last Mile - This is an informative article also by Ryan Gentry, about the last mile problems of the lightning network. As is usual for any network graph, the outer edges tend to be the most challenging to connect and indeed especially with inbound liquidity problems, this is a significant challenge for the Lightning Network. There are alternative last mile solutions which is outlined here like e-cash, channel factories and ark which all have different trade offs. It’s a great way to think about this topic and if you’re working in Lightning, this is a must read.
Economics, Engineering, Etc.
Major Data Breach - Around 3 Billion records of personal information has been leaked from a company called National Public Data, mostly people from the US. Importantly, this includes social security numbers, presumably of nearly everyone in the US (many of the records are redundant). Apparently, this data set was available on the darknet for around $3M back in April, but now that it's been leaked publicly, there's no doubt that it'll be a headache for us all. Honeypots of information like this are very hard to secure, and sadly, almost all information you give to third parties, you have to assume will be public at some point.
The Case for Nostr - Alex Gladstein makes the case in the Libertarian magazine Reason. Nostr hasn’t really been discussed much in the mainstream and this may be its first major article on it. As Alex points out, there are many great reasons to love Nostr, mainly due to the decentralized nature of it and his focus, understandably is in human rights and un-cancelability. I’ve viewed Nostr as a natural extension of the network that Bitcoin has built and re-decentralization of the internet is a good thing.
Celsius lawsuit - Bad actors seem to have a thing for using law to get unjust gains, which probably says more about the flaws of the justice system than in does the bad actors. And indeed, this ponzi scheme is suing a lot of people. The link is about the lawsuit against Tether in particular, most probably due to the fact that it’s one of the most profitable companies in the space. It’s crazy to me that Mashinsky hasn’t been arrested and continues his scam, but that’s fiat law for you.
Quick Hits
Whitepaper for Gen Z - Amusing rewriting of the Bitcoin whitepaper to address a more hip audience.
Tether getting into AI - The well known stablecoin is expanding it's operations to other tech things.
Silk Road coins move - The DoJ moved 10,000 BTC to Coinbase, presumably to sell it before the next administration uses it for a Bitcoin reserve.
Leveraged MSTR - There will soon be an ETF for MSTR traders.
Fiat delenda est.