Bitcoin Tech Talk #418
Interesting Stuff
Why Birthrates are Falling - Governments around the world are trying to raise fertility rates, and despite some pretty enormous economic incentives, they’re failing at even keeping the fertility rate the same, let alone increasing it. Birth rates are down pretty much everywhere, and this article goes into why economic incentives don’t seem to work. In all these societies, being a mother only is embarrassing socially. Women are expected to work and their status in society shifted from one based on making a good home to one that’s based on career. The status game, in other words, has changed and that’s incentivized less babies. Sadly, this shift was one that fiat money had a giant hand in, as the doubling of the labor force was a necessary component of keeping the ponzi going.
North Korean Stability - This is one of the most interesting pieces I’ve seen on North Korea, based on the experience of a Russian who lived there as an exchange student in the 80’s and has continued studying the country since. It’s not your normal perspective on the country, typically told through governments or defectors, and for that reason it deserves a look. What struck me was that the dictatorship that’s been built there is incredibly stable, not *despite* the poverty of its people, but specifically *because* of it. Worth thinking about as the world comes into a generation that’s doing worse than their parents.
Girard Primer - Like Peter Thiel, I’m a big reader of Rene Girard and his theories of conflict settlement. I found this article written by the man himself, as a good introduction to his thinking. If you’ve ever wondered what mimesis is all about and his ideas about the “founding murder” and so on, this is a good place to start. One of the things I’ve learned from his books is that much of the world as it exists is the result of people, groups and governments imitating others. Fiat money has definitely been subject to mimetic contagion, and in many ways so has Bitcoin.
Normalized Ugliness - This is a long and epic rant about the general ugliness of everything, from the perspective of a New Yorker. The writer is surprisingly perceptive enough to see that the low interest rate environment (and the rampant money printing that goes with it) had something to do with it. The main insight for me was the fact that ugliness, and really just the poorer quality of everything in general, affects everyone, even the very rich. In that sense, fiat money debases all consumer goods along with itself.
What I'm up to
Thank God for Bitcoin - Unfortunately the videos from the TGFB conference where I spoke aren’t out yet, but this article is a summary from an attendee of the conference in Nashville. I spoke about financial holiness in that talk and the article has some thoughts on it. I will be posting the videos when they come online, though that may not be for a while.
Plan B Forum - The annual conference in Lugano commences next week! I’ll be there and giving a talk and engaging in a debate both on the first day at the WAGMI stage. If you’re around, please come and say hi and enjoy the beautiful scenery!
Rogue Food Conference - I’m going to this conference in early November to learn about regenerative farming, food quality, its connection with health and much more. Use SONG10 to get a discount if you want to attend in Dallas.
Nostr Note of the Week
What I’m Promoting
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Bitcoin
Bitcoin Core Disclosures - There were three disclosures (there are three links in the title) this week with regard to vulnerabilities in previous versions of Bitcoin Core. The first had to do with propagation of mutated blocks, which are so called because the transactions don’t match the merkle root. Propagating these blocks made the compact block reconstruction state blank. The second had to do with a particular thread that would take too much time sorting under stressful network conditions. The third was the most severe, which had to do with a malicious blocktxn message that would crash the software.
SHA256 Classifier - SHA256 is a cryptographically secure hashing algorithm, which means that it shouldn’t be possible to predict the output better than random chance. This code predicts with 54.9% accuracy on 420,000 inputs the first bit of the output. This is 4.9% better than random chance, which is 62 standard deviations away from the mean. This probably doesn’t mean that the algorithm is broken, but I suspect that this will be useful for future ASICs in Bitcoin mining.
Simplicity on Liquid - The alternative smart contract language with much easier provability and expressiveness has made it onto Liquid Testnet. You can program in the language directly, but Blockstream also released Simfony which is very Rust-like and compiles down to Simplicity in much the same way Miniscript compiles to Script. For me, this is the real test of smart contracts as they will be handling real Bitcoin once it makes it to mainnet. We’ll see then how useful smart contracts really are.
Lightning
Bitcoin Prediction - There’s now a place where you can bet on some events using lightning. The way it works is that you pick a bet, put some sats toward it, enter a lightning address for the payout and wait. It would be better if the system relied on third party oracles and be done as a DLC, but it’s a pretty straightforward application that deserves a look. Right now, most of the bets are around the US presidential election, but there’s definitely a lot of potential here for more.
Swapido - A new exchange in Mexico is notable for being Lightning-first. You can now send money to any Mexican bank account with Lightning. The natural extension would be some sort of BOLT12 recurring payment. This is about halfway to the service that the people on a Bitcoin Standard really want, which is the ability to auto-convert Bitcoin as the bills come in. Please, someone, build this!
High Availability Setup - This guide shows you how you can set up a 3-node cluster to achieve failover. For commercial lightning setups, failovers are critical to service availability and something like this is bound to become the default for high volume businesses.
Economics, Engineering, Etc.
DLC Security Model - DLC Markets does derivatives trading using discrete log contracts and they explain in this post what the security model is and where the vulnerabilities are. Since the primitive is pretty straightforward and doesn’t have any complex loops (unlike in ETH), the main vulnerability is with the oracle. They’re pretty clear about this and show how they handle oracle failure. The only thing about trading on platforms like this is that people that trade such things want liquidity more than security.
MSTR Bitcoin Bank - Michael Saylor has laid out his vision for his company to become a Bitcoin bank in the future. Unlike a traditional bank, he wants to borrow lots of money to buy Bitcoin. This is more or less what he’s been doing, but the amounts are starting to look much larger. The company has $10B in BTC, and he wants to borrow $100B or more as the market allows. It has $4B in debt, but if BTC grows, they’ll have a lot more collateral to borrow more money, which is in a sense, a speculative move against the dollar. The real question is, will anyone else do the same?
Fairshake PAC - This story in the New Yorker is making the rounds and though it’s got a bit of a lean in its reporting, the story itself is fascinating. If you were wondering why so many senators and congressmen seemed to be a lot more crypto friendly the past year, here’s the answer. Coinbase, Ripple and A16Z put $120M into a Super PAC and defeated a senate candidate in the Democratic primary in California and scared everybody in Congress. I’m torn about this because “crypto” will once again be conflated with Bitcoin, but at the same time, we do need to get the politicians’ attention.
Quick Hits
Peter Todd denies being Satoshi - The HBO documentary accused Peter of being Satoshi with some flimsy evidence, which is what caused this article.
CSW vs COPA Review - If you missed this whole saga, here’s a nice summary.
Bitcoin TX over LoRa - Don’t have internet or blockstream satellite? You can now use Long-Range (LoRa) Radio to broadcast your transaction.
Tether Documentary - We don’t just have Bitcoin documentaries anymore, here’s one on the ubiquitous dollar stable-coin.
Fiat delenda est.