Bitcoin Tech Talk #423
Interesting Stuff
Economic Incentives and Kids - Birth rates are down everywhere and governments are in a panic trying to get people to have more kids. There are lots of economic incentives in these countries, from lower taxes to paid leave. As the article points out, though, these incentives simply don’t work. If anything, birth rates are going down despite these programs. Indeed, it seems that the people that have more than 2 kids typically have a dad that’s significantly richer than average. In other words, the economic incentives are nowhere near enough. As I’ve said in my book Fiat Ruins Everything, the reality is that we are significantly poorer and can’t afford children, even with heavy subsidies.
Fight Club and Jesus - Not two things you’d normally associate, but this long read is about young men’s search for meaning and the cultural shift that’s taken place over the last 25 years both in the world and in the church. As the article points out, the movie is deeply spiritual where young men find meaning in something so crazy as a fight club and it’s the film’s exploration of that lack of meaning which made it so popular. What’s surprising is that in the last 25 years, the church has seemingly died and been reborn, to the point that there are more young men than women going to church. I found this article to be a white pill in the midst of the cultural insanity.
Confusing Messages - On the other side of the ledger, this is an article about the experience of young women growing up. As a father, the article was insightful and a bit scary, seeing their plight. Girls are told that anything that’s not feminist is from the patriarchy along with the semi-contradictory sex-positivism. As the author points out, girls are shamed for wanting male validation, but that doesn’t make it go away. In other words, the values young women have to contend with is extremely confusing.
Loserdom has won - The article is provocative and explains how it’s now considered normal and cool to be an introvert at home posting online. It’s really a lament to the fact that there’s just so little will and agency being displayed and speaks to the culture that produced this set of values. I suspect that a lot of this is cope from years of COVID hysteria and collective gaslighting, but the yearning for something more, I find encouraging.
What I'm up to
Rajat Soni - I spoke to Rajat about fiat money and the regression of civilization. We spoke about real estate and stock being Fed-backed stores of value and how they’re asset-inflated as a result, about how most large fiat businesses are really all financialized. We discussed debt-based building and the waste that results from using other peoples’ money instead of your own. Lastly, I made the case against altcoins.
Fiat Ruins Everything - This is a remote talk that I gave at the Thailand Bitcoin Conference back during the summer. I talked about fiat money and the many different ways that the incentives have changed to the point that civilization is actively declining.
Dead Man Switches - I’m looking for a digital dead man’s switch. I’ve been doing some research and am not satisfied with the ones I’ve found. If anyone has one that can be updated reasonably often and has a decently long track record, please let me know by replying to this email.
Nostr Note of the Week
What I’m Promoting
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Bitcoin
3-round Schnorr Threshold - Much like FROST and some other protocols (NOIST, Arctic), this is another threshold signature scheme that uses 3 rounds and has some provable security guarantees. The main feature of the paper is that this protocol is straight-forward. It doesn’t try to optimize on rounds and is meant to be easy to reason about. As the authors state, they were surprised that this algorithm hadn’t been proposed already because it is relatively simple.
Consensus Conundrum - James O’Beirne writes about the consensus process and how he thinks it’s operated on a benevolent dictator model for the last two soft forks, Segwit and Taproot. There’s a lot more here, including how there’s very little movement on the soft fork proposals currently, the process difference for consensus post-2021 and the need for some leadership. It’s a well-thought-out post and worth reading, even with a good deal of frustration coming through.
OP_NEXT recap - This is a Bitcoin scaling conference that took place in Boston at Fidelity’s offices last week. The post goes through what was discussed among the attendees and specifically what seems to be happening with OP_CTV and OP_CAT. The post claims that OP_CTV has “near universal” support and that OP_CAT functionality is doable without the op code. I’m skeptical of the first claim and intrigued by the second claim. If there are use-cases that require OP_CAT, they now have no excuse building something without it first.
Lightning
Yopaki Story - The story is told from the point-of-view of the Breez SDK creator, Roy Scheinfeld, but it’s well worth looking at. This is a lightning banking app that started in Mexico and has since expanded to 29 countries. The big takeaway for me is that banking services in developing countries is way worse than what we have in the west and adoption is just a decent UX away.
Pluggable Channel Factories - Zman has a proposal for standardizing channel factory generated channels, which to the rest of the lightning network look like 0-conf channels and the actual channel factory would need BOLT communication messages. Standardizing off-chain channels like this is a good idea and will hopefully lead to significant scaling.
LQwD - Apparently this is a publicly traded Lightning infrastructure company, but given that this is the first I’ve ever heard of them, color me a bit skeptical. They do have 136 BTC on their balance sheet, which is better than most public companies, but much like the 2017 era when penny stock companies were adding “blockchain” to their name to get a pump, this seems like a cynical play to get public investment. That said, if they make anything useful for the lightning network, I’ll take it all back.
Economics, Engineering, Etc.
Proto - On the heels of shutting down TBD, Block has a new initiative, Proto, which is meant to encapsulate their mining hardware, software and services. Their vision seems to be to decentralize mining and it really covers everything from ASIC design to developer tools. The reorganization makes sense and I hope to see open source consumer level miners soon.
Dual Money Era - River has released a paper in the “dual money era” to come. Essentially it will be a time when both Bitcoin and fiat money will be used for different purposes. I would claim that this is here already for a lot of Bitcoiners already, at least those that are all in. As financial institutions are forced to adapt, we will see some significant changes, especially given the huge amounts of rent-seeking in banking.
Nation-state Stacking - The story is about El Salvador and Bhutan, who have now reached $500M and $1.1B in Bitcoin holdings due to the recent price rise. But the real question is whether other countries are stacking given the anticipated Bitcoin Strategic Reserve bill. There seems to be momentum with Republican majorities in both houses of Congress and Trump mentioning it in interviews. If it looks to pass, the game theory is such that other nation states will want to front run US’s acquisition.
Quick Hits
MSTR BTC holdings - Are now greater than IBM and Nike’s cash holdings. I suspect they’ll be passing a lot more companies in the next 12 months.
Pennsylvania Strategic Reserve - Even the state of Pennsylvania may front run the US Bitcoin Strategic Reserve.
BitFinex Hacker gets 5 Years - That is, Lichenstein, not his more famous partner in crime, Razzlekahn, who’s getting sentenced next week.
States Sue Gary Gensler - It looks like years of stalling the Bitcoin ETF is catching up to the SEC Chairman.
Fiat delenda est.