Bitcoin Tech Talk #425
Interesting Stuff
Gambling is Decivilizing - The article is about Sports Gambling in particular, but I suspect that the obvious detrimental effects can be assigned to gambling in general. The article cites three primary evil results of gambling, primarily bankruptcies, reduced savings and domestic violence, all of which increase society-wide. Sure, people have more fun, but these are pretty serious drawbacks and should thus be seen as more of the scourge that it is. Altcoins and their many euphemisms all play on this dynamic and I also suspect that it’s as or more detrimental to people as sports gambling is.
Appealing to Men - The article is specifically talking about the Orthodox church and why men love it and I have to say after reading it, that I get its appeal. Men want a challenge and a purpose and the way that church is framed is very much in those terms. This was in stark contrast to the ad that the pro-Kamala Harris ad pushed out a month ago to “appeal to men” which was basically saying, if you vote for Trump, he’ll take away your porn. Appealing to a higher sense of self is effective, and appealing to an infantile sense of self is cringe.
Envy and Porn - Speaking of which, this is an article summarizing the once popular blogger, The Last Psychiatrist’s new book on the topic. I haven’t read the book, so the summary was very helpful because if you’ve read anything by this guy, you know the takes are not going to be conventional. And indeed, the quotes from the book are indeed mind-bending. His main thesis is that the heavy use of porn by men is from envy, not lust. The zero-sum game mentality of envy that he touches on which is common in a fiat society and it wouldn’t surprise me to find out that this is one of the drivers of porn consumption.
Evidence of MOND - MOND, or Modified Newtonian Dynamics is a theory of gravity that explains a lot of what we observe without having to add fudge factors like “dark matter” or “dark energy.” Apparently, there’s more evidence of its truthfulness in some observations made by the James Webb space telescope as is asserted in the article. One of the main difficulties of MOND is that it’s hard to reconcile with general relativity, so either a new theory combining them or one or both theories must be discarded. It’s a sad testament that this theory has been floating around for 40 years and yet it’s treated like a renegade theory by academia. But as I’ve written in Fiat Ruins Everything, academia is full of rent-seekers, so you can’t expect them to investigate anything that would threaten their position, or even show them that they might have been wrong.
What I'm up to
Virtues and Vices of Bitcoin - My talk from Lugano is up and it’s all about virtue and vice and how they apply to Bitcoin. My talk took the 4 cardinal virtues and the 3 theological virtues and analyzed them as the moderation between two extremes. Despair and Fantasy being the extremes of Hope, for example. The talk was meant to enlighten why people don’t get into Bitcoin or go into altcoins which is where all the vices at the extremes end up.
Plan B Forum San Salvador - I will be speaking at this conference on January 30-31. We’re working to see if we can have something similar to the ossification debate that I did with Jameson in Lugano, though it would instead be a dialog with the audience. Anyway, it’s an amazing time of year to visit El Salvador, so if you can come, I would encourage it.
Go Blue!
Nostr Note of the Week
What I’m Promoting
Bitcoin
Earmarks - AJ Towns has a post on Delving Bitcoin with a way to share UTXOs using the Taproot Script Tree to do so. The main idea is that a single Taproot UTXO can have many owners that have earmarked their portion of the UTXO for one reason or another (e.g. Lightning Channel) and can update their portion unilaterally. Similarly, the other members can kick out a mal-behaving sharer along with their earmark. It’s an interesting approach to scaling and has been proposed in many covenant proposals, but this one makes clear what each person has and would be doing.
Trustless eCash - The main criticism of eCash protocols has been the trust you have to put into the minter(s) of the eCash. This protocol, using a modified Spillman channel, makes the eCash transfer way less fraught with custody risk by giving the user a unilateral exit transaction. That is, some way to recover the funds if the eCash mint goes under. Similarly, the eCash mint gets the money the customer has spent with their own unilateral exit transaction. The payment channel concept is similar to Lightning except the use of an eCash mint as the counterparty. Given the privacy benefits, it seems to check a lot of the boxes of having private, self-custodial, scalable instantaneous payments on Bitcoin.
UnFE Covenants - A new paper by OP_CTV proposer, Jeremy Rubin aims to make covenants available on Bitcoin without a soft-fork. He actually proposed something similar in the past using Functional Encryption (FE), which unfortunately does not have the sufficient cryptographic primitives to work. This paper tries to get the best of the FE approach, without actually needing the cryptographic proof by using a BitVM incentive structure. The details are laid out in the paper, but the main vulnerability seems to be in having an oracle.
Lightning
Node Selection Algorithm Paper - A new paper claims a better routing algorithm that optimizes the combinatorial node selection and resource allocation. There does seem to be a fairly difficult problem of optimizing when there are many routes to another node and this paper has a useful framework around deep reinforcement learning that looks pretty promising. I’m sure with $500M or so locked in lightning and growing, that the fees routing nodes can collect will optimize around algorithms such as this.
Lightning Channel Optimization - For routing nodes (or in the article’s parlance, fee farms), there are a few keys to maximize the fees collected and this article goes over the main considerations. Among them are setting a competitive fee, opening channels in such a way that your node is reasonably connected and balancing channels in a cost-efficient way. Good resource if you’re earning fees with your node.
402 Payment Required - This has been decades in the making but we have an implementation of 402 payment required error code for web pages that uses lightning (among many other payment methods). The link is to a proof of concept that allows users to access a site after a payment has been made. Most web pages that run on something like this require a subscription, so something a bit more granular would be more welcome.
Economics, Engineering, Etc.
Another $5.4B - Michael Saylor keeps juicing his balance sheet with another round of Bitcoin purchases funded through a convertible bond. The amounts are getting a bit unreal at this point as the $5.4B bought 55,000 BTC. But Saylor’s not the only one we have Semler Scientific which bought about 300 BTC using at-the-money (ATM) offering of their stock. This so-called infinite money glitch is starting to pick up steam with 60 public companies now that have Bitcoin on their balance sheets which account for about 2% of total Bitcoin supply.
The Libra Story - David Marcus was president of PayPal and then went onto Facebook to make something even more scalable a reality, Libra. But the story he tells here about how and why it died sounds like death by a thousand cuts at first and then a sniper rifle to the head. Essentially the political players decided to put pressure on the banks to make this whole thing go away. This is why regulatory compliance is never enough. If you’re unpopular (as Facebook was and still is), then you can’t comply your way to innovation. His experience is what made him start LightSpark, a Bitcoin company.
Tornado Cash Sanction Overturned - An appeals court ruled that the charging of the Tornado Cash founders by OFAC was overstepping its bounds. This was always a specious case as charging the protocol developer of money laundering. The basis of the sanctions were based on the theory that the smart contract itself was property, which the court rejected. This is part of a wider attack on the industry by the Biden Department of Justice, which the wider industry has fought vigorously the past few years. While the victory here is nice for privacy advocates, it does highlight that any centralization point will be used to choke funds.
Quick Hits
Rent a Volcano - El Salvador is talking about a program where you can rent the energy from a volcano, ostensibly for Bitcoin mining.
Rumble has a BTC Treasury - The YouTube competitor looks to have $20M worth of BTC in their treasury going forward.
Justin Sun eats $6.2M Banana - A post-modern art piece (banana duct-taped to a wall) was bought by the Tron founder for $6.2M and subsequently eaten. I can think of no better way to describe the stupidity of fiat money.
CSW appeal rejected - He apparently can’t appeal anymore because he lies so much.
Treasure Hunt - There’s a guy that hid some loot boxes on public property worth $2-3M which may contain Bitcoin.
Fiat delenda est.