Bitcoin Tech Talk #430
Interesting Stuff
The State of Science - The article makes a pretty salient point. We’re not making progress in a lot of scientific areas because we have gatekeepers that demand a certain point of view first. That is, no breakthroughs are made because the funders of science demand that before you experiment, that your experiment should be within some norms. Yet, if you think about it, real breakthroughs are indistinguishable from crazy notions before they’re proven. But given the gatekeeping system of funding we have, the crazy ideas don’t get tested and we get left with whatever is considered orthodox. Fiat money, in other words, has ruined science.
FBI, the US KGB - It’s easy to believe that the FBI began as a mostly benevolent organization that has only recently been corrupted, but as this article shows, that wasn’t the case. In fact, Teddy Roosevelt created the organization with the idea of it being a personal secret police force. While the FBI was created before the Fed, it did greatly expand afterwards, particularly under the leadership of J. Edgar Hoover. The programs it ran (and continues to run) are truly horrifying and morally speaking, not easily distinguishable from the notorious KGB. It’s a fiat money funded domestic surveillance program and the whole thing needs to go.
Disillusioned Progress - The article is about the death of the techno-optimism that was the norm in the first half of the 20th century. So many people were looking forward to the future back then, with the year 2000 as the destination. Yet something went sideways, and the article explains why. Most people reading this would correctly diagnose that fiat money is the culprit, but there’s something more in this article that I found insightful. Specifically, these visions of the future were very much centralized and required central planning. But as the article points out, decentralized progress is a lot more humane and satisfying.
Christian Agency - The article is about a pastor that had a fall from grace, where he was exposed for his sexual affairs, which was obviously devastating not just to his family, but to the church community he was pastoring. What was interesting to me about the article was the analysis of the disgraced pastor’s reaction. He was essentially claiming that his misdeeds were something he got tripped up in, something like a natural disaster that could have happened to anyone. In other words, he denied his own agency. I bring this up because this is a very fiat mentality where responsibility is someone else’s but the glory is all yours, and as the article rightly points out, it is not Christian at all and why the article resonated with me in calling that out. In that vein, I suspect that the agency and responsibility aspect are also what makes Christianity attractive to Bitcoiners.
Modern Parenting Failure - The article is written by a young woman who decries the lack of protection that adults are supposed to provide. Conventional morality denies almost any right of parents to impose on a child’s freedom, and the consequences are that the children feel deeply untethered, leading to an anxious-laden life. The longing for natural authority figures is a deep one and unfortunately, we’re in a society with a very unnatural authority figure in the government, whose oppression is deflected by claiming oppression from everywhere but it. The dearth of adults is also probably why we also have lowering birthrates.
What I'm up to
You’re The Voice - This is one of those interviews that felt just as much like me asking as answering. And that’s because Efrat is Israeli and served in the IDF near the Gaza border. Among other things, she’s pretty suspicious of the narrative that the government has given and decries the media blackout in Israel of the Palestinian suffering. Anyway, we talked about Bitcoin, virtue, winning and much more. It was originally supposed to be 15 minutes, but we kept going, so it ended up as a full episode.
PlanB SV - I’ll be in San Salvador at the end of the month for this conference. I’m looking forward to seeing what progress the country has made. Tickets are relatively cheap, and if you’ve ever wanted to visit, I would encourage you to come.
Fiat Ruins Everything - The book was not available for a bit because I have bought back the rights from Bitcoin Magazine. I’ve dropped the price a bit to celebrate, particularly for the e-book, which is now at $9.99. There will be a new audiobook coming in the next few weeks as well. There’s a hardcover option (with the awesome cover) that will be available, which previously wasn’t available.
Nostr Note of the Week
What I’m Promoting
Bitcoin
2024 Bitcoin Stats - Jameson Lopp has written a post summarizing the various different metrics that he keeps track of and how they did in 2024. Perhaps the most surprising statistic is the giant jump in OP_RETURN outputs, almost entirely due to the Runes stuff that started at the halving. The other one that’s interesting is the fact that the average on-chain transaction is now $62, up from $15 a year ago. This is despite all the ordinals stuff whose transactions are relatively small UTXOs. This probably indicates lightning uptake for low-value transactions.
Jade Plus - The original Jade is an interesting hardware wallet, which works largely with Blockstream Green, but had some trouble with the small screen and hard to read QR code. They’ve fixed a lot of these problems, it looks like in their new model, that’s bigger and has better processing. Secureboot, exfil and SD card inputs are now part of the system, and it should make for a useful air gapped hardware wallet. I eagerly look forward to the units as they start shipping.
ChillDKG - This is a BIP for the distributed key generation part of the FROST protocol (chill, get it?) Unlike MuSig variants, you cannot just bring a private key to the quorum and have it all work, as the keys have to be on points on the same polynomial for the math to work. If you had a trusted dealer setup, where one trusted computer sends everyone their keys, that would make the key generation easy, but unfortunately, that’s a huge vulnerability. Distributed key generation is very tricky as losing any private key material threatens not just loss of one key, but possibly the group private key. The protocol is meant to mitigate for all the possible attacks and as such, is still a work in progress.
Lightning
Boltz Atomic Swaps - This is a new service by Boltz, kind of like Shapeshift, but instead of swapping between different cryptocurrencies, it’s swapping between different Bitcoin layers. So Bitcoin on-chain can be swapped for lightning which can be swapped for Liquid BTC and so on and done so in a cryptographically secure way where both transactions happen or neither. It’s a really interesting idea, particularly as there’s no KYC involved and introduces new ways to anonymize by transferring between layers. Submarine swaps did this for on-chain and lightning, but this is cleaner and adds a lot more fungibility between the different layers.
Lightning Incentives - The article is about a study by Newcastle University regarding how micropayments helped discourse be more friendly and engaging on a Q&A site. The internet is generally considered a toxic place but as I’ve noted in my Nostr Note of the week above, small monetary incentives really do seem to have a cumulative effect on individual behavior. What’s been missing is that layer to do micropayments, and as the article points out, lightning was what allowed the researchers to experiment with that.
HTLCs - This is a post describing and explaining what HTLCs are and how they relate to the Lightning network. In particular, there’s a very useful explanation of how HTLCs can fail to resolve and what the consequences and mitigations for them are. Of course, if we move to PTLCs, we’ll have to have more articles of this nature, but in the meantime, it’s a good thing to learn what they are and how they work if you’re a lightning developer.
Economics, Engineering, Etc.
Last Minute Rule Changes - As with all presidential administration changes, the Biden administration seems to be setting up some rules to make it harder for the next administration to do what they disagree with. As the current administration is relatively crypto-hostile, they have a few rules that they issued recently through the regulatory regime which will undoubtedly be used as bargaining chips going forward. The most interesting ones are around “DeFi” which has central points of failure and are vulnerable to these regulations. While the broader “crypto” industry will be sweating bullets over these changes, Bitcoiners will mostly be stacking quietly.
Bitcoin Treasury - The Blink blog has a post on what a Bitcoin treasury is and what the tricky decisions are. As they point out, the corporations that are keeping their treasuries in cash or T-bills are losing out to inflation and over time, that loss can be substantial. Keeping treasuries in Bitcoin has led to outsized returns and many such businesses have been doing fantastic just on the strength of the Bitcoin balance alone. The rational long-term move is to keep significant savings in Bitcoin, which naturally acts as pressure on the dollar. 2024 was a pretty big year for this, but I suspect 2025 will make the past year look like child’s play.
Amir Taaki - If you’re not familiar with this name, this is the article for you. He was an influential developer (he wrote BIP0001 which laid out the original bitcoin improvement process) back in the early days and then stepped out to fight for who he thought was right in the Middle East during the mid 2010’s. He’s recently begun to criticize Bitcoin Core, which is why the blog post was written, and the blog is speculation about how Bitcoin may have evolved differently had he not taken his break. He, like many original cypherpunks, are generally disappointed in the lack of Bitcoin’s usage as a method of payment, particularly private payments, and I suspect that’s why he’s been criticizing Bitcoin recently. I personally don’t think he would have had much influence as he was dabbling a lot in the privacy coins in the mid 2010’s before he took his years-long sabbatical.
Quick Hits
2138 BTC - Small potatoes compared to previous weeks, but MSTR is anything if consistent.
Ideological Rugpull - BitcoinMechanic takes Saylor to task for his crypto-cheerleading.
$30M - That’s how much Fold raised in a convertible note, notably backed by the Bitcoin on their balance sheet.
Do Kwon Trial - Is going to happen it looks like. NY has charged him on 9 counts of securities fraud for his role in Luna.
Fiat delenda est.