Bitcoin Tech Talk #432
Interesting Stuff
Touching Grass - I was moved by this article about experiencing the real and how so much of modern life, represented by the cell phone is less and less real. The experience of touching grass goes to a picture or video of touching grass to an AI representation to a concept to a meme. The lack of distinction between what’s real and what’s represented has kept us from really engaging in the present, feeling and enjoying what reality is. That same engagement with the real is also prevented by fiat money. It’s also undergone this transformation from something real (gold) to something representational (gold-backed dollar) to something meaningless (fiat money). There’s something fundamentally lost in that transition and it’s that ubiquitous unreality which oppresses our humanity.
Spreadsheet Egregore - Egregore is not a concept I was familiar with before this article, but the basic idea is that it’s a collective spirit of a group not just in an abstract sense, but in almost a demonic sense. You may be familiar with Lily Phillips, the OnlyFans model that made some noise by having sex with 100 men in 24 hours. What this article does is it looks at what led her to that decision, and as the author points out, it wasn’t so much that she’s sex-crazed or because someone was paying her a lot of money. It was because of her fans. The spreadsheet egregore, as it were. She was obligated by the soulless logic of homo economicus, in other words. I suspect that much of the really crass behavior we see is really due to that fiat logic which has pervaded fiat systems.
WNBA Idiocy - The league has a new star in Caitlin Clark and it should be a great time for all the players, as there’s a lot more attention and hence, more money flowing into the league than ever. But such is not the case because, as the article points out, it’s been essentially a subsidized league, losing tens of millions of dollars a year for decades now. As a result, you have a lot of upset players and coaches and owners, who see her as disturbing their rent-seeking than making their product better by drawing more fans. Just goes to show that even in a very obviously meritorious endeavor like sports, you can still have fiat stupidity enter in when you remove market incentives.
Real Gandhi - History is written by the winners and indeed that’s a hard lesson to learn because there are so many ways by which we have been indoctrinated into believing something. Such is the story of Gandhi, which is a bit jarring, given how he’s been made into a secular saint over the years. So reading this piece is going to be a bit of an eye opener if you still hold that view. But as with the news, the point of history isn’t to be accurate, as much as it is to manipulate us. Another instance of fiat ruining everything.
Fertility Rates Among Christians - Some surprising data about who’s having more babies among different religious groups. As the article points out, the more separate a group is from the dominant culture, the more babies they have. Mainline protestants are the least fertile and the Amish and Orthodox Jews are the most fertile. I don’t have any surveys to confirm this, but anecdotally, Bitcoiners are much more likely to have lots of kids, so this would mean Bitcoiners are in many ways pretty radical and distinct from the surrounding culture.
What I'm up to
Brian Paik - Part 2 of the interview I had with Brian is up. We talked about ETFs, rehypothecation, stablecoins and why Tether looks poised to win that battle. We talked about whether it’s better to have your dollars in a bank account or in Tether and I can see the argument for having it in Tether as it’s easier to transfer peer-to-peer. Obviously, cash is preferable, but there’s something to be said about what’s essentially a bank not fractionally reserving their dollars.
Hardcover of Fiat Ruins Everything - I got some complaints about the fact that the original cloth cover didn’t have the great cover that the paperback did, so now that I have the rights, the hard cover is now available! I’m working on getting the audiobook out again, but unfortunately, the AI generated audio that I made goes against the ToS for audible. I will have it on Google Play Store and a few other places, though.
Plan B SV - Not much time left until this conference in San Salvador. I’ll be around and enjoying not just the people, but the weather, food and scenery.
Nostr Note of the Week
What I’m Promoting
Bitcoin
Bitcoin Safe - This is a Bitcoin wallet that has the usual useful tooling like multisig, hardware wallet support and backups. What’s different about this wallet is its leveraging of Nostr. For example, you can sync and label various transactions on different devices. So a watch-only wallet can get updated on new transactions and their labels. In addition, you can coordinate multisig through Nostr as well. This is a huge step for any sort of collaborative custody as it makes doing so in a distributed environment a lot more feasible. I hope to see this type of Nostr usage in Bitcoin wallets to become standard.
Clavis - This is currently a prototype in fundraising mode for a hardware wallet. The architecture of the system is what caught my eye. Instead of the wallet being on the phone, which has a large attack surface, they have, as most hardware wallets do, a separate device for signing. But in addition to the separate device, there’s also an NFC card that holds the private key for the “savings” account. Presumably, this is the maximum security level. It also uses NFC extensively, for communication between the phone and the hardware wallet, but also between the hardware wallet and the NFC card that holds the savings private key. I’ll be keeping my eye on this one as the separation of savings vs spending is not something I’ve seen before.
f2pool OFAC compliance - 0xB10C has been watching the mempool and seeing. which blocks fail to contain economically rational transactions from OFAC-sanctioned addresses and concludes that f2pool is doing some filtering. So far, they’re the only pool, but if the economic costs of non-compliance are higher than the fees, then the economically rational thing to do is to exclude such transactions. That said, this is the most obvious instance of fungibility attacks and given that it’s so obvious and avoidable, I can’t imagine it being something that ultimately gains traction as a government tool.
Lightning
Monthly Budgeting - Alby Hub showcases a neat little tool for budgeting, which does all the annoying accounting categorizations that you don’t want to do. So if you allocate 100,000 sats for eating out, then when you spend on eating, it withdraws from that budget line item. This is one of the benefits of a digitized money because it lets you see at a macro level where your money is going without having to compile the data after the fact. I suspect that the automatic allocation and strategic level overviews will be some of the killer apps that will truly make life on a Bitcoin standard much more harmonious with our values.
JIT Channels - The link goes to the details of BLIP-0052, which is the just-in-time channels for new merchants to lightning. The main idea is that the fees for establishing the channel are deducted from the user’s first received to make the experience smoother. The main requirement is a trusted LSP for the merchant which facilitates the payment. The onboarding experience for merchants is pretty hard, so more ideas like this will need to be implemented to make it easier for them.
Eggstr - The lightning node as a service provider has been around for a while now and cloud hosting services have been around even longer. This is a service that combines the two by letting you run a lightning node and nostr relays on their servers for a fixed price per month on your own domain. This presumably means that you would get your own lightning address among other things and though it’s not as good as running your own server at home, it’s a pretty good start.
Economics, Engineering, Etc.
Trump Bitcoin Policy? - This is a PDF going around that was created by the Bitcoin Policy Institute for Scott Bessent, the incoming Treasury Secretary. The report lobbies for a 1 million Bitcoin strategic reserve and makes arguments about its usefulness for global influence. The game theory of Bitcoin has been obvious to anyone that’s been in this space for even a few months, and indeed, that’s what the report essentially seems to be saying. Getting in early is going to be way better for the US than getting in late. We don’t know if any of this will become policy, but it’s good to know how industry people appeal to the people that are making these decisions.
Bitcoin-based Life Insurance - The idea that your life insurance policy can be denominated in Bitcoin would have seemed crazy a few years ago, but here we are. What’s unusual is that you can get a loan against the Bitcoin that’s in your payout. This seems to be much more tax advantaged and would be a big incentive for people to sign up. Of course, like anyone with custody of Bitcoin, it’s possible they rug, but instead of just holding your money, they have clear instructions and force of law to do what you want them to do with it.
TrumpCoin - I don’t usually write about altcoins, but this one is closely related to the incoming president and it’s probably the most “successful” memecoin launch of all time, hitting #14 in market cap terms a few days after its launch. As the article points out, Trump has branded lots of things, from sneakers to watches to bibles, but this one is by far the biggest cash grab. I get that he likes monetizing his fame, but essentially creating your own personal central bank is the wrong way to do it. What’s worse he’s already apparently pulled out a half billion.
Quick Hits
2530 BTC - Another week, another stack for MSTR.
Bitcoin Etiquette - How to defend against the envy that Bitcoiners will face in the coming years.
Gensler bends the knee - I personally think he’s been a fan of Bitcoin the whole time, but still…
Coinbase Bitcoin Loans - It’s not really Bitcoin.
Fiat delenda est.