Bitcoin Tech Talk #438
Interesting Stuff
No Tech is Inevitable - You would think that innovation would be less subject to the gaslighting that we get in politics, but as this article shows, that is wrong. Scott Locklin shows here how so many hyped technologies come to nothing, and are a form of mass psychosis. From Itanium to Underwater Cities, he shows that more often than not, the popular narrative that “there’s a lot of smart people working on X, therefore there must be something there” is a stupid metric by which to judge a technology’s potential. We’ve certainly seen the same thing play out in “crypto” with the hype around blockchain. Fiat systems are ruining innovation.
Getting Poorer - The constant complaint among millenials and gen Z is how they can’t afford homes and indeed, this is true. The income they make versus the price of the home is out of whack with historical norms, but as this article points out, the houses aren’t necessarily getting more expensive, as much as the people have been getting poorer. When measured in gold, housing costs have gone down (over 6kg of gold per house to 5.8kg). What’s much more significant is that wages have gone down significantly from 1.4g of gold per hour to 0.1g of gold per hour. In other words, we have a significant devaluation of labor, which, sadly, is an all-too-predictable result of fiat money expansion.
Inevitable Bureaucratic Bloat - We all know that bureaucracy grows uncontrollably, especially in a fiat system, but what this article lays out is exactly how such a bureaucracy grows and the incentives that lead to its dysfunction. As the article points out, without the profit motive the desires of bureaucrats becomes power and to get more power, they tend to hire people under them. When power becomes the primary objective, efficiency goes out the window, as having more people that you can command matters much more. Indeed, this seems to be why what DOGE is finding is much worse than what we imagined bureaucracy to be.
Happiness - We think that happiness is what we want, that this is the end goal of humanity. Indeed, the pursuit of it is enshrined in the Declaration of Independence. Yet, there’s something shallow and unsatisfying about happiness, and something fake and insincere about it and that’s what this blogpost, indeed, the author’s whole blog, in many ways is about. As he points out, the demonstrated behavior of people is often antithetical to their happiness, so what are they actually chasing? As he points out, what we chase is not happiness, but status, and in many, perhaps most, status games, even those at the top are not very happy. Happiness, in other words, is the mirage in front of what we actually pursue.
The End of Weak Gods - The article is beautifully written and well worth reading to the end. It’s about what drives our culture, the axioms, the presuppositions, the teleology of the post-WW2 world order. And indeed how the Hitler-as-devil, open society technocracy has shown itself not just to be inadequate, but deeply corrupt and incoherent. The weak gods that are described essentially sound like the wizard behind the curtain, the old man who rules through smoke and mirrors, a representation, as it were, of fiat money. We are entering an era of strong gods, and I suspect that corresponds with the return of strong money.
What I'm up to
BTC Sessions - I was on this weekly show with Dr. Shawn Baker and Rob Wallace. It was supposed to be a show with all carnivores, but Dr. Ken Berry dropped out last minute. We talked about the recent downturn in price, the memecoin phenomenon and Ethereum’s depressed community as well as meat, health, Ron Paul and a bunch of other things. It’s always a fun show to talk about Bitcoin and all the things that go along with it.
Programming Blockchain - Last chance to get the early bird rate as rates go up tomorrow! We are holding this seminar in Austin, TX March 31-April 1. If you’re interested in providing or getting a scholarship, please reply to this email.
Nostr Note of the Week
What I’m Promoting
Bitcoin
On Blockspace - Jameson Lopp writes about a topic that hasn’t been discussed in a while, and that of block sizes. This was, of course, a huge argument during the Segwit wars of 2017, and Jameson does a good job summarizing the various proposals for increasing block size that were made at that time. He considers the various tradeoffs and comes to the conclusion that some sort of dynamic block sizing would make sense. I personally don’t think this is workable and that consensus around something like this is very unlikely, akin to changing the hours in a day based on how busy we all are, but it is good to see what the constraints and tradeoffs are.
Tropic01 by Tropic Square - Hardware wallets until now have used closed-source secure elements or no secure element at all. Neither are particularly great and this is a project that’s meant to change the game as an open-source secure element. It’s still in its early stages, but it supports the P-256 curve signing, which I believe means the secp256k1 curve. What would be really nice is if the chip can be used to build your own hardware wallet with commodity parts. I’m sure there would be some grants available for anyone attempting this.
BitKey Inheritance - The hardware wallet maker has a solution for inheritance that involves a 6-month wait and the beneficiary can decrypt the encrypted keys which will unlock the funds. The designated beneficiary also has to be a BitKey holder and fairly knowledgeable about how Bitcoin works, which in my experience isn’t common. That said, more ideas to solve this inheritance problem are welcome and the market could definitely use more competition.
Lightning
Tollgate - Ever since the idea of Lightning began, a pay-as-you-go service was the killer app people dreamed of. We now have a wifi network pay-as-you-go software for your community. It’s using Ecash and Lightning for the transactions. I can see this being especially useful in remote places where someone can set up Starlink and this service and not even be around. Incentivizing setting up connections to the internet is likely to be more effective, than, say government rural internet connection programs.
CowBolt - This is an app to split the costs of various activities using Lightning or Liquid. The idea is that when you go on vacation or do a group activity and need to split costs, the calculation is pretty thorny. This is an app to make that simple. Most of the time, it’s meals at restaurants or something similar where everyone gets a different level of service, so splitting tends to be pretty difficult and the one that fronts the money gets screwed. I’m not sure if that problem is solved by this app, but if it does, it would indeed be something very useful.
Auto-backup of LND - Channel backups are critical for lightning usage as a data failure can result in a loss of your funds. This is a post on how to automatically backup your channel state to Amazon S3 using Python. The post is useful not necessarily for actually backing up in the manner prescribed, but in learning the various tools involved in creating an automated backup, like making sure the backup is run regularly.
Economics, Engineering, Etc.
Hardening against Lazarus - The article from SlowMist are recommendations to not get hacked by the North Korean hacking group. It seems as if they’re really good at posing as either application developers or traders that want help from employees of an exchange which are then used to compromise their computers, leading to a compromise of the network, ultimately leading to a transfer of funds. They seem to have done this often enough that there are patterns and particular types of files that are used for malware execution. Worth reading and implementing for any Bitcoin business.
Crypto Reserve - Trump tweets, and the Crypto world reacts. The tokens he referenced in this Truth Social post, SOL, ADA and XRP shot up way more than the others, showing that there’s certainly a lot of memecoin energy left. Either this is a way to get into better negotiating position or just plain stupidity from David Sachs (a known SOL holder). My gut feeling is that the push back will be against these altcoins and XRP in particular will draw a ton of criticism, which will result in a Bitcoin-only reserve.
No Jobs - This is a very common complaint, that there are no good Bitcoin jobs and that the few that exist have very high requirements or don’t pay very well or are very uncertain. I get the sentiment. I’ve had many such jobs and I can tell you that they’re not that different than the typical fiat job (startup, big company, etc). But then, the whole debt-financed model is what fiat companies run on and Bitcoin companies are no real exception, almost all using VC funding of some type. Is it any wonder then that they share so many traits as fiat jobs? If you really want to work in Bitcoin, start a normal small business and add Bitcoin to it.
Quick Hits
Free Market Bitcoin - John Carvalho pleads with Michael Saylor to invest more in the actual ecosystem rather than using Bitcoin as a speculative vehicle.
River Report - River has a report on what’s driving Bitcoin adoption this year.
ByBit Hack Report - The interim report on the details of the $1.4B hack of the exchange is now out.
Visa as L2 - Re-thinking L2s and seeing if we can plug into the already existing infrastructure of Visa.
Fiat delenda est.