Bitcoin Tech Talk #442
Interesting Stuff
Comfort Debases Community - The article introduced to me the concept of “third spaces” which are places that are *not* home or work. The argument in the article is that the more comfortable home is, or in the case of the proverbial cafeteria coder, how comfortable work is, the fewer third spaces we need and the less community we get to experience and the lonelier we get. In that sense, community is the result of discomfort and a wise community cultivates the right kind of discomfort so that communities can thrive. Comfort, like everything, has trade-offs, often giving people high-time-preference convenience at the cost of low-time-preference belonging.
The Value of Mercy - The essay is an analysis of Frodo Baggins’s failure at the end of the Lord of the Rings trilogy where he dramatically decides to take the ring for himself right as he’s about to complete his mission to destroy the ring. Even for me, who’s not a big LoTR fan, I valued the analysis of the moral landscape inherent in the story as revealed in this moment. There is a purpose to mercy and pity, particularly to such a wretched creature as Gollum, and the world is not a nihilistic power grab. I’ve always felt this especially with movies like Saving Private Ryan, which works great as drama, operates in a world of moral despair. Where mercy is rewarded with betrayal and death. Mercy and grace have a place, or there is no hope.
Marriage and Fertility - Readers of this newsletter know that fertility decline is one of my obsessions. This article points out the link between marriage and fertility rates, and how less of the former has led to less of the latter. In many ways, this link is obvious, but it’s become politically incorrect to say so. After all, lots of births these days are out of wedlock. But as they say in economics, behavior is more revealing than rhetoric. My thoughts after reading this article are that the fertility crisis is really a marriage crisis and that the marriage crisis is really a romance crisis. The commodification of dating has led to a over-quantification of romance, making dating a lot more like work with KPIs and other performance metrics. Fiat ruins dating, dating ruins marriages, marriages ruin fertility. QED.
Fiat College - There are lots of rants like this by professors of various subjects talking about how students have gotten lazier, less responsible and more addicted to their phones and computers. But this one caught something of a trend over the last 30 years that I found noteworthy. The main thing missing seems to be any excitement or curiosity about the subjects themselves, but as the professor here points out, the subject itself hasn’t changed, the kids have. I suspect part of it is the fertility crisis starting to show up, where the supply of colleges is now bigger than the demand and the average college from 30 years ago is getting worse students. But more than that, their character has been debased through the many high-time-preference choices available to them.
Mental Anguish of Blazing a Trail - The article is written by an academic that shows just how hard it was for him to forsake conformity in favor of blazing his own trail. As he points out, that instinct for conformity has real value in a communal setting and the pain you feel in bucking that trend exists to warn you of the dangers of going off-script. Yet in a world of mass propaganda, it’s the trailblazers that are the only hope of setting things right. Go too far and you get swallowed by the wilderness of sin and death (altcoins). Stay too near and you get debased along with the rest of civilization (fiat). Bitcoiners must walk the narrow trailblazing path in between.
What I'm up to
Bitcoin Matrix - I talked with Cedric Youngleman about the latest book, Fiat Ruins Everything and how it relates to what we’re seeing today. As I said on the podcast, if anything I wasn’t cynical enough in the book with all the DOGE revelations that are coming out regarding the corruption of government. I enjoyed talking to him and we discussed a lot about how fiat really does ruin everything.
Broken Incentives - I was on a panel at Thank God for Bitcoin about the broken incentives of the fiat system and what we should be doing as Christians to combat it. My main point was that Christians have a role to play in the Bitcoin community as the ones calling out both the fiat and altcoin corruption that sneaks in.
TGFB LV BBQ - I will be speaking at the Thank God for Bitcoin Friends and Family Barbecue in Las Vegas on May 27th. Tickets are limited and a portion of the proceeds will be going to Christian missions. Get your tickets at the link here.
Nostr Note of the Week
What I’m Promoting
Bitcoin
Stark Verifier for Symfony - Symfony is a Rust-like language that compiles to Simplicity, the assembly language that was designed for verifiability of smart contracts. This project is the actual verifier for Symfony that can prove whether a smart contract acts the way you expect it to. Bugs of one type or another have been the bane of Turing-complete smart contracts on Ethereum and other platforms, so a prover would seem essential for any smart contract language handling Bitcoin. Liquid deployment has not happened yet, but a project like this is excellent progress.
Consensus Cleanup - The BIP for the “Consensus Cleanup” proposal is finally a pull request and you can now see what’s included. There’s a simple fix for the time warp attack, a way to reduce the worst case block validation time and not require BIP-30 txid validation. The time warp attack is handled by requiring that the last block of a difficulty epoch to have a greater time than the first block. The BIP30 TXID validation no longer needs to happen since BIP34 was implemented years ago, so that can be entirely skipped. Overall, it’s a nice clean proposal, without all the headaches of new OP codes.
BitKey Inheritance Deep Dive - The BitKey inheritance process is detailed in this blog post, where they go through the necessary setup and the waiting period required before the beneficiary can claim the funds. The setup is such that the beneficiary requires the BitKey hardware, among other things. While the setup should work well if you have a Bitcoin-aware beneficiary, I suspect that a lot of Bitcoiners have inheritors that won’t be as into Bitcoin as they are. As one estate lawyer told me, he’s only seen one instance where a key to a safety deposit box was produced by an heir that it was entrusted to. For those people I would think they’d need a different setup.
Lightning
Lightning for Casinos - Bobby Shell makes the case for Casinos adopting Lightning as the on-chain deposits are not quick enough, particularly with the risk of 0-conf RBF. This is a growing segment of casinos already and in a sense, these are probably fairer games than the memecoin/altcoin industry which is well known for their premined pump-and-dump scamming. The crossover seems to be growing, though it’s a bit more altcoin-heavy, as you might expect.
Spam Prevention - A paper by John Law looks at how to prevent spam on the Lightning Network. Spam is not as universal a problem on Lightning as there’s no blockchain that everyone has to keep track of, but it’s still a problem if it affects nodes on the network, particularly the ones that are well connected. The main mechanism is punishing griefing attacks, which are a well-known spam mechanism by collecting upfront and hold fees, which are new. As the network evolves and more sophisticated attacks come into the network, measures like this will surely become more considered among bigger lightning hubs.
Budget Sweeping - Lightning nodes sometimes go offline and remaining channel balances have to be settled on-chain. But when to do it and whether it makes economic sense to settle it is not an easy question to answer. LND now has a feature to algorithmically attempt this calculation by sweeping for channels based on deadlines. There are bound to be cases that this algorithm doesn’t catch, but it’s an excellent start to automating some of these annoying edge cases in lightning channel management.
Economics, Engineering, Etc.
Gamestop - The memestock company will start adding BTC as a treasury reserve asset, raising $1.3B to do so. The company, which accumulated a lot of cash during its WallStreetBets-induced stock run looks to be leveraging their position for a more permanent place in the casual investors’ psyches. In a post-modern investing world, name brand recognition has a lot of value, and if it can also provide returns, I can imagine this kind of Bitcoin-ization (as opposed to fiat financialization) of public companies becoming more frequent.
Mining Economics - CoinMetrics has a long article with lots of charts and graphs, mostly around Bitcoin mining. The main takeaway for me is that the network once again has adjusted to the halving relatively quickly and despite the changing conditions with regard to fees, namely that they’ve gotten much lower, the network continues to run, miners continue to use more efficient equipment and users continue to get their transactions in. All without any central controller or new network policy! (Yes, I did get annoyed at the subtle mining death spiral talk, which is a way to push for centralization)
Fiat vs Bitcoin - For those of us that have been in this space for a while, it’s hard to remember what normies are thinking about with respect to Bitcoin. This article at the Blink blog is a good case in point. It makes the simple, but profound argument for why Bitcoin is scarce with its 21 million limit and how that’s different than fiat money which is expanding constantly. In my experience orange-pilling people this and the unconfiscatability arguments (usually with examples around Canadian truckers or human rights activists) are the ones that help people “get it” the most.
Quick Hits
6911 BTC - Another casual $584M spent by Strategy on BTC accumulation to take them to 500k BTC total in their reserve.
150 BTC - That’s MetaPlanet, the Japanese company who have now accumulated 3350 BTC for their reserve.
IMF BPM7 - The IMF publication Integrated Balance of Payments and International Investment Positions Manual, Seventh Edition now includes a section on Bitcoin.
BTC ETP in EUR - Following its success of the Bitcoin ETF in the US, Blackrock is launching a similar product in Europe under the ticker IBIT.
Fiat delenda est.