Bitcoin Tech Talk #448
Interesting Stuff
Social Consequences of Welfare - Whenever a government can print its own money, a welfare state is sure to follow. And where there’s a welfare state, there are sure to be a lot of unintended consequences. This article points out the many different second order social effects, including crime, unemployment, hedonism and much more. Crime is a particularly unintuitive one, since presumably, if you are having your needs met, you would be less incentivized to commit crime. Yet in welfare states, getting some form of welfare reduces the need to work or train, and that in turn produces more crime. It turns out that idle hands are the devil’s playground and bored people are more tempted by crime than people who work or study.
Puritans - The article is a bit of a review of a book and also a bit of commentary. The book is about the Puritans, the original Pilgrims that made their way to America and are perhaps best known for instituting Thanksgiving. As the article takes pains to point out, almost everything we think of when we think of Puritans is wrong. They wore colorful clothes, they were deep thinkers and generally very forgiving. What was surprising to me is how little they followed tradition and thought things through from first principles, and devoting a large amount of time to family not because they were told to, but because they saw it as a life mission. The whole thing is worth reading and the book being reviewed is going on my reading list. I suspect that Bitcoin would have appealed to these people.
Equal Value - The article is about a trend in the UK that lets entire classes of work to be classified as equal value to another class of work, called equal value. The idea is that garbage men and the secretaries that work for a garbage disposal firm are performing different functions, but if they’re determined to have equal value, the people working those need to be paid the same. Obviously, this is Marxist labor-theory-of-value nonsense, but it’s unfortunately the law in the UK and the consequences a giant mess, as you might expect. One particular consequence has been that there’s now a strike in Birmingham where garbage collectors are protesting the lowering of their wages, making the city reek of garbage. “Discrimination” and political reparations are really getting out of hand.
Organization Feminization - It’s a common complaint that society has feminized a lot during the fiat money era. A lot of articles have been written about the lack of male-only spaces and the feminization of almost all organizations, but this is the first article that I’ve seen that describes what that process looks like. The author takes a few of the experiences he’s had and makes a bit of a generalization about how they became essentially female-dominated spaces. The article is if anything useful to understand how organizational dynamics change once the purpose goes from things to people, which makes sense since men are more interested in things and women in people. It does track quite a bit with the fiat-ization of everything, which also increases politics in every organization.
$21T Bunker? - Perhaps one of the craziest stories I’ve heard in a while is this allegation that the government has been building a huge underground bunker for the past 27 years. Supposedly, there’s about that much of a hole in the collective government budgets of those years that is roughly the same and there’s 170 bases that have been built. What’s particularly crazy is that there’s a former housing official that’s making these allegations, no less! We know that the government is wasteful, but this just seems so crazy and large that it’s hard to believe no one would know about it. Yet, maybe they have blown the whistle on this, only to be dismissed by the media.
What I'm up to
Bitcoin Lawyer - I was on this show to talk about Bitcoin, Christianity, and economics. I talked about the connection between Bitcoin and Christianity, the different Bitcoiners at different places and how they’re similar, and the future of Bitcoin. It was a fun conversation and we talked a good amount as the podcast is something like 90 minutes.
Bitcoin Park Austin - I will be at this event on May 20th at Bitcoin Park Austin (aka Bitcoin Commons). Adam Back, Parker Lewis and Tuur Demeester will be talking about the Bitcoin Thesis going forward.
Thank God for Bitcoin - I will be speaking at this event on May 27th where we’ll be eating some BBQ and having some Christian fellowship.
Nostr Note of the Week
What I’m Promoting
Bitcoin
LoclHost Transparency Report - LoclHost is a non-profit organization dedicated to advancing Bitcoin FOSS projects. As such, they’ve released their first transparency report, showing what they’ve been up to. Among other things, they seem to be helping organize the twice-yearly Core Dev meetups and getting a bunch of soft fork proposals BIP’ed.
MEVPool - Matt Corallo and 7d5x9 propose a different way of solving for the Miner Extractable Value problem by essentially having a private pool with certain properties. In one proposal, the transactions are held back in a trust marketplace and bidding determines who creates the transaction. In another proposal, the execution happens in a trusted execution environment. Both are rather extreme ways to solve the problem, as they require a lot of scaffolding which naturally increases the attack surface, but they’re interesting proposals, nonetheless.
Mempool Policy - The topic du-jour is the OP_RETURN controversy and there are a lot of articles about it. I found this one the most insightful in tying it back to the problem of mining in general and the first stratum protocol design which essentially turned all miners into hashers. This has meant that historically, mining pools have a lot of power in constructing blocks, which in turn has meant that out-of-band payments became a thing. The current OP_RETURN limit dropping pull request is a recognition that these mining pools have this power. But now that Stratum V2 and DATUM exist, does this mean that this PR is fighting the last war?
Lightning
bitika.xyz - You would think more services like that would exist where you can change one digital form of payment for another, but this is one of the first I’ve seen. This is specifically for Mpesa and it’s a dead simple way to buy Bitcoin using the Kenyan Shilling and the lightning network. I would like to see more services like this that let you buy lots of Bitcoin, perhaps with auto-withdrawal to a lightning address.
Liquidity Subscriptions - For large-volume lightning merchants, this is a way to use buying inbound liquidity to receive a lot of payments. They are positioning this as a service that competes with credit cards, as they charge something ilke 0.5%. For high volume merchants that do 6-figures a month, this seems to be a good deal. It feels a bit like a race-to-the-bottom type of business to me, but as we Bitcoinize, this sort of solution looks inevitable.
High Maintenance - This is a long reflection on the last 8 years of lightning and whether it’s really lived up to expectations. As you might expect, there are both good and bad aspects to Lightning, but the article is understandably focused on the shortcomings. Mainly, as the article points out, there’s little to no redundancy on the network which make payments unreliable in certain situations, and the network has a hard time scaling. I suspect that there’s definitely room for other layer 2’s and that lightning may become the settlement layer between other L2s.
Economics, Engineering, Etc.
Rumble Wallet - The Tether-affiliated video site is planning to make a crypto wallet that will be the default way they pay their content creators. This is a pretty thorny problem for most sites that pay out creators as payment processing is the big hurdle and it’s going to be a shot across the bow against YouTube. Tether and Bitcoin are one of the few ways you can pay creators from certain countries, for example, and cutting out all the middlemen should make for a better creator payment experience.
BTCCPI - Measuring inflation is notoriously difficult in fiat, and it’s hard to recognize that prices are getting cheaper in Bitcoin terms, here’s a newly launched index to show you just how much. We’ve seen those memes about houses getting cheaper in Bitcoin, going from thousands of Bitcoin for an average house to about 5 now. As we transition toward Bitcoin as a unit of account, this sort of thing will become more and more useful.
Strike Loans - Strike is entering the loan game with a 50% LTV requirement. They are charging upwards of 12% APR, which is comparable to services like Unchained. I suspect a lot more companies will be getting into this lucrative industry as the business models for Bitcoin keep changing. Exchanges, miners and conferences have been for some time the way to make money in Bitcoin. It looks like loans will be a good business going forward.
Quick Hits
1895 BTC - MSTR is now up to 555450 BTC, and they haven’t really tapped into the $84B yet.
Ripple Shill Ex-communicated - Guy who had Trump’s ear now finds himself on the outs after the Truth Social post that promoted XRP SOL and ADA.
Script to Show Sats - This is a greasemonkey script to show how many sats you’re spending on Amazon and other places.
Criminals and Bitcoin - Tongue in cheek satire about how Bitcoin is used by “criminals”
Fiat delenda est.