Bitcoin Tech Talk #450
Interesting Stuff
Adult Participation Trophies - It’s a little cliche now to complain about kids getting trophies for everything, but don’t adults do the same? The article is authors touting meaningless achievements like being in the top 10 in Pickleball Kids Books, but I think the concept is one worth exploring. We pretend that promotion to middle management is something significant and worth celebrating, that getting a PhD in some random topic means something and donating to some cause means that we’re virtuous. And of course, there’s pomp and ceremony around a lot of these things that are specifically to make us feel good. There’s something like achievement inflation going on, even among adults.
Downfall of Science - If you’ve read my book Fiat Ruins Everything, specifically how Fiat Ruins Science, a lot of what you’ll see in this article will be familiar. The pace of innovation has slowed dramatically, the purse strings are now in the hands of bureaucrats and not entrepreneurs, leading to more political research than profitable research. Many vectors are explored as to why Science has gotten so bad as to have a huge replication crisis, and most of it, sadly can be traced to fiat money. I once dreamed of being a math professor. God gave me grace by closing that door.
The F-Word - This is a rather humorous article decrying that the shock value of the F-word is now completely dead after Andrew Yang used it a three times in a tweet. The crudity that the word represented was why it was avoided, but sadly, the same crudity is a deep part of our culture now, and has been more or less de-fanged. The actual forbidden words, as the article argues are now in Kanye’s new single. The acceptable words have changed, and carries a much more political tone with authorities determining what’s unacceptable rather than the broader culture. As with everything fiat, what’s forbidden has become more centralized.
Psychology as Control Systems - Ever since I learned about Freud and his obsession with sex, I’ve been skeptical of psychology and its claims. This article is a good distillation of the current model of psychology and how it tries to gain knowledge, and shows that it’s largely ineffective. But a new paradigm that makes a lot more sense has arisen, and it’s intriguing, not just for the actual explanation (your body and mind have various control systems which manifest as desires), but for the fact that it hasn’t risen from the traditional sources.
Triumph of Sophistry - The article is about DEI, women’s sports and the system that allowed transgender athletes to take over their podiums. The money quote is this: “Academics tend to be, shall we say, non-confrontational, except when the power dynamic is tilted in their favor.” In other words, they’re easy to control with threats and don’t mind being authoritarian when they have the power. Of course, it’s not just academics, but bureaucrats of all kinds that manifest this kind of cowardice and it’s sadly all too common under fiat money.
What I'm up to
TGFB BBQ - I’ll be at this event tomorrow in Las Vegas. This will be the only event I’ll be attending in Las Vegas and I will not be in the city for long. I have a talk on Christian freedom. Hope to see you there!
BTC Prague - June 19-21, I’ll be at this popular European conference. There will be a debate and a talk about Bitcoin Price and relating it to decentralization, which should be fun.
Nostr Note of the Week
What I’m Promoting
Bitcoin
Ark Explanation - Neha Narula of MIT’s DCI has written up an explanation of Ark, because the other explanations were too confusing. I always appreciate blog posts like this as multiple explanations are much easier to cross check than a single one. The main thing to understand about Ark is that there is a privileged coordinator involved which Lightning does not have, but this also means that there’s no inbound liquidity problems. There’s much more about Ark like which OP codes give it what features and so on.
2015 Spam Attacks - BitMex Research has published a retrospective on the spam attacks from a decade ago by the mysterious and still largely unknown coinwallet.eu syndicate. For those that weren’t around back then, or simply don’t remember, this was a somewhat short-lived spam flooding the network, using a variety of strategies. What’s remarkable is that they spent something like 200 BTC in the last series of spam attacks, which at the time was about $50,000 but is now over $20M. I suspect the spammers of this era will likewise regret their Bitcoin spending spree.
Compensating Node Runners - One of the reasons why the OP_RETURN stuff has been so controversial is that many node runners are not being compensated for transmitting what’s clearly going to be non-transaction data that will presumably end up on the blockchain and thus their node. This is a proposal to compensate the node runners by provably burning some Bitcoin in the OP_RETURN output, which compensates them through a tiny bit of deflation, making whatever Bitcoin they have worth more. This isn’t a completely fleshed out idea, but the concept is an interesting compromise between the filterers and the spammers.
Lightning
Phoenixd and MCP - MCP (Model Context Protocol) is the new hot buzzword in AI for feeding LLMs local context data. This project is an integration to lightning servers and presumably, you can give this data to an LLM to help you manage your lightning node, including liquidity, channel balancing and justice transactions and so on. Managing a lightning node is hard and surely, LLMs will probably do a better job than a newbie. The question is, what sort of emergent behavior can we expect if we get a lot of these on the network?
Lightning Blinder - Lightning naturally has better privacy characteristics than on-chain because there’s no footprint left behind on the blockchain. But it’s still not perfect as LSPs, for example get a lot of information about who and what you’re sending to. This is a project to defeat some of their heuristics in determining who you’re sending to by introducing someone in the middle that acts something like an escrow agent. They create the invoice and receive from the payer, but the payment is ultimately forwarded to the correct recipient. It’s a remarkable architecture for its simplicity and its trustlessness.
Fulmine - This is a project by the people at Ark Labs to transfer back and forth between Ark and Lightning. Details are a bit hazy on exactly how this works, but the purpose is clear enough. The ability to transact in Lightning for early users will be critical for Ark adoption. If users get used to Ark that way and realize that Ark is a lot easier for certain kinds of payments, they may very well demand more Ark-based payment systems. There’s a waitlist to join which will get you the software that you can install on your node for that back and forth.
Economics, Engineering, Etc.
Genesis Saga - The long and complicated story of DCG, Genesis, 3AC, FTX and many others is starting to come to light. What’s alleged in this complaint is that Barry Silbert raided Genesis, a subsidiary of DCG at the time, of billions to shore up DCG, when it knew that Genesis was bankrupt due to the bad loans it had given to 3AC, Alameda (FTX’s investment arm) and others. What’s even more complicated is that Grayscale Investment Trust’s GBTC was the carry trade that blew up so many of these funds that were promising 10-15% APYs to their investors. The once godfather of crypto, who held the industry’s biggest conference, had the biggest stock ticker and had a huge investment arm, is now likely headed toward bankruptcy, if not worse.
BitKit uses B - The hardware wallet produced by Jack Dorsey’s company has embraced what Jack Dorsey has endorsed, that is BIP177, or calling sats just with the B symbol. It’s not quite fully an embrace of BIP177, as in that proposal Bitcoin would refer to 1 satoshi, and it honestly feels to me like a good compromise. That said, I do wonder how many other wallets will follow this standard, not because it’s so confusing, but because they’re used to another way of doing things. Decentralized changes take a long time, and in the long run, this may very well win out, but in the meantime, we’ll have to deal with multiple ways of saying the same amount of Bitcoin.
Days to Cover - Companies like Strategy, MetaPlanet and Semmler continue stacking because the Bitcoin they have on their balance sheet is less than the value of their stack. This ratio, called mNAV (multiple of net asset value) has been a controversial way to value these stocks, noting that an mNAV > 1 doesn’t make sense to people that see Bitcoin as the driving force behind these stocks. Yet their mNAVs are consistently above 1, sometimes much more. This article goes into another model of how to value these stocks, essentially looking at the Bitcoin stacking as a process, and like valuing stocks on future earnings, these stocks may be valued as a multiple of future Bitcoin that they’re stacking. Whether this is true or not, it’s one of the first explanations that made the large mNAVs make sense for me.
Quick Hits
7390 BTC - Strategy continues to stack, much faster than new Bitcoin is being mined which is about 3125 BTC/week. They’re not the only ones stacking.
SUI $223M - The altcoin had a smart contract which wasn’t vetted properly and a user took advantage. Now they’re offering $6M as a bounty to the user.
Strive - Vivek Ramiswamy’s newest venture is trying to get as much Bitcoin as possible, starting with the 75,000 BTC stuck in Mt. Gox proceedings.
Coremunism vs Knotziism - I don’t usually post Bugle articles, but this one made me laugh.
Fiat delenda est.