Bitcoin Tech Talk #488
Efficiency Maxxing, High v. Low Trust, Fermi Paradox, Fiat Pastors, Elder Fraud
Interesting Stuff
Seeking Efficiency - κρῠπτός has this deep thought piece on the opposition of technology and character. Many historians look at the brilliance of Greek philosophers and shake their head about the decisive lack of technological progress that they made. Indeed, the Greeks knew a whole lot about nature and didn’t take advantage of what they knew, particularly through technology. Yet there is a tradeoff in living by technology and it comes as a cost to character and excellence. The article is an excellent distillation of the writings of Jacque Ellul, whose warnings about the dominance of technology seem especially prescient.
High Trust Economy - Tom Owens has this article on how low-trust cultures have taken advantage of high trust cultures through trade. As he points out the regulations around manufacturing in the US are much more stringent and difficult to get around than in China or India. This means Chinese and Indian firms don’t have to spend as much money on compliance of various types giving them an enormous advantage. In addition, these firms get around regulatory compliance through lobbying, which has been extremely effective. Like illegal immigration, this is a consequence of high-trust culture assumptions being taken advantage of by low-trust people.
One Shot Civilizations - Skilos has a take on the Fermi Paradox, or why civilizations may fail to progress. The usual explanations for Fermi’s Paradox are along the lines of nuclear war. Yet as he points out, there are many other things we can see right now, such as the low fertility rates, which may be an indicator of civilization stalling. He has this very interesting thought experiment, which is, what would happen if we were suddenly thrust back to the stone age, how long would it take for people to get back to the current level of technology? As many of the resources have been used up (oil, natural gas, iron ore, even wood), getting back to the same level may take much longer.
Fiat Pastors - Jon Harris has this rather sobering take on how pastors have become more celebrities and less shepherds in modern churches. As he points out, much of their tactics are based on sales, or getting more people to come rather than in taking care of the people in the congregation. He makes a very helpful distinction between the character traits of a pastor versus their competence to execute their job. The latter is often equated with knowing and preaching the Bible, but the biblical job description is much more than that. The former, unfortunately is also pretty lacking, which the many financial and sexual scandals of pastors can attest to.
Elder Fraud - We preach in Bitcoin that we verify, not trust so that we don’t get scammed. Unfortunately for people that grew up in a much more trusting environment, of, say, 50 years ago, they’re getting bilked left and right. Part of the reason is understandable. These are generally people that haven’t been immunized to internet fraud and become easy marks for scammers. But the more subtle reason is that they have so much of the money in the first place! The Baby Boomer generation has managed to take a significant amount of wealth through political means and this means they have the money which they didn’t necessarily earn. I suspect in a non-fiat economy, that most of these people that are getting bilked wouldn’t have that much in the first place.
What I'm up to
Core v Knots Part XI - This is the final installment in the series that Tone and I started months ago and there was no guest involved, just the two of us. It’s a 4-hour stream and we talked about BIP110 and whether that would be good or bad for Bitcoin. Tone’s view is that it would centralize Bitcoin and my view is that it would not. Tone’s view is that it would also cause a huge crash in Bitcoin should it succeed and my view was that it would not. The reasoning is pretty involved and we talked quite a bit about it, so listen if you’re so inclined.
BitBlockBoom - The next conference I will be attending for certain is this one in Dallas, TX April 9-11. There’s a Thank God for Bitcoin conference right before as well, which I’ll also be speaking at. I’m not sure what the topics for either one will be, but both should be fun times.
Nostr Note of the Week
What I’m Promoting
Bitcoin
PIPE v2 - The original PIPE (Polynomial Inner Product Encryption) paper was a way to give Bitcoin covenant functionality without a soft fork (OP_CAT, OP_CTV, ANYPREVOUT, etc). This paper extends the idea by creating an new primitive called a Witness Signature, which looks like any other Schnorr signature but proves the satisfaction of certain conditions. This is notably different than BitVM and its variants in that there’s no fraud proof requirement.
Sigbash v2 - Oblivious signing is a desirable thing if you want the security of an external signer, but the privacy to not let the other party know about your Bitcoin balance. This is a project that does this in a very clever way using zero-knowledge proofs. The main innovation is that a proof of condition satisfaction is sent to the server which then signs based on that proof. It gets no other information. The party wanting to spend creates its own signature completing a MuSig2 2-of-2 multisig, making a valid transaction.
Boomerang - With kidnappings on the rise, this is one solution to the problem. The dreaded wrench attack makes it so that with enough patience and force, the attacker can get you to move your Bitcoin to their address. The idea of this design is that there are multiple outside signers who have to agree and even then, there is a 6 month or longer wait before the funds are actually free to move. There’s also a hard to detect distress signal that you can activate when you contact the outside signers. It’s an interesting idea and I’m not sure the setup and drawbacks are optimal, but this is something to definitely check out if you have a large stash.
Lightning
Satogram - Want to message every node on the lightning network? Pay them! That’s the idea behind this service which will send some amount to every existing lightning address and include whatever message you want. If it was free, it would be called spam, but since the address gets paid, it’s a bit more like junk mail. I suspect if this gets popular, someone will figure out ways to scam with it, which will in turn incentivize lightning node operators to put in higher minimum payments, creating some sort of market equilibrium.
ln agent tools - Lightning Labs has released a suite of tools specifically for AI Agents, to make lightning transactions a part of the AI agent flows. The main use case is to have the AI agent pay for things securely as the wallet that the AI controls can be limited, whereas it’s a little more difficult (and expensive!) to do so with something like credit cards. Personally I think this is the market that Lightning startups should be going for, becoming some sort of processor for AI agents.
Mostro - This is an app for peer-to-peer Bitcoin trading built on Nostr. The main feature is the marketplace of offers that you can browse to buy or sell local currency using lightning. As KYC becomes ever more ubiquitous, the peer-to-peer markets become more important than ever, though the fiat side of the equation gets harder and harder with the slow elimination of cash.
Economics, Engineering, Etc.
Crypto Kidnappings - France has been a hotbed of kidnappings targeting wealthy crypto influencers, with 9 already this year. The tactic seems to be for a famous crypto personality’s private info being obtained through a government employee, and then petty criminals recruited through telegram actually executing the attack, which is to usually kidnap one of the person’s relatives, and not the actual wealthy person. Many people are paying close attention to Nancy Guthrie’s kidnapping in the US, which has a similar pattern. Privacy and security are becoming more important than ever.
Koinvote - Blockchain voting or stake-based voting has been around for a long time, but this is the first one where perhaps some actual community can be gauged. I’m doubtful whether voting for midterms or the next Fed chairman would reveal much, but something more consequential, such as support for BIP110, would actually be something that shows community sentiment by economic weight. I still think futures markets are much better predictors as they align incentives, but this is something to watch if it gets popular.
Blockfill - Bear markets are characterized by exchanges going bankrupt, and this Susquehanna backed trading firm has taken the traditional first step, by suspending withdrawals. The fact that this happened during the downturn to $66,000 suggests that they were leveraged or operating on a fractional reserve basis, which tends to snowball once rumors about insolvency spread. This is more a boutique firm catering to large investors rather than a retail level one, but it may very well be a canary in a coal mine.
Quick Hits
OP_CTV Activation Client - Hot on the heels of the BIP110 activation client, there’s now an OP_CTV analogue.
Mempool Madness - You can bet to see if you can predict when the next block will be found using Cashu.
Coinbase Superbowl Ad - The ad featuring some nostalgic tunes was widely panned everywhere.
Electrum RPC - Blockstream has introduced a fast and scalable RPC calls to their block explorer product.
Fiat delenda est.