Interesting Stuff
Incentives are for Losers - Adam Mastroianni makes the provocative case that people who need incentives to behave well are morally weak. The thrust of the article is that real integrity means doing the right thing regardless of the reward structure. Unfortunately, most people never develop actual convictions, just what he calls “moralistic therapeutic deism” they absorbed by osmosis. He's onto something that is extremely fiat, which is that incentive-talk is really an excuse to sin by blaming the economic system. Fiat money trains us to see monetary incentives as the be-all, end-all of market decisions, which is often just high-time-preference behavior. But a meaningful life requires conviction that holds firm through inconvenience and even suffering. The simplistic model of human behavior, so commonly assumed by economists is the lowest and most base one.
Young adults are Poor - Johann Kurtz documents how the social capital that previous generations got for free like trust, community, mutual obligation through church, union hall, and neighborhood, all collapsed starting in the 1950s-70s. This has forced young adults to buy individually what used to come at low cost through community, which is why they feel poor despite rosy GDP statistics. Tellingly, he notes that wages parted from productivity after 1973, which any Bitcoiner will recognize as two years after Nixon closed the gold window. Financialization didn't just hollow out our economy, it hollowed out our parishes and bowling leagues too. Fiat money let everyone exit their obligations and buy substitutes from strangers, which made everything good cost much more for worse quality. Only now are people realizing that this was a terrible trade.
Fertility and Currency - Dave argues that baby bonuses fail because money is fungible. The bonuses compete with every other consumer desire, whereas children historically earned parents non-fungible rewards like status, community prestige, and old-age security. He illustrates the point with everything from Taiwanese lottery winners to Diablo III's economy-destroying real-money auction house. The returns on baby bonuses are abysmal and ultimately don’t make much sense as being richer doesn’t make people want to have kids. The deeper problem is the same as the previous story in that everything in a fiat economy now has a price, which means that resource allocation, and more obliquely, status, is almost entirely decided on financial terms. And if children don’t bring status, then it’s no wonder people avoid having them.
The Perfect Recipe - Raw Egg Nationalist argues that learning to cook from whole ingredients is the single most transformative health intervention available even more important than lifting. He argues that Kraft-Heinz and General Mills have weaponized food science to make hyperpalatable slop while the FDA's GRAS loophole waves through some 10,000 additives that Europe would never allow. This debased, engineered for addiction, and profitable fiat food has had enormous cost in debased health. Cooking your own dinner is the culinary equivalent of running your own node. Food sovereignty starts in the kitchen, and the fact that 70% of Americans are overweight tells you exactly how much it’s been outsourced.
A New Revolution - John Carter argues that the racial spoils system baked into our Civil Rights legal framework can't be voted away, and explores what sort of revolution would work in this environment. He concludes that a decentralized, leaderless swarm with clear, achievable goals much like the Canadian trucker convoy would be the way. Reading this as a Bitcoiner, I couldn’t help but see how much Bitcoin itself was in alignment with his framework. The trigger in this case would be some sort of financial crisis, which we have seen every 8-10 years in the US. I know he’s a fan of Bitcoin, so it was a bit strange that he didn’t see this at all, but he makes some insightful points about what capitulation of the current regime might look like.
What I'm up to
BIP110 Split Stream - I was on Tone Vays’s live stream during the BIP110 split as we observed some entertaining dynamics. BIP110 chain did not win through game theory and many miners outright refused to signal as the BIP110 soft fork required. My main takeaway is that the proponents have the chain that they want. Even now, it would be difficult for a rando to get in a large spam transaction simply because the miners on that chain are not public and the nodes on that network enforce spam filters.
Mr. M Podcast - I was on this podcast to talk about recent Bitcoin events like the aforementioned BIP110 split and the ColdCard hack. We talked a bit more philosophically about life and bear markets and things like that as well.
Nostr Note of the Week
What I’m Promoting
Bitcoin
BIP460 - Fabian Jahr has formalized cross-input signature aggregation (CISA) as BIP460, letting taproot key path spends in a new SegWit v2 output type combine their signatures across inputs. Each input can choose half-aggregation, full-aggregation, or an explicit opt-out. The practical upshot is smaller transactions and cheaper consolidations, but the more interesting effect is on privacy. CISA makes coinjoin-style collaborative transactions economically attractive instead of just ideologically attractive, which is how you actually get adoption. Of course in the current fee environment, that’s unlikely to be a big savings for most people, but the idea is that as fees increase, this would be a pressure release valve.
ChillDKG - ChillDKG is a draft BIP out of Blockstream Research for distributed key generation to pair with BIP 445's FROST threshold signing. This lets multiple parties create a k-of-n key where no single participant ever sees the whole thing. The clever design choice is that it's deliberately non-robust. Sessions abort with identifiable blame rather than continuing without "faulty" parties, which closes the door on a malicious coordinator quietly excluding honest participants. Threshold Schnorr multisig that looks like a single key on-chain which is a win both for privacy and self-custody. That said, the entire ceremony is fraught with possible key leakage through mistakes, so it’s best to proceed slowly on something like this..
Coldcard Post-Mortem - Wizardsardine delivers the definitive autopsy of the Coldcard disaster. A linker binding bug from March 2021 silently swapped the hardware TRNG for MicroPython’s toy software PRNG, leaving Mk2/Mk3 seeds with roughly 2^22 candidate states. This is such a low number that it’s crackable in about 3 seconds on a single GPU. The brutal irony is that XORing two deterministic generators together added exactly zero entropy, and the bug survived nearly two thousand days because nobody verified symbol resolution across submodule boundaries.
Lightning
Blockstream Swaps - Blockstream launched a swap service to fill the hole left by Boltz's suspension, offering submarine swaps into Lightning, reverse swaps back out, and trustless chain swaps between mainchain BTC and Liquid BTC. This is all built on HTLCs where either both parties settle or neither does. The self-custodial design is the key point. No intermediary ever holds your funds, which is in line with the Bitcoin ethos. Fiat finance is a pyramid of counterparty risk and rent-seeking middlemen, so every piece of infrastructure that lets you move value across layers without trusting anyone is a step in the right direction, though it's worth noting the ecosystem just learned the hard way that redundancy in these services is not optional.
LND Disclosure - Prior to v20.0, LND would forget a collaboratively closed channel after just one confirmation, meaning a 1-block reorg could let an attacker broadcast a revoked state and walk away with the entire channel balance without any penalty. The spec says wait six confirmations, so this is an implementation failure. This is a good reminder that Lightning's security model only works if implementations actually follow it, so if you're running your own LND node upgrade as a 2-block reorg almost happened during the BIP110 split.
LIGHTNING.pub - This is a Nostr-native Lightning node designed so one person can run a payment hub for friends, family, and customers, with guests connecting over encrypted Nostr relays. The idea is that Nostr is simpler than wrestling with port forwarding, Tor, or DNS. Their pitch is that Lightning shouldn't be a hobby that loses money, which resonates because running a Lightning routing node has too often been an act of ideological charity. That said, the trust model is entirely dependent on the operator, but where trust relationships already exist, taking complexity away for money is a fair trade.
Economics, Engineering, Etc.
DIY Signing Device Conference - Keith Mukai reports from the first-ever DIY signing device summit in São Paulo, hosted by Vinteum with HRF support. Specter DIY, SeedSigner, and Krux teams, plus Satochip and Jade DIY folks, chose collaboration over rivalry, even becoming co-maintainers of the embit library after Stepan Snigirev stepped back. The animating idea, captured in the line “every convenience is an attack surface,” is that building your own signer from commodity parts defeats supply chain attacks, dodges the customer-data honeypots that retail vendors accumulate, and works in places where ordering a branded hardware wallet is expensive or outright dangerous. Especially given what happened with ColdCard and Trezor (see the next story), this conference couldn’t have come at a better time.
Trezor Data Breach - Trezor disclosed that its logistics partner ShipMonk was breached, exposing names, phone numbers, emails, and shipping addresses for about 13,689 customers across seven countries who ordered between May and August. Thankfully, Trezor's 90-day retention policy limited the blast radius, but this is the Ledger lesson all over again, hardware wallet customers are self-identified bitcoin holders, and a leaked home address list is asking for phishing or a wrench-attack. Expect a wave of fake “urgent security” emails, and be especially careful if you are in France.
Tracing the Coldcard Drain- Praveen Perera does some genuinely impressive forensic work here, reverse-engineering the Coldcard Mk3's weak RNG path and recovering 328 wallet seeds that explain 87.7% of the 1,082 BTC swept in a 41-minute window on July 29. The attacker took years' worth of latent vulnerability and cashed it in before most victims knew anything was wrong. The fingerprints are fascinating. There was a single transaction builder, a BlockCypher API defaults leaking through in the address caps, and value-ranked job queues suggesting an operator who thinks in Ethereum's account model rather than UTXOs. The attacker, in other words, doesn’t look very sophisticated and there’s still hope for some justice.
Quick Hits
Network Resilience - A new paper looks at how resilient the Bitcoin network is in the face of contentious soft forks.
Red Team Publicity? - The article questions the famed AI-powered Bitcoin “red team.”
Strategy’s New Strategy - Strategy's latest 8-K discloses more at-the-market share issuance alongside bitcoin sales near local lows.
Proof that Humans Suck at Entropy - This is a little game where you try to out-random a simple prediction algorithm by mashing zeros and ones, and after a few dozen rounds the machine is reliably predicting your inputs.
Fiat delenda est.