I honestly can’t believe that this is issue #285. When I started this newsletter 5 years ago, I didn’t think that I would run it all that long. When I began, this newsletter was a bunch of links to interesting articles within Bitcoin. It was originally a curation newsletter for Bitcoin Techies like me.
Two years ago, I started using this space to write weekly essays about the Bitcoin space and included some cartoons to make it more entertaining. Having some sort of commentary structure turned out to be popular and I’m grateful for what this newsletter has become.
I am, however, reshuffling the content I’m putting out on the internet. I’m going to be separating what this newsletter has become to fit different audiences. For opinions, I’ve decided to publish a weekly column at Bitcoin Magazine. For developer news, this newsletter will once again return to being a resource for keeping up with Bitcoin. I will still be commenting on various stories, but there won’t be a main column.
The decision to go paid was not made lightly. I realize that this is content that many of you have looked forward to weekly. But I’ve come to the conclusion over the years that a free newsletter doesn’t have the right incentives nor the same level of mutual commitment that a paid relationship has. I don’t want to be spamming anyone’s inbox and free has a way of making people think that something is not valuable.
With that in mind, I’m committing to a paid subscription that’ll be more targeted. Besides the actual newsletter, I’ll hold a monthly Zoom Q&A for premium subscribers. For founding members, you’ll also get a 30-minute consult on a yearly basis. You’ll get news on any projects I’m working on and will be invited first to any events I’m putting on.
To ease the transition, I’ll still provide one free newsletter the first Monday of every month for the rest of the year and:
For developers to any Bitcoin open source project, I will give a complementary premium subscription.
Just reply to this newsletter with your name and link to your contributions and you’ll become a premium subscriber to this newsletter.
For the rest of you, thank you for your patronage. I hope I helped you understand something about Bitcoin and I hope you continue to follow me on Twitter and read my new column at Bitcoin Magazine.
Gleb Naumenko and Antoine Riard have written about their CoinPool proposal in a nice FAQ format. The idea is that a single UTXO can represent lots of user funds hidden in a Taproot tree. Within a CoinPool, transactions would not be on-chain, while closing transactions would, much like Lightning. The main requirement for CoinPool to work would be SIGHASH_ANYPREVOUT and OP_MERKLESUB. There are some very interesting privacy implications since each UTXO can represent a whole group of people and there’s a natural anonymity set. CoinPool can be a Decentralized Bank, with all the privacy and convenience, but without the trust.
Russell O’Connor has a manual Bech32 Shamir splitting device. The idea is that you could make these slide charts with a printer and a pin, generate entropy manually and then split the secrets using Shamir Secret Sharing. The whole thing encodes the share in Bech32, making for a truly off-line solution for splitting keys. I’m honestly flabbergasted by the existence of such a device as it bypasses any computation by an electronic device. Perhaps this will be the next level of off-line key generation.
Block wallet has a post on the details of how their wallet will work. The main design decision is that the funds are secured in a 2-of-3 multisig. Two of the keys will be owned by the user (one online and one offline) and one will be on Block’s servers. The design is clever as small transactions can be done entirely online with the phone app and the Block server key. Larger transactions will require the phone app and the offline key. The user will get to choose what’s considered small and what’s considered large setting a limit. It’s a clever design, especially given that their goal is to onboard users who haven’t used Bitcoin before.
Rene Pickhardt has come up with a better LN routing algorithm for Multi-Path Payments. The approach is rather technical, but the idea is that solving for a minimal cost path is not trivial and the algorithm approximates the cost in about 100ms. This is very much usable for payment splitting when making multi-path payments. This is something of a CS breakthrough as the cost function was previously thought to be much harder with exponential blowup. The paper has more details, but this is exciting for making Lightning fail less.
SureSats has a post on submarine swaps and its usage for privacy. The post is very instructive for how it’s different than coinjoins and what situations under which submarine swaps are useful. Donations to Canadian truckers are a good use case as the submarine swap breaks the linkage as the lightning payment is used to pay for the on-chain transaction. As I’ve opined before, Submarine Swaps are woefully underutilized for privacy and better than any privacy coin with a much larger anonymity set. For small amounts, especially, it’s got pretty ideal privacy properties.
OpenFare is a micropayment system for funding open source software. Instead of just sending payment to a particular project, OpenFare will send payments to all the dependencies of that project. I can see this getting gamed eventually, but the concept is an interesting use of the Lightning network. Splitting payments is pretty straightforward, though a deep dependency tree will make for some interesting divisions of the money.
Economics, Engineering, Etc.
Croesus ponders the fate of the class of 1986 Harvard Business School and how relatively poorly they did given the insane opportunities they had. As he points out, the 25th year anniversary survey showed the median net worth at $6M, which in today’s dollars is more like $10M. That may sound like a lot, but given all the opportunities that class has had, from high frequency trading, dot-com bubble, crazy rise in real estate, it’s actually not that much. As he says, one day, 1 BTC will be worth more than a Harvard MBA. Who knows, that day may already have passed.
Black Bitcoin Billionaires have come out in opposition to New York’s proposal to limit proof-of-work mining. The ESG narrative on Bitcoin mining has been rolling despite the obvious flaws in the narrative and it’ll be interesting to see if liberal sympathies shift based on this evaluation. What’s been very frustrating is that this ESG narrative won’t die despite the dozens of great logical take-downs that I’ve highlighted here over the past few years. Perhaps the argument against isn’t as important as who makes the argument, given America’s obsession with identity politics. I have hopes that letters like this will be more frequent and perhaps get ESG people to give it a second thought.
David Hansson explains how it’s easy to dig yourself into an ideological hole and be stuck there without a way to gracefully exit. He explains that those that don’t have a graceful exit end up staying in their ideological hole not by argument, but by having no choice. Interestingly, he sees Bitcoin and the ability to gracefully exit from his no-coiner position as a debate that allowed him to have a graceful exit. It’s harder than ever to change your mind on the internet precisely because of the politicization of everything. Bitcoin is a source of hope that things can change.
Jordan Bush has an interesting profile of Wendell Berry and his philosophy’s compatibility with Bitcoin. He doesn’t even use a computer to write, but has some deep thoughts on the relationship of people to nature. As Jordan points out, his philosophy is very much in line with how Bitcoiners think. Berry comes at economics from first principles and seems to me similar to Austrian thinkers. For those that are interested in philosophy, this is not a bad rabbit hole to spend some time in.
Exxon is exploring using Bitcoin mining to flare gas in Nigeria. Many companies have already made millions of dollars flaring off gas to power Bitcoin miners and it’s much cleaner for the environment. The obvious benefits are economically hard to suppress and I imagine this will be a boon for oil exploration all over the world. If ESG people were honest, they’d admit that this is one of the best things that Bitcoin is doing for the environment, but sadly, they don’t seem very interested in doing anything but villify Bitcoin.
Here’s what mining farms look like around the world.
The clownish lawsuit in the UK is decided.
Bitcoin miner price is correlated with Bitcoin price.
Tether is coming to Lightning.
I’ll be doing the Programming Blockchain seminars in Miami April 4-5.
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Fiat delenda est.