The Future is Bitcoin Only. Bitcoin Tech Talk Issue #238

Bitcoin dominance is below 50%. There are new DeFi and NFT projects that are getting tons of publicity. People are throwing money at altcoins like DOGE and making tons of money. How is it, then, that I’m writing about how the future is Bitcoin only?

Yes, it’s true that alt-season is here. There’s been a non-stop flood of new shiny coins to gamble on, and many more people bragging about how they’re now geniuses because they made some money trading. The altcoin market is heating up and the VCs who funded this stuff are thrilled.

Yet, comparing this season to the last on, it’s clear that the narrative has changed. Back in 2017, there were a ton of coins claiming to be the next Bitcoin. Back in 2017, every conference was full of sponsors from random altcoins. Back in 2017, there were actually people trying to defend these altcoins on a technical level.

None of these things are happening anymore. Nearly everyone has conceded the digital gold narrative to Bitcoin. Altcoins have given up even trying to give technical justifications. Instead, the altcoin space has evolved to be pure marketing. They learned from the last cycle that the technical underpinnings don’t matter. Marketing, particularly in the form of rewarding early adopters, and getting in front of lots of eyes that can’t evaluate these products has been the strategy.

In other words, the hype scammers are not even pretending anymore. Altcoins have become pure marketing plays with little to no intellectual backing. And this is why I say that the future is Bitcoin only. Marketing works short-term, but is not sufficient long-term. The long-term success relies on real reasons and on these, altcoins are lacking. In other words, altcoins don’t have a future because they don’t care about anything but short-term marketing.

Contrast this to Bitcoin. Writers are producing deep thought pieces about the current monetary/political/economic system as Bitcoin sheds light on its seedy underpinnings. There is deep, long-term change in the people that hold Bitcoin who are learning low time preference habits. We’re seeing real reform in how people treat their finances. In other words, Bitcoin is producing real, long-lasting change.

Ultimately, this is what makes a movement long-lasting. Marketing only works long-term if it’s true and marketing lies will be revealed as such eventually. Bitcoin has the benefit of having the truth of long-term utility on its side. Altcoins, on the other hand, have done little in the way of keeping its promises, which is why they will fail. Hype can only be sustained for so long without underlying truth and this is why the future is Bitcoin only.

Bitcoin

The latest release of Bitcoin Core includes Taproot Speedy Trial activation. Unfortunately, the binaries haven’t been released in time for the difficulty adjustment period that started the activation window on Saturday, but here’s where you can track which blocks are signaling for Taproot. Slushpool became the first miner to mine a Taproot signaling block. There have already been too many blocks that didn’t signal readiness this adjustment period, so we’ll have to wait for the difficulty adjustment period starting May 13 or 14 to see if that reaches the 90% threshold. That puts the earliest possible Taproot activation at around Thanksgiving.

Blockstream has released a new satellite product. This is a much simpler one than prior ones in that it’s a single piece of hardware. It will be possible to create and sign a valid transaction from cold storage with this. Generally, cold storage options require some level of interactivity, from which this could take out a step. An ideal Bitcoin citadel will have a Faraday cage whose only input is the signal from this satellite.

BTCPay has finally disclosed the software vulnerabilities that were reported by Tesla and patched soon after. There’s no less than 6 different CVE reports, the most serious of which is the Account Takeover vulnerability. Major props to the Tesla engineers who discovered these vulnerabilities and reported them in a responsible manner. My guess is that working on autonomous vehicles makes them particularly sensitive to security vulnerabilities and that’s what got them to find and report these.

Perhaps Peter Smith has been playing a joke on us all along. He promised that the wallet responsible for pretty much all the p2pkh spends on Bitcoin would upgrade to segwit by the end of April. It’s now May and the wallet is still all p2pkh. They continue to fill around 30% of the blocks with these inefficient transactions, which could hold a decent chunk more if they would upgrade. Unfortunately, they’ve been one of those companies that raise lots of money during bull markets and then get lazy during the bear markets.

Economics, Engineering, Etc.

Aleks Svetski argues that Bitcoin is the way to start starving the beast that we call the state. Sound money is one of the few real weapons we have against state encroachment and he makes the argument that collectivism in all its forms is the problem. The state ends up making promises it can’t keep, such as the equality of outcome, which results in a horribly unjust system. Worth reading in full.

Alex Gladstein has the first of three wonderful long-reads from Bitcoin Magazine. His piece is on the Petrodollar and how it has influenced US foreign policy since its inception almost 50 years ago. The petrodollar is neglected to a criminal degree by the mainstream media, and this piece lays out how and why it’s come into existence. Economically, the petrodollar is the reason why Nixon was able to suspend gold convertibility and remain the world’s reserve currency, so it should be a topic of intense study. I realized in reading this piece that Bitcoin is starting to become the light of truth, showing the deceptions of history, such as hiding the petrodollar’s influence.

Pete Rizzo has written another Bitcoin history piece, this time on how Satoshi disappeared and handed over the lead maintainer role to Gavin Andresen. The story is engaging and interesting and illuminates the character of Satoshi with direct evidence. The early chaos of Bitcoin in the latter half of 2010 and early 2011 was captured very well and I learned a few things about not just Satoshi, but Gavin through the piece.

Glass Node is our third and final Bitcoin Magazine piece, which explores the on-chain Bitcoin metrics and what they say about the macro patterns around Bitcoin. Much like stock-to-flow, the general macro pattern seems to be centered around the halvings, but the actual dynamics of new holders and liquidity are presented very well. The main thing I got out of it is that price and liquidity move together and are high in bull markets and low in bear markets.

Pierre Rochard is giving Mike Green fits in this written debate about Bitcoin and China. Mike Green has been pushing the China narrative for a while now and doesn’t understand Bitcoin very well, but this is a good conversation to read. As my experience on Clubhouse has validated, Bitcoin really needs better critics and fiat/altcoins get crushed in real debate.

Quick Hits

Amine Kamel reasons about how Muslims should be treating Bitcoin.

BTC Times has published a list of banks that are friendly toward Bitcoiners, including ones from US and Europe.

The government seems more keen to find vulnerabilities in Bitcoin wallets.

Another week, another company puts Bitcoin on their balance sheet.

Events

I am going to be at Bitcoin 2021 June 4-5. I will also be at The Bitcoin Standard conference on August 12-14 in Mexico.

This is the last week to sign up for the Programming Blockchain seminar at the early bird rate for June 1-2 in Miami. I will be raising rates tomorrow (May 4, 2021). I will also be doing the seminar on August 10-11 in Mexico. This is a 2-day seminar for programmers to learn about Bitcoin. You can apply here. I also have a few scholarships available for those that can’t afford it.

Podcasts, Etc.

On this week’s Bitcoin Fixes This, I talked to Marty Bent about Oil and Gas. We talked about energy, the uniqueness of oil in that market and how Bitcoin mining makes a lot of the processes more efficient. We also dove into the petrodollar and its role in the economy.

I also read through last week’s newsletter on clubhouse which you can find here. I was on Tone’s show to talk about the Bitcoin ETF and the exchanges in Turkey. .

I was interviewed by the Rhodes to Wealth about the new book:

My other books are here.

Fiat delenda est.