What's common to Michael Saylor and Andreas Antonopolous? Bitcoin Tech Talk Issue #206

Michael Saylor is the new darling of Bitcoiners, having put some $400M into Bitcoin over the past 6 months. This is a startling turnaround from 2013, when he dismissed Bitcoin and calling its days “numbered.” By contrast, Andreas Antonopolous has upset Bitcoiners with his newest contention that Bitcoin Maximalists are the biggest threat to Bitcoin. This is similarly a startling turnaround from 2013, when he was one of the few content creators who explained Bitcoin to noobs.

The contrast between these two people is interesting and speaks to a lack of hero worship in the Bitcoin community. No one is sacred and no one is irredeemable. One of the things I love about Bitcoin is that it is very much a meritocracy. You might be a core maintainer like Gavin Andreesen, respected by the whole community in 2013. His status was never higher than in 2013 when he was the face of Bitcoin Core. Then he started talking about becoming a benevolent dictator who would throw his weight around. He then got duped by a conman and in 2020, he’s essentially a persona non grata in the Bitcoin community. You can also be like Wences Cesares, who led an attack against Bitcoin in Segwit2x and tried also to take control in 2017. But apologizing and supporting Bitcoin development brought him back into the good graces of the community.

The point is that Bitcoin has a standard that isn’t based on a person. There’s an ideal that the community is striving for that is not based on a cult-of-personality. This is in stark contrast to every other cryptocurrency out there. They all run on some form of cult-of-personality and not on an objective standard.

During the DAO incident back in 2016, the Ethereum community was trying to decide what to do with the funds that were being drained. There were people saying that code should be law, others were saying that the chain should be reverted to make the investors whole. The crazy thing was that most ETH commentators at the time didn’t actually take a stance. They were waiting for Vitalik to opine first. In fact, most of them were ready to defend Vitalik’s decision either way and said so. Something like, if Vitalik says this, I’ll understand and support, if he says the opposite, I’ll understand and support. That, folks, is a cult of personality and Ethereum is a hero worship driven coin.

Ultimately that’s what will cause these coins to fail. There is an inherent fragility to a person-centered single point of failure. The person can make bad decisions, get pressured by some entity, be bribed into doing something that’s against the community or even die. All of those things are destabilizing to the operation of the coin itself. On the other hand, principle, values and merit are things that are more antifragile and last.

A merit-based community won’t grow as fast as a personality-driven one, but I’ll take long-lasting antifragile over fast growth fragile for my wealth every time.

Bitcoin

Schnorr continues to progress! Schnorr support has been merged into libsecp256k1. This is an important step to getting the rest of the soft fork merged. I initially predicted earlier this year that it would be activated before the end of the year, I really don’t think that’s likely now. I’m guessing early next year for network activation. Wallet developers should start getting their Taproot features ready given that a lot of the work will be in UI for this important update.

Jameson Lopp has a review of Bitcoin hardware wallet performance for multisig. As multisig becomes more the norm, this sort of analysis of their performance becomes something to watch closely. Jameson has a particular interest as his company is a big user of multisig. The limitations on some of these devices is a bit disappointing. Coldcard can’t handle PSBTs that are too big and Ledger is especially slow in signing. Hopefully, this review gets these manufacturers to beef up the specs on these hardware devices and make them more multisig friendly.

OKCoin and Amiti Uttarwar have an article on the Bitcoin development process. This is an excellent overview of everything that happens to get new features into Bitcoin. The article is written in a way as to be beginner friendly, so is a great reference for those that aren’t technical.

Blockstream has an article on making sure you don’t mix timelocks. Specifically, you cannot spend 2 different checklocktimeverify (CLTV) or checksequenceverify (CSV) outputs with timelocks that mix block height and unix time in a single transaction. This feature isn’t used on much other than lightning, but this is very important to know as the two op codes are fundamentally incompatible, even across different inputs. They’ve made changes to Miniscript alert the user to possible conflicts here.

Magical and Bitcoin Development Kit are joining forces! These two projects are developer tools which make bitcoin wallet development much easier. The complex spending policies in particular will be critical once we get Schnorr. I really hope more wallet developers start offering these features as the more complex scripts really require good UX.

Lightning

Breez has an important article on lightning liquidity. The article analyzes two new features on the network, Wumbo channels and Multi-path payments (MPPs). Essentially, both increase liquidity, sometimes pretty dramatically. The explanation in the article for both is well worth reading if you aren’t familiar with either.

Faraday has a new release. The main new features are around accounting, making running a commercial lightning node easier to handle financially. As the network develops, this sort of thing will be critical to giving nodes pricing information and enhance the network.

c-lightning has a new release. What stood out to me is a plugin to fund multiple channels at once. Instead of a transaction per channel, you can now fund many channels in a single transaction. This is obviously a nice fee saver and should result in more channels. Imagine getting a lighting node list and using this plugin to open channels with all of them at once. This is definitely a great way to make the lightning network more robust.

Economics, Engineering, Etc

BitMex set up a Blockstream satellite and wrote about it. They conclude that the bandwidth is enough to keep the chain synced most of the time. The censorship resistance aspect of this device is the main benefit, according to them. I still wonder if there’s a hidden single point of failure in there given that there are companies that control the feed from the satellite and so forth. The fact that something like this exists is great, though.

Shinobi has a provocative article on things Bitcoiners don’t want to hear. He points out problems with Lightning, mostly around micropayments and the economic structure of routing. He also points out problems with electricity use. I find the first argument interesting and the second a misunderstanding of economics. There is a cost to routing which at some point is more than the amount being routed and that’s an economic problem for Lightning. The second is ultimately a rejection of proof-of-work being costly.

There is an intriguing article on the concept of Bitcoin Urbanism. Essentially, these are second and third order effects to the physical environment like architecture, building materials and so on. The architecture during the gold standard, for example, was very different as they had different priorities. I personally think a lot of buildings today look ugly and are much more inwardly focused than the buildings of the gilded age which are more outwardly focused. There’s something about low time preference behavior that Bitcoin engenders which causes this and I hope to see more of it going forward.

Podcasts

My podcast this week was with Michael Flaxman. We talked about startups and investment and how that’s completely changed in the past 20 years due to inflation. The sad state of entrepreneurship and the gatekeepers that bar the way were some of the things we discussed.

I did two shows with Tone. The first was on the BCH hard fork and Bitmain among other things. The second was on Kraken, Andreas Antonopolous and DeFi.

Convert your precoiner friends with my books!

I’m still looking for people to review a manuscript for my next book, which is a Christian case for Bitcoin. Please reply to this email or email me jimmy at programmingblockchain.com if you are interested.

Fiat delenda est