Taproot locked in this past week and Bitcoiners celebrated. Altcoiners, on the other hand, couldn’t care less. I suspect that they don’t even know what it is or what it’s supposed to do. And why should they? Altcoin developers haven’t shown the slightest interest in adding Taproot to their codebases.
The question is, why aren’t they interested? What’s preventing them from embracing what are some very clear wins? There are three reasons for this which I’ll explore today.
First, altcoins are perpetually lacking in developers. Ironically, many of them are getting paid, usually through the premine or some continuing developer subsidy, but it is nevertheless difficult to get developers there to implement anything, even if it’s a line-by-line port of Bitcoin Core’s code. Not only do upgrades like Taproot require a good understanding of the math and computer science behind the constructs, but they require good testers, documenters and adversarial thinkers that can figure out how the new feature interacts with whatever is available on their platforms. Altcoins lack this, so they mostly just stay static and don’t bother with obvious user-empowering upgrades like Taproot because they don’t have the developers to do it.
Second, altcoins have their own marketing to push. A coin founded on proof-of-stake has to make proof-of-stake compelling. Whatever developer resources they have tends to go toward whatever centralized marketing message (fast transactions! privacy! dentists!) that they’re trying to push. These are organizations that are very much top-down, meaning that all the developers are committed to a road map and that doesn’t include off-map projects like Taproot. It would hurt their marketing message too much.
Third, altcoins are centralized. As a result, getting better block efficiency, faster signature verification or reducing the specs necessary to run a full node are not the least bit interesting to altcoins. They all already know they’re centralized so why bother with optimizing anything? Why bother make running a full node easier when it’s already really difficult and few people run them anyway? In other words, altcoins don’t care about features that help individuals have self-sovereignty.
The upshot of all this is that altcoins are exposing their projects to be the decentralization theater that it is. As much lip service they give to that word, the fact that they don’t give features like Taproot priority shows that they really like centralization and not empowering users. Contrast that with Bitcoin with empowers users by giving them the ability to verify, not trust. In other words, altcoins aren’t copying Taproot because they like centralization and have no interest in undermining that.
The other myth that we can stop right now is that altcoins are a testing ground for Bitcoin. Yes, Litecoin did that for Segwit very briefly in 2017, but literally no other coin hash shown interest in the features that Bitcoin wants to implement. No other protocol has any interest in ANYPREVOUT or cross-input signature aggregation or OP_CTV. Far from being a testing ground, they’re all so utterly incompetent that they wouldn’t be able to implement any of these features, let alone see if they work.
Ultimately, this is because altcoins really are centralized and these features just look too hard to the rent-seeking developers who maintain those other coins.
Taproot locked in on Saturday morning in US, around noontime in Europe and dinner in Asia/Australia. The actual lock-in took a little longer than expected due to some hashing power disappearing off the network, probably due to the China crackdown. Nevertheless, the difficulty adjustment period had something like 98%+ signal for Taproot, meaning that we’re all set to have Taproot activated on the network in November.
Galoy is an open-source community-based Bitcoin wallet. The idea is to offer something between a self-custody open-source wallet and a exchange-provided closed source wallet where you can only see a balance. They strive to make it easier to onboard with a community-driven open source wallet that’s custodied by a central party for use in local communities. This is a nice middle step to help people, especially in third world countries, get comfortable with Bitcoin.
Congrats to Dhruv Mehta and Jarol Rodriguez who are now being sponsored by Gemini for their Core development work! It’s great to see more developers get the funding they need.
BitRefill has a thread on what they’ve been doing in El Salvador. Among other things, they settled 10k lightning transactions in a single day! Pretty remarkable that everything just simply works. I hope they and other lightning companies continue to build out the right tools so people can make the infrastructure around El Salvador and whatever other countries to come more robust.
Economics, Engineering, Etc.
Nik Bhatia analyzes the narrative change after the El Salvador announcement. Peter St. Onge does one as well as does Hodl Onward. All three of these hit on some different angles for analysis and give interesting perspectives on what might happen next. Everyone agrees this is good for El Salvador and it likely starts the game of oneupsmanship with other states for Bitcoin supremacy.
Russell Okung urges Nigeria to adopt Bitcoin. This is a letter addressed to the president of Nigeria to get the country to adopt Bitcoin. Bitcoin is already popular among many in that country and it’s only a matter of time until this happens, and I hope his voice can nudge them in the right direction.
Tomer Strolight has a wonderful long-read about art, integrity, Bitcoin and NFTs. I found the idea of integrity in art to ring true and NFTs, as the article argues, are really way too easy to produce, resulting in the silliness we’ve seen. Real art has some proof-of-work as he highlights in the art by FractalEncrypt.
Jeremy Hildreth makes the case that Bitcoin is something like the meter which will allow economics to become more of a science. As there’s absolute scarcity, we can objectively measure other things in economics with Bitcoin. The idea is intriguing in that economics, especially macro-economics, has suffered from the lack of objective metrics and has instead relied on ridiculous cumulative numbers like GDP and CPI. I would love to see what economics does with Bitcoin in the next 30 years.
Kyle Torpey gives Paul Krugman a cruel fisking over his stance on Bitcoin the past 10 years. Let’s just say that Krugman has been wrong over and over again and Kyle takes him to task for it. Then again, being a Keynesian economist, he doesn’t actually have to be right on anything, he just has to say what the oligarchs want him to say, which he’ll do with fanciful justifications. Good on Kyle for documenting his history of wrongness.
Here’s what happened regarding the Colonial Pipeline, the FBI and their not-very-believable claims.
China really looks like they’re banning mining.
Coinmetrics has some interesting statistics on stablecoins.
Texas state-chartered banks can custody Bitcoin.
I will be at The Bitcoin Standard conference on August 12-14 in Mexico and BitBlockBoom in Dallas on August 26-29.
The Programming Blockchain seminar is in Mexico on August 10-11. 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.
On this week’s Bitcoin Fixes This, I took listener questions. I covered Taproot, all the stuff going on in China and of course, El Salvador.
I read through last week’s newsletter on Twitter Spaces which you can find here. Here is my panel with Jameson Lopp, Michael Flaxman and Michael Perklin talking about Bitcoin security at the MIT Bitcoin Expo. I was also on a very long episode of Bitcoin Brief with Tone Vays and Bitcoin Mechanic where we talked about El Salvador, China and Bitcloud.
Unchained Capital is a sponsor of this newsletter. I joined as an advisor to be a part of a company that’s enhancing the security for Bitcoin holders. If you need multisig, collaborative custody or bitcoin native financial services, learn more here.
Fiat delenda est.