Bitcoin Tech Talk #287
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What I'm working on
Bitcoin Songsheet - This is the name for my column at Bitcoin Magazine and this week, I wrote about Altcoin Naivete. That world really is like Hollywood, where a few insiders determine your success, the complete opposite of Bitcoin.
A Missionary’s Story - I wrote about Bitcoin Beach and Mike Peterson’s story to a Christian audience. The main argument in the piece is that the IMF is oppressing a huge portion of the world through monetary shenanigans. It’s ultimately spiritual oppression.
Health Care is Broken - I interviewed Avik Roy, who’s an expert on healthcare policy. For me, it was eye-opening to find out the history of the US health care system and how it came to be so broken. Between FDR, Eisenhower and LBJ, the system had some pretty bad stepdads growing up.
Rant about Lawyers - My moment at the Bitcoin 2022 conference was after a panel with a lawyer that was clearly positioning his preferred altcoins as being “decentralized enough.” I hate legal positivism with a passion and believe natural law is the real foundation, so that showed through in my rather animated response. If you’re interested, here’s the essay I wrote about natural law vs. legal positivism a couple years ago.
What I'm up to
Programming Blockchain - My seminar in Miami was cancelled, so for a limited time, I’m accepting students to the seminar April 20-21 in Austin. Please apply ASAP as there’s very little lead time. Because of the short time window, I will be giving the early bird rate to all who apply and get accepted.
Beef Initiative - I will be at the Beef Initiative conference April 23, which is best described as a combination of beef and Bitcoin. I’ve been ordering from these guys and have a deep freezer full of local beef bought with Bitcoin. If you’re near Austin, this will be a fun event to hang out at.
Austin BitDevs - The monthly Austin Bitcoin Developer Meetup is April 21 at Bitcoin Commons. As usual, there will be BBQ afterwards and possibly a mariachi band. Many people have been known to fly in for the event.
Tweet of the Week
Bitcoin
MuSig2 BIP - We’ve been talking about key and signature aggregation for what feels like a few years now, but we finally have a BIP to specify it all! Jonas Nick has published the specification and it’s not different than what you’d expect. The only tricky thing is that the coefficient for the second key is always 1. The tricky stuff like generating nonces is well explained and must be done carefully to realize its limitations. The applications of MuSig2 are broad, including Lightning Channel opens, which will be indistinguishable from other p2tr UTXOs.
Chaumian CoinJoinXT - This is a coinjoin proposal using a central coordinator and Schnorr signatures from ZMan. The main characteristics are that it requires equal inputs and generates a whole graph of transactions to beat current chain analysis techniques. For example, the CoinJoin may look like a single wallet with random spends to different addresses over some period of time, but in actuality are outputs of a coinjoin. The idea itself is a great way to defeat some of the techniques that chain analysis companies use. If anyone makes this, please name it chameleon.
Bitcoin Code Bounties - NYDIG is offering cash for certain tasks on Bitcoin Core. These aren’t particularly difficult tasks and are meant to get developers into the project. I’m somewhat skeptical that such monetary bounties will really get new developers into the project, but it’s worth trying. At least it gives developers a way to make extra money if they need to pay some bills.
Lightning
Taro - This is a lightning compatible colored coins like implementation that uses Taproot on Bitcoin. In fact, Taro stands for Taproot Asset Representation Overlay. The main idea is that there’s something called a Merkle Sum tree, which commits to not just a hash, but amounts through a whole Merkle tree to the Merkle root. The technical details are fascinating, as it has the ability to prove that an item is not in the Merkle tree using something called sparse trees. It looks like this is going to be the way that Lightning Labs implements some sort of USDT on Lightning.
Strike Integrating into Shopify - Strike’s major announcement is that they’re integrating with Shopify, making it possible to pay with Lightning at Whole Foods or Chipotle. This is indeed pretty cool, especially from a privacy perspective, but I honestly wonder how easy the process will be. How many employees will know what to tap for Lightning payments? Will they be familiar with the QR code that will show up and will anyone other than hardcore Bitcoiners even use it? That said, this will certainly be good infrastructure to have as we go towards a Bitcoin future.
Breez Using Greenlight - The popular wallet is changing its architecture. It used to be running a Neutrino node on the phone to verify everything for its wallet, podcast, and point-of-sale modes for its app. As they expand to video and chat to their app, it would be unwieldy to have a single app do everything, so they’re now splitting to many apps while using Greenlight to do the job their local Neutrino node used to do. That means there’s separation of tasks between managing a lightning node and managing the keys for the wallet. I imagine most lightning apps going forward will be using this architecture.
Robin Hood integrates Lightning - This is just the most surprising company to integrate lightning. BitPay announced their Lightning integration and BitGo sounds like it will soon. Of course, BitPay was beaten to the punch by the open-source BTCPay project, but it’s better late than never. Running a Bitcoin business these days means having these features. Companies like Coinbase and Binance that haven’t announced Lightning integration are bound to suffer as business moves to their competitors that have integrations to the fast and private lightning network.
Economics, Engineering, Etc.
Bitcoin Mining on Tesla Batteries - Blockstream and Block have announced that they’re going to do 100% renewable energy mining using Tesla batteries. The intermittent nature of solar means that excess energy that’s not used by the miners will be stored in these batteries and released to the same miners at night when there’s no energy generation. There’s probably some optimum where energy going to the battery and energy going to miners creates maximum profit opportunity. That said, given that mining profitability doesn’t fluctuate nearly as much as energy demand, I do wonder if the optimum is just mining all the time.
Why Hodl Hodl is Bitcoin Only - They published their reasoning and the article goes through a bit of the history of Bitcoin. Essentially, they argue that Bitcoin is truly decentralized and fair, while altcoins are centralized and unfair. They don’t support altcoins because they’re highly vulnerable to state interference. In a world where exchanges list new coins for a quick buck, it’s good to see a company stand on principle. Not only are they good for the industry, but they’re far more likely to survive a big shakeup should governments start going after altcoins.
Blockchain is a Bug - IDW makes the case that using a blockchain is a bug for almost every project. If it doesn’t require censorship resistance, then using something centralized is cheaper, faster and better. If it does require censorship resistance, it better be a bearer instrument. If it’s a bearer instrument then it better really be decentralized. Every project other than Bitcoin fails one of these tests in which case, it has no technical reason for using a blockchain. The only reason is political/regulatory. Claiming that it’s decentralized is useful for now because it skirts regulation.
Quick Hits
Impervious Browser Demo - The ability to do what they did on their browser peer-to-peer is awesome.
Mainstream El Zonte Feature - 60-minutes featured this yesterday and it’s not bad all things considered, but is way too deferential to the IMF.
Altcoin is exploitive and scammy - The article is scary if you care about privacy or the poor. Just read it.
Altcoin Blocks Congested - Another week, another altcoin has a flaw that doesn’t let transactions through.
What I’m Shilling
Unchained Capital is a sponsor of this newsletter. I am an advisor and proud to be a part of a company that’s enhancing security for Bitcoin holders. If you need multisig, collaborative custody or bitcoin native financial services, learn more here.
Fiat delenda est.