Bitcoin Tech Talk #306

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What I've been working on

  1. Why there’s no need for NFTs on BTC - This rant is much more about altcoins in general and I explain why I think stablecoins are really much better served in an e-cash system. All of these things are DINO and the only reason any of them go on a blockchain is to preserve that “decentralized” status, which is fake to begin with. The idea is really so they can avoid regulation and do what they’ve wanted to do, which is print your own money.

  2. Kerville Talk - My talk from the Beef Initiative is up and it’s about how the dollar works. The audience here were a bunch of ranchers, so I tried to explain how central bank backed fiat money works and showed the moral implications of such a system. The system is one based on implicit taxation through inflation, which is why an alternative is necessary for storing your wealth.

  3. Thank God for Bitcoin - I’m backing the media company of the same name as the book. It’s essentially a way to Orange Pill Christians, though I’m sure some of the content will be good for Bitcoiners as well. The plan is to have some podcasts, content and conferences for the segment of the Bitcoin community that are Christians.

  4. Byzantine General’s Problem - I explained in this podcast about why proof-of-stake doesn’t solve the main problem of decentralized coordination. Proof-of-stake is obviously biting ETH as the OFAC compliance stuff is showing. They are utterly centralized and there’s no way to turn that to decentralized, so it’ll be interesting to see how they’ll handle the coming regulation. The government, through regulation will be controlling what transactions go into that chain soon enough and those that don’t comply will get their staked ETH taken away from them.

What I'm up to

  1. BitBlockBoom - My talk will be on Saturday and will be called “fiat delenda est.” I’ll be showing how fiat money has ruined everything good and meaningful in our lives through the theft of our time, effort and energy. I’ll be around to sign books, hang out and talk. The community around this conference is unbelievable and has to be experienced to be believed. Looking forward to seeing all of you there!

  2. Bitcoin Commons - There are a variety of activities going on in Bitcoin Commons during the week, including Vijay’s BBQ and the launch of Bitcoin Times print edition. It’s Bitcoin and Beef all week. I’ll be there as well to hang out, sign books and socialize. Please feel free to drop by and say hi!

  3. Baltic Honeybadger - I will be in Riga soon after to attend this wonderful eastern European conference. The conference is a lot of fun at least the last time it happened in 2019 and you get a different crowd given that it’s in eastern Europe.

Tweet of the Week

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

Bitcoin

  1. Fedimint Updates - The post from Blockstream goes over what Fedimint is, how it’s evolved and what new things are developing. The more I think about Chaumian e-cash, the more I’m convinced that every altcoin’s model is essentially that with a vestigial blockchain. If the project is successful and gains traction, I wonder whether someone will start issuing altcoins this way. It’s a lot more private than something with a blockchain, for example.

  2. Bitcoin-only Trezor - Trezor now has Bitcoin-only firmware available on their devices. This is good news for people that don’t want the additional attack surfaces of altcoins, nor the firmware updates that are necessary when these other coins update. I like this trend of hardware devices that are going deeper into Bitcoin instead of wider into altcoins.

  3. Mnemonic Encoding - The post goes into different ways to encode the BIP39 words we all know and love. In particular it looks at how to solve for blind people, particularly those that became blind as adults and can’t read Braille. The article is long, but the ideas on how to back these up are intriguing. Embedding your phrase in music or in Lego blocks is unlikely to be used all that much, but these ideas are likely to create better UX for backing up seeds.

Lightning

  1. KolliderPay - Kollider now has an option of keeping some of your Lightning balance in USD or EUR. The way this works is through a swap on the backend. Unfortunately, the website doesn’t explain how this works, but it’s apparently very similar to stablesats. That is, there’s a contract for difference in there somewhere requiring an oracle. This would obviate the need for a stablecoin, though the edge cases around how much BTC to lock up and so on remain thorny.

  2. Core Lightning on Replit - This popular web-based developer platform is an ideal place to learn how to do a lot of stuff and Lightning is no exception! Using Nix you can spin up a node and program against it on testnet by following the instructions in the link! I really like Replit and the ability to get started without too much setup. I hope more developer kits are made with Replit in mind because it’s so much easier. Much like how Docker changed deployment, Replit is changing development environments.

  3. BOLT12 - The Bitcoin Manual has a really nice explanation of BOLT12 (aka Offers). The post goes through the difference between BOLT12 and LNURL, the advantages, disadvantages and so on. Perhaps the biggest thing unsaid in the article is the biggest reason for it not being a standard yet. Lightning Labs is backing LNURL while others such as Blockstream are backing BOLT12. It’s hard to get them to agree on a standard, so how will things play out? That’s the bigger question.

Economics, Engineering, Etc.

  1. TornadoCash Banned by OFAC - TornadoCash is a mixer for Ethereum and the US government made it illegal, basically. The accusation is that it’s used for money laundering, which probably has at least some merit. The technical decisions of Ethereum to use an account-based system instead of a UTXO system makes regulating like this much easier, and also makes screwing with the Ethereum devs easier, too. The incident is showing just how centralized Ethereum is and how vulnerable they are at their centralized choke points. This could not have come at a worse time given the switch to proof-of-stake, since so much of the stake is in the hands of entities that will have to be OFAC compliant.

  2. Galaxy Digital Report on NFTs - Much like ICOs before them, these supposedly valuable digital properties are anything but. They convey few if any rights to the holder of the token as a look into the terms make clear. The report is not from some Bitcoin Maximalist, but from Galaxy Digital, no stranger to altcoins. Sad that so many people fell for this much like the ICOs from 2017-2018.

  3. Downfall of 3AC - This is a nice long-read on exactly what Hsu and Davies did with Three Arrows Capital. The story is very familiar to anyone who’s studied fiat money, which is that they over-leveraged to make lots of money and when things started to go south, they attempted to keep things afloat by moving money around. This is sadly the destination for so much “DeFi” stuff.

  4. We are in this together - Or not. The essay from Gigi shows why Bitcoiners don’t care about Ethereum’s troubles. As he argues, they brought this on themselves while criticizing Bitcoin the entire way. They deserve the scorn they’re getting from Bitcoiners because they made these choices and are expecting us to bail them out.

Quick Hits

Fiat delenda est.

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