Bitcoin Tech Talk #319

November 21, 2022 Paid

What I've been working on

Fiat Ruins Civilization - My latest article published in Bitcoin Magazine makes the argument that Fiat Money ruins civilization. Incentives break with the fiat money printer and ultimately cause all sorts of evil, including a regression of civilization. Merit, unfortunately gets thrown by the wayside and rent-seeking becomes way more prominent. Many of the ideas here are ones I will be exploring further in the book I’m working on.
Bitcoinist Article - Bitcoinist covers the big debate from last week between me, Samson, Vitalik and Diego. The main debate was whether FTX was a symptom of the entire altcoin industrial complex or whether it was a one-off thing. I argue the former as trust is given way too easily by way too many people. I believe that the faster bad things fall, the fewer people get hurt.
CoinExt Interview - My interview with CoinExt is up. I talked to these guys about Bitcoin, incentives, the current macro trends and so on. Many of these interviews come down to “why is Bitcoin price the way it is?” I generally just make the point that price is a function of both supply and demand and while we know the supply, we don’t know the demand. The current macro picture has reduced the demand for Bitcoin, but it’s also exposed a lot of altcoins as well. I think in general, what’s happening is healthy.

South America - My tour of the continent continues this week in Uruguay and Ushuaia. The plan is to see the “end of the world” and make my way to Chile and then onto Peru. I’ve had Machu Picchu on my bucket list for a while, so I’m really excited to finally see it. I’ve been told that Rainbow mountain is worth seeing, but the hike seems like it’d be pretty rough, especially with my kids.
Charity - I’m working on an article on how charity is debased by fiat money. This is a bit hard for me to write because so many people have such a positive view of charitable endeavors. I’ve read and watched a bunch on this very topic, but if you have any resources I could use about the downsides of charity, I would appreciate a reply to this email.
The Middle East - I’m planning to go to this area of the world in December-February. If there are any conferences that you’re aware of around that time, I would appreciate a heads up. I’m very excited to go to many of the places I’ve only read about in the Bible.

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Electrum Server Performance - Jameson Lopp looks at the various block explorer backends to Bitcoin. These are all additional things you need to run on top of your node if you want address balances, for example. Electrs, ElectrumX and Fulcrum are the ones analyzed. Overall, the newcomer Fulcrum, holds up surprisingly well. Most node-in-a-box vendors have one of these as an available option for your node, but I would like to see users be able to select the right one based on what’s best for their needs.
Proof-of-Reserves - Given the fiasco that was FTX, BTC Policy Institute has released a paper on Proof-of-Reserves. While it’s encouraging to note that there’s a good number of exchanges that are participating in Proof-of-Reserve attestations, I remain pretty skeptical that this is a good thing. It’s very easy to get an attestation that some amount of money is there, while still using it to get a loan, for example. The proof-of-reserve will give many people a false sense of security, which I think would be harmful overall.
Dice Passphrase Generation - EFF has an article on how to generate a passphrase using dice. I would love to see a robust recommendation like this for Bitcoin seed words. Currently, there’s seedpicker, but nobody has really come up with good solutions to get the entropy you’d want for a seed phrase. It’s still a bit nerve-wracking for me to see that hardware wallets will generate seed words for you rather than have you add some level of entropy.

Preimage Stealer - If an invoice is paid a second time, the hash reveal from the first time can be used to steal the funds by one of the routing nodes. This is one of the reasons why we make sure we don’t reuse invoices. The tool here steals these funds using bad security practice. This is one of those tricky parts of setting up lightning that you really need to understand and this is a good tool to help people learn their lesson monetarily.
Lightning Projects - Wondering if your idea on LN is already being worked on? This is a pretty comprehensive list of projects that use Lightning. There are over 1400 projects listed, which is more than I was aware of. Point to this page when altcoin morons complain about how “nothing is happening on Bitcoin.”
Cash App’s LDK use - Cash app has a blog post on how they used LDK to enable lightning withdrawals and deposits. LDK is pretty powerful and the various bindings they’ve already developed make it relatively easy to use it with various languages, like Java in the case of this blog post. If you’re building a Lightning project, looking into LDK is a good idea to not have to reinvent the wheel.

SBF Train Wreck - The interview with Vox is something else. Not only is the interview over Twitter DM, but the mental state of SBF just seems incredibly off. Some of it is absolutely true, like his admission that his advocacy of various causes like Effective Altruism and the Democratic Party are a bunch of Shibboleths. What’s absolutely stupifying is how this guy was taken so seriously for so long. But then again, Cantillon winners are usually not the smartest guys in the room, just the most politically well positioned.
Will Blockchain Die Already? - The Australian Stock Exchange finally abandoned plans to settled their trades on “blockchain technology.” If you’ve followed my writing for any length of time, you know how skeptical I’ve been of this ridiculous thesis that blockchain is useful for anything other than Bitcoin. To be fair, this is a quasi-government entity, so it takes longer for them to see the grift, but I really hope this quantitative tightening clears out obvious stupididies like this from the market.
History of Bitcoin Custodians - Jameson Lopp reminds us that holding Bitcoin with custodians is not a good idea. Based on his analysis, something like 1M BTC have been lost on exchanges and custodians over the history of Bitcoin, which is around 5% of the entire supply. As usual, the not your keys, not your coins mantra should be followed. Trusting is not good polity.

BitBox update - Their UI got a nice improvement among other things.
Self hosted is a ridiculous term - EU continues to try to restrict actually owning your Bitcoins
Genesis stopped withdrawals - Gemini’s Earn product is affected as well.
FASB ruling - Bitcoin holding no longer penalized based on this ruling for corporations.
White boy - Arthur Hayes opines on the fraud that is SBF.
UK Inflation - Is now double-digits.

Fiat delenda est.