Bitcoin Tech Talk #324

What I've been working on

  1. How Fiat Ruins Everything - My talk from the Lugano Plan B Forum is up! I talk about rent-seeking, merit, providing value and how civilization is being ruined. This was a fun talk for me to put together and without Bitcoin at the end, it would probably leave most of you depressed. But because Bitcoin exists and the arrow of history isn’t pointing down exclusively, there is hope. Fiat may ruin, but Bitcoin fixes.

  2. Cypherpunk Origins Panel - This was a panel I moderated at the Lugano Plan B Forum about the influence of Cypherpunks on Bitcoin. In many ways, this was a dream panel for me with Adam Back, Nick Szabo and Paolo Ardoino. We talked about the origins of the Cypherpunk email list, their commitment to coding and engineering, how digital cash systems evolved and what eventually build Bitcoin.

  3. Stacker News - Some of the best Bitcoin content is on Stacker News and it’s been growing like crazy. It’s one of my go-to spots besides Twitter for a good summary of all the things Bitcoiners are talking about. They just started a new referral program, which this link does for me. If you’re a free subscriber, this is an easy way to support me, but also, to contribute to the Bitcoin conversation.

What I'm up to

  1. Israel and Palestine - I’m in the West Bank this week (specifically Bethlehem) to celebrate Christmas in the city of Christ’s birth. I’ll be going to the Israel side to see many of the other Christian holy sites. Please let me know if there are any specific things I need to check out, both as a Christian and a Bitcoiner.

  2. Year End Reflections - 2022, like the two years before it, has been unlike anything that came before. We’ve been returning to normal after COVID, but we’re also seeing crazy interest rates, a new war between nuclear powers and a sharper birfurcation of the world. It’s also a bear market year for Bitcoin, which has many fiat pundits beating their chests. It’s also good, however, because it’s clearing out the cruft. An essay along these lines are what I’m thinking in addition to the beliefs article that I still have to finish.

  3. 2023 - Of course, with the end of one year, we begin another. We’ll start to see how the isolation of Russia economically affects prices, particularly with respect to energy. The severe weather we’re seeing already doesn’t bode well for a lot of energy grids around the world. Thinking through the global implications of the Ukraine war as it enters year two will be important for figuring out what will happen next.

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. Liana - This is a Bitcoin wallet with a timelocked backup feature, which I haven’t seen before. Timelocked outputs have been used on the Lightning Network for a while now, but this is the first wallet I’ve seen which makes this feature available for non-lightning outputs. I personally think a timelocked backup multisig should be standard in all these wallets, perhaps without the parties knowing that they’re backups! Taproot makes this sort of thing much easier and I hope more wallets implement this feature.

  2. Kraken Taproot Adresses - Kraken joins the very few companies that seem interested in supporting Taproot addresses as most that support altcoins are busy delisting them. This lack of adoption by many others in the industry is a sobering reminder that tech advancements like Taproot take many years to really propagate. As we consider other soft forks, it’s really a 10-year timeline or longer that we have to consider.

  3. Bitcoin’s Top 10 Developments of 2022 - After catching a lot of flak for their very cringy top 50 people of crypto which included zero Bitcoiners, CoinDesk let some Bitcoiners write an article focused on Bitcoin. The list is a reminder that there was a whole lot of improvement in the Bitcoin ecosystem this past year, in particular, the development of the lightning network and new ideas like Fedimint.

Lightning

  1. Lightning Privacy Primer - Voltage has an excellent primer on the privacy implications of how lightning works. The post is good not only to understand the privacy aspects of Lightning, but also to understand how the Lightning Network transfers data. In particular, they explain what data is encrypted at each stage. This is still a nascent topic and not very well understood, so reading articles like this will help you understand the tradeoffs you are making.

  2. Statechains + LN - Shinobi explains how you can use Statechains for off-chain balancing. As a reminder, Statechains are essentially UTXO transfers that use signatures and split private keys to transfer them off-chain. The problem with UTXO transfers of Statechains is that you need to accept the entire UTXO or have some corresponding offseting UTXO to send back. Thus, a UTXO for 1M Sats has to transfer all 1M. By using Lightning, you can transfer 400k sats by opening a channel instead and transferring just that amount. It’s a very interesting proposal as it wouldn’t require an on-chain transaction to open a Lightning channel.

  3. Eclair Architecture - ACINQ explains how their software is designed for scalability. The post goes into detail on their technical choices that they made and how it enables relatively easy scaling. Given that they run the biggest node on the Lightning Network, there’s a lot to learn about not just Lightning engineering considerations, but in software development in general. Lightning nodes like Eclair seem to be well positioned for enterprise usage in the future.

Economics, Engineering, Etc.

  1. Value Enabled Web - Gigi writes on the importance of attention in today’s web and how it’s the engine that runs the centralized surveillance nightmares that we deal with today. As he points out, Bitcoin and Lightning allow for a completely different way to run the web through value exchanges. We are in something of a transition state between the decrepit, corrupt and centralized way and the new, fair and decentralized way and the implications are definitely worth pondering. He goes through many of the implications like identity. Give this a good read to understand where we’re going.

  2. Nostr Start Guide - This decentralized alternative to Twitter is really starting to get traction. If you want to get started, this is about the most user-friendly guide I’ve seen yet. The post explains what Nostr is, what software you need and how to get started on the network. Unlike the many altcoin scams that tried to claim the decentralized Twitter mantle, this one is actually decentralized because people have to run their own servers! Let’s hope it continues to grow.

  3. Binance US looks sketchy - Now that the FTX saga has blown up so much, all eyes are on Binance and the shenanigans they’ve been pulling. In particular, their US subsidiary looks very much like FTX US in that it’s not really its own entity as much as it is a shell company to make regulators happy. This doesn’t prove that they’re insolvent or anything, but the parallels are making a lot of people nervous.

Quick Hits

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  • Onecoin Founder Pleads Guilty - A $4B fraud that ran for 4 years and stopped 4 years ago finally is about to get the first person landing in jail.

  • Brazil makes Bitcoin Legal - Not that it would stop anyone if they didn’t, but it’s nice to know that it’s legal for payments now.

  • Bitfinex Delists Tokens - This lists BSV, which is significant since there are so few places to trade that altcoin now.

  • SBF Out on Bail - The bail amount is nominally $250M but in reality a promissory note with his parents’ house as the underlying collateral.

Fiat delenda est.

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