Bitcoin Tech Talk #326
Best Articles I Read in 2022
Case Against Quantum Computing - Quantum computing questions are my pet peeve. So many people think they sound smart when they bring up concerns about quantum computing, when really, they have no idea how it works and their understanding is based on a journalist’s understanding, which is to say non-existent. This is one of many articles that show how the field has become a large mental masturbation exercise with essentially no actual engineering to show for it.
World View and Interest Rates - The question posed in the article is not obvious to ask, but very intriguing. What if our whole world view the past 20 years is because of insanely low interest rates? We become way more high time preference and think it to be normal. Entire industries have been affected by this fiat contagion and we’re starting to see how that mentality is crumbling as interest rates rise.
In Praise of Gods - Rationality by itself is a terrible master. The article is a philosophical treatise on why having Gods, or some greater purpose is essential in using rationality. As we’re witnessing, much of the knowledge industrial complex is riddled with errors and justifications of what people already want to believe. We need purpose and we need wonder.
What I'm up to
MENA - I’ve been in the MENA region for almost a month now and it’s been a huge learning experience. As with most parts of the world, there are concerns that local people have that are almost completely unknown in the West and dynamics which are completely unappreciated. I’m now convinced that the conflict in Israel/Palestine is not religious at all, but an old fashioned fight for dominance, for example. As a Christian, going to many of the sites from Biblical times has also been an amazing pilgrimage. It’s one of the few things I’m willing to spend Bitcoin on.
Not Even Trying: The Corruption of Real Science - I’ve written about Fiat Science before, but this book goes much further, accusing the scientific industrial complex of having turned into a complete bureaucracy missing any and all elements of truth. The main error that the author has identified is that scientists are no longer seeking to describe reality, but serving another master. That master is their careers, which with fiat corruption, has led to them producing nothing but meaningless papers. The book is great and prescient given it was written 10 years ago. If you’re wondering why we don’t seem to be making many breakthroughs, this book describes why.
Bitcoin Meetups - I’ve been surprised at how many Bitcoin Meetups there are and how they thrive almost everywhere. If you’re in any of the countries that I’ll be in the next few months (Lebanon, Egypt, Turkey), let me know if you’re interested in meeting up by responding to this email.
Tweet of the Week
What I’m Shilling
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Bitcoin
Game Theory RBF - idBrain has an interesting proposal to make zero-confirmation transactions a bit more secure using the power of full-RBF. The idea is to use PayJoin so that if the transaction gets replaced by the payor, the recipient can pay a slightly higher fee. The idea is to give the recipient some power over the zero-conf transaction, though to some degree that can already be done today using CPFP. The idea that there’s a countermeasure is a powerful thing, though and perhaps zero-conf transactions can be used.
Wallet Choices - Proof-of-Keys was this past week and Brandon Quittem goes over the pros and cons of the different wallet options for holders. As you might expect, hardware wallets are recommended for most people, and multisig for people that have a lot of assets. The post is very thorough and there’s a lot of choices for new people. I would encourage everyone to learn this stuff as not learning it and just trusting someone is an easy way to get wrecked.
Rust Whirlpool Client - A new client for this coinjoin protocol is out and is based on Spiral’s BDK. It’s always interesting to see which protocols get adopted by third party developers as they indicate popularity. Coinjoins very much depend on usage to increase the anonymity set, so popularity is very important. We still don’t have a standard coinjoin that “everyone” uses, so it will be interesting to watch to see if this becomes the default.
Lightning
Immediate Channel Funding - Zman and Jesse Posner have a proposal for creating channels really quickly using a Lightning Service Provider. The basic idea is that the funds coming into a wallet are put into a timelocked single-sig or no-timelock 2-of-2 that lets the LSP gain money immediately in a fashion that lets them credit a new lightning channel without waiting for a confirmation. This is particularly important for mobile wallets, which are often not online for very long and can’t really watch for transaction confirmations to do the actual channel opening and so on. As many already rely on LSPs, why not have a process that lets them spend lightning funds faster?
Lightning File Storage Server - You can now get paid to store files for others. What so many stupid altcoin projects have done with their Rube Goldberg machines, this does in a simple and understandable way. You pay via lightning for a file you want. Extremely simple, requires no tokens and the value prop for both sides of the trade are straightforward and easy to understand. I’m still not sure this is a viable business, unless you can scale very effectively, but it’s refreshing to see something honest and straightforward where the FileCoins of the world make it complicated and scammy.
Mostro on Nostr - Mostro is a project originally launched on Telegram for p2p trading without KYC or third party custody using Lightning. As Telegram is a major single point of failure, they’re starting work on moving to Nostr. This highlights how Nostr and Lightning are very compatible and it looks like the two are going to grow together. Already, there are tip buttons and so on which allow value transfer within the Nostr network. As there’s no central corporation, once there’s a critical mass, I don’t see it stopping.
Economics, Engineering, Etc.
Silvergate the next domino? - The bank that’s provided so many crypto companies banking services looks to be in some trouble. It seems they’re having a good old fashioned bank run as many depositors are rapidly withdrawing. As all banks are insolvent due to fractional reserve banking, this could affect every company that’s banking with them, which is pretty much every US-based crypto company. Banking has historically been a major choke point for government control. This may be a way for regulators to shut down many of these companies, especially given how toxic many of them are in the eyes of the public. This situation is worth watching closely.
Monetary Contraction - For the first time in 33 years, it looks like we have genuine monetary contraction. Money is not so freely available anymore as interest rates can attest. What does this mean? There are fewer overall dollars available to buy the goods in the market. Prices should go down as cash is more attractive than ever. We’re going to see better interest rates, even at banks, in the near future. The larger demand for dollars means a smaller demand for everything, including assets. We’re in for some pain.
Hayes on SBF, Monetary Imperialism and more - Arthur Hayes has a really long essay on a variety of topics, including the monetary imperialism of the west, the bifurcation of the world and the imitation of status that the Traditional Finance system has spawned. The main point of the essay is to show that SBF was not chosen accidentally and that his being showered with money was a result of the system that we have. As he opines the system itself is about to change drastically in the future with the Eurasia part of the world set to take a large bite out of Pax Americana.
Quick Hits
Luke-jr rekt - Core developer and very opinionated Bitcoin holder has been hacked of all his coins. If he can get hacked anyone can. Take your security seriously.
Mt Gox payment delayed again - In what has to be one of the slowest processes ever, the Mt Gox proceedings have been delayed until September 2023, almost 10 years from its initial collapse.
Taleb self-own - The guy that just can’t take L’s continues to double down on COVID, anti-Bitcoinism and much more. He’s quickly entering old man yelling at the sun territory.
SBF wants to hide his bail guarantors - The $250M bail was a misleading figure, but there were guarantors that backed his promise. SBF wants them to be hidden, which raises the question. Who are they?
DCG Struggles - Barry Silbert’s company just laid off 30% of their workforce. There’s probably a ton of rot that needs clearing and there’s little hope he can run the clock out.
Fiat delenda est.