Bitcoin Tech Talk #328

Interesting Stuff

1. Failure of Peer Review - Fiat makes everything a status game, including science, which is supposed to be evidence based. There are so many problems with it and this academic argues that science historically didn’t progress due to peer review and instead encouraged fellow academics to publish pdfs online. The response he got was very telling. A lot of defensiveness, a lot of whataboutism and mostly trying to protect the investment that a lot of academics have made into this very costly status game. After reading this, I’m ready to say that peer review is a scam.

2. Financial Nihilism - Luke Burgis is a talented writer and he explains how financial nihilism is a symptom of a much deeper nihilism that pervades society. It’s a wonderful long-read and if you’re curious about why meme stocks seem to do well, and how Dogecoin and profane NFTs have any value at all, this is well worth reading. I wrote something like this a while back about the Christian perspective on investing, but his cuts deeper and asks more questions of the reader. I don’t think he sees that fiat money’s role in the problem, and that might be a fruitful essay for me to write.

3. Cargo Cult Quantum Factoring - The articles I post on how quantum computing is BS seem to be popular and believe me, there’s a lot more where that came from. Scott Aaronson here points out that the algorithm about RSA being sub-linear is a really deceptive paper indeed. The main thing here is that Shor’s algorithm is not Schnorr’s algorithm, which is what the paper talks about and it’s extremely unlikely that quantum computers help at all in the latter. Quantum Computing is just a deceptive academic talking point and the press release can rightly be called fake news.

What I'm up to

1. Hal Finney Retrospective - I went on CoinDesk to reflect on the significance of Hal Finney’s transaction with Satoshi Nakamoto 14 years ago. The main takeaway for me is that Hal was really interested in private digital money and had enough reputation with the cypherpunk community to really vouch for it. He did and while not every cypherpunk has adopted Bitcoin, his endorsement helped in the adoption.

2. Istanbul Bitcoin Meetup - I will be giving a presentation at the Istanbul Bitcoin Meetup this week to talk about the various methods of doing Multisig on Taproot. I’m also really looking forward to exploring the city as it’s been a place I’ve been wanting to go to for some time. It’ll be interesting to see if the inflation there is noticable and see how it’s affecting people.

3. Egypt was low time preference - I’ve spent the last week in Egypt going around and seeing many of the sites. What has struck me is that so much of what was built there was meant to last. Though not always successful, many of the buildings managed to last through a deep desire to create something that wouldn’t go away. This is in sharp contrast to modern construction which sadly doesn’t last more than 30 years or so.

Tweet of the Week

What I’m Shilling

• Books

  • Bitcoin and the American Dream

  • Thank God for Bitcoin

  • The Little Bitcoin Book

  • Programming Bitcoin

• 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. B10C’s Review - Core developer 0xB10C has a review of 2022 up that is worth reading. These are all projects that he worked on and there are many. The post is a good overview of what it’s like to be a core dev and what sort of concerns and ambitions such a person might have. I found the ideas of creating a signet reorg a regular thing and monitoring p2p through honeypots very interesting. I hope funding for developers like him will continue.

2. Coldcard Security Model - CoinKite goes into detail on exactly what the security model of ColdCards are and how you, as a user, can verify each step. It’s fairly long, but there are really good sections on various mitigations to different threat models. If you’re serious about your Bitcoin security, reading through all of this and picking and choosing the right security measures to take would be very wise.

3. Nutstash - Nutstash is a Chaumian e-cash for Bitcoin. The main usage here is that there’s really, really good privacy if you use Nutstash for spending as there’s no blockchain to keep track. The main tradeoff is that you have to trust a federation with the Bitcoins you’re spending. I can see this being very good for small amounts and this system will be a complement to Lightning in the future.

Lightning

1. C-Lightning embedded Core implementation - Michael Folkson wants to create a fork of Bitcoin Core that has c-lightning embedded, essentially making it a single application. The idea would be that this would be the software you can run to get Lightning for free, in much the same way that the Core implementation has the Bitcoin Core wallet embedded. There are probably some really good efficiencies to be gained this way, but it’s not clear they’re needed. Still, an interesting proposal and one worth looking at.

2. Alby Nostr Extension - The Lightning Browser App, Alby has a Nostr extension! The essential thing needed for a Nostr relay is a public key and Alby clearly has the ability to store one from being a Lightning wallet, so this tech can be used for Nostr as well. This showcases for me just how powerful a simple protocol can be. The fact that Nostr can build something so easily is a testament to its power. Maybe we can get Nostr on my toaster soon.

3. Lightning Vault - Authentications on Lightning can be pretty tricky. The main way has been through the use of Macaroons in lnd to connect to your own node, but that’s not easy to set up on the fly, nor that available. Lightning Vault has a solution by having time-limited macaroons on AWS. It’s an interesting idea, especially if you want to connect to your own node for validation and such.

Economics, Engineering, Etc.

1. Make Time Preference Low Again - Saifedean explains the very important concept of time preference and how it changes under Bitcoin. The main reason why is because Bitcoin allows for non-dependent saving, which lowers time preference allowing all sort of good things to emerge. The impact of Bitcoin in real lives is almost entirely due to this one phenomenon and it shouldn’t be underrated.

2. StreamChain - This is a sidechain idea from a few years ago that was brought to light in this blog post. The idea is very interesting in that there’s a second proof-of-work in the sidechain and a lockup period for withdrawing from the sidechain to the mainchain. The design is quite clever in that it uses a challenge mechanism, similar to Lightning in that there’s a period where a successful challenge would deny a withdrawal. There are problems with the idea, though, as pointed out because there are multiple ways in which someone can double spend, and it’s likely much easier than on the mainchain.

3. 10101 - The story behind this company is all too familiar. They tried to do atomic swaps with BTC and ETH, then tried doing similar things with XMR, then tried doing similar things on Liquid and then finally pivoted to derivatives using DLCs. This last part is what the blog post is about and their vision for their app is very interesting as it allows for synthetic USD using Bitcoin prices and DLCs. Of course, there’s risk of the Oracle reporting wrong prices, but the idea of the app of being able to hedge in all sorts of different ways just using Bitcoin is fascinating. We’ll see if they have enough liquidity to make it work.

Quick Hits

• How Luke-jr got hacked - Technical explanation of what happened. Luke should sue his hosting provider.

• FTX and Congress - A significant percentage of Congress took FTX money, tainting them for Congressional inquiry.

• Money Transfer Data Buffet - There’s a secret program that has let law enforcement agencies get money transfer data from the US to any of 20 different countries. You don’t have any privacy when it comes to international money transfers unless you use Bitcoin.

• New Hampshire Energy Stabilization w/BTC - At least one state is looking to use Bitcoin mining to stabilize their grid.

• 3AC + CoinFlex - Their much-maligned proposal for a new exchange named GTX is apparently changing its name, but I can’t believe these guys are getting funding.

• Genesis Files for Ch 11 - No, this isn’t over. It’s just one move in the many between DCG and Genesis’s creditors.

Fiat delenda est.