Bitcoin Tech Talk #343
Interesting Stuff
Weak vs. Strong Link - Very interesting and useful categorization of different problems as weak or strong link. The main idea is that you will either want to make sure that the weak links are shored up in certain types of problems and you will want to make sure that the strong links are strengthened in other types. Security is a weak link problem, for example. What I’m finding is that when viewed in the light of individual liberty, most things are strong link problems.
Three City Problem - The article is a way of viewing life from the perspective of three forces. Traditionally, there were two, reason and religion, represented by Athens and Jerusalem. The author here adds Silicon Valley as representing something completely different, that of utility. It’s an interesting paradigm to think about, though I completely disagree with the author. Utility has a motivation, and sadly, Silicon Valley today is completely infected by fiat, which really means that there’s a status game at play which mucks our pursuit of truth and meaning.
En-shittification - The article has a provocative headline and it’s hard to disagree with the analysis. So much of what gets sold in ads is over-priced because the marketing dollars spent have to be made up somewhere. Everything is getting suckier and the reason is that these companies need to squeeze more money out of you is the main message of the article. Sadly, this is the reality of fiat money where marketing and deceptive business practices have to make up for the inflation that producers continuously have to outrun.
What I'm up to
BlockMedia Part 2 - The second part of my interview with BlockMedia is now up. I spoke about the IMF, the Dollar Hegemony, why people are starting turn to Bitcoin Maximalism and how this is going to change the current system. If ever there was a country that needs to hear this, it’s Korea, as its future is hanging in the balance with its obscenely low birth rate and the malaise among young people.
Book update - My manuscript is with the editors and it looks like the release will be sometime late August. I have some plans for this book, including a video book trailer, a crowd-fund using Bitcoin and special items that you won’t be able to get elsewhere. There’s also some possibility of foreign translations fairly quickly. Stay tuned to find out more!
Tokyo Meetup - The actual meetup isn’t finalized yet, but it’ll be Friday this week. If you’re in Tokyo and want to hang out with me and some other Bitcoiners, please reply to this newsletter!
Nostr Note of the Week
What I’m Shilling
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Bitcoin
OP_ZKP - Weiji Guo proposes a new opcode called OP_ZKP (Zero-Knowledge Proof), which would enable zero-knowledge-based spending authorization for Bitcoin. The idea is to authorize spending based on off-chain computation, which provides a suitable proof. The proposal would make the Bitcoin script Turing complete and enable payment aggregation, stablecoins, and a lot more. However, it also brings about ecological implications, such as proof generation, computing power services/vendors, contract composability, and vast changes to wallets.
Inscriptions off-by-one - It’s no surprise that inscriptions have all sorts of bugs and stupidity around cases it didn’t know to handle, but the thing that surprised me was this transaction. It’s spending a 0-value output, which I didn’t think was possible. The transaction pays no fees, so the miner had to include it specifically, and probably got paid off-band. Supertestnet even made a tool to create these inscription-breaking transactions. This episode does expose the dangers of trying to add meaning through convention. The spam is worse than ever, but at least that will transfer money from people that don’t really get Bitcoin to those that do.
Formosa - This is a different way to make seed phrases easier to remember, which is to put them into meaningful sentences. I don’t know too many people that memorize their seed phrases, but perhaps that’s a much better way in certain security scenarios. I do think some form of keeping everything in your head solution would be useful, but honestly, as a community, we haven’t done much in making this that easy.
Lightning
LNMesh - This paper created a proof-of-concept using bluetooth and wifi to do lightning transactions off-line. The concept is intriguing and locally settled lightning transactions can almost be a layer 3. Of course, the internet is very much available almost everywhere in the world, but having some setting for where such things are not available would be very useful. I would love to see a bluetooth only lightning settlement between phones if they have a channel against each other.
Email/Lightning in one address - Sovrn has a service to help you make a lightning address act as an email address and vice-versa. The idea is that you can send people sats the same way you can send them an email. This is reminiscent of how paypal was marketed back in its early days, and in many ways, Lightning is fulfilling that vision. Now if they could help me set up my own email server that works across all my devices, that would be amazing.
Nostr-Control - You can now control your CLN node via Nostr DMs. The idea is clever as it’s a decentralized channel of communication that can be used for all sorts of useful things. Controlling your lightning node seems like a good first step, but there’s so much more possibility here. I want my node-in-a-box to have an interface available via Nostr so I don’t have to expose some random port for the crappy web UI. Free business idea: put a LLM/AI engine in there and tell it in natural language what you want it to do and have it fulfill your request.
Economics, Engineering, Etc.
El Salvador Tech Tax Law - El Salvador is working hard to attract talent and they have a doozy here with the new law that just passed. All taxes are eliminated for tech, software and hardware. It’s an amazing deal for new manufacturers, though clearly, they’re a bit behind on the infrastructure and market development. I keep hearing about Bitcoin people moving there and this sort of competition for the best and the brightest is going to become an increasing reality in the next decades.
DAME Tax - By contrast, the Biden administration seems hell-bent on destroying mining in the US by imposing a new tax. The tax would apply only to cryptocurrency mining and not any other industry (porn, video games, dryers, etc) and has little chance of passing on its own. That said, it may be used as a bargaining chip in a must-pass omnibus bill. Should this get into one of these, there will be some noise that needs to be made.
Interest Rate Risk - In the meantime, banks continue closing and the fragility in the markets continues to get worse. As James Lavish points out in the referenced article, a lot of banks have a lot of exposure to interest rate fluctuations and there’s probably a lot more failures coming as a result. It’s looking more like the Fed will backstop all deposits at these banks, but that’s just more inflation done in a hidden way. The recent correlation between bank failure news and Bitcoin price seems to be no accident.
Quick Hits
Bhutan accumulating BTC - They seem to be doing so in a stealth way through mining, which, given its location between India and China, makes some sense.
$5M to OpenSats - This huge funding comes from Jack Dorsey to fund more open source projects on Lightning. Congrats to Gigi who will be leading the effort full-time there!
IRS Watching Ebay - Looks like the IRS is watching online sales to catch you for more taxes. Great, more new bureaucrats to deal with.
Withdraw from Venmo - You can finally withdraw BTC from Venmo.
Fiat delenda est.