Bitcoin Tech Talk #344
Interesting Stuff
High IQ Measurement - We tend to give people who accomplish something great mythic status and in the modern day, this is through IQ. As the article points out, measuring high IQ is fraught with many problems, not the least of which is that the measurements have enormously high variability. Past 130 or so, it’s very difficult to tell whether further points actually measure what they purport to measure. We live in a world that has fetishized intelligence and this article is analyzing just how much we have.
Google has no moat - This is a leak of Google’s internal memo from someone that believes that the AI cat is out of the bag. It’s gone viral the last couple of weeks and it makes some great points. Keeping things proprietary is a long-term loser as the innovation is coming from all corners due to its usefulness. The political bent of these systems reflect the training data and weights and it does seem like the proprietary ones have something of an agenda. Open source may be behind right now, but I doubt it’ll stay that way.
High cost of bureaucracy - 109 of 125 Federal agencies in Washington have employees who average $100k/year salaries or more. This is absolutely crazy given that the average salary is below $55k/year. One of the things I’ve learned going to hyperinflating countries is just how much government bureaucracy contributes to inflation. The government pays these bureaucrats lots of money, that money gets spent into the economy creating inflation and that inflation causes the bureaucrats to have lower salaries, causing the government to raise their salaries. Rinse, repeat and next thing you know hyperinflation. This is a canary in a coal mine. US is closer to hyperinflation than conventional wisdom would like you to believe.
What I'm up to
LightningCon Talk - Here’s my talk about how fiat money ruins everything from the Lightning Conference in Vietnam. I talked about rent-seeking, bad incentives, signature and approval versus work and merit, and much more. If you liked this, I have a lot more coming in my new book, which should be released in the next few months.
Road to Serfdom - This classic by Frederick Hayek is something I’ve been meaning to read for many years. I’m finally on it and it’s great. His analysis of socialism and the instinct of so many to centrally plan is on point and is a reminder that most politicians disagree about the ends, but agree largely on the means. Sadly, fiat money has greatly increased the power of the central planners which has lead to the destructiveness of the 20th century.
Fiji and New Zealand - I’ll be heading off to these places next and if you’re there, I’d love to hear from you! I’m not sure exactly where in New Zealand I’ll be, but I’m trying to get set up for a meetup. Stay tuned if you want to come!
Nostr Note of the Week
What I’m Shilling
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Bitcoin
Ledger Miniscript Vulnerabality - The post goes into a very specific bug in Ledger’s Miniscript implementation. Specifically, it treats the alt stack incorrectly and thus creates either completely unspendable outputs or trivially spendable outputs. It doesn’t look like anyone actually used this rather specific function, but it’s a good reminder that implementing miniscript means testing all of the different op codes that it generates. Given it’s people’s money, this is the sort of thing that needs a lot of QA, unit tests, etc.
Payjoin Payment Batching - Payjoin is a simple concept. Use the merchant’s UTXO as a mixer during payment to foil chain analysis. Except if we take it further, there’s a lot of other cool things that we can do with Payjoin to make transactions more efficient and privacy preserving at the same time. The post goes through the many different ways in which Payjoins can be batched and substituted for privacy preservation. The tradeoff is that there needs to be some negotiation before the transaction gets signed, meaning there has to be some interaction, but that’s not a bad tradeoff for privacy.
Tappy - This is a Taproot playground for developers to play with various Taproot features. You can create a wallet from a descriptor and do various things with it. It’s not meant for use on mainnet, but it’s a great way to understand how Taproot works and try various things with it. I suspect that a lot of hesitancy with Taproot is related to the fact that developers don’t have great tools to make these features. Hopefully, this can help close that gap.
Lightning
Expanding Lightning - This blog post explains how you can expand the lightning network with hosted channels. Essentially, parts of the route could be settled outside the Bitcoin blockchain, based on whatever settlement the people that have the channel prefer. Taking this further, the author suggests that using Liquid’s BTC for channel opens could supplement the lightning network and allow for a lot more channels to open.
Apps w/Lightning - Roy Scheinfeld makes the crucial distinction between Lightning apps and apps that integrate lightning. Essentially, a lot of apps are trying too hard to do more stuff with Lightning instead of adding Lightning to already useful apps. The ideal apps make Lightning almost invisible and make value transfer painless and easy, even for very small amounts, as in Stacker News. Lightning should be unlocking a whole host of new ways to monetize already good content. We should focus on those.
BitLink - This is an instant web wallet whose security is based on the url. The idea is to make it super simple for people to use Bitcoin. The obvious drawback is that it’s got an enormous attack surface as anyone with the link can spend the funds in that wallet. It does have as a benefit that it’s extremely simple to set up and use. I suspect that if it finds a use case, it’ll be for micropayments as I wouldn’t feel comfortable putting more than $20 worth in there.
Getting Started on Routing - Voltage has a post up on how to be a router. Getting started as a router is tricky because the optimal configuration for any routing node is 50% outbound and 50% inbound. The way they suggest you get to that ratio is by spending sats as you normally would and then getting paid for outbound connections later. It’s a long-term strategy and it’s an interesting way to earn sats.
Economics, Engineering, Etc.
Your Own Web Store - Really interesting use of Nostr and Bitcoin to create a web store in a single payload. The idea is that this payload can be hosted nearly anywhere and has within it an lnbits account which can be paid to. It’s an e-commerce store that lives on Nostr instead of on a domain. The decentralized web is here and it’s wonderful to see.
No-KYC Purchases in Canada - Bull Bitcoin is now offering a way to get non-KYC Bitcoin through the Canadian Post Office. Users can purchase up to $999 CAD in BTC with cash and it’ll credit their Bull Bitcoin account. As they’re non-custodial, you essentially get your Bitcoin right away. Bull Bitcoin makes its money by charging a 2% fee for this service. This is an astounding accomplishment, especially in a week where Binance withdrew from Canada.
Bitcoin Month - It was bound to happen, given how many other things have their own months. But it’s essentially from October 5 to November 9, bookended by Pacific Bitcoin Conference and Adopting Bitcoin, respectively. There are a lot of events that are lining up to be in that month and it will be interesting to see how much interest gets drummed up.
Quick Hits
Build your own blockclock - Some e-ink screens, a circuit board, some soldering and voila! You have a blockclock clone.
Bluesky is a scam - Nostr creator fiatjaf makes the case that it’s a protocol controlled by a single entity and is therefore too risky to build on. Sneaky centralization, in other words, will kill it.
ReNostr - If the wastefulness of the transfer protocol in Nostr offends you, here’s the remedy. It uses binary to do transfers and looks to be faster and less bandwidth-intensive.
The first 2-block split in many years - The crazy fees this week have caused the 2-block split in the network. This is a rare event and a very costly one for Foundry, who apparently didn’t relay their blocks fast enough.
El Salvador Nomad Visa - You can live there for 2 years and it’ll only cost $2850 to get the visa. You’ll have to prove that you make at least $1480/month, but wow, what a deal!
Fiat delenda est.