Bitcoin Tech Talk #345

Interesting Stuff

1. Teaching vs Evaluation - This is an interesting analysis of why teaching sucks so much. As the author points out, so much of teaching nowadays is not getting information into the pupil, but is actually evaluation of the pupil’s abilities. These are fundamentally different tasks, and as he points out, they are almost in opposition. Most teachers like teaching and learners like learning. But teachers don’t like evaluating and learners don’t like being evaluated. The insistence on evaluation of pupils is a demand from the fiat world as the oodles of money spent on it need some metrics and justification. Sadly, it’s completely debased both the teaching and learning experiences.

2. Permanent Revolution - The article is an analysis of the general social political dynamic of conservatives versus liberals, which in most historical ages has been healthy. What’s unique about this age is that those that want change are in charge and continue to change where change is not needed or necessary. The conservatives have essentially now become the counter-revolutionaries relying on populism. There isn’t anything about the affect of fiat money on all this, but I suspect that the permanent continuous change can only be fueled by fiat money. Even then, the financial collapse of such a system is inevitable, but takes longer because the theft is hidden.

3. Libertarians and COVID - Jeffrey Tucker takes his fellow libertarians to task for their complete abandonment of principles in the wake of COVID. He’s been one of the few libertarian voices who opposed the lockdowns from the beginning and his written lynching of this group is well deserved. Sadly, we found out during the last three years that few people live out the ideology that they supposedly support when it comes to social acceptance and status games.

What I'm up to

1. Little Bitcoin Book Interview - I did this interview a few years ago, but it’s been rereleased on Konsensus network’s youtube channel. I talked about the process of writing the book, who it’s for and why a different argument is necessary. I’m thrilled that there are many more books along these lines, not the least of which is my co-author Alex Gladstein’s two books, Hidden Repression and Check Your Financial Privilege.

2. Thank God for Bitcoin - I wasn’t at the conference, but it apparently went really well. The talks will be online and I look forward to watching them. If you’re a Christian and want to discuss Bitcoin with other Christians, please join the telegram group.

3. Auckland and LA - I’ll be in New Zealand later this week and unfortunately will just stay in this one city. I’m trying to see if there’s a meetup that I can speak at. I’ll also be in LA the week after and I’m trying to arrange for something, so stay tuned.

Nostr Note 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. Ark - The details are still not clear to me, but the claims of this extraordinary protocol are really exciting. The main gist is that this is something like Chaumian e-cash along with all of its privacy properties, but done in a lightning-like trustless way. The main idea is that there’s a virtual transaction output that’s tied to a real UTXO, which in turn can be spent in the Ark system. It’s even interoperable with Lightning using HTLCs and allows for enormous scaling without needing to get inbound liquidity among other things. If the technical features are correct and there aren’t terrible tradeoffs, I can see this becoming a strong contender for layer 2 against even Lightning.

2. Seed Phrases - The article is intriguing in that they’re looking for ways to make seedless backups without providing details on them, but it does show why seed phrases are essentially hard for a lot of users to handle. It’s true that seeds are a little bit of a weird standard. Many hard-core Bitcoiners aren’t even aware that you can have all kinds of other private keys instead of seed phrases, it’s just that the industry has standardized on the seed phrase paradigm. I would like to see other solutions be tried and let the market figure it out. We need companies like bitkey for this to happen.

3. Ledger Recover - Ledger revealed that they can extract the seed from your device and shard it for recovery at various services. The service itself is clever. Your seed is sharded into 3 pieces and sent to three different backup services. It’s not clear whether it’s 1-of-3, 2-of-3 or 3-of-3, but the essential idea is that if you lose your device, you can get it back through this service that charges $9.99/month. What’s really concerning is that the seed can leave the device at all, and that concern has led to other devices being sold in its stead. This shows why it’s so sucky to have altcoin support, because if this product were Bitcoin-only, a much better architecture using Taproot or even straight Script would not require the seed leaving the device.

Lightning

1. LNChat - This experimental repo is a way to chat with your lightning node to get it to do what you want it to do. I like the direction of this in that chat is a much more intuitive UI than your typical Lightning Node dashboard. That said, QA’ing something like this is bound to be a nightmare and learning the intent of the user and being sure about it is bound to be the difficult part of making something like this work. By the way, I would love to see something similar for my own email server or photo hosting server or my website.

2. Taproot Assets 0.2 - Renamed because of the Tari lawsuit, this is essentially the colored coins protocol that works with Lightning. It’s now available for testing and it has some interesting features. For one, everything is compatible with the vPSBT standard for signing and creating these assets. Further, you can mint multiple assets in a single transaction. The great hope for a protocol like this is to be the rails for something like Tether, which is extremely profitable as can be seen in a later story.

3. Learn Lightning - There’s an open-source workshop which is in its early stages for learning lightning. There’s a lot of demand for learning lightning, and the technical aspects are complicated enough that it’s not a one, or even multiple day endeavor. Learning how it works through the command line like this is a good alternative, as you don’t need to learn all the internals.

Economics, Engineering, Etc.

1. Mempool Accelerator - This is a somewhat controversial service being run by mempool.space. Your stuck transactions will now be included by a miner using out-of-band payment. The controversy is that it will only work for miners that mempool.space has a relationship with and it may very well become more centralized. The fear is that some KYC can be inserted, making transaction acceleration more costly. That said, this is better than CPFP for blockchain space, though RBF seems superior.

2. BitcoinTalk Forum History - This article is an interesting trip down memory lane for OGs, as it documents what went on there. It’s not comprehensive by any means, but there are some things I learned that I didn’t know about, including the various security incidents. Of particular interest is the funds raised to improve the forums which amounted to 6800 BTC. This wasn’t all that much at the time the donations were made, but the forums still haven’t been upgraded and there’s still around $34M publicly traceable amounts for that purpose.

3. Tether is Really Profitable - They have around $81B in assets and made a profit of $1.5B in the first quarter of 2023, according to their press release. Given the interest rate environment, this is not a huge surprise, as there are lots of relatively safe havens that are paying upwards of 5% like US Treasuries. They are committed to putting a lot of these profits into Bitcoin, which bodes well for near continuous demand. Even in a tightening environment, there are demand forces.

Quick Hits

• Go-Eth vulnerability - ETH has a lot of problems syncing as this paper points out. The decentralization they purport is totally in name only, so in a sense, problems like this really aren’t incentivized to be fixed.

• Start9 Job - To be customer support, you can get paid $21/hr. Seems like a great entry-level.

• Foundation Passport and Envoy - A new hardware wallet arrives on the scene!

• Fake Trezors - Be careful out there when getting hardware wallets. Many are fake and will take your money.

Fiat delenda est.