Bitcoin Tech Talk #354

July 24, 2023 Paid

Interesting Stuff

Weak Mimesis - Luke Burgis argues that we are imitating too many weak traits and not enough strong traits. That is, we are copying the thin veneer of success instead of the deeper more underlying character matters that would help us. I couldn’t help but see this with altcoins, where people imitate the shallowest thing possible about Bitcoin, which is buying something early, rather than the much deeper imitation, which is a mentality toward saving.
College Disillusionment - A striking example of where the labor market has gone. As the writer shows, most of the jobs that recent grads are now doing are completely superfluous, like social media manager or being a diversity hire. College degrees simply don’t mean what they used to as their value has been heavily debased. Add to the mix a heavy dose of terrible fiat incentives and you have a generation of young people who wonder if jobs have any meaning at all.
Video Games and Gambling - The article is frightening in how addictive many of these games can be. People spend thousands of dollars and these companies engineer the UX similarly to casino games. No doubt that exchanges will be using similar tactics in the next cycle. What’s scary is how specific this science has gotten. In many ways, profitable businesses seem to rely more on deception to make profits than providing value. That’s not a good pattern.

Bitcoin Basics Podcast - I talked with these guys from New Zealand about ordinals, layer 2’s, Taproot and more. For me, the most interesting part was thinking through some of the dynamic possibilities of L2 interactions (more on that for paid subscribers). I also talked to them a bit about what it’s like traveling and how I got into it during my 20’s.
Financial Fox Podcast - I talked with this podcast about the decentralization of Bitcoin and how it’s very unique in the history of money. We spoke at length about the basic properties of Bitcoin, mining and energy, central banks, ordinals, custody and much more. It’s a bit of an altcoiny audience and hopefully
Pacific Bitcoin - I’ll be at this conference in LA on October 5-6. I was sad I couldn’t make it last year, and I know Cory is talented at putting together events. The fall schedule is absolutely crazy this year (5 in North America, 3 in South America, 4 in Europe, 2 in Asia), but that’s probably due to the anticipation for next year's bull run. Still, this will be one of the better ones. Hope to see you there!
London Meetup - I’ll be speaking at the London Bitcoin Meetup (the one in Canada, not the UK) on Tuesday. If you happen to be around, please stop by! I’ll be doing a short talk and signing some books. There will also be free food!

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Layer 2 Roundup - Blockstream has a post on the different Layer 2 technologies and how they interoperate. Specifically, they highlight Liquid and Lightning as tech that’s not opposed to each other, but create nice synergies, making up for what the other lacks. This sort of tech integration is criminally underutilized at present and will in the future become a much bigger part of the ecosystem. It’s also a fruitful place to look for new business opportunities.
FrostSnap - The blog post is about how FROST changes the game for multisig. As they point out, you can add and remove signers after key generation, which current multisig protocols can’t do without an on-chain transaction. The more important UX improvement, however, is the fact that you don’t need multisig metadata to make signing work. If you have the keys themselves, that’s enough to generate the signatures. I look forward to what this group comes up with, particularly with hardware wallets.
Miniscript and hardware wallets - Ledger has an excellent post on how we can prevent backdooring of hardware wallets using miniscript. The post is great as it summarizes the various attacks that hardware manufacturers can use to take money from their users, and the various ways in which you can prevent these attacks using different techniques. It’s a long post, but well worth reading to see how to think about hardware wallet security.

Lightning and War - Ilya Evdokimov posts about Lightning and the war between Ukraine and Russia. He highlights the decision by the Simple Bitcoin Wallet to disable the Lightning Network feature and how that is being interpreted as a blow to Lightning. The article, takes a bit of a surprising turn to talk about how the war has affected the Lightning network infrastructure in Ukraine and how it’s become less reliable due to the instability of the power grid. It’s an interesting look into what happens to the Lightning Network when infrastructure pieces start to go down.
Scaling Differently - This Bitfinex post argues that Lightning is evolving in a way that we didn’t expect, specifically to connect lots of other layer 2’s. They argue that through the use of statechains, liquid and even Cashu and Fedi, we’re starting to get the benefits of all of them together in Lightning. The result is a scaling solution that’s decentralized in a different way than we expected.
Submarine Swap, Explained - Tara Annison explains the mechanics of a submarine swap and its benefits. The main reason to do a submarine swap is to keep a channel open instead of closing and reopening a channel. A long-lived channel has benefits for routing. The post is a good way for Lightning users to understand what’s going on under the hood and why it’s beneficial.

Blockchain Forensics Example - This is a crazy story about some wallet malware that stole some funds from people. They traced the thieves to a developer and the trail of evidence is pretty damning for the alleged perpetrator of this fraud. What’s fascinating are the tools that were used to trace where the funds went and how they were able to trace the distribution of funds through Shapeshift and Monero.
Bad Business Plans - This is a great summation of how low interest rates create really stupid and capital-destroying businesses. Essentially, every business can play financial games instead of serving the market and “raise money” instead of making profit. The result is an unsustainable game of waiting for the profit to appear. Unfortunately, rent-seeking tends to abound in such places and we get value destruction instead of creation.
RFK’s Bitcoin Plan - Robert Kennedy Jr wants to put 1% of the US Treasury Balance in BTC. This is being reported as “backing the dollar with Bitcoin” but in strict terms, this is not true as the dollar is not convertible for a fixed amount of BTC. He keeps getting dismissed as a candidate that has no chance, whether due to his weak voice or fringe status, but politics is no longer the same after a Trump presidency. Will this make a difference for him? It’s certainly not going to hurt.

Chris Belcher Update - Core developer has been out of commission due to long COVID. Devastating doesn’t begin to describe what he’s going through.
Binance Lightning - In the midst of some wacky price discrepencies on their exchange, they’ve finally implemented Lightning.
SimplexChat - This is becoming a popular messaging app due to not requiring any phone number or any identifying information.
Drivechains Debate - fiatjaf makes the case that Drivechains will end Altcoins. Warmke responds by saying it will probably help them instead.

Fiat delenda est.