Bitcoin Tech Talk #355
Interesting Stuff
Political Atheism - The idea in this article is not about a non-belief in God or politics, but rather, not getting swept up in the political waves that inevitably come. The author draws heavily from Rene Girard and as he points out the extremes, the rivals in any political rivalry are more similar than are alike and the current political moment and inevitable crisis follows the pattern described by Girard. It really does make you think whether political assassinations of the past were really ways to quell the mimetic rivalry for a time.
Review of Trading - This book review goes over a book on trading, which is unusual for its decided lack of both schadenfreude and thinly-disguised boasting about past trades. One of the most insightful parts from the review is about how all trading ends in regret. For successful trades, you always wish you had bet more and for failed trades, you lost, so there’s regret on making the bet at all. It’s also an aggressively merit-based game, though a zero-sum one. I’m not a trader, but the review makes me intrigued as almost everything you do is a trade in a sense and learning how to think about them clearly would be beneficial.
More Science - The article is a call for more science to be done by non-academics, as the current system is increasingly becoming more inept and rent-seeking. While I appreciate the sentiment, I think this approach to getting more science is getting at this problem from the wrong end. People don’t do science on their own because there’s no reward in it. There’s little hope of making a mark without the political backing of someone in power. The recent news about the superconductor is not an exception, but an example of this rule. The actual person that discovered it toiled for 20 years, trying to get funding, patronage and had to get the backing of lots of people before getting published.
What I'm up to
Little Bitcoin Book in Korean - The book has been translated for a while, but it’s now available as a free audiobook on YouTube! If you have Korean friends or family, this is a good introductory book to Bitcoin, and despite being 4 years old, it holds up pretty well. It’s also available in many other languages for free online.
Bit Block Boom - We are only 3.5 weeks away from this iconic Bitcoin conference is Austin, TX! I’m still deciding on whether I’m going to have a side event or not. If you’re going to be in town and would be interested in some sort of exclusive side event, please drop me a line by replying to this newsletter.
Cubo+ - This article talks about the work I did with the students in El Salvador. It was inspiring to see a place that’s developing so rapidly. I’ve been there 3 times in the past year and a half and everything is growing as the country introduces all the policies needed for economic growth. I’m excited to see what these graduates will be doing as they progress in their careers.
Nostr Note of the Week
What I’m Shilling
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Bitcoin
Bulletproofs++ - Confidential Transactions have been something people have wanted in Bitcoin for a long time and they’re currently used in Liquid with Range Proofs, which hide the amounts involved in UTXOs. This is a nice improvement from Range Proofs and even Bullet Proofs by cleverly proving the amount without revealing what it is in an even more clever manner than the previous iterations. It remains to be seen how much this can be used in the current Bitcoin transactions on the network that use Discrete Log Contracts, but I suspect there’s some room for usage in this context.
Coin Control - Athena Alpha has a post on what Coin Control is, why it’s important and the considerations for users using it. The post describes the many different UTXO selection strategies that wallets use, which can be useful if you’re managing a wallet. I’ve personally found manual coin control UI’s horrendous and managing them tends to become a Sysiphean task as UTXOs grow. That’s to say that the UTXO management problem hasn’t really been solved satisfactorily yet. Someone please put some effort into making this easier to manage!
BIP39 in Haskell - Jiri Jakes has a blog post coding BIP39 in Haskell to learn how it works. The post goes into detail on how to generate the words, how to convert them to a seed for a BIP32 wallet and how to test them using the test vectors in the BIP. One of the weaknesses of the protocol is that there are relatively few checksum bits as you can see in the post. I love these types of posts as it helps people learn the protocol better.
Lightning
Improving Lightning - Tony, one of the developers for Mutiny Wallet, articulates the current problems around Lightning, in particular the UX problems caused by the always-connected requirement for receiving payments. He makes the case for using something like FediMint as a more trusted custodial alternative, along with an async protocol upgrade to make Lightning more usable. You can tell that this is a post from someone that’s thought about this topic very deeply and the whole thing is well worth reading.
Coinjoin Channel Opens - Voltage has a post on how a coinjoin can be combined with a channel open to give users more privacy on their lightning transactions. As they point out, one of the problems is that currently, most coinjoins are using p2wpkh rather than the required p2wsh that is used for channel opens. This is where there would be a clear win for privacy if everyone upgraded to Taproot as p2tr addresses support both redeem scripts and single-key and MuSig allows you to make channel opens indistiguishable from a normal single-key spend.
Sling - This is a Core Lightning plugin to auto-rebalance multiple channels. Rebalancing channels is critical for any routing node operator and no doubt that this plugin will get a lot of testing from the routing operators out there. It does require some sort of route from one route to the other, though, so it remains to be seen whether the typical channels are connected enough to do so. After all, the most profitable channels are probably the ones that connect nodes that don’t normally connect.
Economics, Engineering, Etc.
Bitcoin Securities - Jameson Lopp writes about the various ways that investors can get exposure to Bitcoin without taking custody or buying on an exchange. That is, through securities of various types. As he points out there are many such vehicles, including spot and futures ETFs and trusts in various countries. There are many risks to these vehicles and he points them out in detail. As the GBTC saga is showing, these are definitely not Bitcoin and investors will learn some painful lessons.
Bitcoin Model - Allen Farrington has a rather tongue-in-cheek article about price predictions by making a model from scratch that fits the historical Bitcoin price pattern. As he only uses time to predict price, it’s a mentally simple model, though the implementation is obviously tweaked to fit the history. As he’s pointing out, it’s rather easy to make models fit historical data. But models break all the time, and especially in the field of economics, or human behavior, it’s not something that can easily be predicted.
Duck Curve - Adolfo Contreras of Blockstream writes about the persistent problem in Wind and Solar, which is that there’s a supply and demand problem in that the energy produced does not come when consumers demand it. As he points out Bitcoin mining fixes the problem. Personally, I think this is a way to make lemonade out of the lemons of these government subsidized boondoggles.
Quick Hits
WorldCoin Launches - A likely rugpull if unsuccessful and a dystopian nightmare if successful, what’s there to like? Schadenfreude at its eventual demise.
More CSW Forgeries - In yet another of his myriad of lawsuits he’s involved in, the documents he claimed to have used to buy Bitcoin in early 2011 are shown to be forgeries. This after getting his appeal in the McCormack lawsuit denied.
Arthur on AI - Hayes talks about AI and proceeds to claim that somehow everything will run on blockchains. He has a good understanding of trading and macro, but he really has no clue about the technical capabilities of DAOs and how centralized they are.
HRF Bounties - HRF has 20 BTC up as bounties for various technologies in BTC that would help human rights activists around the world. These are going to be some tempting bounties come the next bull market.
Fiat delenda est.