Bitcoin Tech Talk #361
Interesting Stuff
AI in Plain Language - This rather long article is probably the best explanation of how large language models work and how they were able to get the results that they did. What’s really surprising is that the models really aren’t that complex, but the results they’re able to get with it clearly are. From what I can gather from the article, the main restriction seems to be more data and more computing power, so that the vectors that represent the words we use and the operations performed on these vectors can scale up. What struck me is that this is probably one of many different applications of this general technique of using data and simple transformations trillions of times to get results. Language is just the first of many different applications, as we’re seeing with images, audio and even video.
Cable TV’s imminent death - Clay Travis writes about the current state of ESPN and how the business model around cable is quickly collapsing. His main focus is on what this means for sports fans (he thinks the cost to watch will go up) but the more society-shifting thing here is that the entire industry of cable TV is in trouble. Sports are currently the anchor for TV packages and in a sense, they’re Boomer tech. At the same time, streaming is not profitable for anyone except Netflix, so we’re due for another model altogether. Will this be the opportunity for V4V and micropayment based models?
Electrifying Everything - This article gets into the stupidity of the movement to ban natural gas by the current administration. This has shown up as subsidies for electric stoves instead of gas stoves, among other things. The key insight is that natural gas currently takes up a huge part of the electricity load so eliminating natural gas to the home just makes everything much less efficient. The hope is that solar, wind and battery technology can be developed to the point to make up the difference, but there’s no way since they’re all so unreliable and resource-intensive to set up. Centralized mandates like this are very much a fiat artifact, as these initiatives would not win in any sort of fair market.
What I'm up to
Crowdfund - Thank you so much for those that participated! I am overwhelmed by the support and am thrilled that so many of you wanted to get your hands on this book! $12,256 was raised and I’ll continue to write more and create more content for this community!
Family - I recorded another episode of Bitcoin Fixes This with Marty and Will about family, fatherhood and the right environment to raise our kids in this fiat-infested world. Take a listen to get some wisdom from these two dads!
TFTC - I was on Marty’s show to talk about my new book, and we discussed the fiat system and how it’s so incredibly corrupt. We talked about the transition to a Bitcoin standard and what we should be doing to prepare for that eventuality and how we need to get out of debt and focus on providing value.
RugPull Radio - I was also on RugPull Radio to talk about the fiat system and my experience as a developer and how the fiat system has become so corrupt. This was a different audience as they’re more of a political show than a Bitcoin show and it was fun to answer some more basic questions.
Life with Bitcoin - I talked with Vivian about fiat money, how Bitcoin adoption actually happens, rent-seeking and much more. She had very kind things to say about the book and I really appreciated the insightful questions she had.
TGFB at Pacific Bitcoin - I’ll be in Santa Monica, near LA to attend the Pacific Bitcoin conference and the side event for Thank God for Bitcoin. I missed the last TGFB event, so this will be an opportunity for me to see how much this group has grown. Please consider attending if you’re going to Pacific Bitcoin!
Nostr Note of the Week
What I’m Shilling
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Bitcoin
Codex32 - Blockstream has a paper-based tool for calculating Shamir shares! The whole project is astounding in that you can verify the integrity of a backup, split the backup and even initialize a new wallet from a backup by hand. The fact that this is even reasonable without a computer is astounding. That they’ve made a paper tool to do all these things is even more incredible. I know I’ll be ordering one of these things, just to figure out how the whole thing works.
Pruning the UTXO set - One of my pet peeves about the UTXO set is that there are too many outputs that are clearly unspendable, but are not pruned from the set. For example, there is a large set of unspendable UTXOs that encode the Bitcoin Whitepaper. This PR would prune them so that we get a smaller UTXO set, which should reduce the memory used when running a node. This may mess up some of the UTXO set calculations as used by projects like UTreeXO, but the pruning should be beneficial all around.
Shamir Details - This excellent blog post goes into exactly what Sharmir’s Secret Sharing is and all the steps required to make it work. Not only is the math spelled out in detail, but there’s a lot of good explanation on the various gotchas in implementation. What’s nice is that the math here is also the basis for FROST, which is the k-of-n splitting of a private key, which is an improvement on MuSig’s n-of-n requirement.
Lightning
HSM+LN - Bastien Teinturier has a proposal to standardize communication between a Lightning node and Hardware Security Modules (HSMs). I’m unaware of the many different commercial lightning services that utilize HSMs, so this would be a major step in making Lightning funds a lot more secure. The reason is that Lightning requires a lot of signing and thus the private key to have a lot of availability. By encasing the private key in an HSM, the attack surface is significantly reduced. Something like this becoming an industry standard should make it easier for merchants to adopt lightning directly.
Bringin - This is a virtual debit card service that acts as a bridge for Lightning payments. You can create a debit card with a specific amount of money in it using Lightning and use that to pay for various goods and services that take a debit card. The main use case seems to be for rent/bills and less about shopping for stuff online, though it can certainly be used that way. It’s also a convenient way to sell Bitcoin and get fiat money into your bank account, though I wonder about the rate you’re able to get.
Covenants and Lightning - This Lightning-dev mailing post makes the case for how covenants enable better Lightning scaling. The main idea is that you won’t need nearly as much interactivity with a covenant and you can have more users share UTXOs that correspond to a lightning channel and that the channel can be multi-party instead of just two entities. The one flaw I see in the argument is that it assumes multi-party interactivity is very difficult, which I suspect it is, but hasn’t been proven.
Economics, Engineering, Etc.
How IMF Loans Work - This article goes into how IMF loans impoverish the countries they supposedly help by using loan and bailout conditions that favor the first-world countries. The article builds on the work of Alex Gladstein and showcases the mechanisms that keep these developing countries oppressed under monetary colonialism. If you don’t have time to read Alex’s excellent book, this article is a nice preview of the arguments in it.
Ripple acquires Fortress - The altcoin issuing company has acquired a company that has been acquiring Mt Gox claims for the last 10 years. This is a substantial amount of Bitcoin that they’re about to receive and I suspect that this is the real reason for the acquisition, not the banking business. Ripple the company has been the central bank for Ripple the altcoin since its inception, and getting this cache of Bitcoins will give them a lot of dry powder to keep themselves relevant during the next bull run.
Crypto Lawyers - NY Times reports that lawyers are some of the biggest beneficiaries of the altcoin collapse, between user lawsuits, bankruptcy proceedings, SEC action and even criminal indictments. According to the article, around $700M has been paid to lawyers from these court proceedings and indeed, this seems to be the main way in which the fiat rent-seeking class is making its money. I don’t think this has peaked yet as there are a lot of centralized foundations and such that have a lot of assets and lawyers will soon be looking to extract their pounds of flesh from this pillow-soft targets.
Quick Hits
Zapping Devs - You can now tip the developers of the open source software projects that you are using in your own projects.
Chainalysis on kanzure - Apparently, being a Bitcoin Core dev for many years and being CTO of various Bitcoin startups is not enough to be an “expert” in Bitcoin according to Chainalysis.
RIOT saves Texas - The flexible energy consumption of RIOT meant that it could deliver power back to the grid and that’s indeed what prevented blackouts in Texas.
Bitcoin for Missions - An excellent case for how Bitcoin can benefit Christian Missionaries and really, any other organization operating internationally.
Majority of Turkey - A KuCoin research report says that over half of Turkish adults invest in crypto.
Fiat delenda est.