Bitcoin Tech Talk #366
Interesting Stuff
CIA Cult? - One of the weirdest stories I’ve come across, which starts with a concerned citizen calling about some unkempt, dirty kids in the company of a couple of well dressed men in 1987. The trail from there leads to a Satanic cult and child abuse ring called Founders, whose investigation gets stymied by the CIA. Before Jeffrey Epstein, I would have dismissed stories like this as conspiracy theories, but that scandal has sadly made possibly related stories like this much more credible. Maybe there is a deep state that controls politicians through these front organizations.
A Palestinian’s Perspective - One of the most sobering and sad accounts of what it’s like to be Palestinian. This was written by my friend Afkar Ammous (Saifedean’s wife) and it has some very uncomfortable truths in it. What I’ve observed about the conflict is that there’s a lot of blood lust on the neocon Republican side that contrast sharply with the Israelis I’ve talked to who are far less enthusiastic about war and are a lot more understanding of the Palestinian plight. There’s a lot of propaganda at play here, and though I doubt it’ll come to pass, I really hope and pray for peace.
Pop Culture Oligopoly - The article shows through data how books, movies, music, video games, entertainment of all kinds, have become dominated by franchises, which are essentially set in the same universe. A few people are getting more of the pie, even as all of these types of entertainment have become easier and more accessible to produce. I suspect that a lot of this has to do with just how risk-averse everyone has gotten. Not just the gatekeepers (studios, publishers, record labels, etc) but also the consumers. I believe this is because there’s so little of that spirit of exploration and curiosity, which not coincidentally is the fuel for entrepreneurship.
What I'm up to
Financial War - I talked to Preston Pysh about his thesis that theft, particularly through money printing is what leads to violence. I didn’t want to talk specifically about Israel/Palestine or Ukraine/Russia, but this was a great conversation about the reasons why these wars seem to be happening so often. We also talked a bit about how there seem to be another conflict just in time as another one winds down (Afghanistan to Ukraine to Israel).
Renaissance of Men - I talked about my new book on this podcast for Christian men, going through the different consequences of fiat money. We talked specifically about how civilization is crumbling due to all the talented people going into rent-seeking, how fiat money lets you suspend reality for a while, and why jobs that provide real value, the trades, are a good place to be as the financial system blows up.
Freedom Footprint - I talked to Knut about the same book, but interestingly we talked about completely different topics! We talked about AI and how the fear of it is a metaphysical mistake, how praexeology changes in a fiat system of status and of course, we had some good fun talking about his Atheism. I assert that fiat is atheist money because it does not have an external moral order.
Bitcoin Amsterdam - My panel with Rene Pickhardt and Joe Hall was about improving Bitcoin (Dan Held didn’t show). I also moderated a panel with two non-Bitcoiners, Hugh Hendry and Eva Vlaardingerbroek, which I’m told was very entertaining. I was also on the live desk a couple times. The first was a quick comment on the macro panel. The second was wrapping up the whole conference, where I made fun of the “crypto” exchanges.
Lugano Plan B Forum - I’m staying in Europe this week and headed to Lugano for the Plan B Forum. I’ll be moderating two panels, one on El Salvador (Max, Stacy and Josue) and one on the Cypherpunks (Adam Back, Phil Zimmerman, Paolo Arduino). I’ll also be giving a talk and probably sign some books. Please stop by and say hello if you’re around!
Nostr Note of the Week
What I’m Promoting
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Bitcoin
BitcoinVM - The main idea of this paper is that instead of putting entire programs/smart contracts on chain, the correctness of execution is verified by the counterparty. This is in contrast to something like Ethereum, where everyone verifies the correctness of the execution (and why they need something like gas to prevent infinite loops). Should the one asserting correct execution cheat, the counterparty gets to punish on-chain with a fraud proof. This wouldn’t have been possible before Taproot as large programs couldn’t be put in a script output, but Taproot lets you store many smaller scripts (up to 2^128) which means that it can be pretty long. The actual details require establishment of basic gates through Script and in theory, almost any arbitrary program can be written and verified. One of the most interesting projects that have come out in years, and probably on par with the Lightning paper.
Drivechain Critique - In any other week, this would be the top story as Peter Todd has written a comprehensive takedown of drivechains and why they’re not desirable for Bitcoin. In a sense, the BitVM news has made the drivechain design somewhat obsolete. There’s now the possibility of doing something like a two-way peg without miner involvement or a soft fork. Of course, that would mean a lot of development going into creating it, but the cost is borne by the right party, the one that wants to create a sidechain, instead of the network, which has to accomodate new op codes. I hope that development goes in this direction where ideas are proved out in the market first, and if proven to be popular, a soft fork to make the process a bit easier is considered after.
MuSig2 Descriptors - Now that we have a BIP for MuSig2, we have a followup BIP for using MuSig2 in wallet descriptors. Descriptors are typically used today in offline multisig setups for defining how the wallets are set up so the right keys can sign the right hashes. This takes it a step further and makes descriptors useful for hot wallets as presumably, the interactivity requirements of MuSig2 are much easier to fulfill. What’s really nice about MuSig2 is that there’s no upper limit on the number of participants. I’d love to see something similar happen with FROST soon.
Lightning
Lightning Network Report - River has published a comprehensive report on the Lightning Network’s growth in this new report. The stats compared to two years ago are near exponential, with 11x increase in transactions per second, 5.5x increase in dollar equivalent routed, and about 80% of lightning investment came in the last year and a half. In other words, it’s growing like gangbusters, which is a nice contrast to the complete collapse of the altcoin-based things the last two years like NFTs, DeFi and Web3 startups. Lightning is real, all that other stuff were malinvestments.
Batch Channel Openings - A nice writeup to show how you can save on fees for channel openings by batching a bunch of the channel opens in a single transaction. The idea has been around a while with exchange withdrawals, but this is the first I’ve seen where the concept has been thoroughly explained for lightning. A well-constructed batch channel open can also become a coinjoin at the same time, creating even more privacy.
Greenlight - This is a lightning wallet that’s now available as part of Blockstream Green. Much like the on-chain wallet, it’s giving different tradeoffs than other wallets on the market. It’s something between running your own node and trusting a centralized entity. There’s a node being run by Blockstream, but the signing is done on your device and only with your authorization. It’s not as secure as running your own lightning node, but also not as technically difficult. At the same time, you have control of your own keys. What would be amazing is some Jade integration to make it even more secure in the future.
Economics, Engineering, Etc.
Stability - Lyn Alden writes in her October newsletter about the concept of stability, the specific definition and expectation and how we’re poised to no longer have much financial stability in the bond market. It’s hard to argue with her, and her analysis is pretty solid. Her conclusion is that though we may get some turbulence in the markets, real life will continue, despite everything.
Fidelity Bitcoin Report - The report is, as expected bullish on Bitcoin. What’s more interesting is that they’re very keen to separate Bitcoin from other “digital assets,” (aka crypto). While they don’t trash altcoins as I would, they do make the distinction that Bitcoin is primarily money and should be treated as such and not as a technology that can easily be improved. Much of the report reads like debunking common investment myths around Bitcoin, and if it gets read by investment professionals, should help them down the road of holding and using it as savings vehicle rather than a speculation play.
Bitmain in Trouble - The last few years have not been kind to this mining manufacturer. Not only did its CEO recklessly put most of the treasury in BCH in 2017, but they started a lot of projects which later got scrapped like machine-learning ASICs. They’ve now apparently paused salary payments, bonuses and incentives. They’re even talking about salary reductions of 50%. This was a company that was talking about a huge IPO in the Hong Kong stock market just a few years ago. That said, they spent money like drunken sailors in the 2017-19 era and they’re paying for it now.
Quick Hits
Tornado Cash Saga - An analysis of the DoJ’s tactics and what it could mean regarding authoritarian and arbitrary punishments.
FTX Code - The fraud was so blatant that it was written straight into the code.
SEC doesn’t appeal - GBTC may still be denied for some other reason, but at least this hurdle is clear.
Zimbabwe Gold-Backed Token - It’s digital and something like PaxGold, but issued by a sovereign country. I’m not sure I’d trust them, but I guess we’ll see.
Front-running BRC-20 - There’s a bot preventing BRC-20’s from being minted called “Sophon.”
Fiat delenda est.