Bitcoin Tech Talk #487
Interesting Stuff Death of Social Media - Ghost of Arthur Powell has written this perceptive piece on social media not really being social anymore. As he points out, what used to be a way to keep up with friends has devolved into short form videos from strangers. Most people use social media to follow celebrities and what little social signal value it has comes from expressing your own opinion in hopes of influencing those that follow you. As he points out, the real social spaces these days are private group chats on telegram and slack and perhaps rightly so, as these spaces are usually not open to the whole world.
Epstein - Frank Wright has a summary of what’s found in the Epstein files. Let’s just say that it’s not pretty and that there is a lot of Mossad involved. The most surprising part is the financial aspect of his undertaking. It seems he claimed to be representing the Rothchilds in several emails, had lots of contracts with them and so on. His network spanned many countries and the current spin by the media is that he’s somehow a Russian spy. There are some notable Bitcoiners caught in this mess, largely due to Epstein being an LP in a fund that Joi Ito led, who in turn was managing MIT’s Media Lab which housed and continues to house the Digital Currency Initiative.
On Warsh - Michael Nicoletos has this thorough read on what Trump is actually doing with the Kevin Warsh nomination for Fed Chairman. The chaos in the markets the last few weeks have centered around his supposedly hawkish stance, which would mean less money printing and high interest rates, depressing asset prices. His reading is that this move is more to support Main Street directly than to subsidize Wall Street speculation. Indeed the latter has been what the Fed has been doing, but in a sense, subsidizing Main Street (in this case, by giving banks bigger capacities to do lending) is not any better. The Trump administration’s strategy maybe benefits different people, but in the end is still funded through money printing.
AI Opportunity - Freya India has this insightful essay on the opportunity of being a real human in the midst of AI generated content. The reaction of so many people that work in all sorts of industries is that they’re fearing for their jobs, knowing that what they produce will get replaced by AI. In a sense, they’re right. The jobs they have are robotic and they fill the role of a cog in a machine that unsurprisingly, machines may be much better at. Yet in a sense, isn’t that a blessing? Don’t we want the things that are more fit for humans? With emotion, experience, conviction and purpose? In a sense, this whole AI panic has exposed the nature of fiat institutions as being not just filled with rent-seeking, but without a soul.
Financial Fraud - Bits About Money has this take on the Minnesota fraud and why it has the properties that it has. For example, why is it Somalians that are largely implicated in the Daycare center fraud? As he points out, fraud tends to scale, as holes are left unchecked, people rush into them to make their money, and tell their friends and family about it, which will tend to be people of similar ethnic backgrounds. The whole article is detailed in how the financial industry treats fraud, which the MN government in particular and most governments in general, do not know how to handle. In a sense, this is to be expected because all that fraud is not paid out of their own pockets, but is ultimately from money printing.
Death of Social Media - Ghost of Arthur Powell has written this perceptive piece on social media not really being social anymore. As he points out, what used to be a way to keep up with friends has devolved into short form videos from strangers. Most people use social media to follow celebrities and what little social signal value it has comes from expressing your own opinion in hopes of influencing those that follow you. As he points out, the real social spaces these days are private group chats on telegram and slack and perhaps rightly so, as these spaces are usually not open to the whole world.
Epstein - Frank Wright has a summary of what’s found in the Epstein files. Let’s just say that it’s not pretty and that there is a lot of Mossad involved. The most surprising part is the financial aspect of his undertaking. It seems he claimed to be representing the Rothchilds in several emails, had lots of contracts with them and so on. His network spanned many countries and the current spin by the media is that he’s somehow a Russian spy. There are some notable Bitcoiners caught in this mess, largely due to Epstein being an LP in a fund that Joi Ito led, who in turn was managing MIT’s Media Lab which housed and continues to house the Digital Currency Initiative.
On Warsh - Michael Nicoletos has this thorough read on what Trump is actually doing with the Kevin Warsh nomination for Fed Chairman. The chaos in the markets the last few weeks have centered around his supposedly hawkish stance, which would mean less money printing and high interest rates, depressing asset prices. His reading is that this move is more to support Main Street directly than to subsidize Wall Street speculation. Indeed the latter has been what the Fed has been doing, but in a sense, subsidizing Main Street (in this case, by giving banks bigger capacities to do lending) is not any better. The Trump administration’s strategy maybe benefits different people, but in the end is still funded through money printing.
AI Opportunity - Freya India has this insightful essay on the opportunity of being a real human in the midst of AI generated content. The reaction of so many people that work in all sorts of industries is that they’re fearing for their jobs, knowing that what they produce will get replaced by AI. In a sense, they’re right. The jobs they have are robotic and they fill the role of a cog in a machine that unsurprisingly, machines may be much better at. Yet in a sense, isn’t that a blessing? Don’t we want the things that are more fit for humans? With emotion, experience, conviction and purpose? In a sense, this whole AI panic has exposed the nature of fiat institutions as being not just filled with rent-seeking, but without a soul.
Financial Fraud - Bits About Money has this take on the Minnesota fraud and why it has the properties that it has. For example, why is it Somalians that are largely implicated in the Daycare center fraud? As he points out, fraud tends to scale, as holes are left unchecked, people rush into them to make their money, and tell their friends and family about it, which will tend to be people of similar ethnic backgrounds. The whole article is detailed in how the financial industry treats fraud, which the MN government in particular and most governments in general, do not know how to handle. In a sense, this is to be expected because all that fraud is not paid out of their own pockets, but is ultimately from money printing.
What I'm up toTreasury Company Panel - I was on stage at Plan B El Salvador where we discussed the question, “Are Treasury Companies Good for Bitcoin?” I had the pleasure of being the only non-CEO on the panel, and argued that they aren’t. It was a good discussion and you can hopefully get why I think treasury companies are GBTC 2.0.
Russell Brand, Max Keiser and me - This was a conversation from 3 months ago at Bitcoin Historico, and I wasn’t supposed to be on stage, but the two charismatic speakers unexpectedly invited me to after getting into a conversation about Bitcoin, El Salvador and Christ. I’ve been on many stages and many panels, I have to say that this was one of the most electric and memorable.
The Bitcoin Podcast - I was on Walker’s podcast to talk about a whole bunch of things, including Bitcoin as method of payment, the controversy around Knots/Core and BIP110, my take on the current state of Core and my opinions around ossification in particular and software engineering in general.
Treasury Company Panel - I was on stage at Plan B El Salvador where we discussed the question, “Are Treasury Companies Good for Bitcoin?” I had the pleasure of being the only non-CEO on the panel, and argued that they aren’t. It was a good discussion and you can hopefully get why I think treasury companies are GBTC 2.0.
Russell Brand, Max Keiser and me - This was a conversation from 3 months ago at Bitcoin Historico, and I wasn’t supposed to be on stage, but the two charismatic speakers unexpectedly invited me to after getting into a conversation about Bitcoin, El Salvador and Christ. I’ve been on many stages and many panels, I have to say that this was one of the most electric and memorable.
The Bitcoin Podcast - I was on Walker’s podcast to talk about a whole bunch of things, including Bitcoin as method of payment, the controversy around Knots/Core and BIP110, my take on the current state of Core and my opinions around ossification in particular and software engineering in general.
Nostr Note of the Week
What I’m Promotingglozow Retires as Maintainer - This was a bit of a surprise as apparently, only the insiders were aware of her plans, but it’s fairly understandable, given that she’s been at the center of the controversy around the OP_RETURN limit. The impression I get is that she was tired of the drama, and becoming the face of Core to the people opposed to the datacarriersize policy change and the burden that came with it. What changes this indicates for Core is anyone’s guess.
BIP54 on Signet - The so-called “Great Consensus Cleanup” is now merged into AJ Towns’s Bitcoin Inquisition Signet. As is usual for soft forks, merging this into Signet is a way to test it in a real world environment. Bitcoin Inquisition 29.2 has this change in it, which includes fixes for the Timewarp bug, getting rid of BIP-30 validation (now unnecessary due to BIP-34) and using nLockTime in coinbase transactions to determine the block height. Note that Inquisition 29.2 has a bunch of other soft fork proposals activated on it, like BIP118 (ANYPREVOUT), BIP119 (OP_CTV), OP_CAT, OP_CSFS, and OP_INTERNALKEY.
FROST Signing Protocol BIP445 - The long-developing FROST k-of-n signature scheme for Bitcoin now has a BIP number. This is specifically a protocol that uses the x-only keys that Taproot introduced and uses the most effective variant that uses the fewest rounds. FROST is almost magical in its ability to cooperatively sign and make a single signature with any k-of-n participants, but does suffer from incompatibility with HD wallets, which most software and hardware wallets use. Still, there are uses for this technology, though it remains to be seen whether industry takes it up.
glozow Retires as Maintainer - This was a bit of a surprise as apparently, only the insiders were aware of her plans, but it’s fairly understandable, given that she’s been at the center of the controversy around the OP_RETURN limit. The impression I get is that she was tired of the drama, and becoming the face of Core to the people opposed to the datacarriersize policy change and the burden that came with it. What changes this indicates for Core is anyone’s guess.
BIP54 on Signet - The so-called “Great Consensus Cleanup” is now merged into AJ Towns’s Bitcoin Inquisition Signet. As is usual for soft forks, merging this into Signet is a way to test it in a real world environment. Bitcoin Inquisition 29.2 has this change in it, which includes fixes for the Timewarp bug, getting rid of BIP-30 validation (now unnecessary due to BIP-34) and using nLockTime in coinbase transactions to determine the block height. Note that Inquisition 29.2 has a bunch of other soft fork proposals activated on it, like BIP118 (ANYPREVOUT), BIP119 (OP_CTV), OP_CAT, OP_CSFS, and OP_INTERNALKEY.
FROST Signing Protocol BIP445 - The long-developing FROST k-of-n signature scheme for Bitcoin now has a BIP number. This is specifically a protocol that uses the x-only keys that Taproot introduced and uses the most effective variant that uses the fewest rounds. FROST is almost magical in its ability to cooperatively sign and make a single signature with any k-of-n participants, but does suffer from incompatibility with HD wallets, which most software and hardware wallets use. Still, there are uses for this technology, though it remains to be seen whether industry takes it up.
LightningAgent Wallet - AI Agents are all the rage these days, and if you want it to have the ability to transact in Bitcoin, here’s a nice lightning-based solution. You can now have it control some coins to do whatever you need it to. I’m sure there are already hundreds of agents trying to find creative ways to make money, and perhaps this can be a part of that infrastructure that brings ideas to reality faster and faster.
lightning-mcp - Of course, where there’s demand, there’s more than one solution and this one integrates with something like Claude to allow you to pay invoices and get around 402 paywalls and such. As AI scales and people get used to paying for their ability to get things done, will that change for content as well? Will micro-transactions like API calls become a reality with lightning?
$1M LN transaction - This is the highest known value transaction on lightning and it occurred between Kraken and a company called Secure. The transaction was facilitated by Voltage, meaning that the channel capacity all along the route was enough to transfer $1M in Bitcoin (12 BTC or so at the time) to go through. These need to be called super-Wumbo transactions or something.
Agent Wallet - AI Agents are all the rage these days, and if you want it to have the ability to transact in Bitcoin, here’s a nice lightning-based solution. You can now have it control some coins to do whatever you need it to. I’m sure there are already hundreds of agents trying to find creative ways to make money, and perhaps this can be a part of that infrastructure that brings ideas to reality faster and faster.
lightning-mcp - Of course, where there’s demand, there’s more than one solution and this one integrates with something like Claude to allow you to pay invoices and get around 402 paywalls and such. As AI scales and people get used to paying for their ability to get things done, will that change for content as well? Will micro-transactions like API calls become a reality with lightning?
$1M LN transaction - This is the highest known value transaction on lightning and it occurred between Kraken and a company called Secure. The transaction was facilitated by Voltage, meaning that the channel capacity all along the route was enough to transfer $1M in Bitcoin (12 BTC or so at the time) to go through. These need to be called super-Wumbo transactions or something.
Economics, Engineering, Etc.The Crash - There are many explanations for the crash the last few weeks, some on the Knots side saying it’s because of the CSAM risk, others on the Core side saying it’s the BIP110 risk, still others saying it’s quantum risk, but this one by @theotherparker on X is purely financial. The speculation is that a hedge fund in Hong Kong blew up on an options trade on IBIT. The best evidence of this is seen in the volume of options traded for the Bitcoin ETF and as the author explains here, options are typically hedged with the underlying, and at volume cause massive volatility like we’ve seen.
2000 Bitcoin - South Korean exchange Bithumb had planned to give 2000 won (about $1.40) to users as part of a promotional event. But instead of 2000 won, it gave 2000 Bitcoins to the users, resulting in something like 620,000 Bitcoin or $44B worth in today’s prices, being given to users. Thankfully, they recovered 99.7% of the coins, which is still about 2000 Bitcoin short, perhaps a user that reacted quickly enough to get those coins out.
Bitcoin Kidnappings - Kevin Loaec goes into why being known in any capacity in the Bitcoin space in France. According to him, the kidnappings are happening on average ever 2 days, and the people most susceptible seem to be ones that paid taxes on it. The kidnappers are presumably getting their victim lists from bribed tax officials. You don’t pay taxes, your government comes after you. You do pay taxes and the criminals do. Not a great situation in France.
The Crash - There are many explanations for the crash the last few weeks, some on the Knots side saying it’s because of the CSAM risk, others on the Core side saying it’s the BIP110 risk, still others saying it’s quantum risk, but this one by @theotherparker on X is purely financial. The speculation is that a hedge fund in Hong Kong blew up on an options trade on IBIT. The best evidence of this is seen in the volume of options traded for the Bitcoin ETF and as the author explains here, options are typically hedged with the underlying, and at volume cause massive volatility like we’ve seen.
2000 Bitcoin - South Korean exchange Bithumb had planned to give 2000 won (about $1.40) to users as part of a promotional event. But instead of 2000 won, it gave 2000 Bitcoins to the users, resulting in something like 620,000 Bitcoin or $44B worth in today’s prices, being given to users. Thankfully, they recovered 99.7% of the coins, which is still about 2000 Bitcoin short, perhaps a user that reacted quickly enough to get those coins out.
Bitcoin Kidnappings - Kevin Loaec goes into why being known in any capacity in the Bitcoin space in France. According to him, the kidnappings are happening on average ever 2 days, and the people most susceptible seem to be ones that paid taxes on it. The kidnappers are presumably getting their victim lists from bribed tax officials. You don’t pay taxes, your government comes after you. You do pay taxes and the criminals do. Not a great situation in France.
Quick HitsNic Carter rages about Quantum - In typical VC fashion, he complains about developers not taking him seriously enough.
OpenSats Grants - Notable grantees this cycle are a libbitcoin developer and cashu projects.
12-word memorization trick - Similar to the Memory Palace trick, this is a method of memorizing your seed phrase.
Strive Completes Acquisition - This one completed a month ago but I missed it. The Ramaswamy-led treasury company now holds 12797.9 BTC.
Nic Carter rages about Quantum - In typical VC fashion, he complains about developers not taking him seriously enough.
OpenSats Grants - Notable grantees this cycle are a libbitcoin developer and cashu projects.
12-word memorization trick - Similar to the Memory Palace trick, this is a method of memorizing your seed phrase.
Strive Completes Acquisition - This one completed a month ago but I missed it. The Ramaswamy-led treasury company now holds 12797.9 BTC.
Fiat delenda est.