How does anyone keep up with Bitcoin?
Faketoshi rekt, technical innovation, soft forks, EIA attack on miners
Bitcoin is the greatest story the internet told. A pseudonymous creator launching a decentralised network and digital asset, that would grow to being the 7th largest money (in base money terms), and used around the world by tens of millions of people.
These days there are so many things all happening at once. Here are some of the recent news items and some quick thoughts:
CSW (Faketoshi) is getting rekt in court. For more, see this break down: How Adam Back And Martti Malmi Killed Craig Wright’s Hope Of Ever Winning The COPA Case. Hopefully this helps reduce the ‘chilling effect’ CSW’s law suits have on bitcoin developers.
Early Bitcoin developer, Martti Malmi released his email correspondence with Satoshi from 2009-2011 here. This was a new round of Satoshi correspondence not previously made public.
Technical innovation and development proceeds rapidly. As an example, a leading non-custodial lightning wallet, Phoenix, just rolled out a new update making use of Taproot, MuSig2 and output descriptors to improve user privacy and save on fees. ACINQ are really applying the state of the art in Bitcoin tech to provide a better experience for users. Those who want details can see their blog post here.
Meanwhile the next soft fork debate rages on between proponents of various ideas - whether it is Covenants based (CTV, LNHANCE, TXHASH), OP CAT, Consensus Clean up, Vault, with the “ossify now” people in there too. I think there is a path forward with safe, careful and incremental steps forward to improve the capacity of people to self custody Bitcoin. Perhaps that is LNHANCE or a covenant and script based path forward that can help us improve the ‘chain efficiency’ of LN or other L2 layers. One example is ‘Cold Channels’, see this thread by Owen Kemeys if you want to see how it can save doing on-chain transactions.
GBTC based outflows are slowing down to below $50M/day, which combined with the halving and Bitcoin ETF buying, will serve as an accelerator for the bitcoin bull run. The “New 9” Bitcoin ETFs are rapidly accumulating Bitcoin (approx 10k BTC per day), and most HODLers are not releasing any coins until the price goes much much higher.
The Bitcoin Spam debate rages on. Public miner Marathon launches Slipstream, their way of supporting ‘non-standard’ transactions that don’t meet policy but do still align with consensus. Controversially, is this enabling a new route for spammers to put their spam on the chain? e.g. “4 meggers”.
But on the bright side, this may also reduce the spam and fee spikes. How? As mononaut points out, these mining pool API services break the incentive structure of these BRC-20 “fair mints” which drove some of the worst fee spikes in 2023. Instead of having all the degens compete by paying extreme high fees to get their ‘mint’ transaction confirmed, degens may now deploy & premine the entire token by using these services. Thus, the decentralised ‘fair mint’ game is changed, and we could see a reduction in spam and associated fee spikes. JPEG spam will likely remain, but at least JPEG fee pressure isn’t as immense as the BRC-20 spam fee pressure.
Trump changing his tune on Bitcoin and softening his stance was also significant, given his popularity. Now, he “could live with it”. This is a softening from his earlier stance in 2019 where he said he was “not a fan”.
Public Bitcoin miners in the US such as Riot Platforms are pushing back on the EIA Survey which is a fake emergency, designed to commence an attack on Bitcoin mining. The US government’s Department of Energy agreed to temporarily suspend the survey following a lawsuit from Riot Platforms and the Texas Blockchain Council.
Podcast summaries
What’s Next for Bitcoin and Mutiny Wallet with Ben Carman SLP551
Ben and I spoke about a range of things, some key highlights include:
That the path forward is likely some form of covenant based scaling, perhaps LNHANCE.
In order to ‘count’ as a Bitcoin L2, you generally need unilateral exit.
Mutiny Wallet is taking a hybrid approach, to allow users to onboard using a Fedimint style approach, and later upgrade to self custody where feasible. This seems pragmatic given rising fees over time.
EIA Attack On Bitcoin Miners with Brian Morgenstern SLP552
Brian Morgenstern, Head of Public Policy of Riot Platforms joins me to talk about how the USG (pushed by Elizabeth Warren) is going after Bitcoin miners.
Bitcoin support in government is not necessarily based on partisan lines, despite what you might see in the news
This EIA (Energy Information Administration) “emergency” survey is being pushed on false pretenses that Bitcoin mining is bad for the grid and on emissions, both of which are false. But this is part of an attack requiring registration and disclosure of market competitive information.
Elizabeth Warren has effectively been running the Biden administration’s digital asset policy for years, and this survey is a political weapon designed to strangle US Bitcoin miners.
After this podcast was recorded and released, Riot Platforms and the Texas Blockchain Council announced legal action against the EIA, and the survey will not be enforced for 4 weeks (as mentioned above).
But nevertheless, pushing back on government attacks is worthwhile, and this fight is not over yet.
Conclusion
That’s all from me this week. Hope you’re stacking sats and HODLing out there. See you in the citadels.