Once morals improve.


GM! #meme morning!
https://m.primal.net/KHYB.jpg


First up, I want to recognize that this is an uncomfortable topic!  Bitcoin is inevitably changing towards user-pays, and that's not all positive.  But facts we don't like are still facts: can't engineer a solution if we can't think about the problems.

There are three kinds of bitcoiners.
A. Those who can afford any fee.
B. Those who can afford a UTXO, but not often.
C. Those who can't afford a UTXO.

Nobody worries about the A group (and in the early days, that was everyone).  Obviously Lightning (my area!) caters to the B group, and we want it to be as large as possible.  To do this we can (1) make lightning as resiliant as we can so onchain spends are rare, (2) make bitcoin as efficient as possible so we can cram as much as we can into what we have.

(1) Making lightning more resilient and reliable is engineering.  Lots of people working on this, even before we get soft-forks which could help further.

(2) More efficiency has two benefits: obviously if your own onchain spends are 20% smaller, that's 20% cheaper.  But if *everyone's* onchain spends are 20% smaller, that means fees are lower *for everyone* too (and it's non-linear).  So we really care about all Bitcoin usage!  Some things are obvious wins: Taproot so you can avoid even putting the script onchain in many cases, FROST so you can cram your 2 of 3 or other scheme into a single key and signature.  We know we want to get more aggressive with sharing one signature across multiple inputs (Cross Input Signature Aggregation), but that needs a lot more research, and a soft-fork.

But even with all these, the math is clear: some people, even if you somehow gave them their wealth in a UTXO, it couldn't afford its own fees to spend.  The C group is real.  Spoiler alert: we don't have an answer for this!  But let's look at some approaches people have tried.

Firstly, there are attempts to move these people into the B group: give them long enough that maybe fees will reach a point they can afford.  This seems unlikely to me:
1. As fees increase everyone will start doing the work to take advantage of low fee times, and that itself means that low-fee times won't be so low.
2. These schemes tend to increase onchain footprints, so they need fees to drop a lot to overcome that (typical is 2x the transaction size, so you need fees to halve to gain anything).
3. If you really can't afford the fee, you probably also can't afford to wait.
4. You still haven't actually dealt with those who really, really can't afford the fees.  Ever.

Another suggestion is that someone (e.g. a lightning service provider) will lock up funds which would cover fees, in case something goes wrong.  This doesn't work economically, because nobody is paying $100 for a $5 user (not at scale), but it doesn't even work mathematically: the reason some people will have small UTXOs is because there are not enough sats for 10 billion people with any realistic distribution.

There are two basic approaches left:
1. Group people, so they fall into the B category (i.e. onchain tx is possible, but expensive).
2. Trust someone, but rely on incentives.

1. Grouping people is possible, but they need to work together if somenthing goes wrong.  So grouping inside a community is probably better than grouping with randos.

For example, there are various tree-of-transaction schemes where you go onchain only if the coordinator fails/goes rogue, and how much it costs you depends on whether anyone near you in the tree pays to get themselves out.  These are basically free if nothing goes wrong (one UTXO required for thousands of users!).  But this is subject to ghettoization, where the coordinator makes sure all the C people are grouped together, knowing none of them can afford the transactions they need to get their funds back.  It's particularly bad because the coordinator can insert its own fake "whales" to make it look like it's not ghettoized.

You can play with incentives here, too: more research needed.  The details matter!

2. Relying on incentives.

As a simple example, lightning-connected e-cash mints.  They can't rug individuals very easily, they have to rug everyone together (or go fractional and rug the last ones to exit).   Maybe with enough anonymity and reputation, these would be Good Enough.

More ambitious would be a single UTXO held for multiple people by a coordinator.   Can we make it so that if a coordinator is dishonest, you can force them to burn your funds?  Maybe burn more than your funds (ie. a bond)?  Won't get your money, but it aligns incentives so they're not motivated to rug you.  The details here really matter!

There's a cute scheme which has been proposed where the coordinator pays a temporary bond, and asserts that they actually have everyone's signature to transfer the funds.  If nobody challenges within a week, they get the bond back and the funds move.  If someone challenges, all the signatures are put onchain, and if they're not all valid, the bond gets half-burned and half-given to the (successful) challenger.  This is hard to make work, though.  Someone needs to get the money to challenge (hard if you don't have the money in the first place, plus it's hard to prove to someone you *didn't* sign something!), and then make sure nobody gets the challenge bond before them (in particular, a dishonest coordinator, seeing the game is up, completes the successful challenge *themselves* and gets half their bond back), and make sure someone can't grief and delay the settlement indefinitely or bankrupt the coordinator.

More research needed, here, too.

Summary

A longer post than I had expected to write.  And it's buried in the middle of a thread nobody will read.  (I do this sometimes.  I suck at marketing I guess!)

Sub-fee bitcoin amounts will have tradeoffs, involving trusting someone who has more money than you (at least, in someone's competence, even if their *financial* incentives can be made to match yours).  This is difficult to build well, and not a very exciting thing to build today, so it hasn't really happened (custodial things are much, much easier!).

This is also a key reason I believe we need to make Bitcoin more expressive: if we can do *more* with our own UTXOs, we can build better solutions.  And by "we" I mean "someone smarter than me" of course!

Feedback welcome!


Holy shit, I think I just realized a direct and concrete way that I’ve personally experienced to how #Nostr completely changes the social incentives:

• Rage and hateful posts on Twitter get the most attention.
• Positive and happy posts on Nostr get the most zaps.

It really was just monetization all the time.

When attention is the currency, negativity and hate rise to the top because the platforms need people arguing.

When sats directly from peers are the currency, value rises to the top.

(Anyone else feel they’ve had this same experience?)


Any good tips?


Notes and other stuff 😎


In the year 2030, the world stood on the precipice of economic collapse. Decades of political mismanagement and the unchecked printing of fiat money had finally taken their toll. Inflation rates soared to unimaginable heights, and the value of currencies plummeted. Ordinary people watched helplessly as their life savings evaporated overnight.

Governments, desperate to maintain control, continued to flood the market with newly printed money, believing that this would solve the economic crisis. But the more money they printed, the less it was worth. The global economy spiraled into chaos, and societal structures began to crumble. Riots broke out in cities worldwide as people fought over scarce resources, and trust in traditional financial institutions evaporated.

Amidst this turmoil, a small but growing group of people turned to an alternative form of currency: #Bitcoin. Initially dismissed by many as a speculative asset, Bitcoin had steadily grown in acceptance and value. Unlike fiat currencies, it was decentralized and based on a fixed supply, governed by mathematical algorithms rather than fallible human institutions.

As traditional currencies lost their value, more people began to see Bitcoin as a safe haven. Its decentralized nature meant that it was immune to the whims of politicians and central bankers. Transactions were transparent and secure, recorded on an immutable blockchain.

One of the early adopters of Bitcoin was Elena Reyes, a former economist who had lost faith in the traditional financial system. Seeing the writing on the wall, she had converted her savings to Bitcoin years before the crisis hit. Now, she found herself at the center of a burgeoning movement advocating for Bitcoin as the new global reserve currency.

Elena's home, once a modest apartment in a quiet neighborhood, had become a hub for like-minded individuals seeking refuge from the economic storm. They gathered in her living room, laptops open, discussing strategies to promote Bitcoin adoption and support those transitioning away from fiat currencies.

"We have to be the change we want to see," Elena often said, echoing the sentiments of the group. "Bitcoin represents more than just financial stability; it represents freedom from a broken system."

As the crisis deepened, more people joined the movement. Businesses began accepting Bitcoin, and communities formed around the principles of decentralization and transparency. The transition was not without challenges. There were technical hurdles to overcome, and many people were resistant to change. But the relentless devaluation of fiat money left them with little choice.

Gradually, the world began to change. Governments, unable to stabilize their currencies, started to recognize the potential of Bitcoin. Policies shifted, and regulations were introduced to facilitate its use. It was a painful process, but the seeds of a new economic order were being sown.

By 2035, Bitcoin had emerged as the de facto global reserve currency. Its fixed supply and decentralized nature provided a stable foundation for a recovering world economy. Trust, once shattered, was being rebuilt not on promises from fallible institutions, but on the unyielding principles of mathematics and code.

Elena, reflecting on the journey from chaos to stability, understood that this was not the end, but a new beginning. The collapse of the old system had given rise to something more resilient, more just. Bitcoin had not only survived; it had thrived, offering hope and a vision for a better future.


GM!


Agree!


This: https://www.vivobarefoot.com/us/


In the mid-3rd century AD, the mighty Roman Empire, a colossus straddling the known world, began to crumble from within. The seeds of destruction were sown by a practice that seemed harmless at first: the relentless minting of coins. This was the empire's desperate measure to fund its vast military expenditures and the extravagant lifestyles of its emperors.

Imagine the streets of Rome, bustling with merchants and citizens, suddenly finding the denarius in their pockets buying less and less each day. The emperors, in their distant palaces, decreed the creation of more coins, thinking it a panacea for their financial woes. But each new batch of currency, heavily debased with less silver, chipped away at the value of money itself. Prices soared as hyperinflation took hold, turning life into a daily struggle for survival for the common folk.

As the rich draped themselves in luxury, scarcely feeling the pinch of rising prices, the poor found their earnings vanishing into thin air, unable to keep pace with the cost of living. The middle classes, once the backbone of Roman stability, watched helplessly as their savings evaporated and their comforts dwindled, their dreams of a peaceful life turning to dust.

Political instability mirrored this economic chaos. The emperor’s throne, once a symbol of divine authority and stability, became a prize in a deadly game, with over 20 claimants within a mere 50 years, many meeting violent ends. Each new emperor brought hope of reform but instead only added to the turmoil, often leading through force rather than wisdom.

Externally, the empire was assailed by barbarian tribes emboldened by Rome’s internal weaknesses. Internally, provinces began to break away, seeking to fend for themselves rather than remain part of a faltering system. The social fabric, stretched and torn by inequality and inflation, could no longer hold. Bonds of loyalty and duty that had bound the empire’s diverse peoples frayed to breaking.

Thus, a society that had once conquered continents and commanded the allegiance of millions disintegrated, not solely by the sword or by external force, but also by the invisible pressures of economic mismanagement and social inequality. The Crisis of the Third Century serves as a poignant chapter in history, a tale of decline woven by the threads of unchecked ambition, economic folly, and the relentless grind of inequality.

Today, as many Western economies grapple with the specters of inflation and financial uncertainty, eerily echoing the monetary crises of ancient Rome, #Bitcoin emerges as a beacon of hope. By offering an alternative rooted in decentralization and finite supply, it challenges the fiat experiment, centralized monetary systems that is prone to excessive money printing and resultant inequality. Bitcoin is not just a digital asset; it represents the potential to disrupt and reformulate our understanding of monetary value and economic power, providing a modern tool that could help break the cycle of history and prevent the repetition of past economic collapses. In this way, Bitcoin is our best hope to forge a new path forward, ensuring a more stable and equitable economic future.


Llama3 is really impressive!


Welcome, enjoy the weirdness!


Dantastic!


Deterministic Aptimism Nvk 🤔 DAN


#OnlyDans I guess?


Definitely, but that’s what makes it feel more real/alive!


Simple decision tree for those in need of guidance:
https://m.primal.net/HtJH.png


I find #NOSTR to be much more enjoyable and #Primal more welcoming in comparison to the other social media platforms out there.

Long live freedom of speech and the relentless competition of ideas!


“An optimist laughs to forget; a pessimist forgets to laugh.” – Tom Nansbury


AnonymousPleb

Pleb exploring cyberspace using NOSTR and Bitcoin


I fully agree. Personally I feel that it would add just as much wonder either way! The universe is unimaginably large and full of so many unknown unknowns.


Just wrote an article about Blossom Drive. a new nostr app I'm building for file sharing and censorship resistant file hosting

If you want to give it a try its hosted at https://blossom.hzrd149.com/

nostr:naddr1qqxkymr0wdek7mfdv3exjan9qgszv6q4uryjzr06xfxxew34wwc5hmjfmfpqn229d72gfegsdn2q3fgrqsqqqa28e4v8zy


#Bitcoin
The evolution of money:
https://m.primal.net/Heqw.png


Navigating the Triffin Dilemma: Bitcoin's Role in Reshaping Global Finance

In the world of international finance, the Triffin Dilemma presents a paradox at the heart of global economics, posing challenges that have long eluded a comprehensive solution. First identified by economist Robert Triffin in the 1960s, the dilemma highlights a fundamental conflict faced by countries whose currencies serve as global reserves: the need to supply other countries with sufficient liquidity versus the need to maintain the value of their currency.

The Essence of the Triffin Dilemma

At the core of the Triffin Dilemma is a balancing act. On one hand, as global demand for a reserve currency (historically, the U.S. dollar) increases, the issuing country must run larger current account deficits to supply this demand. This involves selling more of its currency than it buys back, providing other countries with the liquidity needed for international trade and financial stability. However, this very act of supplying liquidity can undermine confidence in the value of the reserve currency itself, especially if it leads to sustained current account deficits and rising debts. The paradox is clear: the more a currency fulfills its role as a global reserve, the more it risks devaluation, potentially destabilizing the global financial system it seeks to support.

#Bitcoin: A Modern Solution?

Enter Bitcoin, a decentralized digital currency that presents a novel solution to the age-old challenges posed by the Triffin Dilemma. Bitcoin's unique properties address the core issues of liquidity provision and value preservation in several key ways:

1. Decentralization: Unlike traditional reserve currencies, which are issued by national central banks, Bitcoin operates on a decentralized network. This means no single country bears the responsibility of supplying liquidity to the global economy, circumventing the traditional pitfalls of the Triffin Dilemma.

2. Fixed Supply: Bitcoin has a capped supply of 21 million coins, a feature that inherently limits inflation and encourages value preservation. This fixed supply contrasts sharply with fiat currencies, which can be printed in unlimited quantities by central banks, potentially leading to devaluation and loss of confidence.

3. Global Accessibility: Bitcoin can be accessed and used by anyone with an internet connection, providing a universal form of liquidity without the need for intermediaries. This global accessibility ensures that liquidity can be distributed more evenly across the world, reducing dependence on any single currency for international trade and finance.

4. Transparency and Security: The blockchain technology underlying Bitcoin offers unparalleled transparency and security, fostering trust in its use as a medium of exchange and store of value. Transactions are verified by a decentralized network of nodes, making counterfeiting and double-spending virtually impossible.

5. Potential for Diversification: By providing an alternative to traditional reserve currencies, Bitcoin allows countries and individuals to diversify their reserves and reduce reliance on any single currency. This diversification can mitigate the risks associated with the concentration of global reserves in one currency, contributing to a more stable international financial system.

Challenges and Considerations

While Bitcoin presents a compelling solution to the Triffin Dilemma, it is not without its challenges. Volatility, regulatory acceptance, and scalability remain significant hurdles to its widespread adoption as a global reserve currency. Moreover, transitioning from a world dominated by fiat currencies to one in which Bitcoin plays a central role will require careful navigation, innovative policy solutions, and international cooperation.

The Road Ahead

As we stand at the crossroads of financial history, Bitcoin offers a glimpse into a future where the Triffin Dilemma no longer constrains the global economy. By leveraging the unique advantages of Bitcoin, we can envision a more balanced and stable international financial system. However, realizing this vision will require us to address the challenges head-on, fostering dialogue, innovation, and collaboration across the globe.

In conclusion, while Bitcoin may not be a panacea for all the complexities of global finance, it certainly provides a promising avenue for rethinking how we manage global liquidity and preserve currency value in an interconnected world. As we explore this new frontier, the lessons of the past remind us of the need for prudent management, open-mindedness, and a commitment to global economic stability.


In general I find Primal to be very intuituve and fluid!


The Cantillon Effect, a concept derived from the works of 18th-century economist Richard Cantillon, is an economic theory that explains how monetary inflation can affect different parts of the economy in various ways, depending mainly on who receives the new money first. In essence, it suggests that those who are closer to the source of new money (e.g., banks and financial institutions) benefit through early access, allowing them to spend or invest the money before inflation has diminished its value. Meanwhile, those further away (e.g., the general public) receive this money last, often when its purchasing power has already decreased due to the inflationary pressures created by the initial injection of new money into the economy. This effect exacerbates inequality, as the wealth gap widens between the first recipients of new money and those who receive it later.

Enter #Bitcoin. The proposition of a Bitcoin standard as a solution to the problems posed by the Cantillon Effect is intriguing and warrants a deeper dive. Bitcoin, by design, is decentralized and comes with a predetermined supply cap of 21 million coins, making it immune to the kind of manipulative monetary policies that lead to the Cantillon Effect. Here's how a Bitcoin standard could potentially address these issues:

Decentralization and Equal Access

Unlike fiat currencies, which are controlled by central banks and financial institutions, Bitcoin operates on a decentralized network. This means no single entity can control its issuance, fundamentally altering who benefits from its creation. On a Bitcoin standard, money creation is predetermined by its protocol and distributed through mining, a process accessible to anyone with the necessary computational resources and knowledge, thereby democratizing access to new money.

Fixed Supply and Predictability

Bitcoin's fixed supply of 21 million coins ensures predictability and eliminates the possibility of inflationary policies that devalue currency over time. This aspect could significantly reduce the impact of the Cantillon Effect, as the creation of new money (through mining) is not only transparent and predictable but also decreases over time due to events like halvings, which cut the reward for mining in half approximately every four years. This built-in scarcity mimics the properties of gold while offering the benefits of digital currency.

Eliminating the Need for Intermediaries

The Bitcoin standard could reduce the role of traditional financial intermediaries in the creation and distribution of money. Since Bitcoin transactions occur directly between parties on the blockchain without the need for intermediaries, it levels the playing field by giving everyone equal opportunity to participate in the economy, irrespective of their proximity to traditional financial institutions.

Challenges and Considerations

However, transitioning to a Bitcoin standard is not without its challenges. Volatility, scalability, and regulatory acceptance are significant hurdles. Additionally, there's the question of transition – how to move from a fiat-dominated world to one where Bitcoin plays a central role in the economy. Such a shift would require not just technological adaptations but also a radical shift in monetary policy thinking and public acceptance.

In conclusion, while a Bitcoin standard offers a compelling theoretical solution to the problems posed by the Cantillon Effect, its practical implementation would require overcoming significant challenges. Nonetheless, the debate around this topic is crucial as it pushes us to rethink the fundamentals of our current financial system and explore more equitable alternatives for the future. As we navigate these complex issues, the core principles of Bitcoin – decentralization, fixed supply, and equal access – present a fascinating blueprint for a more equitable economic system.


Bitcoin represents a shift in how we view money. Unlike fiat currency, it’s not subject to the same inflationary pressures, since there’s a cap on how many can ever exist. It’s a peer-to-peer system that isn’t governed by any central authority, which means that the transactions are uncensorable. In the digital age, it’s an approach that can resonate for those looking for alternatives to traditional banking. #Bitcoin


Did you know it costs more than a cent to make a penny? 🤔 Yes, you heard that right! Producing and distributing each U.S. penny costs the Mint over 1.5 cents, thanks to the prices of zinc and copper, plus manufacturing expenses. 🏭💸 While some argue it’s time to say goodbye to the penny due to its higher production costs and limited use in daily transactions, others believe it holds sentimental value and is an iconic piece of American history. 🇺🇸

Countries like Canada, Australia, and New Zealand have already stopped using their lowest denomination coins, sparking a debate: Should the U.S. follow suit and phase out the penny? 🌍🚫💰

What’s your take? Is the penny worth keeping for tradition and nostalgia, or is it time to embrace change and efficiency in our currency? Drop your thoughts below! #PennyForYourThoughts #EconomicDebate #ChangeTheChange


Worth a read:

https://bitcoinmagazine.com/sponsored/mining-misinformation-how-the-united-nations-university-misrepresented-data-to-exaggerate-bitcoins-environmental-footprint


“The amount of energy needed to refute bullshit is an order of magnitude bigger than that needed to produce it.” — Williamson on Bitcoin mining (Brandolini’s Law)


The term “money laundering” originally comes from the mafia’s practice of using laundromats to disguise their revenues from illegal activities as legitimate earnings. Laundromats, being cash-operated businesses, provided an ideal front for the illicit income.


TIL: The word “salary” comes from the Latin word “salarium,” which originally referred to a Roman soldier’s allowance for the purchase of salt—an essential commodity in ancient times. This is also the root of the phrase “worth one’s salt,” meaning worth one’s pay.


GM NOSTR!