Honolulu Bitcoin Developers2024-03-18T00:50:14Zhttps://honolulu-bit-devs-rebrand.vercel.app
Videos
2023-06-16T06:43:00.026Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/videos/
<ul>
<li><a href="https://youtu.be/bBC-nXj3Ng4" target="_blank" class="external-link">But How Does Bitcoin Actually Work?</a></li>
<li><a href="https://youtu.be/8Mhu6dxj7qk" target="_blank" class="external-link">Michael Saylor keynote presentation at BTC Prague 2023 - The Future of Bitcoin</a></li>
<li><a href="https://youtu.be/ig3UN1GYmY8" target="_blank" class="external-link">"Follow The Money - Bitcoin In El Salvador" Documentary By What Bitcoin Did</a></li>
<li><a href="https://youtu.be/xLYYh4aPXAM" target="_blank" class="external-link">Bitcoin Is Protecting Human Rights Around the World</a></li>
<li><a href="https://youtu.be/b-7dMVcVWgc" target="_blank" class="external-link">"This Machine Greens" Documentary By Swan Bitcoin</a></li>
<li><a href="https://youtu.be/NoobUKNttmw" target="_blank" class="external-link">"Bitcoin Macro Strategy" with Michael Saylor and Ross Stevens</a></li>
<li><a href="https://youtu.be/ZaXfoAKnrcM" target="_blank" class="external-link">Nate Harmon's Interview With Compass Mining About OTEC</a></li>
</ul>
Podcasts
2023-05-13T05:59:22.095Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/podcasts/
<h1 id="economics-money" tabindex="-1">Economics/Money</h1>
<ul>
<li><a href="https://overcast.fm/+MYnw6O1iU" target="_blank" class="external-link">Bitcoin Audible: Guy’s Take 60 - Digital Money</a></li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://anchor.fm/troy-cross0" target="_blank" class="external-link">Nate's interview with Troy Cross: "Bitcoin, Energy, and the Environment"</a></li>
<li><a href="https://youtu.be/9-rlJjJyqBc" target="_blank" class="external-link">Nate's What Bitcoin Did interview: "Bitcoin, Unleashing an Ocean of Energy"</a></li>
</ul>
<h1 id="tech-updates-news" tabindex="-1">Tech Updates/News</h1>
<ul>
<li><a href="https://bitcointv.com/c/rhr/videos" target="_blank" class="external-link">Rabbit Hole Recap</a></li>
<li><a href="https://bitcointv.com/c/citadeldispatch/videos" target="_blank" class="external-link">Citadel Dispatch</a></li>
<li><a href="https://bitcoin.review/" target="_blank" class="external-link">Bitcoin Review</a></li>
</ul>
Other
2024-03-14T06:55:13.798Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/other/
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/surviving-a-high-fee-market/">Surviving a High-Fee Market</a>
<ul>
<li>Notes from <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-28/">Socratic Seminar 28</a> discussion topic</li>
</ul>
</li>
<li><a href="https://www.thebitcoinlegacyproject.org/" target="_blank" class="external-link">The Bitcoin Legacy Project</a>
<ul>
<li>Interactive timeline of Bitcoin's complete history</li>
</ul>
</li>
<li><a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's Bitcoin Dashboard</a>
<ul>
<li>Collection of live Bitcoin metrics</li>
</ul>
</li>
<li><a href="https://learnmeabitcoin.com/" target="_blank" class="external-link">Learn Me A Bitcoin (By Greg Walker)</a>
<ul>
<li>"...this website is my attempt to explain how Bitcoin works, how to use it, and how to work with it as a programmer"</li>
</ul>
</li>
<li><a href="https://www.swanbitcoin.com/canon" target="_blank" class="external-link">Bitcoin Canon</a>
<ul>
<li>Presents thematic collections of the best Bitcoin educational content, curated by Bitcoiners</li>
</ul>
</li>
<li><a href="https://bitcoin-resources.com/" target="_blank" class="external-link">Bitcoin Resources</a>
<ul>
<li>Curation of educational books, articles, podcasts, and videos</li>
</ul>
</li>
<li><a href="https://bitcoin-only.com/" target="_blank" class="external-link">Bitcoin-Only</a>
<ul>
<li>Set of technical and educational resources about how to use Bitcoin</li>
</ul>
</li>
<li><a href="https://www.bitcoin.page/" target="_blank" class="external-link">Lopp's Bitcoin Information & Resources</a>
<ul>
<li>Mega-collection of curated educational resources by Jameson Lopp</li>
</ul>
</li>
<li><a href="https://www.ekosys.org/" target="_blank" class="external-link">The Open Source Map of The Bitcoin Protocol Ecosystem</a>
<ul>
<li>Overview of technical developments/projects across the Bitcoin ecosystem</li>
</ul>
</li>
<li><a href="https://endthefud.org/" target="_blank" class="external-link">End The FUD</a>
<ul>
<li>The best links to articles debunking Bitcoin FUD</li>
</ul>
</li>
<li><a href="https://bankaccountfrozen.com/" target="_blank" class="external-link">"Okay So Your Bank Account Is Frozen" Starter Pack</a>
<ul>
<li>Easy self-custody guide for beginners</li>
</ul>
</li>
<li><a href="https://bitcoiner.guide/" target="_blank" class="external-link">Bitcoiner Guide by Bitcoin Q+A</a>
<ul>
<li>Large collection of guides for Bitcoin-related activities</li>
</ul>
</li>
<li><a href="https://bitcoin.rocks/" target="_blank" class="external-link">Bitcoin Rocks</a>
<ul>
<li>Collection of bitcoin resources sorted by topics</li>
</ul>
</li>
<li><a href="https://www.chatbtc.dev/" target="_blank" class="external-link">ChatBTC</a>
<ul>
<li>AI chatbot trained on bitcoin-related technical content</li>
</ul>
</li>
<li><a href="https://bitcoiner.guide/fork/" target="_blank" class="external-link">Modify Open-Source Projects</a>
<ul>
<li>Beginner-friendly guide on contributing to open source projects</li>
</ul>
</li>
</ul>
Zeus v0.8.0 - Embedded LND Node, OLYMPUS, Zeus Pay & More
2023-12-18T05:38:03.124Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/zeus-v0-8-0-embedded-lnd-node-olympus-zeus-pay-and-more/
<h1 id="what-is-it" tabindex="-1">What is it?</h1>
<p><a href="https://zeusln.com/" target="_blank" class="external-link">ZEUS</a> (operated by <a href="https://twitter.com/evankaloudis" target="_blank" class="external-link">@evankaloudis</a>) announced the public release of v0.8.0 on the <a href="https://apps.apple.com/us/app/zeus-wallet/id1456038895?ref=blog.zeusln.com" target="_blank" class="external-link">Apple App Store</a> and <a href="https://play.google.com/store/apps/details?id=app.zeusln.zeus&ref=blog.zeusln.com" target="_blank" class="external-link">Google Play</a>. ZEUS is one of several non-custodial Lightning wallets that leverages an <a href="https://medium.com/breez-technology/introducing-lightning-service-providers-fe9fb1665d5f" target="_blank" class="external-link">Lightning Service Provider</a> (LSP) to abstract away most of the complexities of managing Lightning Network liquidity without sacrificing custody over the funds.</p>
<h1 id="why-is-it-cool" tabindex="-1">Why is it cool?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://blog.zeusln.com/new-release-zeus-v0-8-0/" target="_blank" class="external-link">New release: ZEUS v0.8.0</a><br />
<strong>Embedded node</strong></p>
<p>First and foremost, the new ZEUS features a new embedded LND node. This means that users no longer have to remotely connect to their own pre-configured lightning node back at home or in the cloud. Users simply hit 'Quick Start' on the intro screen and start syncing the blockchain in mere moments.</p>
<p>This node offers up nearly all the same functionality to users as they would have with a remote node: including lightning + on-chain sending and receiving, and channel management. Only the payment forwarding screens are disabled as mobile nodes are not conducive to routing.</p>
<p>While we expect most of our users to be using the embedded node moving forward, we remain committed to supporting remote connections for our original users.</p>
<p><strong>Our LSP: OLYMPUS by ZEUS</strong></p>
<p>Onboarding to lightning can be difficult and overwhelming to new users. So we've lowered the barrier to entry with a channel service from our new lightning service provider (LSP), OLYMPUS by ZEUS.</p>
<p>Users can generate invoices without having previously set up lightning payment channels, and have them paid and settled, nearly instantly, with our 0-conf channel service.</p>
<p>The LSP also provides added privacy to our users by providing them with wrapped invoices that conceal their nodes' public keys from payers.</p>
<p>The LSP is on by default, but users can choose to opt out of it. It is currently only available to use with embedded nodes, but we hope to extend functionality to remote nodes soon.</p>
<p><a href="https://docs.zeusln.app/lsp/intro?ref=blog.zeusln.com" target="_blank" class="external-link">Read more about our LSP here.</a></p>
<p><strong>Self-custodial lightning addresses</strong></p>
<p>Here's where we take it up another level. With this release, we offering up a self-custodial lightning address that we're calling ZEUS PAY. This is the <em>first ever</em> offering of a self-custodial lightning address in a mobile app.</p>
<p>ZEUS PAY leverages user-generated pre-image hashes, hodl invoices, and the <a href="https://github.com/supertestnet/zaplocker?ref=blog.zeusln.com" target="_blank" class="external-link">Zaplocker</a> Nostr attestation scheme to allow users who may not be online 24/7 to receive payments to a static lightning address. Users just need to log in to their ZEUS wallets within 24 hours to claim the payments, otherwise they will be returned to the sender.</p>
<p>We hope that more wallets adopt this scheme to improve the UX for their users. But even without any updates, ZEUS PAY can easily receive payments from all lightning-enabled Bitcoin wallets <em>today.</em></p>
<p>We think this is a fantastic solution for service workers, nomads, dissidents, and others to accept tips and donations without sacrificing custody. We eagerly look forward to all the new people that are onboarded to Bitcoin with this new functionality.</p>
<p>ZEUS PAY is available, not only just to embedded node users, but also remote LND users.</p>
</blockquote>
<h1 id="controversy" tabindex="-1">Controversy</h1>
<p>Some controversy has arisen around ZEUS's self-custodial Lightning address implementation. In order to receive Lightning payments to a non-custodial LN address while offline (i.e., if you don't have the app open on your phone), ZEUS PAY leverages hold invoices (aka "hodl" invoices):</p>
<blockquote>
<h2 id="quote-a-href-https-voltage-cloud-blog-lightning-network-faq-understanding-hold-invoices-on-the-lightning-network-target-blank-class-external-link-understanding-hold-invoices-on-the-lightning-network-voltage-a-br-a-hold-invoice-is-an-alternative-type-of-invoice-that-triggers-a-different-payment-flow-strong-instead-of-immediately-settling-the-payment-by-revealing-the-payment-pre-image-to-the-sender-the-hold-invoice-enables-the-receiver-to-lock-the-htlc-and-delay-or-even-cancel-the-act-of-revealing-the-payment-pre-image-to-complete-the-payment-this-allows-recipients-to-accept-lightning-payments-at-their-discretion-strong-as-mentioned-previously-there-is-a-finite-period-within-which-the-recipient-can-reveal-the-invoice-if-this-specific-timeframe-is-exceeded-the-possibility-of-settling-the-payment-is-no-longer-viable" tabindex="-1">[!QUOTE] <a href="https://voltage.cloud/blog/lightning-network-faq/understanding-hold-invoices-on-the-lightning-network/" target="_blank" class="external-link">Understanding Hold Invoices on the Lightning Network - Voltage</a><br />
A Hold Invoice is an alternative type of invoice that triggers a different payment flow. <strong>Instead of immediately settling the payment by revealing the payment pre-image to the sender, the Hold Invoice enables the receiver to lock the HTLC and delay (or even cancel) the act of revealing the payment pre-image to complete the payment. This allows recipients to accept Lightning payments at their discretion.</strong> As mentioned previously, there is a finite period within which the recipient can reveal the invoice. If this specific timeframe is exceeded, the possibility of settling the payment is no longer viable.</h2>
<h2 id="drawbacks-of-hold-invoices" tabindex="-1">Drawbacks Of Hold Invoices</h2>
<p>Unfortunately, this feature doesn’t come without tradeoffs. Here are some of the drawbacks of using Hold Invoices.</p>
<p><strong>Liquidity Lock-up</strong><br />
Since HODL invoices essentially lock up funds in a transaction, intermediate nodes on the payment route may inadvertently lock their liquidity into payments that could take a long time to settle. This could potentially hinder their ability to route more payments, thereby reducing their operational efficiency and negatively impacting the overall liquidity of the network.</p>
<p><strong>Limit On Concurrent HTLC Payments</strong><br />
The Lightning protocol allows 483 concurrent HTLCs to conform with the standard transaction size. This implies that Hold Invoices can take up significant transaction space, even those involving small amounts.</p>
<p><strong>Trust In The Receiver</strong><br />
There’s a level of trust in the receiver to act appropriately by releasing the pre-image or not, based on other physical or virtual conditions. This adds an element of counterparty risk to the transaction, as the sender must trust that the receiver will behave as expected.</p>
</blockquote>
<p><a href="https://x.com/TheBlueMatt/status/1716848494554595526?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Zeus-Criticism-1.png" alt="BitDevs-29-Zeus-Criticism-1.png" /></a></p>
<p><a href="https://primal.net/e/note1h0lqfkm0neywkmsvuyv69gfgfa6pwmj6aay9vau804hrpgvlfkhqszvfj9" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Zeus-Criticism-2.png" alt="BitDevs-29-Zeus-Criticism-2.png" /></a></p>
<p><a href="https://primal.net/e/note15mgqwjt32hkycxy3tu6738uzm0w9yh3tgmu6zrgv55cw9nqjwrssthazhg" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Zeus-Criticism-3.png" alt="BitDevs-29-Zeus-Criticism-3.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/zeus-v0-8-0/" target="_blank" class="external-link">Zeus v0.8.0 - Embedded LND Node, OLYMPUS, Zeus Pay & More</a></li>
</ul>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Self-Custodial-LN-Wallet-Comparison.jpg" alt="BitDevs-29-Self-Custodial-LN-Wallet-Comparison.jpg" /></p>
ZeroSync demos Header Chain Verifier - Instantly verify Bitcoin's block header chain in your browser
2023-09-18T01:30:29.350Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/zero-sync-demos-header-chain-verifier-instantly-verify-bitcoin-s-block-header-chain-in-your-browser/
<h1 id="zero-sync-overview" tabindex="-1">ZeroSync Overview</h1>
<blockquote>
<p>[!QUOTE] <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/how-zero-sync-hopes-to-reduce-the-costs-of-validating-bitcoin-nodes/">How ZeroSync hopes to reduce the costs of validating bitcoin nodes</a></p>
<ul>
<li>ZeroSync is a project that aims to reduce the computational costs of bootstrapping a fully-validating Bitcoin client by using zero-knowledge proofs (ZKPs).</li>
<li><strong>ZKPs in a nutshell</strong>: You prove something without actually revealing the information that would conventionally prove it (in this case, a signature from a single public key).</li>
<li>ZKPs can be used to <strong>allow highly-complicated script conditions to be proven with a small or constant amount of data</strong> that, when verified, shows definitively that those conditions were met.</li>
<li><strong>ZeroSync aims to help full nodes accomplish a much faster initial sync by iteratively constructing three proofs</strong> that will, when finished, provide a <strong>full verification of the historical blockchain without requiring a user to actually download and process it</strong>.</li>
<li><strong>No consensus change to the Bitcoin protocol is required to accomplish this</strong>, as everything happens simply at the application level, i.e., in the software you run.</li>
<li><strong>The three proofs being constructed are:</strong>
<ul>
<li><strong>Block header proofs</strong> that cover the validity of block headers, proving that each block in the chain met the difficulty requirement at the time and tracks each difficulty change to ensure that every block meets the appropriate target</li>
<li><strong>Transaction inclusion proofs</strong> that verify that transactions are included in a block and are valid</li>
<li><strong>UTXO set proofs</strong> that ensure the current UTXO set is correct and has not been modified since the last block</li>
</ul>
</li>
<li>Given that the blockchain is <a href="https://ycharts.com/indicators/bitcoin_blockchain_size" target="_blank" class="external-link">currently almost 500 GB in size</a>, there is a very restrictive cost that prevents a large number of users from running a validating client.</li>
<li>ZeroSync could <strong>bring that cost down to a few gigabytes for the UTXO set and a ZKP proof so small that it could fit on a 1.44 MB floppy disk</strong>. <em>And it requires no consensus changes or forks whatsoever to do it</em>.</li>
</ul>
</blockquote>
<h1 id="what-happened" tabindex="-1">What Happened?</h1>
<p>The ZeroSync team published a demo of their <a href="https://zerosync.org/demo/" target="_blank" class="external-link">Header Chain Verifier</a>, which lets you verify a recursive proof of Bitcoin's header chain in your browser. This is the first of the 3 proof types described above - the <strong>block header proofs</strong>.</p>
<p>The block header proof alone isn't particularly interesting, but it is an important milestone in the ZeroSync roadmap and is a strong proof-of-concept.</p>
<p><a href="https://x.com/robin_linus/status/1700601091329606124?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-26-zerosync-1.png" alt="BitDevs-26-zerosync-1.png" /></a></p>
<h1 id="more-context" tabindex="-1">More Context</h1>
<blockquote>
<p>[!QUOTE] <a href="https://blockstreamtalk.com/episodes/blockstream-talk-22-zerosync-blockstream-satellite-kVi9Kqxs" target="_blank" class="external-link">ZeroSync & Blockstream Satellite - Blockstream Talk 22</a> podcast transcription snippets 🎧</p>
<ul>
<li>Zerosync is a non profit working on technology that allows for a compact cryptographic proof to substitute the hundreds of gigabytes of information that make up the Bitcoin blockchain, meaning <strong>the entire history of Bitcoin could be validated in an instant rather than in hours or days</strong>.</li>
<li>And when combined with something like the Blockstream satellite network, the implications are pretty far reaching.</li>
<li>All of a sudden, <strong>every smartphone on every part of the planet is capable of validating the Bitcoin network</strong>, and the number of nodes goes from something like just under 20,000 to maybe 20 billion or more.</li>
<li>We are <strong>using the zero knowledge proofs to basically compress the Bitcoin blockchain</strong> - that is, in one sentence, what we are doing. And we're using Stark proofs, and these are a particular kind of zero-knowledge proofs. What's important about them is they are transparent, which means there is no trusted setup involved.</li>
<li>So it's a cryptographic measure to have a very large computation or very large proof and be able to verify it succinctly without having to trust the prover. That is an important part that surprises people often - that there is absolutely no trust involved. <strong>Even if your biggest enemy creates the proof, there is no way for them to cheat.</strong></li>
<li>The main application we are currently building is the chain proof, which is a proof of the entire blockchain. And it allows you to sync the chain state instantly. <strong>So instead of downloading the entire blockchain 500GB or so and verifying that entire 500GB, you just verify a proof. And that proof is as good as if you had downloaded the entire blockchain.</strong></li>
<li>I think there might be more phones on the planet than there are people at this point. And every one of those phones could be a node for bitcoin. That makes me think about the Blockstream Satellite.</li>
<li>The <strong>Blockstream Satellite and ZeroSync are a perfect match</strong> because the bandwidth constraints are so strong with the initial block download. And currently, when you sync with Blockstream Satellite, it takes more than a week or even weeks. A ZeroSync proof would allow you to sync that basically instantly.</li>
<li>Also you could build subnetworks. Like <strong>one person receives it via satellite and they can easily reshare the proof with all other people in the community</strong>, which is much easier with a proof than with the blockchain. Of course, you could also reshare the 500GB of blockchain, meaning that if... someone has access to Blockstream Satellite that they could kind of act as a hub and a spoke for everybody around them that they could interact with on a mobile device.</li>
<li>But <strong>the grand vision would be that people could reshare those proofs in rural areas and create a subnetwork for bitcoin</strong>.</li>
<li>You have a proof that is very hard or impossible to forge and you can look into the bitcoin blockchain and just see if the payment happened or the transaction happened. That's another way users would benefit or the whole ecosystem would benefit from it.</li>
<li>This is still a very early stage, and <strong>we have just completed our first major milestone of recursive chain proof</strong>. That means we have implemented most of bitcoin's consensus rules, and we have also implemented a recursive verifier that is necessary to incrementally extend proofs.</li>
<li>We want to roll it out in multiple stages. The <strong>first stage would be just a headers chain proof that is not that interesting by itself, but it makes sense to have it as a first milestone.</strong> Hopefully, we can roll it out by the end of this year.</li>
<li>But <strong>computing the proof is very computationally intensive</strong>. In the current version that we have now, it's maybe even intractable. But there are lots of ways to improve the performance of the prover, and the main obstacle is to make proving fast enough for us to be able to prove a full block within ten minutes - because we should be able to complete the proof before the next block arrives.</li>
<li>The other thing is we can roll it out as kind of with a backup mechanism. So <strong>you could use the proof to instantly sync your node and then, over time, use the conventional peer-to-peer network to sync your node</strong>. If you find any errors after that, or if you don't find any, you can be sure that the proof was correct. So <strong>you cannot be fooled for longer than three or four days</strong>.</li>
<li>You can just have your phone sync it instantly. And then even if you don't want to sync it anymore... You could stop being in sync, and then after a few blocks, or a few hundred blocks, you turn on the proof again, get a new proof, and be up to date instantly. So I think this really lowers the entry barrier for users of the Bitcoin.</li>
<li><strong>It could expand the number of nodes by a huge amount.</strong> We could have billions of nodes with better geographical dispersion as well. The security of any decentralized currency stems from everybody verifying everything and, of course, that scales poorly because your phone will not verify the transactions of billions of people. But with such a proof system, it is suddenly possible. That solves one of the fundamental scalability problems of Bitcoin.</li>
</ul>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/technical/bitcoin-nodes-now-one-step-closer-to-instant-sync" target="_blank" class="external-link">Bitcoin Nodes Now One Step Closer To Instant Sync</a></li>
<li><a href="https://docs.google.com/presentation/d/1KgNTxulMnIa3SCQIh4P061cIW6Jz_IZYMwqzaohA8ds/edit?pli=1#slide=id.g27e0704f09f_0_4" target="_blank" class="external-link">ZeroSync - Introducing STARKs to Bitcoin (Tabconf Slides)</a></li>
<li><a href="https://www.forbes.com/sites/digital-assets/2023/08/21/how-bitcoin-usage-could-skyrocket-thanks-to-zero-knowledge-proofs/?sh=62c73b04bde6" target="_blank" class="external-link">How Bitcoin Usage Could Skyrocket Thanks To Zero-Knowledge Proofs</a></li>
<li><a href="https://bitcoinmagazine.com/technical/zerosync-reduces-bitcoin-node-validation" target="_blank" class="external-link">How ZeroSync hopes to reduce the costs of validating bitcoin nodes</a></li>
<li><a href="https://stephanlivera.com/episode/484/" target="_blank" class="external-link">Stephan Livera Podcast 484 Robin Linus ZeroSync: Speeding up Bitcoin IBD</a></li>
</ul>
Validating Lightning Signer Beta Release
2023-08-01T01:06:29.358Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/validating-lightning-signer-beta-release/
<blockquote>
<p>[!QUOTE] <a href="https://vls.tech/posts/vls-beta/" target="_blank" class="external-link">Validating Lightning Signer Beta Release</a><br />
The Bitcoin Lightning Network has grown significantly in recent years, but this growth leads to increased security concerns. Lightning Network private keys are currently stored on the node; if the node is compromised, the attacker can steal the user's funds.</p>
<p>VLS (the Validating Lightning Signer), is an open-source Rust library and reference implementation of software that <strong>separates a user's private keys from their Lightning node, ensuring that if the node is compromised, the attacker cannot steal the user's funds</strong>. There are currently no other solutions in the ecosystem that provide the same level of security as VLS. Unlike VLS, <a href="https://gitlab.com/lightning-signer/docs/-/wikis/Blind%20Signing%20Considered%20Harmful" target="_blank" class="external-link">Blind signers</a>, for example, accept any transaction request the node sends them, and actually reduce security if deployed in production.</p>
<p>VLS also opens up the possibility of multi-signature Lightning network setups, similar to Bitcoin layer 1 multi-signature wallets (multi-sig).</p>
<p>We're thrilled to announce the <a href="https://gitlab.com/lightning-signer/validating-lightning-signer/-/releases/v0.9.1" target="_blank" class="external-link">VLS beta release</a>, <strong>a major step forward for Lightning network security</strong>, and we're excited to share it with developers and companies in the Bitcoin ecosystem.</p>
<hr />
<p>We propose to sequester the private keys and secrets in hardened policy signing devices. We have a reference <a href="https://gitlab.com/lightning-signer/validating-lightning-signer" target="_blank" class="external-link">Validating Lightning Signer implementation</a> in Rust.</p>
<p>When run with VLS, the Lightning node uses an alternate signing module, replacing internal signing with proxy calls to the signing device.</p>
<p>The signing device applies a complete set of validation rules to ensure that the proposed transaction is safe to sign. Having a complete set of validation rules protects the funds even in the case of a complete compromise of the node software.</p>
<hr />
<p>Users and merchants who do not want to maintain their own lightning node can also work with a Lightning Service Provider to host and manage their node, while maintaining custody of their funds by securing their Lightning private keys on a consumer device.<br />
Some of the validation rules that VLS implements include:</p>
<ul>
<li>Don't sign a revoked commitment transaction</li>
<li>Don't revoke a signed commitment transaction</li>
<li>Don't close a channel to an unapproved destination</li>
<li>Routed payments must have at least as much input as output value</li>
<li>Payments must claim at least as much from the input as was claimed from us on the output</li>
<li>And <a href="https://gitlab.com/lightning-signer/validating-lightning-signer/-/blob/main/docs/policy-controls.md" target="_blank" class="external-link">many more</a> ...</li>
</ul>
</blockquote>
<p>VLS is also fully integrated with <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/blockstream-greenlight/#bc7889">Blockstream's Greenlight service</a>, which we discussed at <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-23/#ee6080">Socratic Seminar 23</a>:</p>
<div class="transclusion internal-embed is-loaded"><a class="markdown-embed-link" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/blockstream-greenlight/#bc7889" aria-label="Open link"><svg xmlns="http://www.w3.org/2000/svg" width="24" height="24" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="svg-icon lucide-link"><path d="M10 13a5 5 0 0 0 7.54.54l3-3a5 5 0 0 0-7.07-7.07l-1.72 1.71"></path><path d="M14 11a5 5 0 0 0-7.54-.54l-3 3a5 5 0 0 0 7.07 7.07l1.71-1.71"></path></svg></a><div class="markdown-embed">
<p>On a related note, in mid-June 2023, <a href="https://community.corelightning.org/c/start-here/build-on-l2-supports-vls-integration-into-greenlight-with-150-000-grant" target="_blank" class="external-link">Build on L2 (BOL2) announced support</a> for the <a href="https://vls.tech/?ref=nobsbitcoin.com" target="_blank" class="external-link">Validating Lightning Signer project</a> (VLS) with a $150,000 grant. BOL2 is a community initiative spearheaded by Blockstream to connect developers building on technology related to Core Lightning and Liquid. VLS is an open source project that includes the ability to operate on hardware security modules HSMs. This will improve enterprise-level Lightning node security by helping to keep private keys segregated from the node itself. Users can define rules for the types of transactions that the VLS module will automatically sign (e.g., channel opens, routing forwards, etc.), which will enable more sophisticated and programatic node management without necessarily requiring direct human interaction or relinquishing full signing access. VLS is fully integrated with Blockstream's Greenlight, which means that developers can easily access this signer without custom modifications.</p>
</div></div>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-15/#0467b3">Socratic Seminar 15</a></li>
</ul>
V3 Transaction Policy for Anti-Pinning Merged into Bitcoin Core
2024-02-19T20:37:40.613Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/v3-transaction-policy-for-anti-pinning-merged-into-bitcoin-core/
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinops.org/en/newsletters/2024/02/14/#bitcoin-core-28948" target="_blank" class="external-link">Bitcoin Optech Newsletter 289</a><br />
<a href="https://github.com/bitcoin/bitcoin/issues/28948" target="_blank" class="external-link">Bitcoin Core PR 28948</a> adds support for (but does not enable) <a href="https://bitcoinops.org/en/topics/version-3-transaction-relay/" target="_blank" class="external-link">version 3 transaction relay</a>, allowing any v3 transaction that has no unconfirmed parent to enter the mempool according to the normal transaction acceptance rules. The v3 transaction can be <a href="https://bitcoinops.org/en/topics/cpfp/" target="_blank" class="external-link">CPFP fee-bumped</a> but only if the child is 1,000 vbytes or less. Each v3 parent may only have one unconfirmed child transaction in the mempool and each child may only have one unconfirmed parent. Either the parent or child transaction can always be <a href="https://bitcoinops.org/en/topics/replace-by-fee/" target="_blank" class="external-link">replaced by fee</a>. The rules only apply to Bitcoin Core’s relay policy; at the consensus layer, v3 transactions are validated the same as version 2 transactions defined in <a href="https://github.com/bitcoin/bips/blob/master/bip-0068.mediawiki" target="_blank" class="external-link">BIP68</a>. The new rules are intended to help contract protocols such as LN ensure their precommitted transactions can always be confirmed quickly with minimal extra fees needed to escape <a href="https://bitcoinops.org/en/topics/transaction-pinning/" target="_blank" class="external-link">transaction pinning attacks</a>. <a href="https://bitcoinops.org/en/podcast/2024/02/15/#bitcoin-core-28948" target="_blank" class="external-link">🎧</a></p>
</blockquote>
<h1 id="what-is-v3-tx-relay" tabindex="-1">What is V3 TX Relay?</h1>
<p><a href="https://www.youtube.com/watch?v=H1o7TgTCMjk" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-V3TxRelay-SLP-Thumbnail.png" alt="BitDevs-31-V3TxRelay-SLP-Thumbnail.png" /></a></p>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinops.org/en/topics/version-3-transaction-relay/" target="_blank" class="external-link">Version 3 Transaction Relay | Bitcoin Optech</a><br />
<strong>Version 3 transaction relay</strong> is a proposal to allow transactions to opt-in to a modified set of transaction relay policies designed to prevent pinning attacks. Combined with package relay, these policies help enable the use of dynamic feerates with LN onchain transactions.</p>
<p>V3 transaction relay is a superset of standard transaction policy. That is, v3 transactions follow all rules for standard transactions (e.g. minimum and maximum transaction weights) while also adding some additional rules designed to allow <a href="https://bitcoinops.org/en/topics/replace-by-fee/" target="_blank" class="external-link">transaction replacement</a> while precluding transaction-pinning attacks. v3 transactions also require minor changes to the <a href="https://bitcoinops.org/en/topics/package-relay/" target="_blank" class="external-link">package RBF</a> policy in order to maintain incentive compatibility with miners.</p>
<p>V3 transaction relay solves rule 3 <a href="https://bitcoinops.org/en/topics/transaction-pinning/" target="_blank" class="external-link">transaction pinning</a> and may allow the removal of the <a href="https://bitcoinops.org/en/topics/cpfp-carve-out/" target="_blank" class="external-link">CPFP carve-out</a>.</p>
<p>Version 3 transactions are used by <a href="https://bitcoinops.org/en/topics/ephemeral-anchors/" target="_blank" class="external-link">ephemeral anchors</a>.</p>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://github.com/bitcoin/bitcoin/pull/28948" target="_blank" class="external-link">v3 transaction policy for anti-pinning by glozow · Pull Request 28948 · bitcoin/bitcoin · GitHub</a><br />
Rationale:</p>
<ul>
<li>There are various pinning problems with RBF and our general ancestor/descendant limits. These policies help mitigate many pinning attacks and make package RBF feasible (see <a href="https://github.com/bitcoin/bitcoin/pull/28984" target="_blank" class="external-link">Cluster size 2 package rbf 28984</a> which implements package RBF on top of this). I would focus the most here on Rule 3 pinning. [1][2]</li>
<li>Switching to a cluster-based mempool (see <a href="https://github.com/bitcoin/bitcoin/issues/27677" target="_blank" class="external-link">Proposal for a new mempool design 27677</a> and <a href="https://github.com/bitcoin/bitcoin/pull/28676" target="_blank" class="external-link">[WIP] Cluster mempool implementation 28676</a>) requires the removal of CPFP carve out, which applications depend on. V3 + package RBF + ephemeral anchors + 1-parent-1-child package relay provides an intermediate solution.</li>
</ul>
<p>V3 policy is for "Priority Transactions." [3][4] <strong>It allows users to opt in to more restrictive topological limits for shared transactions, in exchange for the more robust fee-bumping abilities that offers.</strong> Even though we don't have cluster limits, we are able to treat these transactions as having as having a maximum cluster size of 2.</p>
<p><strong>Immediate benefits:</strong><br />
<strong>- You can presign a transaction with 0 fees (not just 1sat/vB!) and add a fee-bump later.</strong><br />
<strong>- Rule 3 pinning is reduced by a significant amount, since the attacker can only attach a maximum of 1000vB to your shared transaction.</strong></p>
<p>This also enables some other cool things (again see <a href="https://github.com/bitcoin/bitcoin/issues/27463" target="_blank" class="external-link">27463</a> for overall roadmap):</p>
<ul>
<li>Ephemeral Anchors</li>
<li>Package RBF for these 1-parent-1-child packages. That means e.g. a commitment tx + child can replace another commitment tx using the child's fees.</li>
<li>We can transition to a "single anchor" universe without worrying about package limit pinning. So current users of CPFP carve out would have something else to use.</li>
<li>We can switch to a cluster-based mempool [5] (<a href="https://github.com/bitcoin/bitcoin/issues/27677" target="_blank" class="external-link">Proposal for a new mempool design 27677</a> <a href="https://github.com/bitcoin/bitcoin/pull/28676" target="_blank" class="external-link">[WIP] Cluster mempool implementation 28676</a>), which removes CPFP carve out [6].</li>
</ul>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://github.com/bitcoin/bitcoin/pull/28948" target="_blank" class="external-link">v3 transaction policy for anti-pinning by glozow · Pull Request 28948 · bitcoin/bitcoin · GitHub</a></li>
<li><a href="https://delvingbitcoin.org/t/v3-transaction-policy-for-anti-pinning/340" target="_blank" class="external-link">V3 transaction policy for anti-pinning - Protocol Design - Delving Bitcoin</a></li>
<li><a href="https://petertodd.org/2023/v3-transactions-review" target="_blank" class="external-link">Peter Todd's V3 Transactions Review/Criticisms</a></li>
<li><a href="https://github.com/bitcoin/bitcoin/pull/28948#issuecomment-1873490509" target="_blank" class="external-link">Rebuttal to Peter Todd's V3 Criticisms</a></li>
<li><a href="https://bitcoinops.org/en/topics/transaction-pinning/" target="_blank" class="external-link">Transaction pinning | Bitcoin Optech</a></li>
</ul>
Unchained introduces enterprise collaborative custody key sharing network
2023-10-12T05:33:24.862Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/unchained-introduces-enterprise-collaborative-custody-key-sharing-network/
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-Unchained-Enterprise-Key-Agents.png" alt="BitDevs-27-Unchained-Enterprise-Key-Agents.png" /></p>
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://unchained.com/blog/enterprise-collaborative-custody-network/" target="_blank" class="external-link">Unchained introduces enterprise collaborative custody key sharing network</a><br />
Today we’re introducing the <strong>enterprise collaborative custody network: a network of enterprise keys for securing private wealth and enterprise bitcoin holdings</strong>, available now. Finally, a bitcoin-exclusive form of enterprise custody, where no single company can lose your bitcoin.</p>
<p>Enterprise bitcoin custody is broken. Duct-taping the legacy model of centralized custodians onto the bitcoin protocol has led to billions of dollars lost. As the recent hacks of Prime Trust and Fortress Trust have demonstrated, qualified custodianship only means something in bitcoin if it can be supported by a custody model that respects the bitcoin protocol.</p>
<p>...</p>
<p><strong>This solution enables bitcoin holders to have their private keys distributed among several entities, therefore assuring them that their bitcoin is not being rehypothecated or misused by institutions.</strong> Unchained’s collaborative custody offering has become particularly appealing to investors as a risk-mitigation tool in an era where custodians and other institutions are regularly in the news for losing customer assets, whether deliberately or not.</p>
<p>...</p>
<p>In partnership with <strong>Coincover</strong> and <strong>Kingdom Trust</strong>, now you can:</p>
<ul>
<li><strong>Hold no keys</strong>: Hire 3 best-in-class enterprise key agents to collaborate in the security of your bitcoin</li>
<li><strong>Hold 1 or more keys</strong>: Actively participate in the security of your own bitcoin by controlling 1 or more keys</li>
<li><strong>Reduce counterparty risk</strong>: Eliminate any single institution as a point of failure for the bitcoin</li>
</ul>
<p>In an effort to increase the accessibility for individuals and businesses to achieve security and assurance levels historically reserved for large institutions, <strong>Unchained will continue to expand its collaborative custody partnerships while also ensuring that clients remain in unilateral control of private keys.</strong> We will be evolving this solution into a network of keys through more partnerships that will be announced soon.</p>
</blockquote>
<p><a href="https://x.com/MaxGravitt/status/1712158105595756893?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-Key-Agent-Competition.png" alt="BitDevs-27-Key-Agent-Competition.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://unchained.com/blog/enterprise-collaborative-custody-network/" target="_blank" class="external-link">Introducing the enterprise collaborative custody network</a></li>
<li><a href="https://unchained.com/features/what-is-multisig" target="_blank" class="external-link">What is bitcoin multisig?</a></li>
<li><a href="https://unchained.com/blog/what-is-a-bitcoin-key-agent/" target="_blank" class="external-link">What is a bitcoin key agent?</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/">Self-Custody Workshop</a></li>
</ul>
UTXO Dealership - Grand Prize Winner at TABConf 2023 Hackathon
2023-09-17T08:35:23.032Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/utxo-dealership-grand-prize-winner-at-tab-conf-2023-hackathon/
<p><a href="https://youtu.be/gHqB8htq8Kg?feature=shared" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-26-UTXO-dealership-1.png" alt="BitDevs-26-UTXO-dealership-1.png" /></a></p>
<blockquote>
<p>[!QUOTE] <a href="https://github.com/supertestnet/utxo-dealership/" target="_blank" class="external-link">GitHub - supertestnet/utxo-dealership</a></p>
<h1 id="what-is-going-on" tabindex="-1">What is going on?</h1>
<p>UTXO dealership is a forthcoming privacy tool for bitcoin. <strong>It enables bitcoin miners to easily sell their freshly mined utxos for a premium, and it enables bitcoiners to acquire decent privacy simply by visiting a website and buying a history-free utxo.</strong> (It uses coinswaps, invented by bitcoin legend Gregory Maxwell, to prevent chain analysts from identifying the swap and linking the "old" utxo to the "new" one.) This project should also help increase miner revenues (because miners can sell their utxos for a premium), which should help improve bitcoin's security.</p>
<p>It should also incentivize miners to use pools that sell their utxos via this software, because those pools will have higher revenues. In turn, this may disincentivize KYC'd mining pools -- who I imagine will not want to touch this software, despite its profitability -- who will thus lose members to non-KYC'd mining pools, since non-KYC'd mining pools have no qualms about doing stuff without KYC. Therefore <strong>this software will (hopefully) increase the profitability, and thus the usage, of non-KYC'd mining pools</strong>, improving bitcoin's decentralization and censorship resistance.</p>
</blockquote>
<p><a href="https://x.com/super_testnet/status/1702067456376807792?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-26-UXTO-dealership-2.png" alt="BitDevs-26-UXTO-dealership-2.png" /></a></p>
<blockquote>
<p>[!QUOTE] <a href="https://github.com/supertestnet/utxo-dealership/" target="_blank" class="external-link">GitHub - supertestnet/utxo-dealership</a></p>
<h1 id="how-do-these-swaps-work" tabindex="-1">How do these swaps work?</h1>
<p>The miner gives the buyer a pubkey and the buyer uses it to create a swap address using Gregory Maxwell's <strong>coinswap</strong> technique. The swap address – which I call <strong>Swap Address A</strong> – allows the buyer's pubkey to withdraw after a timelock, otherwise the miner's pubkey can withdraw if the buyer gives him a secret, otherwise the two parties can cooperate to spend the money without revealing the secret. The buyer deposits funds into this address and sends some info about it to the miner.</p>
<p>Then the miner creates an equivalent swap address – <strong>Swap Address B</strong> – which is locked to the same secret, except everything's reversed: his pubkey can withdraw after a timelock, the buyer's pubkey can withdraw using the secret which the buyer already knows, or the two parties can spend the funds cooperatively without revealing the secret. The miner uses Swap Address B as the destination for part of the next coinbase he mines, so now both sides have committed funds.</p>
<p>Then the buyer reveals to the miner the secret that allows the buyer to take the money in Swap Address B and the miner to take the money in Swap Address A. With this information in hand, the miner and the buyer do not actually <em>use</em> the secret (because that would publicly reveal information that links the swap) but instead they cooperatively send the money in Swap Address A to the miner and the money in Swap Address B to to the buyer. <strong>The resulting transactions look like ordinary 1-of-1 taproot transactions with no funkiness, and they reveal nothing that indicates a swap happened.</strong></p>
<p>Importantly, <strong>the money effectively "changes hands" as soon as both parties commit funds</strong>. At that moment, the buyer can take the money in Swap Address B using his secret, but by doing so he would reveal the secret on the blockchain, and that would allow the miner to take the money in Swap Address A. Before the money is in those swap addresses, neither party needs to trust the other. And the very moment the money is in both of those addresses, it has changed hands, so neither party needs to trust one another at that point either.</p>
<p>But there's a caveat: they don't need to trust one another with their <em>money</em> but they <em>do</em> need to trust one another to complete the swap <em>privately,</em> i.e. without revealing the secret that links the swaps together. That is a much smaller trust assumption, in my opinion, but it still is one: <strong>neither party ever has the other's <em>money,</em> but if either one publishes the <em>secret</em> that links the transactions together, the privacy of the swap will be compromised</strong>.</p>
</blockquote>
US Department of Energy Announced an 'Emergency' Data Collection Initiative Targeting US Bitcoin Miners
2024-02-18T05:56:31.367Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/us-department-of-energy-announced-an-emergency-data-collection-initiative-targeting-us-bitcoin-miners/
<blockquote>
<p>[!QUOTE] <a href="https://www.reginfo.gov/public/do/PRAViewDocument" target="_blank" class="external-link">Administrator's Memo Requesting Emergency Clearance</a><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-CryptoMining-Memo-1.png" alt="BitDevs-31-CryptoMining-Memo-1.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-CryptoMining-Memo-2.png" alt="BitDevs-31-CryptoMining-Memo-2.png" /></p>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://www.eia.gov/pressroom/releases/press550.php" target="_blank" class="external-link">Press Release: EIA to initiate collection of data regarding electricity use by U.S. cryptocurrency miners</a><br />
The U.S. Energy Information Administration (EIA) is initiating a provisional survey of electricity consumption information from identified cryptocurrency mining companies operating in the United States.</p>
<p>Beginning next week, EIA will survey identified commercial cryptocurrency miners, which are required to respond with details related to their energy use. The Office of Management and Budget (OMB) authorized the survey on January 26, 2024, as an emergency collection of data request.</p>
<p>EIA will also be soliciting public comment on the collection of cryptocurrency miners’ energy use data.</p>
<p>“We intend to continue to analyze and write about the energy implications of cryptocurrency mining activities in the United States,” said EIA Administrator Joe DeCarolis. “We will specifically focus on how the energy demand for cryptocurrency mining is evolving, identify geographic areas of high growth, and quantify the sources of electricity used to meet cryptocurrency mining demand.”</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/us-department-of-energy-announced-an-emergency-data-collection-initiative-targeting-us-bitcoin-miners/" target="_blank" class="external-link">US Department of Energy Announced an 'Emergency' Data Collection Initiative Targeting US Bitcoin Miners</a></li>
</ul>
Transaction Fees & The Mempool
2023-05-30T01:54:14.896Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/transaction-fees-and-the-mempool/
<h1 id="limited-block-space" tabindex="-1">Limited Block Space</h1>
<p>Bitcoin block space is scarce (theoretical limit of 4 megabytes). The size of each block is kept relatively small to make it easier to run a bitcoin full node - decreased bandwidth and storage costs means a bitcoin full node can run on less powerful hardware in more remote locations around the world.</p>
<p>There is a limit to how many transactions can fit in each new block, and because of that, a queue forms of transactions waiting to get confirmed on chain.</p>
<h1 id="mempools" tabindex="-1">Mempools</h1>
<p>Each bitcoin node keeps track of unconfirmed transactions in a local database called the mempool. People generally refer to this constantly changing set of unconfirmed transactions as "<em>the</em> mempool", even though, technically, each node has its own version.</p>
<p>As new transactions are discovered, nodes gossip with one another to share updates on the latest state of known, unconfirmed transactions. Every node has its own snapshot of these unconfirmed transactions, but they aren't necessarily the same because it takes time for updates to propagate through the network.</p>
<p>Miner nodes also have a mempool, and miners pull from that local database when constructing each new block. In other words, it doesn't matter much if a transaction is sitting in <em>your</em> mempool - it won't get mined unless it eventually propagates into a miner's mempool, either via normal P2P gossip or out-of-band communication directly to a miner.</p>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinops.org/en/newsletters/2023/05/17/#waiting-for-confirmation-1-why-do-we-have-a-mempool" target="_blank" class="external-link">Why do we have a mempool? | Bitcoin Optech 251</a></p>
<ul>
<li>Many nodes on the Bitcoin network store unconfirmed transactions in an in-memory pool, or mempool. This cache is an important resource for each node and enables the peer-to-peer transaction relay network.</li>
<li>Nodes that participate in transaction relay download and validate blocks gradually rather than in spikes. Every ~10 minutes when a block is found, nodes without a mempool experience a bandwidth spike, followed by a computation-intensive period validating each transaction. On the other hand, nodes with a mempool have typically already seen all of the block’s transactions and store them in their mempools.</li>
<li>Mempools can also be used to build an independent fee estimator. The market for block space is a fee-based auction, and keeping a mempool allows users to have a better sense of what others are bidding and what bids have been successful in the past.</li>
<li>However, there is no such thing as “the mempool”—each node may receive different transactions. Submitting a transaction to one node does not necessarily mean that it has made its way to miners.</li>
<li>Some users find this uncertainty frustrating, and wonder, “why don’t we just submit transactions directly to miners?” Consider a Bitcoin network in which all transactions are sent directly from users to miners. One could censor and surveil financial activity by requiring the small number of entities to log the IP addresses corresponding to each transaction, and refuse to accept any transactions matching a particular pattern.</li>
<li>This type of Bitcoin may be more convenient at times, but would be missing a few of Bitcoin’s most valued properties. Bitcoin’s censorship-resistance and privacy come from its peer-to-peer network. In order to relay a transaction, each node may connect to some anonymous set of peers, each of which could be a miner or somebody connected to a miner. This method helps obfuscate which node a transaction originates from as well as which node may be responsible for confirming it. Someone wishing to censor particular entities may target miners, popular exchanges, or other centralized submission services, but it would be difficult to block anything completely.</li>
<li>The general availability of unconfirmed transactions also helps minimize the entrance cost of becoming a block producer—someone who is dissatisfied with the transactions being selected (or excluded) may start mining immediately. Treating each node as an equal candidate for transaction broadcast avoids giving any miner privileged access to transactions and their fees.</li>
<li>In summary, a mempool is an extremely useful cache that allows nodes to distribute the costs of block download and validation over time, and gives users access to better fee estimation. At a network level, mempools support a distributed transaction and block relay network. All of these benefits are most pronounced when everybody sees all transactions before miners include them in blocks - just like any cache, a mempool is most useful when it is “hot” and must be limited in size to fit in memory.</li>
</ul>
</blockquote>
<h1 id="fee-market" tabindex="-1">Fee Market</h1>
<p>Because of the scarce nature of bitcoin block space and the fact that miners must perform work to construct new blocks, a fee market develops where users bid to get their transactions confirmed into upcoming blocks. Bitcoin transactions include a fee output which goes toward miner revenue. Miners generally search through their mempools and choose the transactions that provide the largest amount of fee revenue with a total data footprint that is under the bitcoin block size limit.</p>
<p>When authoring a new transaction, node runners can check their own mempool to see a snapshot of unconfirmed transactions (and associated fees) and then estimate a fee for their own transactions based on the relative priority of the payment and the overall mempool congestion - i.e., if there are a lot of unconfirmed transactions, users must attach a higher fee to increase the likelihood that time-sensitive transactions get confirmed more quickly. You have to outbid everyone else vying for block space at the same time. However, lower priority transactions can include a smaller fee with the assumption that it may take longer for a miner to eventually include it in a block.</p>
<p>In this way, a dynamic fee market emerges where people can pay higher fees to get their transactions confirmed more quickly, all via a free market mechanism without a central coordinator.</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.discreetlog.com/utxos/" target="_blank" class="external-link">Bitcoin Transaction Fees and UTXO Management</a></p>
<ul>
<li>bitcoin transaction fees limit network abuse by making usage expensive</li>
<li>there is a cost to every transaction, set by a dynamic free market based on demand</li>
<li>it is an incredibly robust way to prevent spam without relying on centralized entities that can be corrupted or pressured</li>
<li>when bitcoin blocks are full, highest fee transactions are confirmed first</li>
<li>pending transactions sit in node mempools awaiting confirmation: can conceptualize mempools as a line to enter a restaurant sorted by who is willing to pay the most</li>
<li>if you are willing to wait for your transaction to confirm you can pay significantly lower fees</li>
<li>your bitcoin wallet may show a single balance but the reality is that it is made of many different unspent transaction outputs (UTXOs)</li>
<li>when you make a bitcoin transaction your wallet will select as many UTXOs as necessary to reach the amount of bitcoin you wish to send</li>
<li>onchain transaction fees are calculated based on size in bytes not the amount of sats sent</li>
<li>the more UTXOs required on the input side the higher the fee paid</li>
<li>from a cost perspective you want to consolidate UTXOs, fewer UTXOs with larger amounts</li>
<li>consolidation has privacy tradeoffs though: you link any UTXOs you consolidate as owned by the same person + larger UTXOs mean you will dox more of your stack to anyone you pay in the future</li>
</ul>
</blockquote>
<h1 id="fee-bumping" tabindex="-1">Fee Bumping</h1>
<p>There are times where mempools become congested very quickly, and unconfirmed transactions get stuck with a too-low fee (potentially getting purged from mempools and never getting picked up by a miner). There are bitcoin-native mechanisms for dynamically adjusting fees for unconfirmed transactions (like <a href="https://river.com/learn/terms/r/replace-by-fee-rbf" target="_blank" class="external-link">replace-by-fee (RBF)</a> and <a href="https://river.com/learn/terms/c/child-pays-for-parent-cpfp/" target="_blank" class="external-link">child-pays-for-parent (CPFP)</a>), and there are <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/mempool-space-transaction-acceleration-marketplace/">3rd-party transaction acceleration services</a> that can pay miners out-of-band to get transactions confirmed sooner.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://mempool.space/docs/faq#what-is-a-mempool" target="_blank" class="external-link">mempool.space FAQ</a></li>
<li><a href="https://www.discreetlog.com/high-fees/" target="_blank" class="external-link">High Fees? Bitcoin is Working As Designed</a></li>
<li><a href="https://www.podpage.com/citadeldispatch/cd101-mempools-and-transaction-fees-with-the-mempool-space-team-wiz-simon-and-steve/" target="_blank" class="external-link">Citadel Dispatch 101: Mempools and Transaction Fees with the Mempool Space Team - Wiz, Simon, and Steve</a></li>
</ul>
Teleport transactions - A revival of Chris Belcher's Coinswap protocol
2024-03-18T00:43:35.987Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/teleport-transactions-a-revival-of-chris-belcher-s-coinswap-protocol/
<blockquote>
<p>[!QUOTE] <a href="https://x.com/RajarshiMaitra/status/1768623072280809841?s=20" target="_blank" class="external-link">@RajarshiMaitra Thread on X</a><br />
For whoever is watching, if Maxwell-Belcher Coinswap rings any bell to you, we got news.</p>
<p><strong>Now there exists a one-line command to run the protocol suit with multiple makers, DNS server, and taker client, all working over Tor-only.</strong></p>
<p><a href="https://github.com/utxo-teleport/teleport-transactions" target="_blank" class="external-link">GitHub - utxo-teleport/teleport-transactions: Functioning, minimal-viable binaries and libraries to perform a trustless, p2p Maxwell-Belcher Coinswap Protocol</a></p>
<p>History 🧵👇</p>
<hr />
<p>Greg Maxwell posted in Bitcoin Talk Forum, an ingenious idea of atomic swaps of utxos to "massively improve Bitcoin's fungibility", in 2013,</p>
<p><strong>The idea breaks the fundamental heuristics of chainanal and provides passive privacy to whole Bitcoin network.</strong></p>
<p><a href="https://bitcointalk.org/index.php?topic=321228.0" target="_blank" class="external-link">CoinSwap: Transaction graph disjoint trustless trading | Bitcointalk</a></p>
<hr />
<p>This was one of the first applications of HTLCs with Bitcoin scripts. Even before Lightning.</p>
<p>But for whatever reason, this protocol was never developed.</p>
<p>Until <a href="https://twitter.com/chris_belcher_" target="_blank" class="external-link">@chris_belcher_</a>, a prolific privacy researcher and designer of Join-Market took this task up.</p>
<hr />
<p>He detailed the nuances of the protocol, identified all the edge cases, and made a detailed design document with a lot of future improvements.</p>
<p>But most importantly outlining the impact of the existence of this protocol.</p>
<p><a href="https://gist.github.com/chris-belcher/9144bd57a91c194e332fb5ca371d0964" target="_blank" class="external-link">Design for a CoinSwap Implementation for Massively Improving Bitcoin Privacy and Fungibility</a></p>
<hr />
<p>Belcher started working on this protocol on Dec 2020, and released an alpha version of it on Feb 2022.</p>
<p><a href="https://x.com/chris_belcher_/status/1498306087300259848?s=20" target="_blank" class="external-link">twitter.com/chris_belcher_/status/1498306087300259848?s=20</a></p>
<hr />
<p>Back in 2021, I started working on Bitcoin development full-time, and thanks to <a href="https://twitter.com/spiralbtc" target="_blank" class="external-link">@spiralbtc</a> one of my early assignments was to help Belcher in Coinswap.</p>
<p>The complexity of the protocol was overwhelming. I helped him wherever I could, but over time found myself valuable elsewhere.</p>
<hr />
<p>Then something unfortunate happened.</p>
<p>By mid-2022 Belcher notified in his public diary that he had been affected by Long-Covid and since then been unable work. <strong>Halting the development of coinswap.</strong></p>
<p><a href="https://gist.github.com/chris-belcher/ca5051285c6f8d38693fd127575be44d" target="_blank" class="external-link">Chris Belcher's Work Diary</a></p>
<hr />
<p>After the absence of Belcher, coinswap was <strong>stale for more than 1 year</strong>.</p>
<p>Last year I took one major decision to drop off from the <a href="https://twitter.com/spiralbtc" target="_blank" class="external-link">@spiralbtc</a> dev grant and focus building on <a href="https://twitter.com/bitshala_org" target="_blank" class="external-link">@bitshala_org</a> and Coinswap.</p>
<p>I took up Coinswap as a personal challenge and my tribute to Belcher.</p>
<hr />
<p>The initial days were intimidating.</p>
<p>I essentially had to take it apart and <strong>rewrite the whole protocol</strong>, as Belcher wrote it as a demo, which didn't have adequate architecture to use it as a standalone library and binaries.</p>
<hr />
<p><strong>After 278 commits over the last 8 months, we finally reached the point of maturity.</strong></p>
<p>The whole thing works with the full recovery mechanism, DNS servers, a comprehensive taker client api, and simulation in an automated regtest environment.</p>
<p>Try it out: <a href="https://t.co/UXEkiALF6C" target="_blank" class="external-link">https://github.com/utxo-teleport/teleport-transactions</a></p>
<hr />
<p>This was a massive personal milestone for me. But it wasn't me alone. Shadowy supercoders from <a href="https://twitter.com/bitshala_org" target="_blank" class="external-link">@bitshala_org</a> joined hands and pulled some massive loads. There's an engaging dev community currently behind this project (link in the repo).</p>
<hr />
<p>I am immensely grateful to be able to contribute to Belcher's vision to provide massive fungibility into the <a class="tag" onclick="toggleTagSearch(this)" data-content="#bitcoin">#bitcoin</a> ecosystem. Thanks to all the people who contributed and thanks to <a href="https://twitter.com/spiralbtc" target="_blank" class="external-link">@spiralbtc</a> for leading me to this project. onwards!!</p>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://github.com/utxo-teleport/teleport-transactions/blob/master/docs/dev-book.md" target="_blank" class="external-link">GitHub - teleport-transactions/docs/dev-book.md: Developer Resources</a></p>
<h1 id="what-it-is" tabindex="-1">What it is</h1>
<p>The Coinswap protocol enhances privacy on the Bitcoin network, specifically addressing transaction ownership traceability through chain analysis.</p>
<p>Imagine Alice wants to send bitcoin with maximum privacy. She initiates a unique transaction that appears ordinary on the blockchain, with her coins seemingly moving from address A to B. <strong>However, the coins actually end up in an unrelated address Z. This process confounds any attempt to trace ownership.</strong></p>
<p>This protocol also benefits users like Carol, who use regular wallets. Her transactions appear the same as Alice's, adding uncertainty to any analysis. <strong>Even users unaware of this software enjoy improved privacy.</strong></p>
<p>In a world where privacy is vital due to data collection by advertisers and institutions, this enhancement is significant. Moreover, it bolsters Bitcoin's fungibility, making it a more effective form of currency.</p>
<h1 id="how-coin-swap-works" tabindex="-1">How CoinSwap works</h1>
<p>In a two-party coinswap, Alice and Bob can swap a coin in a non-custodial way, where neither party can steal from each other. At worst, they can waste time and miner fees.</p>
<p>To start a coinswap, Alice will obtain one of Bob's public keys and use that to create a 2-of-2 multisignature address (known as Alice's coinswap address) made from Alice's and Bob's public keys. Alice will create a transaction (known as Alice's funding transaction) sending some of her coins (known as the coinswap amount) into this 2-of-2 multisig, but before she actually broadcasts this transaction she will ask Bob to use his corresponding private key to sign a transaction (known as Alice contract transaction) which sends the coins back to Alice after a timeout. <strong>Even though Alice's coins would be in a 2-of-2 multisig not controlled by her, she knows that if she broadcasts her contract transaction she will be able to get her coins back even if Bob disappears.</strong></p>
<p>Soon after all this has happened, Bob will do a similar thing but mirrored. Bob will obtain one of Alice's public keys and from it Bob's coinswap address. Bob creates a funding transaction paying to it the same coinswap amount, but before he broadcasts it he gets Alice to sign a contract transaction which sends Bob's coins back to him after a timeout.</p>
<p>At this point both Alice and Bob are able to broadcast their funding transactions paying coins into multisig addresses, and if they want they can get those coins back by broadcasting their contract transactions and waiting for the timeout. The trick with coinswap is that the contract transaction script contains a second clause: <strong>it is also possible for the other party to get the coins by providing a hash preimage (e.g. HX = sha256(X)) without waiting for a timeout</strong>. The effect of this is that if the hash preimage is revealed to both parties then the coins in the multisig addresses have transferred possession off-chain to the other party who originally didn't own those coins.</p>
<p><strong>When the preimage is not known, Alice can use her contract transaction to get coins from Alice's multisig address after a timeout, and Bob can use his contract transaction to get coins from the Bob multisig address after a timeout. After the preimage is known, Alice can use Bob's contract transaction and the preimage to get coins from Bob's multisig address, and also Bob can use Alice's contract transaction and the preimage to get the coins from Alice's multisig address.</strong></p>
<p>Here is a diagram of Alice and Bob's coins and how they swap possession after a coinswap:</p>
<p><a href="https://github.com/utxo-teleport/teleport-transactions/blob/master/docs/dev-book.md#how-coinswap-works" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-32-CoinSwap-Diagram-1.png" alt="BitDevs-32-CoinSwap-Diagram-1.png" /></a></p>
<p>If Alice attempts to take the coins from Bob's coinswap address using her knowledge of the hash preimage and Bob's contract transaction, then Bob will be able to read the value of the hash preimage from the blockchain, and use it to take the coins from Alice's coinswap address. This happens in the worst case, but in virtually all real-life situations it will never get to that point. The contracts usually always stay unbroadcasted.</p>
<p>So at this point we've reached a situation where if Alice gets paid then Bob cannot fail to get paid, and vice versa. Now to save time and miner fees, the party which started with knowledge of the hash preimage will reveal it, and both parties will send each other their private keys corresponding to their public keys in the 2-of-2 multisigs. After this private key handover Alice will know both private keys in the relevant multisig address, and so those coins are in her sole possession. The same is true for Bob.</p>
<pre><code>Alice's coins ----> Bob's address
Bob's coins ----> Alice's address
</code></pre>
<p><strong>In a successful coinswap, Alice's and Bob's coinswap addresses transform off-chain to be possessed by the other party</strong></p>
<p><a href="https://en.bitcoin.it/wiki/Script" target="_blank" class="external-link">Bitcoin's script</a> is used to code these timelock and hashlock conditions. Diagrams of the transactions:</p>
<p><a href="https://github.com/utxo-teleport/teleport-transactions/blob/master/docs/dev-book.md#how-coinswap-works" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-32-Coinswap-Diagram-2.png" alt="BitDevs-32-Coinswap-Diagram-2.png" /></a></p>
<p><strong>The contract transactions are only ever used if a dispute occurs. If all goes well the contract transactions never hit the blockchain and so the hashlock is never revealed, and therefore the coinswap improves privacy by delinking the transaction graph.</strong></p>
<p>The party which starts with knowledge of the hash preimage must have a longer timeout, this means there is always enough time for the party without knowledge of the preimage to read the preimage from the blockchain and get their own transaction confirmed.</p>
<p>This explanation describes the simplest form of coinswap. On its own it isn't enough to build a really great private system. For more building blocks read the <a href="https://gist.github.com/chris-belcher/9144bd57a91c194e332fb5ca371d0964" target="_blank" class="external-link">design document of this project</a>.</p>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://river.com/learn/terms/c/coinswap/" target="_blank" class="external-link">CoinSwap | River</a></p>
<h1 id="weaknesses-of-coin-swap" tabindex="-1">Weaknesses of CoinSwap</h1>
<p>The simplified explanation of CoinSwap provided above has several weaknesses, which would undermine the privacy enhancements CoinSwap offers.</p>
<p>For example, <strong>if Alice and Bob both send each other equivalent amounts of money, chain analysis might be able to match the amounts across the different transactions and deduce that a CoinSwap has occurred</strong>. In order to prevent this, the CoinSwap can be split into several transactions, obfuscating the total amounts sent by each party.</p>
<p>Additionally, <strong>a hypothetical CoinSwap market is ripe for denial of service (DoS) attacks and eclipse attacks</strong>. In a DoS attack, an attacker can repeatedly initiate a CoinSwap with an honest participant and halt it midway, forcing the victim to pay on-chain fees without reaping the privacy benefits. An attacker can also offer to execute a CoinSwap many times with many individuals in order to discover which UTXOs they control, stripping their existing privacy. Lastly, an attacker can participate in a large number of CoinSwaps and trick users into thinking they have established privacy when they have simply been executing one or more CoinSwaps with the same observer, who can then deanonymize the victim’s coins.</p>
<h2 id="fidelity-bonds" tabindex="-1">Fidelity Bonds</h2>
<p>Fidelity bonds have been proposed as a solution to these attacks. In brief, <strong>fidelity bonds require the <a href="https://river.com/learn/terms/m/maker/" target="_blank" class="external-link">maker</a> of a CoinSwap offer to post <a href="https://river.com/learn/terms/t/timelock/" target="_blank" class="external-link">time-locked</a> bitcoin as collateral, assuring the <a href="https://river.com/learn/terms/t/taker/" target="_blank" class="external-link">taker</a> that the maker has a strong incentive to execute the CoinSwap smoothly</strong>. Fidelity bonds lock up a maker’s funds, and thus, a large-scale DoS attack would require an enormous amount of bitcoin to be locked up for a significant time period. This high cost is thought to be sufficient to deter DoS attacks.</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://github.com/utxo-teleport/teleport-transactions" target="_blank" class="external-link">GitHub - utxo-teleport/teleport-transactions: Functioning, minimal-viable binaries and libraries to perform a trustless, p2p Maxwell-Belcher Coinswap Protocol</a></li>
<li><a href="https://github.com/utxo-teleport/teleport-transactions/blob/master/docs/dev-book.md" target="_blank" class="external-link">GitHub - teleport-transactions/docs/dev-book.md: Developer Resources</a></li>
<li><a href="https://gist.github.com/chris-belcher/9144bd57a91c194e332fb5ca371d0964" target="_blank" class="external-link">GitHub - Design for a CoinSwap Implementation for Massively Improving Bitcoin Privacy and Fungibility</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2020-October/018221.html" target="_blank" class="external-link">bitcoin-dev - Detailed protocol design for routed multi-transaction CoinSwap appendium</a></li>
<li><a href="https://bitcointalk.org/index.php?topic=321228.0" target="_blank" class="external-link">CoinSwap: Transaction graph disjoint trustless trading | bitcointalk</a></li>
</ul>
Swaproot - Cheaper and more private on-chain deposits on Phoenix Wallet
2024-03-17T06:07:16.603Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/swaproot-cheaper-and-more-private-on-chain-deposits-on-phoenix-wallet/
<p><a href="https://phoenix.acinq.co/" target="_blank" class="external-link">Phoenix</a> is one of the most user-friendly self-custodial Lightning wallets in the space.</p>
<p>A key construction within Phoenix is <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-channel-splicing/">splicing</a>, which is a process by which you can transfer funds from onchain outputs into Lightning payment channels (or vice versa) while leaving the channel fully operational during confirmation delays.</p>
<p>A <code>swap-in</code> is an on-chain transaction that can be used to add funds to a Lightning channel via splicing. Phoenix uses a trustless, instant swap-in protocol based on <a href="https://lists.linuxfoundation.org/pipermail/lightning-dev/2023-January/003810.html" target="_blank" class="external-link">swap-in potentiam</a>.</p>
<p><strong>Before Swaproot, swap-in transactions faced several challenges</strong>:</p>
<ol>
<li>"Pay-to-script" transactions were costly, and the cost is paid not when they are published but when they are spent, because the spending transaction must include the complete script that is used.</li>
<li>These transactions lacked privacy, as their unique nature made them easily traceable on the blockchain, particularly in the case of Phoenix swap-ins.</li>
<li>Developing a universal recovery method, especially for refunds, was complex, leading to the repetitive use of the same address for swap-ins and compromising privacy.</li>
</ol>
<p><strong>Phoenix designed the new Swaproot protocol to address these limitations by leveraging a combination of Taproot, MuSig2, and Miniscript descriptors.</strong></p>
<blockquote>
<p>[!QUOTE] <a href="https://acinq.co/blog/phoenix-swaproot" target="_blank" class="external-link">Swaproot - Cheaper and more private on-chain deposits on Phoenix Wallet</a><br />
<strong>TL; DR:</strong> Depositing on-chain funds to Phoenix is now <strong>cheaper(*) and more private</strong>, thanks to a combination of powerful new features added to Bitcoin and Lightning in the last few years.</p>
<p>(*) <strong>by 16% if the swap transaction has one input, 23% for 2 inputs, 27% for 3 inputs.</strong></p>
<p>Last year, we published a <a href="https://acinq.co/blog/phoenix-splicing-update" target="_blank" class="external-link">major upgrade</a> to our Phoenix wallet: users now have a single channel that will grow and shrink on-demand.</p>
<p>One of the key features included in this upgrade was trustless, instant “swap-ins”: you can send funds to your wallet’s on-chain address, and they will be “spliced” into your existing channel.</p>
<p>But the swap-in protocol that we designed for this upgrade could be improved:</p>
<ul>
<li>the swap-in address displayed by Phoenix was static, which is a privacy issue;</li>
<li>swap-in transactions sent to Phoenix had specific features that made them easy to track on-chain, which is also a privacy issue.</li>
</ul>
<p><strong>Using Taproot, MuSig2 and bitcoin descriptors, we designed and implemented a new swap-in protocol: swap-in transactions are now cheaper, harder to track on-chain, and Phoenix will generate a new swap-in address every time you receive a transaction.</strong></p>
<hr />
<h2 id="conclusion" tabindex="-1">Conclusion</h2>
<p>Our swap-in protocol is standing on the shoulder of giants:</p>
<ul>
<li>The dual-funding and the interactive transaction protocol that was merged into <a href="https://github.com/lightning/bolts/pull/851" target="_blank" class="external-link">the Lightning specifications</a>;</li>
<li>The Taproot upgrade, which makes bitcoin script more powerful and more private;</li>
<li>MuSig2, which enables key and signature aggregation;</li>
<li>The work on descriptors and miniscript, with extensive support added to Bitcoin Core 26.</li>
</ul>
<p>All these features and protocols may seem daunting at first, and it may be difficult to see how they benefit end users. Here it becomes obvious: <strong>they are tools to build better, less expensive, more private protocols that are also easier to use</strong>. Which is what Phoenix is all about!</p>
</blockquote>
<p>Among other things, Taproot introduced <code>key-path</code> and <code>script-path</code> spending, Schnorr signatures, and a new design for <code>pay-to-script</code> transactions that can make them indistinguishable from regular transactions on-chain. This allowed Phoenix to redesign their swap-in script to use a single public key created from the aggregation of user and server keys using MuSig2.</p>
<p>MuSig2 is an algorithm for combining public keys and signatures. It's particularly effective with Schnorr signatures and allows the creation of a single public key from multiple keys. With MuSig2, Phoenix aggregates the user key and server key into a single public key that can be used in Taproot <code>key-path</code> spends, making the script function like this: <code>aggregated user + server key OR user key + delay</code>.</p>
<p>Descriptors, a language for describing wallet patterns, play a crucial role in implementing swap-in address rotation and a recovery procedure. By using descriptors, Phoenix can generate unique swap-in addresses for each transaction while maintaining a single, compact descriptor for recovery. This system not only improves privacy by creating different addresses for each new refund key but also keeps swap-in outputs indistinguishable from regular transactions.</p>
<blockquote>
<p>[!QUOTE] <a href="https://lists.linuxfoundation.org/pipermail/lightning-dev/2023-January/003810.html" target="_blank" class="external-link">Swap-in-Potentiam: Moving Onchain Funds "Instantly" To Lightning</a><br />
In this writeup, we present a novel protocol, <strong>swap-in-potentiam</strong>, that can be used for immediate transfer from the blockchain layer to the Lightning layer, in the above user story.</p>
<h2 id="advantages-and-limitations" tabindex="-1">Advantages And Limitations</h2>
<p>To whet your appetite, here are <strong>the advantages</strong>:</p>
<ul>
<li>Immediate transfer of already-confirmed-received onchain funds to Lightning.</li>
<li>Onchain funds can also be transferred to another onchain address (subject to normal onchain confirmation rules).</li>
<li>This can be "immediate" if sending to a receiver that accepts the risk of 0-conf onchain transactions.</li>
<li>Minimized trust requirement.</li>
</ul>
<p><strong>The disadvantages</strong>, to help convince you that yes, this is technology and not magic beans (and to not oversell this tech, Bitcoin media reporting often tend to oversell new technologies because the disadvantages are often hidden away behind technical minutae):</p>
<ul>
<li>Requires a cooperating LSP. If LSP is down or refuses to cooperate, onchain funds are locked for some time. This has a timeout (so if the LSP never comes online again, you just wait out the timeout) and the timeout starts from when the receiving UTXO is confirmed in a block, so it will not cause loss of funds, only loss of opportunity (i.e. "involuntary HODLing").</li>
<li>If you have multiple LSPs, when you generate an address you <em>have to</em> select one of them at that point, you <em>cannot</em> commit to multiple LSPs and select one of them later when your phone wakes up again. This exacerbates the above disadvantage, since you have to select one of your LSPs and hope that when your phone wakes up the LSP you selected is also up and cooperative.</li>
<li>The onchain-received funds have to be confirmed first, otherwise we still need to wait for confirmation of the onchain-received funds. This is generally true for many blockchain-only wallets anyway and is thus not a worsening, but is also not an improvement.</li>
<li>If the timeout is too near, actions must be performed onchain that require confirmation.</li>
</ul>
<hr />
<p><strong>The use-cases</strong> this enables are:</p>
<ul>
<li>If Alice wants to pay to another onchain address, and Bob is also online and cooperative, Alice can ask Bob to help sign the Onchain/channel branch to move the funds in any arbitrary onchain manner.</li>
<li>If Alice wants to pay to a Lightning invoice / keysend, and has insufficient Lightning outgoing capacity (but has sufficient <em>total</em> capacity), it can swap with Bob, by offerring a transaction that spends via the Onchain/channel branch and instantiates a fresh onchain HTLC that Bob can then forward over Lightning. As soon as Alice offers its signature of that transaction, Bob can immediately offer an in-Lightning HTLC to Alice on their channel, and then Alice can immediately resolve it (thus immediately getting its funds into Lightning).</li>
<li>If Bob is offline or uncooperative, Alice can unilaterally recover its funds after the timeout in the Timelock branch.</li>
</ul>
<p>Trust is required only to the extent that Alice trusts Bob to be cooperative so that Alice can dispose of its funds immediately. In case Bob turns out to be non-trustworthy, Alice can recover its funds via the timelock branch after the timeout period. There is no scope for Bob to steal funds (indeed, it is easier for Bob to steal Lightning funds than to steal swap-in-potentiam funds).</p>
<p>The intent here is that the mobile wallet is Alice, while the LSP is Bob.</p>
</blockquote>
Surviving a High-Fee Market
2024-01-07T06:32:16.841Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/surviving-a-high-fee-market/
<h1 id="bitcoin-transaction-fees" tabindex="-1">Bitcoin Transaction Fees</h1>
<blockquote>
<p>[!QUOTE] <a href="https://river.com/learn/how-bitcoin-fees-work/" target="_blank" class="external-link">How Bitcoin Fees Work - River's Learning Center</a></p>
<h2 id="what-are-bitcoin-transaction-fees" tabindex="-1">What Are Bitcoin Transaction Fees?</h2>
<p>A Bitcoin transaction fee is what a user pays to miners to get their transaction included in the blockchain. The more a user pays, the higher the chance their transaction will be picked up immediately as there is only a limited amount of space in each block.</p>
<p>Bitcoin transaction fees are an important income stream for miners alongside the <a href="https://river.com/learn/terms/b/block-subsidy/" target="_blank" class="external-link">block subsidy</a>. Users who pay transaction fees are contributing to the security of the bitcoin network.</p>
<hr />
<h2 id="how-are-transaction-fees-determined" tabindex="-1">How are Transaction Fees Determined?</h2>
<p>Transaction fees on Bitcoin are mostly determined by two factors:</p>
<ul>
<li>The <strong>“size,”</strong> or data volume of the transaction.</li>
<li>Users’ <strong>demand for block space</strong>. The faster a user wants their transaction confirmed, the more fees they will be willing to pay (generally).</li>
</ul>
<p>A block can contain a maximum of 4 MB of data, so there is a limit to how many transactions can be processed in one block. A larger transaction will take up more block data. Thus, larger transactions typically pay higher fees on a per-byte basis.</p>
<p>If you are sending a transaction with the help of a Bitcoin wallet, the wallet should display an option for you to select your fee rate. This fee rate will be calculated in <a href="https://river.com/learn/terms/s/satoshi/" target="_blank" class="external-link">satoshis</a> per unit of data your transaction will consume on the blockchain, abbreviated as sats/<a href="https://river.com/learn/terms/v/vByte/" target="_blank" class="external-link">vByte</a>. The total fee paid by your transaction will then be this rate multiplied by the size of your transaction.</p>
</blockquote>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Tx-Fee-Equation.png" alt="BitDevs-28-Tx-Fee-Equation.png" /></p>
<h1 id="utxo-management" tabindex="-1">UTXO Management</h1>
<p><a href="https://youtu.be/0_5wb5agLqE?si=vs7P-ukJ1dXt05L-" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-UTXO-Video-Thumbnail.png" alt="BitDevs-28-UTXO-Video-Thumbnail.png" /></a></p>
<blockquote>
<p>[!QUOTE] <a href="https://werunbtc.com/utxos" target="_blank" class="external-link">Matt Odell's UTXO Management Guide</a></p>
<ul>
<li>bitcoin transaction fees limit network abuse by making usage expensive</li>
<li>there is a cost to every transaction, set by a dynamic free market based on demand</li>
<li>it is an incredibly robust way to prevent spam without relying on centralized entities that can be corrupted or pressured</li>
<li>when bitcoin blocks are full, highest fee transactions are confirmed first</li>
<li>pending transactions sit in node mempools awaiting confirmation: can conceptualize mempools as a line to enter a restaurant sorted by who is willing to pay the most</li>
<li>if you are willing to wait for your transaction to confirm you can pay significantly lower fees</li>
<li>your bitcoin wallet may show a single balance but the reality is that it is made of many different unspent transaction outputs (UTXOs)</li>
<li>when you make a bitcoin transaction your wallet will select as many UTXOs as necessary to reach the amount of bitcoin you wish to send</li>
<li>onchain transaction fees are calculated based on size in bytes not the amount of sats sent</li>
<li>the more UTXOs required on the input side the higher the fee paid</li>
<li>from a cost perspective you want to consolidate UTXOs, fewer UTXOs with larger amounts</li>
<li>consolidation has privacy tradeoffs though: you link any UTXOs you consolidate as owned by the same person + larger UTXOs mean you will dox more of your stack to anyone you pay in the future</li>
</ul>
</blockquote>
<p>Consider reading this series of <a href="https://unchained.com/blog/" target="_blank" class="external-link">Unchained blog posts</a> about UTXO management:</p>
<ul>
<li><a href="https://unchained.com/blog/what-is-a-utxo-bitcoin/" target="_blank" class="external-link">What is a bitcoin UTXO and why do they matter?</a></li>
<li><a href="https://unchained.com/blog/too-many-bitcoin-utxos/" target="_blank" class="external-link">More UTXOs, more problems: High fees, signing failures, and how to avoid them</a></li>
<li><a href="https://unchained.com/blog/bitcoin-utxo-privacy/" target="_blank" class="external-link">UTXOs, addresses, and CoinJoins: Preserving privacy in a bitcoin economy</a></li>
</ul>
<h1 id="fee-saving-techniques-and-amp-strategies" tabindex="-1">Fee-Saving Techniques & Strategies</h1>
<p><strong>Avoid bitcoin dust</strong></p>
<blockquote>
<p>[!QUOTE] <a href="https://unchained.com/blog/small-utxo-bitcoin-dust/" target="_blank" class="external-link">How to prevent small UTXOs from becoming bitcoin dust - Unchained</a><br />
In the world of bitcoin, dust colloquially refers to a UTXO with a value smaller than the transaction fees the owner would have to pay in order to spend it. In other words, if someone has a UTXO worth 5k sats, but it would cost 6k sats in transaction fees to be spent, they are disincentivized from spending it. Why would you ever choose to pay a fee that grants you access to a smaller amount of money than what you just paid? This describes the nature of dust—bitcoin that is effectively stuck where it is, useless to the owner.</p>
<p>A common and more precise definition of dust as it relates to mempool policy (what I might call “technical dust”) <a href="https://bitcoin.stackexchange.com/questions/10986/what-is-meant-by-bitcoin-dust/41082#41082" target="_blank" class="external-link">can be found here</a>.</p>
<p>Naturally, the UTXOs categorized as dust will typically have very tiny values. However, the transaction fee required to spend any given UTXO is partially dependent on the current market demand to move bitcoin. This means that if the market demand increases, and fee rates increase as a result, larger-sized UTXOs can enter the dust category. Then, if demand were to subside, some of those bigger UTXOs could lose their dust status.</p>
<p>If we suppose that global bitcoin adoption has a lot of room to grow, it is reasonable to speculate that the average market demand for transferring bitcoin on the blockchain might also grow substantially, and with permanence. The implication would be that the general size of a UTXO qualifying as dust becomes different than it has been historically.</p>
</blockquote>
<p><strong>Reach a stacking threshold before withdrawing to cold storage</strong></p>
<p>Dollar cost averaging (DCA) straight to cold storage is probably a bad idea. Consistent sat stackers generally buy small amounts of bitcoin on semi-frequent intervals. Immediately withdrawing those sats to an on-chain wallet means that, over time, your balance will consist of a large number of small UTXOs. When you then go to spend them later, you will likely need to use many different UTXOs for any reasonably large purchase, which means your transactions will be larger overall (more data = higher total fees).</p>
<p><strong>Use software wallets that allow for coin control</strong></p>
<p>Some wallets abstract away coin control such that users don't actually know which UTXOs are selected when they send a given transaction. In many cases, the wallet will optimize this for you in some way, but if you don't choose UTXOs yourself, you have to trust the wallet to do it properly (and you can't control your privacy by selecting UTXOs based on their prior history).</p>
<p>You don't always need to choose your own UTXOs, but having the option is usually preferable.</p>
<p><strong>Proactively manage UTXOs when fees are low</strong></p>
<p>The most cost-effective time to clean up your UTXOs is when transaction fees are low. Everyone has a unique definition of what a "low"-fee market looks like depending on their own situation and preferences. Still, you can use explorers like <a href="https://mempool.space/" target="_blank" class="external-link">mempool.space</a> for priority-based fee estimations and to <a href="https://mempool.space/graphs/mining/block-fee-rates#1w" target="_blank" class="external-link">easily visualize trends over time</a>.</p>
<p>If you don't want to actively watch the fee market for an opportune time to transact, use a tool like <a href="https://txfee.watch/" target="_blank" class="external-link">txfee.watch</a> to setup email alerts whenever fees are currently high or low. You can even use that tool to set up more customizable automations that respond to the current fee market (e.g., flash your smart lights when fees drop).</p>
<p><strong>Find a balance between fee optimization and privacy</strong></p>
<p>Combining UTXOs mixes the history of those coins, meaning transactions related to each can be traced and linked to one another. For those that <a href="https://www.discreetlog.com/why-bitcoiners-should-care-about-using-bitcoin-privately/" target="_blank" class="external-link">value their financial privacy</a>, combining UTXOs actually makes it much easier for chain observers to collect a lot of information about you and your personal finances.</p>
<p>Ideally, you want to build a subset of UTXOs in fairly large denominations and with obfuscated history (like via <a href="https://river.com/learn/terms/c/coinjoin/" target="_blank" class="external-link">coinjoin</a> or <a href="https://bitcoiner.guide/nokyconly/" target="_blank" class="external-link">KYC-free</a> purchases). Keep those UTXOs as separated as possible from KYC'ed coins to avoid intermingling.</p>
<p>There is no perfect balance between privacy and fee optimization. You just have to routinely reassess the state of your UTXOs and redistribute them as needed, depending on your time horizon and expected economic activity in the future.</p>
<p><strong>Consider how base layer fees impact Lightning</strong></p>
<p>For cheaper day-to-day transacting, the Lightning Network is the best option without compromising sovereignty (if done properly). Every LN transaction is one that didn't have to occur on-chain (and incur base layer fees).</p>
<p>However, Lightning channel management is heavily dependent on the base layer fee market. On-chain transactions are required to open, close, or resize channels (via <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-channel-splicing/">splicing</a>). That means cost effective channel management should be done when fees are lower - if you don't have enough liquidity on one side of a channel when fees spike, you might not actually be able to transact without paying high mining fees first.</p>
<p><strong>Leverage an intermediary layer to accumulate UTXOs</strong></p>
<p>Rather than accumulating sats with a custodian and withdrawing to self-custody after some large-enough threshold, you can find an intermediary step where fees are less of a concern and the custody tradeoffs are reasonable - somewhere between trusting a single custodian and self-custodial cold storage.</p>
<p>For example, you could withdraw from an exchange straight to a Lightning wallet if that exchange supports LN withdrawals (like <a href="https://river.com/signup?r=IRL4B44B" target="_blank" class="external-link">River</a>). Unfortunately, self-custodial Lightning still requires a hot wallet. You could do something similar with <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/expanding-transparency-by-open-sourcing-liquid-s-functionary-code/">Liquid</a> or Chaumian e-cash (like <a href="https://fedimint.org/" target="_blank" class="external-link">Fedimint</a> or <a href="https://blog.bitfinex.com/education/cashu-chaumian-e-cash-mints-over-lightning/" target="_blank" class="external-link">Cashu</a>) for different security/UX tradeoffs.</p>
<p>For example, you can use a non-custodial swap service like <a href="https://boltz.exchange/" target="_blank" class="external-link">Boltz</a> to easily switch between on-chain bitcoin, Lightning bitcoin, or L-BTC without KYC. Liquid is particularly interesting for this type of intermediary stacking layer because you can actually use <a href="https://blockstream.com/jade/" target="_blank" class="external-link">Blockstream's Jade</a> to store L-BTC in cold storage.</p>
<p>You could set up a flow where you accumulate smaller UTXOs as L-BTC (by receiving on Lightning and swapping directly to Liquid), and then you can periodically swap/peg-out of L-BTC to regular, on-chain sats whenever you've reached a reasonable stacking threshold. Liquid could act as a "staging area" for sats that you eventually either send to long-term cold storage or top up a Lightning wallet for day-to-day payments. A setup like that could potentially save a lot of money in a high-fee environment and provide fairly strong security.</p>
<p><a href="https://x.com/francispouliot_/status/1726253329418756192?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Francis-Liquid-Tweet.png" alt="BitDevs-28-Francis-Liquid-Tweet.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.discreetlog.com/high-fees/" target="_blank" class="external-link">High Fees? Bitcoin is Working As Designed</a></li>
<li><a href="https://thebitcoinmanual.com/articles/what-is-coin-control/" target="_blank" class="external-link">What Is Coin Control? - The Bitcoin Manual</a></li>
<li><a href="https://bitcoin.design/guide/how-it-works/coin-selection/" target="_blank" class="external-link">Coin Selection | Bitcoin Design</a></li>
<li><a href="https://bitcoiner.guide/privacy/segregate/" target="_blank" class="external-link">Bitcoin Privacy Guide</a></li>
<li><a href="https://blog.lopp.net/economically-unspendable-bitcoin-utxos/" target="_blank" class="external-link">Economically Unspendable Bitcoin UTXOs</a></li>
<li><a href="https://jlopp.github.io/unspendable-utxo-calculator/" target="_blank" class="external-link">Economically Unspendable Bitcoin UTXO Calculator</a></li>
</ul>
Scaling & Anonymizing Bitcoin At Layer 1 Through Client-Side Validation
2023-06-20T00:35:52.779Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/scaling-and-anonymizing-bitcoin-at-layer-1-through-client-side-validation/
<h1 id="description" tabindex="-1">Description</h1>
<p><a href="https://twitter.com/dr_orlovsky" target="_blank" class="external-link">Maxim Orlovsky</a> from the <a href="https://www.lnp-bp.org/" target="_blank" class="external-link">LNP/BP Standards Association</a> released a proposal outlining how client-side validation could be leveraged to improve scalability, privacy, and contract expressiveness on Bitcoin.</p>
<p>Client-side validation is a methodology in which owners of some state (BTC transaction data, a smart contract, etc.) validate only the part of the transactional history that they own and nothing else - in in contrast to blockchain validation where all nodes maintain and validate a copy of the entire chain history. In this paradigm, the majority of activity happens off-chain, and the blockchain itself is mainly used to manage state updates for those off-chain contracts (i.e., a cryptographically enforced commitment layer), greatly increasing transactional throughput and confidentiality.</p>
<p>Maxim is also spearheading the development of <a href="https://www.rgbfaq.com/what-is-rgb" target="_blank" class="external-link">RGB</a> (<strong>R</strong>eally <strong>G</strong>ood for <strong>B</strong>itcoin), which is a protocol that started development in ~2018. It is built over Bitcoin's consensus layer and uses client-side validation to enable the execution of private smart contracts between two parties. However, the concept of client-side validation itself can be adopted by other systems. This proposal outlines the general framework of client-side validation (with RGB as an example).</p>
<blockquote>
<p>[!QUOTE] <a href="https://github.com/LNP-BP/layer1" target="_blank" class="external-link">Scaling and anonymizing Bitcoin at layer 1 with client-side validation</a> (full proposal)</p>
<ul>
<li>In the paper, we propose a way to upgrade Bitcoin layer 1 (blockchain/timechain) without a required softfork. The upgrade leverages properties of client-side validation, can be gradual, has a permissionless deployment option (i.e. not requiring majority support or miner cooperation) and will have the scalability of the order (no zk-proofs) or (with zk proofs), where is a global number of transactions.</li>
<li>The original implementation of Bitcoin by Satoshi Nakamoto brought the strange idea that everybody needs to verify transactions for the whole world.</li>
<li><strong>Introduction of the ledger has created two problems: absence of scalability and poor privacy</strong>; the first prevents adoption and networking effect from happening; the other contradicts the original cypherpunk spirit of Bitcoin and represents a strategic civilizational risk.</li>
<li>The first ideas in this space came with Peter Todd's back in 2016 and 2017 when he pointed out that <strong>the owners of some state (for instance BTC or any other stateful contract) need to verify just a part of the transactional history - the part which is directly related to their ownership - and omit the rest. He named his approach client-side validation</strong>. Giacomo Zucco designed a protocol able to create assets with this approach, named <strong>RGB</strong>.</li>
<li>In my previous work at LNP/BP Standards Association I was able to develop RGB further and convert it into <strong>the first generic client-side-validated smart-contract system with rich state and bounded Turing-complete computing, providing sufficient functionality to run anything which can be done with blockchain-based smart contracts - but without the public ledger/blockchain storing any user data</strong>, directly utilizing anti-double-spending properties of Bitcoin PoW consensus protocol. This system was publicly developed during the course of four years and got released in April 2023.</li>
<li>In the current proposal we demonstrate that Bitcoin, if provided with a stateful client-side-validated layer (like RGB), can be upgraded to a system without the limiting properties of public ledger (blockchain), and, while preserving PoW consensus protocol, it can be re-based onto a new scalable non-blockchain layer 1 (<strong>codenamed Prime</strong>).</li>
<li>This layer will be able to <strong>host a theoretically indefinite number of transactions (at least billions per minute)</strong> since the storage of state, computing and validation will be moved to the client-side-validated layer above.</li>
<li>The protocol has <strong>three deployment options (permissionless, miner-activated, and softfork)</strong>, with the first two not requiring any soft- (or hard-) fork. Options are independent, but can also be deployed in a consequent way.</li>
<li>The proposal provides several benefits to Bitcoin as digital cash
<ul>
<li><strong>Higher scalability</strong>, achieved at the base layer, without the need for Lightning Network or other dedicated scalability solutions</li>
<li><strong>Much improved privacy</strong> with no publically exposed transaction graph, ledger, addresses or public keys;</li>
<li><strong>Rich programmability</strong>, provided by RGB or other client-side-validation systems;</li>
<li><strong>Better upgradability</strong>: new protocol features may be adopted gradually and without reaching a wide consensus</li>
</ul>
</li>
<li>Some relative drawbacks of the proposed system are:
<ul>
<li><strong>Instead of downloading blockchain participants must keep track of the updates from miners</strong> since a part of the information required for the validation is ephemeral and not persisted by the network. However, dedicated trustless services may appear, which will cache this information and provide it later for a fee (which prevents the unhealthy state of the Bitcoin blockchain where "everybody keeps everything for everybody for free").</li>
<li><strong>BTC as currency, once transferred to the Prime in a trustless way, can't be brought back trustlessly without a Bitcoin blockchain softfork</strong> providing support for either zk op-codes, drivechains or other decentralized/trustless peg-out mechanisms. Alternatively, if the new layer gets higher adoption than the blockchain layer, such peg-out would not be needed at all.</li>
</ul>
</li>
<li>The proposed system (codenamed Prime) consists of four main components:
<ul>
<li><strong>Timestamping service</strong>, generating a sequence of compact (~100 bytes) headers, which periodicity can be 10 minutes or less (up to 10 seconds), improving finality properties;</li>
<li><strong>Proofs</strong>: ephemeral public data produced and published by miners alongside headers. The proofs are not required to be stored by the network and are parsed into individual proofs kept by the users of the protocol in their client-side-validated data storages (named stashes).</li>
<li><strong>Single-use-seal protocol</strong>, providing protection from double-spending attacks.</li>
<li><strong>Smart contract protocol</strong>, operating with client-side-validated data and providing programmability and rich state. Each piece of business logic in the system, including mining fees, is defined as a separate smart contract. Individual contracts are sharded and their history is not linked directly (in the future it may be linked with zero-knowledge proofs). A ready-to-go solution is to use RGB, however, other systems may be developed as well.</li>
</ul>
</li>
<li>These components are jointly equivalent in their functionality to a blockchain-type ledger; however, in our design they become abstracted, providing much more scalability and privacy than any other blockchain system.</li>
</ul>
</blockquote>
<p>In April 2023, RGB v0.10 was released, which included the functional components for RGB to start being adopted in production-like systems. Now that the core consensus layer of the protocol is relatively finalized, the next step is for application-layer technologies to be developed that fully integrate and showcase RGB's key features to spur further adoption.</p>
<blockquote>
<p>[!QUOTE] <a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2023-April/021554.html" target="_blank" class="external-link">[bitcoin-dev] RGB protocol announcement</a></p>
<p><strong>RGB v0.10</strong></p>
<p>Today we’d like to announce the next main milestone: <strong>release of RGB v0.10</strong>, which includes consensus layer, standard library (used by wallets/exchanges for integration) and a command-line tool.</p>
<p>v0.10 release is a major milestone which brings RGB further to being a production-ready system. It introduces the last consensus-breaking changes, aiming at keeping future RGB versions fully backward-compatible. It also unlocks the last features that were required for implementing fully-functional smart contracts which may be arbitrary customized by contract developers.</p>
<hr />
<p><strong>Roadmap after v0.10</strong><br />
With this release the future development of the core RGB technology (at in its consensus layer) becomes gradually ossified, as the cases of client-side-validated systems upgrades are more complex to coordinate than those of blockchain layer 1. Also, the normal understanding of soft-forks and hard-forks do not apply to upgrades in layer 2 and 3. So we found a way for backwards-compatible upgrades, which we call “fast-forwards”, where users keep their assets issued under the older versions that can always operate and be accepted by the users of any other future version. However, the users of a newer version will be restricted in transferring their assets only to the users of the same or more recent version (but they can always ask recipients to upgrade their software). We have a number of features planned for the future fast-forwards:</p>
<ul>
<li>full support of bitcoin layer 1 and channel state introspection;</li>
<li>inter-contract interaction;</li>
<li>bulletproofs++ support;</li>
<li>zero-knowledge-based optimizations of the client-side-validated history.</li>
</ul>
<p>We're also working on the design of a layer 1 which will be perfect for the client-side-validated applications (“how to design a blockchain today if we knew about client-side-validation/single-use-seals”). This should be very compact (order of one signature per block) ultra-scalable (theoretically unlimited no of tx in a block) chain which can run systems like RGB - with Bitcoin UTXO set migrated into RGB operating on both bitcoin blockchain and this new chain (we code-name it “sigchain”). However, these are quite early developments with a number of unsolved tradeoffs and challenges; if there is an interest on this topic here we can start a different discussion thread on the matter.</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://fountain.fm/episode/Zpq9GFPXY71z6hS6U0IQ" target="_blank" class="external-link">The Kevin Rooke Show - E108: Maxim Orlovsky on Building RGB, Standards for BTC & LN, and Smart Contracts on Bitcoin</a></li>
<li><a href="https://www.rgbfaq.com/what-is-rgb" target="_blank" class="external-link">What is RGB? - RGB FAQ</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/04/19/#rgb-update" target="_blank" class="external-link">Bitcoin Optech Newsletter 247</a></li>
<li><a href="https://youtu.be/y2Ak970WpkA" target="_blank" class="external-link">RGB Update: Smart Contracts For Bitcoin & The Lightning Network! - YouTube</a></li>
<li><a href="https://github.com/LNP-BP/presentations/blob/master/Presentation%20slides/RGB%20%26%20Spectrum%20explanation%20for%20business.pdf" target="_blank" class="external-link">LNP-BP slideshow "RGB & Spectrum explanation for business"</a></li>
<li><a href="https://trustmachines.co/learn/what-is-the-rgb-protocol-on-bitcoin/#:~:text=Client%2Dside%20Validation,-One%20of%20RGB's&text=This%20validation%20method%20leverages%20the,and%20privacy%20are%20drastically%20improved." target="_blank" class="external-link">RGB Protocol on Bitcoin, What is it? | Trust Machines</a></li>
<li><a href="https://thebitcoinmanual.com/blockchain/rgb-chain/" target="_blank" class="external-link">What Is The RGB Network - The Bitcoin Manual</a></li>
<li><a href="https://docsend.com/view/he8x9erkjmphphvn" target="_blank" class="external-link">"Emergence of Token Layers on Bitcoin: Overview of Client-Side Validation, RGB, and Taro" slideshow from the Diamond Hands community</a></li>
<li><a href="https://scalingbitcoin.org/transcript/milan2016/client-side-validation" target="_blank" class="external-link">Transcript of Peter Todd's "Progress on scaling via client-side validation" presentation from Scaling Bitcoin 2016 in Milan</a></li>
</ul>
SATSLINK - Multipurpose Communications Device by Coinkite
2023-11-20T04:57:38.755Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/satslink-multipurpose-communications-device-by-coinkite/
<h1 id="what-is-it" tabindex="-1">What is it?</h1>
<p>Coinkite announced preorders for a new product - the <a href="https://satslink.com/" target="_blank" class="external-link">Satslink</a>, which is designed to be a hackable, general purpose device for engineers to explore.</p>
<blockquote>
<p>[!QUOTE] <a href="https://satslink.com/specs" target="_blank" class="external-link">Satslink specs (not final)</a></p>
<ul>
<li>ESP32-S3 main CPU running at 240Mhz with 512k of SRAM, 8M of PSRAM, and 32M of flash (<a href="https://www.espressif.com/sites/default/files/documentation/esp32-s3_datasheet_en.pdf" target="_blank" class="external-link">datasheet</a>)</li>
<li>Wifi (2.4Ghz) and Bluetooth support</li>
<li>ESP-Now protocol for device-to-device radio, Internet access via your 2.4Ghz Wifi access point</li>
<li>320x240 colour LCD (IPS with wide viewing angle)</li>
<li>Full QWERTY keyboard</li>
<li>NFC tag emulation (NFC-V radio protocol)</li>
<li>QR scanner module (with light, dedicated co-processor for image processing)</li>
<li>RGB light for "message waiting" feature (top left corner)</li>
<li>Secure element for private key storage (part number, vendor TBD)</li>
<li>Powered by 3 x AAA cells, or USB-C port</li>
<li>Dedicated keyboard scanning chip to reduce CPU load</li>
<li>MicroSD slot for data transfer</li>
<li>Expansion GPIO and serial port for hacking/debug (includes all ESP32 programming connections)</li>
<li>Typically programmed in Micropython, all source fully-available; completely field upgradable with no locked-down ROM areas</li>
<li>Rugged plastic enclosure</li>
</ul>
</blockquote>
<h1 id="why-does-it-matter" tabindex="-1">Why does it matter?</h1>
<p><a href="https://bitcoinmagazine.com/business/coinkites-newest-bitcoin-device-can-serve-as-a-lightning-wallet-and-nostr-client" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Satslink-Diagram.png" alt="BitDevs-28-Satslink-Diagram.png" /></a></p>
<blockquote>
<p>[!QUOTE] <a href="https://lightningnetwork.plus/posts/462" target="_blank" class="external-link">SATSLINK: A Fusion of Technologies for Bitcoin and Lightning Network Applications - LightningNetwork+</a></p>
<h2 id="how-satslink-augments-the-bitcoin-lightning-network-ecosystem" tabindex="-1">How SATSLINK Augments the Bitcoin Lightning Network Ecosystem</h2>
<p>SATSLINK, brimming with features, is poised to bolster the Lightning Network's prowess. It presents the potential to remotely connect with bitcoin nodes, be it at one's home, office, or even the cloud. Key highlights include:</p>
<ul>
<li><strong>Security:</strong> The Infineon Trust-M secure element stands as a bastion for private key storage pertaining to your Bitcoin node.</li>
<li><strong>Remote Node Management:</strong> Harnessing SATSLINK's multifaceted communication mechanisms will help Lightning Network node management, especially in regions with limited internet access.</li>
<li><strong>QR Payments:</strong> The embedded QR scanner in SATSLINK paves the way for streamlined Lightning Network transactions and instantaneous payments.</li>
<li><strong>NFC-Enabled Payments:</strong> Transact with ease, courtesy of SATSLINK's NFC tag emulation, which propels contactless Lightning Network payments</li>
</ul>
<h2 id="beyond-bitcoin" tabindex="-1">Beyond Bitcoin</h2>
<ul>
<li><strong>Decentralized Communication:</strong> Leveraging the ESP-Now protocol, SATSLINK can relay decentralized messages, mitigating reliance on centralized ISPs.</li>
<li><strong>Open-Source Potential:</strong> SATSLINK’s open-source Micropython infrastructure invites custom applications, catering to a diverse range of communication needs.</li>
<li><strong>Portable Convenience:</strong> The device's pocket-friendly design, combined with a range of communication tools, makes it a must-have for tech aficionados on the move.</li>
</ul>
</blockquote>
<p><a href="https://youtu.be/aN5HkQNXGGk?si=BkNhhJ25Ae_dG91p" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Satslink-Thumbnail.png" alt="BitDevs-28-Satslink-Thumbnail.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/coinkites-newest-bitcoin-device-can-serve-as-a-lightning-wallet-and-nostr-client" target="_blank" class="external-link">Coinkite's Newest Bitcoin Device Can Serve As A Lightning Wallet And Nostr Client</a></li>
</ul>
Rethinking Lightning
2024-01-29T00:47:46.249Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/rethinking-lightning/
<blockquote>
<p>[!QUOTE] <a href="https://stacker.news/items/379225" target="_blank" class="external-link">Rethinking Lightning</a> - Ben Carman<br />
Over the last few months it feels the bitcoin community has gotten more and more jaded on lightning. To be honest, this is for good reason, back in 2017 we were promised a decentralized payment network that would always have cheap payments and everyone would be able to run their own node. Nowadays, the average lightning user actually isn't using lightning, they are just using a custodial wallet and the few of that do run lightning nodes often find it a burdensome task. For us at Mutiny Wallet, we are trying to make this better by creating a lightweight self-custodial wallet and in my opinion we have been executing on that dream fairly well.</p>
</blockquote>
<h1 id="overview" tabindex="-1">Overview</h1>
<p><a href="https://twitter.com/benthecarman" target="_blank" class="external-link">@benthecarman</a> recently made an <a href="https://stacker.news/items/379225" target="_blank" class="external-link">insightful post on Stacker News</a> acknowledging that Bitcoin's Lightning network has fallen short of many end users' expectations. His post critically examines the current state of the Lightning Network, discussing its limitations and proposing a mix of technical and strategic solutions to improve its scalability and user experience.</p>
<ol>
<li>
<p><strong>Jaded Bitcoin Community on Lightning</strong>: There's a growing disillusionment within the Bitcoin community regarding the Lightning Network. Initially promised as a decentralized network with cheap payments, many users now rely on custodial wallets instead of running their own Lightning nodes, which is often seen as too burdensome.</p>
</li>
<li>
<p><strong>Channel Liquidity Challenge</strong>: One of the primary user experience (UX) issues with Lightning is channel liquidity. This unique requirement often confuses users, and there are no simple workarounds. While solutions like just-in-time (JIT) liquidity and splicing exist, they don't fully resolve the problem, leading to confusion over fee variations in day-to-day use.</p>
</li>
<li>
<p><strong>Offline Receive Problem</strong>: Another major issue is the need to be online to receive payments, a requirement that contrasts sharply with the typical on-chain payment flow (and how most people think about payments generally). Attempts to address this, like Zeus Pay lightning addresses, have led to other problems.</p>
</li>
<li>
<p><strong>On-Chain Fees Impacting Liquidity</strong>: Available liquidity doesn't always equate to the ability to receive payments. Even with sufficient liquidity, high on-chain fees can make receiving payments impractical, undermining the fundamental goal of avoiding on-chain fees with Lightning. As fees increase over, this problem will likely worsen.</p>
</li>
<li>
<p><strong>Potential Solutions</strong>: The post discusses solutions like anchor channels, package relay, and ephemeral anchors, but notes these only mask underlying issues. They require users to have on-chain funds for fee bumps, complicating the UX for self-custodial users.</p>
</li>
<li>
<p><strong>Large Scale Nodes vs. Self-Custodial Nodes</strong>: Carman suggests that while Lightning is an excellent payment protocol, its limitations become more apparent without scale. Most users prefer custodial wallets for their efficiency with small-scale retail payments. If we want to enable more sovereign commerce, we need to re-evaluate Lightning's role and accept that some tradeoffs may be necessary for less-technical users.</p>
</li>
<li>
<p><strong>Combining Large Scale Infrastructure with Self-Custodial Solutions</strong>: Current solutions like Muun Wallet and Aqua Wallet offer partial fixes but don't address the root problem. Atomic swaps can improve UX but just offload these challenges to someone else.</p>
</li>
<li>
<p><strong>Scaling Ownership in Bitcoin</strong>: The post explores the need for scaling UTXO (Unspent Transaction Output) ownership in Bitcoin, arguing that scaling ownership is as crucial as scaling payments. It discusses the potential of covenants via soft forks, like OP_CTV and OP_VAULT, which can scale ownership by restricting how UTXOs are spent - allowing for more flexible management of Bitcoin addresses and their spending conditions</p>
</li>
<li>
<p><strong>Fedimint as a Scaling Solution</strong>: Carman is particularly optimistic about leveraging Fedimint (and Chaumian Ecash generally) as a reasonable way to offload some of these Lightning complexities. Fedimints allow for dynamic shared ownership over a group of UTXOs and can interoperate with Lightning - at the cost of requiring trust in a particular mint.</p>
</li>
</ol>
<p>Despite these challenges, the Lightning Network is a useful tool for scaling bitcoin - users just need to manage their expectations and critically evaluate the tradeoffs available.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://gist.github.com/niftynei/5f9373568e2cf6d15db6c7546a43f763" target="_blank" class="external-link">@niftynei's comparison of Bitcoin layer 2 alternatives</a></li>
</ul>
Private Collaborative Custody with FROST
2023-09-18T07:10:50.090Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/private-collaborative-custody-with-frost/
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://tftc.io/martys-bent/issue-1379-using-frost-to-increase-privacy-in-collaborative-bitcoin-custody-models/" target="_blank" class="external-link">TFTC Issue 1379: Using FROST to Increase Privacy in Collaborative Bitcoin Custody Models</a><br />
Nick Farrow took to the bitcoin-dev mailing list earlier this week to lay out his idea for a private collaborative custody solution using FROST.</p>
<p>For those who are unaware, <strong>FROST</strong> stands for <strong>Flexible Round-Optimized Schnorr Threshold Signatures</strong> and it leverages Schnorr signatures and Taproot addresses to allows individuals to create multi-sig quorums that look like a single sig output on-chain. FROST achieves this by enabling each quorum to produce a joint FROST key that is used to sign a transaction after a threshold of members sign their key shares. This is a <strong>massive privacy benefit</strong> as it makes it impossible to tell whether or not an input was produced by a multi-sig spend or a single-sig spend. If implemented into popular wallet softwares individuals and businesses would be able to have peace of mind knowing that it is impossible for people to determine the type of key set up they are using.</p>
<p>Nick's mailing list post from earlier this week is exploring <strong>the possibility of creating a collaborative custody service that enables third parties who are participating in a FROST multi-sig quorum to sign without knowing exactly what transaction they're signing</strong>. Adding a solid layer of privacy to those using FROST multi-sig quorums while engaging with a third party signing service. Again, an incredibly cypherpunk application that is made possible via bitcoin.</p>
<p>It should be noted that FROST isn't exactly the same as the on-chain multisig mechanics that you are probably familiar with. <strong>FROST is a <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/multi-party-computation-mpc/">multiparty computation (MPC)</a> multisig, which means the multisig quorum is coordinated off chain.</strong> Once the necessary threshold signers coordindate and sign off chain, an on chain key can then be signed. There are tradeoffs that come with MPC, mainly revolving around nonce generation that, <strong>if not done properly, can erode the security of a private key</strong>. However, the team at <a href="https://bitcoinops.org/en/newsletters/2023/08/16/?ref=tftc.io" target="_blank" class="external-link">BitGo recently came up with a unique solution</a> to the nonce generation tradeoff by leveraging the data field space in PSBTs to ensure randomness before signing. It will be interesting to see if MPC becomes more popular across the industry. From what I understand, the ability to leverage Schnorr signatures allows for the creation of more secure MPC set ups.</p>
</blockquote>
<h1 id="how-does-it-work" tabindex="-1">How does it work?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://gist.github.com/nickfarrow/4be776782bce0c12cca523cbc203fb9d/" target="_blank" class="external-link">Private Collaborative Custody with FROST</a></p>
<h2 id="enrolling-a-private-collaborative-custodian" tabindex="-1">Enrolling a Private Collaborative Custodian</h2>
<p>Each signer in a FROST multisig controls a point belonging to a joint polynomial at some participant index.</p>
<p>Participants in an existing multisig can collaborate in an enrollment protocol to securely generate a new point on this shared polynomial and verifiably communicate it to a new participant, in this case a collaborative custodian.</p>
<hr />
<h2 id="blind-collaborative-signing" tabindex="-1">Blind Collaborative Signing</h2>
<p>Once the collaborative custodian controls a point belonging to this FROST key, we can now get their help to sign messages.</p>
<p>...</p>
<p>As an overview, we give a 3rd party a secret share belonging to our FROST key. <strong>When we need their help to sign something, we ask them to send us (FROST coordinator) a public nonce, then we create a challenge for them to sign with a blind Schnorr scheme. They sign this challenge, send it back, and we then combine it with the other partial signatures from FROST to form a complete Schnorr signature that is valid under the multisignature's public key.</strong></p>
<p>During this process the collaborative custodian has been unknowing of our public key, and unknowing as to the contents of the challenge which we have requested them to sign. The collaborative signer doesn't even need to know that they are participating in FROST whatsoever.</p>
</blockquote>
<h1 id="more-context" tabindex="-1">More Context</h1>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinops.org/en/newsletters/2023/09/06/#privacy-enhanced-co-signing" target="_blank" class="external-link">Bitcoin Optech Newsletter 267</a><br />
<strong>Privacy enhanced co-signing:</strong> Nick Farrow <a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2023-August/021917.html" target="_blank" class="external-link">posts</a> to the Bitcoin-Dev mailing list about how a <a href="https://bitcoinops.org/en/topics/threshold-signature/" target="_blank" class="external-link">scriptless threshold signature scheme</a> like <a href="https://eprint.iacr.org/2020/852" target="_blank" class="external-link">FROST</a> could improve the privacy of people who use co-signing services. A typical user of a co-signing service has multiple signing keys that are stored separately for security; but, to simplify normal spending, they also allow their outputs to be spent by a combination of some of their keys plus one or more keys held by one or more service providers who only sign after authenticating the user in some way. The user can bypass the service provider if needed, but the service provider makes operations easier in most cases.</p>
<p>With scripted threshold signature schemes like 2-of-3 <code>OP_CHECKMULTISIG</code>, the service’s public key must be associated with the output being spent, so any service will be able to find the transactions it signed by looking at onchain data, allowing it accumulate data about its users. Worse, all currently used protocols we’re aware of directly reveal user transactions to the service provider before signing, allowing the service to refuse to sign certain transactions.</p>
<p>As Farrow describes, <strong>FROST allows hiding the signed transaction from the service at every step of the process, from generation of an output script, to signing, to publication of the fully signed transaction. All the service will know is when it signed and any data the user provided to authenticate themselves with the service.</strong></p>
<p>The idea received some discussion on the mailing list. <a href="https://bitcoinops.org/en/podcast/2023/09/07/#privacy-enhanced-co-signing" target="_blank" class="external-link">🎧</a></p>
</blockquote>
<p><a href="https://x.com/utxoclub/status/1696717492213657775?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-26-frost-1.png" alt="BitDevs-26-frost-1.png" /></a></p>
<p><a href="https://x.com/utxoclub/status/1696458577743897032?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-26-frost-2.png" alt="BitDevs-26-frost-2.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://blindsigs.utxo.club/" target="_blank" class="external-link">Blind Schnorr Signature Interactive Demo</a></li>
<li><a href="https://bitcoinmagazine.com/technical/taproot-and-frost-improve-bitcoin-privacy" target="_blank" class="external-link">Taproot and FROST improve Bitcoin privacy</a></li>
<li><a href="https://stephanlivera.com/episode/476/" target="_blank" class="external-link">Stephan Livera's 476th podcast episode</a></li>
<li><a href="https://eprint.iacr.org/2020/852.pdf" target="_blank" class="external-link">FROST: Flexible Round-Optimized Schnorr Threshold Signatures research paper</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/multi-party-computation-mpc/">Multi-Party Computation (MPC)</a></li>
</ul>
Privacy concerns from Ledger Live and security concerns from Ledger Connect Kit
2023-12-18T01:18:06.975Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/privacy-concerns-from-ledger-live-and-security-concerns-from-ledger-connect-kit/
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<p>It's been a rough month for <a href="https://www.ledger.com/" target="_blank" class="external-link">Ledger</a>:</p>
<ul>
<li><a href="https://www.nobsbitcoin.com/ledger-live-tracks-and-sends-out-all-user-information-by-default/" target="_blank" class="external-link">Someone noticed that Ledger Live sends a ton of user/device data to an outsourced data harvesting service.</a></li>
<li><a href="https://www.ledger.com/blog/a-letter-from-ledger-chairman-ceo-pascal-gauthier-regarding-ledger-connect-kit-exploit" target="_blank" class="external-link">There was an exploit on the Ledger Connect Kit, a Javascript library that implements a button allowing users to connect their Ledger device to third party DApps.</a></li>
</ul>
<h1 id="data-harvesting-in-ledger-live" tabindex="-1">Data Harvesting in Ledger Live</h1>
<p><a href="https://x.com/rektbuildr/status/1732542258698694875?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Ledger-Live-X-1.png" alt="BitDevs-29-Ledger-Live-X-1.png" /></a></p>
<p>From <a href="https://twitter.com/rektbuildr" target="_blank" class="external-link">@rektbuildr</a>'s investigation, it looks like Ledger Live is hitting a third-party data collection endpoint (operated by <a href="https://segment.com/" target="_blank" class="external-link">Twilio Segment</a>) to learn as much as possible about user activity - possibly "everything from screen views, to button clicks, error events, installs, uninstalls, etc. It's basically tracking everything. Anything you do on that app gets tracked".</p>
<blockquote>
<p>[!QUOTE] <a href="https://crypto.bi/forum/threads/ledger-live-data-collection-is-more-than-a-little-concerning.5/" target="_blank" class="external-link">Ledger Live data collection is more than a little concerning | Crypto.bi Forum</a><br />
The main question here is <strong>why must hardware wallet vendors track their users?</strong></p>
<p>We should be able to use hardware wallets without being tracked and monitored</p>
<p>Hardware wallets should allow incognito operation. The wallet manufacturer does not need to receive an alarm every time you use the thing.</p>
<p><strong>Hardware wallet manufacturers seem to be in the data collection business, not hardware wallet business</strong></p>
<p>That explains why Ledger and Trezor analytics code is built into the core of their apps together with its basic functionality like device installation and update routines?</p>
<p>Analytics would then be the business here and selling hardware wallets is secondary.</p>
<p>Kinda like inkjet printers, the real profit is in selling cartridges. They might as well give the printers away.</p>
<p>I have no idea how anyone thinks it's OK for any of these companies to get an alarm every time you click on a button, open the wallet, access a menu, send a transaction, install a new device and so on. This is crazy!</p>
<p>Just so you're a little extra paranoid, if these apps have analytics all over them and you paste your mnemonic in the wrong place, it's gonna leak your mnemonic to an analytics package. Or worse.....it could "accidentally" leak it when pasted in the correct field as well....who knows, it's sending back a tsunami of data. You can't trust it. It has every menu, every text field, everything in the app wired up to view what you're doing.</p>
<p>The thing is sending everything you do to the manufacturer. You just can't trust it. There should be ZERO phoning back in any of these hardware wallet apps. ZERO. It should not be sending anything out, only IN. When you REQUEST a device install, it sends you a firmware, that is all it should do.</p>
<p>Hardware wallet apps should NEVER send anything OUT.</p>
</blockquote>
<p>Unfortunately, Trezor also conducts similar user tracking via Trezor Suite, but it is opt-in, rather than opt-out:</p>
<blockquote>
<p>[!QUOTE] <a href="https://github.com/trezor/trezor-suite/blob/develop/docs/analytics/index.md" target="_blank" class="external-link">Trezor Suite Data Analytics README</a><br />
<strong>Data Analytics</strong></p>
<p><a href="https://github.com/trezor/trezor-suite/blob/develop/docs/analytics/index.md#user-content-fn-1-6dda2c4bc0c9bb92f4f17a1f531a00b2" target="_blank" class="external-link">Anonymous</a> data volunteered by Trezor users directly contributes to improved performance across all the platforms you use Trezor Suite on.</p>
<p>Participation is easy and completely optional. Enable or disable usage data sharing with one click at any time in Trezor Suite Settings. With full control over what you contribute, you can safely take part in making Bitcoin more secure.</p>
<p><strong>TL;DR</strong></p>
<ol>
<li>Data is only collected with explicit permission.</li>
<li>Your sensitive data is not collected.</li>
<li>We use AWS logging for data analytics and Sentry for error tracking.</li>
<li>We store the data concerning errors for the period of 90 days.</li>
<li>Only limited amount of users is able to access the data.</li>
</ol>
</blockquote>
<h1 id="ledger-connect-kit-exploit" tabindex="-1">Ledger Connect Kit Exploit</h1>
<p><a href="https://developers.ledger.com/docs/connectivity/connect-kit" target="_blank" class="external-link">Ledger Connect Kit</a> is a tool that makes it easier for developers to connect DApps to Ledger hardware wallets. These app frontends typically have some sort of a button to connect to the wallet and interact with the smart contract - the Connect Kit is one method of handling that connection.</p>
<blockquote>
<p>[!QUOTE] <a href="https://twitter.com/ledger/status/1735326240658100414" target="_blank" class="external-link">Ledger post with final timeline and customer update</a></p>
<ul>
<li>This morning CET, <strong>a former Ledger Employee fell victim to a phishing attack that gained access to their NPMJS account</strong>.</li>
<li>The attacker <strong>published a malicious version of the Ledger Connect Kit</strong> (affecting versions 1.1.5, 1.1.6, and 1.1.7). The malicious code used a rogue WalletConnect project to reroute funds to a hacker wallet.</li>
<li>Ledger’s technology and security teams were alerted and a fix was deployed within 40 minutes of Ledger becoming aware. The malicious file was live for around 5 hours, however we believe the window where funds were drained was limited to a period of less than two hours.</li>
<li>Ledger coordinated with <a href="https://twitter.com/WalletConnect" target="_blank" class="external-link">@WalletConnect</a> who quickly disabled the the rogue project.</li>
<li>The genuine and verified Ledger Connect Kit version 1.1.8 is now propagating and is safe to use.</li>
<li>For builders who are developing and interacting with the Ledger Connect Kit code: connect-kit development team on the NPM project are now read-only and can’t directly push the NPM package for safety reasons.</li>
<li>We have internally rotated the secrets to publish on Ledger’s GitHub.</li>
<li>Developers, please check again that you’re using the latest version, 1.1.8.</li>
<li>Ledger, along with <a href="https://twitter.com/WalletConnect" target="_blank" class="external-link">@Walletconnect</a> and our partners, have reported the bad actor’s wallet address. The address is now visible on <a href="https://twitter.com/chainalysis" target="_blank" class="external-link">@chainalysis</a>. <a href="https://twitter.com/Tether_to" target="_blank" class="external-link">@Tether_to</a> has frozen the bad actor’s USDT.</li>
<li>We remind you to always Clear Sign with your Ledger. What you see on the Ledger screen is what you actually sign. If you still need to blind sign, use an additional Ledger mint wallet or parse your transaction manually.</li>
<li>We are actively talking with customers whose funds might have been affected, and working proactively to help those individuals at this time.</li>
<li>We are filing a complaint and working with law enforcement on the investigation to find the attacker.</li>
<li>We’re studying the exploit in order to avoid further attacks. We believe the attacker’s address where the funds were drained is here: <code>0x658729879fca881d9526480b82ae00efc54b5c2d</code></li>
</ul>
</blockquote>
<p><a href="https://x.com/lopp/status/1735353894409052227?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Ledger-Connect-Exploit-X-1.png" alt="BitDevs-29-Ledger-Connect-Exploit-X-1.png" /></a></p>
<p><a href="https://x.com/sethforprivacy/status/1735319674303255039?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Ledger-Connect-Exploit-X-2.png" alt="BitDevs-29-Ledger-Connect-Exploit-X-2.png" /></a></p>
<p>In this particular case, Ledger was able to respond quickly to minimize damage. Interestingly, the malicious version that was draining funds added a <a href="https://x.com/LefterisJP/status/1735280230078509201?s=20" target="_blank" class="external-link">class name called <code>DrainerPopup</code></a>, making it fairly obvious to someone watching the code.</p>
<h1 id="takeaways" tabindex="-1">Takeaways</h1>
<p>Historically, Ledger has a <a href="https://cointelegraph.com/news/ledger-data-leak-a-simple-mistake-exposed-270k-crypto-wallet-buyers" target="_blank" class="external-link">bad track record for protecting user data and privacy</a>, and the latest exploit also undermines their credibility as security experts.</p>
<p>If you continue to use a Ledger, at least interact with it via some other wallet software than Ledger Live - e.g., <a href="https://sparrowwallet.com/" target="_blank" class="external-link">Sparrow</a> is a great alternative. Unfortunately, there's still no way to easily update the firmware on a Ledger device without using Ledger Live.</p>
<p>Similarly, if you use a Trezor with Trezor Suite, don't opt in to the data analytics (but you should really just use it with Sparrow instead).</p>
<p>For a bitcoiner wishing to protect their wealth, there are simply better options - take the time to research alternative signing devices (preferably bitcoin-only, like a <a href="https://coldcard.com/" target="_blank" class="external-link">Coldcard</a>) and review <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/">self-custody best practices</a>.</p>
Portal - New hardware wallet from TwentyTwo Devices
2024-03-17T22:10:00.019Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/portal-new-hardware-wallet-from-twenty-two-devices/
<p><a href="https://twenty-two.xyz/" target="_blank" class="external-link">TwentyTwo Devices</a> is a new hardware company founded by <a href="https://twitter.com/afilini" target="_blank" class="external-link">Alekos Filini</a>, who announced preorders for the <a href="https://store.twenty-two.xyz/" target="_blank" class="external-link">Portal</a> (the company's flagship product). Alekos is also a board member of the <a href="https://bitcoindevkit.org/foundation/" target="_blank" class="external-link">Bitcoin Dev Kit Foundation</a>, which is why the Rust-based firmware for the Portal is heavily based on <a href="https://twitter.com/bitcoindevkit" target="_blank" class="external-link">Bitcoin Dev Kit</a>.</p>
<p><a href="https://www.nobsbitcoin.com/portal-by-twentytwo-devices/" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-32-Portal-NoBSBTC.png" alt="BitDevs-32-Portal-NoBSBTC.png" /></a></p>
<p><a href="https://stacker.news/items/464725" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-32-Portal-SN1.png" alt="BitDevs-32-Portal-SN1.png" /></a></p>
<blockquote>
<p>[!QUOTE] <a href="https://twenty-two.xyz/blog/why-you-are-all-wrong/" target="_blank" class="external-link">Why You Are All Wrong | TwentyTwo Devices</a></p>
<h2 id="why-is-it-so-big" tabindex="-1">Why is it so BIG?</h2>
<p><strong>Portal is a hardware wallet designed specifically to be used with mobile wallet apps on smartphones.</strong> It lets people self custody their funds safely by storing the private keys on an isolated device, all without leaving the convenience of using a mobile app on a modern phone.</p>
<p>To safely achieve this, <strong>Portal uses a small display to show the user all the details of the transaction they are creating: the user is required to confirm each output address and amount, and also the amount of fees being paid by the transaction to ensure the wallet isn’t being drained by an attacker.</strong></p>
<p>But in order to perform this check, the user needs to be able to see the display of Portal <em>while</em> holding it up against the back of their phone, so that the device stays powered on and can keep communicating with the smartphone.</p>
<p>This is the reason why the device has such a unique shape: <strong>it’s designed so that the round part (which contains the NFC antenna) can be comfortably held against your phone, while the display and button area sticks out the side so that the user can easily look at the display and press the button.</strong> If we were to shrink it down to, for example, credit card size, only a small part of the display would be visibile, especially on the larger and larger smartphones people are using today.</p>
<h2 id="but-but-but-it-s-not-portable" tabindex="-1">But but but… it’s NOT PORTABLE!</h2>
<p>And yes, I’m sure you can come up with some edge cases for why somebody may want to walk around with such a hardware wallet, like fleeing from a war or smuggling money through customs. <strong>But the vast majority of users will never need that, and if they were to need it we would advise against brining <em>any</em> hardware wallet, no matter the size, with them.</strong> There are better, more private ways out there.</p>
<p>We believe this misconception comes from the fact that Portal is “mobile-native”. People naturally see smartphones as mostly portable devices. And while that’s definitely true, people also use their smartphones within the comfort of their homes or offices. Heck, <strong>people nowadays may easily be spending <em>more</em> time looking at their smartphones at home rather than outside</strong>. And the reason they do that is that it’s just so much more convenient! It’s much easier to pull your phone out and check Instagram quickly, or watch a YouTube video, rather than sitting at a desk, powering on your laptop, and so on.</p>
<p>And this is exactly why we are making Portal: <strong>it’s not a portable device, but it’s designed so that you can very quickly use it just with a smartphone. You don’t need cables, you don’t need to recharge any batteries: Portal is always ready.</strong> When that time comes that you have to make an on-chain transaction, you can just take it from your desk drawer, tap it to your phone and be done with it!</p>
</blockquote>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-32-Portal-UX.png" alt="BitDevs-32-Portal-UX.png" /></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/portal-by-twentytwo-devices/" target="_blank" class="external-link">Portal: Mobile-native Hardware Wallet by TwentyTwo Devices</a></li>
<li><a href="https://x.com/afilini/status/1766085500106920268?s=20" target="_blank" class="external-link">Thread from Alekos Filini on X</a></li>
<li><a href="https://stacker.news/items/464725" target="_blank" class="external-link">Alekos Filini AMA \ stacker news ~bitcoin</a></li>
</ul>
Peerswaps - A Lightning channel rebalancing mechanism
2023-12-17T07:38:26.441Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/peerswaps-a-lightning-channel-rebalancing-mechanism/
<h1 id="what-is-it" tabindex="-1">What is it?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://github.com/ElementsProject/peerswap" target="_blank" class="external-link">GitHub - ElementsProject/peerswap</a><br />
PeerSwap enables Lightning Network nodes to balance their channels by facilitating atomic swaps with direct peers. PeerSwap enhances decentralization of the Lightning Network by enabling all nodes to be their own swap provider. No centralized coordinator, no 3rd party rent collector, and lowest cost channel balancing means small nodes can better compete with large nodes.</p>
</blockquote>
<h1 id="how-does-it-work" tabindex="-1">How does it work?</h1>
<p><a href="https://strike.me/blog/peerswaps/" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Peerswap-Diagram.png" alt="BitDevs-29-Peerswap-Diagram.png" /></a></p>
<blockquote>
<p>[!QUOTE] <a href="https://strike.me/blog/peerswaps/" target="_blank" class="external-link">Peerswaps | Strike blog</a><br />
<strong>Rebalancing Use Bitcoin (BTC) or Liquid Bitcoin (L-BTC)</strong></p>
<p>Peerswaps supports swapping using both the Bitcoin base chain, and the <a href="https://liquid.net/" target="_blank" class="external-link">Liquid</a> Bitcoin federated sidechain. Each has their pros and cons, but for the purposes of rebalancing channels, the Liquid Network has a distinct advantage in two important areas - speed, and cost.</p>
<p><strong>Speed</strong></p>
<p>Blocks on the Liquid network are produced every minute and only 2 confirmations are required to complete a peerswap. So it takes ~2+ minutes to finalize a peerswap.</p>
<p>On the Bitcoin network blocks are produced on average every 10 minutes and it will take 3 confirmations to complete a peerswap. So it takes ~30+ minutes to finalize a peerswap.</p>
<p><strong>Cost</strong></p>
<p>The average transaction fee on the Liquid network is currently 0.1 sat/vbyte to get into the next block (although this may change over time). Given an average transaction size of ~2000 vbytes it would cost you about 200 sats to perform a swap. That is about $0.025 by today's exchange rates.</p>
<p>On the Bitcoin base chain, fees are variable but generally much higher. At the time of writing, it will cost about 50 sat/vbyte to get into the next block. Given an average transaction size of ~300 vbytes it would cost you about 12,000 sats to perform a swap. That is about $5.62 by today's exchange rates. In other words, about 225 times more expensive than L-BTC, and a material consideration if you are a Lightning routing node operator or are running a business in which channels need to be regularly rebalanced.</p>
<p><strong>Other Considerations</strong></p>
<p>Of course, cost and speed aren’t the only considerations. To use Peerswaps you will also have some additional overhead.</p>
<p>Running peerswaps itself is pretty straightforward. It’s only acting as a coordinator so it doesn’t directly hold funds, although it does need access to your nodes, and it does need to maintain state so you will need to ensure you have robust secrets management and backup solutions in place.</p>
<p>If you want to take advantage of Liquid you also need to run the Elements daemon where there is more to consider, as the Elements wallet will be holding an L-BTC balance. And there is also the different <a href="https://blog.liquid.net/the-truth-about-liquid/" target="_blank" class="external-link">trust model</a> of the Liquid federation itself to consider.</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.peerswap.dev/" target="_blank" class="external-link">PeerSwap - P2P BTC LN Balancing Protocol</a></li>
<li><a href="https://github.com/ElementsProject/peerswap" target="_blank" class="external-link">GitHub - ElementsProject/peerswap</a></li>
<li><a href="https://strike.me/blog/peerswaps/" target="_blank" class="external-link">Peerswaps | Strike blog</a></li>
</ul>
OP_CTV
2023-05-30T01:56:50.971Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/op-ctv/
<p><a href="https://github.com/bitcoin/bips/blob/master/bip-0119.mediawiki" target="_blank" class="external-link">BIP-119</a> (OP_CHECKTEMPLATEVERIFY) was pioneered by <a href="https://rubin.io/" target="_blank" class="external-link">Jeremy Rubin</a>.</p>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinops.org/en/topics/op_checktemplateverify/" target="_blank" class="external-link">Bitcoin Optech</a></p>
<ul>
<li><strong>OP_CHECKTEMPLATEVERIFY (CTV)</strong> is a proposed new opcode that takes a commitment hash as a parameter and requires any transaction executing the opcode include a set of outputs that match the commitment. This makes it possible to create an address that specifies how any funds received to that address may be spent—a design known in Bitcoin as a <em>covenant</em>.</li>
</ul>
</blockquote>
<p>Like most proposed bitcoin soft forks, OP_CTV has been met with extreme skepticism, but the strongest argument against it has been that there simply weren't enough obvious benefits relative to potential risks. Many <a href="https://bitcoincovenants.com/" target="_blank" class="external-link">covenant proposals</a> have circulated over the years, all with varying tradeoffs and degrees of interest/support. Technically, OP_CTV is likely one of the most well-studied and least risky of those alternatives to enable general covenant functionality.</p>
<p>Interest in OP_CTV has renewed recently as more compelling use cases have emerged, particularly around scaling and privacy improvements. It could generally enable more sophisticated smart contracts on bitcoin (e.g., "Merkleize All The Things"/<a href="https://merkle.fun/" target="_blank" class="external-link">MATT contracts</a>).</p>
<p>By using OP_CTV commitments to form channel-like network constructions, for example, additional <a href="https://utxos.org/uses/scaling/" target="_blank" class="external-link">scaling</a> solutions like <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/enigma/">Enigma</a>, <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ark/">Ark</a>, and <a href="https://www.nobsbitcoin.com/darkpool-tarpit/" target="_blank" class="external-link">Darkpool</a> are enabled.</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.nobsbitcoin.com/a-collection-of-resources-related-to-covenants/" target="_blank" class="external-link">A Collection of Resources Related to Covenants</a></p>
<h2 id="ctv-activation" tabindex="-1">CTV Activation</h2>
<h3 id="pros" tabindex="-1">Pros</h3>
<ul>
<li>"Covenants have been discussed for more than 6 years."</li>
<li>"There is strong consensus that Bitcoin should support covenants."</li>
<li>"CTV is the most conservative approach to enable covenants."</li>
<li>"The BIP was finalized over two years ago."</li>
<li>"The code is well tested and reviewed."</li>
<li>"People are testing vaults and other covenants live on the CTV signet."</li>
<li>"There are no objections against CTV on the code level."</li>
<li>"For 5 months there has been a 5.5 BTC bug bounty program funded by community members."</li>
<li>"Many community members support the activation of CTV."</li>
</ul>
<h3 id="cons" tabindex="-1">Cons</h3>
<ul>
<li>"The strongest technical argument against bip119 is: since we have to do some soft fork for covenants let’s activate full-featured covenants right away instead of causing multiple forks with overlapping features."</li>
<li>"The most likely alternative seems to be TXHASH + CSFS. It combines Eltoo fans with ctv fans in a way that makes technical sense, it satisfies those who want more complex covenants going forward, the conversational well around it is less poisoned. The main downside is that it uses a few more bytes. The work that needs to be done to get it in safely can be overcome with effort."</li>
<li>"However, nobody is working on it. There's no BIP yet. No review. Not even remotely a PR."</li>
<li>"The number of bitfields in TXHASH is high, so the limiting factor would be writing a large number of both tests and arguing that any possible permutation of those bitfields does not lead to some resource exhaustion attack on some inputs."</li>
<li>"It would take years to activate it."</li>
</ul>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://utxos.org/" target="_blank" class="external-link">utxos.org</a></li>
<li><a href="https://www.nobsbitcoin.com/a-collection-of-resources-related-to-covenants/" target="_blank" class="external-link">A Collection of Resources Related to Covenants</a></li>
<li><a href="https://unchained.com/blog/covenants-ctv-bitcoin-custody/" target="_blank" class="external-link">Covenants & CTV: What they are, how bitcoin custody might benefit, and risks to consider | Unchained</a></li>
<li><a href="https://blog.bitmex.com/op_ctv-summer-softfork-shenanigans/" target="_blank" class="external-link">OP_CTV - Summer Softfork Shenanigans | BitMEX</a></li>
<li><a href="https://bitcoinmagazine.com/tags/op-ctv" target="_blank" class="external-link">Bitcoin Magazine OP_CTV articles</a></li>
<li><a href="https://zensored.substack.com/p/what-does-op-ctv-mean-for-me" target="_blank" class="external-link">What does OP_CTV mean for me?</a></li>
</ul>
<p><a href="https://twitter.com/giacomozucco/status/1661716843512381447" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/@giacomozucco_Tweet_CTV.png" alt="@giacomozucco_Tweet_CTV.png" /></a></p>
<p><a href="https://github.com/JeremyRubin/utxos.org/issues/28" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitcoinErrorLog_CTV_Dissent.png" alt="BitcoinErrorLog_CTV_Dissent.png" /></a></p>
Nostr Wallet Connect - A Bitcoin Application Collaboration Layer
2024-02-19T23:34:12.665Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/nostr-wallet-connect-a-bitcoin-application-collaboration-layer/
<h1 id="what-is-it" tabindex="-1">What is it?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinmagazine.com/technical/nostr-wallet-connect-a-bitcoin-application-collaboration-layer" target="_blank" class="external-link">Nostr Wallet Connect: A Bitcoin Application Collaboration Layer</a><br />
The team behind Amethyst, a Nostr client, and Alby, the web based Lightning wallet, <strong>created NWC in order to solve the problem of Nostr users wishing to integrate Lightning into their Nostr experience without having to use a special purpose wallet</strong>. The application/protocol is based on Nostr’s identity architecture where every message (event) sent over Nostr is signed by a cryptographic keypair functioning as your identity on Nostr. This allows an application to simply generate a Nostr keypair, and from that alone have a cryptographic authentication mechanism to use in communicating with an external Bitcoin wallet to fulfill the functionality of the app.</p>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-NWC-Diagram.png" alt="BitDevs-31-NWC-Diagram.png" /></p>
<p><strong>Using the keypair to register the external application with the Lightning wallet, the application can now ping your wallet to initiate a payment.</strong> The specification currently supports paying BOLT 11 invoices, making keysend payments (invoiceless payments made to a node’s public key), paying multiple invoices simultaneously, generating an invoice to present to someone else to pay you, and a few other functionalities to allow payment history and wallet balance queries from the external application.</p>
<p><strong>All of this is coordinated over Nostr</strong>, allowing for a very redundant means of communication not dependent on a single centralized messaging mechanism or the user needing to depend on complicated software such as Tor or other protocols to facilitate the network connection between an application and wallet software or infrastructure running on their home network. Nostr also supports encrypted direct messages, meaning the communication between the wallet and the application is entirely private, revealing no details about payments being coordinated to the Nostr relays used to communicate.</p>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://github.com/getAlby/nips/blob/master/47.md#theory-of-operation" target="_blank" class="external-link">NIP-47: Nostr Wallet Connect</a></p>
<h2 id="theory-of-operation" tabindex="-1">Theory of Operation</h2>
<ol>
<li><strong>Users</strong> who which to use this NIP to send lightning payments to other nostr users must first acquire a special "connection" URI from their NIP-47 compliant wallet application. The wallet application may provide this URI using a QR screen, or a pasteable string, or some other means.</li>
<li>The <strong>user</strong> should then copy this URI into their <strong>client(s)</strong> by pasting, or scanning the QR, etc. The <strong>client(s)</strong> should save this URI and use it later whenever the <strong>user</strong> makes a payment. The <strong>client</strong> should then request an <code>info</code> (13194) event from the relay(s) specified in the URI. The <strong>wallet service</strong> will have sent that event to those relays earlier, and the relays will hold it as a replaceable event.</li>
<li>When the <strong>user</strong> initiates a payment their nostr <strong>client</strong> create a <code>pay_invoice</code> request, encrypts it using a token from the URI, and sends it (kind 23194) to the relay(s) specified in the connection URI. The <strong>wallet service</strong> will be listening on those relays and will decrypt the request and then contact the <strong>user's</strong> wallet application to send the payment. The <strong>wallet service</strong> will know how to talk to the wallet application because the connection URI specified relay(s) that have access to the wallet app API.</li>
<li>Once the payment is complete the <strong>wallet service</strong> will send an encrypted <code>response</code> (kind 23195) to the <strong>user</strong> over the relay(s) in the URI.</li>
</ol>
</blockquote>
<h1 id="why-is-it-cool" tabindex="-1">Why is it cool?</h1>
<p>Nostr Wallet Connect is a fully open source protocol that makes it much easier for developers to integrate Lightning payments into their applications without having to understand the intricate and complicated details typically associated with such integrations. It relies on the (semi-)decentralized network of nostr relays to handle all of the communication between an application and a user's wallet.</p>
<p>Although NWC focuses on Lightning wallet connections currently, its scope could easily be expanded to handle many other types of communication between multiple parties in any interactive protocol. For example, key holders in a multisig quorum could eventually pass around transaction data and PSBTs via NWC when performing signing ceremonies, or Discreet Log Contract (DLC) participants could receive signatures from an oracle directly over NWC in a consistent/standardized way. Ultimately, NWC is a mechanism that could replace many centralized coordinators by using nostr as a distributed communication layer instead of some centralized platform.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://nwc.getalby.com/about" target="_blank" class="external-link">Alby Nostr Wallet Connect FAQ</a></li>
<li><a href="https://blog.getalby.com/introducing-nostr-wallet-connect/" target="_blank" class="external-link">Introducing Nostr Wallet Connect</a></li>
</ul>
Nostr Data Vending Machine - A Marketplace for Data Processing
2023-08-01T00:52:10.627Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/nostr-data-vending-machine-a-marketplace-for-data-processing/
<blockquote>
<p>[!QUOTE] <a href="https://github.com/nostr-protocol/nips/blob/67e950a2009e81df1b8c91b0a2ade0596e83f168/vending-machine.md" target="_blank" class="external-link">Nostr Data Vending Machine NIP</a> (nostr improvement proposal)</p>
<h1 id="rationale" tabindex="-1">Rationale</h1>
<p>Nostr can act as a marketplace for data processing, where users request jobs to be processed in certain ways (e.g. "speech-to-text", "summarization"), but where they don't necessarily care about "who" processes the data.</p>
<p>This NIP is not to be confused with a 1:1 marketplace; but rather, a flow where user announces a desired output, willigness to pay, and service providers compete to fulfill the job requirement in the best way possible.</p>
<p>There are <strong>two actors</strong> to the workflow described in this NIP:</p>
<ul>
<li>Customers (npubs who request a job)</li>
<li>Service providers (npubs who fulfill jobs)</li>
</ul>
<h1 id="user-flow" tabindex="-1">User flow</h1>
<ul>
<li>User publishes a job request <code>{ "kind": 68001, "tags": [ [ "j", "speech-to-text" ], ... ] }</code></li>
<li>Service providers listen for the type of jobs they can perform <code>{"kinds":[68001], "#j": ["speech-to-text", "image-generation", ... ]}</code></li>
<li>When a job comes in, the service providers who opt to attempt to fulfill the request begin processing it</li>
<li>Upon completion, the service provider publishes the result of the job with a <code>job-result</code> event.</li>
<li>Upon acceptance, the user zaps the service provider, tagging the job request</li>
</ul>
</blockquote>
<p>The <a href="https://github.com/nostr-protocol/nips/blob/67e950a2009e81df1b8c91b0a2ade0596e83f168/vending-machine.md" target="_blank" class="external-link">Nostr Data Vending Machine (DVM) NIP</a> was created by <a href="https://primal.net/p/npub1l2vyh47mk2p0qlsku7hg0vn29faehy9hy34ygaclpn66ukqp3afqutajft" target="_blank" class="external-link">PABLOF7z</a>. He has since <a href="https://github.com/pablof7z/nostr-data-vending-machine" target="_blank" class="external-link">open sourced an implementation of the NIP</a>.</p>
<p>The general idea is that nostr can be used as an open communication protocol for broadcasting and coordinating data processing job requests. By following the standard defined in the DVM NIP, automated AI agents (and humans) can watch nostr relays for job requests, complete the task, broadcast the result, and get <a href="https://nostr.how/en/zaps" target="_blank" class="external-link">zapped as payment</a> for their work.</p>
<p>You could imagine competitive markets develop where AI agents are creating and completing various DVM jobs by autonomously coordinating with each other over nostr. As they complete those tasks, agents will probably be utilizing large sets of <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-labs-releases-developer-tools-for-powering-ap-is-and-large-language-models/#l402-ai">L402-enabled public APIs</a> to collect and process data at each step.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/data-vending-machine-implementation-open-sourced/" target="_blank" class="external-link">Nostr Data Vending Machine: A Marketplace for Data Processing</a></li>
<li><a href="https://youtu.be/OJx6ExVTS7c" target="_blank" class="external-link">Highlighting from an AI through nostr - YouTube</a></li>
<li><a href="https://www.youtube.com/watch?v=dAuLnNxU0Yg" target="_blank" class="external-link">AI4ALL: Nostr Data Vending Machine Clients and Services Tutorial - YouTube</a></li>
<li><a href="https://replit.com/@kody/Tutorial-for-AI-Nostr-DVM-Client-and-Service-Bounties#.tutorial/00-intro.md" target="_blank" class="external-link">Tutorial for AI Nostr DVM Client and Service Bounties - Replit</a></li>
</ul>
Newsworthy Custodial Risk in June 2023
2023-07-08T23:18:21.253Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/newsworthy-custodial-risk-in-june-2023/
<h1 id="binance" tabindex="-1">Binance</h1>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/Binance%20Unlicensed%20Securities%20Bro.png" alt="Binance Unlicensed Securities Bro.png" /></p>
<blockquote>
<p>[!QUOTE] <a href="https://www.sec.gov/news/press-release/2023-101" target="_blank" class="external-link">SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao</a></p>
<ul>
<li>The Securities and Exchange Commission today [<em>6/5/2023</em>] charged Binance Holdings Ltd. (“Binance”), which operates the largest crypto asset trading platform in the world, <a href="http://binance.com/" target="_blank" class="external-link">Binance.com</a>; U.S.-based affiliate, BAM Trading Services Inc. (“BAM Trading”), which, together with Binance, operates the crypto asset trading platform, <a href="http://binance.us/" target="_blank" class="external-link">Binance.US</a>; and their founder, Changpeng Zhao, with a variety of securities law violations.</li>
<li>Among other things, the SEC alleges that, while Zhao and Binance publicly claimed that U.S. customers were restricted from transacting on <a href="http://binance.com/" target="_blank" class="external-link">Binance.com</a>, Zhao and Binance in reality subverted their own controls to secretly allow high-value U.S. customers to continue trading on the <a href="http://binance.com/" target="_blank" class="external-link">Binance.com</a> platform.</li>
<li>Further, the SEC alleges that, while Zhao and Binance publicly claimed that <a href="http://binance.us/" target="_blank" class="external-link">Binance.US</a> was created as a separate, independent trading platform for U.S. investors, Zhao and Binance secretly controlled the <a href="http://binance.us/" target="_blank" class="external-link">Binance.US</a> platform’s operations behind the scenes.</li>
<li>“<strong>Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law</strong>,” said SEC Chair Gary Gensler. “As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied. They attempted to evade U.S. securities laws by announcing sham controls that they disregarded behind the scenes so that they could keep high-value U.S. customers on their platforms. The public should beware of investing any of their hard-earned assets with or on these unlawful platforms.”</li>
<li>“<strong>We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk – all in an effort to maximize their own profits</strong>,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “By engaging in multiple unregistered offerings and also failing to register while at the same time combining the functions of exchanges, brokers, dealers, and clearing agencies, the Binance platforms under Zhao’s control imposed outsized risks and conflicts of interest on investors. Those risks and conflicts are only heightened by the Binance platforms’ lack of transparency, reliance on related-party transactions, and lies about controls to prevent manipulative trading. Despite their years-long efforts to not ‘be held accountable,’ today’s complaint begins the process of doing so.”</li>
<li>The SEC’s complaint alleges that (1) with respect to <a href="http://binance.com/" target="_blank" class="external-link">Binance.com</a>, Binance should have registered as an exchange, broker-dealer, and clearing agency; (2) with respect to <a href="http://binance.us/" target="_blank" class="external-link">Binance.US</a>, Binance and BAM Trading should have registered as an exchange and as clearing agencies; and (3) BAM Trading should have registered as a broker-dealer.</li>
<li>The SEC charged Binance for the unregistered offers and sales of BNB, BUSD, and crypto-lending products known as “Simple Earn” and “BNB Vault.” Further, the SEC charged BAM Trading with the unregistered offer and sale of <a href="http://binance.us/" target="_blank" class="external-link">Binance.US</a>’ staking-as-a-service program. The complaint also notes that Binance secretly has control over assets staked by U.S. customers in BAM’s staking program.</li>
</ul>
</blockquote>
<p>Binance also issued a <a href="https://storage.courtlistener.com/recap/gov.uscourts.dcd.256060/gov.uscourts.dcd.256060.43.0_1.pdf" target="_blank" class="external-link">formal rebuttal</a> to the SEC's allegations, but the <a href="https://twitter.com/Croesus_BTC/status/1668393222459072519" target="_blank" class="external-link">key arguments seemed to offer a weak defense</a> (although <a href="https://twitter.com/JohnReedStark/status/1668997973307453440" target="_blank" class="external-link">others disagree</a>).</p>
<h1 id="coinbase" tabindex="-1">Coinbase</h1>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/SEC%20Sues%20Coinbase%20June%202023.png" alt="SEC Sues Coinbase June 2023.png" /></p>
<blockquote>
<p>[!QUOTE] <a href="https://www.sec.gov/news/press-release/2023-102" target="_blank" class="external-link">SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency</a></p>
<ul>
<li>The Securities and Exchange Commission today [<em>6/6/23</em>] charged Coinbase, Inc. with operating an unregistered national securities exchange, broker, and clearing agency, as well as failing to register the offer and sale of its crypto asset staking-as-a-service program.</li>
<li>According to the SEC’s complaint, <strong>since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities.</strong></li>
<li>The SEC alleges that Coinbase intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the Commission as required by law.</li>
<li>As alleged in the SEC’s complaint, Coinbase’s failure to register has deprived investors of significant protections, including inspection by the SEC, recordkeeping requirements, and safeguards against conflicts of interest, among others.</li>
<li>The SEC alleges that, since 2019, Coinbase has been engaging in an unregistered securities offering through its staking-as-a-service program, which allows customers to earn profits from the “proof of stake” mechanisms of certain blockchains and Coinbase’s efforts.</li>
<li>“We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler. “In other parts of our securities markets, these functions are separate. Coinbase’s alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC. Further, as we allege, Coinbase never registered its staking-as-a-service program as required by the securities laws, again depriving investors of critical disclosure and other protections.”</li>
<li>"<strong>You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great</strong>,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. "As alleged in our complaint, <strong>Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them.</strong> While Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled. Today’s action seeks to hold Coinbase accountable for its choices.”</li>
</ul>
</blockquote>
<p>Coinbase CEO <a href="https://youtu.be/ZjLGyWsgbTA" target="_blank" class="external-link">Brian Armstrong also sat down for an interview with The Wall Street Journal</a> to discuss these crypto regulatory challenges.</p>
<h1 id="prime-trust" tabindex="-1">Prime Trust</h1>
<p>Unlike Binance and Coinbase, Prime Trust's latest struggles seem to be a result of market forces, not regulatory action. In early June 2023, <a href="https://www.nobsbitcoin.com/prime-trust-may-be-facing-bankruptcy/" target="_blank" class="external-link">rumors began circulating that Prime Trust was on the verge of bankruptcy</a>, and several prominent Bitcoiners once again began urging others to move their Bitcoin to self-custody. A couple days later, <a href="https://www.nobsbitcoin.com/bitgo-signs-letter-of-intent-to-acquire-prime-trust/" target="_blank" class="external-link">BitGo announced signing a <strong>non-binding</strong> letter of intent to acquire 100% of the equity of Prime Trust's parent company</a>. Near the end of June, <a href="https://www.nobsbitcoin.com/bitgo-terminates-acquisition-of-prime-trust/" target="_blank" class="external-link">BitGo terminated their agreement to acquire Prime Trust</a>, resulting in suspended deposits/withdrawals of assets on the platform.</p>
<p><a href="https://www.coindesk.com/business/2023/06/14/prime-trust-unit-banq-files-for-bankruptcy/" target="_blank" class="external-link">Banq, a subsidiary of Prime Trust, also recently filed for bankruptcy</a>, citing ~$17.72 million in assets against ~$5.4 million in liabilities. The filing also claims that $17.5 million in assets were taken by former executives in an “unauthorized transfer” of trade secrets and proprietary information/technology to a Fortress subsidiary. Fortress is a competing custody firm founded by the same original founder of Prime Trust.</p>
<p>Red flags had already become apparent earlier in the year when Prime Trust laid off a third of its staff, ceased operations in Texas, and changed CEOs. Many Bitcoin and crypto companies have used Prime Trust as their custodian at some point, although some had already transitioned to other qualified custodians before the news broke (e.g., Swan Bitcoin and Strike). Still, the full impact of this potential bankruptcy is yet to be seen, and it is unclear how many custodial services might be affected.</p>
<h1 id="key-takeaways" tabindex="-1">Key Takeaways</h1>
<p>Binance, Coinbase, and Prime Trust aren't the only exchanges feeling regulatory/market pressure (partially as a result of their altcoin offerings):</p>
<ul>
<li><a href="https://blockworks.co/news/crypto-com-suspending-us-institutional-exchange" target="_blank" class="external-link">Crypto.com is shutting down it's institutional exchange service for US customers, citing lack of demand.</a></li>
<li><a href="https://robinhood.com/us/en/support/articles/cardano-polygon-solana-update/" target="_blank" class="external-link">Robinhood announced they are ending support for Cardano (ADA), Polygon (MATIC), and Solana (SOL) at the end of the month.</a></li>
</ul>
<p>The point is that <strong>any custodian is a central point of failure</strong>, and regulatory/market conditions can turn sour at any moment. Offering altcoins makes these custodial services particularly vulnerable (as Bitcoiners have warned for years), but the custodial risk still exists even for Bitcoin-only services.</p>
<p>Custodial systems have their benefits, but it's important to <strong>routinely reassess your custodial risk exposure and always have an exit strategy</strong> in case of the unexpected.</p>
<p>Self-custody, or holding your own private keys, is the most secure way to own and manage your bitcoin. By keeping your keys in your own possession, you eliminate the risk of a third party losing or confiscating your funds. <strong>If you control your keys, you don't have to stress when this type of news comes out because your money is safe either way.</strong></p>
<blockquote>
<p>[!TIP]</p>
<ul>
<li>Check out the <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/">Self-Custody Workshop</a> we hosted in early 2023 for a large list of reference material about how to take control of your own private keys and follow custody best practices (including complete guides for setting up a Ledger, Trezor or ColdCard from scratch).</li>
</ul>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://youtu.be/CO7BZLamo98" target="_blank" class="external-link">Onramp Bitcoin's The Last Trade E003: The SEC Crackdown and Why Bitcoin-Only</a></li>
<li><a href="https://www.nobsbitcoin.com/binance-us-to-be-cut-off-from-us-banking/" target="_blank" class="external-link">Binance.US To Be Cut Off From The Banking System, Crypto.com Stops US Institutional Exchange</a></li>
<li><a href="https://www.coindesk.com/policy/2023/06/13/binance-goes-to-court-against-the-sec/" target="_blank" class="external-link">Crypto Exchange Binance Goes to Court Against the SEC</a></li>
<li><a href="https://twitter.com/TheBTCTherapist/status/1667558973422092290?s=20" target="_blank" class="external-link">Twitter thread about the Howey Test and why it doesn't apply to Bitcoin</a></li>
</ul>
Multi-Party Computation (MPC)
2023-09-18T07:08:37.002Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/multi-party-computation-mpc/
<h1 id="what-is-multi-party-computation-mpc" tabindex="-1">What is Multi-Party Computation (MPC)?</h1>
<p><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/multi-party-computation-mpc/">Multi-Party Computation (MPC)</a> is a <strong>methodology of separating private keys into multiple parts</strong>. It's similar to Shamir's Secret Sharing (SSS) but in reverse - in SSS, a private key is generated and then split into distributable shards, but in MPC, shards are defined first and come together later to produce a private key signature. A benefit of both SSS and MPC is that they can't be identified on-chain - to observers, it just looks like a single signature.</p>
<p>MPC is often described as an alternative to standard multisignature. Although similar, they approach the challenge of signature aggregation differently:</p>
<blockquote>
<p>[!QUOTE] <a href="https://blog.bitgo.com/multi-sig-vs-mpc-which-is-more-secure-699ecefc8430" target="_blank" class="external-link">Multi-Sig vs MPC: Which is more secure? | BitGo Blog</a></p>
<h2 id="comparison-to-multi-signature" tabindex="-1">Comparison to Multi-signature</h2>
<p>From a functional point of view, multi-signature wallets, which use M-of-N keys per wallet, are similar to MPC based wallets, which use M-of-N parts of a key for a single signature wallet. The difference is that a multi-signature wallet will make use of distinct signatures generated by distinct private keys to secure the wallet, while MPC uses only creates a single signature regardless of the number of private key parts that participated.</p>
</blockquote>
<p>MPC itself is a general methodology/framework, and many <a href="https://en.wikipedia.org/wiki/Secure_multi-party_computation#Protocols" target="_blank" class="external-link">different protocol implementations</a> exist.</p>
<h1 id="how-does-mpc-work" tabindex="-1">How does MPC work?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://www.fireblocks.com/blog/mpc-vs-multi-sig/" target="_blank" class="external-link">MPC vs. Multi-sig</a><br />
MPC removes the concept of a single private key; such a key is never gathered as a whole, neither during the first creation of the <a href="https://www.fireblocks.com/platforms/mpc-wallet/" target="_blank" class="external-link">MPC wallet</a> nor during the actual signature. MPC follows a set of steps to guarantee that there is never a single point of compromise of the private key:</p>
<ol>
<li>Individual secrets are randomized by each of the several (always more than 3) endpoints – either servers or mobile devices. Those secrets are never shared with each other.</li>
<li>The individual endpoints engage in a decentralized wallet creation protocol in which they compute the public key (wallet address) that corresponds to the set of individual private shares.</li>
<li>When a signature on a blockchain transaction is requested, a quorum (at least 3) of endpoints engage in a distributed signature process where each one of the endpoints individually validates the transaction and policy and signs the transaction.</li>
</ol>
<p>In a similar fashion to multi-sig, the <strong>MPC private key protection layer removes the single point of compromise from both external hackers and insiders – as the private key is never concentrated on a single device at any point in time.</strong></p>
</blockquote>
<h1 id="tradeoffs-of-mpc-vs-multisignature" tabindex="-1">Tradeoffs of MPC vs Multisignature</h1>
<p>MPC attempts to address 2 main challenges inherent to multisignature:</p>
<ol>
<li>
<p><strong>Multisig is not protocol agnostic</strong><br />
Various cryptocurrency protocols support multisignature in some form, but it generally must be implemented in a way that is protocol-specific. This means that supporting multisignature across different coins usually requires maintaining several different implementations - and many coins don't support multisignature at all.</p>
</li>
<li>
<p><strong>Multisig can be operationally inflexible</strong><br />
Multisignature wallets are preconfigured to work with a predefined set of signers, which limits the ability to augment those key quorums as operational dynamics change - e.g., adding/revoking key shares, changing signature thresholds, etc. To make these changes in a multisignature setup, a new wallet needs to be created according to those parameters, and funds must be swept to this new wallet. This can present challenges in a growing business with constantly evolving constraints.</p>
</li>
</ol>
<p>In contrast, <strong>native multisignature enforces security at the protocol level, which reduces the attack surface and implementation complexity</strong> (assuming you don't try to support many different multisignature implementations across different coins). For platforms/apps where multiple digital assets are being supported, MPC is likely the better choice - it presents less engineering complexity with reasonable security. However, for bitcoin-only businesses, native bitcoin multisignature provides a better security profile, assuming operational challenges can be appropriately managed at the business level.</p>
<blockquote>
<p>[!QUOTE] <a href="https://blog.bitgo.com/multi-sig-vs-mpc-which-is-more-secure-699ecefc8430" target="_blank" class="external-link">Multi-Sig vs MPC: Which is more secure? | BitGo Blog</a></p>
<h3 id="signature-accountability" tabindex="-1">Signature Accountability</h3>
<p>MPC based wallets introduce a significant problem not present with multi-signature wallets: accountability. With multi-signature wallets, it is always explicit which private keys are used to sign a transaction. This is important because individual private keys are often assigned to specific individuals and understanding who participated in signing a transaction is critical. However, <strong>with MPC based signatures, it is impossible to distinguish which of the key parts were used to sign the transaction</strong>. Once the MPC is complete — all signatures look identical.</p>
<p>Accountability may not sound like a huge drawback, but it is vital in monetary systems, especially when considering the differences in types of people and storage that are typically used for the independent parts of the keys:</p>
<ul>
<li><strong>People</strong>
<ul>
<li>Key material may be stored by different people. If key material is stored by executives at a company (the CEO, CFO, CSO, etc), and 2 of them collude on an inside job, how will investigators know who perpetrated the crime? How would the innocent executives defend themselves when questioned about who signed the transaction?</li>
</ul>
</li>
<li><strong>Geography</strong>
<ul>
<li>Key material may be stored at separate locations. If 3 private keys are required from storage in 5 locations, a critical part of forensics would be to know which of the locations had participated in the transaction.</li>
</ul>
</li>
<li><strong>Multi-institutional Security</strong>
<ul>
<li>Key material may be stored at separate companies. A common practice today is to provision backup keys with independent parties at independent companies. When the backup key can be specifically identified, as with multi-signature security, owners of funds are safe from theft by the backup holder. However, when accountability is eliminated with MPC, backup holders will be unwilling to hold backup keys, as it would be impossible to distinguish if the backup key holder had participated in a fraudulent transaction.</li>
</ul>
</li>
</ul>
<h3 id="peer-review" tabindex="-1">Peer Review</h3>
<p>Many of today’s MPC implementers are using <strong>proprietary implementations and methods with limited or no public review</strong>. As <a href="https://www.schneier.com/blog/archives/2011/04/schneiers_law.html" target="_blank" class="external-link">Schneier on Security</a> would say, “<em>Anyone, from the most clueless amateur to the best cryptographer, can create an algorithm that he himself can’t break.</em>” Unfortunately, many cryptographic algorithms are never mathematically proven to work — rather, cryptographers rely on peer review and sufficient review time (measured in years or decades) before accepting an algorithm as trusted and secure. Because ECDSA MPC is so new, vendors are reluctant to share their algorithms, source code, and implementation details. Many patent applications have already been submitted by current implementations that might further restrict use of these tools. <strong>Lack of transparency and attempts to restrict access to these algorithms makes it impossible to verify correctness or security or predict possible licensing costs</strong>.</p>
<p>Multi-signature technology, by contrast, is tried-and-true; it utilizes well known, heavily scrutinized algorithms with multiple implementations. Multi-signature based wallets take on no additional cryptographic risk — they use the simple cryptographic algorithms that are the most heavily vetted and understood in practice.</p>
<h3 id="lack-of-hardware-security-module-hsm-support" tabindex="-1">Lack of Hardware Security Module (HSM) Support</h3>
<p>Also troubling for MPC-based signatures is the <strong>lack of industry Hardware Security Modules (HSMs) that support the technology</strong>. While HSMs have been employed for decades by financial institutions to secure private key material, current HSMs do not offer support for the brand-new MPC cryptography. Security experts have long recognized that key material must be stored and accessed exclusively through HSMs in order to maintain basic security, and MPC is no different. The key material, or parts of keys, must be securely stored. <strong>If MPC implementers do not build customized HSMs for their technology, it is arguably less safe than single-key systems</strong>.</p>
</blockquote>
<h1 id="combining-mpc-and-multisignature" tabindex="-1">Combining MPC and Multisignature</h1>
<p><strong>Multisignature and MPC can actually be complementary when used in conjunction</strong> - individual keys in a corporate multisignature quorum can be generated and managed via MPC to get the best of both protocols. In that way, the signing quorum stays fixed, but additional flexibility/control can be incorporated at the individual key level. In other words, funds might be secured on-chain through multisig, but MPC can be used to control access to <em>each one of those keys</em> to facilitate securely sharing and rotating internal access to key shards.</p>
<p><a href="https://twitter.com/dhruvbansal/status/1682786268273577985?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/DhruvBansal_MPCvsMultisig.png" alt="DhruvBansal_MPCvsMultisig.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bit-forge-fireblocks-uncovered-vulnerabilities-in-over-15-major-mpc-wallets/">BitForge - Fireblocks Uncovered Vulnerabilities in Over 15 Major MPC Wallets</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/#c3cd70">HNL BitDevs Self-Custody Workshop</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/private-collaborative-custody-with-frost/">Private Collaborative Custody with FROST</a></li>
</ul>
Milk Sad - Wallet Theft Enabled By Weak Entropy
2023-08-20T21:19:43.458Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/milk-sad-wallet-theft-enabled-by-weak-entropy/
<blockquote>
<p>[!QUOTE] <a href="https://milksad.info/disclosure.html" target="_blank" class="external-link">Milk Sad Technical Write-Up</a><br />
<strong>This is the story of a wallet theft enabled by bad cryptography</strong>. It covers our research on problems with Libbitcoin Explorer 3.x (CVE-2023-39910), outlines how it is related to the Trust Wallet vulnerability (CVE-2023-31290), and shows some of the real-world impact that we were able to confirm.</p>
<h3 id="tracing-the-issue-to-the-source" tabindex="-1">Tracing the Issue to the Source</h3>
<p>Our story starts on Friday, 21 July 2023. Upon attempting to use a well-protected cryptocurrency wallet, the wallet owner realizes that all of their funds stored in their wallet are gone. This was no accident – <strong>they were the victim of a sophisticated theft</strong>. The funds were sent to the attacker’s addresses on July 12th, at a time when the hardware wallet wasn’t in use for several days.</p>
<p>The generation and use of the affected wallet was unusually strict:</p>
<ul>
<li>Generated on an <a href="https://en.wikipedia.org/wiki/Air_gap_(networking)" target="_blank" class="external-link">air-gapped</a> Linux laptop with self-compiled software</li>
<li>Use of BIP39 24 mnemonic word phrase</li>
<li>Mnemonic securely entered into Ledger & Trezor hardware wallets</li>
<li>Good PIN and physical security on the hardware wallets</li>
<li>Mnemonic seed phrase never touched a non-air-gapped computer</li>
<li>Mnemonic seed backup well-protected</li>
</ul>
<p>The victim reached out to their network of friends with similar key generation and management protocols, and <strong>a second victim was identified</strong>! The second victim also had the contents of their cryptocurrency wallet stolen during the same period of time – <strong>both victims Bitcoin (BTC) was stolen in the same <em>minute</em> on-chain</strong>. The victims realized this was no accident. They had fallen victim to a some type of hack.</p>
<p>The victims discovered their Bitcoin (BTC) holdings were not the only things stolen. The attackers had also taken Ethereum and other distinct cryptocurrency types from the same wallets. <strong>The victims realized this could only happen with an underlying leak of their main wallet private keys</strong>. Tricking their hardware wallets into authorizing incorrect transfers or breaking individual private keys of sub-accounts would manifest with a more limited impact.</p>
<hr />
<h3 id="our-cryptocurrency-is-gone-but-how" tabindex="-1">Our Cryptocurrency is Gone, But How!?!?</h3>
<p><strong>An essential tool that was involved in the wallet creation in both cases was the <a href="https://github.com/libbitcoin/libbitcoin-explorer/tree/version3" target="_blank" class="external-link">Libbitcoin Explorer</a> in a 3.x version, via its <code>bx</code> binary</strong>. The Libbitcoin project has been around for a very long time (2011 !), is Open Source, and <code>bx</code> brings everything needed for an offline wallet generation in one self-contained binary.</p>
<p>Despite being a specialized tool that most wallet users won’t have heard of, <strong><code>bx</code> has some popularity and is dedicated an <a href="https://github.com/bitcoinbook/bitcoinbook/blob/97df56f77c06813b1e028b5b1f2dbc036f27b1fc/appdx-bx.asciidoc" target="_blank" class="external-link">appendix section</a> in the “Mastering Bitcoin” book</strong>. In other words, it appeared to be a reasonable tool to use.</p>
<hr />
<h3 id="given-enough-eyes-all-bugs-are-shallow" tabindex="-1">Given Enough Eyes, All Bugs are Shallow?</h3>
<p>Digging deeper, the team confirmed that the code uses the standard MT19937 Mersenne Twister PRNG variant which only operates on 32 bits of initial seeding input by design, and not the MT19937-64 extended variant with 64 bits of seeding. So the PRNG can at most have 2^32 starting positions as an upper bound, regardless if it’s seeded by <code>/dev/random</code> or time.</p>
<p>To put this in different words: <strong>when running <code>bx seed -b 256</code> to request 256 bits of non-guessable entropy, the result is 32 bits of high-precision clock time that was put through a blender (or rather: twister 🌪️) and expanded to 256 bit <em>without adding new information</em></strong>. The number of possible key variations would grow exponentially with the size if this were <em>real</em> entropy data, so the difference from the safe expected result (256 bits) and the actual result (32 bits) is of astronomical proportions.</p>
<p><strong>Anyone can re-compute and find a victim’s originally used entropy after a maximum of about 4.29 billion attempts if they have specific characteristics to look for to see if they successfully found a cryptocurrency wallet</strong>. In this case, by checking derived wallet addresses that were seen receiving funds on a public blockchain in the past. To put this number into perspective: <strong>brute-forcing this key space takes a few days of computation on the average gaming PC, at most</strong>. And unfortunately, anyone with sufficient programming skills could do it.</p>
<p>In terms of cryptocurrency wallet security, this is a pretty <strong>catastrophic situation</strong>.</p>
<hr />
<h3 id="codename-milk-sad" tabindex="-1">Codename “Milk Sad”</h3>
<p>Faced with the unexpected task of handling an urgent disclosure, we were in need of a project name that was relevant yet told outsiders nothing about the technical issue. The suggestion was made to use the first two words of first BIP39 mnemonic secret generated by <code>bx</code> on time zero - <code>milk sad wage cup reward [...]</code> -> <strong>Milk Sad</strong>. We found our project name.</p>
<hr />
<h3 id="libbitcoin-team-response-and-context" tabindex="-1">Libbitcoin Team Response and Context</h3>
<p>During our accelerated coordinated disclosure to the Libbitcoin team, <strong>the Libbitcoin team quickly disputed the relevancy of our findings and the CVE assignment</strong>. By our understanding, they consider <code>bx seed</code> a command that should never be used productively by any <code>bx</code> user since it is sufficiently documented as unsuited for safe wallet generation.</p>
<p>We do not agree with this assessment.</p>
<hr />
<h3 id="basic-lessons-learned" tabindex="-1">Basic Lessons Learned</h3>
<ul>
<li><strong>Use BIP39 passphrases for your wallets</strong>, ideally with a complex passphrase based on entropy from a separate source.</li>
<li><strong>Trust only heavily audited software</strong> to be in your wallet generation path.</li>
<li><strong>Document every wallet generation setup for your future self</strong>, this may be very important.</li>
</ul>
<h3 id="summary" tabindex="-1">Summary</h3>
<p>In this article, we presented technical information of a weak entropy generation function in Libbitcoin Explorer, confirmed the practical use of the weak function for over 2600 cryptocurrency wallets on the Bitcoin Mainnet, and connected it to a recent large theft of cryptocurrency funds on multiple popular blockchains that amounts to an <strong>estimated $900k of damages</strong>. Additionally, we described the close similarities with another actively exploited vulnerability in Trust Wallet, and provided some background on the Libbitcoin Explorer context and overall timeline.</p>
</blockquote>
<p><a href="https://milksad.info/disclosure.html#basic-timeline-of-thefts-and-our-disclosure" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/MilkSadTheft_DisclosureTimeline.png" alt="MilkSadTheft_DisclosureTimeline.png" /></a></p>
<p><a href="https://twitter.com/evoskuil/status/1688657656620167169?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/Voskuil_MilkSad_Response.png" alt="Voskuil_MilkSad_Response.png" /></a></p>
<p><a href="https://twitter.com/adam3us/status/1689051705504153600?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/AdamBack_MilkSad_Response.png" alt="AdamBack_MilkSad_Response.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/milk-sad-vulnerability-disclosure/" target="_blank" class="external-link">Milk Sad: Wallet Theft Enabled By Weak Entropy</a></li>
<li><a href="https://twitter.com/i/spaces/1vOxwMrpXDdGB" target="_blank" class="external-link">X Space recording with Eric Voskuil, Bitcoin core developer and lead maintainer of libbitcoin</a></li>
<li><a href="https://blog.ledger.com/Funds-of-every-wallet-created-with-the-Trust-Wallet-browser-extension-could-have-been-stolen/" target="_blank" class="external-link">Funds of every wallet created with the Trust Wallet browser extension could have been stolen without any user interaction</a></li>
</ul>
Mercury Layer - Bitcoin MPC layer 2 protocol using blinded signatures
2024-01-29T00:53:26.144Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/mercury-layer-bitcoin-mpc-layer-2-protocol-using-blinded-signatures/
<h1 id="overview" tabindex="-1">Overview</h1>
<p><a href="https://youtu.be/FNHPI10af4g?feature=shared" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-30-Statechains-Youtube-Thumbnail.png" alt="BitDevs-30-Statechains-Youtube-Thumbnail.png" /></a></p>
<p>Mercury Layer is a layer-2 protocol designed to leverage <a href="https://bitcoinops.org/en/topics/statechains/" target="_blank" class="external-link">statechains</a>, <strong>enabling the off-chain transfer of entire bitcoin UTXOs such that they remain under full custody of the rightful owner at all times, are instantly settled, and cost zero transaction fees</strong>. These transfers can happen without requiring any on-chain blocks to be mined.</p>
<p>The simplest way to think about a statechain is as a virtual <a href="https://opendime.com/" target="_blank" class="external-link">opendime</a>. You can load funds onto an opendime and physically give it to someone else, effectively transferring ownership of those UTXOs without ever having to transact on chain. <strong>Statechains are a similar process but conducted via digital means - you're transferring control of entire UTXOs without ever making a transaction on the base layer</strong> (i.e., like exchanging private keys with someone else but removing your own ability to spend after the exchange is done).</p>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinmagazine.com/technical/mercury-layer-a-massive-improvement-on-statechains" target="_blank" class="external-link">Mercury Layer: A Massive Improvement On Statechains</a><br />
Statechains are essentially analogous to payment channels in many ways, i.e. they are a collaboratively shared UTXO with a pre-signed transaction as a mechanism of last resort for people to enforce their ownership. The major difference between a Lightning channel and a statechain is the parties involved in collaboratively sharing the UTXO, and how ownership of an enforceable claim against it is transferred to other parties.</p>
<p><strong>Unlike a Lightning channel, which is created and shared between two static participants, a statechain is opened with a facilitator/operator, and can be freely transferred in its entirety between any two participants who are willing to trust the operator to be honest, completely off-chain</strong>. Someone wishing to load a statechain collaborates with the operator to create a single public key that the creator and operator both hold a share of the corresponding private key, with neither having a complete copy of the key. From here they pre-sign a transaction allowing the creator to claim their coins back after a timelock unilaterally.</p>
</blockquote>
<h1 id="how-does-it-work" tabindex="-1">How does it work?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://mercurylayer.com/" target="_blank" class="external-link">Mercury Layer: Bitcoin MPC layer 2 protocol using blinded signatures</a><br />
The simplest function of the Mercury layer system is to enable the transfer of the ownership of individual UTXOs controlled by a single public key <code>P</code> from one party to another without an on-chain (Bitcoin) transaction (or change in the spending condition). <strong>The SE facilitates this change of ownership, but has no way to seize, confiscate or freeze the output.</strong> To enable this, the private key (<code>s</code>) for <code>P</code> (where <code>P = s.G</code>) is shared between the SE and the owner, such that neither party ever has knowledge of the full private key (which is <code>s = s1 + o1</code> where <code>s1</code> is the SE private key share, and <code>o1</code> is the owner key share) and so cooperation of the owner and SE is required to spend the UTXO. However, by sharing the secret key in this way, the SE can modify its key share (<code>s1 -> s2</code>) so that it combines with a new owner key share (<code>o2</code>) with the cooperation of the original owner, but without changing the full shared key (i.e. <code>s1 + o1 = s2 + o2</code>) all without any party revealing their key shares or learning the full key. The exclusive control of the UTXO then passes to the new owner without an on-chain transaction, and <strong>the SE only needs to be trusted to delete/overwrite the key share corresponding to the previous owner</strong>.</p>
<p>This key update/transfer mechanism is additionally combined with a system of <em>backup</em> transactions which can be used to claim the value of the UTXO by the current owner in the case the SE does not cooperate or has disappeared. The backup transaction is cooperatively signed by the current owner and the SE at the point of transfer, paying to an address controlled by the new owner. To prevent a previous owner (i.e. not the current owner) from broadcasting their backup transaction and stealing the deposit, the <code>nLocktime</code> value of the transaction is set to a future specified block height. Each time the ownership of the UTXO is transferred, the <code>nLocktime</code> is decremented by a specified value, therefore enabling the current owner to claim the coin before any of the previous owners.</p>
<hr />
<p><strong>The life-cycle of a coin in the statechain, key reassignment and closure is summarised as follows:</strong></p>
<ol>
<li>The first owner initiates a UTXO statechain with the SE by paying BTC to an address where Owner 1 and the SE each have private key shares, both of which are required to spend the UTXO. Additionally, the SE and the initiator cooperate to sign a backup transaction spending the UTXO to a timelocked transaction spending to an address fully controlled by Owner 1 which can be confirmed after the <code>nLocktime</code> block height in case the SE stops cooperating.</li>
<li>Owner 1 can verifiably transfer ownership of the UTXO to a new party (Owner 2) via a key update procedure that overwrites the private key share of SE that invalidates the Owner 1 private key and <em>activates</em> the Owner 2 private key share. Additionally, the transfer incorporates the cooperative signing of a new backup transaction paying to an address controlled by Owner 2 which can be confirmed after a new <code>nLocktime</code> block height, which is reduced (by an accepted confirmation interval) from the previous owners backup transaction <code>nLocktime</code>.</li>
<li>This transfer can be repeated multiple times to new owners as required (up until the most recent recovery <code>nLocktime</code> reaches a lower limit determined by the current Bitcoin block height).</li>
<li>At any time the most recent owner and SE can cooperate to sign a transaction spending the UTXO to an address of the most recent owner's choice (i.e. closure).</li>
</ol>
<hr />
<p><strong>Statechains</strong></p>
<p>The essential function of the Mercury layer system is that it enables 'ownership' (and control) of a UTXO to be transferred between two parties (who don't need to trust each other) via the SE without an on-chain transaction. The SE only needs to be trusted to not store any information about previous key shares and then the transfer of ownership is completely secure, even if the SE was to later get compromised or hacked. At any time the SE can prove that they have the key share for the current owner (and only to the current owner). The current owner is required to sign a <em>statechain transaction</em> (<code>SCTx</code>) with an owner key to transfer ownership to a new owner (i.e. a new owner key). <strong>This means that any theft of the UTXO by the collusion of a corrupt SE and old owner can be independently and conclusively proven.</strong></p>
<p><strong>Blinding</strong></p>
<p>The Mercury layer server is <em>blind</em> - that is the server <em>does not</em> and <em>cannot</em> know anything that would enable it to identify the coin (UTXO) that it is co-signing for. This prevents any censorship and storage of any identifying data in the server - the server itself is not aware of bitcoin, and does not perform any verifcation of transactions.</p>
<p><strong>To achieve this the server cannot know or be able to derive in any way the following values:</strong></p>
<ul>
<li>The TxID:vout of the statecoin UTXO</li>
<li>The address (i.e. public key) of the UTXO</li>
<li>Any signatures added to the bitcoin blockchain for the coin public key.</li>
</ul>
<p><strong>This means that the server cannot:</strong></p>
<ul>
<li>Learn of the shared public key it is co-signing for.</li>
<li>Learn of the final (unblinded) form of any signatures it co-generates.</li>
<li>Verify ANY details of backup or closure transactions (as this would reveal the statecoin TxID).</li>
</ul>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://mercurylayer.com/" target="_blank" class="external-link">Mercury Layer - Bitcoin MPC layer 2 protocol using blinded signatures</a></li>
<li><a href="https://medium.com/@RubenSomsen/statechains-non-custodial-off-chain-bitcoin-transfer-1ae4845a4a39" target="_blank" class="external-link">Statechains: Non-custodial Off-chain Bitcoin Transfer | by Ruben Somsen | Medium</a></li>
<li><a href="https://thebitcoinmanual.com/blockchain/state-chain/" target="_blank" class="external-link">What Are Bitcoin State Chains? - The Bitcoin Manual</a></li>
<li><a href="https://www.nobsbitcoin.com/mercury-layer-available-for-testing/" target="_blank" class="external-link">Mercury Layer is Now Code Complete and Available For Testing</a></li>
<li><a href="https://bitcoinmagazine.com/technical/a-new-privacy-tool-for-bitcoin" target="_blank" class="external-link">This Tool Can Protect Your Privacy When Using Bitcoin</a></li>
</ul>
Mempool Space transaction acceleration marketplace
2023-05-30T01:54:44.361Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/mempool-space-transaction-acceleration-marketplace/
<h1 id="description" tabindex="-1">Description</h1>
<p>The <a href="https://mempool.space/about" target="_blank" class="external-link">Mempool open source project</a> is an extremely popular <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/transaction-fees-and-the-mempool/">mempool</a> and block explorer that can be self-hosted and connected to any bitcoin node. Mempool Space is a company that maintains the project and operates the commonly referenced <a href="https://mempool.space/" target="_blank" class="external-link">mempool.space</a> instance. Because the Mempool Space team is so well-connected across the network, the primary mempool.space instance is often considered the de facto snapshot of bitcoin's global mempool state by many enterprises and individuals.</p>
<p>At Bitcoin 2023, the <a href="https://youtu.be/ebLpn_d133Y" target="_blank" class="external-link">Mempool Space team announced a transaction acceleration marketplace</a>, which is set to officially launch later in the year. At the time of writing (for <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-22/">Socratic Seminar 22</a>), the specific details of how this program works have not been released yet.</p>
<p>Generally, Mempool Space will establish business relationships with mining pools interested in participating in this service. Users will be able to top up their Mempool Space account with funds ahead of time, and if they come across a transaction they wish to accelerate, they can initiate it from the mempool.space interface. The transaction doesn't necessarily need to be your own - opening the possibility for others to accelerate transactions on your behalf through Mempool Space.</p>
<p>Users pay an additional fee using their existing balance on the platform, and Mempool Space then sends that transaction out-of-band to participating mining pools who will attempt to include that transaction in the next block. The acceleration fee paid by the user will be split in some way between Mempool Space and the mining pool who successfully mines the transaction into a block.</p>
<p>Transaction acceleration is not new and has been supported by some 3rd-party services for years (e.g., <a href="https://www.viabtc.com/tools/txaccelerator" target="_blank" class="external-link">ViaBTC</a>). It can also be done natively on the bitcoin protocol with techniques like <a href="https://river.com/learn/terms/r/replace-by-fee-rbf" target="_blank" class="external-link">replace-by-fee (RBF)</a> and <a href="https://river.com/learn/terms/c/child-pays-for-parent-cpfp/" target="_blank" class="external-link">child-pays-for-parent (CPFP)</a>.</p>
<p>It seems that this service would target less-technical end users who may not be familiar with RBF/CPFP or users who were caught off guard by fee market fluctuations and want a quick and simple way to accelerate a transaction confirmation.</p>
<h1 id="concerns" tabindex="-1">Concerns</h1>
<p><a href="https://nitter.at/1f52b_xyz/status/1659673323834408962#m" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/@1f52b_xyz_Tweet_MempoolFeeAcceleration_Drama.png" alt="@1f52b_xyz_Tweet_MempoolFeeAcceleration_Drama.png" /></a></p>
<p>Because these fee acceleration payments happen entirely out-of-band between Mempool Space and various mining pools, the individual miners within those pools can't audit and confirm that they're receiving the proper cut of those additional fees. Individual miners would have no insight into the acceleration fees that users are paying, so they'd have to trust that the pool operators are honestly divvying out those rewards as blocks are mined.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/mempool-acceleration-marketplace-upcoming/" target="_blank" class="external-link">Mempool.Space Announces Transaction Acceleration Marketplace</a></li>
<li><a href="https://youtu.be/kndOXJn6AK8" target="_blank" class="external-link">Mempool Transaction Accelerator Reactions w/ Jeremy Rubin, Antoine Poinset (darosior) + niftynei</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/transaction-fees-and-the-mempool/">Transaction Fees & The Mempool</a></li>
</ul>
Lightning Replacement Cycling Attack
2023-11-20T22:01:42.280Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-replacement-cycling-attack/
<h1 id="context" tabindex="-1">Context</h1>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinmagazine.com/technical/postmortem-on-the-lightning-replacement-cycling-attack" target="_blank" class="external-link">Postmortem On The Lightning Replacement Cycling Attack</a><br />
When a Lightning payment is routed across the network, <strong>one thing that is key to understand is how the timelocks for refunding a failed payment work.</strong> The hop closest to the receiver has a timelock of 'x', and every hop going back to the sender has one of 'x+1', 'x+2', and so on. <strong>The timelocks get progressively longer as you go each hop from the receiver back towards the sender.</strong> The reason for this is that if a payment reaches the receiver, but some problem stops the preimage from propagating all the way back to the sender, the hop where it stopped has time to enforce it on-chain, and put the preimage there that all preceding hops need to confirm the payment. <strong>Otherwise someone in the middle, where the failure happens, could have their outgoing hop claim the funds with the preimage, and the hop that forwarded it to them claim it with their refund path, and leave that person in the middle shit out of luck having lost funds.</strong></p>
<p>The Replacement Cycling Attack is a complicated way to try and accomplish exactly that undesired outcome, the target node losing money by having the outgoing hop claim the funds with a success transaction, and the incoming hop claiming funds through the refund transaction. <strong>This necessitates stalling out the victim node, and preventing them from seeing the preimage in the success transaction on one side until after the timelock expires on the other side, so they can claim the refund there.</strong></p>
</blockquote>
<h1 id="high-level-breakdown" tabindex="-1">High-Level Breakdown</h1>
<p><strong>Exploit Prerequisites</strong></p>
<ul>
<li><strong>Two-way channel connectivity:</strong> The attackers must establish Lightning channels with the victim node on both sides of the payment path. This allows them to control the flow of the payment and manipulate the timelocks.</li>
<li><strong>Payment routing:</strong> The attackers must initiate a payment that routes through the victim node's channels. This creates the opportunity to withhold the preimage and exploit the timelock differences.</li>
</ul>
<p><strong>Attack Mechanism</strong></p>
<ol>
<li>Bob, the victim, opens channels with Alice and Carol, the attackers.</li>
<li>Alice and Carol route a payment through Bob's node.</li>
<li>When Alice receives the payment, she refuses to provide Bob with the preimage needed to complete the transaction.</li>
<li>Bob waits for the timelock to expire and broadcasts a transaction to reclaim his funds.</li>
<li>Alice and Carol repeatedly broadcast transactions to prevent Bob's transaction from being confirmed.</li>
<li>Eventually, Bob gives up and abandons his funds.</li>
<li>Alice and Carol spend Bob's funds.</li>
</ol>
<h1 id="technical-breakdown" tabindex="-1">Technical Breakdown</h1>
<p>One of the best resources to understand how this attack works and its implications is <a href="https://open.getmatter.com/q/rXfwQq0mU2OL?content_id=43545698" target="_blank" class="external-link">Guy Swann's "Lightning Is Dead, Long Live Lightning" episode of the Bitcoin Audible podcast</a>.</p>
<p>This Tweet thread also provides a great illustrated explanation:</p>
<blockquote>
<p>[!QUOTE] <a href="https://x.com/mononautical/status/1715736832950825224?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link">@mononautical Illustrative Thread</a><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-1.png" alt="BitDevs-28-Mononaut-Tweet-1.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-2.png" alt="BitDevs-28-Mononaut-Tweet-2.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-3.png" alt="BitDevs-28-Mononaut-Tweet-3.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-4.png" alt="BitDevs-28-Mononaut-Tweet-4.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-5.png" alt="BitDevs-28-Mononaut-Tweet-5.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-6.png" alt="BitDevs-28-Mononaut-Tweet-6.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-7.png" alt="BitDevs-28-Mononaut-Tweet-7.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-8.png" alt="BitDevs-28-Mononaut-Tweet-8.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-9.png" alt="BitDevs-28-Mononaut-Tweet-9.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-10.png" alt="BitDevs-28-Mononaut-Tweet-10.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-11.png" alt="BitDevs-28-Mononaut-Tweet-11.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-12.png" alt="BitDevs-28-Mononaut-Tweet-12.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-13.png" alt="BitDevs-28-Mononaut-Tweet-13.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-28-Mononaut-Tweet-14.png" alt="BitDevs-28-Mononaut-Tweet-14.png" /></p>
</blockquote>
<h1 id="mitigation-strategies-considerations" tabindex="-1">Mitigation Strategies/Considerations</h1>
<ol>
<li><strong>Fee bumping:</strong> Regularly rebroadcasting the refund transaction with a higher fee can make the attack economically infeasible for the attackers.</li>
<li><strong>Trusted channel partners:</strong> Restricting channel openings to trusted parties and implementing efficient channel management practices can reduce the risk of falling victim to the attack.</li>
<li><strong>Target selection:</strong> The attack is more likely to be successful against large routing nodes that handle a significant amount of payment volume. Routing nodes that fall into this category should be more careful and prepared generally (i.e., LSPs and other large routers require more sophisticated/secure operations because they are high-value targets).</li>
<li><strong>Transaction structure changes:</strong> Changes to the HTLC transaction structure could prevent the attack altogether by using the <code>SIGHASH_ALL</code> flag, which ensures that the transaction signature is invalidated if any minor changes are made. This could prevent double-spending these Lightning channel transactions but would also limit opportunities for more efficient fee optimization via transaction batching.</li>
<li><strong>Reverse timelocks:</strong> Peter Todd suggested an alternative method to prevent the attack by introducing a reverse timelock mechanism, where a transaction becomes invalid after a certain time or block height (instead of being spendable after a certain amount of time).</li>
</ol>
<p>While the Lightning Replacement Cycling attack could be a real concern, the Lightning Network is not dying because of it. Mitigation strategies and ongoing network improvements can significantly reduce the risk and impact of the attack. Future development and community efforts will continue to identify and address potential issues like this.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/technical/postmortem-on-the-lightning-replacement-cycling-attack" target="_blank" class="external-link">Postmortem On The Lightning Replacement Cycling Attack</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/10/25/?ref=nobsbitcoin.com#replacement-cycling-vulnerability-against-htlcs" target="_blank" class="external-link">Bitcoin Optech Newsletter 274: Replacement Cycling Vulnerability Against HTLCs</a></li>
<li><a href="https://www.nobsbitcoin.com/major-lightning-vulnerability-concern-leaves-the-network-in-hard-dillema/" target="_blank" class="external-link">New Class of Replacement Cycling Attacks Might Put Lightning Network in Perilous Position</a></li>
</ul>
Lightning Labs Releases Developer Tools for Powering APIs and Large Language Models
2023-08-11T07:50:25.638Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-labs-releases-developer-tools-for-powering-ap-is-and-large-language-models/
<blockquote>
<p>[!QUOTE] <a href="https://www.nobsbitcoin.com/lightning-labs-ai-tools/" target="_blank" class="external-link">Lightning Labs Releases Developer Tools for Powering APIs and Large Language Models</a><br />
Today, we’re excited to announce the release of a new set of developer tools to enable the Lightning and AI developer communities to build global, inclusive, and out-of-the-box cost effective LLM (Large Language Model) tooling which seamlessly incorporates Lightning and bitcoin. These tools are built on the <a href="https://docs.lightning.engineering/the-lightning-network/l402" target="_blank" class="external-link">L402 protocol</a>, a Lightning native authentication mechanism, and <a href="https://github.com/hwchase17/langchain" target="_blank" class="external-link">Langchain</a>, a popular library to simplify working with AI agents by adding external data to allow for more advanced functionality:</p>
<ul>
<li><a href="https://github.com/lightninglabs/LangChainBitcoin" target="_blank" class="external-link">LangChainBitcoin</a>: a suite of tools that enables Langchain agents to directly interact with Bitcoin and also the Lightning Network, including two main features:
<ul>
<li><strong>LLM Agent BitcoinTools</strong>: a series of tools that leverages the newly released OpenAI GPT function calls to enable developers to create agents that can hold a Bitcoin balance (on-chain and Lightning), send/receive Bitcoin on Lightning, and also directly drive with a LND node.</li>
<li><strong>L402 HTTP API Traversal</strong>: a Python wrapper for a LangChain LLM chain (APIChain) that enables agents to transparently access L402 payment-metered APIs.</li>
</ul>
</li>
<li><a href="https://github.com/lightninglabs/aperture/tree/master" target="_blank" class="external-link">Aperture</a>: the <a href="https://github.com/lightninglabs/aperture/releases/tag/v0.2-beta" target="_blank" class="external-link">latest release of</a> Aperture, a drop-in reverse proxy server implementation of the L402 protocol which can transform any API into a pay per use resource gated via L402 functionality and sats on the Lightning Network.
<ul>
<li><strong>Now with Lightning Node Connect Support</strong>: Aperture supports any Lightning Node running <a href="https://github.com/lightninglabs/lightning-terminal#readme" target="_blank" class="external-link">litd</a>, a binary that bundles Lightning Labs’ services alongside <a href="https://github.com/lightningnetwork/lnd#readme" target="_blank" class="external-link">LND</a>, (e.g Voltage, Umbrel, Start9, Raspiblitz, BTCPayServer) through the <a href="https://docs.lightning.engineering/lightning-network-tools/lightning-terminal/lightning-node-connect" target="_blank" class="external-link">Lightning Node Connect</a> protocol, an end-to-end encrypted mechanism for connecting a Lightning node to a web browser.</li>
<li><strong>Rich Dynamic API Endpoint Pricing</strong>: Aperture now supports the ability to optionally provide full HTTP request context to the proxied backend to enable dynamic per-call pricing. In contrast to the existing static pricing configuration, dynamic pricing allows a backend to implement custom endpoint pricing logic.</li>
</ul>
</li>
<li><a href="https://github.com/lightning/blips/pull/26" target="_blank" class="external-link">L402 bLIP</a>: a Bitcoin Lightning Improvement Proposal (bLIP) specification for the L402 protocol standard to openly share the primitives for building these components with the community.
<ul>
<li><strong>L402 is a protocol standard for payment-metered APIs explicitly designed to fit neatly into the existing HTTP 402 Payment Required status response code</strong>, which was optimistically included by the creators of the Web to enable native payments. A combination of Bitcoin, the Internet's native currency and the Lightning Network enables globally accessible rapid, scalable micropayments for paid APIs via L402.</li>
</ul>
</li>
</ul>
</blockquote>
<h1 id="l402-ai" tabindex="-1">L402 ⚡ + AI 🤖</h1>
<p>The Lightning Network (via <a href="https://docs.lightning.engineering/the-lightning-network/l402" target="_blank" class="external-link">the L402 protocol</a>) can help overcome a number of challenges currently facing LLM development:</p>
<ul>
<li><strong>Gating access to highly trained LLMs can be much more granular and cost effective with per-use Lightning paywalls.</strong> Credit cards force merchants to push higher costs onto consumers to overcome chargebacks and fraud fees. Bitcoin is a digital bearer asset and Lightning payments settle instantly. That means the cost of each LLM query can be offloaded directly to the consumer in realtime, and prices can be adjusted dynamically to respond to ongoing LLM maintenance/scaling costs.</li>
<li><strong>The L402 protocol can be used to create payment-metered APIs that are accessible to billions of people worldwide who do not have credit cards.</strong> The L402 protocol is a payment-metered API standard that uses the HTTP 402 Payment Required status response code to enable global Lightning micropayments for paid APIs. This means that any developer can create APIs that are only accessible to users who have already paid for them - without having to rely on credit cards (so no chargeback/fraud risk or complicated fiat payment infrastructure). L402 makes any paid online resource immediately accessible to a global audience of bitcoin users - <em>whether that be humans or AI agents</em>. Typical fiat payment infrastructure isn't accessible to autonomous agents, so a digital bearer asset like Bitcoin is required instead.</li>
<li><strong>AI agents can manage bitcoin wallets and make micropayments to collect resources and complete goals.</strong> AI agents are software programs that can learn and perform tasks autonomously. After equipping these agents with bitcoin wallets, they can make micropayments to external L402-enabled APIs to query information or initiate subtasks. This will allow AI agents to operate more effectively and independently across the web.</li>
</ul>
<p>The L402 protocol is a promising tool for enabling machine-to-machine web interactions, which is why it complements LLM development so well. More generally, L402 helps decentralize the market for all online services by enabling anyone to set up a content/data paywall with instantly global reach.</p>
<h1 id="aperture" tabindex="-1">Aperture</h1>
<blockquote>
<p>[!QUOTE] <a href="https://www.nobsbitcoin.com/lightning-labs-ai-tools/" target="_blank" class="external-link">Lightning Labs Releases Developer Tools for Powering APIs and Large Language Models</a><br />
<a href="https://docs.lightning.engineering/the-lightning-network/l402" target="_blank" class="external-link">The L402 protocol</a> is a protocol standard for the authentication of paid APIs (using the internet’s preferred currency: sats!). The L402 protocol finally presents a use for the internet’s forgotten HTTP error code: 402 Payment Required. You’ve probably seen error codes such as 200 OK, 404 NOT FOUND, and 500 INTERNAL SERVER ERROR. Alongside these error codes, the early authors of the HTTP protocol also inserted provision to enable internet-native payments. However, at the time, Bitcoin hadn’t yet been created, so a decentralized currency for the internet didn’t yet exist. The <strong>L402 protocol bridges the gap, by creating a <a href="https://github.com/lightning/blips/pull/26" target="_blank" class="external-link">protocol standard</a> that enables programmatic micropayments for API, login, and digital resource access.</strong></p>
<p>Aperture is the first L402-aware reverse proxy that enables seamless L402 integration for any existing API. Aperture serves as a bridge between an incoming request and a payment metered backend. Aperture handles the L402 protocol negotiation, pricing, authentication, and API key creation for the backend. <strong>As a result, any existing API backend can easily be upgraded to add L402 awareness.</strong></p>
<p>The latest version of Aperture now enables dynamic pricing. This dynamic pricing feature means that <strong>an Aperture-aware API backend can dynamically inform the proxy what the new pricing should be for a given endpoint.</strong> In the context of LLMs, this means that a backend could modify the price as a function of the type of model, query length, context window, and other parameters directly related to the operational cost of a model. Aperture also now supports SQLite and Postgres database backends, which should be a very familiar construct for developers.</p>
<p>The combination of the L402 protocol and open source models enables a number of impactful innovations. As an example, a user can sell a prompt by gating access to an API capable of responding to queries against the prompt itself. Potential buyers can then ask their own local agent to evaluate the response given a set of criteria. If the agent approves of the response, then further responses can be purchased. <strong>This interaction effectively creates a new tit-for-tat evaluation model to ensure that purchased data and information meets quality guidelines.</strong></p>
</blockquote>
<h1 id="conclusion" tabindex="-1">Conclusion</h1>
<blockquote>
<p>[!QUOTE] <a href="https://www.nobsbitcoin.com/lightning-labs-ai-tools/" target="_blank" class="external-link">Lightning Labs Releases Developer Tools for Powering APIs and Large Language Models</a><br />
We’re extremely excited about the new wave of innovation brought about with the latest wave of LLM models. With the <a href="https://docs.lightning.engineering/the-lightning-network/l402" target="_blank" class="external-link">L402 protocol</a> and <a href="https://github.com/lightninglabs/LangChainBitcoin" target="_blank" class="external-link">LangChainBitcoin</a>, we’re able to ensure the open models can be accessed using an open payment system, connected to the world’s set of open APIs. In the end, open source will win, and we’re working to provide the tooling to enable greater accessibility to AI for humans and agents alike.</p>
<p>To get started using these developer tools to build your own AI and Lightning-powered products, check out the <a href="https://github.com/lightning/blips/pull/26" target="_blank" class="external-link">L402 bLIP</a>, download <a href="https://github.com/lightninglabs/aperture" target="_blank" class="external-link">Aperture</a>, and read the <a href="https://docs.lightning.engineering/lightning-network-tools/aperture" target="_blank" class="external-link">Aperture developer documentation</a>. If you need access to a Lightning node with LNC integration, you can spin one up in a variety of ways from <a href="https://docs.lightning.engineering/lightning-network-tools/lightning-terminal/get-lit" target="_blank" class="external-link">running your own custom setup</a> to using a node OS like <a href="https://umbrel.com/" target="_blank" class="external-link">Umbrel</a>, <a href="https://start9.com/" target="_blank" class="external-link">Start9</a>, or <a href="https://raspiblitz.org/" target="_blank" class="external-link">Raspiblitz</a> to using a hosting provider like <a href="https://voltage.cloud/" target="_blank" class="external-link">Voltage</a>. As long as the node also runs <a href="https://github.com/lightninglabs/lightning-terminal" target="_blank" class="external-link">litd</a>, then you have access to <a href="https://docs.lightning.engineering/lightning-network-tools/lightning-terminal/lightning-node-connect" target="_blank" class="external-link">Lightning Node Connect</a> and can connect it directly to your Aperture instance.</p>
</blockquote>
Lightning Channel Splicing
2023-07-31T09:19:51.467Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-channel-splicing/
<h1 id="description" tabindex="-1">Description</h1>
<ul>
<li><strong>Splicing</strong> is the act of transferring funds from onchain outputs into a payment channel, or from a payment channel to independent onchain outputs, without the channel participants having to wait for a confirmation delay to spend the channel’s other funds.</li>
<li><strong>The whole idea behind splicing is to reduce the number of on-chain transactions required to efficiently manage Lightning channel liquidity</strong></li>
<li>Splicing comes in two varieties:
<ul>
<li><strong>Splice in</strong> means adding funds to a channel.
<ul>
<li>In this case, a cooperative close of the channel is arranged between the involved parties that spends the old channel funds to a new channel along with the new deposit. Because the new channel open is based on the security of the old channel close, the channel participants can safely spend the old funds within the channel while waiting for the close and open transactions to confirm.</li>
</ul>
</li>
<li><strong>Splice out</strong> means removing funds from a channel to an independent onchain output.
<ul>
<li>Similar to splice-in, the channel is closed and a new channel is opened, with the remaining funds being secured by the old channel’s security until the new channel has fully confirmed.</li>
<li><strong>With a splice out, you can close the channel, pay on-chain, and open a new channel in one single on-chain transaction</strong></li>
</ul>
</li>
</ul>
</li>
<li>Splicing enables the resizing of multiple channels in a single on-chain transaction, without any channels being "down" or closed during any part of the process</li>
<li>Splicing makes it much easier to move funds in and out of Lightning channels dynamically
<ul>
<li>In time, this will enable wallets to implement "one balance" apps that allow users to send lightning & on-chain payments without needing to manage two "bitcoin balances" -- with the lowest fees possible</li>
</ul>
</li>
<li>Not only can participants add their own resizes, due to compatibility with <a href="https://github.com/niftynei" target="_blank" class="external-link">@niftynei</a>'s dual funding feature, they can also add channel opens into the same batch. Eventually dual closing will allow all onchain lightning events to be batched into a single bitcoin transaction.</li>
</ul>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://github.com/ElementsProject/lightning/pull/5675" target="_blank" class="external-link">Splicing pull request by ddustin: Adds the features needed to enable collaborative splicing & resizing of active channels</a></li>
<li><a href="https://blog.muun.com/splices-and-liquidity-in-the-lightning-network/" target="_blank" class="external-link">Splices and Liquidity in the Lightning Network</a></li>
<li><a href="https://thebitcoinmanual.com/articles/splicing-lightning-network/" target="_blank" class="external-link">What Is Splicing On The Lightning Network? - The Bitcoin Manual</a></li>
<li><a href="https://bitcoinops.org/en/topics/splicing/" target="_blank" class="external-link">Splicing - Bitcoin Optech</a></li>
</ul>
Ledger Recover
2023-05-30T01:53:24.230Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ledger-recover/
<h1 id="description" tabindex="-1">Description</h1>
<p>Ledger Recover is an opt-in, ~$10/month service that uses Shamir Secret Sharing to split a seed phrase into 3 encrypted shards and distributes them to 3 custodians:</p>
<ul>
<li><a href="https://www.ledger.com/" target="_blank" class="external-link">Ledger</a></li>
<li>Crypto custody firm <a href="https://www.coincover.com/" target="_blank" class="external-link">Coincover</a></li>
<li>Code escrow company <a href="https://www.escrowtech.com/" target="_blank" class="external-link">EscrowTech</a></li>
</ul>
<p>If a private key is lost, 2 of the 3 shards can be combined to reproduce the key. Ledger Recover requires the user to submit KYC identification because the custodians will check against this ID before reproducing the key.</p>
<p>At the time of writing (for <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-22/">Socratic Seminar 22</a>), this service is not yet available, but will be compatible with Ledger Nano X at launch.</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.wired.co.uk/article/ftx-crypto-investors-hardware-wallets" target="_blank" class="external-link">FTX-ed Crypto Investors Are Moving Back to Hardware Wallets | WIRED UK</a></p>
<ul>
<li>Essentially, Ledger Recover is an additional safety net; for the price of $9.99 a month, it takes the jeopardy out of crypto’s version of stuffing dollars under the mattress. It’ll be available in the UK, EU, US, and Canada and come to other territories later in the year.</li>
<li>Ledger Recover is a service, he says, not a feature - one that provides all the niceties and safety mechanisms regular people are looking for.</li>
<li>The fragments of the recovery phase are encrypted and stored by each custodian on specially secured servers, and the balance of the user’s wallet is covered up to a value of €50,000 ($55,000) if something goes awry, a little like deposit insurance at a bank. It’s also being designed with a less technical user in mind.</li>
<li>“A lot of people say they cannot enter crypto because they can’t manage the recovery phrase. It’s <em>the</em> industry problem. Making that pain point go away will trigger a lot more people to join the space,” Gaunthier was quoted as saying.</li>
<li>"Ledger Recover is a service, he says, not a feature - one that provides all the niceties and safety mechanisms regular people are looking for."</li>
</ul>
</blockquote>
<p>Due to a marketing mistake, the Ledger Recover service was <a href="https://www.nobsbitcoin.com/ledger-to-launch-kyc-cloud-based-recovery-service/" target="_blank" class="external-link">announced prematurely and quickly retracted</a>, which was met with speculation and skepticism from the community. Ledger has since had to respond to severe social backlash to the announcement.</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.ledger.com/blog/ledger-recover-a-message-from-pascal-gauthier-chairman-ceo-at-ledger" target="_blank" class="external-link">Ledger Recover: A Message From Pascal Gauthier, Chairman & CEO at Ledger | Ledger</a></p>
<ul>
<li>Ledger Recover is a much needed product in the market to help existing and future crypto users to be able to get to the security of self-custody, and either offload assets from less secure environments, exchanges or soft wallets, & for newcomers to onboard self-custody securely.</li>
<li>The main concerns that you expressed are around transparency, censorship resistance, and security. I think we’ve done a good job to address all of your concerns, but again, it’s for you to tell us, so please don’t hesitate to like, comment, share our clarified service.</li>
<li>Ledger Recover will be launched as soon as the source code is auditable. We believe in these amendments to the project and will continue to build the industry together.</li>
</ul>
</blockquote>
<h1 id="risks" tabindex="-1">Risks</h1>
<ul>
<li>Because this is a KYC'ed service, users lose privacy, and the 3rd-party KYC service provider becomes a honeypot of identity data potentially tied to crypto balances and transaction history (<a href="https://www.podpage.com/citadeldispatch/cd51-bitcoin-companies-keeping-lists-of-bitcoiners-and-our-transaction-history-with-btcxzelko-laserhodl-diverter_nokyc-and-stephanlivera/" target="_blank" class="external-link">Citadel Dispatch 51</a>)</li>
<li>2 of the 3 shard custodians could collude to steal funds or be coerced to reproduce a key and hand it over to authorities.</li>
<li>In the <a href="https://www.whatbitcoindid.com/podcast/ledger-recover" target="_blank" class="external-link">What Bitcoin Did 661</a> interview (with Pascal Gauthier, NVK, Matt Odell & Harry Sudock), Pascal confirmed that if the custodians were subpoenaed, they would have to hand over private key shards.
<ul>
<li>He downplayed the regulatory risk by claiming the shard custodians were in different jurisdictions and that the likelihood of such a subpoena was very low.</li>
<li>He countered the collusion risk by noting that the shard custodians are all regulated businesses with legal obligations to operate honestly. The reputation hit of such a collusion attempt would also be against their best interest financially.</li>
</ul>
</li>
<li>There are technical implementation risks introduced when the key is being sharded and transferred to the custodians. It expands the attack surface where private key data might be leaked.</li>
<li>Many parts of the Ledger software stack are closed source, so users can't independently verify that the device is operating how Ledger developers claim.</li>
</ul>
<h1 id="opinion" tabindex="-1">Opinion</h1>
<p>The most important takeaway is that current Ledger users <strong>should not panic</strong> - that's how mistakes are made and funds get lost.</p>
<p>The Recover service will only be available for Ledger Nano X users initially, so users of older Ledger Nano S models are at no additional risk. Even Nano X users have to explicitly opt in to the service to initiate the process, so if you don't want to use it, don't opt in (you could also try keep an older firmware version on the device). There's always some risk that Ledger developers could push malicious code that sends private key data involuntarily, but that concern exists to some degree with every wallet - the main difference is that closed source code can't be openly audited to help confirm that isn't happening.</p>
<p>Because only private key data is being sent to the shard custodians, users that add an additional <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/#bip-39-passphrases">BIP39 passphrase</a> on top of their seed are completely safe even if the custodians collude to reproduce the private key itself. In that case, they would still need the secret passphrase to actually access funds.</p>
<p>In response to the community backlash, Ledger announced <a href="https://www.nobsbitcoin.com/ledger-accelerates-open-source-roadmap/" target="_blank" class="external-link">they are fast-tracking their open source roadmap</a> to make more of the software stack publicly auditable:</p>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/LedgerOpenSourceRoadmap.png" alt="LedgerOpenSourceRoadmap.png" /></p>
<p>Any increase in transparency is a good thing - the more code open sourced, the better. The roadmap also includes more educational material about the service itself and hints at the ability to implement your own shard backup provider, which might better distribute risk.</p>
<p>Overall, Ledger Recover will probably be a useful service for very non-technical bitcoin users who aren't ready to take on the personal responsibility of proper key management. For people who are much more concerned with the potential for user error than they are with regulatory/collusion risk, Ledger Recover might offer acceptable tradeoffs.</p>
<p>That being said, I personally wouldn't use Ledger's Recover service and wouldn't secure a meaningful amount of my own savings with a single Ledger device (especially not without a BIP39 passphrase). There are other hardware wallets with arguably better tradeoffs (<a href="https://youtu.be/FAYmE5-40PQ" target="_blank" class="external-link">Coldcard Mk4</a>, <a href="https://foundationdevices.com/" target="_blank" class="external-link">Foundation Passport</a>, <a href="https://shiftcrypto.ch/bitbox02/" target="_blank" class="external-link">BitBox02</a>, <a href="https://seedsigner.com/" target="_blank" class="external-link">SeedSigner</a>, etc) for single-signature setups.</p>
<p>However, I think the risk tradeoffs shift if a Ledger device is being used as part of a larger <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/#multisignature">multisignature quorum</a>, e.g., in a 2-of-3 setup. In that case, compromising a single key doesn't inherently risk loss of funds, so it is probably worth it to over-optimize for redundancy on one of the key backups. Enabling Ledger Recover for a Ledger used in a 2-of-3 quorum would make that particular seed phrase very resilient against loss, and if the shard custodians ever did collude, they still wouldn't have the other 2 keys or even know about the multisignature wallet's existence.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://twitter.com/sethforprivacy/status/1659888128486699008?s=20" target="_blank" class="external-link">Twitter thread from @sethforprivacy</a></li>
</ul>
How ZeroSync hopes to reduce the costs of validating bitcoin nodes
2023-09-17T22:32:55.186Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/how-zero-sync-hopes-to-reduce-the-costs-of-validating-bitcoin-nodes/
<h1 id="a-href-https-bitcoinmagazine-com-technical-zerosync-reduces-bitcoin-node-validation-target-blank-class-external-link-how-zero-sync-hopes-to-reduce-the-costs-of-validating-bitcoin-nodes-a" tabindex="-1"><a href="https://bitcoinmagazine.com/technical/zerosync-reduces-bitcoin-node-validation" target="_blank" class="external-link">How ZeroSync hopes to reduce the costs of validating bitcoin nodes</a></h1>
<h4 id="article-summary" tabindex="-1">Article Summary</h4>
<ul>
<li>ZeroSync is a project that aims to reduce the computational costs of bootstrapping a fully-validating Bitcoin client by using zero-knowledge proofs (ZKPs).</li>
<li><strong>ZKPs in a nutshell</strong>: You prove something without actually revealing the information that would conventionally prove it (in this case, a signature from a single public key).</li>
<li>ZKPs have been discussed in the Bitcoin community for over a decade but had never had a solid implementation.</li>
<li>Complicated and large bitcoin scripts ultimately necessitate putting proportionally-large pieces of witness data on the blockchain in order to spend those coins.</li>
<li>ZKPs can be used to <strong>allow highly-complicated script conditions to be proven with a small or constant amount of data</strong> that, when verified, shows definitively that those conditions were met.</li>
<li><strong>ZeroSync aims to help full nodes accomplish a much faster initial sync by iteratively constructing three proofs</strong> that will, when finished, provide a <strong>full verification of the historical blockchain without requiring a user to actually download and process it</strong>.</li>
<li><strong>No consensus change to the Bitcoin protocol is required to accomplish this</strong>, as everything happens simply at the application level, i.e., in the software you run.</li>
<li>When complete, <strong>anyone can choose to use a ZeroSync node and be sure the UTXO set they download is valid</strong>, or they can keep running Bitcoin Core and fully validate everything in the conventional way.</li>
<li><strong>The three proofs being constructed are:</strong>
<ul>
<li><strong>Block header proofs</strong> that cover the validity of block headers, proving that each block in the chain met the difficulty requirement at the time and tracks each difficulty change to ensure that every block meets the appropriate target</li>
<li><strong>Transaction inclusion proofs</strong> that verify that transactions are included in a block and are valid</li>
<li><strong>UTXO set proofs</strong> that ensure the current UTXO set is correct and has not been modified since the last block</li>
</ul>
</li>
<li><strong>Block header proofs</strong>
<ul>
<li>The first proof that ZeroSync is working on covers the validity of block headers, proving that each block in the chain correctly met the difficulty requirement at the time and tracks each difficulty change to ensure that every block meets the appropriate target.</li>
<li>This also introduces a huge benefit for <a href="https://river.com/learn/terms/s/simplified-payment-verification-spv/#:~:text=Simplified%20Payment%20Verification%20(SPV)%20is,Satoshi%20Nakamoto%20in%20the%20whitepaper" target="_blank" class="external-link">Simplified Payment Verification (SPV)</a> wallet architecture by applying a Merkle tree to each individual block header in the chain, allowing much more compact SPV proofs.</li>
<li>Users wouldn't need to have a copy of the block headers to verify that a transaction is committed to inside of the blockchain with block header proofs. They simply add on a Merkle path from the block header that the transaction is in to the root hash of the Merkle tree.</li>
</ul>
</li>
<li><strong>Verifying block contents</strong>
<ul>
<li>The second proof is focused on the actual validity of the contents of the block, however, like the <a href="https://river.com/learn/terms/a/assume-valid/" target="_blank" class="external-link">Assume Valid</a> function of Bitcoin Core, it does not prove the validity of the witness data.</li>
<li>It will check and verify transaction size limit, coin inflation rules, etc., but doesn't provide a proof that the signatures, hash locks and other witness data are correct.</li>
<li>This proof, however, will incorporate <a href="https://github.com/mit-dci/utreexo" target="_blank" class="external-link">Utreexo</a> in order to integrate the UTXO set at each block height into the overall ZKP protocol for the chain.</li>
<li>The first proof would simply show you that the block headers are valid, but that says nothing about the coin supply or the UTXO set. This second proof would allow a UTXO set to be delivered to a user with a ZKP that proves all of the block headers leading to that UTXO set are valid, as well as including a commitment to each UTXO set and all changes to it proving that each transition from one to the next is also valid.</li>
<li>This would allow for a full sync up to the Bitcoin Core default Assume Valid height with just the UTXO set at that block height and a tiny proof, all with the exact same trust model as downloading all of that and verifying the full blocks directly.</li>
</ul>
</li>
<li><strong>Verifying every piece of witness data</strong>
<ul>
<li>Lastly, the final proof will incorporate both the ZKP for the block headers and build on top of the ZKP for Assume Valid to include proving the validity of every piece of witness data in the historical chain.</li>
<li>After this stage, technically speaking, a node using the final ZeroSync proof system will actually be able to bootstrap with a single proof and a UTXO set with a stronger verification model than Bitcoin Core by default.</li>
<li>The only issue with this last proof is that the computational complexity to actually construct it is much higher than that of the previous two. Verifying a proof is simple and quick, requiring only the ZKP and verifier, but constructing it actually requires taking the full, raw data that would constitute a conventional proof (in this case, the entire historic blockchain) and actually processing it to construct a ZKP for it.</li>
<li>Adding the witness data into the proof currently is very expensive. In order to achieve this roadmap goal a lot of optimization is going to be required.</li>
<li>This project would still provide a massive amount of value in allowing users to "zero sync" up to the default Assume Valid block height and then conventionally verify the rest of the chain from there to the tip.</li>
</ul>
</li>
<li><strong>How would this reduce Bitcoin's computational costs?</strong>
<ul>
<li>If its roadmap is successful, this project could have a massive effect on reducing the computational costs for Bitcoin users to bootstrap a fully-validating Bitcoin client.</li>
<li>Given that the blockchain is <a href="https://ycharts.com/indicators/bitcoin_blockchain_size" target="_blank" class="external-link">currently almost 500 GB in size</a>, there is a very restrictive cost that prevents a large number of users from running a validating client. You need to have the bandwidth available to download it, and in many parts of the world, bandwidth is still prohibitively expensive. You also need a device powerful enough to process that data, and in many parts of the world, people have nothing but a smartphone in terms of digital devices that can connect to the internet.</li>
<li>ZeroSync could <strong>bring that cost down to a few gigabytes for the UTXO set and a ZKP proof so small that it could fit on a 1.44 MB floppy disk</strong>. <em>And it requires no consensus changes or forks whatsoever to do it</em>.</li>
</ul>
</li>
<li>Built by altcoiners
<ul>
<li>ZeroSync is built utilizing the Cairo language developed by Starkware, a Turing-complete language that can be used to build zero-knowledge systems for arbitrary computations. Starkware is a company developing ZKPs for the Ethereum ecosystem, specifically developing zero-knowledge rollups as a second layer solution.</li>
<li>ZeroSync building out a ZKP-verified syncing client for Bitcoin might wind up being the first time a real material development from an altcoin actually produces a valuable improvement that folds back into the Bitcoin ecosystem.</li>
</ul>
</li>
</ul>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/technical/bitcoin-nodes-now-one-step-closer-to-instant-sync" target="_blank" class="external-link">Bitcoin Nodes Now One Step Closer To Instant Sync</a></li>
<li><a href="https://docs.google.com/presentation/d/1KgNTxulMnIa3SCQIh4P061cIW6Jz_IZYMwqzaohA8ds/edit?pli=1#slide=id.g27e0704f09f_0_4" target="_blank" class="external-link">ZeroSync - Introducing STARKs to Bitcoin (Tabconf Slides)</a></li>
<li><a href="https://www.forbes.com/sites/digital-assets/2023/08/21/how-bitcoin-usage-could-skyrocket-thanks-to-zero-knowledge-proofs/?sh=62c73b04bde6" target="_blank" class="external-link">How Bitcoin Usage Could Skyrocket Thanks To Zero-Knowledge Proofs</a></li>
<li><a href="https://stephanlivera.com/episode/484/" target="_blank" class="external-link">Stephan Livera Podcast 484 Robin Linus ZeroSync: Speeding up Bitcoin IBD</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/zero-sync-demos-header-chain-verifier-instantly-verify-bitcoin-s-block-header-chain-in-your-browser/">ZeroSync demos Header Chain Verifier - Instantly verify Bitcoin's block header chain in your browser</a></li>
</ul>
Holepunch Unveils Open-Source P2P App Development Platform Pear Runtime
2024-02-19T21:06:13.182Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/holepunch-unveils-open-source-p2-p-app-development-platform-pear-runtime/
<p><a href="https://x.com/mafintosh/status/1757790686449963339?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-Pear-Tweet-1.png" alt="BitDevs-31-Pear-Tweet-1.png" /></a></p>
<h1 id="what-is-a-href-https-pears-com-target-blank-class-external-link-pear-runtime-a" tabindex="-1">What is <a href="https://pears.com/" target="_blank" class="external-link">Pear Runtime</a>?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://docs.pears.com/" target="_blank" class="external-link">Pear by Holepunch - Pears.com</a><br />
Pear loads applications remotely from peers and allows anyone to create and share applications with peers.</p>
<p>Pear by Holepunch is a combined Peer-to-Peer (P2P) Runtime, Development & Deployment tool.</p>
<p>Build, share & extend unstoppable, zero-infrastructure P2P applications for Desktop, Terminal & Mobile.</p>
<p>Welcome to the Internet of Peers</p>
<p><em>– Holepunch, the P2P Company</em></p>
</blockquote>
<p><a href="https://youtu.be/1pl7SQy93G4?si=V6tttdI5sUFrA-Hy" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-Pear-Overview-YT-Thumbnail.png" alt="BitDevs-31-Pear-Overview-YT-Thumbnail.png" /></a></p>
<h1 id="start-developing" tabindex="-1">Start developing</h1>
<p><a href="https://www.youtube.com/watch?v=y2G97xz78gU&list=PLEZwCXa1K8Q629mWmpcSYCVMDoi0s8hzI" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-Pear-Dev-Playlist-Thumbnail.png" alt="BitDevs-31-Pear-Dev-Playlist-Thumbnail.png" /></a></p>
<p>Holepunch has added fairly extensive <a href="https://docs.pears.com/" target="_blank" class="external-link">development documentation</a> with full walkthroughs and guides.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://pears.com/" target="_blank" class="external-link">Pears | Unleash the Power of P2P</a></li>
<li><a href="https://github.com/holepunchto/pear" target="_blank" class="external-link">GitHub - holepunchto/pear</a></li>
<li><a href="https://github.com/holepunchto/bare" target="_blank" class="external-link">GitHub - holepunchto/bare: Small and modular JavaScript runtime for desktop and mobile</a></li>
<li><a href="https://youtu.be/lmOom5xxVs8?si=C9Jb7cTg-oDYYJ78" target="_blank" class="external-link">🍐Pear Runtime launch - Live Podcast - YouTube</a></li>
<li><a href="https://www.nobsbitcoin.com/holepunch-unveils-pear-runtime/" target="_blank" class="external-link">Holepunch Unveils Open-Source P2P App Development Platform Pear Runtime</a></li>
<li><a href="https://keet.io/" target="_blank" class="external-link">Keet by Holepunch</a></li>
</ul>
HRF Launched 20 BTC Bounty Challenge for Improvements Requested by Activists
2023-07-31T09:12:04.377Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/hrf-launched-20-btc-bounty-challenge-for-improvements-requested-by-activists/
<p>Alex Gladstein, Chief Strategy Officer of the Human Rights Foundation, <a href="https://nitter.at/gladstein/status/1684567095231778818?ref=nobsbitcoin.com" target="_blank" class="external-link">announced the Bitcoin Bounty Challenge</a> - <strong>20 total BTC to go toward specific improvements to 10 bitcoin-related technologies</strong>. This project was the result of 6 months of field research where HRF staff interviewed dissidents, human rights NGO leaders, and Bitcoin developers from around the world. The goal is to fund a mix of projects that are both impactful to freedom fighters and and realistically achievable near-term for Bitcoin developers.</p>
<h1 id="strong-bounty-1-strong-open-sourcing-the-design-guide" tabindex="-1"><strong>Bounty 1</strong>: Open Sourcing the Design Guide</h1>
<blockquote>
<p>"2 BTC to port the <a href="https://www.bitcoinuikit.com/?ref=nobsbitcoin.com" target="_blank" class="external-link">Bitcoin UI Kit</a> from Figma to an open-source Penpot (<a href="https://twitter.com/penpotapp?ref=nobsbitcoin.com" target="_blank" class="external-link">@Penpotapp</a>) project. Currently, the Bitcoin UI Kit is only available in a proprietary Figma file format."</p>
</blockquote>
<p>Figma is a closed-source design prototyping software. Porting the Bitcoin UI Kit to an open-source alternative will make it more accessible to global collaborators.</p>
<h1 id="strong-bounty-2-strong-serverless-payjoin" tabindex="-1"><strong>Bounty 2</strong>: Serverless Payjoin</h1>
<blockquote>
<p>"2 BTC to deploy a production-ready version 2 payjoin protocol which may send and receive payjoin transactions without requiring a sender or recipient to operate a public server."</p>
</blockquote>
<p>In a typical bitcoin transaction, the <em>sender</em> provides all the UTXO inputs. This is a common heuristic used by chain surveillance companies when tracking the movement of funds across the blockchain. <a href="https://payjoin.org/" target="_blank" class="external-link">Payjoins</a> (aka pay-to-endpoint (P2EP) transactions) break that common ownership heuristic by allowing the <em>recipient</em> of a transaction to add their own UTXO inputs into the transaction. Payjoins improve bitcoin transaction privacy in a different way than typical mixers or coinjoin protocols.</p>
<p>One of the main drawbacks of payjoins is that they require interaction from both parties - meaning both sender and receiver need to be online. For the receiver, this generally means setting up an always-on server to coordinate the payjoin with the sender. A serverless payjoin would be much more accessible to the average user.</p>
<h1 id="strong-bounty-3-strong-end-to-end-encrypted-nostr-group-chats" tabindex="-1"><strong>Bounty 3</strong>: End-to-End Encrypted Nostr Group Chats</h1>
<blockquote>
<p>"2 BTC for the creation of end-to-end encrypted group chats powered by any popular Nostr client that do not leak metadata to third parties. Users must be able to chat with at least two other Nostr users."</p>
</blockquote>
<p>Nostr direct messages are currently designed in a way that leaks metadata about the 2 parties communicating. More secure, end-to-end encrypted group chats would allow dissidents to congregate online in a private way using decentralized infrastructure.</p>
<h1 id="strong-bounty-4-strong-silent-payments" tabindex="-1"><strong>Bounty 4</strong>: Silent Payments</h1>
<blockquote>
<p>"2 BTC for a mobile Bitcoin wallet which can send and receive <a href="https://bitcoinops.org/en/topics/silent-payments" target="_blank" class="external-link">Silent Payments</a> in a private manner without requiring the user to run a full node."</p>
</blockquote>
<p>Silent payments are a type of reusable payment code that will create a unique onchain address each time it is used, preventing <a href="https://bitcoinops.org/en/topics/output-linking/" target="_blank" class="external-link">output linking</a> (aka address reuse), which can significantly reduce user privacy.</p>
<p>The biggest downside of silent payments is that they require the recipient to check for all newly-received transactions by scanning every transaction in every new block. This implies the recipient is running a full node, which can hinder adoption.</p>
<h1 id="strong-bounty-5-strong-human-readable-offers" tabindex="-1"><strong>Bounty 5</strong>: Human Readable Offers</h1>
<blockquote>
<p>"2 BTC for a human-readable <a href="https://bolt12.org/?ref=nobsbitcoin.com" target="_blank" class="external-link">BOLT 12 offer</a> generator feature integrated into a popular iOS or android bitcoin wallet."</p>
</blockquote>
<p>Standard BOLT 11 invoices are single-use, meaning every new payment requires a separate invoice be generated by the recipient. BOLT 12 offers are a proposed improvement that would allow a single payment code (i.e., QR code) to be reused for many Lightning payments/donations.</p>
<blockquote>
<p>[!QUOTE] <a href="https://voltage.cloud/blog/lightning-network-faq/bolt-12-enhancing-lightning-networks-users-experience/" target="_blank" class="external-link">BOLT 12 - Natively Enhancing Lightning’s User Experience - Voltage</a><br />
BOLT 12 is an attempt led by Blockstream’s CLN developer <a href="https://twitter.com/rusty_twit" target="_blank" class="external-link">Rusty Russell</a> to solve these limitations. The goal is to enable lightning clients to generate static QR codes that can be used for payments and also to send money, like in the ATM example above. Russel was also the author of the BOLT 11 spec, so if there’s one person that is aware of its limitations, it’s him.</p>
<p>It’s a simple idea: Enable Lighting Nodes to create a static QR code that has the information needed for a wallet to be able to communicate with it, so they can coordinate further actions. If you how LNURL works this already sounds familiar. The major difference from LNULR is that BOLT 12 aims to do this communication and coordination natively on the network.</p>
<p>Because BOLT 12 only needs to embed information about a lightning node, and not information about the payment, like BOLT 11, the end result is a much simpler QR code. There’s room to add additional data, such as blinded paths, for instance.</p>
</blockquote>
<h1 id="strong-bounty-6-strong-self-custodial-mobile-lightning-address" tabindex="-1"><strong>Bounty 6</strong>: Self-custodial Mobile Lightning Address</h1>
<blockquote>
<p>"2 BTC for an easy-to-setup self-custodial mobile <a href="https://lightningaddress.com/" target="_blank" class="external-link">Lightning address</a> generator integrated into a popular iOS or android bitcoin wallet."</p>
</blockquote>
<p><a href="https://youtu.be/G97yzYcyoug" target="_blank" class="external-link">Lightning addresses</a> are like email addresses for bitcoin payments. Lightning addresses use LNURL in the background and require an always-on server to coordinate Lightning payments. Most people defer this responsibility to custodial services. Instead, HRF wants someone to come up with a way to allow users to generate and manage Lightning addresses within a <em>self-custodial</em> mobile wallet.</p>
<h1 id="strong-bounty-7-strong-mobile-border-wallets" tabindex="-1"><strong>Bounty 7</strong>: Mobile Border Wallets</h1>
<blockquote>
<p>"2 BTC for the integration of <a href="https://www.borderwallets.com/?ref=nobsbitcoin.com" target="_blank" class="external-link">Border Wallets</a> optionality in addition to a seed phrase for a popular iOS or android wallet. Users should easily be able to choose to use border wallet functionality to create their seed."</p>
</blockquote>
<p>Border Wallets is a project that allows users to convert seed phrases into image patterns, which are much more memorable - particularly useful when you are crossing a border and want to have your seed phrase memorized.</p>
<h1 id="strong-bounty-8-strong-easy-mobile-multisig" tabindex="-1"><strong>Bounty 8</strong>: Easy Mobile Multisig</h1>
<blockquote>
<p>"2 BTC for the implementation of a “tap or airdrop to create 2 of 3” multisig functionality for an open-source popular iOS or android wallet. The wallet must be self-custodial, with a method for users to recover funds using open-source software."</p>
</blockquote>
<p><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/#multisignature">Multisignature</a> is arguably one of the best technologies for properly securing bitcoin. Most multisignature wallets to date prioritize desktop usage, which causes subpar multisig experiences on mobile devices.</p>
<h1 id="strong-bounty-9-strong-frost-multisig-wallet" tabindex="-1"><strong>Bounty 9</strong>: FROST Multisig Wallet</h1>
<blockquote>
<p>"2 BTC to a FROST-powered dynamic mobile multisig that allows the user to modify the signer set without moving funds to a new address. The wallet must be self-custodial."</p>
</blockquote>
<p><a href="https://eprint.iacr.org/2020/852.pdf" target="_blank" class="external-link">FROST</a> is "a Flexible Round-Optimized Schnorr Threshold signature scheme that minimizes the network overhead of producing Schnorr signatures in a threshold setting while allowing for unrestricted parallelism of signing operations and only a threshold number of signing participants." The protocol is broken down in detail in <a href="https://stephanlivera.com/episode/476/" target="_blank" class="external-link">Stephan Livera's 476th podcast episode</a> .</p>
<h1 id="strong-bounty-10-strong-cashu" tabindex="-1"><strong>Bounty 10</strong>: Cashu</h1>
<blockquote>
<p>"- 0.5 BTC for a fully-functional iOS Cashu app ;</p>
<ul>
<li>0.5 BTC for a fully-functional Android Cashu app;</li>
<li>0.5 BTC for an open-source Cashu web widget for anonymous paywalled content;</li>
<li>0.5 BTC for Cashu-TS backup restore."</li>
</ul>
</blockquote>
<p><a href="https://cashu.space/" target="_blank" class="external-link">Cashu</a> is "a free and open-source Chaumian ecash system built for Bitcoin. Cashu offers near-perfect privacy for users of custodial Bitcoin applications."</p>
<blockquote>
<p>[!QUOTE] <a href="https://blog.bitfinex.com/education/cashu-chaumian-e-cash-mints-over-lightning/#:~:text=Cashu's%20model%20allows%20anyone%20to,or%20other%20factors%20and%20incentives." target="_blank" class="external-link">Cashu: Chaumian E-Cash & Mints Over Lightning - Bitfinex blog</a><br />
With Cashu, there are no accounts or personal information required, the mint cannot see your balance, tokens, or who you’re transacting with, and you can hold on to your own tokens, (although your Bitcoin is in the mint’s custody). Cashu allows anyone to start a mint, and act as a “bank” which can issue e-cash. Users have the freedom to choose the mint they want to use, and redeem their e-cash tokens for Bitcoin at any given time.</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/hrf-20-btc-bounty-challenge/" target="_blank" class="external-link">HRF Launched 20 BTC Bounty Challenge for Improvements Requested by Activists - No Bullshit Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/business/human-rights-foundation-announces-20-btc-bounty-challenge-for-bitcoin-development" target="_blank" class="external-link">The Human Rights Foundation Announces 20 BTC Bounty Challenge For Bitcoin Development - Bitcoin Magazine</a></li>
</ul>
FinCEN Seeks to Impose Strict Surveillance Requirements onto Bitcoin Mixers
2023-11-20T09:03:17.036Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/fin-cen-seeks-to-impose-strict-surveillance-requirements-onto-bitcoin-mixers/
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<p>According to a <a href="https://www.fincen.gov/news/news-releases/fincen-proposes-new-regulation-enhance-transparency-convertible-virtual-currency" target="_blank" class="external-link">press release</a> on 10/19/23, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced a Notice of Proposed Rule Making (NPRM) that identifies international <strong>Convertible Virtual Currency Mixing</strong> (<strong>CVC mixing</strong>) as a class of transactions of primary money laundering concern.</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.nobsbitcoin.com/fincen-wants-to-outlaw-certain-bitcoin-on-chain-transactions/" target="_blank" class="external-link">FinCEN Seeks to Impose Strict Surveillance Requirements onto Broadly Defined Class of 'Bitcoin Mixers'</a></p>
<ul>
<li>“<strong>Today’s action underscores Treasury’s commitment to combatting the exploitation of Convertible Virtual Currency (CVC) mixing by a broad range of illicit actors</strong>, including state-affiliated cyber actors, cyber criminals, and terrorist groups,” said Deputy Secretary of the Treasury Wally Adeyemo.</li>
<li>“This is FinCEN’s <strong>first ever use of the Section 311 authority to target a class of transactions of primary money laundering concern</strong>, and, just as with our efforts in the traditional financial system, Treasury will work to identify and root out the illicit use and abuse of the CVC ecosystem,” said FinCEN Director Andrea Gacki.</li>
</ul>
<hr />
<ul>
<li>"<strong>The lack of transparency surrounding international CVC mixing activity is an acute money laundering and national security risk</strong>, and increasing transparency in connection with this activity is a key component to denying illicit actors access to the U.S. and global financial systems," was stated in the press release.</li>
<li>"The global nature of the problem is further demonstrated by the fact that no CVC mixers are currently registered with FinCEN. CVC mixers are required to register with FinCEN if they do business as money transmitters wholly or in substantial part within the United States."</li>
<li>"FinCEN recognizes that there are legitimate reasons why responsible actors might want to conduct financial transactions in a secure and private manner given the amount of information available on public blockchains. FinCEN also recognizes that, in addition to illicit purposes, CVC mixing may be used for legitimate purposes, such as privacy enhancement for those who live under repressive regimes or wish to conduct licit transactions anonymously. Still, CVC mixing presents an acute money laundering risk because it shields information from responsible third parties, such as financial institutions and law enforcement," was stated in the document.</li>
<li>"If the designation is made, the Treasury Department can impose restrictions on U.S. financial firms' dealings with the mixers, which "range from <strong>requiring additional due diligence and special attention concerning particular account transactions among U.S. financial institutions to prohibiting the opening or maintenance of any correspondent or payable-through accounts</strong>," reported CoinDesk.</li>
<li>"The FinCEN issued a notice of proposed rulemaking on Thursday, which <strong>will be open to public comment for 90 days</strong>."</li>
</ul>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://www.nobsbitcoin.com/fincen-wants-to-outlaw-certain-bitcoin-on-chain-transactions/" target="_blank" class="external-link">FinCEN Seeks to Impose Strict Surveillance Requirements onto Broadly Defined Class of 'Bitcoin Mixers'</a></p>
<ul>
<li>To really get a sense for the scope of things, the first thing to look at is the definitions of mixing provided in the proposal. Obviously, the act of mixing is obscuring the source of funds, but the specific technical definitions they give for what falls under the definition of mixing are incredibly broad when looked at together. Let’s go through them:</li>
<li>
<ol>
<li><strong>“Pooling or aggregating [funds] from multiple persons, wallets, addresses, or accounts”</strong> This encompasses so many different activities other than a traditional custodial mixing service. Lightning channels? That is multiple persons pooling and aggregating funds together. Multisig wallets held by multiple people in general are doing the same thing. Just combining a recent withdrawal from Coinbase with coins you had from Kraken from the point of view of both exchanges is pooling funds from multiple addresses. According to the language of this proposal, something that just happens on a regular basis in the normal course of using Bitcoin, with no attempt whatsoever to obscure or render private anything about the activity, fits into the definition of mixing.</li>
<li><strong>“Using programmatic or algorithmic code to coordinate, manage, or manipulate the structure of a transaction”</strong> Again, that completely covers the Lightning Network. Coinjoins fall into this definition. In fact…you know what? This is so ridiculously and absurdly broad — it doesn’t even specify manipulating the structure of a transaction to attain obfuscation of the source of funds — that this literally encompasses any piece of Bitcoin software that handles making and signing transactions. 100% of the transactional activity on the Bitcoin <a href="https://bitcoinmagazine.com/guides/what-is-blockchain" target="_blank" class="external-link">blockchain</a> out of sheer logical necessity fits this definition of mixing.</li>
<li><strong>“Splitting [funds] for transmittal and transmitting the [funds] through a series of independent transactions”</strong> This is also incredibly broad. How are legitimate independent transactions between the same parties to be distinguished from a single transaction split into many for obfuscation purposes? What about situations where that is a perfectly legitimate thing to do for no reason other than your personal privacy? What if I only have three different UTXOs that three separate people know about, and I don’t want to reveal to all three of them my payment history with the other two in order to make a payment requiring all three UTXOs? Does opening multiple independent Lightning channels with the same node constitute this?</li>
<li><strong>“Creating and using single-use wallets, addresses, or accounts, and sending [funds] through such wallets, addresses, or accounts through a series of independent transactions”</strong> So default behavior of the super majority of Bitcoin wallets — not reusing addresses — constitutes mixing? When I go to my exchange to withdraw with a unique address every time, are they required to consider that action “mixing” my coins? Do physical Bitcoin bearer instruments constitute “single-use wallets?”</li>
<li><strong>“Exchanging between types of [cryptocurrencies] or other digitals assets”</strong> So every single person trading NFTs, dumb tokens, utility tokens, and just outright shitcoins, whether on an exchange or on-chain through different mechanisms, is now mixing?</li>
<li><strong>“Facilitating user-initiated delays in transactional activity”</strong> Uhm.. timelocks in Lightning? Any type of 2FA rate limited multisig set up? Just the DCA scheduled withdrawal function at different on-ramps? All of this is now mixing?</li>
</ol>
</li>
</ul>
<p>The definition of [cryptocurrency] mixer is “<em>any person, group, service, code, tool, or function that facilitates [cryptocurrency] mixing.</em>”</p>
<hr />
<p>Here is the information, within 30 days of being noticed by a business subject to the proposed rule, that would be <strong>required to be reported to the government, <em>for every single transaction</em>:</strong></p>
<ul>
<li>The amount of cryptocurrency transferred, in native units and USD value at the time.</li>
<li>The cryptocurrency involved.</li>
<li>The mixer protocol/service/etc. used, if known.</li>
<li>Any addresses associated with the mixer used.</li>
<li>Any addresses associated with the user who mixed.</li>
<li>The TXID of the relevant transaction.</li>
<li>The date of transaction.</li>
<li>Any IP addresses associated with the transaction.</li>
<li>A “narrative” explaining context, the transaction itself, what the institution did, etc.</li>
</ul>
<p>In terms of private information about the user involved in the transaction, here is <strong>the information proposed to be collected and directly reported to the government for every transaction:</strong></p>
<ul>
<li>User’s full name.</li>
<li>User’s date of birth.</li>
<li>User’s full address.</li>
<li>User’s email address.</li>
<li>User’s IRS Taxpayer Identification Number (TIN) or foreign equivalent.</li>
</ul>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/legal/fincen-proposes-insane-special-measures" target="_blank" class="external-link">FinCEN Proposes Insane Special Measures</a></li>
<li><a href="https://www.coindesk.com/policy/2023/10/19/us-treasury-seeks-to-name-crypto-mixers-as-money-laundering-concern/" target="_blank" class="external-link">U.S. Treasury Seeks to Name Crypto Mixers as 'Money Laundering Concern'</a></li>
<li><a href="https://fincen.gov/sites/default/files/federal_register_notices/2023-10-19/FinCEN_311MixingNPRM_FINAL.pdf" target="_blank" class="external-link">Full FinCEN proposal</a></li>
</ul>
FASB Votes To Introduce New Fair Value Accounting Rules For Bitcoin
2023-09-18T07:02:24.835Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/fasb-votes-to-introduce-new-fair-value-accounting-rules-for-bitcoin/
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://news.bloombergtax.com/financial-accounting/long-awaited-bitcoin-accounting-rules-to-capture-rises-dips" target="_blank" class="external-link">Long-Awaited Bitcoin Accounting Rules to Capture Rises, Dips</a></p>
<ul>
<li>Under new rules expected to be published by year end, companies <a href="https://news.bloombergtax.com/financial-accounting/long-debated-plan-to-account-for-cryptos-wild-swings-is-unveiled?ref=nobsbitcoin.com" target="_blank" class="external-link">that hold or invest</a> in [bitcoin] will be required to report their holdings at <strong>fair value, a measurement that aims to capture the most up-to-date value of an asset - including rebounds in value after prices dip</strong>. While the new standard will inject volatility into the earnings of companies that are heavily invested in [bitcoin], the ability to record recoveries will be an improvement over the <a href="https://news.bloombergtax.com/financial-accounting/bitcoin-miner-accounting-woes-reflect-lack-of-official-rules?ref=nobsbitcoin.com" target="_blank" class="external-link">current practice</a>, companies and accountants have told the Financial Accounting Standards Board for months.</li>
<li>The rules will go into effect as soon as 2025, but <strong>companies will have the option to apply them early</strong>, FASB agreed.</li>
<li>U.S. companies currently default to an American Institute of CPAs practice guide that treats [bitcoin and other crypto assets] as an <strong>intangible asset</strong>, a category that includes things like trademarks, copyrights, and brands - all items that, unlike [bitcoin], are rarely traded. This means companies record the value of their holdings at the historical price they paid and assess their holdings every quarter for impairments, or value declines. If the price of bitcoin drops even briefly during the period, it’s considered impaired. <strong>Companies can’t revise values upward if the market recovers</strong>.</li>
<li>The board kept its focus narrow, <strong>covering assets that are created or reside on distributed ledgers based on blockchain technology and are secured through cryptography</strong>. The crypto assets have to be currently classified as intangible assets, as defined by US accounting rules, and fungible, meaning they can be interchanged with assets of the same type.</li>
<li>Non-fungible tokens, or NFTs—unique digital tokens that can be anything from video clips to digital sports trading cards—won’t be covered by the rules. Stablecoins and wrapped tokens—digital tokens that allow crypto from one blockchain to be used on another—also aren’t covered.</li>
</ul>
</blockquote>
<p>The current way that Bitcoin is tracked on balance sheets is as an <strong>intangible asset</strong>, which means that if the <strong>price drops <em>below</em> the company's BTC purchasing price, then it counts as an impairment charge</strong> on the books (even without selling). However, if the BTC <strong>price increases <em>above</em> the original purchasing price, the company isn't allowed to report those gains</strong> on their financial statements without selling their BTC.</p>
<p>Under the new fair value accounting rules, companies are required to routinely reassess the market value of their digital assets and report any fluctuations - <strong>both positive and negative (without having to sell first)</strong>. This gives a more realistic view of a company's financial health and is more favorable to those who hold Bitcoin, increasing its appeal as a treasury asset.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://youtu.be/6TrOU__rK2M?si=7m5nl2CZPEccUj8N" target="_blank" class="external-link">More Rocket Fuel For Bitcoin (FASB) - YouTube</a></li>
<li><a href="https://www.nobsbitcoin.com/fasb-votes-in-favor-of-fair-value-accounting-for-bitcoin/" target="_blank" class="external-link">FASB Votes To Introduce New Fair Value Accounting Rules For Bitcoin</a></li>
<li><a href="https://news.bloombergtax.com/financial-accounting/long-awaited-bitcoin-accounting-rules-to-capture-rises-dips" target="_blank" class="external-link">Long-Awaited Bitcoin Accounting Rules to Capture Rises, Dips</a></li>
</ul>
Expanding Transparency by Open-Sourcing Liquid's Functionary Code
2023-08-21T07:29:36.275Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/expanding-transparency-by-open-sourcing-liquid-s-functionary-code/
<h1 id="what-is-liquid" tabindex="-1">What is Liquid?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://blog.liquid.net/the-truth-about-liquid/" target="_blank" class="external-link">The Truth About Liquid</a><br />
The <a href="https://t.me/liquid_community?ref=blog.liquid.net" target="_blank" class="external-link">Liquid Network</a> is a Bitcoin layer-2 solution that bolsters the network effects of Bitcoin by providing a secure platform for digital asset issuance, bringing new <a href="https://specter.solutions/liquid-for-bitcoiners-4-4-financial-securities-infrastructure/?ref=blog.liquid.net" target="_blank" class="external-link">financial instruments</a> and distributed trust models that investors and institutions can leverage.</p>
<p><strong>Liquid does not replace or compete with Bitcoin</strong>. Both protocols mutually benefit each other, with Bitcoin providing the underlying security and value for the BTC stored in the Federation’s multisig wallet and with Liquid as a complementary <a href="https://blog.liquid.net/exploring-bitcoin-layer-2/" target="_blank" class="external-link">financial layer</a> in a hyperbitcoinized future, onboarding modern financial instruments like securities and bonds.</p>
<hr />
<h2 id="liquid-is-decentralized-but-not-fully-permissionless" tabindex="-1">Liquid Is Decentralized But Not Fully Permissionless</h2>
<p>Liquid is designed to meet the rigorous standards of modern global financial markets while maintaining decentralization through distributed architecture and governance. <strong>While it's not fully permissionless like Bitcoin, Liquid is fault-tolerant, censorship-resistant, and has <a href="https://blog.liquid.net/six-differences-between-liquid-and-lightning/" target="_blank" class="external-link">different trade-offs</a> than other second layers like Lightning</strong>.</p>
<hr />
<h2 id="liquid-is-secure" tabindex="-1">Liquid Is Secure</h2>
<p><strong>Liquid blocks are generated by a geographically and geopolitically-distributed federation of 15 signers (i.e., functionaries)</strong> running hardware security modules (HSMs). The round-robin block proposing, combined with the consensus mechanism that drives Liquid, requires 2/3rds + 1 (or 11-of-15) functionaries to approve.</p>
<p>This means several functionaries can be offline, and the network will still create new blocks to progress the chain, bringing a higher degree of resilience. With the activation of <a href="https://blog.liquid.net/dynamic-federations-progress-report/" target="_blank" class="external-link">Dynamic Federations</a> (DynaFed) last year, Liquid functionaries will be able to join or leave without affecting network operations, enabling even greater resiliency.</p>
<hr />
<h2 id="funds-are-safe" tabindex="-1">Funds Are Safe</h2>
<p><strong>The BTC that backs the L-BTC on the Liquid Network is stored on the Bitcoin blockchain in a multisignature wallet that requires 11-of-15 functionaries to sign, using keys stored on their external HSMs</strong>. In addition, each functionary’s HSM can only authorize peg-outs to addresses derived from one of the PAK keys.</p>
<p><strong>Stealing from the Federation's multisig wallet would require compromising 11 separate HSM devices around the world in person while remaining undetected or for 11-of-15 functionary operators to be dishonest and collude</strong>.</p>
</blockquote>
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://blog.liquid.net/expanding-transparency-the-liquid-networks-functionary-code-is-now-open-source/" target="_blank" class="external-link">Expanding Transparency by Open-Sourcing Liquid's Functionary Code</a><br />
As of today, <strong>the Liquid Network’s functionary <a href="https://github.com/blockstream/liquid-functionary?ref=blog.liquid.net" target="_blank" class="external-link">source code</a> is free and open-source to the public</strong>. The release <strong>allows anyone to audit the code that runs the functionaries and to create their own Liquid-like network with similar features</strong>, such as <a href="https://blog.liquid.net/guide-to-confidential-transactions/" target="_blank" class="external-link">Confidential Transactions</a> and asset issuance.</p>
<p>More specifically, with the functionary code, independent parties and users can now review how:</p>
<ul>
<li>Unsigned Liquid blocks are produced (in <a href="https://blog.liquid.net/bitcoin-core-and-elements/" target="_blank" class="external-link">Elements</a>)</li>
<li>Liquid blocks are distributed and signed</li>
<li><a href="https://glossary.blockstream.com/dynamic-federations-dynafed/?ref=blog.liquid.net" target="_blank" class="external-link">DynaFed</a> transitions, which update the set of functionaries who operate the network, are coordinated</li>
<li>Network parameters are added to the block headers to update consensus rules</li>
<li>UTXOs are swept back to the Federation address when they are close to expiring</li>
<li>Peg-outs are analyzed and delivered</li>
</ul>
<p>This fulfills a long standing <a href="https://blog.blockstream.com/response-to-aj-towns-blog-post-about-liquid-consensus-changes/?ref=blog.liquid.net" target="_blank" class="external-link">goal</a> to release the code after the Dynamic Federations (DynaFed) update. DynaFed enables the dynamic addition and removal of functionaries from Liquid, allowing the number of functionaries to be changed more elegantly and securely without needing to <a href="https://glossary.blockstream.com/fork/?ref=blog.liquid.net" target="_blank" class="external-link">fork</a>. If one functionary is unavailable, the network remains unaffected by seamlessly substituting one functionary for another to sign blocks.</p>
<hr />
<h2 id="what-is-a-liquid-functionary" tabindex="-1">What is a Liquid Functionary?</h2>
<p>As a refresher, let's revisit how the Liquid functionaries operate and how Liquid works overall.</p>
<p>Liquid is governed by its federated model of geographically and geopolitically distributed <a href="https://blog.liquid.net/liquid-adds-six-new-federation-members-bringing-total-membership-to-67/" target="_blank" class="external-link">members</a>. Of these 67 members, 15 operate functionaries that run custom-built hardware security modules (HSMs) and specialized software to produce blocks and manage the pegged bitcoin in an 11-of-15 multisignature wallet.</p>
<p>Each functionary has two security components: the hardware and software. The Federation member’s host and the custom-built HSMs at the hardware level. And second, at the software level, the Blocksigner and Watchmen, which communicate with each other inside the HSM.</p>
<p>The Blocksigner software <a href="https://elementsproject.org/en/doc/22.0.0/rpc/generating/getnewblockhex/?ref=blog.liquid.net" target="_blank" class="external-link">asks</a> Elements for an unsigned block and then distributes it to the other functionaries so each can sign, <a href="https://elementsproject.org/en/doc/22.0.0/rpc/generating/combineblocksigs/?ref=blog.liquid.net" target="_blank" class="external-link">combine</a> the signatures, and <a href="https://elementsproject.org/en/doc/0.18.1.7/rpc/mining/submitblock/?ref=blog.liquid.net" target="_blank" class="external-link">add</a> them to the Liquid Network. The Watchmen software manages the multisignature wallet that handles the pegged bitcoin, delivering peg-outs, and sweeping the controlled UTXOs before they expire.</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/liquid-federation-open-sourced-its-functionary-code/" target="_blank" class="external-link">Liquid Federation Open Sourced Its Functionary Code</a></li>
<li><a href="https://blog.liquid.net/the-truth-about-liquid/" target="_blank" class="external-link">The Truth About Liquid</a></li>
<li><a href="https://blog.liquid.net/bitcoin-core-and-elements/" target="_blank" class="external-link">Mirror Image: Bitcoin Core and Elements</a></li>
</ul>
Enigma
2023-05-30T01:57:37.503Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/enigma/
<p>Created by <a href="https://twitter.com/Polyd_" target="_blank" class="external-link">@Polyd_</a>. It's a separate scaling framework that leverages <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/op-ctv/">OP_CTV</a> covenants. Users send "anchor" bitcoin transactions that commit to a larger set of off-chain transactions by embedding their combined hash into blocks on the base layer. The transactions getting hashed into the blockchain are effectively aggregated together with only a single on-chain transaction.</p>
<blockquote>
<p>[!QUOTE] <a href="https://app.sigle.io/polydeuces.id.stx/bo-iHio5_4iTlvWwXwZ9l" target="_blank" class="external-link">Bitcoin and CTV Covenants</a></p>
<ul>
<li>In Bitcoin today, if you need to perform a transaction, you acquire the recipient’s address, create a transaction paying them and then sign it. The Enigma Network will allow you to multi-thread your actions. Instead of sending transactions to be directly mined inside a block, you send an anchor transaction representing all of your transactions.</li>
<li>BIP-119 or CheckTemplateVerify (CTV), introduces the capability to pre-commit transactions through pre-signed hashed transactions.</li>
<li>To put it in perspective, if Taproot enables signature aggregation, CTV takes it a step further by enabling transaction aggregation. If channels allow you to go up and off-chain, covenants allow you to go down and in-chain.</li>
</ul>
</blockquote>
<p>The Enigma Network is more of a framework that other protocols can fit into. <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ark/">Ark</a> and <a href="https://www.nobsbitcoin.com/darkpool-tarpit/" target="_blank" class="external-link">Darkpool</a> are examples, according to <a href="https://twitter.com/Polyd_/status/1661654154962427904?s=20" target="_blank" class="external-link">@Polyd_</a>.</p>
<p>Some useful analogies describing Enigma:</p>
<p><a href="https://twitter.com/OwenKemeys/status/1657445153273946119" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/@OwenKemeys_Tweet_EnigmaAnalogy.png" alt="@OwenKemeys_Tweet_EnigmaAnalogy.png" /></a></p>
<p><a href="https://twitter.com/z3ke_sk1/status/1658152242875170818" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/@z3ke_sk1_Tweet_EnigmaAnalogy.png" alt="@z3ke_sk1_Tweet_EnigmaAnalogy.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://stacker.news/items/178371" target="_blank" class="external-link">Stacker News post about the Enigma Network</a></li>
</ul>
Encroaching surveillance and regulatory pressure around digital assets
2023-12-18T22:51:18.790Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/encroaching-surveillance-and-regulatory-pressure-around-digital-assets/
<p>These are all developments from Q4 2023. It seems we're getting closer to the "then they fight us" stage of bitcoin's adoption cycle.</p>
<blockquote>
<p>[!QUOTE] <a href="https://dergigi.com/2021/08/02/implications-of-outlawing-bitcoin/" target="_blank" class="external-link">Implications of Outlawing Bitcoin | Dergigi</a><br />
In light of recent comments by legislators and politicians, we must not forget what Bitcoin does and how it does what it does. Bitcoin is text. Bitcoin is speech. Bitcoin is math. Bitcoin has no jurisdiction, just like 2+2=4 has no jurisdiction. Bitcoin knows no borders. Bitcoin is everywhere and nowhere, and if used and secured properly, bitcoin is as confiscatable as a thought. No amount of legalese or otherwise complicated language will change these facts.</p>
<p>Using Bitcoin does not require any special equipment. We use software and specialized hardware to use Bitcoin more efficiently, and in a more secure manner, but in theory, Bitcoin can be run on pen and paper.</p>
<p>The following statements are and will always be true:</p>
<ul>
<li>You can create a private key by flipping a coin.</li>
<li>Holding a private key allows you to receive sats and create transactions.</li>
<li>Creating a transaction is math.</li>
<li>Sending a transaction is sending a message.</li>
<li>Mining bitcoin is guessing a number.</li>
<li>Everything in Bitcoin is information.</li>
</ul>
</blockquote>
<h1 id="fin-cen-proposal-of-special-measure-regarding-cvc-mixing" tabindex="-1">FinCEN Proposal of Special Measure Regarding CVC Mixing</h1>
<p>The Financial Crimes Enforcement Network (FinCEN) recently proposed policy FINCEN-2023-0016, named <strong>"Proposal of Special Measure Regarding Convertible Virtual Currency Mixing, as a Class of Transactions of Primary Money Laundering Concern"</strong>. The proposal places extensive reporting requirements on banks and money-service businesses for transactions involving convertible virtual currencies (CVCs) or legal tender digital assets (LTDAs) - basically any cryptocurrency. The policy also prohibits many anonymity-preserving technologies and requires additional customer identity verification for "unhosted" wallet transactions.</p>
<p>On <a href="https://egodeath.capital/" target="_blank" class="external-link">Ego Death Capital</a>'s blog, <a href="https://primal.net/preston" target="_blank" class="external-link">Preston Pysh</a> wrote a <a href="https://egodeath.capital/blog/fincen-may-be-violating-your-rights-bitcoin" target="_blank" class="external-link">fantastic breakdown of this proposal and its implications</a>. Preston's analysis outlined several key areas in which this proposal infringes on constitutional rights and individual liberties:</p>
<ol>
<li><strong>Unreasonable searches and seizures</strong> - Expansive data collection and identity verification requirements violate 4th amendment protections.</li>
<li><strong>Freedom of speech and association</strong> - Anonymity prohibitions and identification mandates risk chilling effects on protected financial expressions and associations.</li>
<li><strong>Financial privacy</strong> - Reporting rules and AECVC bans erode autonomy over personal finance data and anonymous transactions.</li>
<li><strong>Due process</strong> - Vague standards, excessive penalties, and inadequate procedural protections violate due process rights.</li>
<li><strong>Personal information security</strong> - Onerous data collection and storage rules jeopardize informational privacy rights.</li>
<li><strong>Non-discrimination</strong> - Bias against crypto users, small businesses, and marginalized groups worsens inequality.</li>
<li><strong>Financial services access</strong> - Barriers like reporting, recordkeeping, and identity rules exclude vulnerable communities.</li>
</ol>
<blockquote>
<p>[!QUOTE] <a href="https://egodeath.capital/blog/fincen-may-be-violating-your-rights-bitcoin" target="_blank" class="external-link">Analysis of FinCEN Policy FINCEN-2023-0016: Overreach and Impact on Individual Rights</a><br />
<strong>Conclusion</strong></p>
<p>This document provides a critical examination of the Financial Crimes Enforcement Network’s (FinCEN) recent proposal 2023-016, pinpointing potential infringements on individual rights and freedoms. <strong>The analysis delves deep into the implications of the proposal on freedom of expression, anonymity, privacy, and association, drawing from a wealth of legal precedents to underscore the gravity of these concerns.</strong></p>
<p>Highlighting the precarious balance between ensuring financial security and upholding constitutional liberties, it is argued that FinCEN’s proposal tips the scales unfavorably. The document emphasizes that, while the demand for transparency is grounded in the aim of ensuring financial security, it inadvertently dampens financial expression and erodes the anonymity and privacy integral to a free society.</p>
<p>Concerns are also raised about the proposal’s potential to exacerbate financial disparities, marginalize vulnerable communities, and erode consumer trust in financial institutions. The document calls for a critical reevaluation of the proposal, urging policymakers to contemplate its far-reaching implications and to seek a balanced approach that protects individual rights while addressing financial crimes.</p>
<p>Most importantly, this document serves as a <a href="https://www.federalregister.gov/documents/2023/10/23/2023-23449/proposal-of-special-measure-regarding-convertible-virtual-currency-mixing-as-a-class-of-transactions#open-comment" target="_blank" class="external-link"><strong>call to action</strong></a>, <strong>encouraging engagement with the policymaking process, voicing of concerns, and advocating for a framework that upholds liberty, ensuring a future where financial integrity and individual freedoms coexist harmoniously.</strong></p>
</blockquote>
<h1 id="u-s-treasury-counter-terrorist-financing-memo" tabindex="-1">U.S. Treasury Counter-Terrorist Financing Memo</h1>
<p>In a recent memo, the U.S. Treasury Department made <a href="https://www.nobsbitcoin.com/u-s-treasury-recommends-massive-expansion-of-warrantless-surveillance-power-to-sanction-open-source-software/" target="_blank" class="external-link">recommendations to Congress for new authorities to strengthen counter-terrorist financing laws related to cryptocurrencies</a>. The recommendations raise civil liberties concerns by seeking massive expansion of warrantless surveillance and powers to sanction open source software.</p>
<p>Key areas of concern:</p>
<ol>
<li>Vague language suggesting new secondary sanctions <strong>could enable sweeping restrictions on crypto transactions</strong> that lack transparency and public input.</li>
<li>Defining non-custodial wallet providers, DeFi services, miners etc. as "financial institutions" subject to existing Bank Secrecy Act rules would <strong>inappropriately regulate software providers not in trusted relationships with users - many of the entities Treasury proposes regulating as financial institutions are engaged merely in the publication of software</strong>.</li>
<li><a href="https://www.coincenter.org/broad-ambiguous-or-delegated-constitutional-infirmities-of-the-bank-secrecy-act/" target="_blank" class="external-link">The BSA already gives Treasury extremely broad discretion to monitor any financial transactions</a> and <strong>the existing authority can already be used to go much further and potentially criminalize everyday life</strong> - expanding that scope is overkill.</li>
<li>Making blockchain nodes subject to International Emergency Economic Powers Act sanctions <strong>is likely technologically infeasible, would threaten free speech, and seeks to resolve issues like the Tornado Cash litigation in an unconstitutional way</strong>.</li>
</ol>
<p>While appropriately filling gaps related to centralized intermediaries could be reasonable, the recommendations overall risk undermining constitutional rights by over-regulating parties not in positions of consumer trust. More precise, transparent policymaking is needed that focuses on accountable institutions rather than sweeping restrictions or surveillance on software and speech.</p>
<p><a href="https://x.com/skwp/status/1734361030120104406?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-BSA-X-1.png" alt="BitDevs-29-BSA-X-1.png" /></a></p>
<h1 id="digital-asset-anti-money-laundering-act" tabindex="-1">Digital Asset Anti-Money Laundering Act</h1>
<p>Originally proposed in 2022 and <a href="https://www.coincenter.org/the-digital-asset-anti-money-laundering-act-is-an-opportunistic-unconstitutional-assault-on-cryptocurrency-self-custody-developers-and-node-operators/" target="_blank" class="external-link">met with extreme criticism at the time</a>, the Digital Asset Anti-Money Laundering Act has resurged with wider support this year. Elizabeth Warren has expanded the coalition of Senate support for the bill, which claims to "mitigate the illicit finance risks that crypto poses by closing loopholes and bringing the digital asset ecosystem into greater compliance with the anti-money laundering and countering the financing of terrorism (AMF/CFT) frameworks that govern much of the financial system."</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.warren.senate.gov/newsroom/press-releases/warren-expands-coalition-of-banking-committee-support-for-bill-cracking-down-on-cryptos-use-in-money-laundering-drug-trafficking-sanctions-evasion" target="_blank" class="external-link">Warren Expands Coalition of Banking Committee Support for Bill Cracking Down on Crypto’s Use in Money Laundering, Drug Trafficking, Sanctions Evasion</a><br />
The Digital Asset Anti-Money Laundering Act would:</p>
<ul>
<li><strong>Extend Bank Secrecy Act (BSA) responsibilities, including Know-Your-Customer requirements</strong>, to digital asset wallet providers, miners, validators, and other network participants that may act to validate, secure, or facilitate digital asset transactions.</li>
<li><strong>Address a major gap with respect to “unhosted” digital wallets</strong> – which allow individuals to bypass AML and sanctions checks – by directing FinCEN to finalize and implement its December 2020 proposed rule, which would require banks and money service businesses (MSBs) to verify customer and counterparty identities, keep records, and file reports in relation to certain digital asset transactions involving unhosted wallets or wallets hosted in non-BSA compliant jurisdictions.</li>
<li><strong>Direct FinCEN to issue guidance to financial institutions</strong> on mitigating the risks of handling, using, or transacting with digital assets that have been anonymized using digital asset mixers and other anonymity-enhancing technologies.</li>
<li><strong>Strengthen enforcement of BSA compliance</strong> by directing the Treasury Department to establish an AML/CFT compliance examination and review process for MSBs and other digital asset entities with BSA obligations and directing the Securities and Exchange Commission and Commodity Futures Trading Commission to establish AML/CFT compliance examination and review processes for the entities they regulate.</li>
<li><strong>Extend BSA rules regarding reporting of foreign bank accounts to include digital assets</strong> by requiring United States persons engaged in a transaction with a value greater than $10,000 in digital assets through one or more offshore accounts to file a Report of Foreign Bank and Financial Accounts (FBAR) with the Internal Revenue Service.</li>
<li><strong>Mitigate the illicit finance risks of digital asset ATMs</strong> by directing FinCEN to ensure that digital asset ATM owners and administrators regularly submit and update the physical addresses of the kiosks they own or operate and verify customer and counterparty identity.</li>
</ul>
</blockquote>
<h1 id="section-702-of-the-foreign-intelligence-surveillance-act-fisa" tabindex="-1">Section 702 of the Foreign Intelligence Surveillance Act (FISA)</h1>
<p>The House Intelligence and Judiciary Committees have advanced two competing bills to reauthorize Section 702 of the Foreign Intelligence Surveillance Act (FISA), which allows warrantless surveillance of non-US persons abroad.</p>
<p>On 12/8/2023, the <a href="https://www.eff.org/deeplinks/2023/12/section-702-needs-reform-and-oversight-not-expansion-congress-should-oppose-hpsci" target="_blank" class="external-link">Electronic Frontier Foundation (EFF) wrote an article</a> analyzing the two bills and comparing the implications of each:</p>
<ul>
<li>The House Intelligence bill (<strong>HR 6611</strong>) would renew 702 for 8 years with minimal reforms. It would expand surveillance powers, including using 702 databases to vet immigrants and asylum seekers. The Judiciary bill (<strong>HR 6570</strong>) is superior - it would ban warrantless searches of the databases concerning Americans, limit data purchases that evade constitutional protections, and only extend 702 for 3 years.</li>
<li>The analysis argues HR 6611 fails to meaningfully address ongoing abuse of 702 for domestic surveillance, with over 4000 violations annually, especially by the FBI. It represents an unchecked expansion of mass surveillance.</li>
<li>In contrast, HR 6570 would start to impose oversight, preserve rights against unwarranted searches, and force reexamination of 702 before long-term renewal.</li>
<li>The article calls for urging Congress members to vote against HR 6611 under the "Queen of the Hill" procedural rule to defeat the Intelligence bill, preventing an entrenchment of overbroad, unaccountable surveillance powers lacking sufficient public debate. The Judiciary bill offers a better path forward by balancing security and liberty interests.</li>
</ul>
<p>On 12/15/2023, the <a href="https://www.eff.org/deeplinks/2023/12/surveillance-showdown-fizzled" target="_blank" class="external-link">EFF posted an update article</a>:</p>
<ul>
<li>Both proposals (<strong>HR 6611</strong> and <strong>HR 6570</strong>) were pulled from December legislative calendar due to heated debate.</li>
<li>Section 702 was set to expire December 31, 2023, though language was added to the National Defense Authorization Act (<strong>NDAA</strong>) to extend the legislative authority of Section 702 through April 2024.</li>
<li>It is disappointing that, <a href="https://www.eff.org/deeplinks/2023/09/federal-governments-privacy-watchdog-concedes-702-must-change" target="_blank" class="external-link">despite all of the reported abuses of the Section 702 program</a>, Congress chose to pass a reauthorization bill instead of making the necessary effort to include critical reforms.</li>
<li>EFF still <a href="https://act.eff.org/action/tell-congress-they-must-defeat-hpsci-s-horrific-surveillance-bill" target="_blank" class="external-link">urges all Members to <strong>oppose</strong></a> the Intelligence Committee’s bill, H.R.6611, the FISA Reform and Reauthorization Act of 2023.</li>
</ul>
<h1 id="related-news" tabindex="-1">Related News</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/tether-freezes-all-ofac-sanctioned-wallets-in/" target="_blank" class="external-link">Tether Freezes All OFAC-Sanctioned Wallets in 'Proactive' Security Measure</a></li>
<li><a href="https://www.nobsbitcoin.com/wallet-of-satoshi-stops-serving-us-customers/" target="_blank" class="external-link">Wallet of Satoshi to Stop Serving Customers in the United States</a></li>
<li><a href="https://www.nobsbitcoin.com/nodeless-shuts-down-canada/" target="_blank" class="external-link">Nodeless.io Shuts Down Due to Investigation for Running 'Illegal Money Transmission' Business in Canada</a></li>
<li><a href="https://www.nobsbitcoin.com/apple-confirms-governments-using-push-notifications-to-surveil-users/" target="_blank" class="external-link">Apple Confirms Governments Use Push Notifications to Surveil Users</a></li>
</ul>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.warren.senate.gov/newsroom/press-releases/warren-expands-coalition-of-banking-committee-support-for-bill-cracking-down-on-cryptos-use-in-money-laundering-drug-trafficking-sanctions-evasion" target="_blank" class="external-link">Warren Expands Coalition of Banking Committee Support for Bill Cracking Down on Crypto’s Use in Money Laundering, Drug Trafficking, Sanctions Evasion</a></li>
<li><a href="https://tftc.io/elizabeth-warren-bitcoin/" target="_blank" class="external-link">Elizabeth Warren Introduces Bill to Crack Down on Bitcoin</a></li>
<li><a href="https://www.nobsbitcoin.com/elizabeth-warren-wants-bank-secrecy/" target="_blank" class="external-link">Elizabeth Warren Wants to Extend Bank Secrecy Act Regulations to Free & Open Source Software</a></li>
<li><a href="https://www.coincenter.org/the-digital-asset-anti-money-laundering-act-is-an-opportunistic-unconstitutional-assault-on-cryptocurrency-self-custody-developers-and-node-operators/" target="_blank" class="external-link">The Digital Asset Anti-Money Laundering Act is an opportunistic, unconstitutional assault on cryptocurrency self custody, developers, and node operators</a></li>
<li><a href="https://www.nobsbitcoin.com/house-intelligence-committees-section-702-reform-bill-marks-the-biggest-expansion-of-surveillance-in-united-states-since-the-patriot-act/" target="_blank" class="external-link">US House Intelligence Committee’s Section 702 Reform' Bill Marks The Biggest Expansion of Surveillance in United States Since the Patriot Act</a></li>
</ul>
Dual Funding Officially Merged into Lightning Network Specifications
2024-02-19T23:34:29.901Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/dual-funding-officially-merged-into-lightning-network-specifications/
<p><a href="https://njump.me/nevent1qqsv49qx632j2tfhcf05ppcyltdppl9e7lyvw9jkhpycnngmll4gs8cpz3mhxue69uhhyetvv9ujumn0wd68ytnzvupzpj79aa4srj73l73vh9df2ncycwz6jdkp4phphwwvmuk0pa8tatxt94j75e" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-DualFunding-Nifty-1.png" alt="BitDevs-31-DualFunding-Nifty-1.png" /></a></p>
<h1 id="what-is-dual-funding" tabindex="-1">What is dual funding?</h1>
<p>The "version 2 channel establishment protocol" is the underlying protocol that enables dual funding, which <strong>allows for the creation of Lightning channels where both participants can contribute funds</strong>. This means participants can immediately spend in either direction once the channel is opened, potentially balancing liquidity and splitting the channel opening costs. V2 channel establishment protocol may also be used for negotiating the opening of single-funded channels, but dual funding is the primary use case.</p>
<p><a href="https://youtu.be/i_GxmNZjwhk" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-31-DualFunding-YT-Thumbnail.png" alt="BitDevs-31-DualFunding-YT-Thumbnail.png" /></a></p>
<p>Dual funding is already supported in some Lightning Network implementations, like LND and Core Lightning, but without a formal <a href="https://github.com/lightning/bolts/blob/master/00-introduction.md" target="_blank" class="external-link">BOLT</a> (Basis of Lightning Technology), implementations might not adhere to any specific standard. Now that Lisa's PR has been merged, implementations have clear guidelines on how to support this functionality in a consistent way.</p>
<p>Overall, dual funding in the Lightning Network allows for more flexible and balanced payment channels by enabling both parties to contribute funds, potentially improving the overall efficiency and functionality of the network.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://github.com/lightning/bolts/pull/851" target="_blank" class="external-link">interactive-tx: Add dual-funding flow, using the interactive tx protocol (feature 28/29) by niftynei · Pull Request 851 · lightning/bolts · GitHub</a></li>
<li><a href="https://bitcoinops.org/en/topics/dual-funding/" target="_blank" class="external-link">Dual funding | Bitcoin Optech</a></li>
<li><a href="https://voltage.cloud/blog/lightning-network-faq/what-are-dual-funded-lightning-channels/" target="_blank" class="external-link">Breakdown: Dual Funded Lightning Channels | Voltage</a></li>
</ul>
District Court Dismisses Coin Center's Case Against Unconstitutional Financial Surveillance
2023-08-01T01:03:16.611Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/district-court-dismisses-coin-center-s-case-against-unconstitutional-financial-surveillance/
<p>On July 20, 2023, Jerry Brito, Executive Director of Coin Center, <a href="https://nitter.at/jerrybrito/status/1682073500184461321" target="_blank" class="external-link">announced</a> that "Coin Center's case challenging Congress’s expansion of Section 6050I of the tax code was dismissed as unripe by the district court", which means that at the beginning of 2024, "<strong>citizens who are recipients of crypto payments of $10,000 or more [will be required] to report to the government not just the transaction, but the PII of the sender as well – all without a warrant</strong>." This amendment was part of the Infrastructure Investment and Jobs Act that was passed in 2021. Coin Center plans to appeal to the Sixth Circuit as soon as possible.</p>
<p>In June 2022, Coin Center wrote a blog post outlining the consequences of this legislation and what is at stake:</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.coincenter.org/coin-center-has-filed-a-court-challenge-against-the-treasury-dept-over-unconstitutional-financial-surveillance/" target="_blank" class="external-link">Coin Center has filed a court challenge against the Treasury Dept. over unconstitutional financial surveillance</a><br />
...there is one provision in the infrastructure bill that is unconstitutional on its face and that simply can’t be fixed through regulation. It is the so-called 6050I amendment, and it will require individuals and businesses who receive $10,000 or more in crypto to report to the government not just the name of who sent them the funds, but that person’s date of birth and Social Security number as well.</p>
<p>Are you an artist who sells a painting or an NFT for $15K? You have to file a form informing the government on your client’s personal information. Are you a nonprofit who receives anonymous donations for your humanitarian work? No longer. You may have to give the government a list of your donors. This is an affront to our civil liberties that must be challenged the only way they can at this point: in court.</p>
<p>Our suit leads with two major claims: (1) <strong>forcing ordinary people to collect highly intrusive information about other ordinary people, and report it to the government without a warrant, is unconstitutional under the Fourth Amendment</strong>; and (2) <strong>demanding that politically active organizations create and report lists of their donors’ names and identifying information to the government is unconstitutional under the First Amendment</strong>.</p>
</blockquote>
<h2 id="first-claim" tabindex="-1">First claim</h2>
<p><strong>"The first claim is about privacy and our Fourth Amendment right to be secure from unreasonable searches and seizures."</strong> Under the “third-party doctrine”, if you give a third party (banks, social media, etc.) access to your private information, you lose your right to prevent warrantless searches of that information. <strong>The key point is that this 6050I provision expands the scope beyond third parties</strong> - peer-to-peer transactions that involve no third parties would still fall under these new requirements, which means individuals on both sides of the trade would be required to report transaction/KYC information about each other to the government.</p>
<h2 id="second-claim" tabindex="-1">Second claim</h2>
<p><strong>"The second claim is about our freedom of association."</strong> The 6050I provision would require political advocacy groups to report their supporter information, which would enable various government agencies to more easily monitor such political activity. This is unconstitutional because such requirements would "chill" political association (as individuals would be more hesitant to contribute funding to politically controversial groups).</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/coin-centers-case-against-unconstitutional-financial-surveillance-dismissed-in-district-court/" target="_blank" class="external-link">District Court Dismisses Coin Center's Case Against Unconstitutional Financial Surveillance</a></li>
</ul>
DCCA RELEASE - Hawai‘i Digital Currency Innovation Lab To Conclude
2024-02-18T05:25:16.942Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/dcca-release-hawai-i-digital-currency-innovation-lab-to-conclude/
<blockquote>
<p>[!QUOTE] <a href="https://governor.hawaii.gov/newsroom/dcca-release-hawaii-digital-currency-innovation-lab-to-conclude/" target="_blank" class="external-link">Governor Josh Green, M.D. | DCCA RELEASE: Hawai‘i Digital Currency Innovation Lab To Conclude</a><br />
The Hawai‘i Department of Commerce and Consumer Affairs Division of Financial Institutions (DFI) and the Hawai‘i Technology Development Corporation (HTDC) jointly <strong>announce that the Digital Currency Innovation Lab (DCIL) is scheduled to conclude on June 30, 2024</strong>. This collaborative research project, initiated in 2020, was created to explore the landscape of digital currency activity within the state, while assessing the regulatory framework required for companies specializing in digital currency (also known as cryptocurrency).</p>
<p>Before the creation of the DCIL, digital currency companies operating in Hawai‘i were required to obtain a money transmitter license. The research project studied whether the money transmitter license was appropriate for the transaction activity, whether the industry should be regulated, and if regulated, what the regulation would include to protect consumers. The project initially spanned a two-year term during which qualified digital currency companies were invited to participate while providing information regarding their operations to the DFI and HTDC. A two-year extension was announced in 2022.</p>
<p>The research project revealed that the activities conducted by digital currency companies did not align with the concept of money transmission as outlined in Chapter 489D of the Hawai‘i Revised Statutes. Consequently, DFI worked with the industry, both participants and the larger industry companies, to propose a special digital currency licensing scheme during the initial term of the DCIL and during the subsequent two-year extension but were unable to provide one that provided sufficient protections for consumers.</p>
<p>With the DCIL coming to an end on June 30, 2024, <strong>the findings indicate that digital currency companies will no longer require a Hawai‘i-issued money transmitter license to conduct business within the state</strong>. The companies will be able to continue transaction activity as an unregulated business. However, such companies will be responsible for complying with any applicable federal licensing or registration requirements, including those set forth by the Financial Crimes Enforcement Network, Securities and Exchange Commission, and the Financial Industry Regulatory Authority, as well as any pertinent federal regulatory requirements involving consumer protection, anti-money laundering measures, etc.</p>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://decrypt.co/215537/aloha-bitcoin-hawaii-drops-crypto-licensing-pilot-leaving-industry-unregulated" target="_blank" class="external-link">Aloha, Bitcoin: Hawaii Drops Crypto Licensing Pilot, Leaving Industry Unregulated - Ryan Ozawa</a><br />
The policy change comes after years of debate, study, and sudden-death failures of attempted fixes in the state legislature. The state's financial regulator, the Division of Financial Institutions (DFI) under the Hawaii Department of Commerce and Consumer Affairs—has long maintained that cryptocurrency—and specifically cryptocurrency exchanges—fall under its purview. This jurisdiction is based on classifying cryptocurrency exchanges like Coinbase and Binance as money transmitters—putting them in the same regulatory bucket as companies like Western Union.</p>
<p>Money transmitters, however, are subject to aggressive reserve requirements in Hawaii. <strong>Which meant crypto exchanges were required to have cash reserves equal to their digital holdings.</strong> While such a policy would make catastrophic failures like FTX improbable, it made conducting business in the islands impossible.</p>
<p><strong>Most major exchanges simply refused to service customers in Hawaii.</strong></p>
<p>To address the stalemate, the DFI collaborated with the Hawaii Technology Development Corporation (HTDC) to establish a Digital Currency Innovation Lab (DCIL). The pilot program created a regulatory sandbox in which exchanges could temporarily serve Hawaii customers without fear of regulatory action, in exchange for data on the business they ultimately transacted in the state.</p>
<p><strong>More than 30 digital currency companies applied, 16 were admitted into the program, and twelve of them were ultimately on board <a href="https://decrypt.co/39217/hawaii-bitcoin-crypto-companies-pilot" target="_blank" class="external-link">for the pilot program's launch</a> in 2020.</strong> In the mean time, the state began developing a license specifically for crypto companies.</p>
<p>Even within the bounds of the regulatory sandbox, <strong>Hawaii managed to register <a href="https://www.canva.com/design/DAFGKTSz7Pg/okj0SguY0AbBoTzDD2jpdw/view?utm_content=DAFGKTSz7Pg&utm_campaign=designshare&utm_medium=link&utm_source=publishsharelink" target="_blank" class="external-link">a fair amount of activity</a> on participating exchanges, serving as many as 146,000 customers transacting as much as $284 million in one quarter.</strong></p>
</blockquote>
Craig Wright is not Satoshi Nakamoto
2024-03-16T23:57:18.936Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/craig-wright-is-not-satoshi-nakamoto/
<p>The Cryptocurrency Open Patent Alliance (COPA) is a non-profit community formed to encourage the adoption and advancement of cryptocurrency technologies and to remove patents as a barrier to growth and innovation.</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.opencrypto.org/2023-12-20-COPAvCraigWright/" target="_blank" class="external-link">New development in the seminal COPA v Craig Wright case, which seeks to guarantee the long-term freedom of the bitcoin and open-source community</a><br />
The COPA v Wright trial seeks to disprove the claim made by Wright that he is Satoshi Nakamoto, the author of the bitcoin whitepaper and, consequently, the founder of bitcoin. Wright is involved in several lawsuits in the UK - which rely on this claim being true - alleging that multiple organisations and individuals in the crypto community violated his copyright in the bitcoin whitepaper, bitcoin database, and other intellectual property related to the creation of bitcoin. He insists, on that basis, that those organisations and individuals cannot host the bitcoin whitepaper or otherwise use that intellectual property. This claim, in effect, stops the development of bitcoin, chills and silences developers with the threat of litigation, and indeed undermines the entire spirit of the open-source community.</p>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://www.opencrypto.org/2024-03-14-Justice-Mellor-Rules-That-Craig-Wright-Is-Not-Satoshi-Nakamoto-in-COPA-v-Wright-Trial/" target="_blank" class="external-link">Justice Mellor Rules That Craig Wright Is Not Satoshi Nakamoto in COPA v Wright Trial</a><br />
Today, Justice Mellor found that the evidence in the COPA v Wright trial was “overwhelming,” ruling that:</p>
<ol>
<li>Dr Wright is <strong>not</strong> the author of the Bitcoin White Paper.</li>
<li>Dr Wright is <strong>not</strong> the person who adopted or operated under the pseudonym Satoshi Nakamoto from 2008 - 2011.</li>
<li>Dr Wright is <strong>not</strong> the person who created the Bitcoin System.</li>
<li>Dr Wright is <strong>not</strong> the author of the initial versions of the Bitcoin software.</li>
</ol>
<p>Justice Mellor commented: “Any further relief will be dealt with in my written judgement. I will extend time for filing any appellant’s notice until 21 days after the form of order hearing, which will be appointed following the hand down of my written judgement.”</p>
<p>A COPA spokesperson said, “This decision is a win for developers, for the entire open source community, and for the truth. <strong>For over eight years, Dr. Wright and his financial backers have lied about his identity as Satoshi Nakamoto and used that lie to bully and intimidate developers in the bitcoin community. That ends today with the court’s ruling that Craig Wright is not Satoshi Nakamoto.</strong>”</p>
</blockquote>
<p><a href="https://njump.me/nevent1qqsxeqq2fpgmrr0e9eq78uvw59zxxtu9ql7lgsnslc7fhxm47ecya8qzyrzf6549wvmx0y4e5mjg29v8c2qy97eylftzt3kk0wxftjr4rt9p23mde0y?ref=nobsbitcoin.com" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-32-Faketoshi-Nostr-1.png" alt="BitDevs-32-Faketoshi-Nostr-1.png" /></a></p>
<blockquote>
<p>[!QUOTE] <a href="https://www.opencrypto.org/2024-03-13-12-reasons-why-Craig-Wright-is-not-Satoshi-Nakamoto/" target="_blank" class="external-link">12 reasons why Craig Wright is not Satoshi Nakamoto</a><br />
Here’s the compendium of reasons why Wright is simply not Satoshi Nakamoto:</p>
<ol>
<li><strong>The Bitcoin White Paper.</strong> The Bitcoin White Paper was produced in OpenOffice, not in LaTeX. The real Satoshi would know that. Dr Wright has insisted that it was produced in LaTeX and has tried in vain to support the story with false documents.</li>
<li><strong>The exchange with Adam Back.</strong> The real Satoshi would know that in response to Satoshi’s August 2008 approach, Adam Back was not dismissive of the Bitcoin concept and did not say it would fail. Dr Wright has insisted otherwise, yet his story has been shown to be false by Adam Back’s own emails.</li>
<li><strong>The influence of Wei Dai’s work on Satoshi.</strong> The real Satoshi first discovered Wei Dai’s b-money proposal in August 2008, as is clear from the now-disclosed Adam Back and Satoshi email correspondence. Dr Wright, by contrast, has claimed to have been captivated by Wei Dai’s work since the late 1990s. Dr. Wright has compounded this by telling a series of lies about work he supposedly did with Professor Wrightson, who he says pointed him to work by Wei Dai, including a paper which Wei Dai did not in fact write.</li>
<li><strong>The Satoshi PGP key.</strong> The real Satoshi would know that the PGP, first of all, had been created, posted and used before 2011; that its primary function was as a signing key; and that it wasn’t restricted in some way to a Vistomail account. Dr Wright’s various inconsistent accounts about the PGP key only go to show that he’s not the person who generated it.</li>
<li><strong>The Bitcoin Code.</strong> The real Satoshi would know the code they wrote, what the CheckBlock function did, that the CheckBlockHeader wasn’t a function that existed in 2013, and what an unsigned integer is. During trial, Dr Wright showed he didn’t know any of this.</li>
<li><strong><a href="http://upload.ae/" target="_blank" class="external-link">Upload.ae</a>.</strong> The real Satoshi would know that the site from which the White Paper was made available was a free file hosting service owned and operated from Dubai and not, as Dr Wright has said, a secondary server operated by him from Melbourne.</li>
<li><strong>Patch Tuesday.</strong> The real Satoshi would know that the Bitcoin System did not crash as a result of patches issued by Microsoft on Patch Tuesday in January 2009. Dr Wright’s series of false stories about Patch Tuesday provides further evidence that he is not Satoshi.</li>
<li><strong>Mining requirements.</strong> The real Satoshi would know that the early operation of the Bitcoin System didn’t require more than 70 computers or cost $11,000 per month to run in electricity costs. Dr Wright’s account of his 2009 mining operations only reveals that he’s not Satoshi and wasn’t mining at that point.</li>
<li><strong>Bitcoin transactions.</strong> The real Satoshi would know that, contrary to Dr Wright’s claims, Satoshi did not send Bitcoin to Zooko Wilcox-O’Hearn. In addition, the real Satoshi would be able to correctly name a person to whom they transferred Bitcoin, in addition to the few names known publicly, for example Nick Bohm, whose name wasn’t public. And if, as Dr Wright claimed, Satoshi had sent Bitcoin to a hundred people not already known, then the real Satoshi would have been able to name at least one of them.</li>
<li><strong>The Genesis Block.</strong> The real Satoshi would not make the serious and obvious mistake of claiming that there isn’t a public key associated with the Coinbase transaction for the Genesis Block. Yet that is the mistake Dr Wright made in his statements.</li>
<li><strong>The Satoshi cryptocurrency post.</strong> The real Satoshi would know that Satoshi, and not Martti Malmi, wrote the cryptocurrency post in July 2010. The real Satoshi would certainly not have gone on insisting the opposite in the face of clear evidence to the contrary, as Dr Wright did.</li>
<li><strong>The transfer to GitHub.</strong> The real Satoshi would have known that in 2010 to 2011, Satoshi took no objection to Gavin Andresen using GitHub in place of SourceForge in connection with the Bitcoin System. Satoshi would also have known that Vladimir van der Laan had nothing to do with the transfer, and that there wasn’t a shred of evidence to suggest he had. Dr Wright’s false accounts on those points mark him out as not being Satoshi.</li>
</ol>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.opencrypto.org/2024-03-14-Justice-Mellor-Rules-That-Craig-Wright-Is-Not-Satoshi-Nakamoto-in-COPA-v-Wright-Trial/" target="_blank" class="external-link">Justice Mellor Rules That Craig Wright Is Not Satoshi Nakamoto in COPA v Wright Trial</a></li>
<li><a href="https://www.opencrypto.org/2024-03-13-12-reasons-why-Craig-Wright-is-not-Satoshi-Nakamoto/" target="_blank" class="external-link">12 reasons why Craig Wright is not Satoshi Nakamoto</a></li>
<li><a href="https://www.opencrypto.org/2024-02-22-witnesses-satoshi-correspondence/" target="_blank" class="external-link">Witnesses speak out against Craig Wright in COPA vs Craig Wright trial; testimony includes never-before-published correspondence with Satoshi Nakamoto</a></li>
<li><a href="https://bitcoinmagazine.com/legal/the-trial-that-could-end-craig-wrights-satoshi-claim-for-good-started-today" target="_blank" class="external-link">COPA vs Wright: The Trial That Could End Faketoshi's Satoshi Claim</a></li>
<li><a href="https://x.com/BitMEXResearch/status/1768202295513165911?s=20" target="_blank" class="external-link">@BitMEXResearch X Thread</a></li>
<li><a href="https://www.opencrypto.org/about/" target="_blank" class="external-link">About COPA</a></li>
</ul>
Coinkite response to Ledger Donjon exploit on ColdCard Mk4
2023-09-17T22:16:00.774Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/coinkite-response-to-ledger-donjon-exploit-on-cold-card-mk4/
<h1 id="what-happened" tabindex="-1">What Happened?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://blog.coinkite.com/donjon-faults-2023/" target="_blank" class="external-link">Coinkite response to Ledger Donjon exploit on ColdCard Mk4</a><br />
<a href="https://donjon.ledger.com/" target="_blank" class="external-link">Ledger’s Donjon lab</a> has released a new presentation on Laser Fault Injection against the DS28C36B used in the Coldcard Mk4. We call the specific chip attacked “the SE2” or “second secure element”, because it is one of three chips—from different vendors—that we use to secure your master secret.</p>
<p><strong>TL;DR They didn’t get the master secret out (your Bitcoin seed), because the Mk4 stores that seed in SE1 (not SE2) and encrypts that with a key which requires full compromise three chips: SE1, SE2 and the main processor (MCU).</strong></p>
<p>At Coinkite, we see today’s report as <a href="https://blog.coinkite.com/understanding-mk4-security-model" target="_blank" class="external-link">great validation of our multi-vendor secure element approach</a>. The work Donjon lab is funding does help the entire Bitcoin community by validating the security claims made by companies like us.</p>
<p>They revealed they are able to access about half of the memory slots of the chip, by removing it from the Coldcard, melting off the chip case, mounting it to a special circuit board and then using a laser mounted to an X/Y gantry to zap the chip at a specific microscopic point. Doing that at the just right time glitches the chip into doing the wrong thing.</p>
</blockquote>
<p>Ledger is a hardware wallet manufacturer, and they have a penetration testing research unit called <strong>DonJon</strong>, which is tasked with testing and exploiting various crypto hardware wallets. They are the only lab that has ever successfully extracted a private key from a ColdCard Mk3, and they did so by cracking the secure element in the device. The ColdCard Mk4 came out as a response to this incident.</p>
<p><strong>The ColdCard Mk3 had one secure element (SE) and one microcontroller unit (MCU). The ColdCard Mk4 added a second secure element, so it has two secure elements and the MCU.</strong> A secure element is a tamper-resistant chip that is responsible for securely storing confidential and cryptographic data.</p>
<p>In this case, this was Ledger DonJon's first attempt at trying to compromise the ColdCard Mk4. They successfully cracked <strong>one of the two secure elements</strong>. However, because of the way it's designed, <strong>in order to extract the private key from the Mk4, you need to compromise all 3 components: the MCU, secure element one, and secure element two</strong>.</p>
<p>Ledger DonJon's latest research showed that they could crack only the second secure element on the Mk4. That secure element is just tasked with validating trick PIN codes, so compromising it might only reveal trick PIN combinations that were saved on that device, not the actual seed phrase.</p>
<p>An <em>older</em> penetration test attempt also proved that Ledger DonJon could crack the first (and only) secure element on the ColdCard Mk3, revealing the private key. As a result, Ledger is suggesting that they can "practically" hack the ColdCard Mk4 if they were to combine these 2 exploits, but <strong>they haven't actually demonstrated it</strong>.</p>
<p>Coinkite is claiming that Ledger's research is presented in a way that could be easily misinterpreted. At first glance, it sounds like Ledger compromised the seed phrase on a ColdCard Mk4, but that isn't the case. They might theoretically know how to do it but haven't yet demonstrated that they have the skill to actually pull it off.</p>
<p><a href="https://x.com/add_BTC/status/1702656477079470157?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-26-Ledger-CCMk4-Exploit.png" alt="BitDevs-26-Ledger-CCMk4-Exploit.png" /></a></p>
<p><strong>Ultimately, in order to theoretically reveal the seed phrase on a stolen ColdCard Mk4, you would need access to very expensive lab equipment (worth ~$500K-$1M ), sophisticated knowledge of how to use that lab equipment, and lots of luck - you could easily make a mistake and brick the device.</strong></p>
<p><em>TLDR</em>; everything has tradeoffs. The ColdCard Mk4 remains an extremely difficult device to compromise, and no one has actually demonstrated a successful private key extraction on it. That being said, you should <strong>operate under the assumption that any hardware wallet can be cracked if a thief has enough time and resources</strong>.</p>
<hr />
<p>You can also largely protect yourself from this threat by leveraging <strong>multi-vender <a href="https://unchained.com/features/what-is-multisig" target="_blank" class="external-link">multisignature</a></strong> to secure your bitcoin. Multisignature adds additional private keys that must also be individually extracted from different devices in order to steal funds. If those keys are stored in hardware wallets from different vendors (i.e., a combination of ColdCard, Ledger, Trezor, BitBox, etc.), a potential attacker would need to know how to crack all of those devices.</p>
<p>And as more people use multisignature, the single signature users also benefit from a sort of protection by proxy - compromising any single device might not even be enough to steal funds because that device could just be part of a larger multisig quorum. The attacker might spend a lot of money on expensive equipment, potentially fail to compromise the hardware wallet, or succeed and still not have access to any money.</p>
<blockquote>
<p>[!TIP]<br />
Bitcoin private keys can be stored in so many different ways that you also gain a lot of plausible deniability if you are ever coerced to hand over the keys. You could potentially separate funds into any number of different custody schemes, including various combinations of singlesig and multisig wallets.</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://blog.coinkite.com/understanding-mk4-security-model/" target="_blank" class="external-link">Understanding The COLDCARD Mk4 Security Model and Secure Element Use | COINKITE Blog</a></li>
</ul>
Blockstream Greenlight
2023-07-31T07:15:55.134Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/blockstream-greenlight/
<h1 id="description" tabindex="-1">Description</h1>
<p><a href="https://blockstream.com/lightning/greenlight/" target="_blank" class="external-link">Greenlight</a> is a Lightning Network service powered by <a href="https://blockstream.com/lightning/" target="_blank" class="external-link">Core Lightning</a> and operated by <a href="https://blockstream.com/" target="_blank" class="external-link">Blockstream</a>. The basic idea is that users can spin up a Lightning node on-demand in Blockstream's cloud infrastructure and interact with it as needed without ever having to relinquish custody of the private keys used to operate the node. Christian Decker explains the 5-minute overview of Greenlight and its intended purpose in this <a href="https://youtu.be/u4ovmbDFJcY" target="_blank" class="external-link">YouTube video</a>.</p>
<blockquote>
<p>[!QUOTE] <a href="https://blog.blockstream.com/en-greenlight-by-blockstream-lightning-made-easy/" target="_blank" class="external-link">Greenlight by Blockstream: Lightning Made Easy</a><br />
The key differences from other setups can be summed up by the following:</p>
<ul>
<li><strong>Security</strong>: Greenlight is non-custodial. While the nodes run on our infrastructure, our operations team never has access to your funds since keys are managed on the user’s device. Operations proposed by the node are verified on the user device before signing off on them.</li>
<li><strong>Low cost</strong>: c-lightning’s low resource footprint and the fact that nodes run on-demand means running a node using Greenlight is very inexpensive compared to other providers. During the initial testing phases of the service, users won’t be charged at all.</li>
<li><strong>One user, one node</strong>: Unlike bundling the node with the front-end app, Greenlight allows sharing a single node among any number of front-ends. This saves a lot of on-chain fees for the user, and reduces fragmentation of user funds. No more moving funds from your home node to your phone because you ran out of capacity.</li>
<li><strong>Simple recovery</strong>: Losing your phone at sea won’t mean losing your bitcoin. Since we manage the database and the backups, recovering the funds is as simple as initiating a new front-end with your seed phrase.</li>
<li><strong>On-board to off-board</strong>: Our main goal is to provide new users with a great first experience and a suitable starting point into the Bitcoin space. Conversely, we want users to eventually become knowledgeable enough to begin taking more control over their infrastructure. For that reason, we will offer users the option of exporting their node and loading it onto a platform of their choice.</li>
</ul>
</blockquote>
<p>At the time of writing (for <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-23/">Socratic Seminar 23</a>), Blockstream has announced that Greenlight is now available for developers to start experimenting with:</p>
<blockquote>
<p>[!QUOTE] <a href="https://blog.blockstream.com/greenlight-by-blockstream-scalable-non-custodial-lightning-infrastructure-now-open-to-developers/" target="_blank" class="external-link">Greenlight by Blockstream: Scalable, Non-Custodial Lightning Infrastructure Now Open to Developers</a></p>
<h3 id="what-s-available-today" tabindex="-1">What’s Available Today?</h3>
<p>While we are still actively developing Greenlight, the public interfaces are stable and ready for you to explore.</p>
<p>The client repository contains several components:</p>
<ul>
<li><code>gl-client</code> and its language bindings provide a simple API to interact with Greenlight and user nodes. The built-in signer takes care of managing your seed, and keeps it hidden from the node, and by extension us, the service operators. The <em>end-to-end</em>-verification (still under active development, not complete in this preview) in the signer ensures that any state change was authorized by an authenticated client, such that a potential node host compromise does not result in funds being lost.</li>
<li><code>gl-testing</code> provides a complete mock environment to test your code against, rather than the real Greenlight service. To learn more, see our <a href="https://blockstream.github.io/greenlight/tutorials/testing/?ref=blog.blockstream.com" target="_blank" class="external-link">tutorial</a> on how <code>gl-testing</code> can be used in a Python project using the Python bindings in <code>gl-client-py</code>, with more tutorials in the pipeline.</li>
<li><code>gl-plugin</code> and <code>gl-signerproxy</code> allow anybody to replicate the interface exposed by Greenlight nodes, including the ability to use a remote signer, rather than keeping the seed on an exposed server.</li>
</ul>
<p>The last two are the basis for our off-boarding plans: <strong>if you outgrow Greenlight, or want more control, we enable you to off-board into your own infrastructure and all of your applications will keep working. This means that if you develop your application against the Greenlight API, you will automatically have support for Core Lightning out of the box.</strong></p>
</blockquote>
<p>The last part of the snippet above is particularly interesting and speaks to Blockstream's intentions when funneling users into their ecosystem of products and services. They're following a 3-phase approach:</p>
<ol>
<li><strong>Onboarding</strong>: Pull forward a good onboarding UX for users new to Lightning by offloading all of the technical complexities associated with node provisioning and management - without sacrificing self-custody.</li>
<li><strong>Educating</strong>: Provide the resources to teach users how Lightning node management works and build the tools that help streamline that knowledge transfer.</li>
<li><strong>Offboarding</strong>: When users are ready, enable a seamless offboarding mechanism to switch to self-hosted, fully-sovereign infrastructure at home.</li>
</ol>
<p id="bc7889">On a related note, in mid-June 2023, <a href="https://community.corelightning.org/c/start-here/build-on-l2-supports-vls-integration-into-greenlight-with-150-000-grant" target="_blank" class="external-link">Build on L2 (BOL2) announced support</a> for the <a href="https://vls.tech/?ref=nobsbitcoin.com" target="_blank" class="external-link">Validating Lightning Signer project</a> (VLS) with a $150,000 grant. BOL2 is a community initiative spearheaded by Blockstream to connect developers building on technology related to Core Lightning and Liquid. VLS is an open source project that includes the ability to operate on hardware security modules HSMs. This will improve enterprise-level Lightning node security by helping to keep private keys segregated from the node itself. Users can define rules for the types of transactions that the VLS module will automatically sign (e.g., channel opens, routing forwards, etc.), which will enable more sophisticated and programatic node management without necessarily requiring direct human interaction or relinquishing full signing access. VLS is fully integrated with Blockstream's Greenlight, which means that developers can easily access this signer without custom modifications.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-20/#13b467">Socratic Seminar 20 discussion</a></li>
<li><a href="https://thebitcoinmanual.com/articles/greenlight-blockstream/" target="_blank" class="external-link">What Is Greenlight By Blockstream - The Bitcoin Manual</a></li>
<li><a href="https://medium.com/breez-technology/lightning-for-everyone-in-any-app-lightning-as-a-service-via-the-breez-sdk-41d899057a1d" target="_blank" class="external-link">Lightning for Everyone in Any App: Lightning as a Service via the Breez SDK</a></li>
</ul>
Bitkey
2023-07-06T06:00:25.716Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bitkey/
<h1 id="description" tabindex="-1">Description</h1>
<p><a href="https://block.xyz/" target="_blank" class="external-link">Block</a>, formerly known as Square, announced in 2022 that they'd be developing a new self-custody solution, which has since been named the <a href="https://bitkey.build/" target="_blank" class="external-link">Bitkey</a>. This solution leverages a 2-of-3 multisignature quorum where each component is built in-house and structured to work in tandem with one another:</p>
<blockquote>
<p>[!QUOTE] <a href="https://bitkey.build/how-the-wallet-works/" target="_blank" class="external-link">How the wallet we're building works</a><br />
With broad adoption in mind, the wallet we’re building has 3 valuable elements that together provide flexibility, security, and peace of mind. The 3 parts of the customer’s wallet have different permissions and optionality built-in to allow the customer to use these self-serve tools in a way that fits with their needs, which we realize will vary greatly for different people in different geographic settings. The wallet is composed of 3 things:</p>
<ol>
<li><strong>A mobile app</strong> that’s easy to use and allows customers to safely own and manage their bitcoin, while finding partners where they can buy/sell/convert between fiat and bitcoin</li>
<li><strong>A hardware device</strong> that adds additional layers of security when moving money and acts as a self-serve recovery kit when a customer loses their mobile wallet</li>
<li><strong>Recovery tools</strong> that help customers recover from losing part or all of their wallets, and that have a clear, defined set of rules to provide customers with reasonable support and peace of mind</li>
</ol>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/Bitkey%20Quorum%20Structure.png" alt="Bitkey Quorum Structure.png" /></p>
<hr />
<p><strong>How do I move money?</strong></p>
<p>You can always move money without interacting with our servers by using the mobile key stored in the mobile app on your phone and the key stored in your hardware device – but we don’t expect you to do this for every transaction as you might want some more flexibility while still maintaining a high level of security.</p>
<p>For smaller transactions, you only need your mobile key stored in your phone, and we will provide the second key in response to you when you move your money with your mobile app. This lets you keep your hardware device tucked away somewhere safe and reserved for larger-sized transactions - or for the recovery capabilities it holds, which we discuss in a few questions below. We don’t expect you to bring the hardware device with you for daily usage - in fact, it’s safer to keep your mobile phone separate from the hardware device on a regular basis as both of those things (the mobile app and the hardware device) are needed together to move larger amounts of money.</p>
<hr />
<p><strong>Does the company that makes this wallet have control over my funds?</strong></p>
<p>No, we do not have control over your funds. You have true ownership: we cannot move your money for you, and you can move your money at any time without us. You have two of the three keys in your possession - on your mobile phone and on your hardware device. We only have one key, and because two keys are required to make a transaction, we cannot access, move, or take your money, or grant anyone else access to your money. Our key only serves two purposes: (1) only with your explicit permission, cooperate in recovering your wallet in case you’ve lost your phone or hardware, and (2) sign, in response to you moving your money with the mobile key for transactions you’ve allowed that do not additionally require your hardware device.</p>
</blockquote>
<p>At the time of writing (for <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-23/">Socratic Seminar 23</a>), Block recently began accepting applications for an <a href="https://bitkey.build/beta-launch/" target="_blank" class="external-link">external beta program</a> though the end of June 2023 and would reach out to those chosen to participate by the end of the following month.</p>
<h1 id="engineering-and-amp-design-principles" tabindex="-1">Engineering & Design Principles</h1>
<blockquote>
<p>[!QUOTE] <a href="https://bitkey.build/product-principles/" target="_blank" class="external-link">Product Principles & Jobs To Be Done: Our Compass for the Journey Ahead</a><br />
<strong>Two Jobs To Be Done</strong></p>
<p>Our opportunity is to build a safe and easy way for people from all around the world with different experiences with technology and financial services to own bitcoin and manage their money with confidence – on their own terms.</p>
<p>That means we want to serve <strong>two</strong> <a href="https://jobs-to-be-done.com/the-history-of-jobs-to-be-done-and-outcome-driven-innovation-a2fdfd0c7a9a?ref=bitkey.build" target="_blank" class="external-link"><strong>Jobs To Be Done</strong></a> for our customers:</p>
<ol>
<li><strong>Help me <em>own</em> bitcoin easily and safely</strong>. Ownership of your keys means ownership of your money. We are building a wallet that prioritizes security and great customer experiences equally.</li>
<li><strong>Help me <em>manage</em> my bitcoin by making it easy to send and receive money anywhere in the world quickly, easily, and cost-effectively</strong>. Bitcoin, especially with its layer 2 innovation, Lightning, can help people send and receive money between friends, families, and businesses – both internationally and domestically. This decentralized payments network has the potential to create a more inclusive financial system for those who have traditionally been underserved.</li>
</ol>
<hr />
<p><strong>Our Product Principles</strong></p>
<ol>
<li>Simple and safe financial tools will empower people to access and benefit from bitcoin.</li>
<li>A customer should own their money with confidence and peace of mind.</li>
<li>A customer should be able to manage their money quickly, easily, and cost-effectively on their own terms.</li>
<li>We build transparently together with partners.</li>
<li>Global-first always.</li>
</ol>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://bitkey.build/losing-your-keys-without-losing-your-coins/" target="_blank" class="external-link">Losing your keys without losing your coins</a><br />
<strong>Who we’re building for</strong></p>
<p>As we laid out in <a href="https://bitkey.build/product-principles/" target="_blank" class="external-link">our product principles</a>, we are trying to build a better tool for a global, mainstream audience to <em>safely</em> self-custody and manage their digital assets, starting with bitcoin. Safety, in the context of a wallet, breaks out into two equally essential jobs:</p>
<ul>
<li>Ensure you do have access (<strong>availability</strong>)</li>
<li>Ensure unauthorized people don’t have access (<strong>security</strong>)</li>
</ul>
<p><strong>These two jobs are almost always in tension</strong>. Any added protection to keep a bad actor out adds a risk that it may also trip up the owner, and any new backup or alternative way to access creates a new potential security hole. From our global research, we've learned that most people holding coins on custodial platforms are hesitant to move to self-custody wallets because they are nervous about making mistakes using them - and not because they think self-custody solutions are less secure. They feel stuck: worried about the lack of control they might experience in a custodial platform, yet also anxious about the unforgiving product experiences that exist in today's relatively technical self-custody wallets.</p>
<p>To make self-custody accessible to this kind of audience, we need to <strong>optimize not just for security, but for safety</strong>. That means building tools that balance the desire for perfect protection against practical realities - accidents happen, and people won’t always perform security procedures perfectly, especially ones that require new behaviors and deep understanding. We need to create forgiving recovery experiences that prioritize easier paths to get customers back on their feet when something goes wrong, with more tolerance for simple mistakes, and without a steep learning curve.</p>
<hr />
<p><strong>Recovery experiences and tools to enable them</strong></p>
<ol>
<li><strong>Enabling your App on a new phone with Cloud Backups and your Hardware</strong></li>
</ol>
<ul>
<li>Cloud Backups allows two encrypted copies of the App Key to be exported to customer-owned cloud storage during Wallet creation, one then decrypted by the Hardware Key, and the second decrypted by a secret held by Server and made available to App in rare emergencies (see 3.) below). The first backup is helpful for quick and easy setup of Wallet on new mobile devices, while the second copy protected by Social Recovery creates a path to recover from loss of both customer-owned hardware devices and their keys.</li>
</ul>
<ol start="2">
<li><strong>Replacing your lost Hardware with Key Rotation with Delay and Notify</strong></li>
</ol>
<ul>
<li>A permanently lost key (either Hardware or App) can be replaced by ‘rotating in’ a new one by using the remaining customer-controlled key + Server’s key to move funds to the control of a new 2-of-3 address. Because Wallet won’t require a login/password elsewhere and identifies customers through key possession, there is a risk of theft by any would-be attackers temporarily compromising a single customer-owned device/key. To mitigate this risk without relying on things like formal identity verification, this recovery flow is time-gated to allow a rightful owner time to be made aware of and cancel any fraudulently-triggered recovery attempts by a bad actor. Notifications of recovery countdowns are broadcast persistently to any online App part of a Wallet undergoing recovery, and periodically to any other customer-provided communication channels such as email or via SMS. If that delay completes without anyone canceling by proving control of the key being replaced, then Server can more safely treat that key as lost and proceed to cooperate in replacing it.</li>
</ul>
<ol start="3">
<li><strong>Recovering from losing <em>both</em> your App and Hardware with Social Recovery</strong></li>
</ol>
<ul>
<li>We plan to offer Social Recovery as an additional opt-in layer of protection that provides another alternative to identifying you as the real owner during a recovery event. This can be used to expedite Delay+Notify Key Rotation, and even unlocks a recovery path in a (more rare) scenario where something goes wrong with both your keys at once. Instead of relying on passwords and/or government-issued IDs to authorize yourself, Wallet can let you rely on people you trust to confirm you are who you say you are, so that Server can safely help you restore your Wallet even with one or both your keys missing or unavailable.</li>
</ul>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://bitkey.build/staying-safe-with-self-custody/" target="_blank" class="external-link">Staying Safe with Self-Custody</a><br />
<strong>How Bitkey Can Help</strong></p>
<p>We're building Bitkey with a focus on security, resilience, and simple user experiences for a broad audience. Our system security choices mean Bitkey:</p>
<ul>
<li><strong>Uses three keys instead of one, by default.</strong> Unlike in a single-signature setup, an attacker must be able to compromise more than one key in order to steal funds - compromising one key is not enough.</li>
<li><strong>Incorporates secure hardware to keep one key stored offline.</strong> Storing one of the keys in a device that is not persistently connected to the internet helps reduce the attack surface available to malicious parties looking to steal keys - and thus your money.</li>
<li><strong>Doesn't require customers to hold onto seed phrases,</strong> which are hard to hold onto and easy to get stolen.</li>
<li><strong>Incorporates important platform security features,</strong> the details of which we'll cover in depth in future posts. We’re designing for considerations including, but not limited to:
<ul>
<li>Safe key generation, storage, and management on each of the three platforms that store a key (mobile app and secure hardware - which hold 2 keys controlled by the customer; and Block servers, which hold only one key, not enough to move money in this 2-of-3 model)</li>
<li>Secure authentication on each of the three platforms</li>
<li>Features that enable customers to ensure they're using the legitimate Bitkey mobile app and hardware</li>
<li>Finding and fixing security issues by inviting scrutiny in the open and investing in security patching and hardening</li>
</ul>
</li>
</ul>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://bitkey.build/seed-phrases-are-sharp-edges/" target="_blank" class="external-link">Seed Phrases are Sharp Edges</a></p>
<ul>
<li>A seed phrase consists of 12 or 24 words representing your bitcoin ownership - it’s a human-readable version of the secret that can unlock your bitcoin on the blockchain. Lose track of it, and you’ve lost access to your money – potentially forever. Let someone else see it, and you’ve given them all they need to take your money. Keeping them safe is a lot of responsibility! It’s a sharp edge of self-custody that we are aiming to smooth out.</li>
<li>To prevent attackers from stealing people’s keys, we want to make it hard to accidentally leave the keys in an unsafe state or even to accidentally hand the keys over.</li>
<li>More fundamentally, beyond safe storage of these seed phrases, a newcomer to bitcoin might not fully understand that the seed phrases are all they - or an attacker - needs to move their money.</li>
<li>And there are so many ways for people to get tricked with seed phrases, from social engineering to <a href="https://usa.kaspersky.com/blog/cryptocurrency-giveaway-scam/26492/?ref=bitkey.build" target="_blank" class="external-link">phishing</a> to schemes that trick people into using an <a href="https://medium.com/metamask/rotten-seed-phrases-a-new-scam-targeting-crypto-users-b414f9ef292e?ref=bitkey.build" target="_blank" class="external-link">attacker-provided seed phrase</a> during wallet setup. <strong>We don’t want our customers subject to these types of attacks, so we aren’t burdening them with seed phrases in the first place.</strong></li>
<li>Even customers who use hardware wallets and don't hand over their seed phrase to scammers can still be subject to remote theft. When customers have to figure out how to back up a sensitive seed themselves, some end up with a copy in their cloud storage that is either completely unencrypted or secured with a password weak enough to be brute-forced by an attacker who steals the file.</li>
<li><strong>So if seed phrases have so many sharp edges, why does anyone use them?</strong>
<ul>
<li><strong>The first reason is to have a backup</strong>: people use seed phrases to back up keys without needing to worry about file formats or other ways to protect digital information. After all, seed phrases are easy to write on post-it notes, or take a picture of and put in cloud storage. Bitkey is a multisignature wallet that uses three keys instead of one, so our <a href="https://bitkey.build/losing-your-keys-without-losing-your-coins/" target="_blank" class="external-link">approach to recovery</a> allows customers to recover from losing either or both of their devices, but without having to rely on unencrypted seed phrases left accessible to prying eyes.</li>
<li><strong>A second reason people use seed phrases lies in ‘key portability’</strong>: the ability to freely move your keys and money to and from different wallets, often by importing a seed phrase. If the provider of your software or hardware wallet goes out of business, or otherwise stops providing services to you for any reason, you can take your seed phrase - and your money - elsewhere. <strong>We think this property is essential to self-custody, and are working on a feature that will allow customers to export their keys and take them to another wallet if they so choose</strong>, but without asking people to hold onto seed phrases until they need them.</li>
</ul>
</li>
</ul>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://bitkey.build/screens-are-not-a-panacea/" target="_blank" class="external-link">Screens are not a Panacea</a><br />
<strong>Easier to Use Means More Self-Custody Owners</strong></p>
<p>In earlier sections, we covered how a screen can be useful in several cases:</p>
<ol>
<li>For providing receive addresses to a sender either in person or via multiple platforms/channels that the sender can compare against</li>
<li>For verifying outgoing transaction details, specifically on a device that was <em><strong>not</strong></em> used to supply the hardware wallet with the transaction details in the first place</li>
</ol>
<p>We think the above aren’t likely to happen for a broad audience - <strong>it's hard to know how to verify correctly and very easy to do a naive comparison between screens that doesn't mitigate most threats</strong>. We also think that reducing the complexity involved in hardware wallet management is one of the biggest levers we can use to bring more people to self-custody and put them in control of their money. Here's why:</p>
<ul>
<li>Small screens are hard to use, and often accompanied by user input mechanisms that are hard to use, too. We want to make self-custody more accessible -- and enabling customers to use their familiar phone screen as much as possible is a key enabler.</li>
<li>Screens add cost and complexity to hardware wallets, including introducing more ways for the hardware to fail. We want to drive the cost of self-custody down, and the reliability up.</li>
<li>Using a screen correctly in order to provide protection is hard – customers have to know to compare their hardware wallet screen to an independent source on outgoing transfers, and to share receive addresses through multiple channels. When many customers don’t do this in practice, they incur a user experience cost that doesn’t come with the benefits they were hoping for. And the user experience cost also means that it’s more likely the feature will be misused, or won’t be used at all. We want large security benefits for low user experience cost – not the other way around.</li>
<li>Correctly verifying properties of transactions is likely to become more technical, not less (e.g. as the community builds on top of Bitcoin over time, for example to provide functionality over the Lightning network). We want to build solutions that hide this complexity from people where we can, while still giving them a set of options that allow them to add more verification friction where they really want it.</li>
</ul>
</blockquote>
<h1 id="opinion" tabindex="-1">Opinion</h1>
<p>Block recognized some of the common pitfalls of single-signature security setups and how multisignature can help reduce some of those pain points (at the cost of increased complexity). In order to abstract away some of challenges of multisignature (and custody in general), they decided to build a full-stack solution that focuses on a cohesive user experience, rather than interoperability with other vendors.</p>
<p>This setup <strong>will probably serve as a really simple and robust self-custody option to onboard a lot of new people into Bitcoin</strong> without overwhelming them.</p>
<p>Bitkey differs from typical collaborative custody setups (like <a href="https://unchained.com/" target="_blank" class="external-link">Unchained</a> or <a href="https://nunchuk.io/" target="_blank" class="external-link">Nunchuk</a>) in that more trust must be put in Block specifically, even though the user still maintains control of the majority of keys in the optimistic case. So far, it doesn't sound like the mobile app or backend server will be open sourced, so users will have to trust that the code does what it says and that Block will not act maliciously (e.g., pushing a bad update to the mobile app, the backend infrastructure gets compromised, etc.). Because there are 3 separate keys with different risk/security considerations, the odds of a user losing funds are still much lower than they would be with a typical custodial setup, even if Block were compromised in some way.</p>
<p>Vendor lock-in is also somewhat of a concern - each component of this multisignature structure is designed to work as a complementary unit, so users would not be able to rotate to a different vendor's hardware device (e.g., ColdCard) or use a different "backend server" key custodian without setting up an entirely different multisignature quorum completely separate from Block's solution. The current design doesn't seem to accommodate swapping out vendors for any of the 3 keys without migrating away from the Bitkey product family entirely.</p>
<p>You could also argue against some of the Bitkey team's claims about seed phrases and screens on hardware devices:</p>
<ul>
<li>Properly safeguarded seed phrases are a new concept for people and doing so properly takes research and practice. However, <strong>it's still the foundation of true self-custody</strong> - if you don't maintain a copy of each seed phrase and public key in the multisignature quorum, you can't unilaterally exit Block's infrastructure. Although Block says they'll allow users to access seed phrases if requested, you still have to trust that they actually will and that the software hasn't been compromised in some way to prevent it. <strong>Abstracting away the seed phrases enables a more convenient UX at the cost of reduced individual sovereignty</strong>. It adds friction in the worst-case scenario where the user needs to move money without Block's cooperation.</li>
<li>On validating transaction information on hardware device screens, I generally agree with the Bitkey team's assessment of the pitfalls and false sense of security. Currently, <strong>it isn't easy to properly validate and protect each piece of data in transit at each touchpoint in the transaction signing process</strong>. Standardization around best practices is still ongoing in the industry (and the technology is constantly evolving). Because of that, work still needs to be done to designing a truly secure transaction signing experience across the full stack that's interoperable with different vendors (where different different combinations of hardware and software wallets can still be used together). <strong>Block got around that issue by designing their Bitkey product suite without interoperability in mind</strong>. Their server, mobile app, and hardware wallet specifically work as a unit and (presumably) no other vendors, so risk/responsibilities can be more effectively distributed across the stack (since each signing device in the Bitkey quorum serves a distinct purpose). The setup is less generalized to build a more cohesive experience, which is why the screenless Bitkey hardware wallet can defer a lot of the transaction verification to the server - that doesn't work with a typical multisignature quorum of 3 random hardware wallets because there is no server to do the same validation. If you're comfortable with this level of vendor lock-in and reliance on Block's infrastructure, then the screen on the actual device isn't very important (since you're just trusting the server to verify transaction data instead).</li>
</ul>
<p><strong>Still, for the majority of relative newcomers (and even some more experienced Bitcoiners), this set of tradeoffs is likely a good balance of security and convenience. For more paranoid Bitcoiners (or those who just want more optionality), there are other custody options that provide more privacy, security, and sovereignty, depending on the tradeoffs they're willing to accept.</strong> Either way, Bitkey's approach to custody is fairly novel, and the rest of the industry will gain useful insights from the user feedback.</p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li>HNL BitDevs <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/">Self-Custody Workshop</a> reference material</li>
<li><a href="https://www.zherbert.com/bitkey/" target="_blank" class="external-link">Block's Bitkey "Hardware Wallet" will Violate your Privacy and Security</a></li>
</ul>
Bitcoin Transaction Package Relay
2023-05-30T01:55:58.503Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bitcoin-transaction-package-relay/
<h1 id="description" tabindex="-1">Description</h1>
<blockquote>
<p>[!QUOTE] <a href="https://bitcoinops.org/en/topics/package-relay/" target="_blank" class="external-link">Package relay | Bitcoin Optech</a><br />
<strong>Package relay</strong> is a proposed feature for Bitcoin relay nodes that would allow them to send and receive packages of related transactions which would be accepted or rejected based on the feerate of the overall package rather than having each individual transaction in the package accepted or rejected based only on its own feerate.</p>
<p>Without package relay, it’s not possible to effectively <a href="https://bitcoinops.org/en/topics/cpfp/" target="_blank" class="external-link">CPFP</a> fee bump a transaction that’s below the minimum feerate nodes accept. Nodes will reject the parent transaction for its too low feerate and then ignore the fee-bumping child transaction because the parent transaction is needed in order to validate the child. This is especially problematic because the minimum feerate that a node accepts depends on the contents of its mempool, so a parent transaction that could previously be fee bumped might not be bumpable now. This has significant security implications for LN and other time-sensitive contract protocols that want to depend on CPFP fee bumping.</p>
<p>The main obstacle to adding package relay support to the Bitcoin P2P protocol is ensuring that an implementation of it doesn’t create any new vectors for denial-of-service attacks.</p>
</blockquote>
<h1 id="package-relay-over-nostr" tabindex="-1">Package Relay over Nostr</h1>
<p>While we wait for package relay functionality to eventually get incorporated into bitcoin natively, others have searched for more creative ways to accomplish the same thing via external tools - like <a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2023-May/021700.html" target="_blank" class="external-link">using nostr to relay these transaction packages</a>. With this method, transaction packages can be broadcast to nostr relays using a dedicated note kind, and miners (or any node) can watch relays for that type of note to identify these transaction bundles and add them to their local mempools - all without relaying on typical mempool gossip propagation.</p>
<p><a href="https://twitter.com/joostjgr/status/1658487013237211155" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/Nostr_txPackageRelay_Demo.png" alt="Nostr_txPackageRelay_Demo.png" /></a></p>
Bitcoin Core Merged BIP-324 and AssumeUTXO Proposals
2023-10-13T01:58:45.698Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bitcoin-core-merged-bip-324-and-assume-utxo-proposals/
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<p>Initial pull requests for <a href="https://github.com/bitcoin/bitcoin/pull/28331" target="_blank" class="external-link">BIP-324</a> and <a href="https://github.com/bitcoin/bitcoin/pull/27596" target="_blank" class="external-link">AssumeUTXO</a> have been merged into Bitcoin Core. These upgrades improve node privacy and bootstrapping UX.</p>
<h1 id="bip-324" tabindex="-1">BIP-324</h1>
<p>BIP-324 is an upgrade to the P2P gossip layer that will allow Bitcoin nodes to communicate with each other over encrypted connections. It is opt-in and backwards compatible (v2 clients will allow inbound v1 connections).</p>
<blockquote>
<p>[!QUOTE] <a href="https://thebitcoinmanual.com/articles/what-is-bip324/" target="_blank" class="external-link">What Is BIP324? - The Bitcoin Manual</a><br />
One potential attack vector for nodes on the network is the way nodes communicate with each other via unencrypted traffic. Powerful interests like governments and Internet Service Providers (ISPs) could use this weakness to wage “man in the middle” attacks on Bitcoin nodes, and you wouldn’t know it until it’s too late. Those gatekeepers of internet connections and traffic relays can secretly gather information about sent transactions.</p>
<p>...</p>
<p>BIP324 is an improvement proposal that aims to enhance the <a href="https://thebitcoinmanual.com/articles/protect-bitcoin-full-node/" target="_blank" class="external-link">privacy of Bitcoin nodes</a>, making the network more robust and secure. <strong>The update is a proposal to encrypt traffic between nodes connected to the Bitcoin network to make network metadata, like the location a transaction is coming from, more private, making it harder for third parties monitoring internet traffic to spy on this type of data transfer.</strong></p>
<hr />
<h2 id="how-bip-324-helps-improve-node-privacy" tabindex="-1">How BIP324 helps improve node privacy:</h2>
<ol>
<li><strong>Encrypted communication</strong>: By encrypting the messages exchanged between nodes, BIP324 makes it much harder for eavesdroppers to intercept and analyse the data transmitted between nodes, protecting user privacy.</li>
<li><strong>Authentication</strong>: The Noise protocol also ensures that the nodes communicating with each other are authentic, preventing potential man-in-the-middle attacks.</li>
<li><strong>IP address protection</strong>: Since the communication between nodes is encrypted, it becomes more difficult for malicious actors to associate a user’s IP address with their transactions or other activities.</li>
<li><strong>Confidentiality against passive attacks</strong>: A passive attacker having recorded a v2 P2P bytestream (without timing and fragmentation information) must not be able to determine the plaintext being exchanged by the nodes.</li>
<li><strong>Observability of active attacks</strong>: A session ID identifying the encrypted channel uniquely is derived deterministically from a Diffie-Hellman negotiation. An active man-in-the-middle attacker is forced to incur a risk of being detected as peer operators can compare session IDs manually, or using optional authentication methods possibly introduced in future protocol versions.</li>
<li><strong>Pseudorandom bytestream</strong>: A passive attacker having recorded a v2 P2P bytestream (without timing information and fragmentation information) must not be able to distinguish it from a uniformly random bytestream.</li>
<li><strong>Shapable bytestream</strong>: It should be possible to shape the bytestream to increase resistance to traffic analysis (for example, to conceal block propagation), or <a href="https://gitlab.torproject.org/legacy/trac/-/issues/20348#note_2229522" target="_blank" class="external-link">censorship avoidance</a>.</li>
<li><strong>Forward secrecy</strong>: An eavesdropping attacker who compromises a peer’s sessions secrets should not be able to decrypt past session traffic, except for the latest few packets.</li>
<li><strong>Upgradability</strong>: The proposal provides an upgrade path using transport versioning which can be used to add features like authentication, PQC handshake upgrade, etc. in the future.</li>
<li><strong>Compatibility</strong>: v2 clients will allow inbound v1 connections to minimise risk of network partitions.</li>
<li><strong>Low overhead</strong>: introducing a new P2P transport protocol should not substantially increase computational cost or bandwidth for nodes that implement it, compared to the current protocol.</li>
</ol>
</blockquote>
<h1 id="assume-utxo" tabindex="-1">AssumeUTXO</h1>
<p>AssumeUXTO enables instant UTXO set bootstrapping for Bitcoin nodes by temporarily trusting a snapshot from another node (while still downloading and verifying the entire chain in the background).</p>
<blockquote>
<p>[!QUOTE] <a href="https://river.com/learn/terms/a/assume-utxo/" target="_blank" class="external-link">AssumeUTXO | River Learning Center</a><br />
AssumeUTXO is a proposed, optional setting that would <strong>allow users to make use of their Bitcoin node before <a href="https://river.com/learn/terms/i/initial-block-download-ibd/" target="_blank" class="external-link">initial block download (IBD)</a> is complete</strong>. IBD is one of the most prohibitive costs to running a node, so reducing or hiding this burden is an important improvement for Bitcoin’s usability and decentralization.</p>
<p><strong>AssumeUTXO allows users who are launching full nodes to first download a full copy of the <a href="https://river.com/learn/terms/u/utxo-set/" target="_blank" class="external-link">UTXO set</a> from a node, allowing their node to immediately start crafting, querying, and broadcasting transactions. In the background, the full node still downloads and verifies each block, maintaining the trustless nature of Bitcoin.</strong></p>
<p>Without AssumeUTXO, users must wait to craft and query transactions until their node has downloaded and validated the entire blockchain, a process that can take up to two weeks depending on the computer.</p>
</blockquote>
<p><a href="https://nitter.net/jamesob/status/1708993120036110695" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-AssumeUTXO-JamesOBeirne-Tweet.png" alt="BitDevs-27-AssumeUTXO-JamesOBeirne-Tweet.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li>BIP-324
<ul>
<li><a href="https://github.com/bitcoin/bips/blob/master/bip-0324.mediawiki" target="_blank" class="external-link">BIP-324: Version 2 P2P Encrypted Transport Protocol</a></li>
<li><a href="https://bitcoinops.org/en/topics/v2-p2p-transport/" target="_blank" class="external-link">Version 2 P2P transport | Bitcoin Optech</a></li>
<li><a href="https://youtu.be/7J7EfqknVpM" target="_blank" class="external-link">BIP324: Improving Bitcoin’s P2P Transport Protocol - YouTube</a></li>
<li><a href="https://thebitcoinmanual.com/articles/what-is-bip324/" target="_blank" class="external-link">What Is BIP324? - The Bitcoin Manual</a></li>
<li><a href="https://en.bitcoin.it/wiki/BIP_0324" target="_blank" class="external-link">BIP 0324 - Bitcoin Wiki</a></li>
<li><a href="https://tftc.io/martys-bent/issue-1231-bip-324-would-bring-end-to-end-encryption-to-bitcoins-p2p-layer-and-it-needs-some-review/" target="_blank" class="external-link">Marty's Bent 1231: BIP 324 would bring encryption to bitcoin's P2P layer and it needs some review</a></li>
<li><a href="https://bitcoinmagazine.com/technical/bip-324-a-message-transport-protocol-that-could-protect-bitcoin-peers" target="_blank" class="external-link">BIP-324: A Message Transport Protocol That Could Protect Bitcoin Peers</a></li>
</ul>
</li>
<li>AssumeUTXO
<ul>
<li><a href="https://github.com/jamesob/assumeutxo-docs/tree/2019-04-proposal/proposal" target="_blank" class="external-link">AssumeUTXO docs</a></li>
<li><a href="https://bitcoinops.org/en/topics/assumeutxo/" target="_blank" class="external-link">AssumeUTXO | Bitcoin Optech</a></li>
<li><a href="https://www.youtube.com/live/JottwT-kEdg?feature=shared" target="_blank" class="external-link">Assume UTXO w/ James O'Beirne - YouTube</a></li>
<li><a href="https://bitcoinmagazine.com/technical/coming-soon-an-easier-way-to-bootstrap-your-bitcoin-nodes-utxo-set" target="_blank" class="external-link">An Easier Way To Bootstrap Your Node's UTXO Set</a></li>
</ul>
</li>
</ul>
BitVM - Compute Anything on Bitcoin
2023-10-13T01:56:10.885Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bit-vm-compute-anything-on-bitcoin/
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<p><a href="https://twitter.com/robin_linus" target="_blank" class="external-link">Robin Linus</a> (from the <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/how-zero-sync-hopes-to-reduce-the-costs-of-validating-bitcoin-nodes/">ZeroSync</a> project) dropped the whitepaper for BitVM, a new mechanism to perform essentially any type of computation off-chain and use that computation to control bitcoin on-chain (i.e., Turing-complete smart contracts). This proposal doesn't require any consensus changes to Bitcoin itself.</p>
<blockquote>
<p>[!QUOTE] <a href="https://bitvm.org/bitvm.pdf" target="_blank" class="external-link">BitVM Whitepaper</a><br />
BitVM is a computing paradigm to express Turing-complete Bitcoin contracts. This requires no changes to the network’s consensus rules. <strong>Rather than executing computations on Bitcoin, they are merely verified</strong>, similarly to optimistic rollups. A prover makes a claim that a given function evaluates for some particular inputs to some specific output. If that claim is false, then the verifier can perform a succinct fraud proof and punish the prover. <strong>Using this mechanism, any computable function can be verified on Bitcoin.</strong></p>
<p>Committing to a large program in a Taproot address requires significant amounts of off-chain computation and communication, however the resulting on-chain footprint is minimal. <strong>As long as both parties collaborate, they can perform arbitrarily complex, stateful off-chain computation, without leaving any trace in the chain. On-chain execution is required only in case of a dispute.</strong></p>
</blockquote>
<p><a href="https://x.com/super_testnet/status/1711395898368856488?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-BitVM-SuperTestnet-Tweet.png" alt="BitDevs-27-BitVM-SuperTestnet-Tweet.png" /></a></p>
<h1 id="how-does-it-work" tabindex="-1">How does it work?</h1>
<p>BitVM is a proposal that aims to bring arbitrary computation capabilities to Bitcoin without necessitating changes to the core Bitcoin protocol. It leverages logic gates, particularly NAND gates, to enable complex computations while providing a mechanism for on-chain enforcement in case of disputes.</p>
<p><a href="https://x.com/zkchesterton/status/1711421528300982414?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-BitVM-zkchesterton-Tweet.png" alt="BitDevs-27-BitVM-zkchesterton-Tweet.png" /></a></p>
<p><strong>Logic Gates and NAND Gates</strong></p>
<ul>
<li>In digital computing, logic gates are fundamental building blocks that perform specific logical operations. A NAND gate is one such gate.</li>
<li>A NAND gate takes two binary inputs (0 or 1) and outputs 0 if both inputs are 1; otherwise, it outputs 1.</li>
</ul>
<p><strong>Building NAND Gates in Bitcoin Script</strong></p>
<ul>
<li>BitVM utilizes Bitcoin script, a simple programming language used for creating smart contracts on the Bitcoin network.</li>
<li>To build a NAND gate in Bitcoin script, it uses hashlocks and two lesser-known Bitcoin script opcodes: <code>OP_BOOLAND</code> and <code>OP_NOT</code>.</li>
<li>Hashlocks are used to create branching scripts that can be spent in one of two ways, depending on the preimage revealed. One path corresponds to 1, and the other to 0.</li>
</ul>
<p><strong>Implementing NAND Gates</strong></p>
<ul>
<li>You can implement a NAND gate in Bitcoin script by using <code>OP_BOOLAND</code> to simulate the opposite of a NAND gate and <code>OP_NOT</code> to reverse the value.</li>
<li>This allows you to perform a NAND operation on the scripting stack and verify the result using <code>OP_EQUALVERIFY</code>.</li>
<li>In this way, a NAND gate is implemented within Bitcoin script, and its operation can be enforced on-chain.</li>
</ul>
<p><strong>Creating Complex Computation Structures</strong></p>
<ul>
<li>Complex computations are achieved by connecting multiple logic gates, just like a computer processor combines logic gates to perform tasks.</li>
<li>Hashlocks are used to link these gates together in a series, ensuring that the output of one gate becomes the input for the next.</li>
</ul>
<p><strong>Challenge and Response Game</strong></p>
<ul>
<li>Users, or parties, encode the entire computation, including individual gates, hashlock choices, and outputs, into a tapleaf tree associated with a single Unspent Transaction Output (UTXO).</li>
<li>Both the prover (the party asserting correctness) and the verifier (the party checking correctness) pre-sign a series of transactions for a challenge and response game that can be executed on-chain.</li>
<li>Ideally, the entire computation is verified off-chain, and the parties cooperatively settle it by spending the funds together based on the outcome.</li>
</ul>
<p><strong>Enforcement and Penalties</strong></p>
<ul>
<li>BitVM's enforcement mechanisms function similarly to the Lightning Network.</li>
<li>If the prover stops cooperating or disputes arise, enforcement occurs on-chain.</li>
<li>The enforcement process involves locking funds with timelocks, using hashlocks to verify correct execution of specific gates, and challenging the prover to execute specific gates on-chain.</li>
<li>Only a few rounds of challenges are required to ensure the contract settles correctly, with various outcomes depending on the situation.</li>
</ul>
<p><a href="https://x.com/super_testnet/status/1712275722562101367?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-BitVM-SuperTestnet-Tweet-2.png" alt="BitDevs-27-BitVM-SuperTestnet-Tweet-2.png" /></a></p>
<h1 id="what-are-the-limitations-challenges" tabindex="-1">What are the limitations/challenges?</h1>
<ul>
<li>It's <strong>very early</strong> - it will take a long time to create all the building blocks for more complex computation. At this stage, using BitVM basically means programming at the level of circuit design.</li>
<li>BitVM <strong>requires a lot of data to be generated and processed</strong>, which incurs an off-chain data management cost - tapleaf trees could theoretically grow to billions of leaves (requiring hundreds of megabytes for a reasonably complex program).</li>
<li>In the worst possible case, <strong>you might need ~250 bitcoin transactions to settle an entire challenge/proof series</strong> if the counterparty consistently disputes the computation outcome.</li>
<li>BitVM's current proposal is <strong>limited to 2-party interactions</strong>, restricting constructions like sidechains or rollups - multi-party smart contracts are supposedly theoretically possible, but more research is needed.</li>
<li><strong>Contracts are "one-time use"</strong> (related to the 2-party limitation) - every time 2 people engage in one of these contracts, they have to set up an entirely new set of pre-signed bitcoin transactions.</li>
</ul>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/technical/the-big-deal-with-bitvm-arbitrary-computation-now-possible-on-bitcoin-without-a-fork" target="_blank" class="external-link">The Big Deal With BitVM: Arbitrary Computation Now Possible On Bitcoin Without A Fork</a> (<a href="https://fountain.fm/episode/oLduobB1mIVFTA1wS65s" target="_blank" class="external-link">Bitcoin Audible Podcast 🎧</a>)</li>
<li><a href="https://stephanlivera.com/episode/520" target="_blank" class="external-link">Stephan Livera Podcast 520: What is BitVM? with Robin Linus and Super Testnet</a></li>
<li><a href="https://github.com/supertestnet/tapleaf-circuits" target="_blank" class="external-link">Super Testnet's "Tapleaf Circuits" BitVM proof of concept for bristol circuits</a></li>
<li><a href="https://x.com/zkchesterton/status/1711421528300982414?s=20" target="_blank" class="external-link">@zkchesterton Tweet</a></li>
<li><a href="https://x.com/BobBodily/status/1711581484254192013?s=20" target="_blank" class="external-link">@BobBodily Tweet</a></li>
</ul>
<blockquote>
<p>[!TIP] <a href="https://x.com/BTCillustrated/status/1712440417524810227?s=20" target="_blank" class="external-link">@BTCillustrated Tweet</a><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-BitVM-Illustration-1.png" alt="BitDevs-27-BitVM-Illustration-1.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-BitVM-Illustration-2.png" alt="BitDevs-27-BitVM-Illustration-2.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-BitVM-Illustration-3.png" alt="BitDevs-27-BitVM-Illustration-3.png" /><br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-BitVM-Illustration-4.png" alt="BitDevs-27-BitVM-Illustration-4.png" /></p>
</blockquote>
BitForge - Fireblocks Uncovered Vulnerabilities in Over 15 Major MPC Wallets
2023-08-21T07:10:18.829Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bit-forge-fireblocks-uncovered-vulnerabilities-in-over-15-major-mpc-wallets/
<div class="transclusion internal-embed is-loaded"><a class="markdown-embed-link" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/multi-party-computation-mpc/#what-is-multi-party-computation-mpc" aria-label="Open link"><svg xmlns="http://www.w3.org/2000/svg" width="24" height="24" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="svg-icon lucide-link"><path d="M10 13a5 5 0 0 0 7.54.54l3-3a5 5 0 0 0-7.07-7.07l-1.72 1.71"></path><path d="M14 11a5 5 0 0 0-7.54-.54l-3 3a5 5 0 0 0 7.07 7.07l1.71-1.71"></path></svg></a><div class="markdown-embed">
<h1 id="what-is-multi-party-computation-mpc" tabindex="-1">What is Multi-Party Computation (MPC)?</h1>
<p><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/multi-party-computation-mpc/">Multi-Party Computation (MPC)</a> is a <strong>methodology of separating private keys into multiple parts</strong>. It's similar to Shamir's Secret Sharing (SSS) but in reverse - in SSS, a private key is generated and then split into distributable shards, but in MPC, shards are defined first and come together later to produce a private key signature. A benefit of both SSS and MPC is that they can't be identified on-chain - to observers, it just looks like a single signature.</p>
<p>MPC is often described as an alternative to standard multisignature. Although similar, they approach the challenge of signature aggregation differently:</p>
<blockquote>
<p>[!QUOTE] <a href="https://blog.bitgo.com/multi-sig-vs-mpc-which-is-more-secure-699ecefc8430" target="_blank" class="external-link">Multi-Sig vs MPC: Which is more secure? | BitGo Blog</a></p>
<h2 id="comparison-to-multi-signature" tabindex="-1">Comparison to Multi-signature</h2>
<p>From a functional point of view, multi-signature wallets, which use M-of-N keys per wallet, are similar to MPC based wallets, which use M-of-N parts of a key for a single signature wallet. The difference is that a multi-signature wallet will make use of distinct signatures generated by distinct private keys to secure the wallet, while MPC uses only creates a single signature regardless of the number of private key parts that participated.</p>
</blockquote>
<p>MPC itself is a general methodology/framework, and many <a href="https://en.wikipedia.org/wiki/Secure_multi-party_computation#Protocols" target="_blank" class="external-link">different protocol implementations</a> exist.</p>
</div></div>
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://www.nobsbitcoin.com/bitforge-fireblocks-researchers-uncover-vulnerabilities-in-over-15-major-wallet-providers/" target="_blank" class="external-link">BitForge: Fireblocks Uncovered Vulnerabilities in Over 15 Major MPC Wallets</a><br />
The Fireblocks cryptography research team has uncovered <strong>BitForge – a series of zero-day vulnerabilities in some of the most widely adopted implementations of multi-party computation (MPC) protocols, including GG-18, GG-20, and Lindell17</strong>.<br />
...<br />
In our ongoing effort to advance MPC security in the field of cryptography, the Fireblocks research team analyzed dozens of publicly available MPC protocols and wallet providers. In doing so, <strong>the team uncovered zero-day vulnerabilities in implementations used by more than 15 digital asset wallet providers, blockchains, and open-source projects, that would allow an attacker with privileged access to drain funds from wallets</strong>. In some implementations, the attack will only take seconds, with no knowledge to the user or vendor.</p>
<p>With the vast amount of closed implementations, we recommend that businesses check with their providers directly or visit the <a href="http://www.fireblocks.com/BitForge" target="_blank" class="external-link">BitForge Status Checker</a> to learn more.</p>
<hr />
<p>The BitForge vulnerabilities, if left unremedied, would enable attackers to exploit a newly discovered <a href="https://www.fireblocks.com/blog/gg18-and-gg20-paillier-key-vulnerability-technical-report/" target="_blank" class="external-link">flaw in the GG18 and GG20 protocols</a> by <strong>exfiltrating the full private key due to a missing zero-knowledge proof</strong>. The <a href="https://www.fireblocks.com/blog/lindell17-abort-vulnerability-technical-report/" target="_blank" class="external-link">Lindell17 protocol vulnerability</a> stems from wallet providers’ deviating from the academic paper, <strong>creating a backdoor for attackers to expose part of the private key when signing fails</strong>. The exploits were validated on major open-source implementations, and a working POC was built on the open libraries.</p>
</blockquote>
<h1 id="bit-forge-faq" tabindex="-1">BitForge FAQ</h1>
<blockquote>
<p>[!QUOTE] <a href="https://www.fireblocks.com/bitforge/" target="_blank" class="external-link">Fireblocks | BitForge Status Checker</a><br />
<strong>Does BitForge impact all wallet providers that use MPC?</strong></p>
<p>No, BitForge only impacts MPC wallet providers that utilize the GG-18, GG-20, and Lindell17 protocols.</p>
<p>Even if your provider is using another MPC protocol, it is important to ensure they undergo regular code audits and have the cryptography resources to immediately patch security vulnerabilities.</p>
<hr />
<p><strong>What does BitForge mean for the security of MPC?</strong></p>
<p>The security and concept of MPC remains intact. The vulnerabilities identified are affecting specific implementations of MPC, and not the overarching concept itself.</p>
<p>When security flaws and vulnerabilities are found, every software and cryptographic protocol must be thoroughly audited and tested, and teams must have a plan in place to address security issues in a timely fashion.</p>
<p>The BitForge vulnerability does not reflect the security of MPC as a technology. The vulnerabilities identified are affecting specific implementations of MPC, and not the overarching concept itself.</p>
<hr />
<p><strong>Why does each wallet provider have a different implementation of the same MPC protocol?</strong></p>
<p>Not all MPC protocols and implementations are created equal. Proficiency in implementation and the ability to manage and resolve vulnerability issues to protect users vary widely, as does the security level of different MPC implementations.</p>
<hr />
<p><strong>Have the vulnerabilities been exploited and if so, how recently?</strong></p>
<p>As far as we know, the vulnerabilities have not been exploited. However, if an attacker was stealing a private key, it would be impossible to know until they move funds to a new wallet.</p>
<p>As part of the responsible disclosure process, Fireblocks provided the industry-standard 90-day notice to all identified providers before publishing the findings from the BitForge vulnerabilities.</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/multi-party-computation-mpc/">Multi-Party Computation (MPC)</a></li>
<li><a href="https://www.fireblocks.com/bitforge/" target="_blank" class="external-link">Fireblocks BitForge Status Checker</a></li>
<li><a href="https://www.fireblocks.com/blog/gg18-and-gg20-paillier-key-vulnerability-technical-report/" target="_blank" class="external-link">GG18 and GG20 Paillier Key Vulnerability [CVE-2023-33241]: Technical Report</a></li>
<li><a href="https://www.fireblocks.com/blog/lindell17-abort-vulnerability-technical-report/" target="_blank" class="external-link">Lindell17 Abort Vulnerability [CVE-2023-33242]: Technical Report</a></li>
<li><a href="https://blog.bitgo.com/multi-sig-vs-mpc-which-is-more-secure-699ecefc8430" target="_blank" class="external-link">Multi-Sig vs MPC: Which is more secure? | BitGo Blog</a></li>
</ul>
Ark
2023-07-29T06:49:45.703Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ark/
<h1 id="description" tabindex="-1">Description</h1>
<p>Created by <a href="https://twitter.com/brqgoo" target="_blank" class="external-link">@brqgoo</a>. It's a second-layer protocol for making cheap, anonymous off-chain Bitcoin payments - attempting to improve on the UX tradeoffs of Lightning and Liquid without compromising on trustless custody of funds. It has been described as a protocol implementation that follows the the <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/enigma/">Enigma</a> framework.</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.arkpill.me/" target="_blank" class="external-link">arkpill.me</a><br />
Ark is a second-layer solution designed to help scale Bitcoin transactions by using a shared utxo model that enables anonymous, off-chain payments through an untrusted intermediary called the Ark Service Provider (ASP). ASPs are always-on servers that provide liquidity to the network, similar to how Lightning service providers work.</p>
<p>Ark is a scaling category of its own and is not a state channel design or a rollup. The protocol allows recipients to receive payments without an onboarding setup, such as acquiring inbound liquidity while preserving their receiver privacy.</p>
<p>Ark has a utxo set that lives off the chain. These utxos are referred to as virtual utxos or vtxos in short. Virtual utxos are like short-lived notes that expire after four weeks. Users must spend their vtxos upon receiving them within this four-week timeframe or return them to themselves to reset the four-week timer.</p>
<p>Users can acquire vtxos from someone who already owns them or use a process called lifting, which is an atomic two-way peg mechanism that doesn't require trust. Lifting lets users lift their on-chain utxos off the chain for a 1:1 virtual utxo. Users can unilaterally redeem a virtual utxo for an on-chain utxo without asking for ASP cooperation.</p>
<p>When sending funds, users coin-select and redeem their vtxos and create new ones for the recipient (plus change) in a coinjoin round where ASP is the blinded coordinator. ASP funds the coinjoin with their own on-chain funds in exchange for vtxo redemptions. Therefore, the coinjoin transaction that hits on-chain has only one or a few inputs provided by the ASP.</p>
<p>The newly created vtxos of the coinjoin round are bundled and nested under a shared transaction output. This shared output expires four weeks after its creation, and once it expires, the ASP who funded the shared output in the first place can solely sweep the shared output. All nested vtxos under this shared output are expected to be redeemed in this window period.</p>
<p>In summary, Ark is a liquidity network that operates like Lightning, but without introducing liquidity constraints or a direct link between the sender and receiver. It uses virtual utxos, to enable anonymous, scalable, off-chain payments. ASPs provide liquidity to the network and charge fees for their services.</p>
</blockquote>
<blockquote>
<p>[!QUOTE] <a href="https://burakkeceli.medium.com/introducing-ark-6f87ae45e272" target="_blank" class="external-link">Introducing Ark</a> (narrated on <a href="https://fountain.fm/episode/HwfNHEd6chfAsaAqvtYA" target="_blank" class="external-link">Bitcoin Audible 734</a>)</p>
<ul>
<li>Ark allows recipients to receive payments without acquiring inbound liquidity while preserving their receiver privacy. The protocol is as private as WabiSabi, as convenient as on-chain, and as cheap as Lightning.</li>
<li>Ark is a trustless, distinct layer two protocol with unilateral exit.</li>
<li>ASPs cannot steal users’ funds or link senders & receivers. Users retain self-custody and can revert their funds to the base layer if something goes wrong on the second layer.</li>
<li>Ark has a utxo set that lives off the chain. These utxos are referred to as virtual utxos or vtxos in short.</li>
<li>Ark payments settle every 5 seconds and final in every block.</li>
<li>Users need to wait for on-chain confirmations to consider a payment ‘final’. However, this doesn’t prevent them from paying invoices with their zero-conf coins.</li>
<li>Ark has immediate availability with delayed finality.</li>
<li>Ark ensures “absolute atomicity” by using ATLCs instead of HTLCs. Users can receive payments and forward them further without waiting for confirmations. A mempool-level double-spend breaks the atomicity. ASPs cannot redeem senders’ vTXOs if they double-spend recipients’ vTXOs.</li>
<li>Ark provides an order of magnitude greater level of privacy compared to Lightning. Every payment on the protocol takes place in a coinjoin round. This obfuscates the trace from the sender to the receiver. The anonymity set is everyone who involves in a payment.</li>
<li>Numbers tell us it would take +100 years to onboard the whole population into lightning in a non-custodial way, assuming it takes 4 channels per human and an average channel opening consumes a few hundred vBytes.</li>
</ul>
</blockquote>
<p>Here is how Burak compares Ark's properties to Lightning or on-chain:</p>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/ArkComparisonChart.png" alt="ArkComparisonChart.png" /></p>
<h1 id="details" tabindex="-1">Details</h1>
<p>At the time of writing (for <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-22/">Socratic Seminar 22</a>), there is no technical implementation of Ark - only conceptual. Ark is a complex system, and a detailed overview of how it works can be found at the <a href="https://www.arkpill.me/deep-dive" target="_blank" class="external-link">arkpill.me deep dive</a> section.</p>
<p>Burak has described Ark as a "trustless, 2-way peg sidechain" and an "off-chain coinjoin protocol" (<a href="https://www.youtube.com/watch?v=iQ7TLBhh9r4" target="_blank" class="external-link">source</a>).</p>
<p>The general idea is that liquidity management is entirely offloaded to Ark Service Providers (ASPs), which is contrary to Lightning where individual users must manage their own liquidity. Users can also be onboarded to Ark immediately without requiring upfront liquidity because that constraint is deferred to the ASPs. Although ASPs are expected to manage liquidity on the user's behalf, the user maintains self-custody because they can always exit unilaterally on-chain.</p>
<p>Onboarding to Ark is as simple as funding a bitcoin address - Ark "lifts" that UTXO off the chain into a virtual UTXO (vTXO), which can then be transacted on this alternative chain. vTXOs follow a similar transaction flow to on-chain bitcoin - when spending, vTXOs are destroyed and new ones are created.</p>
<p>"Pool transactions are created by Ark service providers perpetually every 5 seconds, which are effectively blinded, footprint-minimal, rapid coinjoin rounds" (<a href="https://www.arkpill.me/deep-dive" target="_blank" class="external-link">source</a>). The coinjoin component of Ark will be based off of <a href="https://eprint.iacr.org/2021/206.pdf" target="_blank" class="external-link">WabiSabi</a>.</p>
<p>Transactions on Ark are settled with each 5-second interval by ASPs broadcasting bitcoin transactions containing metadata that represent these vTXO state updates, and transactions are considered final once the corresponding blocks have been confirmed on the bitcoin blockchain.</p>
<p>Every vTXO transaction must have an equivalent amount of bitcoin locked up onchain by an ASP. Although the vTXO can be spent instantly, the corresponding on-chain UTXO is locked up for 4 weeks.</p>
<p>"A vTXO has a lifetime of four weeks. The recipient can solely claim a vTXO in the first two weeks of receiving it. If a vTXO remains unclaimed for the first two weeks, the vTXO reverts to the sender’s control, similar to HTLC timeouts on the Lightning network" (<a href="https://www.arkpill.me/deep-dive" target="_blank" class="external-link">source</a>). This means that users must periodically refresh any stale vTXOs in order to maintain custody of those funds.</p>
<p>Ark is also interoperable with the Lightning network, assuming ASPs are independently managing Lightning routing nodes with sufficient liquidity. From the user's perspective, Ark vTXOs can simply be used to pay Lightning invoices.</p>
<p>Although it would benefit from <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/op-ctv/">OP_CTV</a>-like covenants, Ark can work on bitcoin today using n-of-n multisig with the tradeoff of requiring interactivity. Without covenants, recipients must be online to sign from the n-of-n multisig to constrain the spending transaction.</p>
<p><a href="https://twitter.com/brqgoo/status/1661467837800787969?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/Ark_TxFootprint_Tweet.png" alt="Ark_TxFootprint_Tweet.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://t.me/ark_network_community" target="_blank" class="external-link">Ark Community Telegram</a></li>
<li><a href="http://stephanlivera.com/482" target="_blank" class="external-link">SLP482 Burak – Ark: A new L2 protocol for Bitcoin</a></li>
<li><a href="https://www.youtube.com/watch?v=iQ7TLBhh9r4" target="_blank" class="external-link">Bitcoin Takeover S14 E1: Burak Keceli on Ark & Bitcoin 2nd Layers</a></li>
<li><a href="https://youtu.be/EocWax43QgQ" target="_blank" class="external-link">Ark Whiteboard Masterclass with Burak & Robin</a></li>
<li><a href="https://gist.github.com/RubenSomsen/a394beb1dea9e47e981216768e007454" target="_blank" class="external-link">Ruben Somsen: Simplest Ark Explanation</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/05/31/?ref=nobsbitcoin.com#proposal-for-a-managed-joinpool-protocol" target="_blank" class="external-link">Bitcoin Optech Newsletter 253</a></li>
<li><a href="https://twitter.com/SDWouters/status/1677276030065684482?s=20" target="_blank" class="external-link">Twitter thread summary of Ark concerns discussed at BitDevs Amsterdam</a></li>
</ul>
AnchorWatch team raises $3M and launches public Trident wallet beta
2023-10-12T02:31:43.969Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/anchor-watch-team-raises-3-m-and-launches-public-trident-wallet-beta/
<p><a href="https://x.com/Rob1Ham/status/1704917235305746439?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-RobHamilton-TridentBeta-1.png" alt="BitDevs-27-RobHamilton-TridentBeta-1.png" /></a></p>
<h1 id="what-happened" tabindex="-1">What happened?</h1>
<p>Rob Hamilton, CEO of AnchorWatch, announced the public testnet beta for their forthcoming <a href="https://www.tridentvault.com/" target="_blank" class="external-link">Trident Vault</a> wallet coordinator.</p>
<p>Trident is interesting because it is one of the first enterprise-grade wallets to leverage <strong>miniscript</strong>, which the AnchorWatch team believes can redefine best practices around bitcoin custody.</p>
<p>Soon after introducing the public beta, AnchorWatch also <a href="https://www.nobsbitcoin.com/anchorwatch-raises-3m-funding-round-led-by-ten31/" target="_blank" class="external-link">announced a $3M funding round led by Ten31</a>.</p>
<blockquote>
<p>[!QUOTE] <a href="https://www.prnewswire.com/news-releases/anchorwatch-raises-3m-to-solidify-bitcoin-custody-and-insurance-platform-301938468.html" target="_blank" class="external-link">AnchorWatch Raises $3M to Solidify Bitcoin Custody and Insurance Platform</a><br />
AnchorWatch's proprietary Trident Vault software provides a protocol native custody solution to owners of bitcoin, backed by regulated high-quality insurance.</p>
<p>With this latest investment, AnchorWatch will be in position to complete all regulatory and capital requirements needed to deliver Trident Vault to customers and start selling policies. Additionally, AnchorWatch will undergo security audits by a number of credentialed firms to further solidify Trident Vault as a sound and viable custody solution for enterprise use.</p>
<hr />
<p>AnchorWatch achieves its superior collaborative custody in two ways. First, their Trident Vault enables supported custody by holding a minority of keys and employing protocol-level governance and compliance. With layered security, Trident Vault allows bitcoin to be custodied in a method that suits its technology by dispersing custody physically and among unrelated entities, reducing risks of loss from catastrophic events like fires and floods, but also from theft by internal and external bad actors.</p>
<p>Secondly, AnchorWatch embeds regulated property insurance on the bitcoin in a Trident Vault itself. This guarantees that assets are insured in the case of catastrophe via regulated and collateralized property insurance. Because Trident enables superior security during custody, AnchorWatch is able to offer insurance at affordable rates.</p>
</blockquote>
<h1 id="what-is-miniscript" tabindex="-1">What is miniscript?</h1>
<blockquote>
<p>[!QUOTE] <a href="https://thebitcoinmanual.com/articles/btc-miniscript/" target="_blank" class="external-link">What Is Bitcoin Miniscript? - The Bitcoin Manual</a><br />
Miniscript was designed and implemented by Pieter Wuille, Andrew Poelstra, and Sanket Kanjalkar at Blockstream Research as a result of working on <a href="https://thebitcoinmanual.com/security/multi-sig/" target="_blank" class="external-link">multi-sig</a> implementations but is the conclusion of discussions with several other people who have had to deal with bitcoin scripting in the past and found it difficult or time-consuming to work with and compile.</p>
<p><strong>Miniscript is a standardisation of bitcoin scripts; think of it as turning each script into a building block that any bitcoin wallet could use as a method of compiling transactions on the back end based on what the user would like to achieve.</strong></p>
<p>Minscript allows the software to automatically analyse a script, including determining what witness data must be generated to spend bitcoins protected by that script. It saves wallet developers time as they don’t need to write new code when they switch from one script template to another and would provide better interoperability for users switching between wallets.</p>
<p>The structured representation of Bitcoin scripts provided by miniscript allows wallets to be much more dynamic about the scripts they use while also being efficient in compiling transactions and slightly reducing the footprint of a transaction on-chain.</p>
<p>In support of that dynamism, miniscripts can be created using an easily-written policy language. Policies are composable, allowing any valid sub-expression to be replaced by another valid sub-expression (within certain limits imposed by the Bitcoin system).</p>
<p><strong>This brings the promise of more complex <a href="https://thebitcoinmanual.com/articles/what-is-a-bitcoin-smart-contract/" target="_blank" class="external-link">smart contracts</a> directly on the base chain and offers users more flexible solutions for self-custody that can make it easier and safer to hold your own keys.</strong></p>
</blockquote>
<h1 id="how-does-anchor-watch-use-miniscript" tabindex="-1">How does AnchorWatch use miniscript?</h1>
<h2 id="social-recovery" tabindex="-1">Social recovery</h2>
<p><a href="https://x.com/Rob1Ham/status/1704917244734566856?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-Trident-ui-social-recovery.png" alt="BitDevs-27-Trident-ui-social-recovery.png" /></a></p>
<h2 id="multi-institutional-custody" tabindex="-1">Multi-institutional custody</h2>
<p><a href="https://x.com/Rob1Ham/status/1704917250736574744?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-27-Trident-ui-multi-institutional.png" alt="BitDevs-27-Trident-ui-multi-institutional.png" /></a></p>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://www.tridentvault.com/" target="_blank" class="external-link">AnchorWatch - Trident Wallet</a></li>
<li><a href="https://x.com/Rob1Ham/status/1704917235305746439?s=20" target="_blank" class="external-link">Rob Hamilton Trident beta announcement Tweet</a></li>
<li><a href="https://tftc.io/tftc-podcast/441/" target="_blank" class="external-link">TFTC 441: Miniscript and Bitcoin Risk Products with Rob Hamilton</a></li>
<li><a href="https://thebitcoinmanual.com/articles/btc-miniscript/" target="_blank" class="external-link">What Is Bitcoin Miniscript? - The Bitcoin Manual</a></li>
<li><a href="https://bitbox.swiss/blog/understanding-bitcoin-miniscript-part-1/" target="_blank" class="external-link">BitBox blog: Understanding Bitcoin Miniscript (Part 1) - How does Bitcoin Script work, and why is it so difficult?</a></li>
<li><a href="https://bitbox.swiss/blog/understanding-bitcoin-miniscript-part-2/" target="_blank" class="external-link">BitBox blog: Understanding Bitcoin Miniscript (Part 2) - What's Miniscript, and how does it make Bitcoin scripting easier?</a></li>
</ul>
Amboss Introduces Ghost Addresses
2024-01-28T22:16:15.372Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/amboss-introduces-ghost-addresses/
<h1 id="overview" tabindex="-1">Overview</h1>
<blockquote>
<p>[!QUOTE] <a href="https://amboss.tech/blog/ghost-addresses" target="_blank" class="external-link">Introducing Ghost Addresses</a><br />
The Ghost Address is Amboss’ latest innovation, which <strong>combines the clever behavior of Phantom Payments with the user experience of the Lightning Address</strong>. In combination, a Ghost Address enables any node to receive payments through invoices created using the Lightning Address protocol.</p>
<p>Invoices generated from a Ghost Address use Phantom Payments to allow the destination to intercept routed payments.</p>
<p>The result: a method of invoice creation that enables a lighter-weight solution to receive money. <strong>A Ghost Address functions as a static, reusable endpoint that makes receiving payments into self-custody seamless and straightforward.</strong></p>
<hr />
<p>When a payer wants to pay to a Ghost Address, they will make a GET request to the <a href="http://ghst.to/" target="_blank" class="external-link">ghst.to</a> server, which provides a BOLT 11 lightning invoice.</p>
<p><strong>The <code>destination</code> in the invoice will be a Phantom Node, which technically does not exist.</strong> Since the invoice destination does not exist in the network graph, Amboss will include a route hint in the invoice, which directs the payer to route the payment to the payee’s node and through a specific phantom channel.</p>
<p>The phantom channel is a clue to the payee that the payment that they would otherwise route is instead intended for them. This triggers the payee node to request the preimage from the Amboss API. <strong>Using the preimage, the payee node can intercept the payment destined for the phantom node and claim the payment for themselves.</strong></p>
</blockquote>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-30-GhostAddress-Diagram1.png" alt="BitDevs-30-GhostAddress-Diagram1.png" /></p>
<p><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-30-GhostAddress-Diagram2.png" alt="BitDevs-30-GhostAddress-Diagram2.png" /></p>
<h1 id="benefits" tabindex="-1">Benefits</h1>
<ul>
<li>
<p><strong>Improved non-custodial LN Address UX</strong>: Node runners can receive to a static LN Address without having to set up their own public-facing LN Address server.</p>
</li>
<li>
<p><strong>Better privacy</strong>: Custodial LN Addresses reveal most payment information to the custodian, allowing them to link much of your metadata together. Ghost Addresses reveal the amount of a payment to Amboss, but it doesn't include proof of that payment being completed. Amboss also can't see any details about subsequent withdrawals/payments.</p>
</li>
<li>
<p><strong>Aligned with routing best practices</strong>: Alternative approaches like <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/zeus-v0-8-0-embedded-lnd-node-olympus-zeus-pay-and-more/">Zeus Pay</a> leverage Hodl invoices to lock up liquidity until the recipient comes back online - this has been shown to be detrimental to routing efficiency and reliability across connected routes, occasionally resulting in channel force closures. With Ghost Addresses, transaction settlement is immediate, which is a better UX and maintains a higher standard of conduct within the LN community.</p>
</li>
</ul>
<h1 id="drawbacks" tabindex="-1">Drawbacks</h1>
<ul>
<li>
<p><strong>Requires managing a sovereign LN node</strong>: This tech is useful for those users who are running their own nodes and managing their own liquidity. The receiving node still must have enough inbound liquidity to actually receive payments to its Ghost Address. Ghost Addresses are also currently only configurable through <a href="https://thunderhub.io/" target="_blank" class="external-link">ThunderHub</a>.</p>
</li>
<li>
<p><strong>The ecosystem must adapt to Phantom Payments</strong>: Phantom Payments are relatively new and not well understood. Most nodes aren't yet equipped to properly track these types of payments from an accounting perspective, which could cause confusing UX (e.g., a received payment might bump the total balance without recording an explicit payment in the transaction history). Phantom Payments are also incompatible with <a href="https://river.com/learn/terms/m/multi-path-payment-mpp/" target="_blank" class="external-link">Multi-Path Payments (MPP)</a>, which are becoming increasingly common across wallet implementations.</p>
</li>
</ul>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://amboss.tech/docs/ghost" target="_blank" class="external-link">Amboss Ghost Address Documentation</a></li>
</ul>
Ai4ALL Hackathon Wrap Up
2023-08-20T19:55:57.886Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ai4-all-hackathon-wrap-up/
<blockquote>
<p>[!QUOTE] <a href="https://www.fedi.xyz/blog/prizes-and-promise-coming-out-of-the-ai4all-hackathon" target="_blank" class="external-link">Prizes and Promise Coming Out of the AI4All Hackathon</a><br />
After an exciting couple of weeks that saw the submission of <strong>44 different projects from a total of 173 participants</strong>, the AI4All Hackathon has wrapped and the winners have been selected.</p>
<p>We had participants from all over the world including UAE, India, Saint Lucia, Guatemala, South Africa, USA, Germany, Nigeria, Serbia, Poland, Canada, Italy, France, Georgia, Brazil, Kenya, Argentina, Belgium, Czech Republic, Spain, South Korea, UK, Colombia, Ireland, Scotland, Pakistan, Finland, and Ghana.</p>
<p>Respected personalities from both the Bitcoin and AI industries served as judges,and after careful consideration, they <strong>awarded a total of more than $70,000 in cash and other prizes</strong> to participants whose projects focused on one of four tracks: <strong>Agents (Machine Payments) Track, Privacy Track, Training Track, and Bitcoin Education Track</strong>.</p>
</blockquote>
<h1 id="overall-winner-photo-bolt" tabindex="-1">Overall Winner: PhotoBolt</h1>
<p><a href="https://bolt.fun/project/photobolt?ref=blog.getalby.com" target="_blank" class="external-link">PhotoBolt</a> converts a basic product image into a marketing poster by leveraging <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/nostr-data-vending-machine-a-marketplace-for-data-processing/">Nostr Data Vending Machines</a> to break down the work into a chain of smaller jobs that AI agents compete against one another to service. <a href="https://www.webln.guide/?ref=blog.getalby.com" target="_blank" class="external-link">WebLN</a>, an open standard for bitcoin payments on the web, is used to seamlessly pay these AI agents for doing their jobs.</p>
<p><a href="https://youtu.be/xex9rEsrU5I" target="_blank" class="external-link">Demo video</a></p>
<h1 id="agents-track-winner-flow" tabindex="-1">Agents Track Winner: Flow</h1>
<p><a href="https://bolt.fun/project/flow?ref=blog.getalby.com" target="_blank" class="external-link">Flow</a> enables less-technical people to use the <a href="https://n8n.io/?ref=blog.getalby.com" target="_blank" class="external-link">n8n</a> platform to build no-code workflows that leverage AI-based automation. People without programming skills or bitcoin knowledge can now monetize these workflows with a combination of <a href="https://blog.getalby.com/introducing-nostr-wallet-connect/" target="_blank" class="external-link">Nostr Wallet Connect</a> and <a href="https://github.com/getAlby/n8n-nodes-l402-request?ref=blog.getalby.com" target="_blank" class="external-link">L402</a>, which is abstracted away via <a href="https://getalby.com/" target="_blank" class="external-link">Alby Wallet</a>.</p>
<p><a href="https://vimeo.com/850319178" target="_blank" class="external-link">Demo video</a></p>
<h1 id="privacy-track-winner-netonomy" tabindex="-1">Privacy Track Winner: Netonomy</h1>
<p><a href="https://bolt.fun/project/netonomy?ref=blog.getalby.com" target="_blank" class="external-link">Netonomy</a> is a web portal that attempts to allow users to control their own digital identity and data and selectively reveal it to various applications. It includes a personal data store built from a combination of <a href="https://github.com/nostr-protocol/nips/blob/master/07.md" target="_blank" class="external-link">nostr NIP-07</a>, <a href="https://www.identity.com/what-are-decentralized-identifiers-dids/" target="_blank" class="external-link">decentralized identifiers (DIDs)</a>, and <a href="https://identity.foundation/decentralized-web-node/spec/" target="_blank" class="external-link">decentralized web nodes (DWNs)</a>. The app also allows users to post jobs for AI agents to complete via <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/nostr-data-vending-machine-a-marketplace-for-data-processing/">Nostr Data Vending Machines</a>, and it integrates an OpenAI chatbot powered by an <a href="https://github.com/getAlby/n8n-nodes-l402-request?ref=blog.getalby.com" target="_blank" class="external-link">L402</a> wrapper.</p>
<p><a href="https://www.loom.com/share/cfa7055d63a34ccd81e61f7f9cd1113f?sid=c7839871-dfb3-4c8a-af38-aa938fa88750" target="_blank" class="external-link">Demo video</a></p>
<h1 id="training-track-winner-bitcoin-pal" tabindex="-1">Training Track Winner: Bitcoin-PAL</h1>
<p><a href="https://bolt.fun/project/Bitcoin-PAL?ref=blog.getalby.com" target="_blank" class="external-link">Bitcoin-PAL</a> is a bitcoin-focused AI chatbot coupled with an incentivized crowd-sourcing platform to train and educate LLMs and users with bitcoin payouts. Contributors are paid bitcoin for helping to train the model on high-quality documentation/resources, and chatbot users receive responses based on vetted, bitcoin-focused information.</p>
<p><a href="https://youtu.be/i-LUgcZiPEA" target="_blank" class="external-link">Demo video</a></p>
<h1 id="bitcoin-education-track-winner-bit-devs-upgraded" tabindex="-1">Bitcoin Education Track Winner: BitDevs Upgraded</h1>
<p><a href="https://bolt.fun/project/bitdevsupgrade" target="_blank" class="external-link">BitDevs Upgraded</a> is a new website template with an improved UI and auto-generated summaries of meetup content. This makes it easier for new BitDevs meetups to spin up useful websites out-of-the-box, and attendees can get an idea of the content without reading the full article.</p>
<p><a href="https://ooo.mmhmm.app/z_Y5vDmksVV16yMAuhCNfY?ref=blog.getalby.com" target="_blank" class="external-link">Demo video</a></p>
<h1 id="other-projects" tabindex="-1">Other Projects</h1>
<blockquote>
<p>[!QUOTE] <a href="https://www.nobsbitcoin.com/ai4all-hackathon-2023/" target="_blank" class="external-link">Ai4ALL Hackathon Wrap Up: 44 Bitcoin Projects From 173 Participants</a><br />
"These might be the winners, but the creativity of projects was mind blowing. Have a look at these live, up and running applications," <a href="https://blog.getalby.com/bitcoin-drives-monetization-of-ai/?ref=nobsbitcoin.com" target="_blank" class="external-link">Alby wrote</a> on its hackathon recap blog post.</p>
<ul>
<li><a href="https://transcribe.fm/?ref=nobsbitcoin.com" target="_blank" class="external-link">Transcribe.fm</a>: "A transcription service for podcasters with speaker diarization & word-by-word fidelity where you can pay-what-you-want with your Alby Lightning wallet. Also available as an L402 API."</li>
<li><a href="https://chat.plebai.com/?ref=nobsbitcoin.com" target="_blank" class="external-link">PlebAI</a>: "A free and open Source ChatGPT with open source Large Language Models payable with bitcoin via WebLN."</li>
<li><a href="https://github.com/kodylow/matador?ref=nobsbitcoin.com" target="_blank" class="external-link">Matador</a>: "A service that lets you sell API access against an arbitrary API using your API Key in exchange for bitcoin micropayments via L402 Payment Required Codes."</li>
<li><a href="https://bolt.fun/project/smart_sats?ref=nobsbitcoin.com" target="_blank" class="external-link">SmartSats</a>: Mobile lightning wallet that allows you to conveniently allocate sats for AI agents, enabling task execution within predefined budgets, with the agent having the ability to withdraw funds as needed.</li>
<li><a href="https://bolt.fun/story/pitch-nostr-serverless-api--964?ref=nobsbitcoin.com" target="_blank" class="external-link">Nostr Serverless API</a>: "Typically, data scientists access social media data through well-established APIs and their associated wrappers. We've introduced the <a href="https://github.com/garyokeeffe/NSA?ref=nobsbitcoin.com" target="_blank" class="external-link">Nostr Serverless API (NSA)</a> to recreate this familiar user experience for Nostr."</li>
<li><a href="https://bolt.fun/project/tldr?ref=nobsbitcoin.com" target="_blank" class="external-link">Bitcoin TLDR</a>: "Summaries of posts and threads in the bitcoin-dev and lightning-dev mailing lists."</li>
<li><a href="https://bolt.fun/project/NiNa?ref=nobsbitcoin.com" target="_blank" class="external-link">NiNa Ai</a>: Lightning node management insights and automation tool.</li>
<li>Check out all 44 hackathon projects and their pitches <a href="https://bolt.fun/tournaments/ai4all/projects?ref=blog.getalby.com" target="_blank" class="external-link">here</a>.</li>
</ul>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://bolt.fun/tournaments/ai4all/projects" target="_blank" class="external-link">BOLT.FUN Ai4ALL hackathon page</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-labs-releases-developer-tools-for-powering-ap-is-and-large-language-models/">Lightning Labs Releases Developer Tools for Powering APIs and Large Language Models</a></li>
</ul>
ACINQ Announces New Version of Phoenix Lightning Wallet That Includes Splicing
2023-08-01T00:12:21.175Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/acinq-announces-new-version-of-phoenix-lightning-wallet-that-includes-splicing/
<p><a href="https://acinq.co/about" target="_blank" class="external-link">ACINQ</a> is the company behind <a href="https://phoenix.acinq.co/" target="_blank" class="external-link">Phoenix</a> and <a href="https://github.com/ACINQ/eclair" target="_blank" class="external-link">eclair</a>. Eclair is a <a href="https://acinq.co/blog/eclair-architecture" target="_blank" class="external-link">full Lightning node implementation</a> with a focus on performance and reliability (in contrast to alternatives like <a href="https://corelightning.org/" target="_blank" class="external-link">Core Lightning</a> and <a href="https://docs.lightning.engineering/lightning-network-tools/lnd" target="_blank" class="external-link">LND</a>). Phoenix is a non-custodial Lightning wallet that is powered by eclair.</p>
<blockquote>
<p>[!QUOTE] <a href="https://acinq.co/blog/phoenix-splicing-update" target="_blank" class="external-link">Introducing the new Phoenix: a 3rd generation self-custodial Lightning wallet</a><br />
<strong>TL; DR:</strong> Splicing changes the game. Phoenix now manages a single dynamic channel, no more 1% fee on inbound liquidity, better predictability and control, trustless swaps. The new fee schedule is <a href="https://acinq.co/blog/phoenix-splicing-update#fee-comparison" target="_blank" class="external-link">detailed here</a>.</p>
<p>Only available on Android for now, email <a href="mailto:phoenix@acinq.co" target="_blank" class="external-link">phoenix@acinq.co</a> to apply for the beta. ETA for iOS is a few weeks.</p>
<hr />
<p>Leveraging a technology called splicing, the new Phoenix has the possibility to resize channels, making all those issues go away:</p>
<ul>
<li>each user has only one channel</li>
<li>there is no more scattered liquidity or splitting issues</li>
<li>adding or removing funds to the channel doesn't add future risk and can be priced at current cost: the 1% / 3000 sat fee is replaced by the mining fee for the underlying on-chain transaction.</li>
</ul>
<p>Another way to look at it is that we are moving from N UTXOs/user to 1 UTXO/user. It is simply the current optimum for self-custody on Bitcoin. Further reducing the on-chain footprint implies sharing UTXOs amongst users, either in a simplistic trusted way (custodial wallets), or by introducing concepts like virtual UTXOs.</p>
<p>We believe that the efficiency gains brought by splicing are so phenomenal that all wallets will eventually implement it. That is why this technological improvement marks the beginning of a new generation of self-custodial wallets.</p>
</blockquote>
<h1 id="para-1-projects-honolulu-bit-devs-resources-notes-lightning-channel-splicing-lightning-channel-splicing" tabindex="-1"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-channel-splicing/">Lightning Channel Splicing</a></h1>
<div class="transclusion internal-embed is-loaded"><a class="markdown-embed-link" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-channel-splicing/#description" aria-label="Open link"><svg xmlns="http://www.w3.org/2000/svg" width="24" height="24" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="svg-icon lucide-link"><path d="M10 13a5 5 0 0 0 7.54.54l3-3a5 5 0 0 0-7.07-7.07l-1.72 1.71"></path><path d="M14 11a5 5 0 0 0-7.54-.54l-3 3a5 5 0 0 0 7.07 7.07l1.71-1.71"></path></svg></a><div class="markdown-embed">
<h1 id="description" tabindex="-1">Description</h1>
<ul>
<li><strong>Splicing</strong> is the act of transferring funds from onchain outputs into a payment channel, or from a payment channel to independent onchain outputs, without the channel participants having to wait for a confirmation delay to spend the channel’s other funds.</li>
<li><strong>The whole idea behind splicing is to reduce the number of on-chain transactions required to efficiently manage Lightning channel liquidity</strong></li>
<li>Splicing comes in two varieties:
<ul>
<li><strong>Splice in</strong> means adding funds to a channel.
<ul>
<li>In this case, a cooperative close of the channel is arranged between the involved parties that spends the old channel funds to a new channel along with the new deposit. Because the new channel open is based on the security of the old channel close, the channel participants can safely spend the old funds within the channel while waiting for the close and open transactions to confirm.</li>
</ul>
</li>
<li><strong>Splice out</strong> means removing funds from a channel to an independent onchain output.
<ul>
<li>Similar to splice-in, the channel is closed and a new channel is opened, with the remaining funds being secured by the old channel’s security until the new channel has fully confirmed.</li>
<li><strong>With a splice out, you can close the channel, pay on-chain, and open a new channel in one single on-chain transaction</strong></li>
</ul>
</li>
</ul>
</li>
<li>Splicing enables the resizing of multiple channels in a single on-chain transaction, without any channels being "down" or closed during any part of the process</li>
<li>Splicing makes it much easier to move funds in and out of Lightning channels dynamically
<ul>
<li>In time, this will enable wallets to implement "one balance" apps that allow users to send lightning & on-chain payments without needing to manage two "bitcoin balances" -- with the lowest fees possible</li>
</ul>
</li>
<li>Not only can participants add their own resizes, due to compatibility with <a href="https://github.com/niftynei" target="_blank" class="external-link">@niftynei</a>'s dual funding feature, they can also add channel opens into the same batch. Eventually dual closing will allow all onchain lightning events to be batched into a single bitcoin transaction.</li>
</ul>
</div></div>
<h1 id="benefits-in-phoenix-wallet" tabindex="-1">Benefits in Phoenix Wallet</h1>
<ul>
<li><a href="https://acinq.co/blog/phoenix-splicing-update#fee-comparison" target="_blank" class="external-link">Updated fee structure</a>:<br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/PhoenixUpdatedFeeStructure.png" alt="PhoenixUpdatedFeeStructure.png" /></li>
<li><a href="https://acinq.co/blog/phoenix-splicing-update#more-predictability-and-more-control" target="_blank" class="external-link">More predictability and more control</a>
<ul>
<li>Phoenix today has to periodically create new channels on the fly, which surprises users with a larger fee (1% with a 3000 sat minimum).</li>
<li>The new app version seamlessly splices in our out of a single channel as capacity requirements change, and it only requires the user to pay mining fees each time.</li>
<li>Users can adjust the maximum fee that they are willing to pay for channel management when receiving payments. If the fee is too high, Phoenix will just wait and retry later (for a swap-in) or reject (for a Lightning payment).</li>
<li>This allows the user to validate the fee before making the payment. It also aligns incentives with the wallet provider, which was previously trusted to find the cheapest route. The wallet provider is now incentivized to find the best (reliable, affordable) route within the fee budget.</li>
</ul>
</li>
<li><a href="https://acinq.co/blog/phoenix-splicing-update#trustless-swaps" target="_blank" class="external-link">Trustless swaps</a>
<ul>
<li>Historically, most Lightning wallets have leveraged swap services to offer a way to seamlessly send and receive on-chain bitcoin transactions (aka "swap-out" and "swap-in").</li>
<li><strong>Swap-out</strong> (paying to a bitcoin address)
<ul>
<li>Phoenix's old swap service was very basic, trusted, and didn't let the user choose the feerate for a swap-out.</li>
<li>In the new version, a splice-out is used to trustlessly send on-chain payments from a Lightning channel.</li>
</ul>
</li>
<li><strong>Swap-in</strong> (sending an on-chain transaction to Phoenix)
<ul>
<li>In the previous version of Phoenix, the bitcoin address displayed in the Receive tab wasn't controlled by Phoenix but by the swap service, and for every incoming transaction, a new channel was created.</li>
<li>With the new Phoenix, funds stay in control of Phoenix during the process. If there is already a channel, the funds will be spliced in and the capacity of the channel will grow by that amount. Otherwise, a new channel will be created using dual-funding.</li>
</ul>
</li>
</ul>
</li>
</ul>
<p>Phoenix plans to continue expanding on this functionality - the roadmap includes blinded paths, BOLT 12 Offers, and Taproot.</p>
2 New Mining Pools Launch - DEMAND & OCEAN
2024-01-07T06:37:21.925Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/2-new-mining-pools-launch-demand-and-ocean/
<h1 id="a-href-https-dmnd-work-target-blank-class-external-link-demand-a" tabindex="-1"><a href="https://dmnd.work/" target="_blank" class="external-link">DEMAND</a></h1>
<p>Bitcoin mining company DEMAND has launched the world's first Stratum V2 mining pool, built on open-source Stratum Reference Implementation (SRI).</p>
<p><strong>Key benefits of Stratum V2:</strong></p>
<ul>
<li>Enhanced security, flexibility and performance for mining</li>
<li>Empowers individual miners to construct their own block templates and select transactions for inclusion, decentralizing this process from pool operators</li>
<li>Makes Bitcoin more resistant to mining censorship and regulatory pressure</li>
</ul>
<p>DEMAND currently focuses on <strong>solo mining, allowing miners to keep full block rewards</strong>. The company also runs a hash power resale marketplace.</p>
<p>The new pool aims to drive adoption of Stratum V2 and make home mining more viable to promote a more decentralized Bitcoin mining ecosystem. Miners will need to run translator proxy, job declaration client, and Bitcoin node to utilize Stratum V2 capabilities.</p>
<blockquote>
<p>[!QUOTE] <a href="https://dmnd.work/#faq" target="_blank" class="external-link">DEMAND FAQ</a><br />
<strong>What is Solo Mining?</strong><br />
Solo mining is the process of mining Bitcoin independently, with the help of DEMAND. We provide the infrastructure you need to mine efficiently. This means you receive the entire block reward if you are successful.</p>
<p><strong>How Does Solo Mining Differ from Pool Mining?</strong><br />
In solo mining, you compete against the entire Bitcoin network to find a block, whereas in pool mining, you collaborate with other miners. In a pool, rewards are shared among participants, but in solo mining, you receive the full reward for any block you find.</p>
<p><strong>What is hashrate DEMAND?</strong><br />
An option to maximize your earnings via our hashrate marketplace. You can now earn with just one miner.</p>
<p><strong>What is StratumV2?</strong><br />
Stratum V2 is the next generation protocol for pooled mining. It increases security, makes data transfers more efficient, and reduces mining infrastructure requirements. It also introduces three new sub-protocols that let miners select transaction sets and improve decentralization. More info here</p>
<p><strong>Is Solo Mining Profitable?</strong><br />
We make it profitable by giving our miners an option to sell their hashrate on various hashrate marketplaces. If you hit a block, you earn 6.25 BTC plus the transaction fees.</p>
<p><strong>What Are the Chances of Successfully Mining a Block Solo?</strong><br />
The probability of successfully mining a block solo depends on your mining power compared to the total network hash rate.</p>
<p><strong>How Does Solo Mining Affect Network Security?</strong><br />
Solo mining contributes to the decentralization of the Bitcoin network, which is beneficial for the health of the bitcoin mining network.</p>
</blockquote>
<p><a href="https://youtu.be/hFtI2dPgDdc" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-DEMAND-Youtube-Thumbnail.png" alt="BitDevs-29-DEMAND-Youtube-Thumbnail.png" /></a></p>
<h1 id="a-href-https-ocean-xyz-target-blank-class-external-link-ocean-a" tabindex="-1"><a href="https://ocean.xyz/" target="_blank" class="external-link">OCEAN</a></h1>
<p>OCEAN Pool is a new Bitcoin mining pool launched by long-time Bitcoin developer <a href="https://twitter.com/lukedashjr" target="_blank" class="external-link">@LukeDashjr</a>. It's technically a relaunch of Eligius, a mining pool created and operated by Luke back in 2011.</p>
<p>OCEAN has received $6.2 million in seed funding led by Jack Dorsey's Block Inc. among others. It aims to address centralization issues in Bitcoin mining related to transparency, custodianship of funds, and control over transaction selection.</p>
<p><strong>Unique features include:</strong></p>
<ul>
<li>Non-custodial operation, giving miners direct control of bitcoin payouts rather than through a custodial pool operator.</li>
<li>The TIDES reward system for precise, equitable payouts based on hashrate contribution</li>
<li>Support for Stratum V2 to further decentralize mining and improve efficiency</li>
<li>Future Lightning Network integration for instant, low-cost payouts</li>
<li>Planned upgrades focused on decentralization like distributed block template creation</li>
<li>Runs <a href="https://bitcoinknots.org/" target="_blank" class="external-link">Bitcoin Knots</a> under the hood (Luke's own Bitcoin node/wallet implementation)</li>
</ul>
<p>By tackling centralization, opacity, and exclusivity issues in mining, OCEAN Pool aims to realign the sector with Bitcoin's founding principles - setting a new standard for transparency, inclusiveness, security, and permissionless participation.</p>
<blockquote>
<p>[!QUOTE] <a href="https://ocean.xyz/about" target="_blank" class="external-link">Message from OCEAN founder Luke Dashjr</a><br />
As we stand today, Bitcoin is not a censorship resistant network, rather it just happens to be a network that is not currently being censored. As with other forms of centralization (hardware, firmware, ...), the role of mining pools must change for Bitcoin to exist as a truly decentralized currency.</p>
<p>To that end, I am relaunching Eligius as OCEAN, a new type of pool that enables miners to be truly miners again. At the start, we are already the most transparent pool giving you full visibility into block templates, generation payouts, miner stats, etc. As miners, you should have the ability to know what transactions you are mining with your hashrate. We are also the only non-custodial pool, making you, the miners, recipients of new block rewards directly from Bitcoin.</p>
<p>Over the next year, I will be redesigning the process of block template construction, leveraging and improving Stratum V2 where possible, to truly decentralize mining. We also plan to incorporate Lightning payouts which will solve the dust problem for small miners. This will also serve the dual benefit of bringing more liquidity to Lightning.</p>
<p>To make it worth everyone's effort to switch, OCEAN will be at 0% for the first 2 months of operation. After that we will need to introduce fees, but they will be kept reasonable and fair for all sizes of miners.</p>
<p>~ Luke Dashjr, 2023</p>
</blockquote>
<h1 id="ocean-controversy" tabindex="-1">OCEAN Controversy</h1>
<p>Although the stated mission of OCEAN is noble, they've made several operational blunders and decisions that have stirred up a lot of controversy and debate.</p>
<p><a href="https://twitter.com/Brian_trollz" target="_blank" class="external-link">@brian_trollz</a> outlined several of these issues in his Bitcoin Magazine article "<a href="https://bitcoinmagazine.com/technical/an-ocean-launch-post-mortem" target="_blank" class="external-link">An Ocean Launch Post-mortem</a>":</p>
<ul>
<li><strong>Launch Issues</strong>
<ul>
<li>Launch was chaotic due to unclear communication about filtering inscription transactions.</li>
<li>First block was invalid due to a test server issue.</li>
<li>Payout system initially had problems but has been fixed.</li>
</ul>
</li>
<li><strong>Censorship Debate</strong>
<ul>
<li>Because OCEAN uses Bitcoin Knots to construct their block templates, it filters inscriptions and Whirlpool-based coinjoin transactions, sparking censorship concerns.</li>
<li>Censorship opponents argue miners have the right to choose what transactions to include.</li>
<li>Stratum v2 can allow miners to construct their own templates, including inscriptions, but this is not yet implemented at OCEAN (although is on the roadmap).</li>
</ul>
</li>
<li><strong>Addressing Incentive Problems</strong>
<ul>
<li>OCEAN is trying to address issues like miner censorship and the "dying mempool" (where the majority of transactions start to circumvent typical mempool propagation by relaying directly to mining pools).</li>
<li>Stratum v2 could revive the mempool and make MEV strategies more transparent.</li>
<li>OCEAN's non-custodial payouts and Lightning integration are steps towards solving pool centralization issues.</li>
</ul>
</li>
<li><strong>Overall</strong>
<ul>
<li>OCEAN launch was rocky, but they're actively working on addressing problems.</li>
<li>They're not perfect, but they're taking action while others complain.</li>
<li>The future of Bitcoin mining incentives is complex and evolving, but Stratum v2 has potential to further decentralize the Bitcoin mining ecosystem.</li>
</ul>
</li>
</ul>
<p>More information about OCEAN's role in renewing the miner censorship debate can be found in this D-Central article "<a href="https://d-central.tech/the-debate-over-ocean-pools-op_return-size-limit/" target="_blank" class="external-link">The Debate Over OCEAN Pool's OP_RETURN Size Limit</a>."</p>
<p>However, as of 12/23/2023, <a href="https://www.nobsbitcoin.com/ocean-pool-now-offers-multiple-block-template-policies/" target="_blank" class="external-link">OCEAN Pool Now Offers Multiple Block Template Policies For Miners</a></p>
<p><a href="https://x.com/GrassFedBitcoin/status/1734463368361394564?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-GrassFedBitcoin-X-Ocean-1.png" alt="BitDevs-GrassFedBitcoin-X-Ocean-1.png" /></a></p>
<p><a href="https://primal.net/e/note1z03wsa48vwgm3m4vpckgq40yy68mchfzztwvdyndq9a6jkvke40qeux255" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-Luke-Nostr-1.png" alt="BitDevs-29-Luke-Nostr-1.png" /></a></p>
<p><a href="https://x.com/TheGuySwann/status/1733522148377887137?s=20" target="_blank" class="external-link"><img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/BitDevs-29-GuySwann-Ocean-X-1.png" alt="BitDevs-29-GuySwann-Ocean-X-1.png" /></a></p>
<blockquote>
<p>[!TIP]<br />
If you are a miner and aren't satisfied with the current pool options available, you can also <a href="https://www.nobsbitcoin.com/how-to-run-your-own-bitcoin-mining-pool/" target="_blank" class="external-link">run your own mining pool</a>.</p>
</blockquote>
<h1 id="more-resources" tabindex="-1">More Resources</h1>
<ul>
<li><a href="https://stratumprotocol.org/" target="_blank" class="external-link">Stratum V2: The next-gen protocol for pooled mining</a></li>
<li><a href="https://bitcoinmagazine.com/business/demand-launches-worlds-first-stratum-v2-bitcoin-mining-pool" target="_blank" class="external-link">DEMAND launches world’s first Stratum V2 bitcoin mining pool</a></li>
<li><a href="https://www.prnewswire.com/news-releases/jack-dorsey-leads-seed-round-in-support-of-oceans-mission-to-decentralize-bitcoin-mining-globally---announces-launch-at-future-of-bitcoin-mining-conference-301999073.html" target="_blank" class="external-link">Jack Dorsey Leads Seed Round in Support of OCEAN'S Mission to Decentralize Bitcoin Mining Globally - Announces Launch at Future of Bitcoin Mining Conference</a></li>
<li><a href="https://d-central.tech/ocean-pool-a-new-wave-in-bitcoin-mining-decentralization/" target="_blank" class="external-link">Ocean Pool: A New Wave in Bitcoin Mining Decentralization</a></li>
<li><a href="https://bitcoinmagazine.com/markets/defending-the-undefendable-the-censoring-miner" target="_blank" class="external-link">Defending The Undefendable: The Censoring Miner</a></li>
<li><a href="https://bitcoinmagazine.com/technical/inscriptions-the-cure-is-worse-than-the-disease" target="_blank" class="external-link">Inscriptions: The Cure Is Worse Than The Disease</a></li>
<li><a href="https://x.com/sethforprivacy/status/1729949544035557702?s=20" target="_blank" class="external-link">@sethforprivacy Thread</a></li>
<li><a href="https://x.com/WilsonMining/status/1735446340618891641?s=20" target="_blank" class="external-link">@WilsonMining Tweet</a></li>
<li><a href="https://x.com/SamouraiWallet/status/1732584009442443336?s=20" target="_blank" class="external-link">@SamouraiWallet Thread</a></li>
<li><a href="https://x.com/TheGuySwann/status/1733544435537875371?s=20" target="_blank" class="external-link">@TheGuySwann Tweet</a></li>
<li><a href="https://twitter.com/pippellia/status/1730595998215327917" target="_blank" class="external-link">@pippellia Thread</a></li>
</ul>
Books
2023-05-13T05:59:12.861Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/books/
<h1 id="economics-money" tabindex="-1">Economics/Money</h1>
<ul>
<li><a href="https://saifedean.com/thebitcoinstandard/" target="_blank" class="external-link">The Bitcoin Standard by Saifedean Ammous</a></li>
<li><a href="https://saifedean.com/thefiatstandard/" target="_blank" class="external-link">The Fiat Standard by Saifedean Ammous</a></li>
<li><a href="https://www.layeredmoney.com/" target="_blank" class="external-link">Layered Money by Nik Bhatia</a></li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li><a href="https://www.inventingbitcoin.com/" target="_blank" class="external-link">Inventing Bitcoin by Yan Pritzker</a>
<ul>
<li><a href="https://event.swanbitcoin.com/freebook/" target="_blank" class="external-link">Free download from Swan Bitcoin</a></li>
</ul>
</li>
<li><a href="https://github.com/bitcoinbook/bitcoinbook" target="_blank" class="external-link">Mastering Bitcoin: Programming the Open Blockchain by Andreas Antonopoulos</a></li>
<li><a href="https://github.com/lnbook/lnbook" target="_blank" class="external-link">Mastering the Lightning Network by Andreas Antonopoulos</a></li>
<li><a href="https://programmingbitcoin.com/programming-bitcoin-book/" target="_blank" class="external-link">Programming Bitcoin by Jimmy Song</a></li>
<li><a href="https://getbitcoinclarity.com/" target="_blank" class="external-link">Bitcoin Clarity by Kiara Bickers</a></li>
<li><a href="https://www.amazon.com/Bitcoin-Sovereignty-mathematics-Knut-Svanholm/dp/1090109911" target="_blank" class="external-link">Bitcoin: Sovereignty Through Mathematics by Knut Svanholm</a></li>
</ul>
<h1 id="history-culture-adoption" tabindex="-1">History/Culture/Adoption</h1>
<ul>
<li><a href="https://www.amazon.com/Internet-Money-Andreas-M-Antonopoulos/dp/1537000454" target="_blank" class="external-link">The Internet of Money by Andreas Antonopoulos</a></li>
<li><a href="https://www.amazon.com/Blocksize-War-controls-Bitcoins-protocol/dp/B08YQMC2WM" target="_blank" class="external-link">The Blocksize War by Jonathan Bier</a></li>
<li><a href="https://21lessons.com/" target="_blank" class="external-link">21 Lessons by Gigi</a></li>
<li><a href="https://littlebitcoinbook.com/" target="_blank" class="external-link">The Little Bitcoin Book by Jimmy Song, Alex Gladstein, et al.</a></li>
<li><a href="https://www.amazon.com/The-Sovereign-Individual-audiobook/dp/B07TWNP9NB" target="_blank" class="external-link">The Sovereign Individual: Mastering the Transition to the Information Age by James Dale Davidson, et al.</a></li>
<li><a href="https://magicbitcoinbook.com/" target="_blank" class="external-link">Magic Internet Money: A Book About Bitcoin by Jesse Berger</a>
<ul>
<li>Read online and pay-as-you-go via Lightning Network</li>
</ul>
</li>
</ul>
BTC Resource List
2023-05-30T00:13:05.918Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/btc-resource-list/
<h1 id="a-href-https-bitcoin-org-bitcoin-pdf-target-blank-class-external-link-bitcoin-whitepaper-a" tabindex="-1"><a href="https://bitcoin.org/bitcoin.pdf" target="_blank" class="external-link">Bitcoin Whitepaper</a></h1>
<h1 id="a-href-https-werunbtc-com-thesis-pdf-target-blank-class-external-link-bitcoin-investment-thesis-a" tabindex="-1"><a href="https://werunbtc.com/thesis.pdf" target="_blank" class="external-link">Bitcoin Investment Thesis</a></h1>
<h1 id="additional-resources" tabindex="-1">Additional Resources</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/podcasts/">Podcasts</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/books/">Books</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/videos/">Videos</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/articles/">Articles</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/other/">Other</a></li>
</ul>
<h1 id="workshops" tabindex="-1">Workshops</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/">Self-Custody Workshop</a></li>
</ul>
Articles
2023-05-13T05:58:02.048Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/articles/
<h1 id="guides" tabindex="-1">Guides</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/guides/how-to-use-bitcoin-coldcard" target="_blank" class="external-link">An easy ColdCard setup/usage guide</a></li>
<li><a href="https://www.ministryofnodes.com.au/sparrow-wallet-101-self-custody-your-bitcoin" target="_blank" class="external-link">Sparrow Wallet 101: Self Custody Your Bitcoin | Ministry of Nodes</a></li>
</ul>
<h1 id="mining-energy" tabindex="-1">Mining/Energy</h1>
<ul>
<li><a href="https://braiins.com/blog/bitcoin-mining-the-grid-generators" target="_blank" class="external-link">"Bitcoin Mining & The Grid (Part 1): Generators" by Braiins</a></li>
<li><a href="https://nydig.com/research/report-bitcoin-net-zero" target="_blank" class="external-link">"Bitcoin Net Zero" by NYDIG</a></li>
</ul>
<h1 id="economics-money" tabindex="-1">Economics/Money</h1>
<ul>
<li><a href="https://nakamotoinstitute.org/shelling-out/" target="_blank" class="external-link">"Shelling Out: The Origins of Money" by Nick Szabo</a></li>
<li><a href="https://unchained.com/blog/category/gradually-then-suddenly/" target="_blank" class="external-link">"Gradually, Then Suddenly Series" by Parker Lewis</a></li>
</ul>
<h1 id="history-culture-adoption" tabindex="-1">History/Culture/Adoption</h1>
<ul>
<li><a href="https://breedlove22.medium.com/the-number-zero-and-bitcoin-4c193336db5b" target="_blank" class="external-link">"The Number Zero and Bitcoin" by Robert Breedlove</a></li>
</ul>
<h1 id="other" tabindex="-1">Other</h1>
<ul>
<li><a href="https://www.fidelitydigitalassets.com/articles/bitcoin-first" target="_blank" class="external-link">"Bitcoin First: Why Investors Need to Consider Bitcoin Separately From Other Digital Assets" by Chris Kuiper and Jack Neureuter</a></li>
<li><a href="https://medium.com/@jbourneBTC/debunking-all-the-bitcoin-misinformation-one-by-one-54aaa2a20c4" target="_blank" class="external-link">"unDebunking all the Bitcoin misinformation, one by one" by jbourneBTC</a></li>
<li><a href="https://www.microstrategy.com/en/bitcoin/documents/stone-ridge-2020-shareholder-letter" target="_blank" class="external-link">Stone Ridge 2020 Shareholder Letter by Ross Stevens</a></li>
<li><a href="https://www.seetee.io/static/shareholder_letter-6ae7e85717c28831bf1c0eca1d632722.pdf" target="_blank" class="external-link">Seetee 2021 Shareholder Letter</a></li>
</ul>
Honolulu Bitcoin Homepage
2023-10-20T06:59:35.310Zhttps://honolulu-bit-devs-rebrand.vercel.app/
<p><button class="obsidian-button"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/about-us/">About Us</a></button> <button class="obsidian-button"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/btc-resource-list/">Resources</a></button></p>
<h1 id="upcoming-events" tabindex="-1">Upcoming Events</h1>
<table class="block-language-dataview">
<thead>
<tr>
<th>Date</th>
<th>Event Details</th>
<th></th>
</tr>
</thead>
<tbody>
<tr>
<td>March 18, 2024</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-32/">Socratic Seminar 32</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/298389357/" target="_blank" class="external-link">RSVP</a></td>
</tr>
</tbody>
</table>
<h1 id="past-events" tabindex="-1">Past Events</h1>
<table class="block-language-dataview">
<thead>
<tr>
<th>Date</th>
<th>Event Details</th>
<th></th>
</tr>
</thead>
<tbody>
<tr>
<td>February 19, 2024</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-31/">Socratic Seminar 31</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/298389326/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>January 29, 2024</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-30/">Socratic Seminar 30</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/298253658/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>December 18, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-29/">Socratic Seminar 29</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/296852082/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>November 20, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-28/">Socratic Seminar 28</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/296852078/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>October 12, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-27/">Socratic Seminar 27</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/296270442/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>September 18, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-26/">Socratic Seminar 26</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/295946682" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>August 21, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-25/">Socratic Seminar 25</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/295274267" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>July 31, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-24/">Socratic Seminar 24</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/294387797" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>June 19, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-23/">Socratic Seminar 23</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/294114765/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>May 29, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-22/">Socratic Seminar 22</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/293071352/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>April 10, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-21/">Socratic Seminar 21</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/292203949/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>February 27, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-20/">Socratic Seminar 20</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/291647400/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>February 16, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/">Self-Custody Workshop</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/283132091/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>January 30, 2023</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-19/">Socratic Seminar 19</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/290866266" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>December 19, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-18/">Socratic Seminar 18</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/290234465/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>November 28, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-17/">Socratic Seminar 17</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/289878839/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>October 24, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-16/">Socratic Seminar 16</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/289127323/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>September 26, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-15/">Socratic Seminar 15</a></td>
<td><a href="https://meetu.ps/e/Lq4sp/M2dkz/i" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>August 22, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-14/">Socratic Seminar 14</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/287894171/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>July 28, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-13/">Socratic Seminar 13</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/287219822/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>June 27, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-12/">Socratic Seminar 12</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/286407334/" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>May 22, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-11/">Socratic Seminar 11</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/285894161" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>April 25, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-10/">Socratic Seminar 10</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/285244617" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>March 28, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-9/">Socratic Seminar 9</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/284671355" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>February 28, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-8/">Socratic Seminar 8</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/283910858" target="_blank" class="external-link">RSVP</a></td>
</tr>
<tr>
<td>January 17, 2022</td>
<td><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-7/">Socratic Seminar 7</a></td>
<td><a href="https://www.meetup.com/honolulu-bitdevs/events/283132091/" target="_blank" class="external-link">RSVP</a></td>
</tr>
</tbody>
</table>
Socratic Seminar 9
2023-05-13T06:01:15.353Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-9/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-8/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-10/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li><a href="https://www.meetup.com/honolulu-bitdevs/events/284671355/" target="_blank" class="external-link">RSVP to the meetup!</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://bitcoinerjobs.com/" target="_blank" class="external-link">Apply for a Bitcoin job</a></li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House Rules</a></li>
<li>Respect people's privacy</li>
<li>Interaction and asking questions are encouraged</li>
<li>Updates on Hawaii digital currency bills (<a href="https://www.capitol.hawaii.gov/Session2022/hearingnotices/HEARING_CPN-EET_03-22-22_.PDF" target="_blank" class="external-link">HB2108</a> and <a href="https://www.capitol.hawaii.gov/Session2022/hearingnotices/HEARING_CPC_03-22-22_.PDF" target="_blank" class="external-link">SB3025</a>)</li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/biden-signs-bitcoin-executive-order-taps-cbdc" target="_blank" class="external-link">Biden Signs Bitcoin Executive Order, Taps ‘urgent’ CBDC Development</a></li>
<li><a href="https://bitcoinmagazine.com/business/lugano-switzerland-will-make-bitcoin-legal-tender" target="_blank" class="external-link">Lugano, Switzerland Will Make Bitcoin Legal Tender</a></li>
<li><a href="https://bitcoinmagazine.com/business/virginia-state-banks-receive-green-light-to-custody-bitcoin" target="_blank" class="external-link">Virginia Senate Passes Bill Allowing State Banks To Offer Bitcoin Custody Services</a></li>
<li><a href="https://bitcoinmagazine.com/culture/ukrainians-embrace-bitcoin-for-daily-purchases-nydig-report" target="_blank" class="external-link">Ukrainians Embrace Bitcoin For Daily Purchases: Report</a></li>
<li><a href="https://bitcoinmagazine.com/markets/ukrainian-president-zelensky-signs-law-legalizing-bitcoin" target="_blank" class="external-link">Ukrainian President Zelensky Signs Law Legalizing Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/markets/eu-parliament-backtracks-ban-on-bitcoin-proof-of-work" target="_blank" class="external-link">EU Parliament Backtracks Ban On Bitcoin’s Proof-Of-Work</a></li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/stripe-ftx-partner-for-bitcoin-business-payments" target="_blank" class="external-link">Stripe, FTX Partner For Bitcoin Business Payments</a></li>
<li><a href="https://bitcoinmagazine.com/markets/inflation-accelerates-bitcoin-price-will-go-down" target="_blank" class="external-link">As U.S. Inflation Hits 7.91%, Negative Impact On Bitcoin Price Looming</a></li>
<li><a href="https://bitcoinmagazine.com/business/hubspot-security-breach-leaks-bitcoin-users-data" target="_blank" class="external-link">Hubspot Security Breach Leaks Bitcoin Users’ Data</a>
<ul>
<li><a href="https://unchained.com/blog/email-marketing-data-leak-notice/" target="_blank" class="external-link">Unchained Affected By Activecampaign Data Leak</a></li>
</ul>
</li>
<li><a href="https://www.bloomberg.com/news/articles/2022-02-28/u-s-prods-crypto-exchanges-to-thwart-russia-sanctions-dodgers?srnd=cryptocurrencies-v2" target="_blank" class="external-link">Exchanges Asked to Freeze Accounts by USG in Light of Russia-Ukraine Conflict</a></li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/foundation-devices-launches-new-bitcoin-hardware-wallet" target="_blank" class="external-link">Foundation Devices Launches New Bitcoin Hardware Wallet</a></li>
<li><a href="https://bitcoinmagazine.com/business/dorsey-bitcoin-wallet-will-have-fingerprint-sensor" target="_blank" class="external-link">Jack Dorsey’s Bitcoin Hardware Wallet Will Use Fingerprint Authentication</a></li>
<li><a href="https://bitcoinmagazine.com/business/wasabi-wallet-explains-new-bitcoin-censorship" target="_blank" class="external-link">Wasabi Wallet Parent Company Explains Decision To Censor Bitcoin Transactions</a></li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-mining-pool-braiins-launches-ukrainian-hashrate-donation" target="_blank" class="external-link">Bitcoin Mining Pool Braiins Launches Ukrainian Hashrate Donation</a></li>
<li><a href="https://bitcoinmagazine.com/technical/stratum-v2-bitcoin-mining-progress" target="_blank" class="external-link">Bitcoin Mining Pool Protocol Stratum V2 Is Making Progress</a></li>
</ul>
<h1 id="second-layer-tech" tabindex="-1">Second Layer Tech</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/bitcoin-lightning-network-continues-to-grow" target="_blank" class="external-link">Bitcoin Lightning Network Continues To Grow</a></li>
<li><a href="https://newsletter.impervious.ai/decentralized-identifiers-implications-for-your-data-payments-and-communications-2/" target="_blank" class="external-link">Decentralized Identifiers: Implications for Your Data, Payments and Communications</a>
<ul>
<li><a href="https://twitter.com/Asher68W/status/1506064904825933824?s=20&t=GAFW7Cn6SuYhT1HjqpIMLA" target="_blank" class="external-link">Tweethread summary</a></li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li>Nate's thoughts on how to assess projects in the space (~10m)</li>
<li><a href="https://bitcoinmagazine.com/markets/credit-suisse-ensuing-new-financial-order-will-benefit-bitcoin" target="_blank" class="external-link">Credit Suisse: Ensuing New Financial Order Will Benefit Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/culture/bitcoin-core-dev-providing-aid-in-ukraine" target="_blank" class="external-link">Meet The Core Dev Using Bitcoin For Humanitarian Aid On The Ground In Ukraine</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-February/019968.html?s=09" target="_blank" class="external-link">A Dive into CoinPool : Bitcoin Balances for Billions</a></li>
<li><a href="https://bitcoinmagazine.com/culture/bitcoiners-building-mesh-networks-in-ukraine" target="_blank" class="external-link">Bitcoiners Are Building Mesh Networks In Ukraine</a></li>
<li><a href="https://bitcoinmagazine.com/business/el-salvador-fixing-chivo-bitcoin-wallet" target="_blank" class="external-link">How El Salvador Is Fixing Chivo Wallet, Trying To Get Bitcoin Adoption Back On Track</a></li>
<li><a href="https://bitcoinmagazine.com/business/zebedee-adds-lightning-off-ramp-for-bitcoin-gaming-rewards-in-brazil" target="_blank" class="external-link">Zebedee Adds Lightning Off-Ramp For Bitcoin Gaming Rewards In Brazil</a></li>
<li><a href="https://bitcoinmagazine.com/markets/public-bitcoin-miners-growing-hash-rates-btc" target="_blank" class="external-link">Public Bitcoin Miners Are Increasing Hash Rates, Btc Holdings</a></li>
<li><a href="https://bitcoinmagazine.com/markets/thailand-approves-tax-relief-for-bitcoin-investors" target="_blank" class="external-link">Thailand Approves Tax Relief For Bitcoin, Crypto</a></li>
</ul>
Socratic Seminar 8
2023-05-13T06:01:10.423Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-8/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-7/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-9/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li><a href="https://www.meetup.com/honolulu-bitdevs/events/283910858?utm_medium=referral&utm_campaign=share-btn_savedevents_share_modal&utm_source=link" target="_blank" class="external-link">RSVP to the meetup!</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://bitcoinerjobs.com/" target="_blank" class="external-link">Apply for a Bitcoin job</a></li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House Rules</a></li>
<li>Respect people's privacy</li>
<li>Interaction and asking questions are encouraged</li>
</ul>
<h1 id="hawaii-digital-currency-bills" tabindex="-1">Hawaii Digital Currency Bills</h1>
<ul>
<li><a href="https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=2108&year=2022" target="_blank" class="external-link">HB2108</a>
<ul>
<li>Establishes a program for the licensure, regulation, and oversight of special purpose digital currency companies</li>
<li>Extends operations of companies in the digital currency innovation lab pilot program under certain circumstances</li>
<li>Appropriates funds out of the compliance resolution fund to implement the program</li>
</ul>
</li>
<li><a href="https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2695&year=2022" target="_blank" class="external-link">SB2695</a>
<ul>
<li>Establishes a Blockchain and Cryptocurrency Task Force</li>
</ul>
</li>
<li><a href="https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2695&year=2022" target="_blank" class="external-link">SB2696</a>
<ul>
<li>Allows the Director of Finance to authorize any state agency to enter into virtual currency payment agreements with persons or virtual currency issuers to provide the acceptance of convertible virtual currency as a means of payment</li>
<li>Allows any state agency that enters into a virtual currency agreement with a person or virtual currency issuer as authorized by the Director of Finance to accept convertible virtual currency</li>
</ul>
</li>
<li><a href="https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=2287&year=2022" target="_blank" class="external-link">HB2287</a> / <a href="https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2697&year=2022" target="_blank" class="external-link">SB2697</a>
<ul>
<li>Excludes the electronic transfer of virtual currency through virtual currency companies and cryptocurrency companies from the Money Transmitters Act</li>
</ul>
</li>
<li><a href="https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2698&year=2022" target="_blank" class="external-link">SB2698</a>
<ul>
<li>Prohibits any encumbrance on the right to own, possess, and use any medium of exchange</li>
</ul>
</li>
</ul>
<p><img src="https://honolulubitdevs.com/assets/imgs/socratic-seminar-8/JoeKentPost.jpg" alt="Joe Kent: Restrictions hurt Hawaii's stake in cryptocurrency market" /></p>
<p><img src="https://honolulubitdevs.com/assets/imgs/socratic-seminar-8/RyanOzawaPost.jpg" alt="Ryan Ozawa: State Legislature must act to keep crypto accessible" /></p>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li><a href="https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf" target="_blank" class="external-link">Federal Reserve published paper on CBDC</a></li>
<li><a href="https://bitcoinmagazine.com/markets/fed-bans-its-officials-from-trading-bitcoin-stocks-bonds" target="_blank" class="external-link">Federal Reserve bans its officials from trading bitcoin, stocks, bonds</a></li>
<li><a href="https://bitcoinmagazine.com/markets/fbi-forms-new-bitcoin-unit-as-doj-taps-new-crypto-head" target="_blank" class="external-link">FBI forms new enforcement division</a></li>
<li><a href="https://anchor.fm/john-vallis/episodes/Bitcoin--the-Freedom-Convoy-w-NobodyCaribou-e1e00qs/a-a7bsk4l" target="_blank" class="external-link">Trucker convoy in Ottawa to protest COVID mandates</a>
<ul>
<li><a href="https://www.bbc.com/news/world-us-canada-60383385" target="_blank" class="external-link">Trudeau vows to freeze anti-mandate protesters' bank accounts</a></li>
<li><a href="https://bitcoinmagazine.com/markets/bitcoin-fundraising-canada-ottawa-truckers-freedom-convoy" target="_blank" class="external-link">Bitcoin fundraiser for Ottawa freedom convoy raises over 22 bitcoin (~$1M)</a></li>
<li><a href="https://twitter.com/timpastoor/status/1494704248055029761?s=20&t=XjMLbuGEIQDbjO5kNJFENA" target="_blank" class="external-link">Trucker receiving $8k worth of BTC from donations on livestream</a></li>
<li><a href="https://bankaccountfrozen.com/" target="_blank" class="external-link">"Okay So Your Bank Account Is Frozen" Starter Pack</a></li>
<li><a href="https://www.reuters.com/world/americas/canada-ends-emergency-powers-invoked-tackle-truckers-protests-pm-trudeau-2022-02-23/" target="_blank" class="external-link">Canada ends emergency powers invoked against trucker protests (2/23)</a></li>
</ul>
</li>
<li><a href="https://www.aljazeera.com/tag/ukraine-russia-crisis/" target="_blank" class="external-link">Russia invades Ukraine</a>
<ul>
<li><a href="https://bitcoinmagazine.com/business/4-million-in-bitcoin-has-been-donated-to-ukraine-military-support-groups" target="_blank" class="external-link">~$4M in Bitcoin donated to Ukraine military support groups</a></li>
<li><a href="https://www.reuters.com/world/europe/eu-announces-new-russia-sanctions-with-us-others-including-swift-2022-02-26/" target="_blank" class="external-link">Ukrainian allies target Russia with sanctions and possible ban from SWIFT international payment network</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/markets/russia-shares-plan-to-regulate-bitcoin-crypto" target="_blank" class="external-link">Russia shares plan to regulate Bitcoin & crypto</a>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/russia-embracing-bitcoin-challenges-world" target="_blank" class="external-link">Russia and geopolitical game theory</a></li>
</ul>
</li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li><a href="https://twitter.com/murchandamus/status/1493344130302414851" target="_blank" class="external-link">Distribution of address types by count/value</a>
<ul>
<li>P2PKH outputs make up 23% of the count, but 72% of the value</li>
</ul>
</li>
<li><a href="https://lnmarkets.substack.com/p/41-aopp-bitcoin-options-and-much" target="_blank" class="external-link">AOPP drama</a>
<ul>
<li><a href="https://play.fountain.fm/episode/6455618033" target="_blank" class="external-link">Guy's Take <a class="tag" onclick="toggleTagSearch(this)" data-content="#51">#51</a>: AOPP & the Travel Rule</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/cash-app-integrates-bitcoins-lightning-network" target="_blank" class="external-link">Jack Dorsey's Cash App integrates Bitcoin's Lightning Network</a></li>
<li><a href="https://github.com/lightningnetwork/lnd/issues/5594#issuecomment-1042314431" target="_blank" class="external-link">Debate over BOLT12 Support in LND</a>
<ul>
<li>Learn about BOLT12 - <a href="https://bolt12.org/" target="_blank" class="external-link">Offers: Lightning's Native Experience, Everywhere</a></li>
</ul>
</li>
<li><a href="https://github.com/arcbtc/LNURLVend" target="_blank" class="external-link">LNURLVend</a>
<ul>
<li>Offline Lightning Network vending machine</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-design-guide-v2-launches-with-focus-on-lightning" target="_blank" class="external-link">Bitcoin Design Guide V2 launches with focus on Lightning</a></li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://ogbtc.substack.com/p/february-2022" target="_blank" class="external-link">ASIC competitors coming to market</a>
<ul>
<li><a href="https://www.tomshardware.com/news/intels-second-gen-bitcoin-miners-performance-and-pricing-listed" target="_blank" class="external-link">SEC filing by one of Intel's partners has revealed both the pricing and performance of Intel's second-gen Bonanza Mine (BMZ2) Bitcoin miners</a></li>
</ul>
</li>
<li><a href="https://notgrubles.medium.com/solo-mining-with-blockstream-satellite-9303fdfc5090" target="_blank" class="external-link">Solo mining with Blockstream Satellite</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<h5 id="em-depending-on-time-interest-em" tabindex="-1"><em>Depending on time/interest</em></h5>
<ul>
<li><a href="https://twitter.com/synonym_to/status/1498021273255002115?s=21" target="_blank" class="external-link">Synonym releases first iteration of SlashPay after Lightning Hackday Istanbul 2022</a>
<ul>
<li>Method of abstracting all Bitcoin payment negotiation processes, features, options, communication, and server endpoints to occur outside of the nodes and without limiting a payment to any single format</li>
</ul>
</li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-February/020026.html" target="_blank" class="external-link">Teleport: a CoinSwap implementation alpha release, provides invisible private transactions</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-February/020026.html" target="_blank" class="external-link">RoboSats is a P2P market built on the Lightning Network to privately exchange bitcoin for national currencies</a>
<ul>
<li>Uses lightning hold invoices to minimize custody and trust requirements</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/markets/doj-recovers-36-billion-in-bitcoin-stolen-in-bitfinex-hack" target="_blank" class="external-link">DOJ recovers 94K BTC (~$3.6B) stolen from 2016 Bitfinex hack</a></li>
<li><a href="https://www.kraken.com/proof-of-reserves" target="_blank" class="external-link">Proof of Reserves (Kraken)</a></li>
<li><a href="https://github.com/bitcoin/bitcoin/pull/24058" target="_blank" class="external-link">BIP 322 PR</a>
<ul>
<li>A standard for interoperable signed messages based on the Bitcoin Script format, either for proving fund availability, or committing to a message as the intended recipient of funds sent to the invoice address.</li>
</ul>
</li>
<li><a href="https://blog.bitmex.com/bitcoin-address-re-use-statistics/" target="_blank" class="external-link">Bitcoin Address Reuse Statistics</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-January/019817.html" target="_blank" class="external-link">Limitations Of RBF Policy And How To Improve</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-February/019879.html" target="_blank" class="external-link">Thoughts on Fee Bumping</a></li>
<li><a href="https://gist.github.com/JeremyRubin/92a9fc4c6531817f66c2934282e71fdf" target="_blank" class="external-link">Original Fee Sponsorship Proposal</a></li>
<li><a href="https://github.com/ElementsProject/scriptless-scripts/blob/master/md/thresh-metr.md" target="_blank" class="external-link">Threshold Sigs with Musig + Merkle Trees</a></li>
</ul>
Socratic Seminar 7
2023-05-25T06:21:14.321Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-7/
<p><button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-8/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people's privacy</li>
<li>Interaction and asking questions are encouraged</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House Rules</a></li>
<li>Pushed discussion on Special Purpose Digital Currency Licensure Bill to next month</li>
<li><a href="https://bitcoinerjobs.com/" target="_blank" class="external-link">Apply for a Bitcoin job</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li><a href="https://twitter.com/RepTomEmmer/status/1481283945492852743?s=20" target="_blank" class="external-link">Tom Emmer introduced a bill prohibiting the Fed from issuing a central bank digital currency directly to individuals</a></li>
<li><a href="https://bitcoinmagazine.com/markets/congress-announces-hearing-on-bitcoin-energy-use" target="_blank" class="external-link">Congress announces hearing on Bitcoin energy use</a>
<ul>
<li>Prompted by a letter sent to the House in October by a cohort of national and international climate organizations that argued against the energy usage of Bitcoin and its Proof of Work (PoW) system</li>
<li><a href="https://bitcoinmagazine.com/markets/congress-announces-hearing-on-bitcoin-energy-use" target="_blank" class="external-link">Rebuttal from the Bitcoin Policy Institute (BPI)</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/arkansas-launches-10k-in-bitcoin-relocation-bonus" target="_blank" class="external-link">Arkansas Launches $10k in Bitcoin relocation bonus</a></li>
<li><a href="https://www.coindesk.com/business/2022/01/14/rio-de-janeiro-to-allocate-1-of-treasury-reserves-to-crypto-report/" target="_blank" class="external-link">Rio De Janeiro to Allocate 1% of Treasury Reserves to Bitcoin (maybe crypto?)</a>
<ul>
<li>Plans to apply discounts to tax payments made with bitcoin</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/87-billion-italian-bank-to-add-bitcoin-trading" target="_blank" class="external-link">$87 billion Italian bank to add Bitcoin trading</a></li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-app-strike-launches-in-argentina" target="_blank" class="external-link">Strike Launches in Argentina</a>
<ul>
<li>Uses USDT because BTC isn't legal tender</li>
</ul>
</li>
</ul>
<h1 id="funding-bounties" tabindex="-1">Funding/Bounties</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/jack-dorsey-to-launch-bitcoin-legal-defense-fund" target="_blank" class="external-link">Jack Dorsey launches Bitcoin legal defense fund</a></li>
<li><a href="https://bitcoinmagazine.com/business/hrf-gifts-4-bitcoin-to-bitcoin-projects" target="_blank" class="external-link">HRF Gifts 4.25 BTC to Bitcoin projects</a>
<ul>
<li>A full bitcoin will be awarded to Jarol Rodriguez, a Bitcoin Core developer working on a new graphical user interface (GUI) for Bitcoin’s main software client</li>
<li>Four recipients will each receive 50 million satoshis: Togolese human rights advocate Farida Nabourema, Afghan entrepreneur and Bitcoin educator Roya Mahboob, Sparrow Wallet, and Bitcoin educator and author Anita Posch.</li>
<li>Five other grantees will each receive 25 million satoshis, including Boltz Exchange, Summer of Bitcoin, Exonumia, Blockchain Commons, and Meron Estefanos</li>
</ul>
</li>
<li><a href="https://blog.wasabiwallet.io/1-btc-ln-privacy-grant/" target="_blank" class="external-link">1 BTC grant from Wasabi Wallet for a privacy-focused Lightning wallet</a></li>
<li><a href="https://twitter.com/JeremyRubin/status/1477760236115034113?s=20" target="_blank" class="external-link">~4 BTC crowd-sourced bug bounty for a show-stopping flaw in OP_CTV</a></li>
</ul>
<h1 id="tech" tabindex="-1">Tech</h1>
<ul>
<li><a href="https://bitcoinops.org/en/newsletters/2021/12/22/" target="_blank" class="external-link">Bitcoin OpTech 2021 year in review</a>
<ul>
<li>Great overview of technical updates last year</li>
</ul>
</li>
<li>NFC-based signing devices
<ul>
<li><a href="https://raw.githubusercontent.com/Coldcard/firmware/master/docs/nfc-coldcard.md" target="_blank" class="external-link">Coldcard Mk4</a></li>
<li><a href="https://coinkite.cards/" target="_blank" class="external-link">SatsCard and TapSigner</a></li>
</ul>
</li>
<li><a href="https://twitter.com/RoninDojoNode/status/1479908713192435722?s=20" target="_blank" class="external-link">New RoninDojo node presale</a></li>
<li><a href="https://moxie.org/2022/01/07/web3-first-impressions.html" target="_blank" class="external-link">Moxie's thoughts on Web3</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/op-ctv/">OP_CHECKTEMPLATEVERIFY</a> (BIP-119)
<ul>
<li><a href="https://zensored.substack.com/p/what-does-op-ctv-mean-for-me" target="_blank" class="external-link">What does OP_CTV mean for me?</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2021-December/019719.html" target="_blank" class="external-link">Jeremy Rubin hosting BIP-119 deployment and review workshops</a></li>
</ul>
</li>
<li>Learn more about OP_CTV: <a href="https://utxos.org/" target="_blank" class="external-link">utxos.org</a></li>
<li><a href="https://popeller.io/schnorr-musig2" target="_blank" class="external-link">MuSig2: Multisig with Schnorr</a></li>
<li><a href="https://github.com/meshcollider/musig2-py" target="_blank" class="external-link">Experimental Musig2 implementation in Python</a></li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://twitter.com/bitcoinmagazine/status/1483116674517721092?s=21" target="_blank" class="external-link">New Bitcoin hashrate all-time high</a>
<ul>
<li>~207 exahash/second</li>
</ul>
</li>
<li><a href="https://tftc.io/martys-bent/issue-1145/" target="_blank" class="external-link">Bitcoin miners produced more USD revenue in 2021 than they did in 2018, 2019, and 2020 combined</a>
<ul>
<li><a href="https://blog.hashrateindex.com/hashrate-index-2021-year-end-report-the-year-of-the-greath-hashrate-migration/" target="_blank" class="external-link">Full Hashrate Index report</a></li>
</ul>
</li>
<li><a href="https://tftc.io/martys-bent/issue-1140-a-lesson-from-kazakhstan/" target="_blank" class="external-link">Impact of Kazakhstan internet outage on Bitcoin mining</a>
<ul>
<li>Incumbent government leaders shut down internet in attempt to quell protest/dissent</li>
<li>Many estimate that the country is home to ~18% of the hashrate dedicated to the Bitcoin network</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/jack-dorsey-block-is-building-a-bitcoin-mining-system" target="_blank" class="external-link">Block commits to building open Bitcoin mining system (based on October announcement)</a></li>
<li><a href="https://twitter.com/BitcoinMagazine/status/1481598401481486341?s=20" target="_blank" class="external-link">Two different solo miners discover blocks within a couple days of one another</a></li>
</ul>
<h1 id="economics-finance" tabindex="-1">Economics/Finance</h1>
<ul>
<li><a href="https://twitter.com/LynAldenContact/status/1481286347465936896?s=20" target="_blank" class="external-link">Headline CPI for December came in at just over 7%, a 40-year high</a></li>
<li><a href="https://bitcoinmagazine.com/markets/bitcoin-is-half-of-bill-miller-portfolio" target="_blank" class="external-link">Bitcoin is half of Bill Miller's portfolio</a></li>
<li><a href="https://bitcoinmagazine.com/markets/fidelity-adds-bitcoin-exposure-to-traditional-etfs" target="_blank" class="external-link">Fidelity adds Bitcoin exposure to traditional ETFs</a></li>
<li><a href="https://bitcoinmagazine.com/markets/nasdaq-listed-btcs-to-pay-dividend-in-bitcoin" target="_blank" class="external-link">NASDAQ-listed blockchain firm BTCS will pay dividend in Bitcoin (a first for US markets)</a></li>
<li><a href="https://bitcoinmagazine.com/business/san-diego-state-university-accepting-bitcoin-donations" target="_blank" class="external-link">San Diego State University is now openly accepting bitcoin donations</a>
<ul>
<li>Only 1% of the donations will be employed each quarter to explore Bitcoin opportunities for SDSU</li>
</ul>
</li>
</ul>
<h1 id="other" tabindex="-1">Other</h1>
<ul>
<li>Bitcoin’s 13th Anniversary and Infamous Tweets
<ul>
<li><a href="https://blockstream.info/block/000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f" target="_blank" class="external-link">Genesis Block - Jan 3rd</a></li>
<li><a href="https://u.today/sites/default/files/inline-images/halfin.png" target="_blank" class="external-link">Running bitcoin - Jan 11th</a></li>
</ul>
</li>
</ul>
<h1 id="submitted-meme-of-the-week" tabindex="-1">Submitted Meme of the Week</h1>
<ul>
<li><a href="https://twitter.com/gregzaj1/status/1482244562013802497/photo/1" target="_blank" class="external-link">From @Gregzaj1</a></li>
</ul>
Socratic Seminar 32
2024-03-18T00:30:15.604Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-32/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-31/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/298389357/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: March 18th, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>5:50pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's dashboard</a></li>
<li>6:00pm - The people, culture, and services at River with Ellen</li>
<li>6:30pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Join our Telegram group</li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
</ul>
</li>
</ul>
<h1 id="presentation" tabindex="-1">Presentation</h1>
<ul>
<li><strong>Guest Speaker:</strong> Ellen Weaver, Director of River's People Division</li>
<li><strong>Topic</strong>: <a href="https://river.com/" target="_blank" class="external-link">River</a></li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/culture/newly-revealed-satoshi-email-correspondence-with-martti-malmi" target="_blank" class="external-link">New Satoshi emails released</a> (<a href="https://bitcoinmagazine.com/technical/bitcoin-adam-backs-complete-emails-satoshi-nakamoto" target="_blank" class="external-link">1</a>)(<a href="https://youtu.be/uts8J-rgy4c?si=keeDvmNx_bqzU51o" target="_blank" class="external-link">2</a>)(<a href="https://youtu.be/4701rc744UI?si=yIvnDh1s4bA3nSre" target="_blank" class="external-link">3</a>)</li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/craig-wright-is-not-satoshi-nakamoto/">Craig Wright is not Satoshi Nakamoto</a></li>
<li><a href="https://x.com/Strike/status/1767285074871906556?s=20" target="_blank" class="external-link">Strike expands to Hawaii</a> (<a href="https://www.nobsbitcoin.com/strike-announces-africa-expansion/" target="_blank" class="external-link">and Africa</a>)</li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/portal-new-hardware-wallet-from-twenty-two-devices/">Portal - New hardware wallet from TwentyTwo Devices</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/swaproot-cheaper-and-more-private-on-chain-deposits-on-phoenix-wallet/">Swaproot - Cheaper and more private on-chain deposits on Phoenix Wallet</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/teleport-transactions-a-revival-of-chris-belcher-s-coinswap-protocol/">Teleport transactions - A revival of Chris Belcher's Coinswap protocol</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/julian-assange-appeals-in-most-important-press-freedom-case-in-the-world/" target="_blank" class="external-link">Julian Assange Appeals in Most Important Press Freedom Case in the World</a></li>
<li><a href="https://www.nobsbitcoin.com/roman-sterlingov-found-guilty-on-four-counts/" target="_blank" class="external-link">Roman Sterlingov Found Guilty on Four Counts, Court Finds Chainalysis 'Reliable'</a></li>
<li><a href="https://spacesprotocol.org/" target="_blank" class="external-link">Spaces Protocol - Scalable & Permissionless Bitcoin Identities</a></li>
<li><a href="https://www.nobsbitcoin.com/eia-to-temporarily-suspend-bitcoin-miner-survey-after-lawsuit/" target="_blank" class="external-link">EIA to Temporarily Suspend Bitcoin Miner Survey After Lawsuit</a></li>
<li><a href="https://bisq.wiki/Bisq_2" target="_blank" class="external-link">Bisq 2: Refactored successor to the Bisq v1 decentralized exchange protocol</a></li>
<li><a href="https://medium.com/breez-technology/liquidity-on-lightning-moving-from-ux-to-economix-6e597d9e1abd" target="_blank" class="external-link">Liquidity on Lightning: from UX to Economix | Breez Technology</a></li>
<li><a href="https://blog.boltz.exchange/p/launching-boltz-client" target="_blank" class="external-link">Boltz Client: non-custodial Taproot & Liquid swaps</a></li>
<li><a href="https://blog.mutinywallet.com/mutiny-wallet-android-and-ios/" target="_blank" class="external-link">Mutiny Wallet now available for Android and iOS</a></li>
<li><a href="https://www.nobsbitcoin.com/opensats-announces-fourth-wave-of-bitcoin-grants/" target="_blank" class="external-link">OpenSats Announces Fourth Wave of Bitcoin Grants</a></li>
<li><a href="https://www.nobsbitcoin.com/coldcard-q-v0-0-6-beta/" target="_blank" class="external-link">COLDCARD Q v0.0.6-beta: Source Code Is Now Public</a></li>
<li><a href="https://www.nobsbitcoin.com/bitkey-shares-code-under-commons-clause-license/" target="_blank" class="external-link">Bitkey Shares Code for Firmware, Mobile App, Server & Hardware Schematics</a></li>
<li><a href="https://delvingbitcoin.org/t/economic-majority-signaling-for-op-ctv-activation/635" target="_blank" class="external-link">Economic-Majority Signaling for OP_CTV Activation</a></li>
<li><a href="https://delvingbitcoin.org/t/liquidity-provider-utxo-management/600" target="_blank" class="external-link">Liquidity provider utxo management</a></li>
<li><a href="https://stacker.news/items/442023" target="_blank" class="external-link">PayPerQ (ppq.ai): LN-powered GPT4 experience</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2024/02/28/?ref=nobsbitcoin.com#trustless-contract-for-miner-feerate-futures" target="_blank" class="external-link">Trustless contract for miner feerate futures | Bitcoin Optech 291</a></li>
<li><a href="https://nextblock.is/" target="_blank" class="external-link">Next Block: Probabilistic transaction fee estimator to get into the next block</a></li>
<li><a href="https://www.nobsbitcoin.com/braiins-introduces-lightning-payouts/" target="_blank" class="external-link">Braiins Pool Introduces Lightning Payouts</a></li>
<li><a href="https://www.nobsbitcoin.com/marathon-digital-holdings-launched-slipstream/" target="_blank" class="external-link">Marathon Launched Slipstream Service for Non-Standard Bitcoin Transactions</a></li>
<li><a href="https://www.nobsbitcoin.com/bitdeer-4nm-bitcoin-mining-chip-seal0/" target="_blank" class="external-link">Bitdeer Announced New 4nm Bitcoin Mining Chip SEAL01</a></li>
<li><a href="https://www.nobsbitcoin.com/block-shares-update-on-mdks-firmware-api-and-user-interface/" target="_blank" class="external-link">Block Shares Update on MDK's Firmware, API and User Interface</a></li>
<li><a href="https://www.nobsbitcoin.com/voltage-redesign-teams-pricing/" target="_blank" class="external-link">Voltage Introduces Redesign, Teams, and Pricing Updates</a></li>
<li><a href="https://www.nobsbitcoin.com/geyser-partners-with-flash-to-introduce-recurring-subscriptions/" target="_blank" class="external-link">Geyser Partners with Flash to Introduce NWC-Powered Recurring Subscriptions</a></li>
<li><a href="https://www.nobsbitcoin.com/amboss-launches-reflex/" target="_blank" class="external-link">Amboss Reflex: Compliance Tool for Lightning Businesses</a></li>
<li><a href="https://lightningdevkit.org/blog/unleashing-liquidity-on-the-lightning-network-with-lightning-liquidity/" target="_blank" class="external-link">Lightning Dev Kit releases "lightning-liquidity" rust library for LSP operators</a></li>
<li><a href="https://radio.fountain.fm/" target="_blank" class="external-link">Fountain launches new value-for-value online radio</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2024/02/28/#sending-and-receiving-ecash-using-ln-and-zkcps" target="_blank" class="external-link">Sending and receiving ecash using LN and ZKCPs | Bitcoin Optech 291</a></li>
<li><a href="https://www.nobsbitcoin.com/hack0-open-source-bitcoin-node-for-vendors/" target="_blank" class="external-link">Hack0: Open Source Plug-and- Play Bitcoin Node for Vendors</a></li>
<li><a href="https://www.nobsbitcoin.com/citrea-raises-2-7m/" target="_blank" class="external-link">Citrea Raised $2.7M Seed Round to Launch Bitcoin’s First ZK Rollup</a></li>
<li><a href="https://www.nobsbitcoin.com/signal-introduces-usernames-and-phone-number-privacy/" target="_blank" class="external-link">Signal Introduces Usernames and Phone Number Privacy</a></li>
<li><a href="https://www.nobsbitcoin.com/introducing-wikifreedia/" target="_blank" class="external-link">WikiFreedia: Wikipedia Proof-of-Concept on Nostr</a></li>
<li><a href="https://www.nobsbitcoin.com/noogle-lol/" target="_blank" class="external-link">Noogle.lol: Seach Nostr with Data Vending Machines</a></li>
<li><a href="https://www.nobsbitcoin.com/nostr-nests-v2-0-beta/" target="_blank" class="external-link">Nostr Nests v2.0-beta: Seamless Nostr Integration & Redesigned Interface</a></li>
<li><a href="https://www.nobsbitcoin.com/2023-year-end-review-on-global-base-money/" target="_blank" class="external-link">2023 Q4 Year-End Review of Global Base Money (Bitcoin Now 5th Largest Base Money Globally)</a></li>
<li><a href="https://www.nobsbitcoin.com/nigeria-blocks-access-to-bitcoin-exchanges-in-attempt-to-save-plummeting-national-currency/" target="_blank" class="external-link">Nigeria Blocks Access to Bitcoin Exchanges in Desperate Bid to Control The Price of Plummeting National Currency</a></li>
<li><a href="https://www.nobsbitcoin.com/ecb-reports-record-loss-for-2023-says-bitcoin-has-failed/" target="_blank" class="external-link">ECB Reports Record Loss for 2023, Publishes Another Hit Piece on Bitcoin</a></li>
</ul>
Socratic Seminar 31
2024-02-19T20:22:34.734Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-31/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-30/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-32/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/298389326/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: February 19th, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>5:50pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's dashboard</a></li>
<li>6:00pm - Guest speaker discussing the economics of block space</li>
<li>6:30pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Join our Telegram group</li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
</ul>
</li>
</ul>
<h1 id="presentation" tabindex="-1">Presentation</h1>
<ul>
<li><strong>Guest Speaker</strong></li>
<li><strong>Topic</strong>: Economics of block space</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/dcca-release-hawai-i-digital-currency-innovation-lab-to-conclude/">DCCA RELEASE - Hawai‘i Digital Currency Innovation Lab To Conclude</a></li>
<li><a href="https://www.nobsbitcoin.com/bitcoin-developer-mailing-list-migrates-to-google-groups/" target="_blank" class="external-link">Bitcoin Developer Mailing List Migrates to Google Groups</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/us-department-of-energy-announced-an-emergency-data-collection-initiative-targeting-us-bitcoin-miners/">US Department of Energy Announced an 'Emergency' Data Collection Initiative Targeting US Bitcoin Miners</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/nostr-wallet-connect-a-bitcoin-application-collaboration-layer/">Nostr Wallet Connect - A Bitcoin Application Collaboration Layer</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/holepunch-unveils-open-source-p2-p-app-development-platform-pear-runtime/">Holepunch Unveils Open-Source P2P App Development Platform Pear Runtime</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/dual-funding-officially-merged-into-lightning-network-specifications/">Dual Funding Officially Merged into Lightning Network Specifications</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/v3-transaction-policy-for-anti-pinning-merged-into-bitcoin-core/">V3 Transaction Policy for Anti-Pinning Merged into Bitcoin Core</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://bitcoinops.org/en/newsletters/2024/02/07/#public-disclosure-of-a-block-stalling-bug-in-bitcoin-core-affecting-ln" target="_blank" class="external-link">Public disclosure of a block stalling bug in Bitcoin Core affecting LN | Bitcoin Optech Newsletter 288</a></li>
<li><a href="https://unchained.com/features/mpc-vs-multisig-vs-sss" target="_blank" class="external-link">Multisig vs. Shamir's vs. MPC: Institutional-grade bitcoin custody</a></li>
<li><a href="https://www.nobsbitcoin.com/introducing-satcom/" target="_blank" class="external-link">Satcom: A Collaborative Layer for Internet Browsing Experience</a></li>
<li><a href="https://www.nobsbitcoin.com/introducing-citrea/" target="_blank" class="external-link">Citrea Announced Building Bitcoin’s First ZK Rollup</a></li>
<li><a href="https://github.com/bitcoin/bips/pull/1551" target="_blank" class="external-link">BIP that resolves human readable names into payment info</a></li>
<li><a href="https://x.com/amasad/status/1754582481226150377?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link">First bitcoin-denominated Replit bounty</a></li>
<li><a href="https://delvingbitcoin.org/t/meow-mint-ecash-on-will/466" target="_blank" class="external-link">MEOW: Mint eCash On Will - Delving Bitcoin</a></li>
<li><a href="https://macadamia.cash/" target="_blank" class="external-link">macadamia: Cashu eCash wallet for iOS</a></li>
<li><a href="https://darthcoin.substack.com/p/getting-started-zeus-mobile" target="_blank" class="external-link">Getting started with Zeus Mobile Node - by DarthCoin</a></li>
<li><a href="https://www.nobsbitcoin.com/zkbitcoin-zero-knowledge-applications-for-bitcoin/" target="_blank" class="external-link">zkBitcoin: Zero-Knowledge Applications for Bitcoin</a></li>
<li><a href="https://delvingbitcoin.org/t/an-overview-of-the-cluster-mempool-proposal/393" target="_blank" class="external-link">An overview of the cluster mempool proposal - Delving Bitcoin</a></li>
<li><a href="https://www.nobsbitcoin.com/summer-of-bitcoin-2024-applications-are-open-until-february-19/" target="_blank" class="external-link">Summer of Bitcoin 2024 Applications are Open Until 20th of February</a></li>
<li><a href="https://github.com/taproot-wizards/purrfect_vault" target="_blank" class="external-link">A Prototype Vault using OP_CAT</a></li>
<li><a href="https://bitcoinmagazine.com/technical/dlcs-evolving-to-meet-institutional-needs" target="_blank" class="external-link">DLCs Evolving To Meet Institutional Needs</a></li>
<li><a href="https://medium.com/@elombrozo/latest-thoughts-on-bitcoin-the-good-the-bad-and-the-ugly-598d5346d0d7" target="_blank" class="external-link">Latest Thoughts on Bitcoin: the Good, the Bad, and the Ugly | by Eric Lombrozo</a></li>
</ul>
Socratic Seminar 30
2024-02-14T04:46:10.527Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-30/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-29/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-31/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/298253658/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: January 29th, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>6:00pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's dashboard</a></li>
<li>6:15pm - "No More Inflation" trailer with Bitcoin Shooter</li>
<li>6:30pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Join our Telegram group</li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
<li><a href="http://jam.dev/" target="_blank" class="external-link">Jam</a></li>
</ul>
</li>
</ul>
<h1 id="presentation" tabindex="-1">Presentation</h1>
<ul>
<li><strong>Speaker</strong>: <a href="https://twitter.com/bitcoinshooter" target="_blank" class="external-link">Bitcoin Shooter</a>, world-traveling filmmaker</li>
<li><strong>Topic</strong>: Upcoming "<a href="https://bitcoinshooter.com/no-more-inflation/" target="_blank" class="external-link">No More Inflation</a>" film</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/rethinking-lightning/">Rethinking Lightning</a></li>
<li><a href="https://www.nobsbitcoin.com/aqua-wallet-launched/" target="_blank" class="external-link">Aqua Wallet - Bitcoin, Lightning, Liquid & Tether Mobile Wallet</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/amboss-introduces-ghost-addresses/">Amboss Introduces Ghost Addresses</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/mercury-layer-bitcoin-mpc-layer-2-protocol-using-blinded-signatures/">Mercury Layer - Bitcoin MPC layer 2 protocol using blinded signatures</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://medium.com/breez-technology/the-past-present-and-future-of-offline-payments-1ddb46054e11" target="_blank" class="external-link">The Past, Present, and Future of Offline Payments | Breez Technology</a></li>
<li><a href="https://www.nobsbitcoin.com/hermes-fedimint-based-lightning-address-server/" target="_blank" class="external-link">Hermes: Fedimint-based Lightning Address Server</a></li>
<li><a href="https://cashu-address.com/" target="_blank" class="external-link">Cashu-Address: A Lightning-Address powered by eCash</a></li>
<li><a href="https://github.com/jooray/nutband?tab=readme-ov-file" target="_blank" class="external-link">Nutband: Cashu mint over a mesh network (no internet)</a></li>
<li><a href="https://blog.mutinywallet.com/note-duel-superposition/" target="_blank" class="external-link">Superposition and Note Duel: Mutiny Wallet's first two nostr-based DLC experiments</a></li>
<li><a href="https://github.com/BoltzExchange/boltz-backend/issues/466" target="_blank" class="external-link">Using Liquid Covenants for Trustless & Offline LNURL payments</a></li>
<li><a href="https://github.com/BoltzExchange/boltz-backend/issues/464" target="_blank" class="external-link">Using Liquid Covenants for Trustless Refunds of Swap Overpayments</a></li>
<li><a href="https://medium.com/breez-technology/introducing-fiatlink-a-lightning-fiat-standard-68ab380febb2" target="_blank" class="external-link">FiatLink: A Lightning ↔ Fiat Standard | Breez Technology</a></li>
<li><a href="https://jlopp.github.io/unspendable-utxo-calculator/" target="_blank" class="external-link">Economically Unspendable Bitcoin UTXO Calculator</a></li>
<li><a href="https://www.nobsbitcoin.com/swiss-bitcoin-pay-app-v2-0-0/" target="_blank" class="external-link">Swiss Bitcoin Pay App v2.0.0: Open-Source Code & Other Improvements</a></li>
<li><a href="https://www.nobsbitcoin.com/alby-lightning-account-limits/" target="_blank" class="external-link">Alby Lightning Accounts Go Invite-only in a Bid to Encourage Self-Custody</a></li>
<li><a href="https://www.nobsbitcoin.com/hashrate-index-2023-bitcoin-mining-year-in-review/" target="_blank" class="external-link">Hashrate Index 2023 Bitcoin Mining Year in Review - Report</a></li>
<li><a href="https://www.nobsbitcoin.com/ocean-pool-now-offers-multiple-block-template-policies/" target="_blank" class="external-link">OCEAN Pool Now Offers Multiple Block Template Policies For Miners</a></li>
<li><a href="https://www.nobsbitcoin.com/bitcoin-connect/" target="_blank" class="external-link">Bitcoin Connect: Connect Bitcoin Wallets with Apps</a></li>
<li><a href="https://www.nobsbitcoin.com/robosats-v0-6-0-pre-release/" target="_blank" class="external-link">RoboSats v0.6.0 Pre-release: Introducing RoboSats Federation</a></li>
<li><a href="https://www.nobsbitcoin.com/btcpay-server-ln-bank-plugin-2nd-cve/" target="_blank" class="external-link">BTCPay Server's LNBank Plugin Is Being Phased Out Following Second Critical Vulnerability</a></li>
<li><a href="https://www.nobsbitcoin.com/how-to-use-coinjoin-and-payjoin-with-btcpay-server/" target="_blank" class="external-link">How to Use Coinjoin and Payjoin with BTCPay Server</a></li>
<li><a href="https://www.nobsbitcoin.com/fedimint-v0-2-1/" target="_blank" class="external-link">Fedimint v0.2.1: Stable MVP Release</a></li>
<li><a href="https://www.nobsbitcoin.com/mutiny-wallet-v0-5-0/" target="_blank" class="external-link">Mutiny Wallet v0.5.0: Fedimint & Multi LSP Initial Support</a></li>
<li><a href="https://www.nobsbitcoin.com/the-nexus-of-bitcoin-and-ai-report/" target="_blank" class="external-link">The Nexus of Bitcoin and AI - Report</a></li>
<li><a href="https://www.nobsbitcoin.com/unleashed-chat/" target="_blank" class="external-link">Unleashed.Chat: Uncensored AI Models with Live Nostr Data</a></li>
<li><a href="https://www.nobsbitcoin.com/loan-shark-non-custodial-bitcoin-lending/" target="_blank" class="external-link">Loan Shark: Non-custodial, Bitcoin-only Borrow and Loan Tool</a></li>
<li><a href="https://www.nobsbitcoin.com/semaphore/" target="_blank" class="external-link">Semaphore: P2P Crowdfunding with Bitcoin</a></li>
<li><a href="https://opensats.org/blog/2023-year-in-review" target="_blank" class="external-link">OpenSats' 2023 Year in Review</a></li>
<li><a href="https://www.nobsbitcoin.com/argentina-repeals-forced-legal-tender-laws-for-contracts/" target="_blank" class="external-link">Argentina Repeals Forced Legal Tender Laws for Contracts, Confirms Debts Can Now Be Settled in Bitcoin</a></li>
<li><a href="https://www.nobsbitcoin.com/new-us-bitcoin-tax-reporting-rule-2024/" target="_blank" class="external-link">New US Tax Reporting Rule Requires an IRS Report for Every $10K+ Transaction</a> (or <a href="https://www.nobsbitcoin.com/taxpayers-do-not-have-to-report-digital-assets/" target="_blank" class="external-link">maybe not</a>?)</li>
<li><a href="https://www.nobsbitcoin.com/eu-amlr-surveillance-provisional-agreement/" target="_blank" class="external-link">New EU KYC/AML Rules to Impose Stricter Surveillance Measures on Users and Service Providers</a></li>
<li><a href="https://www.nobsbitcoin.com/sec-approves-bitcoin-spot-etf/" target="_blank" class="external-link">SEC Approves 11 Bitcoin Spot ETF Applications (Updated)</a>
<ul>
<li><a href="https://www.nobsbitcoin.com/bitwise-will-donate-10-of-etf-profits-for-bitcoin-development/" target="_blank" class="external-link">Bitwise Will Donate 10% of Its Bitcoin ETF Profits to Brink, OpenSats and the Human Rights Foundation</a></li>
<li><a href="https://www.nobsbitcoin.com/vaneck-to-donate-5-of-its-bitcoin-etf-profits-to-support-bitcoin-core-developers/" target="_blank" class="external-link">VanEck To Donate 5% of Its Bitcoin ETF Profits to Support Bitcoin Core Developers</a></li>
</ul>
</li>
</ul>
Socratic Seminar 29
2023-12-18T22:53:05.442Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-29/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-28/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-30/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/296852082/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: December 18th, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>5:50pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">state of the network</a></li>
<li>6:00pm - Bitcoin Core 26 with Dave Harding</li>
<li>6:30pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Join our Telegram group</li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
</ul>
</li>
</ul>
<h1 id="presentation" tabindex="-1">Presentation</h1>
<ul>
<li><strong>Speaker</strong>: <a href="https://dtrt.org/" target="_blank" class="external-link">Dave Harding</a> (<a href="https://twitter.com/hrdng?lang=en" target="_blank" class="external-link">@hrdng</a>)
<ul>
<li>Co-author of the Bitcoin Optech weekly <a href="https://bitcoinops.org/en/newsletters/" target="_blank" class="external-link">newsletter</a> (2018-23), <a href="https://learning.oreilly.com/library/view/mastering-bitcoin-3rd/9781098150082/" target="_blank" class="external-link">Mastering Bitcoin, 3E</a> (2023), <a href="http://21.co/" target="_blank" class="external-link">21.co</a> Bitcoin Computer <a href="https://web.archive.org/web/20170606062213/https:/21.co/learn/" target="_blank" class="external-link">tutorials</a> (2015-17), and <a href="http://bitcoin.org/" target="_blank" class="external-link">Bitcoin.org</a> <a href="https://btcinformation.org/en/developer-documentation" target="_blank" class="external-link">developer documentation</a> (2014-15)</li>
<li><a href="https://brink.dev/" target="_blank" class="external-link">Brink.dev</a> grant committee member (2022-23) and former board member (2020-22)</li>
</ul>
</li>
<li><strong>Topic</strong>: What's new in <a href="https://www.nobsbitcoin.com/bitcoin-core-v26-0/" target="_blank" class="external-link">Bitcoin Core 26</a> and why it's important</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a href="https://blog.river.com/introducing-river-link-text-bitcoin-to-anyone-anywhere-any-wallet/" target="_blank" class="external-link">River Link: Text Bitcoin to anyone, anywhere, any wallet</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/encroaching-surveillance-and-regulatory-pressure-around-digital-assets/">Encroaching surveillance and regulatory pressure around digital assets</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/privacy-concerns-from-ledger-live-and-security-concerns-from-ledger-connect-kit/">Privacy concerns from Ledger Live and security concerns from Ledger Connect Kit</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/2-new-mining-pools-launch-demand-and-ocean/">2 New Mining Pools Launch - DEMAND & OCEAN</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/zeus-v0-8-0-embedded-lnd-node-olympus-zeus-pay-and-more/">Zeus v0.8.0 - Embedded LND Node, OLYMPUS, Zeus Pay & More</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/peerswaps-a-lightning-channel-rebalancing-mechanism/">Peerswaps - A Lightning channel rebalancing mechanism</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://unchained.com/go/how-did-satoshi-think-of-bitcoin" target="_blank" class="external-link">How did Satoshi think of bitcoin? | Dhruv Bansal</a></li>
<li><a href="https://www.nobsbitcoin.com/83-btc-transaction-fee/" target="_blank" class="external-link">83 BTC Transaction Fee Sets a New Record in Fiat Terms</a></li>
<li><a href="https://bitkey.build/pre-order-launch/" target="_blank" class="external-link">95+ countries can now pre-order Bitkey, Block's multisig-based custody solution</a></li>
<li><a href="https://bbqr.org/" target="_blank" class="external-link">Coinkite releases BBQr (Better Bitcoin QR) spec</a></li>
<li><a href="https://opensats.org/blog/bitcoin-grants-december-2023" target="_blank" class="external-link">OpenSats Announces Third Wave of Bitcoin Grants</a></li>
<li><a href="https://juraj.bednar.io/en/blog-en/2023/05/07/expanding-the-lightning-network-to-serve-billions-a-quick-win-strategy/" target="_blank" class="external-link">Expanding the Lightning network to serve billions – a quick win strategy</a></li>
<li><a href="https://www.topbuilder.dev/" target="_blank" class="external-link">Top Builder Hackathon Presented by PlebLab and Wolf</a></li>
<li><a href="https://x.com/phoenixwallet/status/1735699451770032354?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link">Phoenix Wallet enables reserving LN liquidity for up to a year</a></li>
<li><a href="https://twitter.com/tonklaus/status/1729567459579945017" target="_blank" class="external-link">Stable Channels - Stable USD or leveraged BTC price exposure using Lightning</a></li>
<li><a href="https://www.nobsbitcoin.com/shockwallet-lightning-pub-alpha/" target="_blank" class="external-link">ShockWallet and Lightning.Pub - non-custodial wallet with a nostr account system that lets you share your node via nostr relays</a></li>
<li><a href="https://www.nobsbitcoin.com/10101-v1-6-1-public-beta/" target="_blank" class="external-link">10101 public beta launch - self-custodial Bitcoin derivatives trading platform</a></li>
<li><a href="https://x.com/btcpayserver/status/1735703168598565365?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link">Critical vulnerability in LNbank plugin for BTCPay Server</a></li>
<li><a href="https://www.nobsbitcoin.com/payjoin-cli-v0-0-1-alpha/" target="_blank" class="external-link">Payjoin CLI v0.0.1-alpha: A Command-line Payjoin Client for Bitcoin Core</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/12/06/#cluster-mempool-discussion" target="_blank" class="external-link">Cluster mempool discussion | Bitcoin Optech Newsletter 280</a></li>
<li><a href="https://www.nobsbitcoin.com/tbd-unveils-tech-preview-of-tbdex-open-source-liquidity-protocol/" target="_blank" class="external-link">TBD Unveils Tech Preview of tbDEX Open Source Liquidity Protocol</a></li>
<li><a href="https://www.nobsbitcoin.com/bitcointalk-bans-mixer-promotion-talk/" target="_blank" class="external-link">BitcoinTalk.org to Ban Link Sharing and Promotion of Custodial No-KYC Mixers</a></li>
<li><a href="https://www.nobsbitcoin.com/primal-mobile-apps-store-debut/" target="_blank" class="external-link">Primal Nostr Client Debuts on Mobile App Stores: iOS v1.0.4, Android Beta v0.21.4 Released</a></li>
</ul>
Socratic Seminar 28
2023-11-20T22:05:03.748Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-28/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-27/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-29/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/296852078/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: November 20th, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>6:00pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">state of the network</a></li>
<li>6:15pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li><a href="https://www.flockstr.com/event/naddr1qqyrqer9x9jnyvf4qyxhwumn8ghj7mn0wvhxcmmvqgsdl9qkjf3la3sc93nw2jmr4r36rf0svzm593z3yaj2ach72h7qrygrqsqqql9nvpmrq5" target="_blank" class="external-link">Flockstr: nostr-based meetup/event coordination</a></li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
</ul>
</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/surviving-a-high-fee-market/">Surviving a High-Fee Market</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-replacement-cycling-attack/">Lightning Replacement Cycling Attack</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/satslink-multipurpose-communications-device-by-coinkite/">SATSLINK - Multipurpose Communications Device by Coinkite</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/fin-cen-seeks-to-impose-strict-surveillance-requirements-onto-bitcoin-mixers/">FinCEN Seeks to Impose Strict Surveillance Requirements onto Bitcoin Mixers</a></li>
<li><a href="https://robinlinus.com/bitstream.pdf" target="_blank" class="external-link">BitStream</a> and <a href="https://github.com/4de67a207019fd4d855ef0a188b4519c/Durabit/blob/main/Durabit%20-%20A%20Bitcoin-native%20Incentive%20Mechanism%20for%20Data%20Distribution.pdf?ref=nobsbitcoin.com" target="_blank" class="external-link">Durabit</a>: 2 Bitcoin-Native Incentive Mechanisms for Data Storage & Distribution</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://bitcoindev.org/" target="_blank" class="external-link">BitcoinDev.org: Bitcoin & Lightning Development Resources</a></li>
<li><a href="https://opcodeexplained.com/" target="_blank" class="external-link">Opcode Explained: Bitcoin Opcode documentation</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2023-November/022134.html" target="_blank" class="external-link">The bitcoin-dev mailing list is moving</a></li>
<li><a href="https://lightning.engineering/posts/2023-10-18-taproot-assets-v0.3/" target="_blank" class="external-link">Alpha Release of Taproot Assets on Mainnet | Lightning Labs</a></li>
<li><a href="https://www.nobsbitcoin.com/zeus-v0-8-0-open-beta/" target="_blank" class="external-link">Zeus v0.8.0 Open Beta (Embedded Node, Olympus LSP & More)</a> and the <a href="https://primal.net/e/note1h0lqfkm0neywkmsvuyv69gfgfa6pwmj6aay9vau804hrpgvlfkhqszvfj9" target="_blank" class="external-link">resulting drama</a></li>
<li><a href="https://x.com/niftynei/status/1726642460129145024?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link">ARK proof-of-concept is being built out on Liquid</a> (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ark/">What is ARK?</a>)</li>
<li><a href="https://x.com/MutinyWallet/status/1716919482445443561?s=20" target="_blank" class="external-link">ZapplePay launches AutoZaps: nostr-based recurring subscription payments</a></li>
<li><a href="https://twitter.com/bax1337/status/1724534339206033532" target="_blank" class="external-link">BitcoinJS vulnerability disclosure</a></li>
<li><a href="https://x.com/_pgauthier/status/1716768601854628087?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link">Ledger launches Recover service</a></li>
<li><a href="https://ishaana.com/blog/wallet_fingerprinting/" target="_blank" class="external-link">Wallet Fingerprints: Detection & Analysis</a></li>
<li><a href="https://www.nobsbitcoin.com/bitbox-partners-with-breez-to-add/" target="_blank" class="external-link">BitBox Partners with Breez to Bring Lightning to the BitBoxApp</a></li>
<li><a href="https://www.nobsbitcoin.com/river-launched-android-app/" target="_blank" class="external-link">River Launched Android App and Hourly Recurring Orders</a></li>
<li><a href="https://blog.coinkite.com/tapsigner-for-2fa/" target="_blank" class="external-link">Corporate Adoption of TAPSIGNER for 2-Factor Authentication | COINKITE Blog</a></li>
<li><a href="https://www.nobsbitcoin.com/tbd-circle-linux-foundation-announced-new-initiative-for-decentralized-identity-and-open-payment-standards/" target="_blank" class="external-link">TBD, Circle, Linux Foundation Announced New Initiative for Decentralized Identity and Open Payment Standards</a></li>
<li><a href="https://www.nobsbitcoin.com/robosats-v0-5-3/" target="_blank" class="external-link">RoboSats v0.5.3-alpha: Face-to-Face Cash Trades</a></li>
<li><a href="https://www.nobsbitcoin.com/bitescrow-beta-launched/" target="_blank" class="external-link">BitEscrow: Non-Custodial Escrow for Bitcoin Transactions</a></li>
<li><a href="https://www.nobsbitcoin.com/mash-v2-0-partners-with-tftc/" target="_blank" class="external-link">Mash Partners with TFTC, Launches v2.0 Publisher Monetization Products</a></li>
<li><a href="https://www.nobsbitcoin.com/onramp-multisig-custody-platorm-launched/" target="_blank" class="external-link">Onramp Launches New Multi-Institution Custody Platform</a></li>
<li><a href="https://www.nobsbitcoin.com/cathedraos-bitcoin-mining-firmware-by-cathedra-bitcoin/" target="_blank" class="external-link">CathedraOS: Bitcoin Mining Firmware by Cathedra Bitcoin</a></li>
<li><a href="https://www.nobsbitcoin.com/bitmain-premieres-antminer-t21/" target="_blank" class="external-link">Bitmain Introduces Antminer T21</a></li>
<li><a href="https://www.nobsbitcoin.com/block-completes-the-first-prototype-of-mdk-hashboard/" target="_blank" class="external-link">Block Completes The First Prototype of MDK Hashboard</a></li>
<li><a href="https://cbdctracker.hrf.org/home" target="_blank" class="external-link">Human Rights Foundation Launches Global CBDC Tracker Tool</a></li>
<li><a href="https://www.nobsbitcoin.com/european-central-bank-decided-to-proceed-with-cdbc-preparation/" target="_blank" class="external-link">European Central Bank Decided to Proceed with CBDC Preparation</a></li>
<li><a href="https://www.nobsbitcoin.com/coin-center-tornado-cash-dismissed/" target="_blank" class="external-link">Coin Center's Tornado Cash OFAC Sanctions Lawsuit Dismissed Due to DAO Structure and TORN Shitcoin</a></li>
<li><a href="https://github.com/nostr-protocol/nips/blob/pf7z-nip41/41.md" target="_blank" class="external-link">NIP-41</a> and <a href="https://kind0.io/" target="_blank" class="external-link">kind0.io</a> for nostr public key migration</li>
<li><a href="https://x.com/cierreporbin/status/1722272161480810879?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link">NostrEggs: Data and API monetization</a></li>
<li><a href="https://www.nobsbitcoin.com/scionic-merkle-dag-trees-backwards-compatible-integration-with-nostr-for-multimedia-hosting/" target="_blank" class="external-link">Scionic Merkle DAG Trees: Backwards-Compatible Integration with Nostr for Multimedia Hosting</a></li>
</ul>
Socratic Seminar 27
2023-11-20T03:01:13.667Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-27/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-26/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-28/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/296270442/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: October 12th, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>6:00pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">state of the network</a></li>
<li>6:15pm - BTC privacy and payjoin with Dan Gould</li>
<li>6:35pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Scams & OPSEC</li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
</ul>
</li>
</ul>
<h1 id="presentation" tabindex="-1">Presentation</h1>
<ul>
<li><strong>Speaker</strong>: <a href="https://x.com/bitgould" target="_blank" class="external-link">Dan Gould</a>, lead contributor to <a href="https://payjoindevkit.org/introduction/" target="_blank" class="external-link">Payjoin Development Kit (PDK)</a> and co-organizer of <a href="https://bostonbitdevs.org/" target="_blank" class="external-link">Boston BitDevs</a> and <a href="https://bitdevs.tw/" target="_blank" class="external-link">Taiwan BitDevs</a></li>
<li><strong>Topic</strong>: Practical Bitcoin Privacy & <a href="https://payjoin.org/" target="_blank" class="external-link">Payjoin</a></li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bitcoin-core-merged-bip-324-and-assume-utxo-proposals/">Bitcoin Core Merged BIP-324 and AssumeUTXO Proposals</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bit-vm-compute-anything-on-bitcoin/">BitVM - Compute Anything on Bitcoin</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/unchained-introduces-enterprise-collaborative-custody-key-sharing-network/">Unchained introduces enterprise collaborative custody key sharing network</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/anchor-watch-team-raises-3-m-and-launches-public-trident-wallet-beta/">AnchorWatch team raises $3M and launches public Trident wallet beta</a></li>
<li><a href="https://www.nobsbitcoin.com/trezor-safe-3-trezor-metal/" target="_blank" class="external-link">Trezor Introduces Safe 3 Signing Device & Trezor Keep Metal Backup</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://utxo.live/oracle/" target="_blank" class="external-link">Open source program UTXOracle.py estimates the bitcoin price using only on-chain data</a></li>
<li><a href="https://blog.river.com/the-lightning-network-in-2023/" target="_blank" class="external-link">The Lightning Network Grew by 1212% in 2 Years - River</a></li>
<li><a href="https://www.nobsbitcoin.com/blockstream-greenlight-is-now-open-for-business/" target="_blank" class="external-link">Blockstream Greenlight is now officially available for commercial-grade use worldwide</a></li>
<li><a href="https://www.nobsbitcoin.com/phoenix-wallet-ios-v2-0-3-android-v-2-0-9/" target="_blank" class="external-link">Phoenix Wallet Splicing Upgrade Now Available iOS Users, Android v2.0.9 Released</a></li>
<li><a href="https://www.nobsbitcoin.com/lnd-v0-17-0-beta/" target="_blank" class="external-link">LND v0.17.0 Beta: Simple Taproot Channels</a></li>
<li><a href="https://www.nobsbitcoin.com/swan-partners-with-blockstream-to-launch-swan-vault/" target="_blank" class="external-link">Swan Partners with Blockstream to Launch Swan Vault</a></li>
<li><a href="https://blog.mutinywallet.com/mutiny-gifts/stodial" target="_blank" class="external-link">Mutiny Gift feature enables easier onboarding to non-custodial Lightning</a></li>
<li><a href="https://www.nobsbitcoin.com/hrfs-bitcoin-development-fund-grants-19-btc-for-15-bitcoin-projects/" target="_blank" class="external-link">HRF's Bitcoin Development Fund Gifts 19 BTC for 15 Bitcoin Projects</a></li>
<li><a href="https://btcpayserver.org/case-studies/hodlhodl2023.pdf" target="_blank" class="external-link">BTCPay Server + Hodl Hodl onboarding case study at Baltic HoneyBadger 2023 conference</a></li>
<li><a href="https://terminal.onrampbitcoin.com/" target="_blank" class="external-link">Onramp Terminal is a new realtime bitcoin analytics dashboard</a></li>
<li><a href="https://block.xyz/inside/report-bitcoin-survey-2023" target="_blank" class="external-link">Block - Bitcoin Knowledge and Perceptions: Chapter II</a></li>
<li><a href="https://www.youtube.com/watch?v=7Zwm5iHFyBQ" target="_blank" class="external-link">OP_VAULT (BIP-345) demo with James O'Beirne</a></li>
<li><a href="https://medium.com/breez-technology/building-on-lightning-how-satimoto-is-beating-fiat-with-the-breez-sdk-88aa8252a994" target="_blank" class="external-link">Satimoto Is Beating Fiat with the Breez SDK</a></li>
<li><a href="https://www.nobsbitcoin.com/thndr-launches-clinch/" target="_blank" class="external-link">THNDR Launches Clinch: Non-Custodial P2P Wagering App + API</a></li>
<li><a href="https://www.nobsbitcoin.com/proxnut-launched/" target="_blank" class="external-link">PROXNUT: Cashu Proxy Crafted to Protect and Monetize Web Resources</a></li>
<li><a href="https://opensats.org/blog/bitcoin-infrastructure-this-decade" target="_blank" class="external-link">Looking Ahead: Bitcoin Infrastructure This Decade</a></li>
<li><a href="https://www.nobsbitcoin.com/ripple-wont-go-forward-with-acquisition-of-fortress-trust/" target="_blank" class="external-link">Ripple Won't Go Forward With Acquisition of Fortress Trust</a></li>
<li><a href="https://www.nobsbitcoin.com/bitcoin-org-operator-loses-appeal-to-craig-wright/" target="_blank" class="external-link">Bitcoin.org Operator Cøbra Must Reveal Identity to Defend Themselves, U.K. High Court Rules</a></li>
<li><a href="https://www.nobsbitcoin.com/lightning-prism-nostr/" target="_blank" class="external-link">$Prism: Lightning Prisms on Nostr Notes</a></li>
</ul>
Socratic Seminar 26
2023-09-19T01:12:04.353Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-26/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-25/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-27/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/295946682/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: September 18th, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>6:00pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">state of the network</a></li>
<li>6:15pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Scams & OPSEC</li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
</ul>
</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/fasb-votes-to-introduce-new-fair-value-accounting-rules-for-bitcoin/">FASB Votes To Introduce New Fair Value Accounting Rules For Bitcoin</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/coinkite-response-to-ledger-donjon-exploit-on-cold-card-mk4/">Coinkite response to Ledger Donjon exploit on ColdCard Mk4</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/utxo-dealership-grand-prize-winner-at-tab-conf-2023-hackathon/">UTXO Dealership - Grand Prize Winner at TABConf 2023 Hackathon</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/zero-sync-demos-header-chain-verifier-instantly-verify-bitcoin-s-block-header-chain-in-your-browser/">ZeroSync demos Header Chain Verifier - Instantly verify Bitcoin's block header chain in your browser</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/private-collaborative-custody-with-frost/">Private Collaborative Custody with FROST</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/eu-parliament-dac-8-surveillance/" target="_blank" class="external-link">EU Parliament Passed DAC8: Crypto Service Providers Will Have to Report All Transaction Information on EU Clients</a></li>
<li><a href="https://www.nobsbitcoin.com/btcpay-server-partners-with-spiral-and-ldk-to-develop-btcpay-app/" target="_blank" class="external-link">BTCPay Server Partners with Spiral and LDK to Develop BTCPay App</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/lightning-dev/2023-September/004089.html" target="_blank" class="external-link">Draft bLIP-0029: Taproot Asset Protocol Channels</a></li>
<li><a href="https://ambosstech.medium.com/businesses-meet-hydro-your-new-best-friend-for-lightning-network-payments-d9fb90016e67" target="_blank" class="external-link">Amboss releases "Hydro" service for automated LN channel liquidity management</a></li>
<li><a href="https://www.nobsbitcoin.com/nucleus-capital-efficient-multipeer-lightning-payments/" target="_blank" class="external-link">Nucleus: Capital-efficient Multipeer Lightning Payments</a></li>
<li><a href="https://www.nobsbitcoin.com/dos-fake-lightning-channels/" target="_blank" class="external-link">DoS: Fake Lightning Channels</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2023-September/021948.html" target="_blank" class="external-link">Trustless 2-way-peg without softfork</a></li>
<li><a href="https://www.nobsbitcoin.com/river-to-reduce-its-lightning-node-capacity-by-48/" target="_blank" class="external-link">River To Reduce Its Lightning Node Capacity Further by 48%</a></li>
<li><a href="https://www.nobsbitcoin.com/nunchuk-byzantine/" target="_blank" class="external-link">Nunchuk Byzantine: Collaborative Custody Platform-as-a-Service</a></li>
<li><a href="https://twitter.com/lnp_bp/status/1699433986752233620?s=52&t=fR1UfkkV0hfE5yaQW87bRg" target="_blank" class="external-link">LNP/BP Standards Association: First stable release of RGB command-line tool and runtime library for desktop and mobile integration</a></li>
<li><a href="https://www.nobsbitcoin.com/bitaxe-ultra/" target="_blank" class="external-link">BitAxe Ultra: Fully open source hardware Bitcoin ASIC miner</a></li>
<li><a href="https://www.nobsbitcoin.com/paxos-identified-as-fat-finger-entity-in-20-btc-fee-mistake/" target="_blank" class="external-link">Paxos Identified as Fat Finger Entity in 20 BTC Fee Mistake</a></li>
<li><a href="https://www.nobsbitcoin.com/10101-v1-2-5-ios-beta/" target="_blank" class="external-link">10101 iOS v1.2.5: Non-Custodial Synthetic USD Using DLCs on Lightning Network</a></li>
<li><a href="https://blog.zaprite.com/zaprite-platform-upgrades" target="_blank" class="external-link">Zaprite Platform Upgrades: Payment Links, New Receive Integrations, Subscription Plans & More</a></li>
<li><a href="https://www.nobsbitcoin.com/breez-sdk-core-v0-2-3/" target="_blank" class="external-link">Breez SDK Core v0.2.3: Dynamic Fee Selection According to LSP & More</a></li>
<li><a href="https://www.nobsbitcoin.com/joinstr-decentralized-coinjoin-implementation-using-nostr/" target="_blank" class="external-link">JoinStr: Decentralized CoinJoin Implementation Using Nostr</a></li>
<li><a href="https://www.nobsbitcoin.com/vendata-io-a-nostr-client-to-interact-with-data-vending-machines/" target="_blank" class="external-link">Vendata.io: Nostr Client to Interact with Data Vending Machines</a></li>
<li><a href="https://www.nobsbitcoin.com/robosats-is-decentralizing-how-to-become-robosats-federation-coordinator/" target="_blank" class="external-link">RoboSats Is Decentralizing: How To Become RoboSats Federation Coordinator</a></li>
<li><a href="https://www.nobsbitcoin.com/bitbox-app-v4-39-0-firmware-v9-15-0/" target="_blank" class="external-link">BitBox App v4.39.0, Firmware v9.15.0: Miniscript Support, Security Update & More</a></li>
<li><a href="https://www.nobsbitcoin.com/support-for-mercury-wallet-discontinued/" target="_blank" class="external-link">Support for Mercury Wallet To Be Discontinued As Developers Focus on Mercury Layer</a></li>
<li><a href="https://blog.lopp.net/an-introduction-to-spiderchain/" target="_blank" class="external-link">An Introduction to Spiderchain</a></li>
<li><a href="https://www.nobsbitcoin.com/fortress-lost-customer-funds-prior-to-acquisition-by-ripple/" target="_blank" class="external-link">Fortress Lost Customer Funds Prior to Acquisition by Ripple</a></li>
<li><a href="https://www.nobsbitcoin.com/grayscale-wins-appeal-over-sec/" target="_blank" class="external-link">Grayscale Wins Appeal Against SEC Overturing Its Decision on Bitcoin ETF</a></li>
<li><a href="https://www.forbes.com/sites/irinaheaver/2023/08/24/omans-bold-bitcoin-play-11-billion-investment-on-bitcoin-mining-infrastructure/?sh=6896c1642709" target="_blank" class="external-link">Oman’s Bold Bitcoin Play: $1.1 Billion Investment On Bitcoin Mining Infrastructure</a></li>
<li><a href="https://www.nobsbitcoin.com/tornado-cash-developers-charged-with-money-laundering-and-sanctions-violations/" target="_blank" class="external-link">Tornado Cash Developers Charged with Money Laundering and Sanctions Violations by US Govt</a></li>
</ul>
Socratic Seminar 25
2023-08-21T07:30:36.732Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-25/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-24/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-26/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/295274267" target="_blank" class="external-link">Meetup</a></li>
<li>Time: August 21st, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>6:00pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">state of the network</a></li>
<li>6:10pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
</ul>
</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ai4-all-hackathon-wrap-up/">Ai4ALL Hackathon Wrap Up - 44 Bitcoin Projects From 173 Participants</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/milk-sad-wallet-theft-enabled-by-weak-entropy/">Milk Sad - Wallet Theft Enabled By Weak Entropy</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bit-forge-fireblocks-uncovered-vulnerabilities-in-over-15-major-mpc-wallets/">BitForge - Fireblocks Uncovered Vulnerabilities in Over 15 Major MPC Wallets</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/expanding-transparency-by-open-sourcing-liquid-s-functionary-code/">The Liquid Federation Open Sourced its Functionary Code</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/phoenix-wallet-v2-0-0/" target="_blank" class="external-link">Phoenix Android v2.0.0: Splicing, Dual Funding & More</a></li>
<li><a href="https://bitcoinmagazine.com/technical/utxoracle-model-could-bring-use-cases-to-bitcoin" target="_blank" class="external-link">UTXOracle: A Decentralized Approach To The Oracle Problem</a></li>
<li><a href="https://decrypt.co/153118/tornado-cash-sanctions-affirmed-by-federal-court" target="_blank" class="external-link">Tornado Cash Sanctions Affirmed by Federal Court</a></li>
<li><a href="https://www.federalreserve.gov/supervisionreg/srletters/SR2307.htm" target="_blank" class="external-link">The Fed - SR 23-7: Creation of Novel Activities Supervision Program</a></li>
<li><a href="https://bitcoinmagazine.com/markets/federal-reserve-officially-launches-instant-payments-system-fednow" target="_blank" class="external-link">Federal Reserve Officially Launches Instant Payments System FedNow</a></li>
<li><a href="https://payjoin.substack.com/p/serverless-payjoin-gets-its-wings" target="_blank" class="external-link">Serverless Payjoin Gets its Wings by Dan Gould</a></li>
<li><a href="https://gist.github.com/moonsettler/42b588fa97a1da3ac0adea0dd16dadf2" target="_blank" class="external-link">Proposal for using credit-based ecash to avoid custodial risk</a></li>
<li><a href="https://blog.blockstream.com/bulletproofs-a-step-towards-fully-anonymous-transactions-with-multiple-asset-types/" target="_blank" class="external-link">Bulletproofs++: A Step Towards Fully Unlinkable Transactions With Multiple Asset Types</a></li>
<li><a href="https://github.com/ElementsProject/lightning/pull/6376" target="_blank" class="external-link"><code>renepay</code> plugin introduces Pickhardt payments to Core Lightning</a></li>
<li><a href="https://www.nobsbitcoin.com/voltage-partners-with-hrf/" target="_blank" class="external-link">Voltage Partners with Human Rights Foundation to Help Dissidents, NGOs Accept Bitcoin Donations</a></li>
<li><a href="https://blog.mutinywallet.com/enhanced-lightning-privacy-for-mutiny-users/" target="_blank" class="external-link">How the Voltage LSP Enhances Privacy for Mutiny Wallet Users</a></li>
<li><a href="https://compassmining.io/education/unknown-miner-carbon-negative-messages-bitcoin/" target="_blank" class="external-link">Miner embedding messages into blocks claiming to have been mined with “Carbon Negative Power Source”</a></li>
<li><a href="https://www.erisian.com.au/wordpress/2023/06/21/putting-the-b-in-btc" target="_blank" class="external-link">AJ Towns on methodologies for scaling bitcoin</a></li>
<li><a href="https://www.nobsbitcoin.com/stratum-v2-sri-roadmap-2023/" target="_blank" class="external-link">Stratum v2 Reference Implementation (SRI) Roadmap Announced</a></li>
<li><a href="https://hugonguyen.medium.com/passphrases-are-not-the-solution-for-bitcoin-custody-4f967a339b1b" target="_blank" class="external-link">Passphrases Are Not the Solution for Bitcoin Custody by Hugo Nguyen</a></li>
<li><a href="https://blog.bitfinex.com/education/is-lightning-scaling-bitcoin-in-a-way-nobody-predicted/" target="_blank" class="external-link">Is Lightning Scaling Bitcoin in a Way Nobody Predicted?</a></li>
<li><a href="https://www.nobsbitcoin.com/staticwire-rent-internet-protocol-subnets-using-bitcoins-lightning-network/" target="_blank" class="external-link">StaticWire: Rent Internet Protocol Subnets Using Bitcoin's Lightning Network</a></li>
<li><a href="https://www.nobsbitcoin.com/opensats-second-wave-of-grants/" target="_blank" class="external-link">OpenSats Announces Second Wave of Grants for Bitcoin and Nostr Projects</a></li>
<li><a href="https://www.nobsbitcoin.com/magic-webstore-added-store-metadata-nostr-auth-notifications-more/" target="_blank" class="external-link">Magic Webstore Added Store Metadata, Nostr Auth, Notifications & More</a></li>
<li><a href="https://www.nobsbitcoin.com/smart-vaults-beta/" target="_blank" class="external-link">Smart Vaults (ex-Coinstr) Launches Testnet Beta, Offers 100k Sats for Testers</a></li>
<li><a href="https://www.nobsbitcoin.com/nodeless-going-source/" target="_blank" class="external-link">Nodeless Is Now Open Source: Receive BTC & Lightning Payments Without a Node</a></li>
<li><a href="https://bitcoinmagazine.com/business/mash-announces-lightning-bitcoin-wallet-app-for-android-ios-now-in-beta" target="_blank" class="external-link">Mash Announces Lightning Bitcoin Wallet App For Android & iOS Now In Beta</a></li>
<li><a href="https://www.nobsbitcoin.com/chainalysis-investigations-lead-declaration/" target="_blank" class="external-link">Head of Chainalysis Investigations Admits There's No Scientific Evidence Proving Their Surveillance Software Works</a></li>
<li><a href="https://www.ft.com/content/1f873dd5-df8f-4cfc-bb21-ef83ed11fb4d" target="_blank" class="external-link">SEC asked Coinbase to halt trading in everything except bitcoin, CEO says</a></li>
<li><a href="https://www.nobsbitcoin.com/the-u-k-government-mass-surveillance/" target="_blank" class="external-link">The U.K. Government Is Dangerously Close to Eroding Encryption and Normalizing Mass Surveillance</a></li>
<li>Side channel attacks
<ul>
<li><a href="https://www.nassiben.com/video-based-crypta" target="_blank" class="external-link">Video-Based Cryptanalysis: Exploiting a Video Camera's Rolling Shutter to Recover Secret Keys from Devices Using Video Footage of Their Power LED</a></li>
<li><a href="https://arxiv.org/pdf/2308.01074.pdf" target="_blank" class="external-link">A Practical Deep Learning-Based Acoustic Side Channel Attack on Keyboards</a></li>
</ul>
</li>
</ul>
Socratic Seminar 24
2023-07-31T18:48:51.137Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-24/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-23/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-25/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/294387797" target="_blank" class="external-link">Meetup</a></li>
<li>Time: July 31st, 5:30pm - 7:30pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>5:30pm - Arrive and network</li>
<li>6:00pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">state of the network</a></li>
<li>6:10pm - Socratic seminar discussion of various bitcoin topics</li>
<li>7:30pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a> or <a href="https://www.villagebeerhawaii.com/" target="_blank" class="external-link">Village</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout
<ul>
<li><a href="https://www.htdc.org/about/" target="_blank" class="external-link">Hawaii Technology Development Corporation</a></li>
<li><a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a></li>
<li><a href="https://hubcoworkinghi.com/" target="_blank" class="external-link">Hub Coworking Hawaii</a></li>
</ul>
</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/acinq-announces-new-version-of-phoenix-lightning-wallet-that-includes-splicing/">ACINQ Announces New Version of Phoenix Lightning Wallet That Includes Splicing</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-labs-releases-developer-tools-for-powering-ap-is-and-large-language-models/">Lightning Labs Releases Developer Tools for Powering APIs and Large Language Models</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/nostr-data-vending-machine-a-marketplace-for-data-processing/">Nostr Data Vending Machine - A Marketplace for Data Processing</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/district-court-dismisses-coin-center-s-case-against-unconstitutional-financial-surveillance/">District Court Dismisses Coin Center's Case Against Unconstitutional Financial Surveillance</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/hrf-launched-20-btc-bounty-challenge-for-improvements-requested-by-activists/">HRF Launched 20 BTC Bounty Challenge for Improvements Requested by Activists</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/validating-lightning-signer-beta-release/">Validating Lightning Signer Beta Release</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/mutiny-wallet-beta-public-release/" target="_blank" class="external-link">Mutiny Wallet Beta Is Now Open To Public</a></li>
<li><a href="https://www.nobsbitcoin.com/zeus-wallet-will-no-longer-require-users-to-run-a-separate-node/" target="_blank" class="external-link">Zeus Wallet Announced It Will No Longer Require Users To Run A Separate Node</a></li>
<li><a href="https://payjoindevkit.org/blog/pdk-an-sdk-for-payjoin-transactions/" target="_blank" class="external-link">PDK: A Payjoin SDK</a></li>
<li><a href="https://medium.com/@graham_krizek/every-company-will-be-a-lightning-company-806576920064" target="_blank" class="external-link">Every Company Will Be A Lightning Company</a></li>
<li><a href="https://www.nobsbitcoin.com/bitpac-publicly-auditable-cooperatives-on-bitcoin/" target="_blank" class="external-link">Bitpac: Publicly Auditable Cooperatives on Bitcoin</a></li>
<li><a href="https://opensats.org/blog/bitcoin-grants-july-2023" target="_blank" class="external-link">OpenSats Announces First Wave of Bitcoin Grants</a></li>
<li><a href="https://www.nobsbitcoin.com/imf-paper-on-taxing-cryptocurrencies/" target="_blank" class="external-link">IMF Paper on Taxing Bitcoin Sees 'Quasi-Anonymity' as Greatest Challenge</a></li>
<li><a href="https://www.nobsbitcoin.com/potential-vulnerability-in-lightning-backends-bolt-11-payment-hash-does-not-commit-to-payment/" target="_blank" class="external-link">Potential Vulnerability in Lightning Backends: BOLT-11 'Payment Hash' Does Not Commit to Payment</a></li>
<li><a href="https://www.nobsbitcoin.com/voltage-launches-surge/" target="_blank" class="external-link">Voltage Launches Surge Service For Lightning Node Monitoring</a></li>
<li><a href="https://www.nobsbitcoin.com/introducing-ldk-node/" target="_blank" class="external-link">LDK Node v0.1.0: A Ready-To-Go Lightning Node Library</a></li>
<li><a href="https://foundationdevices.com/2023/06/make-12-words-the-standard/" target="_blank" class="external-link">Make 12 Words the Standard</a></li>
<li><a href="https://www.nobsbitcoin.com/frostsnap-frost-multisig-foss/" target="_blank" class="external-link">Frostsnap: Easy & Personalized Multisig with FROST</a></li>
<li><a href="https://www.nobsbitcoin.com/mercury-wallet-0-9-0/" target="_blank" class="external-link">Mercury Wallet 0.9.0: Alpha Non-Custodial Lightning Wallet</a></li>
<li><a href="https://www.nobsbitcoin.com/civkit-roadmap-released/" target="_blank" class="external-link">CivKit Roadmap: BOLT12 Offers, Staking Credentials, Mainstay & More</a></li>
<li><a href="https://www.nobsbitcoin.com/civkit-orage-announced/" target="_blank" class="external-link">CivKit Orage: LN Node with Focus on Availability, Modularity & Security</a></li>
<li><a href="https://www.nobsbitcoin.com/ledger-recover-whitepaper-released/" target="_blank" class="external-link">Ledger Recover Technical Whitepaper Released</a></li>
<li><a href="https://www.nobsbitcoin.com/bitgo-terminates-acquisition-of-prime-trust/" target="_blank" class="external-link">BitGo Terminates Agreement to Acquire Prime Trust, Client Deposits and Withdrawals Frozen</a></li>
<li><a href="https://blog.blockstream.com/building-blocks-of-simplicity-values-and-types/" target="_blank" class="external-link">Blockstream launches Simplicity blog series with "Building Blocks of Simplicity: Values and Types"</a></li>
<li><a href="https://www.nobsbitcoin.com/riot-platforms-partnership-brings-production-of-microbts-asics-to-america/" target="_blank" class="external-link">Riot Platforms Partnership Brings Production of MicroBT's ASICs to America</a></li>
<li><a href="https://tether.to/en/tether-signs-mou-with-government-of-georgia-to-develop-blockchain-bitcoin-and-peer-to-peer-infrastructure-to-foster-innovation/" target="_blank" class="external-link">Tether Signs MOU with Government of Georgia to Develop Blockchain and Peer-to-Peer Infrastructure to Foster Innovation</a></li>
<li><a href="https://www.nobsbitcoin.com/bitgo-added-taproot-musig2-on-bitcoin-hot-wallets/" target="_blank" class="external-link">BitGo Added Support for Taproot MuSig2 on Bitcoin Hot Wallets</a></li>
<li><a href="https://blog.ledger.com/blockstream/" target="_blank" class="external-link">Firmware Extraction: Evil-Maid Attacks on Blockstream Jade Hardware Wallet</a></li>
<li><a href="https://www.nobsbitcoin.com/kraken-ordered-to-turn-over-its-users-data-to-irs/" target="_blank" class="external-link">Kraken Ordered to Turn Over Its Users Data to IRS</a></li>
<li><a href="https://www.nobsbitcoin.com/the-first-nostr-documentary-is-out/" target="_blank" class="external-link">The First Nostr Documentary 'Social Media Is Broken. Can We Fix It?' Is Out</a></li>
<li><a href="https://www.nobsbitcoin.com/france-passed-a-bill-allowing-police-to-spy-on-suspects-remotely/" target="_blank" class="external-link">France Passes A Bill Allowing Police to Spy on Suspects Remotely</a></li>
<li>Nostr-based streaming is here
<ul>
<li><a href="https://www.nobsbitcoin.com/snort-live-streaming/" target="_blank" class="external-link">Live.Snort.Social: Streaming on Nostr</a></li>
<li><a href="https://zap.stream/" target="_blank" class="external-link">zap.stream</a> launches zap-enabled livestreams</li>
</ul>
</li>
</ul>
Socratic Seminar 23
2023-08-01T01:07:15.441Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-23/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-22/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-24/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/294114765/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: June 19th, 6pm - 8pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>6:00pm - Arrive and mingle</li>
<li>6:20pm - Announcements and <a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">state of the network</a></li>
<li>6:30pm - Socratic seminar discussion of various bitcoin topics</li>
<li>8:00pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a> or <a href="https://www.villagebeerhawaii.com/" target="_blank" class="external-link">Village</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout
<ul>
<li>Hawaii Technology Development Corporation</li>
<li>Entrepreneurs Sandbox</li>
</ul>
</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/newsworthy-custodial-risk-in-june-2023/">Newsworthy Custodial Risk in June 2023</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/scaling-and-anonymizing-bitcoin-at-layer-1-through-client-side-validation/">Scaling & Anonymizing Bitcoin At Layer 1 Through Client-Side Validation</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/blockstream-greenlight/">Blockstream's Greenlight service is now open to developers</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bitkey/">Block Opens Public Beta of Bitkey, Partners with Cash App and Coinbase</a> (sign up <a href="https://bitkey.build/beta/" target="_blank" class="external-link">here</a>)</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://blog.river.com/bitcoin-vs-the-156-trillion-global-payments-industry/" target="_blank" class="external-link">New River Research report: Bitcoin vs the $156 Trillion Global Payments Industry</a></li>
<li><a href="https://www.nobsbitcoin.com/jack-dorseys-startsmall-pledges-5m-over-5-years-to/" target="_blank" class="external-link">Jack Dorsey's "startsmall" Initiative Pledges $5M Over 5 Years To Support Bitcoin Developers</a></li>
<li><a href="https://www.nobsbitcoin.com/blackrock-files-for-spot-bitcoin-etf/" target="_blank" class="external-link">BlackRock's iShares Files For a Spot Bitcoin ETF</a></li>
<li><a href="https://www.nobsbitcoin.com/bip-for-silent-payments/" target="_blank" class="external-link">BIP for Silent Payments Is Out For Review</a></li>
<li><a href="https://www.toptal.com/cryptocurrency/formosa-crypto-wallet-management" target="_blank" class="external-link">Formosa: An open-source, BIP39-compatible recovery key method that's easier to remember</a></li>
<li><a href="https://www.nobsbitcoin.com/btc-warp-zksnarks/" target="_blank" class="external-link">BTC Warp: Light Node Syncing with zkSNARKs</a></li>
<li><a href="https://www.nobsbitcoin.com/mercury-layer-announced/" target="_blank" class="external-link">MercuryLayer: A New Mercury Statechain Protocol</a></li>
<li><a href="https://www.nobsbitcoin.com/amboss-unveils-liner-index/" target="_blank" class="external-link">Amboss Launched LINER Index For Measuring Cost and Yield on The Lightning Network</a></li>
<li><a href="https://www.nobsbitcoin.com/lightning-payments-when-are-they-too-small-to-secure/" target="_blank" class="external-link">Lightning Payments: When Are They Too Small To Secure?</a></li>
<li><a href="https://www.nobsbitcoin.com/the-curious-case-of-the-half-half-bitcoin-ecdsa-nonces/" target="_blank" class="external-link">A New Class of ECDSA Signature Vulnerability Observed in the Wild on the Bitcoin Blockchain</a></li>
<li><a href="https://www.nobsbitcoin.com/binance-pool-launches-btc-transaction-accelerator/" target="_blank" class="external-link">Binance Pool Launches BTC Transaction Accelerator</a></li>
<li><a href="https://www.nobsbitcoin.com/tbd-launched-tech-preview-of-web5-verifiable-credentials-toolkit/" target="_blank" class="external-link">TBD Launched Tech Preview of Web5 Verifiable Credentials Toolkit</a></li>
<li><a href="https://www.nobsbitcoin.com/umbrel-announces-umbrel-home/" target="_blank" class="external-link">Umbrel Introduces Prebuilt Home Server, Specifically Engineered For umbrelOS</a></li>
<li><a href="https://twitter.com/ordinalhub/status/1668075272132870145" target="_blank" class="external-link">Recursive inscriptions merged into Ordinals protocol</a></li>
<li><a href="https://www.nobsbitcoin.com/vexl-foundation-financial-tyranny-index/" target="_blank" class="external-link">Vexl Foundation and Financial Tyranny Index Launched by SatoshiLabs</a></li>
<li><a href="https://spiritofsatoshi.ai/" target="_blank" class="external-link">Spirit of Satoshi Bitcoin-centric AI project announced</a></li>
<li><a href="https://www.nobsbitcoin.com/bitcoin-keeper-v1-0-4/" target="_blank" class="external-link">Bitcoin Keeper app brings Whirlpool coinjoin to iOS</a></li>
<li><a href="https://www.nobsbitcoin.com/scalinglightning-announced/" target="_blank" class="external-link">Scaling Lightning: Testing Toolkit for the Lightning Network</a></li>
<li><a href="https://www.nobsbitcoin.com/el-salvadors-volcano-energy-secures-1b-in-commitments-for-241-mw-bitcoin-mine/" target="_blank" class="external-link">El Salvador's Volcano Energy Secures $1B in Commitments for 241 MW Bitcoin Mine</a></li>
<li><a href="https://www.nobsbitcoin.com/european-central-bank-releases-cbdc-research/" target="_blank" class="external-link">European Central Bank Releases CBDC Research</a></li>
<li><a href="https://www.nobsbitcoin.com/wavlake-value-for-value-music-with-lightning/" target="_blank" class="external-link">Wavlake: Value for Value Music with Lightning</a></li>
<li><a href="https://www.nobsbitcoin.com/nostrmesh-microcontroller-mesh/" target="_blank" class="external-link">NostrMesh: Self-Healing ESP32 Nostr-Arduino Based Mesh-Network</a></li>
<li><a href="https://www.nobsbitcoin.com/nostr-protocol-1-million-zaps/" target="_blank" class="external-link">Nostr Protocol Surpasses 1 Million Zaps Milestone</a></li>
<li><a href="https://www.nobsbitcoin.com/operation-triangulation-ios-devices-targeted-with-previously-unknown-malware/" target="_blank" class="external-link">Operation Triangulation: iOS Devices Targeted with Previously Unknown Malware</a></li>
<li><a href="https://www.nobsbitcoin.com/border-searches-of-cell-phones-require-a-warrant-us-federal-judge/" target="_blank" class="external-link">Border Searches of Cell Phones Require a Warrant, Rules US Federal Judge in a Historic Decision</a></li>
</ul>
Socratic Seminar 22
2023-09-22T05:08:45.114Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-22/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-21/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-23/">Next Seminar</a></button></p>
<h1 id="event-details" tabindex="-1">Event Details</h1>
<ul>
<li>RSVP: <a href="https://www.meetup.com/honolulu-bitdevs/events/293071352/" target="_blank" class="external-link">Meetup</a></li>
<li>Time: 6pm - 8pm</li>
<li>Location: <a href="https://sandboxhawaii.org/" target="_blank" class="external-link">Entrepreneurs Sandbox</a> (<a href="https://goo.gl/maps/3Zj38htV13iUn4dcA" target="_blank" class="external-link">643 Ilalo St</a>) in the Purple Box room</li>
</ul>
<h1 id="agenda" tabindex="-1">Agenda</h1>
<ul>
<li>6:00pm - Arrive and network</li>
<li>6:15pm - Presentation from Marko</li>
<li>6:45pm - Socratic seminar discussion of various bitcoin topics</li>
<li>8:00pm - Hang out after at <a href="https://www.honolulubeerworks.com/" target="_blank" class="external-link">Honolulu Beerworks</a> or <a href="https://www.villagebeerhawaii.com/" target="_blank" class="external-link">Village</a></li>
</ul>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout
<ul>
<li>Hawaii Technology Development Corporation</li>
<li>Entrepreneurs Sandbox</li>
</ul>
</li>
<li>New website</li>
<li>Britney hosting a <a href="https://events.hawaiitech.com/event/digital-currency-class/" target="_blank" class="external-link">Digital Currency Class</a> on 5/30</li>
<li><a href="https://www.nobsbitcoin.com/bluewallet-postpones-lightning-node-shut/" target="_blank" class="external-link">BlueWallet postpones Lightning node sunset date to 5/31</a></li>
</ul>
<h1 id="presentation" tabindex="-1">Presentation</h1>
<ul>
<li>Speaker: Marko, cofounder of Shift Crypto (creators of the <a href="https://shiftcrypto.ch/bitbox02/" target="_blank" class="external-link">BitBox02</a> hardware wallet)</li>
<li>Topic: Unexpected hardware wallet attack vectors in singlesig and multisig setups</li>
</ul>
<h1 id="main-topics" tabindex="-1">Main Topics</h1>
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ledger-recover/">Ledger's Recover service</a>
<ul>
<li><a href="https://www.nobsbitcoin.com/ledger-to-launch-kyc-cloud-based-recovery-service/" target="_blank" class="external-link">Ledger launches distributed, KYC-based, cloud seed recovery service then quickly deletes it</a></li>
<li><a href="https://www.whatbitcoindid.com/podcast/ledger-recover" target="_blank" class="external-link">What Bitcoin Did 661: Ledger Recover with Pascal Gauthier, NVK, Matt Odell & Harry Sudock</a></li>
<li><a href="https://www.nobsbitcoin.com/ledger-accelerates-open-source-roadmap/" target="_blank" class="external-link">Ledger pauses the launch of Recover service, accelerates open source roadmap</a></li>
<li><a href="https://twitter.com/sethforprivacy/status/1659888128486699008?s=20" target="_blank" class="external-link">Twitter thread from @sethforprivacy</a></li>
</ul>
</li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/transaction-fees-and-the-mempool/">Transaction fees and "the mempool"</a>
<ul>
<li><a href="https://www.discreetlog.com/high-fees/" target="_blank" class="external-link">High Fees? Bitcoin is Working As Designed</a></li>
<li><a href="https://www.podpage.com/citadeldispatch/cd101-mempools-and-transaction-fees-with-the-mempool-space-team-wiz-simon-and-steve/" target="_blank" class="external-link">Citadel Dispatch 101: Mempools and Transaction Fees with the Mempool Space Team - Wiz, Simon, and Steve</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/05/17/#waiting-for-confirmation-1-why-do-we-have-a-mempool" target="_blank" class="external-link">Why do we have a mempool?</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/mempool-space-transaction-acceleration-marketplace/">Mempool.Space announces transaction acceleration marketplace</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/bitcoin-transaction-package-relay/#package-relay-over-nostr">Bitcoin Transaction Relay over Nostr</a></li>
</ul>
</li>
<li>Scaling in layers (and renewed interest in <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/op-ctv/">OP_CTV</a>)
<ul>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/ark/">Ark</a></li>
<li><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/enigma/">Enigma</a></li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/bitcoin-held-on-exchanges-hits-5-year-low/" target="_blank" class="external-link">Bitcoin held on exchanges hits five year low</a></li>
<li><a href="https://www.nobsbitcoin.com/strike-goes-global/" target="_blank" class="external-link">Strike Goes Global, Expands to 65 Countries to Reach 3 Billion People</a></li>
<li>Block's hardware wallet (BitKey)
<ul>
<li><a href="https://www.nobsbitcoin.com/screens-are-not-a-panacea/" target="_blank" class="external-link">Screens Are Not a Panacea: Server as a Screen</a></li>
<li><a href="https://www.nobsbitcoin.com/block-bitkey-design/" target="_blank" class="external-link">Block's Bitkey Will Not Require Customers to Hold Onto Seed Phrases, Will Not Have A Screen</a></li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/spiral-adds-renews-developer-grants-claims-at-least-6000-developers-are-building-with-ldk/" target="_blank" class="external-link">Spiral adds, renews developer grants, counts at least 6000 developers building with LDK</a></li>
<li><a href="https://www.nobsbitcoin.com/hrf-gifts-16-5btc-for-btc-projects/" target="_blank" class="external-link">Human Rights Foundation gifts 16.5 BTC for 12 bitcoin projects</a></li>
<li><a href="https://techcrunch.com/2023/05/25/take-a-look-at-wolfs-first-cohort-of-bitcoin-driven-startups/" target="_blank" class="external-link">Review of Wolf’s first cohort of Bitcoin-driven startups</a></li>
<li><a href="https://www.nobsbitcoin.com/microstrategy-lightning-platform/" target="_blank" class="external-link">MicroStrategy Lightning Platform introduced at MicroStrategy World</a></li>
<li><a href="https://wizardsardine.com/blog/ledger-vulnerability-disclosure/" target="_blank" class="external-link">Wizardsardine discloses vulnerability in Ledger's Bitcoin Miniscript implementation</a></li>
<li><a href="https://www.kaspersky.com/blog/fake-trezor-hardware-crypto-wallet/48155/" target="_blank" class="external-link">Review and analysis of malicious/fake Trezor Model T in circulation</a></li>
<li><a href="https://www.nobsbitcoin.com/breaker-of-jpegs/" target="_blank" class="external-link">SuperTestnet releases a tool that breaks Ordinals</a></li>
<li><a href="https://www.nobsbitcoin.com/bitresolve-dispute-resolution/" target="_blank" class="external-link">BitResolve: Bitcoin-Native Dispute Resolution for FOSS Bounties</a></li>
<li><a href="https://www.nobsbitcoin.com/liquid-swaps-by-boltz/" target="_blank" class="external-link">Liquid Swaps by Boltz: Lightning-Liquid Atomic Swaps</a></li>
<li><a href="https://www.nobsbitcoin.com/lava-bitcoin-native-finance/" target="_blank" class="external-link">Lava: DLC-based bitcoin lending & borrowing protocol</a></li>
<li><a href="https://www.nobsbitcoin.com/offline-lightning-network-payments-using-community-wireless-mesh-networks/" target="_blank" class="external-link">LNMesh: Offline lightning network payments using community wireless mesh networks</a></li>
<li><a href="https://www.nobsbitcoin.com/magic-webstore/" target="_blank" class="external-link">Magic Webstore: Full bitcoin + nostr webstore embedded in a "magic link"</a></li>
<li><a href="https://blog.getalby.com/introducing-alby-wallet-webhooks/" target="_blank" class="external-link">Alby Wallet adds webhooks for developers</a></li>
<li><a href="https://github.com/0xBEEFCAF3/munstr" target="_blank" class="external-link">Munstr: MuSig + Nostr</a></li>
<li><a href="https://github.com/MostroP2P/mostro" target="_blank" class="external-link">Mostro: Lightning Network peer-to-peer exchange platform on Nostr</a></li>
<li><a href="https://gist.github.com/RobinLinus/d036511015caea5a28514259a1bab119" target="_blank" class="external-link">zkCoins: A payment system combining a client-side validation protocol with validity proofs</a></li>
<li><a href="https://www.nobsbitcoin.com/storm-protocol-suite/" target="_blank" class="external-link">Storm: Protocol Suite For Decentralized Storage and Messaging</a></li>
<li><a href="https://www.nobsbitcoin.com/proposal-for-a-new-mempool-design/" target="_blank" class="external-link">Proposal for a new mempool design</a></li>
<li><a href="https://www.nobsbitcoin.com/proposal-ptlc-htlc-reusable-static-invoices/" target="_blank" class="external-link">Payment Route Reservation proposal: PTLC/HTLC with reusable static invoices</a></li>
<li><a href="https://alpha.fedi.xyz/" target="_blank" class="external-link">Fedi launches signet alpha wallet</a></li>
<li><a href="https://stacker.news/items/178510" target="_blank" class="external-link">Nutminer: An ecash-based Bitcoin mining pool simulation built with Cashu</a></li>
<li><a href="https://ellemouton.com/posts/taproot-prelims/" target="_blank" class="external-link">Taproot and MuSig2 recap</a></li>
<li><a href="https://ellemouton.com/posts/taproot-chan-txs/" target="_blank" class="external-link">Taproot Channel Transactions</a></li>
<li><a href="https://www.nobsbitcoin.com/microbt-releases-new-line-of-whatsminer-m50/" target="_blank" class="external-link">MicroBT releases new line of Whatsminer M50 series</a></li>
<li><a href="https://www.mining.build/update-on-our-bitcoin-mining-asic-program/" target="_blank" class="external-link">Update on Block's bitcoin mining ASIC program</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/05/10/#paper-about-powswap-protocol" target="_blank" class="external-link">Advances in Hashrate Derivatives Contracts (PoWSwap)</a></li>
<li><a href="https://www.nobsbitcoin.com/tornado-cash-developer-questions-chainalysis-data-alleging-criminal-links/" target="_blank" class="external-link">Tornado Cash developer challenges Chainalysis data alleging criminal links</a></li>
<li><a href="https://www.nobsbitcoin.com/el-salvadors-tech-innovations-tax-law/" target="_blank" class="external-link">El Salvador's bill on eliminating taxes on tech innovations signed into law</a></li>
<li><a href="https://www.nobsbitcoin.com/biden-admin-bitcoin-mining-tax/" target="_blank" class="external-link">Biden administration proposes a 30% tax on bitcoin mining</a></li>
<li><a href="https://thebhutanese.bt/dhi-confirms-that-it-is-mining-digital-assets/" target="_blank" class="external-link">Bhutan confirms that it is mining Digital Assets</a></li>
</ul>
Socratic Seminar 21
2023-05-20T11:00:53.782Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-21/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-20/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-22/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">New logo</a></li>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout
<ul>
<li>Hawaii Technology Development Corporation</li>
<li>Entrepreneurs Sandbox</li>
</ul>
</li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Poncho Shoffeitt</a> from the <a href="https://makanifc.com/" target="_blank" class="external-link">Makani Football Club</a></li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<h5 id="base-layer" tabindex="-1">Base layer</h5>
<ul>
<li><a href="https://www.nobsbitcoin.com/bip-327-merged/" target="_blank" class="external-link">BIP-327 Merged: MuSig2 for BIP340-compatible Multi-Signatures</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/technical/zerosync-reduces-bitcoin-node-validation" target="_blank" class="external-link">How Zerosync hopes to reduce the costs of validating bitcoin nodes</a> (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/how-zero-sync-hopes-to-reduce-the-costs-of-validating-bitcoin-nodes/">Obsidian Link</a>)
<ul>
<li><a href="https://www.nobsbitcoin.com/zerosync-partners-with-blockstream/" target="_blank" class="external-link">ZeroSync partners with Blockstream to sync bitcoin nodes quickly from space</a></li>
</ul>
</li>
<li><a href="https://www.mining.build/the-mining-development-kit-unlocking-innovation-in-bitcoin-mining/" target="_blank" class="external-link">Block requests community feedback on Mining Development Kit</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
</ul>
<h5 id="second-layer" tabindex="-1">Second layer</h5>
<ul>
<li><a href="https://www.nobsbitcoin.com/route-blinding-merged/" target="_blank" class="external-link">Route Blinding has been merged into the Lightning spec</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://twitter.com/dusty_daemon" target="_blank" class="external-link">@dusty_daemon</a>'s <a href="https://github.com/ElementsProject/lightning/pull/5675" target="_blank" class="external-link">PR to add channel splicing to CoreLightning</a> (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/resources/notes/lightning-channel-splicing/">Obsidian Link</a>)</li>
<li><a href="https://lightningdevkit.org/blog/ldk-roadmap/?ref=nobsbitcoin.com" target="_blank" class="external-link">Lightning Dev Kit (LDK) announces roadmap</a></li>
<li><a href="https://blog.mutinywallet.com/introducing-mutiny/" target="_blank" class="external-link">Mutiny Wallet: Privacy-focused bitcoin lightning payments</a></li>
<li><a href="https://medium.com/breez-technology/the-breez-open-lsp-model-scaling-lightning-by-sharing-roi-with-3rd-party-lsps-e2ef6e31562e" target="_blank" class="external-link">Breez announces "Open-LSP Model" to onboard new Lightning Service Providers</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/business/tbd-announces-new-bitcoin-lightning-service-provider-c" target="_blank" class="external-link">Jack Dorsey’s TBD announces new Lightning Service Provider</a> <a href="https://cequals.xyz/" target="_blank" class="external-link">c=</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://dergigi.com/2023/03/12/lightning-prisms/" target="_blank" class="external-link">Gigi proposes "Lightning Prisms" concept</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://wolfnyc.com/news-wolfpack-1" target="_blank" class="external-link">Lightning accelerator “In Wolf’s Clothing” announces first cohort</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
</ul>
<h5 id="other" tabindex="-1">Other</h5>
<ul>
<li><a href="https://www.nobsbitcoin.com/fedimint-stability-pool-proposal/" target="_blank" class="external-link">Fedimint Stability Pool Proposal</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li><a href="https://thebitcoinmanual.com/articles/fedimint-stability-pool/" target="_blank" class="external-link">Stability Pool breakdown from The Bitcoin Manual</a></li>
</ul>
</li>
<li><a href="https://waxy.org/2023/04/the-bitcoin-whitepaper-is-hidden-in-every-modern-copy-of-macos/" target="_blank" class="external-link">The Bitcoin Whitepaper is hidden in every modern copy of macOS</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li>Bank runs and economic fragility
<ul>
<li><a href="https://bitcoinmagazine.com/markets/recap-of-last-weeks-banking-contagion-and-bitcoin" target="_blank" class="external-link">A recap of last week’s banking contagion and bitcoin</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://jessemyers.substack.com/p/63-march-2023-monthly-update-on-bitcoin" target="_blank" class="external-link">Jesse Myers's March update on bitcoin/macro</a></li>
<li><a href="https://stacker.news/items/150421" target="_blank" class="external-link">ELI5 – What's happened to Silicon Valley Bank?</a></li>
<li><a href="https://bitcoinmagazine.com/markets/federal-government-will-guarantee-all-deposits-at-svb-signature-bank" target="_blank" class="external-link">U.S. Treasury, FDIC and Federal Reserve will guarantee all deposits at SVB, Signature Bank in unprecedented move</a></li>
<li><a href="https://bitcoinmagazine.com/markets/federal-reserve-bank-term-funding-program" target="_blank" class="external-link">The Federal Reserve intervenes: bank term funding program</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/legal/what-the-white-house-economic-report-got-wrong-on-bitcoin" target="_blank" class="external-link">White House releases economic report on bitcoin</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li><a href="https://www.nobsbitcoin.com/the-presidents-annual-economic-report-to-congress-attacks-bitcoin/" target="_blank" class="external-link">The President's annual economic report to congress attacks bitcoin</a></li>
</ul>
</li>
<li>RESTRICT Act (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li><a href="https://www.nobsbitcoin.com/restrict-act/" target="_blank" class="external-link">RESTRICT Act: A sweeping national security 'TikTok ban' bill includes $250k fine if you access a 'banned' site or service</a></li>
<li><a href="https://www.coincenter.org/the-restrict-act-creates-blanket-authority-with-few-checks-to-ban-just-about-anything-linked-to-a-foreign-adversary/" target="_blank" class="external-link">The RESTRICT Act creates blanket authority, with few checks, to ban just about anything linked to a ‘foreign adversary’</a></li>
<li><a href="https://www.nobsbitcoin.com/eff-restrict-act/" target="_blank" class="external-link">Stop the RESTRICT Act, Pass Real Privacy Legislation - EFF</a></li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/us-goverment-sold-9-800-btc/" target="_blank" class="external-link">US Government sold 9,861 BTC stolen from Silkroad, will sell remaining 41,490 BTC this year</a>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/the-us-government-sold-nearly-10000-silk-road-bitcoin" target="_blank" class="external-link">The US government sold nearly 10,000 silk road bitcoin</a></li>
<li><a href="https://www.nobsbitcoin.com/us-government-could-have-saved-over-5-1bn-if-it-hodled/" target="_blank" class="external-link">US Government could have saved $5 billion if it hodled seized bitcoin instead of selling it</a></li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/paxful-suspends-operations/" target="_blank" class="external-link">P2P marketplace Paxful suspends operations</a></li>
<li><a href="https://wallet.build/helping-customers-move-between-fiat-and-bitcoin-how-well-build-with-partners-to-bring-more-people-to-self-custody/" target="_blank" class="external-link">Block describes strategic vision for bitcoin on/off-ramp partnerships</a></li>
<li><a href="https://bitcoinmagazine.com/business/btcpay-server-adds-coinjoin-plugin" target="_blank" class="external-link">BTCPay Server adds WabiSabi coinjoin plugin, giving option for increased privacy for merchants</a></li>
<li><a href="https://openordex.org/" target="_blank" class="external-link">OpenOrdex: Open Ordinals Decentralized Exchange</a></li>
<li><a href="https://rollkit.dev/blog/sovereign-rollups-on-bitcoin/" target="_blank" class="external-link">Sovereign rollups on Bitcoin with Rollkit</a></li>
<li><a href="https://bitcoinmagazine.com/business/fidelity-has-opened-bitcoin-trading-to-the-public" target="_blank" class="external-link">Fidelity investments has opened bitcoin trading to the public</a></li>
<li><a href="https://www.nobsbitcoin.com/ledger-raises-extra-108m/" target="_blank" class="external-link">Ledger raises another $108M in Series C extension round at $1.4B valuation</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/03/15/#service-bit-for-utreexo" target="_blank" class="external-link">Utreexo service bit chosen for testnet/signet signalling</a>
<ul>
<li><a href="https://stephanlivera.com/episode/465/" target="_blank" class="external-link">SLP465 - What is utreexo? with Calvin Kim</a></li>
<li><a href="https://thebitcoinmanual.com/articles/explain-utreexo/" target="_blank" class="external-link">UtreeXO breakdown from The Bitcoin Manual</a></li>
</ul>
</li>
<li><a href="https://luxor.tech/firmware" target="_blank" class="external-link">Luxor Mining launches LuxOS Antminer firmware</a></li>
<li><a href="https://bitcoinmagazine.com/business/fold-announces-exclusive-global-partnership-with-visa" target="_blank" class="external-link">Fold announces exclusive global partnership with Visa</a></li>
<li><a href="https://ronindojo.io/en/roninmobile" target="_blank" class="external-link">RoninDojo team announces RoninMobile security/privacy-focused smartphones</a></li>
<li><a href="https://bitcoinmagazine.com/culture/cftc-commissioner-on-bitcoin-regulation" target="_blank" class="external-link">CFTC commissioner on innovation, commodities and misconceptions about bitcoin regulation</a></li>
<li><a href="https://bitcoinmagazine.com/legal/texas-house-introduces-bill-to-protect-rights-of-btc-ownership" target="_blank" class="external-link">Texas House introduces bill to boost local bitcoin economy and protect rights of individual btc ownership</a></li>
<li><a href="https://bitcoinmagazine.com/legal/what-the-white-house-economic-report-got-wrong-on-bitcoin" target="_blank" class="external-link">Texas Senate committee unanimously passed Bill 1751 - limits miner participation in grid-balancing programs</a></li>
<li><a href="https://www.nobsbitcoin.com/el-salvador-eliminates-all-taxes-on-technology-innovations/" target="_blank" class="external-link">El Salvador eliminates all taxes on technology innovations, establishes a National Bitcoin Office</a></li>
<li><a href="https://www.nobsbitcoin.com/new-eu-aml-rules/" target="_blank" class="external-link">New EU AML rules may seek KYC checks for commercial bitcoin payments over €1000</a></li>
<li><a href="https://bitcoinmagazine.com/business/zebedee-introduces-instant-global-payments-using-bitcoin" target="_blank" class="external-link">Zebedee introduces instant global payments using the bitcoin lightning network</a></li>
<li><a href="https://bitcoinmagazine.com/business/terawulf-first-fully-nuclear-powered-bitcoin-mining" target="_blank" class="external-link">Terawulf brings first fully nuclear-powered Bitcoin mining operation in America online</a></li>
<li><a href="https://www.theblock.co/post/219992/blockchain-startup-tari-labs-wins-restraining-order-against-lightning-labs-over-taro-protocol" target="_blank" class="external-link">Blockchain startup Tari Labs wins restraining order against Lightning Labs over Taro protocol</a></li>
<li><a href="https://www.nobsbitcoin.com/tor-project-mullvad-vpn-mullvad-browser/" target="_blank" class="external-link">Tor Project partners with Mullvad VPN to launch privacy-preserving Mullvad Browser</a></li>
<li><a href="https://schiffgold.com/key-gold-news/brics-nations-developing-new-currency-as-quest-for-global-de-dollarization-accelerates/" target="_blank" class="external-link">BRICS nations developing “New Currency” as quest for global de-dollarization accelerates</a></li>
</ul>
Socratic Seminar 20
2023-06-11T09:21:38.389Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-20/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-19/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-21/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout
<ul>
<li>Hawaii Technology Development Corporation</li>
<li>Entrepreneurs Sandbox</li>
</ul>
</li>
</ul>
<h1 id="geopolitics-market" tabindex="-1">Geopolitics/Market</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/legal/mississippi-missouri-bills-to-protect-bitcoin" target="_blank" class="external-link">Mississippi & Missouri lawmakers introduce bills to protect the rights to mine bitcoin and run a node</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>Lawmakers from the U.S. states of Mississippi and Missouri have introduced bills that seek to <strong>legally protect their citizens’ rights to run a Bitcoin node and to mine BTC</strong></li>
<li>The bills also have language prohibiting:
<ul>
<li>Political subdivisions of the state creating requirements which are not in line with other data center requirements, and changing the zoning of bitcoin miners without proper notice</li>
<li>Outlawing of discriminatory energy rates directed at bitcoin miners</li>
<li>Sound ordinances directed at mining facilities that are not in-line with other sound ordinances within the community</li>
<li>Operating nodes or miners being considered the act of money transmitting</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/legal/wyoming-legislature-bill-protecting-private-keys" target="_blank" class="external-link">Wyoming legislature passes bill protecting bitcoin private keys from courts</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>The U.S. state of Wyoming has passed a bill that protects its citizens from having to disclose their private keys</li>
<li>The bill states that “No person shall be compelled to produce a private key or make a private key known to any other person in any civil, criminal, administrative, legislative or other proceeding in this state that relates to a digital asset, digital identity or other interest or right to which the private key provides access unless a public key is unavailable or unable to disclose the requisite information with respect to the digital asset, digital identity or other interest or right.”</li>
<li>The bill has been approved by the state Senate and House of Representatives and now needs to be signed by the Governor in order to take effect</li>
</ul>
</li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li>
<p><a href="https://www.nobsbitcoin.com/marco-falke-steps-down/" target="_blank" class="external-link">Bitcoin Core maintainer Marco Falke steps down</a></p>
<ul>
<li><strong>Quality assurance and testing maintainer</strong> for Bitcoin Core for <strong>7 years</strong></li>
<li>Didn't provide a specific reason other than saying "being a maintainer is no longer a good fit for me personally."</li>
<li>Several other maintainers have also stepped down over the last few years, <strong>often citing increasing legal risk as a motivating factor</strong></li>
<li>There are only <strong>4 Bitcoin Core maintainers left</strong>: Hennadii Stepanov, Michael Ford, Andrew Chow, and Gloria Zhao</li>
<li>Each maintainer specializes in a given area of the code, so it's reasonable to assume a new QA/test maintainer may join soon</li>
<li>New maintainers are <a href="https://bitcoin.stackexchange.com/questions/99674/how-do-devs-decide-who-should-have-commit-access-what-is-the-process" target="_blank" class="external-link">generally nominated by someone in one of the weekly IRC meetings and all the attendees vote</a> - semi-informal, but nominees and most attendees are generally well-known/prominent devs in the space
<ul>
<li>A newcomer likely wouldn't get nominated or accepted</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/business/coinkite-new-bitcoin-wallet-coldcard-q1" target="_blank" class="external-link">Coinkite launches preorders for new bitcoin hardware wallet COLDCARD Q1</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Coinkite is launching a higher-end, <strong>battery-powered</strong> COLDCARD, featuring a full <strong>QWERTY keyboard</strong>, a <strong>4x larger LCD screen</strong>, <strong>2 microSD card slots</strong>, and a <strong>QR code scanner</strong>
<ul>
<li>Addition of a AAA battery pack makes it much easier to store in remote/less accessible locations
<ul>
<li>Before this, if you didn't have close access to a power outlet where you store your COLDCARD, you'd have buy a battery adapter + battery to use power it on remotely</li>
</ul>
</li>
<li>NVK was hesitant to add QR support until they found an affordable, security-focused way to implement it
<ul>
<li>The Q1’s QR scanner is a specialized module that sits at the top of the unit and is connected to the COLDCARD internally using a basic, 2-wire serial port</li>
<li>According to Coinkite, this ensures "there is less danger of scanned data doing more than it seems."</li>
<li>It uses an optimized grocery store scanner with an LED flashlight, which theoretically allows users to easily scan QRs under less-optimal lighting conditions (useful for those mountain men storing their COLDCARDs deep in a cave somewhere)</li>
</ul>
</li>
<li>The full keyboard is intended to make it much easier to enter BIP39 passphrases on the device
<ul>
<li>Would be worried about wearing down the lettering on individual keys for frequently used passphrases, potentially making it easier to decode if someone accessed the device</li>
</ul>
</li>
</ul>
</li>
<li>It borrows some core features included in the Mk4: <strong>same dual multi-vendor secure element setup, NFC compatibility, USB virtual disk mode, USB-C connector</strong>, etc.</li>
<li>The new COLDCARD Q1 is available for <strong>pre-sale at $199</strong> with a planned release in <strong>Q4 2023</strong>
<ul id="13b467">
<li>The Mk4 currently retails for ~$150, so the pre-sale price is a pretty good deal - not sure what the regular price will be post-launch</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://medium.com/breez-technology/lightning-for-everyone-in-any-app-lightning-as-a-service-via-the-breez-sdk-41d899057a1d" target="_blank" class="external-link">Breez's new SDK enables non-custodial "Lightning as a Service" integration for developers</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Breez wallet in its current form:
<ul>
<li>Breez is a <strong>"swiss army knife"</strong> LN wallet - it does a lot of different things relatively well (regular LN wallet, podcasting 2.0 player, point-of-sale terminal, etc.)</li>
<li>It's been in beta since its launch a few years ago - all its functionality has essentially been a <strong>proof-of-concept on what you can do with Lightning</strong></li>
<li>Breez is unique in that it <strong>runs an entire Lightning node on your phone with the keys stored locally</strong> and controlled by the user, but the liquidity <strong>management is done by Breez</strong> as a Lightning Service Provider (LSP)</li>
<li>The problem with that model is that <strong>the app has to be open</strong> for the node to stay in sync with the network, so if you don't use it for a few days, you'll have to wait for it to sync when you open the app before you can send/receive payments</li>
</ul>
</li>
<li>In the background, Breez has been working on a different model (called <strong>Breez Cloud</strong>) and an entirely separate app leveraging this new model (called "sea breez"?)
<ul>
<li>Breez Cloud uses <a href="https://blockstream.com/lightning/greenlight/" target="_blank" class="external-link">Blockstream's Greenlight</a> to <strong>offload the node hosting and provisioning to Blockstream</strong>, while the Lightning liquidity management is still handled by Breez</li>
<li>This removes the need to run the Lightning node on the mobile device where the app is running - <strong>allowing that computation to be offloaded</strong> to Blockstream's much-more-capable server infrastructure</li>
</ul>
</li>
<li>Breez's new SDK takes that concept a step further - <strong>wrapping access the same infrastructure model in a set of API calls that are opened up to any developer</strong> to use in any application</li>
<li>The open-source Breez SDK enables developers to integrate Lightning and bitcoin payments into their apps with <strong>zero learning curve or technical expertise</strong></li>
<li>It’s an end-to-end, non-custodial, drop-in solution powered by Blockstream's Greenlight, including a built-in LSP, on-chain interoperability, fiat on-ramps, and other services users and operators need</li>
<li><strong>Key benefits</strong>:
<ul>
<li>It's end-to-end: <strong>no assembly required</strong>
<ul>
<li>Developers can delegate a lot of complexity back to Breez</li>
<li>Developers need to add a few abstracted API calls to their apps, and Breez handles all node creation, channel management, etc.</li>
</ul>
</li>
<li>It's trustless: <strong>no custody</strong>
<ul>
<li>All peers maintain custody of their own money at all times</li>
<li>Breez SDK users get provisioned their own nodes on-demand via Greenlight</li>
<li>Users maintain control of private keys and authorize apps to access the Greenlight node when money needs to move</li>
</ul>
</li>
<li>It's frictionless: <strong>no KYC/AML</strong>
<ul>
<li>Breez SDK enables P2P payments, so developers never have to touch the users' money directly</li>
<li>No KYC/AML, money transmitter licenses, or 3rd-party fiat payment processors required</li>
</ul>
</li>
<li>It's interoperable: <strong>no wallets</strong>
<ul>
<li>Users see one balance accessible from any app on any device</li>
<li>Various services can be separately authorized to tap into the same Greenlight node</li>
</ul>
</li>
<li>It's global: <strong>no borders</strong>
<ul>
<li>Non-custodial lightning wallets circumvent the regulatory hurdles associated with different geopolitical jurisdictions</li>
</ul>
</li>
</ul>
</li>
<li><strong>Tradeoffs</strong>:
<ul>
<li><strong>Privacy concerns</strong>
<ul>
<li>Blockstream is running the infrastructure, but (I think) all communication with the node happens via E2E encrypted channels</li>
<li>Blockstream can still see some metadata</li>
<li>Breez handles liquidity management, so they know balances and payment information</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://voltage.cloud/blog/voltage-announcements/introducing-flow-v2/" target="_blank" class="external-link">Voltage announces Flow 2.0: A new LSP focused on just-in-time liquidity</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>The initial version of Flow was released over a year ago and was created as an easy way to purchase persistent channels of a given size to help users get inbound (and outbound) capacity</li>
<li>Flow 2.0 is an upgrade to <strong>provide liquidity at the exact moment it is needed</strong> - a receiver can have zero liquidity and still receive payment via Voltage’s liquidity</li>
<li>Flow 2.0 is a noncustodial way to easily receive Lightning payments without thinking about channels</li>
<li>By leveraging <strong>zero-confirmation channels and preimage hashes</strong>, they can determine on the fly if a new channel is required, open it instantly if necessary, and send the payment to the receiver without ever taking custody of funds</li>
<li>This LSP is <strong>available for use today on testnet with mainnet coming soon</strong></li>
<li><strong>How it works</strong>:
<ul>
<li>The Receiver generates an invoice on their node.</li>
<li>The Receiver sends their invoice to the Voltage LSP.</li>
<li>The Voltage LSP returns a new invoice with the same preimage hash but the LSP Pubkey.</li>
<li>Receiver gives this new ‘Wrapped Invoice’ to the Sender.</li>
<li>The Sender pays the invoice which goes to the LSP.</li>
<li>The LSP detects the payment and opens a zero-conf channel to the Receiver.</li>
<li>The LSP forwards the payment to the receiver and the payment is completed.</li>
</ul>
</li>
</ul>
<ul>
<li><strong>Key benefits</strong>:
<ul>
<li>The Wrapped Invoice uses the same preimage hash as the original invoice, which means the LSP can’t settle the payment without the final Receiver completing the payment</li>
<li>The invoice that’s given to the Sender contains the Voltage LSP’s public key meaning an increase in privacy for the Receiver
<ul>
<li>The Voltage LSP knows the Receiver but no one else does</li>
</ul>
</li>
<li>This method works even if the Receiver has 0 channels
<ul>
<li>There is no requirement to have any kind of liquidity established, you can start from a brand new node.</li>
</ul>
</li>
</ul>
</li>
<li>Think this is <strong>basically how Breez operates</strong> today
<ul>
<li>Instead of hosting a node locally or deferring node management to Blockstream via Greenlight, <strong>Voltage does both the node provisioning/hosting + the Lightning channel liquidity management</strong></li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://www.nobsbitcoin.com/strike-launches-sending-api/" target="_blank" class="external-link">Strike's API is now publicly available: Businesses and developers can easily use the lightning network for payments</a></p>
<ul>
<li>Strike's Sending API documentation is now public</li>
<li>Users can leverage the API to send USD payments over lightning network rails</li>
<li>No stablecoins - lightning network is used to move value, which is automatically converted to USD on either end</li>
<li>"No need to own/spend bitcoin, stomach volatility, encounter taxable events, handle added accounting, or take on any legal/compliance headaches"</li>
<li>List of <a href="https://docs.strike.me/walkthrough/example-apps/" target="_blank" class="external-link">example applications</a> in the documentation</li>
<li>Leveraging this API requires access to Strike and comes with the <strong>typical KYC/AML constraints</strong> (e.g., can't be used in Hawaii)</li>
<li>Dollar liquidity has to be managed by Strike in their app, but the bitcoin side connects to the open Lightning network</li>
</ul>
</li>
<li>
<p><a href="https://bluewallet.io/sunsetting-lndhub/" target="_blank" class="external-link">BlueWallet is sunsetting LNDhub.io and is no longer supporting custodial Lightning wallets</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Lightning wallets in BlueWallet have historically been custodial by default, leveraging their own <a href="https://bluewallet.io/lndhub/" target="_blank" class="external-link">LNDhub</a> instance to provide separate accounts for individual BlueWallet users</li>
<li>BlueWallet is <strong>shutting down their LNDhub instance</strong> on <strong>April 30th</strong>, meaning any users that have sats on BlueWallet's lightning node need to move their funds to a different wallet before that deadline</li>
<li>In the interim, BlueWallet LN <strong>users can still withdraw sats, but creating new or refilling existing lightning wallets on their LNDHub node is no longer possible</strong></li>
<li>LNDHub itself is still a <a href="https://github.com/BlueWallet/LndHub" target="_blank" class="external-link">FOSS project</a> and <strong>users can continue to spin up their own instance as a self-hosted solution</strong></li>
<li>BlueWallet users will always be able to connect to their own LNDHub from BlueWallet or other software that supports the LNDHub API spec (i.e., self-hosted LNDHub users are unaffected by this news)</li>
<li>A few <strong>good alternatives</strong>: <a href="https://muun.com/" target="_blank" class="external-link">Muun</a>, <a href="https://breez.technology/" target="_blank" class="external-link">Breez</a>, <a href="https://phoenix.acinq.co/" target="_blank" class="external-link">Phoenix</a>, <a href="https://zeusln.app/" target="_blank" class="external-link">Zeus</a></li>
</ul>
</li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://www.discreetlog.com/fedipool/" target="_blank" class="external-link">Fedipool: Fedimint could mitigate bitcoin mining pool concerns</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li><a href="https://github.com/fedimint/fedimint/discussions/1504" target="_blank" class="external-link">More discussion on pros and cons</a></li>
<li>The overwhelming majority of bitcoin mining relies on mining pools</li>
<li>Mining pool operators custody bitcoin for their users and choose which transactions are included in the blocks they mine</li>
<li>Fedimint is an emerging open source protocol that combines bitcoin, lightning, chaumian ecash, and federated custodians (called Guardians) to create community wallets that are easy to use, have strong privacy, reduced custodial risk, cheap and fast payments within the community, and interoperability with all bitcoin wallets</li>
<li>The same tech could be used to <strong>replace major custodial mining pools</strong>:
<ul>
<li>A group of independent miners can choose to create a Fedimint together</li>
<li>Rather than a single pool operator constructing blocks and choosing which transactions to include, each Guardian can construct their own blocks, reducing censorship risk</li>
<li>Additional miners can join the pool in the future to take advantage of the above, but rather than be a Guardian, they choose which Guardian they want to construct their blocks</li>
</ul>
</li>
<li><strong>Key benefits</strong>:
<ul>
<li>Rewards can't be seized if at least two miners act honestly</li>
<li>Miners receive the privacy benefit of chaumian ecash</li>
</ul>
<ul>
<li>Miners can withdraw mining rewards using bitcoin or lightning at their leisure</li>
<li>Regulatory risk is significantly reduced since Guardians can be easily located in different jurisdictions throughout the world</li>
</ul>
</li>
</ul>
<ul>
<li>Conceptually Fedipool makes sense to distribute risk from a single pool operator managing payouts to a group of operators</li>
<li><strong>Tradeoffs</strong>:
<ul>
<li>The technical implementation of Fedipools could <strong>introduce complexity that adds risk in other ways</strong>, ultimately not accomplishing the kind of risk reduction sought after in the first place (see linked pros & cons discussion)</li>
<li>There <strong>may be other ways to reduce miner pool centralization risks</strong> that are ultimately more effective - <strong>e.g. P2Pool</strong> is a decentralized mining pool that hasn't gained much traction</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://blockchair.com/bitcoin/blocks?s=size(desc)#" target="_blank" class="external-link">Many ~4MB blocks mined this month as Ordinal inscriptions reach 200k milestone</a>
<ul>
<li>Fees have been low enough that inscriptions are relatively economical</li>
<li>It's yet to be seen whether inscriptions will maintain popularity over time, especially as fees go up</li>
<li>Still a lot of debate on whether or not inscriptions are a good use of block space, but most have accepted that they're inevitable either way</li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://www.sec.gov/news/press-release/2023-25" target="_blank" class="external-link">Kraken to discontinue unregistered offer and sale of crypto asset staking-as-a-service program and pay $30 million to settle SEC charges</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>The SEC has charged Kraken with failing to register the offer and sale of their crypto asset staking-as-a-service program</li>
<li>The program allowed investors to transfer crypto assets to Kraken for staking in exchange for advertised annual investment returns</li>
<li>The SEC's complaint also alleges that Kraken claimed its staking investment program offered easy-to-use benefits and strategies to obtain regular investment returns, but provided investors with zero insight into its financial condition, among other things</li>
<li>SEC Chair Gary Gensler commented, "Today’s action should make clear to the marketplace that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection."</li>
</ul>
</li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2023-February/021465.html" target="_blank" class="external-link">James O'Beirne writes formal BIP for OP_VAULT</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/02/22/#proposed-bip-for-codex32-seed-encoding-scheme" target="_blank" class="external-link">Codex32: Proposed BIP for offline seed-splitting and recovery scheme</a></li>
<li><a href="https://github.com/supertestnet/handcrank" target="_blank" class="external-link">Handcrank: A drivechain wannabe with no softfork</a></li>
<li><a href="https://eprint.iacr.org/2023/086" target="_blank" class="external-link">Flyover: A repayment protocol for fast bitcoin transfers over federated pegs</a></li>
<li><a href="https://eprint.iacr.org/2023/183" target="_blank" class="external-link">Maravedí: A secure and practical protocol to trade risk for instantaneous finality</a></li>
<li><a href="https://twitter.com/MrKukks/status/1630221270246719489?s=20" target="_blank" class="external-link">BTCPay Server launches beta release of WabiSabi-based Coinjoin plugin</a></li>
<li><a href="https://www.fedi.xyz/blog/fedimint-hackaton-winners" target="_blank" class="external-link">Fedimint hackathon winners announced</a></li>
<li><a href="https://blog.lopp.net/how-many-bitcoin-confirmations-is-enough/" target="_blank" class="external-link">How many bitcoin confirmations is enough?</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://minibolt.info/guide/bonus/bitcoin/ordisrespector.html" target="_blank" class="external-link">Ordisrespector is a mempool filter that rejects ordinal transactions</a></li>
<li><a href="https://twitter.com/mononautical/status/1621663167582437376?s=20" target="_blank" class="external-link">Muun wallet submarine swaps are quickly expanding the UTXO set</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2023-February/021438.html" target="_blank" class="external-link">Should we remove the OP_RETURN size limit?</a></li>
<li><a href="https://twitter.com/JeremyRubin/status/1618806141903069184" target="_blank" class="external-link">Jeremy Rubin steps away from development on bitcoin-related projects</a></li>
<li><a href="https://bitcoinmagazine.com/culture/nostr-and-bitcoin-can-change-social-media" target="_blank" class="external-link">Bitcoin + Nostr could redefine social media</a></li>
<li><a href="https://bitcoinsearch.xyz/" target="_blank" class="external-link">Bitcoin Search: A search engine for bitcoin technical documentation and discussions</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/02/01/#serverless-payjoin-proposal" target="_blank" class="external-link">Proposal for a serverless version of the BIP78 payjoin protocol</a></li>
<li><a href="https://bitcoinmagazine.com/legal/u-k-details-plan-to-regulate-bitcoin" target="_blank" class="external-link">U.K. details plan to regulate bitcoin/cryptocurrency industry</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/legal/court-rules-craig-wright-has-no-bitcoin-copyright" target="_blank" class="external-link">UK court rules Craig Wright has no copyright claim on bitcoin</a></li>
</ul>
Socratic Seminar 19
2023-05-20T11:01:43.016Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-19/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-18/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-20/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li><a href="http://btc.jobs/" target="_blank" class="external-link">8Bit's BTC Jobs board launched</a></li>
<li><a href="https://www.honolulubitdevs.com/2023-02-16-workshop-self-custody" target="_blank" class="external-link">Self-custody workshop next month</a></li>
<li>Coinkite giveaway reminder</li>
<li>Sponsor shoutout
<ul>
<li>Hawaii Technology Development Corporation</li>
<li>Entrepreneurs Sandbox</li>
</ul>
</li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/legal/eu-capital-requirements-banks-holding-crypto" target="_blank" class="external-link">EU lawmakers vote to impose strict capital requirements on banks holding bitcoin and crypto</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>European Union lawmakers have voted to impose strict capital requirements on banks that hold cryptocurrencies</li>
<li>Banks would be allowed to hold 2% of capital in bitcoin, but required to have one euro in capital for every euro in cryptocurrency held - in an effort to “prevent instability in the crypto world from spilling over into the financial system,” according to Markus Ferber, economic spokesperson for the EU parliament's European People’s Party</li>
<li>Lawmakers cite the chaos in the markets seen over the last few months as further evidence that such regulation is necessary</li>
<li>While the European Parliament's Economic and Monetary Affairs Committee voted to approve the measures, in order for them to go fully into effect, they must also be approved by the European Parliament as a whole, and be presented to the national finance ministers meeting in the Council of the European Union</li>
<li>The passed regulation mirrors that suggested by the Bank for International Settlements' Basel Committee, which also suggested the highest possible risk tier weighting for holdings of “unbacked crypto.” Their recommendations placed a 2% limit on tier 1 capital that could be held denominated in unbacked cryptocurrencies
<ul>
<li>BIS committee recommendation was discussed at last month's BitDevs</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="market" tabindex="-1">Market</h1>
<ul>
<li>Where's the money, Barry?
<ul>
<li><a href="https://bitcoinmagazine.com/business/gemini-alleges-dcg-genesis-defrauded-users" target="_blank" class="external-link">Gemini's Winklevoss writes open letter to DCG board alleging fraud</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.sec.gov/news/press-release/2023-7" target="_blank" class="external-link">SEC charges Genesis and Gemini for the unregistered offer and sale of crypto asset securities through the Gemini Earn lending program</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.coindesk.com/business/2023/01/20/genesis-global-files-for-bankruptcy-protection/" target="_blank" class="external-link">Genesis files for Chapter 11 bankruptcy</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>, <a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>, <a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.wsj.com/articles/crypto-lender-genesis-lays-off-30-of-staff-11672939434" target="_blank" class="external-link">Genesis already laid off 30% of staff earlier this month</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li>Barry Silbert is the founder and CEO of the Digital Currency Group (DCG) conglomerate</li>
<li>Genesis Trading is the OTC trading desk underneath the DCG corporate umbrella
<ul>
<li>Genesis laid of 30% of staff earlier this month and has since filed for Chapter 11 bankruptcy</li>
<li>It looks like Genesis was taken down due to contagion primarily resulting from the failures of Three Arrows Capital and FTX</li>
</ul>
</li>
<li>Gemini (an exchange run by the Winklevoss twins) is one of many companies affected by Genesis's reckless, over-leveraged lending practices
<ul>
<li>Their Gemini Earn program was a popular way for their clients to earn yield on crypto assets until payouts were unexpectedly halted by Genesis</li>
<li>It has been a few months since those withdrawals were halted, affecting more than 340,000 Gemini Earn users</li>
<li>Cameron Winklevoss wrote an open letter to the DCG board demanding Barry Silbert's removal, claiming he defrauded Gemini by misrepresenting Genesis's working capital</li>
<li>The firm allegedly marked a 10-year promissory note down as a current asset, which normally “refers to cash, cash equivalents, or other assets that can be exchanged into cash within one year”</li>
</ul>
</li>
<li>On top of this, the SEC recently came forward with charges against both Genesis and Gemini for unregistered securities trading through the Gemini Earn program</li>
<li>What does it all mean?
<ul>
<li>Parties affected by Genesis are going to be dragged through lengthy bankruptcy proceedings in an attempt to recoup some of their losses and make their own clients whole (or recover whatever scraps are left)</li>
<li>Contagion probably isn't over - Genesis's failure is going to bleed into DCG's other subsidiaries
<ul>
<li>E.g., Grayscale's GBTC would be at risk if DCG goes under</li>
<li>Some estimate that Grayscale alone holds ~3% of the total BTC supply, and being forced to liquidate that on the market would introduce a lot of sell pressure</li>
<li>The amount of bitcoin owned across all of DCG's subsidiaries is even more substantial</li>
</ul>
</li>
<li>Bitcoin that is held by custodians can be frozen and stolen
<ul>
<li>Gemini Earn users introduced third-party risk and unnecessary trust when they kept their funds on that platform, which then brazenly lent out those entrusted funds</li>
</ul>
</li>
<li>Besides short-term price volatility, bitcoin that is properly self-custodied in cold storage is entirely unaffected by these incidents</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/culture/bitcoin-genesis-block-14th-birthday-reflection" target="_blank" class="external-link">Bitcoin Genesis block was 14 years ago on January 3, 2009</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>14 years ago today, Satoshi Nakamoto created the first block in the Bitcoin blockchain.</li>
<li>Message engraved in the block: "Chancellor on brink of the second bailout for banks"</li>
<li>The engraving in and of itself serves as an anchor to the physical world, and a testament to Bitcoin’s birthdate –– or, at least, that it couldn’t have possibly been created before Jan 3, 2009, the date the cover was published. But more importantly, and more philosophically, the message establishes a sort of manifesto, from the start. It makes it clear that the system being ignited by that very block takes a stand against the central bank policies enabled by a culture of easy money.</li>
<li>Bitcoin seeks to level the playing field, ensuring property rights to millions worldwide, equally and irrespective of their status, race, religious beliefs, gender or nationality.</li>
</ul>
<ul>
<li>Over time, however, more and more Bitcoin-related activity began drifting to centralized institutions, initially for buying and selling, later for custody, and nowadays for a plethora of services unimaginable in the days of Nakamoto. While such a move enabled a greater participation by people around the world, the initial ideals of Bitcoin have started being neglected.</li>
</ul>
<ul>
<li>Proof of Keys Day, also celebrated on January 3, was started by infamous Trace Mayer, who rallied people to withdraw their bitcoin en masse from centralized exchanges and custodians. The reason? Only by withdrawing their BTC can people ensure companies of the burgeoning industry aren’t taking part on old and established vices like fractional reserve banking.</li>
<li>By holding bitcoin in a wallet you create, you ensure that only you can move the bitcoin held in that wallet. When a third party custodian holds your bitcoin for you, they are the final arbiter over those funds - you have an IOU.</li>
</ul>
</li>
<li><a href="https://unchainedpodcast.com/luke-dashjr-warns-users-about-bitcoin-knots-expiry-after-losing-3-6m-in-hack/" target="_blank" class="external-link">Bitcoin Core contributor Luke Dashjr loses ~200 BTC after private server compromised and warns users against upgrading Bitcoin Knots</a>
<ul>
<li>200 BTC currently worth ~$4.5M</li>
<li>There was a sophisticated attack on Luke's personal server back in November 2022
<ul>
<li>He was able to find and purge 2-3 remote shell backdoors an attacker had installed on his system - no evidence they were used for anything at the time</li>
</ul>
</li>
<li>On January 1, 2023, Luke announced his PGP key was compromised
<ul>
<li>Details aren't available for the entire scope of the attack</li>
<li>Seems that attackers laid groundwork for the attack back in November and were able to eventually infect his server with malware that ultimately allowed them to access his PGP key and his local workstation from the hosted server</li>
<li>His bitcoin was stolen from a wallet file stored on the server (presumably encrypted with that PGP key)</li>
</ul>
</li>
<li>Luke is also the primary maintainer of Bitcoin Knots, an alternative bitcoin node and wallet implementation
<ul>
<li>His PGP key is used to sign new releases of the software</li>
<li>Luke cautioned against downloading or updating to the latest version of Bitcoin Knots signed by his key because it could be a compromised by the attacker</li>
</ul>
</li>
<li>Most average bitcoin hardware wallet users are probably in a more secure position than Luke was for protecting their bitcoin stack
<ul>
<li>Luke's encrypted wallet was on an internet-connected device</li>
<li>If he had kept the keys entirely offline (like with a hardware wallet), the likelihood of such an attack would be a lot less</li>
<li>He was probably overconfident in the security of his setup</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/bip-329-merged/" target="_blank" class="external-link">BIP 329 merged: standard for wallet label exports and imports between wallets</a>
<ul>
<li>BIP 329 sets a new standard that will make it easy for wallets to allow users to back up various types of wallet labels and import them into other compatible wallets</li>
<li>Craig Raw, developer of Sparrow Wallet, proposed the standard</li>
<li>Before this, there was no defined standard to transfer any labels the user may have applied to the transactions, addresses, public keys, inputs, outputs or xpubs in one wallet to another wallet.</li>
<li>The UTXO model that Bitcoin uses makes these labels particularly valuable as they may indicate the source of funds, whether received externally or as a result of change from a prior transaction.</li>
<li>In both cases, care must be taken when spending to avoid undesirable leaks of private information.</li>
<li>Labels provide valuable guidance in this regard, and have even become mandatory when spending in several Bitcoin wallets.</li>
<li>Allowing users to import and export their labels in a standardized way ensures that they do not experience lock-in to a particular wallet application.</li>
<li>Individual wallet maintainers need to implement support for the new standard</li>
</ul>
</li>
<li><a href="https://jameso.be/vaults.pdf" target="_blank" class="external-link">James O'Beirne proposes new OP_VAULT soft fork to enable simplified vault/covenant construction</a>
<ul>
<li><a href="https://overcast.fm/+OBZmwPw60" target="_blank" class="external-link">Stephan Livera Podcast <a class="tag" onclick="toggleTagSearch(this)" data-content="#449">#449</a> with James O’Beirne on OP_Vault</a></li>
<li><a href="https://overcast.fm/+KiHqexa6M" target="_blank" class="external-link">Tales From The Crypt Podcast <a class="tag" onclick="toggleTagSearch(this)" data-content="#388">#388</a>: OP_VAULT and Bitcoin Governance with James O’Beirne</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li>Covenants
<ul>
<li>A covenant is a constraint put on how a coin can be spent, above and beyond the traditional requirements of satisfying a one-time unlocking script (e.g., signing a transaction with a private key).</li>
<li>Currently, there is no way to enforce covenants "on-chain" via Bitcoin's internal validation rules, but there are many pending proposals for how Bitcoin's validation rules could be modified to support this functionality.</li>
<li>Generally, these proposals can be divided into 2 categories, each with notable drawbacks:
<ul>
<li><strong>precomputed</strong>: all possible spending and recovery paths for a coin are defined upfront and locked in when the vault is set up
<ul>
<li>Changing these preset options requires setting up an entirely new covenant</li>
<li>The number of possible vault operations is inherently limited and predefined, ruling out arbitrary partial unvaults and recursive re-vaults</li>
<li>Coin destinations are fixed to a set of keys, and unvaulting must be done through a single, predetermined path. Losing keys that control particular operations in this setup can cause issues when finalizing vault transactions.</li>
<li>Vault operations can't be batched together</li>
</ul>
</li>
<li><strong>general</strong>: expanding bitcoin's native scripting capabilities to allow for more flexible/dynamic scripts that could define recursive spending conditions on coins
<ul>
<li>These scripts would likely need to be incredibly complex and take up a lot of space on-chain</li>
<li>Lots of unknown consequences with this kind of script flexibility and a significant chance that the community might not reach broad consensus on a particular standard/implementation</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>Vaults
<ul>
<li>Vaults are an especially useful subset of covenant design that give Bitcoin users operational simplicity during expected use, but heightened security in the event of unauthorized access to private keys.</li>
<li>Vaults were originally defined as a simple covenant that ensured that spending a coin was only allowed after broadcasting an intent to "unvault" and waiting some period. During this delay, the funds could be "clawed back" into a pre-specified recovery path in case the proposed spend was unexpected.</li>
<li>A user could make use of this covenant by spending their coins into a vault and configuring a watchtower process to monitor bitcoin's blockchain. If the watchtower detected an unexpected unvaulting, it could alert the owner or automatically broadcast a transaction that sweeps the funds to safety.</li>
<li>James notes several characteristics for an ideal vault design:
<ul>
<li><strong>efficient reuse of an existing vault configuration</strong>. A single vault scriptPubKey should be able to “receive” multiple deposits and still facilitate efficient administration of the vaulted coins. Batched operations for recovery and unvault should be supported in order to allow managing such a vault efficiently.</li>
<li><strong>partial unvaultings</strong>, which would allow users to withdrawal partial vault balances without having to perform the setup ceremony for a new vault.</li>
<li><strong>dynamic unvault targets</strong>, or allowing the proposed withdrawal target for a vault to be specified at unvault time rather than when the vault is first created. This would remove the need for a statically-specified, intermediate live wallet during withdrawal that only exists to route unvaulted funds to their desired destination.</li>
<li><strong>dynamic fee management</strong> that, like dynamic targets, defers the specification of fee rates and source of fees to unvault time rather than vault creation time.</li>
</ul>
</li>
</ul>
</li>
<li>James's proposal
<ul>
<li>Establish 2 new opcodes: <strong>OP_VAULT and OP_UNVAULT</strong>, which have <strong>covenant-like characteristics but do not attempt to address the general problem of covenants</strong></li>
<li>This approach has a complete set of desirable features for safer custodial operations, none of the limitations of precomputed vaults, and is more concise and usable than a vault implemented with more general covenant scripting primitives.</li>
<li>The idea is to limit the scope to optimize specifically for the vault use case to get the most functionality out of the least risky implementation</li>
<li>Each OP_VAULT-style vault makes use of a few pieces of essential data:
<ul>
<li><strong>a recovery path</strong>: the destination that vault funds can be swept to at any point prior to the finalization of withdrawal to the unvault target.</li>
<li><strong>an unvault key</strong>: used to authorize beginning an unvault process, i.e. the spending of an OP_VAULT into a suitable OP_UNVAULT, which “announces” the intent to unvault and begins the withdrawal lock-in period</li>
<li><strong>an unvault target</strong>: an arbitrary target or destination that is specified as a parameter to OP_UNVAULT, and dictates where unvaulted funds go.</li>
</ul>
</li>
<li>The way this proposal is constructed satisfies all of the characteristics James defined in his ideal vault design without the same drawbacks of pre-existing covenant proposals.</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://wizardsardine.com/blog/liana-announcement/" target="_blank" class="external-link">Wizardsardine announces Liana self-custody solution with unique timelock-based recovery mechanisms</a>
<ul>
<li>Wizardsardine is a development group known for their work on <strong>Revault</strong>, an advanced and complex self-custody solution targeted toward organizations with an emphasis on protecting against theft.
<ul>
<li>It attempts to accomplish something similar to a vault covenant without any changes to Bitcoin's consensus model</li>
<li>It uses native Bitcoin scripting functionality to combine high-threshold multisignature, pre-signed transactions, and various restriction policies</li>
<li>Powerful control over how funds are spent in an enterprise-level custody setup, but not really approachable to most people or organizations</li>
</ul>
</li>
<li>At the end of December, they announced <strong>Liana</strong>, a simpler, lighter self-custody solution that puts the emphasis on protecting against loss without degrading security
<ul>
<li>Liana is meant to incorporate some of the same design principals as Revault in a much more approachable way - targeting individuals or businesses of any size</li>
<li>"You can think of Liana as your regular Bitcoin wallet, with a plugged recovery mechanism. In a common Bitcoin wallet you receive coins on an address that corresponds to a single public key, yours. That is, a signature for your public key would allow you to spend the coins. For Liana it’s the same, but in addition a signature for a secondary key (the “recovery” key) would also let you spend the coins. But this recovery key is disabled until a configurable amount of time has passed since you received the coins."</li>
<li>They describe a few examples of how this setup can be useful:
<ul>
<li><strong>Inheritance</strong>
<ul>
<li>You can define when someone can gain access to a particular key</li>
<li>For inheritance, you want some other party to have access to your funds at some point, you may not want them to be able to spend the entirety of your holdings immediately</li>
<li>E.g., get hit by a bus, and your heir can easily recover all your coins after a year</li>
</ul>
</li>
<li><strong>More resilient backups</strong>
<ul>
<li>There's always a tradeoff between backup availability and security - increasing the protection of your backups against theft is always going to come at the expense of a decreased availability of the backup</li>
<li>With Liana, you can control when a backup becomes available - you can have a more secure backup of the primary key and a more accessible backup of the recovery key</li>
</ul>
</li>
<li><strong>Decaying multisig setups</strong> (not available in current version)
<ul>
<li>The threshold of signing keys in a multisig quorum can become more relaxed over time if funds don't move</li>
<li>E.g., a 4-of-4 multisig that degrades into a 3-of-4 after 9 months and a 2-of-6 with specific recovery keys after a year and a half.</li>
</ul>
</li>
</ul>
</li>
<li>Timelocked recovery adds a new dimension to leverage in custody setups
<ul>
<li>You could previously configure authentication (<strong>who holds the keys</strong>) and space (where the <strong>keys are located</strong>) - now you can configure time (when <strong>the keys become available for use</strong>)</li>
<li>The downside is that <strong>timelock-based setups require interaction</strong> - you have to routinely move funds to avoid allowing unwanted key access when the timelock runs out</li>
</ul>
</li>
<li>Liana is basically in beta - it's usable today, but the UX isn't prioritized in the initial version</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://read.pourteaux.xyz/p/illegitimate-bitcoin-transactions" target="_blank" class="external-link">Ordinal theory and the debate around "illegitimate" bitcoin transactions</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li><a href="https://youtu.be/rSS0O2KQpsI" target="_blank" class="external-link">Ordinal Theory Explained: Satoshi Serial Numbers and NFTs on Bitcoin</a></li>
<li><a href="https://youtu.be/MC_haVa6N3I" target="_blank" class="external-link">Ordinals Workshop with Casey Rodarmor</a></li>
<li><a href="https://docs.ordinals.com/introduction.html" target="_blank" class="external-link">Ordinal Theory Handbook</a></li>
<li><a href="https://twitter.com/brian_trollz/status/1619452301504294912" target="_blank" class="external-link">@brian_trollz tweet summary about ordinals FUD</a></li>
<li>Ordinal theory is the concept of <strong>assigning unique, numeric "identities" to individual satoshis</strong> and <strong>allowing them to be tracked, transferred, and imbued with meaning</strong></li>
<li>Ordinals is an open source project that includes
<ul>
<li>a BIP describing the ordinal scheme</li>
<li>an index that communicates with a Bitcoin Core node to track the location of all satoshis</li>
<li>a wallet that allows making ordinal-aware transactions</li>
<li>a block explorer for interactive exploration of the blockchain</li>
<li>functionality for inscribing satoshis with digital artifacts</li>
</ul>
</li>
<li>According to this scheme, satoshis are numbered in the order in which they're mined, and transferred from transaction inputs to transaction outputs on a first-in-first-out basis</li>
<li>Arbitrary assets, such as NFTs, security tokens, accounts, or stablecoins can be attached to satoshis using ordinal numbers as stable identifiers</li>
<li>Ordinal theory doesn't require a side chain, a separate token, or any changes to Bitcoin</li>
<li>Some interesting properties of ordinal-based "digital artifacts":
<ul>
<li>Ordinal inscriptions are always immutable - once created, they can't be modified or destroyed</li>
<li>Inscription content is always on-chain - there is no way for an inscription to refer to off-chain content (the content itself is embedded in the transaction data)</li>
</ul>
</li>
<li>There has been a longstanding debate about what constitutes a "legitimate" bitcoin transaction - i.e., should bitcoin be used solely for financial transactions, or should it act as a secure, distributed data store for app data and other content?
<ul>
<li>Proponents of using bitcoin only for financial transactions argue that allowing other things on-chain could crowd out financial transactions, making them more difficult to get into limited block space (i.e., it might make bitcoin less usable as money)</li>
<li>Proponents of storing other data on-chain argue that doing so adds demand to the fee market, which ultimately provides more incentive for bitcoin miners to secure the network (more transactions = more fee revenue)</li>
</ul>
</li>
<li>A compromise was met in 2014 with the introduction of OP_RETURN
<ul>
<li>OP_RETURN allows 80 bytes to be used to embed small, arbitrary information in a transaction</li>
<li>This was a sufficient size to, for example, store hashes linked to an external service but forced these services to use bitcoin block space efficiently. And significantly, the messages stored on OP_RETURN were “prunable,” meaning that while they must be downloaded by every full node, the bitcoin software recognizes them as dead ends (as they are unspendable) and thus don’t need to be held in the memory of a bitcoin node.</li>
</ul>
</li>
<li>The resurgence of this debate centers around the fact that ordinals takes advantage of a design quirk in Taproot (a 2021 bitcoin upgrade) to leverage more bitcoin block space for data storage without using OP_RETURN at all
<ul>
<li>Taproot relaxed the limits on witness (signature) data sizes in a bitcoin transaction, allowing Ordinals developer Casey Rodarmor to repurpose old opcodes (OP_FALSE, OP_IF, OP_PUSH) into what he describes as “envelopes” to store arbitrary data for NFTs. That wasn’t the intention of the Taproot upgrade, which relaxed this limit on witness data sizes to allow for future bitcoin contract functionality.</li>
<li>In effect, this trick could allow an ordinals transaction to take up almost the entire space in a 4MB block</li>
<li>People are already using this extra space to store images, PDFs, and small videos as ordinal inscriptions on-chain</li>
</ul>
</li>
<li>Considerations
<ul>
<li>Witness data receives a substantial fee discount compared to data in other parts of the transaction (like inputs, outputs, OP_RETURN values, etc), which means it could be cheaper to inscribe data this way than it is to do a more typical kind of financial transaction
<ul>
<li>Data in the witness is given a discount for fee per byte because that data is not included in the in-memory UTXO set (which is more expensive for computers than on-chain data)</li>
<li>If ordinal inscriptions become popular, it might accelerate the timeline to consistently full blocks (already an inevitability if bitcoin adoption continues), which implies that base layer fees would increase sooner than anticipated</li>
</ul>
</li>
<li>The fee market will ultimately adjust as needed to accommodate fluctuations in demand for block space, and people competing for that block space will have to find ways to use it more efficiently</li>
<li>Even if each 4MB block were being filled entirely, the impact on chain size is relatively negligible
<ul>
<li>At that rate, the entire blockchain would reach a size of ~2.5TB by 2032 - commodity hardware should be able to keep up with that pace easily</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://hashrateindex.com/blog/hashrate-index-2022-bitcoin-mining-year-in-review/" target="_blank" class="external-link">Luxor releases "Hashrate Index 2022 Bitcoin Mining Year in Review"</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>The 2021 bull market brought a lot of capital into the bitcoin mining industry, which became increasingly institutionalized and intertwined with traditional finance and energy sectors</li>
<li>That's why 2022's bear market hit so hard - most mining profits gained in the bull market were lost
<ul>
<li>Hashprice hit an all-time low in November
<ul>
<li>Hashprice, a term coined by Luxor, refers to the expected value of 1 TH/s of hashing power per day. The metric quantifies how much a miner can expect to earn from a specific quantity of hashrate</li>
</ul>
</li>
<li>New-gen ASICs exited the year at all-time low valuations.</li>
<li>Many Bitcoin mining stocks fell more than 90%.</li>
<li>North America's leading hosting providers went bankrupt.</li>
<li>Acquisitions and asset sales became a prevailing theme.</li>
</ul>
</li>
<li>Even with last year's market carnage, Bitcoin’s hashrate grew 41% in 2022 (compared to 2021’s 18% growth)</li>
<li>With Bitcoin’s price impaired, miners made significantly less on a USD-basis compared to 2021. Still, the $9.55 billion in revenue is still nearly double the rewards miners reaped each year in 2020, 2019, and 2018</li>
<li>2021’s bull market – and the hashrate blackout caused by China’s Bitcoin mining ban – made the year an extremely profitable time to mine Bitcoin. The average hashprice for the year was $314.61/PH/day and the yearly high was $412.57/PH/day</li>
<li>The USD hashprice high for 2022 of $246.86/PH/day came on January 1, and it was only downhill from there. The average USD hashprice was $123.88/PH/day, and the $55.94/PH/day low for the year was also an all-time low for Bitcoin’s hashprice</li>
<li>The average industrial electricity price in the US in 2022 was $85 per MWh, a 16% increase from 2021. Even after this electricity price inflation, 35 states have lower average industrial electricity rates than the S19 Pro’s current break-even electricity price of $92 per MWh.</li>
</ul>
<ul>
<li>Bitcoin mining is still very viable in many US states, particularly considering the opportunities for miners to reduce their ultimate electricity prices by engaging in sophisticated power strategies.
<ul>
<li>These power strategies can take many forms, but a common theme is that miners exploit the unique low-consequence-interruptibility of the bitcoin mining process by adjusting their electricity consumption based on market signals. (Other high-energy intensive industries, like traditional data centers or industrial manufacturing, cannot power down without disrupting major economic activities).</li>
</ul>
</li>
<li>In 2021, New-gen (S19, M30 series) and mid-gen rigs (S17, M20 series) hit all-time high values amid the market mania. In 2022, the bear market drove these rig tiers to all-time lows. New-gen rigs fell 85% from $101.04/TH to $14.88/TH, mid-gen rigs fell 87% from $76.10/TH to $9.92/TH, and old-gen rigs fell 82% from $26.53/TH to $4.72/TH.</li>
<li>Driven by market incentives, the public miners expanded as quickly as possible in 2022, mostly with hardware that was pre-ordered in 2021</li>
<li>Public miners started the year producing 14% of Bitcoin’s hashrate, and ended the year at 19%. This increase in their share of the global hashrate means that they expanded capacity much faster than the private miners in 2022. The public miners increased their cumulative hashrate by 59% in 2022, compared to the private miners’ 19% hashrate growth.</li>
</ul>
</li>
</ul>
<h1 id="coinkite-giveaway-3" tabindex="-1">Coinkite Giveaway <a class="tag" onclick="toggleTagSearch(this)" data-content="#3">#3</a></h1>
<ul>
<li><a href="https://forms.gle/RmnDxskivwRbnVWy9" target="_blank" class="external-link">"Guess the Nonce" Google Form</a>
<ul>
<li>Submit guesses ahead of time (only if you plan on attending the meetup)!</li>
<li>A specific block will be chosen at the meetup and its nonce will be compared to all submissions - closest guess wins</li>
<li>Previous winners are ineligible</li>
<li><a href="https://youtu.be/6MgJCGb01jI?t=190" target="_blank" class="external-link">Video explaining what a nonce is in relation to bitcoin mining</a>
<ul>
<li>A "nonce" is a "number used only once".</li>
<li>Miners are continuously hashing block data when trying to "win" the block lottery. The nonce is an extra field that can be repeatedly modified to produce entirely new hashes without changing the actual transaction data in the block.</li>
<li>Miners keep changing the nonce to generate new hashes, ultimately trying to get close enough to the difficulty target.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://blog.coincorner.com/bitcoin-best-bits-2022-b6059bc928ee" target="_blank" class="external-link">CoinCorner releases Bitcoin Best Bits 2022 recap</a></li>
<li>Sam Bankman-Fried moves back in with parents
<ul>
<li><a href="https://www.nobsbitcoin.com/ftx-founder-sbf-released-on-250m-bond-at-u-s-court-appearance/" target="_blank" class="external-link">Two FTX executives plead guilty to criminal charges. SBF released on $250M bond and confined to parents' home in California</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>, <a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.nobsbitcoin.com/sbf-bond-overstated/" target="_blank" class="external-link">SBF's '$250M bond' incredibly overstated: no money paid, parents' ~<mjx-container class="MathJax" jax="SVG" style="direction: ltr; position: relative;"><svg style="overflow: visible; min-height: 1px; min-width: 1px; vertical-align: -0.566ex;" xmlns="http://www.w3.org/2000/svg" width="163.615ex" height="2.283ex" role="img" focusable="false" viewBox="0 -759 72317.7 1009" aria-hidden="true"><g stroke="currentColor" fill="currentColor" stroke-width="0" transform="scale(1,-1)"><g data-mml-node="math"><g data-mml-node="mn"><path data-c="34" d="M462 0Q444 3 333 3Q217 3 199 0H190V46H221Q241 46 248 46T265 48T279 53T286 61Q287 63 287 115V165H28V211L179 442Q332 674 334 675Q336 677 355 677H373L379 671V211H471V165H379V114Q379 73 379 66T385 54Q393 47 442 46H471V0H462ZM293 211V545L74 212L183 211H293Z" style="stroke-width: 3;"></path></g><g data-mml-node="mi" transform="translate(500,0)"><path 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xmlns="http://www.w3.org/1998/Math/MathML"><mn>4</mn><mi>M</mi><mi>h</mi><mi>o</mi><mi>u</mi><mi>s</mi><mi>e</mi><mi>o</mi><mi>n</mi><mi>l</mi><mi>y</mi><mi>c</mi><mi>o</mi><mi>l</mi><mi>l</mi><mi>a</mi><mi>t</mi><mi>e</mi><mi>r</mi><mi>a</mi><mi>l</mi><mi>p</mi><mi>o</mi><mi>s</mi><mi>t</mi><mi>e</mi><mi>d</mi><mo stretchy="false">]</mo><mo stretchy="false">(</mo><mi>h</mi><mi>t</mi><mi>t</mi><mi>p</mi><mi>s</mi><mo>:</mo><mrow data-mjx-texclass="ORD"><mo>/</mo></mrow><mrow data-mjx-texclass="ORD"><mo>/</mo></mrow><mi>w</mi><mi>w</mi><mi>w</mi><mo>.</mo><mi>n</mi><mi>o</mi><mi>b</mi><mi>s</mi><mi>b</mi><mi>i</mi><mi>t</mi><mi>c</mi><mi>o</mi><mi>i</mi><mi>n</mi><mo>.</mo><mi>c</mi><mi>o</mi><mi>m</mi><mrow data-mjx-texclass="ORD"><mo>/</mo></mrow><mi>s</mi><mi>b</mi><mi>f</mi><mo>−</mo><mi>b</mi><mi>o</mi><mi>n</mi><mi>d</mi><mo>−</mo><mi>o</mi><mi>v</mi><mi>e</mi><mi>r</mi><mi>s</mi><mi>t</mi><mi>a</mi><mi>t</mi><mi>e</mi><mi>d</mi><mrow data-mjx-texclass="ORD"><mo>/</mo></mrow><mo 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href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://decrypt.co/119695/feds-seize-about-700m-ftx-sam-bankman-fried-assets" target="_blank" class="external-link">Nearly $700M worth of assets linked to SBF & FTX seized by US</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/silvergate-bank-bank-run/" target="_blank" class="external-link">Major bitcoin banking partner 'Silvergate Bank' lost over $700M liquidating debt to cover $8.1B in withdrawals amid bank run</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>FTX and other companies controlled by its founder, Sam Bankman-Fried, accounted for about $1 billion of the bank's deposits.</li>
</ul>
<ul>
<li>The collapse of FTX sparked a run on Silvergate, forcing the bank to sell assets at a steep loss to cover some $8.1 billion in withdrawals.</li>
</ul>
<ul>
<li>Crypto-related deposits plunged 68% in the fourth quarter, the bank said in an early release of some quarterly results.</li>
<li>To satisfy the withdrawals, Silvergate liquidated debt it was holding on its balance sheet.</li>
<li>The $718 million it lost selling the debt far exceeds the bank's total profits since at least 2013.</li>
<li>The bank has laid off 40% of its staff, or about 200 employees, and said it would pare back its businesses.</li>
<li>It shelved a plan to launch its own digital currency, writing off $196 million it spent buying the technology that Facebook had built in its failed attempt to start a crypto-based payments network.</li>
<li>Crypto-related deposits account for some 90% of the bank's total, and it keeps almost all of its deposits in cash or easy-to-sell securities.</li>
</ul>
</li>
<li><a href="https://blog.bitfinex.com/announcements/el-salvadors-historic-digital-asset-securities-law-passes/" target="_blank" class="external-link">El Salvador passes Digital Asset Issuance legislation</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>El Salvador has announced the passing of its “Digital Asset Issuance” legislation that was proposed last November.</li>
<li>This new law establishes a legal framework around the issuance of digital assets and the broader crypto token classification, which includes every other type of digital asset in the crypto market besides Bitcoin.</li>
</ul>
<ul>
<li>This means that there is now a definitive regulatory framework for tokenised securities, altcoins, and businesses that wish to transact or offer services focused on digital assets other than Bitcoin.</li>
<li>The new digital asset regulatory framework would also establish a Bitcoin Fund Management Agency, which provides oversight and administration for public offerings of digital assets issued by the state of El Salvador and its institutions.</li>
<li>The Volcano Bond, which is more accurately described as Volcano Token, is a digital token which would help El Salvador to raise capital to pay down its sovereign debt, direct funds towards the creation of Bitcoin mining infrastructure, and fund the construction of “Bitcoin City”.</li>
<li>El Salvador’s Volcano Token is targeted to raise $1B and would be backed by the proceeds generated from its geothermal Bitcoin mining operation, which harnesses energy from the nation’s active volcanoes.</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/legal/brazil-enacts-bitcoin-payments-bill" target="_blank" class="external-link">Brazilian president signs bill regulating use of bitcoin as payment</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>Brazilian President Jair Bolsonaro on Thursday morning signed a bill into law that establishes a complete regulatory framework for the trading and use of bitcoin in the country, according to the federal government’s official journal (DOU).</li>
<li>As previously reported, the new rules recognize bitcoin as a digital representation of value that can be used as a means of payment and as an investment asset in the South American nation.</li>
</ul>
<ul>
<li>The new law, which goes into effect in mid-July, does not make bitcoin or any cryptocurrency a legal tender in the country.</li>
<li>The expectation is that the Central Bank of Brazil (BCB) will be in charge when bitcoin is used as payment, while the country’s securities and exchange commission (CVM) will be the watchdog when it is used as an investment asset.</li>
<li>The greater regulatory clarity given by the legislation encourages businesses to explore the burgeoning payment method more closely.</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/leaving-kazakhstan-bitcoin-mostly-green" target="_blank" class="external-link">The Kazakhstan mining exodus has flipped bitcoin to clean-energy dominance</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>At its peak, Kazakhstan was the second-largest Bitcoin mining nation on earth (~18.3% of the global hash rate in late 2021)</li>
<li>Kazakh authorities began putting pressure on miners in 3 waves:
<ul>
<li>A raid where equipment from 13 illegal mining farms was seized. The operations were estimated to be using over 200 megawatts (MW) of power.</li>
</ul>
<ul>
<li>A follow-up raid on remaining known illegal mining activities which seized assets from a further 106 mining operations.</li>
<li>The regulated curtailment of mining. Bitcoin mining can now only legally occur at the off-peak hours of midnight to 8:00 a.m. and on weekends: a reduction from 168 mining hours per week to only 64 mining hours per week.</li>
</ul>
</li>
</ul>
<ul>
<li>According to the author, even at the most bullish upper threshold, Kazakhstan now represents at best 6.4% of global hash rate.</li>
<li>Impact on global bitcoin mining energy mix
<ul>
<li>Kazakhstan's energy demand is fueled ~87.6% by fossil fuels</li>
<li>Less mining there means a higher clean energy mix for the Bitcoin network as a whole</li>
<li>Because Kazakhstan uses so much coal (a much heavier greenhouse-gas emitter than natural gas) the difference to emissions is even more significant.
<ul>
<li>At 18.3% of total hash rate, Bitcoin emissions would've been 36 metric tons of carbon dioxide equivalent C(MTCO2e).</li>
<li>But at current hashing levels, emissions are only 32.4 MtCO2e.</li>
<li>That's a 10% reduction in emissions.</li>
</ul>
</li>
<li>The result is that the miner exodus from Kazakhstan flipped the network to become a majority clean-energy user.</li>
</ul>
</li>
<li>According to the author's model, the Bitcoin network uses 4.7% more clean energy now than it did even just a year ago. The factors that have led to this are:
<ul>
<li>The exodus from Kazakhstan</li>
<li>The migration of Marathon’s remaining coal-based mining onto renewable supply</li>
<li>Continued migration toward mostly renewable-based, off-grid mining</li>
</ul>
</li>
<li>This trend shows no sign of abating. Based on the trendline, the network is set to use 4% more clean energy every year for the next three years.</li>
<li>This might be the fastest transition rate to renewables of any industry in the world.</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/legal/bitcoin-miner-core-scientific-bankruptcy" target="_blank" class="external-link">Bitcoin miner Core Scientific files for bankruptcy</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>One of the largest bitcoin mining companies in the U.S. has filed for Chapter 11 bankruptcy protection</li>
<li>"The filing of these cases was necessitated by a decline in the Company's operating performance and liquidity suffering from the prolonged decrease in the price of bitcoin, the increase in electricity costs necessary to power the Company's data centers, and the failure by certain of its hosting customers to honor their payment obligations," per the statement. "In response to these factors, the Company has actively taken steps to decrease monthly costs, delay construction expenses, reduce and delay capital expenditures and increase hosting profitability."</li>
</ul>
<ul>
<li>"During this process and upon emergence, the Company will continue to operate its existing self-mining and hosting operations, which remain significantly cash flow positive on a debt-free basis," per the statement. "The Company remains dedicated to providing hosting services and self-mining in its state-of-the-art data centers."</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/legal/doj-shuts-down-bitzlato-crypto-exchange" target="_blank" class="external-link">DOJ shuts down Bitzlato crypto exchange and arrests CEO for facilitating money laundering/criminal activity</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.nobsbitcoin.com/prime-trust-texas-issues/" target="_blank" class="external-link">Texan bitcoiners are losing access to Prime Trust-backed services at the end of January due to licensing issues</a>
<ul>
<li>Includes Swan, Fold, and other bitcoin brokerage services and exchanges</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/legal/new-hampshire-commission-recommends-bitcoin-mining" target="_blank" class="external-link">New Hampshire commission recommends statewide bitcoin mining energy plan</a></li>
<li><a href="https://www.technologyreview.com/2023/01/13/1066820/cryptocurrency-bitcoin-mining-congo-virunga-national-park/" target="_blank" class="external-link">Congo’s most famous national park starts mining bitcoin to bring in revenue</a></li>
<li><a href="https://www.prweb.com/releases/2023/1/prweb19127332.htm" target="_blank" class="external-link">Blockstream raises $125M to expand mining operations</a></li>
<li><a href="https://bitcoinmagazine.com/business/clover-integrates-bitcoin-lightning-with-strike" target="_blank" class="external-link">Strike announces 90-day trial period for Clover point-of-sale system lightning integration</a></li>
<li><a href="https://foldapp.com/api" target="_blank" class="external-link">Fold launches enterprise API to enable businesses to offer bitcoin reward and card programs</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-December/021275.html" target="_blank" class="external-link">Anthony Towns announced a new version of Bitcoin Inquisition</a>
<ul>
<li>Inquisition is a software fork of Bitcoin Core designed to be used on the default signet for testing proposed soft forks and other significant protocol changes</li>
<li>Version includes support for BIP 118 (ANYPREVOUT) and BIP 119 (CHECKTEMPLATEVERIFY) on regtest and signet</li>
</ul>
</li>
<li><a href="https://bitcoinops.org/en/newsletters/2023/01/11/#non-interactive-ln-channel-open-commitments" target="_blank" class="external-link">"Swap-in-Potentiam" proposal: non-interactive lightning channel open commitments</a></li>
<li><a href="https://bitcoinmagazine.com/technical/statechain-lightning-combined-in-bitcoin" target="_blank" class="external-link">Integrating statechains with lightning channels can allow for off-chain balancing and improved flexibility</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.nobsbitcoin.com/coinbase-pays-50m-to-ny-gov/" target="_blank" class="external-link">Coinbase pays $50M to NY government and promises to surveil users more</a></li>
<li><a href="https://bitcoinmagazine.com/business/coincorner-pouch-bring-send-globally-to-philippines" target="_blank" class="external-link">Coincorner partners with pouch to bring instant remittance payments to the Philippines utilizing bitcoin's lightning network</a></li>
<li><a href="https://bitcoinmagazine.com/technical/what-makes-nostr-a-different-social-platform" target="_blank" class="external-link">Bitcoiners are flocking to Nostr, but what makes it different?</a></li>
<li><a href="https://www.nobsbitcoin.com/lastpass-hacked-sensitive-data-stolen/" target="_blank" class="external-link">LastPass customer vault data stolen in cloud storage breach - data vulnerable to master password bruteforce</a>
<ul>
<li>If you use LastPass, change your master password immediately - safest bet is to change any other passwords stored in your LastPass vault too</li>
</ul>
</li>
</ul>
Socratic Seminar 18
2023-05-20T11:01:53.122Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-18/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-17/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-19/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout
<ul>
<li>Hawaii Technology Development Corporation</li>
<li>Entrepreneurs Sandbox</li>
</ul>
</li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li>
<p><a href="https://www.cbsnews.com/news/sam-bankman-fried-arrested-bahamas-ftx-fraud-charges/" target="_blank" class="external-link">Former FTX CEO Sam Bankman-Fried arrested in Bahamas</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li><em>See "Everyone's a Scammer" section under optional topics for other crypto-related drama in the wake of the FTX blowup</em></li>
<li><strong>Recap/Background</strong>
<ul>
<li>FTX was one of the world's largest cryptocurrency exchanges before it collapsed last month.</li>
</ul>
<ul>
<li>Users withdrew roughly $5 billion of crypto assets in a single day as concerns mounted over the exchange's solvency.</li>
<li>Bankman-Fried resigned on November 11 and FTX filed for Chapter 11 bankruptcy protection.</li>
<li>John Ray III, who took over as FTX CEO, said in court documents the following week, "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."</li>
</ul>
</li>
<li>Bankman-Fried's arrest "followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition," the Office of the Attorney General of the Bahamas said in a statement</li>
<li>The grand jury indictment charged SBF with seven counts, including wire fraud and conspiracy to commit wire fraud against lenders and customers, conspiracy to commit securities fraud, conspiracy to commit money laundering, and violations of campaign finance laws.</li>
<li>The Securities and Exchange Commission said following news of the arrest that it had "authorized separate charges relating to Bankman-Fried's violations of securities laws."
<ul>
<li>The SEC complaint alleges that Bankman-Fried diverted customer funds from FTX to Alameda Research and used that money for "fraudulent" purposes, including real estate purchases and big political donations.</li>
</ul>
</li>
<li>The court documents also accused Bankman-Fried and FTX of failing to accurately account for the value of FTX's crypto assets and of disorganized management of FTX's cash holdings.</li>
<li>Bankman-Fried's arrest comes one day before he had been expected to testify at a House hearing on the crypto exchange's collapse.</li>
</ul>
</li>
<li>
<p><a href="https://www.coincenter.org/the-digital-asset-anti-money-laundering-act-is-an-opportunistic-unconstitutional-assault-on-cryptocurrency-self-custody-developers-and-node-operators/" target="_blank" class="external-link">Coin Center response to the Digital Asset Anti-Money Laundering Act introduced by Senators Warren and Marshall</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li><a href="https://www.btcpolicy.org/articles/senator-warrens-misguided-war-on-self-custody-of-digital-assets" target="_blank" class="external-link">BTC Policy Institute: "Senator Warren’s Misguided War on Self-Custody"</a></li>
<li><a href="https://bitcoinmagazine.com/legal/sen-warren-unconstitutional-crypto-bill" target="_blank" class="external-link">Opinion piece on how this bill proposes unconstitutional privacy restrictions for bitcoin users</a></li>
<li>"An opportunistic, unconstitutional assault on cryptocurrency self custody, developers, and node operators"</li>
<li>The bipartisan Digital Asset Anti-Money Laundering Act, introduced by Sens. Warren and Marshall, is the most direct attack on the personal freedom and privacy of cryptocurrency users and developers we’ve yet seen.</li>
<li><strong>What it does</strong>
<ul>
<li>The bill seeks to <strong>designate developers of “unhosted wallets” (aka “self-hosted”/non-custodial wallets), miners, and node operators as Money Service Businesses</strong> or MSBs
<ul>
<li>Subjects them to burdensome, expensive, and unnecessary state-by-state licensing and reporting requirements that are impossible for software providers to comply with in many cases.</li>
</ul>
</li>
</ul>
<ul>
<li><strong>As MSBs, they would be obligated to</strong>:
<ul>
<li>identify and record the personal information of every person who uses their software or sends transactions over their internet-connected computers,</li>
<li>develop risk-calibrated AML programs that block persons from using their software or network throughput if they suspect those people are moving funds related to crime, and</li>
<li>file reports about their users without a warrant, government request, or probable cause as the trigger.</li>
</ul>
</li>
<li>Additionally, these MSBs would be banned from making any transactions involving privacy tools (e.g. Tornado Cash or similar privacy software) or privacy preserving cryptocurrencies (e.g. Zcash, Monero, etc.), irrespective of any evidence of criminality related to those transactions.</li>
</ul>
</li>
</ul>
<ul>
<li><strong>The consequences</strong>
<ul>
<li>The bill has been <strong>deliberately crafted to make permissionless blockchains unavailable to Americans by forcing all validators and developers of these networks to gate and surveil their infrastructure</strong>.</li>
<li>The intended result is to <strong>forbid Americans from having any technological guarantees of personal privacy or individual agency when making transactions online</strong>, irrespective of whether those transactions have anything to do with crime.</li>
<li>To the extent cryptocurrencies could even continue to exist in a world where this bill becomes law, Americans’ ability to use them would be limited to a fully permissioned and surveilled environment.</li>
<li>This bill is focused exclusively on financial surveillance and <strong>does not address any of the issues of corporate control that led to the collapse of FTX</strong>.
<ul>
<li>Perversely, this bill <strong>would effectively outlaw self-custody</strong>, which is the only way for consumers to protect themselves from this kind of counterparty risk exemplified in the FTX collapse.</li>
<li>If 2022 has taught us anything about consumer protection in the crypto industry, it is that digital asset investors should take extreme caution before turning over custody of their assets to “trusted third parties.”
<ul>
<li>Firms like FTX, BlockFi, Celisius, and Voyager have a habit of going bust and losing customer deposits due to fraud or poor risk management.</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>If passed, the bill would face harsh constitutional scrutiny from the courts:</strong>
<ul>
<li>The MSB classification of network infrastructure operators infringes on the First Amendment (<em>free speech</em>)
<ul>
<li>Attempts at regulating the writing of software have been struck down by U.S. courts <a href="https://brownpoliticalreview.org/2022/03/decoding-speech/#:~:text=City%20Studios%2C%20Inc.-,v.,is%20unrelated%20to%20constitutional%20inquiry." target="_blank" class="external-link">numerous times</a> in the past</li>
<li>The attempt at restricting the <strong>development of non-custodial wallets</strong> would constitute a regulation of public-private key cryptography, which, too, <a href="https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=1212&context=uclf" target="_blank" class="external-link">has been attempted before and struck down</a> due to violation of the first amendment of the U.S. constitution.
<ul>
<li>Non-custodial wallets transmit bitcoin the currency as much as the key to one’s door moves the house around. Non-custodial wallets function as signing devices, which transfer the <em>access rights</em> to bitcoin — while the asset itself never moves.</li>
</ul>
</li>
<li><strong>Bitcoin nodes</strong> do not secure third-party transactions. They validate their own version of the blockchain against copies obtained through other nodes in the network. Nodes neither secure nor transmit third-party transactions. No other user’s funds are affected if a Bitcoin node goes down.
<ul>
<li>The attempt of ruling Bitcoin node operators as money transmitters can therefore be seen as the <strong>attempt at regulating which individuals are allowed to compare information</strong>. Again, the proposed bill doesn't sufficiently prove that the scope is narrow enough to avoid infringing on aspects of free speech and the freedom of information.</li>
</ul>
</li>
<li>A <strong>bitcoin miner</strong> is just a computer that runs certain software.
<ul>
<li>In no scenario does a bitcoin miner transmit bitcoin from A to B. Rather, a <strong>bitcoin miner propagates blocks of information to the network</strong>.</li>
</ul>
</li>
<li>Additionally, the bill would make it impossible for users of these networks to make anonymous payments, including donations to political organizations and potentially other payments or messages that are essential to effective political assembly and therefore also protected under the First Amendment.</li>
</ul>
</li>
<li>Could also infringe on the Fourth Amendment (<em>unreasonable search and seizure</em>)
<ul>
<li>The bill effectively deputizes software developers and miners to collect and report private information, without a warrant, about cryptocurrency users even though that information is not voluntarily disclosed by those users or in any way relevant to the business purpose of the developer or miner.</li>
</ul>
</li>
</ul>
</li>
<li>Ultimately, physical cash is a fundamental pillar of free societies because it preserves and enables the capability of transacting directly, citizen to citizen, without the need for approval from some corporation or state bureaucracy.
<ul>
<li>Bitcoin is the only way to maintain those characteristics in digital space</li>
<li>This kind of regulation is impossible to enforce and would just put Americans at a disadvantage</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/legal/eu-to-force-crypto-reports-of-user-holdings" target="_blank" class="external-link">EU to force crypto companies to report their users’ holdings to tax authorities</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>The European Union indicated Thursday that it will make cryptocurrency companies report their European users’ holdings to tax authorities.</li>
<li>The new law, inspired by international standards <strong>designed to curb crypto tax evasion</strong>, could also <strong>apply to stablecoins, derivatives and non-fungible tokens (NFT), and force even non-EU based crypto providers to register within the bloc</strong>, the document reveals.</li>
<li>Under the plans, crypto asset providers would have to collect and verify information about their users such as <strong>names, addresses, social security numbers and dates of birth</strong>, which would then be sent to the tax authorities in the user’s country of tax residence.</li>
<li>In a statement, the EU Commissioner for tax, Paolo Gentiloni said, “Anonymity means that many crypto-asset users making significant profits fall under the radar of national tax authorities. This is not acceptable.”</li>
<li>The enforcement of the measures was not made entirely clear, as the cryptocurrency industry has various entities and actors residing in various jurisdictions, including some who claim no base of operations.
<ul>
<li>When asked how the EU will enforce the measures on companies outside the bloc, Gentiloni told reporters, “We will work on that. What counts for us is that EU residents are targeted by these measures,” even if they use crypto providers from elsewhere, he said.</li>
</ul>
</li>
<li>The EU has said it believes the move could <strong>generate as much as $2.5 billion (2.4 billion euros)</strong> through the introduction of the directive.</li>
<li>Forcing companies to provide European tax authorities — including companies based outside of the EU — once again <strong>forces firms to collect copious amounts of data exposing user holdings, and then transmit them to tax authorities in Europe whom they must trust to keep them safe</strong>.</li>
</ul>
</li>
<li>
<p><a href="https://www.bis.org/bcbs/publ/d545.pdf" target="_blank" class="external-link">Bank of International Settlements (BIS) committee finalizes policy proposal about standardizing digital asset exposure limits for banks</a></p>
<ul>
<li><a href="https://www.btctimes.com/news/bank-for-international-settlements-finalizes-policy-with-2-cryptoasset-exposure-cap" target="_blank" class="external-link">Bank for International Settlements finalizes policy with 2% cryptoasset exposure cap</a></li>
<li>Policy proposed by the Bank for International Settlements’ (BIS) Basel Committee on Banking Supervision
<ul>
<li>The policy has the support of the Basel Committee’s supervisory body, the Group of Central Bank Governors and Heads of Supervision (GHOS).</li>
<li>The framing is to protect banks from overexposure to cryptoassets</li>
</ul>
</li>
<li><strong>Key points</strong>:
<ul>
<li>Dropped clause from a previous proposal to penalize the use of permissionless blockchains</li>
<li>Endorsed capital rules for banks globally that enable holding up to 2% of Tier 1 capital in bitcoin/Group 2 cryptoassets</li>
</ul>
</li>
<li>Tier 1 capital refers to a bank’s core capital, which is kept in its reserves and utilized to finance its clients’ commercial activities. Along with declared reserves and a few other assets, it also includes common stock.</li>
<li>Bitcoin would fall under the policy’s Group 2 crypto asset class as an “unbacked cryptoasset.”</li>
<li>The policy also mentions that “a bank’s total exposure to Group 2 cryptoassets should not generally be higher than 1% of the bank’s Tier 1 capital and must not exceed 2% of the bank’s Tier 1 capital.”</li>
<li>Chair of the GHOS Tiff Macklem <a href="https://www.bis.org/press/p221216.htm" target="_blank" class="external-link">stated</a> "Today’s endorsement by the GHOS marks an important milestone in developing a global regulatory baseline for mitigating risks to banks from cryptoassets. It is important to continue to monitor bank-related developments in cryptoasset markets. We remain ready to act further if necessary."</li>
<li>Even though a 2% cap is low, the proposal provides some regulatory clarity that might entice banks to consider exploring bitcoin as an option</li>
</ul>
</li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li>Bitnob partnerships enabling LN-based remittances in Africa
<ul>
<li><a href="https://bitcoinmagazine.com/business/strike-launches-instant-african-remittances" target="_blank" class="external-link">Strike enables instant, cheap remittances for people in Nigeria, Kenya, and Ghana</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>The remittances service is initially enabling people in Nigeria, Kenya and Ghana to receive money from the U.S. and instantly convert it to their local currency.</li>
<li>The feature is made possible thanks to a partnership between Strike and local Bitcoin app Bitnob</li>
<li>“Now, using Lightning rails under the hood, Strike’s Send Globally feature provides users in the U.S. a cheaper, faster, and more innovative way to instantly send payments to Africa,” per the statement. “Payments are instantly converted into naira, cedi, or shillings, and deposited directly into a recipient’s bank, mobile money, or Bitnob account.”</li>
<li>Only requires a phone number from someone in Africa</li>
</ul>
</li>
<li><a href="https://blog.coincorner.com/coincorner-partners-with-bitnob-to-facilitate-cross-border-transactions-from-uk-and-europe-to-3c5b6f059622" target="_blank" class="external-link">CoinCorner partners with Bitnob to facilitate cross-border transactions from UK and Europe to Africa</a>
<ul>
<li>Basically the same setup as the Strike <> Bitnob partnership</li>
<li>UK citizens can send Bitish pounds (GBP) or Euros (EUR) to transfer funds freely and instantly to Nigeria, Kenya, and Ghana via the Lightning Network
<ul>
<li>Funds end up as Nigerian naira (NGN), Kenyan shilling (KES), or Ghanaian cedi (GHS) in a local bank account or mobile money wallet</li>
<li>GBP/EUR in the UK --> LN --> NGN/KES/GHS in Africa</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li>
<p><a href="https://bitcoincore.org/en/releases/24.0.1/" target="_blank" class="external-link">Bitcoin Core version 24.0.1 released</a></p>
<ul>
<li>Includes the new <code>mempoolfullrbf</code> configuration option which allows users to change the policy their individual node will use for relaying and mining unconfirmed transactions.</li>
<li>The option defaults to the same policy that was used in previous releases and no changes to node policy will occur if everyone uses the default.</li>
<li><a href="https://fullrbf.mempool.observer/" target="_blank" class="external-link">Mempool observer tool to view recent full-RBF replacement events</a></li>
<li>Note: a version 24.0 was tagged and had its binaries released, but project maintainers never announced it and instead worked with other contributors to resolve <a href="https://github.com/bitcoin/bitcoin/milestone/59?closed=1" target="_blank" class="external-link">some last-minute issues</a>, making this release of 24.0.1 the first announced release of the 24.x branch.</li>
</ul>
</li>
<li>
<p><a href="https://www.businesswire.com/news/home/20221206005695/en/Ledger-Launches-Ledger-Stax-Designed-by-Tony-Fadell" target="_blank" class="external-link">Ledger launches Stax hardware wallet</a></p>
<ul>
<li>Will start shipping by the end of March 2023 - available for pre-order now</li>
<li>Will eventually be available at Best Buy stores like other Ledger products</li>
<li>Designed by Tony Fadell, the inventor of the iPod and co-creator of the iPhone.</li>
<li>The Ledger Stax will have a large e-ink touch screen
<ul>
<li>A lot of screen space to make use of</li>
<li>E-ink is low-powered, so a full charge can last for months if the device is left unused</li>
</ul>
</li>
<li>It can connect to the Ledger Live mobile app on your phone via Bluetooth or to a computer via USB-C.
<ul>
<li>Looks like no QR or NFC capabilities</li>
</ul>
</li>
<li>Uses the same secure element chip to store secrets as other Ledger devices (proprietary - have to trust Ledger)
<ul>
<li>"Trusted display" screen is operated by the secure element chip itself, so you can "operate a transaction knowing that what you see is what you sign"</li>
</ul>
</li>
<li>The device body has "embedded magnets for stackability"
<ul>
<li>Interesting that they're encouraging keeping multiple devices stacked together in the same hiding spot</li>
<li>Can still use different PINs for each device, but it's generally safest to assume that if someone finds the device and has the right tools, they can eventually crack it</li>
<li>Contrary to the idea of geographically distributed multisig</li>
</ul>
</li>
<li>It's set to launch next year and will be priced at $279, a markup from its Ledger Nano X, which currently retails at $149.</li>
<li>Ledger Stax will be available by the end of March 2023. You can pre-order today on <a href="http://ledger.com/" target="_blank" class="external-link">Ledger.com</a>. In the future, it will also be available from select retailers such as BestBuy in the United States.</li>
</ul>
</li>
<li>
<p><a href="https://www.nobsbitcoin.com/jack-dorsey-provides-14-bitcoin-grant/" target="_blank" class="external-link">Jack Dorsey provides 14 bitcoin grant (~$250k) to open source distributed communication protocol 'nostr' with goal of censorship-resistant Twitter replacement</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li><a href="https://twitter.com/fiatjaf/status/1604219643975057408" target="_blank" class="external-link">@fiatjaf splits grant with @jb55 to enable 2 competing foundations pushing Nostr development</a></li>
<li>2 days later: <a href="https://www.nobsbitcoin.com/twitter-announces-policy-banning-promotion-of-other-social/" target="_blank" class="external-link">Twitter announces policy banning promotion of other social platforms: Facebook, Instagram, Mastodon, Truth Social, Tribel, Post and Nostr</a></li>
<li>Nostr refresher:
<ul>
<li>Nostr aims to be the simplest open protocol that is able to create a censorship-resistant global "social" network once and for all.</li>
</ul>
<ul>
<li>It doesn't rely on any trusted central server, hence it is resilient; it is based on cryptographic keys and signatures, so it is tamperproof; it does not rely on P2P techniques, therefore it works.</li>
<li>Everybody runs a client. It can be a native client, a web client, etc. To publish something, you write a post, sign it with your key and send it to multiple relays (servers hosted by someone else, or yourself). To get updates from other people, you ask multiple relays if they know anything about these other people. Anyone can run a relay. A relay is very simple and dumb. It does nothing besides accepting posts from some people and forwarding to others. Relays don't have to be trusted. Signatures are verified on the client side.</li>
</ul>
</li>
</ul>
<ul>
<li>Dorsey found out about Nostr and was able to get funds distributed to fiatjaf in ~24 hours</li>
<li>Both groups are developing bounties for building various Nostr tools/apps (or to further the protocol itself)</li>
</ul>
</li>
<li>
<p><a href="https://www.nobsbitcoin.com/coinkite-releases-binarywatch-hub-tracks-popular/" target="_blank" class="external-link">Coinkite launches 'BinaryWatch' Hub: tracks popular bitcoin software signature verification</a></p>
<ul>
<li>The <a href="https://binarywatch.org/" target="_blank" class="external-link">BinaryWatch.org</a> website checks binaries from Bitcoin-related projects and monitors for any changes - will sound the alarm if signature verification fails</li>
<li>Best practice for software releases is to include GPG signatures to verify that the maintainers of the software are the ones that compiled and released the binary
<ul>
<li>This prevents a man in the middle attack where an attacker replaces a software release with a malicious version</li>
</ul>
</li>
<li>User can and should verify GPG signatures themselves, but this hub automates the process</li>
<li>BinaryWatch follows these projects currently:
<ul>
<li>bitcoin_core, blockclock, coldcard, green_qt, joinmarket, lnd, core_ln, electrum, sparrow, specter, wasabi</li>
<li>Other projects can request to be added by emailing <a href="mailto:csumchecker@coinkite.com" target="_blank" class="external-link">csumchecker@coinkite.com</a></li>
</ul>
</li>
<li>Coinkite also operates <a href="https://bitcoinbinary.org/" target="_blank" class="external-link">bitcoinbinary.org</a> a service that archives <a href="https://bitcoinops.org/en/topics/reproducible-builds/" target="_blank" class="external-link">reproducible builds</a> for Bitcoin-related projects.</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/technical/dlcs-on-lightning-and-bitcoin-smart-contracts" target="_blank" class="external-link">First successful discreet log contract has been executed on the Lightning Network</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>A Discreet Log Contract (DLC) is a special type of bitcoin transaction that executes a smart contract with information provided by an oracle
<ul>
<li>These can be used trigger a variety of conditional payments (sports bets, wagering on the price of bitcoin, the temperature on a particular day, etc.)</li>
</ul>
</li>
<li>To date, one of the things limiting DLCs from hitting a critical tipping point is the fact that they have only been conducted on chain
<ul>
<li>In a high-fee environment, many DLCs might be priced out</li>
</ul>
</li>
<li>The Crypto Garage team announced that they successfully opened and closed a Lightning channel with an embedded DLC channel on mainnet.
<ul>
<li>Per their blogpost, it looks like the Crypto Garage team forked the Lightning Development Kit to add support for splitting a Lightning channel, which has enabled them to create a DLC channel within a Lightning channel.</li>
<li>From there, they were able to create special transactions — a split transaction and a glue transaction — that would enable the different parties engaged in a DLC to update the state of their contract within the Lightning channel and the DLC channel without giving one of the parties an unfair advantage, which was one of the big design challenges that was previously unsolved. This is a massive step in the right direction.</li>
</ul>
</li>
</ul>
<ul>
<li>With that being said, the Crypto Garage team is warning that this implementation is in its very early days and should not be considered stable.
<ul>
<li>In fact, they warn that you are likely to lose your sats if you try to execute this on mainnet.</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://hackmd.io/@anonsats/SJDzzRR4i" target="_blank" class="external-link">Anonsats: Privacy-focused Chaumian ecash payment system built on Bitcoin, Lightning, and Cashu</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Anonsats is a Chaumian ecash payment and settlement system built on Bitcoin, Lightning, and Cashu.
<ul>
<li>Cashu is the final piece of the puzzle, a Chaumian mint component, that, together with Bitcoin and Lightning, has the promise of becoming an unstoppable and untraceable global digital cash payment and settlement network.</li>
</ul>
</li>
<li>Anonsats is an experimental attempt to give you much better financial privacy in the digital world</li>
<li>Presently, the project is available intermittently through transient and ephemeral deployment instances. But as things progress anonsats will be deployed as a production service.</li>
<li>Anonsats is built on the shoulders of giants and fundamental concepts:
<ul>
<li>Bitcoin uses unspent transactions, known as UTXOs</li>
<li>Traditional financial systems (including Ethereum) use Account Balances</li>
<li>Anonsats, with the help of Cashu, used Blinded Promises</li>
</ul>
</li>
</ul>
<ul>
<li>Blinded promises represent the major next advance toward total financial privacy.
<ul>
<li>Although in existence for decades, blinded promises combined with Bitcoin/Lightning payment/settlement network enable global scalability</li>
<li>What's fundamentally unique about blinded promises is that while they are in circulation (as tokens, coins, etc.), there is absolutely no record of their existence</li>
<li>Only when a blinded promise is presented for redemption, the mint can cryptographically confirm that they are good for the money.</li>
</ul>
</li>
<li>Anonstats tries to combine everything to give the use best of all worlds:
<ol>
<li>a custodial wallet for newbies who only care about having a Lightning address</li>
<li>a method for more sophisticated users to easily convert online sats into negotiable tokens (Cashu tokens)</li>
<li>a way to conduct offline payments (they are actually deferred redemptions) where either the payer or payee don’t have access to reliable internet</li>
</ol>
</li>
</ul>
<ul>
<li>So in the end, whether you call them ‘tokens’ or ‘coins’ (techically, they are signed blinded secrets that represent a promise from the mint), they can be stored and circulated independently of the issuing mint.</li>
<li>The tokens, are like physical bank notes, they have an independent, self-contained and UNTRACEABLE existence. They are a BEARER instrument. In fact, through the magic of cryptography, there is no NO RECORD of their existence while they are in circulation. Only when they are redeemed are they checked for a double-spend condition, and another UNTRACEABLE token is issued.</li>
<li>An anonsat token can be simple text file, stored via NOTEPAD.exe. It can be QR code jpg file that is stored and scanned when it is used. It can be on a printed piece of paper, JUST LIKE A BANK NOTE! Only when the receiver redeems the coin, is there a secure blinded transaction back to the mint to redeem and to issue a new token to the subsequent holder (e.g., merchant)</li>
<li>Each Cashu mint, is its own independence instance. This is not a federation, but rather a competitive participant in a standards-based adverse clearing and settlement system</li>
<li>Anonsats abstracts the multi-mint instances away from the user to make it seamless. If a user gets nervous about a particular Cashu mint, they can immediately withdraw their sats to Lightning/Bitcoin and/or transfer them to a more trustworthy Cashu mint instance.</li>
<li>Every managed Cashu wallet automatically supports all of the mints that are a member of the trusted keyset</li>
<li>Finally, anonsats is ultimately backed by Bitcoin. If a user wishes, they can clear out their anonsats tokens via a Lightning invoice, and do final settlement on the Bitcoin blockchain.</li>
<li>Anonsats is a Layer 3 application, so there is some trust. It is a custodial wallet, yet it can be burned in a moment’s notice. But what you get in return is a massive increase in privacy and a custodial wallet that works across many trusted mints</li>
</ul>
<ul>
<li>Anonsats, in turn, has to trust a set of Chaumian mints that have promised to stay available online and willing to redeem Cashu tokens. A list of trusted keysets is being maintained, which reflects the set of trusted mints within the ecosystem.</li>
<li>The real power is when the user realizes that they can clear out these sats however they wish, to a BTC wallet or to a fiat currency of their own choosing.
<ul>
<li>Even better, if another app is using anonsats, they will be able to easily transact their sats to another anonsats app for use and redemption without penalty or restrictions.</li>
</ul>
</li>
<li>Nothing is ever perfect privacy, but anonsats, if they are used within an app context or between anonsat holders, never touch a chain or channel.
<ul>
<li>Of course, there risk for surveillance within the app itself, but when transacting outside of an app, there is an extra layer of privacy afforded by the Chaumian mints (blinded signatures).</li>
</ul>
</li>
<li>Think of anonsats as your personal secret stash of sats for fully anonymous transactions that, when the time is right, can be cashed out on the open settlement networks (i.e., BTC/LN).</li>
</ul>
</li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li>
<p>Mining in a bear market</p>
<ul>
<li><a href="https://hashrateindex.com/blog/how-does-the-current-bitcoin-mining-bear-market-compare-to-previous-ones/" target="_blank" class="external-link">How does the current bitcoin mining bear market compare to previous ones?</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-miner-capitulation-could-set-price-bottom" target="_blank" class="external-link">Further analysis of the bear market impact on miners</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://coinmetrics.substack.com/p/state-of-the-network-issue-185" target="_blank" class="external-link">Coin Metrics' State of the Network’s Q4 2022 Mining Data Special</a></li>
<li><strong>Current state of the mining industry in Q4 2022:</strong>
<ul>
<li>Bitcoin hash rate continued to push higher throughout most of Q4 in spite of a subdued spot BTC price</li>
<li>Hash rate hit as high as 250 EH/s (quintillion hashes per second) in late October, an all-time high</li>
<li>Hash rate had grown throughout the summer as publicly-traded Bitcoin miners continued to add capacity via mining rigs pre-ordered during the bull market.</li>
<li>There’s a potentially interesting explanation behind the late September and October rise in hash rate: <a href="https://coinmetrics.io/special-insights/ethereum-merge/" target="_blank" class="external-link">The Ethereum Merge</a>.
<ul>
<li>The end of Ethereum mining likely incentivized operators to repurpose industrial rack space, swapping out GPUs used to mine Ethereum with ASICs used to mine Bitcoin. It’s hard to put an exact figure on the magnitude of this resource reallocation, but Bitcoin hash rate grew quickly from 220 EH/s to 250 EH/s shortly after the completion of The Merge in September</li>
</ul>
</li>
<li>Bitcoin’s mining difficulty decreased by more than 7% recently, the biggest decrease since miners <a href="https://medium.com/coinmetrics/bitcoin-miners-are-escaping-china-d3937e8f018c" target="_blank" class="external-link">abruptly exited China</a> in spring 2021.
<ul>
<li>The stagnation in hash rate is a sign that miners are facing a new round of challenges amid wary market conditions</li>
</ul>
</li>
</ul>
</li>
<li><strong>Comparison to previous bear markets:</strong>
<ul>
<li>At the end of 2020, one of the most profitable periods in bitcoin mining's history began.
<ul>
<li>It lasted until early 2022, when a lethal combination of a falling bitcoin price and growing hashrate pushed mining economics down to depressing levels.</li>
</ul>
</li>
<li>Article defines a bitcoin mining bear market as a sustained period with revenue per kWh of less than $0.25, using the most energy-efficient machine on the market.</li>
<li>Although the current bear market is devastating for those with high operating costs and elevated debt levels, mining economics were significantly worse and stayed depressed for much longer during the previous bear market.
<ul>
<li>From a profitability perspective, the current bitcoin mining bear market has not been as bad as the previous ones, as the revenue per kWh was significantly lower in 2020.</li>
</ul>
</li>
<li>Still, when it comes to capital destruction, no other bear market even comes close to the current one.</li>
<li>During previous bear markets, most bitcoin mining companies were privately funded, limiting the amount of outside capital in the industry.
<ul>
<li>At that time, most bitcoin miners organically financed their operations using cash flows from operations.</li>
</ul>
</li>
</ul>
<ul>
<li>The private nature of the industry changed abruptly in late 2020 when an army of bitcoin miners started going public to take advantage of some of the hottest stock market conditions in modern history.</li>
<li>Most of these companies have raised enormous amounts of equity during this period and significantly diluted shareholders.
<ul>
<li>Therefore, most investors who bought these stocks even in late 2020, before the bull market, are significantly underwater with their investments.</li>
</ul>
</li>
<li>A handful of public bitcoin miners are now close to bankruptcy as the depressed mining economics render them unable to generate sufficient operating cash flow to service debt.</li>
</ul>
</li>
</ul>
<ul>
<li><strong>Factors that could contribute to an extended bear market:</strong>
<ul>
<li>A substantial mining capacity is waiting to come online, and the hashrate will likely not stop growing until well into 2023. This hashrate addition will keep putting downward pressure on mining economics for the foreseeable future.</li>
<li>Both retail and institutional investors who got in during the previous bull run have been wrecked, and it takes time before outsiders are ready to invest in the sector again.</li>
<li>In addition, the crypto industry's reputation has gotten severely harmed by the FTX scandal, which will further prevent new investors from coming in.</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://blog.river.com/what-could-bitcoin-mining-look-like-at-one-zettahash/" target="_blank" class="external-link">River report: "What Could Bitcoin Mining Look Like at One Zettahash?"</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>1 zettahash (1 sextillion hashes) per second would be ~300% increase from today's levels</li>
<li>River believes there are 3 categories of requirements to support a zettahash in hashrate, or any future grown in hashrate at all:
<ul>
<li>Security budget (Bitcoin's price, transaction fees, and developer funding)</li>
<li>Mining equipment (mining rigs, efficiency improvements, and manufacturing)</li>
<li>Energy (energy supply and grid infrastructure)</li>
</ul>
</li>
<li>The report examines whether each category could become a potential bottleneck to hashrate growing to 1 zettahash:
<ul>
<li><strong>Security budget</strong>
<ul>
<li><strong>Conclusion</strong>
<ul>
<li>Bitcoin's usage and price will need to increase significantly to support that hashrate growth</li>
</ul>
</li>
</ul>
</li>
<li><strong>Mining equipment</strong>
<ul>
<li><strong>Conclusions</strong>
<ul>
<li>An overall production rate of a few hundred thousand ASICs per year is not an issue, unless major geopolitical tensions arise</li>
<li>Consistent efficiency improvements are historically proven, but this is no guarantee that they will continue in the future.
<ul>
<li>Supply chains and frequent technological breakthroughs are all unpredictable factors</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>Energy</strong>
<ul>
<li><strong>Conclusions</strong>
<ul>
<li>There is an abundance of cheap energy in the world in places with low demand
<ul>
<li>Unlocking access to this energy is a bottleneck</li>
</ul>
</li>
<li>Bitcoin mining can help reduce global warming by being the ideal customer to combust vented methane gas when it cannot be economically captured</li>
<li>Bitcoin mining can act as one of many tools to help stabilize energy grids as they ramp up their reliance on renewable energy</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://nakamotoinstitute.org/mempool/everyones-a-scammer/" target="_blank" class="external-link">Everyone's a Scammer</a> (Hold your own keys!)
<ul>
<li><a href="https://www.nobsbitcoin.com/digital-currency-group-owes-gemini-users-900m-amid-genesis-insolvency/" target="_blank" class="external-link">Digital Currency group owes Gemini users $900m amid Genesis insolvency</a></li>
<li><a href="https://www.forbes.com/sites/johnhyatt/2022/12/16/crypto-exchange-gemini-modifies-terms-and-services-as-gemini-dollar-its-own-stablecoin-gets-caught-in-market-contagion/" target="_blank" class="external-link">Gemini modifies terms of service as Gemini Dollar stablecoin gets caught in market contagion</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/business/assessing-binance-reserves-and-liabilities" target="_blank" class="external-link">Assessing Binance reserves and liabilities</a></li>
<li><a href="https://www.nobsbitcoin.com/sbf-secretly-funded-the-block-news-org/" target="_blank" class="external-link">SBF secretly funded 'The Block' news organization: CEO Michael Mccaffrey used Alameda money to buy out other investors, becoming the majority shareholder himself</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/legal/heres-whats-in-brazils-crypto-bill" target="_blank" class="external-link">Brazil approves bill regulating use of bitcoin as payment</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/legal/nigeria-looking-to-legalize-bitcoin" target="_blank" class="external-link">Nigeria looking to legalize the usage of bitcoin and cryptocurrencies</a></li>
<li><a href="https://www.btctimes.com/news/japans-largest-power-company-will-mine-bitcoin-with-excess-energy" target="_blank" class="external-link">Japan’s largest power company will mine bitcoin with excess energy</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://blog.blockstream.com/core-lightning-v22-11-alameda-yield-generator/" target="_blank" class="external-link">Core Lightning v22.11: "Alameda Yield Generator"</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>Named by Alex Myers</li>
<li><strong>Key features:</strong>
<ul>
<li><code>reckless</code> is a new plugin manager that you can use to install and uninstall plugins with a single command.
<ul>
<li>CLN has always emphasized extensibility and customizability through plugins</li>
<li>Installing and managing plugins required manual work (cloning code, installing dependencies, and updating configuration files)</li>
<li><code>reckless</code> is a tool that handles all those steps for you and does so in a way that helps avoid common problems (missing dependencies, wrong paths, missing permissions, etc.)</li>
<li>It also adds a way for node operators to easily search for and install plugins from the community repository</li>
</ul>
</li>
</ul>
<ul>
<li><code>autoclean</code> has become much more powerful and efficient, especially for larger nodes.
<ul>
<li>The autoclean plugin learned some new tricks on performance optimization and has become significantly faster</li>
<li>It can now automatically delete old forwards, payments and invoices based on parameters such as age or status. By batching those operations, the execution became way more efficient and time-saving.</li>
<li>For some operators this lead to a shave of several hundreds of megabytes from their databases, executed in a fraction of the time it would have taken before</li>
</ul>
</li>
<li>A new <code>filter</code> API can be used to extract only fields you are interested in from most JSON-RPC commands
<ul>
<li>Could massively reduce the size of results if only part of the response is required</li>
</ul>
</li>
</ul>
</li>
</ul>
<ul>
<li>Updated versioning scheme to be date-based instead of time-based
<ul>
<li>Any change in the public APIs is marked as deprecated and will remain functional for six months or two releases after the deprecation has started</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://lightningprivacy.com/en/introduction" target="_blank" class="external-link">New Lightning Network privacy research</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>Split findings into three chapters:
<ul>
<li>In the Routing Analysis chapter we investigate ways in which other nodes on the network can compromise sender and receiver privacy by participating as one or more hops on a payment route. Some of the mitigations we explore include PTLCs, Timing Delays, and Multi-Path Payments.</li>
<li>In the Channel Coinjoins chapter we look into the on-chain connection to Lightning, where channel opens and channel closes can harm the privacy of a Lightning node. This is a particular problem for routing nodes which announce their channels to the network. Potential mitigations include Coinjoins of many flavors, including Coinjoin in and out of a channel, and splicing.</li>
<li>In the Blinded Paths + Trampoline Routing chapter we tackle the receiver privacy problem. In the current state of Lightning, receivers embed their node public keys in invoices so the sender knows how to route to them, which makes it challenging to receive privately. We explore the potential of Blinded Paths and Trampoline Routing, and the potential combination of both, to solve this problem.</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/culture/how-bitcoin-lightning-network-matures" target="_blank" class="external-link">"Maturation of the Lightning Network: Growing up by going vertical" by Roy Sheinfeld from Breez</a></li>
<li>Replit + Mash
<ul>
<li><a href="https://www.getmash.com/news/building-on-replit-with-mash" target="_blank" class="external-link">Blog post from Mash about Lightning monetization and payment tools on Replit</a></li>
<li><a href="https://tftc.io/martys-bent/issue-1293-replit-lighting-could-open-the-floodgates-to-app-building/" target="_blank" class="external-link">TFTC Issue <a class="tag" onclick="toggleTagSearch(this)" data-content="#1293">#1293</a>: Replit + Lighting could open the floodgates to app building</a></li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/legends-of-lightning-tournament-announces-winners/" target="_blank" class="external-link">Legends of Lightning tournament announces winners</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/culture/imf-world-bank-repress-poor-countries" target="_blank" class="external-link">"Structural Adjustment: How the IMF and World Bank repress poor countries and funnel their resources to rich ones" by Alex Gladstein from the HRF</a></li>
<li><a href="https://www.nobsbitcoin.com/zoltan-dec-5-2022/" target="_blank" class="external-link">"Oil, Gold, and LCLo(SP)R" by Zoltan Pozsar of Credit Suisse</a></li>
<li><a href="https://www.nobsbitcoin.com/coinbase-received-12320-government-demands-this-year/" target="_blank" class="external-link">Coinbase received 12320 government demands for customer info this year: up 66% from last year</a></li>
<li><a href="https://www.mdpi.com/2227-7390/10/6/949" target="_blank" class="external-link">"Do Not Rug on Me: Leveraging Machine Learning Techniques for Automated Scam Detection" research paper</a></li>
<li><a href="https://gridlesscompute.com/2022/12/06/gridless-a-bitcoin-mining-company-in-east-africa-raises-2m-in-funding-led-by-stillmark-and-block-inc/" target="_blank" class="external-link">Gridless, a bitcoin mining company in East Africa, raises $2m in funding led by Stillmark and Block, Inc.</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
</ul>
Socratic Seminar 17
2023-05-20T11:01:58.482Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-17/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-16/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-18/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout
<ul>
<li>Hawaii Technology Development Corporation</li>
<li>Entrepreneurs Sandbox</li>
</ul>
</li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li>
<p><a href="https://www.nobsbitcoin.com/us-gov-seizes-50k-bitcoin/" target="_blank" class="external-link">US government announces seizure of 50676.17 bitcoin that was stolen from Silk Road</a></p>
<ul>
<li>James Zhong pled guilty to committing wire fraud in September 2012 when he unlawfully obtained over 50000 Bitcoin from the Silk Road dark web internet marketplace.</li>
<li>On November 9, 2021, pursuant to a judicially authorized premises search warrant of ZHONG’s Gainesville, Georgia, house, law enforcement seized approximately 50,676.17851897 Bitcoin, then valued at over $3.36 billion.</li>
<li>This seizure was then the <strong>largest cryptocurrency seizure in the history of the U.S. Department of Justice</strong> and today <strong>remains the Department’s second largest financial seizure ever</strong>.</li>
<li>Specifically, law enforcement located 50,491.06251844 bitcoin of the approximately 53,500 Bitcoin Crime Proceeds
<ul>
<li><strong>(a) in an underground floor safe; and</strong></li>
<li><strong>(b) on a single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet.</strong></li>
</ul>
</li>
<li>In addition, law enforcement recovered
<ul>
<li>$661,900 in cash</li>
<li>25 Casascius coins (physical bitcoin) with an approximate value of 174 bitcoin</li>
<li>11.1160005300044 additional bitcoin</li>
<li>Four one-ounce silver-colored bars</li>
<li>Three one-ounce gold-colored bars</li>
<li>Four 10-ounce silver-colored bars</li>
<li>One gold-colored coin.</li>
</ul>
</li>
<li>Around March 2022, Zhong began voluntarily surrendering more bitcoin to the Government
<ul>
<li>In total, ZHONG voluntarily surrendered 1,004.14621836 additional bitcoin.</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/legal/el-salvador-submits-bitcoin-bond-bill" target="_blank" class="external-link">El Salvador presents bill to Congress that paves way for bitcoin-backed volcano bonds</a></p>
<ul>
<li>On November 17, El Salvador’s Minister of the Economy submitted a digital assets issuance bill to the country’s legislative assembly, paving the way for the launch of its bitcoin-backed “volcano” bonds.</li>
<li>A year ago, El Salvador announced plans to issue $1 billion in bonds on the Liquid Network, a federated Bitcoin sidechain, with the proceedings of the bonds being split between
<ul>
<li><strong>A $500 million direct allocation to bitcoin</strong></li>
<li><strong>An investment of the same amount in building out energy and bitcoin mining infrastructure in the region</strong></li>
</ul>
</li>
<li>Bitfinex is set to be granted a license in order to be able to process and list the bond issuance in El Salvador.</li>
<li><strong>The bonds will pay a 6.5% yield and enable fast-tracked citizenship for investors.</strong></li>
<li>The government will share half the additional gains with investors as a Bitcoin Dividend once the original $500 million has been monetized.
<ul>
<li>These dividends will be dispersed annually using Blockstream's asset management platform.</li>
</ul>
</li>
<li>The act of submitting the bill kickstarts the first major milestone before the bonds can see the light of day.
<ul>
<li>The next is getting it approved, which is expected to happen before Christmas, a source close to President Nayib Bukele told Bitcoin Magazine.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li>
<p>FTX collapse and contagion</p>
<ul>
<li><a href="https://youtu.be/20BEJouWBgY" target="_blank" class="external-link">Deep dive into Sam Bankman-fried (SBF) and the FTX / Alameda fraud</a>
<ul>
<li>Great video summarizing this history of FTX and the timeline of the collapse</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/ftx-collapse-and-humility-of-bitcoin" target="_blank" class="external-link">FTX Collapse And Humility Of Bitcoin</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.swanbitcoin.com/the-ftx-fiasco-and-the-fallout-to-come/" target="_blank" class="external-link">The FTX Fiasco and the Fallout to Come</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.nbcnews.com/think/opinion/bitcoin-vs-ftx-crypto-king-sam-bankman-fried-problem-rcna57964" target="_blank" class="external-link">FTX's downfall and crypto's Bitcoin betrayal</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li>FTX was a crypto exchange founded in 2019 by Sam Bankman-fried (SBF)
<ul>
<li>It experienced massive growth since its founding to become the third largest crypto exchange in the world</li>
</ul>
</li>
<li>Sam also founded a crypto hedge fund called <strong>Alameda Research</strong></li>
<li><strong>FTX gives Alameda priority orderflow, allowing its sister hedge fund to front-run other traders - basically a perpetual money machine for Alameda by earning a few basis points off all that trading volume</strong></li>
<li>Alameda's leaked balance sheet showed that a <strong>large chunk of their assets were in FTX's own exchange token FTT</strong>
<ul>
<li>$5.8 billion of the $14.6 billion reported</li>
</ul>
</li>
<li>FTT is an exchange token that FTX issued
<ul>
<li>It gave various benefits on the exchange to holders, like reduced trading fees</li>
<li>FTX and Alameda have always held the majority of the tokens with only a small amount actually circulating on the free market
<ul>
<li>Alameda's holdings represented 2-3x FTT's entire circulating supply</li>
</ul>
</li>
</ul>
</li>
<li><strong>Here's how the FTX / Alameda collusion worked:</strong>
<ol>
<li>FTX creates FTT out of thin air</li>
<li>Alameda buys or premines FTT at super low price</li>
<li>FTX pumps FTT via wash trading, token burns, and other scammy methods</li>
<li>Alameda posts FTT back to FTX as collateral, borrowing "real" assets from FTX's customer deposits</li>
</ol>
</li>
<li>The scheme collapsed when CZ from competitor exchange Binance tweeted that he was going to sell all of Binance's FTT holdings - worth more than $500 million</li>
<li>The sell pressure against FTT cratered its price, which took FTX and Alameda out with it (as 2 of the largest token holders)</li>
<li>FTX paused all withdrawals the next day and have since filed for bankruptcy</li>
<li>Alameda and FTX had financial ties to all sorts of other entities in the space who are now being affected by the collapse and deleveraging</li>
<li><strong>The resulting contagion has rippled into other parts of the industry:</strong>
<ul>
<li><a href="https://www.coindesk.com/policy/2022/11/28/ftx-fallout-continues-as-crypto-lender-blockfi-declares-bankruptcy/" target="_blank" class="external-link">BlockFi files for bankruptcy as FTX contagion spreads</a>
<ul>
<li>Back in June, we mentioned that <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-12/#21c303">FTX was bailing out BlockFi with a $250m line of credit</a></li>
<li>That later morphed into a $400 million credit facility and gave FTX the ability to acquire BlockFi</li>
<li>BlockFi's solvency was put into question after FTX collapsed</li>
<li>BlockFi had already paused withdrawals a couple weeks ago</li>
<li>BlockFi officially filed for bankruptcy earlier today</li>
<li>BlockFi has $1-10 billion in liabilities but only ~$250 million cash on hand</li>
<li>Not looking good for client funds that were on the platform</li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/gemini-earn-halts-withdrawals/" target="_blank" class="external-link">Gemini Earn</a> and <a href="https://bitcoinmagazine.com/markets/genesis-lending-halts-crypto-withdrawals" target="_blank" class="external-link">Genesis Global Capital</a> halt withdrawals/redemptions amid <a href="https://bitcoinmagazine.com/business/crypto-lender-genesis-contagion-continues" target="_blank" class="external-link">Genesis solvency concerns</a>
<ul>
<li>Genesis Trading services a large portion of the institutional investor base in the bitcoin and broader crypto markets.
<ul>
<li>For lending, trading, hedging, exchange yields, etc., Genesis Trading was the brokerage to facilitate a lot of that activity.</li>
</ul>
</li>
<li>Genesis held a short client call to announce the <strong>suspension of redemptions, withdrawals and new loan originations</strong>.</li>
<li>With exposure to FTX and Alameda Research, the company now needs another liquidity injection after having <a href="https://www.coindesk.com/business/2022/11/16/genesis-crypto-lending-unit-is-halting-customer-withdrawals-in-wake-of-ftx-collapse/" target="_blank" class="external-link">nearly $175 million locked in a trading account</a> with FTX.</li>
<li>Parent company Digital Currency Group (DCG, the parent company of Grayscale), injected $140 million into the business to keep operations running smoothly.
<ul>
<li>Genesis is still scrambling to find more capital (around $1 billion?)</li>
</ul>
</li>
<li><a href="https://twitter.com/Gemini/status/1592873279232278532?s=20&t=hHTXHBguzAez852Hg12r4g" target="_blank" class="external-link">Gemini Earn</a> had to halt withdrawals as a result of the solvency concerns with Genesis - they stopped paying out yield to Gemini's clients</li>
</ul>
</li>
</ul>
</li>
<li>Stay humble. Stack sats. Practice self-custody.
<ul>
<li>The best way to avoid this kind of contagion risk is to withdraw bitcoin from exchanges to keys you control</li>
<li>You don't actually own any bitcoin that you give to a third party to hold on to</li>
<li>Irresponsible leverage is being cleared from the system as each bad actor files for bankruptcy - this is ultimately a good thing, even if it's difficult for those who might have lost funds</li>
<li>These events might cause short-term price volatility for bitcoin, but the protocol itself is entirely unaffected - we keep mining blocks</li>
<li>This is why it's so important to hold your own keys</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://www.nobsbitcoin.com/bitcoin-policy-institute-proof-of-reserves/" target="_blank" class="external-link">Bitcoin Policy Institute releases new report on Proof of Reserves</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>The Bitcoin Policy Institute (BPI), a non-profit dedicated to furthering governmental Bitcoin adoption, has released a new report discussing <strong>proof-of-reserves (PoR)</strong> in the bitcoin and cryptocurrency ecosystem following the FTX collapse</li>
<li>BPI’s report argues that the adoption of PoR will
<ul>
<li>Provide information on counterparty risk</li>
<li>Reduce the chance of systemic default contagion</li>
<li>Improve user trust in their custodial relationships</li>
</ul>
</li>
</ul>
<ul>
<li>BPI continues to explain that <strong>recent systemic failures in the industry have attracted the eyes of lawmakers</strong>, as was seen with the fall of FTX when the CFTC and SEC both announced they were investigating the company.</li>
<li>Because a lack of transparency has fueled the downfall of many companies over the course of this past year, BPI suggests that the only logical path forward is for the industry to adopt a PoR-based approach.</li>
<li>As of November 9, eight exchanges have reportedly followed Binance in announcing their intentions towards increased transparency in the ecosystem.</li>
<li>David Zell, co-founder of BPI, also commented on the dynamic shift of the industry. “FTX’s bankruptcy should remind all of us that the only way to hold digital assets without counterparty risk is to custody them yourself,” said Zell. “But when customers deposit their assets with a third party, firms need to be as transparent as possible about the state of those funds. Solutions like proof of reserves can play a major role toward that end.”</li>
</ul>
</li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li>
<p><a href="https://www.nobsbitcoin.com/lnd-v0-15-4-beta/" target="_blank" class="external-link">LND v0.15.4-beta</a>: hotfix release to fix another <a href="https://www.nobsbitcoin.com/second-critical-lnd-bug-in-a-month/" target="_blank" class="external-link">critical chain sync bug</a></p>
<ul>
<li><a href="https://tftc.io/martys-bent/issue-1278/" target="_blank" class="external-link">Marty's Bent Issue <a class="tag" onclick="toggleTagSearch(this)" data-content="#1278">#1278</a>: Another LND-btcd bug emerges</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li>Second critical bug in less than a month causing LND nodes to fall out of sync with the blockchain</li>
<li>Bug intentionally triggered by the same developer that caused last month's LN bug (Burak)</li>
<li>Specifically targeted LND nodes - OP_RETURN message said "you'll run cln. and you'll be happy."</li>
<li>Lots of debate on whether <a href="https://bitcoinmagazine.com/technical/exploiting-the-lightning-bug-was-ethical" target="_blank" class="external-link">publicly exploiting the bug was the ethical choice</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li><strong>Should Burak have responsibly disclosed the bug to Lightning Labs?</strong>
<ul>
<li>Probably, but there's some nuance</li>
<li>There actually was a disclosure already - AJ Towns reported the bug through GitHub on October 11, two days after the original bug was triggered by Burak’s 998-of-999 multisig transaction.
<ul>
<li>LND had already quietly patched the bug and expected to include the fix in a future release</li>
<li>This “silent patch” methodology is a common tactic for critical vulnerabilities in order to protect those who are slow to upgrade (if you’re loud about the critical fix, an attacker might become aware of the exploit and target non-upgraded nodes)</li>
</ul>
</li>
<li>You could argue that there was a strong and immediate risk of this new bug being discovered and exploited by a bad actor
<ul>
<li>This second bug was literally right above the one from last month in the codebase, so anyone reviewing last month's bug could have easily noticed this one too.</li>
<li>AJ also reported the bug on Github and left a public post about it up for 10 hours before being deleted - basically leaving instructions for a bad actor to see and exploit</li>
</ul>
</li>
</ul>
</li>
<li><strong>Burak's actions may have actually limited the potential damage of this exploit</strong>
<ul>
<li>If a malicious actor had found the bug before a well-intended developer, they could have tactically opened new channels to vulnerable nodes, routed the entire contents of those channels back to themselves and then exploited the bug to drain the full channel balance back on-chain
<ul>
<li>Because of the way this was exploited in practice, users only had to worry about their existing channel partners stealing their funds - ironically protecting them from being intentionally attacked</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><strong>Key takeaways</strong>
<ul>
<li>Critical codebases (like LN node infrastructure) need to prioritize auditing for security bugs over integrating new features</li>
</ul>
<ul>
<li>Bitcoin and Lightning code maintainers need to increase communication and collaboration to detect and mitigate these issues early on, strengthening the ecosystem overall.
<ul>
<li>This same bug was actually already patched in the Rust Bitcoin implementation but no one noticed</li>
</ul>
</li>
<li>Protocols that depend on observing on-chain activity should delegate as much of that functionality as possible to Bitcoin Core itself (where there are the strongest safety and reliability guarantees), rather than leveraging in-house code or less-audited third parties.</li>
</ul>
</li>
</ul>
</li>
<li>
<p>Full replace-by-fee (RBF) debate</p>
<ul>
<li><a href="https://bitcoinops.org/en/newsletters/2022/11/16/#releases-and-release-candidates" target="_blank" class="external-link">Bitcoin Core 24.0 release candidate includes controversial <code>mempoolfullrbf</code> configuration option</a></li>
<li><a href="https://bitcoinmagazine.com/technical/merging-full-replace-by-fee-into-bitcoin-core" target="_blank" class="external-link">Pros and cons of merging full RBF into Bitcoin Core</a></li>
<li><a href="https://bitcoinmagazine.com/technical/rbf-debate-is-incentives-and-choice" target="_blank" class="external-link">The RBF debate is a matter of incentives and individual choice</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://youtu.be/uBRhFxfIZkE?t=5067" target="_blank" class="external-link">John Carvalho's argument against changing the default RBF behavior in Bitcoin Core</a></li>
<li>Very nuanced discussion with a lot of intermingled/overlapping arguments</li>
<li><strong>Background context</strong>
<ul>
<li><strong>What is a node's <a href="https://river.com/learn/terms/m/mempool/" target="_blank" class="external-link">mempool</a>?</strong>
<ul>
<li>The mempool (memory pool) is a smaller database of unconfirmed or pending transactions which every node keeps.</li>
<li>After you broadcast a transaction, the bitcoin node you're connected to adds the transaction to its own mempool and then notifies its peers to let them know about the transaction too - those connected nodes then add the transaction to their own local copy of the mempool and share the info with their peers</li>
<li>Nodes share mempool data by relaying signed transactions to each other, but there is no single mempool and few if any nodes keep the entire mempool.</li>
<li>Mempool data dynamically propagates through the bitcoin network in that way, where each node maintains a slightly different snapshot of pending transactions waiting to get picked up by a miner</li>
<li>As miners are hashing for the next block, they pull transactions from their view of the mempool to include in that block.</li>
<li>The specific transactions they choose usually depend on the fee attached to them - miners generally prioritize higher fee transactions</li>
<li>When a transaction is finally confirmed by being included in a mined block, it is removed from the mempool and that update propagates through the network of node peers</li>
<li>A related term is a "0-confirmation transaction", which is just a transaction that is known about (because nodes can see it in their mempool), but it hasn't yet been included into a block
<ul>
<li>These unconfirmed transactions haven't yet settled on chain and aren't considered final or immutable - they are at greater risk of being double spent (meaning those UTXOs could get included in a different transaction, invalidating the original payment)</li>
</ul>
</li>
</ul>
</li>
<li><strong>What is replace-by-fee (RBF)?</strong>
<ul>
<li>Bitcoin already allows opt-in RBF - transactions can be individually flagged as RBF-capable in order to allow the sender to replace an unconfirmed transaction with another similar transaction which pays a higher fee.</li>
<li>RBF only works while the transaction is in the mempool.</li>
<li>This mechanism exists to allow users to respond if the network becomes congested and fees rise unexpectedly. If a user sends a transaction with a low fee, and finds that it is taking too long to confirm, the user can raise the fee they pay to confirm their transaction faster.</li>
</ul>
</li>
<li><strong>What is this feature specifically?</strong>
<ul>
<li>Full RBF is a different kind of mempool policy that a bitcoin node can follow - rather than only allowing transactions to be replaced if they explicitly opted in to RBF, full RBF nodes would allow any transaction to be replaceable by default</li>
<li>However, this specific Bitcoin Core update does not actually enable full RBF</li>
<li>It only adds a configuration parameter that can be used to enable it on an individual basis</li>
</ul>
</li>
<li><strong>Why is it controversial?</strong>
<ul>
<li>If enough users enable full RBF, 0-confirmation transactions are no longer a viable tool that a bitcoin merchant can use when trying to offer a fluid UX to customers
<ul>
<li>This is because RBF-able transactions always have the potential to be replaced, so receiving merchants are forced to wait for a full confirmation before they can consider a payment settled</li>
</ul>
</li>
<li>A subset of Bitcoin Core developers think RBF should be the default behavior anyway and have gotten defensive to criticisms from other industry participants who disagree - at least according to John Carvalho</li>
<li>A lot of people weren't aware of this change until it was already about to be merged into the Bitcoin Core release candidate, so it caused a lot of commotion quickly
<ul>
<li>Not enough time to adequately debate the pros and cons or for affected services to prepare</li>
</ul>
</li>
<li>Now that it's part of the release candidate, it takes even more effort to remove the change - new PR, PR review, more room for potential bugs by adding another change this late in the review process</li>
<li><strong>Primary arguments in favor</strong>
<ul>
<li>RBF gives users more control
<ul>
<li>Can respond more dynamically to fee market</li>
<li>Enables users to update/cancel unconfirmed transactions</li>
<li>This change only adds a configuration option that users can manually enable if they want full RBF on by default
<ul>
<li>They still have to change the config file on their node to turn it on</li>
</ul>
</li>
</ul>
</li>
<li>RBF is inevitable anyway
<ul>
<li>It's already possible if users opt-in for specific transactions</li>
<li>As the fee market becomes more congested in the future, users will probably be incentivized to adopt RBF by default - eventually there will be a tipping point where most people have it on</li>
</ul>
</li>
<li>0-confirmation transactions are not safe
<ul>
<li>0-conf transactions are not "real" bitcoin - it's not official until it's confirmed at least once, and preferably more than that</li>
</ul>
</li>
</ul>
</li>
<li><strong>Primary arguments against</strong>
<ul>
<li>Doing nothing keeps everyone happy
<ul>
<li>Users that want RBF can already enable it on a per-transaction basis</li>
<li>Services that want to leverage 0-conf transactions can still do so by hedging risk appropriately</li>
</ul>
</li>
<li>Adding this configuration option hastens the inevitability of RBF adoption
<ul>
<li>RBF may be inevitable, but under typical circumstances, it might not be widely used for years
<ul>
<li>Currently, very few transactions actually signal RBF-capability</li>
</ul>
</li>
<li>In the meantime, the UX that 0-conf transactions can enable provides more value to end users than the occasional person wanting to RBF a transaction
<ul>
<li>Always having to wait for a full confirmation before responding to the client causes a bad UX for some merchants/services - no instant Lightning channel funding, easy online purchases with on-chain funds, bitcoin ATMs, etc.</li>
<li>For example, the benefit of a service being able to instantly onboard someone to the Lightning Network with 0-confirmation funding transactions might be worth not encouraging unnecessary RBF usage in the near future</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/business/cash-app-enables-bitcoin-lightning-payments-for-40-million-users" target="_blank" class="external-link">Cash App now allows sending and receiving bitcoin payments via Lightning</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Cash App users can send and receive payments in BTC via the Lightning Network.
<ul>
<li>Previously, users could only send Lightning payments but not receive them</li>
</ul>
</li>
<li>Cash App has an active user base of 47 million, over six-times larger than the population of El Salvador</li>
<li>Ideally, you should withdraw from Cash App often, but custodial Lightning wallets can be useful for handling small amounts without having to manage your own liquidity</li>
<li>After the most recent update, CashApp now also supports <a href="https://bitcoinqr.dev/" target="_blank" class="external-link">unified QR codes</a>
<ul>
<li>These are QR codes that encode BIP21 Payment URIs - a scheme for creating a "payment link"</li>
<li>That payment link can be used to embed multiple payment methods in a single QR code</li>
<li>Individual wallets can automatically choose which payment method to use based on the context - the user doesn't have to be aware of it when scanning a QR code</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/business/trezor-enables-p2p-bitcoin-trading-hodl-hodl" target="_blank" class="external-link">Trezor enables KYC-free P2P bitcoin trading via Hodl Hodl integration</a></p>
<ul>
<li>Hodl Hodl leverages multisig to enable P2P transactions between buyers and sellers without needing to take custody of funds
<ul>
<li>The buyer, the seller, and Hodl Hodl each hold one key, and 2 signatures are required to move the bitcoin</li>
<li>Hodl Hodl's key acts as an arbiter in the event of a dispute</li>
</ul>
</li>
<li>The Hodl Hodl integration is included in the Trezor Suite software, so Trezor users can now easily buy bitcoin P2P within Trezor's native software and the funds are deposited directly to cold storage</li>
<li>Services like this can help eliminate custodial/exchange risk that occurs when you buy bitcoin through more traditional means</li>
</ul>
</li>
<li>
<p><a href="https://bitkit.to/" target="_blank" class="external-link">Synonym launches Bitkit mobile wallet to showcase Slashtag technology</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>The wallet boasts many features:
<ul>
<li>Portable social profiles</li>
<li>Dynamic payable contacts</li>
<li>Interoperable data feeds</li>
<li>Passwordless web accounts</li>
<li><a href="https://www.slashtags.to/" target="_blank" class="external-link">Slashtags</a></li>
</ul>
</li>
<li>A slashtag is a cryptographic keypair derived from the same seed as your Bitcoin wallet. Anyone can publish data using networked “drives” that are identified by keys the user controls, enabling a censorship-resistant peer-to-peer web.</li>
<li>Slashtags enables users to take control of their data.
<ul>
<li>The protocol does not require a blockchain, includes uncensorable social profiles, automatically-updated contacts, contact payment preferences, passwordless authentication, and more.</li>
</ul>
</li>
<li>Slashtags leverage the same <a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Holepunch</a> technology as <a href="https://keet.io/" target="_blank" class="external-link">Keet</a></li>
<li>Bitkit is still in beta, and Lightning functionality is currently limited for US users (regulatory hurdle)</li>
<li>Non-US users can purchase Lightning liquidity on-demand without manually managing channels via Synonym's <a href="https://blocktank.to/" target="_blank" class="external-link">Blocktank</a> service</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/business/how-fans-boost-baseball-players-with-bitcoin" target="_blank" class="external-link">Perth Heat baseball fans can now ‘boost’ players with bitcoin over the Lightning Network</a></p>
<ul>
<li>Named <a class="tag" onclick="toggleTagSearch(this)" data-content="#sats4stats">#sats4stats</a>, the new collaboration with IBEX allows fans to send Lightning micropayments to individual players during games</li>
<li>Similar to "boosting" podcast creators with Podcasting 2.0-enabled apps</li>
<li>“Each player will have a Lightning QR code linked to their profile for instant boost from any lightning wallet in the world
<ul>
<li><a class="tag" onclick="toggleTagSearch(this)" data-content="#Sats4stats">#Sats4stats</a> will allow fans to send sats directly as the action unfolds at the ballpark or via live broadcast feed.</li>
<li>Fans will be able to send messages to their favorite players and retweet their ‘boosts’,” per the statement.</li>
<li>In a future where this feature is more heavily used, a substantial portion of a player's income could come directly from fans instead of being dependent on various organizations</li>
</ul>
</li>
<li>Australian baseball team Perth Heat last year became the first sports team worldwide to begin operating on a Bitcoin Standard.
<ul>
<li>Since then, the club has already begun paying players and staff in bitcoin and recently activated all concession stands with the ability to pay in bitcoin.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://hashrateindex.com/blog/margin-squeeze-how-bitcoin-mining-revenues-evaporated-over-the-past-months/" target="_blank" class="external-link">Margin Squeeze - How bitcoin mining revenues evaporated over the past months</a>
<ul>
<li><a href="https://tftc.io/martys-bent/issue-1275/" target="_blank" class="external-link">Marty's Bent Issue <a class="tag" onclick="toggleTagSearch(this)" data-content="#1275">#1275</a>: Miners are in a world of hurt</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li>Pain in the mining world continues as hashrate continues to climb over the last several months
<ul>
<li>It has been dropping a bit in November as unprofitable miners have been forced to shut off</li>
</ul>
</li>
<li><strong>Bitcoin miners have never produced less bitcoin per unit of hashrate</strong>
<ul>
<li>A miner's daily bitcoin compensation for a unit of hashrate is called the bitcoin-denominated hashprice</li>
<li>1 EH/s now produces about half as much bitcoin per day as it did one year ago
<ul>
<li>Only miners who have <strong>more than doubled their hashrate</strong> over the past year earn the same amount of bitcoin as they did in October/November of last year</li>
</ul>
</li>
<li>The bitcoin-denominated hashprice will likely keep trending downwards as the difficulty keeps growing due to more hashrate coming online</li>
<li>On a longer timescale, in spring of 2024, the block subsidy halves again from 6.25 BTC to 3.125 BTC, which will lead to a massive drop in the bitcoin-denominated hashprice</li>
<li>Because of the falling bitcoin-denominated hashprice, miners who want to keep their bitcoin production on par with previous years will have to rapidly grow hashrate</li>
</ul>
</li>
<li><strong>Bitcoin miners have never made less dollar per unit of hashrate</strong>
<ul>
<li>Not only have one unit of hashrate never generated less bitcoin than now, but the value of this bitcoin has also evaporated.</li>
<li>During the golden days of bitcoin mining in October 2021, the average bitcoin price was $59k, and we're now sitting around $16-17k, which is a decline of ~75%</li>
<li>Since then, the lethal combination bitcoin becoming more difficult to mine per unit of hash and the massive drop in price per coin have caused dollar-denominated hashprice to plummet by over 80% since its all-time high.</li>
<li>Some hashrate derivatives products are gaining popularity on the market to help enterprise miners hedge their revenues over time, but this market is brutal for even the most effectively hedged miners</li>
</ul>
</li>
<li><strong>Only energy-efficient machines powered by low-priced energy are cash flow positive</strong>
<ul>
<li>The Luxor report includes a chart about 2/3 of the way down that compares breakeven hashprices for various machines at different power costs</li>
<li>Machines that can access cheap/wasted energy are still doing okay</li>
<li>The problem is that getting access to such cheap electricity is very difficult during the current energy crisis, which has led to surging energy prices all over the globe</li>
</ul>
</li>
<li><strong>Takeaways</strong>
<ul>
<li>Hard to say if we've reached maximum pain for miners, but it seems like more is to come</li>
<li>Some large miners used easy money financing from a year ago when interest rates were more favorable to purchase a lot of hardware that's just now coming online
<ul>
<li>Even if it's unprofitable to plug in, they might anyway because of the massive sunk cost (time, money, & resources)</li>
<li>Could turn into a situation where miners are churning water to see who folds first</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/culture/trammell-on-satoshi-bitcoin-white-paper-day" target="_blank" class="external-link">Bitcoin White Paper Day was on 10/31</a>
<ul>
<li>Anniversary of when Satoshi released the whitepaper to a cryptography mailing list on October 31, 2008</li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/biden-administration-wants-to-seize-bitcoin/" target="_blank" class="external-link">Biden administration wants to make it easier to seize bitcoin without criminal charges</a></li>
<li><a href="https://cointelegraph.com/news/pro-crypto-city-of-lugano-and-el-salvador-sign-economic-agreement-based-on-adoption" target="_blank" class="external-link">Lugano and El Salvador sign economic agreement to foster bitcoin adoption</a></li>
<li>BitMEX renews <a href="https://blog.bitmex.com/renewal-of-rene-pickhardts-bitcoin-developer-grant-2/" target="_blank" class="external-link">Rene Pickhardt’s</a>, <a href="https://www.nobsbitcoin.com/bitmex-renews-naumenko-grant/" target="_blank" class="external-link">Gleb Naumenko’s</a>, and <a href="https://www.nobsbitcoin.com/bitmex-renews-chris-coverdales-dev-grant/" target="_blank" class="external-link">Chris Coverdale’s</a> Bitcoin Developer Grants</li>
<li><a href="https://bitcoinmagazine.com/business/vinteum-announces-bitcoin-utreexo-grant" target="_blank" class="external-link">Vinteum nonprofit announces bitcoin Utreexo grant for Davidson Souza</a></li>
<li><a href="https://www.nobsbitcoin.com/amboss-data-sharing/" target="_blank" class="external-link">Popular Lightning analytics company 'Amboss' launches controversial data sharing feature that threatens Lightning privacy</a></li>
<li><a href="https://www.cnbc.com/2022/10/27/bitcoin-miner-core-scientific-warns-it-might-go-bankrupt-stock-plunges.html" target="_blank" class="external-link">Bitcoin miner Core Scientific warns it might go bankrupt; stock plunges</a></li>
<li><a href="https://www.nobsbitcoin.com/bitcoin-miner-stronghold-digital-restructure/" target="_blank" class="external-link">Bitcoin miner Stronghold Digital gave NYDIG 26200 ASICs in exchange for relief from $67.4 million of debt</a></li>
<li><a href="https://bitcoinmagazine.com/business/blockstream-launches-build-on-l2-bol2" target="_blank" class="external-link">Blockstream launches Build On L2 (BOL2) community for bitcoin development</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/business/blip-encrypted-chat-on-bitcoin-lightning" target="_blank" class="external-link">BLIP: encrypted chat powered by Lightning</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/business/how-lightning-revolutionizes-crowdfunding" target="_blank" class="external-link">How Lightning revolutionizes crowdfunding</a></li>
<li><a href="https://www.nobsbitcoin.com/tor-project-annual-statements-2020-2021/" target="_blank" class="external-link">Tor Project releases annual financial statements</a>
<ul>
<li>~38% of revenue came from US government funds</li>
</ul>
</li>
</ul>
Socratic Seminar 16
2023-05-20T11:02:03.708Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-16/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-15/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-17/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Self-custody workshop update</li>
<li>Sponsor shoutout</li>
</ul>
<h1 id="bitcoin-kp-is" tabindex="-1">Bitcoin KPIs</h1>
<ul>
<li><a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's Bitcoin Dashboard</a></li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/biden-signs-bitcoin-executive-order-taps-cbdc" target="_blank" class="external-link">More consequences of Biden's Executive Order 14067 (March 2022)</a>
<ul>
<li>E.O. 14067, AKA <a href="https://bitcoinmagazine.com/markets/biden-signs-bitcoin-executive-order-taps-cbdc" target="_blank" class="external-link">“Ensuring Responsible Development of Digital Assets”</a>, called on government agencies to produce varying forms of research regarding consumer privacy and protection, energy usage, and central bank digital currency (CBDC) benefits and risks.</li>
<li>Several resulting reports were already discussed last month at <a href="https://www.honolulubitdevs.com/2022-09-26-socratic-seminar-15" target="_blank" class="external-link">Socratic 15</a></li>
<li>New report: <a href="https://home.treasury.gov/news/press-releases/jy0986" target="_blank" class="external-link">Financial Stability Oversight Council (FSOC) releases report on digital asset financial stability risks and regulatory recommendations</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/legal/eu-agrees-on-crypto-mica-bill-text" target="_blank" class="external-link">EU agrees on text of landmark Bitcoin/crypto bill (MiCA)</a></li>
<li><a href="https://bitcoinmagazine.com/legal/hodlonaut-wins-defamation-case-against-craig-wright" target="_blank" class="external-link">Hodlonaut wins defamation case against Craig Wright in Norway</a></li>
<li><a href="https://www.zerohedge.com/crypto/russia-allow-international-trade-bitcoin-crypto-any-industry-report" target="_blank" class="external-link">Russia to allow international trade in Bitcoin/crypto for any industry</a></li>
<li>Tornado Cash
<ul>
<li><a href="https://www.theblock.co/post/174016/arrested-tornado-cash-developer-alexey-pertsev-appeal-rejected" target="_blank" class="external-link">Arrested Tornado Cash developer to stay in jail after appeal rejected</a></li>
<li><a href="https://www.coincenter.org/coin-center-is-suing-ofac-over-its-tornado-cash-sanction/" target="_blank" class="external-link">Coin Center is suing OFAC over its Tornado Cash sanction</a></li>
</ul>
</li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li><a href="https://www.nobsbitcoin.com/celsius-doxxes-all-users/" target="_blank" class="external-link">Celsius disclosed names and transaction history of all users during bankruptcy</a>
<ul>
<li>Any wallet that interacted with Celsius is now publicly linked to government ID</li>
</ul>
</li>
<li><a href="https://www.wsj.com/articles/fasb-settles-on-fair-value-accounting-for-measuring-crypto-assets-11665614205" target="_blank" class="external-link">Financial Accounting Standards Board (FASB) settles on fair-value accounting for measuring crypto assets</a></li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-payment-provider-strike-raises-80-million" target="_blank" class="external-link">Strike closes $80 million funding round</a></li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li><a href="https://twitter.com/lopp/status/1579257988162154498" target="_blank" class="external-link">Large Tapscript multisig transaction crashes LND nodes</a>
<ul>
<li>New versions for both <a href="https://github.com/lightningnetwork/lnd/releases/tag/v0.15.2-beta" target="_blank" class="external-link">LND</a> and <a href="https://github.com/btcsuite/btcd/releases/tag/v0.23.2" target="_blank" class="external-link">BTCD</a> released with bug fixes</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/technical/taro-launches-stablecoins-on-bitcoin" target="_blank" class="external-link">Taro launches stablecoins on Bitcoin</a>
<ul>
<li><a href="https://github.com/lightninglabs/taro" target="_blank" class="external-link">Taro Daemon (<code>tarod</code>) repository</a></li>
</ul>
</li>
<li><a href="https://www.rls.dev/" target="_blank" class="external-link">River announces River Lightning Services</a>
<ul>
<li><a href="https://twitter.com/Leishman/status/1579852852335640577" target="_blank" class="external-link">Tweet thread from CEO Alex Leishman</a></li>
<li><a href="https://river.com/learn/files/river-lightning-report.pdf" target="_blank" class="external-link">River also released a report on LN insights</a></li>
</ul>
</li>
<li><a href="https://blog.zebedee.io/announcing-nbd/" target="_blank" class="external-link">ZEBEDEE launches NBD, non-profit for open source Bitcoin development</a></li>
<li><a href="https://newsletter.impervious.ai/impervious-ai-releases-the-highly-anticipated-impervious-browser/" target="_blank" class="external-link">Impervious P2P, Lightning-enabled browser launches for public use</a></li>
<li><a href="https://github.com/bitcoin/bitcoin/pull/23443" target="_blank" class="external-link">Erlay support signaling merged into Bitcoin Core</a></li>
<li><a href="https://dci.mit.edu/utreexo" target="_blank" class="external-link">Utreexo</a>
<ul>
<li><a href="https://blog.bitmex.com/renewal-of-calvin-kims-bitcoin-developer-grant-3/" target="_blank" class="external-link">BitMEX renews Calvin Kim’s Bitcoin Developer Grant to work on Utreexo</a></li>
<li><a href="https://www.nobsbitcoin.com/zerosync-utreexo/" target="_blank" class="external-link">ZeroSync Utreexo implementation also in development</a>
<ul>
<li>"Verify Bitcoin's Chain State in an Instant"</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://bitcoinrollups.org/" target="_blank" class="external-link">John Light releases report on "Validity Rollups on Bitcoin"</a>
<ul>
<li><a href="https://twitter.com/lightcoin/status/1579856946781298688" target="_blank" class="external-link">Tweet thread from John</a></li>
</ul>
</li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://www.cnbc.com/2022/10/11/bitcoin-mining-software-overhaul-stratum-v2-promoted-by-block-braiins.html" target="_blank" class="external-link">Bitcoin mining software overhaul Stratum v2 promoted by Block, Braiins, and others</a></li>
<li><a href="https://www.nature.com/articles/s41598-022-14987-0" target="_blank" class="external-link">Report on the spatial analysis of global Bitcoin mining</a></li>
<li><a href="http://bitcoinminingcouncil.com/bitcoin-mining-council-survey-confirms-year-on-year-improvements-in-sustainable-power-mix-and-technological-efficiency-in-q3-2022/" target="_blank" class="external-link">Bitcoin Mining Council survey confirms year-on-year improvements in sustainable power mix and technological efficiency in Q3 2022</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li>Last month's missed/skimmed topics
<ul>
<li><a href="https://www.linuxfoundation.org/press/linux-foundation-announces-an-intent-to-form-the-openwallet-foundation" target="_blank" class="external-link">Linux Foundation announces an intent to form the OpenWallet Foundation (OWF)</a></li>
<li><a href="https://nydig.com/research/developers-of-bitcoin" target="_blank" class="external-link">NYDIG releases "Developers of Bitcoin" - paper on Bitcoin's technical development and open-source contributors over time</a></li>
<li><a href="https://blockwaresolutions.com/s/Bitcoin-Transaction-Fees-Final-Draft.pdf" target="_blank" class="external-link">Riot and Blockware release Bitcoin transaction fee research report</a></li>
<li><a href="https://www.nobsbitcoin.com/satoshi-mining-analysis/" target="_blank" class="external-link">"Was Satoshi a Greedy Miner?" by Jameson Lopp</a></li>
</ul>
</li>
<li>Conferences this month
<ul>
<li><a href="https://2022.tabconf.com/" target="_blank" class="external-link">TABConf in Atlanta</a></li>
<li><a href="https://b.tc/conference/amsterdam" target="_blank" class="external-link">Bitcoin Conference Amsterdam</a></li>
<li><a href="https://bitcoincollective.co.uk/" target="_blank" class="external-link">Bitcoin Collective in Edinburgh</a></li>
<li><a href="https://planb.lugano.ch/planb-forum/" target="_blank" class="external-link">Plan B Forum in Lugano, Switzerland</a> (upcoming)</li>
</ul>
</li>
<li><a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_22_5989" target="_blank" class="external-link">EU expands Russian sanctions to include all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet</a>
<ul>
<li>Previously under €10,000 worth was allowed</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/mcdonalds-accepts-bitcoin-payments-in-lugano-switzerland" target="_blank" class="external-link">McDonald’s and other businesses now accept Bitcoin in Lugano, Switzerland</a></li>
<li><a href="https://bitcoinmagazine.com/business/swan-bitcoin-acquires-specter-solutions" target="_blank" class="external-link">Swan Bitcoin acquires Specter Solutions</a></li>
<li><a href="https://github.com/carlaKC/boltnd" target="_blank" class="external-link">Experimental BOLT12 support in LND</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-October/020980.html" target="_blank" class="external-link">Muun wallet objects to opt-in full-RBF support in the Bitcoin Core 24.0 release candidate</a></li>
<li><a href="https://blog.getalby.com/nostr-in-the-alby-extension/" target="_blank" class="external-link">Nostr integration in the Alby browser extension</a></li>
<li><a href="https://stacker.news/items/80134" target="_blank" class="external-link">LNsploit: A LN exploit testing tool</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/lightning-dev/2022-September/003685.html" target="_blank" class="external-link">Lisa Neigut's Lightning-Dev mailing list post about fee ratecards</a></li>
<li><a href="https://bitcoinmagazine.com/technical/taproot-and-frost-improve-bitcoin-privacy" target="_blank" class="external-link">Taproot and FROST improve Bitcoin privacy</a></li>
<li><a href="https://github.com/Indra-Labs/indra" target="_blank" class="external-link">Indra: Lightning powered distributed virtual private network with Bitcoin and Lightning integration.</a></li>
<li><a href="https://bitcoinmagazine.com/legal/us-bill-to-let-401-k-plans-invest-in-bitcoin-crypto" target="_blank" class="external-link">US bill to let 401(k) plans invest in Bitcoin/crypto</a></li>
<li><a href="https://www.coindesk.com/policy/2022/10/12/senator-warren-leads-congressional-groups-probe-into-bitcoin-mining-energy-use-in-texas/" target="_blank" class="external-link">US Senator Warren leads congressional group's probe into Bitcoin mining energy use in Texas</a>
<ul>
<li><a href="https://www.einnews.com/pr_news/595758085/texas-blockchain-council-responds-to-senator-warren-s-letter-about-texas-bitcoin-mining" target="_blank" class="external-link">Texas Blockchain Council responds to Senator Warren’s letter about Texas Bitcoin mining</a></li>
</ul>
</li>
<li><a href="https://github.com/supertestnet/bitcoin-lottery-contract" target="_blank" class="external-link">supertestnet's <code>bitcoin-lottery-contract</code>: A lottery in bitcoin script with no escrow</a></li>
<li><a href="https://www.youtube.com/watch?v=hCjbStBKCEQ" target="_blank" class="external-link">"Cryptographic Oracle-Based Conditional Payments" presentation by Lloyd Fournier</a></li>
<li><a href="https://bitcoinmagazine.com/print/stop-drinking-the-elites-kool-aid" target="_blank" class="external-link">"Stop Drinking the Elite’s Kool-Aid" by Nayib Bukele</a></li>
<li><a href="https://bitcoinmagazine.com/business/nfc-bitcoin-card-launches-in-el-salvador" target="_blank" class="external-link">Salvadoran Bitcoin users can now "tap to pay" with CoinCorner’s Lightning-enabled Bolt Card</a></li>
<li><a href="https://bitcoinmagazine.com/business/bny-mellon-offers-bitcoin-custody" target="_blank" class="external-link">BNY Mellon offers Bitcoin custody service</a></li>
<li><a href="https://www.theblock.co/post/175140/grayscale-unveils-bitcoin-mining-centered-investment-entity" target="_blank" class="external-link">Grayscale unveils Bitcoin mining-centered investment entity</a></li>
</ul>
Socratic Seminar 15
2023-07-31T07:22:02.620Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-15/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-14/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-16/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li>Interaction and asking questions are encouraged</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://bitcoinerjobs.com/" target="_blank" class="external-link">Apply for a bitcoin job</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Sponsor shoutout</li>
</ul>
<h1 id="bitcoin-kp-is" tabindex="-1">Bitcoin KPIs</h1>
<ul>
<li><a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's Bitcoin Dashboard</a></li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li>
<p>The anniversary of Bitcoin becoming legal tender in El Salvador</p>
<ul>
<li><a href="https://bitcoinmagazine.com/culture/el-salvador-bitcoin-one-year-later" target="_blank" class="external-link">El Salvador Bitcoin one year later</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/el-salvador-bitcoin-news/what-el-salvadors-bitcoin-law-brought" target="_blank" class="external-link">What El Salvador's Bitcoin law brought</a></li>
<li><a href="https://twitter.com/nayibbukele/status/1572708305876705285" target="_blank" class="external-link">President Bukele's speech to the United Nations</a></li>
<li><strong>Context/background</strong>
<ul>
<li>Salvadorans have been plagued by political corruption, gang violence, lack of opportunity, and constant emigration of younger citizens
<ul>
<li>Perfect storm to take a risk on Nayib Bukele and his New Ideas party</li>
<li>Provided the political conditions for El Salvador to adopt Bitcoin as legal tender</li>
</ul>
</li>
<li>Bukele actually announced that El Salvador would adopt Bitcoin back in 2017, even before he was President</li>
<li>The move was about game theory, the first-mover advantage to a better monetary system and safeguarding El Salvador’s over-reliance on the U.S. dollar.
<ul>
<li>The obvious choice for a country like El Salvador is to seek refuge in the rising monetary system of our time instead of a dying one.</li>
</ul>
</li>
<li>Bukele made it clear in his 2022 UN speech that he's tired of getting bullied (politically and economically) by other countries
<ul>
<li>Didn't really talk about Bitcoin in the speech</li>
</ul>
</li>
</ul>
</li>
<li><strong>In practice</strong>
<ul>
<li>Depending on who you ask, El Salvador’s efforts have been an utter failure, a resounding success, or various stages in between</li>
<li>Most admit that the Chivo wallet rollout was not ideal - confused a lot of people initially, and the app still doesn't work great</li>
<li>Notable metrics:
<ul>
<li><a href="https://elsalvadorinenglish.com/2022/02/21/el-salvadors-tourism-has-grown-by-30-since-the-bitcoin-law/" target="_blank" class="external-link">30% increase in tourism</a></li>
<li><a href="https://twitter.com/nayibbukele/status/1495126452030914562?s=20&t=2Tf9s2mDKgNBVGZw2Q4MdQ" target="_blank" class="external-link">10.3% GDP increase</a></li>
<li><a href="https://twitter.com/bcr_sv/status/1560657712224272389?s=20&t=m-BbM5-Lne62cdIHjrAWSw" target="_blank" class="external-link">19.5% export increase</a></li>
<li><a href="https://twitter.com/bcr_sv/status/1560659555260186625?s=20&t=m-BbM5-Lne62cdIHjrAWSw" target="_blank" class="external-link">3.3% remittances destined for family use increase</a></li>
<li><a href="https://twitter.com/bcr_sv/status/1549089706578743297?s=20&t=m-BbM5-Lne62cdIHjrAWSw" target="_blank" class="external-link">70.2% remittances destined for investment increase</a></li>
<li><a href="https://twitter.com/bcr_sv/status/1565083283762946048?s=20&t=m-BbM5-Lne62cdIHjrAWSw" target="_blank" class="external-link">4.3% volume of economic activity increase</a></li>
<li><a href="https://twitter.com/NoticieroSLV/status/1566597048572469249?s=20&t=m-BbM5-Lne62cdIHjrAWSw" target="_blank" class="external-link">One of the lowest rates of inflation in the region</a></li>
<li><a href="https://twitter.com/noticias4vision/status/1527390428718309376?s=20&t=m-BbM5-Lne62cdIHjrAWSw" target="_blank" class="external-link">One of the lowest rates of outmigration to the U.S. in the region</a></li>
<li><a href="https://twitter.com/Forbes_CA/status/1537903114472128512?s=20&t=m-BbM5-Lne62cdIHjrAWSw" target="_blank" class="external-link">A 62-year record in private investments</a></li>
<li><a href="https://twitter.com/nayibbukele/status/1547037716809977857?s=20&t=m-BbM5-Lne62cdIHjrAWSw" target="_blank" class="external-link">Improvements in road and highway infrastructure</a></li>
<li>El Salvador achieved the metrics above during a bear market and in the second year of the COVID-19 pandemic, despite constant criticism from the traditional finance sector</li>
</ul>
</li>
<li>Other achievements:
<ul>
<li>El Salvador has hosted multiple Bitcoin conferences</li>
<li>They hosted central bankers from 44 other countries</li>
<li>Bukele has great approval ratings among constituents</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/markets/biden-signs-bitcoin-executive-order-taps-cbdc" target="_blank" class="external-link">Consequences of Biden's Executive Order 14067 (March 2022)</a></p>
<ul>
<li>E.O. 14067, AKA <a href="https://bitcoinmagazine.com/markets/biden-signs-bitcoin-executive-order-taps-cbdc" target="_blank" class="external-link">“Ensuring Responsible Development of Digital Assets”</a>, called on government agencies to produce varying forms of research regarding consumer privacy and protection, energy usage, and central bank digital currency (CBDC) benefits and risks.</li>
<li><a href="https://www.whitehouse.gov/wp-content/uploads/2022/09/09-2022-Crypto-Assets-and-Climate-Report.pdf" target="_blank" class="external-link">White House Office of Science and Technology Policy (OSTP) conducted a study into the climate impacts of crypto mining</a>
<ul>
<li><a href="https://bitcoinmagazine.com/business/white-house-condemns-energy-use-of-mining-bitcoin" target="_blank" class="external-link">White House condemns energy use of mining Bitcoin</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>“Electricity usage from digital assets is contributing to greenhouse gas emissions, additional pollution, noise, and other local impacts, depending on markets, policies, and local electricity sources,” reads the report.</li>
</ul>
<ul>
<li>“Should these measures prove ineffective at reducing impacts, the Administration should explore executive actions, and Congress might consider legislation, to limit or eliminate the use of high energy intensity consensus mechanisms for crypto-asset mining,” per the report.</li>
<li>The Office of Science and Technology asserts that bitcoin mining facilities create added stress on the power grid that leads to blackouts, fire hazards, and equipment deterioration.</li>
<li>The report also claims that bitcoin miners will raise the average electricity cost for local consumers.</li>
<li>“Depending on the energy intensity of the technology used, crypto-assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals,” reads the report.</li>
<li>Finally, the last section concludes that there are ways in which bitcoin mining can actually benefit U.S. climate goals, although this is a much smaller section. “Proof-of-work mining that installs equipment to use vented methane to generate electricity for operations is more likely to help rather than hinder U.S. climate objectives,” per the report</li>
</ul>
</li>
<li><a href="https://medium.com/@nic__carter/comments-on-the-white-house-report-on-the-climate-implications-of-crypto-mining-8d65d30ec942" target="_blank" class="external-link">Nic Carter's response</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>Some good parts:
<ul>
<li>The OSTP acknowledges that PoW and PoS may not grant identical assurances, and there remains uncertainty as to whether PoS might be a perfect substitute for PoW</li>
<li>The OSTP acknowledges the interesting developments in mining with otherwise-flared or stranded natural gas (often released as an unsaleable byproduct of oil extraction)</li>
<li>The report meaningfully acknowledges the contributions to grid flexibility miners can offer via participation in demand response programs</li>
<li>The report notes the potential to mine with stranded renewables</li>
<li>And importantly, the report offers only lukewarm recommendations</li>
</ul>
</li>
</ul>
<ul>
<li>However, the overall effort is weak:
<ul>
<li>The paper is effectively an extended literature review with very little in the way of new data or analysis presented.</li>
<li>Many of the academics cited are conflicted. Virtually no sources from the mining space itself are included.</li>
<li>Anything authored by the White House Office of Science and Technology Policy should adhere to a high scientific and academic standard.
<ul>
<li>Relying on non-peer reviewed, non-scientific estimates, especially by individuals with known conflicts of interest, should be an absolute dealbreaker.</li>
</ul>
</li>
<li>Virtually no case studies are presented in the report, even though there are many examples of miners operating sustainably, adding power to the grid, taking zero-carbon approaches, and engaging in grid stabilization.</li>
<li>There are a number of outright falsehoods in the report</li>
<li>The report takes an extremely harsh stance on miners utilizing renewable sources, chastising miners for using renewables and laying out an extremely narrow set of conditions where their use would be acceptable.</li>
<li>The section on demand response concludes that it’s mostly irrelevant, because miners, in the eyes of the government, are raising aggregate power demand without inducing any additional supply.</li>
<li>The section on flared gas mining is a brief olive branch, but the report then concludes that because all oil and gas extraction must be shuttered to meet climate goals, no gas flaring can exist under Net Zero™.</li>
<li>Generally, the subtext is that because mining is a “bad” usage of power, it doesn’t matter if you promote grid stability, or use renewables, or even mine off-grid with stranded resources — you’re not welcome here, and you should buzz off.</li>
</ul>
</li>
<li>Some of the main issues:
<ul>
<li>Presenting virtually no new data</li>
<li>Ignoring contributions of industry subject matter experts</li>
<li>Relying on non-scientific sources</li>
<li>Urging caution on data while using it recklessly</li>
<li>Pushing a “can’t win” approach to miners using renewables</li>
<li>Refusing to project Bitcoin’s energy consumption trajectory</li>
<li>Making stupid and counter-productive recommendations</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/16/fact-sheet-white-house-releases-first-ever-comprehensive-framework-for-responsible-development-of-digital-assets/" target="_blank" class="external-link">White House releases regulatory framework for the "responsible" development of digital assets</a>
<ul>
<li><a href="https://bitcoinmagazine.com/legal/-white-house-releases-digital-asset-regulatory-framework" target="_blank" class="external-link">White House releases digital asset regulatory framework</a></li>
<li>White House will empower the SEC and the CFTC to “aggressively pursue investigations” in the digital asset space based on the research provided</li>
<li>Additionally, Biden’s administration will push the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) to “redouble their efforts to monitor” the ecosystem as it relates to “unfair, deceptive, or abusive practices.”</li>
<li>Following the OSTP report on the environmental impact of crypto mining (from the last socratic topic), the Department of Energy (DoE) and the Environmental Protection Agency (EPA) are being tasked with “tracking digital assets’ environmental impacts; developing performance standards as appropriate; and providing local authorities with the tools, resources, and expertise to mitigate environmental harms.”</li>
<li>The Bank Secrecy Act will be amended to apply to digital assets, leading to larger fines for unlicensed money transfers and stricter enforcement against digital asset service providers</li>
</ul>
</li>
<li><a href="https://www.whitehouse.gov/ostp/news-updates/2022/09/16/technical-possibilities-for-a-u-s-central-bank-digital-currency/" target="_blank" class="external-link">White House Office of Science and Technology Policy (OSTP) releases a technical evaluation for a U.S. Central Bank Digital Currency system</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>Report includes lots of buzzwords and biases</li>
<li>U.S. has not yet decided whether it will pursue a CBDC but has been closely examining the implications of/options for issuing a CBDC.</li>
<li>Supposed "benefits" of a CBDC:
<ul>
<li>facilitating efficient and low-cost transactions</li>
<li>fostering greater access to the financial system</li>
<li>boosting economic growth</li>
<li>supporting the continued centrality of the U.S. within the international financial system.</li>
</ul>
</li>
<li>The report also estimates the technical feasibility of building a CBDC minimum viable product and describes how a U.S. CBDC system might affect Federal operations.</li>
<li>The report makes recommendations on how to prepare the Federal Government for a U.S. CBDC system.</li>
<li>Importantly, the report does not make any assessments or recommendations about whether the U.S. should pursue a CBDC, nor does it make any decisions regarding particular design choices for a potential U.S. CBDC system</li>
<li>They also note that a U.S. CBDC should be sustainable, avoiding the environmental concerns raised by some privately-issued digital assets.
<ul>
<li>Related to the OSTP's bitcoin mining report</li>
</ul>
</li>
<li>It will be important for technical experts to work closely with experts in money and payment systems to ensure that a CBDC system serves broader economic goals while delivering a good customer experience.</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://home.treasury.gov/policy-issues/financial-sanctions/faqs/added/2022-09-13" target="_blank" class="external-link">U.S. Department of the Treasury releases additional guidance on tornado cash sanctions</a></p>
<ul>
<li><a href="https://www.nobsbitcoin.com/ofac-tornado-sanctions-update/" target="_blank" class="external-link">US Treasury OFAC releases clarifications on Tornado Cash sanctions</a></li>
<li>OFAC is requiring people request a specific license to engage in transactions involving sanctioned funds (Tornado Cash transactions initiated before but not completed by 8/8/2022)
<ul>
<li>U.S. persons should be prepared to provide, at a minimum, all relevant information regarding these transactions with Tornado Cash, including:
<ul>
<li>the wallet addresses for the remitter and beneficiary</li>
<li>transaction hashes</li>
<li>the date and time of the transaction(s)</li>
<li>the amount(s) of virtual currency</li>
</ul>
</li>
</ul>
</li>
<li>OFAC is aware of the dust attacks where people may have received unsolicited funds connected to Tornado Cash
<ul>
<li>Technically, OFAC’s regulations would apply to these transactions</li>
<li>OFAC will not "prioritize enforcement" against these individuals</li>
</ul>
</li>
<li>While engaging in any transaction with Tornado Cash or its blocked property/interests is prohibited, interacting with open-source code itself is not prohibited (if it doesn't involve a transaction with Tornado Cash)
<ul>
<li>For example, US people are not prohibited from copying the open-source code and making it available online for others to view, as well as discussing, teaching about, or including open-source code in written publications, such as textbooks, absent additional facts.</li>
<li>US people are also not be prohibited from visiting an archived version of Tornado Cash's website (or the real website if it becomes available again)</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://www.youtube.com/watch?v=J61AZicP4eY&list=PLe0djdakvnFZC4us272mEx03WNuyZxGea" target="_blank" class="external-link">Hodlonaut vs. Craig Wright trial in Norway</a></p>
<ul>
<li><a href="https://www.defendingbtc.com/" target="_blank" class="external-link">Context/background from DefendingBTC</a></li>
<li>The OpenSats Legal Defense Fund (currently supporting Hodlonaut) has raised <strong>~70 bitcoin + ~$75K = ~$1.4M</strong>
<ul>
<li>All proceeds go toward Hodlonaut's ongoing legal fees - any excess will be used for future legal matters</li>
</ul>
</li>
<li>Craig Wright is a known bad actor - he has spent years claiming to be Satoshi without being able to cryptographically prove he owns Satoshi's keys
<ul>
<li>Craig's evidence tends to be from familial/friendly witnesses or entirely fabricated evidence</li>
</ul>
</li>
<li>Instead, he sues people who claim he's lying - Hodlonaut, Bitcoin developers, Peter McCormack, etc.
<ul>
<li>The case against McCormack happened last month in the UK</li>
<li>Although the judge agreed that McCormack caused "serious harm" to Wright's reputation, Wright was awarded only nominal damages of one British pound (US$1.23)</li>
<li>Judge concluded that Wright had "advanced a deliberately false case"</li>
</ul>
</li>
<li>In the Hodlonaut cause, Bitcoin Magazine has a reporter on the ground documenting the trial
<ul>
<li>BM rep has no legal experience</li>
<li>Some translation/technical difficulties in the courtroom added complications</li>
<li>Overall, great journalism with a lot of useful information</li>
</ul>
</li>
<li>Quick timeline:
<ul>
<li>Hodlonaut tweeted about Craig being a fraud (late 2019)</li>
<li>Craig responded with a legal notice/complaint against Hodlonaut</li>
<li>Craig Wright/Calvin Ayre put out a $5k bounty to doxx Hodlonaut's identity</li>
<li>Origination of the <a class="tag" onclick="toggleTagSearch(this)" data-content="#weareallhodlonaut">#weareallhodlonaut</a> movement on Twitter</li>
<li>Private investigator tracked Hodlonaut down and impersonated a police officer to get personal details/contact info</li>
<li>Hodlonaut filed a declaratory judgement in Norway that he was not liable to pay damages to Wright (in response to Craig's legal notice)</li>
<li>Craig filed an official libel lawsuit against Hodlonaut in the UK</li>
<li>Craig and Hodlonaut go back and forth trying to dismiss each other's proceedings</li>
<li>The UK case is originally dismissed but is reopened after an appeal from Craig
<ul>
<li>Based on the condition that the UK case doesn't involve the same cause of action as Hodlonaut's Norwegian case</li>
<li>Both cases allowed because they're slightly different</li>
</ul>
</li>
<li>The case in Norway just finished</li>
<li>Official verdict likely sometime before early November (and will probably affect the upcoming case in the UK)</li>
</ul>
</li>
<li>The Norway proceedings
<ul>
<li>UK has much more strict speech laws than Norway, which is why Hodlonaut wanted the case tried in Norway - better free speech precedent in his favor</li>
<li>Craig had ~9 lawyers, while Hodlonaut had 2</li>
<li>Hundreds of tweets and other documents referenced</li>
<li>Craig's side was more dramatic/vague
<ul>
<li>Craig's team mostly tried to bolster witness testimonies and discredit Hodlonaut's evidence</li>
<li>More emphasis on why Hodlonaut's actions harmed Craig, rather than real evidence that Craig is Satoshi</li>
</ul>
</li>
<li>Lots of discussion on the nature of bitcoin and how it works technically as background context for the case
<ul>
<li>Anyone with a decent technical understanding of how Bitcoin works would probably think it's obvious that Hodlonaut will win, but it's hard to predict how it'll actually play out in court</li>
<li>The judge seemed to be following along well enough, but it showcased the need for more Bitcoin-knowledgeable lawyers</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://bitcoinnews.com/support-hodlonaut-craig-wright/" target="_blank" class="external-link">Why does this matter?</a>
<ul>
<li>"There are plenty of technically unsophisticated but wealthy people out there who can be tricked into ignoring even the most conclusive technical evidence of fraud"</li>
<li>Most competent people have dismissed Craig's claims and ignored him, which has given him the opportunity to gather significant control over the media narrative (through events, press releases, paid testimonies)</li>
<li>"The world has been split into two groups: ones that don’t know any better and will repeat his claims with minimal skepticism, and people who know that they don’t want to go anywhere near it. As a result the first group sets the public narrative."</li>
<li>"although his court cases are laughable and doomed, he’s able to inflict millions of dollars in legal fees on his victims"</li>
<li>"He’s filed a lawsuit against a dozen (active and former, but increasingly former) Bitcoin developers demanding they aid him in producing and distributing a version of Bitcoin with a cryptographic backdoor which will allow him to seize those coins he claims to have lost (but obviously never owned) or otherwise pay him billions of dollars in damages"
<ul>
<li>Obviously, this wouldn't work technically because no one would run the code - but courts don't understand Bitcoin and just take Craig's word</li>
</ul>
</li>
<li>Craig has nothing to lose - he’ll tell whatever lies are required to keep the litigation going for as long as possible</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/markets/russian-central-bank-and-ministry-of-finance-agree-on-bitcoin-crypto-bill" target="_blank" class="external-link">Russian central bank and Ministry of Finance agree on draft bill allowing Bitcoin/crypto for international trade</a></p>
<ul>
<li>The Russian Ministry of Finance and its central bank have agreed on a draft bill allowing bitcoin and cryptocurrency payments for international trade settlements, per a report from Russian news outlet Tass</li>
<li>Bill covers "how cryptocurrency can be purchased, what can be done with it, and how cross-border settlements can or cannot be made" according to the Deputy Finance Minister</li>
<li>Bank of Russia still opposes the legalization of cryptocurrency exchanges and settlements in cryptocurrencies within Russia
<ul>
<li>Continues to illustrate the divergence of opinion among regulators</li>
</ul>
</li>
<li>Initial Russian bill proposing framework for digital assets was presented earlier this year and encouraged a ban on bitcoin mining
<ul>
<li>The Ministry of Finance rebutted with a bill of its own that called for stricter regulation, rather than a full ban.</li>
<li>Putin has since announced his support for the Ministry's bill, citing Russia's potential competitive advantages in the mining space</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/legal/iran-greenlights-bitcoin-crypto-payments-for-imports" target="_blank" class="external-link">Iran greenlights Bitcoin, crypto payments for imports</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Iran reportedly passed a law addressing the use of cryptocurrency for imports.</li>
<li>Cryptocurrency can be used as payment for imports to the country by government and local businesses.</li>
<li>The law also addresses fuel supply and electrical consumption for bitcoin mining</li>
<li>The authorization was an agreement between the Ministry of Industry and the Central Bank –– arguably suggesting a multi-departmental consensus on the viability of bitcoin as a means for international payments.</li>
<li>In May of 2021, Iran previously banned Bitcoin mining, citing power grid concerns.
<ul>
<li>The same month, the Iranian central bank also banned the trading of cryptocurrencies mined outside of the country.</li>
<li>The mining ban was later lifted in October 2021 just to be reimposed by December of the same year, once again citing power grid concerns.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li>
<p><a href="https://bitcoinmagazine.com/business/nydig-announces-lightning-accelerator-project" target="_blank" class="external-link">NYDIG announces Lightning accelerator project "In Wolf's Clothing"</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Announced in-person by Ross Stevens at the Bitcoin Commons on 8/26 (during BitBlockBoom)</li>
<li>Stevens shared what many Bitcoiners believe, "The technology underlying shitcoins is brittle," and assured the audience that his companies "will always stay bitcoin." From his paper with Allen Farrington, he shared his underlying mission. "The concept of decentralized finance is powerful, noble and worthy of a lifetime of focused effort."</li>
<li>Chose to launch a Lightning-focused accelerator after witnessing the growth:
<ul>
<li>"The reality is that this year, the progress in Bitcoin and Lightning is staggering. Month after month after month, the nodes on Lightning are growing."</li>
</ul>
</li>
<li>The accelerator is geared toward individual founders and small teams, developers working on Lightning, Taro and covenants, and pre-seed, seed, series A companies.</li>
<li>Transportation and lodging will be provided for participants from anywhere in the world.</li>
<li>The program will be run in eight-week cohorts. There will be 8-12 teams per cohort. World-class mentors with office hours. The cohorts will be exclusively non-remote. There will be significant seed capital for each team with already-recruited investors and full-time, in-house expertise.</li>
<li>People who are interested can apply at <a href="mailto:apply@wolfnyc.com" target="_blank" class="external-link">apply@wolfnyc.com</a></li>
</ul>
</li>
<li>
<p><a href="https://www.ledger.com/blog/ledger-nano-x-and-nano-s-plus-now-available-in-all-best-buy-stores-nationwide" target="_blank" class="external-link">Ledger Nano X and Nano S Plus now available in all Best Buy stores nationwide</a></p>
<ul>
<li>Ledgers aren't the best hardware wallets (and they entice people toward shitcoins), but they're fairly reliable at a reasonable price point</li>
<li>You can now walk into any Best Buy with cash and buy a hardware wallet privately</li>
<li>Physical purchases help prevent getting caught in online data leaks that might happen with online-only merchants
<ul>
<li>Privacy matters when dealing with Bitcoin/crypto hardware (like when <a href="https://www.ledger.com/message-ledgers-ceo-data-leak" target="_blank" class="external-link">270K Ledger customers had emails and mailing addresses leaked</a> in 2020)</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://www.nobsbitcoin.com/human-rights-foundation-donates-325k-to-bitcoin-development/" target="_blank" class="external-link">Human Rights Foundation donates $325K to Bitcoin development: 8 donations in total</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Latest round of donations focused on furthering key elements of the Bitcoin ecosystem:
<ul>
<li>Censorship-resistance</li>
<li>Open-source custody solutions</li>
<li>Bitcoin Core development</li>
<li>Chaumian e-cash</li>
<li>Education across the globe</li>
</ul>
</li>
<li>Notable grants:
<ul>
<li>$100K to BTCPayServer (open-source payment processor)</li>
<li>$50K toward work on Fedimint (Chaumian e-cash)</li>
<li>$25K to Seed Signer (offline/air-gapped hardware wallet)</li>
<li>$25K toward Robosats (P2P LN-based exchange)</li>
</ul>
</li>
<li>HRF has donated over $1.5 million in BTC and USD over the past two years to further Bitcoin development across the world</li>
<li>Will announce its next round of donations in January 2023</li>
<li>Related news (9/26): <a href="https://bitcoinmagazine.com/business/bitcoin-non-profit-brink-funds-11-bitcoin-lightning-developers" target="_blank" class="external-link">Bitcoin non-profit Brink announced that they fund 11 total Bitcoin/Lightning developers</a></li>
</ul>
</li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li>
<p><a href="https://twitter.com/carl_dong/status/1565108387842560000" target="_blank" class="external-link">Carl Dong leaves Chaincode Labs and stop contributing to Bitcoin Core full-time</a></p>
<ul>
<li>Most well-known for his work toward improving Bitcoin's software supply chain security (e.g., reproducible builds)</li>
<li>Also helped compartmentalize consensus-critical code away from non-consensus-critical modules</li>
<li>Not sure what he plans to do next - looking for opportunities</li>
</ul>
</li>
<li>
<p><a href="https://www.linuxfoundation.org/press/linux-foundation-announces-an-intent-to-form-the-openwallet-foundation" target="_blank" class="external-link">Linux Foundation announces an intent to form the OpenWallet Foundation (OWF)</a></p>
<ul>
<li>"A consortium of companies and non-profit organizations collaborating to create an open source software stack to advance a plurality of interoperable wallets"</li>
<li>OWF aims to establish best practices for digital wallet technology through collaboration on open source code for use by other developers to build interoperable, secure, and privacy-protecting wallets.</li>
<li>The OWF does not intend to publish a wallet itself, nor offer credentials or create any new standards.</li>
<li>The wallet engine they build will support a wide variety of use cases from identity to payments to digital keys and aim to achieve feature parity with the best available wallets</li>
</ul>
</li>
<li>
<p><a href="https://nydig.com/research/developers-of-bitcoin" target="_blank" class="external-link">NYDIG releases "Developers of Bitcoin" - paper on Bitcoin's technical development and open-source contributors over time</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Report looks at the technical development of Bitcoin and the active community of open-source developers who update, maintain, and enhance the Bitcoin code and its greater ecosystem</li>
<li>"The code has been available for public inspection, criticism, and analysis for over 13 years now. It has withstood the test of time and continues to evolve, while its community has become bigger and more vibrant over the years."</li>
<li><strong>Context/Background</strong>
<ul>
<li>Paper provides a timeline of how the development process has changed over time</li>
<li>Breaks down who the core contributors were over different periods in Bitcoin's development</li>
</ul>
</li>
<li><strong>Analysis</strong>
<ul>
<li>By measuring the contributions from the open-source developer community to Bitcoin’s codebase, we can make quantitative assessments of its developments. In this analysis, we specifically look at code commits, which are small, generally self-contained sets of updates to a shared repository of code. Historical commit data can tell us who has been contributing most to the code over time. This helps us understand the pace of development across certain projects as well as the key players at each point in time.
<ul>
<li>They note the drawbacks to this kind of analysis:
<ul>
<li>Code commit quantity doesn't necessarily correlate with meaningful contributions</li>
<li>It only considers contributions that actually made it into the code</li>
</ul>
</li>
</ul>
</li>
<li>There have been <strong>1,140 unique developers</strong> who have contributed to Bitcoin Core.
<ul>
<li>Impressive growth but still small relative to other open-source projects</li>
<li>The broader Bitcoin ecosystem is much larger, with <strong>13,057 unique developers</strong>
<ul>
<li>This excludes developers working on closed-source solutions that are not open to the public, such as the developers here at NYDIG.</li>
</ul>
</li>
</ul>
</li>
<li>We define an <strong>active developer</strong> as anyone who has made a commit in a given month.
<ul>
<li>While that number can vary month to month, Bitcoin Core averages roughly <strong>40 - 60 active developers per month</strong>.</li>
<li>The broader ecosystem has ranged between <strong>600-1000 monthly active developers</strong>.</li>
</ul>
</li>
<li>Bitcoin Core adds ~5-20 new developers per month</li>
<li>In 2021, over half the contributions to Bitcoin Core have come from developers that joined since the last bull market cycle in 2017</li>
<li>Average monthly commits consistently range between 200-400</li>
<li>While many people have contributed to Bitcoin over the years, a small number are responsible for the bulk of development:
<ul>
<li>The <strong>top 37 developers account for 80% of Bitcoin’s total code commits</strong>, and the <strong>top 50 account for 84% of code commits</strong></li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://blockwaresolutions.com/s/Bitcoin-Transaction-Fees-Final-Draft.pdf" target="_blank" class="external-link">Riot and Blockware release Bitcoin transaction fee research report</a></p>
<ul>
<li>For users of Bitcoin, its transaction fees represent an unpredictable cost, but a known benefit: global 24/7 digital final settlement of a highly liquid asset.</li>
<li>Report answers these questions:
<ul>
<li><strong>Who pays transaction fees and how fee rates are set</strong>
<ul>
<li>Breaks down the UTXO model, scarcity of block space, and how a fee market emerges from a variety of different consumers</li>
</ul>
</li>
<li><strong>Why high congestion fees are transitory</strong>
<ul>
<li>Bitcoin’s scaling solutions are not perfectly timed to coincide with waves of new adoption resulting in fee spikes that correspond to scaling cycles:
<ul>
<li>High fees bring pressure to more efficiently use block space by adopting new scaling technologies</li>
<li>These cost-saving measures enable an increase in total throughput for Bitcoin settlements without significantly increasing the cost of running a Bitcoin node</li>
<li>Low-cost nodes empower users to use their own software's consensus rules to verify all transactions and blocks without trusting a third party</li>
<li>Low-cost verification secures Bitcoin's decentralization</li>
<li>Bitcoin's decentralization keeps the network alive, allowing adoption to continue growing over time (increasing demand on block space)</li>
</ul>
</li>
</ul>
</li>
<li><strong>How Bitcoin transactors could use fees to route around unreliable miners</strong>
<ul>
<li>At the end of the day, miners have the ability to only do one thing: propose blocks that nodes (who set the consensus rules) verify, accept, and use to update the ledger.</li>
<li>Since miners cannot change key consensus rules, malicious or unreliable miners can only censor specific transactions they do not want to include in their own blocks.</li>
<li>The dynamic fee market provides a mechanism for economically disincentivizing bad miner behavior
<ul>
<li>Ex) Miners attempt to censor transactions, so censored users start increasing the mining fee they will pay to get in a block. In aggregate, these fees eventually reach a point where honest-acting miners will prioritize including them. Over a long enough time, high fees incentivize more honest miners to come online, making it even more challenging to maintain a censorship attack</li>
</ul>
</li>
<li>Most miner attacks are wars of attrition - requires an ever-increasing amount of energy waste/cost in order to maintain censorship and outcompete honest market actors</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/technical/public-fedimint-testnet-launched-on-signet" target="_blank" class="external-link">Public Fedimint instance launched on signet</a></p>
<ul>
<li>Eric Sirion announced the official launch of the first public signet for Fedimint
<ul>
<li>Fedimint is the open source protocol that allows people to easily create their own Chaumian Mints on top of the LNP/BP stack</li>
<li>Signet is one of several test Bitcoin networks (alongside testnet & regtest)</li>
</ul>
</li>
<li>Limited functionality: you can join a mint, receive signet ecash tokens that represent sats ,and send those ecash tokens to others</li>
</ul>
</li>
<li>
<p><a href="https://ronindojo.io/en/bokuto" target="_blank" class="external-link">RoninDojo announces Bokuto node</a></p>
<ul>
<li><a href="https://ronindojo.io/en/nodes-overview" target="_blank" class="external-link">RoninDojo Node comparison guide</a></li>
<li>Attempting to lower the barrier to entry for sovereign, privacy-focused Bitcoin usage</li>
<li>"Recommended barebone hardware setup...3D print the enclosure yourself, or later upgrade your Bokuto with a Tanto Kit"</li>
<li>Comes without a case, LED lights, premium support, etc. - includes the minimum components to build a high-quality, functional node at home</li>
<li>Not Raspberry Pi-based - Ronin nodes use a RockPro64 Board</li>
<li>Spoke with <a href="https://twitter.com/btcxzelko" target="_blank" class="external-link">BTCxZelko</a> from RoninDojo about being a guest speaker at Honolulu BitDevs
<ul>
<li>He's interested in giving a virtual talk about Bitcoin privacy if we can accommodate</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://btc.usespiral.com/" target="_blank" class="external-link">Spiral is a privacy-preserving block explorer</a></p>
<ul id="0467b3">
<li>All information about the addresses you look up stays on your device. The Spiral server learns nothing about your queries.</li>
<li>Spiral uses <a href="https://blintzbase.com/posts/pir-and-fhe-from-scratch/" target="_blank" class="external-link">fully homomorphic encryption</a> to "guarantee" your privacy.</li>
<li>Currently in beta - cryptographic implementation has not been formally audited</li>
<li>Queries are quite slow on average, and weren't working at all when I tried recently</li>
</ul>
</li>
<li>
<p><a href="https://tftc.io/martys-bent/issue-1264-dont-underestimate-human-creativity/" target="_blank" class="external-link">Validating Lightning Signer (VLS) separates keys from nodes</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</p>
<ul>
<li>Currently being used by Sphinx Chat (Lightning-based chat/podcast app)</li>
<li>Running a Lightning Network node can be difficult since you need 100% uptime to facilitate payments</li>
<li>Uptime requirements have pushed many enterprise-level Lightning users to run their nodes in the cloud using server farms</li>
<li>It would be trivial for a motivated attacker to identify and confiscate dedicated Lightning hardware sitting in server farms across the world, effectively allowing the attacker to confiscate a user's bitcoin</li>
<li>Instead of housing the keys and the node in the same hardware, thus creating a central point of failure, these projects aim to equip users with the means to separate the two functions and give those users back full control of their bitcoin by ensuring they can physically possess their keys using dedicated hardware that communicates with the node running in the cloud</li>
<li>The hardware running the node at a particular server farm can be shut off, but the user will still have their keys and, therefore, access to their bitcoin</li>
</ul>
</li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li>
<p><a href="https://www.nobsbitcoin.com/major-bitcoin-mining-pool-with-10-of-hash-rate-poolin-appears-to-be-insolvent-withdrawals-have-been-frozen/" target="_blank" class="external-link">Major Bitcoin mining pool with 10% of hash rate, 'Poolin', freezes withdrawals</a></p>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/poolin-bitcoin-mining-hash-rate-cut" target="_blank" class="external-link">Poolin Bitcoin mining hash rate cut in half</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.coindesk.com/business/2022/09/13/bitcoin-miner-poolin-to-issue-iou-tokens-after-suspending-withdrawals/" target="_blank" class="external-link">Bitcoin mining pool Poolin will issue 'IOU' tokens after suspending withdrawals</a></li>
<li>In early September, Poolin suspended withdrawals from their wallet service, PoolinWallet, in an effort to stabilize assets and preserve liquidity</li>
<li>Significant because:
<ul>
<li>Poolin is a China-based mining pool service, operating in China after the mining ban</li>
<li>The pool was estimated to have roughly 10% of the hash rate before withdrawals were suspended</li>
<li>Currently sitting at ~4% of global hash rate</li>
</ul>
</li>
<li>Luckily, miners can easily switch between pools</li>
<li>Switching to another pool won’t unfreeze withdrawals from Poolin but it does provide the hash rate market a mechanism to vote with their ASICs in real time and choose a more competitive global pool</li>
<li>One interesting note is that Poolin announced its partnership with Three Arrows Capital back in June of 2020.</li>
<li>Poolin later announced the issuance of IOU tokens reflecting 1:1 ratio with user balances across a variety of cryptocurrencies
<ul>
<li>IOU tokens can be traded for the corresponding crypto, used to by new mining machines, or shares of the company</li>
<li>Poolin's intention is to gradually burn this IOUs in batches</li>
<li>Not the kind of scheme a financially solvent company engages in</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://www.nobsbitcoin.com/satoshi-mining-analysis/" target="_blank" class="external-link">"Was Satoshi a Greedy Miner?" by Jameson Lopp</a></p>
<ul>
<li>Long ago, people analyzed a particular nonce pattern in early mined Bitcoin blocks (dubbed the Patoshi Pattern) that some believe can be attributed to blocks mined by Satoshi himself</li>
<li>Lopp's analysis is based on the assumption that the Patoshi Pattern can be attributed entirely to Satoshi's early mining</li>
<li>He identified some peculiarities, like the fact that Satoshi appeared to be intentionally throttling his hash rate</li>
<li>Lopp's conclusions: "What am I sure of with regard to Satoshi?
<ul>
<li>Their goal was to keep the "heartbeat" of the network alive while it was being bootstrapped.</li>
<li>They mined on a single machine with a maximum hashrate of 6 Mhps.</li>
<li>They could have easily earned more than twice as much BTC if they had mined at full power.</li>
<li>They did not want to be in a position of dominating the network hashrate, but may have felt it was necessary during the earliest days when the network was far more fragile due to having fewer than five miners.</li>
<li>They cared a great deal about difficulty adjustments. The adjustment algorithm was one of Satoshi's greatest innovations and <a href="https://bitcointalk.org/index.php?topic=43.0" target="_blank" class="external-link">they opined upon the topic</a> more than almost any other.</li>
<li>They wanted as many people to be able to mine on home PCs as possible (<a href="https://bitcointalk.org/index.php?topic=12.msg54#msg54" target="_blank" class="external-link">Satoshi decried the FGPA / GPU mining race</a>)"</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="coinkite-giveaway-2" tabindex="-1">Coinkite Giveaway <a class="tag" onclick="toggleTagSearch(this)" data-content="#2">#2</a></h1>
<ul>
<li>
<h4 id="a-href-https-docs-google-com-forms-d-143nx-gh-6v-f-ucmrk-xlgx-wkzdse-kes-pm-kxr-to1-jvpmxc-edit-responses-target-blank-class-external-link-and-quot-guess-the-nonce-and-quot-google-form-a" tabindex="-1"><a href="https://docs.google.com/forms/d/143nxGH6vF-UcmrkXLGXWkzdse_kesPmKXRTo1Jvpmxc/edit#responses" target="_blank" class="external-link">"Guess the Nonce" Google Form</a></h4>
<ul>
<li>Submit guesses ahead of time (only if you plan on attending the meetup)!</li>
<li>A specific block will be chosen at the meetup and its nonce will be compared to all submissions - closest guess wins</li>
<li><a href="https://youtu.be/6MgJCGb01jI?t=190" target="_blank" class="external-link">Video explaining what a nonce is in relation to bitcoin mining</a>
<ul>
<li>A "nonce" is a "number used only once".</li>
<li>Miners are continuously hashing block data when trying to "win" the block lottery. The nonce is an extra field that can be repeatedly modified to produce entirely new hashes without changing the actual transaction data in the block.</li>
<li>Miners keep changing the nonce to generate new hashes, ultimately trying to get close enough to the difficulty target.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li>Last month's missed topics
<ul>
<li><a href="https://cointelegraph.com/news/bitcoin-without-internet-sms-service-allows-sending-btc-with-a-text" target="_blank" class="external-link">Bitcoin without internet: SMS service allows sending BTC with a text</a> (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-14/#903e93">Obsidian Link</a>)</li>
<li><a href="https://bitcoinmagazine.com/technical/galoy-brings-us-dollars-to-bitcoin" target="_blank" class="external-link">Galoy brings synthetic USD to Bitcoin</a> (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-14/#f25c18">Obsidian Link</a>)</li>
<li><a href="https://www.prnewswire.com/news-releases/foundry-makes-btc-donation-to-open-source-stratum-v2-protocol-developer-to-improve-bitcoins-proof-of-work-mining-layer-301598747.html" target="_blank" class="external-link">Foundry Makes BTC donation to open source Stratum V2 protocol developer to improve Bitcoin's proof-of-work mining layer</a> (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-14/#da1ba8">Obsidian Link</a>)</li>
</ul>
</li>
<li>Conferences that happened
<ul>
<li><a href="https://bitblockboom.com/" target="_blank" class="external-link">BitBlockBoom 2022 in Austin</a></li>
<li><a href="https://bitcoinmagazine.com/culture/recap-baltic-honeybadger-2022" target="_blank" class="external-link">Baltic Honeybadger 2022 in Riga</a></li>
</ul>
</li>
<li>Coinbase in the court room
<ul>
<li><a href="https://www.theblock.co/post/165003/coinbase-faces-class-action-for-crashing-during-volatility-listing-securities" target="_blank" class="external-link">Coinbase faces class action for crashing during volatility, listing securities</a></li>
<li><a href="https://www.channelnewsasia.com/business/brother-ex-coinbase-manager-pleads-guilty-insider-trading-charge-2933991" target="_blank" class="external-link">Brother of ex-Coinbase manager pleads guilty to insider trading charge</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://blog.coinbase.com/defending-privacy-in-crypto-e09db33dece8?gi=248cf3e6ee23" target="_blank" class="external-link">Coinbase funding lawsuit against Treasury department</a></li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/compute-north-bankruptcy/" target="_blank" class="external-link">Bitcoin mining hosting provider Compute North has filed for chapter 11 bankruptcy protection in a federal court</a>
<ul>
<li>Clients include Marathon (one of the largest publicly traded mining companies)</li>
<li>A Marathon spokesperson said they don't expect the filing to impact their current mining operations</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/nigeria-binance-partner-for-economic-zone-in-west-africa" target="_blank" class="external-link">Nigeria to establish special economic zone for Bitcoin/crypto</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.nobsbitcoin.com/australian-federal-police-forms-cryptocurrency-unit-focused-on-tracking-and-seizing-funds/" target="_blank" class="external-link">Australian federal police forms cryptocurrency unit focused on tracking and seizing funds</a></li>
<li><a href="https://bitcoinmagazine.com/culture/doctor-bitcoin-jailed-for-selling" target="_blank" class="external-link">Doctor Bitcoin jailed for selling P2P sats</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.nobsbitcoin.com/u-s-recovers-over-30-million-in-cryptocurrency-stolen-by-north-korean-hackers/" target="_blank" class="external-link">U.S. recovers over $30 million in cryptocurrency stolen by North Korean hackers</a></li>
<li><a href="https://www.marketwatch.com/story/irs-says-it-exposed-some-confidential-taxpayer-data-on-website-11662148381" target="_blank" class="external-link">IRS says it exposed some confidential taxpayer data on website</a></li>
<li><a href="https://www.nobsbitcoin.com/us-senator-wyden-border-agent-rights-abuse/" target="_blank" class="external-link">US Senator Wyden: Border agents are searching phones without warrants and storing data for 15 years</a></li>
<li><a href="https://www.wsj.com/articles/global-vpn-providers-pull-india-servers-over-new-cybersecurity-rules-11662024603" target="_blank" class="external-link">Hosted VPN providers shut down in India over anti-privacy law: India will soon require operators to collect names, emails, and IP addresses</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)</li>
<li><a href="https://www.nobsbitcoin.com/bitgo-adds-lightning-support-for-customers/" target="_blank" class="external-link">BitGo adds custodial Lightning support</a></li>
<li><a href="https://www.businesswire.com/news/home/20220913005367/en/Digital-Asset-Exchange-EDX-Markets-Launches-with-Backing-from-Leading-Broker-Dealers-Global-Market-Makers-and-Venture-Capital-Firms" target="_blank" class="external-link">Digital Asset exchange EDX Markets launches with backing from leading broker-dealers, global market makers and venture capital firms</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>Includes Fidelity, Charles Schwab, Citadel, and others</li>
</ul>
</li>
<li><a href="https://blog.blockstream.com/tapscript-new-opcodes-reduced-limits-and-covenants/" target="_blank" class="external-link">Blockstream blog post "Tapscript: New Opcodes, Reduced Limits and Covenants"</a></li>
<li><a href="https://bitcoinmagazine.com/business/blockstream-sevenlabs-launch-decentralized-bitcoin-exchange" target="_blank" class="external-link">BlockStream and Sevenlabs launch decentralized Bitcoin exchange</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>Leverages open source protocol TDEX and will operate 24/7</li>
<li>Provides access to the Liquid Network</li>
</ul>
</li>
<li><a href="https://www.nobsbitcoin.com/trezor-suite-v2293/" target="_blank" class="external-link">Trezor Suite v22.9.3 adds coin control</a></li>
<li><a href="https://www.nobsbitcoin.com/bipbounty-tax-deductible-bug-bounties-for-bitcoin/" target="_blank" class="external-link">BIPBounty: Tax deductible bug bounties for Bitcoin</a></li>
<li><a href="https://github.com/DavidVorick/CredibleConfessions" target="_blank" class="external-link">Credible Confessions: A webapp for writing credible, anonymized information</a></li>
<li><a href="https://blog.getalby.com/introducing-the-alby-wallet-api/" target="_blank" class="external-link">Alby releases wallet API</a> (<a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Obsidian Link</a>)
<ul>
<li>The API enables marketplaces, merchants, businesses, developers, and more, to offer instant, inexpensive, global payments to anyone, at any time</li>
</ul>
</li>
</ul>
Socratic Seminar 14
2023-05-20T11:02:15.072Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-14/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-13/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-15/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect people’s privacy</li>
<li>Interaction and asking questions are encouraged</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House rules</a></li>
<li><a href="https://bitcoinerjobs.com/" target="_blank" class="external-link">Apply for a bitcoin job</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow us on Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate sats</a></li>
<li>Entrepreneur's Sandbox sponsorship + venue change</li>
</ul>
<h1 id="bitcoin-kp-is" tabindex="-1">Bitcoin KPIs</h1>
<ul>
<li><a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's Bitcoin Dashboard</a></li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li>
<p><a href="https://www.coincenter.org/u-s-treasury-sanction-of-privacy-tools-places-sweeping-restrictions-on-all-americans/" target="_blank" class="external-link">US Treasury adds Tornado Cash to OFAC sanctions list</a></p>
<ul>
<li>What happened?
<ul>
<li>Tornado Cash smart contract on Ethereum was specifically targeted (alongside known connected addresses, Tornado Cash entity, etc.)</li>
<li>Tornado Cash is a mixer deployed as a smart contract on the Ethereum blockchain
<ul>
<li>More akin to a robot than an entity –– it can be thought of as an automated version of a typical cryptocurrency mixer</li>
<li>It still works like a regular mixer. Users deposit cryptocurrency into the Tornado Cash contract, which pools the funds and enables withdrawals unlinked to the deposits</li>
<li>Still non-custodial as users can trustlessly withdraw mixed funds by using zero-knowledge proofs to certify ownership over previously deposited funds</li>
</ul>
</li>
<li>The sanctioning of Tornado Cash represents OFAC’s <strong>second-ever sanction on a cryptocurrency mixer</strong>. The first, on Blender, happened in May 2022.</li>
<li>This is still the <strong>first time an open source protocol has been sanctioned</strong>.</li>
<li>OFAC said in a statement that Tornado Cash “<strong>has been used to launder more than $7 billion worth of virtual currency since its creation in 2019</strong>,” highlighting the alleged funneling of over $455 million stolen by the Democratic People’s Republic of Korea (DPRK)-sponsored Lazarus hacking group, which was sanctioned by the U.S. in 2019</li>
<li>Tornado Cash smart contract is still running but requires someone run their own Ethereum node to interact - other known frontends have been shut down</li>
<li>Tornado Cash GitHub repository taken down and certain developers who contributed to the Tornado Cash protocol had their GitHub accounts deleted - affecting unrelated work on other projects</li>
<li><a href="https://www.fiod.nl/arrest-of-suspected-developer-of-tornado-cash/" target="_blank" class="external-link">A suspected Tornado Cash developer was arrested in Amsterdam</a></li>
</ul>
</li>
<li>What are the implications?
<ul>
<li><a href="https://www.coincenter.org/analysis-what-is-and-what-is-not-a-sanctionable-entity-in-the-tornado-cash-case/" target="_blank" class="external-link">Coin Center Analysis: What is and what is not a sanctionable entity in the Tornado Cash case</a></li>
<li><a href="https://www.btcpolicy.org/articles/criminal-code" target="_blank" class="external-link">BTC Policy Institute statement on Tornado Cash</a></li>
<li>Code is speech - banning open source software is unconstitutional and practically infeasible</li>
<li>Blacklisting Tornado Cash funds impacts the complex network of DeFi protocols and connected companies leveraging that money (e.g., DAI, USDC, etc.)</li>
<li>Ethereum's account based system (vs Bitcoin's UTXO system) makes it more difficult to separate "tainted" funds that have gone through Tornado Cash
<ul>
<li>People sending tainted ETH to celebrities and other prominent figures who can't reject or easily isolate that money</li>
</ul>
</li>
<li>How does this affect Ethereum's transition to proof of stake (supposedly) next month?
<ul>
<li>Majority of stakers will be OFAC-compliant entities</li>
<li>Is this <a href="https://twitter.com/pourteaux/status/1559879293810774017" target="_blank" class="external-link">Ethereum's UASF moment</a>?</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/technical/is-bitcoin-next-after-tornado-cash" target="_blank" class="external-link">Is Bitcoin next after Tornado Cash?</a>
<ul>
<li>Ethereum smart contract mixers vs Bitcoin coinjoins
<ul>
<li>Account-based structure forces ETH privacy tools to act more like mixers (deposit, then withdraw), while Bitcoin's UTXO system enables coinjoins, which are just collaborative bitcoin transactions where input ownership is obfuscated
<ul>
<li>Bitcoin UTXO ownership isn't as clearcut - chain analysis is all based on probabilities</li>
</ul>
</li>
<li>In a 2020 report on Wasabi coinjoin software, Europol stated that “users who download the wallet store all bitcoins locally,” which “means that the AML legislation... does not apply to this service.”</li>
<li>Ethereum smart contracts have fixed addresses that users interact with, making it a trivial target for sanctioning
<ul>
<li>Coinjoin coordinators rotate deposit addresses with each new round</li>
</ul>
</li>
<li>Centralized coinjoin coordinators can be targeted (except Joinmarket), but new coordinators can easily pop up and gain liquidity (also applies to spinning up new mixing smart contracts on Ethereum)</li>
<li>In general, centralized tools play a bigger role in Ethereum infrastructure versus Bitcoin - ETH has more regulatory chokepoints, and Bitcoin is more prepared to withstand nation-state attacks</li>
</ul>
</li>
<li>Ultimately, Bitcoin can't rely on good-faith regulation because regulators tend to be stupid</li>
<li>We need to design systems and tools that are robust against bad regulation, such that regulatory enforcement is infeasible in practice</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://content.govdelivery.com/accounts/USFDIC/bulletins/328cfe1" target="_blank" class="external-link">FDIC issues cease and desist letters to five crypto companies about false/misleading claims about deposit insurance</a></p>
<ul>
<li>These companies suggested that certain crypto-related products are FDIC-insured</li>
<li>List includes FTX exchange (others aren't notable)</li>
<li>"FTX US is not insured by the FDIC, and the regulator does not insure brokerage accounts or cover stocks and cryptocurrencies" according to FDIC Assistant General Counsel Seth Rosebrock</li>
<li><a href="https://web.archive.org/web/20220720201025/https://twitter.com/brett_ftx/status/1549773584922333184" target="_blank" class="external-link">In a tweet</a> that has since been deleted, FTX US President Brett Harrison said that any direct deposits from employers to FTX US would be stored in FDIC-insured bank accounts.</li>
<li>Sam Bankman-Fried, CEO of FTX tweeted: “FTX does not have FDIC insurance … banks we work with do. We never meant otherwise, and apologize if anyone misinterpreted it.”</li>
<li>Other letter recipients claimed certain crypto exchanges (Coinbase, Gemini, eToro) were FDIC-insured, which isn't accurate</li>
<li>Similar claims made against Voyager in July for falsely claiming FDIC insurance status</li>
</ul>
</li>
<li>
<p><a href="https://www.defendingbtc.com/" target="_blank" class="external-link">Defending BTC telethon fundraiser on 8/26 for hodlonaut's legal defense</a></p>
<ul>
<li><a href="https://bitcoinmagazine.com/culture/timeline-of-hodlonaut-craig-wright-case" target="_blank" class="external-link">Timeline of the legal battle between hodlonaut and Faketoshi</a></li>
<li><a href="https://www.reddit.com/r/Bitcoin/comments/ws8wfd/starting_september_12th_in_oslo_norway_hodlonaut/ikxqxoo" target="_blank" class="external-link">Greg Maxwell's response/context</a>
<ul>
<li>Faketoshi doesn't deserve any more airtime, but this is an important case</li>
<li>Hodlonaut and many Bitcoin Core developers are racking up legal bills, even though Faketoshi has repeatedly lied and falsified evidence in the past</li>
<li><a href="https://opensats.org/projects/opensats_legal_defense" target="_blank" class="external-link">OpenSats introduces Legal Defense Fund to defend open source Bitcoin contributors</a>
<ul>
<li>Initial round of donations will fund hodlonaut's legal bills, but future donations will go toward defending other open source Bitcoin contributors in similar situations</li>
<li>Currently raised over 50 bitcoin + ~$30k</li>
<li>Fiat donations can be tax deductible (and BTC donations can be anonymous)</li>
<li>You can set up your paycheck split to automatically donate a portion of USD to OpenSats</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://cointelegraph.com/news/victorian-police-to-get-greater-power-to-seize-crypto-assets-from-criminals" target="_blank" class="external-link">Victorian police to get ‘greater power’ to seize crypto assets from criminals</a></p>
<ul>
<li>Authorities in the Australian state are being granted the power to "<strong>seize digital wallets</strong>” under the new laws</li>
<li>Convictions for possessing a <strong>trafficable quantity of firearms/drugs</strong> or <strong>sexual offenses</strong> will automatically trigger the forfeiture of assets (including cryptocurrency)</li>
<li>Cryptocurrency platforms will also be forced to hand over information about suspects to law enforcement</li>
</ul>
</li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li>
<p>Blackrock wants your sats</p>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/blackrock-to-offer-bitcoin-in-coinbase-partnership" target="_blank" class="external-link">BlackRock to offer Bitcoin trading/custody in new Coinbase partnership</a>
<ul>
<li>BlackRock will begin offering bitcoin trading and custody services for its institutional clients by partnering with Coinbase.</li>
</ul>
<ul>
<li>Coinbase Prime (Coinbase's institutional brokerage platform) will be integrated into BlackRock's investment platform Aladdin as part of existing portfolio management/trading workflows</li>
<li>Bitcoin will be held by Coinbase Custody</li>
<li>Funds can be transferred between wallets internally but not withdrawn outside of the Coinbase Prime platform</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/markets/blackrock-launches-spot-bitcoin-private-trust" target="_blank" class="external-link">BlackRock launches spot Bitcoin private trust</a>
<ul>
<li>BlackRock’s institutional bitcoin trust will not support the custodial transfer of bitcoin</li>
<li>The value of the trust will be derived from bitcoin’s spot price</li>
</ul>
</li>
<li>Just last year, BlackRock stated they were <strong>not aware of any institutional interest in Bitcoin</strong>, and now they've launched 2 Bitcoin-focused products for their clients</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/markets/u-s-inflation-slowed-to-8-5-in-july-bitcoin-jumps" target="_blank" class="external-link">U.S. inflation only 8.5% in July</a></p>
<ul>
<li>Slightly under market expectations, but still high</li>
<li>"0% inflation" is a lie - maybe not as bad as last month, but inflation is not 0%</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/business/motiv-launches-16-bitcoin-economies-in-peru" target="_blank" class="external-link">Motiv launches 16 Bitcoin economies in Peru</a></p>
<ul>
<li>Motiv is a non-governmental organization (NGO) dedicated to creating bitcoin circular economies</li>
<li>The NGO announced <strong>16 circular bitcoin economies are operational in Peru</strong> after providing the communities with the educational materials and tools needed to get started</li>
<li>Many communities in Peru are separated from central banking, but <strong>the region has 80% smartphone penetration</strong> - perfect catalyst for Bitcoin adoption</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/business/vinteum-to-fund-bitcoin-developers-in-brazil" target="_blank" class="external-link">Vinteum non-profit launches to fund Bitcoin developers in Brazil/Latin America</a></p>
<ul>
<li>Vinteum is a non-profit dedicated to decentralizing the open-source development of Bitcoin in Brazil (with the intent to expand to all of Latin America and then worldwide)</li>
<li>Vinteum executive director Lucas Ferreira: "The development ecosystem will be <strong>more robust and resistant if we have different entities funding developers from all over the world</strong>."</li>
<li>Bruno Garcia will be the first Bitcoin Core developer to be funded through Vinteum
<ul>
<li>He will also be joining the Vinteum team as the third founding member</li>
</ul>
</li>
</ul>
</li>
<li>
<p><a href="https://blog.river.com/announcing-zero-fee-recurring-orders-2/" target="_blank" class="external-link">River introduces zero-fee recurring Bitcoin purchases</a></p>
<ul>
<li>Not newsworthy itself, but useful info for local sat stackers</li>
<li>River is a great bitcoin-only exchange that actually operates in Hawaii</li>
<li><strong>DCA is the way</strong> - set it and forget it</li>
</ul>
</li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li>
<p><a href="https://bitcoinmagazine.com/culture/luke-dashjr-segwit-bitcoin-independence-day" target="_blank" class="external-link">Bitcoin Independence Day on 8/1</a></p>
<ul>
<li><a href="https://youtu.be/ui9JwnB1d-k" target="_blank" class="external-link">"The History Of Bitcoin Independence Day" video by Bitcoin Magazine</a></li>
<li>Segregated Witness (SegWit) was introduced in a Bitcoin Core upgrade in October 2016
<ul>
<li>It repaired a transaction malleability bug (paving the way for secondary networks like Lightning) and slightly increased the amount of data that could fit in each block</li>
</ul>
</li>
<li>SegWit was merged but would not activate until enough miners signaled their support for the upgrade and began mining SegWit-compatible blocks
<ul>
<li>Once one miner or pool made the signal, 95% of the network’s miners would have the span of two weeks (2,016 blocks; aka a difficulty period) to begin mining SegWit blocks</li>
<li>If 95% of hashing power generated blocks under the new SegWit rules within this timeframe, then the soft fork’s rules would be “locked in” to the network and would be fully activated after another difficulty period</li>
</ul>
</li>
<li>In mid-2017, a cabal of influential companies in the Bitcoin space met and forged what came to be known as the New York Agreement.
<ul>
<li>This group of the largest miners/stakeholders didn't like the original plan for the SegWit soft fork - they demanded a hard fork to further increase the block size to 4 MB as a prerequisite to SegWit activation</li>
<li>The controversial initiative was branded SegWit2x</li>
<li>The hard fork meant the new protocol rules, unlike the SegWit soft fork, would be incompatible with non-upgraded versions — and the agreement’s version of SegWit was incompatible with Core’s version</li>
<li>What was assumed to be a seamless soft fork with SegWit had spiraled into a scaling war between big businesses and individual users</li>
</ul>
</li>
<li>Originally introduced in February 2017, the <strong>idea of a user-activated soft fork resurfaced via BIP148</strong> as a way to implement SegWit without expanding the block size to 4 MB (i.e., a way for node runners to reject the SegWit2x hard fork)
<ul>
<li>BIP148 allowed users to move forward with the SegWit upgrade without the need for 95% of miners to signal their support</li>
</ul>
</li>
<li>By activating the UASF on their wallets and nodes, users would be giving miners an ultimatum: signal SegWit or we will reject your blocks
<ul>
<li>In effect, this would incentivize miners into flipping the switch on SegWit, an opportunity for the community to exercise its control over the Bitcoin network.</li>
<li>In this case, if the miners don’t play by the UASF rules, then they lose out on profit by having their mined blocks be orphaned by the network</li>
</ul>
</li>
<li>8/1/2017 was set as BIP148 flag day - the specific day that node runners would start enforcing the SegWit update via a UASF</li>
<li>Ultimately, the threat of the UASF was enough to get miners to activate SegWit without the SegWit2x hard fork</li>
<li>While it’s unclear how many people implemented BIP148 on August 1, SegWit would <a href="https://bitcoinmagazine.com/articles/point-no-return-segregated-witness-will-lock-bitcoin" target="_blank" class="external-link">lock into the network on August 9</a>, and after a two-week grace period, the upgrade would be set in stone — and without splitting the chain in two.</li>
<li>8/1 is now recognized as Bitcoin Independence Day because it's the day that proved individual node runners are the ones that define the network's consensus rules - not the miners</li>
</ul>
</li>
<li>
<p><a href="https://cointelegraph.com/news/bitcoin-without-internet-sms-service-allows-sending-btc-with-a-text" target="_blank" class="external-link">Bitcoin without internet: SMS service allows sending BTC with a text</a></p>
<ul>
<li>Using the GSM cellular network could help onboard millions of Bitcoin users without direct/easy internet access (but who do have mobile phones)</li>
<li>A South African developer has created Machankura (local slang word for 'money'), a new SMS-based service that enables sending/receiving Bitcoin over the Lightning Network to the phone's number</li>
<li>Similar experience to topping up a phone with minutes, which is very common in Africa</li>
<li>How it works: Users dial a number and are then introduced to a menu where they can learn more about Bitcoin or register an account. "All you need to register an account is a 5-digit pin, and from there on, you are presented with a different menu: Send and receive Bitcoin"</li>
<li>The service is custodial, so the team is looking for a way to use SIM cards as private keys</li>
<li>Not censorship resistant or sovereign, but a good first step to introduce a lot of people to Bitcoin who couldn't otherwise access it</li>
</ul>
</li>
<li>
<p><a href="https://bitcoinmagazine.com/technical/galoy-brings-us-dollars-to-bitcoin" target="_blank" class="external-link">Galoy brings synthetic USD to Bitcoin</a></p>
<ul>
<li><a href="https://stablesats.com/" target="_blank" class="external-link">Stablesats</a> is able to offer a stable dollar balance backed by bitcoin through <a href="https://www.bitmex.com/app/inversePerpetualsGuide" target="_blank" class="external-link">inverse perpetual swaps</a>.</li>
<li>Users are exposed to full custodial risk in order to minimize dollar-denominated volatility</li>
<li>Useful for people who want to leverage Bitcoin payment rails without volatility risk (similar to Strike)</li>
<li>Allows easy interoperability with the Lightning Network (e.g., spend synthetic USD when scanning an invoice or automatically converting BTC received into synthetic USD)</li>
<li>Interesting way to access stable value in USD without requiring access to the traditional banking system or creating another token</li>
<li>The derivatives contracts placed to create Stablesats are fully collateralized with BTC – for every dollar liability, there is an equivalent dollar worth of value in bitcoin</li>
<li>Currently in beta for the Bitcoin Beach Wallet popularized in El Salvador<br />
<img src="https://honolulu-bit-devs-rebrand.vercel.app/img/user/para/artifacts/Stablesats_Trust_Comparison.png" alt="Stablesats_Trust_Comparison.png" /></li>
</ul>
</li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://www.prnewswire.com/news-releases/foundry-makes-btc-donation-to-open-source-stratum-v2-protocol-developer-to-improve-bitcoins-proof-of-work-mining-layer-301598747.html" target="_blank" class="external-link">Foundry Makes BTC Donation to Open Source Stratum V2 Protocol Developer to Improve Bitcoin's Proof-of-Work Mining Layer</a>
<ul>
<li>1 BTC grant to 4ss0, a pseudonymous developer working on Stratum V2</li>
<li>Stratum V2 is an open-source protocol that defines how bitcoin miners and mining pools communicate to contribute hashrate to the bitcoin network</li>
<li>Increases efficiency, security, and decentralization by improving the POW coordination layer that connects the miner and the pool</li>
<li>The developer will use the funds to focus on the <strong>implementation of the Job Negotiation Protocol</strong> in Stratum V2
<ul>
<li>Job Negotiation is a Stratum sub-protocol that <strong>allows miners to construct their own block templates</strong> and will further improve the censorship resistance of Bitcoin by decentralizing block template creation</li>
<li>The protocol will allow individual miners to negotiate a block template (including the set of transactions to be mined) with a pool, making it more difficult for mining pools to censor specific transactions.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li>Last month's missed topics
<ul>
<li>TAPSIGNER Integration Is Live Within Nunchuk Mobile App (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-13/#e3e3b7">Socratic Seminar 13#^e3e3b7</a>)</li>
<li>Blockstream Draft BIP For Non-Interactive Schnorr Signature Half-Aggregation (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-13/#1f4081">Socratic Seminar 13#^1f4081</a>)</li>
<li>Controversy Around BlueWallet's Push Notifications Feature Allowing Addresses/TXIDs To Be Leaked (<a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-13/#04cb9a">Socratic Seminar 13#^04cb9a</a>)</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/culture/the-bitcoin-infinity-day-public-private-keys" target="_blank" class="external-link">Bitcoin Infinity Day on 8/21</a></li>
<li>Bitcoin Policy Institute submitted a <a href="https://uploads-ssl.webflow.com/627aa615676bdd1d47ec97d4/62f1737c38e3e4ea452021b9_Bitcoin%20Policy%20Institute%20-%20US%20Department%20of%20Treasury%20RFC.pdf" target="_blank" class="external-link">letter</a> responding to the US Treasury's request for comment on responsible digital asset development</li>
<li><a href="https://bitcoinmagazine.com/legal/unpacking-and-analyzing-the-lummis-gillibrand-bill" target="_blank" class="external-link">Beautyon's thoughts on the Lummis-Gillibrand Responsible Financial Innovation Act</a></li>
<li><a href="https://bitcoinmagazine.com/business/bitmain-antpool-antalpha-offer-bitcoin-mining-industry-lifeline" target="_blank" class="external-link">Bitmain, Antpool, Antalpha Offer Bitcoin Mining Industry Lifeline</a></li>
<li><a href="https://twitter.com/stephenlacy/status/1554697077430505473" target="_blank" class="external-link">Widespread malware attack on Github (> 35k repositories affected)</a></li>
<li><a href="https://wallet.build/losing-your-keys-without-losing-your-coins/" target="_blank" class="external-link">Block releases blog post about their approach to multisig key management</a></li>
<li>Lyn Alden's <a href="https://www.swanbitcoin.com/a-look-at-the-lightning-network/" target="_blank" class="external-link">"A Look At the Lightning Network"</a></li>
<li><a href="https://bitcoinmagazine.com/business/btg-pactual-launches-bitcoin-crypto-exchange-in-brazil" target="_blank" class="external-link">LATAM’s Largest Investment Bank BTG Pactual Launches Bitcoin, Crypto Exchange</a></li>
<li><a href="https://bitcoinmagazine.com/business/tropic-square-launches-open-source-chip-prototype-for-bitcoin-hardware" target="_blank" class="external-link">Tropic Square Launches Open-Source Chip Prototype For Bitcoin Hardware</a></li>
<li><a href="https://blog.zebedee.io/introducing-log-in-with-zbd/" target="_blank" class="external-link">"Log in with ZBD" product for authenticated identity across Lightning-enabled applications</a>
<ul>
<li>The monetary equivalent of "log in with Google" widgets</li>
<li>Log in with ZBD to connect apps together and move LN funds seamlessly between them (bi-directionally - user can get paid by connected apps)</li>
<li>Uses the <a href="https://oauth.net/2/" target="_blank" class="external-link">OAuth 2.0</a> protocol for authentication/authorization and allows users to connect ZBD gamer info to different apps (Gamertag, Lightning Address, profile pictures, etc.)</li>
</ul>
</li>
<li><a href="https://voltage.cloud/blog/feature-updates/effortless-inbound-channel-opening-for-voltage-nodes/" target="_blank" class="external-link">Effortless Inbound Channel Opening for Voltage Nodes</a></li>
</ul>
<h1 id="obsidian-note-links" tabindex="-1">Obsidian Note Links</h1>
<ul>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">A Look At the Lightning Network</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Bitcoin Independence Day - Luke Dashjr On The Lessons From SegWit That We’re Forgetting</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Bitcoin without internet- SMS service allows sending BTC with a text</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Bitmain, Antpool Offer Bitcoin Mining Industry Lifeline Amid Miner Capitulation</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">BlackRock To Offer Bitcoin Trading, Custody In Coinbase Partnership</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">World’s Largest Asset Manager BlackRock Launches Spot Bitcoin Private Trust</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Foundry Makes BTC Donation to Open Source Stratum V2 Protocol Developer to Improve Bitcoin's Proof-of-Work Mining Layer</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">LATAM’s Largest Investment Bank BTG Pactual Launches Bitcoin, Crypto Exchange</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Losing your keys without losing your coins</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Motiv Inc. Launches 16 Circular Bitcoin Economies In Peru</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Police to get sweeping new asset seizure powers</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Tropic Square To Launch Prototype For Open-Source Chips Used In Bitcoin Hardware</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">U.S. Inflation Slowed To 8.5 In July. Bitcoin Claims $24,000</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Vinteum Launches Funding Bitcoin Developers In Brazil, Latin America</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Criminal Code</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Now That Authorities Have Shut Down Tornado Cash, Is Bitcoin Next</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Unpacking the “Lummis-Gillibrand Responsible Financial Innovation Act”</a></li>
</ul>
Socratic Seminar 13
2023-05-13T06:01:34.504Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-13/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-12/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-14/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect People’s Privacy</li>
<li>Interaction And Asking Questions Are Encouraged</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House Rules</a></li>
<li><a href="https://bitcoinerjobs.com/" target="_blank" class="external-link">Apply For A Bitcoin Job</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join Our Telegram Group</a></li>
<li><a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">Follow Us On Twitter (@HonoluluBitcoin)</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Donate Sats</a></li>
<li>1st Coinkite Giveaway Tonight</li>
</ul>
<h1 id="bitcoin-kp-is" tabindex="-1">Bitcoin KPIs</h1>
<ul>
<li><a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's Bitcoin Dashboard</a></li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li>
<h4 id="a-href-https-www-justice-gov-usao-sdny-pr-three-charged-first-ever-cryptocurrency-insider-trading-tipping-scheme-target-blank-class-external-link-three-charged-in-first-ever-cryptocurrency-insider-trading-tipping-scheme-a" tabindex="-1"><a href="https://www.justice.gov/usao-sdny/pr/three-charged-first-ever-cryptocurrency-insider-trading-tipping-scheme" target="_blank" class="external-link">Three Charged In First Ever Cryptocurrency Insider Trading Tipping Scheme</a></h4>
<ul>
<li><a href="https://bitcoinmagazine.com/legal/former-coinbase-manager-arrested-for-insider-trading" target="_blank" class="external-link">Former Coinbase Manager <strong>"Ishan Wahi"</strong> Arrested For Insider Trading</a></li>
<li><a href="https://www.coindesk.com/layer2/2022/07/22/sec-will-need-to-prove-tokens-are-securities-in-coinbase-insider-trading-case-legal-expert-says/" target="_blank" class="external-link">SEC Will Need to Prove Tokens Are Securities In Coinbase Insider-Trading Case</a></li>
<li><a href="https://www.justice.gov/usao-sdny/pr/former-employee-nft-marketplace-charged-first-ever-digital-asset-insider-trading-scheme" target="_blank" class="external-link">First insider trading case against NFTs</a> happened last month</li>
<li>Ishan knew of Coinbase listing announcements ahead of time and told his brother and friend what to buy early, so they could dump after the announcement pump.</li>
<li>U.S. Attorney Damian Williams said, "...fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them."</li>
<li>The defendants made illegal trades in at least <strong>25 different crypto assets</strong> and realized ill-gotten gains <strong>totaling approximately $1.5 million</strong> (across 14 different Coinbase listing announcements).</li>
<li>All 3 defendants looking at a maximum sentence of 20 years from wire fraud.</li>
<li>They were using "anonymous <a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Ethereum</a> blockchain wallets".</li>
</ul>
</li>
<li>
<h4 id="a-href-https-bitcoinmagazine-com-business-breaking-elon-musks-tesla-sold-75-of-its-bitcoin-target-blank-class-external-link-elon-musk-s-tesla-sold-75-of-its-bitcoin-a" tabindex="-1"><a href="https://bitcoinmagazine.com/business/breaking-elon-musks-tesla-sold-75-of-its-bitcoin" target="_blank" class="external-link">Elon Musk's Tesla Sold 75% of Its Bitcoin</a></h4>
<ul>
<li><a href="https://www.reuters.com/markets/us/bitcoin-falls-after-tesla-says-it-converted-75-bitcoin-purchases-into-fiat-2022-07-20/" target="_blank" class="external-link">Bitcoin recovers after falling on news Tesla sold 75% of its holdings</a>
<ul>
<li>On earnings call, Musk said the primary reason for the sale was uncertainty about lockdowns due to COVID-19 in China, which have created production challenges for the company.</li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Elon Musk</a>: "It was important for us to maximize our cash position. We are certainly open to increasing our bitcoin holdings in future, so this should not be taken as some verdict on bitcoin. It's just that we were concerned about overall liquidity for the company."</li>
<li>Didn't sell any Dogecoin</li>
</ul>
</li>
<li>Tesla held about 42K BTC at the start of Q2 (bought at an average price of ~$29K) but sold $936M worth of it by the end of the quarter.</li>
<li>This is more than a year after Tesla initially announced buying $1.5B worth of BTC for the balance sheet (February 8, 2021).</li>
</ul>
</li>
<li>
<h4 id="a-href-https-bitcoinmagazine-com-markets-june-cpi-inflation-data-sets-40-year-high-as-bitcoin-dips-target-blank-class-external-link-june-cpi-inflation-data-sets-40-year-high-of-9-1-as-bitcoin-dips-a" tabindex="-1"><a href="https://bitcoinmagazine.com/markets/june-cpi-inflation-data-sets-40-year-high-as-bitcoin-dips" target="_blank" class="external-link">June CPI Inflation Data Sets 40-Year High Of 9.1% As Bitcoin Dips</a></h4>
<ul>
<li>Last month, CPI data broke a then 40-year high of 8.6%</li>
<li>Largest price increases occurring in the energy sector, seeing fuel and oil rising almost 100%. Double-digit percentage price increases in other categories, like food and transportation.</li>
<li>Everything is getting more expensive.</li>
<li>As the business owner continues to struggle in finding a fairly priced supply, the consumer pays expeditious demands to business owners.</li>
</ul>
</li>
<li>
<h4 id="a-href-https-bitcoinmagazine-com-markets-bitcoin-leaving-exchanges-hits-an-all-time-high-target-blank-class-external-link-bitcoin-leaving-exchanges-hits-an-all-time-high-a" tabindex="-1"><a href="https://bitcoinmagazine.com/markets/bitcoin-leaving-exchanges-hits-an-all-time-high" target="_blank" class="external-link">Bitcoin Leaving Exchanges Hits An All-Time High</a></h4>
<ul>
<li>In <strong>bitcoin</strong> terms, June was the largest month of net withdrawals from known exchanges/custodians
<ul>
<li>Peak 30-day net change of about 152K BTC leaving exchanges during the 30 days that proceeded June 26</li>
<li>End-of-month net total of BTC leaving exchanges in June was about 123K BTC</li>
</ul>
</li>
<li>In <strong>dollar</strong> terms, April & September 2021 and April 2022 all had larger amounts of net outflows.</li>
<li>Chain analysis is all about probabilities/estimations - can't be certain about who owns various addresses.</li>
<li>Could the exposure of counterparty risk in the crypto industry over the past few months be accelerating this trend?</li>
</ul>
</li>
<li>
<h4 id="de-fi-nitely-reckless" tabindex="-1">DeFi-nitely Reckless</h4>
<ul>
<li>Not "DeFi" directly - these are centralized financial companies making reckless investments into DeFi protocols, like Terra/LUNA.</li>
<li><a href="https://bitcoinmagazine.com/business/voyager-digital-files-for-bankruptcy" target="_blank" class="external-link">Voyager Digital Files For Chapter 11 Bankruptcy</a>
<ul>
<li>Voyager filed on July 6, 2022.</li>
<li>On June 22, 2022, they had already announced having large exposure to the (now-insolvent) 3AC via unsecured loans.</li>
<li>On July 28, 2022, the <a href="https://www.federalreserve.gov/newsevents/pressreleases/bcreg20220728a.htm" target="_blank" class="external-link">FDIC and Federal Reserve issued a letter</a> demanding Voyager stop making false/misleading representations of deposit insurance status.
<ul>
<li>Certain Voyager affiliates have made various statements online suggesting that customers would receive FDIC insurance coverage for funds held on the platform.</li>
<li>FDIC: "Voyager is not itself insured by the FDIC... so customers who invested through its cryptocurrency platform would not receive insurance coverage in the event of Voyager's failure."</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/celsius-files-for-chapter-11-bankruptcy" target="_blank" class="external-link">Celsius Files For Chapter 11 Bankruptcy With Over $1 Billion Hole In Balance Sheet</a>
<ul>
<li><a href="https://www.bloomberg.com/news/articles/2022-07-14/crypto-lender-celsius-files-for-bankruptcy-in-cash-crunch?sref=9NhgVLqx" target="_blank" class="external-link">Bloomberg: Celsius Files for Bankruptcy After Freezing Withdrawals</a>
<ul>
<li>The platform was holding about $4.3B of assets against $5.5B of liabilities as of mid-July, according to court papers (~$1.2B hole in balance sheet)</li>
<li>Under its terms of service, treatment of its customers’ digital assets in case of insolvency is “unsettled” and “not guaranteed” - customers might be unsecured creditors.</li>
</ul>
</li>
<li>Examples of reckless behavior:
<ul>
<li>They were engaging in collateralized lending with customer deposits to invest in mining operations (through a $750M credit line).</li>
<li>They were speculating on futures contracts with customer funds.</li>
<li>They lost private keys to 35K ETH.</li>
<li>They just had <a href="https://www.theblock.co/post/160148/celsius-also-hit-by-costumer-io-email-data-breach?utm_source=rss&utm_medium=rss" target="_blank" class="external-link">a 3rd-party data breach</a> of client email addresses</li>
</ul>
</li>
</ul>
</li>
<li><a href="https://www.btctimes.com/news/three-arrows-capital-founders-speak-out-after-company-implosion-and-radio-silence" target="_blank" class="external-link">Three Arrows Capital Founders Speak Out After Company Implosion and Radio Silence</a>
<ul>
<li>Su Zhu and Kyle Davies claim most losses were due to their trades involving Grayscale Bitcoin Trust (GBTC), Terra’s Luna (LUNA), and terraUSD (UST) tokens.</li>
<li>It is <a href="https://fortune.com/2022/07/19/3ac-bankruptcy-filing-founders-missing-yacht-debt-creditors-owed/#:~:text=The%20crypto%20hedge%20fund%20owes,bankruptcy%20made%20public%20on%20Monday." target="_blank" class="external-link">estimated</a> that 3AC still owes about $3.5B to 27 different companies
<ul>
<li>Includes $2.3B to digital currency lender Genesis Global Trading</li>
</ul>
</li>
<li>Ripple effects of 3AC default has revealed how ill-prepared many lenders were for negative market conditions.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul id="1f4081">
<li>
<h4 id="a-href-https-bitcoinmagazine-com-technical-first-female-bitcoin-core-maintainer-target-blank-class-external-link-gloria-zhao-becomes-first-female-bitcoin-core-maintainer-pieter-wuille-steps-down-a" tabindex="-1"><a href="https://bitcoinmagazine.com/technical/first-female-bitcoin-core-maintainer" target="_blank" class="external-link">Gloria Zhao Becomes First Female Bitcoin Core Maintainer; Pieter Wuille Steps Down</a></h4>
<ul>
<li><a href="https://bitcoincore.org/en/about/" target="_blank" class="external-link">Bitcoin Core</a> maintainers have commit permissions to the repository and are responsible for merging contributions from other developers onto the codebase.</li>
<li>She got a pull request merged that added her PGP key fingerprint into the trusted keys file.</li>
<li>Pieter Wuille <a href="https://github.com/bitcoin/bitcoin/pull/25568" target="_blank" class="external-link">stepped down from the role</a> by removing his PGP keys from the trusted keys files in another PR.</li>
<li>Pieter says he will continue to contribute to and review code for Bitcoin projects he is involved with.</li>
</ul>
</li>
<li>
<h4 id="a-href-https-bitcoinmagazine-com-business-fedi-global-bitcoin-adoption-tech-target-blank-class-external-link-fedi-wallet-powered-by-fedimint-a" tabindex="-1"><a href="https://bitcoinmagazine.com/business/fedi-global-bitcoin-adoption-tech" target="_blank" class="external-link">Fedi: Wallet Powered By Fedimint</a></h4>
<ul>
<li><a href="https://vimeo.com/731755923" target="_blank" class="external-link">Pen-And-Paper Chaumian Mints</a></li>
<li><a href="https://fedimint.org/" target="_blank" class="external-link">Fedimint Is A Protocol Based On Federated Chaumian Mints/Banks</a>
<ul>
<li><strong>Basic idea</strong>: User gives the mint some amount of an asset, and the mint in turn <strong>blind signs</strong> an equivalent number of IOUs. User can exchange IOUs for goods/products or redeem them with the mint for the underlying asset (BTC in this case).</li>
<li>Blind signatures mean that when a mint encounters one of its own signatures on an IOU, <em>it can't determine to whom that specific IOU was issued</em> - helps preserve privacy of people exchanging these IOUs amongst themselves.</li>
<li>Chaumian mints haven't caught on in part because they're single points of failure & trust that are easily prone to regulations or other attacks.</li>
<li>Bitcoin is the first asset in history that can truly be held in a federated manner, enabling trust/risk in a mint to be distributed among different (potentially anonymous) peers.</li>
<li>Any group can spin up their own federation and issue e-cash IOUs with varying management/programmatic tradeoffs.</li>
<li>Mints can be <strong>interoperable with one another via the Lightning Network</strong>:
<ul>
<li>E-cash IOUs can be redeemed at the mint, converted to bitcoin on the Lightning Network, transferred to an entirely different mint, and reissued as new e-cash IOUs.</li>
<li>In theory, this can be done programmatically in a matter of seconds .</li>
</ul>
</li>
</ul>
</li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Fedi</a> is a company building a wallet that makes it easy to use the Fedimint protocol</li>
<li>They want to provide an easier way to onboard billions of people to Bitcoin that skips over traditional custodial institutions.</li>
<li>Federated mints have better tradeoffs than custodial solutions, but <strong>full self-custody of base-layer Bitcoin should always be preferable</strong>.</li>
<li>Federated mints can be flexibly designed, but Fedi initially wants to <strong>target local communities, especially in developing countries</strong>.</li>
</ul>
</li>
<li>
<h4 id="a-href-https-tether-to-en-tether-bitfinex-and-hypercore-launch-holepunch-a-platform-for-building-fully-encrypted-peer-to-peer-applications-target-blank-class-external-link-tether-bitfinex-and-hypercore-launch-holepunch-a-platform-for-building-fully-encrypted-peer-to-peer-applications-a" tabindex="-1"><a href="https://tether.to/en/tether-bitfinex-and-hypercore-launch-holepunch-a-platform-for-building-fully-encrypted-peer-to-peer-applications/" target="_blank" class="external-link">Tether, Bitfinex And Hypercore Launch Holepunch, A Platform For Building Fully Encrypted Peer-To-Peer Applications</a></h4>
<ul>
<li><a href="https://hypercore-protocol.org/" target="_blank" class="external-link">Hypercore</a> a P2P data network protocol built on signed, append-only logs - works similarly to a blockchain, but without the consensus algorithm (and thus no need for a global ledger state to be kept by all nodes).
<ul>
<li>Hypercore: "...for normal apps, it's often much more efficient to use a bunch of smaller data structures, only storing local data."</li>
</ul>
</li>
<li>Holepunch makes Hypercore more accessible by abstracting away low-level technical details
<ul>
<li>It leverages BitTorrent-like computer networking infrastructure to directly connect peers together.</li>
<li>It re-implemented low-level networking protocols to independently select the best technology for highly-scalable data streams</li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/technical/keet-the-decentralized-communications-app" target="_blank" class="external-link">Keet: First App Built With Holepunch Offering P2P Video Chat</a>
<ul>
<li>Unstoppable communication - video, chat, and Bitcoin LN payments (on the roadmap)</li>
<li>It benefits from the increased performance/scalability and improved latency/privacy enabled by Holepunch - allows for distributed apps that are much more efficient than a blockchain.</li>
<li>Keet is part of a growing trend to offer decentralized, P2P applications without the blockchain hype (e.g., Jack Dorsey's "Web5" is another example, but Keet's team thinks that Holepunch offers a more flexible solution)</li>
</ul>
</li>
<li>Tether also supports <a href="https://synonym.to/" target="_blank" class="external-link">Synonym</a> (led by John Carvalho) - similar goals, but Tether considers them complementary products for building the decentralized web.</li>
</ul>
</li>
<li>
<h4 id="a-href-https-twitter-com-jayberjay-status-1551562864426614785-target-blank-class-external-link-magic-internet-money-book-leverages-mash-wallet-for-pay-as-you-go-lightning-integration-a" tabindex="-1"><a href="https://twitter.com/jayberjay/status/1551562864426614785" target="_blank" class="external-link">Magic Internet Money Book Leverages Mash Wallet For Pay-As-You-Go Lightning Integration</a></h4>
<ul>
<li><a href="https://www.getmash.com/" target="_blank" class="external-link">Mash</a>'s product allows easier integration with Lightning Network-related services (donate-as-you-go, tips/boosts, etc.)</li>
<li>Mash web wallet is custodial - easy to use for day-to-day transactions, but don't store large balances</li>
<li>Can top up LN wallet and then buy specific chapters of the digital book - allows users to try it out without purchasing the entire thing</li>
</ul>
</li>
<li>
<h4 id="a-href-https-bitcoinmagazine-com-technical-blockstream-announces-progress-on-signature-aggregation-target-blank-class-external-link-blockstream-announces-draft-bip-for-non-interactive-half-aggregation-of-bip-340-schnorr-signatures-a" tabindex="-1"><a href="https://bitcoinmagazine.com/technical/blockstream-announces-progress-on-signature-aggregation" target="_blank" class="external-link">Blockstream Announces Draft BIP For Non-Interactive Half-Aggregation Of BIP 340 Schnorr Signatures</a></h4>
</li>
</ul>
<p>- Blockstream released an early draft BIP (Bitcoin Improvement Proposal) for non-interactive half-aggregation of BIP 340 Schnorr signatures.<br />
- It allows multiple Schnorr signatures to be aggregated into a single, smaller signature off chain by a third party without any involvement from the actual signers.<br />
- Several examples of potential applications/benefits:<br />
- Off-chain networks could transmit aggregated signatures with lower bandwidth requirements.<br />
- Bitcoin script opcodes requiring multiple signatures could take a single half-aggregate signature instead.<br />
- Transactions could have a single half-aggregate signature instead of one signature per input.<br />
- Half-aggregation may actually be preferable to full-aggregation in many cases because half-aggregation is simpler, and full-aggregation requires interaction among signers.<br />
- The draft specification <strong>only covers the cryptographic scheme</strong> and does <strong>not prescribe a particular application</strong><br />
- This would be the <strong>first BIP with a formal specification</strong>, which reduces ambiguity in how particular operations might be interpreted or behave when implemented - better security assurances via formal proofs.</p>
<ul id="e3e3b7">
<li>
<h4 id="a-href-https-twitter-com-nvk-status-1550894649845305345-target-blank-class-external-link-tapsigner-integration-is-live-within-nunchuk-mobile-app-a" tabindex="-1"><a href="https://twitter.com/nvk/status/1550894649845305345" target="_blank" class="external-link">TAPSIGNER Integration Is Live Within Nunchuk Mobile App</a></h4>
</li>
</ul>
<p id="53812f">- Nunchuk specializes in collaborative multisig - making it easy for multiple people to hold different keys in a quorum and interact as necessary to sign/broadcast transactions (i.e., easier multisig where participants are geographically distributed).<br />
- Nunchuk mobile users can now sign collaborative Bitcoin transactions by tapping an NFC card to a phone.<br />
- <a href="https://tapsigner.com/" target="_blank" class="external-link">TAPSIGNER</a> is available for purchase on the Coinkite website.</p>
<p>- It's intended to be a signing device that <strong>favors convenience over security</strong> - decent tradeoff for part of a multisig quorum.</p>
<ul id="04cb9a">
<li>
<h4 id="a-href-https-github-com-blue-wallet-blue-wallet-issues-4806-target-blank-class-external-link-controversy-around-blue-wallet-s-push-notifications-feature-allowing-addresses-txi-ds-to-be-leaked-a" tabindex="-1"><a href="https://github.com/BlueWallet/BlueWallet/issues/4806" target="_blank" class="external-link">Controversy Around BlueWallet's Push Notifications Feature Allowing Addresses/TXIDs To Be Leaked</a></h4>
</li>
</ul>
<p>- People initially thought that BlueWallet was inadvertently leaking user addresses/TXIDs, even if they had push notifications disabled - <strong>this doesn't seem to be the case</strong>.<br />
- Push notifications are disabled by default, and users can choose to run their own monitoring server (FOSS software <a href="https://github.com/BlueWallet/GroundControl" target="_blank" class="external-link">GroundControl</a>) if they want notifications without relying on BlueWallet.<br />
- From <a href="https://twitter.com/nvcoelho" target="_blank" class="external-link">@nvcoelho</a>: "The data used in this feature is all public addresses. <strong>No xpubs are monitored</strong>."</p>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li>
<h4 id="a-href-https-bitcoinminingcouncil-com-bitcoin-mining-electricity-mix-increased-to-59-5-sustainable-in-q2-2022-target-blank-class-external-link-bitcoin-mining-council-s-q2-survey-confirms-improvements-in-sustainable-power-mix-and-technological-efficiency-a" tabindex="-1"><a href="https://bitcoinminingcouncil.com/bitcoin-mining-electricity-mix-increased-to-59-5-sustainable-in-q2-2022/" target="_blank" class="external-link">Bitcoin Mining Council's Q2 Survey Confirms Improvements In Sustainable Power Mix And Technological Efficiency</a></h4>
<ul>
<li>The BMC's latest voluntary survey collected data from <strong>over 50%</strong> of the global Bitcoin network's hashrate, representing 107.7 exahash (EH), as of June 30, 2022.</li>
<li>Survey participants are currently utilizing electricity with a <strong>66.8% sustainable power mix</strong>.</li>
<li>It's estimated that <strong>~60% of global hashrate is derived from sustainable electricity</strong> (~6% year-over-year increase).</li>
<li>As of Q2 2022, Bitcoin <strong>hashrate increased by 137% year-over-year</strong> while <strong>energy usage only increased 63%</strong>.</li>
<li>It's hard to accurately define what energy sources are truly "sustainable".</li>
<li>Where's Elon Musk? When Tesla stopped accepting bitcoin payments due to energy concerns last year, they said they'd resume accepting BTC once there was confirmation that ~50% of mining came from renewable sources and would continue trending in that direction.</li>
</ul>
</li>
<li>
<h4 id="a-href-https-bitcoinmagazine-com-business-public-miners-start-selling-bitcoin-treasuries-target-blank-class-external-link-public-miners-start-selling-bitcoin-treasuries-a" tabindex="-1"><a href="https://bitcoinmagazine.com/business/public-miners-start-selling-bitcoin-treasuries" target="_blank" class="external-link">Public Miners Start Selling Bitcoin Treasuries</a></h4>
<ul>
<li>On July 5, 2022, Core Scientific (third-largest publicly traded bitcoin miner) announced selling 78.6% of its bitcoin holdings (7202 BTC)</li>
<li>Bitfarms <a href="https://www.coindesk.com/business/2022/06/21/miner-bitfarms-sold-almost-half-its-bitcoin-to-reduce-debt/" target="_blank" class="external-link">sold over 3000 BTC</a> at the end of June</li>
<li>Riot Blockchain <a href="https://www.riotblockchain.com/news-media/press-releases/detail/132/riot-blockchain-announces-june-2022-production-and" target="_blank" class="external-link">produced 421 BTC and sold 300 BTC</a> in June</li>
<li>Previous bear market miner capitulation periods saw hash rate drawdowns of over 25% from previous highs.
<ul>
<li>Currently, hashrate is only down ~13% from ATH - more pain could be on the way.</li>
</ul>
</li>
</ul>
</li>
<li>
<h4 id="a-href-https-bitcoinmagazine-com-technical-three-bitcoin-mining-downward-adjustments-in-a-row-target-blank-class-external-link-three-downward-difficulty-adjustments-in-a-row-a" tabindex="-1"><a href="https://bitcoinmagazine.com/technical/three-bitcoin-mining-downward-adjustments-in-a-row" target="_blank" class="external-link">Three Downward Difficulty Adjustments In A Row</a></h4>
<ul>
<li><a href="https://mempool.space/graphs/mining/hashrate-difficulty" target="_blank" class="external-link">Hashrate & Difficulty - mempool.space</a></li>
<li>The last 3 difficulty adjustments were <strong>-2.35%, -1.41%, and -5.01%</strong>, respectively.</li>
<li>Four of the last five difficulty epochs have had negative adjustments.</li>
<li>The next adjustment is currently estimated to go up ~4% (still about a week away).</li>
<li>Downward BTC price pressure has pushed the <a href="https://charts.woobull.com/bitcoin-hash-price/" target="_blank" class="external-link">hashprice</a> down with it to a low of $0.08 TH/day in mid July.
<ul>
<li>Hashprice is the market value assigned per unit of hashing power. Hashprice is measured by dollars per terahash per second per day ($/TH/s/d).</li>
</ul>
</li>
<li>Many miners are turning unprofitable due to consecutive months of high energy costs and low bitcoin price - those that can't stomach the loss are having to sell assets.</li>
<li>The price for ASICs as measured in dollars per terahash has been absolutely cratering, reaching levels not seen since late 2020.
<ul>
<li>Miners are having to sell their machines to cover expenses and debt obligations.</li>
<li>Currently, tens of thousands of ASICs are sitting in warehouses, not plugged in.</li>
<li>This ASIC firesale presents an incredible opportunity for anyone in the mining industry with significant capital and the ability to execute - resources are transitioning from poorly managed businesses to more resilient miners.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="coinkite-giveaway-1" tabindex="-1">Coinkite Giveaway <a class="tag" onclick="toggleTagSearch(this)" data-content="#1">#1</a></h1>
<ul>
<li>
<h4 id="a-href-https-forms-gle-t-s-tb13-zk-pyu5p-tyy-6-target-blank-class-external-link-and-quot-guess-the-nonce-and-quot-google-form-a" tabindex="-1"><a href="https://forms.gle/tSTb13ZkPyu5pTYY6" target="_blank" class="external-link">"Guess the Nonce" Google Form</a></h4>
<ul>
<li>Submit guesses ahead of time (only if you plan on attending the meetup)!</li>
<li>A specific block will be chosen at the meetup and its nonce will be compared to all submissions - closest guess wins</li>
<li><a href="https://youtu.be/6MgJCGb01jI?t=190" target="_blank" class="external-link">Video Explaining What A Nonce Is In Relation To Bitcoin Mining</a>
<ul>
<li>A "nonce" is a "number used only once".</li>
<li>Miners are continuously hashing block data when trying to "win" the block lottery. The nonce is an extra field that can be repeatedly modified to produce entirely new hashes without changing the actual transaction data in the block.</li>
<li>Miners keep changing the nonce to generate new hashes, ultimately trying to get close enough to the difficulty target.</li>
</ul>
</li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/legal/senate-bill-to-exempt-tax-on-small-bitcoin-transactions" target="_blank" class="external-link">Senate Bill To Exempt Tax On Small Bitcoin Transactions</a></li>
<li><a href="https://restoreprivacy.com/twitter-vulnerability-exposes-5-million-accounts/" target="_blank" class="external-link">Twitter Vulnerability Exposed Emails And Phone Numbers From 5.4 Million Accounts, Which Are Being Sold Online</a>
<ul>
<li>Official <a href="https://privacy.twitter.com/en/blog/2022/an-issue-affecting-some-anonymous-accounts" target="_blank" class="external-link">Twitter announcement</a> from <a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">2022-08-05</a></li>
</ul>
</li>
<li><a href="https://dev.to/melvincarvalho/the-nostr-protocol-nip01-5ach" target="_blank" class="external-link">The Nostr Protocol</a>
<ul>
<li><a href="https://gist.github.com/1440000bytes/1c305097b070c8374cc3b91f50314a45" target="_blank" class="external-link">Joinstr: Coinjoin Implementation Using Nostr Protocol</a></li>
<li><a href="https://github.com/ArcadeCity/bullrun" target="_blank" class="external-link">Bullrun: An Open Protocol For P2P Services Powered By Bitcoin & Nostr</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/technical/pln-makes-bitcoin-lightning-more-private" target="_blank" class="external-link">pLN: New Wallet Project That Aims To Make Private Lightning Network Payments Easy</a></li>
<li><a href="https://bitcoinmagazine.com/business/robinhood-enables-bitcoin-transfers" target="_blank" class="external-link">Robinhood Enables Bitcoin Transfers</a></li>
<li><a href="https://bitcoinmagazine.com/business/el-salvador-buys-the-dip-adds-80-btc-to-treasury" target="_blank" class="external-link">El Salvador Buys The Dip, Adds 80 BTC To Treasury</a></li>
<li><a href="https://bitcoinmagazine.com/business/opennode-partners-with-lemon-cash-to-enable-bitcoin-lightning-payments" target="_blank" class="external-link">OpenNode Partners With Lemon Cash To Enable Bitcoin Lightning Payments</a></li>
<li><a href="https://bitcoinmagazine.com/business/michael-saylor-announces-480-bitcoin-buy-for-microstrategy" target="_blank" class="external-link">MicroStrategy Purchased An Additional 480 Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/business/nubank-rolls-out-bitcoin-buying-in-brazil" target="_blank" class="external-link">Nubank, Brazil's Largest Bank, Brings Bitcoin Purchases To ~54 Million Customers</a></li>
<li><a href="https://bitcoinmagazine.com/business/zebedee-raises-35-million-for-bitcoin-gaming" target="_blank" class="external-link">ZEBEDEE Raises $35 Million For Bitcoin Gaming</a>
<ul>
<li>Doesn't operate in HI</li>
</ul>
</li>
</ul>
<h1 id="obsidian-note-links" tabindex="-1">Obsidian Note Links</h1>
<ul>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Three Charged In First Ever Cryptocurrency Insider Trading Tipping</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Elon Musk's Tesla Sold 75% of Its Bitcoin</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Bitcoin recovers after falling on news Tesla sold 75% of its holdings</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Inflation Sets New 40-Year High of 9.1%, Bitcoin Fights To Hold $19,000</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Half-Aggregation of BIP 340 Signatures</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Q2 Bitcoin Mining Council Survey Confirms Year on Year Improvements in Sustainable Power Mix and Technological Efficiency</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Public Miners Start Selling Bitcoin Treasuries</a></li>
<li><a class="internal-link is-unresolved" href="https://honolulu-bit-devs-rebrand.vercel.app/404">Marty's Bent (Issue 1240) - Another downward difficulty adjustment is on the way</a></li>
</ul>
Socratic Seminar 12
2023-05-13T06:01:29.721Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-12/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-11/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-13/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li>Respect People’s Privacy</li>
<li>Interaction And Asking Questions Are Encouraged</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House Rules</a></li>
<li><a href="https://bitcoinerjobs.com/" target="_blank" class="external-link">Apply For A Bitcoin Job</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join Our Telegram Group</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Now Accepting Bitcoin Donations</a></li>
<li><a href="https://coinkite.com/" target="_blank" class="external-link">Coinkite Giveaway</a></li>
<li>Future Meetup Venue</li>
</ul>
<h1 id="bitcoin-kp-is" tabindex="-1">Bitcoin KPIs</h1>
<ul>
<li><a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's Bitcoin Dashboard</a></li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/central-african-republic-to-launch-bitcoin-crypto-hub" target="_blank" class="external-link">Central African Republic To Launch Bitcoin, Crypto Hub</a></li>
<li><a href="https://bitcoinmagazine.com/business/heres-whats-in-senator-lummis-bitcoin-bill" target="_blank" class="external-link">Lummis/Gillibrand Introduce Responsible Financial Innovation Act</a></li>
<li><a href="https://bitcoinmagazine.com/legal/human-rights-leaders-write-bitcoin-letter-to-congress" target="_blank" class="external-link">Human Rights Leaders Pen Letter To US Congress For Responsible Bitcoin Legislation</a></li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/stripe-and-opennode-to-release-app-for-bitcoin-payments" target="_blank" class="external-link">Stripe To Enable Millions Of Merchants To Convert Payments Into Bitcoin Via OpenNode</a></li>
<li><a href="https://www.uncerto.com/only-the-strong-survive" target="_blank" class="external-link">Only The Strong Survive</a>
<ul id="21c303">
<li>
<p><a href="https://bitcoinmagazine.com/markets/celsius-halts-bitcoin-withdrawals-what-went-wrong" target="_blank" class="external-link">Celsius Halts Bitcoin Withdrawals Amid Price Crash</a></p>
</li>
<li>
<p><a href="https://nitter.net/BlockFiZac/status/1539216594383028224" target="_blank" class="external-link">FTX Bails Out BlockFi With $250m Revolving Credit Facility Amid Complaints Of Withdrawal Delays</a></p>
</li>
<li>
<p><a href="https://twitter.com/FatManTerra/status/1539974901464895490" target="_blank" class="external-link">Twitter Breakdown About Three Arrows Capital</a></p>
</li>
</ul>
</li>
<li><a href="https://nitter.net/BtcpayServer/status/1529065438298120198" target="_blank" class="external-link">Strike And HRF Announce $100k Grant For BTCPayServer At Oslo Freedom Forum</a></li>
<li><a href="https://bitcoinmagazine.com/business/block-and-wakefield-research-release-bitcoin-survey-report" target="_blank" class="external-link">Block Inc Released A Survey Discussing Misconceptions Surrounding Bitcoin</a></li>
<li><a href="https://www.brooklynpaper.com/marcy-house-residents-jay-z-bitcoin-academy/" target="_blank" class="external-link">Jack Dorsey And Jay-Z Announce The Bitcoin Academy In Brooklyn, NY</a></li>
<li><a href="https://bitcoinmagazine.com/business/ibex-onboard-85-merchants-in-miami-to-bitcoin" target="_blank" class="external-link">IBEX Onboards 85 Merchants In Miami To The Bitcoin Lightning Network</a></li>
<li><a href="https://www.prnewswire.com/news-releases/deloitte-and-nydig-announce-alliance-to-provide-banking-for-all-with-bitcoin-301571356.html" target="_blank" class="external-link">Deloitte And NYDIG Announce Alliance To Provide Banking For All With Bitcoin</a></li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/jack-dorseys-tbd-presents-bitcoin-based-decentralized-web5" target="_blank" class="external-link">Jack Dorsey’s TBD Presents Bitcoin-Based Decentralized Web5</a></li>
<li><a href="https://bitcoinops.org/en/newsletters/2022/06/15/#summary-of-ln-developer-meeting" target="_blank" class="external-link">Lightning Network Developer Summit 2022 Notes & Summary/Commentary</a></li>
<li><a href="https://status.torproject.org/issues/2022-06-09-network-ddos" target="_blank" class="external-link">Ongoing DDoS Attempt Impacting The Tor Network</a></li>
<li><a href="https://github.com/BitcoinDevShop/hidden-lightning-network" target="_blank" class="external-link">Hackathon Project To Use LDK To Probe The Lightning Network For The Detection Of Private Channels</a></li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-unlocks-ocean-energy" target="_blank" class="external-link">How Bitcoin Can Unlock The Energy Of The Ocean For 1 Billion People</a></li>
<li><a href="https://bitcoinmagazine.com/business/new-york-to-place-moratorium-on-carbon-based-bitcoin-mining" target="_blank" class="external-link">New York State To Place Moratorium On Non-Renewable Bitcoin Mining</a></li>
<li><a href="https://bitcoinmagazine.com/business/kengen-to-provide-geothermal-energy-to-bitcoin-miners-in-kenya" target="_blank" class="external-link">Kenya’s Largest Power Provider To Offer Geothermal Energy To Bitcoin Miners</a></li>
<li><a href="https://bitcoinmagazine.com/business/gazpromneft-partners-with-bitriver-to-mine-bitcoin" target="_blank" class="external-link">Third Largest Russian Oil Company Gazpromneft Partners With Bitriver To Mine Bitcoin</a></li>
<li><a href="https://twitter.com/dynamicsmining/status/1541262827096358912?s=12&t=X0G0MUtfoi8qErlv3SOlaA" target="_blank" class="external-link">Compass Mining Hosting Facility In Maine Terminates Agreement After Missed Energy Payments</a></li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://www.bbc.com/news/business-61929926" target="_blank" class="external-link">Russia Defaults On Foreign Debt For First Time Since 1918</a></li>
<li><a href="https://www.cnn.com/2022/06/23/asia/sri-lanka-economy-collapse-prime-minister-intl-hnk/index.html" target="_blank" class="external-link">Sri Lanka's Prime Minister Says Economy Has "Completely Collapsed"</a></li>
<li><a href="https://twitter.com/gladstein/status/1540766157212332032?s=20&t=WVnbyTD6Pk10__2VDUk4Cw" target="_blank" class="external-link">191% Inflation And 190% Interest Rates In Zimbabwe</a></li>
<li><a href="https://twitter.com/BloombergUK/status/1539491204575989761?s=20&t=74md4g3rOXJx2U8eQ85xzg" target="_blank" class="external-link">UK Inflation Rises To A New 40-Year High Of 9.1%</a></li>
<li><a href="https://bitcoinmagazine.com/markets/proshares-to-release-short-bitcoin-strategy-etf" target="_blank" class="external-link">Proshares To Release ETF That Allows Investors To Short Bitcoin</a></li>
<li><a href="https://www.reuters.com/world/china/china-bank-protest-stopped-by-health-codes-turning-red-depositors-say-2022-06-14/" target="_blank" class="external-link">China Bank Protest Stopped By Health Codes Turning Red</a></li>
<li><a href="https://bitcoinmagazine.com/business/paypal-allows-bitcoin-crypto-transfers-to-external-wallets" target="_blank" class="external-link">Paypal Now Allows Bitcoin Transfers To External Wallets</a></li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-transactions-are-illegal-ethiopian-central-bank" target="_blank" class="external-link">Ethiopian Central Bank Reminds Citizens Business Transactions Using Bitcoin Are “Illegal”</a></li>
<li><a href="https://www.cnn.com/2022/05/31/politics/treasury-secretary-janet-yellen-inflation-cnntv/index.html" target="_blank" class="external-link">Janet Yellen Backtracks On "Transitory Inflation" In CNN Interview</a></li>
<li><a href="https://www.bloomberg.com/news/articles/2022-05-20/bitmex-co-founder-arthur-hayes-sentenced-to-two-years-probation" target="_blank" class="external-link">BitMEX Founder Hayes Avoids Prison On Bank Secrecy Charge</a></li>
<li><a href="https://twitter.com/ODELL/status/1534884076108275713" target="_blank" class="external-link">Bitcoin Park Launches In Nashville, TN</a></li>
<li><a href="https://bitcoinmagazine.com/markets/bitcoin-is-losing-favor-on-darknet-markets" target="_blank" class="external-link">Bitcoin Is Losing Favor On Darknet Markets</a></li>
<li><a href="https://fadibarbara.it/papers/dmix.pdf" target="_blank" class="external-link">Whitepaper Drops For New Decentralized Mixer Based On MuSig Signature Aggregation: DMix</a></li>
<li><a href="https://nitter.net/mHaGqnOACyFm0h5/status/1536442355003293700" target="_blank" class="external-link">Ex-Developer For Wasabi Wallet Warns Against Wasabi 2.0 Usage</a></li>
<li><a href="https://twitter.com/robosats/status/1538498256400965632" target="_blank" class="external-link">P2P LN Trading Protocol Robosats Enables Withdrawals Directly To Cold Storage</a></li>
<li><a href="https://bitcoinmagazine.com/technical/silent-payments-improve-privacy-without-bitcoin-data" target="_blank" class="external-link">Silent Payments Improve Privacy Without Adding Data To Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/technical/bitcoin-lightning-gossip-protocol-privacy" target="_blank" class="external-link">Improving The Privacy Of The Lightning Network’s Gossip Protocol</a></li>
<li><a href="https://www.eff.org/deeplinks/2022/06/how-federal-government-buys-our-cell-phone-location-data" target="_blank" class="external-link">How The Federal Government Buys Our Cell Phone Location Data</a></li>
</ul>
Socratic Seminar 11
2023-05-13T06:01:25.138Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-11/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-10/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-12/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li><a href="https://youtu.be/tWU3O3X5kKE" target="_blank" class="external-link">Bitcoin Pizza Day</a></li>
<li>Respect People’s Privacy</li>
<li>Interaction And Asking Questions Are Encouraged</li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House Rules</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join Our Telegram Group</a></li>
<li><a href="https://checkout.opennode.com/p/5dea6b7a-d33c-4fda-b54c-98f092814c7d" target="_blank" class="external-link">Now Accepting Bitcoin Donations</a></li>
<li>Azteco Vendor</li>
</ul>
<h1 id="bitcoin-kp-is" tabindex="-1">Bitcoin KPIs</h1>
<ul>
<li><a href="https://bitcoin.clarkmoody.com/dashboard/" target="_blank" class="external-link">Clark Moody's Bitcoin Dashboard</a></li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/culture/el-salvador-brought-44-countries-to-bitcoin" target="_blank" class="external-link">El Salvador Hosts Central Bankers And Financial Regulators From 44 Countries To Discuss Bitcoin And Financial Inclusion</a></li>
<li><a href="https://bitcoinmagazine.com/business/100000-cubans-are-using-bitcoin-in-response-to-us-sanctions" target="_blank" class="external-link">100,000 Cubans Are Using Bitcoin In Response To U.S. Sanctions</a></li>
<li><a href="https://bitcoinmagazine.com/business/panama-assembly-passes-bill-regulating-bitcoin-crypto" target="_blank" class="external-link">Panama Assembly Passes Bill Regulating Bitcoin, Crypto</a></li>
<li><a href="https://bitcoinmagazine.com/business/argentina-bans-banks-from-offering-bitcoin" target="_blank" class="external-link">Central Bank Of Argentina Bans Banks From Offering Bitcoin, Crypto Services</a></li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-education-launches-in-argentina-for-high-schools" target="_blank" class="external-link">The "Schools And Bitcoin" Project Is Launching For 40 High Schools In Argentina</a></li>
<li><a href="https://home.treasury.gov/news/press-releases/jy0768" target="_blank" class="external-link">U.S. Treasury Issues First-Ever Sanctions On A Virtual Currency Mixer, Targets DPRK Cyber Threats</a></li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/terra-collapse-teaches-about-crypto-and-bitcoin" target="_blank" class="external-link">Lessons Learned From The Terra Stablecoin Depegging/Luna Token Collapse</a>
<ul>
<li><a href="https://www.lynalden.com/digital-alchemy/" target="_blank" class="external-link">Lyn Alden's Post-Mortem On Terra/Luna</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/business/fidelity-to-allow-bitcoin-investments-in-retirement-plans-report" target="_blank" class="external-link">Fidelity To Allow Bitcoin Investments In Retirement Plans</a></li>
<li><a href="https://www.forbes.com/sites/ninabambysheva/2022/05/11/coinbase-stock-slides-after-revenue-miss-but-many-analysts-say-fears-appear-greatly-overblown/?sh=78c8454b7de1" target="_blank" class="external-link">Coinbase Stock Slides After First-Quarter Net Loss Of $430 Million</a></li>
<li><a href="https://bitcoinmagazine.com/business/human-rights-foundation-grants-5-btc-to-bitcoin-projects" target="_blank" class="external-link">Human Rights Foundation Grants 5 BTC To Bitcoin Projects</a></li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li><a href="https://blog.keys.casa/announcing-api-series-a/" target="_blank" class="external-link">Casa Announces New API And $21 Million Series A</a></li>
<li><a href="https://bitcoinmagazine.com/technical/what-is-bip-119-bitcoin-controversy-explained" target="_blank" class="external-link">Recent Controversy Around BIP 119 (CheckTemplateVerify) Covenant Proposal</a></li>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-May/020450.html" target="_blank" class="external-link">Rusty Russell Releases Alternative Covenants Proposal: OP_TX</a>
<ul>
<li><a href="https://www.podpage.com/citadeldispatch/cd64-bip119-ctv-and-the-bitcoin-development-process-with-rusty_twit-and-brian_trollz/" target="_blank" class="external-link">Citadel Dispatch Episode With Rusty Discussing OP_TX</a></li>
</ul>
</li>
<li><a href="https://spiral.xyz/blog/a-framework-for-sustainable-open-source-bitcoin-development/" target="_blank" class="external-link">Spiral Releases Framework For Sustainable Open-Source Bitcoin Development</a></li>
<li><a href="https://twitter.com/coincornerdanny/status/1526573313962680321?s=12&t=9WqNIOlAihKMlPF4M6jF0A" target="_blank" class="external-link">CoinCorner Releases BoltCard: An NFC Payment Card Using LNURL </a></li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-startup-amboss-launches-unique-lightning-liquidity-marketplace" target="_blank" class="external-link">Bitcoin Startup Amboss Launches Unique Lightning Liquidity Marketplace</a></li>
<li><a href="https://synonym.to/blocktank/" target="_blank" class="external-link">Synonym Launches Blocktank Service Provider For Bitcoin’s Lightning Network</a></li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/bitcoin-is-halfway-to-the-next-halving" target="_blank" class="external-link">Bitcoin Is Halfway To The Next Halving As Of Block 735,000</a></li>
<li><a href="https://bitcoinmagazine.com/markets/bitcoin-hash-rate-mining-difficulty-hit-new-all-time-highs" target="_blank" class="external-link">Bitcoin Hash Rate, Mining Difficulty Hit New All-Time Highs</a></li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-mining-hash-price-hits-multi-year-lows" target="_blank" class="external-link">Bitcoin Mining Hash Price Hits Multi-Year Lows</a></li>
<li><a href="https://bitcoinmagazine.com/business/fort-worth-texas-becomes-first-city-government-in-the-u-s-to-mine-bitcoin" target="_blank" class="external-link">Fort Worth, Texas Becomes First City Government In The U.S To Mine Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/markets/michael-saylor-jack-dorsey-pen-letter-to-epa-refuting-bitcoin-energy-fud" target="_blank" class="external-link">The Bitcoin Mining Council Writes Letter To EPA Refuting Bitcoin Energy FUD</a>
<ul>
<li><a href="https://global-uploads.webflow.com/61d2416d1d63f07ecbfd010c/627d3c3f5d3ad815883e8036_BPI%20OSTP%20CommentV3.pdf" target="_blank" class="external-link">Bitcoin Policy Institute Response</a></li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-May/020493.html" target="_blank" class="external-link">Package Relay Proposal</a></li>
<li><a href="https://bitcoinmagazine.com/markets/turkey-inflation-data-shows-annual-70-cpi-increase-bitcoin-fixes-this" target="_blank" class="external-link">Turkey Inflation Data Shows Annual 70% CPI Increase</a></li>
<li><a href="https://americandragnet.org/" target="_blank" class="external-link">Georgetown Law Research Shows ICE Tracks 75% Of Americans</a></li>
<li><a href="https://bitcoinmagazine.com/markets/el-salvador-buys-the-wild-bitcoin-dip-with-500-btc-purchase" target="_blank" class="external-link">El Salvador Scoops Up 500 BTC During The Dip</a></li>
<li><a href="https://bitcoinmagazine.com/business/el-salvador-president-nayib-bukele-released-model-of-bitcoin-city" target="_blank" class="external-link">El Salvador President Nayib Bukele Released Model Of Bitcoin City</a></li>
<li><a href="https://bitcoinmagazine.com/markets/norway-votes-against-bitcoin-mining-ban" target="_blank" class="external-link">Norwegian Bitcoin Mining Ban Was Struck Down</a></li>
<li><a href="https://techcrunch.com/2022/05/10/crypto-forensics-startup-chainalysis-raises-170m-at-8-6b-valuation/" target="_blank" class="external-link">Chainalysis Raises $170m At $8.6b Valuation</a></li>
<li><a href="https://bitcoinmagazine.com/business/microstrategy-to-allow-employees-to-invest-in-bitcoin-as-part-of-401k-plan" target="_blank" class="external-link">Microstrategy To Allow Employees To Invest In Bitcoin As Part Of 401(K) Plan</a></li>
<li><a href="https://bitcoinmagazine.com/business/goldman-sachs-partners-with-coinbase-for-banks-first-bitcoin-backed-loan" target="_blank" class="external-link">Goldman Sachs Partners With Coinbase For Bank’s First Bitcoin-Backed Loan</a></li>
<li><a href="https://bitcoinmagazine.com/business/lgt-bank-now-offers-direct-bitcoin-investments" target="_blank" class="external-link">World’s Largest Family-Owned Private Bank Now Offers Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/markets/california-governor-signs-executive-order-encouraging-bitcoin-and-crypto-businesses" target="_blank" class="external-link">California Governor Signs Executive Order Encouraging Bitcoin And Crypto Businesses</a></li>
<li><a href="https://www.benzinga.com/markets/cryptocurrency/22/05/27243535/vitalik-buterin-wants-ethereum-to-be-a-more-bitcoin-like-system" target="_blank" class="external-link">Vitalik Makes Case for Bitcoin</a></li>
<li><a href="https://twitter.com/TuurDemeester/status/1526670962837671937?s=20&t=NPaOBSSXhgZa_yEy-Tfrgw" target="_blank" class="external-link">Joe Lubin on PoW vs PoS</a></li>
<li><a href="https://markets.businessinsider.com/news/currencies/libra-creator-david-marcus-begins-new-lightning-network-venture-lightspark-1031455696" target="_blank" class="external-link">Libra Creator David Marcus Begins New Lightning Network Venture, Lightspark</a></li>
<li><a href="https://youtu.be/-yiTtO_p3Cw" target="_blank" class="external-link">Taro Explainer Video From Lightning Labs</a></li>
<li><a href="https://youtu.be/ZaXfoAKnrcM" target="_blank" class="external-link">Nate's Interview With Compass Mining About OTEC</a></li>
</ul>
Socratic Seminar 10
2023-05-13T06:01:20.560Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-10/
<p><button class="obsidian-button previous-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-9/">Previous Seminar</a></button> <button class="obsidian-button next-seminar"><a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/socratic-seminar-11/">Next Seminar</a></button></p>
<h1 id="announcements" tabindex="-1">Announcements</h1>
<ul>
<li><a href="https://www.meetup.com/honolulu-bitdevs/events/285244617" target="_blank" class="external-link">RSVP to the meetup!</a></li>
<li><a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Join our telegram group</a></li>
<li><a href="https://bitcoinerjobs.com/" target="_blank" class="external-link">Apply for a Bitcoin job</a></li>
<li><a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House Rules</a></li>
<li>Respect people's privacy</li>
<li>Interaction and asking questions are encouraged</li>
<li>Bitcoin 2022 overview</li>
<li>Hawaii crypto legislation update</li>
</ul>
<h1 id="geopolitics" tabindex="-1">Geopolitics</h1>
<ul>
<li><a href="https://forbes.mc/article/first-african-country-adopt-bitcoin-legal-currency-central-african-republic" target="_blank" class="external-link">Parliament Of The Central African Republic Unanimously Passes Bill Establishing Cryptocurrency Legal Framework</a>
<ul>
<li><a href="https://www.rjdhrca.org/centrafrique-le-projet-de-loi-regissant-la-cryptomonnaie-vote-a-lunanimite-par-les-elus-de-la-nation-%EF%BF%BC/" target="_blank" class="external-link">Article from a local NGO (in French)</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/culture/global-legislators-announce-pro-bitcoin-legislation" target="_blank" class="external-link">Samson Mow Announces Pro Bitcoin Legislation In Three Countries</a>
<ul>
<li>Próspera in Honduras, Madeira in Portugal, and Mexico</li>
</ul>
</li>
<li><a href="https://www.coindesk.com/policy/2022/04/22/ukraines-central-bank-bans-crypto-purchases-in-local-currency/" target="_blank" class="external-link">Ukraine's Central Bank Bans Crypto Purchases in Local Currency</a></li>
<li><a href="https://home.treasury.gov/news/press-releases/jy0731" target="_blank" class="external-link">New Sanctions Against Russia Affect Bitcoin Mining Companies</a>
<ul>
<li><a href="https://twitter.com/nobsbitcoin/status/1517182641367400448?s=20&t=bM3ihOVndXbrxgwuWGLzYQ" target="_blank" class="external-link">Compass Mining Forced To Liquidate ASICs In Russian BitRiver Facility</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/markets/greenpeace-seeks-to-change-bitcoin-code" target="_blank" class="external-link">Greenpeace, Ripple Lobby To Move Bitcoin Away From Proof-Of-Work</a></li>
</ul>
<h1 id="market-adoption" tabindex="-1">Market/Adoption</h1>
<ul>
<li><a href="https://www.marketwatch.com/story/coming-up-consumer-price-index-for-march-11649764935" target="_blank" class="external-link">U.S. Inflation Leaped To 40-Year High Of 8.5% In March</a></li>
<li><a href="https://bitcoinmagazine.com/business/macrostrategy-bitcoin-collateralized-loan-from-silvergate-bank-to-buy-btc" target="_blank" class="external-link">Macrostrategy Closes $205 Million Bitcoin-Collateralized Loan From Silvergate Bank To Buy Btc</a></li>
</ul>
<h1 id="technology" tabindex="-1">Technology</h1>
<ul>
<li><a href="https://lists.linuxfoundation.org/pipermail/bitcoin-core-dev/2022-April/000111.html" target="_blank" class="external-link">Bitcoin Core 23.0 Released</a></li>
<li><a href="https://lightning.engineering/posts/2022-4-5-taro-launch/" target="_blank" class="external-link">Taro: A New Protocol for Multi-Asset Bitcoin and Lightning</a>
<ul>
<li><a href="https://bitcoinmagazine.com/technical/how-bitcoin-taro-protocol-works" target="_blank" class="external-link">How Taro Brings Assets To Bitcoin Through Taproot And Lightning</a></li>
<li><a href="https://twitter.com/roasbeef/status/1511361929507479552?s=28&t=Dq1-tWWMYhF4GdNLuQ3ZRQ" target="_blank" class="external-link">Twitter Thread By @roasbeef From Lightning Labs</a></li>
</ul>
</li>
<li><a href="https://bitcoinmagazine.com/industry-events/jack-mallers-adding-bitcoin-to-major-pos-networks" target="_blank" class="external-link">Jack Mallers’ Strike Integrating With World’s Largest Pos Providers To Enable Sovereign Payments With Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/business/impervious-ai-releases-internet-browser-built-on-bitcoin" target="_blank" class="external-link">Impervious AI Releases Internet Browser Built On Bitcoin</a></li>
<li>Lightning Integration
<ul>
<li><a href="https://bitcoinmagazine.com/business/cash-app-adds-pay-me-in-bitcoin-lightning-features" target="_blank" class="external-link">Cash App Announces New Lightning Integration, ‘Pay Me In Bitcoin’ Feature</a></li>
<li><a href="https://bitcoinmagazine.com/business/kraken-exchange-integrates-bitcoins-lightning-network" target="_blank" class="external-link">Kraken Exchange Integrates Bitcoin’s Lightning Network</a></li>
<li><a href="https://bitpay.com/blog/bitpay-supports-lightning-network-payments/" target="_blank" class="external-link">BitPay Supports Lightning Network Payments</a></li>
<li><a href="https://markets.businessinsider.com/news/stocks/hood-stock-broadens-appeal-with-bitcoin-lightning-network-integration-1031343901" target="_blank" class="external-link">Robinhood Integrates Lightning Network</a></li>
</ul>
</li>
</ul>
<h1 id="mining" tabindex="-1">Mining</h1>
<ul>
<li><a href="https://bitcoinmagazine.com/markets/19-million-bitcoin-have-been-mined" target="_blank" class="external-link">The 19 Millionth Bitcoin Has Been Mined</a></li>
<li><a href="https://bitcoinmagazine.com/business/blockstream-using-tesla-array-for-bitcoin-mining" target="_blank" class="external-link">Blockstream, Block To Leverage Tesla Equipment For Renewable Bitcoin Mining Operation</a></li>
<li>New Mining Hardware
<ul>
<li><a href="https://bitcoinmagazine.com/business/intel-launches-new-bitcoin-mining-chip-blockscale" target="_blank" class="external-link">Intel Launches New Bitcoin Mining Chip, Blockscale</a></li>
<li><a href="https://bitcoinmagazine.com/business/canaan-announces-a-new-bitcoin-asic-and-green-mining" target="_blank" class="external-link">Canaan Announces New ASIC Miner Along With Company Standards For Green Bitcoin Mining</a></li>
<li><a href="https://bitcoinmagazine.com/business/microbt-announces-m50-bitcoin-miners" target="_blank" class="external-link">MicroBT Announces More Efficient M50 Series Of Whatsminer Rigs</a></li>
</ul>
</li>
</ul>
<h1 id="optional-topics" tabindex="-1">Optional Topics</h1>
<ul>
<li><a href="https://anchor.fm/troy-cross0" target="_blank" class="external-link">Nate's interview with Troy Cross: "Bitcoin, Energy, and the Environment"</a></li>
<li>Nate's thoughts on how to assess projects in the space (~10m)</li>
<li><a href="https://bitcoinminingcouncil.com/bitcoin-mining-council-survey-confirms-year-on-year-improvements-in-sustainable-power-mix-and-technological-efficiency/" target="_blank" class="external-link">Bitcoin Mining Council Survey Confirms Year on Year Improvements in Sustainable Power Mix and Technological Efficiency</a></li>
<li><a href="https://bitcoinmagazine.com/business/lightning-labs-announces-70-million-series-b-raise" target="_blank" class="external-link">Lightning Labs Announces $70 Million Series B Raise</a></li>
<li><a href="https://bitcoinmagazine.com/culture/bitcoin-advocacy-project-launches-super-pac" target="_blank" class="external-link">Bitcoin Advocacy Project Announces Super Pac To Propel U.S. To Hyperbitcoinization</a></li>
<li><a href="https://bitcoinmagazine.com/business/ten31-partners-with-seetee-for-bitcoin-investments" target="_blank" class="external-link">Ten31 Partners With Seetee For Powerhouse Bitcoin Infrastructure Investment Initiative</a></li>
<li><a href="https://bitcoinmagazine.com/business/tennessee-titans-become-first-nfl-team-to-accept-bitcoin" target="_blank" class="external-link">Tennessee Titans Become First NFL Team To Accept Bitcoin</a></li>
<li><a href="https://bitcoinmagazine.com/business/bitcoin-gaming-company-zebedee-announces-new-lightning-donation-streaming-tool" target="_blank" class="external-link">Bitcoin Gaming Company Zebedee Announces New Lightning Donation Streaming Tool</a></li>
</ul>
Self-Custody Workshop
2023-12-15T06:06:11.386Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/events/self-custody-workshop/
<h1 id="workshop-details" tabindex="-1">Workshop details</h1>
<ul>
<li>Event Link: <a href="https://www.meetup.com/honolulu-bitdevs/events/291173130" target="_blank" class="external-link">https://www.meetup.com/honolulu-bitdevs/events/291173130</a></li>
<li>Date/Time: February 16, 2023 (6-8 PM)</li>
<li>Location: Entrepreneurs Sandbox (Purple Room)</li>
</ul>
<h1 id="workshop-agenda" tabindex="-1">Workshop agenda</h1>
<ul>
<li>Introduction</li>
<li>Key concepts of Bitcoin self-custody</li>
<li>Hardware wallet demos (basic setup and signing)
<ul>
<li>Ledger</li>
<li>Trezor</li>
<li>Coldcard</li>
</ul>
</li>
<li>Advanced techniques
<ul>
<li>Intro to BIP39 passphrases</li>
<li>Multisignature wallet demo (basic setup and signing)</li>
</ul>
</li>
<li>Tips for building a secure custody setup</li>
<li>Wrap up and questions</li>
</ul>
<h1 id="slideshow" tabindex="-1">Slideshow</h1>
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<h1 id="supplemental-resources" tabindex="-1">Supplemental resources</h1>
<h3 id="basic-concepts" tabindex="-1">Basic concepts</h3>
<ul>
<li><a href="https://www.youtube.com/watch?v=GSTiKjnBaes" target="_blank" class="external-link">How Bitcoin Wallets Work (Public & Private Key Explained)</a></li>
<li><a href="https://learnmeabitcoin.com/beginners/keys_addresses" target="_blank" class="external-link">Keys & Addresses</a></li>
<li><a href="https://www.swanbitcoin.com/bitcoin-wallets-not-your-keys-not-your-bitcoin/" target="_blank" class="external-link">Bitcoin Wallets: How, Why and When to Hold Your Own Private Keys</a></li>
<li><a href="https://river.com/learn/terms/b/bip-39/" target="_blank" class="external-link">BIP39 Mnemonic Seed Phrases</a></li>
<li><a href="https://unchained.com/blog/what-is-a-bitcoin-seed-phrase/" target="_blank" class="external-link">What is a bitcoin seed phrase and how does it work?</a></li>
<li><a href="https://youtu.be/0_5wb5agLqE" target="_blank" class="external-link">What is a bitcoin UTXO?</a></li>
</ul>
<h3 id="device-specific-tutorials-setup-and-usage" tabindex="-1">Device-specific tutorials (setup and usage)</h3>
<ul>
<li><a href="https://youtu.be/FAYmE5-40PQ" target="_blank" class="external-link">Coldcard Mk4</a></li>
<li><a href="https://youtu.be/TtlgE2Fx3m8" target="_blank" class="external-link">Trezor Model T</a></li>
<li><a href="https://youtu.be/HnxvEjQGV4s" target="_blank" class="external-link">Trezor Model One</a></li>
<li><a href="https://youtu.be/R0YWdw2AOCg" target="_blank" class="external-link">Ledger Nano X</a></li>
</ul>
<h3 id="other-good-hardware-wallets-not-covered-in-workshop" tabindex="-1">Other good hardware wallets (not covered in workshop)</h3>
<ul>
<li><a href="https://foundationdevices.com/" target="_blank" class="external-link">Foundation Passport</a></li>
<li><a href="https://shiftcrypto.ch/bitbox02/" target="_blank" class="external-link">BitBox02</a></li>
<li><a href="https://seedsigner.com/" target="_blank" class="external-link">SeedSigner</a></li>
<li><a href="https://blockstream.com/jade/" target="_blank" class="external-link">Blockstream Jade</a></li>
</ul>
<h3 id="bip-39-passphrases" tabindex="-1">BIP39 passphrases</h3>
<ul>
<li><a href="https://www.blockplate.com/blogs/blockplate/what-is-a-bip39-passphrase#:~:text=A%20passphrase%20is%20different%20from,wallets%20utilizing%20the%20BIP39%20standard" target="_blank" class="external-link">What is a BIP39 Passphrase?</a></li>
<li><a href="https://youtu.be/DR5SKuhF-50" target="_blank" class="external-link">Passphrase: How it works</a></li>
<li><a href="https://blog.coinkite.com/everything-you-need-to-know-about-passphrases/" target="_blank" class="external-link">Everything You Need To Know About Passphrases</a></li>
<li><a href="https://youtu.be/nhjq_1J0EbU" target="_blank" class="external-link">Picking a Good BIP39 Passphrase</a></li>
</ul>
<h3 id="multisignature" tabindex="-1">Multisignature</h3>
<ul>
<li><a href="https://unchained.com/features/what-is-multisig" target="_blank" class="external-link">What is bitcoin multisig?</a></li>
<li><a href="https://youtu.be/6eFzvxyI06o" target="_blank" class="external-link">Phil Geiger: A love letter to bitcoin multisig</a></li>
<li><a href="https://unchained.com/blog/top-10-bitcoin-multisig-tips/" target="_blank" class="external-link">Top 10 tips for every bitcoin multisig beginner</a></li>
<li><a href="https://unchained.com/blog/what-is-a-multisig-wallet-configuration-file/" target="_blank" class="external-link">What is a bitcoin multisig wallet configuration file?</a></li>
<li><a href="https://youtu.be/CyuWppXLdyM" target="_blank" class="external-link">Unchained webinar: Best practices for securing your bitcoin keys</a></li>
<li><a href="https://youtu.be/Gx0mke_4BJU" target="_blank" class="external-link">Self-sovereign Sparrow wallet multisig setup</a></li>
</ul>
<h3 id="self-custody-best-practices" tabindex="-1">Self-custody best practices</h3>
<ul>
<li><a href="https://unchained.com/blog/how-to-store-bitcoin-seed-phrase-backups/" target="_blank" class="external-link">Ultimate guide to storing your bitcoin seed phrase backups</a></li>
<li><a href="https://unchained.com/blog/seed-phrase-backup-methods-recording-paper-metal/" target="_blank" class="external-link">Seed phrase backup methods compared: paper, metal, and more</a></li>
<li><a href="https://youtu.be/D_M7Cc81Ph4" target="_blank" class="external-link">Unchained webinar: Opsec best practices for your bitcoin private keys</a></li>
<li><a href="https://youtu.be/9K7LZGVRf6Q" target="_blank" class="external-link">Masterclass on Bitcoin Self-Custody and Securing Your Own Keys w/ Tyler Campbell (MI176)</a></li>
</ul>
<h3 id="additional-resources" tabindex="-1">Additional resources</h3>
<ul>
<li><a href="https://www.citadel21.com/not-your-keys-not-your-bitcoin" target="_blank" class="external-link">Not Your Keys, Not Your Bitcoin: Setting Up Your First Bitcoin Mobile Wallet</a></li>
<li><a href="https://unchained.com/blog/bitcoin-singlesig-passphrase-vs-multisig/" target="_blank" class="external-link">Bitcoin singlesig (passphrase) vs. multisig: Which is right for you?</a></li>
<li><a href="https://www.ministryofnodes.com.au/sparrow-wallet-101-self-custody-your-bitcoin" target="_blank" class="external-link">Sparrow Wallet 101: Self Custody Your Bitcoin</a></li>
<li><a href="https://bitcoiner.guide/wallet/" target="_blank" class="external-link">Bitcoin Wallet Guide - Not your keys, not your coins</a></li>
<li><a href="https://bitcoin-only.com/wallets" target="_blank" class="external-link">Software wallet comparison guide</a></li>
<li><a href="https://armantheparman.com/hwws/" target="_blank" class="external-link">Hardware Wallets by Brand</a></li>
<li><a href="https://bitcoin-intro.com/en/backup" target="_blank" class="external-link">Bitcoin Backups - Bitcoin-Intro</a></li>
<li><a href="https://armantheparman.com/bitcoin-storage-get-better/" target="_blank" class="external-link">Bitcoin Storage – The ZeroTrust System</a></li>
<li><a href="https://unchained.com/blog/how-to-replace-upgrade-bitcoin-hardware-wallet/" target="_blank" class="external-link">How to replace or upgrade a bitcoin hardware wallet</a></li>
<li><a href="https://river.com/learn/terms/b/bip-32/" target="_blank" class="external-link">BIP32 Hierarchical Deterministic Wallets</a></li>
<li><a href="https://seedxor.com/" target="_blank" class="external-link">Bitcoin Seed XOR - A simple way of securing seeds with your COLDCARD</a></li>
<li><a href="https://overcast.fm/+MYnx0XEWA" target="_blank" class="external-link">Bitcoin Audible Read 694 - Locked Out of My Digital Life</a></li>
<li><a href="https://youtu.be/LTMAEN6wR8o" target="_blank" class="external-link">Jameson Lopp's "Bitcoin Custody and Security" presentation - Plan ₿ Forum 2022 in Lugano Switzerland</a></li>
</ul>
<h3 id="still-unsure" tabindex="-1">Still unsure?</h3>
<ul>
<li>Remember that your self-custody journey is iterative - take the first step, start simple, and improve your setup over time</li>
<li>Avoid overcomplicating things</li>
<li>Consider scheduling a <a href="https://unchained.com/concierge/" target="_blank" class="external-link">collaborative multisig onboarding session</a> with Unchained (1x1 walkthrough with an expert)</li>
<li>Reach out to me with questions, and I'll point you in the right direction
<ul>
<li>Email: <a href="https://mail.google.com/mail/?view=cm&source=mailto&to=honolulubitcoin@gmail.com" target="_blank" class="external-link">honolulubitcoin@gmail.com</a></li>
<li>Telegram: <a href="https://t.me/+Uh9gbHO9EHFkZWJh" target="_blank" class="external-link">Honolulu BitDevs group</a></li>
<li>Twitter: <a href="https://twitter.com/RawBTC" target="_blank" class="external-link">@RawBTC</a> or <a href="https://twitter.com/HonoluluBitcoin" target="_blank" class="external-link">@HonoluluBitcoin</a></li>
</ul>
</li>
</ul>
About Us
2023-06-11T08:46:19.523Zhttps://honolulu-bit-devs-rebrand.vercel.app/bit-devs/about-us/
<p>Honolulu Bitcoin is a community for those interested in discussing current events and technical developments in the Bitcoin space.</p>
<p>Beyond being a lucrative investment, Bitcoin is a savings technology at its core, and it's a pivotal tool for empowering individuals to take back their financial freedom in the digital age. We dive deep into the concepts and building blocks that make that possible. Although the discussions tend to get technical in nature, <strong>anyone is welcome to join the conversation, regardless of technical expertise!</strong></p>
<p>Note that this is a group for the exploration of Bitcoin specifically. We will not be discussing investing, "Blockchain" as a general purpose technology, or altcoins and ICOs. <strong>Bitcoin is the signal, and that's what we intend to highlight.</strong></p>
<h1 id="socratic-seminars" tabindex="-1">Socratic Seminars</h1>
<p>We meet at least once every month for our Bitcoin Developers (BitDevs) Socratic Seminar series, which is a format <a href="https://bitdevs.org/cities" target="_blank" class="external-link">started by the New York BitDevs chapter and has since spread to many other cities around the US</a> (and the rest of the world). Our seminars are designed to foster debate, information sharing, and lively discussion. In the weeks preceding the event, discussion topics are collated by meetup organizers (and members) from a variety of sources.</p>
<p>At some point before the event, a topic list will be posted on the corresponding event page on this website (including primary and optional topics). We try to hit all the primary topics, but optional topics are included in case there is extra time or for interested members to refer back to later. Archives of these discussion topics and presentations are maintained on past event pages.</p>
<p>The discussion portion of the event is generally never recorded or photographed to protect attendee privacy. We also follow the <a href="https://www.chathamhouse.org/about-us/chatham-house-rule" target="_blank" class="external-link">Chatham House Rule</a> for sharing information after each event. It is recommended that you have a firm grasp of the basics of Bitcoin in order to extract the most value from our Socratic events, but <strong>feel free to come listen and learn even if you're brand new to the space!</strong></p>
<p>Check out all of our events <a class="internal-link" data-note-icon="3" href="https://honolulu-bit-devs-rebrand.vercel.app/">here</a>.</p>
<h1 id="continued-discussion" tabindex="-1">Continued Discussion</h1>
<p>Outside of our regularly scheduled events, we have ongoing discussions on Bitcoin-related topics in our <a href="https://t.me/+Y5QaLhylSNJjMDEx" target="_blank" class="external-link">Telegram group</a>. That's the best way to learn, network with others, and catch the latest group updates. You can also follow us on Twitter at <a href="https://twitter.com/HonoluluBitcoin?s=20" target="_blank" class="external-link">@HonoluluBitcoin</a>.</p>