Don’t Mess with Bitcoin

1 Thought of the Week by Anita Posch

One year ago I was asking my followers for bitcoin donations for St. Annes School in Zimbabwe. With these funds Miss Aurra, headmistress of the school, was able to secure a new school building and to re-open. Since my visit in Zimbabwe in early 2020 the economic and living situation for Zimbabweans has gone worse. High inflation, a complicated and not-functional multi-currency banking system, as well as capital controls make Bitcoin the seemingly perfect solution.

Listen to Miss Aurra how Bitcoin empowers Zimbabweans. This use-case is mainly the reason for me to advocate for Bitcoin.

2 Quote of the Week

Wealth isn’t the gold of pirates - wealth is energy.” - Buckminster Fuller

Richard Buckminster Fuller (1895 - 1983) was an American architect, author, designer, inventor, and futurist. In 1967 he predicted something like Bitcoin and the new wealth it would create. He concludes, we’re going to be able to afford to make all humanity successful.” Thanks to Brian Roemmel for digging that up.

3 Iran’s central bank trying to regulate mining

Mining is done with energy. That’s the segway to the Central Bank of Iran which is banning transactions with Bitcoin that were mined outside of Iran. Within Iran it’s only possible to transact with locally mined coins.

Hm. It’s a known, that there are Iranian mining farms. In April it was announced that miners, who connect to local mining pools could receive a 15% discount on their electricity tariff.

It seems the idea of the Iranian government is to get a foot in the Bitcoin world by enabling value extraction via taxation or hold and use Bitcoin themselves. I agree with @TuurDemeester, who expects that after experiments like these, we might see countries allow for Bitcoin to be used as a full currency alternative to the national currency. It’s really a good idea for countries with cheap and renewable energy resources to mine Bitcoin for themselves.

4 Clean mining is censored mining

Trying to take control of mining is really going to be a thing. Early this year two of the largest Bitcoin mining companies in North America, Marathon Patent Inc. and DMG Blockchain Solutions Inc., joined forces to create the Digital Currency Miners of North America (DCMNA), the first North American mining pool with a legal entity. Together, they’re pledging to only process transactions that comply with American laws.

They are pioneering a technique called clean mining,” meaning they select which transactions to process based on wallet information instead of the most lucrative fee options. They’re promising to only mine transactions that the government approves of.

I would say, clean mining” is: censored mining. On episode 100 Jameson Lopp and I am discussing the possible strategies and outcomes of this attempted attack on Bitcoin.

Yesterday, May 6th 2021, Marathon mined their first clean block”. Bitcoiners started to sending noncompliant” bitcoin to Marathon’s address from sanctioned nations to taint the clean block.

Regulators, it’s a hard job. But if you feel that someone’s got to do it. Try.

5 Mining is getting more decentralized

Last week I pleaded for China to ban mining especially with energy from coal power stations. This week one of the biggest mining pools F2Pool announced that the first time in their 8 years of operations they have seen more hashrate coming from outside of China than from inside.

6 Taproot activation

What is Taproot? In short: it is a soft fork to the Bitcoin network - a software change that will improve the scripting capabilities and most importantly the privacy of Bitcoin and Lightning by making channels look like regular bitcoin transactions. With Taproot even the most complex smart contracts would, on the blockchain, typically be indistinguishable from regular transactions.

Since Bitcoin is the best chance to secure financial privacy in the future, it is very important that Taproot is adapted. To start the activation process 90% of the mined blocks have to signal the deployment by their mining pools.

The signalling method is called Speedy Trial and it works in periods of 2016 blocks, meaning that within a 2016 block period, 90%, or 1815 of the 2016 blocks have to signal for readiness.

It’s not necessarily over if one period does not succeed to reach 90%, it just means that we will have to wait until the next period. The Speedy Trial ends in August, after this no Speedy Trial deployments are possible anymore and a new softfork deployment method has to be developed.

If 1815 (90%) of the blocks signal for readiness within a period, then full nodes that have upgraded to Bitcoin Core or any other compatible implementation will consider the signalling a success and activate the Taproot softfork in November.

On https://taproot.watch/ you can watch the current signalling.

7 Old men yelling at Bitcoin

Charlie Munger hates the success of Bitcoin and Warren Buffett is nodding grandfatherly in agreement.

8 DeFi on Bitcoin is coming

In all the hype around NFTs, Ethereum and people who in all earnest think that Dogecoin could replace Bitcoin…take a big breath, because DeFi on Bitcoin is coming, no it’s already here.

Rootstock is a sidechain of Bitcoin that enables a virtual machine running smart contracts. The launch of @Sovryn has helped Rootstock surpass 1,400 BTC in total value locked. RSK has a currently over 259,000 smart contract transactions, and almost 50,000 active users. As a result, RSK Network exceeded fellow Bitcoin-based blockchain Lighting Network for the first time. In addition, the high value of TVL is proof of the growing demand for DeFi on the Bitcoin network.

Sovryn co-founder Edan Yago is explaining the advantages of Bitcoin DeFi to other blockchains in this interview:

9 Global adoption of Bitcoin

This week Paul Barron invited me on his show to talk about the different aspects of Bitcoin’s adoption including DeFi.

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No financial advice. DYOR.

Up next Documentation of my RaspiBlitz 1.7 upgrade The Eco-Narrative Against Bitcoin and Why It Doesn’t Use Proof-of-Stake
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