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Is This Bitcoin Proposal ‘Entirely Inappropriate’?

Date:

May 4, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

  • The SEC announced it is increasing the size of its crypto unit from 30 to 50 people and SEC commissioner Hester Peirce is not a fan of the expansion.

  • Kraken opened up a waitlist for a forthcoming NFT platform.

  • Ethereum Name Service domain registrations surpassed 1 million.

  • BTC mining revenue fell in April; ETH mining revenue rose.

  • CoinShares reported a fall in earnings in Q1.

  • Fantom network narrowly escaped a series of potentially devastating liquidations this week.

  • El Salvador may have trouble paying back an $800 million bond in January 2023 if its “Bitcoin Bond” does not reach the market.

  • MicroStrategy took a $170 million impairment charge on its BTC in Q1.

  • Crypto stakeholders spent $4 million on DC lobbying in Q1.

Today in Crypto Adoption…

  • Everyday BTC usage in El Salvador is “low and concentrated,” says the National Bureau of Economic Research.

  • A county in Virginia is considering yield farming for pension system investments.

The $$$ Corner…

  • Jane Street Capital plans to borrow up to $25 million in USDC.

  • Syndicate raised $6 million to grow its web3 investment club platform.

  • Decrypt, the web3 media outlet, raised $10 million and is now independent of ConsenSys.


What Do You Meme?


What’s Poppin’?

Bitcoin developer and researcher Jeremy Rubin published BIP-119, a Bitcoin Improvement Proposal that introduced a new coding instruction known as the OP_CHECKTEMPLATEVERIFY (CTV) opcode.

The core of BIP-119 is it allows Bitcoin transactions to have restricted use in the future – meaning transactions can be programmed in a limited manner. In BIP-119 terminology, this restriction on future use is called a “covenant.”

According to Rubin, such covenants can be helpful in times of network congestion. For instance, with CTV, an exchange (or “large volume payment processor”) would be able to aggregate payments into a single transaction during times of congestion and then wait until demand for blockspace decreases before settling the individual payments.

Furthermore, Rubin argues that CTV would decrease the latency of Lightning Network payments by allowing users to route through many more channels, as CTV can bundle hashed timelock contracts (HTLCs) – which are a sort of time-based escrow and limit the number of channels that can be constructed on the L2. In addition, Rubin believes that CTV will make it easier to execute trustless CoinJoins (which mask BTC transactions).

The idea of covenants does not appear to be controversial – especially given the limited contexts that Rubin outlines. However, BIP-119 has caused quite a stir in the community due to Rubin’s choice to propose its implementation via the “Speedy Trial” process.

Here is the actual text:

“Deployment could be done via BIP 9 VersionBits deployed through Speedy Trial. The Bitcoin Core reference implementation includes the below parameters, configured to match Speedy Trial, as that is the current activation mechanism implemented in Bitcoin Core. Should another method become favored by the wider Bitcoin comminity, that might be used instead.”

The Speedy Trial process was developed by David Harding and Russell O’Conner to give structure to the Bitcoin soft-fork process. Essentially, a Speedy Trial sets parameters that if at least 90% of blocks mined in a designated period signal yes, then the activation for a soft-fork can begin. Notably, the Speedy Trial process was used recently to vote for the Taproot upgrade, which went into effect earlier last year.

What makes BIP-119 different is that Taproot was first proposedin 2018. BIP-119, however, was only just proposed in mid 2020 – leaving many prominent Bitcoiners worried that the soft fork is being rushed through without proper understanding or study.

For example, noted Bitcoin OG and educator Andreas Antonopoulos called Rubin’s choice of a Speedy Trial activation “entirely inappropriate” in a video earlier this week. And Peter McCormack, the host of What Bitcoin Did, wrote a thread for laypeople breaking down his worries about BIP-119, with his number one point being this:

“I assumed there was a pretty set process for BIP review, agreement and activation. I’m nervous that something might get activated that a bunch of people just don’t agree with. I thought #bitcoin was a glacier.”

As for Rubin, he has stood by his decision to recommend BIP-119 – even going as far as to publish seven theses for the upgrade and comparing them to that of Martin Luther’s 99.


Recommended Reads

  1. @zachxbt on his latest on-chain research leading to an FBI investigation:

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  1. NFT artist Jonathan Mann on cc0 licenses:

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  1. @gbaciX on Polkadot for beginners:

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On The Pod…

RAC and David Greenstein on Why Music NFTs Are Better Than Spotify

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André Allen Anjos, who is better known as the crypto-friendly artist RAC, and David Greenstein, co-founder of Sound.xyz, a web3 music platform, analyze the current state of the web3 music scene and discuss how artists can leverage web3 tools to get paid at fair market value for their art. Show highlights:

  • RAC’s experience in the traditional music industry

  • why David believes music is the most undervalued sector in the world – and how Sound and crypto can help value it correctly

  • the different types of NFTs with which musicians like RAC are experimenting

  • what Sound.xyz is and how it is helping artists unlock their fanbase and community

  • why David is so passionate about creating a social experience when it comes to music NFTs

  • Sound.xyz’s decision to allow artists to deploy their own smart contracts

  • what RAC has made in NFT drops compared to Spotify streams

  • why Sound.xyz was built with “editions” as the most common format for NFTs sold on the platform

  • what makes blockchain technology well-suited for the music industry

  • RAC’s crypto adventures: $TAPE, $RAC, and more …

  • how the famous “Amen Break” sample would work as an NFT

  • what artists will be measured by in the NFT world


Book Update

My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!

You can purchase it here: http://bit.ly/cryptopians

  • Coinsmart. Europe’s Best Bitcoin and Crypto Exchange.Click Here
  • Platoblockchain. Web3 Metaverse Intelligence. Knowledge Amplified. Access Here.
  • Source: https://unchainedpodcast.com/is-this-bitcoin-proposal-entirely-inappropriate/

This Post was originally published on Unchained

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