Satoshi Scoop Weekly, 21 Jun 2024

Satoshi Scoop Weekly, 21 Jun 2024

Take a byte out of the latest weekly updates in the Bitcoin ecosystem. All things #POW and #UTXO.


4 min read

Crypto Insights

First ZK Rollup on Bitcoin Set to Launch

  • Citrea overcomes Bitcoin’s limitations in terms of block size and script capabilities by modularization. The innovation lies in using Bitcoin as a data availability layer, allowing any data to be published to Bitcoin since it will not be executed on-chain.

  • To facilitate BTC flow in and out of Bitcoin, Citrea has developed the Clementine Bridge — a two-way peg based on BitVM that performs optimistic ZK proofs.

Bitcoind Policy Estimator Modes Analysis

The author’s analysis of the Bitcoind Policy Estimator’s fee estimation data across 435 blocks (Block 846887 to 847322) reveals key insights for the conservative and economical modes:

  • The conservative mode relies on a longer block history for fee estimates, potentially offering higher rates that meet targets but are less responsive to immediate fee market changes. Conversely, the economical mode presents lower estimates that adapt more swiftly to the prevailing fee market dynamics.

  • The consistent overestimation trend of the conservative mode raises concerns about its suitability as the default estimation mode. The analysis recommends shifting to the economical mode to avoid overpayments and align more closely with real-time market conditions.

Significant Bugs in Bitcoin Rust Library Fixed

Bitcoin developer community has released a bug fix update for the Rust library:

  • A critical bug in rust-bitcoin that failed to verify the witness flag in transactions with an empty witness has been addressed, ensuring library robustness.

  • Inconsistencies in miniscript handling between Bitcoin Core and rust-miniscript have also been solved.

Bitcoin Core 27.1 Released

  • This release includes major modifications to Miniscript, RPC commands, and GUI improvements.

  • Notable changes comprise ensuring sanity in parsing TapMiniscript, enforcing maximum setmocktime values, rewording error messages, and adjusting blockToJSON functionality.

EU: Self-Custody and Lightning Network Impact Law Enforcement

  • The EU Innovation Hub for Internal Security issued its First Report on Encryption, describing Layer 2s, zero-knowledge proofs, and self-custody as ‘problematic’.

  • Aligning with the EU's strategies to combat 'Going Dark' (a plan led by EU security authorities which calls for the backdooring of encryption and promoting access to surveillance), the report addresses the challenges law enforcement faces in monitor online activities due to widespread adoption of end-to-end encryption and other privacy technologies.

Bitcoin Ossification Debate With Vijay Boyapati and Reardencode

In this episode, Vijay Boyapati (@real_vijay) and Brandon Black (@reardencode) discuss:

  • Bitcoin special qualities

  • Defining ‘ossification’

  • How many users is ‘enough’?

  • Centralizing MEV concerns

  • Economic nodes and who holds the power

A Dialogue on Sanctions and Compliance at the Consensus 2024

  • The recent U.S. court actions against Binance and the Tornado Cash highlight the need for the crypto industry to understand the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) sanctions operations.

  • This discussion at the Consensus 2024 covered compliance with sanctions lists works, how to comply while maintaining privacy, and the impact of sanctions on governments and daily life in countries like Iran.

  • Watch the video: OFAC Sanctions Compliance: The Good, the Bad, and the Ugly

Top Reads on Blockchain and Beyond

The Emerging Bitcoin Modular Ecosystem

  • The author argues that Ethereum’s approach to interoperability an optional feature rather than a foundational design principle is problematic. Bitcoin, on the other hand, can leverage these divergences to develop better.

  • Lightning Network’s key role in Bitcoin's interoperability and its distinct design from Ethereum's modular architecture are highlighted, along with the functions of Cashu and Fedimint protocol, liquidity providers, atomic bridges, ecash mints, and Nostr.

  • The risks of Bitcoin's modularity should not be overlooked. Liquid Sidechain Protocols (LSPs) demand substantial capital, potentially leading to economies of scale that could impact competition among different providers. Eecash mint facilities’ expansion might face obstacles due to regulatory scrutiny and fraudulent operation risk. Also, the centralization trends in Nostr relays leave uncertainties about the network topology.

Navigating the Social Graph

  • Trust is evolving, shifting a trust-based paradigm to a new structure, the Social Graph.

  • Principles for Social Graph design should at least include:

    • Principle of Least Interference: address issues using mechanism that minimally disrupt social dynamics

    • Principle of Relativity in Cyberspace: avoid imposing personal notions of truth, content quality onto others

    • Principle of natural patterns: prefer mimicking naturally evolved social dynamics over introducing artificial ones

  • Social Graph can help address issues in DoS prevention, social discovery, anti-impersonation, and personalized rating.

Lightning is the Common Language of the Bitcoin Economy

The Lightning Network binds together diverse systems built on Bitcoin. As a common language, it excels for three reasons:

  • The use of BTC, the trustless bearer asset

  • Serving as a transactional protocol designed to promote flow

  • Being inherently interoperable, as detailed in its specifications