Satoshi Scoop Weekly, 29 August 2025

Crypto Insights

Anthony Towns released a BIP draft that describes how nodes can share the transactions they intend to mine in the upcoming block in order to improve the efficiency of compact block relay. This allows nodes to share transactions they accept via their mempool and mining strategy, even if those transactions might be rejected by peers due to their own policies. Peers can then cache these transactions in case those transactions are later included in a mined block, which improves compact block relay efficiency.

Transactions in a node’s block template usually represent the most profitable unconfirmed transactions known to that node, so peers that previously rejected them for policy reasons may reconsider their value once they appear in a mining candidate set.

Falling Fees, Low Mempool Activity: Analyzing the Current Bitcoin Fee Market Structure

This article analyzes Bitcoin’s fee market structure to assess what’s really happening on-chain and explore what this means for the network’s economic health. It also examines OP_RETURN transactions and their evolving use cases.

This is particularly relevant given the debate around the upcoming Bitcoin Core v30 release, which by default will allow larger numbers of OP_RETURN outputs per transaction. Some community members have criticized this planned change, fearing it could lead to spam.

Key takeaways include:

Bitcoin fee pressure has collapsed: Median daily fee has dropped >80% since April 2024. As of August 2025, ~15% of daily blocks are “free blocks.”
OP_RETURN activity surged and receded: During peak Runes adoption (Q2-Q3 2024), OP_RETURN txs often accounted for 40-60% of daily txs. As of August 2025, that share has declined to ~20%.
Mempool activity is lacking: The percent of blocks that are not full has spiked to nearly 50% at times in the past few months.
On-chain activity may be getting displaced by alternatives: Spot BTC ETFs now hold ~1.3 million BTC, much of which doesn’t really move onchain. Trading and speculative activity are shifting to alternative L1s like Solana, especially for use cases such as memecoins and NFTs.
Over 1.5 million BTC are still held in legacy P2PK addresses. These are bare public key addresses and are considered immediately vulnerable to potential quantum computer attacks because the public key is exposed onchain at all times.

No to Burning Quantum-Vulnerable Coins: Preserving Bitcoin’s Core Values

Debate around burning quantum-vulnerable coins has persisted for years. Recently, more community members (including Peter Wuille, Jameson Lopp, and calle) expressed support for a hard fork to destroy them. However, this article argues that doing so would undermine Bitcoin’s core values: property rights must remain independent of external interference, and no authority should “confiscate” or “burn” coins.

Key arguments include:

Quantum threats are overstated: While quantum computers could theoretically break ECDSA, practical threats remain at least a decade away. By then, soft forks could introduce quantum-resistant address formats, giving users time to migrate voluntarily.
No evidence that vulnerable coins pose systemic risks: Most are long-dormant coinbase outputs, concentrated in a small number of large addresses. Even if recovered and sold, the market impact would be manageable, comparable to whale sell-offs.
Retaining P2PK coins provides a benchmark: If quantum computing advances to the point of breaking current addresses, movements in these coins would serve as an early warning signal.

In short, the author strongly opposes hardfork to burn quantum-vulnerable coins, arguing that it breaks Bitcoin’s promise of neutral property rights and fixed supply. A better path is soft forks and voluntary migration, preserving decentralization and non-interference.

Bitcoin advocate Derek Ross argues that every Bitcoiner should use Nostr. A decentralized currency (Bitcoin) only fully realizes its freedom when paired with decentralized communication (Nostr). Together they form the foundation of free money and free communication; without free communication, free payments cannot exist.

Although Nostr’s user experience is still rough, app developers are making rapid improvements. Unlike traditional social platforms, Nostr has no algorithms or centralized control, requiring users to relearn how to build and maintain their social circles. This mirrors Bitcoin’s proof-of-work ethos: the effort invested in building social capital can always be rebuilt.

Nostrpay: An Open-Source Lightning Wallet for Kids

Nostrpay is an open-source Bitcoin Lightning wallet designed for children. It includes parental controls and an educational interface to help families explore Bitcoin together. Built on Nostr Wallet Connect, it allows parents to monitor usage while giving kids hands-on experience with sats.

Arch: Making Bitcoin Bridges Unnecessary

Arch Network is a Turing-complete smart contract platform. Its technology stack, including ArchVM, DAG, dPoS, FROST/ROAST threshold signatures, and the Titan Indexer, aims to deliver scalability, speed, and security. It also offers a Bitcoin-specific syscall layer, enabling developers to natively execute UTXO creation and validation, Taproot signatures, PSBT assembly, and L1 broadcasts directly within the VM.

This post introduces Arch’s design and its ecosystem.

Block Launches Proto Miner: Open-Source Modular Hardware for a New Mining Experience

Perry Hothi, blockchain solutions architect at Block and key contributor to its miner Proto, discussed the launch of Proto in this interview, covering its technical design and modular hardware, supply chain challenges, and how it fits into Block’s larger Bitcoin ecosystem.

Key features include:

Open-source design: Fully open, allowing global review and improvement.
Modularity and maintainability: The hardware is modular and easy to disassemble, repair, and transport.
Customizable configurations: Miners can optimize for IRR or payback period—not just efficiency—depending on power costs and financing needs.
Ecosystem integration: Proto ties into Block’s broader Bitcoin strategy, alongside Cash App, payment terminals, and hardware wallets.

Cambridge Released Global Bitcoin Mining Industry Report

The Cambridge Centre for Alternative Finance (CCAF) published the Cambridge Digital Mining Industry Report, surveying 49 mining companies across 16 jurisdictions, covering nearly 48% of global hashrate. Findings include:

Mining hardware efficiency improved 24% YoY.
52.4% of surveyed miners use renewable energy, up from 37.6% in 2022.
Miner hardware recovery rate is as high as 86.9%.
Mining hardware markets remain highly concentrated, while firmware markets are more fragmented.

As difficulty rises and rewards fall, miners are exploring diversification strategies and integrating new energy sources (e.g., flare gas, waste-heat recovery) into operations to improve efficiency and unlock new revenue streams.

Bitlayer Brings Native BTC to Solana via BitVM

Bitlayer has introduced YBTC to Solana through DeFi platforms Kamino and Orca, enhancing liquidity and yield opportunities in Solana’s DeFi ecosystem. YBTC is minted via BitVM Bridge, pegged at 1:1 with Bitcoin, and can be used across Bitlayer and other supported chains.

Qubic’s Attack on Monero: 51% Attack Unproven, PoW Shouldn’t Take the Blame

Recently, Qubic temporarily controlled >51% of Monero’s hashrate, causing a 6-block reorg and around 60 orphaned blocks (details).

Research lead from Nervos Network (also a PoW chain), Dr. Ren Zhang cautions against misinterpreting this as “PoW is flawed, therefore PoS is better” (as implied by Haotian and Chenxing Li’s posts). He emphasizes that Monero’s vulnerability is specific to its own design, not a failure of Nakamoto Consensus or PoW in general. Other consensus mechanisms (like PoS) have equally severe, if not worse, weaknesses.

Meanwhile, independent research suggests that no true “51% attack” occurred: Qubic never held majority control, but used a selfish mining strategy, which so far has achieved at most around 28%.

Six Common Myths About Blockchain Privacy

Blockchain privacy is often misunderstood as either creating a dangerous level of transparency or a haven for crime. The real challenge is not choosing between privacy and safety, but building technical and legal tools that support both. This article addresses six myths about blockchain privacy:

Myth: The internet is responsible for modernity’s “privacy problems”.

Reality: Privacy issues emerged in the 19th century with the telegraph and telephone, driving the development of privacy law.
Myth: The internet works fine without privacy.

Reality: Advancements in cryptography reduced privacy concerns and resulted in new technologies that facilitate the exchange of confidential digital information and ensure robust data protection. Encryption (HTTPS, public key cryptography) enabled e-commerce and payments, fueling internet growth.
Myth: Public blockchains are anonymous.

Reality: They are pseudonymous—not anonymous. Once an address is linked to an identity, full history can be traced.
Myth: Blockchain privacy facilitates criminal activities.

Reality: Illicit transactions make up a smaller share than in traditional finance. Illicit on-chain activity rates have declined as blockchain technology continues to develop. Transparency actually aids law enforcement.
Myth: You can choose between combating illicit finance or protecting user privacy — but not both.

Reality: Modern cryptographic techniques can reconcile users’ privacy needs and the informational and national security needs of regulators and law enforcement.
Myth: Blockchain privacy is only useful for financial transactions.

Reality: It also applies to digital identity, voting, gaming, AI, and more.