#59 - Bitcoin year-in-review, Ledger X LNM, Lightning news and the best memes
🎄 Bitcoin year-in-review
It has been (once again) an eventful year for Bitcoin! The Bitcoin network has consistently produced blocks of transactions every ten minutes. A new all-time high was reached in the Bitcoin hash rate. The Lightning Network is expanding more quickly. On top of Bitcoin and Lightning, layer 3 protocols for asset issuances are starting to materialize. More and more people realise the value of self-custody. Anti-fragility at its best!
To round out this year in style, we invited 12 cool Bitcoiners to submit their favorite 2022 moments and their most anticipated 2023 events. Enjoy!
Choose a single word to summarise the year Bitcoin had:
Lyn Alden, Founder of Lyn Alden Investment Strategy: Rehypothecation.
Koty Auditore, Cypher CM of LN Markets: Unraveling.
Joe Burnett, Head Analyst at Blockware Solutions: Relentless.
John Carvalho, CEO at Synonym: Maximalist - In 2022, we got to see how righteous maximalists really are, with “crypto” rug pulls, ponzi explosions, lender bankruptcies, closing withdrawals, and the crown-fraud, SBF.
Tuur Demeester, long time Bitcoin analyst & Substack writer: Catharsis.
Desiree Dickerson, CEO & Co-Founder at THNDR Games: Immortal 👻
Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation: Resilient.
Fanis Michalakis, Developer at LN Markets: Energizing!
Samson Mow, CEO at JAN3 & Pixelmatic: Vindication.
Dennis Pourteaux, co-founder of Huat Ventures: Challenging: tourist season is over and only sophisticated bitcoiners remain.
Preston Pysh, co-founder of The Investor’s Podcast Network: Amelioration.
Bastien Teinturier, VP Engineering for ACINQ: Productive.
What is the best thing that happened to Bitcoin in 2022?
Lyn Alden: The best things that happened to Bitcoin in 2022 were the increase in self-custody practices, and the ongoing expansion of the Lightning network.
Koty Auditore: The concept of self-custody increasing among not-so tech savvy Bitcoin users.
Joe Burnett: More users recognized the importance of self custody. Exchanges continue to get drained of the BTC.
John Carvalho: The best, and sometimes worst, thing that happened in 2022 was the massive return of Bitcoin conferences. Covid stopped us for a while, but 2022 had many, maybe too many, great conferences where Bitcoiners could gather around the world.
Tuur Demeester: Crypto panic.
Desiree Dickerson: Ironically, the bear market. Everyone working in bitcoin is building with their head down, ignoring the FUD and general insanity in the market 🧸
Alex Gladstein: Global adoption.
Fanis Michalakis: Privacy and self-custody gaining more importance in the eyes of the public, amidst shitcoin casinos crashes and regulatory havoc.
Samson Mow: Shitcoins and shitcoin companies imploding taught the world about why Bitcoin Only is the way forward.
Dennis Pourteaux: Exchange and lending failures incentivized bitcoiners to self custody.
Preston Pysh: It proved that paper bitcoins are ephemeral in nature due to the speed & ease of self-custody. Something gold has failed to prove at a sovereign level since time immemorial.
Bastien Teinturier: Ethereum's switch to proof-of-stake. This forces people to think about PoW and PoS, energy consumption and long term dynamics, their respective trade-offs and what that says about the goals of each project.
What is the Bitcoin development you are most excited about for the year ahead?
Lyn Alden: For next year, I’m excited for advancements in privacy-related technologies. There are various solutions, including the Fedimint protocol and others, that aim to make the network more private and fungible for users.
Koty Auditore: The development I'm most excited about for the year ahead is not precisely Bitcoin per se but Nostr, because of its promises to boost Bitcoin's reach in ways that could go beyond what the very own Satoshi posted on bitcointalk.org at the dawn of this new monetary paradigm. To me Bitcoin is the protocol of value and Nostr is the new protocol of communication.
There's a claim in Nostr's repository that goes like this: "The simplest open protocol that is able to create a censorship-resistant global "social" network once and for all." Combine that vision with Bitcoin's and I can't feel anything else but hope and the will to keep working for a better future free of censorship and elastic policies from central banks.
Just think about it! What could happen if you put the simplest open protocol that is able to create such feats mentioned before at the service of the most secure and decentralized peer-to-peer electronic cash system ever conceived? I'm excited to see what the future holds!
Joe Burnett: I'm excited for the next wave of adoption to come in and increase transaction fees, which will lead to more scaling solutions being developed and implemented. Channel factories are interesting.
John Carvalho: The Synonym team is pretty excited about any development that makes the Lightning Network easier for users, so we are excited to see splicing on the horizon, which will help us improve the UX in our Bitkit wallet even further.
Tuur Demeester: Bitcoin mortgages.
Desiree Dickerson: More with DLCs, especially on Lightning ⚡
Alex Gladstein: Millions of new users coming online in the developing world.
Fanis Michalakis: Lightning starting to be attacked gradually - and the fact that attack vectors get addressed, gradually.
Samson Mow: Bitcoin Bonds coming to market will be transformative for the global south. They will free hundreds of millions of people from the shackles of the IMF and World Bank.
Dennis Pourteaux: I’m eager for progress on Taro to allow new assets on bitcoin.
Preston Pysh: The continued integration of Bitcoin mining into the global energy grid to strengthen and improve reliability while also spewing sound money into the local regions where it dwells.
Bastien Teinturier: nVersion=3 transactions, which will finally let us address the painful pinning attacks that plague offchain contracts. It took a lot of research from many people but we finally have a good, reasonable solution that will greatly improve funds safety in adversarial conditions.
⚔️ LNM Fam
A lot has happened recently at LN Markets! We have introduced Automatic Withdrawals, Synthetic USD, Slashtag authentication, etc.
🖋️ Speaking of authentication, you can now connect to LN Markets straight from your Ledger! Find out how we implemented this in our blog’s tech post: Poly filling buffer for Ledger Wallet.
💰 Our Cypher CM Koty has morphed into a VC to help Nostr secure a 14 BTC funding by Jack Dorsey!
And it’s our turn to join the Nostr gang 😎
⚽ We did it fam! Thanks to your participation, we have sent 10 million sats Bitcoin Ekasi, helping establish a Bitcoin-based economy in a South African township. Massive congrats to the top German-language Bitcoin podcast Einundzwanzig for launching this world cup forecast game for a good cause.
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⚡ Latest strikes
Your recap of what’s new in the Lightning world by Fanis Michalakis.
Ecosystem
BoltFun Finals
The LegendsOfLightning tournament by BoltFun is over! The first place was awarded to Lightsats, followed by Agrimint and Mutiny. Then comes LNVPN, a very cool VPN provider that only accepts Lightning, and Nolooking at the fifth position. BitPayRoll (payroll platform for companies paying their employees in Bitcoin) and Saving Satoshi (a cool sci-fi game to learn about Bitcoin coding) complete the podium. Congratulations to the winners and to all the other projects and builders.
Strike x Bitnob
Strike and Bitnob announced their partnership, which aims at greatly reducing the cost of remittance to African countries such as Nigeria, Ghana and Kenya (those are the countries concerned, for now).
It was always possible to send money from Strike to Bitnob, so the news left me a bit wondering at first. But the truth is, it’s wasn’t that easy yet for a Nigerian to instantly receive money in their own currency (Naira), even so in their bank or mobile money account. It’s precisely this last steps that this partnership aims to solve: someone in America can send dollars to their family in Africa, and the money will arrive straight to their bank account. The payment goes through the Lightning Network at the speed of light, and Strike and Bitnod handle currency conversions and interconnection with local financial entities (bank, mobile money or Strike/Bitnob account).
Wallets & Tools
Cashu in LNBits
Everyone can now easily be their own Chaumian Ecash mint with the integration of Cashu into LNBits.
Having the ability to run a mint inside an LNBits instance makes a lot of sense: the way LNBits works is already custodial, where the money sent to a LNBits instance is actually sent to the Lightning node on top of which the instance runs. LNBits is “just” a toolkit to make it easy for anyone to run their own instance, and provide some Lightning services to others, be they clients, friends, neighbours or family.
With the Cashu plugin, it is now possible to provide an additional service: the added privacy of chaumian e-cash, supercharged by the ability to send funds between mints through the Lightning Network, without any additional risk or trust assumption than those that arise when using someone else’s LNBits instance.
It makes even more sense to have Cashu in LNBits, as that means that any mint created on an LNBits instance will natively be connected to Lightning through the instance’s channels, thus strengthening the case for cross-mint interoperability through Lightning.
Phoenix Release
Eclair published version 1.4.24 of their Phoenix wallet, which brings the wallet in compliance with the LNURL specification when it comes to authentication. Indeed, LUD4 specifies that the whole domain of the authentication endpoint must be taken into account for key derivation, while Phoenix used to consider only the main domain. For example: lnmarkets.com instead of api.lnmarkets.com.
To ensure backward compatibility (eg. users still being able to login to their accounts on various services), Phoenix will still use the main domain instead of the whole domain for a few impacted websites.
What role does the domain name play in LNURL-Auth? One of the great things about LNURL-Auth is that it doesn’t directly use one’s Lightning node pubkey for authentication, but rather derives a new key for each service. This way, two different services will know the same node/wallet as two completely different entities, and won’t be able to tell that it’s actually the same person. On the other hand, we want users to be able to login using the same key everytime they connect to the same service, in order to access their account. Hence the logical choice to use the service’s domain to derive a child key from the node’s seed.
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🎁 Bonus
🔮 Friedrich August von Hayek the original Bitcoiner
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