Bitcoin (BTC)

Custodial Stablecoins!

Lightning Stablecoins miss the mark according to Danny and Chad.

A stablecoin on Lightning is still a custodial IOU.

It requires trusting a hub that holds the actual dollar-denominated asset and promises to honor the Lightning invoice.

This is not meaningfully different from a bank account.

They argue that a genuine trustless stablecoin on Bitcoin requires smart contract functionality at the base layer to enforce the peg without a trusted issuer.

Bitcoin Takeover S17E15 with @chadmasterxbt and Danny from @opnetbtc

The Ever Present Danger of Government

Xinjiang's Bitcoin mining operations were shut down in a single night.

At their peak, Xinjiang-based miners accounted for 15 to 17 percent of Bitcoin's global hashrate.

When the Chinese government ordered the shutdown, every operation in the region went offline simultaneously.

The speed and totality of the shutdown demonstrated both how centralized the enforcement mechanism was and how quickly a significant fraction of Bitcoin's security could be removed by a single government decision.

Bitcoin Takeover S17E16 with @SummerMeng21 from @BitmarsGroup

Lukas's security model Musings

Bitcoin's security budget which is the total revenue paid to miners, is declining in real terms as block subsidies halve every four years.

For the security model to remain intact, transaction fee revenue must grow to compensate.

But fee revenue depends on block space demand, which depends on Bitcoin being useful for transactions.

If Bitcoin becomes primarily a store of value with few transactions, the security budget collapses precisely as the asset becomes most valuable.

Bitcoin Takeover S17E16 with @LukasHozda from @Braiins