Bitcoin 2022 in Miami brought together tens of thousands of Bitcoiners. A small fraction of these attendees found their way to the place with the highest signal of all: The Open Source Stage.
The stage was hosted by Odell and featured three straight days of in depth talks covering the history, current state and future Bitcoin and Lightning development.
In this post we surface and share the biggest takeaways and themes from the conference.
Building an Open Protocol is a Slow and Iterative Process
Taproot presents an exciting evolution of Bitcoin. It brings the possibility of increased privacy, especially for multi signature transactions.
Now that BIP 340, 341, 342 activated, there are many ways to handle multisig, each with different tradeoffs.
In “Defining The Standards Of Taproot & Multisig,” panelists highlighted these tradeoffs and accentuated the difficulty that optionality brings to an open protocol.
Jameson Lopp noted: “Additional flexibility creates a huge design space. Which means there are a lot of footguns. This is financial engineering, you should really approach it like aerospace engineering – it’s a mission-critical system. One mistake can be catastrophic.”
Keith Mukai broke down the issue with a simple metaphor:
Stick from Trezor highlighted the issue from the wallet developer perspective: “You don’t want to have a multisig wallet that has to speak four different languages if it wants to communicate with four different hardware wallets… When Taproot was activated, I had this urge to talk with people at Casa and Unchained Capital, to get in the same room and try to figure out how to use multisig so everyone can use it so we don’t repeat the same mistake that we did in the past where everybody invented their own protocol.”
Check out the full panel:
- Defining The Standards Of Taproot & Multisig – with Keith Mukai, Jameson Lopp, Stick, Oliver Gugger, Stick and Afsheen Bigdeli
Social Attacks are Harder to Defend Against than Technical Ones
One panel that made waves in the Twitterverse was “Preventing Attacks On Bitcoin” – with Jameson Lopp, Bryan Bishop and Luke Dashjr, hosted by Shinobi. The group walked through whether multiple situations were – or would be – an “attack” on Bitcoin.
Some of the situations examined:
- Was Gavin Andreesen an intentionally malicious actor?
- Litigation against core developers
- The growing narrative of “Bitcoin isn’t money”
- “Is it an attack on Bitcoin to donate $5m to Greenpeace with stipulations of exactly how it must be spent in performing a social narrative”
Watch Lopp draw a clear distinction between social attacks and technical attacks and explain why the former are typically harder to defend against.
.@lopp with the concise breakdown: social/memetic/narrative attacks on Bitcoin are more difficult to defend against than technical ones. From "Preventing Attacks on Bitcoin" at Bitcoin 2022. pic.twitter.com/KFpiHVJNHn— Andrew Begin (@agbegin) April 20, 2022
Check out the full panel:
- Preventing Attacks on Bitcoin – with Jameson Lopp, Bryan Bishop, Luke Dashjr and Shinobi
Taro – Taproot Asset Representation Overlay
In a packed Keynote at the end of day one, Roasbeef took to the stage to recap Taro; a new protocol that was announced just ahead of the conference.
The short description from from the slide deck reads:
“A taproot-powered protocol for issuing assets on the Bitcoin blockchain that can be transferred over the Lightning Network. Taro enables the Lightning Network to move to a multi-asset network with Bitcoin at its core.”
The protocol is part of a bigger trend of transacting assets other than Bitcoin over the Lightning Network. As Vivek joked in an earlier panel: “So you can shitcoin, I can route your shitcoin, and we can still be friends.” 😅
Watch Roasbeef’s Keynote on BitcoinerTV
Lightning Liquidity is Maturing into a Free Market
Lightning is touted as a way to transmit value around the world for nearly zero fees. While it’s true that lightning payments are significantly undercutting traditional payment rail fees, the market for Lightning liquidity has not yet fully developed. In fact, the panelists argued that fees need to increase for Lightning to be successful.
Roy Sheinfeld made this point clear, there’s a myth needing to be busted around Lightning fees:
Ryan Gentry accentuated this point, saying: “We’re still in these early days where the best solution still is to put up the bat signal on twitter, the community will generally open channels to you. As it matures, and the network gets bigger, it’s fundamentally a market problem.”
Gentry did convey that rates for liquidity are starting to get sustainably high: “In the early days, there was an overabundance of supply. Demand is starting to pick up and push prices up, which should – in theory – induce more supply in the network. If you can earn 6% annualized on your bitcoin for opening a channel to a node that wants it, that’s a pretty good deal.”
Check out the full panel:
- Lightning Service Providers and Liquidity – with Michael Tidwell, @niftynei, Roy Sheinfeld, João Almeida and Ryan Gentry
The Stage is Set for Lightning Application Devs
Multiple panels covered advances in lightning implementations and infrastructure that will unleash potential of application developers and noderunners alike.
In “The Future of Lightning,” Matt Corallo of Spiral and Christian Decker of Core Lightning explained how their respective development kits are accelerating development by making node management more turnkey and flexible.
Decker provided context into the current situation, saying:
“Do we want to shove a full node into a mobile app? Potentially segmenting your funds into a multitude of apps… making it hard to experiment? Or do we want to have a more centralized node, that is still operated and run by you, where we just remote into it? Those are tradeoffs that are currently being explored and we will see how they work out in the future.”
“Currently, trying new apps means setting up new nodes… We [Greenlight] as the Lightning developers are in charge of operating the lightning node. Freeing developers from having to learn all the intricacies of building both a beautiful UI/UX and the management of the Lightning node that has to be bundled with your app.”
Hear Decker explain the specialization and optionality that Greenlight enables:
Corallo also weighed in on this idea in the “10Xing Bitcoin Development” panel on day 2. Hear him break down the value BDK and LDK are bringing to app developers:
Catch up on some of the sessions that covered this topic of improving and accelerating the experience for developers:
- The Future of Lightning Development – with Christian Decker, Hannah Rosenberg
- Tradeoffs of Lightning Implementations – with Christian Decker, Matt Corallo, Olaoluwa Osuntokun
- 10x-ing Bitcoin Development – with Conor Okus, Matt Corallo, Steve Myers, Stephen DeLorme
- Bitcoin & Lightning Node Roundtable – with S2L1, /Rootzoll, Jonas Nick, Keagan McClelland & Matt Odell
Privacy and Permissionlessness is Foundational
“Decentralized Bitcoin Exchanges” dove into the importance of self-custody and privacy. Josef Tetek gave three key “whys” of decentralized exchanges:
- You’re forced to self-custody your bitcoin from the start. Decentralized exchanges never hold your keys.
- You actually get to use Bitcoin as a protocol. On centralized exchanges you usually just buy some kind of “weird financial derivative” that’s *maybe* settlable in physical bitcoin.
- Privacy: No KYC, only the counterparty knows some of your details. If you dox yourself at the start [on a centralized exchange], it’s very hard to correct that.
Chris Stewart of SuredBits launched into a rip that summed up a foundational principle of building for permissionlessness and privacy:
"When thinking about designing these things, it's super important to get the base level right, without these things baked in"— El Flaco 🌋🇳🇮⚡ (@_pretyflaco) April 20, 2022
🎯@Chris_Stewart_5 on keeping the protocol level KYC/AML-free pic.twitter.com/izbhYclvv2
Check out the full panel:
- Decentralized Bitcoin Exchanges (DEX) – with D++, Daniel Buchner, wiz, Josef Tětek, Chris Stewart
DLCs – Programmable Real World Events
First described by the co-inventor of the Lightning Network Tadge Dryja, Discreet Log Contracts (DLCs) are one of the technical developments in Bitcoin that gets people really excited. Tony Cai noted that right now, there is a big dichotomy between Bitcoin the asset and Bitcoin finance. The latter is usually offered as a service by centralized companies. Therefore, today’s Bitcoin finance is often neither censorship-resistant nor verifiable and even to some degree removes the provable scarcity of Bitcoin.
DLCs are a Bitcoin native way to bring smart contracts to Bitcoin – a prerequisite to build censorship-resistant financial markets on Bitcoin. A key difference hereby to other blockchain’s DeFi adventures is the challenging approach to not bloat the base layer by keeping most of the data off-chain. This will allow the ecosystem to build out financial tools and products with Bitcoin as the native currency, like other big assets in the world, but with the guarantees and primitives of the underlying asset.
Watch the panel:
- DLCs: Programmable Real World Events – with Chris Stewart, benthecarman, Tony Cai, Tadge Dryja
Lightning Privacy (Concerns & Solution) – With Niftynei, Tony Giorgio, Evan Kaloudis & Shinobi
While payer privacy is already pretty good in Lightning, payees leak a lot of information about themselves in order to get paid. Lisa Neigut breaks the problem down as follows: “If you want to receive a payment right now on Lightning, you create something called an invoice and give it to someone. An invoice has a bunch of information in it: it tells you who you’re paying, how much you’re paying, it usually has a description of what you’re buying etc. Invoices themselves leak all your transaction data.”
A lot of the current research around improving Lightning privacy is therefore about finding solutions to obfuscate information about the receiver, and there are three proposed solutions that are somewhat similar: Route Blinding, Trampoline routing, Rendez-vous routing. All three, with some subtle differences, utilize intermediary nodes that a payment goes to before it is routed to its final destination without the payer having to know who the eventual recipient will be. Currently, it looks like Route Blinding is the closest to being implemented as it is already being actively worked on by Core Lightning and Eclair.
Check out the panel:
- Lightning Privacy Concerns & Solutions – with Shinobi, @niftynei, Tony Giorgio, Evan Kaloudis
The Network Will Develop Across a Spectrum of Custody
Ever since Mt.Gox blew up in 2014 and a lot of users had their bitcoins stolen, developers have been working on solutions for users to hold their own keys, and educators stressing the importance of self-custody. A lot has been achieved to this end since then, from the establishment of hardware wallets as its own industry to the concept of “first-class bitcoin citizens” who are the true sovereigns of the network without the need for trusting complete strangers.
The successful implementation of community custody at Bitcoin Beach in 2020 has added some nuance to the discussion. Not everyone is a 3rd party and hence a “security hole” after all. Ben Arc called this the “murky area in the middle” between two extremes of complete self-custody and custodial services and highlighted the importance of working on decentralized custodianship. “It’s also OK to appreciate that some people will outsource that security to somebody they ‘trust’”, Ben continued and noted that it’s important to build these solutions in a way that users can eventually run themselves.
Obi Nwosu was thinking along those same lines in his keynote when he highlighted the Fedimint protocol designed by Eric Sirion which leverages this concept of federated custody – similar to the multisig community custody in Galoy’s Bitcoin Beach Wallet – to avoid single points of failure while enabling exciting advances in user privacy.
At Galoy we’re stoked to see more builders exploring the area of community banking on Bitcoin and the opportunities that federation of trust offers for both, privacy and scalability.
Watch the panels:
- Lightning Payments: The Future of Commerce – with Tony Giorgio, André Neves, Rockstar Dev, Ben Arc, Alyse Killeen
- Federated Chaumian Mints – Obi Nwosu
- The Future of Bitcoin Privacy – Eric Sirion, Casey Rodarmor and Aaron Van Wirdum
Funding Open Source Bitcoin Developers
Funding for open source devs and projects is a critical part of advancing Bitcoin and securing its future. In the funding panel, Adi Shankara from Summer of Bitcoin shared his pitch to university students for why to come work on Bitcoin vs. big tech or a startup:
.@adibitcoin with the clear pitch for joining @summerofbitcoin— Galoy (@GaloyMoney) April 20, 2022
“If you want to work on frontier technologies that flip the way the world runs, working on Bitcoin today is like working on the internet in the 90s. It might make sense to[…] work on, in case it catches on.” 🔥🚀 pic.twitter.com/G5lS9XeWKW
Conor Okus did a great job outlining the four stages of how Spiral grantees can progress from a proof of concept to a self sustaining project:
Watch the panel:
- Funding Open Source Bitcoin Developers – with Mike Schmidt, Adi Shankara , Ben Price, Conor Okus
Spiciest panel of the week goes to: Sidechains (Benefits & Tradeoffs)
In case you missed it, Burak Keceli held nothing back on stage with Chad Barraford. On more than one occasion, he made clear that shitcoins are not sidechains. Here’s one:
As @weinicus said:
Watch the full panel on BitcoinTV:
- Sidechains: Benefits and Tradeoffs – with Paul Sztorc, Diego Gutierrez Zaldivar, Chad Barraford and Burak Keceli
That’s All, Folks!
Share your favorite moments:
What other moments do people need to see? Drop your favorite rips and exchanges below👇— Galoy (@GaloyMoney) April 21, 2022
For those curious to dig in further, have a listen to the Twitter Space recap we hosted with George Kaloudis from CoinDesk.
Thanks again to Odell and Bitcoin Magazine for putting on an amazing event!
Header photo credit: @BitcoinRunners