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Trending Topics 12:30: Litecoin, MatchPool, Dash crash, UASF Game Theory, Core conspiracy, Prof Sirer trolls, Vinny FUD, Ethereum is this close
Extension Block Update (30:00)
My last Patreon show was on the Miner Activated Soft Fork idea borne out of the Extension Block (EB) proposal by Bcoin. Newer analysis by Core Dev Johnson Lau, who had spent a bunch of time over the last 6 months working on the idea and supposedly published his research results, is now available. In it he offers the criticism that as proposed EB doesn’t fix malleability on the base blockchain layer.
Fixing malleability on the extension layer only offers half ass protection. Transactions between the extension blocks and the base layer are not protected. This is far reaching consequences as Johnson Lau says. I would assume it requires a hard fork to disallow that type of transaction, which changes this proposal from a soft fork to a hard fork. Avoiding a contentious hard fork is one of the state reasons behind the EB proposal in the first place. A solution would be to activate segwit as currently proposed, either through a miner activation or a user activation. This would give the protection needed.
Another big concern is the insulation that EB creates under the real scaling solution, layer 2. Said another way, the miners increase their control over the network. Large sized extension blocks will have the same kind of centralization affect that very large blocks would have. Full nodes, would be forced to validate all data in the base block and the extension block. EB is technically an soft fork, because nodes don’t have to upgrade, but then they lose their full validating status, which is effectively the same as kicking them off the network.
There is hope that EB could be developed to solve some of these problems, but that is very very far away. A promising development is the Bcoin’s team seemed concerned and made a quick adjustment to fix the ASICBoost exploit we talk about later.
A big problem w/ ext blocks is that malleability is not fixed on the base layer. EB txns to legacy addresses are vulnerable. https://t.co/A5HK5ohAvU
— Ansel Lindner (@AnselLindner) April 5, 2017
The biggest news to hit bitcoin in the last couple of years is a post by Gregory Maxwell on the Bitcoin Dev Mailing List reporting that he had evidence of ASICBoost being used by unnamed miners in bitcoin. Everyone knew he was talking about Bitmain and Jihan Wu. A shit storm erupted around this idea and has consumed the bitcoin space for the last week.
Here are some good links.
— Roger Ver (@rogerkver) April 11, 2017
Syria Airstrike (54:45)
I took most of this out of this episode and may release it at a later date, but I wanted to leave it in the show note for your leisurely consumption.
No one attacked the US! What the fuck are they doing over there?!
The official story is that it was a military grade Sarin gas attack is down right silly. No one with any training at all in chemical weapons would buy this. There’s no evidence that it was Sarin. I have experience with chemical warfare training, and no one would touch a victim immediately with bare hands. The military knows this. Military officers know this. It’s not good for the military to be questioning their Commander and Chief. I have some experience with chlorine gas being a competitive swimmer and pool manager in my teens, and the theory that it was chlorine gas makes more sense here. There’s no contact risk, and the air clears quickly.
There’s no evidence that I’ve seen that would lead me to believe that it was the govt. All chemical weapons the Syrian government had have been removed since the 2013 incident.
US intelligence knows exactly who did this, there’s no need for speculation. Believe me when I say, they have plenty of evidence that they aren’t sharing. We know the US has funded ISIS, sided with extremists since 2010 in Syria, lied multiple times about the 2013 incident, and are glossing over inconsistencies here, too. A rational person would believe the opposite of any official US story.
This is a test of the alt media. Did things really did change when Trump was elected. Has the MSM survived and do they maintain their monopoly over the minds of the masses, or has the alt media become legitimate, do they have any real power, can they hold Trump’s feet to the fire? I hope so. Again, I’ll reiterate my only real hope for the Trump presidency was to bust of the MSM.
The government cannot reform itself. Will a junkie get clean if left to their own devices? No. The Syrian incident casts doubt on the whole populist movement we’ve seen over the last year. People will stop believing in the reformist promises of these politicians. It could hurt LePen’s chances in France and Grillo’s in Italy. In a way this changes everything.
Images and reports say that runways and taxiways were not hit. That’s not possible in a real strike on an airfield. Everyone that knows anything about attacking an airfield will tell you that you hit the runway first. One tomahawk missile could have grounded all these jets, but instead they launch 50+?! It beggars belief.
The Fed’s Big Secret (00:00)
I took this out of this episode of the podcast and may release it at a later date, but I wanted to leave it in the show note for your leisurely consumption.
A must read post by the Economica Blog. Here’s some highlights. Make sure to check out the post because the charts are great!
But since QE ended in late 2014, the make-up of the new buyers / holders of US Treasury debt is totally different. Obviously, the Fed Reserve has purchased nothing (on a net new basis…of course they have been buying to replace bonds rolling off, but no net new buying) and since the Fed ceased buying, Foreigners (net) have sworn off US Treasury debt and sold $200+ billion. So the only buyers for the continuing issuance and the portion not rolled over by foreigners is the domestic public (with an assist by the dwindling Intra-Governmental surplus).
On a % basis of who bought / held the debt over different periods? The chart below highlights how completely different the current period is with the domestic public buying 87%, IG buying 25%, and foreigners net selling.
In fact, since the July 2011 debt ceiling debate (debacle?!?) when Congress determined the US would never live within it’s means, it has been the BLICS (Belgium, Luxembourg, Ireland, Cayman Island, and Switzerland) that have done the heavy lifting to maintain the foreign Treasury bid while China (and cumulative BRICS) have been selling despite record dollar surplus’. As an aside, from 2000 through July 2011, China recycled about 50% of it’s dollar trade surplus into Treasury’s…from July 2011 onward, China only continues to sell Treasury’s despite record trade surplus (seems those record surplus’ of dollars in China, Russia, and elsewhere are being recycled into something else, something a little more solid and time tested)…but luckily the BLICS stepped up just as China and the BRICS bowed out.
Well, this should beg the question, who among the domestic public is buying all those still near record low yielding Treasury’s? Great question, and according to the latest Treasury Bulletin we have our answer, “Other Investors” (with an assist from mutual funds) are the primary buyers. Banks bought a little, private parties less, and insurers even less. State/local funds sure aren’t being used to buy US Treasury’s…and US savings bonds are a thing of the past. Interestingly, the “other” category has nearly doubled since September of 2014 from less than a trillion to $1.8 trillion.
So no, by hook or by crook, I don’t think Treasury rates will be rising anytime soon and are far more likely to fall significantly…despite the Federal Reserve claiming it will start systematically selling off it’s trillions in Treasury’s…concurrent with foreigners selling…and simultaneous with fast rising Treasury issuance…all while Social Security turns from a surplus to deficit!?! I don’t think the Federal Government nor the Federal Reserve are about to let a “so called free-market” determine the yields paid on America’s debt.
The Federal government is going to ride this into the ground. Rates are going to remain low as the coming crisis hits. There will be no room to lower Fed Funds Rate either, being that it’s at 0.75% after 8 years of depression. NIRP is coming to the US imo.
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