Bit Cat

Bitcoin is social consensus around the idea of following a default rule (heaviest chain) to keep agreement around something (a global ledger of value) for which there would normally be very little agreement. It's just a default rule, that can be overridden at any time when there is social consensus around something else. If there was social consensus for deleting bitcoin, it would be gone in a split second and it would be hard to prove it ever existed. In the early days, in presence of a catastrophic bug and with the full agreement of the very few participants, the rule was neglected, and patched. It's a human tool after all, therefore human agreement is always king, when it exists. However, despite being just a default rule, it can become an incredibly sticky one, because of the well known difficulty of humans to take any kind of coherent and durable collective decisions, especially at a global scale. Newspapers contain very little traces of social consensus. And when alternatives are shaky and not immediate, the default rule easily becomes the only rule. So while it may sound like a contradiction, I think bitcoin exists thanks to a form of social consensus, but is also nourished by a total lack of it.

@Vladcostea @GrassFedBitcoin So you're willing to nuke the average IQ of your show, bold move.

I’m blocked by @GrassFedBitcoin But he’s invited on Bitcoin Takeover podcast if he can handle an adversarial environment where he gets asked all the uncomfortable questions

@RonSwanonson Something that's capped at 100 won't trade at 100, it's finance 101.

Adding cash reserves is great on paper but $STRC is not where it is because of reserves. Adding cash is not going to bring it back to par… Only trust will do that The market lost a lot of trust from watching something that was marketed to be stable, drop ~20% in a matter of days, wiping every gain that anyone had in the vehicle back from its inception. I don’t think STRC will be back trading at par until that trust is restored or they just buy it back to par and set aside a methodology to use the reserves to keep it at par… within reason I do own some STRC and can still be critical. No shame. This is a new financial frontier. Not everything is going to go right the first try

Order book is very simple, people post bids to buy/sell certain quantities at certain prices, anyone can pick them up and honor them in a p2p way. No global state, so all good (except for the fact that bids around the market price are naturally the hottest so it's possible that multiple people pick them at the same time causing some tx failures if there isn't a central orchestrator). AMM keeps a pool of two tokens and allows users to take some token A out of the pool, by injecting some token B into the pool. The terms of this transaction depend on the quantities of tokens already present in the pool (the more the better, less slippage). So the contract/covenant that offers the swap needs to be aware of all the tokens in the pool. If it's only aware of a subset of them, it will offer a degraded service.

@maxibitcat @bathtoob30 Can you elaborate a bit on the difference assuming no prior knowledge on AMMs and order books?

In programming, the actor model is a concurrency model that avoids lock-based synchronization. Instead of controlling access to a data element through a mutex or a read-write lock, you define a single owning actor for that element, and only that actor can mutate its state. The actor can receive msgs in a message queue from other actors. Think of it as a single thread waiting for msgs in a loop, processing them through actions, and sending msgs to others as part of those actions. It can also initiate communication with other actors. Synchronization primitives may still appear in the implementation of msg queues, but contention is minimal by design. To illustrate, if several parts of a program want to update the same state, they do not race to acquire its lock. They send msgs to the owning actor, which alone decides how to update its private state and what actions or msgs follow. (By the way, rusty-kaspa’s consensus-processing pipeline was inspired by a similar design: actors/processors communicate through msg queues to provide pipeline concurrency, while each uses a worker pool for inner-task parallelism.) --- UTXO detour In the UTXO model, each UTXO is a one-time data storage point, consumed by the spending tx, which in turn produces new UTXOs. These storage cells carry kas value and an spk (script public key). The spk holds the rules for spending the UTXO. With kaspa covenants, we focused on one type of spk called p2sh (pay to script hash), which is basically a simple 32-byte hash committing to a locking script. The locking script (aka the redeem script) can also hold state fields within it (think of them as constants embedded in this specific script and fed to the script’s “main function” as args upon execution). Recent kaspa Toccata additions allow this script to enforce complex conditions, including inspecting the output spks of the tx and verifying complex rules over them. This means an input can verify that an output follows exactly the same contract/script, and that only the embedded state constants are mutated according to the script rules and embedded in the output. Alternatively, it can verify that control has passed to some other known contract template, with the same or a different state object. eg: Counter { count: 5 } → Counter { count: 8 } or: League { players: n, ... } -- register_new_player → League { players: n+1, ... } + Player { games: 0, ... } --- To get to my point, imo this makes it natural to name such a stateful covenant UTXO an “actor.” It is not an actor with a long-lived process and a msg-queue processing loop, but it is an actor in the sense of state ownership. Only my fixed logic can consume my own state and produce the actor(s) I become next, with updated state. No one else can consume or mutate that state without going through the rules the covenant itself enforces. The tx is the interaction/msg that triggers the actor’s next state transition. A logical actor can therefore continue as a chain of UTXOs: Actor₀ → Actor₁ → Actor₂ → ... Each arrow is a valid tx that respects the actor’s transition rules. A covenant id can also give this evolving UTXO lineage a stable identity across state transitions. --- I argue that this is the right mental model and terminology to establish when discussing covenant state-controlling entities: a piece of code owning a state and exclusively authorizing its mutation/consumption. I think many more details now emerging from eg Argent will be easier to discuss once we establish such jargon.

@saylor @Strategy Cool, so we'll get our regular credit crunches every few years as we are used to. Too bad for those who hoped bitcoin would fix that. Thanks.

Bitcoin is Digital Capital. Strategy transforms it into Digital Credit. $BTC

@GreaserRichard They'll mine a block every week, good luck.

Lot of bitaxe hashrate is going to go with the slop fork. The slop fork will be more decentralized from pleb hashrate than the legacy chain

@BTCoptioneer If Naka falls its shareholders suffer, of MSTR falls all bitcoiners suffer. That's why, it's a permanent blackmail to people who haven't asked for it.

$NAKA investors lost 99%+ of their money. So, why are people still hating on $MSTR instead of hating on NAKA?

@michaelsuttonil @bathtoob30 An AMM covenant would need to know at all times how many utxos of each token belong to the pool, which seems hard to do if it's scattered across many utxos itself. A classical order book seems more naturally parallel and adapted to this framework.

In my previous post I mentioned partitioned-state defi. There are ways to reduce contention on a shared state actor, and I can elaborate on that later, but I think the main state-of-mind shift should be in designing systems/apps with partitioned-state + state convergence guarantees. For instance, manage a swap ratio in multiple replicas and design the system such that the gap between replicas is bounded as function of time (for instance for N replicas, gaps converge in log N time or rounds). My personal hypothesis is that reality is inherently parallel and that shared state hotspots/ choke points are the bad design for global defi and not the other way around

@BTCoptioneer A cash reserve obtained by crushing the share price is not a strategy that's suitable to meet perpetual obligations, no matter how many months it covers.

$STRC still below $90 despite increasing the cash reserve today. The market is telling us that the 20-month cash reserve is not the problem. The problem is the volatility. And the only way to reduce the volatility is to have a buyer of last resort. STRC buybacks are coming.

@stephanlivera They destroyed their stock by 30% just in the last month in order to fund that reserve. This is not a perpetual strategy that's suitable for perpetual obligations, and the market sees that.

So from the strategy.com dashboard they've now got 20 months dividend coverage. Bitcoin bear markets don't normally even last that long. Cycle turns eventually and people's confidence returns.

@MicroStrategy This is a tweet fabricated for the purpose of index inclusion, basically screaming "hey look we've got a real business". While everyone knows it's not true.

Strategy is proud to announce a strategic partnership with InsuranceMarket.ae, marking an important milestone in their AI journey. Strategy makes AI reliable on enterprise data, and is committed to helping organizations transform data into actionable insights and make faster, more informed decisions. Through this collaboration, we are enabling InsuranceMarket.ae to further leverage data as a strategic asset across their organization, powered by Strategy Mosaic, our Universal Semantic Layer that gives AI the business context it needs to produce consistent, governed results. This partnership aligns with InsuranceMarket.ae's long-term vision of embedding AI and data-driven decision-making into every aspect of their business. By enhancing their analytical capabilities with Strategy, we are helping to build a stronger foundation for innovation, operational excellence, and customer value. As InsuranceMarket.ae continues its AI-first journey, Strategy is proud to play a role in supporting their growth and shaping the future of their organization. #AI #SemanticLayer #InsuranceTech #StrategyMosaic

@saylor You are certainty shaping its future, but downwards.

In Bitcoin, influence is earned through work, not ambition. Those who contribute money, utility, and power to the network shape its future.

@Vladcostea The problem is not really technical, it's that nobody seems to care about digital money outside of our tiny community and outside of the investment use case (and not even that lately).

The most important question for which we will have to find an answer in the coming year is: Will Bitcoin become the money that does everything from payments to expressive smart contracts to fulfill the maximalist thesis Or was Bitcoin just the first prototype, an early blueprint that leads to better and more efficient internet money?

@zaidlikesmstr @Strategy You realize it's fifty shades of doing nothing even vaguely productive?

$MSTR For over five years, the orange dots were the story. Today, they’re only part of it. @Strategy is evolving from one-way capital issuance to active capital management. To me, that’s the message behind Saylor’s signal this morning. It’s a subtle reminder that the company’s toolkit has expanded well beyond simply buying Bitcoin. Today, management has multiple levers it can pull. It can strengthen the USD Reserve and reinforce confidence in $STRC It can monetize Bitcoin when doing so is more advantageous than issuing common equity. It can repurchase its own securities when management believes they’re trading below intrinsic value. Bitcoin accumulation remains the foundation. But it’s no longer the only way management creates value. That also makes today’s signal much harder to interpret. My approach doesn’t really change. I continue to lean on the framework management itself laid out. To me, that still points toward a relatively quiet week, with perhaps a modest addition to the USD Reserve and otherwise very little activity. Although the orange dots now tell only part of the story, securing one Nakamoto will be one of the biggest stories this space has ever seen. And I believe we’ll be writing that story in the near future. Mission Strategy. $BTC $MSTR $STRC

@saylor Your company delegates the only thing it's supposed to do (hold BTC) and can't even produce a proof of reserves. Embarrassing.

Bitcoin is an emergent network of wallets weighted by satoshis, nodes weighted by commerce, and miners weighted by hashrate, with capital, consensus, and security held in dynamic equilibrium. $BTC

@CedYoungelman Saylor has the greatest control over protocol changes, as in case of a fork he can dump 1M coins of the version he dislikes and send it to basically zero.

Who controls Bitcoin?

@BTCoptioneer Bitcoin may not recover until Strategy is substantially resized, as the company fundamentally devalues bitcoin.

$MSTR is undervalued at 1x mNAV. It’s true that things aren’t looking great right now but once Bitcoin recovers, $STRC will recover as well. So, Strategy will have the ability to accumulate more Bitcoin. Don’t be fooled into believing Saylor will not figure this one out.

@Cointelegraph How exactly do you authenticate a user using a ZK proof?

⚡️ JUST IN: StarkWare founder Eli Ben-Sasson says identity scanning has already lost to AI, arguing that zero-knowledge proofs verify users without collecting personal data.

@BitcoinIsaiah Turns out amplified bitcoin also amplifies its medium term security risk. Yet another way in which treasury companies make bitcoin less valuable.

The most bearish thing about Bitcoin right now is not the price, spam or treasury companies. It’s the fact that transaction fees are at 10 year lows and have been sub 1 sat/vB for more than a year. Where are the on-chain users? Where’s the activity? Where’s the demand for valuable block space? Screw 1 sat/vB. I want to see 100+ sat/vB. Make block space valuable again!

@StickyFingaz88 @TomerStrolight It's good to have a few as we have now (definitely not 20K). But even if there is only one, it doesn't make it a dictatorship, the minute they push anything that people don't want, they can instantly fork the code and take it from there.

@maxibitcat @TomerStrolight Is it better to have one implementation running (core) or "20k" implementations and let the network participants choose which one is best?

After listening to this it is clear that there is widespread and rational concern over Core’s judgment, integrity and independence - not just from those running BIP110, but from longstanding bitcoiners who disagree with the BIP110ers about many other things. Moreover, it was pretty clear that Core’s defenders are in an anxious, emotional and irrational state of mind, grasping at straws and misdirections to avoid addressing those concerns. Core’s bad choices and the bubble of immature yet self proclaimed experts they’ve surrounded themselves with who basically hurl insults and technobabble while avoiding the substance of the concerns has isolated and shattered confidence and trust in that group. This is worth the listen (especially the last couple of hours) to come to your own conclusions.

@RonSwanonson That stock offers capped returns during rallies, while it's more volatile than bitcoin during downturns. It's the definition of useless, and given the way it was marketed it's borderline fraudulent.

If you ever feel stupid, just remember that there are still people out there that think because $STRC offers 12%… That bitcoin also has to go up 12% for Strategy to continuously pay it 😂 Schools have failed us