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Tuesday, May 18th 2021 - Issue #994

More Taproot activation context

Yesterday, Bitcoin Core contributor Anthony Towns published a blogpost with his perspective on the debate that led up to the Speedy Trial activation method being deployed and the User Activated Soft Fork (UASF) client that has been released alongside it by a number of bitcoiners who do not believe Speedy Trial is the best way to activate Taproot. I highly recommend you freaks give it a read when you get a chance. Especially if you want to get a glimpse into the tradeoffs that are discussed when attempting to change something within Bitcoin and the lively debate that ensues. 

What stuck out to me from Anthony's piece is the fact that the
BIP 148-like UASF client is much different this time around considering the parameters of BIP 8 have been changed since the Summer of 2017 when BIP 148 was used to help activate SegWit. This is something I was unaware of. Beyond that, we have learned some interesting things since Speedy Trial activation went live at the beginning of the previous difficulty epoch. Mainly, that some ASIC firmware does not support version bits (basically the ability to signal "yes, I'm ready for the upgrade" or "no, I'm not ready/willing" as defined in BIP 8). I believe the pools that ran into this problem have since solved it with some tweaks to their software, but it is an interesting edge case that has been highlighted over the last few weeks.

As Anthony points out, bitcoiners will have to discuss this particular edge case to decide whether or not this particular activation makes sense in the future. Again, go read this blogpost as it is extremely illuminating in many regards. Another thing to be aware of is the fact that the UASF may not be as secure as one would like considering it forked off Core v0.21.0, which doesn't include some merges integral to Taproot that were included in v0.21.0.

And if you want your Uncle Marty's opinion (I don't know why you would), I tend to agree with Anthony that the thirst for a UASF may highlight some battle scars created by the drama that came with SegWit activation. I think users will be pleasantly surprised by Speedy Trial. 

The politicalization of electricity and grid vulnerabilities are bullish for off-grid mining

The above excerpt is from a blogpost in the Wall Street Journal today titled Denial of Electricity Service Could Become Next Geopolitical Weapon that highlights the recent Colonial Pipeline shutdown due to a ransomware attack and speculates that these types of attacks are only going to increase as the world becomes increasingly "electrified". This story obviously doesn't deal directly with Bitcoin outside of the fact that the hackers who attacked Colonial received bitcoin as payment, but if this trend does continue, this will validate the thesis (disclaimer: a thesis held by Great American Mining, a company I work for) that mining off-grid will be more and more advantageous as we move into the future.

Whether it be via attacks on grids from outside forces or
incompetent politicians forcing bitcoin miners off the grid, the risk of not controlling power generation for a bitcoin miner seem to only be increasing. Bringing your mining equipment and wholly owned power generation equipment upstream to the source of energy extraction is a great strategy for de-risking operations on long time horizons. Miners will be able to significantly reduce the risk of becoming beholden to hackers and politicians while mining more profitably, aiding in the geographic distribution of hashrate, and helping humanity become more efficient at the point of energy extraction. A win-win-win all around, but nothing that is trivial to execute on.

There are many large mining operations across the world that are sitting pretty and comfortable behind the grid at this current moment. It will be interesting to see if that serves as a centralizing factor from a business risk perspective for miners and a hashrate distribution risk for the overall network. Time will tell. We live in exciting times!     
Final thought...

Morning walks along the beach with the fam are a great way to start the day. Nothing like some family bonding and Vitamin D! 
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