One of the most disheartening things we see at Casa is new clients onboarding who tell us they have lots of BTC in an exchange that they want to withdraw to self custody.

Then as we're working with them it becomes obvious that the "exchange" they used is a scam that will never actually honor their withdrawal requests.

The trees obscure the forest

A summary:

Ways to insert data:

1) OP_RETURN outputs (“nulldata”)

You put the bytes in a non-spendable output (scriptPubKey starting with OP_RETURN).

Advantages: does not widen the UTXO set; easy to detect/filter; highly visible in explorers.

2) In the witness (SegWit/Taproot) — e.g., inscriptions

The content is serialized within an unexecuted conditional (“envelope” OP_FALSE OP_IF ... OP_ENDIF).

Advantages: witness bytes “weigh 1 WU/byte” (≈¼ of a vbyte), so it is much cheaper per byte than non-witness/OP_RETURN.

Disadvantages: pruned nodes may discard old witnesses (you don't rebuild them locally).

3) Data in spendable scriptPubKey (“fake” multisig, etc.)

Like the famous case in the whitepaper (2013): bytes distributed across 947 outputs within the scriptPubKey.

Problem: if those outputs remain unspent, the bytes live in the UTXO set ⇒ unspendable until they are spent. This is the least recommended approach today.

4) Coinbase (miner's transaction input script)

Miners can put text/tags in the coinbase scriptSig (in addition to the mandatory height per BIP34).

Useful for messages or pool identifiers; not a general approach for large files.

5) Commitments via Taproot key tweak

You don't store the blob, you cryptographically commit to it (e.g., to its hash) by “putting” it in the Taproot key tweak.

Advantages: cheap and clean (no bulky data on-chain), revealable whenever you want.

Use: protocols/assets on Bitcoin (Taproot Assets, etc.).

Now come the uncomfortable questions.

Do you think spammers will use op_return if it is four times more expensive than witness? Do you think spammers will act in good faith as Core assumes? Since when do spammers act in good faith?

And here's the key: Core has given up on fighting spam, it doesn't run filters on Witness, so why run any kind of limit on op_return?

OP_RETURN is a general policy change. OP_RETURN is just one more thing, in the same way that Knots comes with permitbaremultisig disabled and Core has it enabled.

Currently, Knots filters more than 98% of transactions, while Core no longer filters anything.

Neither violates the consensus rules; they simply have different policies.

So the final decision rests in the hands of the users, knowing that the filters do work, although their effectiveness depends on the percentage of nodes that run them. The more nodes, the more effective they are, but even with 20% of nodes running the filters, as is currently the case, a percentage of spam transactions are not mined.

That said, not running filters and removing the op_return limit opens up new attack vectors.

Perhaps the biggest problem is the campaign of lies that the entire core environment has orchestrated, and obviously one has to wonder who benefits from this.

Did the filters do any harm? Of course, now they will come up with the excuse of compact blocks and mempool homogenization.

It's not about "fucking your own population", it's about common sense.

If you are already a target by the nature of your service, don't make it worse by telling people they can avoid sanctions with it.

Don't be surprised if the DOJ looks into you after you invite Russian oligarchs to avoid sanctions by using your service.

Well they literally SAID THEY WERE and stated on their twitter account that they had a focus on serving "the black and gray markets".

Keep calm and HODL #Bitcoin.

Everyone seems to be overreacting to the Samourai arrests, the FBI PSA, and Phoenix leaving the US. Here's my attempt to break it down.

Samourai

You have to unpack all of the different elements. Could this be a state attack on self-custody and privacy? Maybe. Probably not.

There are a few components here that need to be evaluated on their own.

1⃣ Samourai was a self-custodial wallet

2⃣ Samourai was a mixer

3⃣ Samourai was providing normal people with privacy

4⃣ Samourai were knowingly marketing the service to criminals and flaunting that fact

Reading the charges, it seems like #4 is pretty cut and dry for this case. Their getting arrested for #4, doesn't automatically mean #1, #2, #3 are under siege as well. If Samourai was a taco stand laundering money and bragging about it, I'm sure they would be taken down too.

They may be accused of running a money transmitter now, but that may or may not stick. We'll find out in the trial.

All that said, we should always be vigilant to attempts to erode privacy and the ability to self-custody. It just does not seem that this fight is *that* fight.

FBI PSA

Seems pretty normal that the FBI would advise people to use compliant services, and the entire announcement seems to revolve around potential disruptions due to Samourai being taken down, and potentially others in the future. Given they took action, they have to post some bulletin about it.

Remember that when people lose funds or have funds stolen from them, they do go to the FBI for help. From their point of view, the best thing for people to do is use compliant services where they can potentially help.

The announcement concludes saying that services that purposely break the law will be investigated - so again we go back to #4 above. This is nothing new, and self-custody is not being criminalized.

Phoenix Leaving

As nostr:npub1sg6plzptd64u62a878hep2kev88swjh3tw00gjsfl8f237lmu63q0uf63m said, it's feels completely unnecessary. Phoenix obviously is not a MSB and they are not doing anything illegal. In my view, their exit from the US app stores is a complete overreaction.

Keep Calm

Could "they" come after wallets, developers, mixers, nodes, LSPs, sidechains, eCash, VPNs, encryption, etc? It's totally possible. But if you're not breaking the law, you have nothing to worry about.

To my knowledge, there is still rule of law in the US, property rights are still protected, and privacy is enshrined in the Bill of Rights (nostr:npub1trr5r2nrpsk6xkjk5a7p6pfcryyt6yzsflwjmz6r7uj7lfkjxxtq78hdpu).

It would be very difficult to change the law or stretch it to incriminate these things because it's all just information and software, which is speech. Some will try. But as they are trying, #Bitcoin is becoming more and more mainstream and integral to the world's financial system.

#Bitcoin is freedom technology and it will continue on.

Go outside this weekend and think about why you're here.

# "Free" is Slavery

Thae Young Ho is the highest ranking defector to ever have come out of North Korea. He was an ambassador to Sweden and then to England. At the Oslo Freedom Forum back in 2019, I got to talk to him for a few hours, and it's a conversation I'll never forget.

It's rare that we get such a high ranking official to come out of the country to tell us how they operate, but Mr. Thae is one of those people. He was able to enlighten many of us what North Korea's process for the currency revaluation was and why they backtracked. He also told us about how they had to execute someone so that the regime wouldn't get blamed. If you read any works of Rene Girard, that shouldn't surprise you, especially given that it's an atheist country.

## Kim's Rise to Power

But the story that struck me the most was about Kim Il Sung's rise to power. Mr. Thae explained that after being installed as the hand-picked leader of North Korea in 1945, he wasn't that popular. His Korean was marginal as he had grown up mostly in China. His education was a scant 8 years, all of it in Chinese and communist guerrilla tactics weren't exactly beloved by the people. Yet if we look at how he's looked at in North Korea today, he's essentially viewed as a divinity. Somehow, this poorly educated, barely comprehensible puppet of the Soviet Union became the god of North Korea.

So what happened? How did he gain all that power? What did he do to take control? You would think that given what we're generally told about communism that it would be based completely on fear and ruthlessness that consolidated his power. And certainly, there was plenty of that. But according to Mr. Thae, Kim Il Sung relied on something else: free stuff.

## The Cult of Free

Everyone loves free stuff. Think about how popular the free stuff section on your local craigslist is. I'll bet you anything it's the most visited and monitored part of the site and rarely will you find stuff that's that valuable that someone hasn't taken already. It's part of the human instinct to try to get something for nothing and Kim Il Sung exploited it.

As with most socialist/communist programs, the way he won over the North Korean people was with lots of entitlements. They got free health care, free food, free housing, a guaranteed job. They got everything they needed. And with Soviet subsidization, it worked great. People supported him and for a time, a lot of international observers thought that North Korea was doing better than the South.

But there's a darker side to "free stuff." What happens when they run out of a scarce resource? How do you determine who gets it? Say there's medicine that will help two different people, but there's only enough for one. Who gets it?

In a free market, prices help you decide that, and a high price spurs greater production of the scarce resource so that the prices come down. But if it's free, what do you do? When you have a central controller of everything, the answer is obvious. You reward those that are loyal and punish those that are not. Instead of money being your currency, it was loyalty to the regime that was your currency.

## Markets Build Community

Soon, the only people that really got the free stuff were near the top of the ideological hierarchy. Instead of prices determining what you got, it was your perceived compliance and loyalty to the regime that determined it.

In the absence of a market, compliance was what determined who got what. Mr. Thae's point of the story was that there's something sacred about market transactions. Market transactions cause both parties to have obligations to the other. There's a mutual desire to satisfy the other party and it binds us together in a community. That's precisely what they lacked in North Korea and why the regime was so powerful.

It's easy to listen to these stories and think of it as "out" there, that it's got nothing to do with us. But after listening to this story, I started thinking about what stuff I got for free from centralized entities. I get GMail for free. I get Facebook for free. I get YouTube for free. I realized that the cost of getting these things was indeed compliance. In these walled gardens, they can kick you out at any time and that is indeed what they do. The reason why these companies have so much power is because they give you this stuff in exchange for compliance. They give you this stuff to *enslave* you.

## Western Governments

Fact is, there's way more of the communist/socialist system of free embedded in our supposed democracies than we think. Remember during the pandemic how you had to get a vax to keep your job, visit your sick relatives or travel? There were people in the US suggesting that unvaxxed people should be denied health care services. Such tactics really only work when the service is "free." The central controller of the resource extracts its pound of flesh, just not in money. Many governments have gone down this route. We're much closer to communism in western societies than we'd like to believe.

Prices and paying for things are a good thing. They obligate both parties to the trade to satisfy the other. The instinct to get something for nothing is not one that builds civilization. The reason communism has led to tyranny every single time is because the central government ends up with all the resources and wields absolute power through "free" stuff.

Reject free. Pay for value.

THE TIKTOK BAN BILL GOING THROUGH CONGRESS RIGHT NOW WILL GIVE GOVERNMENT INSANE POWER TO RESTRICT SPEECH.

AT THE SAME TIME SECTION 230 PROTECTIONS ARE ABOUT TO BE NEUTERED BY THE SUPREME COURT WHICH WILL ADD AN INSANE AMOUNT OF LIABILITY TO CENTRALIZED PLATFORMS - INEVITABLY INCREASING CENSORSHIP.

RESTRICTING FREE SPEECH IN AMERICA HAS BIPARTISAN SUPPORT AMONG OUR CORRUPT POLITICAL CLASS.

NOSTR IS ABOUT TO HAVE ITS MOMENT TO SHINE. WE NEED TO BE READY FOR BILLIONS OF NEW USERS.

OMFG I just found my old private key?

What do I do now?

Should I stick to #[0], or go back to this account?!?!?

So very conflicted