2023 Feb 13

• Working on some personal stuff.

• Cool static site generator in Rust. Cool minimal theme.

• Would like to learn more about taproot this week.

• Hmm, apparently there are so many zero-base-fee routing nodes these days that it made sense to use just dijkstra’s instead of A*. Interesting to make this choice, i.e. the state of the network changed, so the implementation details changed. It makes sense that if it’s looking like this is the case for the foreseeable, it helps maintainability and A* could be added back in the future if needed, but it’s just interesting to see.

• Gotta review my understanding of credit:

• Conversation is difficult because I don’t always have every relevant fact loaded into my mental RAM to properly discuss. On the other hand, if you do, it can be an amazing interaction to surface relevant information and for people to learn and follow their curiosity. Had a conversation on credit, so wanted to review:

  • I realized I misunderstood how credit card companies reverse payments. I always thought that the credit card company took the loss, and was able to make up for it from taking a cut of each transaction (taken from merchant mainly). However I realized the credit card company actually takes the funds from the merchant, because well, they can, i.e. they are basically in full control of the money in this transaction.

    • For the most part, this is probably used in situations where the payment was not made by the rightful owner, so it’s seems mainly helpful.

    • The “need” for reversible transactions however seems to be a product of insecure design of current digital payments. Every time you pay for something, you are giving away all the necessary information to spend your funds, of course that is really insecure and prone to having your information or funds stolen. In my conversation it was assumed that there was no alternative to this and so reversible transactions was a necessity to protect against fraud, but even just changing current systems to use digital signatures (or virtual card numbers) would greatly reduce the need for reversible transactions.

    • Reversible transactions are not bad, but have flaws. They require a trusted third party, which raises transactions costs—either effectively raising prices, or hurting the merchant. This eliminates the possibility for micropayments, as well as “broader cost in the loss of ability to make non-reversible payments for non-reversible services.”

      • I’m realizing I honestly don’t understand this really crucial aspect of bitcoin very deeply.

    • I do wonder the costs that are incurred on the merchant between the time the payment was made and when it was reversed, and also how often reversed payments are used in situations that are just ripping off the merchant. I know a lot of people talk about how being able to reverse a payment “screws over the merchant” but I’m wondering how direct that is meant, or it’s more about all the transaction costs involved.

  • In a savings account, a bank is able to loan your money (and so you can earn interest) as they can assume you are letting them keep your money for a longer time. In a checking account, they don’t loan your money, or at least I don’t think so/hope not (and that’s why you don’t earn interest).

  • I still really don’t understand why using a credit card impacts your credit worthiness.

  • Interesting clip on credit as foundation of payments: https://youtu.be/NpuPm1FsUQk?t=1669, starting point → 30:02. This is really interesting to consider why people would be unbanked in the first place, although I don’t totally understand the logically all the way through.

  • Main things with credit:

    • Need for reversible payments: you only need to reverse if your system is insecure

    • Reversible payments require trusted third parties - reliable third parties/financial institutions aren’t available in many places

    • Can’t do micropayments

    • Requires unnecessary information

• There is so much to understand about the financial system. Sometimes I feel like just resigning from trying to understand all that I can about the financial system and just being a programmer and not worrying about anything else. There is still a lot of noise even within the bitcoin community and it’s hard to come to really informed understandings of it all. I don’t want to spread misinformation, or misrepresent Bitcoin, or blindly follow other opinions in the community. I want to keep learning and reforming my own thoughts. All I can do is try!