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Greetings Bitcoiner,
Welcome to Issue #621 of Bitcoin Breakdown, where every Tuesday and Thursday, we bring you the latest must-read Bitcoin thought leadership articles and the newest tools and projects you should know about. But first, today’s Top Stories:
Luke Dashjr's plan for a separate mining chain with new proof of work, why 56 Bitcoin organizations want vetted frontier AI access, and how sustained attacks forced lnp2pBot's small team to shut down an early peer to peer market without KYC.
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💩 Dashjr Eyes a Separate PoW Chain for BIP-110
Luke Dashjr is openly discussing a new proof of work algorithm for the stalled BIP-110 branch. The change would bypass Bitcoin's SHA-256 miners and create a separate chain with its own mining hardware, rules, liquidity, and market test, although no replacement algorithm has been settled.
Why it matters: Changing proof of work would end any ambiguity about what backers are launching. A branch that abandons Bitcoin's miners and starts a separate mining ecosystem is a sh!tcoin, whatever name its supporters put on it. Read more→
From a mining split, the fight shifts to defense...
🛡️ Bitcoin Defenders Ask AI Labs for a Head Start
Bitcoin Policy Institute and 55 other organizations published an open letter requesting leading artificial intelligence labs for vetted access to frontier cyber models. The coalition says this access allows Bitcoin security teams to test emerging threats with enough computing resources, secure research environments, and direct communication channels inside the labs.
Why it matters: The coalition says frontier labs and select partners see new cyber capabilities months early while many open source defenders are shut out. Small teams maintaining Bitcoin software cannot afford to fight automated attacks with weaker tools. Read more→
That defensive gap is already exhausting small teams...
📵 lnp2pBot Shuts Down Under Sustained Attack Pressure
lnp2pBot halted operations indefinitely after developer Francisco Calderon said sustained attacks and financial losses exhausted the team. Calderon attributed part of the pressure to script kiddies using AI models and said the bot was designed to protect users from losses.
Why it matters: lnp2pBot was an early peer to peer Bitcoin market without KYC. Its shutdown shows how cheap attack automation can impose financial and operational costs that small open source teams cannot absorb. Read more→
Kudzai Kutukwa, a Bitcoin commentator, argues that holding your own keys is essential for true monetary sovereignty, warning that using third-party custodians recreates fiat counterparty risks and ruins the 'trustless' design of the Bitcoin network (Aug 11 | 9 min read).
Federico Rivi of Atlas21 explains how BIP-110's failure with 2.53% miner support at 127.48T difficulty highlights Bitcoin's decentralized governance, warning that supporters' desperate plan to alter proof-of-work only creates a new sh!tcoin (Aug 10 | 3 min read).
BTCPay Server, an open-source Bitcoin payment processor, details its response to a security breach that let attackers steal LND wallet funds via stolen macaroon credentials, outlining bounties, researcher rewards, and stronger defenses against AI-driven exploits (Aug 10 | 3 min read).
Che Kohler of The Bitcoin Manual explains how contentious soft forks like BIP-110 risk splitting the Bitcoin network, forcing users, miners, and Layer 2 protocols to navigate the economic and technical chaos of chain divergence until a single canonical chain wins (Aug 9 | 7 min read).
Kane McGukin, host of Navigating Bitcoin's Noise podcast, argues that Bitcoin's failure to reach $1M got nerdsniped as AI stole intellectual attention while Wall Street, stablecoins, and Bitcoin Treasury Companies quietly absorbed Bitcoin into a modernized dollar carry trade (Aug 8 | 6 min read).
Hodlonaut of Citadel21 explains how Coinkite's Coldcard hardware wallet generated predictable seeds due to a licensing-driven code rewrite, allowing an attacker to drain $130M in BTC from users who trust the vendor instead of verifying (Aug 8 | 33 min read).
Atlas Phoenix BTC, a pseudonymous long-time Bitcoiner active since 2013, shares a message of resilience and unwavering conviction in the Bitcoin network after losing their entire life savings in the Coldcard wallet hack (Aug 6 | 3 min read).
Jameson Lopp, CSO of Casa, explains how the recent Coldcard vulnerability that resulted in theft of tens of millions of dollars in bitcoin highlights new AI threats, urging the industry to adopt continuous AI pentesting and multisig architecture to secure funds (Aug 6 | 8 min read).
Colin Crossman, Bitcoiner and Wyoming Deputy Secretary of State, argues that AI-driven code analysis renders closed-source software and 'security through obscurity' obsolete, citing the devastating Coldcard firmware vulnerability to urge developers to adopt open, reproducible, and disciplined security practices on the Bitcoin network (Aug 6 | 6 min read).
DarthCoin, known for guiding beginners on self-custody, outlines alternative methods to refill emptied mobile Lightning Network channels without relying on Boltz swaps, suggesting tools like Loop, Electrum, Phoenix, and peer-to-peer platforms to maintain liquidity via buffer wallets (Aug 5 | 2 min read).
Supratic, in an article on Stacker News, explains how to trustlessly refill a mobile spending wallet from a desktop Electrum wallet using its built-in submarine swaps, bypassing third-party services and avoiding recurring on-chain channel opening fees (Aug 5 | 6 min read).
Superheat, a Bitcoin hardware startup, explains how the century-old electric heating element is being revolutionized by replacing resistive metal with Bitcoin mining processors, converting electricity into valuable computation before utilizing the resulting byproduct heat to warm household water (Aug 3 | 8 min read).
Blockstream launches Blockstream Swaps in beta to provide resilient atomic swap services after partner Boltz suspended operations due to automated cyberattacks.
Zeus, a Lightning Network wallet provider, restores its Lightning Service Provider channel services after an outage, letting users again purchase Lightning node channels.
Bitsaga provides an in-browser SeedSigner simulator, allowing users to safely test the open-source hardware wallet's firmware without risking real bitcoin.
LNProof(dot)space is a web explorer that helps users decode and cryptographically verify off-chain Lightning Network payer proofs without compromising privacy.
Ben Arc of LNbits, a Bitcoin wallet provider, releases EasySwap, a client-side tool utilizing the Spark protocol to swap bitcoin after the popular swap service Boltz shuts down operations.
Odudex, lead maintainer of Krux, an open-source Bitcoin hardware wallet firmware, steps down, warning the project faces sunsetting due to Canaan chip manufacturing discontinuations.
Boltz sparks government intervention fears after its warrant canary temporarily expires, though the team later updated it, citing busy schedules.
Project Loupe, an AI-powered security scanner for open-source Bitcoin software, offers free repository scanning to protect developers from exploits following recent network vulnerabilities.
Airbtc, a bitcoin-friendly accommodation rental platform, rebrands as Hodlstay, launching an updated marketplace that allows global travelers to book stays and pay hosts directly in bitcoin.
Breez, a Lightning infrastructure provider, releases Glow, a customizable open-source app demonstrating how developers can easily integrate instant bitcoin payments using its software development kit.
