Satoshi Scoop Weekly, 24 Jan 2025

Crypto Insights

Revisiting Bitcoin Layer After One Year: New Standard Launched

Bitcoin Layers has announced a new “Bitcoin Layer” standard, stating that projects must be Bitcoin native or Bitcoin side-systems to be considered Bitcoin layers. This new standard excludes projects such as Merlin Chain, Bsquared Network, Core, Bitlayer, BOB, Rollux, and BEVM. Bitcoin Layers further stated that these projects will be moved to the "alternative chains" category if they are not updated by July.

The standard requires a "Bitcoin layer" to meet the following: It must have at least one official, federated two-way peg and an operator set with disclosed operators. These conditions indicate that transparency is considered a core aspect of Bitcoin layers.

To qualify as a Bitcoin side-system, at least one of the following conditions must be met:

• BTC-denominated
• Secured by native BTC
• Rely on Bitcoin for consensus
• Rely on Bitcoin for transaction finalization
• Support interactions with L1 scripts or PSBTs

How Should Bitcoiners View Quantum Computing?

This article analyzes the types of risks quantum computing poses to Bitcoin, concluding that quantum computing, using qubits' superposition and entanglement, could theoretically break Bitcoin's encryption (SHA-256 and ECDSA) with Shor's algorithm. However, due to quantum decoherence (QD), quantum error correction (QEC), and the need for many qubits, this threat is still distant.

To mitigate potential risks, Bitcoin can adopt quantum-resistant measures, such as Lamport signatures or lattice-based cryptography, but these would require a hard fork. While quantum computing does not pose an immediate threat to Bitcoin, keeping an eye on technological developments remains important for market confidence and long-term security.

LQWD: On-Demand Liquidity for the Lightning Network

The Lightning Dev Kit team introduced how LQwD builds a custom LSP (Liquidity Service Provider). LQwD is a specialized LSP node built on LDK nodes and Lightning liquidity crate, showcasing how LSPS2 / bLIP-52 can revolutionize liquidity management on the Lightning Network. By providing JIT channels, this solution simplifies onboarding, lowers barriers, and aligns network resources with real-time demand.

Web3's Vision Can Only Be Realized with PoW+UTXO

This article points out that the core goal of Web5 is to restore Web2's usability while integrating Web3's decentralization advantages, aiming to better protect users' privacy and data sovereignty through decentralized technologies. However, the current Web3 ecosystem relies on centralized infrastructure (such as hosted wallets and centralized services), which contradicts the original decentralization purpose.

It concludes that the only way to achieve Web3's truly decentralized, censorship-resistant, permissionless, and self-hosted goals is to build networks with peer-to-peer topologies, which has so far only been proven possible on PoW+UTXO-based systems.

LayerZero Launches Open-Source, High-Performance, Verifiable Database Quick Merkle

LayerZero introduced Quick Merkle Database (QMDB), a high-performance, verifiable database optimized for blockchain, with highlights include:

• 2.28M state updates per second, 1M TPS (benchmarked transfers per second)
• Benchmarked with workloads up to 15B (10x Ethereum’s 2024 state) and proven capacity to scale to 280B entries on a single server
• Single read per state access, O(1) I/O for updates, and in-memory Merkleization on a footprint as small as 2.3 bytes per entry
• Efficiently scales across both consumer grade and enterprise hardware

AI Agent OS for Web3: Understanding Eliza’s Whitepaper and Development Pipeline

Eliza Labs released the ElizaOS whitepaper Eliza: A Web3 friendly AI Agent Operating System, detailing the technical vision and implementation of ElizaOS. As the first open-source AI agent operating system designed for Web3, ElizaOS aims to address multiple challenges in decentralized ecosystems, offering developers and users a modular, flexible, and powerful framework.

ATXDAO co-founder Roberto Talamas also analyzed Eliza's development pipelines, discussing the project's rapid growth, technical depth, and scalability, while pointing out potential issues such as security, plugin management, and fragmentation.

Personalization and Privacy: Privacy-Friendly Infrastructure in the Age of AI Agents

One of the key focuses of AI agents is personalization. However, to personalize AI agents, access to sensitive personal information is required, which threatens individual privacy. Blind computation technology addresses this challenge—how to process sensitive data while protecting personal privacy. This article introduces how Nilion Network utilizes blind computing technology to achieve AI agent personalization, with use cases in medical diagnosis and inter-company data utilization.

Pieter Wuille and Gregory Maxwell Receive 2012-2016 Finney Freedom Prize

The Finney Freedom Prize, established by the Human Rights Foundation (HRF) in honor of Hal Finney, is awarded to individuals who contribute to digital freedom, helping Bitcoin become a better tool for freedom. The award is given in each halving era. The 2012-2016 awardees (blocks 210,000-420,000) are Pieter Wuille and Gregory Maxwell.

• Pieter Wuille is a developer of Bitcoin Core and co-founder of Blockstream. He has contributed the second-most commits to Bitcoin Core and has been responsible for major improvements such as BIP 66, libsecp256k1, and Segregated Witness.

• Gregory Maxwell's key contributions to cryptography include homomorphic key derivation in BIP32, CoinJoin, and blinded proof of solvency.

Best Lightning Wallets of 2025

The article evaluating various Lightning wallets on the market for different types of investors, considering aspects like ease of use, KYC, hardware wallet, and more, selected the following Best Lightning Wallets of 2025:

• Best Bitcoin wallets for beginners: Blink, Wallet for Satoshi, Alby
• Best self-custodial wallets for beginners: Phoenix Wallet, Green Wallet, BlueWallet, Aqua Wallet
• Best KYC wallets for beginners: Strike, CashApp, Relai, Bitaroo
• Advanced wallets: Sparrow Wallet, Liana Wallet, Zeus, Zap
• Best hardware wallet: Fountain, Trezor, BitBox

Awesome Privacy: A List of Free and Open-Source Privacy-Friendly Apps for Diverse Scenarios

This list reviews apps across various use cases, clearly identifying apps to avoid due to their privacy flaws and offering more privacy-friendly, free, and open-source alternatives.

An Overlooked Trend: Companies Are Buying Bitcoin

Bitwise CIO Matt Hougan predicts that within the next 12-18 months, due to improvements in Bitcoin accounting standards, hundreds of companies will add Bitcoin to their financial reserves.

Top Reads on Blockchain and Beyond

Mining Pools Filtering Transactions? How Resistant Is Bitcoin to Censorship？

The author detected 15 transactions from addresses sanctioned by OFAC (Office of Foreign Assets Control) that were not included in blocks. This article examines whether these transactions were deliberately filtered or if there are other reasonable explanations.

The conclusion is that F2Pool may have filtered OFAC-sanctioned transactions. However, this does not affect Bitcoin's censorship resistance, as only F2Pool is filtering transactions, and these sanctioned transactions were subsequently confirmed in other blocks.

How to Reduce Potential Forest Fires Via Bitcoin Mining

The author introduces the design of "Forest Walker," which allows forest management to use Bitcoin mining to reduce forest fire risks.

"Forest Walker" is an autonomous, machined creature that roams forests and harvests the most widespread and least energy-dense fuel source available, thus making the forest safer.

These low-density woods are transformed into high-density fuel through a "Gassifier," providing the power needed for the entire system to mine Bitcoin.

Interoperability 3.0: Infrastructure in Place, Time for Applications

The author believes that blockchain interoperability has evolved through three stages:

• Interop 1.0 focused on asset transfers.
• Interop 2.0 introduced general messaging protocols.
• Interop 3.0 now supports applications building custom cross-chain strategies.

The Interop 3.0 phase emphasizes three key aspects: omnichain application logics, application-owned interoperability, and chain abstraction, enabling more complex cross-chain operations and improved user experience.