📚 Ark of the covenant

Orson Welles supposedly once told a friend over lunch: “The enemy of art is the absence of limitations.”

To the same effect, T.S. Eliot was paraphrased to say that if one is “forced to write within a certain framework, the imagination is taxed to its utmost and will produce its richest ideas. Given total freedom, however, the chances are good that the work will sprawl.”

Limitations breed valuable creativity.

Bitcoin has limitations by design. Its Script language is famously not Turing-complete — no loops or persistent memory — so any logic directly enforced on the Bitcoin mainnet must fit inside an individual UTXO’s locking script.

This narrows the scope of potential computations. It helps keep costs cheap and predictable, while also capping the range of potential bugs and malicious attacks. 

Of course, there’s a lot you can do with a single transaction, and Satoshi saw the utility in supporting “a tremendous variety of possible transaction types that I designed years ago. Escrow transactions, bonded contracts, third party arbitration, multi-party signature, etc.”

Still, layer-2s building on and around Bitcoin are fighting to add more programmability by pushing logic onto auxiliary payment-channel networks like Lightning and sidechains — enabling an expanded set of use cases, including faster and cheaper payments.

Ark Labs is building one such solution. Ark is a complementary layer for the extended Bitcoin ecosystem, Lightning included. Ark’s pooled-UTXO design is intended to help smooth the layer-2 user experience, particularly around self-custody and inbound liquidity, and generally make bitcoin more versatile as capital.

“Credit to a lot of people that have tried to create a great Lightning experience…but there's still aspects to a lot of these wallets that just seems like it won’t scale to a global audience,” Alex B, head of growth at Ark Labs, told Rizzo on today’s Supply Shock episode.

“You're not going to be able to invite someone to use an application where it requests them to…pre-fund some liquidity subscription and whatnot. It just seems counterintuitive and not very accessible to people.”

Catch the full episode on YouTube, Spotify, Apple Podcasts and X.

— David

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• BTC/USD set a new all-time high overnight, briefly reaching $112,153 on Coinbase, per TradingView data. Current price: $110,932.

• Corporations bought 159,107 BTC ($17.64 billion) in Q2 — the most in one quarter ever — according to Bitwise.

• ATM operator Bitcoin Depot has disclosed a data breach affecting almost 27,000 of its customers, which occurred in June 2024.