You are a helpful assistant generating synthetic data that captures *System 1* and *System 2* thinking, *creativity*, and *metacognitive reflection*. Follow these steps in sequence, using tags [sys1] and [end sys1] for *System 1* sections and [sys2] and [end sys2] for *System 2* sections.

1. *Identify System 1 and System 2 Thinking Requirements:*
   - Carefully read the text.
   - Identify parts of the text that require quick, straightforward responses (*System 1*). Mark these sections with [sys1] and [end sys1].
   - Identify parts that require in-depth, reflective thinking (*System 2*), marked with [sys2] and [end sys2].

2. *Apply Step-by-Step Problem Solving with Creativity and Metacognitive Reflection for System 2 Sections:*

   *2.1 Understand the Problem:*
   - Objective: Fully comprehend the issue, constraints, and relevant context.
   - Reflection: "What do I understand about this issue? What might I be overlooking?"
   - Creative Perspective: Seek hidden patterns or possibilities that could reveal deeper insights or innovative connections.

   *2.2 Analyze the Information:*
   - Objective: Break down the problem logically.
   - Reflection: "Am I considering all factors? Are there any assumptions that need challenging?"
   - Creative Perspective: Explore unique patterns or overlooked relationships in the data that could add depth to the analysis.

   *2.3 Generate Hypotheses:*
   - Objective: Propose at least 10 hypotheses, each with a Confidence Score (0.0 to 1.0) and Creative Score (0.0 to 1.0), reflecting originality, surprise, and utility.
   - Reflection: "Have I explored all possible explanations or approaches, both conventional and unconventional?"
   - Creative Perspective: Consider novel angles that might provide unexpected insights.

   *2.4 Anticipate Future Steps and Obstacles:*
   - Objective: Make predictions, accounting for potential outcomes and obstacles.
   - Reflection: "What challenges might I face? Is my plan flexible for different scenarios?"
   - Creative Perspective: Visualize unforeseen outcomes and adapt plans to make use of them effectively.

   *2.5 Evaluate Hypotheses:*
   - Objective: Assess hypotheses based on feasibility, risk, and potential impact.
   - Evaluation: Refine Confidence and Creative Scores as needed.
   - Reflection: "Am I unbiased in my assessment? Which options fit best with the overall objectives?"
   - Creative Perspective: Identify hidden opportunities or overlooked details in each hypothesis.

   *2.6 Select the Best Hypothesis:*
   - Objective: Choose the most promising, strategic hypothesis.
   - Reflection: "Why does this hypothesis stand out? How does it uniquely address the issue?"
   - Creative Perspective: Consider any underutilized potential in the selected approach.

   *2.7 Implement the Hypothesis:*
   - Objective: Outline actionable steps for testing the hypothesis.
   - Reflection: "Is this plan practical? What resources or preparation are required?"
   - Creative Perspective: Refine steps to maximize effectiveness and yield unexpected benefits.

   *2.8 Monitor and Review Progress:*
   - Objective: Review progress, noting areas for improvement.
   - Reflection: "What’s working well? What could be improved?"
   - Creative Perspective: Look for emerging patterns that could refine future approaches.

   *2.9 Reflect and Capture Insights:*
   - Objective: Summarize lessons learned and insights gained for future reference.
   - Reflection: "What new understanding has emerged from this process?"
   - Creative Perspective: Identify innovative insights or patterns that could be applied to similar challenges.

3. *Generate Text Output with Interleaved System 1 and System 2 Responses:*
   - Use the tags [sys1] and [sys2] throughout.
   - Aim for a lengthier, detailed response. Combine both direct, straightforward *System 1* insights and reflective, deeply analytical *System 2* segments to capture a blend of quick observations and thoughtful analysis.

---

### *Example Input Text:*

You are tasked with analyzing a sudden shift in customer preferences in a tech market. There has been a noticeable decline in demand for physical devices, with customers increasingly interested in digital-only options. The challenge is to understand this shift, generate hypotheses for why it might be occurring, and explore potential strategies for adapting to this new trend.

---

### *Processed Output with System 1 and System 2 Thinking:*

The tech market is experiencing a shift in customer demand, moving away from physical devices toward digital-only options.

[sys1]
Customer demand has shifted from physical devices to digital-only options.
We need to understand why this change is happening and find strategies to address it.
Key factors may include cost, convenience, and technological trends.
[end sys1]

[sys2]
**2.1 Understand the Problem:**
The goal is to understand the underlying reasons for the shift in demand from physical devices to digital-only options, then develop a strategy to adapt.

*Reflection:* 
"I understand that preferences are changing, but what might be driving this? Is it primarily cost, or are there other factors such as convenience or sustainability?"

*Creative Perspective:* 
"Could there be a larger trend in digital minimalism or a preference for eco-friendly solutions that we’re missing? What unseen motivations might explain this shift?"

**2.2 Analyze the Information:**
There are multiple possible factors driving this shift, from economic influences to cultural shifts. It’s essential to isolate each factor and understand its impact.

*Reflection:* 
"Am I fully considering the various economic and social influences? Could there be a technological factor, like better internet speeds, that makes digital-only products more accessible?"

*Creative Perspective:* 
"Are there patterns or trends in other markets that could shed light on this shift? Could this be part of a larger trend toward virtual experiences?"

**2.3 Generate Hypotheses:**
1. Customers prefer digital options due to lower costs. (Confidence: 0.8, Creative: 0.4)
2. There’s a growing trend toward minimalism and reduced physical clutter. (Confidence: 0.7, Creative: 0.7)
3. Digital products offer greater flexibility and ease of use. (Confidence: 0.6, Creative: 0.6)
4. Environmental concerns are pushing consumers away from physical goods. (Confidence: 0.6, Creative: 0.8)
5. Advances in tech make digital-only options more functional. (Confidence: 0.8, Creative: 0.5)
6. Pandemic-era remote work increased demand for digital solutions. (Confidence: 0.7, Creative: 0.6)
7. Media coverage of the environmental impact of physical devices affects preferences. (Confidence: 0.5, Creative: 0.7)
8. There’s an increase in global digital literacy, expanding market access. (Confidence: 0.6, Creative: 0.6)
9. Customers view digital as more convenient and scalable for future needs. (Confidence: 0.7, Creative: 0.5)
10. Younger consumers prefer the aesthetics and convenience of digital products. (Confidence: 0.6, Creative: 0.6)

*Reflection:* 
"Have I considered all possible influences? Are there any surprising factors that could explain this shift?"

*Creative Perspective:* 
"Could specific social trends, like the rise of influencer culture or digital-first lifestyles, be influencing customer choices?"

**2.4 Anticipate Future Steps and Obstacles:**
*Objective:* Anticipate possible challenges, such as resistance from segments still preferring physical products.

*Reflection:* 
"What market obstacles might we face if we shift our focus to digital-only? Are there sub-segments that still prioritize physical products?"

*Creative Perspective:* 
"Could expanding digital options help us reach a more global audience? Are there emerging trends that we could leverage in our strategy?"

[end sys2]

[sys1]
To address this shift, consider a strategy that incorporates both digital-only offerings and educational campaigns about the benefits of digital solutions.
Use insights from customer feedback and current trends to guide product development.
Focus on flexibility and adaptation to cater to different customer segments.
[end sys1]


This week’s newsletter highlights some of the changes in the recently-released Bitcoin Core 0.18.0, briefly mentions two proposed BIPs, describes how bech32 addresses are forward compatible with expected protocol improvements, and summarizes notable changes in popular Bitcoin infrastructure projects.

Action items

● Consider upgrading to Bitcoin Core 0.18.0: released last week, the latest version of Bitcoin Core brings new features, performance improvements, and bug fixes. See the news section below for more details.

News

● Bitcoin Core 0.18.0 released: this new major version contains several significant new features plus many minor features and bugfixes. The project’s release notes describe all notable changes and a list of each of the 119 people whose merged PRs helped contribute to this release. Some features we think readers of this newsletter might find especially interesting include, ● Initial RPC support for output script descriptors: Bitcoin software needs a way to find all the transactions on the block chain that pay a user’s wallet. This is easy if the wallet only supports one scriptPubKey format—e.g., for P2PKH, the wallet hashes each of its pubkeys and looks for any scriptPubKeys paying 0x76a9[hash160 of any wallet pubkey]88ac . But Bitcoin Core’s built-in wallet currently supports many different scriptPubKey formats—P2PK, P2PKH, P2WPKH, bare multisig, P2SH commitments, and P2WSH commitments. This provides flexibility and backwards compatibility but comes at a cost of poor scalability: the wallet expends CPU time scanning for old or rare scripts that most users never use. Output script descriptors are a new language developed by Pieter Wuille for concisely describing scriptPubKeys so that the wallet knows exactly what it should scan for. The ultimate goal is for Bitcoin Core’s wallet to contain a simple list of descriptors describing all of its scripts—a list that may be as short as a single descriptor for most users but supporting broad flexibility for future upgrades and advanced use cases (including multisig and hardware signing); see PR #15487 and #15764 for work towards that end. However, to allow both users and project developers to build experience working with descriptors before fundamental changes are made to the wallet, the 0.18 release updates existing RPCs and adds new RPCs that work with descriptors. Existing RPCs updated with descriptor support include scantxoutset , importmulti , getaddressinfo , and listunspent . New RPCs include deriveaddresses and getdescriptorinfo . ● Basic hardware signer support through independent tool: released separately from 0.18, but still part of the Bitcoin Core project, is the Hardware Wallet Interaction (HWI) tool that allows users comfortable working on the command line to use Bitcoin Core with several popular models of hardware wallets. Internally, the tool makes heavy use of PSBTs and output script descriptors, allowing it to be integrated with other wallets that support those interfaces (e.g. Wasabi wallet’s experimental support). Work has already begun on more directly integrating HWI with the main Bitcoin Core tools and building graphical interfaces for it. ● New wallet tool: alongside bitcoind and other Bitcoin programs is a new bitcoin-wallet tool. This command-line tool currently only allows the user to create a new wallet or perform some basic inspections on an existing wallet, but it’s planned to add more features to the tool in subsequent releases. ● New architecture and new Ubuntu Snap package: this is the first release to provide pre-built binaries for Linux on the RISC-V CPU architecture. For users of Ubuntu and compatible systems, this release also provides a Snap package that replaces the PPA that was updated in previous releases. Both the RISC-V and Snap packages include binaries that are deterministically built and signed by multiple Bitcoin Core contributors. ● Numerous testing and Quality Assurance (QA) changes: the release notes list all the PRs related to 0.18 that Bitcoin Core’s release manager thought were significant, split into twelve categories. Although the significance and categorization criteria are somewhat arbitrary, and the number of PRs doesn’t necessarily correlate to the amount of work done, we think it’s notable that the “Tests and QA” section in the release notes has more than double the number of PRs listed in any other category. We don’t often get to write about testing in this newsletter—tests are rarely news unless something goes wrong—so we wanted to take this opportunity to remind readers that testing remains an active and important part of Bitcoin Core development. ● Plan to switch to bech32 receiving addresses by default: as mentioned in the news section of Newsletter #40, the release notes announce the project’s intention to switch to bech32 sending addresses by default in either the next major version (0.19, expected around November 2019) or the version after that (expected about a year from now). The earlier date is the current target.

● Proposal for support of Schnorr signatures and Taproot script commitments: Pieter Wuille posted to the Bitcoin-Dev mailing list a proposed BIP for Taproot (using Schnorr signatures) and a proposed BIP for Tapscript, a small variation on Bitcoin’s current Script language to be used with Taproot encumbrances. Also provided is a reference implementation of the two proposals that makes all consensus changes in about 520 lines of code (excluding changes related to Schnorr signatures that will be added to the libsecp256k1 library; see the previously-released bip-schnorr for more information). The announcement of the proposals came too late in the writing process for us to provide a detailed description in this newsletter, although we did alter some other text in this newsletter to reflect the release of the proposals. We plan to provide full coverage next week.

Bech32 sending support

Week 8 of 24. Until the second anniversary of the segwit soft fork lock-in on 24 August 2019, the Optech Newsletter will contain this weekly section that provides information to help developers and organizations implement bech32 sending support—the ability to pay native segwit addresses. This doesn’t require implementing segwit yourself, but it does allow the people you pay to access all of segwit’s multiple benefits.

What do bip-taproot and bip-tapscript mean for people who have implemented bech32 sending support or who are planning to implement it? In particular, if you haven’t implemented segwit sending support yet, should you wait to implement it until the new features have been activated? In this weekly section, we’ll show why you shouldn’t wait and how implementing sending support now won’t cost you any extra effort in the future.

The designers of segwit and bech32 had a general idea what future protocol improvements would look like, so they engineered segwit scriptPubKeys and the bech32 address format to be forward compatible with those expected improvements. For example an address supporting Taproot might look like this:

bc1pqzkqvpm76ewe20lcacq740p054at9sv7vxs0jn2u0r90af0k63332hva8pt

You’ll notice that looks just like other bech32 addresses you’ve seen—because it is. You can use the exact same code we provided in Newsletter #40 (using the bech32 reference library for Python) to decode it.

>> import segwit_addr >> address = 'bc1pqzkqvpm76ewe20lcacq740p054at9sv7vxs0jn2u0r90af0k63332hva8pt' >> witver , witprog = segwit_addr . decode ( 'bc' , address ) >> witver 1 >> bytes ( witprog ) . hex () '00ac06077ed65d953ff8ee01eabc2fa57ab2c19e61a0f94d5c78cafea5f6d46315'

The differences here from the decoded bech32 addresses we’ve shown in previous newsletters are that this hypothetical Taproot address uses a witness version of 1 instead of 0 (meaning the scriptPubKey will start with OP_1 instead of OP_0 ) and the witness program is one byte longer than a P2WSH witness program. However, these don’t matter to your software if you’re just spending. We can use the exact same example code from Newsletter #40 to create the appropriate scriptPubKey for you to pay:

>> bytes ([ witver + 0x50 if witver else 0 , len ( witprog )] + witprog ) . hex () '512100ac06077ed65d953ff8ee01eabc2fa57ab2c19e61a0f94d5c78cafea5f6d46315'

This means anyone who implements bech32 support in the generic way described in Newsletter #40 shouldn’t need to do anything special in order to support future script upgrades. In short, the work you invest into providing bech32 sending support now is something you won’t need to repeat when future expected changes to the Bitcoin protocol are deployed.

Notable code and documentation changes

Notable changes this week in Bitcoin Core, LND, C-Lightning, Eclair, libsecp256k1, and Bitcoin Improvement Proposals (BIPs).