0:00 Maybe. So, before that, there was like two things I wanted to say. One was that I actually would like to see like blind merged mining being used. 0:24 And basically, there are like half a dozen ways you could do it. So, I'm confident that in some form it will happen. And so, I'm kind of interested in the outcome of that, I don't know how to say it, objection or whatever. 0:53 But before we get into that, if you... 1:23 So, we're doing this thing about whether or not there is a marginal cost advantage in non-linear in hash rate, that being our X variable. 1:38 Yeah, in hash rate share. The growing hash rate share. Yeah, so the original quote that I tried to summarize the critiques of dry chain from this angle. 1:53 And this is all for those that don't know the context. This is all related to the realization that since sidechains reorg independently, for that reason, the mainchain bid for a sidechain block reference, let's say. 2:17 So, sidechain block reference, when it gets bidded, then it's not atomic. So, the reward that the searcher or block assembler of the sidechain gets on the sidechain is not atomically tied with his expense. 2:31 And that is why it has been theorized that, and I'm going to quote, read the quote. So, Blind Merged Mining bid is inherently risky. Growing pool size and not bidding in the mempool risks the Blind Merged Mining, thus it introduces different economy of scale and centralization dynamics. 2:51 So, that's kind of what is being claimed about Blind Merged Mining. And before we talk about that and why you think that is not true, can we play a little game? 3:04 We can, but I also have a game I wanted to play before we played it out, which is I wanted you to admit six different things that would each make it completely irrelevant if this were even true or not. 3:15 That's exactly what I wanted. What can be done? So, let's pretend it's true for just argument's sake. And what can be done? Exactly. 3:26 Okay, this is interesting because this is my list backwards. I was going from the most likely thing to the most worst case scenario thing. But now you're saying, let's just say the worst has happened. 3:38 So, we'll go through my list backwards, which is the last thing on my list. 1, 2, 3, 4, 5. If we have efficient pool hopping, then nothing matters because as long as you have a way of holding the pool to account, it doesn't matter. 3:55 You just have 25% pools, or even you could have two 50% pools, and they would hop. And I can explain why you'd never have a 51%, 49% pool if you're interested. I explained that long ago in 2016. 4:11 I can explain it again. But that's number five on my list is that as long as you have a way of monitoring the pool, shoving the work of running any node onto the pool, and monitoring them for misbehavior, and then switching, then nothing matters at all. 4:27 Because whatever the pool does, it doesn't matter what the pool is doing. So, that's number five. So, I was curious, what is your take on that? 4:36 So, this is basically an argument on that even if pools grow to a size that is probably uncomfortable to most Bitcoiners. 4:48 Even if they had a very high fixed cost, I should say. 4:52 You are saying even that would work just fine. 4:56 Yeah, if there were two 50% pools, but each of them had to behave perfectly. Because if they made any mistake, someone would switch pools, or they'd start a new pool. You know what I mean? You'd have some kind of automatic pool replacement thing, which is quite easy to do. 5:13 The only reason there hasn't been any creativity, innovation, entrepreneurship in this direction is because the pools are all very well behaved. They're already on a very short leash. 5:22 But even if they weren't, you could have something where there's two 50% pools, and as soon as an error is made, an error would be censoring a transaction or doing some kind of reorg or whatever, anything bad. 5:39 As soon as that mistake was made, there would be the death of that pool, and there would be a new second pool. 5:47 Temporarily, one pool would have maybe 100%, the next pool would spin up and then quickly get the other 50%. 5:53 I've explained this in the past. One such way would be you blacklist any pool that ever makes a mistake, and then you switch pools randomly. 6:04 If you ever find a situation where 100% of the hashrate is in one pool, everyone just flips a coin. They fork the pool. 6:10 And if everyone ran the identical piece of software, like some kind of optimal pool, which I sometimes in my head, I call it Stratum V3. It's like a kind of joke. 6:20 But if everyone ran the exact same software, it could do this, could do all the pooling for us, and it could all be optimized. 6:25 Of course, in practice, there are many pools for many different reasons, sometimes brand, sometimes hash, Anthpool, Marathon. 6:32 Sometimes there's different pools because of the different paper last end shares. People have different preferences on that type of thing. 6:39 That's my first thought. 6:42 Last time, we mentioned that there is an incentive for increasing the pools, which is a lower variance. 6:51 And then you said there is a disincentive for pools to go too big, but you were breaking up around that part, and they did not really catch on. 6:59 That's unfortunate. There's something that was originally called the block withholding attack. 7:03 Unfortunately, that phrase has been used for several different things. 7:07 And also, unfortunately, Google is terrible now. It used to be great, of course, but now it's awful. 7:14 But you can find the original, which I think is by Itay Eyal, or you can search and find on Truthcoin. 7:19 You can find the minor equilibrium analysis, minor threat model and equilibrium analysis, and I cite it there. 7:25 And not only do I cite it, but I replicated their findings in the Microsoft Excel, for anyone who cares. 7:30 But there's a way of attacking a pool profitably, where you join the pool, and then you submit. 7:39 When you find a share, you submit that, but when you find a block, you do not do that. 7:44 And this actually is a more effective attack when your enemy has a higher hash rate. 7:50 And you can, in fact, attack every pool at once, and it is the most effective of all. 7:54 And I'm not sure if there's some kind of second-order effect that prevents this from happening, 8:00 or if it's just the usual story of just no one wanting to start a dispute that has no... 8:06 Yeah, I mean, trying to fuck with the pool that pays you and custodies the funds until you get paid is kind of like an interesting choice. 8:18 Yes, but what you do is you behave honorably, and then it just looks always like you have bad luck. 8:25 Because you are finding shares, so they can tell that you're really doing the hashing, but then you never submit the block. 8:32 And what this does is it does a combined thing. 8:37 First of all, you're leeching the enemy pool of cash, because other people are still submitting shares. 8:43 And then you are lowering the difficulty by discarding. 8:50 You're lowering the work. The proof of work of the network decreases in the whole amount of the work that is... 8:59 Sorry, I just stepped on something. My bad. 9:03 It decreases. The proof of work of the whole network decreases. 9:10 You're knocking out the entire... You're punching above your weight when you discard the block. 9:17 So it looks as though the whole network difficulty decreases. 9:21 Actually, I shouldn't really not even talk about it, because I can't quite fully remember it all, 9:26 because it was a very long time ago when I made this spreadsheet, but the spreadsheet is still there, is my point. 9:29 It's also the case, of course, that no one wants to become too big of a pool, because it's actually too ominous. 9:42 It's too unstable to have 51%, because the other 49% will get nervous. 9:48 They think we're powerless, so the 49% will be very eager to cut a deal with 2% out of the 51%. 9:56 And no one really wants all this deal cutting. 10:00 It's not in anyone's interest. 10:02 It costs basically nothing for a 60% miner to pretend he is a 20% miner. 10:08 So as far as I'm aware, it doesn't cost him anything whatsoever. 10:12 And as you know perfectly well, there are also other economies of scale, 10:16 in that the share rate and the fees have to be set a certain way, given the size. 10:22 And also, it's just annoying to have to interact with more people. 10:27 And as you said, when I was on the train, correctly, the gain from joining a pool has diminishing returns. 10:38 And so I think this is why we have different size pools. 10:41 But of course, we never really know. 10:43 We just know what the pools self-report. 10:46 It's just their volunteer disinformation. 10:49 But that's my number five on my list. 10:52 If that happened, then nothing would matter. 11:11 Okay, well, I'm going to now switch to go back in the list in order, 11:15 because when I wrote it down, it has a temporal order somewhat. 11:22 So the first thing on the list is that the node costs, they won't be that large anyway, for a variety of reasons. 11:30 One is, as I constantly repeat, the regular end user of the sidechain has to be able to run a node. 11:37 And they're a 0% hasher, basically. 11:40 So this is kind of a natural ceiling on the cost of the node. 11:44 But the second sub-bullet point is, these miners, they're spending unbelievable amounts of money, millions and millions of dollars. 11:56 They're buying ASICs by the 40-foot marine container, and they put them on an 18-wheeler. 12:05 It's like the amounts we're talking here are utterly enormous. 12:09 And I calculated even a one-gigabyte node, which is blown way into fantasy land of what I think would even possibly be producing block space that anyone could even consume. 12:27 I've already calculated that as being whatever, like $2,000 and change to set up, and then a couple, like $400-ish a month, which is very, very, very liberal assumptions. 12:39 These calculations are in my blog post called Thunder the Large Box Sidechain. 12:45 There's an appendix at the bottom. 12:48 And probably, honestly, the costs are even lower if you properly adjust for inflation, because I wrote that before the COVID-bite inflation or whatever. 12:56 So I think, honestly, it's even cheaper. 12:59 So the idea that something that we're talking like amortized, like fewer than $10,000 total over like three years. 13:10 $10,000 over three years versus what anyone of a mining operation of any plausible. 13:18 I mean, I looked up like what an S-19, S-9, S-29, whatever. 13:22 Those things are selling for like $4,000, $5,000, $6,000 just to buy one without even plugging it in. 13:27 So it's kind of like the node cost just can't be that large. 13:31 Just right off the bat, like at all. 13:33 I agree. 13:34 I agree. 13:35 The node cost is probably, like a sidechain is only useful if the node cost is affordable to the users or a large enough set of the users, I believe. 13:44 I think people imagine that the searcher's costs will be several, several magnitudes higher. 13:51 Yes. 13:52 Well, I agree. 13:53 But again, this searcher thing is, I think, the point in dispute because it seems like there's some like big, huge miscommunication persistently happening. 14:02 So that's probably the meat of it. 14:04 But then I have some other points. 14:06 I'm not even sure they matter since you agreed to the one in five, and either any one of them would kind of tank the whole thing. 14:12 But two is that if the costs are large, the miners will shirk the costs somehow. 14:18 So even if there is no BIP301, if the costs somehow became so big that they were significant, which I already don't think will happen, but they would just do some kind of partnership, like all the miners would partner with one node. 14:34 Now, I have to stress, lest I be misunderstood, that I'm fully aware that that would be a terrible situation if there's only one node. 14:43 But the point is, it's terrible for the users of the sidechain. 14:48 It does not affect the users of L1 or users of any other sidechain. 14:52 It's really just a decision the user makes of how much decentralization they want. 15:01 They have that choice, and there's plenty of things they could use, WeChat Pay, Venmo, or whatever. 15:08 So the number two point is that the miners are going to shirk the costs because it's not literally the case that one node will run out if a certain number of hashes. 15:19 You know what I mean? It's not like once you do 10 million hashes per second, you need a second node. 15:25 That's not the case. 15:26 So it is theoretically possible for one single node somewhere to service 100% of the miners, which is a BIP301 thing. 15:36 Even if it's not happening with BIP301, it's the same type of thing. 15:40 It would be like an Infura thing, some kind of subscription, or they'd have some kind of handshake deal or whatever it is, and it's sort of a thing. 15:48 I believe Shinobi specifically was ranting about this. 15:54 He believes this would be a very bad thing for Bitcoin, and the miners' dependence on such a supernode would be very bad for Bitcoin. 16:02 He argues that. 16:04 It leads directly to my third point, though, which is very related to the second point, 16:09 which is that something like Liquid that Shinobi supports or presumably supports, that is an example of the node cost being infinite. 16:20 Because no matter how much I pay, I'll never be able to actually join the Liquid 15 set or run the… 16:28 So people seem to have some kind of problem with… 16:31 They obviously don't care if the node costs are zero, but then they seem to care if the node costs rise. 16:38 At some point, it does a U-turn, because before it gets to infinity, people stop caring. 16:43 But the node cost, I just read your articles about this, the node cost was in relation to knowing that you got paid. 16:53 So to run a Liquid node that tells you that you got paid, the cost of that is barely anything, because there are only two transactions happening in a Liquid node block. 17:05 Well, I've got to tell you, that's a very astute of you, but in this context, I think we're referring to something slightly different than… 17:13 What you were referring to is… 17:16 Because in a way, you don't know whether or not you can withdraw. 17:20 In this context, I think what it means is it's a mining technology that allows you to collect the transaction fee. 17:26 So in Liquid, all the fees are collected by quashing, basically. 17:30 And so even though people may observe that their transactions have been validated in Liquid, the miners cannot use that information to collect a fee. 17:42 So we have a slightly different meaning in this case. 17:45 Not all nodes are medical, yeah. 17:49 So in this case of being a miner fee generation technology, Shinobi has to equivocate, he tries to have it both ways. 17:57 And in one sense, he says it's very bad if… 18:03 And when he gets to the T-shirt argument, he flips it around. 18:07 He says that's different because T-shirts require factories and people. 18:12 And then he flips it back around when it comes to the Liquid argument, where he says that it's good because… 18:20 Both of them are incoherent in my point of view, but the Liquid… 18:25 I think he may have said something like when the miners don't get paid, right? 18:32 Like last time we talked, the disagreement seems to be on the sidechain technologies on whether the miners should get paid or not get paid the fees. 18:41 And that basically seems to be in some people's head like a dividing line between the sidechain economic activity being able to influence or distort the mining incentives whatsoever for some reason. 18:57 So they assume if the miners don't get paid, if the sidechain validators or whatever keep all the fees and all the MEV and everything, then it obviously will not affect the Layer 1 miners. 19:08 I'm not sure about that, but that's kind of the idea. 19:13 You should be able to be sure about it because one is just equal to the sum of the others. 19:19 For example, I could start up my own Liquid and it could be identical to Blockstream where I control these keys and I collect all the fees. 19:27 And then after starting up my own Liquid, I could say that I'm going to randomly donate some of the money to the miners. 19:34 And then it just becomes the exact same thing. 19:37 I could give all the money to the miners every 10 minutes, you know what I mean? 19:41 Then it just becomes the exact same thing. 19:43 So that's my point number three is that there's no parallel complaint about Liquid or really even about any other thing that makes money that could partner with miners. 19:55 It's like, again, they have no problem if it's completely separated, no problem if it happens in Liquid, no problem with the current L1 fees where it's completely tightly bound up. 20:08 It's all mandatorily linked. 20:10 And then they seem to have only a problem in weird middle regions of all these... 20:19 I think there is one more aspect to this whole thing. 20:24 A lot of the critics that are worried about these weird... 20:30 perverse or adverse effects are actually very bullish on Drivechains, so they think people would use them a lot more. 20:39 There would be a lot more economic activity on them than the current alternatives that are possible now. 20:47 So that's what I noticed, that they think Drivechains would be much more successful than what I would be betting on, basically. 20:59 Yeah, or even what I would say in the short term, because of course, like with anything, the only way it will actually work is at first it will be created, 21:09 and then a bunch of people are going to send like $20-$25 into the sidechain, and they'll kind of test it out. 21:16 They'll be like the early explorer type people, and then it'll get a little bit of a reputation for working, 21:24 and then people will continue to push the envelope as far as it can be pushed. 21:30 So certainly, at first, it will not have 100,000... 21:34 We are afraid of some misunderstanding, creating like a gold rush-like frenzy, kind of what we saw with... 21:44 I don't know what example to say, like inscriptions. 21:49 So you get this frenzy, this craziness, a lot of uneducated people overestimating the security assumptions or whatever, 21:59 and being really careless and creating these weird situations. 22:03 I think that's kind of the idea, the underlying fear, or I don't know how to say it. 22:12 So you seem to have mostly agreed with numbers 1, 2, 3, and 5 on my list. 22:18 The fourth one is pretty lame, though. 22:20 It just basically says... 22:24 Well, it's sort of hard to say. 22:26 Basically, what I'm getting at in this last one is there's a difference between the U.S. dollar value of the... 22:33 It should be purchasing power equality. 22:36 So basically, if BIP301 works, then it also doesn't matter. 22:39 But that's... 22:41 If the U.S. dollar value of the block is more or less equal to what is paid on L1, 22:50 then you can separate division of labor, and then no miner is paying. 23:01 Miners are free-riding off of the existing sidechain full nodes. 23:06 Miners never need to run a sidechain node, 23:10 and they free-ride off of the other people who are running nodes, 23:14 and therefore they're never affected by whatever the sidechain is doing, 23:21 including MEV, including searchers, including whatever. 23:24 Yeah, that's the ideal outcome, right? 23:26 So that would be the... 23:33 Right. 23:35 So now we should get into this thing that I have apparently struggled to convey. 23:41 Did you have an opportunity to look at my little pictures with the smiley faces, or no? 23:47 If not, I could probably find them. 23:49 We could probably put them in the nest. 23:53 I know I looked at them, but I couldn't find them again. 23:59 Okay, I'll find them now. 24:01 What the hell is happening? 24:05 Okay, I'm going to try to get them. 24:15 I know they're in my highlights, and they go to Tidwell's answer. 24:20 Find them. 24:26 It's not easy to find everything. 24:30 Let's see. 24:34 You can hear me now, by the way, because my headset is on. 24:38 Yeah, I think we can hear you just fine, I think. 24:40 I can hear you. 24:46 Okay. 24:48 So if you put something in the nest, then I can't see it again. 24:53 Okay, I'm getting it. 24:55 I found them now. 24:58 I just have to, because I found it on my laptop and I'm on my phone. 25:04 I have to move them the right way. 25:06 Here we go. 25:07 Copy link. 25:10 From what I remember, by the way, it was something like an assumption that the 25:23 Layer 2 sidechain fees, that MEV would be expressed on the Layer 2 sidechain 25:29 fees, and that's why it doesn't matter. 25:31 That's what I remember, but we will see. 25:34 No, that's not an assumption. 25:36 Okay, hang on. 25:38 I apologize that this has taken so long, but I think I figured it out. 25:42 Here we go. 25:43 Paste reply. 25:45 Okay, I replied with it. 25:48 Send now. 25:51 Okay, I got it. 25:53 And I also have, let me see, if you go into this and you find the quote, 25:58 then there's one where I, let's see where this thing is. 26:04 I see it. 26:07 Okay. 26:12 Find this here. 26:14 I'm trying to find, I'm also going to post the thread that has all the ones 26:18 about MEV, all eight, all three. 26:21 Sorry, there's four links, actually. 26:24 But while you glance at those, I will find this. 26:30 Where is it? 26:36 Okay, here we go. 26:43 Okay, almost. 26:47 Okay. 26:49 All right, now I'm posting this other link that is like the breaking off 26:53 point where it has all the MEV links. 26:57 Links also. 27:04 I have to refresh. 27:07 It's weird that it doesn't, it's weird. 27:10 If I listen live, it will make an infinite loop. 27:12 I don't want to do that. 27:14 We don't want any infinite loops around here. 27:16 Okay, I'm going to reply to the post with this. 27:21 Hopefully this will work. 27:24 All right, so these are for number eight. 27:26 So hopefully you can see that now, possibly. 27:29 But the key thing is these little images here. 27:32 So I don't know if this is making any sense or not, but the person, 27:36 the point I'm trying to say is the BMM searcher, 27:40 they are the person who will bid up on L1. 27:44 It has nothing to do with what the L1 miner wants. 27:47 They won't be affected. 27:54 Yeah. 28:01 So you see, it's all completely something that happens in the side 28:03 chain world inside that little, you know, inside the little box, 28:09 the layer two rounded corners box. 28:17 All right. 28:18 So in the case, right, in the ideal case, 28:22 where you have searchers that are not vertically integrated and have 28:29 competition between each other and they are actually like bidding in the 28:36 map. 28:37 It doesn't quite matter if they have to be competition because remember, 28:40 in the liquid case, there's just a monopolist to collect all the fees. 28:44 Yeah. 28:45 Yeah. 28:46 But what I'm trying to get at, 28:47 I think the idea is that if the searchers do not have competition, 28:53 if there is a monopoly there, 28:55 then that monopoly will retain like every surplus value and only try to 29:01 pay for like the whole thing. 29:04 That's true. 29:05 So they won't be the whole thing. 29:08 And that incentivizes maybe the better capitalized miners to actually go 29:14 after it themselves. 29:15 That's true. 29:18 And that's very clever, but that contradicts the whole monopoly thing. 29:21 So it's either a monopoly or it's not. 29:23 Right. 29:24 So it's a very dynamic game. 29:27 So these things like shift and bounce off of each other, 29:32 these assumptions, or I don't know what to call them, 29:35 these states of these networks, 29:38 because immediately that the miners get the sense that they are being 29:46 withheld from, 29:48 then they will become curious to create an alternative or a competition to 29:56 the searchers, I believe. 29:58 Well, okay. 30:01 In fact, they can completely screw that searcher over because, 30:06 like we discussed, they kind of have the power to reorder the sidechain 30:14 blocks and take away the sidechain rewards and include their own hashes 30:19 and whatever. 30:21 But I don't want to rush ahead with all this. 30:24 Right, because that's a separate thing. 30:26 I think there's a different misconception. 30:29 Because my view on that, even though we'll get to it, 30:31 is that that is what I was talking about, 30:33 about the U.S. dollar value is the same, even if the coin amount is different. 30:39 So if this is a chain where 50% of the blocks are orphaned, 30:45 the equilibrium bid value will fall. 30:48 But it will be the same U.S. dollar. 30:50 It will fall for everyone. 30:52 So no one knows if they're going to be reorged, main or side. 30:55 And so then it's the same U.S. dollar value in the bid, the 301. 30:59 But that's a very complex point, so we can get to that later. 31:03 But, you see, in order to get to your point, 31:05 you have to believe a lot of weird things. 31:08 So first of all, the four or five things that you already said you agreed, 31:11 we jettison those. 31:13 And then you have to have like a half monopoly. 31:16 And then you also have to discard the fact that, like right now, 31:19 the miners aren't collecting any of these fees. 31:22 You might think the MEV person is getting all the fees, 31:26 but in our today world with no BIP300, 301 at all, 31:30 or even in the hypothetical future ARC world or whatever, 31:34 spider chain world, they're not getting any of the fees. 31:38 So there's no like parallel belief, you know what I mean? 31:42 Or even if it's all custodial lightning, 31:44 like there's no parallel belief that says, oh, the miners feel cut out, 31:48 so now they have an incentive to like become a custodial lightning node 31:52 and take all the money, you know what I mean? 31:54 No one makes a parallel argument at all. 31:56 They just kind of only trot it out for this bizarrely specific set of circumstances. 32:01 So they either think… 32:06 I just wanted to say I was very frustrated with this four weeks 32:10 because I just couldn't get a clear picture of like the motivations 32:15 and the incentives and the options of how some people imagine this 32:22 to like almost certainly lead to full vertical integration and larger pool dominance. 32:30 So I really struggled with this, and I told a lot with people in DMs 32:39 and tried to get like a sense of how this could possibly happen, 32:44 how this makes sense whatsoever. 32:47 And that's why I said that I finally thought I had something, 32:53 like there was a plausible scenario painted that I could say, 33:00 all right, all right, let's see then what Paul says about that. 33:06 Well, sure, but I have to like… 33:11 If I'm really being 100% honest with the audience, 33:16 I know that none of this is really real. 33:19 This is like people, critics of Drivechain, 33:23 they've moved the goalposts so many times already, 33:26 and now they're just searching for any possible thing that they could say, 33:33 and in Shinobi's case, it doesn't even matter if the costs are very large, 33:38 like when they're infinite with liquid or if they're small with cheap Drivechain 33:45 or if they involve t-shirts. 33:48 It just doesn't matter. 33:49 Just try to come up with something to say, 33:52 and that is the true explanation of why these complaints appear. 33:57 It is not because people are worried about… 33:59 I don't think he's trying to hide this. 34:01 He really, really dislikes binge mining, 34:05 and he thinks that the hashrate escrow actually makes it somehow worse, 34:12 so somehow it would be more popular and powerful 34:16 if it was combined with hashrate escrow. 34:18 That's what he believes. 34:20 He has been saying it for a while, 34:23 but otherwise he runs straight into the death knell for his argument, 34:29 which is that already we do merge mining with Namecoin, 34:33 and it's totally unpreventable, and it was invented by Satoshi, 34:36 and we've been doing it for 10 years, and we still do it every day. 34:39 So he knows that he has to come up with… 34:42 He can't just say merge mining is bad. 34:44 He has to say, by me improving it, I'm making it bad. 34:50 He is trying to find points of attack on it, 34:54 but I don't think that's a huge problem for Bitcoin, 34:58 and it may be very inconvenient for you, 35:01 but actually might, in the long run, actually help. 35:04 I don't know. 35:05 Well, of course. 35:06 I mean, in one sense, this is a healthy, pure view, 35:09 but in another sense, it's not, 35:11 because we should search… 35:14 Whenever we have a theory, 35:15 we should try to find all the reasons it might be false, 35:19 but we should also search for all the reasons it might be true, 35:22 because those two things are actually the same thing. 35:25 There's no way of… 35:26 You know what I mean? 35:27 It either has purchase on the truth or falsehood, 35:30 or it's irrelevant. 35:31 So it's kind of like… 35:33 Some people are obviously biased. 35:35 You know what I mean? 35:36 You could go down the list, and you could say, 35:38 well, Bitcoin, sure, it works, but you could… 35:43 I had an example about if the two different… 35:47 You could divide all the land in country up into boroughs, 35:54 but what are you going to do about the line between the two boroughs? 35:57 And you could say, okay, we'll put the boroughs on rivers, 36:01 and then you'd say, well, what about when a boat crosses the line? 36:06 You could just keep splitting hairs and focusing on extremely irrelevant things 36:12 when it's really just, does this theory do the work that we want it to do? 36:16 But now let's turn to the case of the RE-ORG, 36:20 whether or not the legitimate hashers, like the SHA256D people, 36:30 if they have a huge advantage over the BMM people, 36:34 and if that even matters at all, because I think that they don't. 36:38 I think all that matters is… 36:43 So, before we get into that, can we play the little game that I was… 36:50 Okay, sure. 36:52 So, if you take it like a button, 36:57 and assume that we somehow should try to solve this issue of atomicity, 37:06 do you think there could be done something about that? 37:11 And more specifically, I see kind of like two possibilities for this immediately. 37:19 One is very simple, and actually it would be like a sidechain consensus thing, 37:25 which says instead of being freely RE-ORGable, 37:30 you are saying that only bad invalid blocks can be RE-ORGed, 37:37 otherwise they have to be RE-ORGed on L1. 37:40 Of course, this is a fatal flaw that you already mentioned, 37:44 and I don't really know what to do with the block withholding attack. 37:48 So, yes, block withholding would kill that idea, right? 37:57 You just withhold the block. 38:00 Yeah, because if it's obviously like trolling, 38:03 if it's obviously a bad hasher, it's a bad block, 38:06 then the sidechain nodes can safely ignore it, 38:08 and you don't have this whole weak subjectivity problem. 38:12 But the moment they can't tell if that hash, 38:15 so you would have to prove a negative basically, and that's impossible. 38:18 Yeah, it's impossible. 38:19 If the attacker just mines two blocks, one is valid, one is invalid, 38:23 and it just withholds them both, and you don't know which is which, 38:26 and you can't build on either, and they just wait for like a month. 38:33 It's really sad because it would actually maximize the value of the sidechain 38:37 for the users, because the value is in large part in blockchains, 38:43 is in the immutability and the finality of these things. 38:55 Actually, what you can say, do what Counterparty did, 38:58 and say basically each transaction is like its own block or something like that, 39:04 where then they're all in L1, but then you get no extra block space, 39:12 so that also kind of ruins it. 39:16 Yeah, so like I said, I really like that first one, 39:19 but somehow would need to find, and probably has no clean and easy solution 39:25 to try to deal with the block withholding attack, 39:28 because someone would actually need to... 39:31 So one way to deal with it, if it happens infrequently, 39:34 then of course the sidechain could like soft fork that block is invalid, 39:41 but this is a huge problem and a very bad UX, 39:44 and if it happens frequently because someone is trolling with it, 39:47 then it will ruin everyone's day, so that's it. 39:51 And the other way to do it would be to try to pay the miners on the sidechain, 39:57 and I faintly remember that Shirobi suggested something like this, 40:01 that an SPV proof would be presented to the miners 40:04 that they got paid on the sidechain, 40:06 or maybe some weird scheme where the sidechain block... 40:11 This is what he didn't understand, is the US dollar value equality versus the coin. 40:17 He was saying something like, make it be required on L1 to show... 40:23 And this idea has lots of problems, but he's saying, 40:26 show the whole Merkle path into L2, into the L2 coinbase on L1, 40:33 so that you can prove that you're not being screwed over. 40:37 But this idea has like 10,000 disadvantages. 40:39 One is, every L2 must be organized in the way that L1 can understand, 40:47 which is already horrible. 40:49 But the other thing is, it doesn't account for any of the MEV, of course, 40:52 the other value in the sidechain block that's unrelated to payouts in the coinbase. 40:59 So this is also terrible. 41:01 But the most important reason of all is that they must float, in fact, 41:06 because newly minted sidechain coins are not equal. 41:11 They have their own block maturity, and then they have to be withdrawn. 41:14 So they're not equal in value. 41:18 Just because the sidechain's coinbase has 109 BTC, 41:21 that does not mean that you should pay 109. 41:25 It may be much less, objectively much less for everyone. 41:29 So it has to float. It has to be like an auction system. 41:33 And there has to be the little delta there. 41:37 No one knows exactly what it is, even. 41:40 So I think that just shows that he didn't understand it, 41:45 because he was going further in the wrong direction. 41:47 He's saying, like, we must prove. 41:49 But the true value of the sidechain block could be in excess of like 109 coins, 41:53 because there could have been, theoretically, there could be any amount of MEV, 41:57 3,000 coins worth of MEV. 42:00 So then it should really be 3,109 paid on L1, or 3,108. 42:05 But that just shows you that. 42:08 This would only work if the MEV comes from, like, some Layer 3, 42:12 and it expressed those fees on Layer 2, and then it could possibly work. 42:16 But you're right. 42:18 I think it's interesting to look at these starter exercises, 42:22 like a little side note that, all right, 42:25 Blind Merged Mining has these properties. 42:30 The user experience-wise, right, the finality that results in this, 42:36 that they reorder rather easily. 42:39 They are basically secured by the fees paid on the sidechain. 42:45 It's competition. 42:46 Yeah. 42:47 And on the miner's side, the Blind Merged Mining side, 42:51 you have this property that it seems to me that you just can't make the L1 bit 42:57 and the L2 payout atomic. 43:00 It doesn't seem possible. 43:02 But you see, the competition is the best way of dealing with that, 43:07 because it automatically takes into account every single difference. 43:11 You know what I mean? 43:12 It takes into account the inconvenience of waiting the L2 maturity period 43:16 and then the withdrawal period. 43:19 So it discounts the fees, but it would also automatically take into account the MEV. 43:24 So it's just automatically resetting everything. 43:28 And the miners benefit because, just like with any competition, 43:32 not everyone is exactly an equal human being. 43:35 They may be equal peers on the peer-to-peer network, 43:39 but the individual people are different. 43:41 So some are more confident or more patient. 43:44 They're more confident in being able to do the L2 to L1 withdrawal. 43:47 They're more patient for whatever reason because of their own circumstance. 43:53 Or they are better at getting MEV. 43:55 Those people will naturally bid the most, 43:57 though those people who are already running a sidechain node, 44:00 maybe for some other reason. 44:01 Maybe they have a website where they have a block explorer. 44:04 They sell ads there, so they already have a node. 44:06 They already do merchant whatever. 44:08 Whatever it is, they already have the node. 44:11 So to them, the marginal cost of the node is free. 44:16 So the miners on L1, they'll automatically be getting the two best bids 44:21 in the whole world, of which they'll only take one. 44:24 And this is a far superior method of aligning the incentives between the two parties. 44:32 This simple act of competition does far more than any convoluted thing 44:37 where you SPV-prove the actual number in the coinbase. 44:42 What you are saying is basically that you believe the market would price it adequately. 44:50 Find a way to price it. 44:52 Again, it's not the market. 44:53 The dynamics are anyone – it's a simple auction. 44:57 Everyone bids. 45:00 Only one bid will win. 45:02 The miners will pick the highest bid. 45:04 And those are very straightforward ingredients, I think. 45:11 What else could happen? 45:12 I understand what you are trying to say. 45:16 I think it's not going through. 45:22 I'm pretty sure it's not going through. 45:24 The way you are saying it, I think a lot of people don't understand why. 45:30 I think a lot of people don't understand why this is necessarily happening and why wouldn't the miners try to play selfish games. 45:39 Because, for example, when you have, let's say, finding the best MEV is really a high specialization, high capital investment game. 45:55 This is the assumption. I'm not sure it's even worth talking about. If close to the maximum fees can be extracted by simply running the sidechain, I'm not sure the whole thing is worth discussing. 46:07 Because, in that world, I'm pretty sure that these imagined outcomes just won't happen. 46:19 But if you think that someone can indeed, by just doing this whole thing best and putting a lot of money into it – and that can include subsidizing it. 46:32 So, if people keep bidding and then keep getting rewards and not getting rewards, then in this game it's entirely possible that someone better capitalized, 46:47 for a short period of time taking huge losses, they can win a five year period when they are the undisputed king of the hill. 46:54 And that's kind of another approach to this whole thing, that people might not just be interested in their profitability for the next block, 47:04 but they might actually want to secure a long period of very high profitability for taking a temporary loss. 47:11 That's also, I believe, part of the fear. People are just very bad at describing this whole thing, clearly, I think. 47:24 Right, but is it fair for me to say that – I mean, you believe me when I say that – what do you think of the situation now, having listened to what I have to say? 47:40 I honestly don't know, for the reason that I don't know enough about what is going on at Rome. 47:51 Like, how Copter Intensive is finding MEV there, what is the state of the competition and centralization there, with the searchers and stuff like that. 48:04 I don't understand that whole world. 48:06 And that kind of gets in the way of trying to imagine this, how it could play out in the drive-chain context. 48:16 Because people seem very set in their ways and their base assumptions, and that's another thing about drive-chains. 48:27 So people coming at it from assumptions, basically, on how people will behave in the future, or in general, 48:37 will come to entirely different conclusions if they look at the same rule set. 48:41 That's another thing. 48:43 So I don't find what you are saying implausible, but I don't find what they are saying implausible either, totally. 48:52 Well, sure, but didn't you just agree with me about all five of those five things, any of which would have made it a moot point, what the MEV was? 49:08 No, because I again lost my headset. 49:23 Yes, you would say maybe the first one, the node cost won't be large, maybe the searcher cost won't be large. 49:35 Yes, so I don't think the net node cost in that sense, the node that everyone can run, the node software, I don't think that will be expensive, 49:46 and I don't think that will be prohibitive in any way. 49:49 I think a sidechain that has two expensive nodes is kind of a failure and kind of pointless, but that's my personal opinion. 49:56 Right, mine as well. 50:00 But I don't know how high the cost for MEV searchers can get, because that entirely depends on what insane costing those people build on these sidechains. 50:09 Maybe Alex can, if he's up for it, maybe he can tell us about what he sees, because he's much more versed in the Atell sphere than I am. 50:20 I'm generally not interested in DeFi and stuff like this. 50:25 Yeah, but did you not look at the pictures I sent about the searcher as the person who would bid? 50:32 And so then you have your weird quasi-monopoly scenario. 50:38 You see, why wouldn't there be two searchers? Because the searchers are making money in return for doing nothing. 50:45 You know what I mean? 50:47 If they keep a premium, then that means someone else could do what they do and charge less of a premium. 50:53 They make a bid that is slightly higher. 50:56 So it really can't happen. 50:58 Since anyone can bid in 301, there really can't be a monopoly. 51:01 If one searcher has $100 million and another searcher has $5 billion to secure the next 10 years of dominance, 51:11 then I think the assumption is that the one with the $5 million will win. 51:18 He will be able to outbid the other, and the other will be disgusted with no returns on his activity and capital investments, 51:26 and just give up and leave. 51:29 That's kind of the assumption. 51:31 It's like anything that one searcher does, another searcher could do. 51:36 And if one of them requires $100 million worth of capital, then they pay opportunity costs equal to that capital investment. 51:45 And so that's just as likely to be a disadvantage as it is to be an advantage. 51:50 If you didn't spend $100 million on Bitcoin or on whatever, iBonds, but instead you spent it on this, 51:58 then you're basically losing. 52:00 So basically, the better capitalized searcher can just spend $200 million on crowding the other one out of the market. 52:08 And the other assumption regarding this is that if someone, either a miner that pretends to be multiple pools, 52:17 because we established that we don't actually know how many pools are, 52:22 but what portion of the hash rate is controlled by one person, or what pools are controlled by one person, 52:27 or one coalition, or one cartel, or whatever you want to say. 52:31 So if a significant chunk of the hash rate actually tries to actively make external searchers unprofitable, 52:42 then they have pretty good equipment. 52:45 They are well-positioned to do that as well. 52:48 And again, this might absolutely not make sense. 52:50 So I can agree with you. 52:52 It absolutely does not make sense. 52:55 We've gone pretty far into the community land. 52:58 This could be fun to talk about, of course, but it's, you know... 53:03 Yeah, I think I can add something. 53:05 It does not make economic sense. 53:08 Just quickly, but I don't know if it's that relevant. 53:11 I think that there's some game theoretical for the searchers where they can grief any other searcher. 53:19 And if somebody's attempting to do MEV, they can say, 53:24 hey, listen, you either join us, or we will outbid your MEV and just give that money over to the validators instead of us. 53:32 This way, everybody's forced to join one coalition of MEV. 53:37 I think that something like that goes on on Ethereum. 53:40 I don't remember the exact... 53:41 Even that, though, I think that's plausible, because I think, first of all, 53:45 because Ethereum has a bad design where you have to pay fees even for things that don't go through. 53:51 And I don't see that having a future just because it's a terrible idea. 53:55 It's for the user. 53:56 So I think people will eventually replicate the Ethereum ideas that are good on their own sidechains that just don't have any gas fee at all. 54:07 But that's a complete separate point. 54:09 Interestingly, even if that is the case, that it's winner-take-all, it still doesn't necessarily mean that there's no competition. 54:17 It just makes it more unstable. 54:20 Because let's say you're the winner, and you extract a huge premium. 54:23 And you extract the premium every 12 seconds or whatever it is, every day. 54:29 So you're getting a lot of money. 54:30 This is like a magic money tree for you of like $8 million a day or whatever. 54:36 I don't know. I'm just making it up. 54:38 The thing is that the laws of economics can still accommodate competition in that scenario. 54:44 Because they just need to go to a bank and say, listen, I'll give you – these people are making $8 million. 54:51 We can crowd them out and take all the $8 million for ourselves. 54:56 We'll be the new number one. 54:58 And I'll give you, the bank, $6 million a day, and I only want $2 million a day. 55:04 And the bank says, oh, okay, sure, take all the money you need. 55:07 Well, I think in that scenario, what they're doing is they're making sure that nobody will profit unless they join them. 55:14 And at their own detriment. 55:16 So it's like if there's $100 to be made on MEV, and somebody else tries to compete, 55:20 they will make sure that 99 of that or the full 100 will instead go to validators. 55:26 Unless people join their pool and do MEV through them, and then they'll share the profits. 55:31 So it's like – 55:33 Yeah, but that's not the point though. 55:36 Yeah, that's – well, yeah, during the period in which the two compete, maybe neither of them get it. 55:42 But the point is you just have to outlast the other person. 55:45 You see what I mean? 55:46 It's just kind of an assumption that just says someone will be number one. 55:50 So that's the point where you go to the bank and you say, listen, we can outlast them. 55:54 Just give us – you go to whatever, Goldman Sachs, and you tell them, you guys don't have any good ideas around here for investments. 56:01 But I've got one for you. 56:04 And then you go to them and you say, this is the plan. 56:08 And then they say, okay, we'll fund it, and then you're the number one guy. 56:12 So there's no like – it's true that this is like what you might call friction, but it's not – 56:19 and I think even it's just – this is only because of badly designed Ethereum stuff that this scenario even arises. 56:30 And right now that miners are not getting any of this transaction fee because BIP300 is itself censored. 56:35 Yeah, so you very correctly said that the game there, when there is a competition, 56:44 and with such a reward that you might actually be the dominant searcher for the next four or five years possibly, that's your goal. 56:53 That is a huge amount of money. 56:55 And you will be able to take short-term losses if you are well capitalized, if you have a business plan for this or you have the funding for this. 57:03 And again, that is a part of the argument. 57:06 I think it ties back to that if someone controls a very significant chunk of the hash rate, 57:11 then they have more control over the outcome. 57:15 And then they might be able to take short-term losses better or smaller short-term losses for trying to achieve this long-term dominance. 57:24 I just wanted this to explain how it could possibly get into that situation whatsoever that we are talking about, 57:34 like full vertical integration and large pool dominance. 57:41 I'm trying my best to argue for that a little bit or make it plausible so that we can discuss it. 57:49 Yeah, but basically at this point what it has assumed is it has saying, 57:57 assume that we write something into existence that has this exact property that it rewards the larger hashers. 58:11 That's kind of like, well, okay. 58:14 In that scenario, then I guess it would. 58:18 But then we are at the point, I guess, where you tell us why that is wrong. 58:27 Well, yeah, I don't think that that is. 58:35 At this point, it's sort of getting a little too, like we have gone down this road of no one cares about scalability, privacy. 58:52 No one cares about smart contracts that have a use. 58:56 We're like, this is like the thing. 58:57 This is like the point where we say we divide the country into zones. 59:03 And then what do we do with the, you know, this is like extreme hunting down to like some tiny detail that cannot possibly have any relevance. 59:17 Because just because if someone has an advantage, this is the same thing as before. 59:23 If you have an advantage because your hashrate is large, then this ends up being the two pools of 50 scenario that already doesn't make any difference because of the pool hopping. 59:35 Yeah, the problem with this, Paul, is I don't think if you try to sell that, I don't think people would be very receptive. 59:50 So I think that's horrible. 59:55 Yeah, but that's also because people believe a lot of false things right now. 1:00:00 And I don't know, it's just like, I don't think that they because what they think is it's very ironic that the people who worry about large pools are the same people who would say in 2017, we proved to the world that, you know, like miners are. 1:00:19 Subordinate to nodes or whatever. 1:00:23 So they don't they don't set the rules, right? 1:00:28 Right. So ironically, they'd be sort of wrong both times negatively, like diagonally, because the reason that it doesn't matter if all the hashrate is in two pools. 1:00:40 It's because the only thing the pool can do is sensor transaction or do some kind of reorg or some other kind of mischief. 1:00:48 And that is exactly what won't happen if there is vigilance on the pools. 1:00:55 So that's why the quantity of pools has never mattered. 1:00:59 But again, this is because this is the searching for your car keys under the lamplight or whatever issue where the data on pools is available. 1:01:09 The hashrate is estimable. 1:01:12 So people can make a pie chart. 1:01:14 So they just decided to make a pie chart and everyone is in their head. 1:01:17 Everyone is thinking about like a corporation boardroom or like a succession or something. 1:01:23 They're thinking that, you know, once it's 51 percent or 50 percent, then we're all doomed. 1:01:31 And so unfortunately, even though these people know the talking points about miners not really having a lot of power, they don't really understand the talking points. 1:01:43 So that's too bad. But I agree with you that it wouldn't be persuasive if I said that type of thing. 1:01:48 Yeah, I'm not sure I mentioned because I wanted to say like two things at the beginning. 1:01:54 And I think I only said the second one. 1:01:58 The first one just occurred to me is basically the way I came to look at the Drivechain situation and all the restringing and worrying and debating if this is the best thing we could do or whatever. 1:02:15 So I came to the conclusion that if it can't be demonstrated that it will harm or make the outcome worse for those people who do not explicitly opt in, then I believe there is no moral ground for opposing it. 1:02:31 That's kind of the conclusion I came to. 1:02:34 And that is why I kind of focus on these things. 1:02:37 You know, I try to work around this. 1:02:42 Yeah, I know. But haven't I beaten you down yet? I mean, haven't we just exhausted it all now? 1:02:47 You can now fully sit back in your chair and you can sign off on this. 1:02:52 I am satisfied with how this turned out. I will listen back, make notes, think about it. 1:03:00 We can talk about something else if you want. 1:03:03 Okay, great. 1:03:05 Okay, great. Flavor has his hand up at this exact time. 1:03:10 Hey Paul, I was just wondering if you could speak a little bit to the article that came out yesterday in Bitcoin Magazine. 1:03:19 Oh my gosh. I thought it was so bad. What was that? 1:03:22 This is like some kind of – am I being drugged or something? Is this Candid Camera? 1:03:26 I just don't get it at all. 1:03:28 It seemed like it really – well, you know, the whole thing is based on miners. 1:03:35 Those three authors, I don't think they understand what BIP300 asks miners to do, which is – 1:03:47 I think that they think that they are supposed to be getting involved. 1:03:50 This vote word, I think, is unfortunate now. 1:03:54 Because when I wrote BIP300, Reddit was very big, and I was just thinking upvote, downvote. 1:03:59 That's kind of what it really was. 1:04:02 But instead, I think the idea of miners voting on the fate of each sidechain is like they'll be petitioned. 1:04:09 People will go to them and say, vote for my withdrawal, please. Here's why. 1:04:16 And then someone will say, no, vote for my withdrawal. 1:04:18 That's not what happens at all in the slightest. 1:04:20 The software automatically computes the single withdrawal for every single person. 1:04:26 It's the same hash for everyone in the sidechain in each three-month epoch. 1:04:33 And this is what actually does make me think we really should – we have testnet software now, 1:04:38 but we should probably activate BIP300 on some chain. 1:04:44 Because if we had it working in the wild, people would at least know – they would at least see the basics of how it works. 1:04:52 And it's just not the same if people read the BIP text. I think they just don't get it. 1:04:57 But I don't know. This is a rambling answer, but yeah. 1:05:01 I'm wondering, if you were to play the devil's advocate for the argument about regulatory pressure, 1:05:08 imagine a hypothetical scenario where one of these people is running a Drivechain, 1:05:14 and they're experiencing some kind of regulatory pressure. What does that look like for them? 1:05:19 I think that this question is misconceived. 1:05:23 So this is the type of thing that makes me wish we had Bitcoin Uncensored back because they would have just laughed. 1:05:29 This type of thing came up where someone said, oh, they'll only do white-listed UTXOs. 1:05:38 They read the news, and then they both just laughed. 1:05:40 And they said they'd have no idea what mining is for. 1:05:43 And then they practically just moved on to the next topic because people in that era were very well-educated on Bitcoin, 1:05:49 and so they knew better, which is, if Bitcoin has to compete – 1:05:54 Bitcoin has nothing to do with what anyone wants or prefers about the law or about justice or about morality or power or whatever. 1:06:04 If Bitcoin does not have a private angle, a politically subversive edge, it will go to zero. 1:06:14 And that's absolutely true. 1:06:17 And the reason why is if it fully competes on being compliant, it will lose to Venmo, WeChat Pay, et cetera. 1:06:28 Also, the tech will lose. The tech is also not as good. 1:06:32 The tech – because the tech used by WeChat Pay or whatever is just going to be some MySQL database or something. 1:06:39 And the blockchain technology is much more awkward. 1:06:44 And it only works because it is existing in an environment where the entire engineering design for Bitcoin is that it will have its own independent existence. 1:06:54 It will have its own independent existence, and that's why it won't go the way that Liberty Reserve went, where there was one server, and it was also just shut off. 1:07:02 So that's the entire story of Bitcoin, is that it will have achieved censorship resistance by shirking or even denying regulatory influence. 1:07:18 So the regulatory influence is basically just those people are asking them to censor, and they either conform, and they lose out on money, and someone else gets the transaction fees, or they defy. 1:07:31 But the argument that Bitcoin must be compliant is just – it's kind of a dirty trick because most people refuse to be totally honest about this because it sounds so shady. 1:07:48 And so it's actually just a horrible thing. It's a very un-Bitcoin thing. 1:07:53 It's basically the equivalent of Craig S. Wright suing people because it forces people to kind of talk a little bit more openly about things that most people are too cowardly to speak openly about or they want to be more evasive about. 1:08:05 But just the logic of Bitcoin is just that it's something that works in the darknet market use cases and all the lightnet market use cases, and that's why it will eventually take over via network effect. 1:08:17 And that's the whole premise of Bitcoin. So the whole premise of Bitcoin is that it will hit the darknet markets, and that is the edge it has over WeChat Pay or CBDC. 1:08:29 And so the fact that that person doesn't know that, and the fact that they highlight it in an article, and the fact that they critique me in completely the wrong way – I mean, this used to be the thing that would just get you laughed out of a Bitcoin conversation. 1:08:42 So I think it should not be steel-manned at all. It should not be set aside lightly. It should be thrust aside with extreme force. It's a terrible thing to even bring up, and it just speaks to the person's total inability to comprehend Bitcoin. 1:09:03 And so you're saying not only would Drivechains – Drivechains wouldn't increase attack vectors or create more regulatory pressure any more than there would be already, and that if they did, even if they did, you really wouldn't have an option but to try… 1:09:19 It would be good, in fact, because it's possible that something like the Zcash sidechain might, but that would be a good thing. In fact, this would be what would decentralize mining, so to speak, because any miner with a mailing address who's registered, they would not want to touch the fees from this thing. 1:09:43 And as a result, it would be the anti-registration effect, would be the Zcash sidechain and its economic activity. That's possible. Sorry, I have to sneeze again. 1:09:55 Ah, my gosh, excuse me. Anyway, so it's possible that – it wouldn't be Drivechain itself. It would be the fact that creativity had been unleashed and people could do subversive things. 1:10:11 It's really Zcash itself that is the truly innovative and subversive direction that this would take. It's the Zcash snark privacy technology. 1:10:20 Now, if that happened, that would be a good thing. That guy talking about if your senator is on the phone or something like… 1:10:28 If the senator is on the phone with anyone influential in Bitcoin, then the coin, it doesn't have a future. 1:10:37 And again, this is not – it has nothing to do with what anyone prefers. 1:10:41 This is a simple calculation of comparative advantage among the different coins and payment networks. 1:10:50 Because if you think that network effect is all that matters, then the U.S. dollar is going to win easily. 1:10:58 It's going to crush everything in its path, and Bitcoin will lose. 1:11:02 And if you think that only features matter, then we'll have an altcoin universe because people keep inventing new features. 1:11:09 And we'll have multi-coin pluralism. But that's not true. Network effects do matter. 1:11:17 There's some mix. And in Bitcoin's case, the edge that it has is in the privacy, darknet markets, smart contracts. 1:11:26 By smart contract, I mean something that the senator calls and the senator can't get rewritten or whatever. 1:11:34 That's what makes it smart. That no one can. It has nothing to do with the senator. No one can. 1:11:39 It has its own independent existence. 1:11:42 So the whole thing is just horribly misconceived and just very disappointing. 1:11:47 And it honestly just speaks to how far the community has fallen, I think, unfortunately. 1:11:56 And so you're saying that it is possible, maybe not likely, but it's a roadblock. 1:12:02 It's like an impasse that Bitcoin is going to have to go through if it wants to become what people say it should be. 1:12:09 Yeah, I mean, our options are we stay very niche and we don't really bother anyone. 1:12:17 And I think that leads to death, at least to being worth zero dollars per coin eventually. 1:12:27 Or we get really big. I mean, a lot of people want it. 1:12:31 So certainly I think what the large blockers had in mind was a sort of Uber like strategy. 1:12:39 That, you know, as far as anyone knows, it might have worked at this point. I don't know. 1:12:43 People didn't like it at the time, but what they had in mind was like, we'll just get so big so quick. 1:12:49 It will be too difficult for every government in the world to ban us all at the same time. 1:12:54 And we'll just grow, grow, grow. 1:12:57 And it would be like Uber and like, you know, DraftKings and FanDuel, where it's technically illegal when it started. 1:13:04 But then it just captured the hearts and minds of the people. 1:13:12 Which, you know, I think that was certainly a viable. 1:13:16 That was, you know, that's certainly one strategy that might have worked, but certainly didn't go in that direction. 1:13:23 Anyway, yeah, I do think that it's kind of like the. 1:13:34 What exactly is their plan to only write software that is approved by the U.S. Congress? 1:13:47 Because then again, it loses its independence. 1:13:49 So this is why this is why I say these people are equal to the. 1:13:54 They're basically completely equivalent to the infinite size, large blocker L1 people in the block size war, where they said, well, the instead of hanging on to the properties of Bitcoin and make it unique. 1:14:08 And make it special and which make it valuable. 1:14:11 We will sacrifice those. 1:14:14 For some kind of like temporary quick fix, quick convenience. 1:14:20 So, yeah, I thought the regulatory angle was very bad and I thought the angle about the miners don't want to get involved. 1:14:27 That was silly in so many ways. 1:14:29 I think they just didn't understand at all how it worked. 1:14:31 And they also they failed to put two and two together when they said stuff like, sure, maybe we'll get much, much, much more revenue by doing this. 1:14:40 But on the other hand, we might have to do a little bit of work. 1:14:43 And it's like, OK, how about you subtract the revenue from the costs and then and then decide. 1:14:51 So I was disappointed by that. 1:14:54 I'm wondering, so then have you had conversations with miners or could you share anecdotes with miners? 1:15:02 No, I have lots of. 1:15:04 Yeah, I have. I'm in chat rooms with miners. 1:15:07 I have talked to miners. 1:15:10 I talked to my Zoom miners. 1:15:14 So I think. Many of the miners, you know, are. 1:15:21 They don't want to. 1:15:25 Get involved with something like this that is contentious just for the same reason that anyone wouldn't. 1:15:30 But also we have many miners who. 1:15:34 Are supportive publicly some. 1:15:38 And we have. 1:15:41 I think, you know, I think it's a matter of time, like have other. 1:15:46 You know, like meetings with miners lined up. 1:15:49 So I think it is just I had only started talking to miners like in July 25th. 1:15:56 And then a lot of this crazy stuff happened and then I've been very busy recently. 1:16:02 And so. 1:16:05 I've been really busy talking because we've gotten a lot of attention ever since miners first found out about it. 1:16:12 Late July. 1:16:14 July, August. 1:16:16 And then we had a kind of crazy September, as we all know, this idea. 1:16:20 This idea. 1:16:22 Really went from being. 1:16:24 Kind of a not that talked about, but then in September it started to get very, very talked about. 1:16:29 And so that's. 1:16:31 That month is only just ended and now I'm here for. 1:16:34 Bitcoin Amsterdam and for other things. 1:16:38 So it's kind of just started, but. 1:16:42 Yeah, it's very weird. Some of the miners who are. 1:16:46 Against are very, very close. Also, like I don't want to like name everything, but like some of the miners want. 1:16:56 To basically have sidechains, but they I'm not sure if they want to activate the 300. 1:17:02 So some of them are in like a weird position of being kind of close. 1:17:07 I don't know how much I can share or should say, but. 1:17:11 Do you think miners understand by chance? 1:17:15 Do you think they understand? 1:17:17 I think they I think they don't understand them as well as you do, Moon Settler, but I think that they. 1:17:25 I think what really happened was they were very surprised by the arguments against like, for example, I did show them. 1:17:32 The Blockstream paper, the mining centralization. 1:17:35 Section three point four or four point three. 1:17:38 One of those. 1:17:40 And in it, it basically just says that some miners have an advantage over other miners and they'll push the other miners out. 1:17:46 And they they people couldn't believe that that was that was the whole case against sidechains and why Blockstream abandoned them. 1:17:54 And then I was showing them the math on. 1:17:57 The fee revenues they could earn. 1:18:00 Which is. 1:18:01 Much, much more than they currently earn total. 1:18:06 So and they had already gotten a taste of additional fee revenues from ordinals. 1:18:11 So that was like those were like some things that were there like, OK, and I think weirdly what's on their mind is, of course, the having coming up. 1:18:22 They're all thinking about that. 1:18:23 You know, they're all thinking my revenue is going to get cut in half. 1:18:25 So what should I do, if anything? 1:18:28 So I think that that. 1:18:30 I think that this is I think a lot of them think that probably. 1:18:35 That would be around the time. 1:18:36 They all have this this survivalist mindset, no? 1:18:40 That they they need to survive the worst case scenario in their business plans. 1:18:47 That's what they are focusing on, I imagine. 1:18:50 Pretty much right now. 1:18:53 Yeah, I mean, I think some of them, if I had to guess, also, I think some of them are. 1:18:58 Some of them would say something along the lines of we miners have never done anything wrong and we have invested. 1:19:05 We have all this money at stake. 1:19:06 So. 1:19:08 Why is it the case that people doubt. 1:19:13 Us, which is a very good question, I think. 1:19:17 This is all blind. 1:19:18 This is all stuff from the scaling war that it's like taking on new and bizarre dimensions for no reason. 1:19:24 Yeah, I mean, the way I remember, there were some very, very big boats made by the big bookers or people on the big booker camp that I kind of. 1:19:37 Suspect the loudest, most obnoxious ones were the ones that ended up on BSE, not even BCH. 1:19:45 So those people said stuff like, you know, miners will obviously come to us and you will go into that spiral and you will be able to do whatever you want. 1:19:59 So that was the general sentiment around the time, as I remember, and I think a lot of people got like really angry and resentful about all that imagery. 1:20:27 Well, yes, certainly we can go over all the long, many details of that history, but mainly involving. 1:20:35 A Bitcoin unlimited being signaled with nine percent after scaling three, thus preventing SegWit from activating via BIP-9. 1:20:43 Which set off this whole miners versus developers war in 2017. 1:20:50 And, you know, how level headed and forgiving. 1:20:56 The top developers are. 1:21:04 Everyone is. It all ended up happily ever after. 1:21:09 So just to put a put a cap on what you were saying about the article, it's just that it's actually the concern about regulatory pressure doesn't have that much merit and it's kind of missing the point altogether. 1:21:24 It may be a concern for certain miners who have made the mistake, again, quite parallel to the large blocker case where they may have set things up a certain way. 1:21:35 Banking on maybe they are set up for something they can only get if they are registered, but that's their mistake. 1:21:44 Other miners can and will put them out of business if they rely on that type of thing. 1:21:50 So we want miners to compete against the right people in the right ways for the right reasons. 1:21:59 So that is what we want. 1:22:00 Any kind of competition can can turn ugly. 1:22:05 Like two people can be competing over a girl and it can be honorable or they could end up like killing each other or you know what I mean? 1:22:12 Or you could compete in a business. 1:22:14 You could open two bakeries across the street and it can be an honorable competition or it can be horrible. 1:22:23 You know what I mean? 1:22:24 You have on one hand, you have like whatever Margaret Thatcher. 1:22:29 And then if the competition goes a different way, you have like Adolf Hitler. 1:22:33 It's like both are examples of people trying to compete with like a vision. 1:22:41 So the miners, we want the miners to be, we don't want the miners to compete on who can placate some random government official of a completely random country. 1:22:53 That's not what we want them to compete on. 1:22:55 In fact, we want them to compete on putting as many transactions into the blocks they mine as possible, including all the merged mine blocks. 1:23:06 So if somebody was asking you, let's say there's somebody who's on the fence about Drivechain and they're concerned about the livelihood of their business in the event that they signal support for Drivechain. 1:23:17 I mean, what could you tell them besides this is what you signed up for, you have to deal with it? 1:23:24 Well, can you be more specific? 1:23:27 As far as like if there's somebody worried about regulatory pressure like was put forward in that article, but somebody was more favorable to you and they're asking for advice. 1:23:36 Like, well, how should I navigate this situation if it's going to invite, if I'm going to be making more money and getting regulatory pressure? 1:23:44 I mean, is there any way for people to navigate that more smartly? 1:23:49 I thought I put that in my response to the article. 1:23:53 I had like one sentence about it. 1:23:55 So what you can do is with Line merge mining, you don't need to run any sidechain node at all. 1:24:02 So you don't have to run the Z side node or any nodes if you don't want. 1:24:08 You still collect the fee revenues. 1:24:10 You're not at a disadvantage. 1:24:11 Now, you have to mine the middleman transaction that connects them. 1:24:18 So there's someone who's paying you. 1:24:20 All the Z side money is coming in. 1:24:24 And maybe that sidechain slot number six, and maybe it pays two Bitcoin every 10 minutes. 1:24:31 And you're getting the L1 transaction base, whatever, 1.999. 1:24:35 You have to mine that one. 1:24:36 You have to mine that one. 1:24:38 But then you just, I think what you would do is you would just organize a defense around independence and decentralization. 1:24:45 And you just, you would tell whoever it is, whatever. 1:24:49 And the senator calls and you'd say, listen, if I don't mine this, the only thing that's going to happen is I'm going to lose out on two Bitcoin every 10 minutes. 1:25:00 Someone else will mine the block 10 minutes later. 1:25:03 So it won't achieve anything. 1:25:04 And the only thing you're going to do is put me out of business eventually if I keep losing this two BTC. 1:25:12 So I think that's just what you say. 1:25:15 And that's the truth. 1:25:17 I think you would also, a business person could easily just say, well, I'm going to weigh the advantages I get for being compliant with whatever, the government of whatever country. 1:25:32 Because you know what I mean? 1:25:34 Because framing it with the U.S. congressperson makes it sound very different than if we say, President Xi in China said he would murder my entire family and make me disappear if I didn't do such and such or whatever, Vladimir Putin's government. 1:25:52 So it's like someone somewhere tells you that they want you to do something. 1:25:57 You know, you don't automatically, it's not automatically a respectable thing. 1:26:03 It sounds a lot more respectable when you say U.S. congressperson, of course. 1:26:06 But so whoever it is, they say, don't mine the Zcash sidechain. 1:26:11 And then you just, you have to weigh whatever advantages you get with your relationship with this person against what you lose by complying. 1:26:21 That would be my advice, I suppose. 1:26:23 It's possible that the North American miners pretty much made up their mind, especially the publicly traded company miners. 1:26:32 They made up their mind about that they will comply with whatever is thrown at them. 1:26:36 And in that sense, they kind of might have that feeling that they actually could in a dry chain, in a successful dry chain, become disadvantaged economically. 1:26:49 I would say it's an honorable way to have Drivechain like not activate. 1:26:55 I would say, actually, Paul came up with this idea, but because the Bitcoin miners wanted to stay compliant and they did not want to have any risk of a Zcash sidechain, it didn't activate on Bitcoin. 1:27:10 I would just, I would stand and sort of applaud in an ironic way, because I would say, this just proves that, you know, clearly the fault wasn't mine. 1:27:23 You know, it's just, I would just say, I would just get a big kick out of that. 1:27:29 I don't know, it would be very weird. 1:27:32 And that entire article was, to me, a disappointment. 1:27:37 I did not expect to read that. 1:27:40 But just thinking about what their motivation could be, they might actually not want like foreign miners, miners in other countries, other jurisdictions to have like more bucks per terahash. 1:27:58 That is basically economically irrational. 1:28:02 If they expect, they would have to comply anyhow. 1:28:15 Okay, Rio. 1:28:17 Oh, hey, Paul. 1:28:19 Hey, Paul. Thanks for having me up. 1:28:21 Great convo and such. 1:28:23 Always learning. 1:28:24 I wanted to touch back on a couple of things that were brought up. 1:28:28 Agree with you on the regulatory thing. 1:28:30 I think the next hash war is not a chain split. 1:28:35 It's compliant hash, non-compliant hash, and it's sovereign hash versus non-sovereign hash. 1:28:41 Either explicit sovereign hash, like volcanoes from El Salvador in the dream world, or again, sovereign hash in that Texas hash is compliant. 1:28:53 So it's as good as sovereign hash, and that's the next hash war. 1:28:56 So your points are taken if people are prepared for that or aware or in denial that it's an adversarial environment to the standard system when you're trying to make a competitive product like Bitcoin. 1:29:08 Again, go back and read the white paper. 1:29:12 Start over. 1:29:13 Do not pass go. 1:29:14 Do not collect $200. 1:29:16 Just a public service announcement. 1:29:18 The compliant hash, all of that is a complete waste. 1:29:22 That is a useless proof of work because if it's all coming from Congress anyway, then it doesn't even matter. 1:29:29 All the proof of work stuff is a complete charade. 1:29:32 They can subsidize energy as they can. 1:29:34 So they will simply subsidize it to say we'll make it economical for you to not include that because we'll give you the subsidy in a different way through energy subsidy, which is only further proving that the sovereigns will bend the knee to the Bitcoin and math will win in the end. 1:29:47 So again, it's just a sign of a positive thing in the long run, but again, it is coming. 1:29:50 The next hash war is sovereign hash or compliant hash purposely not being economical and me to your point, not doing what you would expect a truly selfish player to do. 1:29:59 And that will be the next hash war, which is why a zero knowledge proof or a Z chain sidechain thing is certainly one of the use cases, one of the things that would potentially push that hash war to a different level or make it even more moot for them to attempt it. 1:30:14 But then the regulatory pressures that are spoken of in the article, I think we need to look at wrapped. 1:30:21 BTC is our only scaled example. 1:30:24 All due respect to lightning again. 1:30:26 Bitcoin has more TVL, but you look at a federated model and the pressure put there was put. 1:30:31 But you know that wrapped BTC contract on Ethereum does not have locks. 1:30:36 Unlike most stable coins, they only have regulatory pressure they can put on the externals of the claim outs. 1:30:41 You can still put wrapped BTC into a Aave and get ETH back out. 1:30:45 They have to have the compliant people track that through. 1:30:48 They can't stop it in V2, which is still can't be undeployed, etc. 1:30:53 So there's, you know, things that make it challenging. 1:30:56 You also think about dusting that's shown to be very adversarial to, oh, you want to stay compliant. 1:31:00 OK, well, dust point zero zero zero one ETH and like all these celebrities wallet. 1:31:04 So you have to block all of them, too, if you want to stay compliant. 1:31:07 Those type of things will also occur. 1:31:09 So leaning in and allowing that to occur to show the futility of compliance to either cause Bitcoin to change or others is beneficial in my view. 1:31:22 The concerns I do have is that I do think the critiques on minor power struggles and minor and sidechain operator collusions are newly introduced. 1:31:37 And also point to potential regulatory attack vectors. 1:31:43 I still think it isolates to only affect those users on the sidechain. 1:31:46 But I do think that people saying sidechain Bitcoin is just as good as layer one Bitcoin, which would I don't believe to be true. 1:31:54 And I'm not saying people are advocating that here, but would be a narrative that these sidechain people would be running if we enabled it. 1:31:59 Could be dangerous if people don't understand how they come back. 1:32:04 I also think that people we agreed to have Taproot and SegWit, which was lower cost VB block space. 1:32:12 This is the antithesis. This is premium costed block space. 1:32:15 Slot one, slot two is a premium cost because only one person can occupy that slot one here. 1:32:21 So, you know, if we think about we can go one direction with Taproot and have discounted block space reserved or created. 1:32:27 What is the problem with going the other way for premium? 1:32:31 Especially I can understand the miners saying you maybe not get my full money to increase my block instead of increasing block at standard rate block wars. 1:32:38 Now, I want to say, OK, let's do that. But let's have some reserved area. Now, that's a premium. 1:32:42 Now, you don't want to go that way. You were willing to go the discount route. 1:32:45 Why can't you go the other route is a valid point, especially into a halving. 1:32:48 The last point, and then I'll love to hear any response back, is the BMMs. 1:32:52 The node operators that are going back and forth do become the dominant people that will need the withdrawals. 1:32:57 They have a natural need to take their revenue on the sidechain. They pay their costs on the L1. 1:33:02 They will be the dominant people requesting the withdrawals. 1:33:05 That is centralized withdrawals versus potentially centralized pools, template operators. 1:33:09 And the people running the nodes are probably the people also pushing the L2 chain and the new features. 1:33:14 This does provide centralization and collusion issues. 1:33:18 I don't think it's a fault of the protocol. It's a fault of humanity. 1:33:19 But that's the whole point of not putting in protocols that can't be manipulated by humanity, which is the Bitcoin thing. 1:33:25 So, you know, I'm still on the fence on the whole 300, but that's just a few points I'd like to cut out. 1:33:30 And I'd love any, you know, on any of those points, any rationales or further stuff I can continue to learn. 1:33:36 Okay. Well, at the end, like, why do you say that it's centralized withdrawals if the withdrawals are concentrated in one person? 1:33:49 You know what I mean? Because what one person could, it could actually be only one person withdrawing every three months. 1:33:56 But there could be one person by turning it off and not piss off the rest of the ecosystem. 1:34:01 So that one person is a centralized person that has to bribe the miner to get out because they're the only one damaged if the miners decide not to do it for you. 1:34:11 Oh, well, they're the only political victim. 1:34:13 But you see, that's also not really the case because what the, in the scenario where there's only one person withdrawing, 1:34:19 I would imagine that there's many people who want to withdraw, but this one person is buying up all their L2 coins and they pay in L1 coins. 1:34:30 With BMM, and then they want to withdraw. 1:34:34 So they're collecting all the L2 coin bases, they buy up everyone's L2 coins. 1:34:38 So as you say, they have a giant pile of L2 coins, and then they withdraw. 1:34:42 But they are providing a service for all the, they themselves have, maybe have tens of thousands of customers. 1:34:49 So if this person is screwed over, then they won't be able to offer the service to anyone else. 1:34:54 And so everyone else is indirectly getting screwed over, even if they don't literally withdraw. 1:35:00 So the withdrawal thing is kind of like the BIP300 part. 1:35:06 The withdrawal is only half of the withdrawal picture because there is also, it's really just who wants to do the slow withdrawal. 1:35:15 That person buying up everybody's L2s and then Binance is the one taking those three withdrawals. 1:35:18 CZ is in control there, and then he has to basically bribe the miners to say, let my withdrawals go through or let's OTC make a deal. 1:35:27 But they don't need any particular bribe. They just use the BIP300 withdrawal. 1:35:31 You know what I mean? They pay the L2 transaction fee, they pay the L1 transaction fee, same as anyone else. 1:35:38 They may want to put a hefty, if they're the only one, they managed to shrink it down to 43 bytes on L1. 1:35:45 So they might say, well, instead of paying the prevailing, what I think is the prevailing 90th percentile, 1:35:52 what I think is the prevailing 90th percentile fee of like $4.50, since this one withdrawal is moving 10,000 coins, 1:36:00 I'll pay $500 per, I'll pay what is the equivalent of $500 per the 220-coin transaction. 1:36:11 The miners love it. So I shouldn't describe it as a bribe. It is aggregating and maximizing value. 1:36:17 The withdrawals pay a transaction fee on each because they're cross-chain. 1:36:23 They must pay the sidechain transaction fee to qualify as a withdrawal in the sidechain. 1:36:28 And then when the sidechain software constructs the withdrawal transaction automatically and hashes it, 1:36:36 this is that hash that's so important. When that transaction is included in L1, then it must pay a transaction fee also. 1:36:45 It has to be included in L1 in a very specific spot as well. It can't just be anywhere in L1. 1:36:51 It has to be in the slot spot, right? And if somebody else wants to take that slot spot… 1:36:55 Yes, the withdrawals are per slot. No, the withdrawals are per slot and the withdrawals are global. 1:37:01 They're globally unique for everyone. So whatever the withdrawal is, each three months is only one withdrawal. 1:37:07 And it could pay out up to like 20,000 people, but it just needs to make it into any block. 1:37:14 But that is the point then. A sidechain can be attacked by a person saying, 1:37:18 on L1, I will always pay the most to blank out that reserve slot one so that a real slot one can never get there. 1:37:24 Now, again, I have to perpetually pay. 1:37:29 I'm happy to explain this because I think it's quite interesting, but this doesn't happen. 1:37:33 What happens is L2 is what constructs this thing that will pay out on L1. 1:37:40 So the way it works is basically each withdrawal is as if there was some kind of train or spaceship leaving a planet 1:37:48 or a train leaving a train station. And the train takes three months to go from wherever it is, New York to L.A. 1:37:56 And the next train can't leave until the first one is finished going. 1:38:04 Because you can only pull the train. L1 is like pulling the train closer each time. 1:38:10 We have this bucket metaphor if you watch the whiteboard video on LayerTwoLabs.com. 1:38:15 They're being pulled to L1, like the spaceship is being pulled in like a tractor beam to the next planet or something. 1:38:23 And you can only pull one at a time. So when they're done pulling the one over, 1:38:29 on L2, the L2 loads the next people onto the train. 1:38:33 They can't buy up all the tickets on the train all at once. Each car, each time, they'd have to buy all the… 1:38:40 Let me explain. Very close, yes. 1:38:43 So what you do is when you want to make a withdrawal on L2, you're in the L2 world. 1:38:49 You set the sidechain transaction fee as always, because every L2 message in the sidechain needs to pay that fee. 1:38:59 And then you also set your L1 fee. And each withdrawal is going to be an output on L1 that takes 43 Vbytes. 1:39:07 So they're all exactly the same size, because you just pay out to your L1 address, whatever it is. 1:39:16 And so you click on L2. You say, I want to withdraw. And what that does is your money basically then visits the train station. 1:39:24 Instead of being on the planet and doing whatever it's doing over there, circulating, being used, 1:39:30 it goes to the spaceport or the train station or whatever you want to call it. 1:39:34 And then it waits in line based on how high its L1 fee is being paid. 1:39:42 So there's 20,000 places in line. And in order for someone to buy all those up, they have to buy basically all 20,000 tickets. 1:39:50 But then their work isn't done because they have to pay the same fee rate for all of those. 1:39:55 And then if anyone outbids that rate, so it's a factor of 20,000 advantage to the… 1:40:01 So if anyone outbids that, then they cut in line. So it's like first class or something. 1:40:05 So you can always cut in line and you can always make a deal with anyone who has a ticket. 1:40:11 So if you show up and the line is 25,000 people, there's 5,000 people out the door. 1:40:17 You could go to someone, you can find someone in the first 20,000 and say, listen, you're withdrawing. 1:40:25 That person maybe is withdrawing. Let's say they pay a very high fee. They pay a whole one Bitcoin in main chain fee, L1 fee. 1:40:34 So they're withdrawing 28 Bitcoin, but they pay one Bitcoin in fee. And you want to withdraw your 0.5 BTC. 1:40:43 You tell them, you cut a deal with them. You say, listen, edit your withdrawal so that I'll give you my 0.5. 1:40:52 And then you can withdraw 28.5 BTC and pay one Bitcoin in L1 fee. 1:40:58 So you put, I'll give you my coins since you're already in line and you pay me on L1, you pay me like 0.49 BTC on L1 instantly. 1:41:08 So then you don't even have to take the train. So you can cut a side deal with any of these people. 1:41:13 They can charge you like a fee. But so you have two options. 1:41:18 You can either outbid them on L1 main chain fee and again, or you can just swap out instantly at any time. 1:41:25 You can just say, but the swap out thing never hits the ceiling because as people gather more coins, 1:41:32 they just, they merge them with a kind of coin join type thing on L2 and then they withdraw them. 1:41:38 So, you know what I mean? Like they can have like 50 million inputs on L2 and they merge them into one withdrawal of 58 BTC. 1:41:48 And then you have one space in line that is one for 58 going to Bitcoin address 1C7J8, whatever. 1:41:56 So you're just that one guy. 1:41:58 I don't have to buy out every three months. I have to buy out constantly. 1:42:02 So it's not once every three months I have to buy out the train if I want to blank it. 1:42:06 Right. That's the other thing is you have to keep doing it. You have to keep doing it. 1:42:09 The next block, the next block. 1:42:11 Once this train leaves. Well, it's the next train. So you can wait three months. 1:42:15 If you successfully block out the whole withdrawal, then you don't have to do it for three months, but you have to do it again. 1:42:20 Right. I'm a state-based attacker hating the Drivechain Z chain. 1:42:24 And I'm saying I'm buying all the tickets on the train every withdrawal so that you can't get off the sidechain to kill the Z sidechain because I'm a state-based attacker. 1:42:32 But again, I may have misexplained it in that point because you're not really buying the ticket. 1:42:37 What you are is you pay a certain L1 fee rate. 1:42:39 Right. They have to earn money. 1:42:41 You say that what they're doing is they'll say I withdraw at this rate, which is I say I pay $50 per with $50 L1 fee, 20,000 instances of that. 1:42:53 And since 50 is the highest so far. 1:42:56 You have you temporarily have all of the places in line number one through 20,000. 1:43:05 But if anyone pays 51 at any time before the train leaves, then they jump to spot number one. 1:43:13 And that guy can single-handedly withdraw everyone else's coins. 1:43:18 Right. Once he's got a spot in line, he can edit it. I see. 1:43:21 So it makes it very challenging. 1:43:23 You have to burn a lot. 1:43:24 So then the bad guy has to decide, okay, they just paid 51. 1:43:30 So am I going to do 52 for all 20,000 spots? 1:43:34 And now they think, you know, now this then. 1:43:37 Okay. So that's why I say it's a huge advantage. 1:43:39 Yeah. Yeah. 1:43:40 It's a 20,000 to one to really stop it. 1:43:44 So, again, unless you're talking about, you know, Russia level sanctions where the government will burn money to ridiculous degrees in North Korea level sanctions. 1:43:52 They're not going to bring that much pain to bear and take that much economic loss. 1:43:56 It's only a sovereign that could infinitely print. 1:43:59 And, again, that only helps Bitcoin in the long run, as we all know, because the printer never stops. 1:44:03 Okay. Okay. No, you got it. 1:44:04 I'm just walking through the stuff and learning the mechanics. 1:44:06 Thank you for all that. 1:44:07 It's very helpful. 1:44:08 Okay. So that's the withdrawal. 1:44:09 And then taprootsegwit, that temporarily made block space slightly more abundant because it was a mandatory block size increase. 1:44:19 But that additional size is a discount in cost as well, right? 1:44:22 Because it's temporary. It's right. 1:44:25 It could be temporary. 1:44:27 It has nothing to do with the feature. 1:44:33 It's just we made this extension block for witnesses. 1:44:37 And so that is why it made those types of transactions cheaper. 1:44:43 This being in slot one or slot two, when you deposit, you're on L1. 1:44:49 So you could use a taproot. 1:44:51 You could spend from a taproot output and go into slot one or slot two. 1:44:57 It's completely unrelated. 1:44:59 So I'm not sure what you were trying to get at with that. 1:45:06 Is the slot one, is it right to believe each of the sidechain slots that can accept a hash that is representative of a Merkle or a block or whatever is necessary for validation on the sidechain that's receiving a hash in slot one? 1:45:16 Is it appropriate to treat that as a premium area of block space? 1:45:20 Because people will pay higher than the other areas of the block because they want to be the person that wins all the fees on L2. 1:45:26 So they're paying the L1 fees. 1:45:27 No, I don't think so. 1:45:28 I think so. 1:45:29 What happens is when you deposit, there's each sidechain slot. 1:45:35 So let's say we're talking about sidechain number five. 1:45:38 And sidechain number five is like the Ethereum sidechain or whatever. 1:45:40 And it has like 20,000 BTC total that has been deposited into it. 1:45:45 If that's the case, then on L1 somewhere, there is a UTXO that is spent with like a BIP300 script, OP_DRIVECHAIN, OpNap5 script that has 20,000 BTC in it somewhere. 1:46:02 And when you deposit to it, you select that one. 1:46:04 You select your own. 1:46:05 Let's say you have like a five BTC UTXO and you spend it and you give yourself three Bitcoin and change and you pay a transaction fee of 0.01. 1:46:18 And so then you pay 1.99 into the sidechain. 1:46:24 And it will be a new output that has 20,000, whatever I said, 20,000 1.99. 1:46:30 And so that's the L1 picture. 1:46:34 And then what it really is, is the more abundant block space on L2 that is not as valuable. 1:46:40 So I would say that actually you make a more abundant block space, but it's less valuable. 1:46:45 So you have a lower demand by a much higher supply. 1:46:48 And as a result, the block space would probably be cheap. 1:46:53 For the end user, agreed. 1:46:55 But from the L1 perspective of the miner and the block space value to me, which is what I'm selling. 1:47:02 I'm selling block space to be included in the block space. 1:47:05 I'm a miner, right? 1:47:06 I'll include you in my block space. 1:47:08 I'm always going to take the extractable highest one. 1:47:10 So people give me the most fees. 1:47:12 But I can't have more than one block for the sidechain go in because I only have one slot, slot five. 1:47:20 I can't take two sidechain five blocks into one. 1:47:24 Normally, I could take two inscriptions. 1:47:26 I can take two transactions. 1:47:27 So because it is further scarce block space than others, it will demand a premium. 1:47:32 And that's what you're saying. 1:47:33 You're going to increase fees for the miners. 1:47:35 You can do two inscriptions, but you couldn't do something. 1:47:39 You can't put two sidechain blocks in the same layer one block. 1:47:44 There's only one slot five. 1:47:46 Only one sidechain hash is going to go in there. 1:47:48 So that is, by nature, a more scarce area of my block on L1. 1:47:52 It is a premium area. 1:47:53 I think it's a slightly different thing. 1:47:55 Yes. 1:47:56 Right? 1:47:57 Yes. 1:47:58 But that's a slightly different thing. 1:47:59 Okay. 1:48:00 You're right. 1:48:01 Yes. 1:48:02 But let me explain that. 1:48:05 It's because there's a finite space for the merge mine hash, which would be like whatever, 1:48:12 this certain 32-byte region. 1:48:15 That is the thing that in BIP301 is auctioned off. 1:48:18 Let's say you have the EVM chain that's in slot five. 1:48:21 Let's say that one pays total transaction fees of a certain block that is 8 BTC. 1:48:30 And so in the layer two Coinbase, whoever created that block, they're getting 8 BTC. 1:48:38 And in each transaction, each transaction pays a small fee, and it all sums up to 8 BTC. 1:48:46 So you're following me so far. 1:48:48 The L2 block is worth 8 BTC. 1:48:53 So what is happening now in Blind Merged Mining is there's a middleman who constructs the block, 1:49:00 paying themselves the 8 BTC. 1:49:02 And then in L1, they make a transaction that says, they make a bid. 1:49:08 They say, I'll pay 7.99 to anyone. 1:49:14 It's up for grabs. 1:49:15 As long as the special 32-byte region corresponding to Drivechain slot number five has this exact hash in it. 1:49:26 If that's the case, then you can take my 7.99 L1 BTC. 1:49:32 But if not, then you cannot include this transaction in a block. 1:49:35 So you're right. 1:49:36 It makes a premium only for those 32 bytes, not for the rest of the block. 1:49:40 So what you would really see on L1 is you would see some kind of normal distribution. 1:49:45 By normal, I don't mean Gaussian. 1:49:47 I mean like some kind of... 1:49:48 As expected, Neve, maximizing. 1:49:50 Exactly. 1:49:51 Some regularly shaped thing that would have been the case before. 1:49:56 There was any BIP300 or 301. 1:49:58 And then there will be over in the block interspersed for each sidechain, 1:50:04 there will be this huge skyscraper-like pins, these huge spikes that one transaction will just pay 7.99 in fee. 1:50:17 7.99 BTC in total in fees. 1:50:19 So some of these may pay more than the entire rest of the block in one single transaction. 1:50:24 But this is not because that person really wanted to get into L1. 1:50:28 It's because they really wanted to set the sidechain block contents. 1:50:33 And this is only if they use BIP301. 1:50:35 If BIP301 is not used, then this just won't happen. 1:50:39 But if it is, then you would see that. 1:50:41 And that is the sense in which they're scarce. 1:50:44 And then your first thing was something about... 1:50:48 Oh, yeah. 1:50:49 The damage is isolated to the sidechain. 1:50:51 Yes. 1:50:52 The whole point of sidechains, as I see it, is a proper accountability, proper blame. 1:50:59 So we have a situation where if the sidechain developer does something stupid that attracts the wrong kind of attention, 1:51:07 if the sidechain developer screws up and loses everyone's coins, they are blamed. 1:51:14 And I think putting blame in the right spot, that is really the difference between capitalism and communism. 1:51:21 Like hell on earth and prosperity. 1:51:26 Or at least doing the best we can with what we have. 1:51:30 So this is what we want. 1:51:34 We just need the right people to get the right blame. 1:51:38 That's the key ingredient. 1:51:41 So as you say, it's possible to design some kind of sidechain that just draws the wrath of any number of people, of course. 1:51:51 For example, Silk Road, there was a senator. 1:51:55 Was it Chuck Schumer? 1:51:58 There's a documentary with Amir Taki. 1:52:01 And Amir Taki plays on his laptop a video of Chuck Schumer saying that he wants his website taken off the internet. 1:52:09 By the way, that's how I learned about Bitcoin from that. 1:52:13 Me too, yeah. 1:52:14 Not from that documentary, but from the Silk Road drama. 1:52:20 And then what does he do, Satoshi Inoue? 1:52:22 He pauses it and then he turns to the camera and he says, do you remember? 1:52:26 I don't remember that, but I remember he goes step by step on how to use Silk Road, how to use Tor, how to get that there's this Bitcoin currency. 1:52:34 Literally step by step, exactly how to use it. 1:52:37 And then that drove me into doing more research about it, of course. 1:52:41 I remember it was a little hazy myself, but he says something along the lines of he looks at the camera and he says, that was a year and a half ago. 1:52:47 And the site is still up. 1:52:49 So, yeah, I agree. 1:52:52 The whole point of sidechains is that people take their own risks and they suffer the consequences, be they good or bad. 1:53:01 Now, I think we had a Tryptonomic and a Moon Settler hand. 1:53:07 Just one thing I want to say. 1:53:12 Way, way before someone mentioned that Zcash sidechain might be such a breaking point. 1:53:19 I totally don't think so. 1:53:21 In an ideal successful sidechain world, if DeFi comes and builds on top of Bitcoin, I think we would be talking about tens or hundreds of millions of dollars in revenue for the miners from that. 1:53:42 I think that's what Ethereum and other stuff is showing us roughly. 1:53:48 And that could grow to God knows what over time. 1:53:52 But that's kind of like over the timeline that this can play out. 1:53:57 That seems realistic to me. 1:53:59 And for something like a Zcash side, I would see like hundreds or thousands of dollars of free revenue collected. 1:54:06 So that's such a non-issue. 1:54:09 That's a total non-issue. 1:54:10 The entire thing would probably boil down to DeFi. 1:54:15 And of course, the entire point of DeFi is to avoid regulators. 1:54:19 And regulators will be pretty prissy about that. 1:54:23 And that is much more likely to be the breaking point, in my opinion. 1:54:35 Makes sense. 1:54:37 Should we do Tryptonomic? 1:54:43 Sure. 1:54:44 By the way, the term is bow the knee, not bend the knee. 1:54:50 Anyway. 1:54:51 So I have an answer to the question you had last week on quantum error correction and decoherence. 1:54:59 I actually was on a space this week and Charles Hodgkinson was on. 1:55:04 And I got to speak with him for a little while and we brought up the same issues. 1:55:09 However, I found the answer is found when the entanglements of whatever particles are being entangled. 1:55:21 Some particles are heavier than others. 1:55:23 And so if you're doing calculations with whatever qubits you have, assuming that they're stable, the entanglement is a lot more stable when the particles are less dense and they're not as heavy. 1:55:38 So that helps with quantum error correction and decoherence as well as gate errors. 1:55:47 And so IBM, for instance, went from one qubit to 50 qubit chip to now they have a chip with more than 1,000 qubits. 1:56:01 And so these entanglements are very stable. 1:56:07 So we have 1,000 qubits that can be used. 1:56:12 But did we get an answer to the question about it only affects the signatures and not hashes though? 1:56:21 Sure, because even if a qubit hashes, a 256-bit hash, it would still be, I guess, the same number. 1:56:33 It wouldn't be calculated with bits, of course, but it would still be the same size of a number. 1:56:38 So, yeah. 1:56:44 Well, interesting. 1:56:47 Wow, that's very cool. 1:56:51 Yeah, I think it got much faster than I thought. 1:56:53 I mean, I know they were struggling to get two qubits and then they were struggling to get four. 1:56:58 And then someone got six somewhere. 1:57:00 And then that was all that had happened in like 10 years. 1:57:03 No, that was decades ago. 1:57:05 Right now, I mean, it's outperforming Moore's Law. 1:57:10 I mean, Moore's Law doesn't really apply here as much. 1:57:13 But I mean, it was 50 and then 100. 1:57:16 And even if you have a 50-qubit chip and you have these entanglements with particles that are less dense than other particles, 1:57:29 like I said, it depends on the particles you use. 1:57:31 But if the particles aren't very dense, then 50 qubits can outperform a modern supercomputer, 1:57:39 assuming that you don't have any errors and there isn't errors with the gates and the hardware is there. 1:57:47 But IBM has an over 1,000-qubit chip. 1:57:54 And so the era of one and two qubits and 50, that was during research and development and really trying to configure the hardware as well. 1:58:07 I mean, the hardware is more than half of the problem because the quantum mechanics are available everywhere. 1:58:15 They're essentially infinite. 1:58:16 It's just about configuring a hardware environment around them to stabilize them or to help them remain stable, 1:58:23 depending on what state of density the particles have. 1:58:27 So yeah, 1,000 qubits, wow, it's a lot. 1:58:31 That is interesting, yes. 1:58:33 What do you mean by density? 1:58:34 Well, I don't know if we should – maybe it's too much off-topic really. 1:58:37 But I thought – 1:58:38 Yeah, I'm sorry. 1:58:39 I don't think you normally use photons, and, of course, a photon has no mass. 1:58:44 It only has momentum, as I'm sure we all remember from whatever physics class we took. 1:58:51 Or at least that's what I remember, although these things are certainly counterintuitive to say the least. 1:58:58 But I don't know what you mean by dense. 1:59:00 Do you mean like there are many photons like in one area? 1:59:03 What does that mean? 1:59:13 Well, it's a tricky subject anyway. 1:59:19 Maybe we should see if anyone has a BIP300 comment or question. 1:59:29 Then maybe we can come back. 1:59:33 Yeah, I couldn't actually hear you until now. 1:59:37 I think your question was like how do you measure density in particles or something like that? 1:59:42 Yeah. 1:59:49 It refers to the – like if you have a molecule, how many particles are in that molecule? 1:59:56 How many particles are in a certain atom? 1:59:59 Yeah, it's a particle. 2:00:05 Yeah, I don't really have the answer. 2:00:07 Like I said, I don't have the answer. 2:00:09 All I know is that you can measure the density of one particle versus another, 2:00:20 and some are essentially larger or heavier in some way. 2:00:25 So – 2:00:25 that's all I have there. I'm not exactly sure how the quantum states are changed in IBM's quantum teams computers, but whatever quantum states their computer is changing, they ensure that those states are less dense than – are as least dense as possible. 2:00:52 Okay, cool. All right. Thanks. 2:01:03 Okay, thanks. 2:01:07 Bet Green, aka Bitcoin Penguin is on stage now. Hello. 2:01:17 I've got a question about kind of incentivize trying a 51% attack. So usually you could only essentially times two your coins on L1, but with Drivechain you could get a lot more than what you've got. 2:01:36 Now, I suppose this is the same with lightning, that you could get a lot more than you've got, but what's your view on incentivizing doing a 51% attack? I know it's super hard because you're going to have to do it for three months, but what's your view on the incentive? 2:01:51 That's exactly it, which is to say the three-month time period is supposed to try to offset the fact that the attack is more profitable. So that's exactly it. 2:02:07 With certain things like reorging L1 or holding UTXO hostage or emptying the lightning channel, it is actually very easy to do it sort of quickly. 2:02:20 With this, the idea is that making it longer makes it much harder. One way in particular is that the miners will have to construct the transaction paying themselves the loot, the plunder, and then hash that and then put that hash in. 2:02:40 Everyone will know immediately that the hash is wrong, and what will happen in that scenario is, over the next three months, the hash rate can change. The hash distribution can change. 2:02:56 No one knows exactly who has joined the network, who has left, who is getting very lucky, who is getting very unlucky. That is one additional stumbling block. This is why to make it so long. 2:03:08 Of course, with 51%, it's not three months. It's actually six months. You need 100%. Cooperating can do it all in three months, but with 51%, you barely eke it out over six months, where the hash rate distribution might change even more. 2:03:26 Of course, we have to keep in mind that even though the pools are stable, this is slightly misleading because the pools, their main asset is their brand, which is also their main liability, which is if they screw anything up, they are screwed. 2:03:48 This hides what must be an enormous amount of dynamism under the hood of the actual SHA-256 hashers. They are the ones who ultimately will be responsible for executing this 51% attack, and they have much more dynamism than the pools. 2:04:08 That's my thought on that, which is that the length of time is, and not only the length of time, but also pigeonholing it all into one event that is globally observed and that is very easy to ascribe blame for because the sidechain node will tell everyone what the true withdrawal hash should be. 2:04:28 Everyone will know on day one that the 51% attack one is wrong. It's completely wrong in that it has no relationship to the truth at all. It's not like some kind of mistake or fluke. That is the idea behind, since they can take more coins, we have to make it harder. That is part of the logic. 2:04:50 The other part of the logic is, of course, that making it longer doesn't really inconvenience too many normal users. 2:04:57 Now, I think the key thing to always keep in mind with the 51% attack is what is the consequence going to be in the Drivechain case. The consequence is they steal all the coins, but they have almost certainly destroyed the transaction fee revenue from all the Drivechains, probably. 2:05:13 I have done some math on that. Anyone can do it. Just go to cryptofees.info. Look up what Ethereum is paying in fees each day. It's just a kind of empirical glimpse of today's data. 2:05:29 Just take a net present value of that and then divide that by the price of Bitcoin. You'll see, if we had Drivechain today, about how many coins could safely fit in there, where a greedy miner would find it more greedy to not steal via the 51% attack. 2:05:49 Those are my thoughts on that, but that is the crucial question. If the sidechain, if the Drivechain, BIP300 chain is not generating fees, or if it doesn't have some kind of plausible story about why it will generate fees, then it will not be secure. That is the whole basis of this idea. 2:06:11 Fortunately, from Ethereum, we see that it's at least possible for something to generate fees that are so large, they dwarf even Bitcoin's fees. 2:06:29 Anyway, Alex, hello. Nice to see you again. When is the feepocalypse, Alex? Is it tomorrow? 2:06:39 Hi, guys. I'm still a proponent of the feepocalypse, and on that front, there's been a few new developments. There's basically two funded roll-up companies, one of which is doing sovereign roll-ups on Bitcoin, and the other one is doing with EVM capability, and the other one is doing some other kind of roll-up on Bitcoin without EVM, maybe with StarkNet. 2:07:05 But I wanted just to remark on something, because there's been a lot of talk about miner incentives and regulation, and today we have something that's probably more offensive than any sidechain could possibly be. 2:07:19 For example, if Wikileaks did its disclosures today, there would be no better place for them to disclose than to inscribe a whole collection of leaks in hierarchical inscriptions, which have the same censorship resistance and immutability as Bitcoin itself. 2:07:39 And that would be more offensive than any kind of small potato financial movements on Z sidechains. 2:07:48 And then the question will be, well, should the miners censor those inscriptions? Well, of course they cannot, because they're basically, you know… 2:07:57 In other words, the arguments about some sidechain or Drivechain being offensive and for miners being forced to censor it are moot relative to the possibility of simply dumping highly classified alien disclosure stuff or abuses by the US proxies around the world, black sites, whatever it is that got Wikileaks people into big trouble. 2:08:27 And that can trivially be embedded immutably into Bitcoin blockchain for pennies, essentially, today. 2:08:34 And that would be much more offensive to the powers that be than a few thousand nerds trying to mix their coins on Z sidechains. 2:08:43 Yeah, that's a very good point. 2:08:46 I do feel a lot of it is concern trolling and none of it is really real. 2:08:51 There was a famous case early in Bitcoin where people put hyperlinks to the dreaded CP. 2:09:00 And then people said that would be the end of Bitcoin. 2:09:03 And then someone actually somehow put some of it actually on the blockchain somehow. 2:09:08 And then again, people said, this is the end of Bitcoin, but of course, nothing happened at all. 2:09:16 Because why would it? 2:09:18 And all data has to be interpreted anyway. 2:09:21 Everything is encrypted when it's digital in some way, you know what I mean? 2:09:28 Because you have to know if it's a JPEG or a PNG. 2:09:32 There's been a couple of new developments in the world of inscriptions that are highly promising as far as amplifying the fee pressure. 2:09:42 Recently, they introduced what they call recursiveness of inscriptions, 2:09:49 which is to say that you can now have whole websites with hundreds of elements all referring to each other as separate inscriptions inscribed. 2:09:58 And you can essentially launch websites inside inscriptions where a single HTML inscription refers to others. 2:10:08 So they call that recursiveness where you basically can have content assembling itself from referring to... 2:10:16 Also, you have a situation where there is public good inscriptions. 2:10:22 For example, there's been over 50 popular JavaScript libraries that got inscribed, 2:10:29 and those can now be embedded inside websites that are published inside inscriptions. 2:10:35 What's interesting about those websites is that one of those websites has decentralized naming, 2:10:42 like their domain names cannot be taken down, and the websites themselves are uncensorable completely. 2:10:48 And the best part for the creators of these websites is that they pay upfront one-time fee, 2:10:55 and they get essentially eternal storage and uncensorability of their content inside Bitcoin blockchain. 2:11:02 Eternal hosting, in fact. 2:11:04 Eternal hosting, which basically blows away Amazon or Filecoin or all these other things. 2:11:09 Because once you pay the fee once today, especially with this recursivity, 2:11:17 like for example, the publishers of NFTs used to... 2:11:20 Now they can dynamically draw images. 2:11:23 They used to publish collections of, let's say, 1,000 modifications of a bear. 2:11:30 The bear would be wearing this hat or that t-shirt. 2:11:32 Right now, because of recursivity, all they need is to publish 10 or 20 things 2:11:39 and then start combining them in arbitrary ways. 2:11:42 So that's like a 99% price cut on publishing a collection of 1,000 bear images. 2:11:49 And because of Jevon's paradox, what you're going to see is that there's going to be much more usage 2:11:55 because they just added 1,000 new lines to the highway where you can basically publish 2:11:59 millions of pieces of rendered visible content while paying only one tenth or 1% of the fees. 2:12:09 So that's the recursivity. 2:12:12 I like it. I mean, I love the creativity of it. 2:12:15 It just speaks to how when people get annoyed at something new, 2:12:20 they really are very short-sighted and they should just let it play out. 2:12:23 It's a whole new internet. If you think about it, this is like a whole new layer on top of the internet 2:12:27 because you can now have websites with domain names that are decentralized. 2:12:33 They have these .sats names and .whatever. 2:12:36 And these websites are published once and they can refer to shared JavaScript libraries 2:12:44 that are published by somebody else's public goods as other inscriptions. 2:12:48 And these are completely dynamic websites that will just appear in blockchain explorers 2:12:54 and they will be interactive as well. 2:12:55 They're not just static brochure websites. 2:12:58 They will be able to embed games. 2:13:00 You can go to these Ordinal's portals right now and play hundreds of video games 2:13:07 that are essentially published to Bitcoin, paid for once for $20 or whatever, 2:13:12 and then they remain hosted forever and completely uncensorable. 2:13:16 And there's nothing that China or US or anybody else can do. 2:13:19 So there's this explosion of essentially the cheapest publishing decentralized medium for websites 2:13:27 that's because of recursivity. 2:13:29 Then there is this additional feature that was added called re-inscriptions, 2:13:34 which is basically an ability to publish multiple inscriptions on a single Satoshi, 2:13:39 which allows you to have... 2:13:42 You can now essentially hold bags of inscriptions on a single Satoshi 2:13:48 and move them around wholesale. 2:13:50 You can trade wholesale bags. 2:13:52 You can stash wholesale bags. 2:13:54 But the third most important, I think, addition is what they call provenance 2:13:59 or hierarchical inscriptions, 2:14:01 where basically now you have a capability to create an inscription 2:14:05 that represents your identity. 2:14:07 Let's call it ID inscription. 2:14:09 So I would create an Alex Kravitz inscription. 2:14:13 Then underneath that, I could create a hierarchical file system 2:14:17 of all my creative work. 2:14:19 I could say collections. 2:14:21 And then inside each collection, I would create a bunch of collections 2:14:25 that hierarchically trustlessly contain inscriptions. 2:14:29 And the best part is that the artist can now seal the collections 2:14:33 by burning the root inscription 2:14:36 and therefore provably making it impossible to print 2:14:40 any more of that particular collection. 2:14:43 So you now have basically the best of all possible worlds NFT 2:14:48 and file system storage. 2:14:50 So for example, you can take a whole library of source code 2:14:55 or a bunch of baby pictures that you want to back up 2:14:59 and completely trustlessly associate it with your own identity inscription 2:15:05 that only you can control. 2:15:07 And all those things will have perfect, trustless, 2:15:10 uncensorable provenance to your identity inscription. 2:15:14 Well, that's pretty neat. 2:15:16 I think that's also part of what I would hope to have achieved 2:15:21 with sidechains, where we have already resurrected 2:15:25 the Namecoin sidechain. 2:15:26 And I think, not that they compete, 2:15:31 I think that this just speaks, though, to how annoying it is 2:15:35 that people compare things to gold, which they should. 2:15:41 But of course, gold has many alternative uses 2:15:44 and many of them were discovered. 2:15:46 Like gold was first discovered and then it was made into jewelry. 2:15:50 And then later, it was made hundreds of years later, 2:15:54 it was made into coins. 2:15:56 It was used in teeth. 2:15:58 And then it was used in electricity. 2:16:00 I don't know when the Japanese used it for that roof 2:16:02 that they made that one time. 2:16:04 But it's not all at the same time, is my point. 2:16:07 And of course, it's much better if you have something 2:16:11 that has many different fallback use cases. 2:16:19 That makes it much better as money. 2:16:21 Because when you have something like that, 2:16:23 it's basically a store where you can only pay in gold. 2:16:26 You can't put it into a tooth filling. 2:16:28 And Silk Road is a perfect example of something. 2:16:31 You can only spend BTC there. 2:16:33 And none of Bitcoin made any sense to me 2:16:37 until that website was created. 2:16:39 So, I think we should do everything we can to encourage… 2:16:42 Austrians used to argue about this Remainder Theorem or whatever, 2:16:46 which a commodity must have some kind of… 2:16:49 Regression, sorry, Regression Theorem. 2:16:52 Yeah, it's not a good thing. 2:16:54 Why don't you refute it first and then I'll… 2:16:56 Before, the one demonstrative use case 2:16:59 was to pay fees to transfer Bitcoin. 2:17:02 And now you can pay a fee to publish 2:17:05 a 1,000-page website forever and never pay hosting again 2:17:09 and then have that website be 2:17:11 uncensorable, immutable and interactive at the same time. 2:17:15 And that you need to use Bitcoin to pay those fees, right? 2:17:19 The tragedy of this whole… 2:17:21 Yeah, no, I think all that's great. 2:17:23 I mean, the problem with the Regression Theorem 2:17:24 is that it's designed to just critique government money 2:17:31 and it doesn't really do that 2:17:33 because it says that you need to have… 2:17:35 Money needs to have alternate employments first. 2:17:38 It needs to be used for something else before it can be money. 2:17:41 But that's never defined at all. 2:17:45 So, it could just be people acquiring 2:17:47 just because they like to look at it. 2:17:49 And it ignores the fact that the fiat currency also has… 2:17:52 Yeah, it ignores the fact that… 2:17:54 Because credit is also money. 2:17:56 It ignores that. 2:17:58 It just pretends that all money is a commodity of some kind. 2:18:01 It must be a physical object or something, which… 2:18:04 But no reciprocity would make any sense. 2:18:07 Like people being invited to a dinner party 2:18:09 and then, I'll have you over for my birthday 2:18:11 and then we'll go over to your house for your… 2:18:13 None of that would make any sense 2:18:15 if there were all human cooperation. 2:18:17 I'll marry off my daughter to your son 2:18:19 in exchange for you making me a high priest of the clan or whatever. 2:18:25 Right. 2:18:27 So, unfortunately, it's not that Mises is best 2:18:30 even though it is… 2:18:32 Mises is one of the greats. 2:18:34 We all love Von Mises. 2:18:36 But that theorem, it has no content 2:18:40 because he doesn't say what he means 2:18:42 about whatever has to be used for first. 2:18:44 So, it could just be anything. 2:18:46 It could just be that they like looking at it. 2:18:48 It could just be that they like supporting the government 2:18:51 or it could be that they like paying taxes 2:18:53 or being able to pay taxes. 2:18:55 It's like none of it doesn't actually mean it. 2:18:57 It fails at its task, 2:18:59 which is supposed to lead to sort things 2:19:01 into what could be money and what could not. 2:19:03 It doesn't actually do that. 2:19:05 But Von Mises, if you're listening… 2:19:08 I just wanted to add something 2:19:10 that inscriptions do provide competition 2:19:13 to potential Drivechains. 2:19:15 Like, for example, 2:19:16 the name chain Drivechain… 2:19:18 Yeah, I think that's the case. 2:19:20 People are going to… 2:19:22 And the Namecoin is going to prefer 2:19:24 that everyone use the same phone book 2:19:27 so they will have strong network effects. 2:19:29 So, whoever's name thing takes off first 2:19:31 will probably win. 2:19:33 It's that. 2:19:35 But also, sidechains, 2:19:37 while being more scalable than roll-ups 2:19:39 or inscriptions because they're not limited 2:19:41 by the data availability of Bitcoin, right? 2:19:43 At the same time, 2:19:44 they need to develop their own… 2:19:46 They need to achieve their own escape velocity 2:19:49 in order to become secure enough 2:19:52 to be trusted, right? 2:19:54 Whereas both inscriptions 2:19:56 and sovereign roll-ups on Bitcoin 2:19:59 automatically inherit immutability 2:20:01 and double spend resistance of Bitcoin. 2:20:04 And in this regime of low fees, 2:20:07 which we're still in right now, 2:20:09 although we haven't had a block… 2:20:11 a mempool clearing in like… 2:20:12 since April 23rd, 2:20:14 which is amazing in a bear market. 2:20:16 Just wait till the bull market hits, right? 2:20:20 Once the… 2:20:22 Basically, I see such compelling… 2:20:25 It's because of fee politics 2:20:27 that I think the Namecoin one will… 2:20:29 But you're right. 2:20:31 You're 100% correct. 2:20:33 The trade-off will be this. 2:20:35 It will be being on L1 2:20:37 has many advantages, 2:20:39 such as immortality. 2:20:40 And that's pretty cool. 2:20:42 But the L1 has the same problem 2:20:44 it's always had, 2:20:46 which is the limited block space 2:20:48 cannot support critical mass of end users. 2:20:50 Well, it can support luxury users, right? 2:20:53 And those are the ones that pay the fees, right? 2:20:56 So, in other words, 2:20:58 it's the fact that 2:21:00 if Bitcoin transactions go to $50 per transaction 2:21:02 and Bitcoin remains only for 2:21:04 essentially whales and institutions, 2:21:06 that will not stop 2:21:08 luxury inscribe wars 2:21:10 inscribing all of their baby pictures 2:21:12 for a couple of hundred bucks 2:21:14 and making the whole thing 2:21:16 a legacy for their kids and grandkids, right? 2:21:18 So, we won't see this effect on Ethereum, right? 2:21:21 Ethereum is a luxury… 2:21:23 It's a kind of a judgment call. 2:21:25 I agree with you. 2:21:27 It's a judgment call 2:21:29 and I'm certainly not saying that I am… 2:21:31 I'm not very confident. 2:21:33 But if you look around the world 2:21:35 and you see the wealthy people of the world 2:21:37 they use the same iPhone 2:21:38 and many of the relatively poorer people 2:21:40 have the same iPhone 2:21:43 and it's just like Walmart versus… 2:21:46 You compare Walmart to like, 2:21:48 I don't know, 2:21:50 Rolex, you know? 2:21:52 But the poor people in India 2:21:54 or whatever, 2:21:56 they get those Androids for $10 to $20, 2:21:58 the Chinese Android clones 2:22:00 and they also get $50 to $100 older iPhone models. 2:22:04 So, there's like a trickle-down effect 2:22:06 that once the high-end is full 2:22:08 then there is a trickle-down to lower levels. 2:22:11 You see this exactly, 2:22:13 this waterfall kind of multi-level fountain effect 2:22:15 in the Ethereum world 2:22:17 where Ethereum is like a luxury EVM chain 2:22:19 that people, you know, 2:22:21 people who are whales or institutions 2:22:23 don't care about paying $50 2:22:25 to invoke a smart contract 2:22:27 if they're moving a few million dollars worth of liquidity. 2:22:30 But this high level of fees 2:22:32 is what creates high level of security, 2:22:35 double-spend resistance and immutability 2:22:36 that then allows L2 ecosystem to flourish 2:22:41 and then you can perform a million transactions 2:22:44 for the same amount 2:22:46 on some highly scalable Ethereum L2. 2:22:48 So, you basically have like this hybrid situation 2:22:50 where you'll have both. 2:22:52 You'll have a luxury L1 2:22:54 with high fees 2:22:56 but then you'll have L2s and L3s 2:22:58 with like ridiculously cheap fees. 2:23:00 So, it'll be the same outcome in Bitcoin, I think. 2:23:04 You will have basically large institutions in whales 2:23:07 and luxury, you know, baby photo pictures 2:23:10 and whatever luxury NFTs inscribed on Bitcoin 2:23:15 and, you know, the artist will pay $100 2:23:17 to inscribe a single NFT 2:23:19 if it will then sell for $10,000 2:23:21 on a luxury market. 2:23:23 I mean, after all, 2:23:25 fine art market today is $27 trillion. 2:23:27 It's larger than gold. 2:23:29 I can't see a reason why 2:23:30 a fine immortal digital object market 2:23:34 which is what inscriptions are, 2:23:36 they're like the ultimate form of NFTs, right? 2:23:39 Why that can't get to a few trillion dollars 2:23:41 and become a driver of incredible fee pressure. 2:23:47 Okay, so what's the fee apocalypse? 2:23:50 Next bull market, that's the fee apocalypse? 2:23:53 No, no, no. 2:23:55 My fee apocalypse rests on the existence 2:23:57 of the fee market, right? 2:23:58 You should not disagree with the following statement 2:24:01 that the fee market only begins 2:24:03 on the last day that the mempool clears. 2:24:06 Prior to that time, 2:24:08 the fee market cannot be said to exist 2:24:10 because there is no equilibrium 2:24:12 between supply and demand. 2:24:14 So maybe we are in the fee market regime now 2:24:16 because the fee market, 2:24:18 the mempool has not cleared since April 23rd 2:24:21 and my hunch is it will never clear again 2:24:23 because of all these new developments. 2:24:25 But we are finally at that point 2:24:26 that Ethereum was in in 2019 2:24:29 when their mempool stopped clearing too, right? 2:24:33 So we are now just entering the fee market, 2:24:36 the first real fee market. 2:24:40 But that's not quite the point though. 2:24:42 I would say like cost per transaction 2:24:48 like US dollars per 220 bytes 2:24:52 or something like that, 2:24:54 that's not very high right now. 2:24:56 So it has to be like 5 times, 10 times 2:25:00 what a credit card would charge 2:25:04 in that equivalent situation. 2:25:06 You know what I mean? 2:25:08 It's not high now but you know 2:25:10 that it has a non-linear response to demand. 2:25:12 Absolutely, yes. 2:25:14 That's the key between the small empty blocks 2:25:16 and I would really say that actually 2:25:19 it's not so much that the mempool doesn't clear, 2:25:21 it's like when there is 2:25:23 when there is 2:25:24 like when there is less space or just the right amount, it kind of doesn't matter. 2:25:30 But as soon as there is scarcity... 2:25:32 I'm saying like going back and looking at the charts of fees, you know, since the launch of Bitcoin until now, I think is meaningless. 2:25:39 The only charts that are meaningful are the charts that begin hopefully April 23rd this year. 2:25:45 And when I talk about non-linear response, the way I think about it is roughly all in, 2:25:53 you have about 100 gigabytes worth of block space produced by Bitcoin per year. 2:25:58 So you can now think about 100 gigabytes of immortal data storage space produced for all of 2:26:05 the unknown applications yet. I mean a single sovereign roll-up that's about to be launched, 2:26:11 could easily fill up that much with data storage, right? You have luxury ordinals, you have 2:26:18 conventional Bitcoin transactions, everything, right? And when I say non-linear response, 2:26:23 what I'm talking about is simply ongoing adoption of Bitcoin and ongoing adoption of 2:26:28 inscriptions, etc. are hitting this immovable wall of 100 gigabytes per year. 2:26:35 And once it hits that wall, you will quickly have the separation of Bitcoin into this luxury L1 2:26:43 chain. The same thing we already saw happen in Ethereum, right? Like once it hit the wall 2:26:47 and the blocks and the mempool stopped clearing, but adoption continued, this is when the feepocalypse 2:26:54 already happened in Ethereum and this is why Ethereum is now scaling through L2s and has 2:26:59 enough fee revenue to pay the yield, etc. So there's no escaping 100 gigabytes per year. 2:27:07 And I honestly can back up that much of my own data and leave it all encrypted in there easily. 2:27:15 Right. I agree with that. I mean, it may be, isn't it 1,008 blocks per week, 2:27:21 52 weeks per year? So it is 52,000-ish blocks per year. So if you use the whole four megabytes 2:27:30 you can actually get 200 gigabytes, but because the financial transactions do not use, 2:27:38 they're not discounted. If you assume the mix between financial and non-financial transactions 2:27:43 in some kind of equilibrium, you have to divide by two. Because financial transactions only use 50, 2:27:50 like if all transactions were financial, the actual block space would peak at 50 gigabytes per 2:27:55 year. So I'm just assuming some kind of equilibrium between financial and non-financial transactions 2:28:00 at 100 gigabytes per year. Because if every transaction was an inscription, oh, by the way, 2:28:07 another interesting development is because of this recursivity, you can now inscribe a terabyte size 2:28:12 inscription in multiple transactions that assembles itself from four megabyte pieces. 2:28:19 So there's actually not even a four megabyte limit anymore. You can actually put a terabyte size 2:28:25 inscription in multiple transactions that assembles itself from four megabyte pieces. 2:28:27 Well, I mean, that'll take a few years. 2:28:29 Any of us who remember the days of WinRAR, that would be intuitive. 2:28:34 Exactly. But now it's going to be on all these inscription 2:28:40 explorers where you basically have a little button in there called Upload Inscription. 2:28:44 And it used to be that that button would say, well, only upload up to 400 kilobytes because 2:28:50 the others are non-standard. But now these explorers have basically agreements with 2:28:55 pools that allow them to upload four megabyte inscriptions and pay out of band. 2:29:01 But the latest development is, I want to upload a gigabyte size file. 2:29:05 And OK, no problem. We'll chop it up and we'll use recursion to reassemble the file dynamically 2:29:12 from whatever, 200 sub-inscriptions that are all referred to by a parent inscription as parts. 2:29:20 So it's a multi-part world, too. 2:29:25 OK, Moonsettler and Rio have had their hands up for a while. 2:29:29 Just a comment a little bit about... 2:29:31 Oh, go ahead. You first. 2:29:33 I'll save this. 2:29:34 OK, OK. I was just going to say a couple of things. Hypothetically, 2:29:47 SegWit data is not perpetual and immutable. It is allowed to be pruned. Will that ever really 2:29:52 happen in practice? Probably not at this point, given the popularity of inscriptions. But I do 2:29:57 just want to clarify, SegWit data is not officially part of the Bitcoin requirement 2:30:05 for nodes to hold. They are entitled to prune it. We could have assumed that. This is why SegWit was 2:30:10 a soft fork. In practice, that is almost never done and probably given the value of holding it. 2:30:16 But when we say these are perpetual in the data and the inscriptions, that is under the presumption 2:30:22 that they will not be pruning, that becomes very, very popular. Or even if it is perpetual, 2:30:27 it may load slower than one would think because there's only certain nodes that maintain SegWit 2:30:32 witness data from two decades ago and aren't pruning. I doubt because of technology improvements 2:30:38 that that would ever be a concern for storage. But if we are the old school small blockers that want 2:30:43 extreme decentralization in nodes, a pruned node is easier to run than a non-pruned node. 2:30:48 Just putting it out there. Love recursions on inscriptions. Love code base and storage and 2:30:56 witness data as a use case and a fee utility. I myself have put JavaScript HTML that renders 2:31:03 dynamic SVGs on an inscription. That's my PFP on Chain Pepe, just a pixel Pepe where you can 2:31:10 turn on and off laser eyes or bubble gum. And you can change the colors all on an inscription, 2:31:15 like the gentleman saying, with the code there. A dynamic piece of art where you can change the 2:31:21 traits or change the colors like NFT people do when you think about a trait-based NFT. 2:31:28 Very much there with recursion enabling that. All positive to what the gentleman said. 2:31:34 But the other thing I just want to talk about is the centralization of the indexer and the sequencer 2:31:39 on ordinals when we talk about immutable, permissionless, and unsensible with regard 2:31:43 to the website. I think that's a little out of ourselves, if I may critique, given the centralization 2:31:49 of the sequencer and indexer. Not that I don't love ordinals and what's happening there, but I just 2:31:53 want to make sure we try to be as complete with what isn't fully trustless, fully decentralized, 2:31:58 and as hard as Bitcoin. If I could respond, the reason why it's not an issue as far as 2:32:05 prunability of SegWit data is because we're talking about data availability, not data storage. 2:32:12 So the fact that an inscription, when published, will be propagated and made available, that's 2:32:17 kind of what the best you can hope for. And there will always be nodes that are archiving every 2:32:22 node, every block, especially, like you said, because we're talking about 200 gigabytes of data 2:32:27 per year linearly increasing when we now have tiny flashcards that can store 2:32:35 4 to 16 terabytes. So that's not going to be an issue. There's always going to be hundreds of 2:32:40 archival nodes that will just feed you every block, even if 99% of nodes prune all the blocks 2:32:46 or just the SegWit data. The other thing about centralization of indexes, there is no barrier 2:32:51 to entry right into that business. Anybody can launch an indexer website and just like you have 2:32:58 hundreds of block explorers, you'll have, or you can run your own node, right? You can simply run 2:33:02 your own Bitcoin node and see all the artwork. So, I mean, the fact that certain indexers are 2:33:10 popular, I don't see as a sort of like an inherent centralization pressure because... 2:33:15 It is, but I don't like Casey's arbitrary block height. I run my own independent indexers. 2:33:21 Now my pointers go differently. So do you build on Casey's ecosystem of ordinal recursions or mine 2:33:26 if I run an independent? I don't like his decision, I'm cursed. 2:33:30 Right. It's like forking in Bitcoin, right? You will have incompatibility, but at the same time, 2:33:36 there's like huge pressure to reach consensus on the protocol. And I think Casey's protocol 2:33:43 probably went out because Casey's, at this point, Casey's like Satoshi in the early years and he 2:33:49 hasn't quit the project yet, but he probably will in a year or two, right? Like once the protocol 2:33:54 stabilizes, the Ordinal's protocol with all these three mega features, which is one is 2:34:02 recursiveness of inscriptions. And I think even a bigger one is this whole provenance or nestedness 2:34:08 of inscriptions, because I'm actually tempted to create my own identity for the first time on 2:34:13 Bitcoin and have that identity actually be like the root of all of my stuff that I want, 2:34:22 because that's the first time that you can publish something in a completely immutable, 2:34:27 immortal, uncensorable way and then have it all provenance back to you trustlessly, right? 2:34:35 Yeah, I agree. The hierarchical aspects and the recursion is definitely the case. And I agree, 2:34:40 it requires a social consensus to a single protocol in terms of curse numbers and how 2:34:46 to handle the reinscriptions. That's probably likely been made, and I do hope everything you 2:34:51 said comes to pass. I also agree, I think it will, but I just was pointing out the critiques. 2:34:57 We're just in like the year 2009. We're just in the year 2009 or 2010. Once Casey quits and leaves 2:35:06 the project fatherless, which probably will happen once the protocol stabilizes, at that point, 2:35:11 you can say, well, ossification has started to set in for inscriptions, right? 2:35:22 Because it's true that you could, I guess it would always be cat and mouse, 2:35:27 like it'd be like stamps would just be wherever it would go. 2:35:33 I guess it's interesting whether or not it's really immortal. 2:35:38 It sort of is. 2:35:38 It's immortal because it's proof of publication, right? Yeah, sorry. 2:35:45 Yeah, I wanted to ask, and you kind of answered my second question, which was about what do you 2:35:52 guys think about the possibility that Bitcoin as in response will go to like a pruning network, 2:35:59 just to like be able to use the Bitcoin block space for financial transactions and 2:36:06 like completely demolish any notion of permanence for exogenous data storage. 2:36:14 And in theory with this zero sync development and heavy pruning, you could like really, 2:36:25 really reduce the significance and the number of the fully archiving nodes enough that 2:36:31 basically is not really winning out against cloud storage for the redundancy and data 2:36:38 available that you get for the price, in fact, the economic transactions might be. 2:36:45 I'm not worried about it because remember Bitcoin today has a single honest peer assumption where 2:36:50 somebody needs to give you the heaviest chain, even if 99% of your peers are sponsored by 2:36:56 Chinese Communist Party. So this archival of data is the same thing. 2:37:00 You need to find one archiving node that's actually not pruning. 2:37:05 And once you have found such a peer, well, in the future, right, once you found one archiving peer, 2:37:12 that peer does not, you know, the data that comes from that peer does not need to be trusted, 2:37:18 right? And then you can recreate the archive locally by running your own node. 2:37:22 So the same kind of... 2:37:23 But people don't have to, that's my point. 2:37:26 People don't have to, but as long as some people will, the data is immortal still, 2:37:32 right? Because you would simply need to find a single archiving peer, 2:37:35 just like today you need to find a single honest peer that gives you the heaviest chain. 2:37:39 It's the same kind of assumption. 2:37:42 With zero sync, you don't actually have to, 2:37:45 because you are just getting zero knowledge proofs of first the header chain and then the 2:37:52 the validity of the UPXO. 2:37:57 But I know you don't have to, but if it costs you less than a dollar to archive everything, 2:38:02 because, you know, 10 years from now, entire Bitcoin blockchain will cost 2:38:05 one penny to store on, you know, on non-volatile storage, 2:38:10 you will have plenty of these archiving column, you know... 2:38:13 And it's true that the zero sync does let you shortcut, but you cannot 2:38:21 not everyone can use zero sync. 2:38:23 There has to be someone who stores the data. 2:38:27 Right, and that could be reduced to like miners, large financial nodes, 2:38:35 and block explorer providers. 2:38:38 You can always count on the government of El Salvador to run an archiving network. 2:38:42 Yeah, I'm not saying there is a possibility that it goes away. 2:38:46 I'm saying that the current level of replication of the Bitcoin blockchain, 2:38:51 the current perception of complete permissionlessness and immutability 2:38:58 might be on purpose given up just for that, you know, 2:39:02 the Bitcoin users can actually like use the block space. 2:39:06 This would be like one direction it can go. 2:39:09 The other direction it can go is like really creating less desirable block spaces 2:39:16 just for their endless, so that they are not unique, not single. 2:39:21 So any sidechain type thing must by default be less desirable for the luxury use case 2:39:28 and the financial transactions can be more competitive there, I guess. 2:39:33 And I really, really hated this idea before, to be honest, 2:39:39 but actually it might be possible that to further restrict and discourage this sort of use, 2:39:48 the Bitcoin users might actually agree on a block size reduction on the mainchain. 2:39:53 So what do you think about that? 2:39:58 I think the time of everyone agreeing on everything will have ended. 2:40:02 There will be nothing. 2:40:03 Everything will be contentious from now on, I think. 2:40:05 Well, also reducing the block size essentially kills all the lightning-style L2s, 2:40:12 including ARK and Lightning, etc. 2:40:14 Because those depend on ability to appeal to the chain inexpensively, right? 2:40:20 So reducing the block size essentially, you know, kills all non-custodial Lightning 2:40:26 and it probably destroys ARK and other coin pools and other protocols 2:40:30 that still need to use a lot. 2:40:32 Still need to use a lot, so that will not go over easy. 2:40:38 But imagine the precedent of somebody essentially stealing, you know, 2:40:43 WikiLeaks-like treasure trove of highly embarrassing information 2:40:48 and publishing it under, you know, high-provenance route 2:40:53 as a giant collection of data into inscriptions, right? 2:40:56 Anonymously today. 2:40:57 That would be more infuriating to the US government, 2:41:00 but because the government will be helpless about it, 2:41:03 this will not be pursued or publicized, right? 2:41:06 Because they will pretend, you know, like it hasn't happened. 2:41:09 Like, for example, there's plenty of highly offensive inscriptions 2:41:12 to Chinese government today, 2:41:14 but they're not trying to censor Bitcoin blocks 2:41:18 through the Great Firewall of China, as far as I know. 2:41:21 Does China block IPFS today? 2:41:24 The firewall blocks IPFS? 2:41:27 Interplanetary file storage? 2:41:29 IPFS is a failure because it's not even worth blocking, right? 2:41:34 It's not even worth blocking. 2:41:37 Okay, because, yeah, you can't get a standard web. 2:41:39 You have to have an explorer, this, that. 2:41:42 Well, it's not that. 2:41:43 It's just that it's not incentive compatible. 2:41:45 Essentially, it's prone to spam. 2:41:46 If you run your own node, then your node will be overrun 2:41:49 with child porn from other people, 2:41:51 and you get no benefit for running a node. 2:41:54 So there is, like, more incentive compatible. 2:41:56 Like, even Filecoin is not truly incentive compatible 2:42:02 because it doesn't guarantee, like, eternal retrievability. 2:42:05 Like, there was this other... 2:42:07 I forgot what it's called. 2:42:09 Yeah, you have to write a pinning. 2:42:11 It's not... 2:42:12 There's no incentive to keep it perpetual, 2:42:13 similar to an archive with very strong coins. 2:42:18 How can you compete today with paying $10 worth of Bitcoin 2:42:22 and then having a website hosted forever? 2:42:25 Like, that's not... 2:42:26 Nothing competes with that, right? 2:42:28 And hosted forever in one place that we know 2:42:31 that 100 years from now will still be available online. 2:42:34 Hosted forever if Casey wins, 2:42:37 and I believe Casey's protocol becomes a decentralized standard. 2:42:41 But, yeah. 2:42:42 I mean, like, I'm more sure that my website 2:42:46 published in inscriptions today will be around 2:42:48 than I'm sure that Google will be around 100 years from now, 2:42:51 to tell you the truth, right? 2:42:52 Yeah, that's fair. 2:42:53 A better bet that we'll figure this out 2:42:55 and get to a consensus on ordinals in the next two years 2:42:57 rather than Google being... 2:42:58 Well, I mean, what's the controversy there? 2:43:01 The cursed inscription numbers? 2:43:03 I thought Casey gave up on renumbering, right? 2:43:05 Like, so that's already off the table. 2:43:07 But anybody that already did a previous... 2:43:09 Anybody that already did a previous cursed 2:43:11 inscription recursion is cut off. 2:43:13 He basically said, 2:43:14 you shouldn't have done cursed inscriptions 2:43:15 before I told you the block height 2:43:16 where I'm going to honor cursed inscriptions. 2:43:18 Some people are going to put an indexer that doesn't 2:43:20 if they went cursed inscriptions before. 2:43:22 Will it probably die out as a side competitor? 2:43:25 And there will be this... 2:43:26 Well, it's kind of like, you know, 2:43:28 a large fraction of Satoshi's Bitcoins 2:43:31 are sending to no longer standard addresses, right? 2:43:36 That's kind of like a historical artifact, 2:43:38 but nobody cares about it now, you know? 2:43:41 Exactly. 2:43:41 So we have to forego the data 2:43:43 that was put in cursed inscriptions 2:43:45 prior to the recognization of cursed inscriptions 2:43:47 at stated block height Casey is about to announce. 2:43:50 So, but then, yeah, then the data, 2:43:52 any data from that point forward, 2:43:54 including cursed once they're recognized, 2:43:56 would meet your standard. 2:43:57 So I think we're going to get where you're saying. 2:44:00 I'm just saying it's not without... 2:44:02 I mean, this is such a minor controversy, right? 2:44:06 Compared to the stuff that's not controversial, 2:44:09 like recursion and provenance nesting 2:44:12 and, you know, the inscriptions. 2:44:16 I mean, all that stuff is like huge. 2:44:18 Like the fact when he launched inscriptions, 2:44:20 I'm not doing anything with putting my data in there 2:44:22 until provenance nesting is there, 2:44:24 because I do want to create a single inscription 2:44:27 that then I can leave the private key for to my kids 2:44:31 and then they will find a treasure trove, right? 2:44:33 It's like signing your art, too. 2:44:34 Yeah, exactly. 2:44:34 All my art is signed with that provenance. 2:44:36 It's like your definitive artist's signature 2:44:38 if you're doing an art use case 2:44:40 opposed to a data use case. 2:44:42 It is very cool. 2:44:44 Highly underestimated use case of provenance 2:44:47 is that the artist can burn the root inscription 2:44:52 and provably terminate any possibility of anybody, 2:44:56 including himself, adding to that collection, right? 2:44:58 It's like Mötley Crüe guaranteed this is the last tour. 2:45:01 We're signing a copy. 2:45:03 It's like Van Gogh. 2:45:05 I think you could do that with any programming language. 2:45:08 If Van Gogh no longer needs to die 2:45:11 in order for his paintings to become valuable, 2:45:13 he can just provably terminate his ability 2:45:15 to add to that style of paintings, right? 2:45:18 Because the artist can just burn that root inscription 2:45:21 and 1,000 apes will become impossible to add. 2:45:26 I mean, you could just... 2:45:31 Anything can be made unspendable, but that's fine. 2:45:34 I mean, this is very interesting, 2:45:35 but we should see if anyone wants, 2:45:39 anyone else in the audience who wants to bring us 2:45:42 slightly more, 2:45:44 to have anything slightly more on topic per se. 2:45:47 I do think that's fascinating though. 2:45:49 In the meantime, one more question about this. 2:45:52 Is there any chance, like any chance whatsoever, 2:45:55 do you think, Alex, 2:45:57 that this could go to like another blockchain 2:46:01 instead of Bitcoin mainchain, 2:46:03 even a sidechain or like an altcoin? 2:46:06 So like why don't inscribers prefer like Bcash, 2:46:11 which just forks in right now or in adoptive block size? 2:46:16 There's zero chance of that. 2:46:17 I would not, I mean, if you're hoping for that, 2:46:20 you know, abandon all hope, yay. 2:46:22 We hope for that. 2:46:24 And the reason for that is precisely 2:46:26 what makes Bitcoin so hard to change 2:46:30 in combination with this highly, 2:46:32 highly desirable protocol that was developed by Casey, 2:46:36 which creates true immutable digital artifacts, right? 2:46:39 And they both have to go together 2:46:41 in order to make inscriptions as attractive as they are. 2:46:45 Because any other sidechain, 2:46:47 or even if you take Casey's protocol 2:46:49 and you launch it on a sidechain of Bitcoin, 2:46:52 the fact that sidechain, you know, 2:46:54 if it's a Drivechain, 2:46:55 its survival is not really guaranteed. 2:46:58 So it's like everybody wants to be in one place. 2:47:02 So there's zero chance that this will go anywhere else. 2:47:04 That's my short answer, basically. 2:47:07 The one proper competitor is Doge and all. 2:47:09 But again, you'd have to believe that Dogecoin 2:47:11 is going to be perpetual as much as Bitcoin. 2:47:14 So no, it's not zero. 2:47:17 I understand why you would say zero, 2:47:19 but I think that's not right. 2:47:23 Because you have network effects 2:47:28 and you have the ability to customize 2:47:31 the new location chain in new ways. 2:47:35 And you have unlimited block space. 2:47:38 So those are very powerful ingredients. 2:47:42 I'm not saying that there's not a lot of truth to it. 2:47:45 You're forgetting the Veblen Good dynamic, right? 2:47:47 The fact that these inscriptions will be expensive, 2:47:50 the fact that it will cost $1,000 2:47:53 to put a monkey in there in a year or two, 2:47:56 that will make that monkey more valuable. 2:47:58 It's kind of like a proof of work for rich people. 2:48:01 The fact that there's no cheap way to mint them 2:48:05 is what makes them attractive. 2:48:07 The fact that you would pay $1 fee or $0.01 fee on Polygon, 2:48:12 the whole Veblen Good dynamic is incredibly strong 2:48:14 with luxury ordinals and luxury inscriptions. 2:48:17 This is underestimated. 2:48:20 Yeah, I think it's underestimated, 2:48:23 but I also think it's overestimated. 2:48:25 Because what you're saying is that there is... 2:48:27 I think we're just in early days. 2:48:29 And the only thing that people think 2:48:30 that this could be used for 2:48:32 is some kind of frivolous digital art thing. 2:48:37 And I think that actually, 2:48:38 there will be many more things that are useful 2:48:43 that are not like that. 2:48:46 Something like Rolex is not worth as much as Walmart. 2:48:50 It's like the whole brand is worth $1,000 as much or more. 2:48:56 It's true that you might have a bigger NFT market 2:48:59 on Polygon in aggregate. 2:49:01 But my only claim is that 2:49:04 you will have a big enough inscription market on Bitcoin 2:49:09 to catalyze a fipocalypse. 2:49:11 And by fipocalypse, I mean fees going to $10 or $20 2:49:14 per financial transaction and staying there permanently. 2:49:18 And the reason that's apocalypse 2:49:19 is because that essentially neutralizes 2:49:22 non-custodial lightning or arc. 2:49:24 And it sort of immobilizes global South Bitcoin savings 2:49:28 as they stand today, right? 2:49:29 Because somebody in Nigeria who has- 2:49:31 Yeah, the dust. 2:49:32 $500 worth of savings, right? 2:49:36 Yeah, so somebody in Nigeria 2:49:37 who has $500 worth of Bitcoin savings 2:49:39 will not want to pay $50 fee to move them. 2:49:42 So you essentially, this is the point at which Bitcoin L1 2:49:47 becomes whales and institutions only. 2:49:49 And I guarantee you that this time next year, 2:49:52 the laser eyed priests will just tell the faithful, 2:49:55 just buy some BlackRock ETF to get exposure. 2:49:58 And don't worry about multi-sig setups 2:50:01 and worrying about, right? 2:50:04 That will be, I mean, I'm predicting. 2:50:07 That will be very bad for Bitcoin, 2:50:14 but it will, but you know what else? 2:50:16 It would be phenomenal for BIP300, of course, 2:50:19 which would be the last lifeboat 2:50:20 leaving the Titanic in that scenario, basically, 2:50:23 because the L1- Well, I mean- And all the existing L2s- The FIPOCalypse is good for all L2s, right, including Drivechains, because FIPOCalypse causes the plebs to rebel against the priests of laser eyed cult, and the plebs will screen scale Bitcoin now, right, which will force some kind of L2 scaling, which is not available in Bitcoin today, because there's no trust minimized way to move Bitcoin to any kind of L2 right now. So both Drivechains, 2:50:50 rollups, sovereign or non-sovereign, what do they call the rollups with a bridge, right? All kinds of L2s- Optimistic? Yeah, not optimistic, but the other kind, the provable- Validity rollups? ZK, yeah, validity rollups. So validity rollups, sovereign rollups, Drivechains, spider chain, right? Like you guys have heard, the spider chain is out there now, and all kinds of L2s, 2:51:20 will finally be free, because, you know, there will be a common soft fork, there will be all these soft forks, because the priests will be shown to be bankrupt in their, you know, in their ideology of claiming that Bitcoin is for the Global South billions, while the fees are perma high at 20 to 50 bucks. 2:51:38 I would just counter that the Global South currently works in the US dollar with $40 wire fees, which is a travesty and does lock them out, and why a majority of the Global South don't have access to it. But I will say that the current use case does not provide them a better alternative than $40 transactions. That's the problem, Bitcoin is trying to solve, not be the same as, your point is extremely well taken. 2:52:03 One other thing, though, I will say, I do think Paul made a spectacular point. Providence, luxury good, fully granted. 2:52:12 If I believe script hash and script mining and Dogecoin is not going anywhere, and I just want to have a permissionless website where I want to put JavaScript packages, Doge Nulls is a legitimate threat to Ordinals from a recursion standpoint, because it is copyable, and they don't have the controversy of KC. 2:52:28 That said, I only think that's for the use case of technical immutable websites and JavaScript open source publishing, and I don't need it to be prominent, I functionally need it. In combination with the Doge being lower fees to do that, I do think there is a challenge to inscriptions utility use case by Doge Nulls, as ridiculous as, of course, a shitcoin is. 2:52:49 But, if I'm a programmer, and I'm, like we said, in Nigeria, and I want to make my immutable website, I'm not putting it on inscriptions, I'm putting it on Doge Nulls, as crazy as it sounds, right, because of what you speak of, of the cost prohibitiveness. 2:53:03 Yeah, the cost is, of course, a double-edged sword. 2:53:17 It's a double-edged sword, but Doge Nulls, I don't see them being any more of a threat than Bitcoin, Satoshi Vision is to Bitcoin, right? You can have an unlimited amount of block space out there, but you can have 10 million copies of the Mona Lisa, but they're not Mona Lisa. It's the same story all over again, right? 2:53:36 Yeah, the prominence in luxury cases is there. It's only about decentralized, permissionless storage that people will claim. 2:53:45 And my claim is actually weaker than it may appear, because I'm not claiming that the market for luxury ordinance will be trillions of dollars. All I'm claiming is that it will be large enough to raise the fees to 10-20 dollars for financial transactions, and keep them there forever. 2:54:01 So, essentially, it's large enough to cause a fipocalypse of the plebs, and the uprising to scale Bitcoin. That's my only claim is that. I'm not claiming that the market will be the largest market in the world. 2:54:14 I think it's a very strong claim. Yeah, I would agree. 2:54:17 Do you think there's going to be 300,000 to 400,000 of those created every year on 24-7-365? 2:54:29 You did watch Sats, right? You saw Sats, the BRC20s, where it just didn't stop, and they minted 21 quadrillion Sats? 2:54:36 Well, there's 38 million inscriptions already, right? Since January. 2:54:41 Well, right, but it's gone. 2:54:43 Once you overflow 100 gigabytes per year, the fee response is non-linear. In other words, the fees will spike exponentially once the demand exceeds 100 gigabytes per year. That's the block space available. 2:54:58 I can tell you that somebody will want to put a movie in there at 5 gigabytes. It's not that expensive today, and given recursion, you can assemble it from parts. So why not back up valuable Hollywood movies in there, or corporate documents, or whales? 2:55:16 Why not use Litecoin or Dogecoin, where you have the space and it costs you a fraction of that? If you're looking for eternal storage… 2:55:24 Because of the same reason that people don't use… the only place where eternity can be found is Bitcoin. It's not in Bitcoin's name, Bitcoin Cash. 2:55:36 We hope. But I think to Alex's point, as he says, if it switches… if the dynamics could switch to something that looks a little bit more like… instead of what it looks like now, when the blocks are near empty, and we pay whatever it is, you know, 20 cents per Bitcoin transaction for 220 bytes. 2:56:00 They could switch to something like, what is the average income of an upper-middle class resident of the United States, like, percentage of that. Because if it switches to some kind of signaling or attention-based economy thing, where people are just bidding against themselves, it could plausibly take on a completely different form. 2:56:27 And, you know, so they could be the Feepocalypse. 2:56:33 For example, right now there is no tool out there that will allow you to upload a file system into inscriptions, even though the protocol supports it. As far as I know, no indexer has a button that says pick a folder and hierarchically upload all of its contents. 2:56:49 But the protocol already supports that, right? So it's just a question of some UIs popping up and people are like, oh, wait a second, it will cost me $500 to put my will and all the related addendums and all the corporate documentation that's super valuable encrypted as a kind of a giant zip archive or a bunch of folders. 2:57:12 And then I can hand the keys that are backed up on steel or paper to my heirs, and then they can decrypt this data. There's just no tool to do that, but the protocol supports it, right? You can see that all the wealthy individuals in the world are competing for 100 gigabytes per year worth of this block space, right? You can see how high the fees can go, right? 2:57:34 Yeah, encrypted backups will be one thing that Bitcoiners might actually consider doing. 2:57:45 I mean, I would want to put my encrypted will in there and then take the decryption keys on steel and hand it to my attorney or to my heirs. 2:57:55 I guess I'd have to understand why you think that people would pay a premium when they're able to get the same function for $1,000. 2:58:06 It's not the same function because there's… 2:58:09 Because if you're saying there's going to be ample… What you're saying is there's ample… 2:58:14 Alex, this poor gentleman has a Litecoin right in his name. 2:58:18 I know, but hang on. 2:58:19 Alex, you do think that… We agree, Alex, that Bitcoin is sort of an immortality thing, but if you actually head to Beth, like we travel 10 years into the future, do you think Litecoin is just completely obliterated? 2:58:38 No, Litecoin will be gone because all chains don't go away. They just become zombified, right? 2:58:44 Well, that's sort of what he's saying, but I'll let him make his point. 2:58:46 What you're saying is there will be sufficient demand for forever storage. And if you have the ability to… 2:58:52 But only at that one shelling point, right? There has to be… For example, there's plenty of places in New York City where you can tell people to meet, but there's only one place they can figure out to meet with each other without coordinating. 2:59:05 That's the Grand Central Station, right? So Bitcoin is a shelling point for immortality, right? 2:59:11 Like the fact that you could meet in New York at the Statue of Liberty, for example, or other well-known landmarks. 2:59:18 Actually, this experiment has been conducted, right? Give a hundred students an assignment to meet each other without ever coordinating a single message in New York City, and 50 of them or more will show up at the clock. 2:59:30 Of course. It was Tom Schelling himself who did the experiment. And the actual data is in his book, The Strategy of Conflict, which is one of my favorite books. 2:59:39 Exactly. So Bitcoin is such a shelling point. It's not Litecoin. It's not Litecoin. I mean Litecoin will not be gone. I'm not claiming that Litecoin data will be inaccessible. It's just obscure. It's just like… 2:59:52 What do you think you're going to be? You're going to see a front. Like a business is going to come to you and say, hey, I have a way. I can store your data forever. We'll help you encrypt the keys. 3:00:03 As a customer, you're not going to know what you're getting put up. You're not going to know is it on Bitcoin or is it on Litecoin. You're just going to pay a fee and someone's going to handle it for you, right? 3:00:13 I don't think so. No, no. Because this is valuable data. You see people burning their NFTs that they paid $10,000 for on Ethereum to teleport them to inscriptions, right? People are burning their Ethereum NFTs today to teleport them to cryptosphere. 3:00:29 You're talking about people in the cryptosphere, right? You just told me there's unlimited demand. 3:00:34 No, I'm talking about whales and finance. 3:00:36 This is the whale sphere. This is a whale cryptosphere. What I'm saying is that 1,000 crypto whales is enough to get the great perma high fees. It's the 1% of the 1%. You don't even need the crypto people or regular normies doing this. 3:00:57 Michael Saylor said that he would like to store valuable corporate documents in inscriptions. He realizes the use case. He hasn't done it yet, but wait till he comes out a few months from now and says, 3:01:10 Oh, we put encrypted versions or clear text versions of our legal corporate formation documents and our reports that we file with the government or whatever it is that's valuable in there and people will start doing it, right? 3:01:25 Corporates. Whales. I'm talking about 1%. This is a market for... 3:01:32 You said there's going to be 100 million. You said there's going to be how many billions of transactions backed up? 3:01:37 I'm saying that there's only 100 gigabytes worth of block space per year and you can have 1,000 transactions occupying it or you can have 10 million transactions occupying it. 3:01:49 But this is like a hard, unbreachable limit that once you fill up 100 gigabytes per year, this is exactly for the same reason that Bitcoin itself is valuable because it's like escalating adoption meets immovable scarcity. 3:02:05 This is escalating adoption that will also meet immovable scarcity. 3:02:10 What's the tipping point in your opinion of where the cost gets to be so great that people go, okay, is there any other option? 3:02:21 We already saw this process before. What we're theorizing has happened in a large ecosystem called Ethereum and the tipping point was that for six months, Ethereum blocks were full and people would have to pay $10 or $20 per transfer just to move Ether around or ERC20s. 3:02:41 And then what happened was that the prices did not fall to zero, but L2s appeared. 3:02:46 And once L2s appeared, that put a ceiling on cost on L1, but the cost never goes down. 3:02:54 It's like this restaurant is no good because it's always crowded kind of effect, right? 3:02:59 So the same dynamics will play out. 3:03:01 Once you have $10 per transaction fees or $20 per transaction fees that don't go down, this is what I call the fipocalypse. 3:03:09 And there will be scaled Bitcoin now uprising and then L2s will appear. 3:03:13 But L2s will not give you the same functionality as L1 in regards to ordinance, right? 3:03:20 Correct. But it will be better if we had validity roll-ups. 3:03:26 You would have the same security guarantees for your actual Bitcoin. 3:03:29 So Global South plebs could store their savings on a validity roll-up with the same exact security guarantee that L1s, but they would pay one penny or five cents to move the savings over there. 3:03:42 And once in their lifetime, they would move it back to L1. 3:03:46 This is the weird realization that the transactional logs don't actually need to be kept forever. 3:03:52 They don't need to have the same finality as some alternate use cases. 3:03:57 It's very, very weird. 3:03:59 But basically what people want is that the ledger to be immutable, but spent UTXOs are not really a big concern for anyone that uses Bitcoin as money. 3:04:16 Maybe I'm a light coiner, but what you're saying is once ordinal fees get to be $10 to $20 on Bitcoin, excess demand spills over to another chain that is capable of providing the same level of security, the same functionality until their fees get to be $10 or $20 and then on to a third chain. 3:04:42 Well, not the same, but if you want the same security, you need validity roll-ups, essentially. 3:04:49 But you can scale computation on a validity roll-up, but you cannot scale data, right? 3:04:55 Right. 3:05:00 Imagine the visualization I have in mind is this multi-level water fountain where the highest level is L1. 3:05:08 Once that bucket is full, then it starts overflowing to the next level. 3:05:12 And that's exactly what we saw in Ethereum. 3:05:14 For example, all the Ethereum L2s right now are executing six active transactions of Ethereum itself. 3:05:20 So there's like scaling of Ethereum on its own L2s, but they're launching an L2 right now called Layer N, which promises a million transactions per second and 500 millisecond finality without losing security guarantees of Ethereum, for example. 3:05:35 So there will be like this infinite amount of block space on L2s and L3s, but this highly desirable Veblen good block space. 3:05:45 So, I mean, central banks are, you know, I'm also assuming full institutionalization, like I'm assuming that it will not be controversial 5-10 years from now for Eurodollar banks to hold Bitcoin on their balance sheet, right? 3:05:59 And when they settle with each other once a day, they don't mind paying $1,000 per transaction fee because they're settling a billion dollars worth of Bitcoin. 3:06:08 So whales, institutions and luxury worth notes, that's the only things that can fit into this hundred gigabytes per year. 3:06:15 Everything else has to overflow into this other buckets. 3:06:18 If the roll-ups are just as good, why bother? 3:06:21 Why pay the fee if the roll-up is just as secure? 3:06:24 Because roll-ups have immutability and double spend guarantees of the L1, but roll-ups are just like a different neighborhood, right? 3:06:41 I mean, you can say that there's some neighborhoods in Texas have no crime and they have low taxes, but for some reason people want to live in Hamptons, not in the middle of Plano, Texas. 3:06:51 Yeah, this is just a commodity. This is just block space, right? This is just transactions. 3:06:58 It's just people want to be where other people are, right? 3:07:01 If I'm leaving something to my heirs or corporate, like if all corporations and wealthy individuals use Bitcoin for this kind of valuable document backup, then it becomes sort of like a country club. 3:07:14 You want to use what other people of your… 3:07:17 Yeah, there's like a hundred insurance companies. There's like millions of insurance companies. I'm in a town with eight country clubs and I'm living in a small rust city. 3:07:26 People are diverse in what they're looking for. 3:07:30 What about wealthy neighborhoods? 3:07:34 What's that? 3:07:35 Well, because it's not just about data backup. What about putting deeds on a blockchain? Chains of ownership? 3:07:45 And I agree with you that there can be demand for this long term forever, what I'll call forever chains. 3:07:52 And you may not think script mining with… frankly, script mining with Dogecoin having unending block rewards is maybe more suitable because it has that tail emission or something like Monero that has a forever tail emission may have some more reality of being sustainable. 3:08:12 Bitcoin has a tail emission in another commodity. It's called block space. There's a hundred gigabytes of it produced forever, every year. 3:08:19 Yeah, so does Dogecoin. Dogecoin has ten times that. 3:08:24 No, I know. So does BSV as well. But I'm saying Bitcoin is like Beverly Hills or Bel Air and other chains are like other neighborhoods basically. 3:08:39 Yeah, fair enough. I mean, I guess that's a lot to pin your hopes. 3:08:47 But the thing is, again, my claim is weak. I'm not claiming trillion dollar size markets here. I'm claiming just enough fee pressure to catalyze a feepocalypse. 3:08:57 And that's not even much. 3:08:59 I frankly hope there is. I think fees, full blocks are critical to any chain. I certainly would love to see… 3:09:06 I don't like Paul's old arguments about fees being insufficient because they all reflect pre-fee market era, which hopefully the fee market did actually begin on April 23rd. 3:09:19 A week ago, it came within 20 or 30 blocks of clearing, but it didn't. It started rising again. So I guess we still have that fee market, hopeful, that started on April 23rd. 3:09:31 But a week ago, it looked like the blocks were going to clear again. But then the fees started rising again. 3:09:38 Well, you know, my argument, which of course may be wrong, of course, it's very much a scientific argument. So it's very falsifiable. 3:09:47 In fact, I literally give the challenge in the blog post. I say, I don't remember exactly what I said, but I said something like, point to a two month period where the Bitcoin price isn't rising, where the fees were above $2 and increased, or something like that. 3:10:08 But the argument was based on the fact that people don't enjoy paying high fees. So you have a view… 3:10:21 People don't enjoy paying high fees, but wealthy people enjoy paying high fees. 3:10:25 Yeah, you have a different – this is your thing. But this is what I'm saying. That's what I was saying before. If you're right, then the fees will rise to some percentage of the average wealthy person's annual income or something. 3:10:38 Don't you think you're also basing your own view of wealth as based in a system that has people where the wealth distribution is so bizarre in a fiat system? 3:10:50 It's not going to exist in a Bitcoin system. 3:10:54 Just random… 3:10:56 It might be worse. 3:10:58 Everyone, I just got to tell you, it could be worse, because the only book that you ever need to read about – I mean, I'm joking, of course. Read all the books you want. Every book you can get your hands on. 3:11:09 But the only one on inequality that's any good is called The Great Leveler. And I don't know if anyone here has read it, but it's fantastic. 3:11:19 But the summary is there are – left to ourselves, inequality increases geometrically. That's the norm. But every now and then, something really horrible happens like famine, war, catastrophe, disease, and then it knocks everyone back down to the same spot and zero. 3:11:43 And then it starts to become unequal all over again. But I highly recommend this book. 3:11:53 That guy's had his hand up. 3:11:55 Everything we're speculating about has already happened. So, go ahead, Monsadwe. 3:12:00 So, Fipocalypse and then Mad Max, basically. 3:12:06 And then Mad Max, you said? 3:12:08 Yeah. 3:12:10 Well, it's not Mad Max. I think it's a huge problem. 3:12:16 I'm saying that is the only thing that has ever caused equality. But that won't necessarily happen. In fact, quite the reverse. If Bitcoin protects us from some kind of apocalypse, then normal apocalypse, not Fipocalypse, not to be confused. 3:12:33 And if it protects us from that, then it will just increase the geometric growth. I think the wealth inequality was kind of a tangent anyway. It was just saying – what Alex is saying is there's only 100 gigabytes of space. The population is huge. It has a certain number of rich people, something like that. 3:12:50 Yeah. And also, once we've hit – like right now, we're at equilibrium because the mempool is not clearing. So, there is actually a valid price in the market for block space. 3:13:03 Now, imagine what happens to this valid price once gradually adoption escalates by 2x every year or year and a half in Bitcoin world. Simply due to gradual inertia of escalating adoption, the price doesn't go up 2x. It might go up 8x or 16x. That's a nonlinear response. 3:13:24 Same as scarcity of Bitcoin itself, right? Bitcoin itself is highly scarce, 21 million units. Once adoption keeps doubling every year and a half or two, there's a nonlinear response in price. It's exactly the same. 3:13:37 By the way, this was my expectation since the entire ordinals, inscription, luxury, good, whatever, inscribing thing. So, that was my baseline assumption. That's what I expected to happen just from people adopting Bitcoin. 3:13:55 Yeah, that would be enough to raise the fees. Inscriptions just brought it up two or three years. The fees would go to $10.20. 3:14:03 Yeah, of course. I'm just saying that people do seem… My experience has been, since you brought my article, which is fine, of course. Obviously, it's fair game. But I'm just saying my experience has been people don't like paying these fees. 3:14:17 So, when the fees go up, people complain. And then they don't just complain. They stop transacting in Bitcoin. Sometimes they move to an altcoin. Sometimes they try to batch. Sometimes they just quit altogether and they say this crypto thing is stupid. 3:14:30 That does happen, but that's the equilibrium in the multi-level fountain, right? People will go to the next level of the fountain, but that does not empty the bucket at the top. 3:14:40 The pain has to get high enough, which it did in Ethereum, right? And Ethereum transactions went to $10 per transfer in 2019. And they haven't gone to zero, even though there's now all this plentiful L2 space that can move a thousand times more transactions. 3:15:00 For some reason, Ethereum block space is not back to zero. The same is going to happen with Bitcoin. 3:15:07 Well, I think it's a fascinating open question. I mean, I think it's totally empirical, which means that I really can see it. I can see it going any which way. 3:15:18 It's very interesting that unlike most Bitcoin stuff is very theoretical, but I don't think this is. This is really something where... 3:15:26 I do think anything could happen. We could wake up tomorrow and it could just start happening. 3:15:37 So it has to be something that requires the digital governance to happen in a decentralized 3:15:44 space. Again, you bring up the Will example. If I can go buy three USB drives and they cost me 3:15:52 $15 and I store it and pass them around, I'm not sure what I'm gaining by putting it on a Bitcoin 3:16:00 protocol. Well, I think there is a big difference between total certainty and high confidence. 3:16:09 But I guess I'd have to see from your average user why they would go pay. 3:16:13 Well, what you're gaining is that the devices that read your USB drives will change the 3:16:18 standard of the interface in 5, 10, 20 years, just like CDs or CD-ROMs are hard to read these days. 3:16:25 Whereas the data in the Bitcoin block space will always be at the shelling point and always 3:16:30 readable by no matter what happens to hardware. Well, I'll just put on pieces of paper, 3:16:36 you know what I'm saying? Yeah, but pieces of paper can burn a lot. 3:16:43 This is like a classic laser eye. I'm not accusing you of being a laser eye, 3:16:47 but I'm saying like a classic laser eye rationalization goes something like this. 3:16:50 Well, if this doesn't work for you, then just use X. And next year, X will be, you know, 3:16:55 just get some exposure through BlackRock and watch the NGU. So there's always these 3:17:02 excuses, but why can't you just use taproot assets? Or why can't you just use lightning 3:17:08 with factories? And all of these post-factum rationalizations don't actually apply, right? 3:17:14 Because there's one place that I know that will be uncensorable and immortal, right? 3:17:18 That's Bitcoin. My lawyers will know this. I think the use case is there, but it's maybe not as 3:17:25 fast. The use case is proving itself since January because you've seen 38 million of 3:17:31 them created. They essentially account for 50 to 70% of all transactions included in blocks. 3:17:38 It's like in that movie about the pirates, you know, look at me, I'm the captain now. 3:17:42 So like the inscriptions, look at me, I'm the Bitcoin now, right? 3:17:45 That's because they comprise 50 to 70% of all the transactions, right? 3:17:50 Only the block space, if not the coins themselves. 3:17:53 No, no. Actual transaction counts, not just the block space, but transaction counts. 3:18:03 Guys, there is a solution for that. 3:18:06 For some things, you need to use encryption. For some things, you need to use Oracle, 3:18:14 which are more public, you know, inscribing data. And by the way, I and other people, 3:18:22 we are doing exactly what you're talking now. And we are working on the client. 3:18:28 And probably, if we manage to make it quick enough, the protocol will be also as a drive 3:18:38 chain. And I want to be on a testnet also. But if Drivechain will not be enabled, 3:18:51 soon probably we will use Bitcoin top route. But we will not directly on Ordinos. 3:19:02 One thing that Ordinos don't have is the two-way peg, right? That's the missing piece. 3:19:06 Because if they had two-way peg, that would be game over, right? Basically for all other L2s. 3:19:11 Yeah. But you know what? Ordinos, I already burned Ordinos. It just sent to the legacy address 3:19:17 and it's destroyed. I mean, you can destroy more, you know, very easily. 3:19:24 You can destroy them, but it's just like burning Bitcoin, right? 3:19:29 No, I mean, you can't burn. It's not possible to burn Bitcoin at the moment. I don't know if 3:19:35 something happened in the future. But I can mean burning, like destroying the 3:19:40 the description, not the SAT. It's actually only a number of SATs in the wallet. 3:19:52 Well, the owner of that has the capability to do it. 3:19:56 I think he was saying that it's a user interface, makes it too easy to accidentally destroy. 3:20:02 Oh, okay. Yeah. I mean, the wallets don't support this stuff yet. 3:20:06 So, but the protocol is there. So, this is the year 2009 or early 2010 of inscriptions. I mean, 3:20:14 this time next year, there will be, like, I expect inscription support in Trezor actually, 3:20:20 sooner or later, right? And that's sort of, that's the mainstreaming of inscriptions, 3:20:24 is when Trezor and other hardware wallets start supporting them. 3:20:26 People love these hardware wallets. I really don't, but... 3:20:38 I like your offline computer as a hardware wallet idea too, which is fine. You know, 3:20:43 let's get an old iPhone and, you know, wipe it out and disable Wi-Fi in it and stuff. 3:20:51 And get a Faraday cage as well. And that's the real expense. 3:20:55 Faraday cage. That's great. 3:20:57 Yeah. 3:20:57 It's a whole mountain man ideology, right? Like, sit in a bunker... 3:21:04 If you're going to do it, then just be serious about it. No, it's like, the Faraday cage is not 3:21:10 bad. It's the Faraday, because the Faraday cage, you can't easily open the phone and unplug the 3:21:14 Bluetooth and the Wi-Fi thing, whereas you can with a laptop. It sounds crazy, but it's really 3:21:20 not. Trust me, there's plenty of videos online where you can watch someone... You just take a 3:21:24 knife, you open the laptop up, and there's a little thing that says Wi-Fi on a little label, 3:21:29 and you just grab it with your fingers and unplug it, and then you're good to go. 3:21:33 It's not enough. I mean, someone can actually read your screen and your keyboard very easily 3:21:40 from a slight distance or from the street. 3:21:44 That's why you need... You can also live in the mountains. No, I'm just kidding. 3:21:48 Yeah, yeah, yeah. 3:21:48 The whole mountain man ideology is wacky, right? Like, sit in a bunker in the mountains... 3:21:55 It's irrational, because we have many different risks, and you have to weigh them each 3:22:01 proportionally, and so the idea that people would care so much about this one particular risk, 3:22:07 when, for example, when you have... 3:22:10 Social animals with friends and family and societies, right? 3:22:13 Of course, if people are rational, what they would care about is activating BIP300 as 3:22:22 quickly as possible. Take that for granted, obviously. 3:22:26 By the way, the best way to activate BIP300 is to start uploading your file systems into 3:22:30 inscriptions. There's no better... There's no need to lobby for it. You just need to start 3:22:36 raising the fee level to $10 for a few months, and then pleb uprising will take care of the 3:22:42 rest. 3:22:44 Yeah, it'll help. 3:22:45 Yeah, I think you're probably right about that. That probably would help more. But, 3:22:49 of course, you have to remember, from my point of view, I kind of think that they won't go up. 3:22:54 But I hope... I think you're right. Didn't I agree with you when you first brought it up? 3:22:57 I said that would be great for me. 3:22:59 No, I mean, it's a good outcome for all concerned. It's just that you have this 3:23:03 perfect substitutability idea that one block space is perfectly substitutable for another, 3:23:09 and that's not true about neighborhoods. A piece of land in Plano, Texas is not the same 3:23:14 as a piece of land in Bel Air, California. So that doesn't work, number one. Number two, 3:23:19 the fee market only started a few months ago, so all the past arguments about how high the 3:23:25 fees were are just completely invalid because the fee market never existed. 3:23:31 Why do you think that land's more valuable? 3:23:33 Because other valuable people and their properties are there. Ultimately, it's the 3:23:41 country club effect. Birds of feather flock together. That's, at the end of the day, 3:23:45 that's the social desire of people. 3:23:46 Where do you buy your car insurance from, where rich people buy car insurance? 3:23:52 No, car insurance is a commodity. 3:23:53 Does that factor into your... 3:23:54 But real estate does not. Car insurance is a commodity. 3:23:59 So is block space. 3:24:00 Guys, do you know that the biggest insurance settlement company is using blockchain for 3:24:12 their settlement? 3:24:16 Who's that? 3:24:17 Ethereum? I don't know. 3:24:19 Lemonade. No, no. Subnet. Subnet on Avalanche, which is the same setup as Drivechain. 3:24:26 Subnet is like a sidechain, and it's secured by validator nodes on Avalanche blockchain. 3:24:36 And actually, the main chain is decentralized and it's UTXO-based chain. And you can create 3:24:48 special application blockchains, they call, but it's like a sidechain. 3:24:53 Guys, we interrupt this Feepocalypse meandering conversation because we have a new person 3:24:59 on the stage. Saul is on the stage. Hello. 3:25:05 I didn't mean to interrupt the flow of the conversation. How's it going, Paul? 3:25:12 Yes, it's going okay. 3:25:15 No, I mean, I was just going to chime in a little bit with you. 3:25:18 The inscription thing, just to remind people that they are prunable. 3:25:27 Yeah, that prunability thing is a pretty critical question, Alex, because I'm not sure myself 3:25:35 exactly how, if they can put a box around and say, these things don't affect the UTXO set and these 3:25:41 things do, and if they can box it out, then it is, you would still, what you're going to say is... 3:25:59 Every inscription creates an unprunable UTXO when it's inscribed. But the witness data, 3:26:06 which is the data is optionally prunable by nodes, and it has been for years, while 3:26:12 inscriptions do create new fresh UTXOs. If you look at the chart of UTXO growth, 3:26:17 the UTXOs from the beginning of the year doubled roughly from 60 million to 120 million. All that 3:26:22 growth is due to BRC20 and other inscriptions. Those UTXOs are not prunable. They're part of 3:26:28 the UTXO unspent transaction output set today, but their witness data may be prunable. 3:26:37 Well, the UTXOs in the context of forever storage of data is kind of moot, don't you think? I mean, 3:26:47 it's really the... I mean, the ordinal part, the trackability part is one thing, but like, 3:26:53 there's a lot of data that you're referring to that doesn't necessarily need to be movable, 3:27:00 tradable, trackable, it just needs to be there, right? So it's not really ordinal, 3:27:04 it's just inscriptions in general, and that's all prunable. 3:27:09 There's no new strong assumptions here, because like we discussed before you came on stage, 3:27:14 Bitcoin has a single honest peer assumption. If you're running a node, 3:27:19 one out of a hundred peers you connect to, at least one has to give you the heaviest change, 3:27:23 whereas the other 99 can be controlled by the Chinese Communist Party, and you don't need to 3:27:28 trust this honest peer. So the same kind of assumption occurs here as well, that you need 3:27:34 to be able to connect to one node that will not prune the witness data, and you don't need to 3:27:40 trust that peer, because you can validate that data when you get it, and then you can become 3:27:45 the archival node yourself. Yeah, but then how decentralized is it, you know? How decentralized 3:27:53 is the actual data then, if only a fraction of nodes actually store it? 3:27:59 No, no, it's incredibly decentralized, because a single node on the internet is as decentralized 3:28:06 as a thousand nodes on the internet, as a million nodes, because a single archival node, 3:28:13 no, a single archival node, right, it's just like getting blocks from the Blockstream satellite, 3:28:19 it implies no trust to Blockstream, because Blockstream blocks, those blocks are self-validating 3:28:25 data, right? So a single supplier of that data is enough. What I wanted to say is that 3:28:33 under the default configuration with Asunvalid, you actually don't need to download the SegWit 3:28:40 extension data, and I think someone maybe already made a change in code, or they are planning a 3:28:46 change, where nodes will not even ask for it when they sync up, because it's basically 3:28:52 completely irrelevant data, if they don't want to validate it. 3:28:58 Yeah, and in the future, the snapshot... 3:29:01 It's okay for Vitalik to be running a node that does give you the SegWit data, 3:29:07 because even Vitalik, or the Pope, or the Chinese Communist Party, as long as there's one node 3:29:13 that's giving you this data, you can clone that node and become an archival node yourself, 3:29:18 without any trust. Yeah, I'm just saying Bitcoin network could become a network in response to 3:29:24 this whole thing, that simply, explicitly does not care about the odd witness data, 3:29:30 and the nodes don't keep it, and don't propagate it. And in that case, it is going to be pretty 3:29:36 hard. In a peer-to-peer network, if the nodes don't propagate the odd SegWit data, you're going 3:29:42 to have a hard time to find that one archival node, and that one archival node is not going to 3:29:48 be as permissionless, and as a peer-to-peer experience, because they can basically close 3:29:57 up anytime, they can charge you for the data, or whatever, that's entirely not the same 3:30:02 as right now, is with Bitcoin. Actually, it's very similar to today, most nodes pruning their 3:30:09 old blocks, and yet somehow you're able to sync from block zero, right? What percentage of 3:30:16 Bitcoin nodes do not prune their blocks today? Probably a small percentage, because when you 3:30:21 install Bitcoin Core, it has like, keep last couple of hundred blocks, but prune all the others. 3:30:27 I think it's been that way by default for a long time, and nobody can charge you for this data, 3:30:33 because if one copy of it gets out, you don't need to trust the seller, and you can just start 3:30:39 selling and undercutting them, right? Paul will understand that the marginal cost of that data 3:30:45 is zero, because it's self-certifying data, and a single archival node will clone a hundred more 3:30:51 within a day, so there's nothing you can charge for this data, and this is not about data 3:30:56 availability, this is about data persistence for the long run. Why do you say it's not data availability? 3:31:02 Because isn't it sort of about data availability, isn't it? Why do you say that? No, because data 3:31:07 availability is a technical term that refers to proof of publication, it does not refer to 3:31:13 eternal storage, there's like a different term for that. Data availability is proof of publication, basically. 3:31:20 Everyone needs to sync the blockchain, they need to download all the block data at some point, 3:31:26 when they, you know, I'm talking normally, maybe people invent shortcuts or whatever, but the only 3:31:32 way to know if the shortcuts like zero sync or whatever, if the only way to know that those are 3:31:35 working is, and someone will always, we can't have any part of the blockchain go missing, or I think 3:31:43 the entire project will die. We are in that regime, we have been in that regime for years, that kind of 3:31:50 sounds like bad news, but the good news is a single node that's actually serving you the blocks 3:31:57 can be sufficient to receive the network without any trust, a hundredfold. I agree with that, of 3:32:04 course, of course, I completely agree with that. This assumption is not 3:32:12 stronger than the underlying assumption that some peer will actually give you the heaviest chain, 3:32:19 right? That assumption... I was kind of worried that maybe one day they would not or something, I don't 3:32:25 know. Alex, I agree with you, but I don't think people would have the same desire 3:32:33 to inscribe data on the blockchain if it was a few nodes, and most of them were not even 3:32:41 responsive or very rate limited for all witness data. So if you had a situation like that compared 3:32:47 to what is today, I don't think there would be the same enthusiasm for 3:32:54 inscriptions, so I'm not sure about that whole thing, but what you are saying... 3:32:58 What I'm saying is that there is a lot of enthusiasm for running conventional Bitcoin nodes 3:33:03 today, right? There's allegedly like 15,000 reachable ones and maybe a hundred thousand 3:33:09 altogether, and people do not seem to be worried that 99% of their peers are pruning blocks, 3:33:16 because it seems like every node that comes up is able to sync from block zero today. 3:33:21 There's been no reported failures of, oh my god, a certain section of blocks are just 3:33:27 inaccessible. I don't think I've heard anyone complain about that. I think a much larger 3:33:34 percent of Bitcoin nodes today are full archiving nodes, partly from ideological reasons 3:33:41 and partly from some default reasons for these ready-made, 3:33:51 pre-packaged Lightning home nodes that basically run with full archiving mode out of box. 3:34:00 So why would you have ideological inscribers doing the same thing, or libraries, or 3:34:06 Bitcoin, or escrow companies? So basically, you could have guerrilla artist collectives that run 3:34:13 a node, you could have libraries, the institutions we call libraries today, simply writing archival 3:34:19 nodes, because every book worth reading has been inscribed in Bitcoin, and they can just let you 3:34:24 click and download that book, right? People haven't thought about backing up all the books 3:34:32 worthwhile reading into inscriptions, and that's what Project Gutenberg would only dream of when 3:34:39 it was launched 20, 30 years ago, right? But now you can actually launch a real Project Gutenberg 3:34:44 where you actually take a thousand books from civilization from all time, and you just inscribe 3:34:50 them in various file formats, and that becomes like an open library for the world. Why not? 3:34:56 The problem is, there's no incentive. The only incentive is for miners to validate the 3:35:02 transactions, but after the file, the data is stored, there's no further incentive to keep it 3:35:09 there at all, currently. But there's no incentive to keep old blocks either, and yet they don't seem 3:35:15 to disappear, right? What I'm saying is the same dynamics. If we're talking in the context of forever, 3:35:22 the thing is, if you're talking in the context of forever or a very long time, I mean, in five years, 3:35:28 10 years even, there could be ways, roll-ups and whatnot, where pruning a majority, if not all of 3:35:35 the witness data, would be perfectly fine. It would be fine, but who would care about pruning? 3:35:42 In the next 10 years, two terabytes of data will be added to the Bitcoin blockchain, 3:35:47 but 10 years from now, two terabytes of data will be less than 1% of your $9.99 3:35:54 USB stick. So who cares about all these optimizations? Nobody cares about a million 3:35:59 transistors here and there these days, or even a billion transistors. Who would care about two 3:36:04 terabytes of data? Today, it's like pennies. So does this whole thing that we talked about 3:36:11 for the past, I don't know how many hours, does it validate small blockerism? Is there a block 3:36:18 size that is optimal from the user's perspective? Like if blocks are larger or smaller, would the 3:36:26 situation be better or worse in this sense? Well, I think it just changes the timeline. 3:36:32 For example, if the SegWit soft fork never happened, we would be in Fipocalypse a year 3:36:38 or two ago already because there would be no 4x block size increase. So SegWit pushed it off a 3:36:45 few years and now the appearance of inscriptions has brought it forward again, but this is just 3:36:50 an immovable wall being hit by this gradual sort of tidal way of escalating adoption. It's just 3:36:57 a question of when the Fipocalypse happens. It doesn't matter if the blocks are 10% of what 3:37:03 they are now or 10 times what they are now, it just changes the timeline. It doesn't change the 3:37:07 final outcome. Yeah, but if the burden grows large enough, that actually incentivizes people to get 3:37:16 rid of it or work around it more. So in that sense, also the pruning network may come into 3:37:24 existence when people realize that it is the ledger that is the most important and all 3:37:31 transaction data can be under certain circumstances safely discarded and that can become 3:37:37 like a safe practice is what I mean because it's counterintuitive. When people assumed back 3:37:44 then that larger block size would lead to lesser replication of the Bitcoin blockchain 3:37:52 and they assume that causes like lower decentralization, 3:37:59 I'm not sure if they considered that this actually might discourage people 3:38:06 from using it as a graffiti wall. 3:38:15 So my question is, is there an equilibrium size you think? 3:38:20 Oh like, well it's the size that we have to live with, right? Whether it's optimal, I don't know. 3:38:25 I mean, in my mind, any kind of block size soft fork to decrease the block size would be madness 3:38:32 and it would be opposed by, you know, but because it essentially disables non-custodial lightning 3:38:38 and ARK and everything else. So nobody... It's only a matter of time you are saying, so that's 3:38:45 only a matter of time to disable on L2 because on L3 they can exist just fine. 3:38:50 Yes, but the thing is, but it's kind of like the old saying, it has to get worse before it gets 3:38:57 better. So it has to go to the FIPOCALYPSE in order for the chokehold of the laser eyed 3:39:04 beasts and podcasters who, you know, engage farm on Twitter with their dumerism about never changing. 3:39:10 Basically, the chorus that's chanting ossify, ossify, that has to be essentially exposed for 3:39:16 just what they are, which is just a cult and the plebs should lose confidence in them first 3:39:22 and then, you know, confidence and real L2s will be possible, I think. 3:39:27 Because after the pleb uprising, nothing that stands in the way of scaling Bitcoin can survive, 3:39:36 because, I mean, Bitcoin loses all rationale and purpose if it becomes a plaything of whales and 3:39:42 black rock, right? And don't you find it plausible that the pleb uprising would cause such a chaos 3:39:49 that it's already very hard to get consensus on anything or for people to get a good understanding 3:39:58 on most Bitcoiners won't get a good understanding on any of the proposed changes today and in the 3:40:05 chaos, don't you find it possible that this actually gets worse? 3:40:13 No, I think ossification is the de facto status quo now, a premature ossification, 3:40:18 right? But the uprising is all about overturning the status quo. It's about 3:40:22 we need covenant soft fork to scale L2s, we need Drivechain. 3:40:27 soft fork to allow Drivechains, we need a WASM opcode, you know, to verify proofs, right, to enable ZK roll ups with WASM, there is something I want to mention, I mean, I completely agree with basically what you're saying. But I just thought I'd bring this up, which is, you know, people like Roger Veer, for example, he has been waiting and hoping for fees to rise. And he's been waiting for fees to rise. 3:40:54 And L1, I think maybe I brought this up, like, months ago, when you first started to talk about fee pocket, like he's been, he's been, he's been waiting, I assume. I mean, I don't, I have, I don't know, of course, but I'm guessing he's sitting down because of the 4x block size increase by SegWit, right? And he's thinking something like, he needs the fees to go up, he needs people to be unhappy with BTC. And then he's hoping to swoop in. And that everyone will switch to Bitcoin. 3:41:24 People will switch to validity roll ups and Drivechains and ARK and, you know, better scaled lightning, that all those things remain within the network effect, right? 3:41:42 And the moment you switch the asset, you're, you know, you're exiled to another planet, basically. Nobody wants to be exiled to another planet. Everybody wants to, if you cannot stay in Beverly Hills, you want to stay in Brentwood or Westwood or coastal LA, right? If you can't stay there, you have to be like a few hours drive away from LAX or something. The point is that you don't want to be exiled to another planet. 3:42:04 You want to go to a roll up where you can move your Bitcoin trustlessly or Drivechains, you know, which is, you know, economically secure. Nobody wants to like abandon the asset. That's unthinkable. 3:42:16 I agree, but I just thought I would toss it out there as like, I mean, it will be an uncertain time. Don't you think maybe if it won't, maybe it wouldn't be Bitcoin cash, but maybe someone would try something. 3:42:28 It's like Game of Thrones, you know, chaos is a ladder. It's an opportunity for soft forks to get through. That's the way I see it. I see chaos of the pleb uprising as a way that nobody can say, well, we shouldn't change Bitcoin because by that time the ossification course will be completely discredited, right? 3:42:50 Because they've been telling the plebs just keep stacking sats, but then plebs are like, wait a second, you want me to spend 10% of my savings to move them somewhere now because the fees are 50 bucks? I'm talking about global soft plebs. I'm not talking about, you know, first world, you know, Crypto, Cryptorati or whatever. 3:43:10 It's a time of opportunity, basically. And the sooner it comes, the better. Like, for example, the guy that spoke recently, Bitcode, that they're doing some kind of indexer or something with inscriptions. 3:43:26 You know, there's just like a huge amount of activity in there. And we're like weeks from somebody launching based on the new recently committed standard for the Ordinals server. We're like weeks from launching ability to, you know, to like open the fire hose of fee pressure. Like all the collections will want to be inscribed with hierarchical Ordinals, you know, uncensorable, decentralized namespaces, websites, all of that is coming. 3:43:55 Yeah, yeah. No, Alex, we are doing exactly client for inscribing, not indexer, inscribing the important data. 3:44:08 I agree. 3:44:38 I just wanted to ask if Alex basically thinks that ION and that whole DID thing is basically getting one-upped or upended or how they say it. 3:45:02 Well, I don't know if it will take off as an identity infrastructure, but for example, if I was a heavy Nostr user, I would want my Nostr identity and my inscription identity to be the same thing. 3:45:17 You can actually do it, right? You can actually have a public key that has both your Nostr identity and your inscription identity at the same time. And you can have both of them secured by hardware wallet with right now it's only like one or two wallets that don't burn your Ordinals like Sparrow or whatever. 3:45:37 But once there is mainstream support a year or two from now, you know, now you're talking about like, here's another use case for inscriptions. Imagine highly secure direct messages or just, you know, uncensored. Think of using Bitcoin blockchain as a Nostr relay, right? And that's a Nostr relay that you only pay once. And then the data stays there forever, right? 3:46:02 Yeah, but this totally does not scale, right? 3:46:06 For highly secure valuable messages, it would be worth it, right? If you want to send, like, if you want to communicate between secret agents that are like around the world or whatever with encrypted messages, that's, you know, that's like spam bots do that with Bitcoin blockchain. Nostr would just make it available to humans. 3:46:29 Yeah. 3:46:31 Honestly, that's 3:46:33 But I want to shut up, but I have something to say about that. 3:46:39 I was going to say, I don't think it makes sense for private, highly encrypted messages to be permanently on a ledger. You'd be better off using the mempool and have a BF Emerald. 3:46:59 Well, I mean, I don't use Nostr right now. Go ahead, Monserrat. 3:47:03 With this, just one. So some people are expecting that there will be a cyber pandemic event. It is kind of telegraphed that there will be something made up or real. And in that case, actually, we could see that the Bitcoin network is weaponized. 3:47:23 And as a defense measure, might actually they will put real effort into trying to filter out the Bitcoin protocol as a national defense effort. What do you think about that? This is just a side. 3:47:39 I thought recently there was a merge of some encrypted communications for peer to peer nodes. Maybe deep inspection firewalls like the Great Firewall of China can handle it. I don't know. 3:47:52 No, I don't think you can do that with deep pocket inspection, but I think you have to use stateful inspection and many in the middle attacks to actually identify. 3:48:09 But I think just general traffic shape analysis and just identifying the node patterns and stuff will allow them to just drop those packets and basically make the Bitcoin peer to peer network unable to function. 3:48:27 I'm not sure if they have to go absolutely sure about it. 3:48:36 What about using Tor? Tor recently had an upgrade with Hashcash. I think Tor was unusable for about a year, a year and a half. Is it possible to communicate with nodes in North Korea over Tor or not today? 3:48:52 I don't know, honestly. And again, in a scenario where they are trying to cut off the command and control capability of an adversarial superpower or a belligerent superpower from their infrastructure, like stop from updating the bots and stop from getting new instructions. 3:49:15 In a situation like that, you might even see stuff like only HTTPS and DNS works and nothing else really, or it's very rate limited and doesn't work between countries whatsoever. So it can get pretty wild, I think. 3:49:31 It can, but I mean, people have been tunneling DNS traffic over HTTPS, and I suppose you could tunnel peer to peer traffic over HTTPS as well. 3:49:41 Right. 3:50:11 Yeah, I agree. 3:50:42 which is advertised on the internet. And the claim implicitly is that the miners will reorg out blocks that include transactions offending the BIP300. And, you know, user rejection, URSF, user rejection soft fork, I think, would be very, very difficult to coordinate and it would fail. I would love to see how this game theory would actually play out. 3:51:05 So yeah, I 100% agree that it's not me who's framing it as a change. It's the critics. The critics, though, they're not real critics, like Moon Settler is a real critic, but they they're just like concern trolling, and they just want to kill the idea. And they don't they don't know anything about the idea. 3:51:29 They just Michael Saylor or someone told them that Bitcoin has to be protected against change, or it just evolved out of the SegWit2x momentum. And so there really are no critics of this idea. It has just using an opcode to count to 13,000. It's not even really possible to criticize the idea. 3:51:48 What do you think about the stability of a miner activated soft fork? 3:51:53 No, I think the miner activated soft fork will win instantly. And the users cannot resist it. If they do, they'll be breaking the... 3:52:03 Will it be stable or will it require continual policing of the cartel of the miners? 3:52:09 If the miners activate the soft fork, and then all that's necessary is a few other anyone who's using BIP300, if they also run a node that speaks that language that also enforces that, which they would do because they just want the accounting... 3:52:30 You'll have a challenge from a dissenting laser-eyed miner. So there will be a mining pool controlled by a laser-eyed ossifier priest that will try to mine a block that includes an offending transaction. 3:52:43 You have 51%. 3:52:45 No, I know, but everybody will publicly see that block orphaned, right? And this is the essentially assassination of the prince in World War I. That's the starting point for the next war, the hot war to break out. 3:53:01 Orphaning of that block is like invading Poland or whatever in 1939. 3:53:06 Not really, because it's actually quite different in many, many ways. But even if it weren't, as you said before, no one wants to be exiled to a different planet. 3:53:18 And none of these laser-eyed people run nodes or do any mining. They're all just fake. It's just one guy with a Twitter bot farm, basically. 3:53:26 They're farming engagement on Twitter to sell their podcast time, essentially. This is the whole nature of the laser-eyed cult, is that it's a bunch of people chanting ossify as a way to cause outrage on Twitter to engage farm audience for their podcasts. 3:53:44 And these people will tell you a year from now, just buy a Blackrock ETF and sleep well at night not worrying about multi-sig backups. 3:53:52 You're right about everything you say. The miner-activated soft fork, it should be marketed probably to the miners, probably exclusively. 3:54:01 But it's less stable than a regular soft fork, isn't it? It's less stable, isn't it? 3:54:07 No, I don't think there's any difference. It's maybe unstable in the fact that it may have... 3:54:21 He's lagging, I think. 3:54:52 Even though it's to their benefit to do this and their software will do this by default. 3:54:58 Yes. 3:55:00 Paul, are you back? 3:55:01 If you activate a soft fork, basically the miners have no choice but to do something. 3:55:10 I believe they have two choices. They either enforce the rules themselves or if they really want to try to wiggle out from enforcing the rules, 3:55:21 then they have to reject all dry chain related transactions from their mempool not to accidentally mine something that breaks the rules because at that point they would get orphaned. 3:55:32 So they would need some mempool policy filter at least, I believe. 3:55:37 You have to assume that one of the pools will be a laser pool and will intentionally mine a block as a challenge to see if it gets orphaned or not. 3:55:47 The activation means that the majority of them, like 85-90% enforces the rules. It is suicidal to try to challenge them. 3:56:00 You're talking about a conventional BIP-9 soft fork. There's never been a miner activated soft fork of this kind tried before, right? 3:56:10 This is where none of the nodes have upgraded but the miners have agreed to orphan blocks anyways. 3:56:16 Yes, it's the same thing. 3:56:19 You could do it with 55 or 60% but the stability of the cartel is different. 3:56:27 The only difference is that the miners could in theory stop enforcing the rules any day. That's the only difference in my view. 3:56:35 You have the same dynamics for activation. You have the same dynamics for enforcement. 3:56:39 But the users can't really trust it because the miners can change their mind any day if they are not enforcing the rules. 3:56:48 So the users would have to wait for it to be merged into core and be widely distributed and then they can start relying on it in theory. 3:56:58 Even if you're doing miner signaling for a miner activated soft fork, miners can lie or change their minds. 3:57:05 And then to what Alex was saying, let's say that an economically significant portion of nodes start rejecting blocks that use whatever opcode it ends up being, OP_NOP5 or whatever. 3:57:22 A miner could say, alright fine, I'm going to mine a block that bypasses the normal hashrate escrow counter and just spends these anyone can spend coins. 3:57:36 And at that point the group of miners who want to enforce BIP300 have to actively reorg that block. 3:57:43 So it's not just a matter of they have to enforce the rules, they have to be able to reorg blocks out. 3:57:48 It's pretty possibly happening. 3:57:52 Every node that enforces the Drivechain rules at that point automatically finds that block invalid. 3:58:00 Yes, but the problem is you have to assume the worst. 3:58:05 Assume that no nodes have upgraded to Drivechain because it hasn't been merged into core. 3:58:13 But somebody created a fork of core and merged Luke Dashjr.'s patch into it and then 60 or 70% of the miners are running that version. 3:58:26 But that version also actually has to reorg offending blocks. 3:58:31 And let's say that this reorg has actually happened which is proof to everybody because everybody can see this happening. 3:58:39 This is proof that there is a cartel that's now enforcing drivechains. 3:58:43 And this proof is highly offensive to the laser eyes who will then rally and start screaming. 3:58:49 Sorry, I thought when we are talking about miners activating is that they have been signaling and they are enforcing and that's pretty much already known to everyone. 3:59:00 I think we were talking about a case where it's like all in LayerTwo Labs go and talk to a bunch of miners and say hey why don't you guys just turn this on. 3:59:11 And in the extreme case it's like the only people who are enforcing are the miners and nobody else is enforcing. 3:59:20 But that wouldn't really happen because what it would be with the miner activated soft fork would be like you release software that invalidates any block that breaks the PIP 300 rule. 3:59:34 And then it only activates if like some threshold whatever 75% of miners upgrade in their whatever if they signal in the 2000 block period or whatever it is. 3:59:48 So if you did that then what would happen would be anyone who wanted to use PIP 300 like an end user who wanted whatever Zcat sidechain. 4:00:00 They would also be running it because the best way to just track all the deposits and withdrawals is just straight up run the software. 4:00:09 So it would start to accumulate users and by the time that enough people there was the time there was any significant amount of money in the chain there would be like some people running it. 4:00:22 And then of course well with the soft fork or even with the hard fork the exchanges would play a pretty big role I would think because everyone cares so much about the liquidity. 4:00:34 But I think when some rogue pool that's not on board with Drivechains decides to take the coins. 4:00:42 Right so they just decide to. 4:00:44 But it will be the 75% will not build on that block and then it will always be. 4:00:52 That will trigger the outrage of the anti-Drivechain crowd to run and install URS clients right. 4:01:00 And the question is what happens then. 4:01:03 Because what that is is really a hard fork because they break the heaviest. 4:01:09 You're asking people to do something where you're only on the chain that the upgraded people are going to break the heaviest chain. 4:01:16 Let's say you're right that's a hard fork and let's say that fails. 4:01:20 However long term what is the stability of such a soft fork when 99% of conventional nodes that are still running the unpatched core are not enforcing it. 4:01:29 It seems like the miners have to keep coordinating the cartel to stay active right. 4:01:35 They cannot have the center. 4:01:37 So this is like the fragility of the cartel problem. 4:01:39 I think the only issue would be that the miners would find it henceforth difficult to upgrade to the latest version of Bitcoin core because Bitcoin core might not have support for BIP300. 4:01:50 And it would then maybe end the road of upgrades in that direction. 4:01:56 Yes. 4:01:57 No. 4:01:58 But in order to make it easy for them you would have to have a tracking patch that has no rebasing conflicts with core. 4:02:06 So that whenever a new version of core is released without any rebasing conflicts you could just merge this patch on the side and obtain the new version for miners. 4:02:17 Because without that the cartel starts falling apart as soon as the new core is released and some people upgrade and others don't. 4:02:23 If you think about that though. 4:02:25 Think about the fact that there are no soft forks anymore. 4:02:28 And then you think maybe it actually doesn't matter because Bitcoin core never is actually going to ship anything that actually makes any difference to anything. 4:02:40 Jeremy Rubin was told by core maintainers he was essentially told that if you want to do a soft fork you should not do it within core now. 4:02:49 You should just have alternative clients. 4:02:52 And you know there's recently there was a submission about the covenant tools that has three soft forks in one. 4:03:00 And it's not clear that the maintainers will merge it or not. 4:03:04 But the point is that if the ossification crowd is so strong that no changes consensus can get merged now without people losing all their privileges in core. 4:03:15 Just being sort of silently shunned or losing their maintainer privileges or what have you. 4:03:25 If no merging in the core is possible then somebody has to try what Jeremy Rubin didn't try. 4:03:31 Which is to create this patch that can be tracking core without conflicts continuously and then create core plus essentially. 4:03:40 I think that's what might be necessary for activation. 4:03:48 But I think if a soft fork actually got activated it would get merged into core. 4:03:54 Like I think the thing that core maintainers are trying to get out of the business of doing is I think they're trying to get out of the business of setting policy or weighing in on consensus changes. 4:04:06 But if the network has activated a consensus chain. 4:04:11 Yeah but they can plausibly argue that if the nodes are not enforcing it it's not a real soft fork. 4:04:16 It's kind of like a censorship attack by the cartel. 4:04:19 Yeah so the scenario that I'm just so like let's leave Drivechains aside for a minute. 4:04:23 Let's talk about the covenant tools one. 4:04:25 Suppose that there actually is something like a UAS app to turn on covenants across the network. 4:04:32 And like nodes are actually enforcing it. 4:04:35 Is there a scenario where I could see that being up streamed into core after activation? 4:04:41 That's what they said at least. 4:04:43 That was my understanding. 4:04:45 That was the communication that if it's activated properly then it will get merged into core of course. 4:04:52 But by activated they mean if like 80 percent of nodes are actually upgraded to that soft fork. 4:04:58 They don't mean the cartel maintainers are censoring. 4:05:00 The nodes are not measurable really. 4:05:04 So we all know that you can't really have consensus with nodes. 4:05:10 But if somehow the users manage to goad or coerce or plead the miners into activating it. 4:05:21 With proper signaling and whatever activation parameters. 4:05:24 And it is their understanding that it is now enforced on the network. 4:05:29 Then they would include it. 4:05:31 That was my understanding. 4:05:33 I don't actually know what the maintainers think. 4:05:36 But it seemed like that's what they are saying. 4:05:39 Paul, so what why haven't we seen the cartel of miners activate LayerTwo soft fork yet? 4:05:46 Are they afraid of the laser eyed priests and all the controversy? 4:05:49 Are they waiting for their revenues to drop by 50 percent? 4:05:52 But remember that we have yet to actually ship anything that could be activated. 4:06:01 We have our testnet software. 4:06:05 Which is slightly different from Luke's pull request. 4:06:08 What about that pull request from Luke? How is that doing? 4:06:11 Well that one didn't, Luke's pull request did not have activation logic. 4:06:16 And it was not reviewed or tested by anyone except Reindahl. 4:06:22 And like two other people. 4:06:24 It's shunned by the core essentially. It's shunned by the core. 4:06:26 Well it would be better if we had a pull request that lots of people had actually looked at. 4:06:34 And had given a thought on. 4:06:37 Of course the main goal with the pull request was to take the logic of the BIP300 text. 4:06:45 And the code that we had already written. 4:06:49 And acknowledge the fact that Bitcoin Core has certain customs and rules. 4:06:54 And things about whether or not certain letters are capitalized. 4:06:59 And stuff like that. 4:07:01 And also things have to be easy to maintain. 4:07:04 Such and such. 4:07:06 So there's these little idiosyncrasies. 4:07:09 So let's try to respect that. 4:07:12 Something that would really fit in. 4:07:14 So it's not like there is no code. 4:07:16 But it is like there is nothing that perhaps would be totally up to the caliber. 4:07:24 But you know like we're working on that. 4:07:27 Although it would help if people would look at Luke's pull request and give a real opinion on it. 4:07:34 Like as far as actual code. 4:07:37 So maybe we should just give up on waiting for people in Bitcoin Core to do it. 4:07:42 Maybe just try and hire the most expensive freelance C++ people we can find. 4:07:48 And just have them go through it. 4:07:50 Or something like that. I don't know what specifically would be done. 4:07:53 But we have yet to actually produce. 4:07:56 And I personally have actually delayed intentionally producing such a thing for as long as possible. 4:08:02 Because I thought I'm not exactly sure what would happen after I did that. 4:08:06 You know. 4:08:07 So I did kind of want to not do that. 4:08:10 I have a desire to be nice. 4:08:12 You've been delaying things since 2015. 4:08:14 Right? 4:08:15 Like the delay hasn't worked. 4:08:16 Yes, that's true. 4:08:17 You've got to try something new now. 4:08:20 Yeah. 4:08:21 Well, you know, I think you're right. 4:08:24 I have tried a couple of new things. 4:08:26 But I think that... 4:08:28 Some people take offense if you open a pull request before there is technical consensus. 4:08:35 Whatever that means. 4:08:39 Those are called draft pull requests, right? 4:08:41 That's why you mark it as a draft. 4:08:46 Yeah. 4:08:47 No, seriously. 4:08:48 Of course. 4:08:49 But then you saw that even in the pull request, you saw, obviously, anyone who looks through the comments can see plenty of people, including Peter Todd and whatever. 4:08:57 They were saying, basically, like, this pull request should never have been opened. 4:09:02 Luke explicitly said that he is not looking for concept X. 4:09:06 Right? 4:09:07 That's not the point. 4:09:08 He explicitly said... 4:09:09 And that was pretty much all he got. 4:09:13 My point is, like, you've got to stop asking for permission because those sovereign roll-up people and, you know, the stock net roll-up people that are about to deploy their roll-ups, they don't bother asking for permission. 4:09:24 Asking for permission is essentially asking to be told no. 4:09:32 Yeah, I think you're probably right. 4:09:36 Like, whatever arguments apply against Drivechains apply tenfold against sovereign roll-ups. 4:09:42 Like, offensive, you know, impact on the miners, MEV, whatever the hell they came up with. 4:09:48 Let's just be clear. 4:09:50 You are talking about, when you say sovereign roll-ups, you mean people in Ethereum dumping a bunch of ETH data and using BTC as, like, a parking lot. 4:09:58 No, no, no. 4:09:59 No, no. 4:10:00 It's actually a brand new deployment of the EVM compatible chain that, you know, in Ethereum world they have, like, a very well-developed terminology for kinds of roll-ups. 4:10:11 And the sexiest roll-ups are either based roll-ups or sovereign roll-ups. 4:10:15 Basically, these are roll-ups that are not, you know, stitched at the hip to the L1 chain because they don't bother trying to create a two-way peg. 4:10:26 And they essentially just use the base chain just for data availability while the semantics of what the data means and whether it's valid or not is left completely to the nodes of the roll-ups. 4:10:37 So, there's a company called Chainway, which is about to deploy in a few weeks or months a sovereign roll-up with all the Ethereum tooling and probably cloned all the Ethereum protocols onto Bitcoin. 4:10:50 And it will probably have a shitcoin in there because the two-way peg. 4:10:54 Now, they made some noises about some kind of interesting novel two-way peg design that's kind of the secret sauce that they're withholding until later, which may or may not be trust-minimized enough. 4:11:05 But my point is that these roll-ups will—whatever criticism applies against Drivechain applies more so to the roll-ups because roll-ups actually operate right on the Bitcoin blockchain, right? 4:11:19 They embed the data inside Bitcoin transactions. 4:11:22 So, therefore, MEV and every other concern is much more acute with sovereign roll-ups than it is with Drivechains, including offensive content, MEV, whatever miner incentives completely change if the roll-up becomes popular. 4:11:39 So, whatever objections apply to DC apply to sovereign roll-ups tenfold, but nobody talks about them because Bitcoin or the laser eye cult is impotent to do anything about them. 4:11:52 And therefore, it's not even a subject of discussion, right? 4:12:00 Well, I agree with you. 4:12:02 I mean, I have occasionally said— 4:12:04 Essentially, by lobbying, you created a shelling point for the laser eye cult to criticize you and coordinate with each other by finger-pointing and saying that, look, Paul Sztorc is the devil here. 4:12:18 He's trying to kill Bitcoin by introducing this change X. 4:12:21 So, you're just feeding their engagement farming on Twitter by being a personification of the devil that they all need in order to rally the faithful, right? 4:12:31 Whereas the real devil, quote-unquote, is the sovereign roll-ups and ordinals that don't bother asking permission and they don't get personified and they don't parade themselves in front of their laser eyed priest cult and then they just do what they want. 4:12:44 And I think that's your endgame is to do what needs to be done, I think, because playing nice has only made things worse for Drivechains and for Bitcoin. 4:13:01 Well, stay tuned because there's always time to break bad, right? 4:13:07 I think you hinted that you want to do something around the time of the halving, which is not too far away, like April next year, because maybe there'll be some kind of cut in revenue and the miners will all of a sudden become highly incentivized to do something. 4:13:23 But if you're going to do that, then you have to provide a client on testnets like now in order to do something early next year around the time of the halving or halving. 4:13:37 Right. 4:13:41 Well, I got disconnected there. 4:13:43 Now we have a green person. 4:13:46 A green block six backup. 4:13:49 I hope they. 4:13:51 And we have right now, of course. 4:13:53 So I hope everyone got their questions answered or whatever. 4:14:10 We have been going for a little while. 4:14:13 So maybe we should start to wrap it up. 4:14:21 If you need to ask questions quick. 4:14:43 OK, I don't hear any. 4:14:53 Well, I guess we should call it here then. 4:14:55 So this has been a very fun one. 4:14:59 Still, no critics or whatever decided to show up. 4:15:04 Yes, I hear you. 4:15:06 So I just wanted to say I crashed in the previous minutes and I hear you. 4:15:13 OK, great. 4:15:17 About to talk and he got disconnected, so. 4:15:24 Space is a complete shit show. 4:15:26 I crashed like four or five times. 4:15:28 Yeah, I don't understand. 4:15:30 I don't understand why some people crash. 4:15:33 I crash myself a lot. 4:15:35 I don't know why. 4:15:36 Yeah, people have been posting shit like this. 4:15:39 Alone fired 90 percent of the employees and Twitter is working fine. 4:15:43 I mean, it's not working fine. 4:15:47 Still, though, it is kind of for not firing 90 percent. 4:15:51 I mean, that's it is kind of remarkable. 4:15:53 Pretty good. 4:15:54 Pretty good. 4:15:56 But they still can't deploy spaces thing on the right. 4:15:59 Yeah, spaces doesn't work that well. 4:16:02 Can you imagine like when else would you even be able to like what if like a 4:16:06 train company fired 90 percent of the 4:16:11 staff or like? 4:16:14 I don't know. 4:16:16 Well, you know, most employees were probably political commissars, 4:16:21 you know, policing, you know, political correctness and locus on the network. 4:16:26 Right. 4:16:27 It was democracy. 4:16:28 It was at risk. 4:16:29 It was absolutely essential that we hire those people full time benefits, 4:16:34 health care and remove disinformation 4:16:39 that could harm our society. 4:16:43 Because, as we all know, if you hear about it on Twitter, that means it must 4:16:48 be true. 4:16:50 Somebody somebody needs to start mirroring Twitter and inscriptions, you know, 4:16:54 and that way it'll actually become immutable. 4:17:03 Either a good bird pond for that. 4:17:07 Creative people get on it. 4:17:09 What's a bird? 4:17:10 It's not you. 4:17:11 It's a bird. 4:17:15 You should you should you should you should mirror only the tweets that have 4:17:19 like that were published by people with like 10 million or more followers into 4:17:24 inscriptions automatically and then nobody can delete a tweet. 4:17:28 So you have like eternal eternal X. 4:17:31 So you next because I'm killable bird 4:17:35 killable bird. 4:17:36 That's a freebie. 4:17:41 I mean, that's just an example. 4:17:44 I mean, that's just another another unknown, unknown application of 4:17:47 inscriptions that along with like using inscriptions 4:17:51 as a relay for Nostra, which is kind of like my fantasies, 4:17:55 ultra secure Nostra messaging with eternal messages. 4:18:02 Now you're turning into a Bitcoin SV guy. 4:18:06 I'm just like you, which is like the unknown, 4:18:10 unknown uses of digital scarcity. 4:18:13 As opposed to like monetarist dogmatics, like the laser eyes 4:18:18 called. 4:18:21 Yeah, they're very weird in that they think demand can 4:18:25 only like flow one direction or something. 4:18:28 I don't even really get it. 4:18:30 They're literally like saying like it's bad if gold was discovered to cure 4:18:34 cancer and and allow us to teleport across space and 4:18:38 time. That would be bad for gold because it would interfere 4:18:42 with gold. 4:18:44 No, it would only be bad for their engagement on podcasts because 4:18:48 they have to create, you know, like dietary restrictions, kind of 4:18:52 restrictions to the religion. 4:18:53 Like you must not do a million things. 4:18:55 Otherwise, all the faithful are outraged because nothing like 4:18:59 outrage drives engagement on Twitter and podcasts. 4:19:03 Ultimately, you know, like like the Berkshire Hathaway 4:19:07 guy says, show me the incentives and I'll show you the outcomes. 4:19:11 Now we're seeing the outcomes. 4:19:14 We have two new people who made it up here. 4:19:17 Hello. 4:19:19 Yeah, what's up, guys? 4:19:22 So you said about make Twitter 4:19:26 sensible and you guys, you guys are not right. 4:19:30 I hope so. 4:19:32 I have this idea for a sidechain that's 4:19:35 because I think that's just like you said, 4:19:38 the apocalypse will come and people will try to escalate 4:19:42 going some way. 4:19:44 And and. 4:19:47 One thing that I hate on also is that it 4:19:51 gives our IP to the release. 4:19:55 And I think you should update that. 4:19:58 And the lightning, it's all custodial. 4:20:01 Everyone use what 4:20:05 Satoshi uses. 4:20:06 I'll be in. 4:20:08 For now, it's good. 4:20:09 But if you want to have a medium user, 4:20:12 how many users Twitter have? 4:20:15 So if Nostra is scaled to that point, 4:20:18 we need to have, I think, my opinion. 4:20:21 The best way should be to have a sidechain with 4:20:28 nodes, sidechain, 4:20:31 relay effects of Nostra together. 4:20:35 And the incentives of the 4:20:38 the sidechain come to the relay. 4:20:42 So the relay can be paid to host the data. 4:20:46 And we could make something like 4:20:50 a fork of Monero for 4:20:54 pick up the code of the Monero. 4:20:56 So or another Z 4:20:59 snark or another thing for 4:21:02 anonymity. 4:21:04 Anonymity for because. 4:21:08 Is that possible? 4:21:10 Some of it is. 4:21:11 So I think the problem with the IP 4:21:14 is at the end of the day, you have to accomplish 4:21:17 two contradictory things. 4:21:19 Everyone has to be able to find your computer to 4:21:21 message you and you have to find other people's 4:21:24 computer to message them. 4:21:25 But also everyone wants the 4:21:27 location of their computer to be hidden. 4:21:30 So it's two is a bit of a contradiction and 4:21:33 there's ways around it. 4:21:34 But what I think the way to go is 4:21:37 I wrote a post called Bit Names. 4:21:39 You search for it, you find on my blog, 4:21:41 Truthcoin Bit Names. 4:21:43 And I have a little section in there about social 4:21:45 media. And what I think you should do is you should 4:21:47 have your name on a sidechain 4:21:50 and you should have a fallback. 4:21:52 There should be like a fallback 4:21:54 Twitter there that's very 4:21:57 rarely used. You only use it if you get like 4:22:00 shadow banned or canceled or something. 4:22:02 Or you get like demonetized or whatever. 4:22:04 They just delete your account. 4:22:06 You know, then you use it to 4:22:09 tell everyone where your new account is. 4:22:12 And so it's it's 4:22:14 it's sort of you're only using it when 4:22:18 it's basically the layer one of your Twitter. 4:22:22 And then everything else is like a custodial cached L2 4:22:26 Twitter. It's more server based 4:22:29 or something like that. 4:22:30 So that's what I think is the way to go. 4:22:34 I don't know about putting every single tweet 4:22:38 on the blockchain. 4:22:39 If that is actually ultimately going to work because 4:22:42 of just. 4:22:43 The thing is, I don't want to put every single tweet 4:22:46 in a blockchain. I just want the 4:22:49 instead of using lightning 4:22:52 on Nostr using 4:22:55 sidechain. 4:22:57 So the sidechain 4:23:01 the relays of the Nostr could be monetized 4:23:04 through this network. 4:23:06 So they will be centralized to host data. 4:23:10 Yeah, I think what actually what actually would might work 4:23:13 is there may be like a kind of 4:23:16 file coin storage CEO type 4:23:19 project and that project 4:23:23 will be able that will allow you to 4:23:27 have like host files and like a decentralized 4:23:30 cloud. 4:23:31 And I think that that project that could 4:23:34 easily transform into anything because then you really 4:23:37 are storing. 4:23:39 That is a case where you have an unlimited amount of data 4:23:41 available. It's not like immortal the way L1 4:23:46 ordinal inscription data is but it's at 4:23:49 least unlimited in size. 4:23:51 It can be everything like you could just flip the entire 4:23:55 reality where everything hosted by 4:23:58 AWS everything hosted by Linode 4:24:01 everything hosted by whatever digital ocean or 4:24:05 all of that could be flipped to 4:24:08 go into the decentralized protocol because 4:24:13 well because you basically it's not the storage itself that's 4:24:15 on the blockchain. It's just these periodic proofs. So it has this 4:24:18 like log in scaling. 4:24:21 So that's a kind of ambitious idea. But 4:24:24 but I think something like that could happen. And I think the 4:24:27 Namecoin thing that would do your identity idea 4:24:30 your identity would be like your actual name 4:24:33 everywhere. So you wouldn't just have like a screen 4:24:36 name on Twitter or screen name on YouTube screen name 4:24:39 on whatever Instagram. 4:24:41 So I think that's a good place to actually 4:24:44 have some kind of like on block 4:24:47 chain social media thing. Although of course 4:24:50 it would not actually work for scan to every single message 4:24:54 but the few key messages registering 4:24:57 letting people know what your public key is 4:25:00 so that they can communicate with you letting people know 4:25:03 like where to find you like what is your onion 4:25:07 address or your ITP address or something. So I think that 4:25:10 something like that could work. I think 4:25:14 I think there is one problem. Nostra 4:25:17 has that that is probably more important 4:25:20 than the long term data 4:25:23 availability and that is just you 4:25:26 don't have any guarantees that that 4:25:29 if you send someone a message they will receive 4:25:32 it. That's kind of intriguingly 4:25:36 the opposite of if you use anything on chain any 4:25:39 any message there. Everyone knows that everyone receives 4:25:42 it which is quite a very intriguing 4:25:46 different situation. That's that's that's exactly the 4:25:49 bargain that the Nostra did with the devil is 4:25:52 that it gave up shared state 4:25:55 with good consensus and that's how it gets 4:25:58 decentralization and censorship resistance. But the 4:26:01 the cost of that is that there is 4:26:04 no data availability in the sense that there's 4:26:07 there's not even a single unified view on Nostra from 4:26:10 anywhere. Right. And like you said there is no guarantee 4:26:13 of persistence either. But that's the bargain 4:26:16 with the devil that Nostra did. And delivery because 4:26:19 yeah. 4:26:22 I mean if the Nostra protocol simply documented in a NIP 4:26:25 saying for high value messages that you want to 4:26:28 be guaranteed to have data 4:26:31 availability and guaranteed to have persistence use 4:26:34 this relay zero which doesn't use WebSockets like 4:26:37 every other relay but instead simply 4:26:40 creates an inscription 4:26:43 that then other Nostra nodes can read 4:26:46 that's the relay zero kind of fallback 4:26:49 if people with high priority messages that need 4:26:52 that data availability and persistence people would say 4:26:55 important message you know checkbox on 4:26:58 and it would go into Bitcoin inscriptions and then you would 4:27:01 get what you're not getting from Nostra today 4:27:04 which is availability and persistence 4:27:07 and a unified view. 4:27:10 Nostra would have like 4:27:13 a very nice use case 4:27:16 of just like completely 4:27:19 sidestepping the whole 4:27:22 problem we have with domains 4:27:25 and web servers and stuff 4:27:28 like that and there is a possibility 4:27:31 for it to be used like 4:27:34 such a network that 4:27:37 is an alternative to these JSON 4:27:40 API calls basically. So 4:27:43 instead of having an application where you have 4:27:46 a hard-coded 4:27:49 domain or 4:27:52 whatever in the application 4:27:55 and everyone can see what it is and 4:27:58 they can hunt down your server 4:28:01 and say arrest you for 4:28:04 running a Chomini cache mint 4:28:07 or something like that. Instead of that 4:28:10 you would have like an AMP app in the application 4:28:13 and the communication can actually happen 4:28:16 in Nostra DMs. The problem however is 4:28:19 that you run into this 4:28:22 maybe you would not need to store the data forever 4:28:25 you would need to store it for like a period 4:28:28 of time. You would need it to be available 4:28:31 for proving things in 4:28:34 these back and forth protocols but you don't really 4:28:37 need it to be stored forever. If it's stored for like 4:28:40 a month by delays or whatever that would be completely 4:28:43 fine but you actually do need 4:28:46 like assurances of delivery 4:28:49 and provability because that would make 4:28:52 a lot of these 4:28:55 off-chain scaling solutions be able 4:28:58 to use this for 4:29:01 communication but I don't think it actually works. 4:29:04 When you try to put this sort of 4:29:07 communication on a blockchain I think that just 4:29:10 doesn't scale unless the blockchain is 4:29:13 pruning in its nature but maybe not 4:29:16 even then I don't know. So basically I don't see 4:29:19 kind of it solving 4:29:22 that particular use case. I don't see anything 4:29:25 really solving that but I think we need to find 4:29:28 like a middle ground 4:29:31 between static web pages on 4:29:34 blockchains stored forever and 4:29:37 like having a web server that 4:29:40 can be hunted down and confiscated 4:29:43 or whatever. 4:29:46 Well thank you. 4:29:49 I think you have a similar situation 4:29:52 in Bitcoin. If you know when Bitcoin core starts 4:29:55 it has to have a bunch of seed IP addresses to 4:29:58 find peers. This is what's missing from 4:30:01 Nostr is the ability to bootstrap using 4:30:04 some external system and 4:30:07 a perfect way to bootstrap would be to have 4:30:10 some kind of channel in inscriptions where you 4:30:13 could just say if 4:30:16 the public key also happens to have 4:30:19 an inscription under it on Bitcoin 4:30:22 that's where you can go to bootstrap. 4:30:25 The bootstrapping semantics are not defined 4:30:28 in Nostr but if they were then after you bootstrap 4:30:31 through Bitcoin inscriptions you could then continue the 4:30:34 protocol by communicating whatever relays you have 4:30:37 shared with all your peers later. 4:30:40 So this is similar to how Bitcoin has to have a list of 8 or 16 IP addresses to give you the seeds which is not specified in Nostr but if it was through Bitcoin that would solve your problem I think. 4:30:55 I'm not sure but I will let others talk. 4:31:03 For you to host the data we can run our own relays but the problem is that everyone has to connect to my relay to see my messages and I think they will like you said pick up a relay that's sent to a relay zero that retransmits to other relays for example I don't know. 4:31:28 Relay zero has to be a well-known place that everybody knows how to get to it shouldn't have an IP address right it should be like an implicit shelling point which my candidate for that is Bitcoin inscriptions that's the relay zero is whenever you start your Nostr relay or Nostr client go there and see what this is like the meta Nostr this is for bootstrapping only. 4:31:59 Yeah but that's just for the messages because when Nostr came is just for text messages and well that's the most important. 4:32:10 Moon is right about people are trying to do decentralized communication protocols that cannot be censored like there's all these attempts to do multi-state coordination on Nostr or Nostr marketplaces where people instead of going to dark web and being subjected to exit scams by guys running these you know nodes on tour you can just have a Nostr marketplace that occurs spontaneously. 4:32:38 But what's missing is that little piece of coordination out of band which is where do you go to find the set of relays that this marketplace uses. 4:32:49 Not just that because you need fraud proofs if you want to do this peer-to-peer marketplace or you want to do so many cash means and stuff like that that is highly reputation based and that is the main incentive not to cheat right you lose your reputation you lose your business. 4:33:07 So you need fraud proofs and for fraud proofs you actually do need to make sure that you can prove either the existence of something at a given time or the absence of a reply in a given time and the Nostr relay network right now absolutely doesn't work for that. 4:33:28 Well because like you said it's because Nostr does not provide any guarantees that your recipient will get the message right. 4:33:35 But there is a way to ensure that every recipient who wants to get important messages gets those important messages is that to hard code the behavior into every Nostr client that says when you start up along with your usual list of relays that are configurable always check relay zero which is you know Bitcoin inscriptions. 4:33:58 A Bitcoin inscription is always checked by every Nostr client and the messages can get there yeah. 4:34:04 Then those messages do have to contain fraud proofs etc right for marketplaces but at least they will get there. 4:34:11 But all those messages should be public it's not a good way to do that. 4:34:18 No they could be encrypted right encrypted to the public key of the recipient. 4:34:22 Yeah they are they are by default on Nostr the DMs are encrypted so that's not a problem. 4:34:29 Yeah but you can see who sent you who. 4:34:33 The thing is I don't want to bring up like shit coins but I have to Odyssey is doing really really good as a substitute for YouTube because YouTube is a shit. 4:34:52 Yesterday I was familiar with whatever it is what was it called the shit coin. 4:35:01 A library I think. 4:35:04 Oh library yeah I remember that from back in the day those people were in New Haven around the same time I was. 4:35:09 Yeah Odyssey is really great. 4:35:13 It's it's it's the people there still not censored. 4:35:20 And yesterday I uploaded a video on YouTube. 4:35:24 It was a documentary called Out of Shadows. 4:35:28 YouTube just said that it was a conspiracy theory harmful violence. 4:35:34 Just say the documentary just say that you shouldn't trust the information that you are getting. 4:35:40 So yeah and I would say people have even this community of 3D printed guns and people are sharing. 4:35:52 There's a guy called 3D printed general. 4:35:56 He YouTube channel was completely banned just because he puts a video of the history of 3D printed guns. 4:36:05 And a lot of things that people are being banned from YouTube. 4:36:09 But Odyssey I don't know how it works. 4:36:13 I have to look it up but I think it's uncensorable. 4:36:18 I don't know but the channels can be taken down. 4:36:21 The only thing that I know is that it's working and people are not getting banned and that's free of speech there. 4:36:28 And the way it is now is not working the proper way because people are not incentivized to host videos. 4:36:39 We did have let me see we lost Mar as a speaker but maybe he will come back. 4:36:49 But yes I think this topic is certainly of interest like what will digital scarcity be used for. 4:37:01 And in particular why is the communication backbone of the Internet so bad. 4:37:08 Because it does feel very heavy handed like the YouTube seems to be very very. 4:37:17 I mean I'm sure there's an interesting flip side to it which is just that they want to protect the advertising dollars. 4:37:24 And so they don't want anything on there. 4:37:26 They want to discourage anything that's just too weird. 4:37:29 You know like I don't know if they want videos of like people getting killed and stuff like on YouTube like probably not. 4:37:38 So my guess is that part of it is of Russians being killed but not videos of Ukrainians being killed in the war. 4:37:47 Yes. 4:37:49 So that's obviously a double standard. 4:37:51 But of course I think every time there's a war people always move very quickly to boost all the good news on their side. 4:38:03 And you know what I mean. 4:38:05 You don't want people to despair. 4:38:07 It's like you said there's a bad dynamic but there's also the deep state dynamic. 4:38:12 So Twitter is abandoning all the advertising revenue in favor of eight dollars a month. 4:38:17 And I think they're successfully transitioning from advertiser driven revenue to the subscription revenue. 4:38:23 Once they do that then they're immune from pressure from advertisers. 4:38:30 But there's still the deep state with all the witch hunts and stuff. 4:38:35 Elon Musk was on the spaces excusing himself for the ADL last week. 4:38:44 They're everywhere. 4:38:47 And he just said about that. 4:38:50 Oh nice that you approve the ad revenue here on Twitter. 4:38:55 Before Elon bought Twitter. 4:38:59 No after he bought Twitter. 4:39:01 They released these Twitter files literally saying that the CIA. 4:39:07 It was very surprising. 4:39:09 I mean it was very surprising. 4:39:12 I mean it wasn't literally surprising but it was surprising. 4:39:18 Of course. 4:39:20 But I just meant that it was surprising that it was so explicit. 4:39:25 Like there's emails where there's just like here's a list of accounts we need taken care of. 4:39:31 And they're like okay we're on it. 4:39:33 It's just like what? 4:39:36 This is exactly. 4:39:39 Now we have David Bailey is here. 4:39:42 Hello. 4:39:44 Dude what's up with Bitcoin magazine giving you some beef. 4:39:50 I don't know. 4:39:52 Maybe I should be asking you. 4:39:54 I don't know. 4:39:56 I hear it's run by. 4:39:58 I hear it's run badly. 4:40:00 I think. 4:40:02 That's definitely true. 4:40:03 It was it was well run when Vitalik was running it right. 4:40:07 Yeah. 4:40:09 Yeah. 4:40:11 This is me. 4:40:13 Bitcoin. 4:40:15 It's just like Vitalik is the big friend of Ordinal's in there for Bitcoin. 4:40:20 Well. 4:40:23 We were discussing earlier. 4:40:25 If you watch the recording we talk about the article yesterday's article or whatever. 4:40:29 Whatever day it was. 4:40:30 Well I thought there was some interesting elements to it. 4:40:32 I thought there was other parts that made no sense to me. 4:40:34 But I will say one of the nice things about having a platform is when you let people call both ways I feel like you get more credibility for the platform in general. 4:40:48 So I'm glad to have a diversity of thought and opinion there. 4:40:54 Yeah. 4:40:57 I think. 4:40:58 I actually also I definitely think it's much better to have long form articles as critique of Drivechain rather than like tweets or whatever. 4:41:11 I think that it's actually a lot better. 4:41:13 Yeah. 4:41:15 Even though that one wasn't that one was great. 4:41:17 But but yeah that's that's much better because I don't know I just think that's it's just like more substantive conversations. 4:41:26 It actually. 4:41:27 Yeah. 4:41:28 It feels like it has a like a direction or something going. 4:41:33 Yeah. 4:41:34 Right. 4:41:35 It's also kind of like more of a sense that it's a finished thought because like a tweet is always too little. 4:41:41 So everyone knows that there's not enough context. 4:41:44 But when it's like when someone has a long form thing they're really like their reputation is kind of on the line where they say this is the best I can do with all the I had as many as much space as I needed and I laid out my whole thing and this was the best I could do. 4:42:01 Yeah. 4:42:02 Have you tried. 4:42:03 You know it's possible to go to GPT 4 and tell it to create a court where there is a pro and a con side and a judge and then you can stage an argument for and against any issue and have the judge decide on the merits at the end and GPT 4 will run the whole process for you. 4:42:22 That's amazing. 4:42:23 You see what happens. 4:42:25 I was loving GPT 3. 4:42:27 I was loving it. 4:42:28 And then everyone's been telling me how good GPT 4 is. 4:42:31 So this is kind of like when you save a dessert for a really long time. 4:42:36 I've been kind of like trying to build it up like I'm trying to remember what was life like before GPT 4. 4:42:42 And I just kind of even though I say GPT 3 I still haven't really used GPT 4 because everyone's like you know Peter Schiff's son said it was the greatest thing. 4:42:53 You can go right now on GPT 4 and say please form a coherent argument for why all criticism of Drivechain is reducible to concern trolling and misunderstanding of what it does. 4:43:04 And it will go scour the web and it will summarize the whole argument in one page point by point for you. 4:43:13 We should do that. 4:43:14 And then I'll send it over David. 4:43:16 That'll be new. 4:43:18 He just said he liked both sides. 4:43:20 The new long form. 4:43:22 That will be my new article written completely by GPT 4 and my amazing prompt. 4:43:29 My amazing prompt of course is the seed of creativity. 4:43:33 AI support Drivechains. 4:43:37 You know the strangest thing is that you get the best answers if you conclude every prompt that you make by the following sentence. 4:43:45 Take a deep breath and think it step by step. 4:43:49 Think it out step by step. 4:43:50 If you say take a deep breath and think it out step by step carefully for some reason that just drastically improves the quality of the output. 4:43:58 I'll tell you the reason. 4:44:00 Well this is me being an armchair psychologist. 4:44:03 But I think the implication is we have obviously we have obviously our brain has many different modes of thinking. 4:44:10 But there must be a big edge to some of the ones that involve not taking a deep breath which is why they must work better in some cases. 4:44:20 Probably not a case where you want a written textual reply. 4:44:24 Yeah. 4:44:25 So but they must work in some cases that are online like where people go back and forth quickly or something else is happening. 4:44:33 You know like it's virtue signaling or it's flirting or something. 4:44:38 And so that must automatically it must automatically discount all those. 4:44:45 But it must be something. 4:44:46 You see what I mean. 4:44:47 Because otherwise it would be it can't be the case that that always improves everything because that doesn't really make any sense. 4:44:55 Like it would just it's already trying to do the best thing. 4:44:57 So you must be cluing it in that you want a certain flavor of response which is like a more rational flavor or whatever you know what I mean. 4:45:04 But I mean anyway it's my sort of theory. 4:45:08 No I mean it's crazy how you can go tell it to create personas. 4:45:11 Like you can you can actually formulate a demand that it create a persona of a well-informed proponent and well-informed opponent. 4:45:20 And you can have them read all the cons and pros on the Internet for one side or the other. 4:45:27 And once those personas have been fully created and indoctrinated then you can have them lay out their best arguments. 4:45:34 And then have a third persona of an impartial judge summarize both sides and render an opinion. 4:45:40 And people have done that on political issues. 4:45:43 But this Drivechain that's you know you can just basically go dump that into a prompt a paragraph long prompt and you will get some amazing output. 4:45:53 And then inscribe on the blockchain. 4:45:57 It will be forever. 4:45:59 Inscribe it. 4:46:02 Nice I like that. 4:46:04 Hey well. 4:46:06 We should do it. 4:46:09 That would be great. 4:46:10 And then we can have them. 4:46:11 You need a plugin. 4:46:13 Plugins are possible on GPT-4 so you need an inscription plugin. 4:46:17 Inscription plugin. 4:46:20 Yeah that's good. 4:46:21 You just say inscribe this answer like you have share this answer. 4:46:25 Yeah you just you can just say that internalize this answer as a Bitcoin inscription and send it over to this address for my ownership. 4:46:35 That's not as catchy though Alex. 4:46:40 That was that's too wordy. 4:46:42 Let's check GPT-4 to shorten that. 4:46:50 Bit drive. 4:46:56 Quick question for you Paul. 4:46:59 So we have our panel next week. 4:47:03 Curious if you. 4:47:06 I haven't listened to the debate that you did with Peter at. 4:47:10 At. 4:47:13 TabConf. 4:47:14 TabConf. 4:47:17 I'm going to before our session but. 4:47:21 You know what do you think are. 4:47:25 The most interesting questions to ask. 4:47:29 Peter. 4:47:30 Like you like probe Peter's position. 4:47:33 And you know after the past couple of months of you taking fire from all directions. 4:47:40 What do you think are the most sensitive questions for you to answer. 4:47:46 Well I mean I asked Peter's belief is that if miners are persuaded to do anything. 4:47:52 Then that's a block size increase. 4:47:54 So I asked him. 4:47:55 Is an is buying an ASIC is an ASIC a block size increase. 4:47:59 But he didn't answer it. 4:48:01 The audience had sort of moved on. 4:48:04 So but I thought that was even though that sounds ridiculous. 4:48:07 That's certainly I was thinking like what how far I see really take this idea that anything that a miner is persuaded to do. 4:48:12 And of course if I if someone says but I don't know if the audience will get anything out of it but it's like. 4:48:18 If someone offers a miner fifty dollars to like dance or something. 4:48:23 Is that a block size increase. 4:48:25 So I don't know. 4:48:27 He also. 4:48:29 One thing that he should be sort of asked about is he we paid him to write this written critique of Drivechain but he still has not produced it. 4:48:40 So this is like many months ago three four months ago. 4:48:44 I don't know exactly how long but it was a while ago. 4:48:47 And he he has all this time to do all this other stuff. 4:48:51 And he's been saying he says like in Luke's pull request. 4:48:54 This is a terrible idea. 4:48:56 And he's tweeted that merge mine sidechains are Greg Maxwell's biggest mistake. 4:49:01 And so he's tweeted for years about this idea of being terrible. 4:49:05 But he's not producing any of this. 4:49:07 And in fact not only is he not produced the report but he started actually tweeting in public like the day before the debate that he didn't really know the idea and you would have to ask me some questions live on stage in order to understand the idea. 4:49:22 So if you watch the debate you see that Tidwell is a little confused because what he thinks Peter is doing. 4:49:31 He thinks that Peter is asking me some kind of like Socratic question to like tee me up for some kind of haymaker or whatever as Tidwell put it. 4:49:41 But really they were he was just asking me about the protocol which also made it kind of bizarre for me because I was like now I have to play two roles. 4:49:50 One is I have to like helpfully explain the idea to him in addition to doing like a debate opponent type thing. 4:49:57 And then Tidwell said that he didn't he didn't realize that he hadn't seen those tweets until after the debate and he didn't realize that Peter had basically become unprepared. 4:50:10 So all of these are kind of mysterious constellations of things. 4:50:14 So like you know this is the idea because it was all he could end up saying was that it was a block size increase. 4:50:22 But it's not a block size increase at all. 4:50:26 The only thing that's a block size increase is what our layer one node is required to do in order to measure confirmations. 4:50:33 I don't know why Peter Todd says that. 4:50:36 And you can see how bizarre I find it when I have to even ask him a question that is like is buying an ASIC a block size increase. 4:50:46 So and then he's also maybe complained about like his time. 4:50:51 He's like it might take miners some time to set up the sidechains or something. 4:50:56 But it's kind of like it's really absurd you know because the miners do all kinds of things all the time. 4:51:02 They you know like it takes them all kinds of time to do everything when they plug in all the miners you know when they research a new cooling system. 4:51:13 So it's really this bizarre paternalism on the part of the miners and Peter Peter's view is that we should take a big interest in what miners do all the time. 4:51:24 As for myself I don't I mean I think the idea is has enormous potential and is basically harmless and that's just my point of view. 4:51:37 I think probably I was too polite in advocating for it and I just kind of shrug people critique it and I would say some people say this some people say that. 4:51:48 Even though the critiques don't make any sense. 4:51:52 I don't know what I would be asked. 4:51:54 What would I be asked. 4:51:55 Maybe someone here can suggest something. 4:51:57 What should someone ask. 4:51:58 What should I be asked. 4:52:00 One topic I know I want to drill into is I want to go into the most controversial part of the proposal or not proposal. 4:52:10 The conversation in general which is activation and minor activated soft forks and. 4:52:18 Yeah. 4:52:20 That is the most controversial part of the of course that it doesn't really have anything to do with Drivechain specifically it's more just about our defective culture after all these years. 4:52:31 Is unable to regard like progress or even just like it's unable to. 4:52:42 We have this complacency that I think is a huge mistake. 4:52:46 We just think everyone thinks Bitcoin the current version of Bitcoin core is a is perfect. 4:52:53 And I think that's a huge risk. 4:52:55 Yeah. 4:52:56 And it's like there's no pre. 4:52:59 There's no process for advancing things. 4:53:04 And so when you just take the only process that's known and pursue it the critique and attack is well how dare you follow this process. 4:53:15 It's like well what other process is there to even follow. 4:53:19 I mean it was very disappointing that Luke put out the pull request and he said it was the drafts in the title which is the proper thing to say and he had no activation logic in it at all. 4:53:29 And in it he said he only wanted people to comment. 4:53:34 He said it very explicitly that he only wanted people to comment on the approach he was using and not on whether or not the idea was desirable or whatever. 4:53:44 He made it crystal clear. 4:53:47 But then that pull request was immediately overrun by basically vandalism. 4:53:53 But more than that very few people participated in like reviewing it honestly which is even worse. 4:54:01 So it was the so it speaks to is basically a kind of a corruption and a hypocrisy in the process which is kind of like even though it's partially working. 4:54:12 It just speaks to basically that there is there you know like the unwritten rules or whatever. 4:54:21 And that would seem to indicate that there's plenty of room for people involved in the process to advance their own agenda at the expense of Bitcoin. 4:54:31 By the way what I saw in that pull request was that it is using or trying to use the UTXO database to hold the Drivechain databases so that it does not add additional databases to the transaction validation context. 4:54:58 Was that something like that going on? 4:55:01 Yes that's correct. There's like a kind of a different index. There's like a negative index of some kind. 4:55:10 And that's something that Luke did. 4:55:15 Yeah he came up with that. 4:55:17 I think he probably I mean he would certainly know much better than I. 4:55:22 He probably thought there would be some combination of like easier to review easier to understand. 4:55:26 Yeah I mean it was one technical criticism. 4:55:32 One technical criticism I've met in regards to the Drivechain is that it expands the transaction validation context and we might not want to do that and when I looked at the code that Luke was writing that's what occurred to me that this seems to be a different approach and I was however not sure when this happened and where this happened first and that's why I was... 4:56:00 So the critic was that you are adding two additional databases to the transaction validation context. This is a very developer view of things. 4:56:11 Like the users don't understand this probably by running a node but for developers the context where you call a function or whatever the size of that context does matter. 4:56:25 And in the maintainability in the possible errors in the complexity of the code in the scope of the changes that need to be made. 4:56:34 So if you can you know keep that like small and minimal and every alternative to Drivechain that would use like covenants or covenant like primitives to do this without explicit databases. 4:56:51 Because there are ways to less efficiently do things like with something like the Merkleizer the things proposal or something like that. 4:57:01 You just basically implement a hash rate, a scroll counter and the walking back and forth logic in the script and you can do the blind match mining with covenants. 4:57:12 So you basically could do this in a very different way and those would have this advantage that they are not actually adding additional databases to the transaction validation context. 4:57:22 And you basically just have the UTXO set as a database for evaluating the transactions in a block. 4:57:29 And from what I saw Luke actually rewrote the BIP300 logic in a way that he did something very similar some clever hack where he actually put the data in the same database. 4:57:44 Yes but it is a very minor point I mean like I think I mean I don't know really what to say like it's kind of like if you had an Excel spreadsheet and you instead of adding two new tabs he could keep it on the first tab or something like that you know. 4:58:04 So it's not really like yeah it's totally a core developer fixation or whatever. 4:58:13 Yeah but it wasn't like a technical critique like it's like a you know it's like you build a car and then you something under the hood is moved somewhere else also under the hood. 4:58:27 But that is the type of productive thing that should happen whenever anyone you know tries to contribute to Bitcoin Core. 4:58:40 So that would be like a good thing but very few people even commented on any of that you know like that was what Luke asked for comments about. 4:58:48 But so what do you make of this argument of BIP300 makes miners custodians. 4:59:01 I don't make really anything of it because the miners are already custodians of everything and the only way to change that is to remove proof of work from Bitcoin. 4:59:14 So the it's true that the miners have slightly more what you might call. 4:59:23 Well I don't even really believe that. 4:59:25 So because the idea is the miners have a narrow task which is to copy paste this hash from the sidechain to one once every three months. 4:59:37 And they really have the choice between like conforming to that or rejecting that and trying to steal all the coins for themselves. 4:59:46 But that's the very same choice that they face when they support the lightning network or when they support regular L1 Bitcoin UTXO moving around. 4:59:58 So I think it also doesn't matter. 5:00:01 The logic of the custodian question is the same as the terrible logic of caring about what other people think third parties think about the Bitcoin network such as the senator type thing which I think is just terrible. 5:00:19 It's a very low quality idea you know because if you care about if you if you have like if we split Bitcoin into like compliant hash that was like compliant with let's say the government of Russia or something and one that was just independent. 5:00:39 The compliant it once it's compliant it's all the proof of work is useless because it's just saying it's all coming from whatever it is Washington D.C. or whatever. 5:00:49 If that makes any sense. 5:00:51 Yep. 5:00:53 So it's all the proof the whole point of proof of work is to disregard the opinion of irrelevant third parties who people who have some kind of opinion on what people should do. 5:01:08 So my view is that hashes don't even have any agency and the mining pools don't have any agency either. 5:01:14 So even the question of whether or not they should support Drivechain is kind of like or whether or not they should support any Drivechain. 5:01:20 The one that has a lot of coins in it or steal from it. 5:01:23 All of this is just the mining pools will do whatever they think the hashes want them to do because the hashes can switch mining pools at the drop of a hat. 5:01:33 Very easily and cheaply. 5:01:35 So the pools have to do what they think their clients do. 5:01:38 We don't want them to do. 5:01:40 So the pools really have no agency. 5:01:42 They don't have any ability to decide. 5:01:44 So they're not really custodians of anything because they can't they're not they don't own anything. 5:01:49 They temporarily on the show. 5:01:51 Is this kind of like you said something like if you had a show if you were like whoever it is. 5:01:57 Let's say you're Bill Maher or something. 5:01:58 In the in an instant the security guards are running Bill Maher show like in any given point in time. 5:02:06 But you know if you wanted to fire the security guards and replace. 5:02:10 So then how much agency does anyone really have. 5:02:13 And the hashes themselves they must do because of the difficulty adjustments. 5:02:17 They if they're not profitable if they're not in the upper half in terms of profitability. 5:02:23 They are fired. 5:02:24 They are fired. 5:02:26 And so they also have no agency. 5:02:29 So the whole idea about. 5:02:31 I don't know you know the Drivechain is a very simple offer to miners. 5:02:37 It offers them lots and lots and lots of fees. 5:02:40 In return it basically asks that they copy paste the hash. 5:02:48 It's not really. 5:02:50 They cannot do that. 5:02:52 But if they don't then they you know it's no different than just if they decide to stop supporting the lightning network or something. 5:02:58 Moon Settler. 5:02:59 Yes. 5:03:00 Hello. 5:03:01 Yeah. 5:03:02 It did. 5:03:03 It did occur to me when I read that article from the miners that they basically screwed the pooch if they have to worry about that already. 5:03:14 So they are overexposed oversized and position themselves badly jurisdictionally if that is a big concern. 5:03:26 But I didn't want to really get into that with them. 5:03:30 I don't think this is an awkward thing to discuss. 5:03:33 I think it would be a very good thing if we had minor revenues that they wouldn't touch that would decentralize mining like we mentioned before. 5:03:41 Even though we think this would be very small. 5:03:43 But the Zcash Drivechain if those were revenues that some kind of like KYC heavy minor if they couldn't touch those then that would actually be good because it would just melt that pool down. 5:03:58 Yeah. 5:03:59 And obviously they don't want that. 5:04:01 So they will argue about that. 5:04:03 As I mentioned that they don't actually want other miners to be more profitable. 5:04:07 And what I wanted to ask earlier from you is, is it really true that the miners, the hashers or the AC owners can just switch pools in this context? 5:04:18 So what is going on in the United States? 5:04:23 I like to call that thing Uncle Sauron for obvious reasons. 5:04:30 So I think they have this tendency where if ever 51% of the hash rate would be on American soil at one time they would just say that they now own the Bitcoin network and silly stuff like that. 5:04:48 It's just the nature of the beast. 5:04:50 And in this case they can easily, so if publicly traded miners are the majority of the hash there, they can easily just mandate that they have to use OFA compliant pools or something like that. 5:05:03 They can just make an executive order or whatever other regulation. 5:05:07 They can also try to use various subsidy tactics, tax exemptions or whatever for compliant miners. 5:05:14 As you already know, if that is economically detrimental, then all it does is increase the ROI of non-compliant mining, which means that if you are an enterprising person and you start mining in a different jurisdiction, 5:05:32 you will eventually be able to outcompete the other miners who will not only start to lose on a relative basis, but because of the difficulty adjustment they will eventually go completely out of business. 5:05:45 In the ideal scenario where they leave money on the table it is, if the government subsidy is significant enough for the opposite to happen, for the hash rate to grow, then that is very, very bad for Bitcoin. 5:05:58 And I'm afraid it would cost almost nothing for the budget of the United States. 5:06:05 It would be like a joke. 5:06:07 So it's very weird for me when people boast about how nobody can do anything about Bitcoin. 5:06:12 Well, let me answer your question, though. 5:06:15 If it doesn't cost anything, then what's really happening is not... 5:06:19 Because remember, the main bad thing that the miners would do would be to censor transactions. 5:06:24 So if somehow the government is paying them more, then what they're really doing is some kind of complicated outbidding of the... 5:06:32 They're really doing an organelles inscription thing. 5:06:35 They're outbidding the block, but they're doing this in favor of not broadcasting their thing. 5:06:40 So it's kind of weirdly... 5:06:42 But again, they can only keep that up for as long as the people are unable to outbid them in terms of fees. 5:06:50 And it's only suppressed until the US government stops bribing them to not include these transactions. 5:06:58 And then all the transactions become up for grabs immediately. 5:07:02 But let me answer your first question about how easy it is to switch pools, which is to say it's very easy, and they even admit that in the article. 5:07:09 And on Twitter afterwards. 5:07:12 But we should make it even easier. 5:07:16 So one thing that I have been tinkering with recently is a piece of software that... 5:07:24 Like it's a plausible piece of software where every single... 5:07:30 The goal would be to have every single miner run this software, which is kind of like this big... 5:07:41 I mentioned it to you at the beginning, Moonsettler. 5:07:45 What it does is it keeps track of who's in what pool. 5:08:00 Oh. Can you guys hear me? Or am I frozen? 5:08:05 I can hear you. I think Paul's... Paul went out. 5:08:11 Yeah. 5:08:13 I wanted to ask him that since he got his new phone, did this Twitter app got better? But it looks like not by much. 5:08:23 This is big mining interfering in this Twitter space right now. 5:08:28 They're censoring and silencing Paul. 5:08:33 You know, I will say like, you know, first off, talking about anything mining is a little bit of a sensitive topic for me because a lot of miners are customers of mine. 5:08:46 And I do not want to piss off my actual customers. 5:08:50 And I also think, you know, in terms of selling Drivechains and advocating for it, it is not going to be well received by miners to say kind of like, hey, miners have gotten too big and really y'all need to be disrupted. 5:09:12 I think that that's going to be a sales pitch. 5:09:15 But that being said, I do think it's true. 5:09:21 And I think that like if if let's just say hypothetically, like Bitcoin mining was made illegal everywhere. 5:09:30 I was like I started thinking this through the other day, like what would happen? 5:09:35 And I honestly think that if we could get Bitcoin mining banned in every country, Bitcoin would become much more robust, like much stronger because the network wouldn't shut down. 5:09:49 You just drive all the activity underground on the mining side. 5:09:52 And from an end user perspective, it's not like miners improve the user experience of Bitcoin. 5:09:59 So the hash rate would just basically flow to the people that are best at hiding their activity, which is kind of what we want. 5:10:08 Like compliant Bitcoin mining is really, you know, like, quote, legal Bitcoin mining is really a subsidy to those that do their mining out in public. 5:10:22 Like they do it out in where everyone knows what they're doing, because that's the whole point of being compliant is that you don't have to worry about the authorities. 5:10:31 You don't have to worry about the authorities. You don't build that into your business model. 5:10:35 Well, one day we're going to have to worry about the authorities. 5:10:38 One day Bitcoin mining is not going to be compliant when the government turns hostile against Bitcoin, truly. 5:10:42 So, like, why wouldn't we want to start incentivizing the behavior of miners? 5:10:52 Exactly what Paul was just saying. It's like, OK, if there's all this extra revenue to be generated by, you know, hiding your activity, you're going to get a lot more miners hiding their activity. 5:11:05 Yeah. So the only counter argument could be that it is like objectively not a nice thing and a very fair thing to change the rules after people made their business plans and investments. 5:11:23 So to change the rules and change their profitability after they committed financially, that's kind of like an asshole move. 5:11:31 But I'm not overly sensitive to the plight of U.S. miners, I have to say. 5:11:39 Yeah, it's definitely an asshole move. So I hear that. And that's why miners also would not want to hear that message. 5:11:47 But like, you know, I think we've, you know, it's a beleaguered point that like home mining is not profitable and like you have to have like economies of scale. 5:12:03 And like if Bitcoin mining, but like nodes don't suffer from that same problem, anyone can run a node and like that's the value prop of a node. 5:12:11 So like what if like by, you know, making like Bitcoin mining something that is, you know, underground, you really return back to a dynamic where the only kind of scale you can mine at is like from your home. 5:12:31 You know, like now there's so few less institutional scale mining facilities that it actually can be profitable to mine at home. 5:12:42 I don't know. I don't know. Just a thought. 5:12:48 Yeah, sorry, guys, I got interrupted yet again by this crazy app that continues to crash. 5:12:55 But I was trying to say it's one software that everyone runs. And then it checks, it can check for censored transactions and blame a pool. 5:13:06 So it's like a pool hopper software. And since it's easy to see if a transaction is censored, because if you if you've heard about a transaction for like 20 minutes, and it should have been in the made it into the blockchain, you know, if it had the highest fee. 5:13:26 But it didn't, it misses like twice in a row or something, then you can be pretty sure that something sneaky going on. 5:13:38 So it can then ban that you can figure out which pool is responsible and just everyone just disconnects from that pool. 5:13:45 They join another pool. And then you just have it so that this can keep happening forever. And then as I mentioned, you move that layer, it's like if everyone ends up in one pool, it just has everyone flip a coin or choose a random number, and it just splits them in randomly into new pools and software would be able to also create a new pool from scratch. 5:14:10 So it would also be able to do that. So it'll be automated. 5:14:15 And that is why the important thing with the pools is just how easy it is to switch. And that can be made very, very, very easy. The thing is, we don't even really need to do any of that, though, because it's already so easy to do that. 5:14:29 I think the miners are already on a very short leash. When has any transaction really been censored? And when have there been like, you know, reorganizations, so that people can double spend like none of this stuff actually happens. 5:14:46 So already, they're on a very, very, very short leash. And already, it's very easy to switch pools. I think it's interesting how stable the hash rate distribution is, you know what I mean? If you check it on one day, you come back a month later, it's still like Foundry and pool, whatever, it's still Luxor with 3% or something. 5:15:05 So I find that to be kind of interesting. But I can only assume that just because everyone's happy with where they are, and there's nothing to disturb this equilibrium. 5:15:15 Yeah, my theory about that, why we did not see like real campaigns and stuff like that is, I believe it's a big part that there is a huge coordination difficulty that is basically unsolved for any such thing to happen. 5:15:32 But the problem with that is actually real markets that solve this coordination difficulty would cost basically almost nothing to set up. 5:15:44 And when people start doing silly things where they try to build up marketplaces for transactions and transaction acceleration outside the mempool, they actually like basically are laying the foundations for such a thing to happen. 5:16:01 And I don't see it, not only I don't see it an unsolvable problem, but I see it something that might actually just solve itself for those that want to pay for reorgs for whatever reason. 5:16:15 And a lot of people can opportunistically jump on it by basically submitting double spend transactions to this mempool alternative and when there is a profitable set, then it is offered to miners or any such thing. 5:16:31 I kind of think this could emerge unless the mempool is so good that nobody even thinks about using alternatives. I think that's kind of the direction that Bitcoin should go, but it's not a popular idea right now for some reason. 5:16:50 Hey, not to interrupt at all, but Satoshi Enjoyer, did you get a taproot wizard? What is going on here? 5:17:12 He got one. Damn, dude. Udi, what the fuck? Investor in Udi's thing, I can't fucking get a taproot wizard. 5:17:23 I think my mic is on. 5:17:25 Oh, I hear you. Did you get a taproot wizard? 5:17:27 Yeah, I just got one earlier today. Really happy about that. I think that the taproot wizard has been a monumental shift of Bitcoin culture, brought a lot of other people from other ecosystems back to Bitcoin and more eyes on Bitcoin. 5:17:42 I mean, that's how I learned about ordinals and inscriptions. Obviously, I've been a Bitcoinist very, very early on, but I think it's a good movement in general. I think that there's been a lot of benefits to the taproot wizards movement. 5:17:58 Well, dude, solid flex. Solid flex. Very jelly belly. 5:18:05 Thank you. Thank you. Yeah, I'm super honored to have one. As silly as it seems, it's just a pixel image, but I think it's more than just an NFT. I really do think it's a movement that hopefully will continue to do good things for Bitcoin. 5:18:22 I think ordinals in general has onboarded a lot of people to Bitcoin that were, you know, some people might say for the wrong reasons or whatever, but these are people that have spun up nodes. You know, there's been definitely thousands of nodes and at least hundreds that I've helped myself in the order core. 5:18:38 There's definitely been people that are, you know, that been in other ecosystems and now they're becoming Bitcoin maximalists. And I've had plenty of conversations with people that they're like, wow, everything else, you know, is incomparable to Bitcoin. And these are people that didn't really touch Bitcoin, but have been in the crypto ecosystem for, you know, over a year or two years or whatever. 5:18:56 So I think that's really good. And just seeing people running full nodes, learning about UTXOs, learning about self custody and just seeing the benefits of, you know, Bitcoin over other, you know, other chains and just to see, to understand why are Bitcoiners the way they are. Why do they, you know, what do they value? What is the culture of Bitcoin? What are the values of Bitcoin? And like a lot of people are becoming more exposed to that. 5:19:18 I think that that's a benefit. You know, more people learning about Bitcoin is good for everybody that are Bitcoiners and no matter for what reason they use it. And I think that that goes together with like Drivechains. It shows that, you know, people can use Bitcoin for different things. But as long as we're all using the same thing, we can all be under the same umbrella. We can all have like a common goal. People that might use Bitcoin for something we don't like, you know, that's OK because maybe other developers might help them out then. And we don't have to completely shun them out. 5:19:46 We can we can help them. We can all be together and work towards a common goal, even if we have differences and we might want to use it in a different way. So, yeah, thanks. Thanks for asking me, I guess. 5:19:56 No, we can't have any of that. Bitcoin adoption, people running nodes, people learning about what makes Bitcoin special. No, Satoshi and Joy, what about what about my podcast? What about... 5:20:13 Bro, Bitcoin is a cool band and if we let people find out about it, it's going to not be cool anymore. 5:20:18 I think that like the podcast is, you know, they're going to come crawling back. They're going to one day when they'll be the only way they'll be able to buy food will be with Bitcoin. 5:20:30 And then Bitcoin will have saved like they're they definitely have a good to them, right? 5:20:35 They definitely speak to a lot of people and people resonate with it, but not everybody. 5:20:38 There's going to be people that will not resonate with it. 5:20:41 And you want them to know those people are the problem. 5:20:44 We need what we should do is we need to melt those people down and pour them into a different 5:20:50 cast that so that they're exactly like the rest of us, because that's what Bitcoin is 5:20:55 about. Hey, speaking about what Bitcoin is about, one last comment and I'll get out of 5:21:01 here so I don't derail y'all's conversation. 5:21:06 But going back to Bitcoin miners being compliant, like I was also thinking about this the 5:21:14 other day on like like what makes Bitcoin like more valuable. 5:21:21 And it kind of bothers me that like we've allowed this narrative to take root, that 5:21:27 Bitcoin is different or special or Bitcoin is like Bitcoin exists because, you know, we 5:21:38 comply with the laws. 5:21:39 And so the government like allows Bitcoin to exist. 5:21:43 And. It bothers me because the unregistered securities that the whole point of Bitcoin is 5:21:51 like like there's nothing the government can fucking do about it, like that's what makes 5:21:56 Bitcoin valuable and powerful, like like the government's perception of Bitcoin, even 5:22:01 though they can cause a lot of pain, is kind of irrelevant, like that's the point of it. 5:22:06 And so, like in the power dynamic, Bitcoin is more powerful than the government, like it 5:22:13 like like Jesus, that's a very moxie thing to say. 5:22:16 Well, I mean, I guess what I'm saying is like you've been to the will of Bitcoin. 5:22:21 Bitcoin doesn't bend to the will of some elected politician. 5:22:25 And so from that perspective, having them ban Bitcoin, but it not fucking matter is like a 5:22:32 massive billboard that is displaying the power dynamic. 5:22:37 And so to allow them to like act like, oh, they've blessed it to continue. 5:22:43 It's like you're like you're just some fucking old man who shits in a diaper in 5:22:47 Washington, D.C., like you don't fucking matter. 5:22:50 Like, I don't know. 5:22:52 I just feel like it's like Bitcoin becomes more powerful, like more valuable when people 5:23:00 come to appreciate that its existence is independent. 5:23:04 Entirely from the political system. 5:23:10 Well, of course, I actually think it's a little worse than that, which is to say, if we go 5:23:15 down the road of saying. 5:23:19 That Bitcoin must always be compliant with whatever Washington, D.C., decides, then the 5:23:27 entire design is not going to work. 5:23:31 All the proof of work is wasted. 5:23:33 The, you know, the database would be more technically efficient and better, easier to 5:23:40 scale. Venmo, WeChat Pay, CBDCs, they would all be able to easily compete with Bitcoin 5:23:49 in that dimension. 5:23:50 So unless Bitcoin has this kind of subversive edge, I think it will definitely go to zero. 5:23:58 Well, I feel like the government's going to keep trying to sanitize its subversive edge 5:24:02 because the last thing the government wants is to be shown to be powerless. 5:24:08 So it's like they'll figure out some contorted way to make it seem like these two things 5:24:13 are working in combination, when in reality, Bitcoin has no fucking clue what they're doing. 5:24:20 It doesn't fucking care. 5:24:22 They're hanger-ons. 5:24:23 And the sooner that we can have everyone else see that, it's like just the faster that we 5:24:29 like, I don't know, dissolve their power. 5:24:31 I feel like this is a little bit out there, but like I'm starting to think that like we 5:24:40 need to get Bitcoin mining banned. 5:24:42 You'll need to have vendor adoption for any kind of like for anyone to kind of see what 5:24:50 you're proclaiming here, because if you had the government's close off any fiat off and 5:24:58 on ramps, like peg in, peg out, so to speak, then that would have not a catastrophic effect 5:25:06 because the network would continue, but it would certainly have an effect. 5:25:10 The only way that you make everyone realize that governments have no effect on Bitcoin 5:25:15 is to have wider vendor adoption. 5:25:20 Circular economy and the most important thing is this centralized price discovery for 5:25:28 Bitcoin, because so long as the price is discovered on a few centralized exchanges and 5:25:35 basically the fiat, Wall Street, bro, liquidity is the main driver of Bitcoin price. 5:25:46 It reacts to the changes in available credit almost immediately and the money supply 5:25:53 changes and doesn't really seem to care about anything else. 5:25:57 These are very centrally controllable things, so Bitcoin can hardly be free in this 5:26:06 setup. Well, I will what I will push back on with the the markets where these things 5:26:11 trade, because we have examples of illicit goods that are banned basically universally 5:26:19 and those markets are massively liquid. 5:26:22 So like, you know, cocaine or fucking like hard drugs, those are massively liquid markets 5:26:28 that are moving huge sums of money, moving more money than Bitcoin's moving. 5:26:32 And they're able to operate like just fine. 5:26:36 I mean, like I did not I did not say I did not say that we would not be liquid without 5:26:45 this. I would say that it needs to it needs to move off from this platform because these 5:26:51 platforms have shown that they will bend over to the regulators like almost immediately 5:26:58 they will fall. Then they implemented these KCM bullshit that was pushed on them without 5:27:03 much resistance. They did not try to flee the jurisdiction. 5:27:06 They did not try to. 5:27:08 I mean, a few of them did try to ignore VPN users and stuff like that. 5:27:15 But even they got smacked down and and beaten into obedience. 5:27:20 And somehow people seem to value the large compliant semi institutions. 5:27:28 And the whole thing basically went sideways there, in my view. 5:27:34 And now now the price discovery happens that an increasing beyond derivatives. 5:27:38 And I think what you are saying makes sense. 5:27:42 So I was kind of hoping that Bitcoin gets banned in the United States and especially 5:27:49 mining. I kind of found it weird that the European Union was more hard line on Bitcoin 5:27:55 than the U.S. for up till now. 5:27:58 It was a bit weird. 5:27:59 And I don't like this situation that the miners are so much exposed to the U.S. 5:28:07 legislators. And I do believe that it would probably better long term if Bitcoin was 5:28:15 basically mining and trading was banned in the United States. 5:28:20 But that's not the world we live in. 5:28:22 One can hope, one can dream that one day we can be banned. 5:28:29 The you know, I think Paul's point on the mining of like a compliance is subsidizing 5:28:37 one set of miners and it's and it's subsidizing one form of behavior. 5:28:43 And it's basically taking away potential revenue from those that would mind in a 5:28:47 noncompliant way. 5:28:49 I think that that applies equally to fiat on ramps as well, like like the centralized 5:28:55 exchanges that are compliant have have cannibalized the on ramp market and taken 5:29:02 business away from what would be the noncompliant like peer to peer markets. 5:29:06 And I remember when I got into Bitcoin, like the peer to peer markets were were 5:29:09 vibrant and now they basically all shut down. 5:29:13 I mean, there's maybe there's a couple left, but yeah, it's it's it's an 5:29:21 interesting kind of way to look at it of just like, yeah, I don't know, it's 5:29:25 interesting. That speaks to my point where if if fiat off ramps and on ramps were 5:29:32 banned, then all that we would have would be illegal drugs and podcasts and whoever 5:29:37 sells stickers with lightning on the Internet, we need to get more people, you 5:29:43 know, selling crepes and and lattes. 5:29:48 The reason I came up here, though, is if I could bring it back to Drivechains for a 5:29:52 sec. Yeah, sorry. 5:29:55 I just have a bit of a this is probably like quite beginner questions, but I just 5:29:59 want to make sure that I'm grasping this correctly. 5:30:02 And when you have this, the the miners who are all. 5:30:10 Like the word I think that has been used is kind of voting on a hash that they 5:30:14 copied and pasted, it's not really voting so much as just making sure that there's 5:30:21 like a sort of enough of a mass that agree on this particular hash being what the 5:30:30 Drivechain like the shitcoin enjoyers are saying, because it's it's it's supposed to 5:30:38 operate more like a protocol. 5:30:42 Yes, it's not. 5:30:44 I think I still stand by using the word vote, even though I think it is misleading. 5:30:49 I think it is actually the least misleading of all the words in context, because what 5:30:56 it does, it's supposed to highlight the fact that. 5:31:01 You are not when you run an L1 node, you're not required to run. 5:31:06 The L2 node, though it could be anything, and in that sense, it's kind of arbitrary 5:31:12 what it is. And that is very important because it would be very, very easy to design 5:31:18 something that works perfectly all the time and that miners could never steal from if we 5:31:21 just made it mandatory. 5:31:23 But the whole point of sidechains is that we're going to try to police a sidechain that 5:31:26 we're not looking at. 5:31:28 So we shrink it to this one arbitrary thing. 5:31:31 But then, even though on L1, from L1's point of view, anything could go there, any hash 5:31:37 could go there, any 32 byte hash could go there for this three month period. 5:31:41 And if there were a disagreement or like sort of a close vote, that would that would 5:31:48 entirely be a side effect of the shitcoin having some disagreement on their chain, which 5:31:55 is sort of spilling. 5:31:57 It's actually not possible. 5:31:58 I mean, it actually is possible because no matter how well we design the sidechain 5:32:02 template, anyone could fork it and then just delete all the good stuff. 5:32:07 And you could have it's theoretically possible to have a sidechain that has no software 5:32:12 and then no one knows what the withdrawal state is. 5:32:17 But it's theoretically possible. 5:32:20 That's so much free. Because, again, the goal with sidechains is to give people freedom 5:32:25 to try their own ideas and to also assign blame when the idea doesn't work. 5:32:30 Blame the sidechain developer. 5:32:32 Don't blame like the Bitcoin process or like the consensus or the people or the miners. 5:32:38 It's all about, no, you have your shot, sidechain developer. 5:32:41 And if there's no bugs and if it's popular, then you've done well. 5:32:48 And the miners, they also have their shot. 5:32:50 No one gets to say, no one gets to shirk the responsibility and say, well, what could I 5:32:56 have done? I was I'm only David Bailey, runner of a magazine. 5:33:00 What could I have done to fix this problem in Bitcoin? 5:33:04 Everyone always has their opportunity to fix the problem. 5:33:06 And they always get blamed if they don't do it right. 5:33:08 So the so so. 5:33:10 But the what I'm trying to get is everyone is resisting the ideas because they don't 5:33:16 want the accountability. 5:33:18 Exactly. I'm afraid that's probably the case. 5:33:21 But the what's happening is if you use our sidechain template, there's no disagreement 5:33:28 on possible on the L2. 5:33:30 The L2 will automatically calculate for everyone. 5:33:34 It's doing every single thing when it does its sidechain node, it tracks every sidechain 5:33:38 block, every sidechain transaction. 5:33:41 And then as part of the 300 rules, it has carefully kept track of during this period 5:33:47 which withdrawals haven't been paid out yet. 5:33:50 It sources withdrawals based on the L1 fee that they intended to pay if they make it 5:33:55 through the gauntlet, the 13000 count. 5:33:59 And it will automatically calculate the one hash that is the hash for that sidechain for 5:34:10 everyone. It's always the exact same and that is also the transaction ID of the ultimate 5:34:16 transaction that would pay out on L1 that all those withdrawals. 5:34:22 So it's all the same hash and it's exactly the same for everyone and it's procedurally 5:34:26 calculated automatically. 5:34:28 And in fact, then it's in every single sidechain block and every single sidechain block 5:34:32 header. And it's in our software. 5:34:35 It shows up in a little ribbon in the bottom of the screen where everyone can look at it 5:34:41 for three months. So that's that's the this is the technique is on L1. 5:34:46 It's arbitrary. Hash could be anything. 5:34:49 But on L2, it's it's the easiest thing to find in the entire world. 5:34:54 You know, you can't miss it. 5:34:55 And it's one hash. 5:34:57 It's the same for everyone. 5:34:58 And it's staring you in the face all the time. 5:35:02 It's very easy to find. 5:35:04 OK, so that's why it's. 5:35:05 So if if like some of the opponent's arguments have been like about if there's a sort of 5:35:13 split vote, but that would only occur if there was like some real maliciousness happening 5:35:17 on the on the sidechain where they were trying to go on. 5:35:21 It can never happen because it can only happen if what could the only thing that could 5:35:25 happen would be if you fork, if you if the blockchain has some kind of orphaned block 5:35:31 situation or reorgan near the exact moment when the new epoch epoch is is starting. 5:35:40 So when it's going to calculate, it's going to switch. 5:35:42 It's been telling you this one hash for January, February, March, and now it's it's 5:35:48 around April 1st and it's getting ready to click over. 5:35:51 Someone could do a last minute withdrawal to try and jump, jump the line to get on the 5:35:58 train in time, you know, before it leaves the station. 5:36:02 And if that block is like if there's some weird blockchain split and it's reorg out or 5:36:06 something, then that then it will change there. 5:36:10 But there's actually never any point in time when it is not known, because even if there 5:36:18 is even if that event happens, there will always be one of the two chains that is long, 5:36:26 either longer than the other or has the most recent block found. 5:36:30 So this everyone who runs a sidechain node will see this exact same chain state and they 5:36:35 will see the exact same hash. 5:36:37 And so I guess the reason why you that's why I hate to interrupt you, but I just want to 5:36:43 get in this last point about that's why I began the answer by saying I stand by the 5:36:49 word vote, even though it's misleading. 5:36:51 So maybe now you get a better idea of what I meant by that, which is what I meant was 5:36:57 it's not really a vote at all. 5:36:58 A vote is like there's two groups of people and they each have their argument for like 5:37:03 why you should vote for them. 5:37:04 And they're kind of like vying for your support in this adversarial situation. 5:37:10 But that's not what it is in the slightest. 5:37:13 However, I still stand by it because the most important thing to emphasize is that L1 5:37:18 is not required to do any of this. 5:37:20 I'm saying I shrink the problem to just one hash and I sort of hope for the best. 5:37:25 And that's much better, of course, than because otherwise we'd have to be responsible for 5:37:30 every single sidechain message, every single sidechain block, all the sidechain rules and 5:37:35 dependencies and whatever else. 5:37:38 And that would be that would not work at all, because this is something that already is 5:37:44 in L1. Counting to 13,000 and checking if transaction ID matches 5:37:51 something else is already what it's done. 5:37:52 So now I'll let you get back to asking whatever you're going to ask about. 5:37:56 No, I think I better understand it. 5:37:58 And yeah, voting, I don't know if that's the best word, but confirmation has already been 5:38:03 used. It technically is a cross-chain confirmation of a 5:38:07 kind in the sense that when a Bitcoin miner builds a block, when 5:38:13 they try to find the next block, they are sort of voting on which block to extend. 5:38:19 This happens to be the case that in our situation, they almost always vote on the most 5:38:24 recent block. But of course, they could try to go back and build some other block. 5:38:29 They just never do. And that is really, really similar to what is supposed to be happening 5:38:34 in BIP300, since everyone knows which hash should be upvoted. 5:38:39 But we cannot ever. 5:38:43 You see, the design has to be built around. 5:38:48 The whole point of any design is in this situation, I think, is like there are all these 5:38:54 things out there that are very big problems. 5:38:57 So you design it so that they don't become problems. 5:39:00 And then I don't know if this explanation is making any sense. 5:39:03 Moonsetter gave me the thumbs up, but it's kind of like the whole point, the whole point 5:39:09 that we extended the block, miners always find it in their interest to extend the latest 5:39:14 block. That's because the design is good. 5:39:16 And it only works because they could extend some other block. 5:39:21 And that's why, for example, the block withholding a block of ambiguous validity, which 5:39:27 is a problem we discussed earlier in this space. 5:39:31 That's how you beat that problem, by letting the miners extend any block. 5:39:34 So if someone finds a block and they say they refuse to tell you whether or not what's in 5:39:38 the block or whether or not the block is valid, you're not screwed. 5:39:42 You just go two blocks back and you just keep moving on and then you just orphan that 5:39:47 block. So it's because the design is so good that the problem never comes up. 5:39:52 And similarly, with PIP 300, the goal is it's totally and completely unambiguous what the 5:39:58 hash should be. 5:40:00 And that's why it's not as big of a deal to let the miners put any hash there that they 5:40:05 want, because everyone knows what it is and everyone knows that even if they don't know, 5:40:09 they could know. 5:40:11 And so if anyone out there claims that, you know, if anyone tries to claim some kind of 5:40:15 dispute, that person is destroying their own reputation because it's going to be very, 5:40:21 very, very easy. 5:40:24 Unbelievably easy for anyone to figure out what the true hash is, and then they'll just 5:40:28 wonder why this person tried to tell them such a pointless and destructive lie. 5:40:34 Anyone who runs a sidechain node will know the real hash. 5:40:38 And that includes people who weren't running one before. 5:40:41 Listen to this dispute for five or six weeks and then just decide to run it on a random 5:40:45 weekend. So anyone can. 5:40:48 It's that's why it's the way it is. 5:40:50 And the other thing is, even if there was like controversy in this voting process, the 5:41:00 entire thing, in my understanding, can't ever come to a situation where the layer one 5:41:07 nodes experience the chain split by enforcing Drivechain rules. 5:41:14 So the most likely scenario, if someone really insists on the wrong hash, is that the 5:41:19 withdrawal just won't happen. 5:41:21 At least that's how I understand it. 5:41:23 And the only way that a chain split could actually happen is if the layer one nodes 5:41:32 try to like manually alter the outcome, they would fork or something like that. 5:41:42 The Drivechain rules themselves cannot cause and that's a very important thing. 5:41:47 Right. So yes, it is. 5:41:51 It's very important that one of the things it does is it also prevents unexpected miner 5:41:57 related soft forks as a result of drama on the sidechain, because the three month long 5:42:05 withdrawal is like a really, really, really slow measurement of the miners sentiment. 5:42:13 You know what I mean? Like they're not going to carry it the full 13000. 5:42:18 You know, votes or cross block confirmations, unless this is really what they are 5:42:26 determined to do. So by the time the withdrawal actually happens, there's no like 5:42:31 ambiguity over what is supposed to be happening. 5:42:35 Whereas, of course, it's just much easier. 5:42:36 Everyone what everyone can do is more easily just let the withdrawal fail so that 5:42:41 there's neither a theft nor a withdrawal. 5:42:44 And then the sidechain software automatically, it will automatically notice that it 5:42:49 didn't fail. It dumps everyone off the train and back in line and reshuffles the line. 5:42:55 And we have a program to wait as a sort of courtesy since something really weird 5:43:01 happened. It waits like I think like 200 blocks so that people can decide if they want 5:43:07 to get out of line or get more to get in line or something, try to figure out what's 5:43:11 going on. And then it will try again to load the train and it will just keep trying 5:43:18 because that's what it's supposed to do. 5:43:20 And again, this is all about putting the blame on the sidechain community, the 5:43:28 developers and the users of the sidechain. 5:43:31 If the sidechain is run very well, it will always be very easy to find, very, very, 5:43:37 very easy to find out which hash is real as long as it's possible to run a node. 5:43:44 That's the cost. And as long as the sidechain is generating fees, as long as it's 5:43:48 generating useful activity for its members and for Bitcoin, as long as it's increasing the 5:43:54 price of Bitcoin by offering a cool feature, which is the Zcash feature, as long as it's 5:44:00 doing all of that, then it will be something that the miners want to keep around. 5:44:07 So no one, there's no one who would be stopping the withdrawal process. 5:44:11 There's no one, there's absolutely no one in the whole system actually has any 5:44:18 incentive whatsoever to create a dispute over which hash is real. 5:44:26 So given what you say about how the L1 is basically unaffected, am I correct in 5:44:35 understanding that the reason that there still needs to be like kind of massive buy-in on 5:44:41 this is because if you don't have consensus across the board that Drivechains are 5:44:46 happening, if 300 and 301 are adopted, then any transactions or addresses created by 5:44:55 Drivechains are seen as everyone else who's not a Drivechain enjoyer as being anyone can 5:45:02 spend? 5:45:03 Well, that's partially the case, yes. 5:45:06 I'm afraid that the true answer involves a little bit of like history and just randomness 5:45:13 and chaos. 5:45:15 I mean, in terms of the social element. 5:45:17 Yeah, the literal answer is that more than 51 percent of miners must be enforcing a 5:45:25 soft fork. And then as long as they are enforcing it, plus the people using it. 5:45:30 Enforcing it, plus the people using it are enforcing it, plus maybe like one or two other people, like maybe like one Coinbase or something, you know, Coinbase, the company. 5:45:41 Then no one will be able to do a withdrawal early. 5:45:48 They all have to do the $13,000 counter. 5:45:52 And the point of that is keep the miners on a short leash. 5:45:54 So it's kind of ironic that what BIFF 300 does is make it harder for miners to steal from a drivechain. 5:46:03 And that is the whole point. 5:46:05 That is sort of why miners alone shouldn't activate it. 5:46:12 It's because we could already do Drivechain today with no soft fork by just doing like a handshake deal with the miners where we just say, OK, miners, let's just all do this now. 5:46:21 But the miners would prefer to be able to prove that they can't do something. 5:46:27 You know what I mean? Like it's a it's kind of it's hard to, you know, I don't know if it's a great metaphors, but it's like, you know, when people get together and they drink, everyone lets their guard down. 5:46:37 It's kind of like a disarmament. 5:46:39 The miners say, listen, if you send us these coins, we'll be able to send them wherever we want. 5:46:46 And then you're thinking, well, why would I do that? 5:46:49 That sounds crazy. 5:46:51 And the miners say, well, listen, we can send them wherever we want, but we have to we have to first tell you exactly where we're sending them. 5:47:01 And then we have to do this three month long dance. 5:47:04 And so and during those three months, who owns what hash or who's in what pool? 5:47:10 All that could change a lot. 5:47:12 So it's going to be kind of hard for us to we're going to be sending it today to our future selves three months from now, which are not necessarily complete overlap. 5:47:24 And so that just kind of makes it a little harder for us to take the coins and therefore it's sort of easier for people to trust the miners who have handicapped themselves in this way. 5:47:35 That makes sense. 5:47:37 OK, good. 5:47:39 Just a final question. And as to why you're not doing it in a super ordinate way, like the way ordinals are done, sort of building up a scaffolding outside of layer one. 5:47:49 I assume that's because in your in your view, this this way is the the way to do it without introducing any trust, like the way you need to with liquid. 5:48:00 Partly, it's really because I was probably a little too nice about the whole thing, really, which is I just sort of like I invented this thing and then it kind of felt like the community went like in the SegWit direction and I was kind of like, fine, everyone's making money this whole time. 5:48:16 So I was just kind of like, whatever. 5:48:19 And everyone thought, you know, all the other thing that was happening was a lot of people who had different ideas were shooting themselves in the foot. 5:48:28 And so all the other ideas sucked. 5:48:30 So Bitcoin was doing great. 5:48:33 The large blockers forked off and they would have been like good customers of this project. 5:48:40 So that kind of stalled it all. 5:48:41 So the way in which they withheld SegWit created this miners versus developers sort of drama. 5:48:47 So that was kind of just like this kind of slowed it down, I think. 5:48:52 And I was just kind of waiting around for, you know, like a better moment, I think. 5:48:58 But then what happened was recently, I was kind of looking into more of what everyone else was doing. 5:49:04 You know, how are things going and lightning and whatever. 5:49:08 And I was like, oh, this sucks, actually. 5:49:11 So I should better be able to do a little more advocacy. 5:49:18 So that's partly why. 5:49:21 I think the technical reason, though, is that you cannot unilaterally do something like this. 5:49:30 The OPNAP 5 has to be redefined for everyone at the same time or it just stays what it is. 5:49:38 So there is a tiny collective action problem where like it would be nice if the first miners to switch over to doing this somehow got more money than the miners to come later. 5:49:50 But I'm afraid that that is not. 5:49:52 I haven't figured out how to do that yet. 5:49:56 So right now, no one wants to be like the. 5:50:00 People all want to just look around and wait. 5:50:04 Shirking the responsibility. 5:50:07 God bless them, you know. 5:50:10 Yeah, I get it. 5:50:12 Does this this doesn't interfere at all with OP_CTV or OPVault like they're completely unrelated in every way? 5:50:19 The only relationship is actually that CTV greatly improves the withdrawal from 20,000 to like 100 million or something. 5:50:31 So like the withdrawal right now, it's limited to one transaction. 5:50:36 So this is one hash, as we've already belabored this point. 5:50:41 So the miner is going to pay take this. 5:50:43 They're going to select when the withdrawal ultimately goes through the transaction. 5:50:48 It'll select the UTXO that has all the coins and pay it out to like this big list of like maybe like 20,000 people max. 5:50:56 But it can never be more than the one megabyte block size limit, since there's no witness discount in this case. 5:51:05 And of course, it shouldn't be anywhere near that, because that's a little that's kind of cutting it close. 5:51:10 And it's a little discourteous also. 5:51:13 So we made it like half that or something, especially since it's only one transaction every three months. 5:51:19 So it's not so bad to take up half of a block. 5:51:21 And it can be at any block. 5:51:22 It can be at one that's in like 3 a.m. in the morning or something. 5:51:27 Once it crosses the 13,000 number, I can keep going to like 13,001, 13,002, and then it can still be included. 5:51:35 So, but be that as it may, it can only pay out to those people. 5:51:41 But with CTV on layer one, you could pay out to 20,000 CTV outputs that could then each pay to whatever an unlimited number of not an unlimited, but like it would be something like each of them would pay to up to maybe it's like 50 or 60,000 or something. 5:52:02 So then it would go from 20,000 to 20,000 times 60,000. 5:52:08 So that would actually be kind of neat. 5:52:11 But I don't know how relevant that would be, but that would be kind of a cool improvement. 5:52:15 But the real heart of your question. 5:52:17 Yeah, of course. 5:52:18 Yeah, yeah. 5:52:19 They're all unrelated. 5:52:20 All the OpVault, OP_CTV, OP_DRIVECHAIN are all unrelated and kind of orthogonal. 5:52:29 I don't think. 5:52:30 Well, a quick question. 5:52:32 If the covenants are soft forked in and it's possible to implement a primitive Drivechain without registration slots and with some inefficiency, there were ideas for how CTV or APO or other covenants enable kind of primitive inefficient Drivechains. 5:52:51 Would you be willing to settle for that? 5:52:54 Well, I don't know about settle, but I think maybe we would do that next. 5:52:58 But you see, the thing is, to me, that would just prove how extra pointless it was not to do the efficient version. 5:53:07 So I still don't see. 5:53:09 I mean, I understand it. 5:53:10 Maybe it's just because I'm too autistic. 5:53:12 But I just think like, you know what I mean? 5:53:15 It's kind of like building a screwdriver and people are saying, well, Paul, what if we had this thing where we had like eight hammers in a row and then they each had toothpicks and then we could maybe get some screws and I would just be like, why are we not using the screwdriver that I have? 5:53:32 You expect reason and rational behavior from a cult. 5:53:35 That's the main problem. 5:53:37 From humans in general, right? 5:53:40 Yeah, that's my big character flaw. 5:53:44 Oh, my gosh. 5:53:45 How will I ever make it through life? 5:53:49 But I think the other thing to mention, though, is that I just mentioned also that we could do BIP300 today with no soft fork. 5:53:58 It's just like a handshake deal with the miners. 5:54:00 But it would be similar. 5:54:02 It would be like an inverse case where nothing is enforced by anyone. 5:54:06 That would be even less secure. 5:54:08 Right. 5:54:10 But see, you're saying something like it's just as secure because it does the accounting, but it's more inefficient. 5:54:17 But I have the version that is totally efficient, but less secure. 5:54:24 And these are all just weird versions of the same thing to me, but probably not to you. 5:54:33 But yes, would I settle for it? 5:54:36 Yeah, I think you're right. 5:54:38 What I would say is I would not settle for that, but I would probably just go to an intermediate step. 5:54:43 I mean, the funnier thing would be to do the first. 5:54:46 We would do the handshake deal, wait for a while, have someone steal the coins, and then say it's only because we didn't have BIP300 that these coins were stolen. 5:54:56 And then just blame that on the obstructors. 5:54:59 Also, I just want to point out, because I guess I'm a little autistic, that when you say the whole benefit of Drivechains is that L1 doesn't need to care about what's going on in there, while at the same time there's someone to blame. 5:55:12 Technically, validity rollups, even though the ZKR opcode or OpZKVerify opcode must be checked by every node on L1, what happens inside the checking is just proofchecking. 5:55:28 There is no inspection of the state or understanding of the rules or anything. 5:55:32 It's just like a dumb top-to-bottom proofchecker that just checks syntactic correctness of the proof without actually understanding anything that's going on on the validity rollup. 5:55:43 One recent new innovation in how to bring validity rollups to Bitcoin was that the problem with validity rollups is that there's infinite amount of bike-shedding, arguing about what particular virtual machine to target with this opcode. 5:56:01 Whether it should be Stark or Snark or this machine or that machine, until somebody just suggested to target Wasm, which is the WebAssembly language, as the target virtual machine, because that's highly portable, all languages compiled to it, it's high performance, it already works in all the web browsers. 5:56:23 And then as long as the validity rollup itself can be compiled to Wasm, which anything can be these days, that solves the coordination problem of what particular opcode to target. 5:56:35 It also retains that desirable property that you advertise for Drivechains of not needing to care about what happens on the L2. 5:56:45 As far as blaming if something goes wrong, like who gets blamed today if something goes wrong on Ethereum L2, like Arbitrum or whatever, clearly it's the team that launched that rollup that gets blamed. 5:57:01 And if the rollup is launched as some kind of Satoshi-style launch, then Satoshi disappears and there's no one to blame. 5:57:08 So it's basically buyer beware all the way. 5:57:11 So if you are not worried about lack of decentralization and rollups, then send your coins there. 5:57:17 If you are, don't send your coins there. 5:57:20 Yes, of course. 5:57:21 I mean, I think that I wouldn't really even feel that bad if we fast forward 10 years into the future and people don't use BIP300, but they use something that does functionally the exact same thing. 5:57:36 I would just think, well, of course, I was right in 2015, and I was right the entire time, and all these people saying, oh, what about if we call a senator? 5:57:48 You will be validated one way or the other, either by rollups being or by covenants being soft forked in or by Drivechains, or sooner or later, a pleb uprising because of this apocalypse will validate your ideas, I'm sure. 5:58:02 I'm just saying that the interesting, peculiar thing about rollups is that any Tom, Dick and Harry can launch a rollup on Ethereum permissionlessly for a single app. 5:58:14 So there's like app-centric rollups. 5:58:16 Like, for example, you can have a decentralized exchange that becomes a rollup, or for example, the FRAX stablecoin on Ethereum is about to launch its own rollup just for that stablecoin. 5:58:27 So you can see a world where there is like a million rollups all leeching off of L1, and there's no need to have a few major ones. 5:58:38 Yeah, the really, really upsetting thing would be if the only thing, which I can see this happening, Ethereum defeats Bitcoin because of the Turing complete script, and it's not even used. 5:58:52 It is not even actually used in terms of being like Turing complete. 5:58:56 It is just used for like the same single thing. 5:59:01 That's already in the roadmap. 5:59:03 Like, for example, Ethereum's roadmap says never do any computations on Ethereum L1 anymore. 5:59:09 Move all computation to one of a million L2 rollups, and Ethereum L1 is nothing but settlement and data availability. 5:59:17 But this is exactly what, of course, we Bitcoiners would say when we were comparing and contrasting Bitcoin and Ethereum. 5:59:25 It's the biggest irony that Ethereum is becoming more Bitcoin. 5:59:28 Well, that's what I'm trying to say is that the disappointing thing would be if Bitcoin decided because of the ossification gain, it will not add this tiny thing, which is BIP300, which is like counting to 13,000 in a reversible opcode that you could just discard. 5:59:48 So instead, Bitcoin decides – it would be like an irony. 5:59:56 It's like, you know what, Ethereum is saying we have this Turing completeness, but it was only ever used for this one thing, the Kravitz rollup, which ended up being the standardized rollup that everyone uses. 6:00:10 You know what I mean? 6:00:11 Like maybe there's one or two flavors. 6:00:13 It's basically like it's going to be used like a Grand Central train station, which simply orders blobs of opaque data from a million other rollups into a kind of canonical sequence and preserves immutability and double spend resistance of the sequence of opaque blobs. 6:00:34 But there's one additional component, which is that these rollups want to tap into the liquidity of Ethereum, which they all get that two-way bridge with no trust of moving not just Ether, but every token on Ether to the rollup and back with no trust. 6:00:49 Yeah, but that's what I'm saying. 6:00:51 The tragedy would be Ethereum defeats Bitcoin because they used Turing completeness to basically add BIP300 only and BIP300 Ethereum. 6:01:02 And that's the only thing that Ethereum Turing completeness is used for is basically like these asymmetric sidechains or rollups as they're now called. 6:01:15 And then Bitcoin could have decided at any time to just do that one thing, but because they didn't want to resemble Ethereum, we just decided sort of not to for no real reason. 6:01:36 That would be like so weird and pretty lame. 6:01:39 It's not going to stay. I'm very optimistic because of two basically things, which is I've already mentioned that the apocalypse with or without ordinals is unavoidable simply because the tidal wave of adoption is going to hit the absolute scarcity of block space. 6:01:57 With the ordinals, it's probably within 12 to 18 months. And once that happens, the pleb uprising will sweep away the cult that's been chanting ossify and farm the engagement on Twitter. 6:02:12 That's all going to be swept away by the energy of the democratic crowd from below. It's going to be like a color revolution basically. 6:02:22 I have a question for you, Alex, because I also kind of see it where it's inevitable where the fee will go up, ordinals or not. 6:02:30 But I'm sure you remember like during Ethereum, there was a peak time where like Uniswap transactions were like over $300 each for sustainably for several weeks, right? 6:02:39 For like at least a month. 6:02:40 That was their apocalypse, right? 6:02:42 Right. But you can see that like most of the newcomers coming into the space, they just weren't even using Ethereum, right? They were using like BSC and other chains. 6:02:51 So I'm not sure if like the pep... 6:02:55 I tried that when I had to like collateralize my Bitcoin in order not to sell it, not to pay taxes. So I tried using other L1s, like I tried using Avalanche and other chains. 6:03:09 And what I came to realize is that even though the transaction fees could be 100 times lower on those other chains, it was still dramatically cheaper to use Ethereum simply because liquidity was so much higher on Ethereum that even though you're paying $20 to $50 transaction fee, you're actually getting a much significantly better price on swapping assets or doing any kind of operation simply because that's where all the liquidity is. 6:03:35 Right, but that's only if the fees are $20 to $50. But when the fees were like $300 plus just for a Uniswap, I'm sure it was way more for what you're doing. 6:03:43 No, but that's exactly... it remains the same way. It becomes unaffordable to 99% of individuals, but it remains affordable to the people who count, which is namely whales and institutions because they're the ones who actually provide the liquidity and the fees. 6:03:58 So you think that the whales will basically, in short, the whales will sustain the feepocalypse on Ethereum? 6:04:05 That's exactly what already happened on Ethereum and that's exactly what's going to happen on Bitcoin. I'm assuming that Bitcoin gets fully institutionalized and you will have luxury ordinals and you will have BlackRock paying PayPal, settling Bitcoin between Eurodollar banks and you will have like the average size of transaction in dollars will go to like a million dollars and then the fees can go to $1,000 and nobody will care. 6:04:32 So in that scenario, like in the current environment, it looks like then most people would just be using custodial Bitcoin then? 6:04:43 Exactly. Because I know that all the podcasters and the laser eyed priests have already been telling people to use custodial Lightning and LSPs as long as they keep chanting, we love Bitcoin and Bitcoin only. They're told to use custodial Lightning solutions. 6:05:01 I have no doubt that they will tell their bamboozled flock to go and use BlackRock ETF. They will say, well, you can just buy Bitcoin and not worry about multi-sig, fragile multi-sig. 6:05:15 At the same time, you also think that enough of these plebs are going to be like, we want to use fully non-custodial Bitcoin and we have to do some type of changes. 6:05:24 Right. The reason why you will have enough of these plebs is because like 50 million plebs have already bought in and they hold some Bitcoin. And once it becomes unaffordable to use Bitcoin L1 for these plebs, that will be the outcry that we saw on Ethereum. 6:05:40 And this constituency is about to get a rude awakening that they've been listening to podcasters. They've been essentially telling them that everything is fine. Bitcoin is perfect as is. You don't need any covenant soft force or anything. But when they see that they have to pay $50 or $100 to move $500 worth of savings in Nigeria, they can tell that everything is not fine. 6:06:04 And the feedback, the anger from that will be overwhelming. 6:06:07 And the anger from that will essentially discredit every priest that's been podcasting ossified chants 24-7 because this is what happened in Ethereum and it's going to happen in Bitcoin. 6:06:19 And there's already a way to fix all these problems. For example, simply enabling covenant soft fork enables ARK, scales lightning, enables primitive Drivechains. I'm not even talking about Drivechains proper or validity roll-ups, but it will all be up in the air. Once the chaos breaks out, it will be like a ladder. 6:06:41 Yeah, I wouldn't use the word Drivechains for what simple covenants can do. That's not right. Let's just call them sidechains of some sort or space chains. They are closer to space chains than to Drivechains. 6:06:56 But do they have the same semantics as Drivechains with counting, etc.? 6:07:02 You can have stuff like that, but you can't really have a true hashrate escrow. And Drivechain is the hashrate escrow plus the Blind Merged Mining. 6:07:11 So as far as I can tell, there are only a few proposals or you need to make a tailor-made proposal for actually implementing the hashrate escrow with a covenant. Because CTV, APO or VOD will not really do that. 6:07:28 If you can do something like TX hash plus opcache, maybe someone can figure out a way of counting with that. 6:07:36 I think Zman had a proposal for how to turn almost any covenant into a kind of primitive counting of lambda expressions with the count going to 13,000. 6:07:52 Yeah, but see, this is again me being autistic, of course. Aren't people even listening to themselves? It's all just nonsense. It's all just like whether or not we can count to 13,000. That's why I did the right thing when I just made it count to 13,000 explicitly. It's all it needs to do. 6:08:10 It's like you suffer from a philosopher's fallacy, I call it, which is expecting humans in general to exercise reason and rationality when not even philosophers themselves exercise it. So basically philosophy can never work because philosophy is not a solution to any problem. It's just a symptom of the underlying human condition. And it doesn't actually solve anything. It's just a symptom. It's not a solution. 6:08:36 So you're expecting Bitcoiners to be rational? No, don't do that. That's like a bad idea. Humans in general, never mind. Cult-indoctrinated, ossified chanting, basically peanut gallery plebs out there. 6:08:53 Alex, the scenario you laid out earlier, there was like a one-week period where fees went high during ordinals where you could kind of feel the fear setting in. 6:09:06 Yeah, because lightning started falling apart. You saw it in May this year, right? 6:09:11 And then people started looking to their choice leaders for answers. And I feel like that's part of the reason the reaction to ordinals was so negative, so anti-ordinals. There's a variety of reasons. Part of it is because they could demonize ordinals as the problem. 6:09:33 No, the real problem was that the priests were being seen to be helpless. The emperor had no clothes. So right now the priests can condemn you on Twitter and they can character assassinate Paul and say he's the devil incarnate or whatever. 6:09:49 And it seems to be working in a sense because whenever there's a vote on Twitter, Paul is outvoted three to one. But when it comes to ordinals, which is the priests themselves blast that taproot soft fork and they're completely helpless. 6:10:02 They don't even know what's coming to them because what you've seen in ordinals and inscriptions is less than 1% of 1% of the fee pressure. I'm confident of this because I'm telling you that the flood of data that's coming, anybody can simply create a web page that allows people to upload folders in there and that's going to create gigabytes upon gigabytes of fee pressure. 6:10:28 By the way, guys, Paul actually kind of performed worse than the devil, if we are talking about Paul. 6:10:37 He's like incompetent devil. 6:10:40 No, I mean, like 60% of Bitcoin has voted that they would consider activating the soft fork that the devil proposed and Paul is usually... 6:10:51 I think that it's also important to see that like just ordinals aside, completely aside, I feel like a lot of these, the Nigerian plebs opening and closing lightning channels and complaining that they can't, I feel like they just did not understand that the fee market, they really just didn't understand the fee market or they believe that Bitcoin will never be like, you know, mass adopted because if it's mass adopted... 6:11:11 Are those real Nigerians? Are we talking about real people? 6:11:16 I mean, I've heard people that were saying that they can't open a lightning channel and I'm like, well, open it once in a month and they're like, well, it's too much or it's too expensive and they're complaining about this. 6:11:23 They bought the propaganda that was sold to them about lightning networks solving all the scaling problems, right? 6:11:28 Yeah, I feel like they just didn't understand how the fee market works with Bitcoin adoption. Like the fees are going to go up. You should understand that. And actually, you should want that, right? Like you desire Bitcoin to be more used without ordinals even, like the fees should go up. 6:11:42 Yeah, the fees are going to go. The feepocalypse is inevitable either way. The ordinals just brought it two, three years soon. 6:11:48 It's going to be interesting when the fees go astronomical just based on monetary transactions, then the reaction is going to be to demonize certain types of monetary transactions as being not as valuable of monetary transactions as others. 6:12:03 Because they're going to have the same existential crisis. It's going to be the exact same emperor has no clothes scenario. 6:12:12 Well, I mean, I can tell you what narrative they'll bring along then. They will basically say, you shouldn't use L1 Bitcoin, but instead sign up with Uncle Jim who's running your local Fetimint for your neighborhood or for your surfing game. 6:12:26 And then transactions between Uncle Jim's Fetimint will be on L1, right? 6:12:30 Have you guys seen that cringe animation from Blockstream where 40 million TPS can happen on Lightning? 6:12:40 Right, that's the lie. That's the big lie. 6:12:42 In reality, Bitcoin does like 3 TPS on average and Lightning got like 0.1. That is probably closer to the reality of the situation, but they are pushing this. 6:13:00 I'm wondering over here because it seems like a lot of us believe that the fees will go up even without ordinals. It's an inevitable thing, but of course with ordinals even more. 6:13:10 But I believe Paul has a different opinion where fees would not go up or they would go up to a certain amount. 6:13:15 I mean, I would love that. If the fees went up, that would be great. 6:13:20 My opinion is very simple. I'd love to try to explain it yet again, which is that people don't like it when the fees go up. 6:13:28 So when the fees go up, they change their behavior. And so Alex, I don't know, you seem to have studied Ethereum in detail. 6:13:36 But people have brought up to you that they go to Binance Smart Chain or they went to Solana or whatever. 6:13:40 No, I'm saying that will definitely occur. 6:13:43 But don't you think Ethereum built the L2s to solve that problem? 6:13:49 Right. 6:13:50 But there's a difference between Ethereum and Bitcoin though, which is that right now Bitcoin is paralyzed with the hatred. 6:13:56 There's a difference between Binance and Ethereum's L2 ecosystem, which is Binance is a different planet with a different asset. 6:14:03 People don't want to leave Ethereum. Basically, there's two flaws in your argument that fees can never go high. 6:14:09 The easier flaw is that you've analyzed so-called fee market in the past where I claim it never existed until maybe April 23rd this year. 6:14:18 That's a simpler kind of fallacy, which is to assume that the fee market has existed at all. 6:14:23 And I claim that it just cannot be said to exist until the last day that the mempool clears. Right. 6:14:28 That's a simpler objection. A more complicated objection is that you argue for kind of substitutability of block space. 6:14:35 It's kind of an idealization that doesn't hold in the real world because, listen, you know, the property values in Beverly Hills, California, skyrocketed to $20 million per mansion. 6:14:45 And you don't see those people moving to Plano, Texas. Right. 6:14:49 But there is some price at which they would, right? Like if it costs an infinite $9,999,000,000. 6:14:56 Absolutely. Right. So there's a kernel of truth in what you're saying as well. 6:15:01 But my model that reconciles both positions is this kind of picture of a multilevel fountain where the top level bucket fills up and then it starts spilling over into the second and third levels after that. 6:15:13 And that's exactly what we saw in Ethereum. And that's exactly what happened here. 6:15:17 It's not really relevant that much. 6:15:19 Here's one last remark. Despite the fees being 100x smaller on Ethereum L2s, I never operate on Ethereum L2s precisely because all the prices and all the liquidity is so much more favorable on Ethereum proper. 6:15:36 That the fact that I can save, you know, $19 on a $20 fee by going to Avalanche is more than offset by me losing $500 because the prices on a swap on Avalanche are less favorable. 6:15:50 So even though some people for very small amounts will go to these L2s, there is like a captive audience for L1 where it simply makes no financial sense to leave Ethereum. 6:16:03 Okay. First of all, let me just mention this is not really that important at all. 6:16:06 But my empirical, which is only one part of seven, the empirical research I did on the fees in my article, which is whatever, a merge mining security budget to merge mining, whatever, I'm sure people can find it. 6:16:25 But that was in order to discredit the people who say there's an automatic upward trend in P. 6:16:33 And I think you and I agree that it doesn't really work like that. 6:16:36 It's not like – because what people will do is they'll draw some kind of graph and they'll say, oh, fees have gone up and up and up and they will continue to go up and up and up. 6:16:43 But that's not really – that doesn't make any sense at all in any way. 6:16:48 You know what I mean? 6:16:49 Like they go up for a reason. 6:16:50 Like it's not like – unless you're just considering inflation, it's not like a price of a carpet goes up and it's $0.10 and then it's $0.15 and then it's $0.20 and then it's $0.25. 6:17:01 Like that's not really what's happening here. 6:17:04 This is like a crazily dynamic – so I agree with you that – but it doesn't really matter because the theoretical thing is far more important. 6:17:16 And the idea of the substitutability of the block space. 6:17:20 Let me just throw – see, this is – I introduced a new argument that you decided not to run with, which is I said a moment ago, Ethereum is the type of culture that would build in L2 to solve its problem. 6:17:38 But do you think that's actually the case here in Bitcoin? 6:17:42 Because, of course, you could easily just have people say, you know, this is what Bitcoin is supposed to be about. 6:17:53 Well, see, in Ethereum, the culture only developed after they had their apocalypse. 6:17:58 And I'm saying – 6:17:59 I don't think that's the case. 6:18:00 I'm saying Ethereum built – they would like move fast and break things the whole time. 6:18:05 No, no, it's true. 6:18:06 But until they actually – because, I mean, Ethereum promised to scale in 2015, 16, 17, 18. 6:18:14 But they had their apocalypse in 2019. 6:18:17 And until 2019, there were all these research projects that never amounted to anything. 6:18:22 I mean, they considered sidechains. 6:18:24 They considered state channels. 6:18:26 They considered plasma. 6:18:28 They considered lots of – 6:18:30 Yes, I remember that. 6:18:31 They had their own version of lightning and their own version of plasma. 6:18:34 Their lightning was like generalized lightning because it was for arbitrary computations, not just for financial transfers. 6:18:39 They called it state channels, not just payment channels. 6:18:44 So they tried all these things, but none of it got serious enough to be actually included in the proper Ethereum or anything. 6:18:51 Until everybody's feet got held to the fire when their apocalypse happened. 6:18:57 Because Ethereum has a socialistic kind of ethos. 6:19:01 So when they promised the world a world computer that anybody in the world can use, and all of a sudden only whales and institutions are using it, 6:19:08 and everybody else is stuck with their Ether that they cannot even send because it costs $10 or $15, $20 to send $100 worth of Ether. 6:19:16 That was a real shock to the system. 6:19:19 And only after that point, they actually got serious about scaling. 6:19:23 And having tried everything, they settled on validity and optimistic roll-ups. 6:19:28 But why do you think that we would, in Bitcoin, handle it the same way? 6:19:32 I can easily see us saying that, well, the fees are supposed to be $100. 6:19:36 As you were saying a moment ago, you would kick it over to maybe Fediment. 6:19:41 But you understand that Fediment is not really a... 6:19:44 You can make all the rationalizations that you want, but even Fediments have to use lightning network for interoperability, right? 6:19:52 You can always send people to the blockchain, BlackRock kind of ETF, 6:19:57 but the thing is you already have a captive audience of 50 million Bitcoiners who store some stats on L1, 6:20:04 and those people will get frozen out. 6:20:06 So that's the revolutionary force of the pleb uprising. 6:20:11 It's not trying to sell it to new plebs. 6:20:13 Because you can send new plebs to BlackRock, but by the time the uprising happens... 6:20:18 So you're talking about the dust UTXO. 6:20:21 Right. It will be like 100 million captive, you know, like lumpenproletariat out there. 6:20:28 I did not understand that that was such a key part of your argument, but it's very interesting. 6:20:32 I think you're certainly right about that. 6:20:34 One thing that was interesting in the past was that Roger at some point tweeted a website where you could look up... 6:20:42 If someone searches my Twitter, you can probably find it. 6:20:46 Search for the term $1,000, I think, because I tweeted about it after he tweeted about it, 6:20:55 because I was fascinated by it. 6:20:57 But he's documented... 6:20:59 You can search on this site through the Bitcoin BTC blockchain 6:21:03 and find how many people paid a transaction fee that was more than $1,000. 6:21:11 Because it just multiplies by the historical price for you. 6:21:14 Oh, yeah, yeah. 6:21:15 And there were very, very many, and that must mean that there was a lot of people who had these inputs that were not consolidated. 6:21:22 And as a result... 6:21:24 Well, exchanges will pay $1,000 transaction fee to consolidate 100,000 UTXOs, no problem. 6:21:33 But just the fact that that is even possible, like the fact that that, you know... 6:21:38 The fact that it even happened is like... 6:21:41 Well, what I'm saying is that you basically have this kind of... 6:21:45 The laser-eyed priests have sown the seeds of their own destruction, 6:21:49 because they've essentially evangelized Bitcoin to 50 million global South Plebs. 6:21:54 And by the time this apocalypse hits, it will probably be 100 million. 6:21:57 And those people are all going to become hostages of high fees, right? 6:22:02 You can tell them so much to go to the Uncle Jim's, you know, Fetty Mint, 6:22:06 or you can tell them to... 6:22:07 They cannot buy the BlackRock ETF. 6:22:09 Their local banking system is hostile. 6:22:11 They have to do, you know, back-alley, peer-to-peer transactions for cash, 6:22:15 but they can't transfer their Bitcoin that's already stuck. 6:22:18 And you will see this outcry, which we kind of saw a preview of in Ethereum, 6:22:22 where 100 million global South Plebs cry out, you know, there's like a disturbance in the force. 6:22:28 You could feel it in May this year. 6:22:31 People pointed out that when transaction fees peaked at $28 per financial transfer for a few days, 6:22:37 and it was like above $10 for like a week or two, 6:22:40 you could feel that people who are running their own Lightning nodes 6:22:44 all of a sudden had all their channels closed automatically, 6:22:46 and they couldn't reopen them, and they lost money, 6:22:49 and they couldn't send a punishment transaction, 6:22:51 because the amount of money in the channel was less than the transaction fee. 6:22:55 This is how Lightning dies. 6:22:57 This is how non-custodial Lightning dies. 6:22:59 And I'm all for, you know, Bank of America and Mitsubishi Bank in Japan 6:23:03 settling with Lightning instantaneously and with instant finality, 6:23:07 billion-dollar private fat pipes, and not caring about the fees, 6:23:11 but don't sell Lightning as a solution to the Plebs on their iPhones, 6:23:15 because Lightning can never be that, right? 6:23:17 So you and I know this, but this is just the hard facts of the Lightning design. 6:23:22 But of course, the priests have sold Lightning as the silver bullet solution to scaling, 6:23:27 and that was just a lie. 6:23:31 I think there's also a difference where doing complicated transactions on Ethereum, 6:23:37 you require liquidity and several assets and things like this, 6:23:41 where it's not as easy for you to just use a different layer 6:23:44 or even a different chain for that purpose. 6:23:46 But if you're just settling value, 6:23:48 it might be much easier to just use a different chain, right? 6:23:51 No, well, it's easier for you if you're moving $100 or less, 6:23:55 but if you're moving $1,000,000 worth of Bitcoin, 6:23:57 whether you pay $10, $1,000, or $1,000 makes no difference. 6:24:02 This is all rounding errors. 6:24:04 Let's say I want to move $1,000,000 of Bitcoin 6:24:07 and the transaction fees on layer 1 Bitcoin 6:24:10 versus the transaction fees on using WBTC on Ethereum, right? 6:24:13 And if it's cheaper on Ethereum, let's just say, 6:24:15 then I would be incentivized to do it on Ethereum, 6:24:17 maybe to a point, unless I... 6:24:19 No, but WBTC is a different planet, right? 6:24:21 It's a custodial synthetic asset. 6:24:23 It's not Bitcoin. 6:24:25 Never mind that it's sitting on Ethereum, 6:24:27 which is a different galaxy, right? 6:24:29 Right, but for the majority of plebs' use cases, 6:24:31 they might be okay with that. 6:24:34 Well, the majority of plebs have been told to do the following. 6:24:37 They've been told to have a Strike wallet 6:24:39 that has like $100 worth of USD stablecoin issued by Strike, 6:24:44 and then they keep their savings that they stack into, 6:24:46 which is, in Global South, it's like $1,000 or less, 6:24:50 and in the middle-income countries, 6:24:52 it's like $1,000 to $10,000, 6:24:54 and in high-income countries, it's maybe more. 6:24:56 But that stash that's sitting in savings, 6:24:59 that stash becomes a hostage of high fees. 6:25:02 And once the fees go high enough, 6:25:05 they will hate moving that stash around, 6:25:08 and they have to move it around, right? 6:25:09 Because if they want to sell or collateralize Bitcoin 6:25:12 or give it to their kids or whatever, 6:25:14 they have to do transactions. 6:25:15 Once the fees are perma-high, 6:25:17 these people have become lumpenproletariat 6:25:19 who've been duped by the priests into storing their money 6:25:22 in something that gets frozen into ice. 6:25:26 So you're saying one way or another, 6:25:28 in the future, we're going to get sidechains 6:25:30 that have trustless swaps eventually? 6:25:34 Once this apocalypse happens 6:25:36 and it catalyzes the pleb uprising, 6:25:39 you will essentially have excitement. 6:25:42 In other words, the reason why people in core maintainers 6:25:47 loathe to merge any soft fork right now 6:25:50 is because they will be condemned by the priests. 6:25:52 But once there's political cover from the pleb uprising, 6:25:55 not merging a soft fork will be suicidal 6:25:58 if it allows ARK to get launched. 6:26:01 You know what I mean? 6:26:02 If it allows scaling of Lightning, 6:26:04 launching of ARK, Drivechain, 6:26:06 it will become very unpopular 6:26:08 not to merge a non-controversial soft fork 6:26:11 that's been reviewed for 10 years. 6:26:14 Basically, Drivechains are coming up on 10 years. 6:26:17 This is insane. 6:26:18 I can't believe it that we're even discussing this 10 years later. 6:26:22 What I'm saying is it'll flip. 6:26:24 Right now, it's suicidal for core maintainers 6:26:26 to merge something 6:26:27 because the ossifier chanters will have their skull on Twitter. 6:26:30 But once the pleb uprising happens, 6:26:32 it will be the opposite. 6:26:34 It will be suicidal to sit back and do nothing. 6:26:37 That's a clear point. 6:26:38 So the political and the social aspect 6:26:40 will start to change. 6:26:42 Right, because people underestimate politics 6:26:45 because it's so structureless and diffuse inside core. 6:26:48 But core is essentially a politics of prestige, right? 6:26:51 There is like a hierarchy of prestigious devs 6:26:53 that all defer to other more prestigious devs 6:26:56 until that thing terminates 6:26:59 with G. Maxwell or Peter Woolley or something. 6:27:01 But the point is that it's like a culture of fear 6:27:04 based on lack of information 6:27:06 and everybody holding their own belief about the prestige. 6:27:10 And right now in that culture, 6:27:12 merging anything is suicidal 6:27:14 because the priests and the laser eyes 6:27:16 and sailor eyes, etc. 6:27:18 will have your skull for this. 6:27:20 But once that whole thing, 6:27:22 the whole laser eye thing of don't touch Bitcoin 6:27:24 is shown to be bankrupt 6:27:26 because it throws out 15 million plebs in the global south, 6:27:29 once that whole ideology is bankrupt, 6:27:32 then the political environment will change. 6:27:35 I think you're right. 6:27:37 I think you're very, very right on this, actually. 6:27:39 Except for one thing, 6:27:41 which is I don't think we need to wait 6:27:43 for a pleb uprising of Bitcoin users in the global south 6:27:49 and for fees to rise in that way. 6:27:53 Well, you don't need to wait, 6:27:55 but as they say, it has to get worse before it gets better, right? 6:27:58 Because the cult is so strong. 6:28:00 You essentially can't break the spell of the cult 6:28:02 until it's shown to be completely bankrupt, right? 6:28:06 Yeah, it needs to get worse, but luckily it is. 6:28:09 The fees are going up. 6:28:12 No, but it's not enough for fees to go up. 6:28:14 They have to break $10 to $20 6:28:16 and then stay there for a month or two. 6:28:19 I think that's the trigger point for the fee apocalypse. 6:28:23 That's a good goal for 2024, I think. 6:28:26 Well, I mean, that would happen naturally in the bull market, 6:28:28 but in the previous bull market, 6:28:30 the fees would spike high for a week or two 6:28:32 and then they would subside. 6:28:34 But this time, it's going to be a nonlinear response 6:28:37 because in that bull market, 6:28:39 there will be inscription enjoyers 6:28:42 dumping gigabytes of data in there. 6:28:44 There will be financial transactions, 10Xing. 6:28:47 There will be lightning activity. 6:28:49 All of that. 6:28:50 I think, yeah. 6:28:51 The reason that in 2017, you had high fees for, 6:28:56 in my opinion, a more sustained period of time 6:28:59 than in the last bull market, 6:29:00 and I think that's because speculators were using Bitcoin to move value. 6:29:06 And now they didn't. 6:29:14 Sorry, but the nice thing is that the speculators are back. 6:29:18 And they're back now in the bear market. 6:29:21 But they're not moving value between exchanges using Bitcoin, right? 6:29:25 No, but they're moving BRC20s and they're moving a bunch of stuff. 6:29:29 So the speculators are back in a way that they were not in Bitcoin 6:29:33 for like, what, five, six years? 6:29:35 And now it's a bear market. 6:29:37 But once a bull market starts, the speculators are going to go crazy. 6:29:41 Oh, yeah. I mean, that's inevitable. 6:29:43 You will definitely break a $100 fee. 6:29:45 I mean, I can make a bet with anyone 6:29:47 that in the next bull market, 6:29:48 you will have one day of $100 or higher fees. 6:29:52 There's also a few points that I want to make. 6:29:54 One thing is, I'm not an expert on ARK, 6:29:57 but from what I understand, you still have to settle on-chain, 6:30:01 like the shared UTXO, right? 6:30:03 So I'm not sure if that will definitely help. 6:30:06 No, you don't have to settle on-chain with ARK. 6:30:11 The only case when you actually have to unroll an ARK pool transaction 6:30:18 into the full CTV tree or whatever covenant is used, 6:30:21 the only time is if the ASP is trying to steal from the users. 6:30:28 If the users, mobile clients or whatever, warn them that... 6:30:33 Everybody accepts ARK or Lightning, right? 6:30:36 But if you're still trying to send this to somewhere 6:30:38 that's not accepting ARK or Lightning, 6:30:40 you still have to settle on-chain, right? 6:30:42 I mean, you can send on Lightning from ARK and back. 6:30:48 Okay, great. 6:30:49 And then just one more point. 6:30:51 As far as all the other type of proposals for sidechains, 6:30:54 from what I've seen, 6:30:55 and maybe there's ones that I didn't look at or understand well, 6:30:58 most of them do not seem like they're giving the fees of the sidechain 6:31:02 to the Bitcoin miners on L1. 6:31:04 Is that correct? 6:31:06 Yeah, I think currently that's not a popular idea. 6:31:10 And I wanted to say I absolutely love that you guys are making predictions 6:31:14 on what will happen, 6:31:15 and nobody said that federated sidechains are going to get an uptake 6:31:21 or get recommended. 6:31:23 We don't need to predict. 6:31:25 We don't need to predict. 6:31:26 We have like 10 years of history and no one cares. 6:31:28 So there's no need to make predictions about federated sidechains. 6:31:32 Yeah, but a fee apocalypse is like putting a strong pressure on this. 6:31:37 So I'm not sure it's the same situation exactly, 6:31:41 but I love the vibe. 6:31:46 It's definitely an exciting time to be in Bitcoin, that's for sure. 6:31:50 I think it's a very bizarre decision to not care about the fact 6:31:54 that the fees don't go to miners, 6:31:56 which many people have taken up out of this weird misguided fear 6:32:02 of not, quote, distorting mining incentives, unquote. 6:32:07 But that is a very bizarre thing to do because in order to enter… 6:32:10 You mean on the sidechains? 6:32:12 I'm talking about how people would maybe push for like ARK 6:32:16 or Lightning or Fetamint. 6:32:21 These things cut the miners out. 6:32:24 And a federated sidechain, they also cut the miners out, of course. 6:32:29 All of these things cut the miners out. 6:32:31 And even if you don't believe in security budget, 6:32:34 I just find it strange that you would want to go blindly into something 6:32:41 where in order to get out and in, you need the miners' help. 6:32:45 But now they have no real reason to help you. 6:32:48 And in fact, they would love nothing more than to direct economic activity 6:32:53 towards something where they do collect the fees, 6:32:56 which is the MergeMined Drivechain. 6:32:59 I wonder, I don't know if this is the case. 6:33:01 I have absolutely no idea whatsoever, 6:33:03 but I just tossed this out there for your consideration. 6:33:06 If one day there will be a point where miners just say 6:33:11 they will try to ban transactions into and out of all the L2s 6:33:17 that do not pay them to just kind of tilt people's support 6:33:22 into ones that do pay them. 6:33:27 Yeah, this is a weird thing because there is not enough block space 6:33:32 for people to be self-sufficient with their Lightning use 6:33:36 at the global scale already. 6:33:40 And even if you count solutions like Org, 6:33:44 they take up a significant amount of block space. 6:33:48 They pay fees to the miners at a pretty predictable rate 6:33:52 by normal operation. 6:33:54 And the ESPs also have to maintain these Lightning channels, 6:33:58 and these Lightning channels need to be rebalanced with splicing and whatever. 6:34:03 So at a sufficient scale, I'm not sure that the Bitcoin block size 6:34:10 is anywhere near enough to support all these as a Layer 2. 6:34:16 So I kind of expect that a lot of these things have to move 6:34:20 to Layer 3 on top of sidechains that have many advantages. 6:34:26 And cross-chain Lightning is basically pretty trivial to implement. 6:34:32 And if people would not be worried about the exchange rate risk 6:34:37 with an altcoin, then it would be very easy to hold your UTXOs 6:34:43 on an altcoin chain and still interface with the Lightning network. 6:34:48 That is also a pretty easy solution. 6:34:52 Hey guys, I've got to bounce. 6:34:54 I just want to say enjoy the conversation. 6:34:56 Paul, I look forward to seeing you in Amsterdam. 6:34:59 And we'll try to have some fun. 6:35:02 Catch y'all later. Enjoy. 6:35:06 Hey, thanks for stopping by. 6:35:12 Perhaps we should wind it down. 6:35:14 It's been lots of fun. 6:35:17 I can continue, but I do think we've been going for a while. 6:35:22 What do you guys think? 6:35:24 We always have next week. 6:35:26 Actually, next week I'll be in Amsterdam doing the event, so I probably won't be here next week. 6:35:32 Are you getting security for the event? 6:35:35 No. 6:35:39 A lot of people asked me before Miami if we were getting security. 6:35:43 Oh my god. 6:35:45 People were very nice. 6:35:46 Ridiculous. 6:35:49 But this does go to show how easily things get out of hand, you know. 6:35:55 To say the least. 6:35:57 I'm talking about people have certain ideas in mind, and the ideas spread, and then the ideas sort of legitimize the dehumanization of people. 6:36:09 Yeah, like that crazy person you guys played at the beginning of your show. 6:36:13 What is that? 6:36:17 What was that guy talking about? 6:36:19 And then people always think, oh, this is going to hurt my children's future because you're messing with my Bitcoin. 6:36:28 And you're like, oh my god. 6:36:31 Yeah, I wish there was less of that. 6:36:33 I wish people just like, you know, it's like, hey, listen, I want Bitcoin to be better just as much as you do, right? 6:36:39 Yeah, without actual knowledge, who's to say it's not them? 6:36:44 Them who's ruining their own children's future. 6:36:47 We're on the same team. 6:36:49 We want the same thing. 6:36:51 We just have different ideas for what the best thing is, right? 6:36:53 Like, hear me out, I'll hear you out. 6:36:55 Let's all talk together. 6:36:57 Let's be friends after. 6:36:59 Let's give each other a handshake after. 6:37:01 Oh my god, Alec. 6:37:03 We've got another one. 6:37:05 Another one who believes in rationality. 6:37:06 I think the vast majority of Bitcoiners are kind of on the same page on those things. 6:37:14 But you've got people like Saifedean. 6:37:19 I remember his tweet about how Drivechains are going to destroy his family's future in Lebanon or something. 6:37:27 And that's intentional. 6:37:31 That's not like, oh, we all won Bitcoin or whatnot. 6:37:38 That's just pure politics. 6:37:41 And, you know, some of these people are... 6:37:44 And of course, many of these people are just such a horrible lie. 6:37:48 They just will lie about anything. 6:37:50 It's not even, you know, like, I don't know who's lying, who's saying the truth. 6:37:54 I'm just saying, like, it's unfortunately not accurate. 6:37:57 Every single person that you look at has the same interests, you know. 6:38:02 Like some people are just here to sell books and speaker slots, you know. 6:38:06 Not everyone is here to establish Bitcoin's future. 6:38:11 I think it's also part of it that they talk among each other, like not in public. 6:38:17 They talk about it among each other. 6:38:19 But reading the BIP is not very popular among them. 6:38:23 So they kind of just make shit up and they believe what each other is telling. 6:38:34 Anyways, Munzer, are you a pro-CTV person? 6:38:40 I'm not particularly. 6:38:42 I'm very interested, however, in figuring out, you know, how things are. 6:38:48 And as I said before, if it cannot be demonstrated that it will hurt the outcomes of those that don't opt in explicitly, 6:38:58 then I believe it does not stand on moral legs to oppose it. 6:39:03 That's my stance. 6:39:05 All right, guys, it's late over here in Europe, so I'll probably go. 6:39:09 But if you guys want to hang out, then by all means, hang out. 6:39:13 That's OK. 6:39:15 We'll allow you to end this. 6:39:17 Yeah, we've been going on for like seven hours, right? 6:39:20 It's been a nice space. 6:39:22 Really? Wow. 6:39:24 Yeah. 6:39:26 It's been a nice space. 6:39:33 Really? Wow. 6:39:35 Like a lot of times, I like to listen to these, because I miss it. 6:39:39 I can't sit here for the whole seven hours. 6:39:41 Yeah, we put them on the website. 6:39:43 We put them on LayerTwoLabs.com. 6:39:45 Someone make sure that they're all still going up there. 6:39:47 We can put it on 2x speed and just like, you know, blast through it real quick. 6:39:51 But yeah, thanks for the spaces. 6:39:54 Yeah, all made possible because we have great guests who come. 6:40:00 And ask great questions. 6:40:02 So thanks to all you guys as well. 6:40:06 See you guys later. 6:40:08 I'll leave you guys. 6:40:10 If you all leave, then I guess the space will end. 6:40:12 But otherwise, it will continue. 6:40:14 All right. Bye, everyone. 6:40:16 Bye. Good night. 6:40:18 Later, guys. Have a great weekend.
