0:00 People worship the Lightning Network, but to me it is clear that I think at certain points it has actually crossed the line into overt fraud. 0:06 And it will be talked about like with Theranos and the Fyre Festival. 0:10 The relay policy is mostly a mistake because at its heart it tries to ignore one fact, 0:18 which is that whoever pays for the block space is the rightful owner. 0:22 If you have an idea that doesn't make it through the Bitcoin Core process, what do you do with it? 0:27 Does it mean that it's absolutely a bad idea? 0:30 So I think, unfortunately, the entire ecosystem has evolved in the wrong direction. 0:35 Look, reminder, nothing said on Supply Shock is a recommendation to buy or sell any investment or product. 0:39 This podcast is for informational purposes only and the views expressed by anyone on the show are solely their opinions, 0:42 not financial advice or necessarily the views of Blockworks. 0:44 Our hosts, guests, and the Blockworks team may hold positions in the company's funds or projects discussed. 0:58 Hey everybody, Pete Rizzo, the Bitcoin Historian on X here to bring you another great episode of the Supply Shock podcast. 1:05 We've got a living legend here today, founder and CEO of LayerTwo Labs, 1:09 one of my favorite bloggers and thinkers about all things Bitcoin. 1:13 You can go to Truthcoin.info to dive into his ever-increasing repository of information about how you should think about Bitcoin. 1:22 We've got Paul Sztorc here. Paul, welcome to the program. 1:25 Thank you. You're one of my favorite people too, Pete. 1:29 Well, thank you, Paul. Well, I just thought it would be fun to reconnect, right? 1:32 Bitcoin development has become a silly enterprise these days, right? 1:35 We have these kind of evolving social factions, some of which, you know, perhaps me and you have chatted about their emergence before, 1:43 but I don't know, Bitcoin version 30 is released. 1:47 We had probably the biggest sort of, you know, at least since the 4Core era, 1:51 the biggest sort of FUD campaign launched against a Bitcoin software implementation. 1:56 It's live on the network now. Blocks are processing. Transactions are being verified. 2:02 The network goes on. What are you thinking about? 2:04 It was a missed opportunity for prediction markets because there were a lot of claims made with a high degree of certainty about V30 will destroy everything. 2:14 And we could have had, that would have been nice to have a betting market on that. I would have made a lot of money. 2:19 There wasn't anything on Polymarket or anything like that? 2:22 If there was, I didn't really care about it in the discourse. 2:24 So it wasn't working. It wasn't working its cure through the media landscape. 2:31 So I would have preferred if we could have just, you know, if we had a tangible claim, 2:36 like the market price of Bitcoin would be worse as a result of the upper return. 2:42 Really? I mean, I personally, I got bored with that very quickly. 2:46 I participated a little bit and I was like, I can't believe we've really regressed a lot. 2:50 The block size debate was more serious than this, I think. 2:54 Well, I think the thing that happened that was problematic is that, and I think me and you talked about this, 2:59 is that the sort of, you know, communicative sphere around Bitcoin, you know, 3:03 sort of the books and the education process around Bitcoin sort of divorced from the technical aspect of like actually how the Bitcoin core development process worked. 3:12 And I almost see it as, you know, I think I've given you my sort of broad strokes on the fork wars that, right, 3:17 the faction that won, there's been sort of this myth that the faction that won, the small blockers who raised the block size, 3:23 this group was sort of a homogenous group. 3:26 And I think it's sort of this recent argument has sort of delinked kind of the two groups that had come together. 3:33 So I think that what I mean by that is that there is sort of a segment of, you know, users for whom the core development process is Bitcoin, right? 3:42 And whatever the core development process sort of decides, you know, it's a meritocratic process to upgrade Bitcoin like that is Bitcoin. 3:49 And then there's this idea that users should upgrade Bitcoin and decide what Bitcoin is. 3:53 And in the UASF, those two things were sort of together and they were sort of indistinguishable, right? 3:59 You couldn't tell who was on which side of the board there. 4:02 Here, it seemed like that really came apart and you had sort of a faction of, you know, this is being very charitable to the nuts group, right? 4:10 At least at the figurehead that wanted sort of like a users to either impart on the Bitcoin core process or lead the Bitcoin core process. 4:18 And then you had sort of the other faction, which, you know, saw the Bitcoin core process as being sort of above or not necessarily really including or meant to include, 4:29 you know, opinions from outside their process, right? 4:33 And those things really kind of separated here. 4:35 What's your take on that? 4:36 Well, yeah, I agree. It's political and politics. 4:40 It helps to be in a big team. And that's why you often have two factions. 4:44 And so, as you said, the block size war, you had small blockers and large blockers. 4:50 Or really, you kind of had like a... 4:52 Well, I think the small blockers were those two groups, right? 4:54 Like what I guess I'm saying is the small blockers were both folks who thought like users should decide what Bitcoin is. 5:01 And there was developers who thought like the Bitcoin core process is Bitcoin. 5:04 And thus, you know, we've decided. 5:06 You're right to say it was a wide, diverse group of people, but they teamed up. 5:11 That's what I was trying to say. They had funneled into small block world. 5:16 Right. 5:16 And then I kind of thought like I was really worried at the time. 5:21 I said, you know, a few times also. 5:24 I don't know if anyone listened, but I, you know, we kind of killed the goose that laid. 5:28 Like I think the divorce was actually very bad for Bitcoin because we spun out a lot of people who were pretty good for Bitcoin, 5:34 even though they were large blockers. We spun some of those people out and we lost them. 5:39 And we lost like a whole type of person for a long time. 5:44 Maybe we might be on the verge of losing another type of person. 5:47 Right. That's what I mean. I don't think the divorces are good, actually. 5:52 And and so but also we it made it as exactly as you were saying, 5:56 it made it seem like these people were correct and that they have like some kind of authority. 6:01 And then I think we really had like 10 years of stagnation. Maybe. 6:04 I don't know how you do the draw the years, 6:05 but you could say like 2015 was when the block size war really heated up with. 6:10 Yeah, my current and XT and all that stuff. And then the divorce being in 2017. 6:16 But really, I think we actually have had a lot of stagnation because the big bet of the small blockers was on the Lightning Network. 6:24 It wasn't really on there were like these abstract ideas, 6:28 but scaling and layers or whatever, but really it was like the meme was the Lightning Network. 6:34 So I know you're going to be a top tab conf arguing against I'll be next week. 6:39 I'll be they wrote me in to doing this like this thing of I don't even know if it's maybe an hour 6:45 or more where I have to give like a tiny little talk and then I have to just field questions, 6:50 which I think will be a really good format. 6:52 Yeah, I don't understand. I have a very it's still one of the biggest sacred cows. 6:56 So I recognize that people worship the Lightning Network, 6:59 but to me it is clear that it will go down in history as basically I don't know. 7:06 I think it's certain points. It has actually crossed the line into overt fraud 7:10 and it will be talked about like with Theranos and the fire festival 7:14 and stuff like that like just mass delusions of people just all going in. 7:19 I mean, isn't that I mean, it's kind of hard to pull out like a mass delusion 7:23 and crypto which is itself a collage of there's a lot. 7:26 Yeah, it's very common. Well, that's an interesting point, 7:29 which is that the Lightning Network has made us a lot like stuff that we used to make fun of. 7:33 So we look in with aetherium and with Dan Larimer 7:36 and people we would say well Dan Larimer keep changing you do bit shares 7:40 and then there'd be like some critique and they would like patch it. 7:43 It'd be like playing whack-a-mole and we would say well, 7:46 this is stupid and then many times I would criticize aetherium 7:50 and people would say well, I remember William McGuire. 7:52 He would say like Vitalik has said he will fix it. 7:55 I heard that phrase like over and over again. 7:58 I was like, no like that's not like really like a real answer, 8:01 but you know, that's what we had and but Lightning Network is like that 8:06 where it's like you play whack-a-mole 8:08 and then the thing changes all the time actually 8:10 and you have all these bizarre situations onboarding liquidity flood 8:15 and lewds things expiring the HTLC is consuming too many bytes 8:21 and and then people say well, we'll fix it with PTLC. 8:24 We'll fix it with whatever blah blah blah. 8:26 We'll just change it all to arc later. 8:27 There'll be one instead of instead of everyone six degrees of Kevin Bacon. 8:31 They'll just be one arc Supernode that has expiring VTX 8:35 and you're just like this is what we used to make fun of in the old coin community. 8:39 Well, but wasn't the benefit just to be charitable to for that case, 8:42 right like that. 8:43 We didn't want that at the base protocol. 8:45 So we just moved it up the stack 8:47 but we should have had more competition among the L2s. 8:51 There should have been and there is a tiny amount. 8:53 There isn't that I feel like there's more competition among the L2s. 8:56 Since the season 2 it was like 2023. 9:00 It's become more. 9:01 So ever since I wrote a to the mailing list 9:03 and then wrote my lightning limitations article that slowly percolated through the 9:09 but ever since 2022 when in February, 9:13 it's become slightly more socially acceptable. 9:16 Just a little bit to criticize lightning 9:19 or just talk about it as though it's not the greatest thing in the entire world 9:22 and to your other point about the the the fake. 9:29 They had an idea of unity and like infallibility of core 9:33 that has been shaken recently 9:36 and I do think that is because I don't know. 9:38 I feel like it's I feel like it is. 9:41 I feel like v30 was sort of a big win for the core group 9:44 and that it's for the first time in a long time. 9:47 It's sort of staunchly kind of held the line on something 9:50 and then you know was able to kind of it's a huge setback 9:54 for my project of criticizing core 9:57 and saying that they are lazy and corrupt that they that this is the issue. 10:01 It's an issue where they are correct where the core people are correct 10:04 that this is the issue that became like the big issue 10:07 some stupid issue where the or happens to be correct 10:09 or happens to be correct in the facts, 10:12 but the anti core people the knots people have they kind of picked up 10:16 as you were also saying they're kind of like detected 10:19 that they don't really like have much of a say or something. 10:24 So in this case, it's because their say is incorrect. 10:27 So wisely it's just ignored 10:29 but I think they're right that like they don't really like 10:32 what's their recourse if they may it core makes a mistake, 10:35 but that's the way they're reading recourse core makes a mistake. 10:38 What do we do? 10:38 Do we go like it's not we don't have like Crestrose Colgate here. 10:41 We have like a monopoly. 10:42 Well, that's why I think like, you know, maybe we can steal man. 10:45 Like so one of the more so, you know, 10:47 I've been on the record of being pretty critical of not since like their earlier days 10:51 or just the sociology of the movement. 10:52 I think you know, I do think dissenting implementations like broadly 10:56 like are actually you know, pretty interesting people don't really know 11:00 what to do like if core makes a mistake what a core makes a mistake. 11:03 Like what do they do? 11:04 They don't really they're not really sure about what to do with the ironically Luke used to be the one 11:08 who would say core is a monolith 11:11 and the only way to deal with course mistake is to like participate in the like GitHub process. 11:17 And he would tell me stuff like that. 11:18 So now it's a little iron. 11:20 It's meant there's many ironies of course. 11:22 Well, we're talking about the emergence of this group and right like how they carry forward, right? 11:26 Oh, okay. 11:27 But one of the things that I think that is really interesting that they put forward that, 11:30 you know, while sillier I'm surprised doesn't get more actual intellectual discussion is this idea 11:36 that you know, Bitcoin core is itself sort of like a failing left-wing institution, right? 11:40 That like in today's modern society, I think there's a lot of yeah, 11:44 but there is like, you know, a lot of like left-wing institutions are actually failing at a large level. 11:49 And I think is that you're like a kind of like a you know, a sociologist historian type person. 11:54 I think you're aware there. 11:55 I don't remember the name of it, 11:56 but there is like a law or something that says something like the left is better at like overtly every organization eventually drifts into the left 12:08 and then it be stagnates and dies. 12:11 There's some law that says something like this has a permanent feature across all of every institution for like hundreds of years 12:18 and has something to do with like the left is easier to like more practice to justifying itself or like has more lawyers or something. 12:24 Well, there's this idea that like Bitcoin core should return to like a strong man. 12:28 Like so so like this and I think this is sort of like, 12:30 you know, I think within knots you have like Luca mechanic at the top who actually have like some very Byzantine technical argument 12:38 that they're just are willing to die on the hill 12:39 and then you have sort of the rest of the group which really just wants like a strong man sort of authoritative Bitcoin core leader to sort of, 12:46 you know, be politically aligned with them. 12:48 People want a certain outcome, right? 12:51 So when they don't get it, 12:52 they're one way they say, 12:53 well, if only we had a king and the king and the king of course agrees with me because I'm because the king is so reasonable and I'm reasonable. 13:00 Of course. 13:01 So people do that all the time. 13:02 They never find a, you know, it's interesting within the context of like Bitcoin earlier in the epochs, right? 13:08 Both Satoshi and Gavin were sort of pseudo Kings, right? 13:11 You could you could argue that Satoshi was an absolute monarch and Gavin was a monarch with a loose parliamentary system that he was a very British. 13:21 Nothing was actually written down. 13:23 They were defined, but he, but it was like clear that he had limited power. 13:27 Yeah, he wanted like the, the, 13:29 then regretted what he did. 13:30 I mean, you would probably know much better than me, 13:32 but it seemed like he gave it back up to people who they people. 13:36 Yeah, he wanted this veneer of a parliament, 13:39 but he wanted to be able to like seize the Julius Caesar. 13:42 Yeah, of course. 13:42 We wanted both ways. 13:43 They don't want. 13:44 Well, that's the other thing that core also does this where they say we want to have the final say we want the power to reject stupid ideas, 13:52 but we don't want to be held responsible, 13:55 which is also like they don't want to be out legally responsible. 13:58 They don't want to get sued by Craig Wright and other crazy people. 14:01 They don't want the government to say, 14:03 oh, look, these are the official people. 14:05 Well, that was like during a, you know, fork era, war era thing, right? 14:08 This idea that the Bitcoin core developers did not want to be perceived as being in charge of Bitcoin, right? 14:12 Like that, that's, that's been a pretty, which they aren't, but I think they, they aren't in charge of it. 14:18 And so they should, it is an accurate. 14:19 It's a reasonable thing to want to be perceived accurately as like not being responsible for what, 14:25 but I do think the pendulum has swung too far where they don't, 14:29 they don't really like they, they, they can't become a very insular group, 14:34 like very, like what are they accountable to really? 14:39 Like who, what kind of oversight, like who, who could fire them like that? 14:44 And if the answer is no one, then how can, 14:46 how can they be upset when people complain about that on Twitter? 14:49 I think that's, that's also a pretty, it's a reason to ask, 14:54 like, who are these people and like, how do we get rid of them if we don't like them? 14:58 I think that's totally reasonable. 15:00 And so I think like the knots group, like, you know, 15:02 so I've tended to focus a lot of these long form talks on like my criticism level, 15:06 which I think like, you know, most of their, their intellectual position is very silly and untenable. 15:10 But yeah, I think like, what are they? 15:12 A lot of what they've done has fallen into the low, 15:14 the low brow, like bottom of the barrel manipulative, you know, like, you know, 15:20 like to manipulate people and fake, fake panic and extremely emotionally charged, 15:29 you know, words and phrases designed to manipulate, shame people. 15:33 And, you know, that all that's just like awful. 15:36 I think, you know, they should, the knots people should reject all that if they want anyone to. 15:41 Well, it just, it feels like for a long time there's been this, 15:44 you know, and then there was a kind of period during like the Ordinals boom where, 15:47 you know, Bitcoin Core was viewed as like not technical savvy enough and not pushing enough changes. 15:52 And now it's not, you know, so Bitcoin Core is a bit in a, in a, between a rock and a hard place. 15:56 But it does feel like, you know, there's more of an openness towards Bitcoin having multiple implementations 16:02 now than there's perhaps ever been, I guess, in my time in Bitcoin. 16:07 Right, I agree. 16:09 And then like, you know, my whole thing with knots is like, you know, 16:11 if you're going to go to the route of dissenting implementations, 16:14 then the real Bitcoin was really the pinnacle of that. 16:16 And like, how do you improve on the real Bitcoin? 16:18 You know, knots is just like a very like, you know. 16:21 Well, I mean, you know, I, this is where I'm disappointed and bored by the knots thing. 16:25 I mean, I know that it's the current thing. 16:27 And so that's people want a take on it. 16:29 I think like it's like I'm depressed by it. 16:32 This is the current thing. 16:34 And if you think like you're talking about like they get in trouble for not making enough changes or whatever. 16:39 It used to back in 2012, the whole reason the soft fork was invented 16:44 or conceptualized was because it's too difficult to get everyone to upgrade. 16:48 You'll never get everyone to upgrade. 16:50 So you have these backwards compatible. 16:51 And but that has lasted only a little bit of time. 16:55 And I don't know if you've seen, but I have a slide that I sometimes use about the, you know, 17:00 there were like something like 14 soft forks in the first seven years. 17:04 And then 20 months separated SegWit from when it was first proposed on the mailing list to when it was coded and activated. 17:12 And there's something like 46 months for Taproot. 17:15 And then since then, nothing. So Taproot was whatever, November 2021. 17:20 So we have a geometrically increasing time between. 17:23 So the soft fork is out. And now even a change to the relay policy, 17:28 which the whole idea of the relay policy is a mistake and misconceived, 17:33 but it's the relay policy is optional and configurable. 17:36 And if you want, you can change something in the... 17:39 Or go back to the relay policy thing. 17:42 Yeah, there's been some interesting literature recently about like emergence of relay 17:46 or policy in general as something that's divorced from consensus. 17:51 You know, and I think that those things have been interesting to read that Satoshi 17:53 and Gavin sort of created this idea that the users would, 17:57 they would use sort of the defaults of the network to sort of, you know, 18:00 push certain things that would have otherwise been at consensus, 18:02 but weren't pushed to that level. You have any thoughts on that? 18:05 There is a, you know, there's a wide continuum of like, 18:09 so like your node will ban people for different amounts of time. 18:13 I'm just trying to say it's not, it's never been completely black and white 18:18 and it wouldn't really work if it did because like sending someone an invalid block 18:21 gets you banned for like, I don't know, like whatever, like a day or like forever or something. 18:25 But if you just do something else, it'll just disconnect for a shorter period of time. 18:29 So because there's different like ways the nodes can like waste each other's time 18:35 and the transactions can waste each other's time. 18:37 Like a transaction can have like a, it can contain Sergio, 18:41 Damon Lerner made a like a some kind of transaction that takes up a whole block. 18:45 It takes like an extremely long time to figure out if it's valid or not. 18:49 So there are these, there are all these kind of little things, 18:53 little costs to each thing that people have tried to kind of like counter 18:57 in like a proportional way. 19:00 But yeah, I think the relay policy is mostly a mistake 19:04 because at its heart, it tries to ignore one fact, 19:09 which is that whoever pays for the block space is the rightful owner 19:13 and that the miners want to make as much money as possible. 19:16 So I guess that's two facts. I snuck in two facts at once. 19:19 But if you... 19:19 Wait, so why does, how does it, how does it, how does it ignore those two facts exactly? 19:23 Because it's trying to say something like we should punish people. 19:27 Well, if your thing has a long op return, we're going to try to like discourage that. 19:32 But, but that premise is nonsense because the miner wants to get the transaction 19:39 because it pays the highest fee. 19:40 It's, we are, we've already assumed implicitly that it's crowding out. 19:44 If it's... 19:45 What do you, what do you think about like one of the other funny parts of Knott's lore, 19:49 I think is this idea that the economic incentives of miners, 19:54 that there are fiat incentives and then there are Bitcoin incentives 19:56 and the miner should be altruistic. 19:57 Yeah, a lot of this is like first talk rationalization and kind of desperate hope. 20:01 Humans are great lawyers. 20:03 We were born to argue and you can just find anything. 20:05 Your brain is just looking for any, it's like trying to like connect to... 20:10 Well, I just thought you would find it particularly amusing as a... 20:12 I do think there is like a, there's an argument that makes some sense, 20:16 which is something like if something gets you more transaction fees in the next block, 20:21 but it causes the price of Bitcoin to crash, then maybe miners wouldn't do it. 20:25 And there have been many cases in which, that you probably remember, 20:29 where someone like accidentally paid, they were experimenting. 20:32 This is a common mistake that people make. 20:34 They don't understand change outputs. 20:36 So they think I've got 10 Bitcoin. 20:38 I'm going to spend 0.001 on something. 20:40 And they accidentally, they only do that 20:42 and that makes the entire rest of the balance, the transaction fee. 20:46 And like the mining pool will like track the person down 20:49 and voluntarily give the money back. 20:51 This has happened many times in Bitcoin's history, 20:54 where it's sort of not necessarily in the short-term interest of the miner, 20:59 but it's in kind of better for the Bitcoin brand. 21:02 So that has happened. 21:04 So I think I'm open to that. 21:05 That's sort of a line, yeah. 21:07 The whole thing is, I think again, 21:09 like it's just a matter of people who understand the actual issues 21:13 and then people who just have less of an understanding and are relying on... 21:17 Well, my big take on this, I'm curious what you think of this, 21:21 is essentially like one of the problems is Bitcoin has scaled 21:24 and because it's become more mainstream, we've sort of pulled the ladder up. 21:27 And what I mean by this is like in 2021, 21:29 it was possible to be part of the Bitcoin culture 21:32 by like starting a spaces and like yelling about NFTs, right? 21:34 Like that was like, that was the barrier entry 21:37 to being like an important person in Bitcoin 21:38 is that like you just like got on some random spaces 21:41 and like talks about how people shouldn't buy NFTs. 21:44 And sort of like now as the sort of community is fragmenting 21:46 and you sort of have this like Wall Street finance movement with Michael Saylor 21:50 and then you have this sort of like crypto savvy ZK movement 21:53 with like Eric Wall and these types of people. 21:55 And then, you know, you have sort of the political stuff, 21:59 you know, so you have to be in Washington like doing, 22:01 you know, insider shaking in DC. 22:03 So you have like three, like the three main sociological elements of the movement, 22:07 like the pro-crypto side, like the pro-regulatory side 22:10 and the, you know, pro-Wall Street side require like a barrier to entry 22:16 where like you're a nuanced expert in that field, right? 22:19 Like so to partake in like Washington legislate, 22:21 you know, that there's not, the average pleb is not participating in that. 22:25 And so Knott's in some sense, I think has benefited from this phenomenon 22:28 of like Bitcoin becoming more, 22:30 it's like more inaccessible to be like part of the Bitcoin industry 22:33 and in a useful way. 22:35 And sort of Knott's has collected a lot of these. 22:37 Like the Bernie Sanders or something of the. 22:39 That's an interesting analogy. 22:43 Yeah, it's just sort of like there was this culture that was behind, 22:46 like it's, you know, as Bitcoin has sort of moved a bit beyond 22:50 like the insular kind of everyman culture, 22:53 it's sort of left behind some people. 22:55 And I feel like there's a lot of like, you know, 22:57 you see this with the big podcasters and influencers, 22:59 I won't name them, who have like, you know, 23:01 they'll say that they're running knots to demonstrate 23:03 some sort of social conservatism, you know, 23:05 like where it was just pretty gross. 23:07 Like, you know, they're so afraid, 23:12 they're so afraid to be like, 23:13 I think we have to maybe like, okay. 23:15 Yeah, very few people understand. 23:16 This is as Jameson Lobb says, 23:18 actually very few people understand the whole Bitcoin idea. 23:21 So running a node only helps you if you are receiving money 23:25 or for some other reason you want to like view the blockchain, 23:29 like you run a block Explorer 23:30 or you want to back up the chain 23:32 because you think everyone else is going to get hit by a meteor or something. 23:36 So but basically if you when you're receiving the node is telling you 23:40 if you're getting money, 23:41 if you're getting BTC or not. 23:42 So it's ironically or interestingly the people who like run a store, 23:46 like you people would run like Silk Road or Backpage at the time, 23:50 but you know, or now the exchanges or the ETF 23:54 or whatever they need to know how much Bitcoin they really have. 23:56 Those people, the node is actually doing something 23:59 and when you're not receiving money, 24:00 the node doesn't do anything. 24:01 You could spin up a node, you could spin up a hundred nodes 24:04 and then shut them all off and you know, 24:06 the network's left back the way it was before. 24:08 It's not like shutting them off is like. 24:10 Well, yeah, there's this weird like latent, 24:13 as much as the Udots camp tries to view itself 24:16 as this like socially conservative right-wing group. 24:18 It's an amazingly a very collectivist sort of group 24:21 in terms of how they make arguments. 24:22 Like I think that's like one of the fascinating inversions of it, right? 24:25 And it's sort of like this idea that like, 24:28 you know, you see the people was like, 24:29 my gun is my node kind of thing where it's like, 24:33 you know, and like there is a truth to that, right? 24:35 I guess. 24:36 I don't know. 24:36 I know we've talked about the Fork Wars 24:38 and whether the UASF was like, you know, 24:40 even a coherent movement that like achieved anything 24:43 and it's very hard to like figure that out. 24:45 It's more ambiguous than people later rewrote. 24:48 They later rewrote it like, oh, whatever, 24:51 like small block was right. 24:52 Well, because one of the things that like is really whitewashed 24:55 from that history is just like that the big blockers, 24:58 the biggest hurdle the big blockers had 25:00 was that their coalition became largely disinterested in them 25:03 as the crypto investment ecosystem like expanded more broadly 25:06 and then the business is just diversified 25:08 and it's other crypto assets. 25:09 And so I think a lot of like Coinbase, 25:11 you mean like just be an altcoin. 25:13 Yeah, they were just like, we're just going to do Ethereum, right, you know, so there was like there was an earlier defection from that camp where, you know, it's like the big blockers who remained up until the Bitcoin cash fork were just like a fraction of the prior constituency, you know, for a variety of reasons. 25:29 And this is also the key. This is one of the arguments of the small blockers that and that people made, including me about like, you know, people want there to be some sticking power. They want to say like there's some sometimes called the moral glue holding the coalition together, that if everyone just goes with their with the thing that they prefer, then we end up with like, you know, 8 billion different blockchains. 25:52 Everyone has one person on them, you know, and then it doesn't the whole point is that to some extent you like this is like the Bitcoin is for enemies. 26:02 I mean, so the whole point, to some extent, is that you're only partially in agreement with these people, but you agree enough to be on the same network, you know, your network effects and network effects are big. 26:16 Being with the biggest is a big advantage. So that does suck for Bitcoin cash. And then, of course, Bitcoin cash people got immediately like talk about live by the fork, die by the fork. 26:29 Then that Bitcoin SV does that a lot of other, you know, Bitcoin gold or whatever, like a lot of. 26:36 So I think going forward, there's a few things that can happen. I mean, I think I think for for better or for worse, what's what's happened now is that like people understand that the development process a lot more than they used to. 26:48 And those people are who are dissatisfied with it, have the opportunity to do something going forward. You know, they can bear the cost to create other implementations and then, you know, operate them for some period of time. 26:58 And I think, you know, if we get so it's interesting to think like if we're moving towards like a multi implementation network, let's just say, you know, not continues to be popular. 27:06 You know, there's some other folks we know who are talking about launching other implementations. Let's just say one of those goes live and it's sort of appealing for whatever reason. 27:15 You know, Luke is and I'm curious your thoughts on this, because Luke Dasher has put forth the idea that knots might even, you know, upgrade or push, you know, software upgrades, which I, you know, even it is that I can imagine is like actually not popular with his user base. 27:29 But let's just let's just go with the fact that that's in the realm. 27:32 I agree with you that that's intriguing and no one else has talked about it like when he was talking about, oh, like we'll have like like Stark verify something like that. 27:41 And I was like, this is weird because this is not what you would expect. And it's the kind of thing you would do if you were just trying to like be a politician and just gather more people say whoever feels neglected and try to fold them into your coalition. 27:54 And I thought that was kind of curious. So I agree with you. I don't know. 27:59 So I think it's consistent because like, again, like if you go back to my idea of like, OK, the two what are the two factions that split if you what was the USA at a USF camp and then what's the split? 28:09 The split is basically there's a group that thinks the technical development process is Bitcoin, like whatever you either participate in the technical process or you don't either abide by those decisions. 28:18 You don't. And then whatever gets produced, that is Bitcoin, because this is anyone to participate. 28:23 Anyone can discuss. And this is simply the best efforts of the people. That's that's the best steel man argument for Bitcoin core. 28:30 And then you sort of have the USF movement, which, you know, Luke was at the helm of. And then he did try to do the USF for Taproot, right, which helped successfully get it activated. 28:39 So his his theory, I think, is that, you know, we the users are Bitcoin. We are Bitcoin. Bitcoin can change if we want it to change. 28:46 And so there's this idea inherent in it where, you know, he does want to move the network forward and continue upgrading it. 28:53 And I think that, you know, if you if you did see an implementation outside of core, you know, offer some sort of, you know, more progressive updating. 29:03 And then these implementations were able to keep compatibility. You might get something to like what I think you've wanted, which is, you know, sort of a marketplace of competition between where at least these new technologies get tested. 29:15 And it's right. And it's finally after I think after whatever we call it, eight years, eight years since the block size war, I think the lack of competition is really becoming more obvious. 29:28 It's now all the people are figuring out what I predicted long ago. It's starting to become more obvious. 29:34 New stuff's being invented that we used to say that we obviously wanted, like cool privacy, ZK-SNARK privacy. That was like a Greg Maxwell thing, like back on BitcoinTalk.org. 29:47 And but we used to always say that we wanted the option to have greater Bitcoin privacy, reusable addresses, whatever. 29:55 Now we have altcoins that that do that. I mean, I think I remember a time when everyone said they wanted smart contracts on Bitcoin or then you or you'd have. 30:02 Well, there's been some interesting. 30:04 Smart contracts on Bitcoin and stuff like that. And so like, you know, but that's then after Ethereum did that, we had to do the sour grapes and say, oh, we never wanted that. 30:14 And that's all that's becoming top heavy now, especially as Internet speeds get faster, computing gets cheaper. 30:23 Now it actually the cost benefit on larger. You have these people like Solana that have like this incredibly expensive node. 30:30 But it turns out after years and years of R&D, it's like, you know, like a few thousand dollars a year. 30:37 And so actually super expensive as a percentage of like someone's wage in the first world is actually not that much. 30:45 And so then it's kind of like revisits the whole scaling is going to revisit everything. 30:49 We have another issue with the lack of competition. 30:52 And this is similar to what Luke was saying, or I think what he was sort of not saying. 30:58 Well, let me explain what I'm trying to say is that we kind of have a rotten premise, which is that we on one hand, we say Bitcoin is all you need. 31:07 Bitcoin is perfect. Everything else is a shit going. Everything else is terrible. 31:10 And you're a scammer if you show anything, something you buy with Bitcoin on that is the shit going, whatever. 31:16 So the word shit coin has slowly taken on more and more meaning until now. 31:20 It just basically means anything I don't like. Right. 31:23 But on one hand, we say this is it's either Bitcoin or nothing. 31:28 And there's, you know, Bitcoin, not crypto, blah, blah, blah. There's a whole pillar of this. 31:33 And yet it's kind of like if you have an idea that doesn't make it through the Bitcoin core process, what do you do with it? 31:41 Does it mean that it's absolutely a bad idea? 31:44 And so what you're then saying is a core is infallible. 31:47 And then if if your idea doesn't make it on your idea for. 31:51 Well, this was part of the Bitcoin cash. 31:54 And what do you do now? 31:57 Like you have to if someone has a good idea now, you have to launch an altcoin. 32:00 Right. There is no there used to be the idea used to be sidechain idea. 32:04 It was firmly in the original Bitcoin in 2015 and 2014. 32:10 People would say we will eventually do this, you know, rootstock or we will eventually do a theorem. 32:14 That's why I've been encouraging you to launch an altcoin for the last several. 32:17 Yeah, I think it could. Well, I do think we have a test net. 32:21 We have two test nets right now. So we have a signet. These are fake coins. 32:24 But they it's a block chain is sort of as real as any altcoin or Bitcoin. 32:29 And the coins have no value. 32:31 But we have a signet and we have one that is very similar to Bitcoin core proof of work. 32:36 900000 blocks. So we have the tests are getting progressively more realistic. 32:43 But what do you what do you think about, you know, so is there a power vacuum here where, you know, 32:48 you could consider even launching your own implementation like around some. 32:52 Yeah, I think actually in particular, we have like a big power vacuum for people like the knots versus core. 33:03 That's currently like locked in everyone's head. So I don't know if I could disturb that. 33:07 But I do think you could be like the who's the Ross Perot. 33:11 Yeah, well, that is I do think I'm a huge believer. 33:14 Anyone who knows me knows that I am a huge I sing the song of Ralph Nader all the time. 33:19 I love the network effect, I think. So I do think like, you know, 33:23 and I told even earlier in this conversation about the political factions usually split into bigger teams better. 33:29 I do think, though, we have like this thing bid window, which is kind of like it's like a graphical user interface for Bitcoin core. 33:36 So you just run Bitcoin core. But Bitcoin core is, you know, just like hidden black box. 33:43 And then the window is like what the user sees. And that began as just to manage the sidechain L2s. 33:50 But I added I bolted on all kinds of stuff that I just think is cool and I think it's way better. 33:55 And I think that's much more impactful than if I compare that to knots. 33:59 I think that's way better because now I give you I give people tons and tons of options because we can add all kinds of knots relay options. 34:06 But the thing is, those relay options don't really do anything. But I give you lots of cool stuff in my little bit window experience. 34:12 And this is better, too, because knots is a different version of, you know, the back end, the actual consensus. 34:19 Who knows? Luke has had a history of having his server be insecure. 34:24 And so but I'm just running Bitcoin core and then just showing you a different display. 34:30 So I think that is better, actually, a lot. And then I have this other thing that's also better. 34:34 The Core Untouched Soft Fork, CUSF, C-U-S-F. And that's you just run Bitcoin core. 34:39 And then you have these other things like these activators that you could enforce, OP_CAT or BIP300 or whatever you want, a CTV. 34:48 So that is also better because you don't touch Bitcoin core. 34:51 So I do think my paradigm is actually much better than knots and that knots is in some sense blazing a trail of descent from core. 34:59 But as I said earlier, I'm very disappointed that the issue that the big issue is one where core is just, you know, sort of flatly correct. 35:09 And the people, the knots people are going like hardcore emotional manipulation to make their point. 35:15 And I think that's, you know, that's not the right way to go. 35:18 So, well, I'm curious what you think about this, because I was actually, you know, I was trying to draw a mental diagram of this. 35:23 It's OK. So, you know, if you have this, there's basically only three bodies that could be in charge of the network. 35:28 Right. It's either the miners are in charge of the network, the developers in charge of the network. 35:33 No one's in charge of the network or the users are in charge of the network. 35:36 And then, you know, you think back to the history of Bitcoin, there's different people who have tried to run different of these theses. 35:42 Right. So like the miners are in charge of the network. Right. 35:44 Like Bitcoin Cash would just make that very clear that that was an unsuccessful attempt. 35:48 It was an attempt to do. I don't remember what the name was, but it was something like the miners could like increase the blocks. 35:54 The miner activated soft fork. Yeah. 35:56 There was some name like Gated something. I don't remember what it was. 36:01 It wasn't the MASF, the miner activated soft fork or hard fork. 36:06 We've had miners. The miner activated soft fork is cool. We've done in core many times, but not every time. 36:12 Well, this was a good nine, according to me. Right. 36:15 I don't know, according to anyone else. I think it's unfortunate. 36:19 Like everyone seems to have their own little definition. 36:21 I published mine on my blog to try to make mine transparent, but I don't know if it had any success. 36:27 The definitions are kind of a fool. 36:29 What do you think about this? So there's this tension between if you even go back to the USF days. 36:34 The people pushing the USF and the core developers weren't necessarily aligned. 36:38 Well, they both got the same outcome. 36:40 There was a lot of social distance between those groups. Right. 36:43 I mean like from Shaolin to like other people. 36:48 Is that what you're talking about? 36:50 Yeah. So my understanding is like, you know, my assertion has always been that the USF coalition was sort of two groups. 36:56 It was the Bitcoin core developers and the, you know, Mersha, Influence, Shaolin, Frye, sort of user. 37:05 Users should, users control the network and users can signal to the network. 37:09 I'm worried that you're making it a little too, the sentences are a little too short. 37:12 Like users control the network. I think there's like a lot of knobs. 37:16 It's like you drive a car, you can control the car, but you don't control like the airbag or some of the other things. 37:23 Like you can't shut off the thing that beeps if you don't put on your seatbelt. 37:26 You know what I mean? Like you don't, the control, like you can't make the car like fly into space or something. 37:30 Well, that's an interesting analysis. Like cars go above the speed limit, right? 37:34 That's actually, I've been thinking about this a lot in the context of like this debate. 37:37 BIP300 gives miners control over the drop and add and deposit and withdrawal to some L2s. 37:44 But the withdrawal is heavily gated. 37:48 So like, it's like, I don't, it's not like blank. 37:52 The X controls the network, I think is too, is not enough. 37:57 Well, yeah, I'm not trying to simplify it. 38:00 I'm just sort of state that like, okay, it seems very clearly that, you know, what the knots group says, 38:06 and these are the people who were sort of fed the sort of secondhand story of the UASF, 38:10 is this idea that like users implicitly control the network. 38:14 That's been very clearly invalidated by this. 38:17 I think whenever people bet it on, it's exactly the point I just made. 38:20 Whenever people bet on this like simplified thing, that usually ends up not working. 38:27 And usually I'd like, for example, for SegWit, I do think mostly everyone who examined the issue, 38:35 looked at the issue and said, people are upset that about the one megabyte block size. 38:40 They're worried about how to scale Bitcoin. 38:42 And if this means that Bitcoin is not the end-all be-all, this creates a problem. 38:47 It creates an anxiety for the users, for the investors. 38:51 The developers have ideas. 38:52 They want to try the Lightning Network. 38:54 SegWit is backwards compatible, or at least, you know, it's like a SegWit is like a soft fork. 39:01 So it won't have the problem of splitting the network. 39:04 The hard fork requires everyone update by a certain time, like a certain calendar date. 39:11 And that is difficult because you don't know how many people are unreachable, 39:16 how many people really want to complain, 39:18 but they won't because they don't want anyone to like know that they are a Bitcoiner. 39:23 So there were just all these objective facts that made it seem like SegWit. 39:27 No one – OK, here's another thing. 39:29 The people objecting to SegWit, they didn't really have an objection that was like a certain type of objection 39:35 that said something like this line of code will steal all my Bitcoins. 39:39 They were just saying like blah, blah, blah, like we want larger blocks or something. 39:43 Well, there was a lot of – there was the emerging consensus. 39:46 Not to be unfair to like Peter Risen. 39:49 There was the emerging consensus theory, right, that miners would self-limit the – you know. 39:57 I think there was – that paper was not correct about the orphan rate being a negative feedback loop against – 40:08 and people pointed out why at the time that it wasn't right. 40:11 So that was correctly de-emphasized. 40:14 So this is what I'm saying is I'm saying like you're trying to frame it in a certain way, which is perfectly fine, 40:19 like who – which group decides. 40:21 But I'm trying to say like actually the objective facts were – 40:24 it's like we went – you go on a boat and then who decides if we get – if we put on the life preserver? 40:31 And it's like well, the boat struck – hit a rock and it started to sink. 40:36 And so then everyone put – it's like whoever made the decision, it was the decision. 40:41 It was the correct – it was justified by the problem itself. 40:45 It just led to that. 40:47 So that was the right thing. 40:49 Just the way it all shook out with the timing of scaling to in Hong Kong in December 2015, 40:58 Peter Weil's presentation saying we could do SegWit as a soft fork. 41:03 This would actually result in a de facto increase in the block size to what he thought would be like 2.3 megabytes, 41:11 4 megabytes like theoretically possible and demonstrated by the Tapper Wizard's image. 41:18 So it just seemed like – it was just a thing that people seemed like they wanted to try 41:23 and there was no credible alternative other than to like stall or like do Bitcoin Cash. 41:29 So these are like things that emerged. 41:31 But it wasn't like someone decided I think. 41:34 That's not – it's not like when you wake up in the morning and you decide which shirt – 41:38 you have a bunch of shirts and you're just going to decide. 41:42 I don't think it was really like that. 41:45 Sure, but I'm still saying like there's a competing – so let's just say like a lead process, 41:50 a developer-led process or a user-led process. 41:52 So the people who are really pinned down to this whole knots movement are very like users should lead, 42:02 users should dictate, like users – they should be the sort of end all sort of – 42:08 I think everyone agrees that like it has to be a consensual upgrade 42:12 that the users should give consent to what they run and that to some extent it has to be an informed consent. 42:18 Of course, I do think it's depressing that many of these users clearly have no idea what any of these vocab words mean 42:24 and we have to bite the bullet on either like a knowledgeable – I don't know what the word would be, 42:30 but like a knowledgeable high priest's class that is sort of paternalistic to some extent 42:35 or a rabble of like median intelligence people which is always going to underperform. 42:43 But this is why my idea – I think the L2 – if we have L1s that – the L1 is mostly just exists to be its own transaction network 42:52 and to facilitate movement among different L2s. 42:55 The L2s can have their own benevolent dictator. 42:58 Of course, speaking with like the Gavin Satoshi thing, like there is the model of – 43:02 this is very common in open source that there would be like a very opinionated person 43:09 and obviously, this is common in business and in government too. 43:13 You have the CEO or you have like the president. 43:15 You have someone – you don't like – it depends on what country you're in. 43:19 In Europe, it's a little different. 43:21 But in a lot of – like in America and in the former British Commonwealth countries, 43:28 you have the two parties. 43:30 Someone wins because they say this is what I stand for. 43:33 This is what I want to do. 43:35 If you elect me, we will do this. 43:38 And the president has an opinion. 43:40 You know what I mean? 43:41 It's not like we get like a median person. 43:43 We get like – 43:44 Yeah, that's why the – 43:46 Also, the CEO doesn't do like – they don't like gather around to do the consensus. 43:51 They just – the CEO says this is the plan. 43:54 And if you don't help me do it, then I'm firing you. 43:57 So where do we go from here? 43:58 It seems like the pleb movement has kind of run its course. 44:01 It feels like the pleb movement is kind of on its last legs in terms of being – 44:06 I think they have like built like a cool – that I respect, 44:09 like a kind of weird network of people to like organize. 44:12 So I don't know. 44:13 I hope something will come of it, something useful. 44:16 But I just have to tell them they picked as their issue not a good issue. 44:23 This is a bad issue that they picked. 44:26 Can they pick one? 44:27 Of all the issues, I have wrote a post called Derangements of Bitcoin. 44:32 So I have a huge list of like nonsense. 44:36 Unfortunately, I had to put one of them was the fact that we're talking about this relay policy at all. 44:42 It made the list of the big derangements, I think. 44:45 And that's just because you think it's – 44:47 Just pick one that I agree with because obviously my opinion is there. 44:52 But seriously, I actually – there's a little bit of thought. 44:55 Go read that list if you're interested in this idea. 44:59 There are these people who are clearly interested in building some kind of 45:03 countercurrent to Bitcoin Core. 45:06 And why don't you pick an issue where Core is actually flatly wrong about everything? 45:11 Why don't you pick one of those? 45:12 So knowing that you want to get towards more competition, do you see this as being something that you could build off of 45:18 or that pushes Bitcoin out? 45:20 I do think it's inevitable. 45:22 I don't know how long it will take. 45:23 But I do think we will continue to see more problems as just stuff is invented, the context changes. 45:31 Or even if everyone did nothing, everyone is always trying to rise on the totem pole. 45:38 Let's say – let's take the Bitcoin gold narrative or like the store of value narrative or whatever the hell people are calling it now. 45:44 It's like all you do is buy this and it doesn't matter what the software does or what the users do 45:49 or what the miner's transaction fee income is and we just buy this and numbers go up. 45:54 People, they have been – they jostle on that who can be the biggest store of value guy. 46:02 And there's always a bigger fish. 46:04 You know what I mean? 46:05 The whole landscape is constantly evolving. 46:07 People are becoming specialists at each thing. 46:09 So you might think you're a cool guy. 46:13 You could be Merchant Popescu. 46:15 But then Michael Saylor is like even better at running a cult than – because he's got like a mile or whatever. 46:23 You know what I mean? 46:24 And so there will be another – eventually there will be like the Michael Saylor squared or there will be people push. 46:30 It's like they opened the treasury company idea with MicroStrategy. 46:33 But then everyone wants to do it and you have the competitors. 46:36 But it's not as easy to be the third or fourth one through the door. 46:39 You have to push the envelope a little bit further. 46:42 So you have these people. 46:44 If the idea is not fundamentally – I'm talking down to the foundations like an idea that works where you have real growth. 46:53 You have real users growing all the time. 46:56 We're working towards 8 billion people adopting Bitcoin and using it every day or just more people. 47:03 Eventually everything will be exhausted. 47:05 The growth will be exhausted. 47:07 And then people will start to get bored or people will start to take extra risk. 47:11 So I do think it's inevitable that in the long run people will find some idea that works for 8 billion people. 47:18 I think I have one and I have one that lets people deal with developers that disagree with each other 47:25 and lets people just not make decisions without going through Twitter mob. 47:30 I do think there's another occurrence that maybe pushes people more in your direction. 47:34 Is that if this is the cycle top, if Bitcoin really kind of peaks at 120 and then sort of does its classical thing. 47:43 My view is that we can't actually hit the ceiling. 47:47 And this is one of the derangements that I wrote in my giant post. 47:51 But it's like the – I think I call it the final rotation or something. 47:55 Where it's like each time you 10X, there's a point where we 10X and Bitcoin just replaces all the money of the world. 48:03 And that's like this 200 trillion-ish number. 48:06 I mean no one knows exactly for sure. 48:08 But you can look up what is the value of all the broad money in the world. 48:11 You can just look that number up. 48:13 And so at that point – and people could say stuff about famous art or other things that are money substitutes. 48:21 And people can make an argument for the number. 48:23 Because eventually there's a number. 48:24 There's a ceiling. 48:25 And I think you can't go the final 10X or the final two 10X. 48:29 Because the ceiling would be like basically 100X from here or something like 15 million, 20 million, 25 million dollars per coin. 48:38 So that's like we're already at 100,000 order of magnitude. 48:44 So it's kind of like to really make it those last two jumps from 1% to 100%. 48:49 I think it has to be something with the actual users. 48:53 You can't just get there only with investors who are speculating on future users. 48:57 So I do think that eventually, even if we go up from here, like I think we cannot actually hit that. 49:04 We can't get across that last line from like 10% to 100% unless you have actual users. 49:10 You have actual customers who pay fees. 49:13 The people who pay a transaction fee in Bitcoin, those are kind of like someone shopping at the corporation. 49:20 They're shopping at Walmart. 49:21 They're revenue for the company. 49:23 But the stock price, it can go up a lot based on expectations of future revenue. 49:29 But I don't think we can actually get up until – so I do think whatever the price does, it will eventually just either keep going up or it will stop. 49:38 So then eventually, it will stop. 49:40 And I think then that's exactly what you were trying to say. 49:43 Have you looked at Pierre Richard's like cost of counter censorship thing and just this idea that blocks won't always have to be full? 49:50 There seems to be like an increasing sort of intelligentsia view or alternative view here that like we might have a future. 49:57 Whatever you want to call it, like dog and pony show for a long time. 50:02 He was one of those people who would say like – he was at the Bitcoin conference and saying like, well, Bitcoin, Taproot is the biggest smart contract upgrade in the entire crypto space or something. 50:14 So I think a lot of that is just trolling or whatever you want to call it. But I wouldn't – he's not like an accurate source of information. He has a very tenuous relationship. 50:24 His blog posts have held up pretty well, like speculative attack and things like that. 50:29 Well, okay. But that's – just because you have a tenuous relationship with the truth doesn't mean that you lie 100% of the time. It just means that you don't care very much about – 50:38 Well, so again, it just seems like the technical community for a long time – 50:42 I would like to ask people like do they think it matters if like – if there's no mining fees paid, mining revenue is like $5,000 a block or if it's 10 cents a year. 50:55 Obviously, it's not realistic. But the block subsidy is going down. It goes down 94% every 16 years. It will eventually go down 100% to zero. 51:05 Like does anyone actually care about that? If the answer is no, then I think that there's a long list of problems that that creates. 51:15 And I think it's very blasé to just say that you don't care about that. 51:18 It's like for example, you can – first of all, in addition to it being very cheap to rewrite the chain and do either – either filling up the chain with junk and not letting any real transactions in or doing – rewriting reorgs and doing reorgs. 51:34 Now, I have to admit that it's very interesting that most people won't – like most people are all talk and they don't attack any blockchain. 51:42 So even like Bitcoin SV, when it was a very, very small percentage of the hash rate of BTC, same – exact same hashing algorithm. 51:53 The mining equipment – you could have redeployed a tiny amount of hash rate to attack Bitcoin SV. 52:02 But people just don't. It's because it's cheap to just tweet on Twitter and then with the hash rate. I assume or maybe it would have – maybe it has happened. 52:12 Well, there's an interesting aspect of that idea as it seems to like the idea that blocks need to be full to protect the chain seems to – we've seen in real life that these attacks take place and then these chains don't go to zero. 52:24 They just continue on having been attacked, but they still just continue. 52:29 And so the idea that – 52:31 The design is very good. 52:33 Like the proof of work design does deter people from even bothering to attack even when the cost is pretty low. 52:39 And the way the blockchain is set up, it's relatively easy to recover from the attack. 52:45 I think even like the attack almost gives you a little bit more relevance. 52:48 So you kind of – it's like a Mott and Bailey type of thing. 52:50 You can kind of switch from comfortable operating mode to like turtle mode and survive. 52:59 I think like it's – the argument about the fees is multidimensional. 53:08 So in one sense, it means that you're not collecting any revenue. 53:13 And so the more revenue that miners collect, that's – at maximum, that is how much they can spend on proof of work to deter a 51% attack. 53:21 But there's more – there's much more to it than that. 53:23 It's also like a kind of capitalist metric of whether or not you are meeting – whether or not you have product market fit and you have actual users who are loyal to the product. 53:34 And they actually like the product enough to pay money to use it. 53:39 So that's a – 53:40 Where's the revenue in like the gold network, right? 53:42 If you use that as a – you seem to like the gold network. 53:45 Okay, but this is a difference between – well, first of all, I think you have to emphasize that banknote money replaced gold. 53:52 So gold is a failure as money. 53:54 And Peter Schiff's idea that people are going to have like tiny little squares of gold and they're going to pay at the gas station. 54:00 You're going to get to go to the front of the line. 54:02 He wants blockchain-based gold. 54:04 Many times that in the future, you're going to be able to go to the front of the line to fill up your car with gas because if you have gold, then you're going to have – 54:11 And then he also has like his gold-backed credit card and he doesn't seem to have like connected any of these dots about like exactly what you're using to pay. 54:20 These are like a really – I'll keep talking about this with you if you want, but it takes a long time to like explain each tiny little point. 54:29 But I think the – gold lost to banknote money. 54:34 And gold also has many advantages over Bitcoin. 54:36 Bitcoin has – people have to wrestle with the fact that Bitcoin is on one hand like a property right on a thing that people want to have and they want it to be like defended against and they don't want it to be invaded by other people's opinions. 54:56 It's sort of a contract. 54:58 So part of when you make a contract is you and the other person agree in writing. 55:03 And you don't want to have to justify it to third parties. 55:06 Like I will sell you my car for $80. 55:10 And you don't want the person to later say, well, I only got $80 for my car. 55:14 You go to court and they say, well, why didn't you put it in the contract because we don't – no one wants to live in a world where you have to justify – 55:20 So that's – I'm just saying this one side of it is this property rights dimension. 55:24 But then the other side is a completely different thing is that Bitcoin is a piece of open source software. 55:28 And so it has to be – people have to check for bugs. 55:32 It has to be a CVE-like thing. 55:35 Like this is just mandatory. 55:37 And people prefer – but there's dependencies. 55:40 There's the operating system change. 55:42 People's tastes change. 55:44 So in the past, people had the desktop computer. 55:47 Now people have a phone. 55:49 A lot of people don't even own like a laptop or a desktop. 55:52 So stuff – all that's in flux and the fact that it is a piece of software has this whole second dimension. 56:04 Well, really, many dimensions of like pluses and minuses, pros and cons that come with it. 56:11 Similarly with gold, gold, it was money. 56:14 It was something people used to pay for things. 56:17 It was a unit of account. 56:18 It was like a – it was these things. 56:20 It was also an element. 56:21 So it was used like in dentistry, et cetera, blah, blah, blah, the lists. 56:27 But gold lost to banknote money. 56:32 And I think Bitcoin can defeat banknote money, but it has to be better. 56:37 And in many ways, it is better. 56:40 But we wanted to just – the better it is, the better it is. 56:43 That's something that people – people are worried that if it's too open to change, then maybe it will be corrupted or something, which I understand. 56:54 But I think people should look into the issues on like how you can have ossification by making sure each new release of the software is always compatible with all previous releases. 57:04 Then it really can't get any worse. 57:06 Now it's just a ratchet that can only turn in one direction as long as you can always go back. 57:10 Notably, Luke has always rejected this premise, and he has built into his software that the software expires like formally just like shuts itself off after two years or something. 57:22 So Luke has always rejected this premise that I think is the key to upholding the whole problem. 57:29 Yeah, I've always been confused about that is that, yeah, he seems to think that softworks are coercive and that like you have to upgrade. 57:35 Yeah, I completely disagree. 57:36 He and I have a huge disagreement on it, and many times I have had a chat – text chat with him and then even have printed it out and re-read it to try to figure out what is he talking about. 57:49 He has a lot of interesting beliefs, and I tried – I'm just saying on my honor, I tried good faith to understand what he's talking about. 57:56 I don't agree with him at all. 57:58 He has this view that like if 80 percent of the network doesn't run – 58:03 his view is that the soft fork immediately degrades previous versions to SPV mode. 58:07 He does not draw any distinction between something like Electrum where everything is SPV and the full – like the last full node where everything is a full node except for like one thing. 58:20 That was explicitly designed as an op-nop that it was supposed to be for future upgrades, and that's just the one thing that's not – and you're not even receiving any money on that. 58:29 I couldn't understand any distinction he drew between that, and he says that more than 80 percent of the network or more than whatever – the threshold has actually been changing over time because he's been telling people different numbers. 58:42 I have a tweet about that, but if a certain number of people run SPV, then Bitcoin has died, he says. 58:51 This is typical hyperbolic fashion as I'm sure you can imagine. 58:55 Then I ask him questions like, well, what if we have the same network we have today, and then tomorrow everyone in India spins up an SPV node? 59:03 We have a billion extra nodes. 59:05 So pushing the percentage to 99, but then they shut them all off like on Friday. 59:14 Like Bitcoin was dead for this week or something? 59:17 Luke does give an answer to that, but I cannot understand what it is at all. 59:23 It's something like that I'm not being sincere or something, but this is what he's saying. 59:29 It's hard. 59:30 I can't understand what the point is. 59:32 If anyone can, get it out of him and try. 59:36 I would love to know the answer to these questions. 59:38 I don't think any of that is true. 59:40 I think the smarter thing is you have to acknowledge the fact that it is software. 59:46 You have to understand what software is, just like you have to understand what gold is and what a metal is and stuff like that. 59:54 You have to be realistic. 59:56 Gold, you have to physically transport it around. 1:00:00 You're going to have to ship. 1:00:02 If France asks for their gold back, you're going to have to put it on a boat and ship it across. 1:00:05 But with Bitcoin, you won't. 1:00:07 But Bitcoin is software, so it's going to have GitHub, blue-haired developers. 1:00:11 It's going to have this weird stuff. 1:00:13 You know what I mean? 1:00:14 That's what I'm trying to say. 1:00:15 So the way of processing that is to have the software always be compatible with previous versions. 1:00:22 I wrote a giant piece of writing about that on Truthcoin.info, which you politely shilled at the beginning. 1:00:28 It's called Precedence Ossification, so people can read about that if they want. 1:00:32 So what would you say to the folks, maybe as we sort of close the loop here? 1:00:38 The Treasury Company Group seems to think that digital credit, right? 1:00:41 There's this idea that Bitcoin will back this kind of security, like Wall Street securities, 1:00:47 and that that will sort of be the end-user adoption. 1:00:50 I kind of talked in a podcast I did about utopian visions. 1:00:55 Each era of Bitcoin has a utopian vision, and the utopian vision of this era seems to be 1:01:00 Michael Saylor's kind of idea that digital credit will sort of expand, 1:01:05 and this will actually solve the last mile problem, and then Bitcoin can remain having low fees. 1:01:11 The actual unit doesn't need to transact that much, but then it'll be solved by Wall Street and the securitization. 1:01:18 What are your thoughts on that? 1:01:19 I think you're very right to focus on what everyone is trying to construct as their endgame. 1:01:27 And I think that will bear a lot of fruit. 1:01:29 I think that's smart. 1:01:30 As I was remarking before, I think eventually people will start to hit a wall. 1:01:36 Either they'll succeed, and we'll get the $8 billion, and we'll get the price to 100%, 1:01:44 or they'll hit a wall, and then they'll get frustrated, and they'll start looking for other ideas, 1:01:48 and eventually someone's ideas will win. 1:01:51 Well, so what I said about Michael Saylor's vision is like, 1:01:54 I sort of said each version of Bitcoin has its sort of utopian vision. 1:01:58 So maybe 2021 is the Safedine version, right? 1:02:01 It's like Bitcoin is hardly software at all. 1:02:03 It's just this kind of new digital gold. 1:02:05 2017, it was Greg Maxwell. 1:02:07 It's like Bitcoin is a settlement network. 1:02:09 2013 is Gavin. 1:02:10 Bitcoin is the new PayPal. 1:02:12 Everybody has their sort of whole utopian vision. 1:02:15 But the interesting thing about Michael Saylor's is that it's the most compatible with the legal and state infrastructure. 1:02:21 It's sort of the least threatening version of it. 1:02:23 I wouldn't bet on that personally. 1:02:26 I think the Bitcoin – as you know, I do believe – I subscribe to the Bitcoin Uncensored school that actually – it's kind of like – 1:02:36 A very lost school. 1:02:37 Yeah, but it's like – it doesn't need to be in the open because it's got so much merit. 1:02:44 It's just – it's a cockroach. 1:02:46 It's a radioactive cockroach that will be here long after everyone else has been killed off. 1:02:53 But I think – it's kind of hard to describe, but I do think one way that it was put very well was during the block size war itself. 1:03:02 People said, well, hey, listen. 1:03:03 Adam Backen, plenty of people – I and I – plenty of people said this. 1:03:06 If this just becomes like Venmo. 1:03:08 If you have one brand – like a single cryptographic key like Venmo.com, the – whatever you want to call it. 1:03:16 Like whatever, the SSL certificate or however you want to phrase it. 1:03:19 One key is more powerful than all the proof of work in the world because you just sign the blocks and you just say this is a block. 1:03:28 And that's better than proof. 1:03:30 The whole point of the proof of work was that you did not have the central admin key. 1:03:36 You had a decentralized process where people could join or leave at any time, no identities. 1:03:41 It self-justified. 1:03:43 The proof of work was on the block headers. 1:03:47 So I kind of think the same thing. 1:03:49 It's like if we have the ETFs, then why do we need the concord? 1:03:53 Why do we need the proof of work? 1:03:55 It's all waste. 1:03:56 So I think that it will only go – the subversive direction just has more teeth. 1:04:03 And I think we have lived through a long period of stagnation where that's been underdeveloped. 1:04:09 Like we don't have – if we had more people using the network, people would care more about, oh, how can I increase the privacy? 1:04:16 How can I do the reusable addresses or like just something that – where we don't have to have the – we have like a human readable Namecoin. 1:04:27 You just have priso.bit. 1:04:30 So I think unfortunately the entire ecosystem has devolved or has evolved in the wrong direction. 1:04:37 It has evolved chasing this stuff that I think is just a little too easy. 1:04:44 And actually I think it won't work in the future or it just won't pay off like very well. 1:04:50 Of course, anyone could be mistaken, including me. 1:04:55 But I think like that's kind of like my reading of the situation that when you have actual users who pay transaction fees, the whole thing is healthier. 1:05:07 Like the whole process is healthier. 1:05:09 You know what it is that people – like what are people complaining about? 1:05:15 That's what you should work on next. 1:05:17 And the miners want users to pay more transaction fees. 1:05:22 So miners might get more involved in a more constructive way instead of other weird stuff that happened in the past. 1:05:30 The miners might say, listen – or like someone like Bitmain or whatever, someone who's selling the ASIC chips. 1:05:35 Each ASIC chip is like a little – you get whatever percentage of the hash rate, that's the percentage of the transaction fees you ultimately get. 1:05:42 So it's kind of like they're kind of like inherently shareholders of the transaction fee corporation. 1:05:48 I don't know. Maybe this is getting a little too abstract. 1:05:50 But the idea is that maybe they would say we've got to hire like full-time people to investigate this core versus nots. 1:05:59 Is core doing a good job? How can we get more users paying transaction fees? 1:06:03 What are the users complaining about? 1:06:04 They might like hire their whole developer teams, and then they might just run all these teams with the goal of maximizing transaction fees in Bitcoin that they collect. 1:06:14 And I think that would be way healthier than what we currently have, which is just like a weird committee. 1:06:19 And it is kind of like a weird – it's like a commune garden or something. 1:06:24 It's like a hippie thing where it's like, oh, will you review my pull requests about tests? 1:06:32 Will you review my pull requests about everything should be in camel case? 1:06:36 And it's like, will you water my plant? Will you water my cucumber plant? 1:06:42 That's like what it is though. It's like nothing is really – there's no like – it has become committee-like. 1:06:51 So that's where I kind of feel for the nots people where I'm kind of like, yeah, this is like – and there's no soft form. 1:07:00 What can they do other than just create another committee though? That's the thing. 1:07:04 Yeah, that's difficult. Well, I agree, but that's hard. 1:07:06 But as you know, I have concrete suggestions like if BIP300 would create some competing mined L2s and they would compete with each other. 1:07:15 And when we have some competition among L2s, I think not very good. 1:07:21 I don't think that – we have like whatever. 1:07:24 We have like the ARC idea. We have Fatament. We have Liquid. 1:07:28 All that stuff is pretty weak though. 1:07:30 Even really, we have like a lot of stuff that's just like me and my friends have a multi-sig. 1:07:39 Again, we used to make fun of Ethereum for stuff like that. 1:07:41 We used to say, oh, they say they have – I don't know. 1:07:46 There's a lot of names, so I can't remember which is which. 1:07:49 We used to have like something. What was it? Like the Terra Luna or something. 1:07:54 But it's just like a multi-sig or even like wrapped BTC is like a multi-sig on Ethereum or something. 1:08:00 We used to make fun of the altcoins for doing stuff like that with the admin keys. 1:08:03 You can say the admin keys. They just update it. 1:08:05 This had many DAOs or something. 1:08:10 The person running it, like they could just update it to something else and then just take all the money. 1:08:18 So this is like – that's what Liquid is. 1:08:20 So that's what Fatament is. 1:08:22 So this is the stuff we've used to. 1:08:24 So this is what we've been reduced to. 1:08:26 I think this is an important point about like if you don't build something that 8 billion people use, someone else will. 1:08:33 So we'll have WeChat pay or we'll have Telegram or Elon Musk will do X or we'll have Visa. 1:08:38 Someone else will build that thing. 1:08:41 And like we have to just say we're not doing this. 1:08:48 So like the recent comments with Custodial Lightning where that guy from – was it Spark or whatever? 1:08:54 CleanSpark? Is that it? 1:08:56 LightSpark is a mining one. 1:08:58 LightSpark is David Marcus's. 1:09:01 And he recently had a tweet. I think I'm talking about the same person. 1:09:04 But he was like, we have to just give up and do Custodial Lightning for everything. 1:09:08 He said something like that. 1:09:11 That's accurate. 1:09:12 Vaguely. I don't know. 1:09:14 There were some complaints about Spark's privacy design that I saw. 1:09:17 And so someone recently put out a tweet, and this happens from time to time, about Lightning is too difficult. 1:09:26 We just have to make it Custodial. 1:09:28 People say this type of thing. 1:09:30 The users don't want to transact. 1:09:31 They only want to use it to store value. 1:09:33 The users find whatever running a node too difficult or something. 1:09:38 That was why Sturgey put in SPV, by the way, because he knew that not everyone would want to shell out 800 gigabytes on day one. 1:09:46 But maybe eventually they would. 1:09:48 But on day one, of course, it's a big ask. 1:09:52 Unless you play some of these games or whatever, like Call of Duty or whatever, where one update could be larger than the entire Bitcoin blockchain. 1:10:01 But the point I'm trying to make is this, is that if we live in a world where no one's using the actual Lightning network, 1:10:07 no one's using the two of two multisig channels connected by HTLCs, then we don't need LightSpark. 1:10:15 We don't need anything. 1:10:17 We just have one guy with the key, and it would be like Venmo, and that person would just do it all. 1:10:24 So that was what we used to say against the large blockers. 1:10:28 We used to say, well, listen, if we don't keep the node costs down, people won't run a node. 1:10:34 If people don't care enough to get involved, there will just be some Venmo that just does it all. 1:10:41 And then we will have not really achieved anything. 1:10:44 So I think that that is why I disagree to close the loop. 1:10:48 That's why I disagree with the Michael Saylor bet. 1:10:51 I think also he's just flatly wrong on many technical issues, such as he doesn't want – 1:10:56 he wants to avoid privacy on Bitcoin because he doesn't want the association. 1:11:02 As you know, this point has been brought up many times throughout the years, 1:11:08 and it's just a losing point because Bitcoin can be associated with whatever. 1:11:13 Like you can cryptographically swap Bitcoin for Monero. 1:11:17 So you could buy the Bitcoin first and then swap it using software for something that is tainted. 1:11:27 So the taint or the brand association of Bitcoin with crime and money laundering and political activism 1:11:36 and like the cypherpunk movement and these other things that are good, 1:11:43 but also crime and nefarious uses of privacy. 1:11:47 All this stuff is coming to Bitcoin whether Michael Saylor likes it or not, 1:11:51 and the fact that he doesn't understand that is his problem, not anyone else's, certainly not mine. 1:11:57 And so that's just the reality. 1:12:00 So I think that these are the reasons why I just don't agree with that. 1:12:04 I think that's not a good – but I think it's nice that he's doing it because you may bring in more people. 1:12:10 We get more attention. We get more recognizability. 1:12:13 The higher price is good. 1:12:15 Higher price means it's a lot easier for people to get funding, independent developers, companies, et cetera. 1:12:22 So people get a lot of – so it's good for the whole space. 1:12:24 The whole space gets into the news. 1:12:26 More people hear about it. More people hear about it for a second time. 1:12:28 Everyone kind of has to hear about Bitcoin at least twice, right? 1:12:30 So they just think – first time, they're like, this is the stupidest thing I've ever heard. 1:12:33 Then they hear about it again, and they're like, oh, that thing is still around. 1:12:37 So all that – it's good that he is doing that. 1:12:40 I just don't think that in the future, when the future historian Pete Rizzo writes the history of how it all took out, 1:12:51 he's going to be like, those Bitcoin Censor guys will write the whole time. 1:12:54 And everyone else, some people politely – 1:12:57 It all goes back to the vaulted philosophers, philosopher Joseph and philosopher DeRose. 1:13:05 Right, exactly, yeah. 1:13:07 And that's just – I just think that's a stronger bet. 1:13:13 Paul, where can people find out more about your work? 1:13:16 I have Truthcoin on Twitter. 1:13:19 It's Truthcoin.info. 1:13:21 It's my blog and formerly my prediction market idea site. 1:13:26 This is Bitcoin Hive, my prediction market is in the news. 1:13:29 We have the Polymarket. 1:13:30 Again, hey, that was another thing. 1:13:32 In 2013, I was saying that we should pay more attention to this, and then I had – 1:13:37 You could have been the guy. 1:13:39 Yeah, I didn't want to quite do it, which Shane did. 1:13:44 And Shane suffered as a result. 1:13:46 He got raided by the FBI and et cetera. 1:13:48 These are all things I predicted in writing back in the time. 1:13:51 But this is another thing that we could have had this idea easily on Bitcoin if people were just better at the sidechain idea. 1:14:01 There's a lot of stuff to just unpack or whatever. 1:14:03 But, yeah, I have my Truthcoin.info is my blog. 1:14:06 I have drivechain.info, which is about BIP300. 1:14:09 I have BIP300CUSF.com, which is about the Core Untouched Soft Fork. 1:14:14 LayerTwoLabs.com is my company. 1:14:18 And you can read – on LayerTwoLabs.com, you can download our test software, 1:14:24 and it will connect you to Cygnet, fake Bitcoin network that resembles the real one. 1:14:31 And you can try out with fake coins the software that we have produced. 1:14:36 Paul, appreciate it. 1:14:37 Of course, if you are online, after you go check out Truthcoin and you download some Drivechains, 1:14:42 you can go over to YouTube and smash that like and subscribe button. 1:14:45 Appreciate all the listeners out there. 1:14:47 You can go back to our catalog. 1:14:49 We've been talking about Bitcoin corpors, Bitcoin nots, 1:14:51 a who's who of people opining on recent episodes. 1:14:54 We had merch from the Bitcoin Stack Exchange. 1:14:56 We had Mike Schmidt of Brink. 1:14:59 And, of course, you can go all the way back to earlier this year in May, 1:15:03 we had Chris Guida on presenting the idea of nots. 1:15:06 So a rich history there. 1:15:07 If you want to go down the rabbit hole into YouTube, of course, Core version 30 live now. 1:15:12 If you're interested in checking out the software yourself, 1:15:14 this has been Supply Shock at BlockWorks Podcast. 1:15:17 ♪♪