0:05 Hello and welcome to Drivechain Twitter Spaces, run by LayerTwo Labs. 0:11 This is Henry speaking. 0:13 We're excited to have another day of conversation about Bitcoin Improvement Proposal 300 and 0:19 301, Drivechain. 0:24 Drivechain is an important potential upgrade for Bitcoin, years in the making. 0:29 It has been analyzed and advocated for years, and now we are excited about the higher level 0:37 of support and understanding that's been achieved lately. 0:44 A high number of very well-known Bitcoiners support Drivechain. 0:50 Their tweets are easily available on the internet. 0:53 You can find what they've said. 0:58 I collected them into a spreadsheet called Friends of Drivechain. 1:03 It's available at www.drivechain.info forward slash friends. 1:11 Again that's drivechain.info forward slash friends. 1:19 Welcome to those who've joined the audience. 1:22 All are welcome to come on up to the stage, raise your hand if you have a question or 1:25 comment about Drivechain, BIP300 and 301. 1:34 BIP300 is Hashrate Escrow, which is the peer-to-peer two-way peg for Bitcoin sidechains. 1:44 BIP301 is Blind Merged Mining, which is an optimization of Satoshi's Merged Mining. 1:53 In Blind Merged Mining, the miners on Bitcoin mainchain are paid in Bitcoin for merged mining 2:01 of the sidechain. 2:05 In Ordinary Merged Mining, they're paid in an altcoin. 2:10 So the benefit of Blind Merged Mining is that it is Bitcoin-only, unlike Ordinary Merged 2:16 Mining. 2:19 Drivechain really is the most Bitcoin-only idea in the history of Bitcoin, if that makes 2:24 any sense. 2:26 What Drivechain is all about is enabling Bitcoin to platform virtually every technology currently 2:32 only available on altcoins. 2:35 Right now there are a number of technologies that are only available on altcoins, and in 2:41 order to bring those into the peer-to-peer Bitcoin system, we need Drivechain. 2:47 Drivechain fundamentally is an upgrade for Bitcoin's sidechains that make them more peer-to-peer. 2:53 Making them more peer-to-peer is essential. 2:57 Sidechains that aren't peer-to-peer are lacking in that important peer-to-peer attribute, 3:03 which is so special to how Bitcoin operates. 3:08 So right now Bitcoin is peer-to-peer, but its sidechains aren't. 3:11 Each of the sidechains today requires a 15-party multisig federation for control of the Bitcoin 3:22 sent to the sidechain. 3:25 With Drivechain, that Bitcoin would be controlled by the miners, and since Bitcoin is peer-to-peer, 3:32 Bitcoin mining is peer-to-peer, and therefore the two-way peg controlled by the sidechain 3:36 miners is peer-to-peer in Drivechain. 3:41 For a more detailed discussion, you can see the tweets of Adam Back, the essay by Fiat 3:47 Joff, tweets by Michael Tidwell, and others. 3:57 Fiatjaf's essay is especially good. 3:59 Fiatjaf is the creator of Nostr and an avid supporter of Drivechain for Bitcoin. 4:08 You can read Fiatjaf's essay at fiatjaf.com forward slash drivechain.html. 4:16 So that's, I'll spell it out, f-i-a-t-j-a-f dot com, f-i-a-t-j-a-f dot com forward slash 4:28 drivechain dot h-t-m-l. 4:32 That's the essay by Fiatjaf, the creator of Nostr, his essay on Drivechain. 4:44 If anyone in the audience has a question or comment, you're welcome to come on up 4:46 to the stage and share it with us. 4:50 This is a recorded Twitter space. 4:57 All right. 5:14 Don't be shy. 5:15 Come on up. 5:16 Ask your question or comment. 5:17 Let's chat about Drivechain. 5:19 We meet every Monday and Thursday. 5:40 Welcome to those who've joined in the audience. 5:45 Everyone's welcome to come on up to the stage and ask a question or share a comment. 5:55 We had a great time at LayerTwo Labs in Miami. 5:59 Our booth was visited by thousands of people. 6:03 We handed out over a thousand t-shirts, hundreds of sunglasses, hundreds of pieces of paper 6:12 with Drivechain explained on them, and a whole lot of candy and treats. 6:21 We had visitors to our booth hitting a piñata that looked like an altcoin. 6:27 We had a bunch of piñatas, and we had them destroyed one by one by blindfolded piñata 6:33 bat visitors. 6:45 It was a great moment to share the Drivechain message with so many people. 6:49 We had a lot of people visit who already knew about Drivechain, and we also had a lot of 6:52 newcomers who have been watching the space for a while. 6:57 Some people have been visiting the conference for years and watching Paul speak about Drivechain. 7:06 It was a delight to hear their thoughts and reflections about how the topic has evolved 7:10 over the years. 7:17 Welcome to the stage, Ingmar. 7:21 Hello. 7:22 I was actually going to ask, how was the reception in Miami? 7:27 Have you seen opinions change on this? 7:32 Maybe from the Bitcoin Core Devs crowd? 7:36 That's a great question. 7:41 Well, Bitcoin Core Devs, yes, there's a more favorable attitude than there used to 7:49 be. 7:53 I would point to, for example, Mike Tidwell has been a longtime supporter of Drivechain, 8:04 and he's a Bitcoin Core Dev. 8:05 He's had pull requests accepted by Bitcoin Core, I think two of them. 8:14 Anyone who's had a pull request accepted by Bitcoin Core, I think, is a Bitcoin Core Dev 8:20 by definition. 8:21 Of course, the term more often refers to the top 20 people or so who have been involved 8:27 in Bitcoin. 8:28 For example, it's been many years since Peter Todd last contributed to the code, but he 8:36 comes to mind as one person people would refer to in that way. 8:42 There are some vocal supporters who are Bitcoin Core Devs, and then there's supporters like 8:47 Adam Back, who I don't think has ever contributed to the code of Bitcoin Core per se, although 8:55 of course he contributed before Bitcoin was ever created with his invention of HashCash, 9:00 which Satoshi credited him for by name in the white paper. 9:09 I think that we'll find out what the Bitcoin Core Devs think when the pull request is submitted 9:15 for Drivechain. 9:17 Luke Dashjr. has been retained by LayerTwo Labs to rebase the code, and hopefully it'll 9:24 be done in a matter of months, and then there'll be a pull request, and then there can be review 9:32 of it publicly on GitHub. 9:35 So we're excited to see that evolve. 9:39 I think this is something which has never been done before, which is the submission 9:43 of a pull request for Drivechain. 9:48 So that's exciting. 9:51 If you go to drivechain.info forward slash friends, if you go to that website, drivechain.info 10:00 forward slash friends, you'll see my collection of all the latest statements by notable Bitcoiners 10:07 who support Drivechain, as well as a few statements by people who aren't that notable, but I just 10:13 included them anyway because I liked what they said. 10:16 So we have about 60 people listed there, and it's an exciting list, many big names. 10:26 So Drivechain has notable support. 10:30 There are a few detractors who are vocal. 10:33 Peter Todd is probably the biggest one, and it'll be interesting to see how the community 10:41 evolves on this issue. 10:45 Supertestnet was here last time we spoke in Twitter Spaces. 10:48 He had a great conversation with Paul. 10:50 You can look at the LayerTwo Labs Twitter feed, and you'll see that last Thursday we had a 10:57 conversation for about two and a half hours. 11:01 Supertestnet is a Drivechain supporter and recently became even more famous when he did 11:10 some sort of special transaction that was disruptive within the Ordinal space, I think. 11:17 He's built various technology and software related to sidechains, and it's always great 11:22 to have him with us. 11:24 The reason why I'm talking about him, though, is that he mentioned that it's unlikely that 11:27 Drivechain would come to Bitcoin, and perhaps he's right. 11:33 Another Drivechain supporter who thinks it's unlikely is Eric Wall. 11:37 So in the most recent episode where Eric Wall appeared on WhatBitcoinDid, so probably one 11:45 of the last recent episodes, Eric conveyed that he supports Drivechain, but that the 11:52 idea is dead. 11:53 So what he means there is that it's been around for a while, and the inner circles 12:00 of Bitcoin thinkers aren't in favor of it. 12:04 So there you have it. 12:05 You have Eric Wall and Supertestnet, two Drivechain supporters who think it's unlikely. 12:10 So it's a sobering assessment, because to answer your question, like, where do we stand? 12:16 I think if you were to ask Eric Wall or Supertestnet, as they've said, they would say that it's 12:23 unlikely. 12:24 It's either unlikely or very unlikely that we'll get Drivechain on Bitcoin. 12:30 So what we're doing here is we're trying to change that around and have a more optimistic 12:36 and ambitious approach for this project, trying to get it past the finish line, into the end 12:42 zone, get it on Bitcoin, and then there will be great success that would flow from it. 12:48 There would be a lot of value that would flow to Bitcoin through these sidechains. 12:54 The sidechains could have hundreds of billions of dollars of value, and all of that value 13:00 would accrue to Bitcoin. 13:02 So for example, with the Thunder sidechain, this large block sidechain of Bitcoin, if 13:08 it were $100 billion in value, that would mean that Bitcoin's price would be boosted 13:14 by $100 billion of demand, because all of the demand for the Thunder sidechain translates 13:19 to demand for Bitcoin because of the two-way peg. 13:22 The only way to create tokens on the sidechain for Thunder is to lock Bitcoin in a hashrate 13:28 escrow on mainchain. 13:31 So all of the demand for the synthetic Bitcoin on the Thunder sidechain would boost the value 13:38 of Bitcoin. 13:39 I think that number go up is one of the correct and compelling selling points of Drivechain. 13:45 It has the potential to increase Bitcoin's value a lot. 13:50 Really there's no limit. 13:52 The entire value of all altcoins is the amount of value that Drivechain could potentially 13:59 bring to Bitcoin. 14:01 In other words, Bitcoin would expand and swallow up all of the altcoin technology, users, and 14:07 value, and fees. 14:09 So Bitcoin would be the overwhelmingly dominant presence in crypto, unlike today where it's 14:16 a fraction of the total value of all cryptocurrency because of the proliferation of all these 14:21 altcoins. 14:22 And the reason why they're proliferating is that there has been year after year where 14:27 Bitcoin had no way to internalize the value in a peer-to-peer technology of altcoins. 14:38 So someone built Zcash and Monero partly because there's no way to build those protocols 14:46 on Bitcoin peer-to-peer, none. 14:50 So right now with Bitcoin, there's sort of like this, as Paul Sztorc would describe, 14:56 an attitude that the consumer is not to be put on a pedestal. 15:02 He said, you know, the Bitcoin is one way and people should just like, they have to 15:06 like it or not. 15:08 And that's not the right attitude. 15:10 We want to have like a pro-consumer attitude. 15:13 Give the consumer whatever he wants. 15:16 If he wants small blocks, Drivechain offers that on mainchain. 15:19 If he wants large blocks, Drivechain offers that on the sidechain. 15:23 If he wants risky advanced technology for privacy, Drivechain offers that on the Zcash 15:30 sidechain called Zside. 15:33 So with Drivechain, the goal is make everything optional. 15:38 Make everything possible on Bitcoin. 15:40 Have a sidechain for every new kind of technology. 15:43 And that way, no one is turned away from Bitcoin. 15:47 Everyone can come to Bitcoin and get what they want. 15:52 Almost without exception. 15:54 I appreciate the answer. 16:00 Thanks a lot. 16:01 Thanks for the question. 16:02 It's a great question. 16:03 I mean, no one really knows the answer. 16:04 Where do we stand? 16:05 No one really knows because things could change on dime, right? 16:09 Like suppose in a couple of months, the hot topic in crypto isn't ordinals and high fees 16:16 on Bitcoin. 16:17 Suppose like the flippening makes a resurgence as a threat. 16:23 And instead of Ethereum being 40% of Bitcoin, the market cap like it is today, roughly, 16:30 suppose it reaches an all time high of 75%. 16:35 That would create a new discussion. 16:37 So the discussion around Drivechain has evolved over the years. 16:42 In my understanding, it's, you know, when the fees are very high on Bitcoin, then the 16:47 discussion around Drivechain can focus on scaling, how Drivechain facilitates scaling 16:53 for Bitcoin through large block sidechains, Thunder. 16:57 And that's, and while the fees have been high lately, I've been, you know, putting out on 17:02 the LayerTwo Labs Twitter, you know, links to the Thunder GitHub so people can see what 17:06 this sidechain would be all about. 17:08 A sidechain which would only be enabled through adoption of Drivechain. 17:12 You get this large block, one gigabyte block size sidechain. 17:18 But when the fees are low, the conversation around Drivechain can also focus on merged 17:25 mining and how merged mining can fix Bitcoin's security budget problem. 17:30 So whether the fees are high, and we're talking about scaling, or the fees are low, and we're 17:35 talking about the security budget, Drivechain helps both of those. 17:41 Both of those problems are helped by Drivechain. 17:45 The need for peer-to-peer scaling, in other words, scaling that isn't trusted, that isn't 17:50 custodial, that's important. 17:52 We need this large block scaling sidechain. 17:55 As Adam Back has tweeted multiple times in recent months that we need a large block scaling 17:59 sidechain to facilitate the onboarding of billions of people rapidly to Bitcoin. 18:05 There isn't enough block space to have the whole world open lightning channels. 18:08 You have to have a large block sidechain enabling a layer on Bitcoin that's cheaper 18:14 and has higher throughput. 18:18 And then when the fees are low, which they usually are, it's appropriate to talk about 18:22 how Drivechain helps bring in more fees for multiple blockchains fixing the security budget. 18:28 But I think, I think that both of those topics are a little bit complicated. 18:36 For the average Bitcoiner who is holding Bitcoin in a simple way, or, you know, maybe their 18:44 friend is handling it for them, or they're using Coinbase, for a lot of Bitcoiners, the 18:50 idea that Bitcoin needs a way to scale peer-to-peer, non-custodially, it's a little bit complicated. 18:57 And therefore, not everyone understands what we're talking about when we talk about the 19:01 benefits of a large block sidechain. 19:03 In fact, Paul Sztorc has said that he often, when asked what's the point of Drivechain, 19:09 uses the large block sidechain proposal as a way of identifying who knows what they're 19:17 talking about. 19:18 Because so many people are triggered by the idea of a large block sidechain because they 19:22 think large blocks are evil and there's no point to them. 19:26 But actually, large blocks are very good, but only on a second layer, not on the base 19:33 layer. 19:34 Because if it's on the base layer, it's a mandatory block size increase for everyone. 19:38 Whereas if it's in an optional venue, such as a sidechain, where absolutely no one ever 19:45 has to use the sidechain, it's completely optional. 19:50 Therefore, it doesn't harm Bitcoin mainchain. 19:54 It creates an optional thing that people can opt into and then if they do, it brings 20:00 value to Bitcoin, fees and value. 20:02 So boosting Bitcoin's price and boosting Bitcoin's fee revenue for miners. 20:08 So some people understand that and some people don't. 20:11 And then even harder to understand is the security budget. 20:14 Most Bitcoiners don't really know what this is all about. 20:16 And making matters worse, some of the respected Bitcoiners out there like Pierre Richard say that the security budget concept is bogus. 20:24 He tweeted this just a few days ago. 20:26 He tweeted that we don't need high fees unless there's an attack going on and that if people pay high fees when there's no attack, it's wasteful. 20:34 So there's people out there who are saying the opposite, the opposite of what drivechainers say, unfortunately. 20:44 So we would argue that this actually is harming Bitcoin understanding, that it's diminishing people's understanding of Bitcoin to tell them that we don't need high fees. 20:57 And by the way, you don't even have to be a drivechainer to understand that high fees are important and that the security budget is important. 21:07 Look, look to, for example, Gregory Maxwell, one of the more famous Bitcoiners who isn't a drivechain supporter. 21:14 Last time I checked, he wrote in the past that it's very good when Bitcoin has high fees because that shows that we'll potentially have enough fee revenue to pay for security after 21:27 the subsidy is gone. 21:28 So he laid out explicitly an acknowledgement of the role of high fees, just as Satoshi did. 21:35 Satoshi wrote in August of 2010 in the thread on BitDNS that collecting fees from multiple blockchains increases total strength of the network. 21:46 So Satoshi got it, Greg Maxwell get it, got it, and drivechainers all get it. 21:57 We need high fees. 21:59 Well, most drivechainers get it, that we need high fees to increase security, making the cost of becoming a hostile 51 percent miner prohibitively expensive for the nation states and terrorists who might want to do harm to Bitcoin. 22:14 And that Rashard is wrong to suggest that we can start paying higher fees only after the attack begins. 22:27 So those are two ways that we can talk about drivechain, that the need for noncustodial scaling with large blocks and then the need for collecting high fees from many blockchains through merged mining to increase the cost of a hostile 22:43 attack in order to defend Bitcoin. 22:48 So those are two ways we can talk about drivechain. 22:50 But I'm still answering your question. 22:52 I'm trying to. 22:54 It's a great question. 22:55 The thing that we've never really seen, at least I haven't in my one or two years of being a drivechain enthusiast, we have never really seen a sustained moment where it looked like the flippening was coming. 23:10 And if that were to occur, if we were to make, for example, if Ethereum were to make an all time high against Bitcoin in terms of market cap or exchange rate, then I think that would prompt a new and perhaps most compelling line of reasoning and reckoning regarding drivechain. 23:37 Because what drivechain does is not just fix the security budget and it's not just enable on-chain scaling with low, with very low fees and high throughput. 23:48 Drivechain is something much more fundamental and broader in nature. 23:56 And it all boils down ultimately to making Bitcoin the number one and really the only layer one for the whole world. 24:07 So in the end, the flippening or the way that drivechain is an anti-flippening upgrade is important and I would say more important than the security budget and the on-chain scaling. 24:21 So I think that one way we could see drivechain adoption in the future is if the flippening were to get closer, which I think it will because of the lack of drivechain, and then maybe that would prompt a realization within the community that something is going on that's not good. 24:41 Bitcoin in its current form isn't sufficiently optimized to internalize the value of innovation outside of its main chain. 24:52 So what Bitcoin needs is a way of internalizing innovation that occurs on altcoins. 25:00 And the way to do that is to have sidechains. 25:02 So whenever there's a good altcoin that's created, like Monero or Zcash, it's important that Bitcoin be able to copy that software into a sidechain so that Bitcoiners can, without selling their Bitcoin, use that technology. 25:19 That is exactly what drivechain is all about. 25:22 Whenever there's a good altcoin, Bitcoin will be able to copy that open source code into a Bitcoin sidechain and then Bitcoiners can send their Bitcoin into that sidechain and use that technology without ever selling their Bitcoin. 25:36 And all of the fees that they generate on the sidechains are paid to Bitcoin mainchain. 25:41 And the miners don't even have to run the node of the sidechain thanks to blind merge mining. 25:47 The miners can run the node only if they feel like it. 25:50 They might make a little bit more money depending on whether there's nev on the sidechain, but there is not going to be the obligation to run the sidechain node. 26:01 And those who don't will still receive more fees than the fees that they would have received if Bitcoin didn't have those sidechains. 26:14 For example, right now, over half of Bitcoin's hash rate is merged mining RSK. 26:20 Did you have a question? 26:21 Please chime in. 26:25 Yeah, I was just wondering about the price of Bitcoin versus Ethereum being like the uniting motivator, the uniting last resort motivator to the price of Bitcoin versus Ethereum. 26:43 You know, I guess augment Bitcoin to compete. 26:49 I wonder what it says that like, just the price of Bitcoin being like the number one motivator, not like the grand scheme of like Bitcoin being able to do anything and can be like a sandbox for any kind of experiment. 27:05 Like that doesn't seem to be the highest priority, but like, you know, once the price of Bitcoin comes into question, then that would probably be like the universal wake up call to every Bitcoiner of every kind of belief or school of thought. 27:22 It'll be a wake up call because one of the things that drivechain advocates feel is that drivechain is perhaps essential to the survival of Bitcoin. 27:36 So if someone thinks that Bitcoin can't ever fail, and if that person thinks that every altcoin is from the moment it was created until the present day, nothing like nothing's good about those altcoins. 27:49 If someone thinks that if someone thinks that altcoins are inherently unproductive and inherently wasteful and inherently of zero intrinsic value, if they think that, then they're never going to understand drivechain. 28:05 So part of the way that a person understands the value of drivechain is understanding that Bitcoin needs something like this. 28:15 Bitcoin needs a way to internalize innovation that's occurring, internalize the value of innovation that's occurring outside of its main blockchain. 28:26 So we have to have these other blockchains attached to Bitcoin where the native token of those other blockchains is Bitcoin from the main chain. 28:35 So the whole essence of drivechain is we're preserving the monetary policy of Bitcoin while massively expanding the technological features of Bitcoin. 28:49 So as Adam Back has tweeted, it's innovation maximalism, altcoin seniorage minimalism. 28:58 We're trying to defeat the altcoins, erase their raison d'etre, erase the reason for having altcoins. 29:04 Like as long as Bitcoin doesn't have a sidechain that's peer to peer where you can do Zcash technology transactions, as long as that's the case, then there's a reason for people to buy Zcash. 29:17 Same thing with Ethereum and all the rest. 29:21 Until Bitcoin can copy this technology from altcoins, all their technology into peer to peer sidechains, until that's part of Bitcoin, the altcoins have a reason for being. 29:35 So if the flipping gets closer, people will start to wonder what's going on, what's wrong, why is this happening? 29:43 When I was in Miami recently for the conference, I was on the beach at one point with one of the well-known critics of drivechain and we talked one-on-one and I asked him about the flippening and he said that'll never happen. 30:00 So I think that a lot of the drivechain critics are guilty of this error where they think that flippening can't ever happen and that's why they feel no motivation to think more carefully and completely about drivechain. 30:19 Because they think, well, what's really the point of this BIP that's all about taking the technology of altcoins? 30:24 Because what's the reason to do that when the altcoins are just silly anyway? 30:29 They don't take altcoins seriously. 30:32 The most serious competitor to Bitcoin, however, is Ethereum. 30:36 And there's a lot of effort going on in that realm to boost the value of Ethereum. 30:43 Lots of people are working on Ethereum, trying to look at all the different ideas out there and optimize that blockchain and try to make it accrue value. 30:55 And they're targeting Bitcoin's narratives of monetary scarcity and they're targeting the differences between Bitcoin and Ethereum, such as how Ethereum has more extensibility. 31:07 You can build protocols on it for privacy or scaling, whereas on Bitcoin, all of the sidechains are federated. 31:17 So there's a 15-party multisig federation controlling liquid and controlling Rootstock. 31:24 And those are great projects, but they're not fully peer-to-peer in the way that Bitcoin is peer-to-peer. 31:31 So if the flippity gets closer, then some people will have to come to terms with reality. 31:39 They'll have to see, OK, why is this happening? 31:42 What's wrong? 31:44 Maybe something needs to change. 31:46 And some of them are on record saying the flippity can never occur. 31:50 So I don't think any drive-chainers have made that mistake, because the whole point of drivechain is that we need this. 31:57 It hasn't happened yet. 31:58 So, yeah, the flippity would be a big deal. 32:01 And it would definitely, without a doubt, definitely be favorable in terms of getting people to understand how drivechain can make Bitcoin stronger. 32:15 So we're not hoping for the flippity, but it would be helpful if it does occur. 32:20 And it will occur because it will probably occur because Bitcoin hasn't had a way to internalize all of the valuable innovation that's going on outside of Bitcoin's main chain. 32:37 So it needs a way to absorb those technologies, absorb those good ideas. 32:43 If I may comment, I did write something about this. 32:48 It was a theory posed by Edan Iago. 32:53 He called it Satoshi's paradox. 32:56 And the summary of it is that if anyone can make another Bitcoin that can surpass the value of Bitcoin, then no one can. 33:05 If Ethereum flips Bitcoin next week, that shows that there is no number one chain. 33:12 The number one chain can be easily fallible. 33:17 And then maybe a couple of weeks later, Cosmos will flip Ethereum, and then a couple of days after that, Odell will flip Cosmos, and then all these chains kind of topple because there is no trade-off. 33:35 There is no champion of these chains that can compete against the dollar or gold or some of the leading world reserve assets. 33:46 So it's kind of like we need a champion's digital asset. 33:51 And if Bitcoin can't stand against Ethereum, then what's going to stand against gold? 33:59 That was kind of Satoshi's paradox. 34:01 Welcome. 34:04 I think a lot of people take the view that no one wants there to be a large turnover in the number one coin. 34:11 Like something is the number one coin today, but something else is the number one coin tomorrow. 34:17 That's annoying, so therefore the flippening can't happen because people don't like annoying things. 34:24 And there's a lot of merit to that argument, I think, but not enough. 34:28 Because all it is is that it means that whoever wants to do the flippening just has a few more problems to solve. 34:36 Like one is that they just have to say, well, we plan on flippening BTC today, but we don't plan on anyone flippening us ever again in the future. 34:46 Or they can do something where they say, yes, like a Bitcoin Cash type of thing. 34:51 If they were, you know, maybe much smarter, they would have maybe had something like it going like this. 34:57 That said something like they did try to say, like, we're the real Bitcoin. 35:00 But the hard fork argument is something like, yes, we will flip in this coin. 35:06 I mean, so they hoped we will flip in this coin, but we. 35:13 It doesn't inconvenience the end user at all because it's a hard fork, so you have the same amount of coins. 35:18 So even though, yes, this is annoying, the annoyance is minimized. 35:23 And so, yeah, I think a lot of that is that is there's certainly there's a lot of things that are certainly true, 35:29 which is that people don't want there to be a high turnover in the number one coin, which gives the number one coin a lot of extra staying power. 35:37 It's also true that a lot of these coins are short term deliberately. 35:42 They they like a Solana or something. 35:44 They give the founders give themselves a huge percentage. 35:48 It's run like a company, like a startup, and then it's a flash in the pan and it does well for a short amount of time and then it does badly. 35:59 And then so those like quick, like easy come, easy go, you know. 36:06 But I don't think it's really the case that you're absolutely doomed just because the number I think it's true that the number one BTC has a lot of staying power. 36:16 And there's no there is no there's nothing challenging it at all, like really at the moment. 36:22 But that is partly why BTC is so slow and is so content with stasis and does not doesn't prioritize innovation. 36:32 It's because the competitors aren't good. This makes everyone complacent for an overconfident. 36:44 Eden has made some great statements about drivechain. 36:49 But what you quoted in Gamar, what you said as like Eden's paradox, I think, is actually attributable to how thinny. 37:00 How thin he wrote in 2011 that any successor replacement of the Bitcoin blockchain will forever undermine the credibility of any successor. 37:11 Or any successful replacement would credibly undermine any successor. 37:15 So, yeah, that's an important articulation of that idea. 37:20 But it's, of course, wrong that it's just wrong to think that Bitcoin can never be flipped because then a precedent would exist where. 37:31 Exactly, all they have to do, that's what I was trying to say, is that all they have to do is keep that in mind when they flip in BTC. 37:38 They have to say, OK, listen, we know that we don't want endless flippenings. 37:43 So that's that's all they have to do is just keep that in mind, whoever whoever it would be. 37:47 Yeah, exactly. 37:50 It's just a it's an unfortunate confusion. 37:53 Confusion. It's like a metaphysics of crypto blockchains where people think, well, the first one has to be the best one forever. 38:02 Otherwise, if it ever loses, then there'll be just this rapid succession forever of things constantly changing and no one ever winning. 38:12 Like the fact is, everything is in competition all the time and there's absolutely no guarantee that the first blockchain will always be the biggest and best. 38:24 There's no guarantee of that. 38:25 All of these projects are constantly evolving. 38:28 There are changes made to Bitcoin frequently. 38:30 You can look at the list of changes that are made to Bitcoin Core and there have been soft forks. 38:36 Bitcoin has itself been hard forked by Satoshi, you know, at least once or twice. 38:42 And so what Bitcoin is, is changing. 38:45 These other blockchains are changing. 38:47 So therefore their attributes and features are changing and therefore their value accrual rates can change. 38:54 And eventually one could be bigger than the other and it would lose status while the other one gains. 39:00 And it's important that we. 39:04 We think about how costly it would be to Bitcoin and to the prospect of global Bitcoinization, if Bitcoin were to lose the market cap crown, it would be damaging to Bitcoin's credibility, narratives and momentum. 39:19 And people would say correctly that that is the beginning of Bitcoin potentially becoming a smaller and irrelevant libertarian movement, just like gold. 39:31 So if Bitcoin were to be flipped, it would perhaps be the beginning of Bitcoin being exactly in the worst possible sense, digital gold, like digital gold bugs. 39:43 It wouldn't be good. 39:45 So this there needs to be a renaissance in Bitcoin thinking in favor of drivechain. 39:49 We need to get away from this Austrian economics, safety and Amos style way of thinking where Bitcoin is all about the monetary unit and not about the software. 40:02 We need to have a more software focused view of Bitcoin, not a view of Bitcoin as digital gold. 40:10 Because it turns out that the reality is that only about half of the value of all of all of the future potential growth of blockchain, only about half of it is money and the other half is all these other kinds of interesting and important things that you can do on blockchain, such as, you know, money that's more scalable, money that's more private or smart contracts, prediction markets, DNS. 40:38 In fact, Satoshi himself countenanced DNS on blockchain in the BitDNS thread. 40:44 So anyone who thinks that Bitcoin has always just been about money, like that Parker Lewis essay, Bitcoin, not blockchain, it's in that article. 40:54 He never even acknowledges that Satoshi said that you could have DNS on blockchain merged mine with Bitcoin and that it would be good. 41:03 It would be good for Bitcoin because it would increase Bitcoin's fees. 41:07 So from the very beginning of Bitcoin, there has been talk about the opportunity to have more than just money on blockchain. 41:15 And to the extent that the Bitcoin community decides that it will only be for money and not the other things, then Bitcoin will eventually probably be flipped by a blockchain that has a broader mandate for extensibility. 41:30 So, yeah, the flipping would be a threat to Bitcoin in terms of its network effects, and it would be the result of the non adoption of drivechain, we would argue. 41:51 Right now, at this moment, it doesn't appear to be like a hot topic because Ethereum is only like 40 percent of Bitcoin's market cap. 42:01 It was about a year ago when it was like higher than that, I think. 42:06 But in the wake of the recent like bank runs and economic turmoil, Bitcoin caught a bid and a narrative of, you know, digital gold. 42:26 People were going to Bitcoin, taking their money out of Silicon Valley Bank and buying Bitcoin, I suppose. 42:32 So it saw strength relative to Ethereum in this moment. 42:48 Yeah, I think I think we're saying similar things. 42:52 And, yeah, I appreciate that. 42:54 I have to get back to work. 42:56 I appreciate you having me on. 42:58 Thanks for the questions. 43:00 Everyone's welcome to come on up to the stage and chat. 43:04 This is Drivechain Twitter Spaces. 43:06 We meet every Monday and Friday. 43:08 Talk about Bitcoin improvement proposal 300 and 301. 43:28 On the most recent episode of Citadel Dispatch, Adam Back was interviewed with Jack Mollers. 43:35 And later today, from the LayerTwo Labs Twitter handle, we'll be tweeting some quotes about Drivechain from that excellent interview that Dr. 43:48 Back did on Citadel Dispatch. 43:50 You can engage with Drivechain a number of ways. 43:58 Check out the Drivechain GitHub page, which is the LayerTwo Labs GitHub. 44:04 We post the link often in our tweets. 44:06 If you're a coder or if you're curious to learn more about that realm, that's where you want to be. 44:11 Read the Drivechain bips. 44:13 And there's also lots of information in our Telegram group, Drivechain Talk. 44:17 We have over 700 members there. 44:19 We also are on Reddit, TikTok, Instagram, Facebook, LinkedIn, and elsewhere. 44:26 So you can follow us on any platform. 44:34 Come on up to the stage with your questions or comments if you'd like. 44:41 We have the Drivechain designer, Paul Sztorc, here on stage. 44:48 Paul, how was your experience at the conference speaking? 45:04 Did you enjoy your two appearances, one on the mining stage and one on the open source stage? 45:15 I did, yeah. It was fun. 45:17 I think that in general, though, the conference is a little... 45:24 I don't know. I got the impression that there was not... 45:29 They always try to prioritize news and announcements. 45:34 We had Edward Snowden revealing that he bought the server. 45:39 In the first conference, we had Edward Snowden's exclusive interview. 45:43 He revealed he bought all the servers that hosted those files. 45:46 We bought that with Bitcoin. 45:48 We had a conversation with Ross Albright. 45:53 We had the initial El Salvador announcement. 45:56 We had all these big announcements. 45:58 It does seem like there's not as much novelty this year. 46:03 I thought we had by far the best booth. 46:05 Our booth was pretty cool. 46:08 But I think in general, it is a little bit... 46:13 I think they have to kind of... 46:15 I wonder what they'll come up with next year in the Nashville one. 46:20 Because I wonder what they will try to prioritize. 46:25 They try to get... 46:28 I don't know if this is making any sense. 46:32 I've been to every single one. 46:34 I think I've actually spoken at every single Bitcoin event, Bitcoin conference. 46:39 Like the Bitcoin 2019, 2020, whatever. 46:44 And I think it had a lot of upward momentum. 46:49 And then this year was like a down momentum year. 46:51 So I think they will... 46:53 I wonder about what they will try to do or say this year. 46:59 I don't know. 47:01 Did anyone who went... 47:03 Did they hear something? 47:04 A great announcement that they were really amped up about? 47:10 Or did they enjoy just hanging out with other Bitcoiners? 47:13 I would be interested to know what it was like from someone in the audience's point of view. 47:26 Everyone should feel free to come on up if you'd like. 47:30 Raise your hand if you were at the Bitcoin conference or if you observed it. 47:34 You can come on up and chat about it. 47:37 There were no nation state announcements I think this year. 47:41 That's what they like to do is announce that a nation state has anointed Bitcoin. 47:48 Well. 48:02 Ah, we have a request for speaker. 48:05 Fuzzy Bear. 48:07 Welcome back. 48:09 Thanks for organizing this and making yourselves available. 48:12 Sorry that I haven't been keeping up too much with the developments of LayerTwo Labs. 48:17 But from an outside perspective, I'm curious what the short term, say within the next 12 months, 48:23 short term like technical goals of LayerTwo Labs is as a company and some of the commercial goals of LayerTwo Labs. 48:30 This may be old hat. 48:32 So I'm sorry if it's repeated. 48:34 You don't have to answer it. 48:36 But yeah, just what are you like? 48:38 What are you looking to do in the commercial sector? 48:40 Maybe nothing. 48:41 And what are you looking to do in the technical sector? 48:44 Do you have any partners? 48:46 Is there any feature you want to push out? 48:48 Is there some. 48:49 Yeah, I don't know. 48:51 Some outstanding issues that a lot of people are waiting for. 48:54 Just what are what are the goals of LayerTwo Labs over the next 12 months? 48:57 Let me know if I can clarify. 48:59 Thank you. 49:01 I think over the next really over the next one month, to be honest with you, 49:06 we hope to have have shipped a wide variety of sidechains on the test net, which include. 49:14 I mean, I don't know if this can be done by the end of June, but we're hoping for it should be. 49:19 There should be a Namecoin sidechain, which will be huge. 49:22 I mean, people don't really Namecoin in prediction markets. 49:24 So the two like long shot sidechains where if they succeed, they will just transform life on this planet for everyone. 49:35 And it's huge, absolutely enormous. 49:38 But people don't really understand them. 49:40 So the commercial goals are primarily we have a wide variety of like commercialization, monetization ideas. 49:50 But to rest on those two ideas, which have enormous like multibillion dollar payoff. 50:00 And so we hope to have both of those shipped in June. 50:06 And in fact, we already have a preliminary version of the Namecoin sidechain already out that lets you register names and stuff. 50:13 But it's on test net, so it's constantly reset. 50:16 So you can't really own a name. 50:17 But you can at least see what the software would do if BIP300 were activated or if some altcoin ran with it or something. 50:26 So those are the two. 50:28 And then we also hope to have like a large block, a high performance scaling sidechain. 50:33 We already have a version of our template that has just a higher block size. 50:37 But we hope to actually have like a very, very high performance version of that. 50:41 We're going to do a contest with that. 50:44 I still want to do it, but actually we just in-house, we just made so much progress on it that maybe I kind of deprioritized it slightly. 50:53 So we hope to have that. 50:55 We hope to have sidechains. 51:00 We have like an NFT sidechain that is like just it's basically a UTXO model, but like, you know, whatever, ERC20, BRC20, NFT, whatever you want to call it. 51:11 But it's just the same UTXO model as Bitcoin. 51:15 So you can put the assets like in a channel. 51:17 So in that way, it competes with with Taro even. 51:21 And you can put them in a multi-signature output or whatever. 51:24 You can use Bitcoin script. 51:26 We also plan to have a version, a sidechain that is just the latest version of Bitcoin Core. 51:31 With stuff like CTV in it and BIP-118 and OpWalt and stuff so that people can actually just play with that and see what that's like. 51:43 Jerry Paul, what is that? 51:45 CTV and blah, blah, blah, BIP. 51:48 Give me all the info, please. 51:50 CTV is the Jeremy Rubin's Check Template Verify. 51:53 And it also enables that thing Ark that Barack presented. 51:57 So these are like new soft forks for Bitcoin that will take 10,000 years to be added to Bitcoin Core because it's so slow. 52:06 But on the sidechain, we can just add them immediately. 52:10 So that would be interesting, I think. 52:16 We also plan to have a copy of SIA, which is like a Filecoin thing. 52:22 We actually have a copy of Filecoin, but Filecoin, I think actually the numbers are, Filecoin is not as real as it appears to be. 52:33 So SIA seems more legit and it's fast enough. 52:37 The latency is very low, so you can stream video and stuff. 52:41 So SIA is kind of like a replacement for the Internet, honestly, the World Wide Web, because it just serves files. 52:47 You host files and you rent your storage disk storage space and your bandwidth out. 52:52 And so in addition to that, we have clones of the latest version of Zcash and Ethereum. 52:57 So then like those are just, we already have those. 52:59 We've had those for months. 53:01 So that's big. 53:07 The goal of LayerTwo Labs as a product is pretty clear to me as a user because I get the security model of Bitcoin. 53:15 But then all of the features that everyone's been working on in these disparate chains and environments over the past five years. 53:22 But, and I think you're sympathetic to this, there's like a lack of recognition or a lack of adoption for BIP300 and BIP301. 53:32 Some of that might just be implementation. 53:34 There's stuff to be built and once things are built, people will come. 53:37 But what is your vision as the spearheader for this? 53:42 And I guess CEO of LayerTwo Labs, what is your vision for bringing this to market on a large scale? 53:49 What do you see as the major hindrances? 53:51 Why is something so obvious to me not used or not hyped? 53:58 Why is it the purview of a very small subset of people? 54:02 Is it just the technical aspect? 54:04 I don't think that's it. 54:06 Is it the marketing? 54:08 You know, we lack marketing skills. 54:10 What is it? 54:12 Sorry if this is, and it might be larger than I think. 54:14 Yeah, go ahead. 54:16 Well, there's a wide variety of things. 54:18 One is, I mean, probably we should hire like a PR firm or something and maybe we'll do that. 54:23 You know, we should like have maybe be more serious about marketing. 54:27 But really, there's a lot of weird stuff happened. 54:28 So like one, one thing is that the recently this narrative has taken over, which is like the safe Dean Saylor narrative that Bitcoin success is inevitable. 54:39 And as a result, you see how that makes it look like. 54:42 We don't need this because we don't need anything. 54:45 Because it'll already be a $300 trillion asset just by doing nothing. 54:48 So the other thing was SegWit2x happened, which made people cause this block size war. 55:00 And the winning side was the side that resisted change from outside. 55:05 And as a result, this has trained everyone to think of resisting change as the good thing. 55:11 That's how you rise on the totem pole in Bitcoin. 55:14 So that's a thing. 55:15 There's lots of, there's really a lot of bizarre reasons. 55:19 So another one is that the, like, in a way, as the altcoins have gotten more useful, the Bitcoiner response has become a kind of like a sour grapes where we say we never wanted that anyway. 55:35 And so in the past, it was a little easier because there was nothing good. 55:39 But now that there are some good altcoins, such as the modern Zcash. 55:44 Which is different from old Zcash. 55:47 And certainly modern Ethereum is way different from 2015 Ethereum. 55:51 But as those have gotten better, people have decided more and more double down on toxicity. 55:57 There's another, there's many things. 55:59 So like one thing is that the success of this project sort of makes other projects, you know, look worse by comparison. 56:06 Most notably like a Blockstream or even Lightning Labs or something that kind of look different. 56:13 Because everyone's been sold this idea that lightning was the only thing we need to make Bitcoin conquer the planet, which is very widely believed. 56:23 A lot of people just believe in whatever, any kind of like stock to flow inevitability argument. 56:29 That's another thing. 56:30 On the technical side, this idea is very difficult for people to endorse. 56:36 Because usually in Bitcoin, people are trained to be paranoid about losing the user's coins. 56:42 It's like the worst thing. 56:44 So it's kind of like they're the FDA. 56:46 And they're like if they let anything through and someone has a bad experience, then they get blamed. 56:49 But someone in a reviewer on github.com slash Bitcoin slash Bitcoin, they don't get anything if they, it doesn't cost them anything to delay the feature. 57:04 So like no one's being punished by the fact that the feature is delayed. 57:07 Because it's not like someone is going to launch a viable altcoin like anytime soon. 57:13 Isn't there a cost, like a liquidity cost? 57:16 Like all the energy and momentum is going to other places. 57:19 That's a cost, right? 57:21 Yes. Well, I think the other thing is people are, I think I could see it very easy for someone to suck all the energy out of the room. 57:29 So like another thing that happened with SegWit2x was it started this, what you might call like a hatocracy or the Twitterocracy or something. 57:35 Where it's like the governance of Bitcoin is based on widespread consensus for many people. 57:41 But this is actually a very bad thing. 57:42 I mean, there is this place, Tammany Hall in America, where there was enormous political participation, but it was all corrupt. 57:50 And it was like union bosses just, they got everyone to vote a certain way. 57:54 You always voted for the person you were told to. 57:57 And there was enormous participation, but it was, there was no political health. 58:01 It was all corruption. 58:03 And that is kind of a little more like what we have today, where we have these big figureheads. 58:07 Everyone puts something in their Twitter. 58:09 They don't, there's more participation, but there's not, people didn't really know anything about what SegWit or Taproot was. 58:17 People admit years later that they didn't know SegWit was a block size increase. 58:21 People still think that, people still don't even know. 58:25 For example, people think Taproot is like a smart contract upgrade or something. 58:29 Or they think that Taproot caused ordinals, which is not true at all. 58:33 But even when people finally update their point of view, they're not right. 58:37 So there's no expertise. 58:39 So there's a wide variety of overlapping weird reasons. 58:42 I can go on and on and on. 58:44 To be honest with you, one of them is that in the technical community, not only are they prioritizing safety over innovation or over any kind of risk taking. 58:52 And they prioritize consensus over any kind of like what you might call freedom. 58:58 Like I should be free with my own money if I want to put it into a BIP300 script and a miner wants to mine the BIP300 script. 59:07 Then why should some bureaucrat on the Bitcoin dev mailing list stop me or whatever. 59:13 But in addition to prioritizing consensus, in addition to prioritizing extreme conservatism. 59:21 The sidechain idea is basically saying, we can leave. 59:27 Finally, we can leave Bitcoin Core software. 59:30 Well, that idea is very alien to someone who if you work on Bitcoin Core software, you just think, well, if there's something wrong with it, why don't we just change it in Bitcoin Core and we'll make it great. 59:38 We don't want people to leave. 59:40 It's like as if we're in a restaurant and I come out, I go to the bathroom for like three months. 59:45 And then I come out and I say, I've tunneled an escape hole in. 59:49 We can finally get out of this restaurant. 59:51 But if I'm saying that to the owner of the restaurant, they're going to be like, what? 59:54 Like, what do you mean? 59:55 Like, this isn't a prison. 59:56 Anyone can leave whenever they want. 59:57 That's kind of what they think. 59:58 They don't realize, people don't realize that the network effects are a prison and they're actually immoral and they harm freedom and they harm innovation and they harm prosperity. 1:00:08 And they have a bunch of people trapped here who don't really want to be here. 1:00:12 But that's a very weird thing to say to the owner of wherever you're trying to escape. 1:00:16 They just, you know, it's news to them. 1:00:19 So there's tons and tons of reasons. 1:00:23 One reason, there's even more reasons I can give you more is like the timing of this idea involved like miners, hash rate process, securing the sidechain. 1:00:33 But they would happen to be announced at the same time that would happen to come out onto the world, like around the same time that there was the SegWit blockade in 2016, 2017. 1:00:43 So that's just bad luck. 1:00:46 Thanks, Paul. Another question, if I can sneak one in, you need for security reasons or no, you need for like in order to roll out BIP300, BIP301, you need miner adoption, right? 1:00:58 They need to be able to support the sidechains. 1:01:01 Have you on the ground, have you seen miners express interest in running like sidechain software, drivechains or no? 1:01:11 How's it changing over time as like fees drop and everything? 1:01:15 I think the thing is, the answer is yes, they are. But I think the bigger thing is that a miner ever since SegWit2x, the miners have been very, I would say, afraid of expressing any point of view on anything. 1:01:26 And in fact, since ordinals, since inscriptions, now I think they still feel that way. 1:01:35 But I think that with the right framing, that issue can be completely resolved. 1:01:42 So I think that that one is an easy one. 1:01:44 But I think that for the most part, they are afraid of expressing any opinion about anything. 1:01:51 I got to be careful about promoting centralization or whatever, corruption. 1:01:56 But have you been in contact with any large mining organizations or pools to increase adoption? 1:02:02 Well, you know, I've never, every now and then I contact one or two, but they usually say what I've just told you, which is something like, we like it, but we don't want to like get involved with anything. 1:02:16 But I think that, again, like I was saying, with a little more thought and a little more effort than it could be. 1:02:21 I think that's a good next step for us to do, actually, because we have a lot of elite support. 1:02:26 Believe it or not, if you go to like layer2labs.com slash friends, you see we actually have a lot of expert elite support. 1:02:33 And we actually have a decent amount of grassroots support. 1:02:36 And we have the miner support. 1:02:38 So I just think if someone could ask them a question phrased a certain way, like if we just asked the miners to say like, well, if there were no objections, would you be interested in this? 1:02:48 If there were no objections from the technical community, then we could probably get a lot of yeses. 1:02:52 And then that would probably be. 1:02:54 What does no objections from the technical community mean? 1:02:56 That's a tall order, right? 1:02:58 Well, I think, yeah, that's true. 1:03:00 But I think like, I think what it's really saying is it's hanging on the word if. 1:03:05 So it's just saying it's giving them an out. 1:03:08 It's saying like, OK, we like it, yes. 1:03:11 But we will we will abandon our yes. 1:03:15 We'll retract the yes. 1:03:18 If the technical community objects, so then it's like it's a conditional. 1:03:23 I think it's dangerous to pose it that way, because you're always going to find someone prominent who object to something. 1:03:28 And in my opinion, right. 1:03:29 It's like it's a political thing. 1:03:31 Probably. But I think the phrasing could be tweaked. 1:03:34 But I think something like that, the goal is just to show other people that there's not a veto from the miners. 1:03:42 The miners actually are, yes, but they're but they won't push it. 1:03:45 So that I think that would be like the next step in that direction is my is my guess. 1:03:51 Yeah, because I think in order in order to get people interested in using the software, there have to be instances of it in the real world. 1:04:01 On which they can build new products. 1:04:03 And it can't really exist in the real world as a secure product for Bitcoin unless miners are supporting drivechains. 1:04:08 So it seems like one of the first steps is just to get miners running drivechains so that they can support sidechains. 1:04:15 But that's just me. I don't know. 1:04:17 I don't think about that. Maybe that's obvious or maybe you argue that. 1:04:21 I don't know. Well, people don't really want to run any soft fork thing. 1:04:28 That was like the SegWit2x thing. So I don't think they'll run any non core software anytime soon. 1:04:33 I thought that maybe they will. I don't know. But I don't think they will. 1:04:37 My understanding of drivechain and I have a limited understanding. 1:04:41 So apologies, this is wrong. My understanding was you're not modifying Bitcoin Core or like you don't you're not obligated to run something different than Bitcoin Core. 1:04:50 You're just adding like the regular people do not need to run new software, but the miners do to enforce. 1:04:58 In fact, to enforce the software. Some people do. 1:05:02 It's kind of like how you don't really have to upgrade your node to support Taproot or even SegWit if you don't really want to. 1:05:09 But but but enough people have to. 1:05:14 OK, OK. 1:05:20 What's optional is the miners don't have to run the sidechain nodes. 1:05:38 That's the critical. I think that's what I was thinking. 1:05:41 Yeah, I knew there was like some opt out or some backwards compatibility thing, but I think that was it. 1:05:45 And they're not obligated to run the sidechains, but if they want additional fees, they can opt in. 1:05:49 I think that was it. Thank you. 1:05:51 Did you understand Paul's earlier response to your question about why is it that there isn't an incentive that's clear to the core development community to do drivechain? 1:06:05 Like they don't have a profit motive to do it. 1:06:07 Not that they would only do things for profit, but it's just it's important to understand that the way that this open source software development occurs is that if if there's like a group of people who are deciding what to do, it's kind of bureaucratic. 1:06:26 Categorically speaking, not not we're not criticizing them. 1:06:30 We're just describing the fact that it isn't like they're running a restaurant. 1:06:35 And the better they run the restaurant, the more profit they make. 1:06:37 The only way that they would really lose personally is through the humiliation of like flippening, for example. 1:06:48 So if they do a bad job, they don't merge drivechain in. 1:06:50 And then Bitcoin as a result fails to accrue value, then it would eventually be flipped. 1:07:00 And then that would expose the mistake that was made. 1:07:04 Of course, some will argue when if the flipping does occur, they'll argue that, well, it doesn't mean anything. 1:07:12 That's just that's just, you know. 1:07:15 Ethereum getting more success for its scams, but the same people probably said in the past that a flipping can never occur because of Bitcoin's fundamental superiority and a person can't have it both ways. 1:07:30 A person can't say Bitcoin will always be the winner because of fundamental economic properties like it was first and its best. 1:07:39 And then. When it when the flipping does occur, then they'll say, well, it can be dismissed because of other reasons. 1:07:47 So people have to be consistent. 1:07:51 That was that was a good clarification. 1:07:53 Yeah, Paul's explanation did make sense, but this is valuable to thanks. 1:08:01 Everyone's welcome to come on up to the stage and ask questions. 1:08:08 We have a very knowledgeable drive trainer here on stage. 1:08:13 Since no one else has taken to the torch, Paul, what's a day in the life like? 1:08:16 What are your preoccupations as you run LayerTwo Labs and you try to increase adoption? 1:08:21 How are you spending your time and energy? 1:08:23 How much software are you writing? 1:08:24 None. Who are you talking to? 1:08:26 None anymore. Unfortunately, I don't want to do any software writing, unfortunately. 1:08:31 But now we have a lot of people who write software, which is good. 1:08:34 So now we have we finally have a front end person. 1:08:38 And so we have different back end people working on different sidechains. 1:08:41 So we have. So all that is very exciting. 1:08:45 We have the sidechains based on clones and then we have a sidechain based on the template. 1:08:49 Which is like a blank. So you can either fork. 1:08:51 There's like a library that we add to an altcoin full node and turn it into a sidechain. 1:08:55 And then separately, there is like from scratch rewrite. 1:09:01 We have like a C++ version, a rust version and a JavaScript version now. 1:09:06 And then we have people cloning the different altcoins and just replicating the functionality. 1:09:10 And then we have a lot of different people working on different sidechains. 1:09:14 And then we have people cloning the different altcoins and just replicating the functionality. 1:09:18 And so that's good. So we like that. 1:09:22 We work on the front end. 1:09:26 So I like that we work on like the Web site, like the whiteboard video, like. 1:09:32 Stuff we have like boring legal stuff, too. 1:09:35 So are you are you sitting in on dailies and like managing task assignments? 1:09:42 And how large is the team and how has it grown over time? 1:09:44 The team can be like in the open source sense, not even just working for LayerTwo Labs. 1:09:48 Like how large has the ecosystem around you kind of grown? 1:09:52 I have something like five tech people. 1:09:55 I maybe have six now. 1:09:57 Six and I have like so like six non-tech people. 1:10:00 Also, so now it's it's getting kind of big. 1:10:03 I mean, whatever. 1:10:05 More managers or assistants. 1:10:09 Maybe just stop it here. 1:10:11 But I think the non-tech people, what are their responsibilities? 1:10:15 So yeah, there's like a strategy, like marketing, like communications, stuff about like legal. 1:10:26 Do you have a dedicated technical writer or someone who's writing for like public facing like adoption stuff like for miners or for people working on altcoin features that they can see? 1:10:38 At one point we had people doing copy like for the for like older version of the Web site. 1:10:44 Exactly. 1:10:45 Yeah. 1:10:46 Like sometimes we have chat TPT doing things. 1:10:49 But no, we don't have like a good we have like some. 1:10:54 It sort of depends on how you would frame it, I guess. 1:10:56 But we have. 1:11:00 But yeah, I don't think so. 1:11:01 We need more. 1:11:05 I would say that we do not have a technical writer. 1:11:10 OK. 1:11:11 All right. 1:11:12 There's a vacuum. 1:11:13 Thanks. 1:11:15 If anyone's interested in sending a resume, you can send it to me at Henry at LayerTwo Labs dot com. 1:11:21 That's H.E.N.R.Y. at LayerTwo Labs. 1:11:25 All letters, no numbers dot com. 1:11:29 And I'll make sure that Paul and the other founders get a chance to think about anyone's interest. 1:11:36 Those are great questions. 1:11:38 Paul, regarding the rebasement. 1:11:41 Is that something which would be potentially. 1:11:44 Would you describe it as something which has never happened before? 1:11:46 Like never before has there been a pull request for drivechain code to Bitcoin Core? 1:11:52 My opinion is different. 1:11:53 Well, yeah, that's true. 1:11:54 be potentially would you describe it something which has never happened before like 1:11:59 never before has there been a pull request for drivechain code to Bitcoin core 1:12:04 opinion is different. 1:12:05 Well, yeah, that's true And that's an important thing that we're working on. 1:12:11 I a lot of people say that Like 1:12:15 Like, the sort of attitude in core is that unless something has, like, support on Twitter from 100% or 99% of the world, 1:12:25 it will not, like, be merged, which is a weird point of view, of course. 1:12:30 But I think other people say something like, until there's a pull request, there's no real call to action. 1:12:36 for BIP300 other than giving it thumbs up because you don't see the details. 1:12:42 It's like, oh, you agree to do a deal with someone, but you do need to see the 1:12:48 actual paperwork, details, to actually sign. 1:12:52 Paul, could you 1:12:52 speak about whether drivechain could be achieved without BIP300 and 1:12:58 301 such as Like this might be a kind of a technical question, which is great 1:13:04 to ask you about like does Jeremy Rubens Bip Allow 1:13:09 allow for Drivechain through kind of a roundabout way, or do other things that are currently 1:13:14 in the realm of being potentially the next soft fork, do they allow for Drivechain in 1:13:20 a roundabout way? 1:13:21 I think people who ask that question don't really understand. 1:13:29 The way Drivechain works, the way BIP300 works, or whatever, in contrast to an extension 1:13:34 block proposed by Adam Back many years ago in 2014, is that BIP300 is like, everything 1:13:41 is a miner courtesy, and then BIP300 puts a lot of heat on the miners and makes it very 1:13:48 difficult for the miners to steal. 1:13:51 Everything is a courtesy done by the miners, so they have total control over everything, 1:13:55 but then we tighten the thumbscrews on the miners to make it very, very, very hard for 1:14:01 them to misbehave. 1:14:04 That's what BIP300 is designed to do, and lots of other things would kind of do that, 1:14:10 but everyone seems to be missing the point that the point of BIP300 is actually to constrain 1:14:13 the miners' behavior. 1:14:16 Every dilution of that, it just makes it less effective, but yes, it's actually possible 1:14:21 to do all of this today with no miner support, or today with no anything, but people don't 1:14:31 really get what BIP300 is doing, I think, when they ask that, but it is true that there 1:14:38 is no real need for BIP300 in the sense that miners can just soft fork in something like 1:14:43 this whenever they want. 1:14:45 They could have done it six months ago without telling anyone, and so there's no need to 1:14:49 really go through the BIP process at all, and it's possible that some other BIP or some 1:14:54 other combination of arrangements, even like a kind of agreements or something, will just 1:15:05 replace whatever Drivechain does, but it'll be very, very inefficient use of block space 1:15:09 and it won't work as well at all, or it will be too expressive, so like if there's someone 1:15:17 writes a crazy script that can do lots and lots of things, or they achieve like some 1:15:21 kind of, you know, reach like a Turing completeness or something, then it may be much, much worse 1:15:30 because there may be individual contracts that aren't like easily comparable, or maybe 1:15:39 they are too expressive and it is now impossible to censor a type of category of like interfering 1:15:46 transaction. 1:15:47 So it's probably like really confusing, but yeah, the answer is that all the objections 1:15:51 to BIP300 is kind of nonsense, because it will eventually just, either it will, people 1:15:59 just don't really get, even to this day, years later, they just don't really get what it's doing. 1:16:09 That's like the only important thing to keep in mind. 1:16:11 Understood. So this, this kind of line of discussion that has been, that sometimes pops 1:16:18 up on Twitter, tweets, which is like, maybe Drivechain will be achieved through some other 1:16:23 BIP, like, oh, XYZ gets us Drivechain. 1:16:27 Yeah, that would be a bad thing. 1:16:30 Right. 1:16:31 But that just shows you why it's pointless to be against. If you're against it because 1:16:35 you don't want people, you don't want it to happen, then that is an invalid reason 1:16:41 because. 1:16:42 Yeah, for example, for example, Adam Back, you know, frequently mentions he supports 1:16:48 Drivechain. Sometimes he also mentions he likes the idea of simplicity, which would 1:16:54 also, in his words, I think he said, you know, provide like a different path to the same 1:17:00 objective that Drivechain is oriented towards. 1:17:05 I guess he's referring to a peer-to-peer two-way peg. 1:17:11 Well, what do you think about simplicity? 1:17:14 It doesn't sound very simple. 1:17:22 I see we have another request for a speaker. 1:17:30 While they're connecting, please, please continue with any thoughts or questions, anyone. 1:18:00 Welcome, Detroit XMR, one of our frequent speakers. 1:18:18 Oh, hey, thanks for having me. 1:18:22 This one's not very intelligent, quick and easy. 1:18:26 I love this trend. 1:18:27 I'm starting to see on Twitter with Ubi and some other people where bragging about not 1:18:35 wanting things to change isn't as socially powerful. 1:18:40 It's still a pretty huge majority consensus type thing, but it's nice seeing cracks in 1:18:45 the wall when it comes to now on Twitter, you can kind of just tell someone to get out 1:18:51 of the way. I've really enjoyed a couple of tweets I've seen lately of cool view. 1:18:57 We got it from here, almost like when people say they don't want things to change, kind 1:19:02 of acting like they're saying they want out almost. 1:19:05 That's just been exciting. It's just hopeful to see maybe some cracks in the wall. 1:19:09 Love these chats. 1:19:11 Thanks for doing what you guys are doing. 1:19:16 Great, thank you. Yes, the failure to innovate is a change and a risk. 1:19:23 It's not good. So we. 1:19:26 It would be great if really everything were all solved, I mean, all the privacy, 1:19:31 scalability, extensibility, and there was no, you know, there was no one interested in 1:19:35 inventing something new and we could all we were all somehow aware of that, then maybe 1:19:41 it would be fine. And you could try out the TCP IP argument. 1:19:45 But it's clearly the world we live in has many unanswered questions. 1:19:51 About exactly what the protocol should be doing. 1:19:57 I have a I have a question for you, Paul. 1:19:59 OK, the the opt in nature of block sizes is easy to understand where we have small 1:20:07 blocks on main chain and then potentially larger blocks on certain sidechains that 1:20:12 people can opt in. 1:20:14 And as you've explained. 1:20:15 When someone's using a sidechain with a large block there, their level of decentralization would be the result of the sum of the block sizes. 1:20:26 So on the main chain plus the large larger chain. 1:20:30 They would get they would be experiencing decentralization from the sum of those two block sizes. 1:20:36 But my question to you is, what if somebody prefers main chain small blocks, but also the privacy of the zSide sidechain and they don't want a block size increase? 1:20:50 Then they want to use a blockchain which they can't opt into because they would have to do the block sizes of the zSide plus the main chain. 1:21:00 So is it true that with drivechain, it isn't like you can get any particular feature set you might possibly want? 1:21:07 Because what if you want not the larger blocks of any sidechain, but you want the in other words, suppose you're like a Z cacher where you want your base layer to be hyper private? 1:21:19 They might argue, well, if the main chain isn't super private, then it's not exactly what we want. 1:21:28 We want the base layer to be having maximum privacy. 1:21:32 What are your what's your response to to that exact point that the main chain? 1:21:36 I mean, I don't know. 1:21:38 Like, you know, it's like unreasonable because you have a group of people and it's like what we want is the layer one to be the most minimally invasive layer. 1:21:49 So we want layer one to have small blocks. 1:21:51 We want layer one to be slow changing. 1:21:54 We want it to be very conservative because that's the one that everyone has to have. 1:21:58 So, I mean, it's kind of like if you said like in our house, we have 120 volt electricity. 1:22:05 We all have the same plug, electrical outlet plug shape. 1:22:11 And someone out there says, you know, even though everything has like a transformer, everything like, you know, whatever, computer, TV, whatever. 1:22:20 And it changes the voltage to whatever is needed. 1:22:24 But someone out there says, I want the voltage coming into my house to be different. 1:22:28 And I want the plugs to be different. 1:22:31 Well, you know, it's a cost, just a cost benefit analysis. 1:22:35 You know what I mean? 1:22:36 Like if they make it because there's plenty of people who don't want Zcash privacy on layer one because it ruins the auditability of the 21 million coin limit. 1:22:43 So there's a way of getting most of the people most of what they want most of the time. 1:22:49 Or there's a way of making it so that only one group of people can get what they want. 1:22:54 Then that second way is worse. 1:22:56 This is also why the layer one large cannot have large blocks, because you put small blocks on top of large blocks. 1:23:03 That's a terrible decision because the small block people aren't getting what they want. 1:23:08 But in the reverse, then both groups are getting what they want. 1:23:11 Now, it's true. Some people might say, oh, I want I want layer one to change. 1:23:14 But so, you know, then it's just whose ox gets gored. 1:23:17 You know, like someone wants layer one to change like that. 1:23:20 Someone wants layer one to change some other way. 1:23:22 They wanted to go left. 1:23:23 They wanted to go right. 1:23:24 They wanted to go up. 1:23:25 They wanted to go down. 1:23:27 It's a incoherent, incoherent strategy. 1:23:33 So that's the one thing that we know is a stupid decision. 1:23:48 Well said. 1:23:52 Well, could you please go into detail a little bit about how putting some of the privacy features from Zcash on layer one is outside the scope of the 300, right? 1:24:00 So you can project it. 1:24:01 But how that like inclusion of those features on layer one makes it hard to audit the 21 million Bitcoin limit, please. 1:24:11 Well, on Zcash, they cannot audit their coin limit, so they don't know. 1:24:15 It's possible to have an inflation bug that is undetected because the privacy makes it hard to know the amount transferred, whereas with Bitcoin, that's not possible. 1:24:25 So it's a win-lose situation on layer one for Zcash level privacy. 1:24:31 So the win-lose situation is not good. 1:24:33 So we always want to try to maximize the number of win-win situations. 1:24:40 Is that the same thing with Monero, the same sort of restriction? 1:24:45 The privacy restricts how much you can know. 1:24:47 That's a good question. 1:24:48 I don't think so, because I think the ring signatures do not exactly work that way. 1:24:52 There is like a number of decoys in each transaction, I think. 1:24:57 But it's possible that it may. 1:24:59 Monero is. 1:25:02 That's a good question. 1:25:02 I don't know. 1:25:03 I don't actually can't guarantee the answer there. 1:25:06 I think that Zcash is certain that the amount is always hidden when it's in the shielded pools. 1:25:12 With Monero, I don't remember if it only hides who the sender and receiver is, like among a giant list, or if it also hides. 1:25:21 I think they must have bulletproofs now. 1:25:22 So I don't know. 1:25:23 I don't actually know. 1:25:24 I'm not familiar. 1:25:26 No problem. 1:25:26 Thank you. 1:25:35 Everyone is welcome to come on up to the stage if you've been listening. 1:25:39 Join us on stage to ask a question or share a comment. 1:25:43 We meet every Monday and Friday to talk about Drivechain. 1:25:47 Paul, what are your thoughts on the BitAssets sidechain and how it can meet the needs and desires of people who are doing these inscriptions and 1:26:14 ordinals, NFT type activity? 1:26:17 And do you feel that they'll ever be happy on a sidechain or is there something special? 1:26:23 Yeah, there's actually different groups of people. 1:26:25 So some people actually just want to do it. 1:26:28 At this point, if you've lived so long and you don't know that people enjoy, you know, because we had Counterparty, we had Omni, we had MasterCoin, we had ColoredCoins, we 1:26:41 had Ethereum, ICOs, ERC20, NFT. 1:26:48 We have had a lot and now we have whatever, what do you want to call it, BRC20 or whatever you want to call it, inscriptions. 1:26:56 So people like issuing their own assets and this is also what many clubs or corporations do. 1:27:04 They say, we issue eight million shares, we control the supply and who gets them, and then we control what they're redeemed for, like an arcade issues a token, they sell tokens. 1:27:19 That's a little more like a sidechain, but similar type of a thing. 1:27:24 People sell tickets. 1:27:27 So people like to do this thing. 1:27:29 Those people would be happy on a sidechain because the sidechain can be set up with all kinds of special customized features to facilitate the trading, the liquidity, lists of stuff, figuring out who owns this asset, being able to, if you own it, set like a little thing, like a set, like a little description, like they have in a museum, like on loan from the Detroit XMR collection, blah, blah, blah. 1:27:57 You can like set like a little thing. 1:27:58 So those people will love the sidechain. 1:28:01 A lot of the people doing the ordinals and inscriptions today are people like Eric Wall and Udi, and their primary aim is to break up all of the stupidity in the Bitcoin community today, which is the sidechains would also do just as a category. 1:28:19 This is the fact that sidechain. 1:28:21 So if we had sidechains, there would not be Bitcoin stupidity. 1:28:25 And then there would be no need for Eric and Udi to do what they are doing. 1:28:30 So that is why they are doing that, because there's no alternative for them. 1:28:34 They have to have to stay and try to persuade people. 1:28:37 So it's partly a persuasion technique. 1:28:39 There's something else that people are now, again, as I predicted, this would happen like in whatever, 2016 or like a million years ago. 1:28:46 But the block space itself is a new form of commodity in its own right, and it's a new form of media, in fact. 1:28:54 And people are now realizing that you can use the blockchain to broadcast like global messages and get the word out on something. 1:29:05 There's something, there's a much more efficient, many, much more efficient ways of doing this, like very efficient. 1:29:11 And that will also go, I predict and have already coded something that I call CoinNews that will also pick up the slack on that, which is just 1:29:27 something that displays if you if you outbid, if you pay a higher fee to the miners, you're just you get your messages like featured in like a little spot in the GUI. 1:29:36 This is no soft fork, no anything, just cosmetic thing. 1:29:40 But that's that's also that's another thing that people will love about Bitcoin to have an actual, more actual what they call, you know, fundamental value or an actual use value. 1:29:49 Like there'd be something to actually do with the coin, which will be direct people's attention. 1:29:56 So it'd be like advertising or it'll be media. 1:30:01 So in that way, with all there would be none, none of this stuff, none of the problems associated with ordinals or inscriptions, none of those would happen 1:30:10 if we had sidechains, because all that stuff would have already could already be in use. 1:30:15 But you have to differentiate between the three different types of people who are doing that. 1:30:19 Only one of the three actually is interested in. 1:30:23 Digital asset like issuance, like issuing a board or whatever. 1:30:31 Paul, what is your view generally on the subject of Bitcoin as distinct from blockchain? 1:30:37 There is a narrative over the last few years that blockchain as an idea is is fraudulent and people should just focus on the Bitcoin. 1:30:45 The thing with that is if you're around in 2016, you would know that it is like there was this horrible narrative of blockchain without Bitcoin. 1:30:53 And it was basically the stupidest thing ever to exist. 1:30:57 And there was just years and years of just absolute nonsense coming from literally every direction. 1:31:03 Microsoft, IBM, whatever, the government, people, all kinds of random people were just emailing starting companies on this. 1:31:11 We're going to put everything on the blockchain. 1:31:14 John Seth wrote that fake essay about putting horse semen on the blockchain. 1:31:17 That was like half real because it was it was edited from an essay about like provenance of art that was real. 1:31:23 So it was like half real. 1:31:26 The whole thing was all nonsense. 1:31:27 So I think this is, again, a case where people have learned the old lesson. 1:31:32 Blockchain without Bitcoin is a scam. 1:31:35 But they don't realize that that lesson only applied to the people who are really, 1:31:40 really, really stupid and didn't know anything in 2016 and they were brand new. 1:31:43 It doesn't really apply to like Satoshi inventing Namecoin in 2010. 1:31:48 Or it doesn't apply to, 1:31:52 you know, 1:31:53 ninety nine point nine nine percent of the blockchain use case stuff is garbage. 1:31:58 But that doesn't mean that it's completely impossible to have 1:32:04 useful stuff. And some of that stuff now exists. 1:32:07 OK, maybe maybe what I'm going to do, though, this has been fun, but great. 1:32:13 Thank you for being here. 1:32:16 We'll continue on. 1:32:19 All right. 1:32:21 Let's continue with the questions and comments. 1:32:24 It was great to have Paul here. 1:32:26 And hopefully he'll be back for another Drivechain Twitter Spaces on Friday. 1:32:32 Today is a holiday. 1:32:39 Happy Memorial Day, everyone. 1:32:42 Thanks to those who've served. 1:32:47 Or are serving. 1:32:51 I don't know if I can think of anyone who's like in the active military who has 1:32:55 written to me about drivechain, I do communicate with a lot of drive 1:32:58 chainers, I have been tweeting at Jason Lowery, Space Jason, our space cadet, 1:33:03 who is the leader of the Bitcoinization of the Space Force. 1:33:10 Maybe he'll become a drive chainer. 1:33:12 He has written a little bit from time to time about fees and subsidy. 1:33:18 So he does know that Bitcoin has what's called the Coinbase, 1:33:23 also referred to as the subsidy or the inflation. 1:33:26 And he's interested in hashing. 1:33:29 So he is a great candidate for grokking the security budget problem and how 1:33:35 merged mining is an important solution to it. 1:33:38 He once tweeted about this. 1:33:42 I'll read his tweet. 1:33:44 It's kind of sad. 1:33:46 So this is what Jason Lowery wrote on May 16, 2022, so almost exactly one year ago, 1:33:53 he tweeted. 1:33:56 In other words, the fees that Bitcoin users pay to their 1:34:00 defenders is buying exponentially more hash. 1:34:03 It's literally already true that hash is increasing despite exponentially 1:34:08 decreasing subsidies, comma, fees, dot, dot, dot. 1:34:12 And this is the unfortunate part. 1:34:14 I mean, that first tweet was just kind of like a mess of words. 1:34:17 But the second part is where he makes a mistake. 1:34:20 He wrote this on May 16, 2022. 1:34:22 You can find it on his Twitter, Jason P. Lowery. 1:34:25 He wrote, he wrote, and if for some reason it stops decreasing fast enough to make 1:34:31 Bitcoin hashing commercially profitable, then we will just defend Bitcoin the same 1:34:35 way we defend all physical property, dot, dot, dot, by using the same 1:34:39 way we defend all physical property, dot, dot, dot, by having governments pay 1:34:44 for Bitcoin hashing pools using taxes. 1:34:49 So there you go. 1:34:51 He's interested in the possibility of taxpayer funded Bitcoin mining, 1:34:57 which is a very bad idea because. 1:35:01 It's not right to use the government's money. 1:35:05 Without a very good justification, so as Bitcoiners, I think we are all 1:35:09 sympathetic to the idea of limited government and government that doesn't just 1:35:13 spend money on whatever, but instead using money only for, like, 1:35:19 national defense, police and other limited constitutionally lawful activities. 1:35:24 So we shouldn't deploy taxpayer money to Bitcoin mining. 1:35:28 Couldn't you make the argument that there'd be analogous to, you know, 1:35:33 there'd be analogous to guarding Fort Knox with National Guards, 1:35:39 right, if it becomes like a national security issue? 1:35:42 Right, miners provide national like they provide the security for the whole network. 1:35:47 So having revenue from taxpayers fund 1:35:52 that security may be a net benefit for everybody. 1:35:55 Just as a counterpoint, as devil's argument. 1:35:59 Well, I think the government should be 1:36:01 neutral as to which money is adopted by society. 1:36:06 So government shouldn't be against Bitcoin. 1:36:10 And if Bitcoin were to be so popular in society that it makes sense for the 1:36:15 government to exempt it from capital gains tax, then that would be great. 1:36:20 However, if the solution to the security budget. 1:36:26 Is to be taxpayer funded mining, then I think Bitcoin isn't going to make it 1:36:32 because the whole point of Bitcoin is that the government doesn't control it. 1:36:39 The whole point of Bitcoin is that it's not controlled by the government. 1:36:43 So if Bitcoin is going to be vulnerable 1:36:45 to hostile attackers unless the government protects it, that is. 1:36:51 Quite simply, the fox guarding the hen house. 1:36:57 Do you know what I mean? 1:36:59 I do, yeah. 1:37:00 In my head, if Bitcoin becomes like a national security concern for the United 1:37:04 States, for example, it may very well in the future be a national 1:37:09 security concern for a large number of countries which have 1:37:13 the opposite of competing interests, which are antagonistic to each other. 1:37:17 So like there wouldn't be 1:37:22 like a specific one, like there wouldn't be. 1:37:24 Let's say this. 1:37:27 There would be an obvious benefit for any 1:37:29 one country to remove or add funding to Bitcoin because the security of Bitcoin 1:37:33 generally is advantageous to everyone, does that make sense? 1:37:36 It's almost like a common good. 1:37:38 I get what you mean, which is this vague Jason Lowry idea that there's 1:37:44 like a game theoretic equilibrium where every country is using taxpayer money to 1:37:50 mine and that's what they're doing instead of maintaining a military. 1:37:56 That's his theory. 1:37:57 I haven't read his book, but I guess that's what it is. 1:38:01 I mean, we had some DMs, you know, and I asked him about the security budget. 1:38:06 He is in favor of taxes, as you can see from his public tweets. 1:38:11 Which is which his messages elsewhere resonated with. 1:38:16 In other words, he thinks that if there's 1:38:18 ever a problem where the fees aren't high enough, taxes are the solution. 1:38:22 He's wrong. 1:38:24 We can't rely on government funded programs to make Bitcoin work. 1:38:28 Bitcoin has to have a design which is going to 1:38:34 not rely on governments. 1:38:37 The whole point was to not have governments be in control. 1:38:41 And. 1:38:43 When you say that there's like a game 1:38:44 theoretic, well, you didn't say it, but if we think that there's a game 1:38:48 theoretic equilibrium where every country is mining with their volcano, 1:38:53 you know, and their tax revenue like El Salvador and others, if there's 1:39:00 if there's government supported Bitcoin, then I don't think that's a healthy, 1:39:07 long term vision for Bitcoinization, because a different blockchain that doesn't 1:39:12 rely on taxpayer funded support would accrue value. 1:39:20 So in principle, are you opposed to what 1:39:22 El Salvador is doing in mining Bitcoin using their volcanoes? 1:39:25 You don't see it as a positive development. 1:39:28 I'm OK with it. 1:39:30 They can do whatever they want. 1:39:31 I mean, everyone's free to use to do whatever they want. 1:39:35 If a group of people form a government, right, like if the country of like St. 1:39:39 Kitts and Nevis or Monaco or Lichtenstein or some tiny country or a large country 1:39:44 decides to spend their taxpayer money hashing. 1:39:49 Like they can do that, it probably is not going to be profitable, 1:39:52 so it's going to be wasteful, like they'll be doing it with it'll be 1:39:56 a negative value add economic phenomenon where they consume a million dollars a day 1:40:02 in electricity and machines and labor and they're producing like $800,000 a day 1:40:09 in revenue. 1:40:10 Because mining is extremely competitive and the government is very bad at doing things efficiently, 1:40:17 so they're going to do it inefficiently and it'll waste society's money. And if they think that 1:40:23 they're securing the network and that this is going to be part of Bitcoinization, it's like 1:40:28 the cart pushing the horse. Doesn't make any sense. Bitcoin is designed to be a peer to peer 1:40:38 libertarian movement, not one in which like a hegemonic and violent like organ. The government 1:40:46 is using taxpayer funded revenues from like its involuntary tax source, which is its citizenry. 1:40:56 They're forced to pay taxes that this trusted third party that's violent is going to be 1:41:02 supporting Bitcoin network. Doesn't make sense. It's not a good plan. The way to avoid this 1:41:07 completely is to have the transaction fees collected from every blockchain. That is part 1:41:12 of the drivechain vision is that as Satoshi wrote in 2010, every single blockchain in the world 1:41:19 would be merged mind with Bitcoin. That's what Satoshi wanted. He was right. The only thing he 1:41:23 didn't understand is that instead of merged mind altcoins, we want merged mind sidechains. 1:41:31 The main difference between a merged mind altcoin, which is what Satoshi was talking about 1:41:36 with BitDNS, is that the miners on Bitcoin's main chain are getting paid transaction fees from the 1:41:44 altcoin blockchain denominated in altcoin. And that's bad. It's not Bitcoin only. Whereas with 1:41:51 a sidechain with blind merged mining, you can have the miners paid the merged mind transaction 1:41:58 fees in Bitcoin and all demand for the native token on the sidechain accrues to Bitcoin 1:42:04 because of a two way peg. So instead of using an altcoin, we're using synthetic Bitcoin created 1:42:10 on the sidechain. So it's a much better design. I think Satoshi definitely would have loved it. 1:42:16 If he had known about it, he would have implemented it. It's an exciting improvement 1:42:23 and it has nothing to do with using taxes to secure the network. 1:42:27 This security budget problem is really important, so I'm glad that we're chatting about it. 1:42:33 Ultimately, it's one of the most dramatic events in all of crypto 1:42:38 that Bitcoin is marching towards this future where eventually there will only be 1:42:46 transaction fees. And because it's in the far future, people don't fully understand it 1:42:51 or they dismiss it because they figure, well, it's decades away by then. We'll either have one 1:42:57 or we'll either not have one. But that's not correct. That's actually an error because the 1:43:05 future is important for people's activities today. Economic actors are future oriented. 1:43:14 They're future oriented. So if Bitcoin has an uncertain long term transaction fee 1:43:21 reliant economic security model, that will factor into people's present decisions. 1:43:28 We can't, as Bitcoiners, say, well, that's a problem for the far future. Let's just ignore it 1:43:32 for now. And at the same time, talk about generational saving, generational wealth, 1:43:39 saving for one's grandkids, grandkids. So Bitcoiners on the one hand are saying, 1:43:43 let's save forever. Let's be long term oriented. Let's be low time preference. 1:43:47 And then the same time, the same people should not be saying, well, the security model is 1:43:55 transaction fee reliant and the fees aren't rising enough. But let's just worry about that when we 1:44:00 get to it. Let's cross that bridge in the future. And Jason Lowery's cop out, in my opinion, 1:44:07 to refer to taxes isn't a compelling answer to this question. And I think it'd be great if he 1:44:14 and Lynn Alden and other people who have commented on fees, but never on drivechain, 1:44:20 would study drivechain and then comment on it. Because the simple truth is that 1:44:28 there's like three things that can happen. Bitcoin continues in its current form 1:44:35 and the fees stay low, or we get a lot more fees from merged mining via drivechain, or 1:44:45 we embark on inflation, which we certainly do not want as drive chainers. But some people want it 1:44:51 like Peter Todd endorses inflation. So that would be just augmenting the issuance from the Coinbase 1:44:59 so that it just persists forever, maybe 1% per year forever. So that would eliminate one of 1:45:07 Bitcoin's most important narratives, which is absolute scarcity. It would disrupt the monetary 1:45:14 policy. It would open the door to debates forever about how high the inflation should be. And 1:45:22 the governments and the miners and others would like more inflation because they always like 1:45:25 more inflation because it's politically popular to talk about inflation because it devalues the 1:45:31 fixed debts of parties who are indebted. So it's popular politically to say, let's 1:45:38 debase the money. Anyone who owes money will then be able to pay it back with cheaper dollars. 1:45:46 But it's not productive. It doesn't create any wealth in society to have more units of money. 1:45:52 So it would be great if we just kept Bitcoin's absolute scarcity 1:45:56 and increase the fees through merged mining. Bitcoin's fees aren't nearly as high as they 1:46:03 were at the height of the Ordinals episode in the recent months. Let's check the fees. 1:46:09 It's a good exercise. Every time we have these Twitter spaces, let's teach people how to check 1:46:14 the fees. Let's do it now. You can go to glassnode.com or menpool.space. I personally 1:46:21 like blockchain.com. So let's run through it. Are you with me, Fuzzy Bear? Want to check it out 1:46:28 together? Yeah, I'm with you. Awesome. Blockchain.com. All right. You can follow 1:46:35 along. So we go to blockchain.com and then we go to at the top, click on Explorer 1:46:41 in the menu at the top. Blockchain.com, then Explorer, and then on the left, click on Charts. 1:46:49 You can do it on your phone. I'm doing it on a laptop. It's much easier on laptop. 1:46:55 And then once you've gotten to the Charts page, then you click on Mining Information. 1:47:00 That's Mining Information. You there? Yeah, I'm there. Cool. And then Total Transaction Fees. 1:47:10 Do you see that one? Total Transaction Fees, USD. Yeah, I see it. Okay. Total Transaction Fees, 1:47:18 USD. Now you might be wondering why USD? Why not BTC? Don't we love Bitcoin? Don't we hate the 1:47:25 dollar? Well, USD is the correct way to think about this because it is the unit of account 1:47:33 which is most stable over the short and medium term. And therefore we should use dollars to 1:47:39 refer to the real purchasing power rather than Bitcoin because Bitcoin is volatile. 1:47:47 So to get a sense of the real purchasing power 1:47:50 that the miners are receiving from fees, we have to look to this dollar chart. 1:47:57 Now, of course, this dollar chart is not inflation-adjusted. So it's not a perfect 1:48:02 picture of the real purchasing power. In fact, if we were to adjust for inflation and look at 1:48:08 the all-time chart, then an inflation-adjusted chart would look even worse in the sense of 1:48:15 not showing an upward trajectory of growth for the fees. In other words, the block space is not 1:48:24 appreciating. Those are the exact same thing. They're synonymous. And when we're talking about 1:48:29 the total transaction fee rate per unit of time, that is a synonym for the value of the block 1:48:33 space. If someone says Bitcoin's block space is getting more expensive, they are making a 1:48:39 statement which has identical meaning to if they had said the transaction fees paid per unit of 1:48:47 time in terms of real purchasing power is not growing. But it's reasonable to expect that 1:48:55 there'll be volatility in the value of block space over time because during different periods of time, 1:49:01 some people may want to do transactions in bursts. So I wouldn't expect necessarily to see 1:49:07 a linear increase in the value of the block space over time. And I don't know if what I'm seeing is 1:49:12 unhealthy or unexpected from the long-term limit when Bitcoin is, say, the global reserve currency 1:49:19 and people are using it all the time. I'm not sure. I don't know. But I do see that it's lower 1:49:26 than it used to be. I also see that it's higher than it used to be, depending on what used to be 1:49:30 you're talking about. Yeah. So from 2010 to 2016, it was like under $200,000 per day, as you can see 1:49:40 on the all-time chart. By the way, it's helpful, Fuzzy Bear, if you click on the words market price. 1:49:46 Do you see where it says market price USD? Yes. Yeah. Just click on there. And that removes the 1:49:52 price of Bitcoin from the chart. And now we're looking at a chart only of the blue line, 1:49:56 which is the total transaction fees. Do you see that? Yeah, I do. 1:50:00 Cool. So you can choose on the chart at the top one month or three years or all, 1:50:06 and you can cycle through these different time frames to get a sense of what's happening. 1:50:11 So we look at the all-time chart. We see that in 2017, in December, 1:50:16 there was a spike. And this was the highest time, the highest price for a Bitcoin transaction ever. 1:50:22 It was $50 per transaction on that day in December. And that's when Greg Maxwell wrote 1:50:30 that he was breaking out the champagne because Bitcoin is showing transaction fees that are so 1:50:37 high that security for the blockchain would be achieved even after the subsidy 1:50:46 is gone in the future after more halvings. But of course, after he said that, 1:50:53 the fees went down, and not just a little bit. They went down 98% 1:50:57 from the point at which he was celebrating. And they stayed there for months and months and years 1:51:04 until there was a bigger spike, a smaller spike, but that was still large in April of 2021. 1:51:12 We were back up to those high fees, over $10 million per day for a few days, maybe just one 1:51:18 day in April. And then for another year or two, it was under $500,000 a day in most of 2022. 1:51:27 And then finally, with Ordinals, we got this spike specifically in May of this year, 1:51:36 this month basically, we got a spike up to $17 million per day on May 7th. So the miners got 1:51:42 an influx of value. If you're Bitcoin mining, life is good. This month, we got a big spike, 1:51:48 only lasted a few days. And now we're back to, right now it's about $1.7 million per day in fees. 1:51:57 So we're still elevated because the usual level of fees, for example, look at the one-year chart. 1:52:05 On the one-year chart, we see that for most of 2022, we were about half a million dollars a 1:52:09 day in fees. That is kind of like the norm. Like over the last five years, 1:52:16 under half a million dollars a day is the typical range. And then if we're over a million, 1:52:20 I would say we're elevated. And what we're seeing again and again is there are spikes, 1:52:25 and then it falls back down and stays low for a long time. Because what happens is people don't 1:52:30 like paying high fees. So the Paul Sztorc view, the drivechain view is that people generally 1:52:39 don't want to pay a high fee on a blockchain. So what Bitcoin needs to do is try to collect fees 1:52:42 from many blockchains. Collect fees from, like instead of all the altcoiners paying fees on 1:52:49 like a thousand different blockchains, what if they were all paying fees on Bitcoin sidechains, 1:52:54 and then together there would be a synergy where the base layer would have massive fees 1:53:01 because of all of the merged mining going on, where the fees are being 1:53:07 pulled down to the base layer. So everyone's sharing the same miners. 1:53:17 Are we getting something from nothing? Because it seems like with the same security budget, 1:53:22 we're getting more transactions processed through the virtue of having all the sidechains process 1:53:28 their transactions. So are each of those transactions on the sidechains as secure? 1:53:34 Are we losing security on those sidechains? Are we diluting it basically? Or is it an obvious win 1:53:41 for everybody and the total transaction fees that would be garnered are so much greater that 1:53:49 we're not actually losing anything? Do you know what I mean? It seems like we're taking the 1:53:54 value of a transaction, the amount someone would pay to get a transaction encoded on the chain, 1:53:59 and we're dividing that up among a lot more transactions on the sidechain. So are we 1:54:03 reducing the value of each transaction? Are we reducing the security of each transaction? 1:54:09 Do you understand what I mean or no? It's a weird question. 1:54:13 It's a great question. So the security budget of a blockchain is the cost that it would take to 1:54:21 51% hostile attack that blockchain for a period of time. And the worst thing that could ever happen 1:54:29 to Bitcoin is if, well, one of the worst things is that a 51% miner, someone who controls over 1:54:36 half of the hash rate would be hostile to Bitcoin and would mine in perpetuity. 1:54:43 So that's one kind of security that we're talking about. And also in conversations about security, 1:54:52 it's important to make clear that we're talking about Bitcoin's economic security, 1:54:58 which is a question of what is the ratio of honest miners to attackers? 1:55:04 So there is a separate topic in security related conversations like cryptographic security of 1:55:12 signatures, but those are asymmetrically secure. So when we're talking about Bitcoin's security 1:55:18 budget, we're not talking about the signatures security, which are cryptographically secured 1:55:23 and asymmetrically secured. We're talking about mining and whether the miners are honest or not 1:55:30 and what damage could be done from dishonest mining. So with that said, 1:55:39 the answer to your question is that the security budget of each sidechain is its fees. 1:55:46 So the each would have a different level of security budget. In other words, each sidechain 1:55:52 would have a different degree of transaction finality. And the security budget of the main 1:55:58 chain would be the sum of the security budgets of all the sidechains and the main chain, 1:56:05 because the main chain has the coinbase incentivizing the miners and it has the fees 1:56:11 on the main chain incentivizing the miners. And lastly, it has the fees from all of the sidechains. 1:56:18 So right now, the main chain miners, about half of them are merged mining RSK. They're getting 1:56:24 about three Bitcoin per month. And that extra money is making there be more miners on Bitcoin, 1:56:31 making Bitcoin stronger. In other words, making it more expensive for Janet Yellen to do her 51% 1:56:38 attack. So what we want is for the RSK fees to be like massively higher. We want tons of fees 1:56:47 from lots of lots of merged mine sidechains. And that's how Drivechain strengthens Bitcoin in terms 1:56:53 of the security budget. But your question was, what is the security on the sidechains specifically? 1:57:02 So let's consider the Zcash sidechain called Zside, where once Drivechain is adopted, then 1:57:10 there will be this sidechain for privacy. So if you're a privacy enthusiast, let's say you're 1:57:16 a political dissident living in China or Russia, you're trying to get money from your contacts to 1:57:22 run your libertarian newspaper or whatever you're doing. You're some sort of ethical person who 1:57:28 needs privacy. That's the kind of person who this Zcash sidechain is made for. So there is a certain 1:57:39 amount of fees paid per unit of time on that sidechain, and they're flowing down to the main 1:57:44 chain. So it's making Bitcoin stronger. And your question was, what is the security on the sidechain? 1:57:51 So if you're holding the sidechain token, which is a synthetic Bitcoin that can be moved around 1:57:56 using the Zcash privacy tech, so it's very fungible transactions, the security on that 1:58:04 sidechain is going to be directly related to the total amount of fees that are paid per unit of 1:58:11 time on the sidechain. And one of the exciting things about Drivechain is that the drivechains 1:58:18 can have a lot of security, but there is a bootstrapping similar to the way that Bitcoin 1:58:26 itself needed to bootstrap security. And the sidechains aren't going to have the benefit of 1:58:31 the Coinbase or the subsidy to help that bootstrapping. But nevertheless, it can definitely 1:58:39 be the case that the sidechains could grow very large and fully bootstrap security over time 1:58:47 as people experiment with using the sidechain and they pay some fees and then they start paying 1:58:52 more fees. That brings more users, more security, and the more the security is there, the more use 1:58:58 there'll be. And when there's more and more fees paid, that means more security measured by 1:59:05 transaction finality. In other words, how large a transaction can you do without having to worry 1:59:13 about needing to wait a very, very long time or needing to worry about double spending 1:59:19 on the sidechain? So those are the kinds of things that are relevant when thinking about 1:59:26 the security of each drivechain sidechain. But you're right in asking your question about, 1:59:33 you know, what is the level of security on the sidechains? And the answer is that it depends 1:59:38 on the fees that are paid there. So that's one reason why some people say, well, what we want 1:59:45 for layer twos are, you know, layer twos that inherit the security of the mainchain. We don't 1:59:53 want to burden people with having to worry. But then it is not the drivechain design, which is 1:59:59 optimal, which allows each sidechain to exist with near zero burden on the mainchain. That's the goal 2:00:08 of drivechain is to have each blockchain be like an independent community. 2:00:12 That nevertheless is sharing the same set of miners and the same unit of account. 2:00:23 So that's the beauty of drivechain is if there's a sidechain that gets launched, 2:00:28 and it has a lot of users, and then it turns out they're not happy and they give up, 2:00:32 the creation and destruction of these sidechains doesn't impact or burden the mainchain at all. 2:00:38 It's a totally independent ecosystem. It has its own set of node runners that are distinct 2:00:44 from the set of Bitcoin miners on mainchain. So no one has to run the sidechain node. 2:00:50 No one has to use the sidechain. 2:00:54 Oh, I misunderstood that. I thought the Bitcoin miners would have to run 2:01:00 the sidechain software. They'd have to run the sidechains. 2:01:03 No. 2:01:03 That's not right? Oh, okay. 2:01:05 No, it's not. Because of BIP301, blind merged mining, the word blind there refers to the fact 2:01:12 that the Bitcoin miners don't have to run the node of the sidechains. It's optional for them to run it. 2:01:19 Well, okay. So they can run it and they'll just pay more in energy costs or they'll mine less 2:01:27 Bitcoin. So why would a miner choose to run like a sidechain? Why would they choose to? 2:01:33 Running the sidechain node would be like opening a laptop, downloading the RSK software, 2:01:40 so you can validate that sidechain. It's a blockchain. It's a protocol. Every blockchain 2:01:46 is a protocol. Every sidechain is a blockchain. And people who want to use that sidechain and 2:01:54 be enthusiasts would run the sidechain node and the Bitcoin miners wouldn't have to. 2:02:01 It would be optional for them through blind merged mining. They would receive the fees 2:02:05 from the sidechain, the transaction fees, without running the node. They could run the node 2:02:11 and they might want to just to be involved more so, but they might make a slightly higher amount 2:02:18 of money in the case of some sidechains. Oh, because they'd be getting the fees from 2:02:23 that sidechain also. Okay. But in terms of economic incentive, it's likely that the Bitcoin 2:02:27 nodes would just do it in a blind sense probably. There might be some incentive for some miners 2:02:36 to run certain sidechain nodes. For example, if there's a sidechain for smart contracting, 2:02:45 then there might be a slightly higher amount of profit that would arise from running the node. 2:02:52 So some miners would run the node and others wouldn't. It's kind of like today, some people 2:03:01 might be in their own pool all by themselves or they might join someone else's pool and that way 2:03:08 they can just focus on hashing. They don't want to have to also run a Bitcoin node. So some people 2:03:14 have an ASIC like me. I have an ASIC. I run it using brains slash pool. I don't have my own 2:03:24 pool all by myself, not running my own node to then just independently participate directly. 2:03:30 Instead, I let brains do that work and then they also provide a smoother flow of income 2:03:38 with respect to the mining activity that I'm doing. So people can either outsource 2:03:43 and not run the node or they can internalize that activity and do it themselves. It would be optional. 2:03:51 That makes sense. Thank you. 2:03:55 Well, it was cool to check out the prices with you. What we saw is that the latest data available 2:03:59 on blockchain.com shows that as of a couple of days ago, the fees were about $1.7 million per day. 2:04:08 So right now, we're about three times higher than the normal rate of half a million dollars a day. 2:04:13 So my kind of rough assessment is that right now in Bitcoin, we're looking at fees that are a 2:04:20 little bit higher than where they usually are. So I would expect the fees to come down a bit, 2:04:26 back down to about half a million dollars a day. That's been the norm since Bitcoin was created. 2:04:31 It's like a low level of fees and then there's a spike now and then and then we fall back down. 2:04:37 Of course, some people are optimistic, in the worst sense of the word, that the fees will start 2:04:44 to just march higher and higher and that we won't need drivechain and that the fees will climb 2:04:50 forever. And these people think that Bitcoin, you know, the token will appreciate and so will 2:04:56 the block space. But actually, the reality is that the token has appreciated astronomically 2:05:03 over the last decade, while the block space hasn't similarly appreciated. 2:05:09 And that's because the block space is a whole different kind of economic good than the token. 2:05:18 The token, you know, as we know from reading Paul's article called Security Budget in the 2:05:22 Long Run, the token is a proportional good, whereas the block space is a production good. 2:05:29 And different kinds of goods have different features in economics. So people like there to be 2:05:38 a lot of tools and economic goods that can be used for, well, I don't want to kind of 2:05:49 try to restate his whole argument in that article, but you can find it if you go to 2:05:56 truthcoin.info and read from 2019 Security Budget in the Long Run and then the follow up article, 2:06:03 the second one in 2021 called Security Budget Part 2. Those two essays are great 2:06:12 and they're all about exploring the relationship between Bitcoin's token and its block space. Those 2:06:16 are the two goods on the Bitcoin network, the token and the block space. And the block space 2:06:22 is the one that is not well understood. Everyone understands the token. You know, 2:06:26 it's like digital gold. There's only so many of them and they're scarce and they have value. 2:06:32 So people understand the token. But the block space is a tricky matter and 2:06:42 there's no guarantee that the block space will appreciate a lot. 2:06:46 Because people can buy Bitcoin and then move claims on Bitcoin around without generating 2:06:53 fees. For example, if you're holding liquid Bitcoin or custodial Bitcoin or Bitcoin on 2:07:00 Lightning, then the amount of fees generated for main chain miners is lower than if you were to 2:07:08 hold an equal amount of Bitcoin on main chain and move it around just as much. 2:07:15 If I send my Bitcoin from my Coinbase account to your Coinbase account, 2:07:20 that doesn't generate a Bitcoin transaction on main chain. 2:07:26 So people are using technology to lower their burden of fees that they have to pay Bitcoin miners. 2:07:36 So in a future where there's one sidechain, say something like 2:07:40 Lightning fork on top of Bitcoin, for example, layer two payment solution that makes 2:07:45 each fee per Bitcoin transaction, virtualized Bitcoin on this layer two cheaper. 2:07:51 Is it possible we'd see fees reduced relative to today because the fees on the second layer 2:07:58 would be cheaper and periodically summarized to the main chain? Does it make sense? Is it 2:08:04 guaranteed that any addition of a sidechain 2:08:08 will increase the amount of fees per block or is it possible it could reduce in some cases? 2:08:16 I think that it's going to increase the total amount of fees received by the Bitcoin miners 2:08:22 because each sidechain exists only to offer new features. So the value of Bitcoin grows 2:08:32 in proportion to the creation of useful sidechains and all the demand for the sidechains 2:08:43 in terms of the token and the token on the sidechain is a synthetic Bitcoin 2:08:48 and the value of the block space on the sidechain flows to Bitcoin miners through merged mining. 2:08:54 So whenever these sidechains are adopted, if they're successful, people are using them, 2:08:59 then they're causing Bitcoin's price to rise and they're sending fees to Bitcoin miners. 2:09:06 And the sidechains are connected to the main chain through the two-way peg. 2:09:13 So there will be peg in and peg out transactions on main chain where people are sending Bitcoin 2:09:20 to the sidechain or removing Bitcoin from the sidechain. In other words, there's Bitcoin locked 2:09:26 in the hashrate escrow and there are transactions that will be adding to the hashrate escrow or 2:09:31 subtracting from it. And those peg in or peg out transactions generate a main chain transaction. 2:09:37 And there's only so much space on the main chain block space for transactions, such as those peg 2:09:45 in and peg out transactions. So the sidechains will tend to increase the value of main chain 2:09:52 block space. And through blind merged mining, all of the transaction fees on the sidechain 2:09:58 are almost entirely brought down to main chain miners through blind merged mining. 2:10:02 So the net effect of all of this is if Bitcoin has all these sidechains that are very popular 2:10:08 for privacy, for scaling, for smart contracts, for hive mind, for all sorts of reasons. If there's 2:10:14 all these large sidechains, then the overall effect is that the main chain transaction 2:10:21 fees will be high and the total amount of transaction fees received by miners will be high 2:10:28 due to blind merged mining. I think I wanted to ask Paul this question. 2:10:33 I think I've asked him it in the past before he left. I wanted to ask what is the approximate 2:10:42 amount of value that the sidechains will have relative to the main chain? In other words, 2:10:48 how much Bitcoin will be held in a hash rate escrow versus held in main chain, not in hash 2:10:55 rate escrow? I think in the past he said probably about half, maybe. So half of the potential value 2:11:02 of Bitcoin is going to be in these sidechains. And the other half will just be sitting on main 2:11:09 chain. And he also thinks, if I recall from prior conversations, that probably 99 percent of the 2:11:17 transaction fees in the far future would come from sidechains. So most of the activity of 2:11:24 people moving money around will be on the higher layers, the sidechains, not on the main chain. 2:11:29 The main chain would mainly be used for just peg in and peg out transactions to the sidechain. 2:11:36 So in the far future, Bitcoin would be very much multi-layered and most people would not be 2:11:41 interacting with the main chain. And this is something that some people who've been around 2:11:45 for a long time might be uncomfortable with because they like the idea of Bitcoin staying 2:11:50 simple and staying single layer. But Bitcoin only has so much throughput available on the base layer. 2:11:55 You can only do a few hundred thousand transactions per day. So there's no way that 10 billion people 2:12:01 will use Bitcoin unless Bitcoin becomes multi-layered where there's much higher throughput 2:12:06 on some of the higher layers. Is the 50 percent value split just conjecture or is there some 2:12:14 restraint that you can impose on the implementation that would restrict how much 2:12:21 value is allocated between sidechains and the main chain? I know you don't remember the exact 2:12:27 number if it's 50 percent, but is that just conjecture? Yeah, it's just a guess. 2:12:31 Okay. What motivates that? Because you can guess anything. 2:12:38 A similar kind of way of thinking is to say, look at all the value of the altcoins. 2:12:45 Their value is like half of the blockchain market. 2:12:48 It's changing, right? As time goes on, it changes. So is Paul just saying if sidechains were to 2:12:55 exist today in place of altcoins, they would take 50 percent of the value? Or is he saying in the 2:13:01 long term stability limit? What I recall from the conversation is that in the very long term, 2:13:08 if Bitcoin adopts drivechain, then like 10 years later, we'll look and we'll see that the majority 2:13:15 of the transaction fees are coming from sidechains. And about half of Bitcoin's value has 2:13:21 been sent to sidechains so that the Bitcoiners can use the features of the sidechains while 2:13:27 still using a Bitcoin rather than having sold their Bitcoin for Ethereum or for Zcash. 2:13:35 So if I can rephrase, you're saying 50 percent of value will be stored and then 50 percent of value 2:13:43 will be transferred and used and be actively transacted. Is that kind of the idea? The 50 2:13:51 percent that's not on the sidechains, that's just in custody. Someone's holding it. Is that the idea? 2:13:59 Yes. So if you're like a frequent transactor who wants very private money, then you would be on the 2:14:05 Zcash sidechain. And if you're paying for coffee at the local Starbucks, you're paying probably on 2:14:14 Thunder sidechain. That's how you're moving your Bitcoin around, you know, with one gigabyte blocks 2:14:19 and low fees. And then if you're storing money for your grandkids, perhaps that would be on main 2:14:25 chain, where the fee to move it is a high fee, like $50 or $100 worth of Bitcoin. The kind of fee 2:14:33 you're not going to want to pay except in rare circumstances, like once every couple of years, 2:14:38 you might move a bunch of your money into Thunder so that you can spend it. 2:14:45 That makes sense. Thank you. 2:14:46 So the way I feel about this is, if about half of the potential value of Bitcoin is 2:14:54 the demand for these sidechains, then there's roughly a similar understanding we can have where 2:14:59 we look at the market for blockchains today, we see that so much value is held in altcoins. That's 2:15:06 value that should be with Bitcoin. So that's how we can get this rough approximation that 2:15:12 Bitcoin is missing out on really doubling its price through adoptive drivechain potentially, 2:15:20 because drivechain could lead to the devaluation of the altcoins and a sort of harmonious, you know, 2:15:31 appreciation of Bitcoin at the same time and through the same effect, where Bitcoin absorbs 2:15:38 effect, where Bitcoin absorbs the technology and then absorbs the value of the altcoins. 2:15:46 But it would absorb them not to Bitcoin main chain directly, it would absorb them 2:15:50 to the sidechains, the demand for which feeds into Bitcoin's price. So we don't defeat the 2:15:56 altcoins and get their value and technology and users until we have peer to peer sidechains on 2:16:02 Bitcoin. And that is what will lead to Bitcoin having all of the users and value and fees of 2:16:09 altcoins. They have to be peer to peer. As long as the sidechains on Bitcoin aren't peer to peer, 2:16:16 Bitcoin will continue to lose value to altcoins. That's the drivechain thesis is that there's 2:16:22 good ideas out there for blockchains other than the way Bitcoin is designed. And the only way 2:16:28 Bitcoin can keep the users and fees and value associated with those ideas is if Bitcoin has 2:16:37 peer to peer sidechains. Every Bitcoin sidechain today is federated. Every single one has a 15 party 2:16:46 federated multisig. Or rather, I should say, every Bitcoin sidechain today that has a two way peg 2:16:53 is not peer to peer because people have these like one way pegged peer to peer space chains, 2:17:00 but they're not they're not two way pegged. So there's no guarantee that the token on that side 2:17:06 chain is going to be traded for one Bitcoin because you can't move it. You can't get that 2:17:10 value back to main chain. It's a one way peg. So it might be peer to peer, but good luck with that 2:17:17 as like an investment decision. Because it can't be redeemed for Bitcoin on main chain. That's the 2:17:24 whole point of drivechain is that it provides the peer to peer two way peg that includes a peg out, 2:17:30 not just a peg in. Pegging out to the sidechain can be done peer to peer without drivechain, 2:17:36 but there's no way to get the token back. So they call that a space chain, 2:17:39 maybe because you're you're out in space using it. And people want to be able to move their Bitcoin 2:17:45 back. That is a peg out mechanism that brings Bitcoin back to the main chain. That's what 2:17:50 forces up the price of the token on the sidechain. The fact that it can be redeemed for Bitcoin. 2:17:55 That's what that's what forces the price up at all times. So there's always trades one for one 2:18:00 with Bitcoin. It's a really elaborate and exciting design. Coming to a Bitcoin store near you. 2:18:11 Hopefully, we don't have to wait too many more years. Hopefully, things take off this year. 2:18:16 We've got some exciting things planned. You asked a lot of really awesome questions today. Thank you 2:18:20 for that. It was fun to hear your back and forth, Paul. You're welcome. We'll be back on Friday. 2:18:29 This has been Drivechain Twitter Spaces. Everyone's favorite place to get conversation on Drivechain. 2:18:36 It's a fast paced and exciting topic. What will the future bring? Will we see higher fees 2:18:44 through the activities of Eric Wall? Or will Bitcoin's block space drop down in value 2:18:50 as it has time and again? And will there be a flippity or not? And will it encourage understanding 2:18:58 and support for Drivechain or not? We'll have to wait and see. 2:19:01 It'll be a drama. And who knows how the future will unfold? We'll have to just be patient and 2:19:09 watch as time marches on. But we have the truth on our side. So there's that. And that's exciting. 2:19:22 We used to meet every Monday and Thursday. Now we meet every Monday and Friday. 2:19:25 And that's exciting. We used to meet every Monday and Thursday. Now we meet every Monday and Friday. 2:19:31 It's always at 9.30 a.m. Pacific. And these are recorded spaces for those who want to listen 2:19:38 on demand. I know Fiatjaf sometimes does. He is a great Drivechain fan and has written a whole 2:19:47 essay about it, which you can all find at fiatjaf.com. Click on Bitcoin and then click 2:19:53 on Drivechain and you'll see his essay. It's great. So happy Memorial Day again. Thanks, 2:20:01 everyone, for joining. We'll be back on Friday for more Drivechain conversation. 2:20:06 Bring your thoughts and questions. And in the meantime, be sure to check out our Telegram group. 2:20:15 You can find it if you go to Drivechain.info and then click on Telegram in the links on the right. 2:20:22 And you'll see the Telegram group with 700 members. We also have Drivechain's Reddit. 2:20:29 That's Drivechain with an S at the end. That's our subreddit. We have posts in there on occasion. 2:20:36 But the main place where we do our content is Layer2Labs.com, 2:20:41 the newly created company focused on Drivechain and related matters. And you can go to Layer2.com 2:20:49 for information along with Drivechain.info. Follow us here at LayerTwo Labs to see our spaces 2:20:55 in the future. And at Layer2Labs.com or Drivechain.info, you can download our software. 2:21:04 We have powerful software written by genius developers who have created a testnet with 2:21:12 the Zside sidechain, Ethereum, Ethside, and other exciting projects are coming. So if you're 2:21:20 capable with computers, download the software and run it and experience the thrill of Drivechain 2:21:29 firsthand. And make sure you don't have a Drivechain accident. Don't succumb to temptation 2:21:38 to support inflation. Stay true to Bitcoin's ethos and support merged mining. So if you see 2:21:46 Peter Todd, give him a friendly hello and remind him that it's important that Bitcoin not embark 2:21:54 on inflation. And instead, Bitcoin should do merged mining like Satoshi said. And 2:22:03 and if you see a Bitcoiner who thinks that 2:22:12 the flippening doesn't matter, but also that Bitcoin is perfect and will always be number one, 2:22:19 well, they're having a Drivechain accident. Help them correct their course. Help them 2:22:24 understand that they can't simultaneously think that Bitcoin will always be number one, 2:22:30 but also that the flippening can't happen. And if it does, it's meaningless. Like, no, 2:22:34 we have to make a decision. Either we're trying to be number one or not. And if we're not trying 2:22:39 to be number one, then what is all this talk about global monetization and Bitcoinization about? I 2:22:45 mean, that's certainly predicated on the idea that Bitcoin will be number one and take over 2:22:50 the world and have the biggest network effect. And there's like this Robert Breedlove idea that 2:22:57 money moves to one through network effects. Well, it's important, therefore, that Bitcoin be number 2:23:01 one. If Ethereum is number one, has the biggest number of users and network effect, then 2:23:08 it's on track to be the global money. So we want to stay number one. We want Bitcoin to be number 2:23:13 one forever and not just number one. We want Bitcoin to be the only layer one with no competition. 2:23:20 And every single blockchain user would be using Bitcoin or a layer two on Bitcoin, a sidechain. 2:23:27 That's our goal with Drivechain. So we have to we have to conquer these mistakes people have 2:23:34 of thinking that the flipping isn't a threat and thinking that inflation is fine and all the other 2:23:42 concerns and misguided ideas that are holding back Drivechain. We have to conquer those mistakes 2:23:48 together. 2:23:56 See you all on Friday. Bring your friends and family for more Drivechain Twitter spaces. 2:24:03 Thanks, Fuzzy Bear.
