0:00 Well, here we are. 0:23 What I thought was, I had a thought, like, should we discuss the recent lightening news? 0:29 And then I thought, you know what, we still haven't done this, Peter Title wrote up this 0:33 big thing. 0:34 And it's, it's just really quite terrible. 0:36 And like every single paragraph, every single sentence in it, it's just not good at all. 0:42 But he really does seem to hate this Drivechain idea. 0:46 And so I thought we could go through it and explain why in detail why all of this is wrong. 0:56 But then I had the idea that it would actually be much better to do that with like video 1:00 so that we could just scroll along and see all the text. 1:05 So now all of a sudden, I have some sort of second thoughts about that, because it's a 1:08 little too late to change the format from a Twitter space into a YouTube video. 1:14 So I don't know, maybe we could just do it twice. 1:15 Like maybe I could do the dry run here, we do the dry run and then do a video. 1:23 I don't know if anyone would, I don't know if anyone will care. 1:29 But so, I don't know, I guess, but the most important thing is that we give the audience 1:36 something that they want. 1:37 Yeah, we could link, we link the, we can link the post and then maybe people can read through 1:42 it at their leisure. 1:46 Kind of the cool thing would be if someone would volunteer to read the, we can read the 1:51 Peter Todd part, maybe so that it's clear when I'm replying versus just quoting him. 1:58 Or this will just be really boring and not, but this should, this must be done. 2:01 I have to go through his, his article. 2:04 To be honest with you, I went through it like the day he published it and I wrote some Twitter 2:08 response. 2:09 And I just, I just think it's just, it's not very good is the real reason why if it was 2:14 actually really good, I would probably have been more into like engaging with it more 2:20 seriously, but it's, it's not good. 2:24 It's full of mistakes. 2:26 It is sort of rude in many parts, which is fine, but just kind of like, it's not taking 2:33 it very seriously. 2:36 So I don't know, but I think unless someone wants to pop up as a speaker and demand that 2:44 something else be done, I guess we'll just do that for now. 2:48 And then I guess I'll just repeat myself completely in video format, which it's kind of disappointing 2:55 because I don't really want to repeat myself ever. 2:58 I think that's kind of, you're not really giving people your money's worth, but nonetheless, 3:05 what can I say? 3:06 Peter Todd, you know, he has this, he has this thing. 3:10 I took the liberty of printing it out and stapling it. 3:15 So, um, yes, uh, the, uh, so I guess we'll just do that then. 3:29 Let's do it without further ado, unless anyone really, really, okay, we've got some people 3:34 who are happy. 3:35 Thumbs up. 3:36 We've got some faces. 3:37 We've got a cool fist. 3:38 So, all right, we'll do it. 3:41 And then we'll have the recording. 3:43 So, okay, this is Peter Todd's thing. 3:46 It's linked up, Drivechains of detail analysis. 3:51 He has this paragraph where he says what it is, and then his second paragraph credit goes 3:55 to Matthew Haywood. 3:56 Now, I don't know who this Matthew Haywood person is, but they work for Blockstream, 3:59 I think, and they published on the same day, October 13th, their own thing that I didn't 4:06 even really realize. 4:07 I didn't even actually realize that there was a second one until, uh, like, honestly, 4:14 like a few days ago, I knew that he just had linked it. 4:18 So what I kind of think is funny about this is that I think what actually happened was 4:22 Peter Todd is so lazy that he didn't actually do really any work on this. 4:26 And he just kind of copied the ideas of this other person who wrote his own thing that 4:32 maybe we can go through. 4:34 But I just thought it'd be funny. 4:35 So I'm going to open this table of contents, then number one, backstory. 4:38 The backstory is itself. 4:39 You'd think how bad could this be, but we're just going to go through it in order. 4:44 And he says, I have been a critic of Drivechain's idea since it was published in many ways before 4:49 the idea was published, since I was also a critic of Blockstream's since abandoned idea 4:53 of merge mining. 4:54 That's true. 4:56 That's the problem. 4:57 And so then he says, Paul Sztorc seems to be of the idea that paying me to write this 5:02 blog post will change my mind, which is sort of true, because I think that paying him to 5:09 actually investigate the idea, I think he's been too lazy to actually look into the idea. 5:13 And I think I was right. 5:15 And I think if you actually investigate it, but then he quotes me as saying this. 5:20 This is him quoting me. 5:21 He says, thus it is a waste of time to talk to those three, since after Peter Todd admits 5:27 he was mistaken, those three will either cave or become irrelevant, blah, blah, blah. 5:31 And then Peter Todd says, I can assure you the only thing he bought was my time. 5:35 So what he's trying to imply there is that I'm sort of bribing him to change his mind. 5:43 But no, I'm actually paying him to actually look into the idea, because then he'll either 5:47 have to admit that he was wrong or he'll have to publish something that's so bad that no 5:52 one wants to be associated with it. 5:54 And so that was what I was going, and unfortunately, it looks like that's the road we are going 5:58 to be taking. 6:00 If anyone ever wants to just jump up and just start having fun up here, then just join as 6:05 a speaker. 6:06 That's fine. 6:07 So then Scope, he has section part two of Scope, and there's nothing interesting in 6:11 it. 6:12 It just says, he just, the interesting, it's funny because even the parts that have no 6:16 relevance to anything are bad, where the Scope, he just says, in two, he just says that he's 6:21 trying to build a trap door for himself by saying it doesn't contain all his critiques 6:26 because that would have taken too much time. 6:31 And he says, they declined to pay me for the time it would take to do that analysis, which 6:36 is not true at all. 6:37 I would have paid him almost any amount of money to get all of them out in one piece. 6:42 But I asked him, wait, will you write a post just explaining why you don't like this idea 6:47 once and for all? 6:48 And he said yes. 6:50 And then he charged me $2,500. 6:55 So even these parts that have no relevance to anything are full of what amounts to basically 7:00 lies or misrepresentations, which is, you know, it's not too big of a deal, but it's 7:05 just kind of like, even in the Scope section, he wants to say that we didn't pay him enough, 7:12 so he's still got a bunch of critiques. 7:13 Even if I answer everything in this post, he's still got whatever, like a giant kitchen 7:19 cabinet full of nonsense. 7:21 So, great. 7:23 Okay, three, background to understand Drivechains to start with the motivation. 7:27 This is the only part that's actually good. 7:28 He understands that it's in part to create a new chain that has exotic rules, including 7:34 my Bitcoin Hivemind project. 7:36 Fine. 7:37 He talks about liquid. 7:40 Liquids federated multisig is a compromise. 7:43 For reasons we will now analyze, this is the last sentence of part three, Blockstream gave 7:48 up on the idea. 7:50 So it's nice to at least have people admit that liquid is giving up on the original idea, 7:55 which for some reason you have people like Samson Mao and whatever would still fight 7:58 that. 7:59 It's like, honestly, it's such a chore to deal with some of this stuff, as you will 8:04 now experience. 8:05 So here we go. 8:06 For section four, hashrate S grows, there's a paragraph about how script pubkeys work. 8:15 And then there's a second paragraph that says no amount of Bitcoin hash power can fake a 8:20 digital signature, which is something that no one has ever disputed. 8:23 But the sentence right before that says this miners cannot simply steal coins from the 8:28 perspective of a fully validating node. 8:31 After all, no amount of Bitcoin hash power can fake a digital signature. 8:36 So but this is logically invalid, though, because it's possible, as everyone knows, 8:40 it's possible to steal coins without faking a digital signature. 8:45 So again, I mean, I'm just going through the article in order. 8:48 I'm not going on to the most important thing, but I'm going to pick every single nit because, 8:51 you know, it's like kind of amazing how every single sentence managed to contain some kind 8:55 of lack of logic or just a mistake or just some kind of something that's kind of a misrepresentation. 9:02 Because as we all know, you can just double spend with if you have if you have any amount 9:07 of hashing power, like 100 percent, you can steal coins by double spending, by reorging, 9:13 by doing all kinds of other things. 9:16 So you don't need to. 9:17 But nonetheless, I think he's just trying to set up the idea that what's going on in 9:20 a sidechain is hash power makes the transaction valid, which is completely fine. 9:27 Since the scripts are untrue, then he goes into anyone can spend. 9:31 I think the theme of this essay is that Peter Todd used to know a lot about Bitcoin, like 9:36 in 2015 and earlier. 9:40 And having lived through SegWit, anyone can spend, there was like a fake drama about that. 9:45 So I think he's trying to get that out of the way, that anyone can spend is how we use 9:50 soft fork upgrades. 9:52 Now this is where it starts to go off the rails, which is why he says, OK, if an output 9:57 can be spent on any miner, surely it can just be stolen, right? 10:01 Blockstream proposed to fix this problem with two main mitigations. 10:06 Number one is multi-sig. 10:08 Multiple blocks would have to approve a spend of hashrate escrow funds. 10:12 Blockstream suggests one to two days worth. 10:15 And two, this is the important one, fraud proofs. 10:18 Once the spend was approved, there would be an additional one to two day waiting period 10:22 where proofs of fraudulent transfer could be published on the Bitcoin chain, potentially 10:27 canceling the spend before it actually happens. 10:29 Now again, this is where it's starting to go way off the rails, watch. 10:33 This idea is similar in spirit to Lightning's justice transactions, comma, but the very 10:38 important difference, not just important, very important difference that Lightning's 10:41 justice transactions are actually implemented and have been proven to work in the wild. 10:49 OK, now, why do I say this is going off the rails? 10:52 Well, it's because it's either an empirical question or it's not. 10:54 I mean, it's not an empirical question, but either way, it wouldn't make any sense. 10:58 So the Lightning justice transactions have the property that 51 percent of miners could 11:04 censor them. 11:06 And in that way, they could also censor fraud proofs, and so the whole basis of the fraud 11:11 proof idea of using a fraud proof against a miner is impossible. 11:17 So it's interesting that he says it's similar in spirit to Lightning's justice transaction. 11:23 It doesn't matter that Lightning's have been implemented because anything could anything 11:28 that's not implemented could be implemented. 11:30 So that's irrelevant. 11:32 That's irrelevant. And the idea that they've been proven, quote, proven to work in the 11:36 wild, that also doesn't matter because that just turns it into an empirical question of 11:43 they could stop working in the wild at any day and we could try the Drivechain model 11:50 and we could try that in the wild and then it could be proven to work. 11:53 And then so this whole basis that any of this is any different between Lightning on chain, 11:59 sidechain with a fraud proof or Drivechain, the whole basis that any of this is any 12:05 different is not true. 12:08 So he's trying to tee this thing up, but it's not going to work. 12:13 That was probably a little confusing, but trust me, I'm going to re-explain it after 12:16 this next paragraph. 12:17 So he says in his discussions with some of the authors of the PEG sidechains paper, I've 12:21 been told that one of the main things in their view that halted the PEG sidechains 12:25 project. Again, I have to just pause here to say how reassuring it is that people are 12:31 finally admitting out loud what they would only whisper before, which is that the whole 12:37 original sidechains project was the plug was pulled. 12:42 Now, why was it pulled? They halted the PEG sidechains project was that actually 12:46 implementing fraud proofs turns out to be much more difficult than they had hoped. 12:50 The reason why this sentence is important is the same reason as the Lightning justice 12:54 transaction concept, which is that it is more difficult than they had proved. 12:58 It's impossible. 12:59 From first principles, it should be very obvious that it's impossible. 13:03 If there comes a time when you're proving fraud against the L1 miners. 13:12 If you're coming to that point, they can just block whatever that message is. 13:17 They can just say, we never got that message. 13:20 And they censor it from the blockchain. 13:23 So from just without any kind of real analysis or really even thinking about it too hard, 13:28 we can see that that entire task is not possible at all. 13:32 It should be obvious that it's not possible at all. 13:35 And so it should be obvious that it's not going to be a criterion for anything. 13:40 So if what they're saying is we will never be able to beat. 13:45 Weirdly, I agree with Peter that the reason why the original sidechains authors abandoned 13:49 the idea was because they didn't understand it. 13:51 The idea is to win the L1 miners over and bribe them with huge amounts of money, the 13:57 fees, the fees and the ability to increase the value of the BTC coin. 14:05 You bribe them and you get them on your side and then they don't. 14:08 The last thing they would want is to do fraud. 14:12 So that's just the idea is the way I understand it. 14:14 I'm not saying that I have the absolute. 14:17 Best idea in the universe, but what I am saying is that this should have been obvious 14:22 that this like implementing like they investigate, they went into a laboratory and they 14:26 were like, oh, it ended up being more difficult than we had thought. 14:28 That's like, you know. 14:31 That would be like Walter White going into his chemistry laboratory and trying to 14:35 produce like something with a negative weight or something and being like, well, it 14:39 ended up being hard, like you don't really have to go into the laboratory to figure it 14:42 out. OK, now we're going to go into the details. 14:46 Four point one, BIP300 Drivechain take on hash rate escrows. 14:52 He gives the two paragraphs that say what the idea is. 14:57 This is where this gets absurd. 15:00 Next paragraph, unlike Blockstream's proposal, BIP300 does not have any concept of 15:04 fraud proofs. As the BIP300 introduction suggests, BIP300 is a strict hash rate 15:09 escrow where the miners unilaterally decide if and how to spend the escrow coins 15:13 regardless of what rules the associated Drivechain is meant to enforce. 15:17 This includes spending coins in ways that some people might characterize as theft. 15:22 Now, this paragraph is just terrible because, as I've already explained, it's obvious 15:26 why the fraud proofs thing is dead. 15:28 You don't have to think about it for that long. 15:30 And so why would he why would he write a whole paragraph even pointing this out? 15:36 It's a very strange. But whatever. 15:41 OK, next paragraph, while Blockstream proposed relatively short one to two day voting 15:45 and fraud proof periods, BIP300 proposes much longer timescales of approximately three 15:50 to six months. Concretely, to withdraw coins from the BIP300 hashrate escrow, a 15:56 miner must propose the hash of what is supposed to be a bundle of transact blah, blah, 16:01 blah, blah, blah. So that's if you already understand BIP300, you know that part. 16:05 There's some more details in the BIF itself, for instance, that the specific drive must 16:09 be first proposed by supermajority of hashing power. 16:11 The exact details aren't particularly important to this critique. 16:14 That's right. What is important is to understand that miners vote to decide what to do 16:19 with the escrowed coins. The vote happens over a long period and that there is no mechanism 16:23 to challenge the vote with the proof of fraud theft. 16:28 But it just doesn't make any sense that he would say this because there's no literal 16:31 fraud proof, which is impossible. 16:32 But there is a mechanism to learn about whether or not the there is a he says there's 16:39 no mechanism to challenge a vote. 16:42 But that's not you know, that implies that nothing is stopping the vote from being 16:46 wrong, which is completely missing the point. 16:51 Then we have this. 16:52 You have the section 4.11 other unimportant BIP300 criticism, but even the unimportant 16:58 things just reveal basically how late it is. 17:00 Even the unimportant things just reveal basically how lazy Peter has become and how 17:05 terrible the how little effort he's put into this and how badly he misunderstands it all. 17:09 So he says, well, this is an unimportant criticism in the overall context of what we 17:14 just discussed. 17:15 I mean, what we just discussed was basically nothing. 17:19 So I don't even know what that means. 17:20 I'll also he says, I'll also point out that the inclusion of human readable names, 17:24 description, tarball, hashes, git commit, etc. 17:27 In the BIP300 specification is a very silly amateur mistake. 17:32 He says, obviously, any real use of a Drivechain would not start with non-consensus 17:37 enforced information obtained on a blockchain. 17:39 Inclusion of such fields merely serves to aid in fraudulent attempts at confusing users. 17:47 Now, like he completely misunderstands what the point of this is. 17:52 There's no sense. 17:53 The whole point of those is to not confuse users. 17:56 So what he's saying is we have a section when you activate the sidechain where you can label 18:01 it, you can say Zcash sidechain, and you can also put stuff in there like the tarball hash, 18:05 the git commit hash, etc. 18:09 That is that solves an extremely relevant and obvious problem that would otherwise kill 18:15 the whole idea. 18:16 And which is with the inclusion of these fields is easily solved, which is that you don't 18:21 want people to say something like, well, what is the Zcash sidechain? 18:26 And we have sidechain slot number four. 18:29 What is the Zcash sidechain? 18:30 And then you have exactly like the block size where you have people dispute over exactly 18:36 what you mean. 18:38 I think what Peter Todd is confused about is he thinks that these numbers are relied 18:45 on for either the sidechain or the mainchain consensus. 18:51 But it's really just a human thing, where everyone can agree on what exactly the Zcash 18:58 sidechain software is. 19:00 And all that's fixed perfectly if you just have the one tarball hash and you just say, 19:07 this is what defines version 0.1 of the software. 19:11 So that way you'll always be able to find it. 19:13 So there's no sense in which it's a very silly amateur mistake. 19:18 It costs basically nothing and it solves a huge problem. 19:23 If I had to guess, I would say that Peter doesn't realize that that data is not in 19:29 consensus. 19:31 Nothing later depends on it, literally from L1 consensus. 19:35 But it is required that there be only one tarball hash per sidechain slot. 19:46 So the fact that there's only one of those in the L1 blockchain, that does help people. 19:53 BitCode, hello. 19:54 Welcome to the stage. 19:55 Do you have any thoughts? 19:56 Do you think this is fun or is this just rambling nonsense of just a bunch of text? 20:01 Hi, Paul. 20:02 Hi, Ilya, too. 20:03 Yeah, I have my thoughts. 20:06 And I'm thinking like and I'm asking myself a question, why in Bitcoin development we 20:16 need to rely on some people, you know, individuals that, I don't know if you agree with me, but 20:23 these people are like, you know, very, very coding focused. 20:30 I don't see in that article anywhere that he's saying something about, you know, drive 20:36 chain will harm the decentralization and stuff like that. 20:40 And, you know, the self-sovereignty, which, you know, the Bitcoin properties are the most 20:47 important to see if they are kind of, you know, damaged by something that new comes 20:57 on top of Bitcoin or not. 20:58 So, like, I don't know. 21:02 I mean, that article for me is total nonsense because, you know, like it doesn't give you 21:09 any crucial evidence of, you know, OK, he's right here. 21:15 You know, this can happen. 21:16 And then actually also we can write anything, you know, people are biased. 21:24 So, like, I want to see when somebody criticizes to prove that by practical means, you know, 21:34 like to show us, yeah, here is, you know, this will break something, you know. 21:40 And by the way, when Drivechain is very simple to understand and when you say one transaction 21:48 is sent as a hash to the L1 and included in the block, I don't see how the transaction can damage 22:01 anything because everything is happening on Drivechain. 22:05 And plus, like, when we see the sidechains, for me, Drivechain is only way to have more 22:15 decentralized kind of environment around Bitcoin, because I have experience. 22:21 I know I follow other kind of, you know, in. 22:27 They say they are L2s on Bitcoin, but actually they have no connection at all to Bitcoin. 22:33 And it's like, you know, I don't know. I think I think I don't know if you agree with me, but Bitcoin community and at all like Bitcoin blockchain and everything around should develop some some, you know, system that is kind of, you know, for new development coming on Bitcoin. 22:54 To be non-biased, to be kind of on the centralized way, you know, to maybe not voting, but some kind of consensus for for beefs and stuff like that. 23:11 What do you think about that? 23:13 Well, I think that actually the sidechain idea is what will free everyone from the prison. 23:18 And I think that's actually why on some on some level, that's why a lot of the people such as Peter don't like it, because they are the like the safety officer right now and then no one will need that job. 23:36 Yeah. 23:37 So, yeah, I just I don't get it. I mean, one thing you said is about like he should be able to write an article that just shows what the problem is, like the problem with large naive L1 large blocks was very, very easy to just articulate. 23:51 You could say, well, listen, the bigger the block size, it means harder to run a full node, you know, more bandwidth needed. 23:59 Someone's got to download and store and serve all of that. 24:02 So and the question was, if the block size limit is not going to be one megabyte, then what will it be? 24:10 It could be any amount. And then so these are all like these are pretty easy. 24:15 That was at least pretty easy to articulate. 24:17 You could just say, well, the disadvantage of having large blocks on L1 was that the blockchain became more expensive. 24:25 But with this, there is not going to be any like one thing. 24:28 Yeah. What do you think, Paul, about what Satoshi planned to do with the block size, about incrementally increasing the size by the month, coming the month? 24:49 Well, I think he I think he had changed his mind. 24:54 I think Satoshi started as a large blocker and then he changed his mind to being a small blocker. 24:58 And then he I think he left the project with a small block. 25:03 So but it's very hard to say. Anyway, do you think I should go back to reading this? 25:09 Yeah. 25:12 OK. So so, yeah, he has this pointless 4.11. 25:21 It doesn't make any sense at all for him to say it includes, you know, so we'll just move on to the next part. 25:30 Part five, which is he talks about Blind Merged Mining. 25:34 Now, an important thing to keep in mind about. Part five, it's true that we wanted to hear all about his problems with Drivechain, but it kind of doesn't make any sense for anyone to criticize 301 because Blind Merged Mining, Blind Merged Mining already exists. 25:51 And Ruben Thompson and Supertestnet and other people have implemented various ways of emulating it. 25:57 And they they've already implemented those. They already play around with those. 26:00 We already have even more ways of emulating it. 26:03 So the BIP301 train has left the station and the whole thing is kind of. 26:08 So it's true. It's fair for him to comment on it, but it's very pointless. 26:12 You would think, why would he focus on any energy on this? 26:15 Because it already exists. Regular vanilla, vanilla merge mining has been in existence for a long time. 26:23 It's been used by Satoshi. Blah, blah, blah. 26:27 So so he has two paragraphs kind of. 26:31 Introducing the idea, then he says he has a remarkable paragraph, which, again, like I just don't understand, like I don't understand anyone is persuaded by this. 26:42 I just think it's so funny. Actually, some of the parts of it are funny. 26:47 OK, this is what it says. BIP301 doesn't actually specify in detail how a blind mind chain is meant to actually form a consensus. 26:55 OK, I'm going to stop right there after that. What first sentence? 26:59 Because it makes no sense at all. Like he doesn't understand the basics of the idea at all. 27:05 Like how the blind mind change is actually the form of consensus. 27:09 The sidechains can be written by anyone and they can do whatever the person wants, including never find a consensus or. 27:19 Or just do exactly what vanilla merge mining would have done in that scenario or do something else. 27:24 We have no ability to police what people do with the sidechain. 27:30 So it doesn't even know like what he's referring to there. The sidechains, you know, block size limit of the sidechain or whether or not it has ZK proofs. 27:39 Like, it's very bizarre that he would think that the sidechains consensus on L2. 27:46 Why would that be in the BIP301 specification, which is something that only happens on an L1? 27:52 Like, it's just very bizarre to me. It's kind of rudimentary. But anyway, that's sentence number one. 27:59 The specific rules would be part of the blind mind change consensus, not Bitcoin itself. True. 28:03 Now, but then he says, however, it's notable that for the most obvious and efficient way, he's going to use this word obvious a lot. 28:12 But the most obvious and efficient way of implementing those rules, we have 301 has a serious cryptographic flaw, which we will discuss separately. 28:19 So what he means is that he's going to invent a way that he's going to say is the obvious and efficient way, which is not the way that we use. 28:26 It's not the way that we use in our code. And it's also a complete misunderstanding of the difference between line merge mining and vanilla merge mining. 28:35 But Peter is going to invent a fake way that only he has come up with, because basically, Peter comes from, he remembers something that happened in Namecoin like 10 years ago. 28:48 And he's too lazy to look into any of this stuff himself. So he is going to use what he remembered happening in Namecoin, even though that was vanilla merge mining, not line merge mining. 28:59 He's going to invent his own fake way. He's going to label it the most obvious. He's going to invent a fake way. It has a serious cryptographic flaw. 29:06 And then he's going to he's going to say it's the most obvious and efficient way, which is why he brings it up. 29:13 So he's about to invent in 5.1. He invents a fake way. That's not what we do. And he says it has a serious cryptographic flaw. 29:21 But it's his flaw, not mine. So whatever. So we'll get to that two paragraphs from now. 29:26 But then he says, with respect to Bitcoin, you can think of BIP301 as a mechanism where mining a special transaction requires a miner to also have an upper return, blah, blah, blah. 29:35 Since only one can be included, it's an auction. So then he gets in. Now he's going to get into this equivocation attack. 29:42 As per BIP301, he gives a description of BIP301. And then he says, an obvious, this is the obvious problem with this design is that it's subject to equivocation attacks. 29:54 The obvious and efficient implementation of a merge mine chain is to use an SPV proof to the coinbase transaction to prove that a block has been blind merge mined. 30:06 Now, the only thing that's obvious, though, is that Peter doesn't understand the difference between merge mining vanilla and the L2. 30:14 Because since every L2 requires an L1 just to exist, there's no need to have an SPV proof. You have the entire L1 chain. 30:25 So it's funny, again, that he says something's obvious when in reality he's just mixing up. 30:31 I don't know if this is easy for people in the audience to understand, but I find it kind of funny. 30:36 Anyway, he says, since the operaturing format doesn't commit to which chain is being blind merge mined, a miner could in fact include multiple conflicting operaterm transactions at the same block height. 30:48 This is similar to the double proof problem that Namecoin solved back in 2011. 30:53 So again, what's happening here is Peter remembers something from 2011. 30:58 He rubs his hand together and he thinks, oh, this is going to be great. I'm going to bring this up. 31:05 He has absolutely no idea that it doesn't apply at all. 31:08 And he's going to try to say, oh, as if we're not aware of a solution that is so old that it dates back to 2011. 31:17 And it's embarrassing, honestly. I'm embarrassed on his behalf because the idea... 31:22 OK, let me reread the sentence. 31:25 Since the operaturing format doesn't commit to which chain is being blind merge mined... 31:33 Yeah, but the sidechain itself knows which chain it is. 31:37 See, it's so obvious it can barely even be described, honestly. 31:40 The sidechain already knows which sidechain it is, and it's going to need its block to be a block that follows all the block validity rules. 31:48 So I think the only way of explaining this in a way that anyone else has a chance of understanding would be to try to explain this whole Namecoin thing slightly. 31:55 Which is Namecoin has the ability to exist... 32:00 It was possible in Namecoin to have an L1 Bitcoin block that contained multiple Namecoin headers. 32:08 And so what Peter is saying, if that's possible, then someone can... 32:14 Then on L2, they could draw a little bit of line, a connecting thread to 1, 2, 3, 4, 5, 6, multiple of these. 32:24 And then they can find multiple L2 blocks for every L1 block. 32:28 But the whole thing is just so completely absurd. 32:32 First of all, in 3.0.1, the blocks are found at the same time. 32:38 An L1 and L2 block are always found at the same time. 32:40 And there's no way of finding an L2 block any other way. 32:43 And the L2 always has a fully validating L1 node. 32:47 So the L1 node can always just use the first one it sees or something else. 32:53 But the bigger problem is it doesn't make any difference because the sidechain can only collect its fees. 33:00 And so there's no point in finding multiple blocks. 33:03 It's the same 10-minute period for each thing. 33:06 So it's terrible. 33:07 But I'm not sure if it's easy for people in the audience to understand. 33:11 But trust me, it doesn't make any sense. 33:15 There's no sense in which a miner could include multiple conflicting upper-term transactions at the same block height. 33:23 But that doesn't have any effect on anything. 33:27 It just wastes L1 block space. 33:29 It does nothing. 33:30 There's no sense in which the L2 can be tricked into not seeing something on L1 because the L2 sees everything on L1. 33:37 The fact that Peter doesn't know that is shocking because the difference between L1 and L2 is completely prerequisite for understanding this idea. 33:48 And then he says, okay, an obvious solution would be to tag the upper-term with some kind of merge mine chain identifier. 33:53 We call that nsidechain. 33:55 And we do that later where it is important. 33:58 But we don't do that here because it's not important. 34:01 And then he says a strict consensus rule in the blind merge chain with the first matching tag wins. 34:06 But you see, that's the whole point. 34:07 The L2 already knows what sidechain number it is, and it's already only going to do that. 34:12 So I don't understand why would Peter invent this fake thing that's not real, then criticize it and say it's a serious cryptographic flaw, then at the end say, well, it could be easily fixed. 34:27 I mean, it's a farce. 34:30 We already have code that works that does it. 34:35 So it's ridiculous. 34:37 I mean, if he's saying it's not worth it to continue to talk about it. 34:41 Reorgs and validating coins. 34:45 5.2. 34:47 The blind merge mile, we have a zero up on the stage. 34:49 Hello. 34:50 Welcome to the stage. 34:51 Feel free to just shout out. 34:52 I think it might be a little too boring if I just keep rambling. 34:56 Is this any good? 34:57 Do you like this or no? 35:03 All right. 35:04 The strong silent type. 35:10 We'll get back to him later. 35:12 5.2. 35:13 The blind merge mine request is the following format. 35:16 Blah, blah, blah. 35:17 See, the inside chain is there. 35:20 The last field is designed to commit to the previous block header, ensuring that a blind merge mine request transaction is only valid in a specific block. 35:28 Correct. 35:29 This directly conflicts with an important principle of Bitcoin consensus design. 35:33 Reorgs should not invalidate transactions. 35:37 For example, this is why Coinbase outputs are only spendable after 100 blocks and why we have not and will not implement consensus level transaction expiry. 35:48 Now, the irony with this is that moments after this post was made, we are now literally encountered a lightning bug that has caused people to basically admit that an op code with the literal name op expire is not only going to be done, but is crucial to the survival of the lightning network. 36:09 So that's just one irony. 36:12 But it's true that it may be a principle. 36:16 It's sort of a desirable thing because it makes lots of different caching easier, but there's no sense in which this is a requirement. 36:23 So the idea is, again, I'll remind you, reorgs should not invalidate transactions. 36:29 But it should be quite obvious to anyone with intermediate level understanding that a reorg could lead to a double spend and a double spend would lead to the invalidation of every transaction that depended on the double spend, whichever side got kicked out. 36:46 So it's absolutely possible that reorgs can and do invalidate transactions. 36:54 It's true that it's frustrating for the software when this happens, and we built a special cache. 37:02 It did take a little bit of engineering to build a special cache to track these particular transactions. 37:08 But these are special transactions anyway because only one – it's not just reorgs invalidating coins. 37:14 This is a case where these are all bids, and only one bid is valid. 37:19 So everyone's broadcasting a transaction on L1, like they broadcast 200 transactions or 2,000. 37:26 Only one of those is going to be valid, and the rest will have to be invalidated and then purged and then abandoned. 37:34 There's this concept of abandoning a transaction in a wallet, which you may be familiar with if you have more advanced Bitcoin knowledge. 37:42 So that was already a tricky thing to deal with. 37:46 They're already only valid for exactly one block, so they're fill or kill. 37:51 But it's true that that is a little bit of a careful thing, but it's absolutely 100% false to say that reorgs can never invalidate transactions. 38:03 Of course, any double spend would do. 38:06 It's just the idea that it would be relevant enough to even be a critique of the idea. 38:14 It just says, basically, this is an unusual type of thing. 38:18 But it's very easy to solve with just a little cache. 38:26 So it's certainly not anything where it would be like, oh, an unsolvable problem because, again, reorgs already invalidate transactions. 38:36 And then he has, again, a way to fix it. 38:38 He says this is a way to fix it. 38:39 I think he knows for a while that his way of fixing it would require a weird prep transaction, and there would be no change output in the blind merge mine request. 38:53 People could do this, or they could not do it. 38:55 It doesn't really make any difference. 38:57 I think that it makes no difference. 39:01 That's the point. 39:02 That's his point at the end of this. 39:04 He says, oh, here's this problem, but also it doesn't matter. 39:06 So, I mean, I don't know. 39:09 I guess one of those two was the serious cryptographic flaw, even though neither are flawed. 39:19 And they're just things that it's just not true that there's a flaw at all. 39:25 Then here's part six. 39:28 I don't know why this part is in here, but here it is. 39:31 The lack of BIP301 and BIP300 interaction. 39:36 A notable omission in 301 is that BIP301 does not interact with BIP300. 39:39 I know. 39:40 That's why I separated them to make it easier to read, since they are independent. 39:44 There is no mechanism to pay miners to act or enact a specific thing. 39:49 The only way that coins could be withdrawn is by the direct participation, blah, blah, blah. 39:54 BIP301 clearly states in the motivation section that is intended to fix drawbacks of traditional merge mining, including the fact that in traditional merge mining, miners must run a full node of the other chain, thus they must run non-bitcoin software, which may be buggy. 40:06 Then he says, but this obviously conflicts with the requirement that miners either run Drivechain nodes or trust others to run them for them. 40:15 See, but or to safely allow withdrawals to happen. 40:18 If miners are not doing that, either coins become stuck or they become subject to theft. 40:23 So again, Peter throws this obvious word around, even though it was. 40:28 Let's let's revisit the sentence. 40:30 He says, but this obviously conflicts with the requirement that miners either run Drivechain full nodes, which is not a requirement. 40:35 So that's why it doesn't it doesn't conflict or trust others to run them for them. 40:41 So now you see that he has actually contradicted himself. 40:46 Because what I'm saying is BIP301 allows miners to shirk running a node. 40:52 And he's saying, well, this obviously conflicts with blank. 40:55 That's not important or that they trust others to run a node for them. 40:59 But there is no such thing. 41:02 There is no the requirement that miners trust others to run a node has nothing to do with BIP301. 41:07 I don't know if that's clear or not. 41:09 Hopefully it is. He wants it both ways. 41:12 He says, BIP301, Paul, I'm saying, I, Paul, I'm saying BIP301 means miners don't need to run a sidechain node. 41:20 Then Peter is saying, hey, listen, they either have to run a node or trust someone else to run them for them. 41:24 But if they trust someone else to run a node for them, then they aren't running them. 41:29 So Peter just says, Peter is basically saying one person on planet Earth somewhere, at least one person is running a full node. 41:38 Therefore, it contradicts what Paul is saying in 301 that miners don't need to run a full node if they don't want to. 41:46 Because somewhere someone is running a node, which is absurd. 41:49 Someone who is either a miner or a miner's friend or someone else is running a node. 41:54 Now he says, frankly, the really crazy thing is he says, because I just printed this out and re-read it before this space. 42:04 He says, now, frankly, when I first learned about Drivechains, I had assumed that the blind merge mine mechanism also allowed for blind withdrawal proposals of some kind, given the decentralization claims around drivechains. 42:13 I was shocked. He said, this is him. I was shocked. 42:16 And I learned otherwise. The proposal simply punts on this obvious issue with no solution. 42:23 Now, I got to skip. I know I'm doing it in order, but I want to just skip ahead slightly because at some point he says. 42:29 OK, right before 7.3, I'll go right back to where I was before. 42:34 But he says he then he's completely contradicts himself again, saying, OK, he's shocked that there's no thing. 42:42 And the proposal punts on this obvious problem. 42:46 First of all, there is no problem because BIP300 works and BIP301 works, so they each work separately. 42:52 And whether they're combined or not makes absolutely no difference. 42:57 And there's no way there's no possible way of forcing a sidechain to use. 43:04 301 or not, since we don't know what it's doing. 43:07 So the whole thing is a huge misunderstanding again, if he just doesn't understand, like. 43:13 Really like anything behind the philosophy of the idea, because there's no way that you could force someone to use 301. 43:22 But anyway, he says this and he says he is shocked that there's no way of using the blind mechanism to do the withdrawals. 43:31 But then later on, he's going to say, I suspect the reason for this omission. 43:38 Is that the authors of Drivechains attempted to make blind withdrawal voting. 43:42 Not true. And failed due to it being incompatible with rational game theory. 43:48 If you can pay money to steal coins, obviously, someone will do exactly that. 43:51 Requiring a majority of hash power to vote in favor of coin withdrawal obscures this problem. 43:56 So it's just kind of funny because he says he's shocked that there's no way of combining them. 44:02 And then later on, later on at a different section, he says, well, obviously, it's a conflict with rational game theory that they could never be combined. 44:13 So he seems to be shocked by both. And but, you know, it doesn't really make any difference. 44:18 This is the whole section. Seven is really the only important part. 44:23 Per se, because this is analysis, how can Drivechains affect Bitcoin? 44:30 The rest of it, you know. Is meaningless, mostly, but. 44:36 So section seven, as we're about to understand, there is absolutely nothing whatsoever in all of section seven about anything other than Bitcoin mining. 44:47 So you could retitle it and say analysis, how can Drivechains affect Bitcoin mining? 44:52 He actually admits. I don't know if he admits it like like explicitly, but he admits that the Drivechain idea does not affect your full node at all, nor how expensive it is for you to run a full node. 45:05 Nor like what your full node won't start doing new things and it won't stop doing old things. 45:13 And just as your full node is independent of what the network difficulty is at any time. 45:21 It's still work, your full node works, no matter what the network difficulty is, your full node also work, no matter how many. 45:28 That work the same, no matter how many L2 Drivechains there are. 45:33 So to me, that's like the entire thing. 45:36 So he kind of admits that and he just focuses on how can Drivechains affect Bitcoin mining, which is fine because we Bitcoiners, we all share the same. 45:44 Well, as Francis Puyo said to me once, we all share the same brand and we all share the same mining, miners or mining process. 45:56 So that's something I suppose. 45:59 Anyway, I'll go back to reading it now. This is the only important part, section seven anyway. 46:04 Now that we've covered how the Drivechain proposal works, along with some more obvious flaws, again, what he considers to be obvious flaws are just mistakes that he has made or things where he and or things where he contradicts himself later. 46:15 But we can analyze how Drivechains affect Bitcoin. 46:19 Let's start with our goals. 46:22 I even thought this sentence was funny, honestly, that our goals like, you know, that remember that meme with those like Bugs Bunny and there's like a communist flag behind him. 46:30 And it's like, it's like your girlfriend asked you if you want a sandwich or something. 46:37 And then you ask her if she wants a sandwich. She says no. And then you buy the sandwich. 46:41 And then it's like our sandwich, you know. 46:44 So let's start with our goals. 46:47 Communist goal meme. 46:50 And then he says we want Bitcoin to be useful, blah, blah, blah, secure. 46:57 Bitcoin must be useful and decentralized. 46:59 We do not want any single group entity or group of entities. 47:03 OK, so this is very revealing for Peter Todd, because, again, he misses the entire point of sidechains. 47:10 The whole point is that each of these three things, useful, secure, decentralized. 47:15 It cannot be one size fits all. 47:20 That is really basic. 47:23 So he says we want Bitcoin to be useful, secure, decentralized. 47:25 But, you know, some people find Monero to be more useful than Bitcoin because they find ring signatures to be more private than Bitcoin. 47:32 And then as for secure, some people find Bitcoin, you know, many people find BTC to be more secure than Bitcoin SV or they find BTC to be more secure than whatever, Feathercoin or something. 47:45 Some people find SPV security to be enough. Some people use a custodial wallet. Some people use Breeze. Some people use custodial Lightning, use Wallet of Satoshi. 47:57 So useful, secure, decentralized. You just got to think of these like volume knobs or something where individual people are going to be turning them to different settings. 48:06 Useful, secure, decentralized. So the whole problem of sidechains is how do we let each person change the volume knob to whatever they want it to be? 48:16 They choose how useful, secure, decentralized they want to be and someone else picks something different. 48:21 So just by framing it this way, he misses the point completely because he's saying it should be a certain amount useful, a certain amount secure, a certain amount decentralized. 48:32 But it can't not for everyone because people will disagree, but he kind of goes from bad to worse when he says decentralized. 48:40 He says in achieving goal number two, we do not trust any single entity or group of entities. We assume any single entity or group of entities may attack Bitcoin. 48:48 So his metric for decentralization is how many people we need to trust, like a quantity of people, a quantity of entities. 48:57 And I just think it's amazing how bad this definition is. 49:01 Decentralization means that, you know, I guess you could rephrase if you weren't trying to salvage his definition. 49:09 The key to understanding Bitcoin and decentralization is to imagine the Liberty Reserve e-gold collapse scenario where there was this bank, Liberty Reserve, that was like a private libertarian bank, but it had only the one server somewhere. 49:29 And so it was seized by the government and closed down very easily. 49:32 However, something like BitTorrent survives because there's no single point of failure. 49:38 So I guess you could rewrite, you could try to salvage what he was saying. 49:43 We do not trust any single entity. 49:46 Instead, we think, right, so he's saying there's no single point of failure. 49:51 That would be hard to salvage this, but it's not really about the quantity of entities. 49:55 You know, decentralization is about how easily we recover from the failure of one node, basically. 50:03 That's how I think. 50:05 But so now he's going to say the last goal, I'm going to continue to quote him. 50:10 The last goal is generating the bulk of the discussion on drivechains. 50:13 Do they encourage centralization of Bitcoin mining? 50:16 Now, again, centralization doesn't really apply to Bitcoin mining. 50:25 We'll see actually what he means. 50:27 I'll go on because it'll be clear that when I talk about centralization and decentralization, I'm talking about the cost of running a full node. 50:36 And I have been able to convince most people that this is the appropriate definition. 50:41 It's the cost of the cell dividing. 50:42 It's the cost of starting up a new node. 50:45 The easier it is to start up nodes, the more nodes there will be. 50:48 The less problematic it will be if 99% of the nodes go offline because we can just turn them back on. 50:55 It'll be very easy for you to flee the country, get a laptop, turn the node back on. 51:00 So it's the cost of running the node. 51:02 That's the key thing. 51:04 Mining centralization, it seems as though he's now going to contradict himself again because he was talking about entities. 51:10 He was saying there can't be one mining entity. 51:13 But of course, the mining process doesn't have entities at all. 51:17 There is no signature or anything with mining. 51:20 Anyone can join or leave at any time. 51:22 You have no idea if everyone is actually the same person or not. 51:25 It's possible for 100% of the current mining stock to get hit by a meteor and then new people can mine. 51:34 And then you could later be revealed that those people are actually the same person. 51:37 So there is no sense in which this whole group of entities thing doesn't apply to mining at all. 51:43 But now we'll get into what does Peter actually mean. 51:47 And we're going to read these two paragraphs to you. 51:50 But it's clear that he's referring to something like geographic, geometric decentralization. 51:55 He literally cares about the physical distance the miners are from each other, which I think is just completely absurd. 52:02 But we'll read it now. 52:03 Bitcoin mining comprises of both hashing and block verification and production. 52:08 The economics of Bitcoin mining have both economies and diseconomies of scale. 52:13 These economies and diseconomies of scale act as centralizing and decentralizing pressures. 52:19 So, I'm sorry, it's actually the next paragraph where he gets into this geographic thing. 52:27 This first thing, he's talking about diseconomies of scale. 52:29 So he's saying, like, it doesn't actually even make any sense. 52:34 Because if in a world where you have high economies of scale, that can mean that many entities, 52:45 like a corporation is something that has many entities, has many shareholders. 52:49 It could have many widespread ownership. 52:54 But it could have enormous, it could be like, you know, 100,000 people each on one 100,000th of like a big power plant. 53:03 Or something, a big hydroelectric dam. 53:06 Hydroelectric dam being in one place. 53:10 And hydroelectric dam has economies of scale, and then it has huge diseconomies of scale. 53:18 Like at first, it costs nothing to produce a little bit more electricity. 53:20 But once you use 100% of the hydroelectric power, then the economies of scale, at that point, they flip. 53:31 Now it's very, very difficult to get any more power out of that thing. 53:35 So even in the context of one specific example, whether or not something has economies of scale or diseconomies of scale depends on the scale. 53:45 This is basic of economies, this is a basic concept of economies of scale. 53:51 Anyway, let me read this next thing, because it'll get back to, I think it will make more sense. 53:55 The primary diseconomy of scale, this is Peter Todd, is the fact that Bitcoin hashing consumes energy and produces heat. 54:02 So he's talking, this is where he's talking about the geographic distribution. 54:06 So he's not talking about entities anymore, because he's saying heat dispersion has like a physics quality where it's easier to do if you're further away. 54:15 You're further away in Euclidean distance. 54:18 So you could have like five different hydroelectric plants, and they could all be owned by the same entity, but they could be geographically dispersed. 54:30 So it just shows, I think, how extremely sloppy the thinking is. 54:36 It's just like so tiresome, because like imagine if you had, if he's saying the heat is what's important, you could have like a coal power plant, 54:43 and then you would want to build a coal plant like 100 feet away so that it's not the warmth of the first coal power plant is not interfering with the second one. 54:54 Like, again, that's a sense in which moving it away by 50 feet makes a big difference. 55:01 But then whether or not it's 100 feet or 200 feet stops making any difference. 55:05 And if every single thing is inside of like, if it's all in the state of Kansas, and it's surrounded by the US military, it's controlled by one entity, even though it's geographically distributed within Kansas. 55:20 So does he mean that literally mining decentralization would increase if we built a power plant like in the middle of the Pacific Ocean? 55:28 Or does he mean that it matters how many entities control each miner, in which case it would if something switched from being a sole enterprise to a partnership or a corporation, it would start changing again. 55:41 In reality, none of these things make any difference at all. But I'm just trying to give you an idea of what Peter thinks is important. 55:47 None of these things make any difference in the slightest. 55:50 So it doesn't matter the economies and diseconomies of scale don't matter. 55:54 They can't matter, in fact, because the only thing that matters is the scale that maximizes efficiency. 56:02 That is what will be done. 56:05 That is what will be done, and it's certainly not going to be something with zero fixed costs. 56:11 So the fixed costs are always going to be somewhere. 56:13 You know what I mean? If you're a miner, you're going to pay a certain amount up front and then a certain amount every month. 56:17 There's no planet in which you're going to get zero for that fixed cost. 56:23 It's absurd. Same if you want to start a pool. 56:26 It's just, I don't know, I just wonder if you're in the audience and you really read Peter's thing and you think, oh, this is good. 56:33 Please come up and just say, what about it did you think was good? 56:37 So I'm going to keep reading. 56:39 He says, for example, flare gas and stranded surplus renewable energy are some of the cheapest sources of energy available. 56:45 Obviously, opportunities to collect flare gas and renewable energy are inherently spread across the globe. 56:53 So again, he's talking about the globe. 56:55 This is really important to him. 56:57 This is a diseconomy of scale because the maximum size of these operations is limited by the available energy in any one location. 57:03 So now by diseconomy of scale, he's going full tilt into this geographic thing. 57:09 An oil well that generates 100 kilowatt of free waste flare gas in a given location simply can't generate more free waste gas at any reasonable price. 57:18 Similarly, some hashing operations make use of their waste heat, e.g. to heat buildings. 57:24 The amount of waste heat in any one location can make use of is inherently limited. 57:28 Again, this acts as a diseconomy of scale. 57:31 A house that can be sufficiently heated with 50 kilowatt hash power simply has no more use for more hash power in that location. 57:38 Grid stabilization is another example. 57:42 So again, Peter is giving all these examples. 57:44 He's saying, look at me, I know all these great examples. 57:45 I'll just read it, though, so that it seems like I'm not skipping anything. 57:51 Grid stabilization is another example of a diseconomy of scale. 57:55 Some Bitcoin hashing operations have been able to get credits on their electricity bills for providing the ability to quickly reduce their power usage. 58:02 Obviously, the maximum amount of grid stabilization needed in any one geographic area is limited, creating a diseconomy of scale. 58:09 So he's got all his paragraphs about that. 58:11 Now he says the primary economies of scale are in mining pools. 58:15 They exist because of variance. 58:17 Now notice he has immediately abandoned his previous criterion of geographics. 58:23 Because the mining pool, it doesn't matter where it is. 58:26 If you VPN into it or you could connect to it from far away, near, far, just like that Titanic song. 58:33 It doesn't matter. 58:35 It doesn't matter. 58:37 Because the mining pool, it doesn't have any. 58:40 We'll just read the paragraph. 58:42 It's quite a tiresome paragraph, but we're going to read it. 58:44 Here we go. 58:46 The primary economies of scale are in mining pools. 58:49 They exist because of variance. 58:51 With just 144 Bitcoin blocks generated per day, the average Bitcoin hashing operation, 58:55 solo mining, you would need to wait months or even years between payments. 58:58 He's 100% correct. 59:00 Secondly, the operating costs of a mining pool are mostly fixed. 59:04 The bandwidth and compute power needed per hashing operation is almost zero. 59:08 I don't really see it, but it doesn't matter. 59:12 If the overhead costs of operating the necessary nodes is nontrivial, 59:16 there's significant savings for a large pool compared to a small pool 59:20 as that overhead is spread over more clients. 59:24 Thus, we see that while Bitcoin hashing is quite decentralized 59:27 with a very large number of individual hashing operations in existence, 59:30 the number of mining pools is much more limited. 59:32 As of the time of writing, a majority of hash power is spread over just two pools. 59:37 Now we see that he has split this problem in two. 59:42 He says, forget about hashing. 59:44 I know I wrote five or six paragraphs about it, but just forget about it. 59:47 The important thing now is the quantity of pools. 59:50 He says, while undesirable. 59:54 When he says undesirable, he means the hash power is spread over just two pools. 59:58 So to him, it's the quantity of pools is the metric 1:00:03 for this mining centralization that Drivechain is going to supposedly affect. 1:00:08 While undesirable, this situation isn't fatal as, in theory, 1:00:12 bad behavior can cause hashing operators to quickly switch from one pool to another. 1:00:16 So now he's correctly admitting that it actually doesn't matter how many pools there are. 1:00:20 What matters is how easy it is to switch from a pool that is making a mistake. 1:00:24 I see that Moonsettler is here, and we discussed this topic in detail. 1:00:28 Back when I was in Europe, and the space is there. 1:00:31 So again, he fronts this criterion. 1:00:34 There's only two pools, and then he says, actually, it doesn't matter. 1:00:37 Then he says, also, there's Stratum V2, P2 pool, Braid pool. 1:00:41 He says, these decentralized block production, aka mining. 1:00:46 So again, he's saying that it's the quantity of block producers. 1:00:50 That is how decentralized mining is. 1:00:53 So what he's saying is, if we have 10 million different people making blocks, 1:00:56 even if they all make the same block, 1:00:59 10 million different people each making a block, 1:01:02 and then that number goes up from 10 million to 100 million, 1:01:06 and then that number goes up from 100 million to 50 million, 1:01:11 like in Monday, Tuesday, Wednesday. 1:01:14 According to Peter, Bitcoin has become suddenly more decentralized, 1:01:19 and then suddenly collapsed and become less decentralized. 1:01:21 Even if all these millions of people are all making the exact same block, 1:01:27 because no one has ever said that there'll be a dispute 1:01:31 among these people over which block to make, 1:01:33 since every single person will just be trying to include 1:01:36 as many high fee-paying transactions as possible. 1:01:39 So you can see that it's kind of an absurd criterion, 1:01:43 but we can just roll with it if you want. 1:01:45 The quantity of block producers does not matter. 1:01:48 The only thing that matters is if transactions will be censored 1:01:52 or blocks will be re-org'd. 1:01:54 It doesn't actually matter how many block producers there are 1:01:58 or if they join a pool or not. 1:02:00 None of that makes any difference. 1:02:02 None of that has ever mattered, and it never will. 1:02:04 And as soon as the incident does start to matter, 1:02:06 people will just abandon that pool. 1:02:08 So whatever, and he says, well, we don't have space to go into details. 1:02:12 And then he says, the important thing in the context of Drivechains 1:02:16 is that they, these technologies, I think he's talking about 1:02:19 Stratum V2, P2Pool, Braidpool. 1:02:22 Stratum V2, P2Pool, and Braidpool, 1:02:24 they all require hashing operations to produce blocks themselves. 1:02:28 I think he means hashing operators. 1:02:30 By hashing operations, I think he means a warehouse full of ASICs. 1:02:35 So it's kind of a hard sentence to parse, 1:02:39 but it means something like, 1:02:41 while we don't have space to go into Stratum V2, P2Pool, 1:02:46 those things require that the end miner, 1:02:52 the person with the ASIC, run a full node. 1:02:58 So that's what he's saying. 1:03:00 Now, this is where we get into the meat of the philosophical disagreement, maybe, 1:03:07 which is 7.2, which is related to that last sentence. 1:03:11 Do miners need to run Drivechain nodes? 1:03:13 He says yes, and then he moves on to the next paragraph. 1:03:17 He is wrong about this, though, 1:03:19 and it's a pretty big deal because this is the whole dispute. 1:03:23 It actually doesn't matter if they need to run nodes or not, 1:03:26 but his thinking behind it is the key to unraveling the dispute. 1:03:33 And since Drivechain is probably the only way for us to scale to 8 billion people 1:03:38 and obtain Zcash-level privacy in time before we get regulatory captured, 1:03:42 which is already happening, 1:03:43 and have extensibility and have just new BIPs come out in less than five years, 1:03:51 it's kind of a big deal whether or not this dispute is resolved the right way. 1:03:59 Now, I guess what I should do is I'll read the next two paragraphs 1:04:03 and then try to explain this. 1:04:05 So, do miners need to run Drivechain nodes? 1:04:08 Yes. The reason why is simple. 1:04:10 If Drivechains are to work correctly, coin withdrawal needs to work. 1:04:13 It requires that a majority of hash power directly vote on withdrawal proposals 1:04:17 in the only way—this is not true, by the way— 1:04:19 the only way to validate a withdrawal proposal for a given Drivechain 1:04:22 is to run a node for that drivechain. 1:04:24 That's not true. 1:04:26 That would be the paranoid way that maximizes certainty, 1:04:28 but it's not necessarily the efficient way, which is the whole point, 1:04:31 and I'll get back to that in a second. 1:04:33 Back to Peter Todd, though. 1:04:35 Since there could be dozens or even hundreds of Drivechains, 1:04:38 this is an obvious economy of scale 1:04:40 that will significantly centralize mining. 1:04:43 Again, the Peter Todd view—I'll go back to his comments in a second— 1:04:47 but the Peter Todd view is 1:04:49 we need anyone to be able to run a new mining pool, 1:04:53 which I agree with, but he says we need something like a P2 pool. 1:04:59 Each individual hasher must run a full node, 1:05:02 and if these costs rise, then the little guy will get pushed out. 1:05:08 As we're going to see, though, none of that is true. 1:05:12 But that's his point of view. 1:05:14 I mean, as near as I can understand it, 1:05:16 honestly, I think it's kind of confusing, 1:05:18 but I think that's what his point of view is. 1:05:20 So let me repeat now. 1:05:22 Since there could be dozens or even hundreds of Drivechains, 1:05:24 this is an obvious economy of scale 1:05:26 that will significantly centralize mining. 1:05:28 Every one of these Drivechains will have associated software 1:05:30 that needs installation, maintenance, and upgrades. 1:05:33 Those Drivechain nodes will require bandwidth, CPU time, and storage space. 1:05:37 Well, now we get to— 1:05:39 so this is difficult for me 1:05:41 because it's super, super obvious in my head, 1:05:44 and I'm not sure if I'm going to be able to convey it pretty easily, 1:05:47 but this is the misunderstanding that Peter has, 1:05:51 and it's also a contradiction that he has. 1:05:54 So I'll lay out the contradiction first 1:05:56 because maybe that's easier to understand. 1:05:58 Peter is saying that the miners must— 1:06:01 miners are led— 1:06:03 there's a carrot and a stick. 1:06:05 Miners are greedily led. 1:06:07 to run the Drivechains and collect their fees. 1:06:12 Because, of course, if that doesn't happen, then nothing has happened. 1:06:14 Everything is a moot point. 1:06:16 So the Drivechain—miners are being enticed. 1:06:19 They must chase the revenue of the fees. 1:06:22 But what Peter is saying, they also must pay the cost. 1:06:26 But no, that's not the case. 1:06:28 What miners have to do is maximize their profits. 1:06:30 So they're going to shirk every cost, 1:06:32 they're not going to pay any cost, 1:06:34 and they are going to chase every revenue. 1:06:37 So I'm just going to repeat this a couple times, 1:06:39 and I don't know, maybe shoot a very confused face in the audience 1:06:42 or come up or something if you wish. 1:06:44 But come up on stage if it doesn't make any sense. 1:06:48 But every single user must run a full node. 1:06:53 We're going to define user that way. 1:06:55 So if you use the L2, you need an L2 node and an L1 node. 1:06:58 If you're only an L1 user, you need an L1 node. 1:07:01 However, miners do not need any node 1:07:04 of any kind of L1 or L2. 1:07:08 They can specialize and only do part of the process. 1:07:11 So just as it's the case that, you know, 1:07:15 the person manufacturing the ASIC 1:07:17 isn't necessarily running a full node either, 1:07:20 but they're part of the supply chain. 1:07:22 So the question is, what bad thing will happen to you 1:07:25 if you don't run a full node? 1:07:27 And the answer is you lose certainty 1:07:29 on the state of the blockchain. 1:07:31 But this is something that only affects you. 1:07:34 It's ironically, Peter Todd was one of the first people 1:07:36 to say back in the day that your full node only protects you. 1:07:40 It doesn't do anything else for anyone. 1:07:42 And that's not quite true, of course, 1:07:44 because your full node can also seed 1:07:46 a new full node for someone else. 1:07:49 But in general, what the full node is doing 1:07:52 is it's protecting you. 1:07:54 The full node is like your armor. 1:07:56 And the miners are people who must ruthlessly 1:08:00 maximize their profits. 1:08:02 So if running the full node, 1:08:05 if wearing the armor is worth it, 1:08:07 then they will do it all by themselves. 1:08:10 And if it's not worth it, then they won't do it. 1:08:13 But this is what Peter Todd is trying to tie 1:08:15 all this to a block size increase logic 1:08:17 because he doesn't understand that 1:08:19 miners don't need to run a full node. 1:08:22 They can just partner with any other full node. 1:08:24 Someone out there needs to run it, 1:08:26 but not the miners themselves. 1:08:28 Because again, he knows that he's already surrendered 1:08:30 all the important territory 1:08:32 by saying that it doesn't affect the L1 protocol. 1:08:36 And so he just has to hope 1:08:38 somehow it could affect something 1:08:40 that someone on L1 might care about, 1:08:42 which is the miners. 1:08:44 But he can't have it both ways. 1:08:46 It's either required that miners chase the fees, 1:08:49 chase the fee revenue, 1:08:51 or it's required that they pay the full node. 1:08:53 In that case, they must maximize profits, 1:08:57 which is the case. 1:08:58 So they must chase the revenue, 1:09:00 and also they must not run, 1:09:02 not pay any costs. 1:09:07 If it's the reverse, 1:09:09 where the miners are free to do as they like, 1:09:11 then it doesn't matter 1:09:13 because they'll just do whichever of those two 1:09:16 they feel like doing. 1:09:20 But maybe we could go into more detail 1:09:23 on why each thing is false. 1:09:25 So Drivechain requires that a majority of hash power 1:09:26 directly vote on withdrawal proposals. 1:09:28 The only way to validate a withdrawal proposal 1:09:30 is to run a node for that Drivechain. 1:09:32 That's not true. 1:09:35 Let's try to get to the meat. 1:09:38 The idea behind it, though, is that 1:09:43 I think the armor was maybe a decent metaphor 1:09:46 where it's like 1:09:48 the U.S. Army sends plenty of people 1:09:50 into combat. 1:09:52 Some of them get body armor 1:09:54 and some don't. 1:09:55 I remember at one point when I was in school, 1:09:57 a friend of mine's older brother 1:09:59 was in the Army 1:10:01 and he was very upset at 1:10:03 my friend was upset at John Kerry 1:10:05 in the Senate 1:10:07 had voted against some kind of body armor 1:10:10 I don't know, 1:10:12 act or something. 1:10:14 So they didn't get 1:10:16 the troops didn't get quite as much body armor 1:10:18 as they had wanted 1:10:20 or whatever that someone thought 1:10:22 that someone should want. 1:10:23 But. 1:10:25 Which is, of course, 1:10:27 you know, distressing the situation to be in. 1:10:29 But the other point is that 1:10:32 there's an efficient amount. 1:10:34 There's the difference between the efficient thing 1:10:36 and the paranoid thing. 1:10:38 The paranoid thing would be to be covered in armor 1:10:40 and you're like an Iron Man. 1:10:42 Give everyone an Iron Man suit 1:10:44 that costs $10 billion. 1:10:48 And the efficient way you could, 1:10:50 you know, if you had a loaf of bread 1:10:51 and you had to make sure it wasn't poisoned. 1:10:53 There's the efficient way 1:10:55 that has tradeoffs. 1:10:57 And then there's the paranoid way, 1:10:59 which is to obtain absolute certainty. 1:11:01 But the miners, 1:11:03 the miners must take the efficient way. 1:11:05 They can never take the paranoid way. 1:11:07 In direct contrast to users, 1:11:09 users to be a user, 1:11:11 by definition, 1:11:13 you must run a full node. 1:11:15 Otherwise, you're not a real user. 1:11:17 You are you're asking a friend. 1:11:19 You're adjacent. 1:11:21 But miners are not, 1:11:23 miners don't have to be users. 1:11:25 Miners do the efficient. 1:11:27 So like when you want a loaf of bread, 1:11:29 you usually just go to the supermarket 1:11:31 and you buy it and you just think, 1:11:33 well, you know what? 1:11:35 There's no way that, 1:11:37 you know, whatever. 1:11:39 The supermarket would go out of business 1:11:41 if the supermarket would go out of business 1:11:43 if they ever sold any poisoned bread to anyone. 1:11:47 And what are the odds that 1:11:49 out of all the poisoned bread that there might be 1:11:51 one I pick off the shelf is poisoned. 1:11:53 So in the real world, 1:11:55 we do not obtain stuff. 1:11:58 And so again, if the cost is very, very low, 1:12:01 it's a moot point. 1:12:03 It doesn't matter who's mining these blocks. 1:12:06 I mean, who's running these nodes. 1:12:08 It doesn't matter because it's cheap. 1:12:10 So it's whether or not they must or not, 1:12:12 it doesn't matter. 1:12:14 If it's expensive, 1:12:16 then they must shirk it because of the efficiency. 1:12:18 So as soon as it becomes expensive enough to matter, 1:12:19 excuse me, 1:12:21 as soon as it becomes expensive enough to matter, 1:12:24 as soon as it becomes expensive enough to matter, miners will just stop doing it. 1:12:27 But the more important thing is that the entire premise is literally absurd. 1:12:31 So we'll get to that in a second though, because I remember I took a little note on it. I don't know 1:12:35 when we'll get to it. Okay, it's near the end of this next part. So I'm not sure, but this is the 1:12:41 crucial disagreement. So if anyone in the audience understands this, then they'll get it, which is 1:12:45 that miners must do the efficient thing. And it doesn't matter. If you run a node, 1:12:54 then it doesn't matter to you if miners run a node or not. And in fact, if just enough people 1:12:59 run a node, the whole network will survive invalid blocks produced by miners very, very easily. 1:13:05 It's because we don't trust the miners. It's because Satoshi's design doesn't give the 1:13:11 miners unlimited ability to create fake blocks. It's because each block is checked by all the 1:13:18 other nodes. That is why it doesn't matter if the person who's mining a block today 1:13:25 is running a node or not. There's also a pretty obvious difference between 1:13:29 needing to run a node every single day. I'm sorry that Peter doesn't understand this. 1:13:33 There's a pretty huge difference between needing to run the node 24-7 and have it be perfect uptime 1:13:38 and have it be do everything, which is what a normal full node would do, and the sense in which 1:13:43 the three to six month withdrawal process would require them to run a full node, which is to say 1:13:50 one time, if there's ever a dispute, which could be never, but if there's ever a dispute, 1:13:56 you have three to six months to, at some point, turn the node on and have it sync for like three 1:14:02 days, look at the hash, and then shut it off. So I'm sorry that Peter doesn't understand that 1:14:07 there's like six orders of magnitude difference in those two things. But even then, it ignores the 1:14:14 more fundamental principle that the miners can obtain that hash any way they want, and because 1:14:19 it's so easy, the easier we make it to find that hash, every single sidechain node knows it. Every 1:14:24 single sidechain SPV node knows it. It's in the ribbon and the GUI. It's in every sidechain block 1:14:30 header. It only changes once every three to six months. Everyone knows what it is, and everyone 1:14:35 has an interest in it being reported accurately. No one can get away with lying about it. So all of 1:14:40 those factors combined mean that everyone will just know what this hash is, whether they run the full 1:14:47 node or not. The fact that they could become, the fact that if they run a regular full node, they 1:14:53 also know all this other information about every block being valid, etc. That's kind of not the 1:14:57 point. But even all this is missing, even an even bigger point, which I'll get to, I suppose. 1:15:03 So he says, this is where the fact that Blind Merged Mining and coin withdrawal votes are 1:15:06 unconnected is such a glaring omission. He says, Roger's mining claims to fix the mining 1:15:11 decentralization problem. The fact that withdrawal votes require direct majority 1:15:16 and blah blah blah negates this claim. So again, he really does not see how it's different 1:15:22 that needing to run a node every day, 24-7, 365, versus needing to run it in the event of a dispute 1:15:30 that will never happen, because it's so easy to find the real withdrawal hash, 1:15:35 that only in the event of a dispute, having three to six months to decide to maybe look into it, 1:15:41 maybe see if it just resolves itself, maybe see if everyone just folds, because it's such a deterrent. 1:15:47 This is, as I understand, basic deterrence. People will be deterred from lying about what 1:15:52 the withdrawal hash is, because it's so easy for everyone to know. There'll be so many people who 1:15:56 know. You'll just be destroying your own reputation, and anyone who reports it wrong will 1:16:01 just be laughed at. They won't be able to get away with it. But even if that weren't the case, 1:16:07 in the event of a dispute, you have three to six months to turn the node on and sync it. 1:16:12 It's not going to take three to six months to sync the node, so it's only going to take like 1:16:15 five days, or whatever it is. It all depends on parameters. I just don't understand why he 1:16:22 doesn't understand that. This is like an enormous difference. It's the night and day difference. 1:16:27 He just thinks, oh, the fact, aha, someone somewhere felt the desire to run a node 1:16:33 at some point in the last 20 years. They ran a node once for five days. Aha, that proves. 1:16:41 So to him, it must make no difference if over 10 years someone runs a node 0.00000001% of the time 1:16:50 versus 100% of the time. To him, there's no difference between those. 1:16:56 This doesn't make any sense. Then there's the paragraph that I got to before. Yes, hello. 1:17:00 Just to mention something about what you're talking about, and you're making a 1:17:07 very good point. Even if you don't run any node on sidechain, 1:17:15 even on L1, but on sidechain, probably there will be an explorer where you can track, 1:17:22 even if you don't run a node, you can see by the length of the time and confirmations. 1:17:29 If nobody argued or disputed anything about that withdrawal, you have the information. 1:17:37 They don't even need to run to check even once. I think it will be much easier when 1:17:47 impractical come in life. Exactly. Yes, 100%. There will be all kinds of 1:17:58 how a lot of people today, they get their news from some people who are better sources of news 1:18:02 than others. Joe Rogan experience or whatever it is, whatever your preferred thing is. 1:18:09 The problem with this is it looks like I'm dodging the issue of whether or not people 1:18:15 run full nodes, which is absolutely not the case. I think running a full node is very, 1:18:19 very important, but each individual person decides whether the... We want the full node 1:18:26 cost to be low, and they will be low, because individual, otherwise the network won't exist. 1:18:31 Each individual user is a 0% hasher. The whole node network must be cheap enough for at least 1:18:40 some people. But the running a node is very important. We want to keep the full node cost 1:18:47 down. The whole point of sidechains is to differentially move it up so that certain 1:18:53 people can order a la carte, like if they want more food. You have a cheap option, 1:18:58 do you have the soup? Everyone gets the soup at the restaurant, and then people order a la 1:19:03 carte, so they're moving it up. Someone is going to be paying this node cost, 1:19:08 and I'm saying it doesn't have to be the miners, and Peter is admitting that none of this affects 1:19:12 L1 at all, and he just has this desperate, desperate, desperate stretch to say that, 1:19:19 well, sometimes the miners might feel like they need to run these L2 1:19:22 networks, because it costs like hard drive and CPU space, which is that is itself laughable, 1:19:28 that the idea that mining on any scale today, well, we'll get to that. 1:19:36 So he's saying that, and then he's just trying desperately to tie it into like a cost that would 1:19:43 affect something, even though it does not. So as soon as it does, the miner would just say, 1:19:48 okay, no, listen, I want to collect the fees for this, but I don't want to run 1:19:54 the full node. It's extra bizarre, because these things aren't actually costs. 1:20:02 They aren't costs at all. So first of all, if they were costs, they would be very low, 1:20:07 because the full node cost must be low, and they aren't costs because miners don't need to run a 1:20:12 full node. But even if they did, let's just say the only way of getting the fees is to obtain, 1:20:20 you run your own full node. Well, then if the node costs are higher than the expected fees, 1:20:29 then you just do nothing and you just get zero. You pay no costs, you get no fee revenues. 1:20:35 It's true that other miners will then have an advantage, because they'll be getting 1:20:39 revenue minus cost, that is some positive thing. So they have an edge over you. But again, 1:20:46 well, I again, I didn't say again, but this is not, you see, none of these things are actual 1:20:51 costs at all. That's a really bizarre thing. But if the other miners have an edge over you, then 1:20:56 then you have to go down the line and say, where are all the things that could give one miner an 1:21:00 edge over another edge, another miner. But it just happens to be the case that this is something that 1:21:08 literally does not cost anything. Because you don't, they don't need to run a full node at all. 1:21:13 And if they could out, if the node was needed, they could outsource to a different node. That's 1:21:17 what 301 does, makes it trustless. So I don't know, it's just bizarre. Anyway, now we're going 1:21:25 to get this. The fact that miners need to run Drivechain nodes is particularly problematic 1:21:31 to the claims that Drivechains will scale Bitcoin. Obviously, if Drivechains supporting 1:21:35 hundreds of thousands of transactions per second catch on, miners will need to invest in thousands 1:21:40 or tens of thousands dollars worth of computing hardware and bandwidth to mine. This is completely 1:21:45 incompatible with technologies that decentralize mining such as the aforementioned Stratum v2 and 1:21:49 p2pool slash braidpool. Okay, so this again, this is the key disagreement. So I suppose we'd better 1:21:55 spend, you know, enormous amount of time on it. First of all, 1:22:26 Okay. So, again, Peter's point of view is that every single miner, no matter how small, must mine 1:22:35 and that they cannot outsource this, even though 7.3 is this phone a friend thing. 1:22:40 So he rejects that, even though I don't. There's no reason to reject it. It's funny, he contradicts 1:22:48 himself again, because in the phone a friend part, he says, but I'm trying to imagine what is the 1:22:53 best way of explaining this. But I think, I think one way would be to explain, 1:23:01 first of all, the phone a friend thing will work just fine. And that's why 301 1:23:06 was written anyway. And even if there was no 301, people will do the phone a friend. 1:23:13 So maybe we should do that first, but I suppose not. I mean, okay, he's saying, miners will need 1:23:18 to invest in thousands or tens of thousands of dollars worth of computing hardware and bandwidth 1:23:22 to mine. Now, we have to point out something here that if total revenues are going to go up 1:23:29 by 10,000x, because we're going to have huge amounts of fees coming in, 1:23:34 and we're going to have, the price of Bitcoin is going to explode. 1:23:39 If total revenues are going to go up by 10,000x, then total costs, 1:23:44 total mining costs will also go up by 10,000x. 1:23:48 So even if the same number of people are mining as before, same quantity of people, 1:23:56 if the revenues go up by 10,000x, the total costs also go up by 10,000x, because the 1:24:00 Bitcoin difficulty is going to adjust. And so this is just what it means, you know, 1:24:11 this is just what it means to, if you participate in the economy, 1:24:17 let's say you're an accountant or something, you have to work hard. You have to work hard to stand 1:24:23 still, you know, you need to stay ahead, you need to be, you need to know about the state 1:24:28 of the art of accounting. Every year, you get a little bit better. Every year, everyone gets 1:24:36 better at a little bit of what they do. You get a little bit better at golf or whatever it is you 1:24:42 do, video games. So the difficult, upward difficulty adjustments, those are what increase the workload 1:24:50 required. And if total revenues go up, then total costs will also go up, difficulty will go up. 1:24:56 So this is why I have often said, and it's probably cryptic, and probably people don't 1:25:00 really understand what I mean. But I have often said on Twitter that all the arguments against 1:25:06 Drivechain are just arguments against L1 fees going up. And I really believe that. 1:25:14 Because at the end of the day, if fee revenues go up, costs are going up. 1:25:20 So what he's complaining about here is, oh, boohoo, the small miner may, 1:25:25 uh, it's kind of weird because it's wrong in so many different ways that you don't even know what 1:25:30 to attack it on. But he's saying, boohoo, the small miner might have to pay more fixed costs. 1:25:34 So the fixed costs might rise. But what I'm telling you is total costs are going to skyrocket. 1:25:42 Total costs across the entire mining network. Now, maybe it'll be a lot of people with a tiny 1:25:46 little miner that they use to heat their house. This is where we get into this whole phone a 1:25:51 friend thing. Like, it's just not literally, just imagine it in your mind. It's not literally the 1:25:56 case that the guy with the heater needs to run a full node of any sidechains, or even of L1. 1:26:06 Just like, imagine it. Imagine, imagine that that's, like, you have, you buy this machine, 1:26:13 and you take it home, and you tell, you tell your wife, tell your girlfriend, this is our new heater. 1:26:18 It's a Bitcoin miner. It's great. It produces heat. Like, it doesn't need to run, it just literally 1:26:28 does not need to run a full node. It can use, and one reason why is what you could do, you could 1:26:34 buy two of these, and you could connect them to a full node on your laptop. Or you could buy a hundred 1:26:40 and connect them to a full node on your desktop. Or you could buy 50,000 of these heat miners, 1:26:48 put one in every, you could own a, you own a huge apartment, you're in a hotel or an apartment 1:26:52 complex. You put them in each room, or you put them in the hallways or something. 1:26:57 And then you, you, you proxy them all. You have one server room that has one full node, 1:27:05 and they all do the same thing. So, and then what's the difference between doing that and 1:27:11 just pointing them all at a pool, and where the pool is the one who runs the nodes. So it's just 1:27:17 literally, it's just literally not true that the individual hashers must run any node. All they need 1:27:24 is an efficient way of recovering if the pool is screwing them over. Fortunately, we have different 1:27:29 pools competing for their business all the time. Each pool would love nothing more than for the 1:27:33 other pools to disappoint their clients in some way. Basics of competition. So, I don't know. 1:27:41 But now this is when Peter, Peter addresses this claim now, exactly. He says the phone-a-friend 1:27:46 model, or it could be phone-a-pool model, or it could be BIP301. And he says, to avoid the 1:27:52 necessity of miners running Drivechain nodes, it's been suggested that miners could just phone a 1:27:56 friend and copy withdrawal approval hashes from trusted sources like social media. He says there's 1:28:03 a lot of problems with this. Number one, his first and most important problem, why should miners do 1:28:09 anything at all? There's no direct incentive to approving withdrawal requests. Yeah, but there's 1:28:14 an indirect incentive of the revenues going up 10,000x. As he's going to point out later, the 1:28:21 miners could orphan freeloaders. So he later, you could say he either later contradicts himself or 1:28:28 he later discusses it in more nuance. I don't know. He says this is a 51% attack if the miners orphan 1:28:34 freeloaders. Although that's, you know, it's a very, when he says 51% attack, I find that to be 1:28:43 somewhat, you know, dishonest, misleading to the point of being dishonest, because there's no 1:28:48 reorg, there's no transaction censorship. The only thing that's happening is just like slow blocks 1:28:54 for like one day, and then everything returns to normal, which is statistically something that 1:29:00 happens on a random day anyway, sometimes. So, so that's the 51% attack. That's the dreaded, 1:29:08 you know, when I think of 51% attack, I think there's either a reorg or there's transaction 1:29:13 censorship, something that affects me. Because I mean, who's attacking? They're just the miners 1:29:18 are just attacking each other. Not me. So good for them. But he says, why should miners do anything 1:29:27 at all? There's no direct incentive, well, then just don't do it. There's there's an indirect 1:29:31 incentive in the form of having more useful Bitcoin and having a more transaction fee 1:29:38 revenue coming in total, you grow the size of the pie. But it's true, there's no direct incentive for 1:29:46 each individual upload. That's actually the case, whether or not you get the 1:29:56 node from yourself or your friend. Even if you run your own node, 1:30:00 your own, even if they ran their own Drivechain node, L2 node, there's still no direct incentive. 1:30:08 So this one is not really relevant either. Even though it's wrong, it's both wrong and irrelevant. 1:30:14 But yeah, to workload, imagine a future with dozens or even hundreds of work of Drivechains, 1:30:20 miners in research every week or so, even without run, that's enormous increase in workload. Yeah, 1:30:24 again, this is like though, what to be a miner is to have face a workload, you know, you don't 1:30:33 mine for free. And they don't, the pool will just do it all for them anyway. So there won't really 1:30:43 be. It's an enormous increase in revenues. If the difficulty increases, that's an increase in 1:30:48 workload. So that does more to make the workload increase than this. 1:30:57 Trauma and legal risks due to failures. Given how broken the system is, 1:31:00 inevitable that some Drivechains will fail. Pressure will be put on miners to fix the problem. 1:31:05 Yeah, but yeah, well, this goes back to what I was saying about everything in part seven is just 1:31:11 how it affects Bitcoin miners. So whether or not miners get pressure put on them, 1:31:16 and they yield to the pressure, or they fight the pressure, or they ignore the pressure, 1:31:19 or they do something else, it doesn't make any difference. If they, for example, if they yield 1:31:26 to the pressure, okay, if they ignore the pressure, then obviously, really, it's truly obvious that 1:31:32 nothing is happening. But if they yield to the pressure, it doesn't, it only affects the people 1:31:36 who use that sidechain. They're the one who have either their withdrawal, either is stolen or 1:31:44 paused or whatever you count, whatever counts as yielding to the pressure. So either way, 1:31:49 it doesn't affect anyone who's not using it. The miners can ignore it. That's one of the things 1:31:55 they can do to the pressure is ignore it. So they're also not affected. Miners are only affected 1:32:00 to the extent that they actually care about collecting these juicy transaction fee revenues. 1:32:05 This is the last is a particularly serious problem in light of Bitcoin's high degree of mining 1:32:09 centralization, which again, by that he means there's two pools. And even though he immediately 1:32:14 contradicts himself by saying that it doesn't matter if there's two pools, because you can 1:32:17 switch, which is the correct thing to say. So there is no mining centralization in Bitcoin, 1:32:23 because it's just the cost of switching pools, which is outrageously cheap. So 1:32:28 Bitcoin mining is already almost perfectly decentralized. 1:32:34 But anyway, he says 51% of hash power can salvage a Drivechain failure by attacking 1:32:40 others to overrule their votes or lack of votes. That's what I said before about miners 1:32:44 orphaning freeloaders. We do not want there to be more incentives to 51% attack. But again, 1:32:49 Peter says a 51% attack is just if miners orphan each other's blocks, but there's no transaction 1:32:54 censorship and there's no reorg. And at the end, this thing, they don't have to do it for a very 1:33:01 short time before all the other miners would cave and fall in line because they know they can't win 1:33:10 against 51%. So this is something that affects, this is like an inter-miner thing. It doesn't 1:33:16 affect anyone who's not mining. A key thing enabling minor decentralization, this is back 1:33:21 to Peter now. The key thing enabling minor decentralization is the fact that at the 1:33:26 moment it's still reasonably possible to form a new pool and to use decentralized mining pool tech. 1:33:31 The rules to create a new valid block are clear. Provided you follow those rules, 1:33:34 you are not risking enormous financial loss by using a small pool or a decentralized pool. 1:33:40 If these rules become unclear, the rules about creating a new valid block, 1:33:44 because Drivechain funds are being frozen or looted, that's an enormous centralization pressure. 1:33:49 It's enormous centralization pressure that introduces a hashing power to move towards 1:33:53 the largest pools. Yeah, again, then he's going back to saying that it matters how many pools 1:34:00 there are, which is not true. I mean, maybe we should just ask him, does it actually matter? 1:34:08 This is a riddle that Moon Settler and I discussed. If you have only two pools, 1:34:12 but you can instantly switch to another pool or start a new pool, then is that a worse situation 1:34:17 where there's a hundred pools, but you're locked in? You're handcuffed to the pool and you can 1:34:21 never escape no matter what they do. The number of pools really just doesn't matter. It's the 1:34:27 ability to leave the pool. But anyway, he's saying, what Peter is trying to say here is that 1:34:34 Drivechain is going to make it harder to figure out whether or not a block is 1:34:40 going to be accepted by the other miners because they will want certain upvotes in BIP300. 1:34:45 He says that's an enormous centralization pressure. He uses the word enormous. 1:34:51 It doesn't make sense though, because 51% could just start at any random day demanding that 1:34:57 they could introduce an arbitrary rule at any time. It has nothing to do with Drivechain. 1:35:01 So the whole point of Drivechain is all the miners will be getting 1:35:05 more money because of this. That would be a good thing. The miners also be getting money 1:35:10 from things that they can't really touch in other scenarios, like a Zcash sidechain or whatever. 1:35:15 So their loyalty will be to the Bitcoin user, will be to even people who use privacy tech, 1:35:21 and it will be able to re-decentralize mining. 1:35:26 But Peter is saying, on the off chance that some miners disagree, 1:35:32 it doesn't have anything to do with Drivechain, what he's saying. He's saying that 1:35:36 what people could do is miners would want to have a certain outcome. 1:35:44 They form a cartel and they force everyone to go along with them. 1:35:49 That counts as centralization pressure. If they merely form a cartel, 1:35:53 where that cartel does nothing other than what are they going to do? 1:35:58 Where that cartel does nothing other than what all the existing miners are doing. 1:36:06 Because this cartel is going to be putting each transaction into a... 1:36:12 It's not going to censor any transactions and it's not going to do any reorgs. 1:36:17 And only orphan blocks that don't comply. 1:36:20 So that's just no different than what any other soft fork does. 1:36:24 I don't know. It's just tiresome, I think. 1:36:28 You could flip it around and say something like, 1:36:32 because we have no sidechains, it is the... 1:36:37 It's going to be... We're going to have all this drama over which soft forks to activate 1:36:41 and how and when, or even which hard forks to activate. 1:36:44 The fact that we would never have had... There would not be Ethereum if we had sidechains 1:36:48 and there would not have been the Bitcoin cash split. 1:36:51 You could say that, actually, the drama and everything is increased or it's the same. 1:37:01 I don't know. It makes no difference. 1:37:02 7.4 is the worst part of the whole thing, which is a low bar. 1:37:07 But 7.4 says, legal risks to Drivechains make miners custodians. 1:37:12 And what he means by that is custodians in the eyes of the law. 1:37:15 And what he means by that is custodians in the eyes of the law. 1:37:22 The answer is obviously no, because the BIP300 rules allow the miners to, quote, steal, unquote. 1:37:28 And they're held in place by their business revenues. 1:37:32 But the real thing is just such a sad question. I mean, look how far we've fallen. 1:37:36 It's whether or not we're giving the law the ability to decide whether or not... 1:37:44 You know, of course, the law is going to decide if miners are in a certain jurisdiction, the law will decide what they can and can't do. 1:37:51 But it's not in the case of an abstract protocol, like long division or something, you know. 1:37:59 What if carrying the two, you know, made you a criminal? 1:38:07 It's like, it's just sad that that's what it comes to. 1:38:13 And he says, maybe. And then he has to, of course, he has to say, I personally am being sued by Craig Wright and the lawsuit aimed me to do just that. 1:38:20 Wow. He just has to make it all about him, of course. 1:38:25 Anyway, I don't know. Anyone who thinks that there's even a shred of relevance to 7.4 should just find something else to look into, I think. 1:38:32 7.5, though, is kind of even worse than that. This one is atrocious. It's like middle school level math mistake. 1:38:40 Just terrible. 7.5 says fees and Drivechain block size limit. 1:38:45 It has been claimed that Drivechains will benefit Bitcoin miners through higher fees generated by Blind Merged Mining. 1:38:51 He says, however, Drivechains have no mechanism to limit total block size. 1:38:55 Yes. Promoted as a way to dramatically scale Bitcoin without a limit. It's obvious that the supply of block space is unlimited. 1:39:02 False. And thus, there is no reason to expect economic supply and demand to converge to anything more than trivial fees. 1:39:09 OK, it's hard to even know where to begin, but there's a big difference between price and revenue. 1:39:14 So if you sell whatever, watermelons and you make 10 cents of watermelon and you sell five hundred thousand watermelons, 10 cents each, five hundred thousand. 1:39:28 Or whatever I said, I said, so you say say five hundred million, then that's 50 million dollars. 1:39:34 Fifty million dollars. So then that's a low price, but a high quantity. 1:39:38 So it's a high revenue. Revenue is the area of the rectangle. 1:39:44 But if the fees like the per watermelon cost could be instead of 10 cents, it could be like seventy five dollars. 1:39:51 But if you only sell a hundred or you only sell a thousand watermelons, it's seventy five thousand dollars worth of revenue. 1:39:57 So it's millions versus thousands. So how can it be that Peter Todd doesn't understand such a basic thing? 1:40:06 I mean, it's kind of shocking. And he really is. 1:40:09 What he's saying is because he's saying he's we're imagining a world where all these chain fees exist. 1:40:14 It's just some emerge mind context with L1 and others not. 1:40:19 And so what he's saying is that Bitcoin miners to mine only collect fee revenue from only one chain. 1:40:26 We give them more money than if they collected fee revenue from multiple chains, including the one. 1:40:33 Because it's main chain plus all sidechains, one main chain plus and sidechains. 1:40:38 And Peter is saying the N will be zero. 1:40:43 And in fact, it will decrease main chain fee rates and fee revenues somehow in a way that won't. 1:40:49 Given that those those chains will exist somewhere else, if they're not, if they don't exist, the sidechains, they will exist somewhere else. 1:40:54 Maybe as altcoins, maybe as some kind of other thing, some permission thing. Who knows? 1:41:00 So it's shocking, he's saying. And but even none of it is true, really. 1:41:06 Drivechains have no mechanism to limit total block size. That's not true. 1:41:10 The miners self-interest in maximizing the area of the rectangle. 1:41:15 That is the mechanism to limit it. 1:41:20 And says, indeed, promoted as a dramatic scale, Bitcoin, no contradiction there without a limit. 1:41:25 It's obvious that the supply of block space is unlimited. 1:41:29 That's not true. Not only is it not obvious, it's not true. 1:41:34 It would have some limit. And there's no reason to expect supply and whatever. 1:41:38 And then he says, note how this particular claim is reminiscent of big blocker claims from the block size board. 1:41:43 Well, they were right about that claim. They are wrong about most other claims. 1:41:49 Time value of money. I mean, it's all so tiresome. We've got to just skip through it at this point. 1:41:53 I think it's like every single paragraph is so bad. 1:41:58 But if they do somehow generate non-trivial free revenues, 1:42:01 it's consensualized by increasing the capital costs required to merge mine. 1:42:05 Exclamation point. Not true. 1:42:09 The problem is the creators of blind merge mine blocks have to pay transaction fees now denominated in Bitcoin. 1:42:14 But they receive the transaction fees in the Drivechain coins. 1:42:17 In theory, these coins are supposed to be pegged one to one. 1:42:19 But obviously, with a three to six month withdrawal period, that is certainly not guaranteed to succeed. 1:42:24 Wrong. It's also wrong. You don't even know where to begin. 1:42:28 But the they're pegged one to one in the sense at the moment of withdrawal. 1:42:35 But there is no sense in which they will be. 1:42:41 The fact that they the exchange rate will float and it could be ninety nine cents or ninety eight cents. 1:42:46 That is what will equalize the two amounts. 1:42:51 I'm not sure of that. 1:42:55 I don't even know where to continue, but it's like they pay a different amount of L1 coins versus side coins. 1:43:02 So that's the same. It must be the same. 1:43:04 It's like you have the two. You have a situation where each node is going to compete and bid up higher and higher. 1:43:12 So there's no sense in which one person can be cheating the other. 1:43:18 You know, it's like competition is a much that is the superior way of getting the best deal. 1:43:27 Because you say, well, listen, anyone out there can give me a better deal. 1:43:32 I don't know. He links in this thing to where Shinobi is a good article explaining this. 1:43:36 This is in my tweet, Twitter highlights. 1:43:39 And I have and then he kind of quotes Shinobi. 1:43:41 This is just more of Peter Todd's laziness that he can't even come up with his own thing. 1:43:44 He's going to take a terrible argument from Peter Shinobi that makes no sense. 1:43:48 I argue that swaps fix this issue. 1:43:50 But as Shinobi explains, the reality is just shove the liquidity requirements onto yet another party. 1:43:55 I think this just speaks to just it just speaks to the extreme laziness. 1:44:00 That the there's no liquidity requirement. 1:44:03 Anyone with L1 coins can do this at any time. 1:44:06 So you don't need to have the coins locked up until after you make the trade. 1:44:13 Then they become L2 coins. 1:44:16 But that's only after you set the price so that they're equal. 1:44:19 So you get your big discount, you collect your big fee, and then you pull the trigger. 1:44:23 So you get you basically get all the yield up front in a way. 1:44:28 You swap 100 L1 coins for 102 L2 coins instantly. 1:44:37 So it's only after you buy the block that you. 1:44:42 So it doesn't make any difference. 1:44:44 Increasing the capital costs required to blind merge mine. 1:44:46 There is no there is no cost. 1:44:51 It's just an accounting operation of switching a certain U.S. dollar amount of fees from L1 to L2. 1:44:59 So I don't know, this whole thing is just like Peter being too lazy to come up with something. 1:45:03 Copying and pasting from something from Shinobi that he didn't understand. 1:45:06 Probably maybe they all met in like a big group, big telegram group, and they put their heads together. 1:45:11 And Shinobi was like, oh, you got to put this in. 1:45:13 Peter was like, OK. 1:45:16 So I don't know. 1:45:18 It's all just terrible. 1:45:19 And then section eight. 1:45:20 I mean, guys, this is too tiresome to really continue. 1:45:22 But eight is our direction is going to see significant usage. 1:45:25 I mean, who even cares? 1:45:27 But I think like about what Peter thinks about this, because he either is saying no, in which case none of it matters. 1:45:35 Are you saying yes, in which case is validating the idea. 1:45:41 So it doesn't even matter. 1:45:44 I think the obvious UI UX problem. 1:45:46 I mean, it's just silly. 1:45:48 I'm just skipping because I can't take it anymore. 1:45:52 He says, yeah, he's saying he says there's not enough substance to the idea. 1:46:00 Concrete that can be distilled down to logic and math and critique with logic and math. 1:46:05 Drivechain is not like that. 1:46:06 Drivechain is a vapid, hand wavy idea that replaces the careful incentive design we see in other Bitcoin protocols and Bitcoin itself. 1:46:12 With blind trust in miners. 1:46:14 Of course, blind trust could very well work in practice. 1:46:16 But if you're willing to rely on trust, why are we going through the trouble of using Bitcoin in the first place? 1:46:21 Which is that's the last sentence. 1:46:23 And it speaks to just how truly awful the analysis is. 1:46:27 It's actually laughable because there is I actually do have logic and math. 1:46:32 I have an actual set of equations in the Drivechain security model in the 2015 post. 1:46:38 And I'm directing that info to the front page. 1:46:40 There's actually equations with these two parameters, M and B. 1:46:44 And that is the security model. 1:46:46 It has math. 1:46:48 And he's saying that that this should be possible to distill it down to logic and math. 1:46:55 But he has not even addressed the math that I supplied. 1:46:59 And then he's saying it replaces blah, blah, blah with blind trust in miners. 1:47:05 But this is completely untrue. 1:47:07 Because the miners are kept in line by these M and B parameters, which are basically the fees coming in from the sidechain. 1:47:15 And the effect that having a multi-platform coin would have on the price. 1:47:20 So we're only trusting miners to be greedy. 1:47:24 Which is the exact same way they're trusted on L1. 1:47:27 I mean, after all, L1 is not going to exist. 1:47:29 After all, L1 is not going to exist at all. 1:47:34 If there's no miners. 1:47:37 So in that sense, Bitcoin Core requires miners to exist also. 1:47:42 And then he says, if you're willing, blind trust could work very well. 1:47:45 If you're willing to rely on trust, why are we using Bitcoin in the first place? 1:47:48 But it's like that is completely missing the point. 1:47:53 So I don't know. 1:47:55 I just think it's really terrible. 1:47:57 I think maybe I should go through it again on video or something. 1:48:02 If anyone actually thought anything in it was any good, I'd love for you to come up and say why you think that. 1:48:11 But I just couldn't believe almost every paragraph and every sentence. 1:48:15 Lazy, incorrect, totally missing. 1:48:18 Often he's just making his own thing up and then criticizing that and then saying it's actually not a problem. 1:48:23 He does that like three or four different times. 1:48:26 The whole idea that it must matter. 1:48:32 Most of the mining thing is just a mix up between full node costs and mining costs. 1:48:37 And if you worry about mining costs and you want to get rid of upward difficulty adjustments from Bitcoin, you want to remove work from Bitcoin. 1:48:44 So it's just terrible. 1:48:46 And just anyone who thinks any paragraph of it was good, please come up and say. 1:48:51 Paul, I want to make a comment about the fees. 1:48:56 I don't understand why he kind of say that about the fees and, you know, the miners and stuff. 1:49:07 Because like today on L1 with all these ordinals, we see that, you know, the miners collect more fees. 1:49:15 But also the fee rate for any other transaction is more expensive because, you know, the fee rate is higher because everything happening on the L1. 1:49:27 So I don't understand how he don't see that when when Drivechains, you know, send the transaction is just giving more fees. 1:49:39 But on L1, actually, the fee rate for other transactions stays the same or is much cheaper. 1:49:47 So there I make kind of a good point for Drivechains, because even I believe that ordinals, if Drivechains are, you know, enabled, that ordinals and all this stuff will be transferred to Drivechains. 1:50:02 And another thing is how he don't see that, for example, ordinal exists today, but tomorrow can come another protocol that is the same like ordinal or thousands of them or hundreds of them. 1:50:14 So can you imagine then the fee rate? What will what will be if, you know, comes along some some protocols kind of like on a same way like ordinals? 1:50:34 Yep. Well, yeah, I know. I don't get it. 1:50:37 I don't know. I think he he really wants to have a client said validation work, which is too bad because it's not going to work. 1:50:47 But I think he thinks that miners should never be touched, like under any circumstances. 1:50:53 And mining should I think it's this is a sad thing, because this is also not going to work, because the real world has a lot of transactions. 1:51:03 So the real world is going to have a lot of transaction fees, and of course, visa and everything that's already 100 million per day ish. 1:51:10 So that's the reality. And if there's going to be an L2 on top of L1 that cuts the miners out, that is going to be not incentive compatible. 1:51:24 The miners will be able to earn millions of dollars a day by censoring that L2 and forcing people on to a different L2 that does cut them in. 1:51:33 So all that's dead, all that all that stuff is dead is going to be dead. 1:51:37 All the L2s that don't cut the miners and will probably be dead. 1:51:40 We should still try them, but they're probably dead. 1:51:43 And so the because there's just no one on no way on the planet Earth, if you can easily take $100 million per day by doing something that you are not going to do it. 1:51:59 So he wants mining to like stay the way it was in 2012 or something, but that's just wanting Bitcoin to fail, basically, wanting Bitcoin to be super niche. 1:52:15 And if it's going to grow, then total revenues are going to skyrocket and then total costs are going to skyrocket. 1:52:23 I just can't believe I really just I would have actually gone through it before I would have made like a video or more of like a thing. 1:52:28 But I just thought he really, really phoned it in and he doesn't really he's determined to put like zero thought into this. 1:52:37 It's just like I think he's just going to rely on his knowledge base from like 2014, which he's never going to update. 1:52:49 And he's just going to say, oh, look at me. I know about something with Namecoin. Craig Wright is suing me. 1:52:56 There's no way that anyone can get him to actually pay any attention to the idea in enough detail to. 1:53:03 But I mean, there's the one the one key disagreement is that he really thinks that each miner like he thinks that each individual he thinks something like each individual ASIC chip must run a full node. 1:53:17 So like I was saying, if you buy two ASICs, even though it's you and your house, you need like two full nodes. 1:53:25 He has this weird belief about that. I don't think he realizes that that's what he believes, but that is what he believes. 1:53:31 You say, why can't you just reuse the same node for both chips in your house? 1:53:36 But that's the same thing as all them reusing a single node at the pool. 1:53:42 It's the same principle. It's just a question of how efficient they are operating versus how paranoid they are. 1:53:50 Peter's saying that they should be paranoid, but that's, you know, it's a decision each person should make. 1:53:57 Anyway, people in the audience come up if you want or ask any Drivechain question. 1:54:03 I think it's just horrendous that people have listened. I think Peter convinced Blockstream to or something like that. I don't know. They convinced themselves. 1:54:14 There's some kind of weird death cult or something. They convinced themselves to stop working on the idea. 1:54:19 And as a result, Bitcoin has suffered enormously. It would already probably have taken over the entire planet if we had had sidechains in 2016. 1:54:29 There would never have been Ethereum. There would never have been Bitcoin. 1:54:32 Already, we would have planetary scale. We'd have Zcash privacy. We'd have tons of other things. We'd have Namecoin prediction markets. We'd have lots of stuff. 1:54:41 We would have all this bit assets, Ordinal stuff would have happened on its own chain. And that it already would have been big. 1:54:48 And it would have taken over the entire planet. 1:54:51 We would already have Arc. We would already have everything. And there would be no toxicity. 1:54:58 These horrible people who are ruining the industry because they have no real skills. 1:55:03 We would have already had OpVault, CTV, all that stuff would have been invented in 2018, 2019 and just activated immediately. 1:55:13 We would already have Arc. We would already have everything. 1:55:17 And there would be no toxicity. 1:55:20 These horrible people who are ruining the industry because they have no real skills, except just trolling on the internet. 1:55:29 And those people have now invaded and become a core part. 1:55:35 We don't need social manipulation to win. We just need a better idea. 1:55:48 Cheaper transactions, cool stuff. 1:55:51 The whole Bitcoin project has been gutted. It's all malinvestment. 1:56:00 All the Lightning VC funding is now hurting Bitcoin because it's just contributing to self-delusion on an enormous scale. 1:56:11 We look the other way for our Lightning people in the same way that the Fed looks the other way for their banker friends. 1:56:22 JP Morgan or whatever. We just have our thumb on the scale. 1:56:27 We say, well, sure, Lightning's not what we thought, but those are our people. 1:56:33 And in that sense, we are huge hypocrites and we're much worse than in that way. 1:56:39 We're much worse than the system we aim to replace. 1:56:43 Good. Well said. 1:56:48 But hey, anyone who disagrees, come up. 1:56:53 Or if you know a friend who disagrees, call them over and send them in. 1:56:59 I guess everyone perfectly agrees 100 percent. 1:57:05 Probably after some time, everybody will agree with you. 1:57:11 Well, this has happened actually quite a few times. 1:57:14 Sometimes I publish something on my blog and usually 12, 18 months later, people come around to it. 1:57:21 So sometimes they're much earlier than others. 1:57:23 So sometimes they're much earlier than others. 1:57:26 But I mean, I did the Lightning Limitations post and then I started seeing that phrase all around. 1:57:34 All kinds of people are doing a space with that or they did a YouTube thing. 1:57:39 There's now all these panels that are all Lightning Limitations. 1:57:42 So in that case, I was like two years ahead. 1:57:46 Very common, though. I've been in this industry for a really long time and I've been ahead most of the time. 1:57:51 Most of the time. So not on everything, of course. 1:57:55 There's even certain things I got wrong, like I hated to bid USD and I thought it was a terrible idea. 1:58:00 And for Tether, I was always saying, I don't know that it says people had such strong opinions on Tether being the greatest idea or being certainly a scam. 1:58:12 And I would always say, I would always say, like, I don't know. 1:58:15 But now in hindsight, I say that was wrong because I think it kind of clearly seems to be working out just fine. 1:58:22 People love USDT. They love the product. 1:58:25 And now that interest rates are high, they have a phenomenal business model. 1:58:30 Just raking in the cash in exchange for doing basically nothing. 1:58:34 Raking in utterly enormous amounts. 1:58:37 One thing about Tether is I don't get why they're not closed down, though. 1:58:41 You would think they would get. 1:58:44 Liberty reserved. 1:58:46 Kind of a mystery. 1:58:54 Yeah, so. 1:59:00 Come on, someone out there has to have some, they have to be curious about something or another, even a beginner question. 1:59:07 We're here, we're up here, we're having fun. 1:59:10 Miguel is here. 1:59:16 Hello. 1:59:17 Hey, Paul. 1:59:19 Can you hear me? 1:59:21 Great. 1:59:22 Hello. 1:59:23 Yeah. 1:59:24 Like, I agree with everything that you said, but there's one thing that I don't agree. 1:59:28 Is that we have a good idea, so we don't need to fight a narrative. 1:59:33 I disagree with that because otherwise, those small group of people that complain about Drivechain, they're going to win. 1:59:41 Right. 1:59:42 So I think we need to have a good narrative and kind of embrace everything because that's what Drivechain does. 1:59:51 Right. 1:59:52 We're not against Lightning because if Drivechain has an HOC compatible, we can use channels between them. 1:59:59 So the thing here that I don't agree is it is a battle of narratives and we have to deal with this. 2:00:10 It's hard. 2:00:14 I don't like it all, but that's the way it is. 2:00:17 Right. 2:00:18 So thinking that you just. 2:00:21 Well, yeah, you're right. 2:00:22 I mean, it's really like the Lightning idea itself is kind of collateral damage, actually, I think. 2:00:27 I think if it weren't for the cultural issues, then probably Lightning would have quickly been introduced, supported by everyone. 2:00:36 Then it would have transformed, rapidly transformed into something else. 2:00:41 Like it would specialize in duplex channels only or become arc. 2:00:46 It would become faster. 2:00:47 But it's because it became a political football, as they say. 2:00:51 It's because of all that, that it was impossible to criticize Lightning. 2:00:55 And that's the beginning of the end. 2:00:56 That means the idea is that means we're kind of all doomed. 2:01:02 Lightning is kind of reckless because we kind of have a lot of bugs. 2:01:06 It's hard to to open a channel with someone that you don't know, that you don't trust. 2:01:11 So it's not it's not done yet. 2:01:13 And it's going to be I think it's we are far away from done. 2:01:16 So that's why people are trying to, OK, let's put this new BIP here to stable channels and stuff like that. 2:01:22 So it's not done yet. 2:01:24 So there's a lot of work to do. 2:01:27 So that's why Drivechains could could be a place to iterate faster because now we have to approve a BIP and then iterate that BIP. 2:01:35 And then, OK, Lightning is not stable yet. 2:01:39 So let's put another BIP. 2:01:41 And we're kind of doing that, like following the pathway to Lightning. 2:01:47 Don't be reckless anymore. 2:01:48 So for me, like it's Lightning development, the driven development. 2:01:54 What's going on with Bitcoin, you know? 2:01:56 So for me, like Drivechains will embrace that. 2:02:00 OK, let's fix Lightning on another layer. 2:02:02 And then if we can fix that in another layer, we could have like 30 years of testing now. 2:02:08 OK, we are stable. 2:02:10 We don't have like any any side bags like ordinals or stuff like that that people kind of don't like. 2:02:15 The maxis don't like it. 2:02:17 And that's OK. 2:02:18 Now we have the 30 years trying to figure out how to to. 2:02:23 30 years trying to figure out how to to to build Lightning. 2:02:24 And we do that in a Drivechain. 2:02:26 And after we do, we do that, we can just pull the all the features 2:02:32 that is retrocompatible with the main chain. 2:02:34 And that's it. So this is like Drivechains. 2:02:39 We have to have a narrative that embraces everything. 2:02:43 And at the same time, you kind of ossify the first layer. 2:02:46 And we push the political battle to a second layer because 2:02:50 I think that is the main narrative that kind of convey people, because 2:02:54 it's going to be hard if you don't, if you don't battle with narratives, 2:02:57 we're going to lose because a good idea is not enough. 2:03:00 I think that's proven, right? 2:03:02 Because your work like I'm following you since I think 2017, 2018. 2:03:07 And really, your good idea is not enough. 2:03:11 I think it's we all agree on that. Right. 2:03:14 So I think we have to push hard, but not the heart that kind of a phrase 2:03:18 everyone, but embrace everyone, you know, but I don't know. 2:03:22 But I agree with you. 2:03:25 Yeah, I don't know either. 2:03:29 I think it's important to note, if you're talking about 2:03:32 if we're comparing and contrasting lightning and Drivechain 2:03:36 with respect to like narratives, narrative management, it's important to note that 2:03:42 Blockstream has 66 times the funding. 2:03:46 So the difference of one hundred ninety seven million dollars 2:03:50 to put towards narrative management and propagating. 2:03:56 Even Blockstream is not that big into lightning. 2:04:00 It's only and the main things they do in lightning, 2:04:03 like Rusty Russell is like a nice guy 2:04:06 and a very smart, like professional, normal human. 2:04:10 And so the lightning is even more 2:04:14 as all lightning labs is all of a 2:04:18 chain code. There's there's tons. 2:04:22 So the I don't even know who's responsible for a clear. 2:04:24 I don't remember which, but. 2:04:27 And there's all the custodial lightning companies. 2:04:30 So this is what we did. This is why it's so important. 2:04:32 People say, oh, Paul, you care so much about the meaning of these words. 2:04:37 Why do you why are you such a stickler for all this? 2:04:40 Let's just let it slide. 2:04:42 Blah, blah, blah. People tell that to me all the time. 2:04:44 But this is the problem. 2:04:45 These are all these seeds we planted six, seven years ago. 2:04:50 We told everyone lightning is the future and the VCs, you know, 2:04:53 and the other people, they invest in lightning startups. 2:04:58 Who knows how much money has been misallocated? 2:05:00 It would be interesting to look up all of the money invested in lightning. 2:05:06 And see how close it even comes to the total amount of Bitcoin 2:05:11 in the lightning network, which is like, you know, 5000 Bitcoin. 2:05:15 It's like not that much. 2:05:19 I mean, I don't know. 2:05:19 I think it's true that the. 2:05:24 I mean, it shouldn't matter 2:05:27 how much money I know it's going to sound naive. 2:05:33 People love money and people love. 2:05:37 They love they love joining a winning team, 2:05:40 but. Well, I don't know, I mean, I'm not sure what to say 2:05:45 because I don't know to what extent it is 2:05:49 just wishful thinking or to what extent it is like 2:05:53 desperation or just humiliation. 2:05:57 I don't know. 2:05:58 But this is the problem is that people this is a psychology is, of course, 2:06:02 that people they buy into something and then they can't let it go. 2:06:08 That's true of everyone, of course. 2:06:09 I'm not sure what to make of any of that or, you know, to do at all. 2:06:12 You know what the plan should be, Miguel? 2:06:14 Like, what do you think? 2:06:15 I think it's what I can just go out and say, like, oh, everything's great. 2:06:20 You know, I think it's it's a mix between ego, fear 2:06:24 and ignorance, I think, because I've talked a lot. 2:06:28 I went to a conference last weekend and I talked to a lot of Maxis 2:06:33 known, well-known Maxis that are against Drivechains. 2:06:38 And they are completely ignorant about the subject. 2:06:41 Even for the Bitcoin core stuff there. 2:06:43 It's weird. It's weird to realize that it's kind of a kill your heroes. 2:06:46 Don't know your heroes, right? 2:06:48 Because you're going to 2:06:50 you're going to find out bad things about it. 2:06:52 But it's weird because I think it's completely ignorance, ignorance and fear. 2:06:58 It's it's hard to deal with this, right? 2:07:02 I don't know. 2:07:03 I mean, do you think we should maybe we should do more fear than we should say? 2:07:07 We're keeping track of everyone who is against this idea 2:07:10 and after it succeeds, we'll just humiliate them all. 2:07:13 Maybe if they do that, if they respond to fear. 2:07:17 But if they respond to fear, then that's that's what you're saying, though, 2:07:20 is you're saying they live in fear and I'm too nice. 2:07:24 But but then you're kind of 2:07:28 you're pushing too hard and you don't like giving chance to forgiveness. 2:07:33 You know, it's kind of it's hard, you know, 2:07:35 because they're going to double down if you if you push too hard, right? 2:07:39 That's what people does when they are in fear. 2:07:41 Like if you don't give it them an exit to accept our chains. 2:07:46 Just going to they're going to double down, you know, so. 2:07:50 I don't think that's a good strategy. 2:07:51 I think that's you should embrace everyone. 2:07:53 And what do you think that is a good strategy? 2:07:57 Yeah, so it's hard because people I think it's an ignorance 2:08:04 that people don't know how Bitcoin works. 2:08:07 And and they think the Drivechain is going to implode everything. 2:08:11 That's that's what they think. 2:08:13 And lack of understanding of Bitcoin. 2:08:16 Yeah. Lack of understanding of Bitcoin protocol itself. 2:08:20 And oh, you're trying to change Bitcoin in a way that blah, blah, blah, blah, blah. 2:08:23 But they don't know the way Bitcoin works now. 2:08:26 It's weird and very well-known guys don't know. 2:08:31 So it's kind of strange. 2:08:33 Yeah, it's strange. It's very strange. 2:08:35 I recognize that. 2:08:37 Yeah, so and then if you if you try to explain it, they know that's not how Bitcoin works. 2:08:41 And I say, no, it is. 2:08:42 So it's kind of a it's weird. 2:08:45 Like I think people like are so comfortable and then don't need to work anymore 2:08:49 because maybe they're rich or so. 2:08:50 And I don't know. 2:08:53 They're not like us, you know, nerds, you know. 2:08:57 It's weird. 2:08:59 I think it's education like it like. 2:09:02 But it's also a battle of narrative. 2:09:04 So if you don't do nothing, it's bad. 2:09:07 If you push too hard, it's bad. 2:09:09 If you don't push at all, it's bad also. 2:09:11 So I don't know. 2:09:13 Yeah, right. 2:09:14 I don't have an answer to that. 2:09:16 But hey, Paul, do you think it's like a 2:09:20 like, you know, the VCH thing, the big blockers, like you could sit here 2:09:23 and we could say they're wrong, right? 2:09:25 But maybe they weren't there wasn't a malicious 2:09:27 like they weren't motivated in any kind of evil way. 2:09:30 They thought they had the right idea, but they just happened to be wrong, right? 2:09:33 Do you think I agree with you? 2:09:35 Yes, I think that a lot of people said that they were evil. 2:09:38 But at the time, I was thinking, no, these people, you know, Roger 2:09:41 Veer doesn't want Bitcoin to fail or whatever. 2:09:44 It's absurd. 2:09:45 It's the same thing with these guys. 2:09:46 I don't I don't necessarily think that they're 2:09:49 malintended, but what do you think their motivation is? 2:09:54 I do think the key part of it is attention is limited. 2:09:59 And if people think the idea 2:10:02 doesn't have a chance already because nothing controversial will be merged 2:10:07 and they think it's just it's already slightly controversial enough, 2:10:10 then no one will rush to defend it. 2:10:14 And that's why I think it was Luke's pull request that. 2:10:17 Sort of set it off. 2:10:20 Before. 2:10:23 And it will probably be more support from minors. 2:10:27 That sets it off again when minors say we want this idea, where is it? 2:10:33 That's my guess. 2:10:35 But I think there's not a lot of I think people despair, 2:10:41 like they think it won't be possible to get it across. 2:10:46 And therefore it they think, OK, if I fight for this idea, I'm just going to lose. 2:10:50 So I think I think people think it's a lost cause. 2:10:53 So they don't even investigate the idea to find out how much merit 2:10:56 it has. And I think to some people, they think. 2:11:02 It's like you can always reinvent the idea and have a different name, 2:11:07 like someone could always do. 2:11:09 They could redo BIP300, but they could call it a lightning channel. 2:11:14 And then no one will know, since it's all inscrutable. 2:11:18 All the technical stuff is so difficult to understand. 2:11:22 No one will really know that they will. 2:11:23 And that probably is what, you know, like a 1984 style door to a well. 2:11:29 That's probably like possible. 2:11:31 So people just think, listen, I'm not going to get involved. 2:11:34 It's a it's too much of a collective action problem where either it activates 2:11:38 for the whole network or it doesn't. 2:11:41 So people think kind of why should I get involved? 2:11:43 I think that's kind of two sides here. 2:11:46 Just OK. I have two points here. 2:11:48 One is BSV, I think, is an enemy. 2:11:50 I think it's an enemy. 2:11:52 And two, I'm going to start with the two. 2:11:55 Remember me the first one. 2:11:56 The BSV is an enemy. 2:11:58 A Bitcoin Cash is an enemy. 2:12:00 The first one is when I tried to speak for the Brazilian in Brazil, 2:12:05 the first time that I speak was OK. 2:12:06 But the second time, people saying that I was a layer to live agencies. 2:12:12 I was paying to get to to promote Drivechain. 2:12:15 So people started attacking me and defending me. 2:12:18 So it's kind of a it's hard for you to expose yourself to to those kinds of concepts, 2:12:24 you know, complex concepts. 2:12:26 So that's what I learned. 2:12:29 Like, it's too hard. 2:12:30 People don't understand. 2:12:32 And they're saying that you're earning money. 2:12:34 They're starting to to say lies about you. 2:12:37 So it's very hard to to to do that. 2:12:40 So so regarding that, please pay me invoice so so I can say that I was paid to. 2:12:46 Yeah, I mean, like, even that is like, why? 2:12:51 Why would that matter? 2:12:53 Like, you know, to be paid to say true things or paid to. 2:12:57 It's like it's so weird that why this is like the bottom of the barrel that you get. 2:13:02 Like a layer to live. 2:13:04 It's been funny by seven hundred seven million dollars. 2:13:06 Right. 2:13:07 So why does that matter? 2:13:08 But anyway, but I didn't receive anything from you. 2:13:12 So the second point is, I think that the big cash, the Bitcoin cash was an attack because 2:13:20 it's the same thing that that Jimmy Song's trying to to build with the user reject support. 2:13:25 Right. 2:13:25 If for some reason miners decide to activate the BIP300 and then Bitcoin Max is like 2:13:32 Jimmy Song's decided to to prevent that they are kind of the new owners of Bitcoin. 2:13:39 So Bitcoin is not a decentralized protocol anymore. 2:13:42 Because they can they can censor soft forks. 2:13:44 They can do whatever they want. 2:13:45 So it's kind of now we have leaders. 2:13:48 The same thing of Bitcoin, Bitcoin cash. 2:13:50 Now we have we know the leaders. 2:13:52 Right. 2:13:52 So I think that kind of you can say that they are naive. 2:13:58 They think that it was good. 2:13:59 So they push that. 2:14:00 But for me, like looking from outside, I think that Roger Ver was a Bitcoin Jesus once and 2:14:06 now he's the enemy of Bitcoin because he tried to to force people to do the thing that he 2:14:12 wants to do. 2:14:13 Right. 2:14:13 So I don't like that. 2:14:15 That type of, you know, I don't like hard forks. 2:14:18 I like exactly. 2:14:22 I think part of the problem with Bitcoin cash was that Roger had Bitcoin.com and he didn't 2:14:30 want he was like saying it was the real Bitcoin, which is tough because there is no definition. 2:14:40 Like like what have you just said? 2:14:44 Like if it had a new name, would that have helped or no? 2:14:48 No, because like the difference between soft forks and hard forks is that you have to convince 2:14:54 everyone to update, to upgrade the software and to upgrade to your version of the software that 2:15:00 you like, that you promoted. 2:15:02 So it's kind of a now we have a leader now. 2:15:04 Roger Ver is the leader. 2:15:05 So I don't like that narrative. 2:15:07 I like your narrative. 2:15:08 Like you're not the leader. 2:15:10 Even if you're even if your BIP comes out and activated and you're not the leader, right? 2:15:16 Then it's a soft fork. 2:15:17 You don't need to convince all of the players, all of the nodes to upgrade their nodes. 2:15:21 So like they're going to continue to receive blocks and everything's going to be well. 2:15:26 So I don't like the, you know, forcing everyone to upgrade. 2:15:30 That's that's what the difference between soft fork and hard fork. 2:15:32 So BIP200, it's OK. 2:15:36 That's why my narrative here in Brazil, I try to pick the narrative of the prepper narrative. 2:15:41 Like I want to be prepper for what's going to come. 2:15:45 Right. 2:15:45 If you saw a storm, I'm going to get my umbrella. 2:15:48 You know, I'm going to prepare for this storm. 2:15:49 Storm. 2:15:50 But what I mean by that is that if miners decide to defend the soft fork with the miner activate 2:15:56 soft fork, there's nothing that the users can do. 2:15:59 Right. 2:16:00 And and users. 2:16:04 The only thing that the users can do is not use Drivechains at all. 2:16:07 That's the only thing. 2:16:08 Right. 2:16:09 That's the only defense against Drivechains, because, OK, I don't want to use Steproot. 2:16:13 Don't use Steproot. 2:16:14 I don't want to use SegWit. 2:16:15 Don't use SegWit. 2:16:16 I don't want to use DirectChain. 2:16:18 Just don't use DirectChain. 2:16:19 It's just an opt-in, you know, just an option where you can spend your bitcoins. 2:16:24 But, you know, I don't like the narrative of hard forks because you have to. 2:16:30 It's not an opt-in. 2:16:31 It's a forced option. 2:16:33 So that's. 2:16:35 Actually, a lot of people are arguing it's the other way around, by the way, because 2:16:40 if everyone decides to activate the soft fork, given if you don't update, you don't really 2:16:45 have a choice. 2:16:46 You are just dragged along by the tyranny of the majority. 2:16:50 Meanwhile, you know, hard forks actually require you to consciously opt-in to be part of the 2:16:58 new network. 2:16:59 So it's interesting that people disagree even on this matter. 2:17:03 I have many times heard the argument made that hard forks are actually more decentralized 2:17:09 and more peer-to-peer or whatever way to do updates, because it's not like you have 2:17:17 a bunch of devs who release a new client and, you know, people drag you with them, even 2:17:23 if you don't want to be there with them. 2:17:26 I'm not sure, because in proof of work and the way Bitcoin works, you kind of have to 2:17:31 be with the hard anyways. 2:17:34 But, yeah. 2:17:36 But I disagree with you on the decentralized part, because hard forks kind of change the 2:17:40 policy of the network. 2:17:42 That's the thing, like nodes are going to reject each other. 2:17:44 But if you don't update the software, then you can't be on the new network. 2:17:51 That's the point. 2:17:52 So you have a choice. 2:17:54 But of course, with proof of work, you don't really have a choice. 2:17:56 So if 90% of the network goes on, does a hard fork, then you are kind of either go with 2:18:04 them or you go somewhere else. 2:18:11 Yeah, but that's how soft fork works, right? 2:18:15 Even if you don't agree with SegWit, for example, you don't run the node, you run the 2:18:20 node like, I forgot the version that SegWit was activated, but if you run a node before 2:18:26 that, that's okay. 2:18:28 Like the thing that you're going to see that you don't understand what's going on there. 2:18:32 And if you try to spend a SegWit, miners are going to enforce the rule and going to 2:18:38 reject the transactions. 2:18:39 So if you try to spend the Drivechain address, miners are going to reject that because they 2:18:46 are enforcing the rule. 2:18:47 Don't you see the contradiction from your point of view and your sovereignty that you 2:18:55 are actually have a choice, a decision over which network to participate? 2:19:00 With a soft fork, you absolutely have no choice. 2:19:02 If a soft fork is activated, then you are dragged along. 2:19:04 It's like democracy. 2:19:06 You can have a minority opinion. 2:19:07 Nobody gives a shit. 2:19:11 I agree with that. 2:19:13 If you don't agree with the soft fork, you kind of have to do a hard fork, you know? 2:19:21 So that's the nature of Bitcoin. 2:19:28 You don't control Bitcoin. 2:19:29 So if the majority of the users, miners decides to create an opt-in, it's opt-in. 2:19:36 You don't need to enforce that rule if you don't like the rule. 2:19:40 Like if I don't like SegWit, if I don't like Taproot, I can deactivate that on my node. 2:19:44 But it's a meaningless thing if you enforce or don't enforce a rule. 2:19:48 It's completely meaningless. 2:19:49 If a soft fork activates, then you are bound by that rule, whether you like it or not. 2:19:53 That's the point of the people that are saying that soft forks are actually evil. 2:19:59 Some people are saying that soft forks are evil and we should only upgrade by hard forks. 2:20:03 I'm not one of those people, by the way. 2:20:04 I'm just saying that there is a point of view of looking at this that is just in a 2:20:09 direct contradiction of what you are saying. 2:20:11 But do you think that if you only have like a hard fork, if soft fork doesn't exist, 2:20:19 the hard fork would impose a narrative and now we have leaders? 2:20:24 Because soft fork is everything is opt-in. 2:20:27 If for some reason all the users decide to impose a soft fork that is malicious and you 2:20:33 don't agree with the soft fork, nothing is going to happen with the node. 2:20:37 No, that's the opposite. 2:20:39 I'm telling you, you are absolutely wrong about that. 2:20:42 If people decide to do a hard fork that you don't agree with and you don't update, 2:20:46 then nothing will happen to your node. 2:20:48 But if they decide to do a malicious soft fork, for example, like burn certain coins 2:20:54 forever and you don't actually agree with it, there is nothing you can do. 2:20:57 Like you are basically dragged along with the majority decision. 2:21:02 You don't get to make your own decision. 2:21:05 That's the entire point. 2:21:07 That's the argument that the, I don't know, hard fork fanatics or fans make. 2:21:24 I don't think it's that important, really. 2:21:35 I think we have to draw a distinction. 2:21:37 The distinction between hard and soft fork has been played out. 2:21:44 It's no longer useful and it should just be like... 2:21:51 This is one of the problems with doing SegWit as a soft fork. 2:21:53 I think it confused everyone forever. 2:21:57 But I think just having two options is not good because things get tricked into fitting 2:22:04 into one of the two buckets, one of the two funnels, and it's just not helpful. 2:22:12 But I think, yeah, it's a hard fork if everyone has to update, which basically will never happen. 2:22:17 Don't you think it's different? 2:22:18 Because we got onto this topic by discussing whether or not Bitcoin Cash was a good thing. 2:22:26 I'm against hard forks, but I do think being pro-competition is more important. 2:22:32 And if you are just going to launch your own thing, doing the airdrop to all Bitcoiners, 2:22:41 that's pretty nice for Bitcoiners, I think. 2:22:42 I think the one thing that is worth taking a note of in the whole Bitcoin Cash fork drama 2:22:51 is that roughly the same event, I know they are not exactly the same events, but roughly 2:22:56 the same event, this separation, has been celebrated as a day of independence by both 2:23:02 Bitcoiners and both Bitcoin Cashers. 2:23:05 So Bitcoin Cashers feel like they have been liberated from the majority 2:23:10 will or whatever. 2:23:12 They don't actually think it's a minority. 2:23:14 They think it's a small minority, an intolerant small minority that has taken everyone hostage 2:23:20 and forced their will on them. 2:23:22 That's actually what they think. 2:23:23 And they think that the hard fork actually liberated them and now they can be free. 2:23:30 And the narrative in the small block camp is that they have been freed from the corporate 2:23:38 interests that try to take over Bitcoin. 2:23:40 So both of the camps think that this has been their fight to independence and they won. 2:23:46 It's pretty funny. 2:23:56 I had another question to challenge you a little bit on, Paul, if I can. 2:24:00 Yeah, sure. 2:24:02 Well, so one of the things Peter Todd said about kind of dilution of fees actually is 2:24:07 something I think is real because fees aren't this linear, you don't capture fees linearly, 2:24:16 you know, so like fees rise exponentially due to restricted space. 2:24:20 And so if you do always have a relief valve for those fees, the higher fees, you'll actually 2:24:26 overall collect fewer fees, even if you have far more transactions. 2:24:32 So if your fees are, yeah. 2:24:35 What's the lowest fee? 2:24:36 Yeah, of course. 2:24:37 Forever, as opposed to two, three dollars. 2:24:40 It's you got to make a lot more transactions, right? 2:24:43 The logic requires that it be the case that Drivechain be such a good fee offload valve 2:24:52 thing that it reduces the L1 fee rate. 2:24:56 But the thing is, how can that be the case? 2:24:59 Like imagine a parallel world where there are no, there's no such substitute, then that 2:25:07 means that the existing L2s are not serving as many people. 2:25:11 By definition, we're not having as many transactions on Bitcoin. 2:25:14 So that's only possible in a world where Drivechain is very necessary. 2:25:19 Only in the world where Drivechain is necessary can it bring the L1 fees down. 2:25:23 If there's something where people want the Drivechain like thing and they can't get 2:25:27 it, then that means that the end user is going to prefer to ditch that coin and purchase 2:25:33 a Drivechain enabled coin. 2:25:38 It is interesting, like the fees are still high, even though. 2:25:43 Yeah, there's Lightning, there's Litecoin, there's Custodial, there's Liquid. 2:25:47 So those things should either all push the L1 fee rate down the same, as would the DC, 2:25:53 Valve, or if they don't do that, then it just means that people really hate the existing 2:26:02 thing of L2s in comparison to what they would like. 2:26:06 So it's kind of like the L1 fee rates are already low today. 2:26:15 Well, I think what Drivechains would have done better than Lightning, Lightning meant 2:26:19 to tackle, I think the developers focused on a problem that maybe wasn't there yet. 2:26:27 Users are not dead set on low fees yet because obviously they're still using higher fees. 2:26:37 A free market might've been something more like Zcash would have succeeded 2:26:42 versus instantaneous low fees. 2:26:47 Right? 2:26:47 Because when you say coin joins, probably brings in more fees than Lightning today. 2:26:54 Yeah, probably. 2:26:55 L1, yeah. 2:26:59 I have a question to Moon Sattler, if I can. 2:27:06 Moon, how can you prevent a soft fork if it's already activated? 2:27:11 It's already activated. 2:27:15 Please say it again. 2:27:18 How can you prevent a soft fork if there is a soft fork, for example, 2:27:22 Taproot, how can you prevent that now? 2:27:25 Like for example, Taproot, how can you prevent that now? 2:27:25 Can you? 2:27:28 I don't understand the word you are saying there. 2:27:30 I understand soft fork and Taproot and everything else, 2:27:33 but what do you want with the soft fork? 2:27:35 When a software is activated, how can you deactivate it? 2:27:40 Ah, how can you deactivate it, yeah, yeah. 2:27:43 Let's assume that your example, 2:27:45 like we activated a malicious soft fork and everyone, 2:27:48 okay, you know, the majority of the users 2:27:50 decided to enforce that, the miners agree, 2:27:53 and now there is a malicious soft fork there. 2:27:55 How can you prevent that in the future? 2:27:57 Or Bitcoin will be broken forever? 2:28:00 Yeah, you can. 2:28:01 So usually you can very easily disable soft forks. 2:28:06 Most of the time we do soft forks 2:28:09 in a way that we restrict the rules. 2:28:11 Previously undefined behaviors are restricted 2:28:14 for a specific purpose. 2:28:17 And this can be a result of codes 2:28:19 that do nothing for now and stuff like that. 2:28:22 And then you can just further restrict them to do nothing. 2:28:25 Like you could actually like create a soft fork change 2:28:29 that basically makes Taproot transactions invalid. 2:28:34 And, or if OpenHash4 would be repurposed 2:28:41 for check template verified, 2:28:43 then you could further restrict 2:28:45 that basically no hash is accepted. 2:28:47 It's always invalid and that basically disables 2:28:51 the usability of CTV if there is some problem. 2:28:54 So you usually can restrict things to unusability. 2:28:58 That's how you soft fork out a soft fork. 2:29:03 And do you think that the activation using soft forks 2:29:05 are better than hard forks? 2:29:08 I think technically, yes. 2:29:10 So it's like probably a hundred times easier 2:29:14 to coordinate soft forks. 2:29:16 And it also probably gives people like more safety 2:29:22 if you can, like let's say you are an economically 2:29:26 significant node and you are not like mentally ill, 2:29:32 then you would probably just run both versions. 2:29:34 And if they disagree, you don't accept payments 2:29:37 until you know what the hell is happening, right? 2:29:39 So you have this ability that you can just run 2:29:42 the old software just in case the new software 2:29:45 has some bugs in it. 2:29:47 And those are users can be lazy in updating 2:29:49 and see if anything breaks. 2:29:51 And Paul has talked about it a lot. 2:29:54 And I think he's largely right that soft forks 2:29:57 actually protect the users, especially if they are not 2:30:01 like thought about this, everyone has to update in lockstep 2:30:05 like we are in the military or something, you know, whatever. 2:30:11 Miners have to enforce it, right? 2:30:12 Otherwise, like they're the block producers, 2:30:15 they produce the blocks, right? 2:30:16 So if miners decide to defend a BIP, 2:30:19 like they should defend the BIP, right? 2:30:23 Because they are gonna produce the blocks, 2:30:24 they are gonna enforce the blocks. 2:30:25 Yeah, so if the miners don't enforce a soft fork, 2:30:29 generally they risk that they are making an invalid block. 2:30:32 Of course, there could be ways around this. 2:30:35 So let's take dry chains for an example. 2:30:37 Let's say a miner does not want, for whatever reason, 2:30:40 they don't want to be thought of as custodians or whatever, 2:30:44 and they don't want to actually enforce 2:30:46 the dry chain rules. 2:30:48 They have to do something. 2:30:50 They have to acknowledge the existence of dry chains 2:30:54 in a way with some custom software that makes sure 2:30:58 that they are not making an invalid block 2:31:00 under dry chain rules or they get followed 2:31:02 from the network. 2:31:03 So kinda they have to do something. 2:31:07 I kinda have a vision on how dry chains could be enforced 2:31:13 as a soft fork, is that miners, 2:31:17 I think it would be the first miner activates soft fork. 2:31:20 Miners are gonna enforce that rule, 2:31:22 and then users are gonna come and try to do peg-ins. 2:31:27 And they, oh, that's a good thing that I could do 2:31:30 with my Satoshi, so let's do that. 2:31:32 And then users are gonna enforce the rule as well. 2:31:34 So I think it's gonna be for miners to users this time, 2:31:38 because I think it's good for the miners, 2:31:41 and they will activate it. 2:31:44 There's no harmful for Bitcoin. 2:31:46 And then they probably activate a dry chain, a sidechain, 2:31:50 and then users will come. 2:31:52 They will enforce the rule 2:31:54 because they're using the rule, right? 2:31:56 I think it's gonna be bottom-up this time. 2:31:59 Yes, so I kinda think that in case of dry chains, 2:32:03 it should be a miner-activated soft fork specifically. 2:32:07 But the surrounding narratives with soft forks 2:32:11 and how they all should be user-activated 2:32:15 are splitting the community in a pretty violent way 2:32:19 to such a degree that CTV has been opposed 2:32:23 just on the grounds of the activation parameter. 2:32:27 Nobody actually gave a flying fuck 2:32:29 what CTV was actually doing, 2:32:31 all the drama, all the people getting up in arms against it 2:32:37 and grabbing pitchforks and pitchforks, 2:32:40 torches and pitchforks and everything, 2:32:43 all just happened over informally suggested 2:32:48 activation parameters. 2:32:50 Like there was not even code. 2:32:52 Jeremy just talked about him releasing an activation client. 2:32:56 There was no code, nothing actually concretely proposed. 2:32:59 He just suggested that CTV would be activated 2:33:03 with a speedy trial, same as taproot, by the way, 2:33:06 which was widely celebrated. 2:33:08 And then basically all hell broke loose. 2:33:11 And that is like incomparable 2:33:13 to what we are talking about here, 2:33:16 like miners just activating 2:33:18 without user consensus, anything. 2:33:20 So that's a whole different set of shitstorm. 2:33:26 Yeah, I do agree with you that it's going to be very hard 2:33:30 if miners decide to do their own soft fork, 2:33:32 but I think it's the only way. 2:33:36 Because as we're talking about, 2:33:40 the narrative is kind of against everyone 2:33:42 that defends these Drivechains 2:33:43 because the status quo doesn't want to change. 2:33:46 The gatekeepers like Mike Peter Todd 2:33:48 is going to like scream about it. 2:33:53 And I really do think that miners 2:33:58 will kind of have to activate it. 2:34:01 Otherwise, I don't see any way that we could, 2:34:06 probably I'm wrong, 2:34:07 but I don't see any way 2:34:09 that we can activate Drivechains in other ways. 2:34:13 Yeah, I mean, activation is like, 2:34:17 it's like when you are opening the gates of an asylum 2:34:22 and letting all the crazies on the streets for a few days, 2:34:25 that's normal activation talk. 2:34:28 And if you are just suggesting 2:34:30 that miners should activate anything 2:34:35 without the user node enforcing 2:34:38 or having as Adam Beck said, 2:34:41 technical consensus first, 2:34:43 before even such a thing suggested 2:34:45 between among core developers, 2:34:48 like that's just straight up heresy. 2:34:51 That will really get people up in arms 2:34:54 and they will probably try to reign up the UASF of 2017. 2:34:59 And they are going to try to rally up a UASF movement. 2:35:04 If you are like seriously go along with this, 2:35:08 maybe even release a client that will do this. 2:35:12 And I mean, it would be fabulous and hilarious 2:35:17 and very sad to watch it unfold. 2:35:20 Yeah. 2:35:21 But if they tried, 2:35:23 if miners decide to defend with all their hearts, 2:35:26 like there's nothing you can do 2:35:28 doing a user reject soft fork, 2:35:30 you will have to convince all the other players. 2:35:35 Yeah, the UASF is a hard fork 2:35:39 because it breaks the longest chain rule. 2:35:42 Only if it does not end up being the heaviest chain, right? 2:35:46 So it depends on who's winning. 2:35:47 We're just gonna assume that the miners are doing it 2:35:50 and the users are determined 2:35:52 and they both pulled the trigger, 2:35:54 then what will happen will be exactly the same as if. 2:35:56 Yeah, I believe so because miner activates a fork, 2:36:00 the miners are already there. 2:36:01 They already have the majority of hashing power 2:36:03 and the users don't produce blocks. 2:36:05 They have to convince the miner 2:36:06 that they're doing the wrong thing. 2:36:09 No, no, no, no, no, no, no, wait. 2:36:11 That's not, I don't think that's how it works. 2:36:14 So kind of how it works is that 2:36:17 the users would get really riled up about something. 2:36:21 It doesn't really matter if it's a UASF or a URSF, 2:36:24 it doesn't matter, it's the same thing. 2:36:26 So basically, the users are signaling on social media 2:36:29 or whatever that they can do 2:36:31 because they have no severe resistant way 2:36:34 to signal on the Bitcoin network whatsoever. 2:36:36 So that's just complete garbage. 2:36:39 The idea of node runners enforcing things on their own 2:36:43 is probably completely meaningless 2:36:46 aside from economically truly significant nodes. 2:36:48 But like I said, economically truly significant nodes 2:36:51 can just run all versions 2:36:54 and see if their nodes disagree and whatever. 2:36:56 So that's a different story. 2:36:59 But let's say the users are convincing 2:37:01 all the major exchanges and everyone 2:37:03 that they will simply not value that chain, that coin. 2:37:07 They will not buy the chain and the coin 2:37:10 that would fall under the new rules. 2:37:14 And if they are successful in making enough noise, 2:37:18 and like I said, this can be done 2:37:19 by an intolerant minority, like a very small minority. 2:37:22 There are millions, maybe tens of millions 2:37:24 of Bitcoiners out there. 2:37:26 And there are like 100 to 1,000 people 2:37:29 who really make the noise on Twitter. 2:37:31 And if this 100 to 1,000 people 2:37:33 manages to convince everyone, 2:37:36 all the major exchanges, all the major payment providers 2:37:40 to back out basically or turn against a change 2:37:44 or enforce a software change, 2:37:46 then those economically significant nodes 2:37:48 decide who gets paid and who does not get paid 2:37:52 when the miners produce a block. 2:37:54 And if those nodes reject the miners' block, 2:37:57 then the miners are making their, 2:37:59 basically mining a shitcoin. 2:38:01 And so this is the theory behind 2:38:03 how the users can actually indirectly enforce the rules 2:38:07 by simply valuing the rule set 2:38:10 that they want Bitcoin to be. 2:38:12 But what will happen is if miners decide to defend it, 2:38:17 even if the economic nodes decide to defend the other side, 2:38:21 what will happen is the miner will mine other chains, 2:38:26 the main chain, let's say, 2:38:28 it's not gonna be like a shitcoin 2:38:29 because they decide to defend it. 2:38:31 And- 2:38:32 No, no, it will be a shitcoin because they can't sell it. 2:38:34 Like literally, if you can't sell it on an exchange, 2:38:37 it's a worthless shitcoin 2:38:38 and the miners will not even get that. 2:38:39 They won't even activate. 2:38:41 So if they get just a whiff of this, 2:38:43 that this is going to happen, 2:38:44 they are not going to activate it. 2:38:46 Yeah, I agree with you. 2:38:47 But let's say that they're mining the right Bitcoin 2:38:51 that in this example, with the Drivechain, right? 2:38:54 And the majority of the users, 2:38:57 the economic nodes decided to don't agree with that 2:39:00 and invalidate blocks, 2:39:01 but they don't have fresh rates in their site. 2:39:03 So they are gonna do transactions, 2:39:07 propagate to that network, 2:39:08 but there's no blocks coming in, right? 2:39:10 So they're gonna be like a huge plot to the miners. 2:39:15 Okay, let's switch our hash power to the other network 2:39:17 because there is a lot of Bitcoin that I can mine there. 2:39:20 That's the whole point that I think- 2:39:22 This was the whole mistake 2:39:23 that the big blockers made in 2017. 2:39:26 This is what you are saying. 2:39:27 They told the same thing. 2:39:29 They told that the users cannot go against the miners 2:39:32 if the miners really decide to do something, 2:39:34 then they get to do. 2:39:36 But no, the hard fork side is such an uphill battle 2:39:41 and such an impossible thing to win against the market 2:39:44 that actually values something 2:39:46 because Bitcoin is like all gathered 2:39:48 around certain set of values in the end. 2:39:52 And if the miners try to go against that, 2:39:54 it's impossible and they won't even try. 2:39:56 I'm telling you, at least that's the idea. 2:39:58 The whole USF thing, you could say it was untried, 2:40:02 but it's very likely that it works perfectly well 2:40:06 as a bluff. 2:40:06 And then the next time this is happening, 2:40:11 that's a bluff because we did not actually- 2:40:13 It was a bluff. 2:40:14 It was a bluff. 2:40:16 So, but this time, this time, if users decide to bluff, 2:40:21 we're not gonna accept blocks. 2:40:23 We're gonna invalidate blocks with Drivechain rules. 2:40:26 Not the users, yeah, not the users. 2:40:29 It's the same thing that you're in a battle 2:40:31 in the top of a hill and the miners in the top of a hill, 2:40:34 they have better position to battle 2:40:36 and the user rejects- 2:40:37 No, no, no, no, no. 2:40:38 The exchanges are the top of the food chain, man. 2:40:42 The miners cannot mine a block 2:40:44 that they can set a coin base for. 2:40:46 It's impossible for them. 2:40:47 Every miner would leave that pool that does that. 2:40:50 It's not possible for them to go against the market 2:40:53 in such a way. 2:40:55 They can't mine invalid blocks. 2:40:56 But they are basically hard fork. 2:40:58 Yeah, but then, guys, then we have a trypto. 2:41:01 We have a tryptonomics hand has been up for a while. 2:41:07 Yeah, but my point here, Moon, 2:41:10 is the thing that if a minority of users 2:41:15 decide to reject the block, 2:41:18 they're gonna fork themselves, right? 2:41:21 Because, look, if miners decide to defend it, 2:41:24 miners will upgrade their nodes to the BIP300/301. 2:41:28 The majority of the nodes that decided to stay as they are, 2:41:34 they are gonna also validate their blocks. 2:41:40 You are right. 2:41:40 You are right. 2:41:41 If Lou Dasher and Peter Toad and a few other people 2:41:44 decide to reject these blocks, 2:41:46 then they are going to be left alone and basically die. 2:41:50 They're gonna have- 2:41:51 That's not the USF or USF2. 2:41:54 USF or USF2 is actually convincing 2:41:57 the economically significant nodes 2:41:59 that pay the miners in the end 2:42:02 that they should enforce a certain rule set. 2:42:04 And if they do, then the miners will lose. 2:42:06 Like, they will lose before the battle even begins. 2:42:09 So it all depends on if the internal minority 2:42:12 can raise enough noise in social media 2:42:15 to convince these payment providers and exchanges 2:42:18 and other truly significant nodes. 2:42:21 To basically go with the soft fork side 2:42:25 and then the hard fork side loses. 2:42:28 Otherwise, the miners obviously win. 2:42:31 Like, you can't piece against the hash rate 2:42:36 as a node. 2:42:36 That's impossible. 2:42:39 Yeah, so that was my point. 2:42:40 Like, if miners actually defend it, they will defend. 2:42:44 So a majority of people will decide to complain about it. 2:42:47 Yeah, I know. 2:42:48 But don't you guys mostly agree? 2:42:49 I mean, what are you even disagreeing about? 2:42:51 And what about a tryptonomic in their hand? 2:42:57 Hello. 2:43:00 Hello, how's everybody? 2:43:02 Really cool discussion. 2:43:04 So I am about to assist 2:43:08 with launching a mining operation. 2:43:14 I came across a mutual, our friends' friends 2:43:18 who owns a wealth management company. 2:43:19 He wants to offer Bitcoin to his customers. 2:43:22 It's in a non-American market. 2:43:25 But he also wants to set up a mining operation. 2:43:28 So they've gathered all the funds. 2:43:30 And so it looks like they're gonna be setting up, 2:43:34 starting initially with like 15 or 20 mining machines. 2:43:37 So of course, I'll be recommending soft forking 2:43:42 on to bit 300301 and utilizing Drivechains 2:43:49 and configuring the nodes that way. 2:43:52 But are there any more maybe recommendations 2:43:56 or suggestions on the configuration besides that? 2:43:59 And maybe any mining machine recommendations? 2:44:01 And also maybe if you guys have any comments 2:44:04 on a developer known as Gummo 2:44:06 who says he has built a supercomputer 2:44:10 and mines something like, 2:44:14 mines Bitcoins worth seven and a half billion dollars. 2:44:18 So really curious about that as well. 2:44:26 Well, I definitely, I mean, can you be more specific 2:44:32 about like what is the size of this mining operation? 2:44:37 Yeah, they wanna start out with 2:44:40 between 15 and 20 machines. 2:44:41 And I think the machines they're looking at 2:44:43 are around $1,300. 2:44:47 So pretty small. 2:44:50 Eventually they're looking at multiplying that 2:44:53 like 10 times and then just continuing to scale that 2:44:58 as long as they see growth. 2:45:01 But I'm looking at your BIP and looking at soft forking 2:45:07 and configuring the nodes this way. 2:45:12 So do you recommend anything else 2:45:14 besides configuring the nodes to, 2:45:19 besides soft forking? 2:45:20 I would point it at Luxor. 2:45:24 They care about maximizing the economic return of there 2:45:31 and they're unpersuaded by like the death cult. 2:45:34 So I would go with Luxor as the pool. 2:45:37 That's what I would do. 2:45:40 Okay. 2:45:42 Luxor. 2:45:46 Yep, that's what I would do. 2:45:48 That's the mining pool I would do. 2:45:59 Okay, so the two of you were quarreling 2:46:02 about miner activated, user activated, et cetera. 2:46:07 If the users fight the miners, 2:46:09 they are breaking the heaviest chain rule. 2:46:11 So they are, it's a very nuanced thing, 2:46:14 but they are hard forking in that case. 2:46:16 The miners need to sell the coins. 2:46:19 So the miners have no agency 2:46:21 if they really can't sell the coins anywhere, 2:46:23 if they mine a block that no one wants. 2:46:27 So they need to have the block we wanted. 2:46:29 They need the exchange as an enormous short term 2:46:34 because they have a huge network effect. 2:46:35 So they have a competitive moat. 2:46:36 They have liquidity. 2:46:38 They have buyers and sellers. 2:46:39 That's where they both, the buyer and seller meet. 2:46:41 So they're like Craigslist. 2:46:43 So they have some pretty decent market leverage. 2:46:53 So probably the exchanges, you know, 2:46:55 what if an exchange did a user activated soft fork 2:46:57 and it was just Coinbase and Kraken, 2:47:01 would that be enough? 2:47:03 Yeah, probably. 2:47:07 Yeah, but again, they probably don't want to go against 2:47:11 what the people want, what they value, 2:47:14 what they are willing to pay for. 2:47:16 I mean, assuming that the exchanges even care 2:47:18 about Bitcoin and not just like getting 99% 2:47:22 of the fee revenue from, you know, altcoins and DeFi. 2:47:27 My guess is at this point, 2:47:28 probably I don't even know if Brian Armstrong 2:47:32 wants Bitcoin to succeed. 2:47:34 He may just, he got his, he got his B, 2:47:39 you know, his billion, he's in the three comma club. 2:47:43 And so now he's kind of like, 2:47:46 kind of a bunch of annoying people. 2:47:48 A lot of people are actually convinced 2:47:51 that Brian Armstrong came to outright hate Bitcoin 2:47:54 and like would actually do something to see it fail 2:47:58 if he could. 2:48:00 A lot of people are convinced of that. 2:48:02 I'm not sure about this, but apparently he got, 2:48:06 he got really disappointed around the block size war 2:48:10 and how things are going. 2:48:11 Yeah, of course, I mean, he was like working really hard 2:48:14 to make Coinbase a success. 2:48:16 Sleepless nights, beeper duty, you know, 2:48:20 like people have when you do a startup. 2:48:22 I've never done this, 2:48:23 but there's videos where Brian Armstrong 2:48:25 actually talks about it, him and Fred Ursham. 2:48:29 Cause I've been in Bitcoin a long time. 2:48:30 So I remember the old videos, 2:48:34 but they would complain about like, 2:48:35 if the website would go down, 2:48:37 they'd have this like beeper that would go off. 2:48:38 Young people are like, what the is a beeper? 2:48:41 To any young people listening, 2:48:42 a beeper is like a cell phone with no screen. 2:48:47 I don't know, watch house, watch house the show. 2:48:50 And it would beep and go off. 2:48:53 And so then they'd have like, 2:48:54 they would like pass it around. 2:49:00 And so then it'd be yours and it went off at 4 a.m. 2:49:02 You had to like try and get the site back on quick. 2:49:04 You gotta have that site back on. 2:49:08 Sucks. 2:49:10 Anyways, he started it and he, 2:49:11 against all the odds, he succeeded. 2:49:15 And yeah, it certainly looks much more, 2:49:20 at the time I really thought that people were trying 2:49:22 to block the small blocker group that I was in, 2:49:26 because I was and still am a small blocker. 2:49:29 But I really felt like we were doing it 2:49:31 to keep the full node costs down. 2:49:32 Like I thought we were doing it for a purpose, 2:49:34 but now in retrospect, it does seem like 2:49:37 it was just like a kind of, it turned into an ego thing. 2:49:41 And now it just seems totally irrational to me at all. 2:49:44 It doesn't seem like there was anyone 2:49:46 who actually cared about Bitcoin, 2:49:49 except for a few other few people, so. 2:49:53 I think most of us care for ourselves. 2:49:55 Now interestingly, also you have this 2:49:57 where all the large exchanges are trying 2:50:00 to create their own little gardens 2:50:03 where people can do the small contract things 2:50:05 and they are actually trying to help people 2:50:09 to use their stable coin and their contract chain 2:50:13 and their whatever. 2:50:15 So they are trying to like lock people 2:50:18 into their little universe. 2:50:23 And I'm not even sure if they would be interested 2:50:26 in any proposal, supporting any proposal 2:50:29 that actually wants to blow all the top 2:50:32 or maybe just even has a chance to blow all the top. 2:50:36 I just wanted to mention that the world 2:50:39 pretty much changed a lot since that time. 2:50:43 Yeah. 2:50:46 You're absolutely correct that the exchanges will be, 2:50:50 they are the final enemies of Bitcoin in a way 2:50:54 because they are the enemy of hyper-Bitcoinization. 2:50:56 At first they're the strong ally, 2:50:59 but then the last thing they want is for everything 2:51:03 to happen in the crypto system. 2:51:06 And the last thing they want is for every fiat currency 2:51:08 and every altcoin to die 2:51:11 because there'll be no more trading of those. 2:51:14 So that'll just be over. 2:51:16 So the exchanges are actually in the long run 2:51:20 huge risk to Bitcoin. 2:51:25 Yes, but in the extreme short term, 2:51:27 they are the guardians of the protocol 2:51:30 in the sense that we discussed 2:51:31 that miners simply cannot make a block 2:51:34 that their nodes will not accept. 2:51:37 Yeah, one intriguing thing is that the miners 2:51:41 are the biggest transaction processors 2:51:42 at this particular phase. 2:51:44 So they are, the miners are the ones 2:51:48 who actually process like deposits and withdrawals 2:51:51 at an exchange. 2:51:52 So they're not like, they're not quite Visa 2:51:54 or whatever you want to call it. 2:51:56 But I think that's what Satoshi had in mind was that, 2:52:00 well, the incentives will never get out of whack 2:52:03 because the people who are actually processing 2:52:06 the transactions will be the customers. 2:52:10 You know, they'll be like the big nodes 2:52:11 will be like the Visa node. 2:52:14 And so the incentives can never get misaligned because. 2:52:18 The Visa people, they just want to keep maximizing their transaction fee revenue, and that means they want to maximize the number of transactions. 2:52:22 And that means they're always just in when he says he has that cryptic line that goes, any needed rules can be enforced with this consensus mechanism. 2:52:29 Or he says something like that, where it kind of makes it seem like hard forks and soft forks will never be a problem and will never be contentious. 2:52:37 So I think that's what he's referring to. And the weird thing is, is right now it is the exchanges that actually process the deposits and withdrawals. 2:52:47 You know, like they are the ones who, because that's where most people send and spend their money from and to. 2:52:57 And they have for a very long time set unreasonably high fees for withdrawals, of course, because that's not in their business interest to let people go. 2:53:08 They actually want them to stay on the exchange and they do everything in their power to lure people into trading. 2:53:17 You get these alerts that something is doing whatever and then you should do something about it, maybe, wink wink, you know. 2:53:25 And I also think that miners don't actually process the largest. 2:53:33 So probably the transaction volume that happens in centralized exchanges is probably completely failing what is happening on-chain. 2:53:42 And that's kind of how the centralized exchanges like it. 2:53:46 John, John, Paul, I think I share a post in your space. 2:54:13 Because I try, as you guys are saying, I try to summarize all the features that all the players of Bitcoin would like. 2:54:23 And maybe we could have a pitch specific for everyone. 2:54:28 Because if you want to be a success, to have a success, we need to embrace everyone. 2:54:34 So I was wondering if it's a good idea to go through all of them. 2:54:39 Because I think for the users, the good pitch for the users is that it's going to increase. 2:54:45 I mean, we can try. Yeah, let's give it a try. Let's do it. 2:54:50 Can you share? I don't know how to do that. 2:54:55 Can you send it? Can you post it in the comment in the little bubble in the bottom right? 2:55:01 You can comment and I think we can put it in the nest, I think. 2:55:04 Yeah, share the space for me. I've already shared, I think. 2:55:09 Oh, yeah, I think you've accepted, right? 2:55:18 You shared it three times. 2:55:20 Well, this has happened to me once because I didn't see that I shared it because I didn't see the nest and I shared something three times. 2:55:28 Yeah, I shared it three times, I'm sorry. 2:55:30 But the first thing is for the users, it's going to increase usability and functionality, right? 2:55:36 Because you can do a lot of things with your Satoshis in the Drivechain. 2:55:40 And it's trustless two-way peg in the sense that you only have to trust miners. 2:55:46 And potentially low fees, right? Because on the other side, on the Drivechain, it could be like a low fee. 2:55:52 And it can scale to planets, to billions. 2:55:56 But I think it's a mistake, this whole miner trust thing, I wish we could fight back on it because I feel like it's a mistake. 2:56:03 Because really, we're not trusting them to do anything other than maximize their profits. 2:56:06 Which is really a far less amount of trust than what other people are asking. 2:56:16 The thing here is compared to tight chains like Liquid, you have to trust the Federation instead of miners, right? 2:56:23 Well, really though, it's like the whole trust thing is kind of different. 2:56:28 Because Liquid, no matter what the context is, they can remove... 2:56:32 Yeah, I don't know, I guess... 2:56:34 I think with Liquid, it's not really explained. 2:56:37 With Liquid, it's... 2:56:39 I think in all cases, you're kind of trusting the fee revenue will be more than the amount taken or something like that, I don't know. 2:56:45 Yeah, I agree with you. 2:56:47 I agree with you. 2:56:49 Okay, we can change that. 2:56:51 But for core developers, I think we should focus on security updates and reduce soft fork overhead. 2:56:56 Because we can do all the political battles that we're doing on the first layer, we're going to do on the second layer. 2:57:03 So I think it's a good pitch for them. 2:57:05 So you don't need to convince all the other developers of Bitcoin Core. 2:57:09 You just have to convince a few miners to activate your BIP. 2:57:13 And you're good to go and you can test with real satoshis. 2:57:17 So I think it's a good pitch for them. 2:57:19 But of course, people like Peter Todd, they like the job they're doing today. 2:57:25 They're liking the job they're doing today. 2:57:27 So I don't know if some of them are going to agree because they're kind of earning a little bit money in that. 2:57:34 So anyways, what do you think about that? 2:57:37 Okay, I think it's definitely the case that some people will lose a lot from Drivechain. 2:57:50 I think we should just, I don't know, there's like a conflicts of interest type of a thing. 2:57:55 Where like Peter Todd, he gets flown around the world. 2:57:58 He gets to just hang out in conferences instead of having like a real job. 2:58:03 And so it's kind of like it's all fake. 2:58:07 So I don't know if anything will convince him. 2:58:11 Especially the people who have already come out against it, like the three or four. 2:58:15 I think it's not, I think they'll never be convinced. 2:58:19 So they have to be like fought kind of. 2:58:26 Yeah, so the third one would be like the miners. 2:58:31 They will have like earning petitions and replied much money. 2:58:35 They don't even need to look at the layer two, right? 2:58:37 Only care about layer one and petition solution for mining reward reduction, right? 2:58:43 Because we don't have like more fees coming in from the blocks. 2:58:50 They will have fees coming in from the Drivechains, right? 2:58:53 So it could be a good pitch for them to earn money, right? 2:58:57 That's what they want. 2:59:00 And regarding for the Drivechain miners, like the Drivechain block producers that you like to say. 2:59:06 It's going to be earning petitions and protect the sidechain rules, right? 2:59:12 Because they want the earning petition. 2:59:14 So that's the thing. 2:59:15 And for Drivechain developers could be like an opportunity for innovation and real world test environment. 2:59:22 So there's no need to iterate on the first layer and wait for another soft fork or so. 2:59:29 So they could have this opportunity for innovations. 2:59:33 And of course for entrepreneurs also opportunity for innovations, provide liquidity, earn fees, earn money. 2:59:39 So I think it could be like good for everyone. 2:59:43 Don't you think that's a specific pitch for everyone? 2:59:46 So you could like take that from a starting point and then. 2:59:50 Well, I mean, I don't know because it already is good for everyone. 2:59:53 And so I don't know where to go from there. 2:59:57 I mean, it is good for everyone. 2:59:59 Yeah, it is. 3:00:00 But we need to pitch that, right? 3:00:02 I think it's a battle of narratives. 3:00:04 And, you know, I think that's a problem because it's a good idea. 3:00:07 I think it's a bad idea. 3:00:09 But we need to pitch them, you know, in order to get more players to defend it, you know. 3:00:27 I was talking with Pitchoff and he really thinks that. 3:00:31 I mean, it might be too late because people who want to do something new, they might just move to like. 3:00:36 They might have already moved to like whatever chain they like. 3:00:41 So the idea of the future of there just being one chain, one coin, maybe that just won't happen. 3:00:49 Maybe there'll just be many coins. 3:00:57 There'll be lots of... 3:00:58 That's impossible in a way that... 3:01:00 Yeah, I think so. 3:01:01 No, no. 3:01:03 I think it's impossible to have like only one coin because culture difference and stuff like that. 3:01:08 But there's only one coin that has the most hash power, right? 3:01:16 So in that regard, that's only be one Bitcoin. 3:01:19 That's impossible, right? 3:01:22 So if we want to succeed on that realm, like I think we need to have a good pitch for them. 3:01:28 And over time, if we have the best idea that could onboard everyone, I think that's the way to go. 3:01:36 But it's hard. 3:01:38 I agree with you. 3:01:39 It's kind of hard. 3:01:41 It's hard to do a perfect pitch for everyone, right? 3:01:46 I don't think it's the pitch. 3:01:48 I think there's conflicts of interest, egos. 3:01:54 It's too hard for the layperson to understand, so they can't check the expert. 3:02:02 People don't do their own research. 3:02:05 They rely on whatever, Peter Todd or some oracle. 3:02:10 They rely on whoever to do it, and that makes it so that it's all based on trust, ironically. 3:02:22 Yeah, that's crazy. 3:02:24 You're true. 3:02:25 That's the truth. 3:02:28 Okay, saying is, like, a lot of, it's a small set of people that don't trust Verify, right? 3:02:37 The majority of people just trust, don't verify. 3:02:42 That's the problem. 3:02:44 Like, I don't trust Verify. 3:02:48 The majority of people just trust, don't verify. 3:02:52 That's the problem. 3:02:54 Like, I think the best explanation and, you know, giving the kind of positive narrative or thoughts, or how you want to call it, for Drivechain is to compare the function of Drivechain with the already existing function of Verify. 3:03:16 The already existing one that actually, you know, how Drivechain improves. 3:03:23 As I said before, I don't know, Miguel, if he was here, but Paul was going through Peter Todd's article and the fees that he's complaining about. 3:03:36 I said, like, at the moment we have the ordinal where you have on L1 so much overload with transactions and the fee rate goes sky high. 3:03:50 But again, the miner is getting the fees. 3:03:54 So with Drivechain, the overload and the fee rate, the high fee rate is eliminated through, you know, collecting the same fees or even more fees in one transaction that is actually not causing any fee rate to go up. 3:04:14 So on L1, the fee rate will be cheap for other things to be done, other transactions. 3:04:22 So something like that, like if we compare, you know, the benefits of Drivechain, I think people will better understand. 3:04:32 And maybe that's a good, if you want to say, pitch or whatever message or something like that. 3:04:39 And there is more. 3:04:42 I totally disagree, by the way, with that take. 3:04:45 First of all, that ordinal inscriptions would go to a sidechain, Drivechain, whatever. 3:04:52 There is not much chance of that. 3:04:55 There is a reason that they value Bitcoin blockchain, mainchain to do this stuff, and they are not doing it on Bitcoin Cash or BSV or whatever. 3:05:09 And more plentiful. 3:05:11 So that is not going to happen for multiple reasons. 3:05:14 So what they value is the identity, the replication of the block space, blockchain, the archival distribution of the data, the availability of the data. 3:05:30 Everyone expects Bitcoin will be around forever and the prestige and the actual scarcity of the block space. 3:05:38 So the entire point, I think, in sidechains is that they are not, they don't have this identity, this uniqueness. 3:05:46 They are one of many. 3:05:49 So they cannot be as prestigious as Bitcoin. 3:05:51 They will not be as scarce as Bitcoin. 3:05:54 I actually don't think that is necessarily true, though. 3:05:57 I don't think it is necessarily true because you can still have just one sidechain that specializes in bit assets. 3:06:05 And it would still be its own thing with its own block size. 3:06:10 And if you are saying it is all based on if they expect it to be around for a while, those expectations could reappear for this. 3:06:20 I think there is something to be said for like they do like it to be a big party. 3:06:24 Like it is very social. 3:06:25 Like they like to throw their ordinals party. 3:06:27 And I think they want to throw a big party that has lots of people attending. 3:06:31 So I think if they could just have it keep growing and growing, that would be something they would like. 3:06:37 The fact that it would be because it is not like the miners are going to gate the slots to some extent. 3:06:47 You can't have a sidechain if it is completely frivolous, right? 3:06:51 So you have to gate something. 3:06:54 I don't disagree that it could happen. 3:06:56 I don't expect that it would happen. 3:06:59 Like I would expect that people would simply like value ordinals on Bitcoin mainchain like many, many times more. 3:07:09 And this would actually like the luxury use case that Alex Kravets is talking about. 3:07:15 He pretty much convinced me that we will not be rid of this menace even if there are sidechains where you could do it. 3:07:21 Of course, I could be wrong. 3:07:23 Like that would be also like fine. 3:07:26 But assuming that this is true, it's actually the users who want to use the block space for transactions. 3:07:32 Who are not looking for that in-sale replication and forever data availability. 3:07:37 That's actually not important. 3:07:39 In fact, it might be an anti-feature. 3:07:42 So for you to buy anything with Bitcoin that everyone will forever replicate the data and it will be there forever is not actually like an important thing for you. 3:07:53 Otherwise, nobody would use the Lightning Network, right? 3:07:57 So that's an anti-feature and you are not willing to pay a premium for that. 3:08:03 So I can totally see that these idiotic luxury use cases actually remain on mainchain. 3:08:10 And people who want to use the block space for transactions might actually prefer a less replicated, less plastic use case. 3:08:16 That's true. 3:08:17 I completely 100% agree with that. 3:08:19 That would be more desirable as a use case. 3:08:24 But I think it could be both. 3:08:26 You could have ordinals on L1 and on their own BitAssets chain. 3:08:29 I just wanted to mention one thing, which is part of it is the troll aspect, which is that they get to troll. 3:08:34 They're trolling L1. 3:08:36 But I think also if Drivechains are controversial topics, so people could get in on that as a troll. 3:08:44 It's almost a bigger troll in a way. 3:08:46 So it's possible. 3:08:49 Let me reply to Moon. 3:08:52 I know I'm following everything that's going on very closely. 3:08:57 And I see they try to develop something that is off-chain. 3:09:02 So they're moving from the real on-chain inscribing and stuff. 3:09:08 And it's happening. 3:09:09 They created even e-descriptions with indexers. 3:09:14 And they try to eliminate the fee rate because it's expensive. 3:09:20 I mean, anybody can check. 3:09:23 So when they move and they have a kind of mindset that, okay, we try to do something that is off-chain, which I disagree. 3:09:34 And I don't like off-chain things. 3:09:37 If you're on L1, it should be everything on-chain. 3:09:42 So I'm thinking, okay, this is the opportunity because they want something that is much cheaper. 3:09:50 But on the other hand, I didn't make this example specifically. 3:09:55 I just gave an example of what can be done, like comparing stuff that Drivechain benefits. 3:10:03 I agree. 3:10:04 I agree that, first of all, not all block space is made equal. 3:10:08 That's my main point. 3:10:10 So there will be demand for cheaper block space. 3:10:13 But it's unlikely that the demand for the luxury block space is going to go away over time as adoption grows overall. 3:10:22 It's probably just going to get worse. 3:10:26 And even if only one, I don't want to call them NFTs, but one inscribed ordinals for a thousand that is inscribed on sidechain or whatever other block space or whatever other data availability they come up with. 3:10:43 I mean, eventually they could just decide to inscribe hashes of files or magnet URIs or whatever, resource descriptors instead of inscribing the whole thing. 3:10:57 But there will always be people who will find it more valuable if it's replicated on Bitcoin forever. 3:11:05 And they will find that the block space is cheap for this luxury use case because they expect they will be able to sell it for like 100 times later than what they paid for it. 3:11:16 So that's the motivation. 3:11:17 They want to make money on it. 3:11:19 And I totally disagree with this, but I can totally see that this insanity will persist. 3:11:26 And so long it is profitable to do, so long anyone values this particular thing, it can just persist. 3:11:34 And that's why I kind of think that the idea that this will completely go to other block spaces is just not going to stick. 3:11:44 I'm pessimistic on that. 3:11:46 But I totally see that there will be demand for cheap block space as well. 3:11:51 But the demand will be less than the most highly replicated, most prestigious, most unique block space. 3:12:01 So it has to be a lower paying demand for those block spaces, I believe. 3:12:11 I agree. 3:12:16 That's kind of not a bad thing overall. 3:12:20 So if you see that there are block spaces with different costs to use, that will probably reflect their utility and their security. 3:12:32 And if everyone can find what they can afford and it gives them the maximum utility, 3:12:39 then you probably maximize the total collectible value for the system. 3:12:45 And you also maximize the total value that the system provides for the users. 3:12:50 And probably the number of users that can use this ecosystem, you also maximize that. 3:12:55 That's just like a hunch I have about this. 3:12:58 Yeah, listening to you guys, I just realized that I think it's a good pitch. 3:13:08 I think the perfect pitch for Drivechains could be like, it's a way that you can open free market of ideas on Bitcoin. 3:13:15 So, for example, on Ordinals, if you think that's a good way to do other stuff on Bitcoins, you can do it. 3:13:22 On Drivechains, you can do it. 3:13:24 And there is a competition between the main layer and the L2 layers. 3:13:30 And this is for everyone, right? 3:13:32 If you think that CTV is better and CFSF or whatever APO, it's a free market of idea that you can compete freely. 3:13:42 Just do a peg in and you can test it out and compete with other DriveChains. 3:13:47 So I think this is a better pitch, I think. 3:13:49 Yeah, but I've had on drivechain.info, I've had that thing when devs compete, users win. 3:13:54 I've had that up there for like a long time, like five years. 3:13:58 That's like the little tagline and it just, I don't know, it just doesn't seem to be working. 3:14:06 Maybe you should try the opposite. 3:14:08 If you don't like free competition, you're a tyrant, you know? 3:14:13 Just push them a little bit, you know? 3:14:16 Don't say names, don't say anything. 3:14:18 Just if you don't like free market of idea, you're a tyrant, you know? 3:14:24 Yeah, well, that is what I believe. 3:14:26 But then before you were saying at the beginning of this conversation, you were saying like, oh, don't do such and such. 3:14:32 No, no, don't push too hard. 3:14:33 I said don't push too hard. 3:14:34 Push just a little bit, just a little bit. 3:14:37 Yeah, it's a bit collectivistic, right? 3:14:39 So, when Luke Dasher posed these things about what should be and should not be tolerated on Bitcoin blockchain, 3:14:50 I always have this feeling that this road leads to communism. 3:14:55 But I don't want to quarrel with him and I don't want to push too hard. 3:15:01 I always have this feeling that this road leads to communism. 3:15:04 But I don't want to quarrel with him and I don't want to be mean to people. 3:15:09 And Bitcoiners will probably take it really hard if you call them commies. 3:15:15 Like, I don't know, some ass clown called me a Keynesian and I really got mad over that. 3:15:23 So, the point is that there is some collectivistic and central planning feeling to this thing that is going on. 3:15:36 And that's probably not good for Bitcoin, I believe. 3:15:43 Yeah, I think it's a battle against capitalism versus communism. 3:15:48 I think that's the whole battle. 3:15:51 And the other thing is that we see that benevolent dictators get shit done. 3:16:03 They make projects progress faster. 3:16:07 And obviously nobody wants that on Bitcoin mainchain. 3:16:10 We don't want any dictators, even benevolent ones on Bitcoin. 3:16:14 It's a very good thing that Sotoshi left and did not hang around like Linus Torvalds. 3:16:20 But on sidechains... 3:16:22 Yeah, it's exactly what we do want. 3:16:24 Right, exactly. 3:16:25 We do want that because they compete. 3:16:28 Yeah, we don't want to exclude a guy from MIT that has a good idea and with good intentions. 3:16:33 We just put it on the Drivechain and compete with the other guys from MIT. 3:16:37 That's the whole point. 3:16:41 Yeah, I don't see any problem with that. 3:16:44 That you have these in sidechains and they actually compete with each other and the ideas compete 3:16:49 and people can move their money to what they value and all that stuff. 3:16:55 That's actually a totally good thing. 3:16:59 Just a side note, I'm not sure if you saw it, Paul, 3:17:02 but I'm pretty sure that you can implement hashrate escrow with OP_CAT. 3:17:09 With just string concatenation added to Bitcoin, you can implement hashrate escrow. 3:17:16 It would be very expensive and very cumbersome. 3:17:21 It's not as pleasant and nice as with BIP300. 3:17:27 But you can actually do it. 3:17:31 And I think you can do... 3:17:32 Very interesting. 3:17:33 Paul... 3:17:34 We should code up a proof of concept. 3:17:37 Correct me if I'm wrong, Paul, but I think you can do sidechains also using BitVM, right? 3:17:51 BitVM doesn't easily allow people to expand the set of participants. 3:17:59 But you could have something where the BitVM people are like virtual miners. 3:18:05 And then there's like a set of them and then they... 3:18:09 It's not as good at all. 3:18:11 BitVM is better when the participants list is fixed. 3:18:17 And the game is sort of fixed. 3:18:20 Like they'll play chess or whatever. 3:18:22 And it's much more complex. 3:18:24 Like if you just assume that Ocon's Blade, we should go for BIP300 run, right? 3:18:32 It's... 3:18:33 Go with the simple solution, right? 3:18:35 Yeah, so BitVM does not really... 3:18:43 As far as we know right now, it does not really enable two-way peg mechanism that is trustless. 3:18:50 Like that's not actually something that it can do. 3:18:55 What it can do is that you can commit funds to a statement. 3:18:59 You can commit it to a script where if you execute the program badly that you committed to, 3:19:08 then you get slashed. 3:19:10 So you get punished. 3:19:11 That's kind of the main thing that BitVM does. 3:19:14 And people who participate in some state channel kind of thing can do this back and forth. 3:19:20 But if one participant declines to commit to the next step 3:19:26 and they are not committing to something that could be falsified and they could be punished, 3:19:33 then the whole thing is kind of stuck. 3:19:36 And so it's kind of limited to problems where you can like pre-sign a chain of transactions 3:19:45 that go through the whole thing. 3:19:47 And neither party can just decide to stop cooperating at a certain point or something like that. 3:19:55 So it does not solve everything. 3:19:58 It does not really solve proper two-way pegs and sidechains as far as we know currently. 3:20:04 But it's very interesting. 3:20:06 So you can do fraud proofs with it, and I'm very excited about that. 3:20:11 Yeah, me too. 3:20:13 Maybe because we are free market guys, right? 3:20:17 I think that this is the bigger problem, though, is more important even than sidechains, 3:20:24 which is the most important idea discussed so far. 3:20:29 If the community like becomes overconfident and complacent, 3:20:35 then I think it's just a fall of Rome scenario. 3:20:38 It's just only a matter of time before Bitcoin is just replaced by something else. 3:20:42 It doesn't matter how good it is. 3:20:44 So in a way, I think fighting against the complacency is even more important. 3:20:52 Like maybe it could already be a dead project as far as we know, Bitcoin, 3:20:57 even though I'm all in on Bitcoin. 3:21:00 I mean, when you see stuff like when you have Sailor and you have stuff like this from Peter Tutt. 3:21:08 Like someone needs to defend free market, right? 3:21:11 Someone. 3:21:15 Yeah, I think it's the time that is critical. 3:21:18 Like we have wasted like a lot of time on not scaling for a larger adoption 3:21:25 and not gaining a larger adoption. 3:21:28 And now there is a lot more competition than there was like seven, eight years ago. 3:21:34 Like it's a completely different world. 3:21:38 So I think that's probably the biggest issue is that people are complacent about time 3:21:44 and they actually want to slow down the rate. 3:21:48 Bitcoin changes and tries to adapt to the world and tries to compete with other stuff. 3:21:52 They don't even acknowledge that there is a competition, most of the people in Bitcoin, 3:21:57 especially the laserized. 3:21:59 And that deep level of complacency like really puts us at a disadvantage, I believe. 3:22:09 Yeah, I agree with you. 3:22:10 But do you think that in the next bull run, the fees are going to be very high 3:22:15 and people are going to try to see how we can scale? 3:22:19 And then if we have like the PR ready, if you have like, I don't know, 3:22:25 people testing out on Cygnet or Testnet or whatever, we could have a chance? 3:22:33 Do you think that? 3:22:34 I believe the fees are going to be real high and it will alarm a lot of people 3:22:40 when the mempool like really close and we have persistently high fees. 3:22:44 It will alarm a lot of people and they will probably, 3:22:48 they might demand the developers to finally do something. 3:22:52 There might be like an emergent social consensus that something needs to be done. 3:22:57 But most of the things that are being talked about will not provide an immediate relief. 3:23:03 Like that's impossible for most of the proposals. 3:23:06 They will take many years to develop out. 3:23:09 In theory, of course, that is good. 3:23:12 Like I said, in theory, but in practice, I don't think they would. 3:23:15 Like it takes time when people start trusting or start using new software, whatever. 3:23:23 So I don't think it provides immediate relief. 3:23:26 At that point, at that point in time when people are like panicking over the fees 3:23:32 and everything in the middle of the boom market, 3:23:36 the only thing that can provide an immediate relief is a block size increase, 3:23:40 a mandatory block size increase. 3:23:42 The thing that everyone wanted to avoid like for the past seven years or whatever. 3:23:47 That's the only thing that can actually help at that point. 3:23:50 But in the long term, it can actually make things worse. 3:23:53 So there will be a strong pushback. 3:23:56 So I have no idea what will happen, and I'm very curious to see it play out. 3:24:02 I just want to have a comment here. 3:24:12 You said that people are not willing to put money on new software, 3:24:17 but with Lightning, people put money like very fast on that. 3:24:22 I don't know about other people. 3:24:26 I only put money on Lightning that I'm absolutely willing to lose. 3:24:30 Like I'm not putting my savings. 3:24:32 I'm not even putting like a significant amount of my stash. 3:24:36 I put play money on Lightning, and I think most people. 3:24:40 Very few people actually did use it. 3:24:42 Of course, I would go around there and ask people, 3:24:45 and they'd say, oh, I haven't used Lightning myself. 3:24:47 They'd say Lightning is the next big thing. 3:24:49 I'd say, well, do you use? 3:24:51 And they would say, they would like change the subject. 3:24:54 And then you have some people who did, and Michael Tidwell, remember? 3:24:57 He was like going to make his video. 3:24:59 He was all bright-eyed and bushy-tailed, as we say, and he was just so excited. 3:25:05 And then he like lost all of his money like immediately, 3:25:08 and then he made the video about things to know about the Lightning Network 3:25:12 where it was all just like about how he had lost his money, 3:25:15 and the seed phrase doesn't work, 3:25:17 and if your computer ever goes to sleep or something, 3:25:20 it will like destroy all your money. 3:25:22 And then people started retweeting it. 3:25:25 I remember Pierre Richard was like, Lightning is the future, 3:25:29 but he didn't even realize that the video was full of just like, 3:25:33 it was a litany of tragedies of just like, it was all bad news. 3:25:38 So he didn't even watch the video. 3:25:40 And then people were like calling him out on it, 3:25:42 and he's like, I don't even, he's like, I don't watch anything I retweet. 3:25:45 And you're just like, oh, my God, like, come on. 3:25:48 I was more lucky because what happened is I had the Lightning node 3:25:52 run in a virtual machine, and the host machine crashed. 3:25:56 And I was able to use the seed in, I think I used BlixtWallet. 3:26:03 It's a mobile wallet with an LND full node. 3:26:06 I used BlixtWallet to, you can, I think, use any LND software, 3:26:11 and I managed to, it was excruciatingly slow. 3:26:16 So for a very, very long time, it looked like I lost those SATs 3:26:20 that I had on Lightning. 3:26:22 But eventually, like a day later, I got my funds back, or most of them. 3:26:28 So that was the end of my Lightning node running career, 3:26:35 to be honest, for a while. 3:26:37 I'm waiting for things to stabilize a little bit, and for now, 3:26:42 I'm just making use of it. 3:26:45 But these are the things, though, where it's like, 3:26:49 the payments, like, they can't fail, like, at all. 3:26:52 Like, you know, like Visa, like, it fails, like, very rarely 3:26:56 when I use my Visa card. 3:26:58 Sometimes it fails, but it's just, no one is going to put up with it 3:27:03 if it ever fails, and no one is going to put up with it 3:27:06 if it ever charges them money for something that they didn't get. 3:27:10 No one will tolerate loss or failure, like, at all. 3:27:14 That's how far it has to go. 3:27:16 At first, it was very bad. 3:27:18 Like, Lightning payments at first failed more than they succeeded 3:27:25 for any significant size of payment. 3:27:28 And I think that got a lot better. 3:27:31 So I did not have that experience of late. 3:27:35 But, yeah. 3:27:38 Like, I tried to run in 2018, I think, and it was really bad. 3:27:44 I kind of lost a few money there. 3:27:47 But, yeah, I just had, I didn't put, like, the whole money. 3:27:51 I just tried to test it out. 3:27:53 And I really think that when we activate a Drivechain, 3:27:56 people are going to do peg-ins really slowly. 3:27:59 They try to peg out. 3:28:01 They kind of get confidence in that. 3:28:03 And then, over time, you know, I think people will have, like, 3:28:09 we have, like, a million Bitcoins in the Drivechain. 3:28:11 It could be, like, a thing. 3:28:13 I don't know. 3:28:14 I think we can probably solve a lot of these thiefing issues with Lightning. 3:28:19 The one thing that cannot be solved with self-custodial Lightning, 3:28:23 as far as I'm aware of it, is that you have to have the liquidity 3:28:28 logged in if you want to receive. 3:28:30 Like, that's a complete antipod for normal users. 3:28:34 It's totally not natural for someone that they, at some point, 3:28:42 have to have the money that they are about to receive. 3:28:45 And if their salary is over the amount that they have, you know, 3:28:51 in inbound liquidity, then they just can't receive it. 3:28:55 And that whole thing is, like, Burak has been, like, 3:29:00 explaining this in detail. 3:29:01 It's just a huge anti-feature. 3:29:03 The whole thing is a huge anti-pod and anti-feature for the users. 3:29:08 And they also have, like, absolutely horrible privacy. 3:29:12 In the hub-and-spoke LSP model, the Lightning service provider 3:29:17 absolutely sees everything that they do. 3:29:20 And they report the chain analysis, which they will. 3:29:23 Like, you can just assume that all the large providers right now 3:29:28 are reporting to chain analysis. 3:29:29 Volatiles, Satoshi, everyone. 3:29:32 So they report the chain analysis. 3:29:34 These large nodes, everyone is going through. 3:29:37 There will be absolutely zero privacy on the Lightning network. 3:29:41 And so I think what needs to happen is that there are alternative 3:29:49 tools that handle this part of the user interaction. 3:29:56 And people are not going to run the Lightning nodes, 3:30:01 and they are not going to lock in liquidity or buy locked-in liquidity 3:30:05 and have the struggle that the channel they paid, like, 3:30:09 $6,000 for, which, I don't know, will cost $0.6,000 or whatever, or $600. 3:30:16 And it just closes on them because they did not receive money 3:30:23 that would justify from the channel partner to keep that liquidity there 3:30:28 and all this horrible stuff that comes with, you know, 3:30:31 running your own Lightning node as an end user. 3:30:34 So I kind of expect that this will change, and we will have stuff like Org. 3:30:39 And also, Lightning would, like, probably work really well with sidechains. 3:30:45 That's my other expectations, that if we manage to have sidechains, 3:30:49 then, you know, Lightning nodes want cheap block space. 3:30:55 They need cheap, available block space to be there just in case 3:30:59 for the Lightning network to work perfectly. 3:31:03 But we also know that if we just keep adding block space to mainchain, 3:31:09 then it will be gobbled up. 3:31:12 Like I said, it's a highly desirable block space. 3:31:15 And it's entirely possible that we can only have cheap and up-to-date block space 3:31:20 that is not utilized to the max on sidechains, 3:31:24 simply for the reasons that they are not as replicated, not as permanent, 3:31:27 not as desired. 3:31:29 But for Lightning, they don't need to be, like, literally don't need to be. 3:31:35 Yeah, and I do agree with your centralization on LSPs and locking to wallets. 3:31:41 And just an observation, there is a technique called TurboChannels. 3:31:45 I don't know if you heard about it. 3:31:46 But the users don't have to have any channels open, 3:31:50 and it received any voice intercepted by the LSP, 3:31:54 and the LSP just deducts the value from the opening channel 3:31:59 and opens the channels for him. 3:32:00 So it's kind of like they don't need to have any knowledge about it. 3:32:04 That's like a bit of a sleight of hand, 3:32:07 because for the moment, it's basically custodial. 3:32:11 So the LSP receives the money. 3:32:13 So, again, I was talking about non-custodial Lightning, 3:32:16 like the real hardcore, not even for a second custodial Lightning, 3:32:20 when I talked about the impossible. 3:32:22 Of course, there will be a lot of clever tricks developed 3:32:25 and a lot of smart things developed. 3:32:28 But I kind of think the privacy issues in the hub-and-spoke model 3:32:33 are just inherent in the technology. 3:32:36 Yeah, we can do that in a Drivechain with privacy, 3:32:39 not capture regularly. 3:32:41 They cannot capture anything. 3:32:43 We don't need to rely on LSPs. 3:32:47 It's much, much better to design a protocol model for payment. 3:32:51 I think we should do ARC pools on sidechains, 3:32:56 because ARC is, again, another protocol that really loves cheap 3:33:00 and obdurant block space that it does not even want to use. 3:33:03 So in theory, for a sidechain that you dedicate to ARC pools, 3:33:07 you would have a very low cost for people to validate that. 3:33:11 It would be like a small block sidechain, 3:33:13 even if the max block size is 32 megabytes. 3:33:16 And the reason why that 32 megabytes would not be packed 3:33:19 full of fucking JPEGs or whatever 3:33:22 is that it's not a desirable, not a coveted, not a prestigious block space. 3:33:26 It's not as replicated, not as permanent. 3:33:29 If someone starts bloating it, someone else will start up another blockchain. 3:33:34 Everyone will move over that over time, 3:33:37 and they will just abandon the fucking chain. 3:33:40 Someone wanted to store his family albums forever, 3:33:43 and suddenly that chain is just dead, and he's shit out of luck. 3:33:47 So I expect people will simply not do that. 3:33:50 Block space will be used for what it was meant to be used for, 3:33:54 to record transactions and to allow nodes to reach consensus 3:33:59 on the state of the UTXO set. 3:34:04 Yeah, I agree completely. 3:34:07 I do agree that maybe one of the first Drivechains 3:34:11 that could be for activating ARC or something like that, 3:34:14 because we do need an option for payments. 3:34:18 Yeah, well we do have one already 3:34:20 that is the latest version of Bitcoin Core 3:34:23 plus 1.18 and 1.19 and up vault. 3:34:27 So we already have one that could potentially, 3:34:31 although we've activated them the way they are 3:34:34 on like Bitcoin Inquisition or whatever, 3:34:36 I don't know exactly what the state of like the wallet tooling or whatever would be. 3:34:42 But we do have one 3:34:45 that already could be used for that purpose. 3:34:48 I don't know if maybe they want something more customized. 3:34:52 Hey, we should put OP_CAT in there. 3:34:54 Moonsettler, you should make it. 3:34:56 Join our project. 3:34:59 Put an OP_CAT in there. I know it's really small. 3:35:02 Actually, probably I can do it. 3:35:04 Probably anyone can do it. 3:35:05 Yeah, I think it's a few lines probably the actual code, 3:35:09 and you would have like 200 lines for activation and stuff. 3:35:15 We'll just reset it. 3:35:16 We'll just reset the chain. 3:35:18 We reset them all the time. 3:35:19 So we'll just re-hard fork it back to nothing. 3:35:21 The sidechain with it, it'll be that OP_CAT the whole time. 3:35:25 Yeah, we just frag them all the time. 3:35:27 And in fact, now we have it set up that it just opens in reg test mode. 3:35:32 We need to get a signet actually. 3:35:34 Someone wanted to do this, but I never pursued it. 3:35:37 But it opens now with locally just reg test 3:35:39 and finding a block every two seconds. 3:35:42 So it's all just local anyway. 3:35:44 Every time the user opens it, it's just like nothing happening. 3:35:48 We're going to get a signet version now. 3:35:50 Send your DM, by the way, on the gist. 3:35:55 I wrote about how you could probably do hashrate escrow with OP_CAT, 3:36:01 and in that it is very clear how you could emulate CTV very closely 3:36:08 for most practical use cases with OP_CAT. 3:36:12 And I mean, it's a weird pseudocode. 3:36:18 I just made it up, so it's not a real language or anything. 3:36:21 I'm not going to do this in actual assembly 3:36:24 because Bitcoin VM is a stack machine, 3:36:27 and it would be extremely painful to read that code. 3:36:30 I tried to convey the actual meaning. 3:36:32 But what's important, what I would like to tell people is that 3:36:36 so OP_CAT was part of Bitcoin in the very beginning, 3:36:40 and what you can do with OP_CAT is you can actually introspect 3:36:45 the output script in a way that you can propagate a state 3:36:49 and you can propagate the contract 3:36:52 that is enforcing the valid state transitions. 3:36:55 So basically you can do finite state machines 3:36:58 that are enforced by Bitcoin consensus with OP_CAT on Bitcoin, 3:37:03 which means sort of that Bitcoin was actually in a roundabout weird way 3:37:09 probably to incomplete in the beginning. 3:37:13 It's a funny thing. 3:37:16 Yes, so what you're saying is you have OP_CAT, 3:37:19 and then you have half of it is the state transition thing, 3:37:24 and half of it is the actual state. 3:37:29 Yes, so you basically are going to put a couple of push operators 3:37:38 and the data in the beginning, 3:37:41 and then you are going to have a hash of the contract 3:37:46 and then the contract itself, 3:37:48 and the inconvenient thing about OP_CAT is that you have to put all this data 3:37:52 on the stack when you execute the transaction, 3:37:55 because you can't introspect. 3:37:57 Without introspection, of course, you can't actually take these things 3:38:00 from Bitcoin or the transaction itself. 3:38:04 You have to put these things in as witness parameters, 3:38:07 so that it can just assemble them, hash them, and introspect them 3:38:11 and enforce them in the outputs and stuff like that. 3:38:15 There is this trick that you can do with the signature. 3:38:20 I think Andrew Polstra might have written the article, 3:38:24 but I'm not absolutely sure right now, 3:38:28 but basically you can use just OP_CAT without any other covenant proposal, 3:38:34 to actually introspect the transaction image, 3:38:39 and it's very inefficient, but it works, 3:38:43 and the easiest thing in the world with it 3:38:47 is put together on the stack a transaction image 3:38:53 where you basically hard code in the outputs, 3:38:58 so how the output scripts and amounts should be distributed, 3:39:03 and then you hash it and compare it with the hash, 3:39:06 and this allows you to basically emulate CTV. 3:39:12 There are minor detail differences in CTV commits to various fields, 3:39:17 and you can also do that. 3:39:19 I did not go very much into details. 3:39:22 I tried to convey the basic idea, 3:39:27 but the point is that you can propagate a state, 3:39:30 and you can restrict that state to a certain contract 3:39:33 that can update that state, and you can propagate that as well, 3:39:37 and this is enforced by Bitcoin consensus. 3:39:39 This is very cool, and it's not like the BitVM where this runs externally. 3:39:44 This is actually Turing complete code or something very similar, 3:39:49 practically looping finite state machine code 3:39:54 that is actually running on Bitcoin consensus. 3:39:57 It's interesting. 3:40:03 Okay, excellent. 3:40:07 Well, we seem to have wound down to about four by five. 3:40:13 What do we have here? 3:40:15 We only have 20 people here. 3:40:17 20 remain, just like, I don't know, 3:40:27 a Call of Duty game where only 20 people remain. 3:40:32 So I'm not sure if we should end it here, 3:40:38 or if anyone is dying to say anything particularly new. 3:40:44 We've been going for a few hours, 3:40:46 so come on up if you want to say something especially. 3:40:51 Well, I have to leave. 3:40:53 I just want to say to you and all the guys, 3:40:56 congrats for the work that you're doing. 3:40:58 Just continue. 3:41:01 We need you, and I really do think that in the next bull market, 3:41:05 we're going to have a chance, so we should be prepared for that. 3:41:10 So yeah, thanks a lot. 3:41:12 Hey, thanks. 3:41:18 I had a slightly irrelevant question that occurred to me 3:41:23 when I thought about what you said, 3:41:25 what Shinobi said about the capital that one requires to lock in 3:41:32 to do sidechain arbitrage and withdrawals, 3:41:37 and it just occurred to me that this is not dissimilar from buying a bond. 3:41:42 Buying a bond that will mature in three months and will have a certain yield, 3:41:48 and of course it has a risk, 3:41:50 like not necessarily a large full-on default risk, 3:41:55 but it has a risk of not going through and you have to wait more, 3:41:59 and you can just price that in. 3:42:03 It just occurred to me that for the same reason why people buy bonds, 3:42:07 they would probably do this, even though this is not a security. 3:42:12 Right, and you can see how ridiculous it would be 3:42:15 if we lived in a world with no bonds, 3:42:18 and I said, I'm going to release these three-month bonds into the world, 3:42:23 and I'm going to allow people... 3:42:26 to issue a three-month bond. This has never been possible before, but anyone in the world can now issue a three-month bond, and you can say... 3:42:35 and then somewhere, a fictional Shinobi in this world says, oh no, all the capital required for that would be too much. 3:42:44 And it's like, there is no capital requirement. Everyone has dollars, they have the same dollars they had before, 3:42:50 and now they can spend them on something else, but it's not until they buy the bond that they front the capital. 3:42:58 I mean, the bond itself is also capital, basically, but I don't know. 3:43:04 Yeah, but there's no new thing, there's no capital being eaten up in the L1 world that couldn't also have just been a deposit to L2. 3:43:20 You see what I mean? It's not like it requires... 3:43:26 I mean, if you look from an investor perspective, he is locking up liquid USD into a T-bill right now. 3:43:34 Let's say you have a T-bill of three-month maturity, you are locking up that liquidity. 3:43:39 I mean, someone else has it, you don't actually lock it up technically, because someone else is spending those coins or whatever, 3:43:46 but you, from your perspective, have locked up for three months and you are not liquid. 3:43:52 I think that is the only thing... 3:43:54 That's what he thinks it means? 3:43:56 See, but here's the thing, they do that in return for a yield. 3:44:00 So, they voluntarily do that. 3:44:04 That's what I was getting at. 3:44:07 We have this in this world, and in a world where... 3:44:12 I mean, there is no yield without risk. 3:44:15 In an ideal world, if you have yield without risk, then something is extremely wrong, right? 3:44:25 Yeah, it's an unsustainable perpetual motion machine. 3:44:37 So, that one is, you know... 3:44:40 In a sense, if the bond has risk or the maturity, the time value of money is disadvantageous, 3:44:51 and you have a situation where people are not going to want the bond, demand falls for the bond for any reason, demand falls for the swap, 3:45:02 then that's what sets the price. 3:45:05 That's the only thing that sets the price. 3:45:07 So, it doesn't matter. 3:45:09 The cost could be enormous and horrible, but that doesn't make any difference at all. 3:45:14 In fact, the people who are still... 3:45:17 You see, it's the same amount of money. 3:45:20 Like you said, I pay $90 for a $100 bond. 3:45:23 You're paying $90 today for a $90 bond today. 3:45:27 It's only worth $100 in the future. 3:45:32 That's what I'm saying. 3:45:36 Yeah, if anything, they always get a better deal because the most patient person in the economy is the one providing the swaps. 3:45:45 And so, it's very implausible that you would even tie that person. 3:45:50 So, the person on the sidechain is... 3:45:53 The person on the sidechain is... 3:45:56 They have an essentially $90 block, even if it's a $100 BTC. 3:46:01 They have a $90 BTC block today. 3:46:05 So, they're swapping $90 worth of L2 BTC for $90 worth... 3:46:10 Again, it's $90 worth of BTC, which could be a $100 BTC on L2 for $90 worth. 3:46:19 How I would put it is that if there is a free market, like really a free permissionless market ideally, 3:46:26 then history shows us that the market will find a discount rate that makes sense and just find it automatically, right? 3:46:36 Of course. 3:46:38 I mean, that type of thing I just sort of thought went without saying. 3:46:42 So, I don't understand. 3:46:44 It's very disappointing that we... 3:46:45 We don't really wait. 3:46:47 We in the sidechain group, we have to wait for the dumbest people in the class to catch up on the official markets. 3:46:54 I don't understand the fee thing, like about the fee rates versus revenues. 3:46:58 That's just like literally... 3:47:02 It's not even like finance 101. 3:47:04 It's not even... 3:47:06 It's like middle school math, the difference between a line and a rectangle. 3:47:11 It's baffling. 3:47:12 So, I think... 3:47:18 But as BitCode was saying, it's not like... 3:47:20 They don't just say like, this is the problem. 3:47:23 They just make up a bunch of... 3:47:25 A big blur of stuff, all of which is wrong. 3:47:28 So... 3:47:30 I mean, BitCode was especially disappointing. 3:47:33 Like, we waited a long time for this proposal. 3:47:38 I think it was extremely underwhelming and disappointing. 3:47:42 Even though lately he had many weird and, I would say, from my perspective, very wrong takes. 3:47:52 But I did not expect him to do this nearly zero research and just write this. 3:48:01 I actually did not expect this to come out this way. 3:48:08 Right. 3:48:13 Yeah, like I was going to say, that's why I didn't like... 3:48:16 What I thought I would do is he'd write this post. 3:48:18 Then I would like read it. 3:48:21 And then I'd like react to it. 3:48:23 And then we'd go and do the podcast. 3:48:25 But he doesn't even really want to do the podcast. 3:48:28 He's like, he's been telling Stefan Levera. 3:48:30 He's like, well, I'm traveling. 3:48:32 I'm at all these conferences. 3:48:34 So, it'll be like whatever, like mid-November or something. 3:48:39 But yeah. 3:48:40 So, that's like... 3:48:42 But I think he just doesn't even want to do it. 3:48:45 He just wants to kind of get out of it or whatever. 3:48:49 I don't know. 3:48:51 Get out of the... finish the contract. 3:48:53 So, yeah. 3:48:57 So, that's what he was saying. 3:48:59 But you have to notice how his story has also changed in a very dishonest way. 3:49:05 In a way that is not... 3:49:07 It shows a lack of integrity, I think, honestly. 3:49:10 Because before he was saying something like... 3:49:12 He would say, this is the worst idea ever. 3:49:14 Merge mine sidechains were Greg Maxwell's biggest mistake. 3:49:18 He would say stuff like that. 3:49:20 And then I would ask, like, why? 3:49:22 And he'd say, oh, I don't have time to write it down. 3:49:24 So, then really we were just paying him. 3:49:27 We're paying him for the time it would take for him to write it down. 3:49:30 But it was as if he had dealt these fully formed rejections in his head. 3:49:35 But then it was clear as of TabConf that he had not looked into the idea at all. 3:49:40 He didn't even know about it. 3:49:42 And now, what he has produced here is really just... 3:49:45 He doesn't even take a moment to acknowledge, like... 3:49:47 Oh, by the way, this doesn't affect L1 full nodes at all. 3:49:51 It only affects miners. 3:49:53 I mean, he does indirectly acknowledge it through the content of the post. 3:49:57 But he doesn't actually say, like... 3:49:59 This really will not affect you other than through the miners. 3:50:04 And you already... 3:50:06 If you're only running a full node... 3:50:08 You know what I mean? 3:50:10 You can't sit with a helicopter and a car and look at what all the miners are doing when you run a Bitcoin node. 3:50:18 You know what I mean? 3:50:20 So, he doesn't even acknowledge that, hey, mostly the mining is a process that we don't observe. 3:50:25 We only observe the L1 full node process. 3:50:28 This does not affect that at all. 3:50:30 The whole thing is like when he said, there is no code, there is nothing for this. 3:50:37 Remember that moment? 3:50:38 Yeah, at Baltic Honey Badger in September. 3:50:40 That was months into having been paid the first half already to do that, to do this thing. 3:50:46 So, he had no idea the code had been out for two, three years. 3:50:50 Yeah, just would have to go to the website and just look over it. 3:50:55 Yeah, the very first page, there's a download link right at the top, yeah. 3:50:59 I mean, come on. 3:51:00 Come on. 3:51:06 So, yeah, as you said, he made up a straw man in his head and he defeated it. 3:51:13 And that's kind of how this comes across. 3:51:16 Like, that's it. 3:51:17 That's it. 3:51:24 Yeah, but sure, if we've got any great fans of Peter Todd, this is the last opportunity before we end the space. 3:51:32 So, jump up quick and say whatever your thing is that you need to say. 3:51:37 Quick. 3:51:41 Last five seconds. 3:51:43 Going once, going twice. 3:51:48 Okay, well, then I think the space has come to an end. 3:51:54 Now, until next week, you know, the mass has ended, go in peace. 3:52:00 See everyone later.
