0:08 Hello, and welcome to Drivechain Twitterspaces. 0:12 This is Henry at LayerTwo Labs. 0:15 Today we have a bunch of cool stuff to discuss 0:19 related to recent conversations on Twitter and elsewhere 0:24 regarding drivechain, sidechains, 0:28 and how Bitcoin would be greatly strengthened 0:32 through adoption of drivechain. 0:35 Drivechain Twitterspaces by LayerTwo Labs 0:38 happens every Monday and Thursday on Twitterspaces, 0:42 and we are planning to also do a podcast in the near future 0:47 where we'll interview many exciting and brilliant 0:56 members of the Bitcoin community focused on sidechains. 1:01 Sidechains are a path for Bitcoin development in the future 1:06 which can be greatly embraced further. 1:10 Already, Bitcoin has some sidechains, 1:14 but they are not as peer-to-peer in their design as they could be. 1:20 Right now, every Bitcoin sidechain uses a 15-party multisig federation 1:28 or a similar design with a different number of multisig participants. 1:35 Even if the number of multisig participants were 5,000, 1:39 it would not be peer-to-peer. 1:42 A peer-to-peer arrangement is one in which 1:45 no person or organization has been socially selected. 1:51 A peer-to-peer arrangement is one in which 1:54 there is no barrier other than economic cost to entry for each role. 2:03 In other words, if anyone is socially selected 2:08 to participate in the security model of a sidechain, 2:12 then that sidechain's foundation is not peer-to-peer. 2:16 Its security model is not peer-to-peer. 2:19 What we want is something like Bitcoin 2:22 where anyone can opt in to being a miner, a user, a node runner, 2:28 with the only barrier to entry being the cost. 2:31 No one is ever socially selected, necessarily, 2:34 to participate in any aspect of Bitcoin. 2:37 Instead, the whole system involves parties, presumably, 2:43 that are anonymous, mutually distrusting, and self-interested, 2:48 and yet there is an emergent order. 2:51 So, ah, we have a request to speak. 2:55 Or do we not? 2:57 Everyone is welcome to request to speak and come on up to the stage, 3:02 and they can participate, ask questions, share thoughts. 3:08 I see some familiar faces in the audience. 3:11 We love it when people join our spaces, 3:13 whether they are newcomers, OGs, skeptics, or avid fans. 3:23 And there's been a lot of great discourse lately 3:26 on the need to make sidechains more peer-to-peer, 3:29 as Adam Back says. 3:31 Sidechains today have the multisig federation, 3:34 typically 15 people, socially selected. 3:37 Sometimes no one knows who they are. 3:40 And with drivechain, the sidechains would be, as Adam says, 3:44 more peer-to-peer. 3:46 It would be a dynamic group of parties participating in mining 3:50 and expressing the will of the community 3:53 through their activities in mining. 3:56 It's entirely reliant on economic incentives and profit motive, 4:01 just like Bitcoin does. 4:03 Just like Bitcoin has an emergent order, 4:06 even though all of the parties can be anonymous, 4:09 mutually distrusting and self-interested still, 4:13 the order emerges and the value is created reliably and robustly. 4:20 We had a number of great tweets recently 4:23 about drivechain and related topics 4:26 within the discourse that's occurred recently. 4:32 Let's look at some of those tweets as fodder for conversation. 4:42 So I will share to the nest those tweets. 4:52 The first one is from one of our favorite thinkers in Bitcoin, 4:57 Warren Tagami. 4:59 He wrote recently, 5:01 it wouldn't matter if Satoshi were to appear today with or without keys. 5:05 Appeals to authority would mean failure of the decentralized system. 5:10 Satoshi's ideas should be evaluated on a case-by-case basis, 5:14 like any other contributor to the safety-critical peer review process. 5:19 That's a really great thought 5:21 because so much of what Satoshi said was perfect and outstanding, 5:26 but there are parts that were left unfinished and he knew that. 5:29 And that's why he wrote that the main parts of Bitcoin are set in stone. 5:33 He didn't say absolutely everything. 5:36 So he was aware that there could be development, optimization, 5:40 a few tweaks here and there that might make Bitcoin even better. 5:44 So he had an inkling, perhaps, 5:48 that something like drivechain could be useful. 5:51 There could be an idea which would unlock even greater value accrual 5:55 even greater network effect, even greater development, 5:59 greater ossification, greater scaling. 6:02 He was aware that there were some tensions in the system. 6:05 For example, with regard to the block size, 6:08 he said on the one hand that, you know, 6:12 I mean, he himself placed the limit. 6:15 And then he also talked about there being perhaps some discussion in the future 6:19 on both sides of making it larger or keeping it the same. 6:23 So he was aware of the tensions and he knew that updates might come. 6:28 As drivechainers, we feel that if he were here today, 6:32 he would probably support drivechain because it makes the system so much more 6:36 robust in many ways, enabling greater peer-to-peer scaling, 6:40 which brings us to our next tweet for discussion. 6:44 Now that we've discussed Warren's excellent tweet, 6:50 I will post to the Nest another. 6:53 Anyone is welcome to come on up to the stage and chat if you'd like. 6:57 The next tweet we'll discuss is from Adam Back. 6:59 I've placed it in the Nest. 7:01 Adam wrote, 7:02 I think we're going to need big peer-to-peer sidechains for the next billion 7:07 users to benefit from unseizable sensor-resistant Bitcoin, 7:11 opcodes to support peer-to-peer sidechains like drivechain from LayerTwo Labs, 7:17 peer-to-peer liquid, Rootstock. 7:20 That's his statement. 7:22 In fact, that was written today, this morning. 7:26 A great tweet from Adam Back explicitly endorsing large block Bitcoin 7:31 sidechains. 7:33 He has in mind, of course, Thunder sidechain, 7:36 which is the product of the work of LayerTwo Labs and related developers who 7:43 have, over the years, conceived and developed code for a large block sidechain, 7:49 which would begin with a smaller block size than 1 gigabyte. 7:53 And over time, over a few years, 7:56 it would scale up to 1 gigabyte, 7:59 enabling a very exciting experiment in the Bitcoin space, 8:04 a very exciting experiment where the value of large blocks might be massively 8:11 fulfilled as a Layer 2 large block sidechain instead of an altcoin. 8:16 So far, 8:17 there have been experiments with copies of Bitcoin modified with a larger block, 8:22 but they were on a base layer. 8:23 They were not an opt-in feature of a small blockchain. 8:28 So it's a very different thing when the large block size blockchain is a second 8:37 layer. 8:38 It's a very different thing than when it's a first layer. 8:41 It's a whole different arrangement, and that's important. 8:45 So it's an experiment, an innovation, 8:49 and probably a very successful one, 8:52 as we'll see in the near future after drivechain is adopted and the large 8:56 block size sidechain is launched. 9:00 Of course, 9:01 it's worth noting that this experiment would not include the creation of a new 9:06 token. 9:07 Instead, 9:08 a synthetic Bitcoin is the token on the sidechain, 9:11 and the only way to create it is to place Bitcoin in hash rate escrow. 9:16 This, 9:17 as Adam Back has tweeted, 9:19 maintains Bitcoin's 21 million unit limit while enabling a different experience 9:25 for the user in terms of more scaling, 9:28 more low fees, 9:29 high throughput, 9:30 the kinds of things that large blockers talk about as advantages correctly. 9:37 Most excitingly for the community, 9:39 this would bring home to Bitcoin, 9:41 the large block community. 9:43 Thousands of people were upset years ago in the block size war, 9:47 and some of them left. 9:49 With drivechain, 9:51 they would come back to Bitcoin, 9:52 not for sentimental reasons, 9:54 but for pure financial profit, 9:57 because profit is what accrues to the user of the best money, 10:03 the money that has the most features, 10:06 the most network effect, 10:07 the most stability. 10:09 That is what will bring people to drivechain, 10:12 and Bitcoin is profit motive. 10:15 Nothing else. 10:17 Drivechain relies on nothing else but people's self interest. 10:22 That is what will make Bitcoin more valuable when it has peer to peer side 10:27 chains is profit motive. 10:29 So Adam Back's statement there is great. 10:31 All of you are welcome to come on up to the stage and share a thought if you'd like, 10:38 and we can also move forward to the next tweet for conversation in the thread. 10:44 This one I've posted to the nest is from Jameson Lopp. 10:49 He wrote this week. 10:53 The one issue I have with anyone using the word inevitable when describing Bitcoin is that it could lull folks into a false sense of security, 11:04 that it's safe for us to rest on our laurels. 11:09 And Dan held wrote beneath that agreed. 11:13 We should never rest. 11:15 And then Dan held made an outstanding point. 11:19 Dan held is one of the commenters in the Bitcoin space who for years has had many excellent ideas and insights, 11:28 among many other people held wrote in response to Lopp. 11:33 Also to win parenthesis price transaction fees building close parenthesis. 11:40 We inherently need more believers, which would move past which will move past the homebrew computer club types. 11:49 In other words, what Dan held is saying there is a few things. 11:54 First, we can't have Bitcoin be only for ultra cypherpunks because that view that outlook for Bitcoin, 12:03 that it's for people who are hardcore Bitcoiners necessarily means that Bitcoin is only for a tiny fraction of the world. 12:10 Most people aren't interested in living in a bunker and having a totally anonymous life. 12:17 Most people are, you know, buying the latest Kim Kardashian lingerie. 12:23 It's not that they're living in a bunker, you know, collecting guns. 12:27 So we want Bitcoin to be for everyone. 12:29 But we also want to elevate humanity by having a peer-to-peer electronic cash that has no inflation and that is permissionless. 12:38 So no one's getting doxed and de-platformed and sent to the Gulag. 12:42 So how do we do that? 12:43 We have to make it the best possible technology. 12:46 Nothing less than the best possible version of Bitcoin will win. 12:51 Nothing else has a shot. 12:53 We're up against statism. 12:55 We're up against collectivism. 12:57 This is the kind of thing that Fiatjaf I feel would agree with. 13:01 He tweets to this effect often that all of the value of Bitcoin right now, all of it is predicated on the expectation that Bitcoin will take over the world. 13:13 Everyone who's holding Bitcoin today is betting that it's going to go all the way. 13:18 So we have to make sure that it does. 13:20 And to the extent that the Bitcoin community would adopt a narrow mandate for development, then the value would be much lower. 13:29 So we have to be very ambitious. 13:32 And that includes focusing on experimentation and innovation. 13:37 While at the same time enabling conservatism, stability and ossification. 13:44 And how do we do that? 13:46 We have a multilayered architecture in which the base layer is stable. 13:50 Ossified, conservative, reliable, mostly unchanging. 13:56 And the upper layers, the upper layers are innovative, experimental, varied. 14:02 And indeed, they will compete with each other in the fascinating design known as drivechain. 14:08 So multiple second layers, each offering different features, enabling the community to see what ideas accrue value and what ideas don't. 14:18 That's the drivechain vision. 14:20 It's more capitalistic. 14:22 Instead of merely having us deliberate on how to change main chain every few years. 14:27 Instead, we ossify it and let developers compete to create value in the sidechains. 14:33 That's the drivechain vision. 14:35 Sidechains will come and go depending on whether users want them or not. 14:41 Without ever changing the main chain. 14:43 So Jameson Lopp's tweet in the nest was great, as was Dan Held's tweet under it. 14:48 One of the great things that Dan Held has said lately, Dan Held is really on a roll. 14:54 He said recently in that tweet that I just read that, as you noticed, he wrote price, transaction fees and building. 15:01 Those are the things that he feels are the path to winning. 15:04 So let's focus on the issue of transaction fees. 15:08 It's vitally important that Bitcoin have high transaction fees. 15:12 Some people don't agree with this. 15:14 Like yesterday, there were one or two tweets from Pierre Richard, an excellent thinker who doesn't hold the view that we agree with as drive chainers. 15:24 As drive chainers, we know that Bitcoin needs high transaction fees as part of its security budget. 15:31 And Richard, who we respect, wrote in disagreement with that notion. 15:36 He wrote that Bitcoin's security budget is not a concept that he accepts as it's ordinarily discussed. 15:46 He rejects the notion, Richard does, that he rejects the notion that we must have a high security budget. 15:54 We must have high fees. 15:56 In his view, it would be fine if the fees rise only when there is an attack occurring. 16:02 So our view as drive chainers, which we believe is definitely correct, is that Bitcoin must have a massive security budget, meaning very high fees in the future as the subsidy gets smaller and smaller. 16:16 And also we would go further and say that all of the rhetoric which questions the validity of the notion of these words like subsidy and security budget, all of this criticism of this language is sort of a cope. 16:32 People who see that the fees are low say, well, it doesn't matter if the fees are low and we shouldn't even use words like security budget to describe that the fees are low. 16:44 So they're trying to say that whatever the security budget is, is fine. 16:50 In my personal experience, I've had conversations with people who said that it doesn't matter when the fees are low, but when the fees go up momentarily, then they celebrate that. 16:59 For example, we saw that with Greg Maxwell, who wrote in 2017, one of Bitcoin's most excellent thinkers, wrote in 2017 in December that he was breaking out the champagne when transaction fees were $50 each. 17:13 And Bitcoin miners were making many millions of dollars per day at that time. 17:18 For a brief moment, the fees were very high. 17:21 He was celebrating. 17:22 Well, there's been silence over the last five years on that topic from him. 17:25 As far as I can personally recall, he hasn't been making a great complaint that the fees are low over the last few years when they mostly have been. 17:38 So it would be interesting to know, like if he was celebrating when the fees were high, what is his thought today? 17:44 Same thing with Pierre Richard. 17:45 I would imagine that when the fees are high, he would say, well, in fact, yesterday he tweeted that it's wasteful. 17:52 If the fees are high when there's no attack, it's a waste. 17:55 But as drive trainers, we know that we want consistently high fees to create a prohibitively costly hostile attack situation where no one would even contemplate attacking Bitcoin because it would cost them a trillion dollars a year. 18:13 That's the ideal situation. 18:18 Right now, the concern should not be that Bitcoin is oversecured and that fees are wastefully being spent. 18:24 Instead, we want high fees consistently all the time. 18:31 Everyone's welcome to come on up to the stage and ask a question. 18:37 We can have a chat. 18:39 Raise your hands. 18:40 Don't be shy. 18:42 But if we don't have any speakers, then I'll continue with these tweets that we're discussing. 18:46 The next one in the thread that was posted today by LayerTwo Labs. 18:49 Now that we've discussed these excellent thoughts by Warren Tagami, Adam Back, Jameson Lopp, and Dan Held, the next thought that we'll discuss is a recent tweet from two days ago from Rob Hamilton. 19:05 Rob is very often in Cafe Bitcoin in Clubhouse. 19:08 So if you want to talk to him, he's available there. 19:10 I have many times. 19:13 He wrote this excellent tweet that I thought was repeating here about the importance of Bitcoin discourse not having any threats of violence. 19:23 It was very smart of Rob to contribute at this moment when there's been some friction in the community. 19:30 He contributed by saying to everyone, let's not have these threats of violence. 19:35 And I thought that was a great statement. 19:37 So you can read his tweet there if you'd like. 19:39 It's in the Nest. 19:45 And then the next tweet that we'll discuss is from the one and only Fiatjaf. 19:50 I have placed it in the Nest. 19:52 It is a link to his own essay on Drivechain. 19:54 And he wrote, I think the arguments on fiatjaf.com slash Drivechain are pretty compelling. 20:01 They have convinced me over and over every time I lose faith and reread. 20:05 That was great. 20:08 Fiatjaf, I was very impressed when the first time I read that essay, I thought, wow, this guy really gets it. He writes. He writes about Drivechain with such clarity and understanding. 20:20 I'm not sure if his essay mentions the security budget, though, I should reread it today to confirm that. 20:26 Fiatjaf, like Adam Back, talks about Drivechain often in terms of innovation and experimentation. 20:33 People come to Drivechain with different things in mind. Some people understand Bitcoin primarily in the context of payments. 20:41 And they like that sidechains could offer more scaling opportunities for Bitcoin as a complement to lightning. 20:52 However, in Fiatjaf's case, I recall he tweeted once that HiveMind is the thing that excites him the most about Drivechain. 20:59 And he thinks that Drivechain is worth doing if only for HiveMind. So therefore, peer to peer oracles are the thing that Fiatjaf feels are very exciting. 21:13 Others have expressed interest in large block sidechains. Some people come to Drivechain for the security budget concerns, which are certainly very valid. 21:24 And others might come to Drivechain out of an interest in having Bitcoin main chain ossify. 21:30 And lastly, but not leastly, some people come to Drivechain because they comprehend all of these things like scaling, innovation, ossification, security budget. 21:42 And they put it all together and they realize that ultimately the final effect of Drivechain is that it would cause Bitcoin's price to skyrocket, potentially. 21:55 Because if Bitcoin achieves greater peer to peer scaling, greater long term security budget outlook, greater ossification for main chain at the same time as greater extensibility for layer twos, 22:08 and greater fees paid to Bitcoin miners, if Bitcoin gets those four things, the result will be so powerful, potentially, that the price would rise a lot. 22:22 And not just from onboarding more Bitcoiners who have never had any crypto, but also absorbing all of the users value and technology of the altcoins. 22:33 And this wouldn't simply double Bitcoin's price. If all of the energy spent hating on altcoins were instead directed towards Bitcoin development more productively, 22:47 then all of the friction and internal conflict within the crypto community that's currently being wasted, where Ethereum people and Bitcoin people yell at each other, 22:57 and write all these essays and conversations about which is better. 23:01 Instead, imagine if everyone were on Bitcoin, everyone were using Bitcoin as their base chain, and then they all had their sidechains harmoniously without any friction or competition. 23:13 Well, there would be competition in a sense, but it would be on top of Bitcoin, and everyone would be using a synthetic Bitcoin in their sidechain. 23:21 So it would be synergistic, we wouldn't just double the Bitcoin price, it would go up much higher, because all the energy that's been spent fighting altcoins would no longer be spent that way. 23:32 Bitcoin would no longer have competition. So the narrative around Bitcoin will be much more powerful. 23:39 So the ultimate effect of drivechain in the most idealistic, optimistic vision is that drivechain would cause Bitcoin to rapidly absorb the entire crypto community, 23:54 sending the price to the moon, strengthening Bitcoin politically, culturally, and economically in every way. 24:02 It would return Bitcoin to the best possible trajectory that it used to have. 24:08 It used to have, in the early days of Bitcoin, from 2009 through 2014, Bitcoin had a certain character, as I understand from my historical reading and conversation. 24:19 It had a certain energy that has dissipated to some extent over the years due to the failure to adopt peer-to-peer sidechains. 24:30 So let's return Bitcoin to that path. Let's avoid the flippening. Let's avoid it. Let's avoid a security budget problem. Let's avoid custodial scaling. 24:42 Let's avoid the threat and risks of ongoing changes to mainchain. 24:49 We cannot continue to do this every few years, changing the mainchain. It is disruptive. It is risky. 24:56 We have to do a change which would end all changes. 25:01 Now, of course, some people don't like the idea of ossification. 25:09 There have been some brilliant people in Bitcoin like Moon Settler and like Luke Dashjr and others who do not agree that ossification is a great thing. 25:20 But, you know, just in general, I don't want to misquote them. 25:29 But basically, the idea here is that we want to have a higher degree of ossification than we currently have. 25:36 If we can think of ossification as in terms of degrees, what we want for Bitcoin is for there to be a natural, a natural achievement of ossification of a higher degree than we currently have. 25:49 Right now in the community, there are calls to do a few different changes to mainchain, a few different soft forks. 25:56 And what we would like as drivechainers is to see a change done, which would naturally reduce the pressure within the community for more changes. 26:08 Because instead, all of these developers with all of their excellent ideas would happily build on sidechains. 26:15 And if any of the sidechains were to become so successful that its value was approaching the value of mainchain, then we would have a market signal mechanism to know that perhaps that code should be brought down to the mainchain. 26:33 So instead of debating what to do, we would have a way of testing economically, capitalistically. 26:40 So we're not saying Bitcoin would never, ever change for any reason. 26:45 Absolutely. In the future, when we say that ossification is necessary and important, what we mean is that we should have a natural achievement of lower pressure to change mainchain. 26:57 And perhaps with drivechain, we're saying, perhaps with drivechain, after it's adopted, everyone who wants to develop on Bitcoin will happily do it in a sidechain. 27:08 And then they'll have to prove that their idea is so good by having it grow such that the sidechain is so large. 27:15 And then we would have maybe another change to mainchain. 27:20 Like, for example, some people want to see rollups on Bitcoin, but rollups, zero knowledge proofs, things like that involve the latest complex mathematics. 27:30 And maybe it's experimental to an extent that it would be risky to add it to Bitcoin at this moment. 27:38 So instead, we could do drivechain, which uses technology that's been discussed for years and isn't quite so experimental and risky, one would argue. 27:50 And we could do rollups on the sidechain. 27:53 And if they prove to be successful and if they accrue a lot of value, if they accrue a lot of value, then that could be brought down to mainchain. 28:00 So drivechain would fundamentally improve our system for making changes to Bitcoin on mainchain, where ideas have to accrue value and prove themselves instead of what we have today, which is merely testnets and conversation. 28:17 And of course, altcoins. But experimenting with altcoins, using altcoins for experiments is a risky proposition, because suppose the Ethereum experiment proves to be successful. 28:30 Suppose the Ethereum experiment grows and grows and grows, and then it's so large that it's competing with Bitcoin. 28:38 Right now, it's already half of Bitcoin's market cap. 28:41 This is a risky way, a very risky way of testing new ideas, because as Hasu himself wrote in 2017, Bitcoin, when he was referring explicitly to drivechain, he wrote drivechain good. 28:55 Bitcoin needs a way to internalize innovation occurring outside of its mainchain. 29:03 I believe that I'm reading it from memory, but I think that's what he tweeted. 29:09 I don't think he used the word mainchain, but maybe he said blockchain. 29:13 But the point is the same, that Hasu understood that it's not great for Bitcoin to let all the innovation and experimentation occur on altcoins, because what if one of them grows a lot? 29:26 I mean, that doesn't bring any value to Bitcoin. 29:29 In fact, the growth of altcoins is an explicit threat to the network effects of Bitcoin, and that's one of the key drivechain insights. 29:37 Drivechainers understand that toxicity and denunciation and dismissal of altcoins is a cope by toxic Bitcoiners, and a wiser plan would be to try to copy all of the code of all of the altcoins, not to try to demonize them, because they're not going to be convinced of that. 30:01 They know that their technology is legitimate. The technology in Zcash for privacy is definitely legitimate. 30:07 The technology for privacy in Monero is definitely legitimate. 30:12 The people working on Oracles, on Chainlink, and in Ethereum, these efforts are certainly scientific in nature, and whether or not there's a pre-mine or developer tax or backdoor doesn't change the fact that these are technological experiments to some extent. 30:30 And it would be good for Bitcoin if they were occurring on Bitcoin instead of occurring on altcoins, where in the case of Ethereum, there is a substantial threat to Bitcoin's long-term network effects and Bitcoin's ability to maintain its market cap leadership. 30:47 Come on up to the stage and ask a question. 30:51 Don't leave me here all alone. 30:53 Thank you, everyone who's listening. 30:55 If you have a question or if you disagree with things I'm saying, come on up. 30:59 Let's chat. 31:01 Everyone gets things wrong sometimes. 31:04 I could be mistaken. 31:06 If you don't agree, raise your hand. 31:08 Come on up. 31:09 This is a recorded space. 31:11 Everyone's welcome to listen live or listen afterwards. 31:15 The next tweet that we'll discuss from that thread, this is the final one. 31:20 I'm going to post it into the net. 31:22 This is John Light, one of the most excellent thinkers in the space on sidechains. 31:29 He wrote, you said, quote, do drivechain with CTV, unquote, but the retraction makes clear that the other opcodes are needed to actually make it work. 31:42 By that point, might as well do BIP300, which is clean, straightforward, and most importantly, already exists and works and has a lot of tests, et cetera. 31:52 So that's John Light responding to Tim Satz. 31:56 Both of them are names that we're familiar with in the drivechain community, especially John Light. 32:05 And the key part of that tweet that I just read was where he wrote that BIP300 is clean, straightforward, and most importantly, already exists and works and has a lot of tests. 32:15 So in his view, we're ready to go with BIP300. 32:19 John Light is an expert on rollups for Bitcoin, and he has a favorable view of drivechain and rollups for Bitcoin. 32:28 He would like to see both of them adopted. 32:30 He has spoken in Twitter spaces here with drivechain Twitter spaces, LayerTwo Labs. 32:34 He's come and spoken here a few times. 32:37 One time, he said that he supports doing drivechain and rollups, and he would expect that it would be easier to do drivechain first because it has more years of analysis and preparation. 32:51 So he's a supporter in that sense. 32:54 Ah, we have a request for a speaker. 32:58 Welcome to the stage, Aminabek, Web3 NFT community builder. 33:05 Oh, hi. 33:07 I really like how you're doing this Twitter space. 33:10 I've never actually had anybody pin really good tweets and then talk about them. 33:16 So props to you. 33:19 I just wanted to give a shout out also to Sol. 33:23 He brought up a really good point on actually like onboarding new people to Bitcoin and just the difficulty that is very cost prohibitive and also just not very welcoming at all. 33:41 I don't know if he'd like to come up, but there was a really good tweet that he put out. 33:47 I don't know. 33:48 Would you mind if I pinned it as well? 33:50 Sure. 33:51 Go ahead. 33:52 Sorry. 33:53 When you're referring to the cost of onboarding, are you referring to the fees like how it costs like a dollar or two right now for someone to... 34:00 Oh, no, no, no, no. 34:02 So basically, the Bitcoin ordinals have been really trending. 34:10 They've been pretty popular in the last few months. 34:15 The thing is, what I've noticed is I've done a lot of research. 34:20 I've looked at how this can be done, and I even wrote about it. 34:25 But then I tried doing it, and it was like $300 to inscribe one image, one JPEG. 34:34 And the fees just are incredible. 34:38 So then I just was like, okay, well, I guess I'm not going to inscribe because, I mean, that's like a portion of rent or whatever. 34:46 So I just I feel like artists and creators are kind of getting left behind in this movement, even after providing education to themselves or learning what is necessary to do this. 35:02 I think there's just other barriers that Bitcoin unfortunately hasn't resolved, and it makes it very hard to access what is there. 35:15 Yeah. 35:17 So those are great points. 35:19 You're right. 35:20 There are high financial costs to participating in activities on the blockchain in the case of ordinals and related things. 35:30 It's a very, very complex topic, and there's uncertainty as to whether the value of the ordinals, like a Veblen good in economic theory, has to do with the high cost of participation. 35:47 Kind of like how some brands never put their clothes on sale because they know that the fact that there are no sales, there are no low prices, is actually part of the demand for those goods. 36:02 So the drivechain view on this topic is that if peer-to-peer sidechains existed, one would arise, which perfectly meets the needs of this kind of activity, as well as other kinds of activity. 36:18 So there would be a funder sidechain with large blocks for transacting value with high throughput and low fees. 36:26 And separately from that large block sidechain for transacting, there would be a sidechain called BitAssets. 36:35 And people can read about this on drivechain.info. 36:39 If you go to that website and then click on sidechain projects, you'll see one called BitAssets. 36:46 Again, drivechain.info, and then click on sidechain projects. 36:52 The BitAssets sidechain would be a sidechain on Bitcoin that is peer-to-peer and allows for activities of an ordinals and inscriptions nature. 37:06 And this would be a great complement to that movement, and it would not interfere with the activities of other sidechains or of the main chain. 37:18 And the fees that are paid on that sidechain would flow almost entirely to main chain miners through blind merge mining. 37:28 So the drivechain view on the ordinals and inscriptions, like what Udi and Eric are doing, the drivechain view is really the opposite of what the toxic maximalists think. 37:41 So a lot of people in Bitcoin, I'm not going to name them, but some people have criticized the ordinals and inscriptions as unethical, as harming the children, as interfering with the very important message of sound money. 37:59 But we believe that this makes Bitcoin stronger when there's more users, more transactions fees being paid, and more people downloading nodes and learning about the technology. 38:10 It is essential that Bitcoin be the place where exciting, innovative things are being done. 38:17 The market for creativity and art, and also the market for storing data, these are massive markets, and Bitcoin could have an important role in those markets in the future. 38:33 So it's important that Bitcoin enable these applications and activities and not attempt to shut them out, which would send them back to Ethereum. 38:45 It's important for Bitcoin to be a place where everyone can get what they want, kind of like walking into Walmart, where they sell a million different things. 38:55 And that's why Walmart is one of the largest companies in the whole world. 38:59 They don't turn away any kind of customer. 39:01 Whatever you want, you can find there. 39:03 Bitcoin needs to be like that. 39:05 So we think that what you're doing is cool and good with being interested in inscriptions and that kind of thing. 39:13 And we feel, we believe that with Drivechain, there would be more success for Bitcoin in those matters without any interference for others. 39:24 For example, if Greg Foss or others don't, or Tomer Strohleit, like people who don't like this inscriptions activity because it raises the fees and prevents poor people in Africa from moving Bitcoin around on mainchain. 39:38 Those concerns will stop when Bitcoin has a peer-to-peer thunder sidechain with large blocks, because people will be able to move their value around for less than a penny in fees on the sidechain that has the large blocks. 39:54 And they'll be moving Bitcoin. 39:59 Can you explain that to me like I'm five? 40:04 Sure. There's a layered architecture with Drivechain, and people can opt in to whichever layer they feel is best for them. 40:15 So if you're going to buy a cup of coffee, then you're going to want to buy that cup of coffee using Thunder sidechain. 40:21 But if you're going to buy a house, you might want to buy the house using mainchain Bitcoin. 40:27 On mainchain, the fee might be $50. But on the Thunder sidechain, the fee might be one tenth of a penny. 40:38 So that's the difference, is that on the Thunder sidechain, there's very high throughput, very high block size, a one gigabyte block size, and very low fees. 40:52 It's all peer-to-peer. That's the key. It's Bitcoin. It's the same design as Bitcoin. There are nodes, there are miners, and there's a unit of account. 41:02 And it's peer-to-peer. And most importantly, the token that you're using on each level of the system is Bitcoin. 41:13 It's one Bitcoin. That's the token. Infinitely divisible, one Bitcoin, and you can have it on mainchain, or you can move it around on the higher level. 41:23 And on the higher level, the fees are much lower, and there is less decentralization. 41:29 But you don't need maximum decentralization when you're buying a cup of coffee. 41:38 Yo, welcome to the stage, 0xMetaPanda, founder of Endanger Labs. 41:48 Yo, what's good, everyone? Yeah, just MetaPanda. 41:52 Yeah, no, this is super interesting. We're also building on Bitcoin, launching our first digital identity offering over there pretty soon. 42:01 I actually just tried joining the Telegram twice, but it automatically kicked me. 42:07 Oh man, I'm so sorry. 42:09 Yeah, so in the Telegram group for Drivechain, we have a very robust anti-spam feature where people who don't perfectly complete the captcha don't get allowed to stay in. 42:24 Maybe it's too aggressive, but what you have to do is you have to be in the general topic. 42:31 There's different topics, like technical support, off-topic, and then general. 42:36 If you're in the general one, that's where the captcha appears. You can try again in a few minutes. I think it'll then work. 42:43 Yeah, I did it in general twice. 42:46 Third time works a charm. 42:49 I don't know what to tell you, but you're like the 100th person who's mentioned this. 42:53 So yeah, we have a high bar, it's a high barrier to entry to get into that Telegram group. 42:58 You've got to really do it just right, and then we'll work. 43:01 I don't know what else to say, but we're aware of this issue and we apologize for it. 43:06 Nah, no worries. I love it. Very big on security, OPSEC, so keep up the good work. 43:13 Do you go to BitDevs? If you do, I encourage you to talk about Drivechain there. 43:18 That's a great place to learn. 43:20 Also, if you want to know what do all these thinkers think about Drivechain, 43:24 like the people who talk a lot about Bitcoin at the conferences on stage, 43:28 I've made a list of what they think about Drivechain. 43:32 You can find it at drivechain.info forward slash friends. 43:39 That's drivechain.info forward slash friends. 43:44 And that will give you a list of what Adam Back, Fiatjaf, Mike Tidwell, John Light, 43:51 and others have said about Drivechain. 43:54 It's not like the negatives, it's only the positives. 43:59 But the list of people who support it is very large, 44:02 and I chose to just highlight who's a supporter, who likes it, 44:07 who has a favorable attitude about it, who's excited about it. 44:12 So I'll give you more context on this idea. 44:14 Drivechain. It's an idea which has been growing within the Bitcoin community for eight years. 44:19 It was first introduced in a blog post by Paul Sztorc. 44:23 Later, Paul Sztorc and CryptAxe authored the Drivechain BIPs, BIP300 and 301. 44:31 That's Bitcoin Improvement Proposal 300 and 301. 44:35 Numbers were assigned, and you can read the BIPs publicly on the Bitcoin GitHub page. 44:45 And later this year, there will be a pull request to merge the code into Bitcoin Core, 44:53 which would be, if that's done, the final step in the first part of the Drivechain experience. 45:00 The second part will be using Drivechain, where all these exciting sidechains will come to Bitcoin. 45:08 But that can't happen until the maintainers of Bitcoin Core, 45:14 acting on behalf of the community of Bitcoin users, merges the Drivechain BIPs. 45:19 So right now, an exciting development is occurring where Luke Dashjr., 45:25 one of the most experienced Bitcoiners in the whole world, is rebasing the Drivechain code 45:32 so it is perfectly ready to be merged into Bitcoin Core, which would launch Drivechain. 45:38 And it would be a very exciting time, especially for people like me who are obsessed about it for many months, over a year. 45:46 So a great big amount of stuff is happening this year. 45:51 This is like a momentous time. 45:53 And it couldn't be better for Drivechain because all kinds of things are happening right now. 45:58 Like there's a fee crisis where the fees are higher, which is actually a good thing, not a crisis. 46:04 So there's discussion of scaling. 46:08 There's all this infighting over the ordinals and inscriptions. 46:11 So Drivechain solves all these problems, we believe. 46:16 I love that. Congrats, guys. 46:18 This is actually incredible stuff. 46:21 It's really awesome to see this level of innovation coinciding with the happening. 46:27 Usually there's always some sort of catalyst where people are like, well, how are we going to get out of this bear market? 46:32 And I think we're seeing it on Bitcoin. 46:35 It's this incredible renaissance right now where Bitcoin had its first move for quite a while. 46:42 And then Ethereum came along and then a lot of these alternative L1s. 46:46 But now it's sort of like Bitcoin with the features of Ethereum. 46:50 So I'm just super excited for this next cycle. 46:55 Well said. 46:56 I do have a different take on the halving. 47:00 And it'll be interesting to see who's right, you or me. 47:03 We don't know for sure whether the halving... 47:07 Well, let me rephrase that. 47:10 What the halving tells us is that every four years, approximately, the Coinbase is halved. 47:18 And historically, people have been witnessing Bitcoin's price rise. 47:23 And sometimes they attribute that to the halving. 47:26 And this is the so-called stock-to-flow model. 47:29 But it doesn't take into account demand. 47:32 It just assumes demand is constant. 47:34 And therefore, if there's half as much issuance, then the effect on the marginal buyer is that the price will have to rise as they bid to obtain Bitcoin. 47:46 But there's no guarantee that the halving will send the price up. 47:51 It's entirely possible that Bitcoin's price will not go up because of the halving. 47:56 A much better, more fundamental economic understanding of Bitcoin is possible. 48:05 Where we perceive correctly that the demand for Bitcoin is a function of whether or not it serves the needs of economic actors. 48:15 The fact that the issuance halves every four years towards zero doesn't tell us anything about whether or not Bitcoin is valuable to people and whether it'll sustain demand from the market. 48:28 For example, the halving occurs in Bitcoin Cash and BSV. 48:33 But of course, none of us would say that there's more demand coming to Bitcoin Cash and BSV because of their halvings in the future. 48:43 And mathematically and economically, we can say with total certainty that the economic effect of each halving, whatever that effect is, is half as much as every prior halving. 48:58 So in other words, as a result of the nature of halvings, each one is half as important as the prior one. 49:07 And we've had a number of them. 49:09 For example, in 50 years from now, when the amount of the Coinbase is 0.00 whatever, and then it halves to 0.0005 Bitcoin, that's not going to have any effect on the market. 49:27 And the very last halving will be so infinitesimally insignificant. 49:32 Of course, people will pay attention to the last one in 100 years because it's the last. 49:36 So it's interesting, kind of like an inscription that's like 999,000, like the last one before the million. 49:42 But my point is that people talk too much about the halving. 49:46 And it's sort of like economically uninformed and simplistic, in my opinion. 49:52 And what's much more important is such things as generating noncustodial scaling, ensuring that Bitcoin has large blocks for noncustodial scaling, ensuring Bitcoin has a high fee revenue to miners via merged mining of many successful sidechains. 50:12 That's what we need to have. 50:13 Today, there's only about 3 Bitcoin per month is coming to Bitcoin miners from Rootstock. 50:21 It's not a lot of money. 50:23 It needs to be 3,000 Bitcoin per month. 50:27 It needs to be 30,000. 50:29 We have to have merged mining be the source of revenue for Bitcoin miners in the future. 50:35 We need to have every single blockchain paying fees to Bitcoin. 50:40 This is necessary for Bitcoin's success. 50:43 The only way we're going to see very high value for Bitcoin in the future is if Bitcoin has very high transaction finality due to very high fee revenue. 50:56 The fees are what generate the transaction finality. 51:01 The transaction finality, in other words, the economic security or the security budget, the robustness of Bitcoin to thwart a hostile 51% miner. 51:13 Bitcoin needs high fees for that. 51:16 We can't rely on the subsidy, which is halved every four years. 51:20 We need to have high fees flowing constantly to Bitcoin miners. 51:25 The vision of Drivechain is that we have, let's say, 20 sidechains, each with a market capitalization of $100 billion. 51:36 They're all sending millions and millions of dollars of fees every day to Bitcoin miners. 51:43 This would result in the security budget of each sidechain being the fees paid on that specific sidechain. 51:50 And then, amazingly, the security budget of the mainchain will be three things. 51:56 The coinbase on the mainchain, that's part of the revenue. 52:00 And then the fees paid on the mainchain. 52:03 And then, importantly, the fees paid on the sidechains. 52:07 As a result of many merged-mind sidechains sending fees to the mainchain on layer one, the security budget of the mainchain is the sum of the coinbase on the mainchain, the fees on the mainchain, and the fees on the sidechain. 52:22 As Drivechain advocates, what we want to see is a lot of fees being received onto the mainchain from all these merged-mind, fascinating and varied, innovative sidechains. 52:35 A sidechain like HiveMind for peer-to-peer oracles. 52:38 A sidechain like Thunder for one-gigabyte-block, large-block Bitcoin, high-throughput transactions. 52:45 A sidechain for BitAssets, like NFTs. 52:48 BitNames, the DNS-focused sidechain. 52:51 All these different, amazing, technological breakthrough sidechains on Bitcoin paying fees to the mainchain. 52:58 That is what's going to make Bitcoin be very strong. 53:01 It's kind of like a safe. 53:04 If a safe is well-designed and has very thick steel walls and it's bolted to the floor, then it's a robust safe that's hard to steal from. 53:14 People might put their gold bars in that safe. 53:17 But if the safe is weak and flimsy over time and getting weaker and weaker, then people aren't going to want to store their money there. 53:25 So if Bitcoin has a diminishing security budget in the future due to halvings and low fees, that's a recipe for disaster. 53:35 So one of the most controversial things that drive-chainers understand correctly, I believe, is the security budget problem and the need to have high fees in the future. 53:46 People just wrongfully assume—wrongly assume, not wrongfully, but wrongly assume—that Bitcoin will have high fees. 53:54 They've been thinking that for years, even though we're 13 years in, roughly. 53:59 The fees are still pretty low. 54:01 It only costs a dollar to send a Bitcoin transaction the last time I checked yesterday. 54:06 It needs to be back to $50. 54:09 $50 is where Greg Maxwell said in December of 2017 that he's breaking out the champagne, at $50. 54:16 That was a daily revenue of, I think, north of like $20 million a day of fees for Bitcoin miners. 54:24 Today, it's much less than that. 54:27 We're at a fraction of what he thought was worthy of celebrating with champagne. 54:32 So we have to get the fees up. 54:34 And it's funny that within Bitcoin discourse, all we see are mostly like Pierre Richard yesterday, who I respect very much, writing that the security budget is a nonsense concept. 54:46 And we don't need high fees unless Bitcoin's being attacked. 54:50 And if we do have high fees when Bitcoin's being attacked, then it's wasteful. 54:56 We're wasting the fees. 54:57 So that's what Pierre Richard said. 54:59 Now, if you look at what the Ethereum people say, it's the exact opposite. 55:06 It's so fascinating to see these echo chambers, like within Bitcoin, where people are saying, don't worry about low fees. 55:14 It's not a problem. 55:15 In fact, let's make sure we're not wastefully overpaying. 55:18 Bitcoin doesn't have a security budget. 55:20 Don't listen to people who use that phrase. 55:22 That's what some Bitcoiners say. 55:24 And I think they're mistaken. 55:26 Now, if you read what Vitalik says, it's the opposite. 55:30 He and all the Ethereum maxis would say, Bitcoin has a problem. 55:36 The fees are low. 55:37 When the halving runs out, Bitcoin will devalue. 55:41 And they are exactly right, I believe. 55:45 Unless Bitcoin does drivechain. 55:48 Drivechain or something like it. 55:51 Drivechain or something like it, which would bring fees to the main chain from blockchains outside of Bitcoin. 55:58 That's the essence of drivechain is you have a multitude of sidechains. 56:02 All of them have no coins on them. 56:04 And then Bitcoin users are sending coins to the sidechain, maintaining Bitcoin's monetary policy while expanding Bitcoin's technological capabilities. 56:16 And that sidechains have to be peer-to-peer, meaning no one is socially selected to participate in any role. 56:25 That's what peer-to-peer means, in my view. 56:27 If no one is socially selected for any particular role and anyone who's willing to spend some money to buy some ASICs can participate in the security model, then the security model is peer-to-peer. 56:39 Then the sidechain is peer-to-peer. 56:42 Peer-to-peer doesn't mean that everyone you're interacting with is equal to you in some sense. 56:49 What peer-to-peer means is no one is socially selected. 56:53 No one is privileged. 56:55 That is the correct definition of peer-to-peer, in my opinion. 57:00 So what we want as drive chainers is a multitude of sidechains, all of them peer-to-peer, built on Bitcoin, where Bitcoin users can send a unit of Bitcoin to the sidechain, transact with that unit of account, that synthetic Bitcoin. 57:17 And then when they're done, eventually send it back down to main chain to use main chain again. 57:24 And we have to have this arrangement such that all the sidechain fees are collected to the main chain. 57:33 So that's the brilliant thing about drivechain. 57:35 It doesn't just open up more technological possibilities. 57:38 It solves the security budget, potentially. 57:43 Bitcoin just simply must aspire to collect every single blockchain user in the whole world. 57:49 We have to aim for that. 57:51 We have to aim that every single application can be on Bitcoin. 57:54 Every user can use Bitcoin. 57:56 We can't have it be that people must go to an altcoin to do something. 58:01 And the more that Bitcoin embraces that narrow mandate, the more the altcoins will thrive. 58:12 Welcome to everyone in the audience. 58:14 This is Drivechain Twitter Spaces by LayerTwo Labs. 58:17 We go every Monday and Thursday to talk about drivechain and related concepts. 58:23 Everyone's welcome to come on up to the stage. 58:25 You can raise your hand to ask a question or share a comment. 58:32 Don't be shy. 58:33 Raise your hand. 58:34 Come on up. 58:36 Tell me how I'm wrong. 58:37 Go for it. 58:42 Welcome to all the new faces I see and welcome to the familiar ones. 58:48 It was great to meet some of you at the recent Bitcoin Miami event. 58:52 We hope for those who weren't there that you've enjoyed reviewing our tweets. 58:56 We put out a lot of videos on our LayerTwo Labs Twitter of our friends and newcomers visiting our booth. 59:06 We had thousands of people visit our booth to collect all of the T-shirts and sunglasses, shot glasses and other things that we handed out, as well as they wanted to take part in the fun act of smashing the pinatas that we had. 59:21 Welcome to our speakers. 59:24 We have two speakers joining the stage. 59:27 Hello, Paul, and hello, SuperTestNet. 59:36 Hello. 59:37 I just thought I would join, too. 59:39 I was sort of listening before, but we were busy doing real work, so now I would get the speaker microphone if I need it. 59:50 I don't have anything in particular to say right now, just that we're working on some cool—I guess we could talk about stuff that we're doing. 59:59 We're working on Namecoin as a sidechain. 1:00:04 It's a high-performance sidechain, but I don't know. Those are details. 1:00:08 I just wanted to grab the microphone option in case I need it. 1:00:12 What's up, SuperTestNet? Nice seeing you at Miami. Had a great time. 1:00:16 Did you come to our booth? We gave away a bunch of stuff. 1:00:19 I never did get to your booth and actually never made it to the conference at all. 1:00:23 I just hung out in Miami with my friends. 1:00:26 I got some good slides for that one. I think I posted them, but I should tweet them or something. 1:00:46 I'll tweet them. 1:00:49 Super, which sidechain excites you the most? Would it be the Thunder large block sidechain, the Hivemind Oracle sidechain, or the DNS sidechain, or a different one? 1:01:04 The Thunder one. Thunderblocks? Is that what it was called? 1:01:07 Thunder. 1:01:08 I think I actually may have whatever-pilled, drive-pilled Adam back on that a little bit. 1:01:17 He was also thinking about it himself. He came to me and he was like, well, this. 1:01:21 Then I sent him my written article about it, and then he just tweeted about it two hours ago or something. 1:01:31 He's the originator of a different idea called the extension block from December 2014, which is a fascinating idea in its own right. 1:01:42 These are historical details that maybe people are interested in, maybe probably not. 1:01:48 Let me post these slides. I'm going to tweet these slides. 1:02:00 Super, have you seen the GitHub page for the Thunder sidechain? 1:02:10 No. 1:02:12 Okay. 1:02:13 There is a GitHub, but I also have a blog post, which I think is more important for people to understand that it's not the same as naive layer one large blockism, because that is a bad idea, but that's not this idea. 1:02:27 It is also, which is very important. 1:02:30 Also, I just give a lot of context, like reframing. 1:02:34 Let's say it's like an airplane where you have some first class transactions that pay the high fee. 1:02:41 They would be first class. 1:02:43 Layer one Bitcoin is first class, but then you have Coach, where it's a shittier node experience, because the node is more expensive and whatever. 1:02:54 But it's cheaper, and so sometimes you want first class, sometimes you want business class, sometimes you want Coach. 1:03:02 Shouldn't we just have them all in the same airplane? 1:03:05 I don't know if I can easily share that, but I just call it Thunder as a little bit of a joke, like a lightning joke, of course. 1:03:16 But it's a great article. 1:03:19 I can link to it if you just search something for scaling. 1:03:23 So you said it's not the same as naive layer one big blocks. 1:03:26 Is it the same as naive layer two big blocks? 1:03:29 Because that's kind of what I was hoping for. 1:03:31 It is slightly different than just naive layer two, but basically something like that. 1:03:38 Some of the things people don't grasp is you can fail safe with layer two, whereas if layer one fails, you're dead. 1:03:48 Layer two can just kind of pause. 1:03:50 As long as layer one is still working, layer two fails, but it's just on pause. 1:03:54 It can come pause and come back. 1:03:56 Layer two, the chains can have like a pyramid hierarchical structure of some kind where they have like zones, and they work as a team. 1:04:09 So like one of them is like for maybe the East Coast of the United States, and another one is for Southeast Asia, 1:04:17 where situations where most people make transactions among themselves, but they do not transact with anyone outside their zone. 1:04:25 Another thing people don't understand is the main failure mode of the large block sidechain is that the nodes are censored, 1:04:34 but it's possible for, for example, let's say you have the node, all the nodes that serve the people of China. 1:04:42 Everyone in China is using SPV node, but all the full nodes are in a different country. 1:04:47 The Chinese government cannot ban the nodes that are in the United States, 1:04:53 and the United States government can really not ban the nodes that are in Switzerland, 1:04:57 and the Swiss government can't ban the nodes that are in whatever, Djibouti or whatever they are. 1:05:04 So actually these are a lot of things that I think people just don't keep in mind, 1:05:09 and then what people should keep in mind is the potential upside of being able to give everyone a UTXO, 1:05:16 all eight billion people in the world, their own UTXOs. 1:05:20 Finally, another thing that people don't appreciate is that different transactions are different. 1:05:25 So you have a coffee transaction. It doesn't really need a lot of decentralization. 1:05:30 So why would we compete with Venmo credit cards? They are centralized. 1:05:35 We should have a deliberately more centralized option just so that we have the whole spectrum of stuff. 1:05:42 So I talk about this in the article, truthcoin.info.com. 1:05:49 I think the article is a good one to read because it's mind-expanding. 1:05:55 If you want to fit in on Bitcoin Twitter, then you should not read it because you will become enlightened, 1:06:02 and then you will be alienated from the experience of the common man. 1:06:06 But if you want to achieve greatness and ascend into a transcendental religious plane of pure knowledge 1:06:17 and innovation and progress, then maybe you could read it and think about it a little bit. 1:06:23 Well, I like this version of Paul Sztorc. Where did this version of Paul Sztorc come from, the guru version? 1:06:29 It's all because of the magic of the Bitcoin conference. 1:06:33 Have you been listening to Tony Robbins? 1:06:36 Of course not. I sure don't. I should add more Tony Robbins. That would help Bitcoin 300. 1:06:41 I think anyone who's met and chatted with Super, as I recently was fortunate to, 1:06:46 can tell immediately that he is definitely of that kind of mindset. 1:06:50 He is 100% interested in the truth, not at all interested in any kind of superficial posturing or community clout. 1:07:01 He's the kind of independent thinker who is moving Bitcoin forward through science 100%. 1:07:08 I may not be interested in clout, but keep saying stuff like that. It really builds my ego up. 1:07:12 I think people like you really move the conversation forward because it's just so clear to everyone that you're a builder, 1:07:19 that you have the highest class of knowledge, which is someone who's able to actually build a whole application, 1:07:25 like a full-blown coder focused on Bitcoin, Lightning and Nostr. 1:07:30 So it's really great to have you in the sidechain community, and I'm really genuinely excited to see what you do. 1:07:37 If Drivechain is launched, it's people like you, and the few people like you, 1:07:41 who will be able to actually build entire sidechains that are very successful, that accrue billions of dollars of value. 1:07:48 It takes a lot of mastery to probably design that kind of thing. 1:07:53 I have to say, what you see in others also exists in you. 1:08:03 So I just really like that you're uplifting the community. I think this is so rare to see. 1:08:12 Well, the exciting thing about Drivechain is to know that we're going to be vindicated, whatever happens. 1:08:20 Because there's no way, I think, that we're wrong. 1:08:26 Because either Bitcoin does Drivechain, or something like it, and is very successful, or Bitcoin doesn't, 1:08:34 and then some other chain will, and that chain eventually would probably out-compete Bitcoin. 1:08:41 So whatever happens, Drivechain or something like it will become the world's blockchain that has the ossified Layer 1, 1:08:50 the highly extensible Layer 2s, and that will take over. 1:08:55 It'll be the most popular and successful thing in the whole realm of blockchain, money and software. 1:09:01 Just be careful when you think there's no way you can be wrong. It's a dangerous place to be. 1:09:06 Of course, of course. I mean, there could be some oversight or problem. 1:09:09 So it's exciting to find out whether we're right, right? What do you think, Cooper? 1:09:15 I think you're right. I think you're probably right. Like 99.8%. 1:09:20 I think there could be something. I mean, let me list some ways we could be wrong, even though I definitely think that we're right. 1:09:29 But I think that one way is it could be the case that, for some reason, all blockchains just don't work without the block reward at all. 1:09:40 And if you have only transaction fees, something about that doesn't work in a different way, 1:09:46 like in whether or not blocks make forward progress, because there's something called fee sniping, 1:09:53 and there's this old paper called Mind the Gap that I thought it wasn't actually very good, but at least it raises the right problem. 1:10:00 And that would be interesting. And what would be interesting about that is it would kind of be like a canary in the coal mine. 1:10:05 And it would indicate that Bitcoin layer one main chain also will eventually not work because the block subsidy will trend to zero. 1:10:16 That's possible. It's possible that something like – I really don't believe in this ZK-SNARK supremacy thing, 1:10:24 but I suppose it's possible that someone would have a version of this that just has the ZK-SNARK stapled on, 1:10:32 and that for whatever reason, people like – that would really not be significantly different from this project, 1:10:39 because of the data availability problem is not solved at all by ZK-SNARK. 1:10:43 So that would just be like this problem. It would just be BIP300. It would be drivechain plus ZK-SNARK, drive SNARK, or whatever. 1:10:53 And so that would not be that different. And I think another way might be that we could theoretically be wrong. 1:11:03 I'm really scraping the bottom of the barrel here, but if network effects are just so strong, like the QWERTY keyboard level strong, 1:11:11 where just something is big and people are absolutely – no matter how stupid we get, and Bitcoin just becomes more and more successful, 1:11:22 and no matter how complacent we sort of become – I think we have been very complacent for the last five, six, seven years. 1:11:29 There hasn't been a lot of novelty. There has not been a lot of novelty in Bitcoin. 1:11:34 And I think maybe that's just the case. The problem with that is, though, it really predicts that the U.S. dollar will just destroy everything. 1:11:41 It will just conquer every fiat currency, and then it will just be so big that people will need there to be an exchange between BTC and the U.S. dollar, 1:11:50 and then they'll just be able to close down all the exchanges or something. 1:11:56 So that's kind of a dark – the network effect. But I think the network effect is tough, because no matter how strong network effects are, 1:12:03 like Silk Road, you could only use Bitcoin there. And Bitcoin grew from having zero users to having a market cap of $1 trillion. 1:12:12 So how can you explain – if you have a network effect-only story, how do you explain that? 1:12:19 I have a quick question. Paul, the wrapped Bitcoin product is totally centralized through BitCo, as I understand, if I understand correctly. 1:12:30 And yet it has – 1:12:32 There are a couple of different ones. I don't know. I think WBTC is not – which one is the one that is? Maybe I get them mixed up. 1:12:41 I think WBTC has a market cap of $4 billion, and I assume there's a 15-party multisig that the company is managing. 1:12:49 So it's centralized but somewhat successful – $4 billion. Much bigger than Liquid or Rootstock. 1:12:54 What if we built a Thunder sidechain that was a clone of Bitcoin, but not peer-to-peer, but instead had a multisig? 1:13:02 Maybe it would take off, and that would demonstrate the possibility of sidechains being good, 1:13:09 and then people would want to improve it even further by making it peer-to-peer through drivechain. Could we try that? 1:13:20 What do we do? We launch Thunder, and then what do we do? 1:13:23 We launch Thunder, and we promise not to run away with the money. 1:13:27 As a federated sidechain? 1:13:30 Oh, with no BIP300? 1:13:32 Right. 1:13:34 I don't think people would be very persuaded by that. They would just say they're just going to steal it. 1:13:38 But I think RackBitcoin is not peer-to-peer. Someone's trusting them with $4 billion. 1:13:47 They're also not trying to be specifically a scaling solution. They're trying to make it so you can use Bitcoin on DeFi, which is a bit of a different – there's a bit of a demand gap there. 1:13:59 Yeah, they have a rising debt trend. 1:14:07 I was thinking that if we could get more value into the federated sidechains that we have today, that would help the cause of drivechain, 1:14:15 because then people would see that something similar is doing well, and they would want to be able to elevate it further. 1:14:24 I think that the Rootstock people are kind of doing that, because their whole thing is that as soon as we have drivechain, they'll switch to that. 1:14:30 But in the meantime, they're going to use the federated thing, which seems like a good – I think that's reasonable. 1:14:36 Exactly. 1:14:38 But yeah, maybe just becoming Rootstock shillers would be the way, because they're already doing that. 1:14:45 Right, but they're not doing exactly what Thunder is. 1:14:50 Well, I don't know about exactly, but if Thunder has bigger blocks, Rootstock does have bigger blocks than Bitcoin. 1:14:59 So it's got that aspect of it, too. 1:15:02 Yes, you're right. 1:15:07 It's great that Rootstock is there. 1:15:09 Or at least it could have bigger blocks if anyone was using it. 1:15:14 They have some users. They've got Sovereign built on top of Rootstock. 1:15:19 Gabriel Kerman, one of the co-founders, was here a few weeks ago in this Twitter space, 1:15:24 and said that they're generating three Bitcoin per month in transaction fees for Bitcoin miners. 1:15:31 Yeah, I'm looking at their block explorer right now, and it's just a string of empty blocks with no transactions in them. 1:15:40 Two transactions in this one, four in the one before that, one in the one before that. 1:15:44 There's just very little usage of the actual thing. 1:15:47 Every little bit helps for the security budget. 1:15:51 Yeah, but I think these federated things are potentially cool. 1:15:58 It's just that Bitcoiners don't really seem to want to use them all very much. 1:16:02 I guess except for wrapped Bitcoin, people do seem to use that. 1:16:06 One very cool metric is that about half of Bitcoin's hash rate is merged mining Rootstock. 1:16:11 I would assume that's just a few pools is all it takes to get to half, but that's still a large number. 1:16:20 I feel like Paul's baffled that we're talking about Rootstock. 1:16:23 Paul, can you save us from talking about non-Drivechain-y things? 1:16:29 I think Rootstock, well, Rootstock, there's some weird questions about it. 1:16:34 Of course, the Rootstock guys are great, but the point of Rootstock is supposed to be, 1:16:40 okay, does anyone like Ethereum? We'll do Ethereum on Bitcoin. 1:16:46 And I don't know, they seem to do a lot of other stuff. 1:16:50 They have a huge website with lots of stuff on it. 1:16:55 I guess they're building Rootstock versions of a lot of ETH things, which is great, I guess. 1:17:03 With Liquid or with the Federation, I don't know. 1:17:06 We're in a weird situation where Matt Corral publicly tweeted that 1:17:13 it should only be used for sending coins among exchanges. 1:17:22 And I think he literally said in the tweet, if anyone talks about it in a different way, 1:17:26 you should mistrust them. 1:17:30 And he's like the creator of Liquid, sort of, one of the co-creators. 1:17:36 I don't know. I think, I don't know. 1:17:39 It's also possible that there will be no demand, like, 1:17:42 it's possible that there's no demand for any of the actual end uses at all, 1:17:47 and the whole thing is like just sociopathy, which coin you own. 1:17:52 And you own your coin, and you share your coin, 1:17:56 including by pretending that you use it for its features, 1:17:59 but no one is really using any of them for any feature. 1:18:03 But that's kind of hard when you consider that Bitcoin was, 1:18:06 that the Darknet markets were Bitcoin only, 1:18:09 and then they switched to being Monero only. 1:18:15 It's kind of hard to regard that as... 1:18:17 I question that narrative. 1:18:20 Who's doing analysis on Darknet market transactions 1:18:26 to find out what the volume is for these things? 1:18:29 It seems to me that if you were a really good Dark market, 1:18:31 part of your job would be to prevent people from being able to find out your transaction volumes. 1:18:37 Indeed, but I think you also want to attract customers 1:18:41 by saying, like, we're the biggest or something. 1:18:43 There was a good friend of mine. 1:18:45 Well, I don't know about a good friend, 1:18:47 but, I mean, someone I've known for, like, whatever, 1:18:49 like 15 years on the Internet from far away. 1:18:51 And I don't think I've never met them in person. 1:18:53 But this guy Guern, and he's an absolutely fascinating character. 1:18:59 He's one of the most interesting people on the Internet, I think. 1:19:02 It's almost fair to say. 1:19:05 He has this site, and he used to look into all this, 1:19:08 but I don't think he has recently. 1:19:09 But he used to actually be a... 1:19:11 He was a Darknet market researcher, was one of his many titles. 1:19:15 And he's an absolutely fascinating guy. 1:19:18 Just a wide variety of interests. 1:19:21 He's kind of like a polymath kind of guy. 1:19:23 He's just... 1:19:24 When he gets into something, he really gets into it, 1:19:26 and he uses a computer at a very high level. 1:19:30 I wouldn't trust... 1:19:31 I wouldn't trust if a Darknet market had some sort of advertising campaign 1:19:35 to convince people that they were the largest. 1:19:38 I wouldn't trust that they actually are, 1:19:39 because I'd think they're doing a pretty bad job being a Darknet market. 1:19:43 If they're advertising. 1:19:45 It is a paradox, yes. 1:19:47 It's definitely a paradox. 1:19:48 I agree. 1:19:49 It's hard, because you want... 1:19:51 In some sense, I would imagine they want people to know about them, 1:19:54 and then in a different sense, they want no one to find out about them. 1:20:00 Yeah, I remember recently, Post Capone, he mentioned in passing that if half the transactions on Bitcoin were through Lightning, then essentially Bitcoin would be as private as Monero. Does that sound right? 1:20:16 Well, maybe. 1:20:18 It doesn't sound likely, but... 1:20:20 I think one thing... Well, there's a... John Carvalho hosted a Lightning limitations synonym space. He did these synonym spaces. I think this one was like August of last year. 1:20:33 And then you can hear he has elite Lightning people, and there's a section about privacy, and they complain a lot about the privacy in that video. 1:20:44 So I think the privacy is overhyped a little bit in Lightning, where the original thought, like layer one of the onion, so to speak, is like people say, well, it's off-chain, so on-chain, there's this permanent record of every transaction. 1:20:58 But on Lightning, that's not the case, so therefore, better privacy. But then there's all kinds of... I think for a start, IP addresses and things are mandatory to do the routing and just form connections between the Lightning nodes to find the route. 1:21:17 So you should listen to them, not me. They seem to be a little bit pessimistic about near-term Lightning privacy. I think it will be eventually very private, but they think that in the, whatever, two to three year time window, from what I gather, it's pretty pessimistic. 1:21:39 At an intuitive level, the idea of not putting everything on the blockchain sounds like it would be an improvement in privacy. But if your alternative is to tie it to your IP address instead, well, it's like, okay, I guess you're just out of the frying pan and into the fire. 1:21:57 But yeah, I don't think the concept of the Lightning network requires tying payments to your IP address. I know you can use Tor addresses, because I've done it before, to hide my IP address, and I suspect that there's some other things you can do as well. 1:22:19 But we'll see. Maybe we'll never see, because Lightning sucks, and we'll just maybe come up with something better instead of trying to fix it. 1:22:31 Yeah, I feel that. Because I do see a similarity with Mineral now, where back in the day with Bitcoin, it just had a lot of the fundamentals that people look for. 1:22:44 Obviously, people in the dark utilizing it, low supply, proof of work, all these things that are attractive to a lot of people across the internet. But if Bitcoin can nail that, then there's really no argument. 1:23:14 All right. 1:23:44 I'm a big fan of all the attempts to build sidechains. I like Liquid. I like Rootstock. I guess, with the exception of Stacks, I don't like Stacks. 1:24:15 That's the only one. You guys know I like spacechains. I've come up with a couple of sidechain models of my own, and I've implemented some of them and have some worked on other ones. 1:24:26 So I like all of that stuff. Right now, I'm trying to work with some guys on making something called a SPV verification function in Bitcoin script. 1:24:38 So early on in Bitcoin, there was this thought that perhaps we could soft fork in a simplified payment verification function in Bitcoin. 1:24:50 So simplified payment verification is this technique for proving that a payment occurred on Bitcoin without validating the entire blockchain. 1:25:00 You just prove that the particular transaction is included in a branch of a Merkle tree whose root has a certain amount of proof of work on it, and then you can use that as a substitute for actually proving the payment happened. 1:25:16 And there was talk about soft forking in a function that would do that so you could validate whether a payment happened on Bitcoin or on another blockchain and use that as the condition to spend on Bitcoin. 1:25:27 But it never happened, and now me and some other guys are in a Telegram group trying to hack together a way to do it, a way to implement one without a soft fork, just by using the native built-in functions of script. 1:25:40 And I think it's kind of promising. I think there's some promising work being done in that group. 1:25:45 And if we're able to succeed, then I think we could use it to build a two-way peg without a soft fork. 1:25:53 And right now, I think that work is the most promising I see in terms of building a sidechain that has a two-way peg. 1:26:04 Because right now it doesn't seem to me like there's much chance that BIP300 will get accepted by the community. 1:26:13 And so I'm trying to find ways to just work around that and do it without a soft fork. 1:26:18 Would that result be merge-mined sidechains? 1:26:21 It could be. That's what I would want, because we already have ways to do merge-mining, and that's been a success. 1:26:31 So I would like to use that as the governance mechanism, because there's really two problems. 1:26:36 BIP300 and BIP301 solve two problems. One of them is the two-way peg, and the other is governance. 1:26:43 Another way of putting that is, how do you come to consensus on the order of transactions on the sidechain? 1:26:48 BIP301 solves that, but also Reuben Thompson's blind merge-mining proposal can do the same thing without a soft fork. 1:26:56 So that's the one that I use in my Space Chain Launcher. That's the one a couple of other people have used as well. 1:27:02 And then the other one is the two-way peg. That's the more important one, and we don't really have anything for that. 1:27:08 Nothing good, anyway. All we have is the multi-sigs, the multi-sig federated pegs. 1:27:16 So finding a solution to that is one of my current goals. 1:27:25 The original way the sidechain was explained was as SPV proof, and that was the original sidechain design. 1:27:36 The original design involved something like a skip list idea, where it proved that many blocks had happened, like thousands, 1:27:46 by tying each block had a little index, and it referred to a few preceding ones. 1:27:54 This had a log in growth or something, but you still had to put many headers. 1:28:00 You actually had to put many, many actual block headers into the peg-out transaction, which would be like tens of kilobytes. 1:28:11 And it required a soft fork. 1:28:14 Yes, it required quite a bit, and then it could also be surprise attacked, which is a little bit different than PIF300. 1:28:22 But yeah, I think that would be different. 1:28:25 I would wonder about, the goal is to first use current Bitcoin scripts to prove SPV of work on a different chain? 1:28:37 Yes, the goal is to design a transaction system such that transactions on this sidechain can be validated using an SPV verifier that we can construct in Bitcoin script. 1:29:01 So like, custom design a hashing function that we can implement in Bitcoin script, and then use that to build like Merkle trees and stuff on this sidechain. 1:29:11 And then just create a whole sidechain that's based on what can we validate with Bitcoin script. 1:29:19 And if we get that, then we might be able to work. I don't know, the work is ongoing. 1:29:23 That's cool. That's going to be very difficult to get something that will have the second chain, where because you have to unlayer one, people will spend to this weird script, and then it will be unlocked by giving the thing a lot of stuff, an awful lot of stuff on the second chain. 1:29:53 An awful lot of stuff, yeah. 1:29:55 But if you have that as an option, then you can make like an optimistic version, where you can use a federation to peg in and peg out. 1:30:03 But if they censor you, you can fall back on using a very expensive alternative peg out that doesn't require the federation. 1:30:11 So you can have like just an or statement, either this big long SPV verifier, or 11 of 15 of these signatures, or of these public keys. 1:30:21 And that way, you can just always use the cheap method unless you get censored, and then you can use the expensive method. 1:30:28 But we'll see. I mean, it's early work. It's pretty much just a concept right now. 1:30:34 But I did some work on demonstrating that you can build a SHA-256 function in Bitcoin script. 1:30:42 And actually, I got pretty much complete with it. 1:30:46 Instead of just using OP-SHA-256, which you already have, I just built one using the Boolean functions. 1:30:54 I built like a Boolean circuit that does SHA-256. 1:30:58 And so if you can do that, you can probably build something custom. 1:31:04 You can probably build a custom hashing function designed to be much cheaper, 1:31:08 and designed specifically for proving that some transaction happened on a sidechain. 1:31:16 So I mean, it's early days, but I think it's promising. 1:31:22 It might be the most promising way that I'm currently aware of for getting something like a two-way peg into Bitcoin without a soft fork. 1:31:28 Other than just using a multisig, which of course already works. You can just do that. 1:31:39 Are you familiar with the crypto-economic objections some people have to merged mining? 1:31:46 Like Peter Todd and Shinobi, they think it's going to make the incentives too complicated. 1:31:54 And that we should keep Bitcoin simple. 1:31:59 What do you think about that, this ongoing sort of dissent from the idea that Satoshi, with his invention of merged mining, was on the right track? 1:32:10 I haven't given it much thought. 1:32:15 The fact is you can do it. 1:32:17 And if it is a vulnerability of some sort, I don't think there's a way to stop it from happening. 1:32:26 So I would rather try and build the best version of it that I can. 1:32:33 And then if it's a vulnerability and if it can kill Bitcoin, great. 1:32:37 Then we know Bitcoin can't succeed because it has this unstoppable vulnerability called merged mining. 1:32:42 As long as you can add data into Bitcoin's blockchain, you can do merged mining. 1:32:48 And I don't think there's a way to stop people from adding data to Bitcoin. 1:32:52 Are you agreeable to the notion that not only are they wrong, but in fact a vital strength of Bitcoin is what Satoshi suggested, which was collecting fees from every single blockchain. 1:33:04 The vision that every blockchain in the world would be a merged mined blockchain of Bitcoin. 1:33:11 That's what Satoshi explicitly said he expected. 1:33:14 That Bitcoin be the L1 for every other blockchain. 1:33:17 Do you think that'd be great to collect a ton of fees, strengthening the security budget? 1:33:22 I've long thought that using merged mining to collect fees so that miners can increase their fee revenue sounds like a good thing. 1:33:34 I'm aware that Shinobi at least, I didn't know Peter Todd also says this, but I'm aware that Shinobi says that it's actually a vulnerability. 1:33:42 I think I did read his argument once, but I haven't processed it and I can't remember what its contents are. 1:33:48 So I hesitate to say it's false without even knowing what it is. 1:33:53 But if it is true, then I don't think that's a reason to not do it. 1:34:01 If Bitcoin does have a vulnerability, then I'd like to see it exploited so that it can either be fixed or so that we can learn that Bitcoin won't work because it has a serious vulnerability. 1:34:11 That's a great response. Thank you. 1:34:14 The security budget topic is exciting to a lot of people because unlike the other topics related to drivechain, this one is going to be right or wrong. 1:34:25 Either the fees will go up without a lot of merged mining or they won't. 1:34:28 And if they don't ever go up, then the halvings one by one will reduce the transaction finality. 1:34:37 And eventually it would be very cheap in theory to be a hostile miner with a majority of the hash rate. 1:34:43 And people who are optimistic think, well, the fees will go up soon. 1:34:47 But year after year, they come back down to one sat per V byte. 1:34:51 So it's only a matter of time until they're one sat per V byte again, perhaps. 1:34:55 Perhaps. 1:34:57 They also keep going up in value, though, like overall, because if you check year by year, we're sitting at fee all time highs. 1:35:07 So every year we seem to be doing that. 1:35:10 But we'll see because it's not just the absolute value of Satoshis that are relevant to replacing the subsidy, but also the value of those Satoshis also contributes. 1:35:23 And that part's been on the rise year after year. 1:35:28 That's an interesting view. 1:35:30 I, of course, agree that the real purchasing power of the fees per unit of time is what matters and not the nominal number of sats. 1:35:40 Of course, it's the purchasing power of those sats that matters. 1:35:44 But are you adjusting for the loss of the value of the dollar when you think about whether the total fees per day are growing? 1:35:55 Because if we're at half a million dollars a day of fee revenue in recent weeks before this spike, right now I think we're about at a million dollars a day. 1:36:10 But I've looked at the chart a lot. 1:36:11 Over the last five years, the fees again and again were mainly at half a million dollars a day of revenue. 1:36:20 And there are spikes from time to time. 1:36:24 But half a million dollars a day five years ago was worth more than it is today. 1:36:29 So, in fact, I would argue that we're not on an encouraging path in terms of the value of the block space, which is the fees total paid per unit of time in terms of their purchasing power, their real value. 1:36:44 I have not looked at those charts. 1:36:46 That's pretty cool to hear. 1:36:48 If you could put out a tweetstorm about that and show the charts, that'd be really interesting. 1:36:53 I would like to look at that and see your analysis. 1:36:56 It sounds like you're saying in 2017 fees were half a million dollars a day. 1:37:02 Today, over the course of this year so far, fees have been about half a million dollars a day. 1:37:10 But, of course, the dollar was worth more in 2017. 1:37:14 Is that a good summary of what you're saying? 1:37:17 Yes. 1:37:18 So I usually go to blockchain.com and then click on Explorer. 1:37:24 And after you click on Explorer on blockchain.com, click on Charts. 1:37:29 And then click on Mining Information. 1:37:33 That's Mining Information. 1:37:35 And then click on Total Transaction Fees Parenthesis USD. 1:37:40 That's Total Transaction Fees Parenthesis USD. 1:37:44 And then where it says Market Price on the chart, click on the word Market. 1:37:51 And that will eliminate the price of Bitcoin. 1:37:55 And now we're looking at a chart of only the transaction fees in U.S. dollars. 1:38:00 Which, as I mentioned earlier, isn't a perfect measure of the real value. 1:38:05 Because, of course, the dollar is always losing value over the long term. 1:38:09 So if it were possible to adjust this for inflation, then it would look slightly worse in terms of the growth of the value of Bitcoin's block space. 1:38:21 So we can look at a chart of three years. 1:38:24 Hang on a second. I'm trying to follow your example here. 1:38:27 I went to blockchain.com, I clicked Explorer, then I clicked Charts. 1:38:30 And what do I do? 1:38:31 Mining Information. 1:38:33 And after you click on it. 1:38:35 I don't see that. 1:38:37 Oh, there it is. Mining Information. 1:38:39 And then Total Transaction Fees or Miner's Revenue. 1:38:43 Total Transaction Fees USD. 1:38:45 Because Miner Revenue, of course, takes into effect the subsidy. 1:38:48 Whereas we want to look at only the value of the block space. 1:38:53 Okay, so I'm on the Total Transaction Fees USD and then you said to get rid of something? 1:38:59 If you click on the word Market Price, just click on the word Market. 1:39:02 Which is at the top right of the chart graphic. 1:39:05 That removes the distraction of the market price of Bitcoin. 1:39:09 Now we're looking at a chart of only the value of the block space, which is synonymous with the phrase Total Transaction Fees. 1:39:15 So we're talking, we're thinking here about the value of the block space per unit of time. 1:39:21 So this chart shows the total fees paid in each calendar day to Bitcoin miners from just transaction fees. 1:39:29 Now, of course, I would concede that during the recent Ordinals event, you know, with people doing all kinds of entertaining things like posting unusual transactions. 1:39:40 There was some payments to miners that so-called out-of-band payments or just off-chain payments like a check written to a miner in a bank account. 1:39:50 And that would be part of the security budget in theory. 1:39:53 So I would concede that some people got money that wasn't shown in this chart. 1:39:59 Almost all miner income is on-chain, right? Like, so that's, but I would concede there's other miner things to think about with in terms of miner income. But here we're looking at Total Transaction Fees in dollars, not inflation adjusted. And you can see here, click on three years. Look at the three years today at the very right hand side of the chart. May 23rd is the latest data available. 1.7 million dollars. 1:40:29 It's almost the exact same thing as August of 2020, when we were a little bit higher than 1.7. 1:40:37 So anyone who says right now, as of most recent data available, that the fees are very high, you know, is actually mistaken. 1:40:46 The fees are where they were, you know, two or three years ago. 1:40:50 And pretty soon we'll be back down to that, like, you know, June 2022 level of like $400,000 per day, I think. 1:40:59 The usual Bitcoin, which is like half a million dollars a day to pay to miners. 1:41:03 This is not good. You know, Bitcoin has 200 million people supposedly using it. 1:41:08 I heard that number from Brad Mills and he was one of my friends from, never met him, but, you know, talked to him hundreds of times on Clubhouse. 1:41:17 So he said 200 million people use Bitcoin. 1:41:19 Well, I'm thinking if we're 13 years in with 200 million people, why is the block space so cheap? 1:41:23 Something is wrong. 1:41:25 Well, now, hang on. I'm looking at this chart. 1:41:27 It looks like over the it looks like the average over the last year is about two million or two million dollars a day in transaction fees. 1:41:36 And when I look in 2017, it looks like the average is close to close to half a million per day. 1:41:42 So that seems like a big increase. 1:41:46 Look at the all time chart and what do you see? 1:41:48 What we see is almost always Bitcoin is getting under half a million dollars a day of fees. 1:41:56 There's the spike in 2018, the spike in 2021 and then the smaller spike in 2023. 1:42:04 But if you look at like January 2017, we were at a hundred thousand dollars per day. 1:42:09 And then if you look at the end of 2017, you know, it was it was enormous. 1:42:13 It was like 11 million dollars a day. 1:42:14 Just a few days, a few days. 1:42:18 Yeah, for a few days. So on average, though, it was close to it looks like I mean, I would have to do some analysis to figure out the average. 1:42:25 But it looks to me naively just looking at it like the average was around a half a million per day. 1:42:31 And then if you look at 2023, you go to the beginning of the thing at the beginning of 2023, which is January. 1:42:41 We were at two hundred fifty thousand dollars a day at the beginning of January. 1:42:49 Three hundred. Yeah. Two hundred fifty thousand. 1:42:52 And then all along, it looks like it's it increases to quite a bit more than a half, somewhere around seven hundred seventy thousand, it stays up there for a long time per day. 1:43:03 I don't know. It looks like we're we are significantly increasing compared to where we were in 2017. 1:43:10 Yeah, I mean, but it needs analysis, though. 1:43:12 I mean, it's hard to judge with all these spikes everywhere on the graph. 1:43:15 OK, I would like to see some actual analysis of that. 1:43:18 Let's look at click on where it says under the words total transaction fees, there's the 30 day average you can select instead of one day average. 1:43:28 So you can smooth the chart. 1:43:30 You can also as the Bitcoin security budget optimists love to do change the chart to log instead of linear. 1:43:38 And for analysis, there are some good places I would point you to people much smarter than me. 1:43:45 For example, there's Lynn Alden's. 1:43:50 Article from March 2021 called Bitcoin Fee Modeling, and it's a very long essay, I think it's outstanding. 1:43:58 And I recommend it highly, there's a good passage in there. 1:44:05 Well, I won't read that now, but that's a good one. 1:44:08 There's also debates that Paul has had that you can easily find on. 1:44:14 On like podcast apps, he had a debate with Dan Held about this topic, they got into the details of log scale versus linear scale and Paul's articles. 1:44:26 Paul has two articles on this topic of the security budget, one from 2019 called Security Budget in the Long Run, which is on TruthCoin.info. 1:44:35 And then another article, a follow up in 2021 about merged mining. 1:44:41 So those are the two posts, very detailed sort of PhD level discussion of the security budget and the fees. 1:44:48 And also, Paul has like a professional background in statistics. 1:44:54 And I find his articles very compelling. 1:44:57 We have to think about, you know, in the future, will there be these huge spikes in fees that flood the miners with revenue? 1:45:04 Or will there be fewer and fewer of those over time as, you know, scaling through custodial venues and other scaling solutions that lower the fees and enable the high frequency traders to move off of Bitcoin? 1:45:18 Those depart from Bitcoin's main chain and people get lower fees elsewhere. 1:45:23 So I think we can't rely on these spikes coming from time to time. 1:45:28 And capitalism has the effect of pushing down the price of everything, almost everything. 1:45:33 There are only a few kinds of goods where this doesn't operate. 1:45:38 And money is one of them. 1:45:40 Capitalism doesn't push down the price of money. 1:45:44 However, capitalism does push down the price of block space because innovation and scaling solutions and consumer choice tend to reduce the price of the block space as people find ways to avoid paying high fees. 1:45:59 So there's this good analysis in Paul's articles that I find compelling, which is that what we should aspire to do is make sure we collect fees from every single blockchain in the world and bring those fees to Bitcoin through merged mining. 1:46:12 And if we don't do that, then we'll see the Bitcoin main chain block space return to one sat per V by it again and again, even as Bitcoin has hundreds of millions of people using it. 1:46:24 And this will perplex and confound people who haven't thought about it enough, I think. 1:46:32 That's a really cool chart. 1:46:33 I want to share this chart and then try and convince somebody to do some analysis on it. 1:46:40 One thing I'm noticing is that the year 2020 seems like it was the year with the most with the most consistently higher than baseline fee revenue, which is interesting. 1:46:54 What was special about the I don't remember any any particular thing during 2020 being like, oh, I guess that was probably a block was doing stuff during that year and they were bumping up. 1:47:03 They were increasing fees for everyone. 1:47:04 So if you look at if you look at the market price, I want you to click on the words market price to bring back the price of Bitcoin. 1:47:12 And this will bring us to one of the things that Paul talks about in his statistical analysis in that article on proof point that info called security budget in the long run. 1:47:20 He argues that Bitcoin has had run ups where the price rose dramatically for a period of time, such as weeks or months. 1:47:27 And when the price of Bitcoin is rising very fast, economic actors, that is, investors, speculators, transactors, they don't care as much about how much how much they're paying in fees because in their mind they're going to make more from the gains of rapid execution. 1:47:45 So they'll pay for a high fee to get in, get their transaction in because they want to buy Bitcoin immediately. 1:47:52 They have high time preference because they want to own Bitcoin soon because they think it's appreciating rapidly. 1:47:58 However, we can know with certainty that if Bitcoin continues to be adopted and grow, there necessarily cannot always be rapid run ups in its price in terms of real purchasing power, because every time Bitcoin has a run up in price, it gets closer and closer to its total addressable market. 1:48:21 At some point, the real return from holding Bitcoin will will be lower. 1:48:32 The real return from holding Bitcoin will be lower because it can't be a 10x year, for example, in Bitcoin again and again and again, eventually Bitcoin will be the world's money and then it can't have a 10x. 1:48:45 There's a limit to how many times Bitcoin could multiply in the future and in terms of its real value. 1:48:52 So in other words, we can't rely for the sake of the security budget. 1:48:56 We can't rely on there being these massive spikes in fees every time Bitcoin has a run up in its value because eventually Bitcoin will stop having those run ups and Bitcoin will be the world's money. 1:49:08 And then if the security is low, there won't be the occasional fee spike to fix that. 1:49:18 Do you follow what I'm saying that we can't do, but I don't think at least this 2020 part of the chart is fascinating to me because there was there wasn't a huge. 1:49:27 Well, for most of 2020, there wasn't a huge run up in price. 1:49:33 There was at the end of that year. 1:49:36 But for most of that year, there was not. 1:49:37 And yet there and yet the fees were consistently were very they were typically higher than baseline. 1:49:45 Like they were they were pretty they're doing pretty well in that year. 1:49:49 So I wonder what was happening there. 1:49:58 Well. 1:50:04 I think the big the big the big price run up didn't even happen until January, so there wasn't really a big price or price got to $20,000 by the by the end of 2020. 1:50:17 And it started 2020 at about 10,000. 1:50:24 Right. That's interesting. 1:50:25 So what I would say to sort of assist those who might be listening and have the opposite view of mine is to speak for them. 1:50:33 I would attempt to say that what would and Paul contemplates this in his security budget article. 1:50:40 And on Truthcoin.info, the one from 2019, that article, he he says that what would what security budget skeptics are looking to see is the increase in the value of the block space at a time when the Bitcoin price is not moving up. 1:51:00 And what we'd like to see is this occur for a multi-month period. 1:51:05 In other words, although we usually refer to total transaction fees in Paul's article, he mentions just as kind of a convenient reference. 1:51:12 If we saw the price of Bitcoin over $2 per transaction over $2 as the price to transact on Bitcoin's main chain, if we saw it over $2 for a multi-month period, while at the same time, Bitcoin's price was not moving up but was moving sideways. 1:51:30 And if we saw the value of the block space moving from $2 per transaction north, that would be very interesting. 1:51:37 If you follow what I'm saying, like we want to see a multi-month period, like three or six months where transaction fees are rising while Bitcoin is level or falling. 1:51:47 And if that were to occur for a multi-month period with transaction fees over $2 per transaction, then that would be statistically significant evidence that perhaps there isn't a security budget problem. 1:52:00 But instead, Bitcoin's market is sustaining a high transaction fee demand, despite there not being a bull run that's necessarily and inherently short-lived, as I mentioned earlier, for the reasons I mentioned. 1:52:15 We can't have an endless bull run in the price. 1:52:20 So one of the essences of the insight, I think, in Paul's article is that there have been fee spikes, spikes where the block space was much more valuable, people were paying a lot of fees, and this flooded the miners with money. 1:52:34 And a lot of people went into Bitcoin mining thinking that there would be another spike and another spike and maybe a spike that's sustained with many millions of dollars per day in fees. 1:52:45 But instead, what we've seen is the spikes are short-lived. 1:52:48 They tend to mostly coincide with bull runs that cannot be expected to last forever. 1:52:54 Because if Bitcoin has a bull run that's huge and it would become the world's money and then the bull run would stop because it can't become the only asset in the whole world and then still appreciate it. 1:53:06 It can't go on forever that way in terms of a real return. 1:53:10 At some point, it reaches this total addressable market. 1:53:13 So for all these complex reasons, we have to be worried. 1:53:16 We have to be thoughtfully concerned about will the security budget, will the transaction fee revenue in the long run be high to make it very cost prohibitive to be a 51 percent hostile miner. 1:53:31 And the strategy to ensure there's no problem there is to try to have every blockchain be a merged mined sidechain of Bitcoin. 1:53:41 And that way, we're collecting fees from every blockchain. 1:53:44 Because right now, Bitcoin is getting only a fraction of all the fees paid across all blockchains. 1:53:48 It's about one-tenth to one-twentieth generally. 1:53:53 So one funny thing is that it may. 1:53:56 I don't know, but I don't know how many months it's been or since the Ordinal's phenomenon is certainly a multi-month phenomenon. 1:54:04 But it would actually be very funny if the criterion was met of the criterion of increasing fees, but not a temporary price bubble. 1:54:16 That would be funny if that was met in just like a third way, which is like doing something that was like Ethereum-like or sidechain-like. 1:54:25 Like something that just does not involve the, I don't know, like the Jimmy Song safety and like only using Bitcoin as money type of a thing. 1:54:36 So maybe I should have added that last requirement in or something. 1:54:43 Because that would be ironic if the fees would only go up if you would do like BRC-20 tokens or something. 1:54:51 I think that would be kind of funny. 1:54:54 Well, I find that – thank you for this phone call. 1:54:58 I say phone call. 1:54:59 Thank you for this Twitter space because I didn't know about this fee chart, and it's very fascinating and deserves a lot of analysis. 1:55:05 Or maybe not a lot, but at least a little analysis. 1:55:08 It's very interesting and informative. 1:55:11 So thank you. 1:55:13 Thank you for being here. 1:55:15 I posted in the Nest the article from truthcoin.info on the security budget. 1:55:21 So it's there for anyone curious. 1:55:23 It's very difficult. 1:55:25 It's very high level. 1:55:26 This is like a master's or PhD-level article, I think. 1:55:29 It's long, and there's – 1:55:31 Well, it's by Paul, so there you go. 1:55:33 There's like statistical analysis in there. 1:55:35 There's some math. 1:55:37 But the essence is very interesting for those who are ambitious to read it about the inevitable end of bull runs. 1:55:47 We can't have bull runs forever in Bitcoin's value. 1:55:49 There can't always be a hysterical 10x year where everyone's feverishly buying Bitcoin and doesn't care about the price of the transaction. 1:55:55 That can't go on forever. 1:55:57 There can only be so many of those until we've saturated the world with Bitcoin, and then the bull run will end. 1:56:03 So we can't rely on these bull run fee spikes. 1:56:07 And there's never been a multi-month period where the price was over $2 a transaction and rising while Bitcoin's price was level. 1:56:16 So there's been no evidence that we're going to see high fees on a sustained basis, including this ordinals episode recently. 1:56:25 People were saying, oh, wow, we're seeing $10 million a day in fees. 1:56:29 And then that ended rather quickly. 1:56:31 And now it costs under $2, again, as usual, to send a Bitcoin transaction. 1:56:35 Right now it's under $2. 1:56:37 Last time I checked yesterday on mempool.space. 1:56:42 So the evidence is on Paul's side so far. 1:56:46 But the good news is that there's a powerful solution to this, which is drivechain. 1:56:51 The aspiration to collect fees from every blockchain in the world. 1:56:55 If Bitcoin were collecting fees from every blockchain, if every blockchain were a merged mined sidechain of Bitcoin, Bitcoin miners would receive 15 times more fees. 1:57:08 It would be great. 1:57:11 There'd be a robust fee revenue coming to the miners. 1:57:15 Every Bitcoin miner should look into this idea to understand how it benefits the industry a lot and ultimately is probably necessary for Bitcoin survival. 1:57:37 Well, that was great to have SuperTesna here. 1:57:46 It's rare that people are interested in both the economics of Bitcoin and the software. 1:57:54 But he's one of those people who really has a broad view on the whole subject, which is so great. 1:58:00 Appreciating the fee market while also being like a sidechain coder. 1:58:08 That's why he's in favor of drivechain. 1:58:13 SuperTesna has tweeted unequivocally that he supports drivechain. 1:58:17 Most recently he wrote, I support drivechain, BIP300 and 301. 1:58:22 And he's written about it many times. 1:58:24 He wrote a whole essay in favor of drivechain on Stacker News. 1:58:28 If you look through LayerTwo Labs' tweets, you'll find it. 1:58:32 We tweeted a link to it and he's tweeted links to it. 1:58:35 He wrote a great essay called Responding to Objections to Drivechain. 1:58:40 I think that was the title or Answering Objections to Drivechain. 1:58:45 He lists three or five common objections to drivechain and then his view of why they're wrong. 1:58:52 But before he even says why they're wrong, he tries to articulate exactly what the objection is. 1:58:58 Which is great in terms of sincere engagement. 1:59:01 He tries to explain what the people think and he tries to give it full charitable treatment. 1:59:08 And then he answers why he thinks there's a mistake in their objections. 1:59:12 So he's really like a genuine intellectual in that way. 1:59:19 It's so great to have him like part of the drivechain community. 1:59:26 This has been Drivechain Twitter Spaces. 1:59:28 We meet twice a week on Mondays and Thursdays to talk about Bitcoin Improvement Proposal 300 and 301. 1:59:37 It's an idea which has the support of Adam Back. 1:59:39 He tweeted about it today. 1:59:43 And his words were in our nest. 1:59:48 The very second tweet we put in the nest where he wrote, 1:59:51 I think we're going to need big peer-to-peer sidechain for the next billion users to benefit. 1:59:58 From unseasable peer-to-peer sidechains like drivechain, LayerTwo Labs, peer-to-peer liquid and Rootstock. 2:00:08 So you can see that in the nest. If you scroll through all the tweets that we've posted in the nest, it's the second to the first tweet. 2:00:17 Thanks, Dr. Back, for tweeting that. It's really great to have the support of such well-regarded and seasoned Bitcoiners. 2:00:25 Adam Back is the only person whose name appears in the Bitcoin whitepaper, in the body of the whitepaper. 2:00:31 There's Satoshi Nakamoto's name, then there's Adam Back's name in one of the paragraphs, and then there's about seven or nine people mentioned in the footnotes. 2:00:40 Everyone should read the whitepaper and also the footnotes in the whitepaper, or rather endnotes, rather. 2:00:46 They're really fascinating. Each of the articles in the endnotes, such as way, dyes, be money. 2:00:52 And there's also articles about privacy, about identity and different important components of blockchain. 2:01:00 So it's a great way to understand all of the ideas that came before Satoshi published the whitepaper and the ideas that he chose to cite to give credit 2:01:10 and to make sure everyone knew where the ideas came from that he brought together to make Bitcoin. 2:01:22 Would anyone like to come up and share a thought? 2:01:26 Before we close today, we've been going for about two hours. We usually go for just an hour and a half. 2:01:32 All of the recorded Drivechain Twitter spaces are available on our Twitter, LayerTwo Labs. 2:01:39 You can also learn a lot more in different ways, like you can check out our Telegram group that has 700 members called Drivechain Talk. 2:01:49 And you can find links to everything that we have if you go to layer2labs.com or drivechain.info. 2:01:57 There's tons of essays and articles. 2:02:00 can see a list of all of the favorable Drivechain related comments 2:02:06 that famous Bitcoiners have made. 2:02:09 If you go to the spreadsheet I made called drivechain.info 2:02:16 forward slash friends. 2:02:18 That's drivechain.info forward slash friends. 2:02:21 And you can see there what Fiatjaf, the creator of Noster has to say about 2:02:25 Drivechain. He's emphatically in favor of it, along with Adam Back and Mike 2:02:38 And there's like 50 other like notable Bitcoiners, there's there's too many to list 2:02:44 I'm sure I've missed some and I'm sorry if you're listening and I haven't put your you know, drivechain support into that list, but 2:02:54 There's only so much time in the day 2:02:57 Everyone's free to make their own website about drivechain people have made 2:03:01 Websites about drivechain who I don't even know who they are or where why they did it, but it was great like one of them 2:03:07 Is 2:03:09 drivechain.xyz that's a fan website made by a drivechain supporter and 2:03:16 There's others 2:03:20 We have a request to speak from Shumba 2:03:25 Welcome Shumba 2:03:29 How's it going 2:03:33 Take it away 2:03:34 Good afternoon 2:03:37 Yeah, I just wanted to ask because 2:03:41 you know, I think it would sound like conspiracy theories or 2:03:46 but 2:03:47 Don't do we have a question now? 2:03:51 whether Satoshi Nakamoto could be the NSA because 2:03:57 Lately even with my belief in Bitcoin. I've become a bit skeptical 2:04:03 To say probably Bitcoin was an experiment for us to 2:04:09 For to drive us towards the adoption of CBDCs. What's your take on that and 2:04:17 Don't you think these ones we have mastered using Bitcoin it was an experiment for us to move on to 2:04:25 start to be able to use 2:04:28 To use the CBDCs 2:04:30 I don't know. I would want someone's take on it because I've been digging deep. I may believe in Bitcoin, but 2:04:40 For some reason I come to an understanding that this might be 2:04:46 Actually, maybe the US government behind it. What's your take on that? Thank you 2:04:52 I 2:04:54 Shumba thanks for your question. I appreciate you asking it. It's an interesting question. Many people have asked 2:05:00 I don't think it matters whether or not the US government or any particular person had any role in the creation of Bitcoin because 2:05:08 Bitcoin is peer-to-peer and that means no one is privileged by the software. The software is 2:05:16 Totally unrelated to the particular people who were involved in it 2:05:20 so if John made Bitcoin or Michael made Bitcoin or Shumba made Bitcoin or 2:05:28 Janet Yellen made Bitcoin doesn't matter because Bitcoin is peer-to-peer 2:05:33 So everyone in every part of the system is replaceable with others 2:05:39 Who are interested in getting involved? It doesn't rely on any particular privileged party 2:05:45 to perform any role 2:05:47 So because it's peer-to-peer 2:05:49 public and permissionless 2:05:51 It doesn't matter if the government had any role in its creation 2:05:55 Governments have had the have had a role in lots of technological innovations 2:06:00 especially related to the military 2:06:03 weapons 2:06:04 surveillance and space 2:06:06 There's all kinds of great people working in the government making technology 2:06:10 and there's also some people in government who use their positions to enrich themselves and 2:06:16 unfortunately 2:06:17 collude with industry 2:06:20 So just like people governments are imperfect 2:06:23 It doesn't matter whether the NSA or the CIA or anyone was involved with Bitcoin. I don't think any of them were I 2:06:30 Think probably Satoshi was just a private person 2:06:33 Not you know a civilian not an agent of the government, but it wouldn't matter 2:06:39 That's a great question, I think it's cool that your profile mentions Austrian economics 2:06:43 That's what brought me to Bitcoin a strong interest in von Mises 2:06:48 Hayek 2:06:49 von Balverk and the thinkers at George Mason University and at the Mises Institute in Auburn, Alabama 2:06:57 Where I've spent time 2:07:00 Austrian economics is a really great foundation for understanding the economic aspects of Bitcoin 2:07:05 Not so much the cryptography or the code 2:07:07 But the economics of sound money the Austrians have for decades for generations been 2:07:13 leaders in explaining how the entrepreneurial competitive market process 2:07:19 facilitates 2:07:20 civilization and wealth creation and peace 2:07:24 Von Mises was one of the key thinkers in that realm and it was cool that Satoshi himself 2:07:30 Participated in an email thread about the ideas of von Mises 2:07:35 Which we've all read if you've read Phil champagne's book the book of Satoshi by the way Phil was at the conference 2:07:41 I recognized him from the picture in the back of the book of the book of Satoshi 2:07:46 And I shook his hand and he gave me a copy of his latest book 2:07:51 which is called 2:07:53 Bitcoin versus altcoins the battle for dominance by Phil champagne forward by Preston Pish 2:07:59 So Phil is back at it with a new book after the great success of his first book 2:08:05 Which was simply a collection of everything Satoshi publicly wrote 2:08:09 put into a book with an excellent forward and some commentary on each in each chapter as he as Phil introduces 2:08:17 The concepts and then gives you exactly what Satoshi wrote 2:08:22 Which was posted on SourceForge and then the content, you know 2:08:26 Was published on Bitcoin talk and that's where the conversation continued until I think Bitcoin talk is still around 2:08:33 But now, you know, there's many different forums where people discuss Bitcoin from reddit to Twitter and Twitter spaces and elsewhere 2:08:40 But yeah, there's this thread that was on Bitcoin talk called the Mises regression theorem 2:08:47 where 2:08:48 Satoshi and his contacts were discussing publicly Mises and Rothbard and 2:08:53 That thread was what captivated my attention at the beginning of my Bitcoin journey 2:08:58 It was cool that Satoshi was talking about von Mises 2:09:02 and I think that thread may have brought in others to who have Austrian economics background and 2:09:08 notice whenever anyone's discussing von Mises in an unexpected context such as 2:09:13 cryptography or digital 2:09:16 digital economics, so 2:09:18 It's really great that Satoshi was was informed of Mises and not only was he aware of Mises 2:09:23 But he wrote that von Mises his ideas are harmonious with Bitcoin 2:09:29 Specifically the so-called regression theorem, which is a discussion about whether or not money can arise 2:09:37 Without participating first in a barter context 2:09:41 so some some economic theorists 2:09:44 puzzle over whether or not 2:09:46 Bitcoin ever was a barter good or whether it leapfrogged 2:09:50 Directly into monetary premium, which means use for use as a generally accepted medium of exchange 2:09:58 instead of being a final good like gold where you can put it into you know, a shot glass or a 2:10:05 jewelry piece 2:10:10 So, yeah, I was just saying that it's cool that you're into Austrian economics 2:10:13 but as for like the 2:10:15 Conspiracy ideas about like whether the government's involved. I don't think that it would be it wouldn't make sense for the government to 2:10:21 Want Bitcoin to succeed? 2:10:24 In the in the short term because that would deprive the government of the printing press 2:10:28 Revenue that it gets from the senior age profits of money creation in a fiat context 2:10:34 the 2:10:35 you know, the Bitcoin is so much better than any CBDC because the CBDC would be permissioned and 2:10:42 and 2:10:43 Have infinite inflation potential. So I don't think the government would release something better than Bitcoin 2:10:50 I'm sorry, the government wouldn't release Bitcoin and then plan that to be an entree or a prelude to 2:10:57 Something worse which would be permissioned and inflationary instead. I think 2:11:05 It's unreasonable to think that that's the case so 2:11:07 No, I don't I think the answer is no the government probably is not hoping that Bitcoin is a prelude to a CBDC 2:11:14 Like the Chinese CBDC isn't even on a blockchain and I don't think the US government would want our money to be on a blockchain 2:11:21 Now, of course, there are some in government who are ethical and long-term minded and want the best for society and they support Bitcoin 2:11:28 people like Ted Cruz 2:11:30 Cynthia Lummis 2:11:32 That mayor of Miami and others 2:11:35 Who and every day there's someone new right like Tulsi Gabbard 2:11:39 Ron DeSantis, is that his name Ron and other people like 2:11:44 Politicians are understanding. There's a huge market for promoting Bitcoin and 2:11:49 Getting the votes of Bitcoiners. So that is what we want to see is an ethical and virtuous 2:11:54 transition away from 2:11:56 dollar 2:11:57 Hegemony and towards a global harmonious very peaceful 2:12:01 You know sound money private property 2:12:04 ethical regime of Bitcoin 2:12:06 As the base layer for the entire monetary system. That would be great. There'd be much less war 2:12:12 As Murray Rothbard would say the welfare warfare state. There'd be much less of that 2:12:17 And there'd be more, you know anarchic value creation harmonious peaceful 2:12:22 Economic activity when money is not inflated arbitrarily by governments 2:12:27 So it's great to see more people in government being pro Bitcoin anti fiat 2:12:36 Welcome to the stage Peter sticks Bitcoin optimist 2:12:41 I definitely know are you 2:12:45 Awesome. All right 2:12:48 Well, first of all, I was I was in the 2:12:51 You know, I'm by no means an expert in any of this, but I was curious to your 2:12:59 Your opinion about 2:13:01 You know will drivechain compliment 2:13:05 no means an expert in any of this, but I was curious to 2:13:10 your opinion about, you know, will 2:13:15 Drivechains complement or compete with the Lightning 2:13:20 Network? 2:13:28 Drivechains are complementary to lightning. So that's complementary with an e after the l 2:13:35 Complementary meaning the drivechain and lightning work together perfectly and synergistically 2:13:46 Opening a lightning channel 2:13:48 On bitcoin main chain involves a bitcoin transaction on main chain, which in the future will be expensive 2:13:57 so 2:13:58 People will be able to opt in to a large block version of bitcoin 2:14:04 on a sidechain 2:14:06 It'll be totally optional just like lightning. No one has to use lightning. No one has to use a sidechain, but 2:14:13 The sidechain provides optional functionality 2:14:18 And scalability 2:14:21 and 2:14:23 Lightning on the sidechain will be possible 2:14:26 Lightning is a technology that can be used not just on bitcoin's blockchain, but on bitcoin's sidechains as well 2:14:35 I think there can even be lightning on all every altcoin if they wanted to there could be lightning on dogecoin on ethereum 2:14:41 Ethereum lightning is that kind of technology. It has like a broad application capability 2:14:48 So the work together people will be able to do lightning on thunder thunder is the name of the 2:14:54 Clone of bitcoin, which is a large block version of bitcoin 2:14:58 So it's the same as bitcoin in almost every way. The main difference is the block size is one gigabyte 2:15:05 So there was a kernel of truth in the block size war among the large blockers the kernel of truth is that 2:15:12 large block bitcoin 2:15:14 has value 2:15:15 but 2:15:17 The large blockers were wrong to think that the large block version of bitcoin should be the base layer 2:15:24 instead 2:15:25 As drive chainers, we advocate for a multi-layered view of bitcoin where every layer is optional 2:15:32 No one has to use a sidechain, but you can opt in and here's where it gets really good 2:15:39 There's no coins on the sidechain at the start 2:15:42 The only way to send coins there is to lock bitcoin in the hash rate escrow, which is the technical term for the two-way peg 2:15:50 so drivechain preserves bitcoin's monetary policy 2:15:55 The only way to create the coin on thunder would be to send bitcoin to the two-way peg which 2:16:01 mints 2:16:03 A coin of bitcoin on thunder while holding a bitcoin in the two-way peg thus 2:16:09 We take one bitcoin out of circulation 2:16:12 Holding it in the two-way peg while creating a bitcoin on the thunder sidechain with the large blocks 2:16:17 When users are finished using the thunder sidechain and they want to get their main chain bitcoin back 2:16:23 They send that bitcoin to the two-way peg that burns the bitcoin on thunder sidechain and releases it on main chain 2:16:31 As adam back has explained 2:16:34 in tweets 2:16:35 drivechain is 2:16:36 innovation 2:16:38 maximalism altcoin seniorage 2:16:40 criticism 2:16:41 So we're all about innovation 2:16:44 But we want to preserve 2:16:46 The 21 million monetary policy of bitcoin in other words 2:16:50 Imagine if every single altcoin were instead a sidechain of bitcoin the total number of coins would be 21 million 2:16:59 while 2:17:00 We would have all of the features and variety and innovation and experimentation of the altcoins 2:17:06 So that's the goal is more innovation more experimentation 2:17:10 But making sure all of it is done in a manner that accrues value to bitcoin's main chain token 2:17:17 That's the key so I think drivechain would send bitcoin's price really high 2:17:23 Potentially no one can know for sure the future but it the economic design is that we would have 2:17:29 Innovation that is happening on sidechains and all of the demand for those sidechain tokens is bringing demand for bitcoin 2:17:39 And also the fees are paid to bitcoin miners so it increases the value not only of bitcoin's token but also of bitcoin's block space 2:17:46 So that's the vision of drivechains and then lightning on the sidechains would be possible 2:17:51 As you asked about there'll be lightning on probably all of them 2:17:55 And people will be able to move coins not just within a sidechain, but it would be possible to swap 2:18:02 And this technology already exists sideshift.ai 2:18:06 And similar technology those companies and technologies would be able to enable people to swap their tokens 2:18:13 across sidechains without 2:18:15 needing to go back to main chain 2:18:18 and then professional arbitrageurs 2:18:20 Would equilibriate the demand for main chain token with the sidechain token because the peg out takes months 2:18:27 So professionals would go through the peg out while ordinary users would not they would swap 2:18:33 And pay a infinitesimally small fee 2:18:36 to do that 2:18:38 So they would swap in the secondary market. Whereas the professionals would go through the two-way peg just like 2:18:45 Ordinary people buy gasoline at a gas station and only professionals 2:18:50 use the futures market 2:18:53 for 2:18:54 oil 2:18:56 Or natural gas ordinary people buy it one way professionals are active in the 2:19:02 Institutional market which is a larger scale 2:19:06 Operation where professionals focus on making a little bit of money by moving large 2:19:11 amounts of value around 2:19:13 in the economy 2:19:14 so that's how drivechain would work Paul Sztorc has 2:19:18 Likened it to the way the energy market works where the ordinary person 2:19:23 Is not interacting directly with a power plant a nuclear power plant interacts with 2:19:29 Sort of the second layer and there's a third layer and a fourth layer and finally the ordinary consumer plugs her iphone 2:19:36 Charger into the wall in an apartment building, but that apartment building, you know is connected to like 2:19:42 A larger 2:19:43 power line that power line goes to some 2:19:47 like 2:19:48 sort of institutional grade 2:19:50 Location which eventually links up with the power plant 10 miles away 2:19:54 So there's a layered architecture in energy and similarly in drivechain 2:19:59 The vision for bitcoin is a layered architecture where the main chain is the most heavy-duty institutional 2:20:07 robust and ossified layer and above that there is 2:20:11 Existing a layer of sidechains, which are more experimental 2:20:15 More flexible and if any of those sidechains ever fails 2:20:19 No one is harmed except those who opted into it and that's exactly what we want. We want capitalism 2:20:25 People to be able to try new things create value 2:20:29 In a manner that accrues value to bitcoin. The worst thing for bitcoin is to have increasingly 2:20:35 the growth of altcoins altcoins threaten 2:20:38 Bitcoin's network effects altcoins deprive bitcoin of transaction fee revenue 2:20:44 That we want paid to bitcoin miners altcoins deprive bitcoin of users 2:20:51 and voters 2:20:52 And loyalty and all of the irl features that altcoins are accumulating 2:20:58 In their communities. We want that to be on bitcoin instead. So that's what drivechain is all about. It's about 2:21:05 enabling all these developments to occur on 2:21:08 bitcoin 2:21:09 And at the at the at the essence of drivechain is the understanding that some altcoins have value 2:21:17 They're not all scams 2:21:19 The privacy altcoins have value 2:21:21 The altcoins focused on oracles have value the altcoins focused on 2:21:26 high speed 2:21:28 low 2:21:29 Fee payments have value 2:21:31 The altcoins focused on dns have value there is a wide variety of applications which aren't possible on mainchain bitcoin 2:21:40 And they have value. I mean we should enable them on bitcoin sidechains right now bitcoin sidechains are not peer-to-peer 2:21:47 Every one of them has a federation 2:21:50 Which are which means people that are socially selected 2:21:53 It doesn't matter if they enable the federation to be a thousand people using the latest like taproot innovations 2:22:01 Even if there's a thousand people they're socially selected and therefore it's not peer-to-peer 2:22:06 The only way to make the altcoins perfectly harmonious with bitcoin and to give them the strongest possible narrative 2:22:12 Is if they are arguably peer-to-peer 2:22:15 And as adam back says in his tweets 2:22:18 drivechain would make the sidechains more peer-to-peer by 2:22:22 graduating them from these socially selected federation 2:22:26 membership model to a model which 2:22:30 Anyone can participate in the security model of the of the sidechain 2:22:34 Because the miners are controlling the sidechain 2:22:37 And the sidechain rather the sidechain two-way peg the miners control 2:22:42 And anyone can be a miner. All you need is some money 2:22:45 So the only barrier is economic not social and that's the meaning of peer-to-peer. I think when satoshi said bitcoin is a peer-to-peer 2:22:53 Electronic cash system. That's what he meant. He meant no one 2:22:57 Is privileged no one is socially no one is socially selected to perform any role anyone can 2:23:04 Participate in mining anyone can have a node 2:23:07 Anyone can get involved in any of the roles 2:23:10 With economic barriers being the only kind of barrier no social barrier. No one's being selected and privileged 2:23:17 I got a couple more questions. So 2:23:20 Um, is there so in essence you're telling me that drivechains could potentially be the shit coins 2:23:26 killers, like, you know, there'll be no longer a need for 2:23:30 other tokens or or 2:23:33 digital currencies and then the second question how many 2:23:38 sidechains can we have 2:23:40 uh along bitcoin 2:23:42 So 2:23:45 Sidechains on bitcoin can be very high in number 2:23:48 The designers of drivechain think that probably they'll just be about 20 2:23:54 Sidechains, but there could be many more 2:23:56 We don't know what the bitcoiners will develop people like Super Testnet and CryptAxe and others people who are really 2:24:03 Sophisticated about the code of bitcoin and what sidechains can offer might develop all kinds of interesting sidechains 2:24:10 But the fact is right now that there's only about 10 or 20 that are envisioned because 2:24:16 That's how many interesting and valuable applications exist 2:24:20 In the view of the drivechain community at this time, but there could be hundreds 2:24:25 if desired if the community desires that there be 2:24:29 hundreds of drivechain sidechains there could be 2:24:32 The drivechain code allows for a few hundred 2:24:35 And if it were ever necessary there could easily be a change made that would enable thousands of them if that were desired 2:24:43 and and 2:24:45 You know a lot of the reasons why we have a lot of shit coins is because speculations and you know new 2:24:50 Uh, you know shit coins and people want to get in so that this would be eliminated, right? 2:24:54 Because everything will be under bitcoin 2:24:57 And it would be whatever 2:24:58 You know price, you know 2:25:00 Supply and demand on bitcoin, right? 2:25:04 Yeah, everything would be built on bitcoin 2:25:07 And the demand for the monetary token on every one of the sidechains 2:25:12 Would create demand for bitcoin because the only way to create the monetary token 2:25:17 On each of these sidechains is to lock up bitcoin in the hash rate escrow. So 2:25:22 the 21 million limit 2:25:24 of bitcoin's monetary policy 2:25:27 Is preserved through drivechain while enabling all of the functionality of altcoins 2:25:34 This would cause I believe the altcoiners to drop their altcoins to sell them for bitcoin 2:25:40 Sending the value of the altcoins to zero 2:25:44 As the users of the altcoins migrate to bitcoin sidechains, for example 2:25:49 the monero and zcash communities 2:25:53 Their altcoins are worth a few billion dollars in total 2:25:57 Those two altcoins. I think those communities will drop their altcoins. They'll sell them for bitcoin 2:26:03 To use the sidechains that are literally clones of their code 2:26:08 Their code is open source. Anyone can take it and put it into the sidechain 2:26:13 and 2:26:14 then 2:26:16 Those sidechains will be 2:26:18 A combination of bitcoiners who opted in 2:26:21 To those sidechains along with the altcoiners who moved from their altcoins to the bitcoin sidechains 2:26:27 There's already a sidechain in a test net for drivechain called zside that uses zcash 2:26:34 Technology, but with a bitcoin token 2:26:36 It's a very powerful upgrade 2:26:39 For the privacy cypherpunk community to finally be able to use the latest and greatest technology 2:26:46 For privacy but with bitcoin as the unit of account and with all the transaction fees 2:26:51 being paid to bitcoin miners adam back explicitly 2:26:55 Wrote in favor of this 2:26:58 If you go to drivechain 2:27:00 dot info forward slash friends you can read 2:27:04 This is a spreadsheet I made if you look at line 2:27:08 Nine on Drivechain.info forward slash friends adam back wrote 2:27:14 In this tweet that I pasted here truthcoin made a testnet bitcoin sidechain drivechain with zcash crypto for a reason 2:27:20 I wouldn't buy the altcoin, but I would try and use the drivechain version zcash protocol is a bit risky 2:27:28 Is a bit risk rnd risky like research and development risky for bitcoin main chain 2:27:34 Due to reliance on recent and experimental cryptography. In other words 2:27:38 Dr. Back there is saying 2:27:40 Zcash is cool 2:27:41 I don't want to use the altcoin but I would be excited to use the the drivechain sidechain version 2:27:47 Because then you're using a bitcoin on the sidechain with this strong cypher punky 2:27:54 Privacy technology. So it's the privacy tech of zcash 2:27:58 With bitcoin's monetary policy. It's the best of all worlds. It is literally a win win for everyone involved 2:28:06 except probably the zcash founders who are like 2:28:10 owning a giant bag of zcash 2:28:13 So they might they might lose out but but almost everyone in the whole community wins in zcash 2:28:19 If they drop their altcoin and join the bitcoin community 2:28:22 Because then they get access to like the massive multitude of bitcoin's network effect 2:28:30 That's great, thank you 2:28:32 We've been running for quite a while 2:28:36 We started at 9 30. It's now 12. So it's been 2:28:39 two and a half hours 2:28:41 Perhaps we should wrap and regroup on monday 2:28:46 Does that sound good to you peter 2:28:48 Sounds good to me drivechain twitter spaces happens every monday and thursday. We talk about bips 300 and 301 2:28:57 We talk about how this can increase bitcoin's strength in so many ways 2:29:01 more 2:29:02 fees for the miners more innovation and development 2:29:06 A greater platform for bitcoin builders on sidechains sidechains that are more peer-to-peer 2:29:12 growing bitcoin's network effect 2:29:15 absorbing all of the users and value of altcoins sending bitcoin to the moon 2:29:20 And sending bitcoin past a million dollars a coin. That's our dream. That's our vision. We think this is the best strategy 2:29:27 And we're excited to be 2:29:29 Talking about it. Thanks everyone for being here. This is a recorded space 2:29:33 If you joined late, you can listen to the recording just follow us on LayerTwo Labs. It's posted there as soon as the space ends 2:29:40 Hope to see you all on monday in the meantime 2:29:41 Check out our telegram group drivechain talk and our website layer2labs.com 2:29:47 And also drivechain.info
