0:01 Hello, everyone, and welcome to another Drivechain Twitter Spaces. 0:07 This is Henry of LayerTwo Labs. 0:10 Welcome, everybody. 0:12 Please feel free to raise your hand and come on up to the stage 0:16 if you would like to chat and talk about ideas that we are here to talk about. 0:25 If you have a Drivechain question or comment or rant or thought to share, come on up. 0:36 Some of the tweets that were shared along with this Twitter Spaces post 0:42 are what I'm going to put in the nest. 0:46 Let me get those up. 0:48 Let's see. 0:53 Put those in the nest. 1:01 There's the first one. This one is by Checkmate. 1:04 Checkmate is the lead on-chain analyst at Glassnode and a famous Bitcoiner. 1:15 This was the first of the tweets that I thought we might discuss today. 1:22 So raise your hand and come on up if you'd like to talk about it. 1:26 I'll read it for those who are just listening. 1:29 Maybe people are riding around in their car and unable to read on their phone. 1:37 Checkmate wrote... 1:49 One moment. 1:54 He wrote, all true, but my point is that we should invest in capacity now 1:59 so that scaling up later is achievable. 2:02 Efficiency built today pays dividends in the future. 2:05 I also agree with Paul that we need Drivechains or similar to actually fill that added capacity. 2:15 In short, we need both. 2:17 Of course, this tweet he wrote is part of a thread. 2:21 You can go to the nest and read the whole thread to understand what he's talking about here. 2:26 It caught my eye that he wrote this because this is an on-chain analyst at Glassnode 2:35 who is familiar with Drivechain, familiar with the work of Paul Sztorc, 2:40 and is holding a favorable opinion about it and understands the capacity for Drivechain 2:48 to help Bitcoin achieve its scaling goals and needs. 2:56 And how does Drivechain do that? 2:58 Well, Drivechain enables this amazing synergy between large block and small block protocols. 3:05 What we would have with Drivechain is a small block base layer, the digital gold. 3:10 And above that, on a layer two, we would have a sidechain that could have a larger block 3:19 and that would allow for lower fees, and the two protocols would exist synergistically 3:25 where people could opt in to the sidechain and enjoy its features. 3:32 And then when they're finished, they could come back to main chain Bitcoin. 3:37 And the crucial difference between that arrangement and what we can do today 3:42 is that today the sidechain would have to be federated, 3:45 which would mean that 15 people would hold control over the Bitcoin locked in the peg 3:51 between the sidechain and the main chain. 3:53 But with Drivechain, the indomitable power of the Bitcoin miners would be in control of the peg. 4:00 That's the difference. 4:03 So I think that it's very possible that if Drivechain is adopted, 4:08 Bitcoin sidechains could hold tens of billions of dollars or more in value. 4:13 And all of that value would be accruing to Bitcoin main chain, I think, 4:19 as well as the transaction fees on these sidechains. 4:23 So what we would get is the ability to just clone every good altcoin 4:27 and internalize that value to Bitcoin main chain, potentially. 4:32 It's extremely exciting. 4:34 It could transform the whole crypto space. 4:36 We could see Bitcoin dominance at 100% in the future because of this. 4:40 I know that sounds far-fetched. 4:42 It's just my personal opinion. 4:44 Maybe I'm a dreamer. 4:46 But that's what I believe. 4:48 I think that people to really grok the Drivechain potential have to be economically oriented. 4:55 A lot of people have a cryptography or software engineering background, 4:59 and not so much an economics mindset. 5:02 And it's important to understand Drivechain economically, 5:05 not only from a programming perspective, 5:07 but the perspective that focuses on incentives, 5:10 on the way that value is accrued to property. 5:15 And what Drivechain could do is accrue enormous value to Bitcoin's token, 5:20 as well as Bitcoin's block space. 5:23 So when we're talking about the block space, of course, 5:25 we're talking about the total transaction fee rate. 5:28 And growing that in the future could potentially be a huge source of strength for Bitcoin. 5:35 So as people are joining here, please raise your hand and come on up 5:39 if you'd like to share any thoughts or comments, 5:42 especially on the tweet in the nest or anything else. 5:47 If no one has any comments, then I will move on to tweet number two for our discussion. 5:55 So I'll bring that tweet up. 6:04 Here we go. Tweet number two. 6:15 So first tweet that we discussed was by Checkmate, 6:19 the on-chain analyst at Glassnode who wrote favorably about Drivechain. 6:23 Tweet number two is a favorable tweet from Ari Paul, 6:27 who I think is an investment professional who comments on crypto and Bitcoin. 6:32 He wrote in a thread, he wrote, 6:35 Drivechains are at least four years old. 6:38 The Lightning Network white paper was 2016. 6:41 If there had been aggressive innovation from the user functionality perspective on this stuff, 6:47 I'd agree it would have taken the wind out of many altcoin sales. 6:52 But there wasn't. So it didn't. 6:55 And what he's saying here, in my interpretation, 6:58 is that Drivechain, among other things, 7:02 could have influenced greatly in a negative way the growth of altcoins. 7:10 So if Bitcoin had had this technology, 7:13 this technology to copy altcoin software into sidechains that are controlled by miners with respect to the peg mechanism, 7:22 then a lot of altcoins would not have been founded and grown as they have. 7:30 I interpreted this perspective to be also aligned with the notion that 7:36 Drivechain has influences on the crypto community that are not just technical, but also narratives. 7:42 So the narratives of altcoins, the narrative that we see in the Ethereum white paper, 7:47 this narrative that it's hard or impossible to build on Bitcoin and therefore altcoins are necessary. 7:55 So that narrative would be undermined and eliminated by by Drivechain adoption on Bitcoin, arguably. 8:03 That's my view. That if Bitcoin develops this capacity to create sidechains that are that have a miner controlled peg, 8:13 I think a lot of altcoins would not only not be created as altcoins, 8:20 but instead those software would be on top of Bitcoin, accruing value to Bitcoin, increasing Bitcoin dominance, 8:26 increasing Bitcoin network strength, increasing the speed of Bitcoinization, 8:31 helping maintain Bitcoin as the number one crypto and eventually the only layer one crypto. 8:37 That's really the optimistic long term vision. 8:42 And it's good for everyone in the long run to have one platform we can all share one money, 8:48 one system rather than a competition, rather than a hostile environment of competitive protocols, 8:57 each trying to accrue as much value and network effect. 9:02 Instead, we would have. One collaborative system. 9:07 One market all built on top of Bitcoin, one unit of account. 9:13 And that would lead to a lot of value creation in society. 9:19 Anyone's welcome to come up and tell me I'm totally wrong. 9:24 And if not, we'll move on to our next tweet for discussion. 9:30 Tweet number three. Here we go. 9:38 Tweet number three is from famous cryptocurrency trader Joe 007. 9:46 He has a ton of followers. He wrote, as a self-professed Bitcoin maximalist, 9:51 I support BIP300. Enabling permissionless innovation on top of a stable and conservative Bitcoin base layer 10:00 rather than pushing them into a shit coin sphere is a very important goal. 10:06 That's how modern, versatile Internet came into being. 10:10 End quote. And he's, quote, tweeting Mario Gibney, who wrote, 10:15 noticing a significant uptick in people expressing support for Drivechain's BIP300 in my corner of the Bitcoin world. 10:24 So. These. These Bitcoiners are talking about how Drivechain is growing in support and. 10:35 How it's going to have an enormous influence potentially on the value accrual to Bitcoin relative to altcoins, 10:43 because what we've seen in recent years is altcoins grow and grow and grow. 10:47 Bitcoin dominance falling. Bitcoin fee market not growing as much as it might have otherwise. 10:54 But if Drivechain is adopted, this could be reversed. 10:56 There could be a trend where Bitcoin dominance is rising back towards 100 percent. 11:01 The value accrual in the crypto space is exclusively to Bitcoin. 11:06 Altcoin developers and users move to Bitcoin. 11:10 And the only people who would be left in the altcoin community would be the founders. 11:15 Because the users themselves, as distinct from the founders, the users, they want to be in the best network. 11:22 They want to be in the strongest network. They want to be in the unit of account that's most stable and predictable. 11:29 They want to have the benefit of Bitcoin's monetary policy. 11:32 They want to have all of Bitcoin miners mining their token. 11:36 And what Drivechain does is it allows all for that. 11:40 For example, if someone's using Zcash or if someone's using Bitcoin Cash, those softwares could be copied into sidechains. 11:48 And then the users could use those sidechains on Bitcoin instead of their altcoin. 11:53 They would have the exact same software, but they would be using Bitcoin's unit of account. 11:58 Because the token they'd be using would be redeemable for Bitcoin. 12:01 It would be created by locking up layer one Bitcoin in the hash rate escrow of the sidechain. 12:08 And when they're done, they can come back to layer one Bitcoin. 12:11 That's what Drivechain is all about. 12:13 So I envision Drivechain being adopted. 12:16 The altcoins going to zero literally and the powerful network effects of money leading to 100 percent Bitcoin dominance. 12:27 It's such an optimistic and dramatic vision of the future that I think some people in the Bitcoin Maxi community encounter it with skepticism. 12:41 Even though they talk about Bitcoin being the best, they talk about Bitcoin's inevitable success. 12:46 But this is actually the path forward, and it's one that requires a bit of emotional experience to fully understand. 13:00 It's a powerful idea, and a person has to be comfortable with it and think about it for a while before they fully understand it. 13:09 Because this really is the path forward for Bitcoin to win. 13:13 It would enable a lot of great things for Bitcoin, like shrinking the block size further, ossification potentially, and achieving total dominance, 13:22 achieving much higher fees for layer one, funding the miners forever with transaction fees, 13:29 and moving 100 percent of blockchain economic activity onto Bitcoin to boost Bitcoin's value and the value of Bitcoin's block space. 13:39 It really solves pretty much every problem that exists in this space. 13:46 So it's an extremely powerful idea, and that's why it has so much support. 13:50 As we've looked at these tweets, we have support from Glassnode, Onchain Analyst, we have support from investment professionals like Ari Paul, 13:57 we have support from traders who are Bitcoin maximalists like Joe007. 14:02 I thought this would be a great opportunity today to look at some of these people who are in the space, rather than only looking at the academics. 14:09 We could look at academics who support Bitcoin, like Adam Back at Blockstream, who has a PhD in computer science. 14:18 But I felt like we've looked at that enough in recent talks, and today we should look at people who are more like, not commoners, 14:25 but just like people who are out in the world without a PhD, people who might be trading in altcoins, 14:31 people who might be running a hedge fund or trading or other stuff like that. 14:35 And that's why today I picked this particular set of tweets to look at, 14:41 rather than just looking at the academic perspectives of Dr. Back and others. 14:47 Because it's important what the commoners think, it's important what normal plebs think about drivechain. 14:54 It's not only important to look at what the academics like Dr. Back think. 15:01 But it's great to see that across the board we see support for drivechain. 15:06 Everyone is free to come up, raise your hand, join the conversation. 15:12 We run these twice a week, Mondays and Thursdays. 15:17 And the goal is to have everyone be able to engage, find out how to get involved in drivechain, find out where you can learn more. 15:25 So one way you can learn more is join the drivechain telegram group, which is called Drivechain Talk. 15:32 Another way you can get involved is check out the Reddit spaces called subreddit called rdrivechains. 15:39 And there's also drivechain.info, which is the website of the project. 15:45 And there's a bunch of posts about drivechain by Fiatjaf on his website, fiatjaf.com. 15:54 And. There's also other like websites by fans like drivechain.xyz was created by a fan of drivechain. 16:06 And there's great posts by John Light of Sovereign. 16:12 He has written two posts about why he thinks it is unlikely that the Bitcoin miners would ever steal from the hash rate escrows. 16:28 So everyone's free to come on up and ask a question, share a comment, go on a rant. 16:33 Whatever you want to do is cool. If not, I'll just keep on going. 16:45 But I'm sure everyone would love to hear some some more thoughts from the crowd. 16:53 I just shared in the nest a tweet from Dr. Adam Back, one of the coolest people in crypto, without any doubt. 17:02 He wrote today, Truthcoin made a test net Bitcoin sidechain drivechain with Zcash Crypto for a reason. 17:10 I wouldn't buy the altcoin, but I would try and use the drivechain version. 17:16 Zcash protocol is a bit R&D risky for Bitcoin main chain due to reliance on recent and experimental cryptography. 17:27 That was a tweet from Dr. Back today. 17:31 What Dr. Back is saying there, in my understanding, is that he likes the fact that drivechain enables the Zcash protocol to exist as a sidechain of Bitcoin, not affecting the main chain. 17:46 So what he's really saying here is that it wouldn't be good, in his view, to have Bitcoin main chain be upgraded to include Zcash technology. 17:56 But it would be good to allow for Zcash technology to be on a sidechain. 18:01 That way, if it breaks down, it doesn't affect the main chain. 18:08 So we want to give Bitcoiners the ability to benefit from the Zcash privacy. 18:15 And we want to make it opt in. 18:18 So rather than make all of Bitcoin like Zcash, we want to enable a partitioned, segregated experience where people can opt into the Zcash experience while still using Bitcoin's monetary policy, Bitcoin's unit of account. 18:34 So the goal is, let's say you have some Bitcoin. 18:37 You want to get the experience of Zcash without losing the experience of Bitcoin's economics. 18:43 So you would go into the Zcash sidechain of Bitcoin, which is enabled by drivechain. 18:49 You could do your confidential transactions there and benefit from the extremely strong privacy of Zcash software. 18:57 And then when you're finished, you come back to Bitcoin main chain. 19:00 That's the drivechain vision. 19:02 It gives everybody what they want. 19:04 It gives you all these options. 19:07 We've had a lot of people join. 19:09 Please raise your hand. 19:11 Come on up and comment on anything you'd like to. 19:16 We have some familiar faces and some drivechain experts. 19:19 We also have some newcomers. 19:21 All are welcome to come on up anytime and say what's on your mind. 19:27 What excites you about drivechain today? 19:30 How do you feel about the recent uptick in interest in drivechain? 19:37 You know, we have 700 people, over 700 people are in the drivechain talk telegram group. 19:44 We have over 100 people in the Reddit. 19:47 We have many thousands of people who have visited the drivechain website. 19:53 We have a surge of tweets and interest. 20:00 With every passing day, I think it becomes more obvious to a lot of Bitcoiners that there is enormous potential for drivechain to increase Bitcoin dominance, to increase Bitcoin's fees on the main chain paid to the miners, and to increase the likelihood of success of Bitcoinization by greatly expanding the software that can exist in a manner that accrues value to Bitcoin. 20:26 So if anyone builds valuable software, we want to make it very easy for them to build it on Bitcoin so that it makes Bitcoin more valuable and makes Bitcoin's block space more valuable. 20:38 Those are the two goods, the two economic goods in the Bitcoin network. 20:43 There's the token and there's the block space. 20:47 And we want to make both more valuable because that really is what Bitcoinization is all about. 20:53 It's increasing the demand from society to Bitcoin. 20:59 Is society demanding Bitcoin? 21:01 Do they want Bitcoin and its block space? 21:03 And drivechain enhances that demand by enabling more creativity, innovation, experimentation, more markets to develop on top of Bitcoin. 21:14 It's so interesting because it's the kind of thing that really only exists in an open source protocol context. 21:23 Like if, let's say, Wendy's comes out with a new hamburger, McDonald's can't just copy that hamburger. 21:29 Wendy probably has like a patent on it, right? 21:32 They're going to give it some name and they're going to have certain ingredients and McDonald's isn't going to just copy that. 21:38 But in the realm of open source protocols and software, it's possible for, for example, you know, a large box, a large block fork of Bitcoin, that software to just be copied into a drivechain. 21:56 And then the the community may stop using the altcoin and start using the copy of it that exists as a Bitcoin sidechain because of all the benefits that you would get. 22:07 For example, let's say there's like one billion dollars of value in some large block Bitcoin. 22:12 So. Right now that, you know, let's say it's Bitcoin Cash, so there's these large blockers who are transacting and holding this altcoin and we have a speaker, Cullen. 22:25 I'll just finish my point quickly. 22:30 Imagine if one percent of Bitcoiners sent their Bitcoin to the hash rate escrow of the large block drivechain sidechain, then there would be four billion dollars of value in this large block sidechain of Bitcoin. 22:46 Four billion dollars is much more, I think, than the value of any large block Bitcoin fork. 22:53 So if one percent of Bitcoiners were to use a large block drivechain. 23:00 Then that would be larger, more stable and a more secure. 23:08 Version of the altcoin, and therefore because of the powerful market force of network effects, the large block drivechain would outcompete over time the large block altcoin, because if the drivechain version is a clone of the altcoins software, the users would strictly prefer. 23:39 To use the drivechain insofar as they value the economic profit of using a more stable and. 23:48 Secure version of their software. 23:51 So in this in this hypothetical, I'm posing there's the altcoin version, let's say Bitcoin Cash, and then there's the drivechain version. 24:01 And if one percent of Bitcoiners use the drivechain, then it has four billion dollars because Bitcoin has like four hundred billion dollars of value. 24:07 So if four billion dollars is in the Bitcoin Cash drivechain, then all the Bitcoin Cash users will prefer it because it's going to have a more stable purchasing power, more stable value than the altcoin, because it has Bitcoin's value. 24:22 I'm talking about the token on the drivechain, and it's going to have more fees because if it's four billion dollars instead of two or three billion dollars of market cap, then presumably the fee market and level of activity among the users would be equivalent. 24:37 And therefore it'd be more fees in the larger market cap version, presumably, and therefore it's going to have more security on the on the drivechain. 24:47 So if just a few people start moving over that tips the scales even more, there's a dramatic flip where the altcoin goes to zero as everyone races to get out of the altcoin and buy the the superior drivechain version. 25:04 And then this alters the scales even more. 25:06 It's so dramatic because once one altcoin drops in value billions to zero and all the users and value accrue to the drivechain version that boosts Bitcoin's dominance, that makes all the drivechain tokens, all the native drivechain tokens more valuable along with Bitcoin's main chain token, causing the scales to tip even further. 25:29 There's a dramatic situation where as one altcoin drops in value and Bitcoin accrues its value, its market, its fees, then that makes all of the Bitcoin ecosystem more viable, higher dominance, higher network security, which causes the next altcoin at the margins to also experience this domino effect. 25:50 And what we're going to see is one altcoin after another lose its users and developers and investors to Bitcoin because of drive chainization. 26:01 And it's kind of like the dollar milkshake theory, where one after the other, these currencies collapse, like Brent Johnson's dollar milkshake theory and macroeconomics. 26:12 So I think there's like a Bitcoin milkshake theory, which is similar. 26:17 And I see this really occurring in actual reality in the future, where if drivechain is adopted, which is a big if, right, we all have to get involved and educate others about it. 26:26 But if it's adopted, I see the altcoins devaluing to literally zero and the only people who will be left holding them will be the founders and all of the users will have moved over to the more secure instance of that software, which is on Bitcoin. 26:45 Cullen, what is up, man? 26:46 How are you doing? 26:46 Good, Henry. 26:47 How are you doing? 26:49 Pretty well. 26:50 Thanks for the opportunity to speak. 26:52 I guess you started to dive into the topic that I was curious about, which is really like, what does this look like from like a real world application for an altcoiner? 26:59 You know, for example, if you're somebody who's really a big bull on Ethereum, right, you think Ethereum is really cool, you love all the different dApps and things that can be built on Ethereum, and you hold quite a lot of ETH. 27:12 In a world where BIP300, BIP301 is implemented and being used, I just imagine it would be hard to get altcoiners to switch over for the situation that you outlined earlier, which is, you know, you can't, let's say you hold 100 ETH, you can't port that 100 ETH over into the ETH Bitcoin sidechain to BIP300. 27:35 You'd have to sell the ETH for, you know, fiat to buy Bitcoin or trade directly for Bitcoin to then peg into the ETH sidechain, correct? 27:46 yeah that the two ways you could get into the drivechain our first you could 27:53 sell your Ethereum altcoin for bitcoin and then you could move the 27:58 bitcoin through the hash rate escrow to achieve ownership of the 28:04 drivechain token which is a synthetic bitcoin right meaning it trades one for one 28:09 with bitcoin or You could and this is the way almost everyone will do it 99 % 28:14 people will be ordinary users who will directly experience the hashrate 28:20 escrow. will instead instantly swap from one crypto to another. 28:26 they'll sell their ETH altcoin and buy the Drivechain token, which 28:32 is 28:32 the token of ETH side, and that'll be instant for them. 28:37 It'll be professionals, arbitragers, financial professionals who will be navigating 28:42 the hashrate escrow with its various complexities and 28:48 delays, kind of like the way that almost no 28:51 one interacts with the futures market. 28:53 The futures market in finance has hundreds of billions of dollars of value, but very 28:59 few people interact with futures. 29:00 It's only professionals, speculators, hedge funds, and industrial parties that use the 29:05 futures market. And I think the hash rate escrow mechanism in crypto will 29:09 be similar. 29:12 Gotcha. And you're right, you're right that there's an enormous network effect, know, 29:17 thousands of developers who are working in Ethereum today. 29:20 And this is why, partly, that Ethereum has accrued great value, 29:26 is that people are building in 29:27 Ethereum. As soon as drivechain is adopted, I believe that phenomenon will begin to diminish. Because Bitcoin has a larger market cap, it has a more powerful narrative, in my opinion, which is why I chose this project, instead of, you know, choosing to like work in Ethereum. I believe that Bitcoin's superiority arises from the simplicity and enormous 29:58 success of its layer one architecture. And it is, I think, fundamentally superior to build on a more stable foundation than to build on a foundation that is more complex and risky and experimental. So it's kind of like if you're going to build a house, the layer at the very bottom, you know, in the basement needs to be cement, it shouldn't be an intricate and complex architecture at the very bottom, it should be steel and cement, very heavy, 30:26 immovable, almost impossible to rearrange. So the base layer of the crypto economy, if it is to support $100 trillion, is going to be simple and stable and immovable, ossified. And I think Bitcoin has that simplicity and conservatism for the base layer that's better than Ethereum's relative complexity. For example, Justin Drake of the Ethereum Foundation, who is one of their lead researchers and publishers, 30:56 he says that proof of stake is 20 times more complex than proof of work. So that's one, that's one instance in which proof of stake is perhaps riskier, and more experimental, arguably. So I think that it's not clear, absolutely, that Ethereum's development plan will be sustainable. Whereas for me, it's not as much in doubt whether Bitcoin, especially if it adopts 31:26 Drivechain, will have a robust, secure, stable future path to, you know, ameliorate any of the concerns that are attending Bitcoin, such as its low fees, or the inability to build on top of it. I think Drivechain fixes both of those things, strengthens Bitcoin in those ways, and, and provides a clear path for the future. So I think that if you're looking at two different projects, you know, and one, one is Bitcoin with Drivechain, the other is Ethereum, someone who's coming into the space, I think, will prefer 31:56 the stronger foundation. And therefore, the value accrual and the enormous number of development projects on Ethereum will begin to migrate instantly to Drivechain. And in the long run, I think all of them will migrate to Drivechain instead of, instead of on Ethereum. That's, that's my opinion. And, you know, Bitcoin still has like the larger market cap, we have the market cap crown. So I think we have like the solid foundation. And we have the economics of network effects going for us right now, 32:25 if we adopt Drivechain in the near future, while we are still the market cap leader, I think there's no doubt that there is, it's very possible that all of the projects in the long run will migrate. As I laid out earlier, if just a couple people from any community come over to Drivechain, the, the, the tidal wave has just begun at that point. And of course, the first users of the Drivechains will be Bitcoiners, not altcoiners, it'll be the Bitcoiners who, who come 32:55 into the Drivechain and begin to accrue value on that Drivechain, begin to pay the transaction fees, and begin the process of DriveChainization of this clone of the altcoin software. And if the Bitcoiners, because right now, Bitcoin is so large, as I laid out earlier with the Bcash example, if just 1% of Bitcoiners use the Bcash clone, then the Bcash clone is $4 billion right there. 33:24 So let's say one year in, it's $4 billion, that's bigger than Bitcoin Cash. So now we have a clone of Bitcoin Cash that's bigger than Bitcoin Cash, that is going to necessarily induce migration of all of the users from the altcoin to the Drivechain. So that's, that's the economic dynamics I see leading, even in the case of Ethereum, the same thing will occur, I believe. 33:50 Gotcha. Okay. Thanks very much. Yeah, I guess I think my main concern for altcoiners is that, you know, for ETH or Zcash or any of the larger ones where there's quite a lot of conviction from the users, there would be kind of almost like the sunk cost fallacy, mostly because I think, you know, smart people that use those altcoins will realize quickly that there'll be kind of a, if, if everyone is moving to sidechains, there'll be a big race to the exit to try and sell your altcoin so that you can acquire Bitcoin so that you can then peg it back into the, you know, synthetic sidechain. 34:20 That now represents your altcoins functionality. 34:23 And they might just say, well, never mind, I'll just keep, keep using the altcoin because I don't want to, you know, lose value in, I guess, in fiat terms. 34:35 Yeah, I mean, people will have to choose one or the other. 34:37 You can't have your cake and eat it. 34:39 You have to either, let's say if you have a thousand dollars, that specific thousand dollars is either invested in an altcoin or it's invested in Bitcoin. 34:49 So you have to choose with respect to that specific pile of money. 34:54 And people want to have their pile of money in the thing that is going to be most useful to them at the times and places in the future when they expect to be likely to want to liquidate it. 35:05 That's what money is all about. 35:08 And, yeah, there's a sunk cost, you know, if someone has committed, you know, a lot to the Ethereum project, it is precisely those people who would be most punished, unfortunately, for them. 35:20 If, if drivegenetization is successful, because they're the ones who are going to be the last. 35:25 Hey, SuperTestNet, thanks for joining. 35:27 Please jump in. 35:29 What's on your mind today? 35:32 Hi, I'm not sure if you can hear me very well. 35:34 It's a little bit windy today. 35:36 We can hear you. 35:36 Am I coming through OK? 35:37 Yes. 35:38 Cool. So I question one of the statements you made, which is that if the first people to use a drivechain would be Bitcoiners. 35:49 So the first thing that the first sidechain that I think would switch over is RSK, because they've said many times that they want to that they want drivechain. 35:58 And if drivechain existed, they would already be one. 36:01 So I think RSK would switch over to being a sidechain or a drivechain right away. 36:06 And then all of their users would would now be, you know, Bitcoiners who are using drivechain. 36:12 But that that's about like six people. 36:15 It's like there's nobody using RSK. 36:18 And I think that the same thing would happen for any other drivechain. 36:21 If Bitcoiners want to use sidechains right now can do so and they don't want to. 36:29 They're just not interested. 36:31 So if we made drivechains available, I think we'd see the same thing. 36:34 Bitcoiners would be like, great, now I can use now I can use RSK as a drivechain, but I still don't want to. 36:40 And it just wouldn't attract any volume. 36:43 So what are your thoughts on that? 36:45 Super, as always, you ask the most sophisticated, interesting questions and comments, along with Colin. 36:52 And thanks for that thought. 36:55 You're totally right about RSK. 36:57 The RSK community is awesome. 37:00 It has many years of effort in developing a Ethereum competitor. 37:05 However, I think that I would look at their project a little bit differently. 37:10 I've lately been very interested in the writings of their one of their leaders, Sergio Lerner. 37:15 And in his view and in the view of the RSK people, I think they view their current project as being a Bitcoin project in a in a significant sense. 37:26 So when you said that the Bitcoin users wouldn't be the first users of drivechains, it would be, for example, RSK users. 37:35 They consider themselves Bitcoiners. 37:37 And I think they're right. 37:39 They view their synthetic Bitcoin as equivalent to Bitcoin. 37:43 Their synthetic Bitcoin, which is the native token of their project, which is Rootstock Bitcoin, RBTC, trades one for one with Bitcoin. 37:53 And as Sergio has affirmed recently in tweets last week, the intent of RSK has always been to upgrade into a drivechain instead of their current format, which is a federated peg sidechain. 38:08 In the view of some drivechain thinkers. 38:13 Once drivechain is adopted, people will no longer even think of federated sidechains as sidechains. 38:19 In the view of some drivechain thinkers, including me, once drivechain is adopted, when people talk about a Bitcoin sidechain, they will mean a drivechain. 38:28 They will mean a sidechain that is trustless. 38:31 And I say that with quote unquote, because, of course, nothing in life is perfectly trustless. 38:36 Right. But what we mean here is that it's peer to peer, which I know you and I have discussed in the past. 38:42 But, you know, I spoke last week, I'm not sure if you heard it, about a recent tweet from Adam Back where he referred to peer to peer sidechains in a thread about drivechain. 38:54 And I interpret that to refer to the idea that since Bitcoin is peer to peer cash, Bitcoin mining is part of Bitcoin, Bitcoin mining is peer to peer. 39:03 Anyone can, you know, become a Bitcoin miner. 39:06 I own an ASIC. I'm a Bitcoin miner. 39:08 Right. So everyone can be a Bitcoin miner. 39:11 You don't have to be, you know, receiving a permission slip or a social approval to be a Bitcoin miner. 39:17 So in that sense, it's peer to peer. 39:18 Economically, the only barrier to entry is cost, not social approval and social permission. 39:27 So that's what peer to peer means to me. 39:29 And if we have peer to peer sidechains, if we have these trustless peg sidechains controlled by Bitcoin miners, which anyone, including me, can take part in without permission from anyone else, then drive, then RSK would see more use. 39:42 And also, I do think because the Ethereum community has such a strong and successful marketing effort and robust developer community, the notion that RSK would be the largest drivechain immediately maybe isn't what I would expect. 39:57 I think the first huge wins would be perhaps the Bitcoin BTC cousins, which is the big block Bitcoiners. 40:06 I think that these sort of old friends from the past would perhaps reunite on Bitcoin and 40:12 there would be like a huge use of big block sidechains and also the privacy community just 40:20 as well, like Monero and Zcash. 40:22 These people who want strong privacy, I think they're not speculating so much as they really 40:27 want absolute privacy. 40:28 They're really users of tech. 40:30 They're not just like a, you know, betting on number go up. 40:33 I think that many of them truly want the privacy for their personal reasons, such as maybe 40:39 they're like political dissidents or something. 40:41 They want to send money to Wikileaks without being doxed. 40:44 So as an example. 40:46 So I think that we would see like billions of dollars accrue to the drivechains focused on 40:50 privacy and big blocks. 40:52 And then in the long run, the smart contracting drivechains as well. 40:56 How does that strike you? 40:58 I don't think we would see a large usage for many of those groups, because let's take the two 41:05 big block sidechains that I most frequently think of are Bitcoin Cash and Bitcoin SV. 41:10 Both of them have like two transactions per block. 41:14 It's like there's no one using those chains. 41:16 So if they switched over, like even if all two people who use those sidechains or those 41:22 blockchains switched over to using an equivalent sidechain, it wouldn't be meaningful. 41:28 I think that the reason we see very little usage of any blockchains that are like big block 41:37 or what's it called, or smart or like RSK or liquid is because Bitcoiners just aren't 41:44 interested. They're just like, that doesn't appeal to me. 41:47 I don't want that for my Bitcoin. 41:48 I just want, you know, I want Bitcoin to be Bitcoin and I don't want to use it on a 41:53 sidechain. And everyone else is happy with the blockchains that they create. 41:59 That's kind of my concern is that if it's not really a concern, I want to activate 42:04 drivechains anyway. But if we do, I wonder if anyone will use them because no one wants 42:08 to use sidechains right now. 42:10 And that's kind of what I think will just continue to happen. 42:14 Super, I'm trying to reconcile two thoughts that I feel are distillations of what you're 42:19 saying, and I feel that they conflict, so I want to hear your thought on how you reconcile 42:24 them or if I've misunderstood what you're saying, because I think what you're saying 42:28 is very good. So one thought is that you said people are happy with the blockchains 42:33 they're using now. So some people are happy with Bitcoin. 42:36 Some people are happy with Ethereum. 42:38 Some people are happy with Bitcoin Cash, etc. 42:41 Some people are happy with Monero. 42:44 So you said people are happy with what they're using now, but you also say that people 42:48 might not choose to use any of these drivechains, even if they are made available. 42:54 But I think that people are happy only insofar as they expect that their project, that 43:02 their asset is going to be most useful to them in terms of its value, accrual in the 43:08 future and the features of asset ownership, such as its privacy, its Turing completeness, 43:16 its scalability. 43:18 So you're saying that they're happy with what they're using now and you're talking about 43:21 the altcoiners and the Bitcoiners all being happy, which I don't dispute. 43:27 But if drivechain is adopted on Bitcoin, I think it fundamentally opens the door to the 43:32 domino effects that I described earlier. 43:35 Because, for example, with the privacy community, I look, I'm not someone who uses 43:40 Monero every day or something like that or Zcash, but I think there are a lot of people 43:46 who are transacting in privacy coins, not because they want it, as I said earlier, to 43:50 go up in value as much as they want true privacy for their medium of exchange. 43:55 And if that were made possible, there would be some people who would use it on as 44:01 Bitcoiners within a Bitcoin context as a drivechain that aren't today because of the 44:08 deficiencies of a federated peg relative to a miner controlled peg. 44:13 So I think that you would see some adoption of these drivechains if they were made 44:17 available. It's kind of like build it and they will come. 44:19 And what you're saying is, well, everyone is happy with candles and horses and, you 44:23 know, the car, who's going to use it? 44:24 Everyone's pretty happy with their with their car. 44:27 I think that we would see billions of dollars flow from Bitcoin into the hash rate 44:31 escrow for people to experiment, because ultimately what drives all of this is profit. 44:36 It's all about profit in the sense of I want my Bitcoin to be profitable. 44:40 In the sense of I want my assets to profit me in terms of the valuable user experience, 44:47 in terms of value accrual in the future. 44:50 And when you're when you're using a drivechain token, you're getting the exact same 44:53 software as Zcash. 44:56 But instead, you're getting Bitcoin's unit of account, which is just strictly speaking 45:00 better. I mean, does anyone I think there are probably plenty of Bitcoiners who would 45:05 say I'd like to use a more private, you know, version of Bitcoin in a sidechain. 45:10 But I don't want to take the altcoin speculation risk. 45:14 So if it's available as a drivechain, I would use it, but I wouldn't use it as an 45:18 altcoin. And if just one percent of Bitcoiners go into each of these drivechains, just 45:23 one percent, that is four billion dollars in the drivechain. 45:28 That's bigger than many of these altcoins. 45:31 It's bigger than Monero. 45:32 It's bigger than Zcash. 45:33 It's bigger than Bitcoin Cash. 45:35 So when you say none would go or perhaps almost none, I wonder if it's if if we're 45:42 underestimating it and it's one percent right there, we get we get the a larger 45:50 version of these altcoins on Bitcoin, which would then pull in all the users because of 45:54 network effects and the risk that the altcoin goes to zero as a result. 45:59 So right there, Bitcoin gets probably 10 billion dollars of altcoin value through 46:05 drivechainization, through that magnetizing the altcoin users over to Bitcoin, 46:10 increasing Bitcoin's network effect even further, causing the next set of altcoins to 46:15 also flow in. Do you get you get what I'm saying there? 46:18 Or does that just strike you as kind of a fantasy? 46:23 Yes, I think that's a good answer. 46:25 I'm going to try and summarize my earlier earlier point and then say why I think 46:29 you've corrected it. 46:32 I don't know anyone, any Bitcoin user I've ever met who has ever said anything like, 46:38 man, I love Bitcoin, but I really wish I could use it on a chain like on a chain like 46:44 Ethereum so I could get their smart contract features. 46:46 I've never met any Bitcoiner who was interested in in the additional quote unquote 46:52 features that Ethereum offers. 46:56 And I've never met any Bitcoiner who was like, man, I really love my Bitcoin, but I 47:00 but I sure do wish that I could just use it on a really on a big block sidechain. 47:03 I just I just want my regular Bitcoin, but put it on a big block sidechain. 47:07 I've never met anyone who wants to do that. 47:10 But the reason why I think you did answer my point is because you've brought up 47:13 privacy. I have met lots of Bitcoiners who say, I love my Bitcoin, I just wish I could 47:19 use it with Monero's privacy or Zcash's privacy. 47:23 So I think that's that's the winning ticket right there. 47:26 We would we would gain users. 47:28 The sidechain that would have a lot of users would be the one would be the privacy 47:31 one, because I've actually met people who really want that. 47:35 So it kind of makes me wonder why there's not a federated privacy sidechain right 47:40 now. How come no one's made, you know, a peg in Monero with it with a federation? 47:45 Well, it's a very, very, very important question. 47:47 It's a very central question to whether or not the federation is actually a viable 47:51 idea when push comes to shove. 47:53 So that's that would be my guess. 47:55 But I would be certainly very open to be. 47:59 Being refuted on that because but my guess would be that people, if it's really 48:04 private, then the incentive to steal goes way up because you can steal privately, you 48:09 can steal Monero. 48:11 So the incentive to steal goes way up unless the people have their reputations at 48:15 stake, in which case the other the other you know, the other horn of the bull, you 48:20 know, is like pick your poison, which is that they have their public reputation. 48:26 And then, you know, a senator makes a phone call and all these people get arrested. 48:30 And then, you know, they are seen as being the direct administrators of this money 48:36 laundering service, basically. 48:38 So that would be an interesting question. 48:40 Super, another aspect of what you're saying, what's so interesting to me is you say 48:46 that you don't hear Bitcoiners talk about wanting to use a large block sidechain of 48:52 Bitcoin, but super. 48:55 The way that's really interesting to kind of take that thought you had and flip it 48:59 around is to recognize that the Bitcoiners who were saying that in the past left 49:05 Bitcoin. So it is precisely that community of historic Bitcoiners who would 49:14 potentially serve as the demand for those softwares in a sidechain format. 49:22 So if some current Bitcoiners use it and if it grows such that it has more economic 49:30 security, more fee revenue than the altcoin, then that community that left Bitcoin in 49:36 the past would to the extent that their profit motivated would return if they're 49:42 sentimentally motivated to maintain their altcoin and try to fulfill their vision of 49:47 conquering Bitcoin and being vindicated historically, then they would remain. 49:52 But I believe the overwhelming economic force in markets is not sentimentality, but 49:59 it's profit. People want profit. 50:01 They want their token to appreciate and they want to have it be useful to them. 50:07 And that's what drivechain offers. 50:08 So it does require some people to just like swallow their pride and return to Bitcoin and 50:15 realize that in the long run, that's actually the most beneficial thing for their 50:19 community. And this is where the game theory comes in. 50:23 If all of the altcoins do it, then the altcoin that doesn't do it is the one that will 50:28 suffer the most. You don't want to be the one left holding the bag when drivechain 50:34 leads to so much value accrual to Bitcoin and so many altcoins going to zero. 50:40 And I know this is just my view and I can't predict the future. 50:43 And maybe you're completely right. 50:45 And if that's the case, I think drivechain still has value as you recognize and 50:50 promote, which is that the non-adoption of the actual drivechains would not undermine 50:59 the fact that the availability of drivechains would remove from altcoin founders the 51:05 rationale for their activity, the rationale that it's hard or impossible to build on 51:11 Bitcoin trustlessly. 51:13 It would remove that rationale. 51:15 But I do believe optimistically that drivechain would see many billions of dollars of 51:19 real value accrual to Bitcoin and its block space. 51:23 I'm not one who thinks that the only reason that we should do it is simply to have a 51:28 narrative advantage. 51:33 I just wanted to make clear this point that Paul often makes clear, which is that many 51:38 people, Super, who are interested in drivechains are specifically those who left in the 51:43 past, who left Bitcoin in the past. 51:45 So they no longer talk about the need for sidechains because now they're doing an 51:48 altcoin. So it is specifically the fact that Bitcoin's sidechain community has suffered 51:55 from high rates of attrition. 51:57 That's the that's the reason why you don't hear often that people want to use a side 52:02 chain, because all that all that they've been able to do in the past was do a federated 52:06 sidechain, which means that 15, 15 people, in some cases anonymously, are controlling 52:12 that Bitcoin. So right now we have 100 million dollars locked in Bitcoin sidechains 52:17 across RSK, Liquid and a few others. 52:20 It's about 100 million dollars. 52:21 But that's because the setup is weak. 52:24 A federated federation is fiat. 52:26 It's, you know, some people socially appointed and accepted to manage as a trusted third 52:33 party. It's kind of akin to a custodial relationship. 52:36 I mean, it's not it's more it's closer to custody than to the trustless and peer to 52:42 peer nature of Bitcoin mining. 52:45 I would, you know, argue. 52:49 Cullen, jump in, man. 52:51 What's your thought? I, well, I'll let you go just because I'm thinking of something 52:57 that's kind of totally separate from the current topic. 52:59 So I don't want to hijack the conversation. 53:02 I'm just I'm scrolling through the latest BCH blocks, seven transactions, 35 53:09 transactions, 14 transactions. 53:13 Like, are we really if 1 percent of those people come over, is it really going to make 53:19 the magnitude of difference to the Bitcoin's price? 53:22 Because 1 percent of 14 people came over to Bitcoin again. 53:26 When I said 1 percent, I was talking only about Bitcoin. 53:30 I was talking about if the Bitcoin community were to move 1 percent of its value into the 53:35 large block sidechain, that would be four billion dollars on the clone of of the large 53:42 block altcoin, possibly, if that's how if that's how it's chosen to be designed. 53:46 But who wants that? Like what Bitcoiners want is like, I really want to use my Bitcoin on 53:53 a big block sidechain. Have you ever met anyone who wants that? 53:56 Well, right now there's all this discussion in the Bitcoin community, as you know, about 54:01 whether the block size should be larger or smaller and whether we and how that would 54:07 accommodate the desire of some people to do uses of blockchain that are data intensive. 54:16 And therefore, if there were a large blockchain sidechain on Bitcoin, then people could opt 54:22 in to those tradeoffs of lower decentralization and higher scalability and they could do 54:28 what they want to do over there in a way that is harmonious with Bitcoin insofar as it 54:34 accrues value to Bitcoin's main chain and pays fees to Bitcoin's miners. 54:38 So what we want for Bitcoin is a format that can allow for innovation and experimentation 54:46 in a multitude of different softwares. 54:49 And not to push the innovators and developers out of our community. 54:55 We want people like you who are building, we want to enable them, as you do, to build on 55:02 Bitcoin. And we can't know with certainty whether this will lead to enormous success for 55:09 the privacy sidechain or the big block sidechain, the NFT sidechain, the Turing Complete 55:15 sidechain. We don't know exactly which ones will be most successful and exactly how much. 55:20 But if we build it, they may come. 55:22 And your point that there are a few transactions on the big block altcoins is interesting 55:28 because I hear from their, you know, sort of marketing that they do like trillions of 55:32 transactions and have a high volume, at least in theory. 55:38 So I guess. 55:40 Yeah, it's all theory. 55:41 Like they can handle trillions of dollars of volume, but no one's, anyone who has BCH are 55:46 not using it on the chain. 55:48 They're just hoping the price goes up and they're holding it on an exchange. 55:52 Because no one cares. No one cares to use it. 55:55 Well, in the long run, in the long run for Bitcoin, there would need to be a higher rate of 56:00 transaction fees paid on layer one for the Bitcoin miners to receive sufficient income to 56:07 secure the network from a hostile attacker. 56:09 So I think that in the long run, if Bitcoin fees go up as they should, ideally, then there 56:16 would be increasing demand for a low fee experience. 56:19 And I think that large block sidechains could serve as a complement to Lightning. 56:26 So instead of people only relying on Lightning as the mechanism for low fee transactions, 56:33 there could be large block sidechains. 56:35 And that would be a different set of features and experience, a different set of 56:40 complexity. And maybe that would be very good for Bitcoin to have that avenue of 56:45 development available rather than betting everything on Lightning delivering the low fee 56:50 experience. How does that strike you? 56:52 Yeah, I think I'm totally in agreement that if fees ever rose and we had big block side 56:57 chains available, then I think people would use them. 57:00 I don't think we're going to see any immediate, like if we drive, if we activate 57:03 drivechains anytime soon, I don't think we're going to see any immediate usage of a big 57:07 block sidechain because fees aren't high on Bitcoin and people will just keep using 57:12 Bitcoin for ordinals and whatever because they don't like I can just do it on Bitcoin and not 57:18 use the sidechain. But yeah, once fees rose, then they would. 57:24 I think. Yeah, we had high fees five years ago, you know, back in December of 2017, it was 57:29 $50 to send a single Bitcoin transaction and the miners were receiving millions of 57:34 dollars a day from that instead of what they currently receive, which is a few hundred 57:39 thousand dollars a day. 57:41 So well, but only it was only like one day and that happened, I remember 2017 and there 57:47 was only one day when when fees were for most of the day, $50 and even on that day, I 57:55 still use Bitcoin. 57:57 I just I set a low fee and waited and it confirmed the next day or something like that. 58:02 Actually, I didn't even do that. 58:03 But yeah, there was only one day when they were when they were meaningfully high. 58:09 Do you agree that it is necessary for fees to go high permanently for Bitcoin to be 58:15 secure in the far future? 58:18 Yeah. So I feel like I feel like the best I feel like drive team is going to grow and 58:28 popularity, not because it absolutely necessarily will work, but because it is the most 58:34 viable path forward for Bitcoin. 58:37 In the spirit of Satoshi from long ago, you know, he didn't know if there was going to 58:41 be huge success. 58:43 He thought it would either go to zero or be huge. 58:46 And I feel like that same spirit of innovation and experimentation, kind of like going to 58:50 the moon is the spirit of drivechain. 58:53 Like I feel we're right now in this room at the very beginning of an enormously 58:58 successful program. 59:01 I feel like it's the most ambitious program in all of crypto. 59:04 We want to have 100 percent of the economic activity on blockchain be built on 59:09 Bitcoin, not because it's fun or interesting, but because that is the most profitable 59:14 design for everyone involved. 59:17 It's better if everyone is sharing one massive network effect, one unit of account. 59:24 There isn't going to be many monies in the world in the future, there'll be one money 59:29 for all of humanity because that is the most profitable experience for everyone. 59:33 Nobody wants to be using a money that everyone else isn't using. 59:36 So money has more network effect power than anything else. 59:40 It's the ultimate good in terms of network effects. 59:44 So for these reasons, I think there'll be only one L1 and that will be the digital gold. 59:49 And on top of it, there will be many synthetic versions of Bitcoin. 59:54 So they trade one for one with Bitcoin, but they have different software features. 59:58 And that's what the drivechain's vision is all about. 1:00:01 So I feel like that's the path forward. 1:00:03 And you're right to ask, would it be the privacy coin that's most successful or would it be the big block sidechain? 1:00:10 Would it be the Turing complete drivechain? Would it be the other drivechains out there? 1:00:17 There's a list of them on the drivechain.info website, and people can read about the different drivechains that are envisioned. 1:00:24 And some of them have already been created in the test software. 1:00:29 But I think all of your questions are totally right. 1:00:31 I feel like it is exactly people like you who will be among the first to develop and innovate and explain what's going on to everyone else. 1:00:40 So I respect all of your questions and skepticism, 100 percent. 1:00:49 Thanks. I'm grateful to have a place to voice my thoughts about it all. 1:00:58 I do think that some of the interesting kind of features or facets of the discourse include what I mentioned earlier, 1:01:06 where the people who are most interested in sidechains, many of them left and did an altcoin. 1:01:13 So when you say when you said that you don't hear that much call for more sidechain development, 1:01:19 that's precisely because the people who would call for it are instead promoting and building like Avalanche or Ethereum or other things. 1:01:27 They don't actually benefit if they talk about how their users could return to Bitcoin, use drivechains and be better off. 1:01:35 It's in their benefit to market that altcoins are fundamentally necessary and valid. 1:01:41 But once drivechains enabled, then that narrative, that rationale is no longer there. 1:01:49 And the users will be magnetized to the drivechain version of that software, especially if it's exactly the same. 1:01:57 If we clone the altcoin software and then there's Bitcoiners who use it and then the altcoin software is being used more on the drivechain than it is on the altcoin. 1:02:07 Right there, it's game over. It is game over. 1:02:10 It's like if I told you you can have an apple. 1:02:15 You know, in my left hand or an apple in my right hand, and they are exactly identical, but the apple in one hand is cheaper than the other. 1:02:22 You would choose the cheaper one if they're identical in every other way. 1:02:28 Colin's had his hand up for a while now. I think he's ready to ask his question now. 1:02:33 Thanks. I was going in a kind of a totally different direction. 1:02:36 But something I was thinking about, and perhaps this doesn't really make any sense, but we know from confirmation from Gary Gensler and other financial regulators that Bitcoin is not a security. 1:02:50 Right. They've been very clear about that. And then they've kind of been waffling about other altcoins, if they are or are not securities. 1:02:56 And it looks like a lot of them likely will be. 1:02:58 So is there any concern, let's say, in the future where drivechains exist and all altcoins have gone to zero and are now federated, you know, peg outs of Bitcoin using sidechains? 1:03:09 Do we then run the risk of running afoul of financial regulators for securities offerings via sidechain? 1:03:23 In my opinion, it would be surprising to me if that were to occur. 1:03:32 I think that we could have like a securities lawyer, you know, visit and opine on that. 1:03:37 I don't want to give like legal advice, but I mean, I am a lawyer, so I'll just share my opinion. 1:03:43 This is like informal and not like a legal opinion at all. 1:03:46 This is just like a personal reaction to your question. 1:03:48 I think it would not be a security for a drivechain to exist because the token is one for one exchangeable to Bitcoin. 1:03:57 So no one would ever buy a drivechain token, meaning one of the tokens that is one for one exchangeable with Bitcoin and fully backed by Bitcoin. 1:04:10 No one would ever buy that in order to try to have a performance that's higher than Bitcoin's performance, because the whole point by design is that these synthetic Bitcoins are exchangeable for Bitcoin. 1:04:23 So I feel like, you know, since Bitcoin isn't a security, something that's one for one redeemable for Bitcoin would also not be a security. 1:04:32 OK, that makes sense to me. Thank you. 1:04:41 Yeah, I mean, Bitcoin is property in the view of the government, so it is. 1:04:49 I think the drivechain tokens would also be property. 1:04:52 Now, there could be security tokens built on, for example, the Turing complete drivechain, like the one that's a clone of Ethereum. 1:05:00 There could be tokens built on there just like there are token. 1:05:03 There are security tokens on liquid blockstreams, liquid sidechain. 1:05:08 So, first of all, it's not it's not a bad thing. 1:05:12 If someone creates a cryptocurrency token that is a registered security, that's possible. 1:05:18 And, you know, blockstreams liquid sidechain is really cool and a really fantastic project. 1:05:26 And a lot of the best thinkers in the sidechain sort of development community are working on liquid. 1:05:36 And I feel that all of that work is valuable and is helpful to understand the value of sidechains. 1:05:44 And drivechain, I think, is harmonious with that project and and is going to elevate everyone who's been working on sidechains. 1:05:53 Will will benefit ultimately from the improvement of of the sidechain architecture that drivechain allows for. 1:06:02 I hope some of the Ordinal's people make unregistered securities on Bitcoin and then we can finally get the regulators mad at us instead of just being mad at Ethereum. 1:06:16 That would be fun. 1:06:20 Yeah, it's very interesting to watch all this debate. 1:06:24 It's interesting how some Bitcoiners would even say that, you know, we shouldn't have a privacy sidechain on Bitcoin because that will invite regulatory scrutiny. 1:06:33 Like, look at how the exchanges don't want to list Monero except Kraken. 1:06:37 Kraken is the one exchange that's run by that really cool guy, Jesse Powell, who is just like, you know what, we're going to support Monero. 1:06:45 And I don't care if like that makes anyone upset because Monero is just private money and people should be free to use that. 1:06:53 Right. It's not a crime to be private. Privacy is a right. 1:06:57 You're not hurting anyone when you're just being private about your personal activities. 1:07:01 So I think that the original ethos of Bitcoin was one that embraced anonymity. 1:07:08 Satoshi wrote about anonymity six different times and he never once criticized it. 1:07:13 He always said anonymity was cool. It was good. People should be free to use Bitcoin anonymously. 1:07:20 And therefore it's a shame if the Bitcoin narratives become one of, well, let's work together hand in hand with the government to make sure the government is happy with Bitcoin. 1:07:31 Because that's not going to be a good path to go down. 1:07:34 Because what's going to happen eventually is the Bitcoin will get really big and then the government will think that it's a threat to the monetary hegemony of the U.S. dollar system. 1:07:45 Because, of course, one big difference between Bitcoin and the dollar is that the government can't print more Bitcoin. 1:07:51 So if Bitcoinization occurs, that disempowers and eliminates the Federal Reserve with respect to the Reserve's ability to, in concert with the Treasury, issue more money to do money drops and helicopter money for all the different special interest groups that benefit from money printing. 1:08:09 So I think that Bitcoinization ultimately conflicts with the fiat system and therefore the notion that we should be trying to partner with big government is not going to work out. 1:08:24 So it would be good if we stay true to our ultimate values, our core values. 1:08:28 Things like volunteerism, free markets, private property, competition and uphold psychopunk ethos of anonymity and anarcho-capitalism. 1:08:43 That's the political philosophy that I like. 1:08:45 And that's what brought me into Bitcoin in the first place was the things that Satoshi referred to with respect to like Von Mises and Rothbard in that thread on the nature of Bitcoin. 1:09:03 You must be a really weird lawyer. 1:09:07 I mean, I'm certainly weird. 1:09:10 So but every lawyer is weird in his or her own way. 1:09:16 What can I say to that? 1:09:18 By the way, welcome. 1:09:20 That's what you said. 1:09:22 Welcome to everyone who has joined. 1:09:25 Please raise your hand and come on up if you'd like to share a thought or ask a question or just speak your mind about drivechain or anything related to it. 1:09:35 The essence of what I was saying, Super, just kind of put it all into one sentence is that I think it'd be cool to have a privacy focused L2, a privacy focused drivechain, a miner control pegged sidechain for Bitcoin focused on privacy. 1:09:54 I think that would be great for us. 1:09:56 It wouldn't make everyone happy, but you can't please everyone all the time. 1:10:00 UFO 42. 1:10:03 Welcome to the stage. 1:10:06 Well, hello. 1:10:07 Thanks for having me up. 1:10:09 I just posted into the little like side conversation chat a question, which is like, what do you guys think about like these cross chain projects, like maybe chaining, whatever, and other stuff? 1:10:25 And do you regard them just as a bridge tech until there will be the one and you're saying layer one Bitcoin left? 1:10:38 Or will this stuff be a long running thing? 1:10:41 And what timeframe would you be talking about until like this whole thing like merges back into the one, in this case, Bitcoin plus sidechains? 1:11:05 Thanks for that question. 1:11:06 Drivechain was an idea that began in 2015, when Paul Sztorc designed it and talked about it in blog posts. 1:11:15 Since then, it has developed greatly in terms of there being a lot of software that demonstrates how it would work and extensive analysis of its economic design. 1:11:27 So it's moving forward when exactly it would achieve consensus and total merger into Bitcoin by its community in terms of getting everything ready for that. 1:11:39 That would be at some point in the future, maybe in the months to come, or the next few years, or maybe there'll be a tidal wave of strong interest and work on it very soon. 1:11:51 So no one knows for sure. And I think the lessons of history would involve looking at how SegWit came into being and how Taproot came into being to understand how drivechain might come into being, what kind of timeline would be involved. 1:12:08 Yeah, this is the thing. It's about consensus within the communities. 1:12:13 I guess Taproot was like, I don't know, a year and a half ago or something, or two. 1:12:21 And I've been following the Lightning stuff from when it was below 100 nodes. 1:12:32 And now there's, I don't know, maybe also 100 million, if you take the US dollar still as the stable in it, and it's working more or less, but sometimes things can take longer than people predict. 1:13:03 Totally. 1:13:07 Some of the things that have led to perhaps the slowing of the rate of drivechain understanding are what I mentioned earlier to Supertestnet, which is that some of the people who were very anxious to have drivechain adopted in Bitcoin left Bitcoin, and they did an altcoin. 1:13:28 So in the case of Paul Sztorc and those who are working on drivechain, and who are talking about it and are interested in it within the Bitcoin community, there has been a consistent and loyalty to Bitcoin, a consistent interest in drivechain and a loyalty to Bitcoin. 1:13:44 So some people remain in Bitcoin and promote the adoption of stronger sidechain technology in the form of drivechain, while others got frustrated or impatient and decided to instead build an altcoin or work on an altcoin that allows for similar technology to drivechain. 1:14:08 So that's one reason why drivechain has had the rate of understanding and success that it has so far, is that some of the people who would have supported it chose to leave Bitcoin and do an altcoin or join an altcoin community. 1:14:22 So I think that's one way to understand the seven year path that drivechain has had. 1:14:31 But I do believe, I mean, I recently got really interested in it over the last year, I chose to join Paul's company to work for LayerTwo Labs and to host these Twitter spaces to promote this idea and to encourage understanding of it and to encourage understanding of how it would strengthen Bitcoin. 1:14:49 To be able to clone the software of any altcoin the community wants and have Bitcoiners use that sidechain rather than having to either not use that kind of software or sell Bitcoin and buy an altcoin to use that kind of software. 1:15:04 That kind of software could include big block software, it can include privacy software, it could include Turing complete software. 1:15:11 Any of the protocols that we see existing in an altcoin format could be cloned to a Bitcoin sidechain as a drivechain. 1:15:20 And then there might be large usage of them. 1:15:24 There might be growth to Bitcoin in terms of value accrual to Bitcoin and Bitcoin's block space from that upgrade. 1:15:33 Well, thank you very much. 1:15:35 Thank you very much. You guys are going to be in Miami in May? 1:15:40 Personally, I haven't been to any conferences. 1:15:48 I mean, I'm on the West Coast and I have a family, so it's hard for me to get away sometimes to attend these things. 1:15:57 But Paul Sztorc, one of the co-authors of the BIPs for drivechain, BIPs 300 and 301, he very frequently attends the major Bitcoin conferences. 1:16:10 For example, he spoke with Adam Back at Bitcoin Amsterdam last year and then again with Adam Back at Honeyball. 1:16:23 That's OK. That's fine. That's totally OK. 1:16:26 I'm just, you know, just looking at all of the ecosystems. 1:16:30 And I personally went out of Bitcoin at some time mostly, but I'm still very interested in what's going on and what's going to happen. 1:16:41 So thank you very much for your answer. 1:16:44 And nice to having me on. 1:16:47 See you guys. 1:16:49 Thanks for joining. Everyone is free to raise your hand and come on up to the stage, ask a question or share comments. 1:16:59 Bitcoin biohacker, welcome back to the stage. 1:17:05 Hey, thanks for picking me up. 1:17:10 This is kind of a difficult question, so probably you might not have an answer. 1:17:15 I've been reading about taxes and Bitcoin and I think the best. 1:17:22 I read an article on DLAPiper.com that said that Bitcoin is not – basically the 1031 exchange, which is where you take real estate and you defer your taxes by buying a larger piece of real estate. 1:17:41 That virtual currencies are not really – they're not really – you can't just go in from one to another and defer those taxes like you can with actual real physical properties. 1:18:02 So I was kind of wondering how would drivechain work with that in terms of the law and taxes? 1:18:13 And obviously you're a Canadian lawyer, is that right? 1:18:16 You're not versed in the U.S. law or the U.S. tax code. 1:18:23 I am regrettably not Canadian. 1:18:26 I think Canadians are very cool and I love Canada, but I am definitely an American and always have been. 1:18:33 And yeah, I'm in California. 1:18:36 I'm not a California licensed attorney, but I am not giving any legal advice nor have I ever on anything in a Twitter space. 1:18:48 Your question is about whether if someone converts his or her Bitcoin into the drivechain synthetic Bitcoin, would that be a taxable event? 1:19:01 I can't comment on that. 1:19:06 Yeah, I guess ultimately the IRS would be responsible for that. 1:19:09 So thanks. 1:19:12 Sure. 1:19:17 I mean, in theory, the value of the synthetic Bitcoin on a drivechain is going to be the value of Bitcoin main chain token. 1:19:25 That's the whole point of a two-way peg. 1:19:28 It's like selling a gold bar that's one ounce for a gold coin that's one ounce, right? 1:19:36 One is a square and the other is a circle, but they're both one ounce of gold. 1:19:41 So it wouldn't typically be profitable when you exchange the square to the circle and then go back from the circle to the square. 1:19:51 So it might be a taxable event that has no gain or loss associated with it because the things have equivalent market value. 1:20:03 Just like if you exchange your Bitcoin into wrapped Bitcoin and then you go from wrapped 1:20:07 Bitcoin back to main chain Bitcoin, or if you go from Bitcoin to liquid Bitcoin and then liquid 1:20:12 Bitcoin back to main chain Bitcoin, the exchanges aren't made for profit and loss. They're made for 1:20:18 the different features available between the sidechains and the main chain. 1:20:24 So it might be a taxable event with no gain or loss. But again, 1:20:28 I don't know as I'm not able to give any legal advice on that. But you could ask a tax person. 1:20:35 I'm seeing online at DLAPiper.com, it says the IRS concludes section 1031 tax deferred like 1:20:40 kind exchange not available for cryptocurrency trades written by Tom Garrarty. So that sounds 1:20:49 correct. Yeah, that's the article. And it's a good article to understand because 1:20:55 it explains further down that article how Ethereum's value is derived not just 1:21:01 because it's a property like Bitcoin, but also from the contracts and the apps built on it. 1:21:08 And then Bitcoin is a property and that is its value. And then it says Litecoin is also not 1:21:17 a property. They don't consider it a property in terms of taxes. It's more of like a security. 1:21:24 And so in each one of those scenarios, Bitcoin to Ethereum, 1:21:29 that's a taxable event because they derive their value differently. Whereas with the 1:21:37 Bitcoin to WrappedBitcoin, it's sort of like you're handing off your keys to someone else 1:21:47 for other purposes, for someone to hold it with the purpose of getting it back. If I understand 1:21:55 WrappedBitcoin correctly, it's like a synthetic Bitcoin. So I guess that 1:22:02 perhaps that could be more closer to what a synthetic or a drivechain would actually be. 1:22:12 But yeah. So I'm looking at this article you've mentioned from DLA Piper, 1:22:17 and it sounds like the article is a description of the IRS's memo. And this memo discussed 1:22:26 just Bitcoin, Litecoin, and Ethereum. And the memo held that if one trades one of these tokens 1:22:31 for the other, one cannot utilize section 1031 tax deferral treatment with respect to any gain. 1:22:42 So that's interesting. Maybe, I'm not sure if it's really relevant to drivechain, but 1:22:51 it's an interesting topic. I mean, obviously in the far future, we all hope as Bitcoiners 1:22:59 that society would become so bullish and favorable about Bitcoin that there is a tax 1:23:06 exemption for Bitcoin. And probably in the best possible situation in the future, the tax 1:23:16 exemption would apply to any synthetic Bitcoin. So if you have the drivechains with their 1:23:25 synthetic Bitcoins on them, that is units of account that are one for one traded with Bitcoin, 1:23:30 fully backed by Bitcoin, then those would be property that if it appreciates in real value, 1:23:39 you wouldn't have to pay a taxable gain on that. So that would be the best possible situation. 1:23:45 If all of this taxable event stuff were to not be a hassle for those living in countries that have 1:23:51 capital gains tax. Supertestnet, you had asked earlier about the low rate of usage of big block 1:23:58 sidechains and how maybe that would mean that there wouldn't be much usage of them. One of the 1:24:04 things that Satoshi was very interested in was microtransactions. He wrote a number of times 1:24:09 that he was interested in there being small, casual transactions, you know, very small 1:24:16 transactions and that this could change the way the economy worked. And there have been some people 1:24:22 who are very interested in that. I think that they probably are more so in the large block community 1:24:28 and trying to facilitate there being an economy of small microtransactions. And I think that a 1:24:36 big box sidechain could bring all those people together to build on that kind of thing. 1:24:44 Especially, oh, I was going to finish that thought with by saying, especially if 1:24:48 such transactions are not capital gains taxed, then there's a lot of potential for 1:24:54 such transactions are not capital gains taxed. Then, you know, if there's no tax on these small 1:25:00 transactions, then there could be much less overhead burden and headache. And that might be, 1:25:06 you know, great for Bitcoin to have this economy of smaller transactions, not just 1:25:11 digital gold, you know, billion dollar money movements once a century, but instead, 1:25:16 you know, a whole interesting high frequency movement of small amounts of Bitcoin, maybe. 1:25:30 Well, you kind of can right now. The people doing the ordinal things are moving dust amounts 1:25:35 of Bitcoin whenever they trade ordinals with one another. So there are, it still happens on Bitcoin 1:25:44 and of course, the Lightning community definitely does that, like Stacker News and recently, 1:25:49 the Nostr folks are all doing, showing how Lightning can be used for microtransactions. 1:25:55 So that is, that stuff is still happening. It's probably happening more than it's ever 1:25:59 happened before in the history of currency. 1:26:05 Super, are you, do you have a favorable attitude towards the possibility of a smaller block size 1:26:10 for Bitcoin layer one? One of the things that Paul wrote about in his most recent blog posts 1:26:16 on truthcoin.info, Paul Sztorc wrote in this post called the sidechain vision for Bitcoin. 1:26:24 He wrote half a year ago, this post, his most recent post. And one of the things that he calls 1:26:28 for among the six different things that he wants to see in Bitcoin, one of the six was to shrink 1:26:35 the block size and also to ossify layer one. And I think that those two goals are possibly achieved 1:26:45 through drivechain. So once we do drivechain, then we could do a block size increase, or we 1:26:51 could do it the other way around. There could be a block, I'm sorry, block size decrease, 1:26:54 a block size decrease and then drivechain or drivechain and then a block size decrease. 1:26:59 Either way isn't, doesn't, it's not terribly important, the exact order, as long as they're 1:27:03 roughly done around the same, you know, period of, you know, one or two years, it probably wouldn't 1:27:09 make a huge difference, the order exactly. But if we shrink the block size in order to make it 1:27:13 cheaper for ordinary people to have a full node so that they can personally and directly validate 1:27:19 that they've been paid Bitcoin, that works harmoniously, I think, with the notion of 1:27:25 enhancing the strength of sidechains so that the sidechain can be the venue for scalability. 1:27:33 So that way people can opt into different sidechains, use the block space on those 1:27:39 sidechains, and that way the small blocks on layer one don't constrain the scalability of Bitcoin. 1:27:45 To your, in your perspective, does that make sense that smaller blocks on Bitcoin layer one 1:27:50 are harmonious with drivechain? Is that one of your motivations for being as interested in drive 1:27:55 chain as you are? Yeah, yes, but probably yes to both questions, although it doesn't, 1:28:03 I don't think about it very often, so I don't know if it is a large motivator, but yeah, 1:28:09 when it occurs to me, like, oh yeah, drivechain would help with that too. But yeah, I think one of 1:28:14 the reasons I would like to see smaller, smaller blocks is because my, because of my own efforts 1:28:20 to sync a node got harder after SegWit. When you synchronize your node now, 1:28:29 you have to download more data, so your bandwidth increases. If you choose to store that data, 1:28:34 you have to store it, and you have to process a lot more transactions. All three factors in 1:28:39 what goes into making a program resource intensive go up. Your storage, your bandwidth, 1:28:47 and your compute costs all rise because of SegWit and its block size increase. So I would 1:28:52 like to undo that aspect of SegWit and go back to only having one megabyte blocks or smaller 1:29:02 so that it's easy, like, if we went smaller, we could maybe undo some of that damage and, like, 1:29:07 get back on track to where it would have been, you know, had we remained at one megabyte the 1:29:13 whole time. Because it just got harder to sync a node, and I would like it to be easier again. 1:29:19 Exactly. Isn't it interesting, Super, how there are some really awesome thinkers in Bitcoin 1:29:27 who want smaller blocks but who don't yet appreciate drivechain or are opposed to it 1:29:35 currently? Like, for example, you know, one of the great thinkers, Luke Dashjr., 1:29:40 he calls for smaller blocks a lot. He calls for people to contemplate the possibility that 1:29:46 smaller blocks could be very good for Bitcoin, you know, reducing it from one megabyte to 300 1:29:51 kilobytes. And yet he doesn't, in tandem with that view, support, you know, strengthening the 1:30:00 options with respect to sidechain creation via drivechain. So I wonder, how does that add up? 1:30:07 Why do you think that is? Like, people would be okay with shrinking layer one, but then not 1:30:11 building concomitantly the sidechain format to allow for Bitcoin to grow, you know, right? 1:30:19 If you're going to shrink layer one, you want to grow layer two, right? 1:30:24 I don't know. I've never read his comments on the topic, so I don't have any 1:30:29 ability to criticize something I haven't read. Has he written at any length or even 1:30:35 at small length on why he doesn't support drivechain? That's news to me. I didn't even know he 1:30:41 didn't support it. He's written very intelligently and politely about it, as he always does. And so 1:30:48 far, the tweets have been on occasion, and they've been that drivechains, in his view, are slightly 1:30:55 less secure than federated sidechains. That's one tweet he put out. I don't want to quote him too 1:31:01 much without him being here to respond and elaborate on the context. And I'm optimistic 1:31:06 that some of the people who will become the strongest proponents of drivechain are those 1:31:11 who most ardently support smaller blocks on Bitcoin, because it works so well to strengthen 1:31:17 layer two, just as we're shrinking the layer one block size. That way, Bitcoin doesn't become 1:31:24 a project with limited overall capacity and expressiveness and potential. It works so well 1:31:33 to strengthen layer two at the same time as shrinking layer one. And that way, we have this 1:31:39 very decentralized, inexpensive layer one to validate, but at the same time, an enormous 1:31:45 multitude of projects on layer two that are strengthening layer one, because the merged mining 1:31:51 is really the crux of it, that if you're going to have smaller block size on layer one, 1:31:57 that will tend to require high fees, because you're going to have fewer transactions if the 1:32:02 block size gets smaller. So there's less data in the blocks. So the fee associated with each 1:32:07 transaction would have to be a higher average fee in order to sustain a robust fee market 1:32:13 for the miners to be incentivized to secure the network. And merged mining of sidechains 1:32:19 is the path forward, which Satoshi himself talked about merged mining. So it's so harmonious with 1:32:26 these OG Bitcoiners and their ethos that it would be great to see a lot more merged mining 1:32:35 of sidechains, right? Because it's either that or like the three options for the future with 1:32:40 respect to economic security are, as I see it, inflation, do nothing, and merged mining. And 1:32:47 of those three options, I'm sure some people would argue that there's other options, right? They would 1:32:51 put it differently. But to me, it's like inflation, hope for the best, or merged mining. And I love 1:32:56 the merged mining option, because it strengthens layer one, and there's no inflation. 1:33:04 And doing nothing, I don't think, is a viable path in the very long run. 1:33:10 So I'm just looking, I searched this Twitter timeline for the word drivechain, 1:33:14 good dashers. And I see, he mostly talked about it in 2017. He appeared to be a fan 1:33:22 back then. I only see two posts about it in the last year, one of which says drivechain is not 1:33:29 even close to trustless. And then the other one by him from this year says, in the case of drive 1:33:35 chain, miners make more money by just taking all the sidechain funds for themselves. So I don't see, 1:33:41 neither of those seems to be positive statements about it. But also, neither of them says like, 1:33:47 we shouldn't do this, or I don't want this to happen. So I'm not sure. I'm not sure what is, 1:33:55 can you, if you can find something by him where he talks about it at some, 1:33:59 what you said earlier about he thinks federated ones are more secure. I'd like to see that so I 1:34:07 can ask him questions about it. Yeah, I think you're exactly right. He's tweeted only a couple 1:34:14 times ever about it, a few times ever about it. And I didn't really mean to get into an inquiry 1:34:22 about him. I'm just basically... In 2017, he said, how about the SegWit plus drivechain path? Safe 1:34:29 permissionless and gets everyone what they say what they want. Yeah, that seems pretty positive. 1:34:34 So yeah, maybe we could ask him, hey, do you still think this? Well, I think it's pretty clear 1:34:40 at this moment, he wouldn't affirm his original tweet as being his current view. Although I do 1:34:46 very much appreciate and respect the way he articulates his current views, which is that, 1:34:52 as you point out, they haven't been, you know, vociferous or frequent. And he hasn't denounced 1:34:59 the project. He has merely objected to certain angles of, you know, reasoning about it. And 1:35:06 it's possible. I mean, it's certainly the case that he would respect, you know, like the opinion 1:35:11 of others if they were the overwhelming majority of Bitcoiners. And I think he is a great Bitcoiner. 1:35:16 So I'm optimistic. I'm optimistic that among, you see, at this moment, we're at a dramatic moment 1:35:22 where this project is gaining attention. And it's unclear exactly how it will proceed, 1:35:28 because we have some of the leading thinkers in Bitcoin, some, you know, I mean, no one's a leader, 1:35:33 of course, but in a certain sense, like some, you know, people are very interested in it. Others are 1:35:40 opposed to it. And then there's a majority of people, perhaps in the middle, who are making 1:35:44 up their minds and learning about it. And I feel that among those independent voters, in a sense, 1:35:50 there is there is the community that doesn't yet appreciate drivechain, but does appreciate 1:35:57 smaller block size going down to 300 kilobytes. I'm optimistic that thinkers like that, such as 1:36:03 Luke, may in the future evolve their view to appreciate that drivechain works harmoniously 1:36:12 with a smaller layer one block size. Hey, D, thanks for joining the stage. 1:36:18 Welcome for the first time to this space. What's your comment or question? 1:36:21 Yeah, thanks for having me. I was just curious why, you know, obviously super basic question, 1:36:28 but you know, what's the goal of drivechain? Like, why do you think we need it? I guess. 1:36:39 That's a great question. Thanks for asking that. Drivechain is about strengthening Bitcoin 1:36:44 through developing stronger sidechains as options for Bitcoiners to benefit from software 1:36:52 development. So, for example, there could be a sidechain on Bitcoin that uses drivechain technology 1:37:00 that enables Bitcoiners to experience a greater amount of scalability, a greater amount of 1:37:06 privacy, a greater amount of Turing completeness or other software features that currently exist 1:37:12 in altcoins. Instead, with drivechain can exist on Bitcoin. And the Bitcoin that would be locked 1:37:20 in the hash rate escrow technology would be controlled by the Bitcoin miners. So it's a 1:37:25 similar trust model to Bitcoin layer one. Well, while not being identical to it, 1:37:34 it's similar in that the Bitcoin miners, 51% of them have power over the Bitcoin that is held 1:37:41 in the hash rate escrow, which is a term that refers to the drivechain technology that 1:37:46 performs the function of a two way peg. So people send their Bitcoin to the sidechain, 1:37:52 their layer one Bitcoin remains in what's called a hash rate escrow. And to the extent that Bitcoin 1:37:58 is sent into the hash rate escrow, a native token is generated on the sidechain, which is a synthetic 1:38:04 Bitcoin, meaning it's a token that isn't Bitcoin, but it is one for one redeemable with Bitcoin. 1:38:11 And therefore, it is worth one Bitcoin. So it enables the Bitcoin economics of 21 million 1:38:18 to remain the same, while enabling users to experience a different quality of software. 1:38:24 So it's what drivechain does is enables Bitcoin's monetary policy to remain fixed. 1:38:30 So it keeps the quantity of Bitcoin the same, but it makes their quality different 1:38:34 by enabling these redeemable tokens to be issued that have the features of altcoins 1:38:39 without the altcoins economics of monetary inflation and high volatility of purchasing 1:38:45 power. Gotcha. Hey, no, I appreciate that explanation. That's definitely helpful. 1:38:49 I was wondering, you know, maybe a follow up, you know, you say this allows Bitcoin to keep its, 1:38:57 you know, 21 million hard cap. As it stands right now, it still will retain its 21 hard, 1:39:03 you know, there's no BIP to increase the supply. Why do you believe that we need to increase the 1:39:09 supply? I didn't speak that well. I said that it would when I when I said that what drivechain 1:39:18 does is it enables the the 21 million hard cap to remain intact. What I meant there is that when 1:39:26 drivechain is used, the users are locking up their Bitcoin in a hashrate escrow. And as a 1:39:34 result, the users are receiving synthetic Bitcoin on the drivechains on these sidechains. And 1:39:42 therefore, when I refer to the 21 million cap being preserved, I was referring to the quantity 1:39:48 of circulating Bitcoin in the following sense, that when you send a Bitcoin to the hashrate escrow, 1:39:56 you were you were removing it from circulation in a sense. And therefore, it is not a violation 1:40:02 of the 21 million hard cap for the token to be generated on the sidechain that is a synthetic 1:40:09 Bitcoin. So as an example, just in case I know you get it, but in case anyone doesn't get it, 1:40:15 like suppose there's a privacy sidechain on Bitcoin called zSide and there is in the test 1:40:20 software. So if people send one million Bitcoin into the hashrate escrow and they create one 1:40:27 million zSide tokens. So there's a it's a synthetic Bitcoin on this sidechain that's 1:40:33 worth one Bitcoin. There's one million of them now in this hypothetical. The total purchasing 1:40:38 power of all those zSide tokens is one million Bitcoin. And this hasn't caused there to be 22 1:40:48 million Bitcoin in circulation because one million Bitcoin have been removed from circulation in a 1:40:54 sense by sitting in the hashrate escrow. And then if the zSide users are done with what they're 1:41:00 doing, they send them back to the hashrate escrow and then they get their original Bitcoin. The Z 1:41:04 side tokens are deleted from circulation through that process. So what drivechain does is, in a 1:41:10 sense, maintain Bitcoin's monetary policy while increasing the variety of qualities that Bitcoin 1:41:20 can have when it takes the form of the drivechain tokens, which is an opt in format where you don't 1:41:27 have to opt into it. And if you do, you will receive a different feature set in terms of 1:41:33 decentralization being less possibly, but scalability or privacy being more. 1:41:39 So it's all about enabling Bitcoin users to get altcoin software without leaving Bitcoin's 1:41:45 economics. We want to have the altcoin software such as scalability, Turing completeness, privacy 1:41:52 or other software advantages and tradeoffs. We want to internalize that development and innovation to 1:41:59 Bitcoin, making Bitcoin the one stop shop, making everyone happy. Everyone will be able to use 1:42:05 Bitcoin and get any software they want. So the idea of drivechains is it requires a narrative 1:42:11 change within Bitcoin's community. It's going to induce a change in narratives instead of saying 1:42:16 altcoins are all scams. Instead, we recognize the truth, which is that some altcoin technology is 1:42:24 legitimate and it would be better if it were available on Bitcoin. It would be better if 1:42:29 Bitcoiners could opt in without leaving Bitcoin, opt in to larger blocks, to stronger fungibility, 1:42:37 which is privacy, to Turing completeness for smart contracting. So it's all about bringing 1:42:43 in the good altcoin tech. Now, of course, most altcoins aren't substantial, innovative technologies. 1:42:51 Many of them are just Ponzi nomics. People buy a token and hope that others 1:42:56 ape in and the greater fool makes the earlier adopters rich. That's like 99% of altcoins. 1:43:01 But there is a few that are legitimate, like privacy tokens and large blockchains 1:43:07 and large block blockchains and Turing complete, you know, smart contracting blockchains. Those 1:43:13 protocols should be available to Bitcoiners, to the Bitcoiners who want to opt in and use 1:43:19 those things, because as long as that's not possible, except in a federated sidechain, 1:43:24 many Bitcoiners will leave and do altcoining. And it's that harms Bitcoin's value accrual 1:43:30 and it reduces Bitcoin's miner revenue because we're missing out on those fees. 1:43:35 Right. Yeah, no, I appreciate that. It really helps out. 1:43:39 Sorry. Sorry, Super. You had a question. You had a question or you're going to say something I'll 1:43:42 ask after. Yeah, I was going to bring up a point about what you just said about Turing completeness. 1:43:55 I've never I've never seen any any popularly used contract that uses Turing complete properties of 1:44:03 the BBM or any other blockchain system. Are you aware of any any contract that actually even uses 1:44:15 like loops or anything like that? 1:44:18 No, what I'm referring to when I talk about the Turing completeness or the relatively greater 1:44:22 Turing completeness of, you know, Bitcoin's main rival is the fact that it seems to me, 1:44:32 not being a programmer like you, that there is a large amount of people who feel that Ethereum, 1:44:39 because of its technical foundations, affords developers greater flexibility and more flexibility 1:44:46 greater flexibility and potential for expressiveness of software than Bitcoin's 1:44:51 layer one does. And that's why it would be great if we had a drivechain, which is a clone of 1:44:58 Ethereum, as we do in the drivechain test software to to allow developers to use Bitcoin's economics, 1:45:07 Bitcoin's unit of account, and Bitcoin's miners to secure that sidechain rather than having those 1:45:13 same developers go to Ethereum to do what they want to do over there. Does that make any sense? 1:45:21 Yeah, it does. I did an analysis once of the functions that Ethereum has that I think are 1:45:29 the most used. The functions it has that Bitcoin doesn't, that are the most used in popular smart 1:45:35 contracts. And I narrowed it down to two, which are op bytes and op ballots. And I think those 1:45:42 are the ones that really make it so much easier to work on Ethereum. The op balance one lets you 1:45:49 make a contract that is only valid if you specify another Ethereum address and say, 1:45:55 like, this transaction can only go through if this other Ethereum address has this balance. 1:46:00 And Uniswap uses that to say, like, you only get my token if you send me 500 Ether first, 1:46:05 or whatever. And they can do non-interactive swaps that way. And then the other one's op byte, 1:46:12 which allows you to do transaction introspection, where you say stuff like, this transaction is only 1:46:17 valid if so-and-so provides this certain type of information to the contract. You can actually 1:46:23 expect what information they provide and make the contract valid or invalid based on that. 1:46:28 And we don't have things like those in Bitcoin. And those are the ones that I think people 1:46:33 actually use. I don't think they use the smart contracting features. So the idea of going after 1:46:38 those things seems like it's... I don't know what we would gain by going after putting loops in 1:46:44 Bitcoin script. But I think it would make it easier for developers to do Ethereum-like stuff on 1:46:49 Bitcoin are something equivalent to op byte and something equivalent to op balance. And then I 1:46:55 think that would attract developers back to Bitcoin, in my opinion. I agree with everything 1:47:02 you've said. When I talked about a drivechain that offers greater Turing completeness, what I 1:47:07 really meant, and I should have just said it this way, is a drivechain that offers everything 1:47:13 Ethereum offers. Because that's what the ETH side drivechain would be. It is a clone of Ethereum. 1:47:22 And you probably understand it 100 times better than I do. But it offers the fundamental features 1:47:28 of Ethereum because it's a clone of that software. So when I refer to greater Turing completeness, 1:47:35 I'm just referring to the main difference between Ethereum and Bitcoin. Maybe you can suggest to me 1:47:40 a phrase to use other than greater Turing completeness to differentiate between Bitcoin 1:47:47 and Ethereum. How else could I describe it rather than just saying a clone of Ethereum? 1:47:52 How can we refer to the drivechain that would be a clone of Ethereum in the same way that we refer 1:47:57 to the big block drivechain as a scalability drivechain and the privacy one as a fungibility 1:48:02 drivechain? So I was saying the Ethereum clone would be a drivechain that has greater Turing 1:48:08 completeness than layer one Bitcoin. How would you put it? Probably easier to develop on. 1:48:19 Maybe that might be the way to put it. Or maybe a more powerful, more opcodes. 1:48:28 I don't know. I don't have a good answer for what would be a good way to do it. 1:48:31 I'm still trying to come up with a way because I used to say Turing complete. And then after I 1:48:35 analyzed, I was like, no one uses the Turing complete functionality of Ethereum. It's too 1:48:40 expensive. But they do use these other functions. And when I looked at them, I was like, I would 1:48:45 like those functions. Thank you, Bitcoin. I was making stuff like there is some cool stuff you 1:48:49 can do with this. So that's my new perspective. It's like op byte and op balance are the things 1:48:55 that I think we want. But I don't know how to put that in a way that makes it 1:48:59 simple for other people to understand. 1:49:02 I want to point the audience to SuperTestNet's recent essay that he wrote in recent weeks 1:49:09 about BIP300, which is drivechain. It's in the nest. So you can go to that tweet in the nest 1:49:16 and open his article and see his long form thoughts on the project. Specifically, 1:49:25 he explores some of the major objections and skepticism around drivechain and talks about 1:49:34 why he thinks that there is a good response to those objections. 1:49:38 What's the nest? I don't see anything called the nest. 1:49:42 The nest is the tweets that I've posted at the top of this Twitter space. 1:49:47 So I've posted six tweets. The most recent one is a tweet of yours. If you look at the Twitter 1:49:53 space and you see where I'm speaking is LayerTwo Labs, you're speaking SuperTestNet, we're in 1:49:59 the top row. Right above that row of speakers is the nest, which is tweets that have been posted 1:50:07 below the title of the spaces. I only see five and none of them are or whatever. 1:50:18 There might be a delay. I mean, I posted it like 10 minutes ago. 1:50:22 So if you scroll through... Okay. You know, Super, sometimes there's glitches where in spaces people 1:50:29 can't hear each other who are on stage, but the audience can hear you. So it could just be a 1:50:32 glitch. Maybe it doesn't show you your own tweets and it sort of... What's the author's name? 1:50:41 Kafka. Orwellian. 1:50:45 Yeah. Or like sometimes you can't see your own tweets, but you can see everyone else's. 1:50:52 So do you mind if I ask another question? I really appreciate the space, by the way, 1:50:55 and I love the discussion. 1:50:57 I would love it. 1:50:57 We're not here to argue, right? We're just here to chat. So I appreciate it. 1:51:02 Totally. 1:51:03 I guess one other question is, for Bitcoin's sake, you mentioned privacy and stuff like that. And 1:51:12 I'm kind of under the impression that that might come on, say, an L2 or taproot-enabled 1:51:21 better privacy in terms of on-chain data, because a multi-sig looks the same as a regular transaction 1:51:29 and stuff like that. They've kind of obfuscated it a little bit. I guess, what's the difference 1:51:35 between this and having privacy on an L2? And then maybe as well as, what does drivechain 1:51:44 help Bitcoin with, right? Because like, yeah, it might help miners out with fees and stuff, 1:51:50 but what's maybe the main concern and why do you think we need to implement this? Go ahead. 1:51:56 So the Zcash technology has advanced a lot in recent years. And when you're using Zcash, 1:52:06 you conceal completely the sender, the recipient, and the amount. This is not the case with Bitcoin 1:52:12 layer one, where there is some degree of traceability. Of course, Bitcoiners who are 1:52:20 very sophisticated can use Tor and CoinJoin and Lightning and other things to attempt to conceal 1:52:32 their transactions. However, the market share of Bitcoin among privacy-oriented blockchain users, 1:52:40 such as the dark markets and other markets, the market share of Bitcoin has declined in recent 1:52:47 years as these technologies from Monero and Zcash have improved. So if Bitcoin had a sidechain that 1:52:57 was a clone of Zcash and Monero, then those sidechains would possibly be successful in 1:53:07 terms of adoption. So people who want strong privacy might prefer to use Bitcoin's unit 1:53:15 of account for its low volatility of purchasing power when that unit of account has the software 1:53:21 features of strong fungibility that are made available by Monero and Zcash technology. 1:53:27 So the goal here is to bring those blockchain use cases of strong fungibility into the Bitcoin 1:53:36 economy rather than having these dark markets be altcoin markets. Because one of the original 1:53:44 inspirations that Satoshi had for electronic peer-to-peer cash is that it wouldn't be lacking 1:53:50 in anonymity, but instead he wrote again and again how users can be anonymous and users can have 1:53:57 privacy. So Zcash is frankly more private than Bitcoin in the view of some thinkers. And I find 1:54:07 that to be compelling. And I also find it to be compelling that it would be good if Bitcoiners 1:54:13 opt into that rather than having the Bitcoin community simply abandon 1:54:19 anonymity and privacy as values and instead just hope that a fully doxed Bitcoin experience 1:54:28 is an acceptable future. I feel like that would be kind of giving up. 1:54:31 No, yeah, I agree that privacy is important and I agree we're trying to find solutions for that. 1:54:36 Are you not a fan of L2 privacy implementations? Obviously I'm not a big coder guy, so I don't know 1:54:49 the details of how that would exist. But I'm under the impression that if we're on a Bitcoin 1:54:54 standard, a lot of people... It's called drivechain. That's how we get it. 1:54:58 Well, obviously I'm under the impression like if we're on a Bitcoin standard, 1:55:01 a lot of people aren't going to be even interacting on L1 because it's going to be 1:55:05 very costly. So that's why they're being, quote unquote, pushed up to these higher layers. 1:55:12 In your opinion, do you not see privacy on higher layers, a route to take and 1:55:19 drivechain is better for that? Or yeah, where do you stand there, I guess? 1:55:26 Yeah, I totally see in the long run Bitcoin being layered, layered money. And money itself is not a 1:55:34 monolithic category. There can be money that's more private. There can be money that's more 1:55:39 scalable. For example, in our money system today, if I mentioned the word money, you might have in 1:55:46 mind physical coins. You might have in mind a physical check, a paper check. You might have 1:55:52 in mind money at a bank account. So there's different kinds of money there. There's custodial 1:55:59 money and there's bearer assets like coins and bills. And there's, you know, the bills can be 1:56:04 credit money or they can be, you know, there's all different kinds of money and it has different 1:56:10 layers. And Bitcoin, I think, will be the same where people could, when they refer to like, 1:56:15 you know, sending Bitcoin around, in the far future, I think if drivechain is adopted and 1:56:20 very successful, they will be referring either to layer one Bitcoin for a large transaction 1:56:25 or they'll be referring to a layer two drivechain for a low fee transaction, or they'll be 1:56:33 referring to a privacy drivechain for an anonymous transaction. So money will have layers. And the 1:56:42 key insight with drivechain is that on every drivechain, the native token, the main token 1:56:48 is going to be a synthetic Bitcoin. So there isn't going to be speculation on altcoins. Instead, 1:56:53 people will hold a synthetic Bitcoin, meaning a cryptocurrency that's 100% backed by Bitcoin 1:57:01 in a verifiable on-chain manner, because there's Bitcoin held in the hash rate escrow 1:57:05 that is used to generate the token on the sidechain that is redeemable for that Bitcoin held 1:57:11 in the hash rate escrow. So what drivechain is all about is giving us unlimited potential 1:57:18 to copy the software of altcoins into Bitcoin's ecosystem so that Bitcoin can accrue that value 1:57:25 and accrue that transaction fee revenue. So it enables Bitcoin economically to grow. 1:57:30 In my personal view, drivechain is an economic upgrade for Bitcoin. It's fundamentally an 1:57:37 economic advantage for Bitcoin that anything built on an altcoin can be copied into Bitcoin's 1:57:44 space. And then Bitcoin can accrue that value, those users, that development, 1:57:48 that future, rather than having some altcoin grow and grow and grow. And eventually that altcoin 1:57:54 will be the biggest and then it will be the one that has most of the narratives. And if that 1:57:59 altcoin were to be bigger than Bitcoin and have a design similar to drivechain, then ultimately 1:58:05 that altcoin would render Bitcoin a lesser relevant and more of like a collectible, 1:58:13 you know, smaller community. I think that Bitcoin succeeding means that Bitcoin develops the drive 1:58:19 chain approach, which is that it has the powerful ability to engage in versatile innovations on 1:58:26 layer twos. The whole, and by design, drivechain is designed to have as small of a possible impact 1:58:35 on layer one, while at the same time bringing in fees to layer one miners, 1:58:42 potentially at a very voluminous rate, strengthening Bitcoin. And all the demand for 1:58:47 the synthetic Bitcoin on the drivechains is demand for Bitcoin layer one. So it accrues value 1:58:54 to Bitcoin's token and market cap by, you know, having people like, it's just an amazing and 1:59:00 exciting thing. I think people are getting it more and more every day. 1:59:05 Yeah, no, I appreciate it. That's a great stance. And I'm still learning about drivechain and I 1:59:12 don't exactly know where I stand, but I appreciate all the points here, man. I actually jumped up 1:59:18 because, and I know we have other people in here, so it's going to be my last question. 1:59:23 You guys are talking about ordinals and inscriptions and that kind of deal. You know, 1:59:29 we're talking about people that used to be in altcoins and now they're, you know, 1:59:34 quote unquote inscribing or they want to call minting their JPEGs and files on Bitcoin. How do 1:59:41 you, you know, that didn't require a change of BIP or anything. I guess that that was enabled 1:59:47 through Taproot a little bit through the witness data. But just curious your thoughts on that 1:59:53 approach, because we are seeing, obviously people are, you know, inscribing a bunch of these things 1:59:58 and they're trying to create projects and blah, blah, blah. 2:00:02 Yeah, just curious your thoughts on it, I guess. 2:00:09 Well, it's a great question because the recent conversation on ordinals has raised a lot of interesting topics that are very relevant to drivechain. 2:00:19 For example, in the drivechain community, there is strong support for the notion that a even smaller block size for Bitcoin layer one would be very valuable to Bitcoin, because it would enable the ordinary user to have an inexpensive node by reducing the rate of growth of the blockchain so that the amount of cost associated with having an expensive node would be significantly reduced. 2:00:49 So we don't want to have a fastly growing file size for the full nodes. 2:01:09 Yeah. 2:01:10 So this ordinals thing has raised this question of like, it also ordinals talks about the ordinals discourse includes discussion of how much data is in a full node. 2:01:22 So that's one topic. 2:01:24 Another topic is, are people putting a lot of data into the blockchain without paying commensurately for their load that they're generating for the blockchain? 2:01:37 So it's a crypto economic discussion of how expensive is it to have a full node? 2:01:41 How fast are the full nodes growing in size relative to the cost of this hardware associated with that data and bandwidth? 2:01:50 And it all fits together with drivechain, because on drivechain, I think we would see a sidechain focused on NFTs, like there is this discussion of that on the drivechain.info website, drivechain.info. 2:02:04 There is a, you know, project number five is called BitAssets, and it says counterparty like, but without touching L1 block space. 2:02:13 And it's, I think this would be the sidechain that would be, you know, facilitating NFTs and other things like that. 2:02:23 So I think we would see that activity move away from layer one. 2:02:26 Gotcha. 2:02:27 Yeah, no, it's definitely interesting. 2:02:28 I just, I just see a lot of old coiners, you know, quote unquote, shit coiners moving over to Bitcoin through these inscriptions. 2:02:37 So it is interesting to me. 2:02:41 I guess, I guess I lost my train of thought here. 2:02:44 Sorry, give me a second. 2:02:45 Let maybe let someone else go. 2:02:46 I'll come back to it. 2:02:53 It is a very interesting discourse that we've heard in the Ordinals conversations. 2:02:57 Yeah. 2:02:58 Oh, it's, it's like, it's very, it's very important that we make sure that the cost associated with having a full node doesn't grow too fast. 2:03:07 If the blocks are large, then with every passing day, it becomes perhaps more costly for the ordinary person to have a full node. 2:03:16 Having a full node be inexpensive is one of the key reasons why it's great that layer one remains small block. 2:03:24 And it's a very complicated topic, but I think we should err on the side of ensuring decentralization and ensuring inexpensiveness of the full nodes so that ordinary people can validate the blockchain by having a full node, perhaps not only on their laptop, but in the case of many poor people around the world, they could be having a full node on their phone in the future if the block size were smaller. 2:03:51 Yeah. 2:03:51 And that's, that's the, that's a position which I think some of the coolest thinkers, in my personal opinion, in Bitcoin have is they would, it would be very valuable to maintain the blocks being small enough so that people can have a full node on their phone. 2:04:07 And I feel that drivechain is harmonious with that view, because it is a vision for Bitcoin, which has a very expressive and high potential view of the, of the value to Bitcoiners of being able to opt into a sidechain and have those sidechains bringing fees to layer one miners to secure layer one. 2:04:28 So it's a harmonious relationship between the sidechains and the mainchain and having smaller blocks in the mainchain, I think, works very well if we develop at the same time, the sidechain capabilities. 2:04:41 So there's like a harmony there. 2:04:42 It's very synergistic and collaborative. 2:04:45 Some people will prefer the mainchain and maybe never use a drivechain. 2:04:49 Some people will primarily use a drivechain and not touch the mainchain. 2:04:53 But by having a system, an architecture, which makes them both, both of those sets of people that are perhaps not entirely overlapping, collaborate, collaborate, by having a single set of miners and a single unit of account between the sidechain and the mainchain, that creates a very dynamic, collaborative and productive arrangement. 2:05:17 I think it's very capitalistic because that's what capitalism is all about, is having a shared economy where people are doing different things, but there's a network effect of using a single money, a single unit of account. 2:05:32 It's pretty exciting to me. 2:05:33 Yeah, no, I appreciate it. 2:05:34 Gotcha. 2:05:35 You mentioned storage and storage concerns. 2:05:38 Now, obviously, blocks can only be four megabytes. 2:05:41 Obviously, SegWit didn't, you know, like up to four megabytes, you know, obviously at the time they weren't being filled like they are being now with, you know, JPEGs and other files. 2:05:54 But, you know, like what's what's the major concern there, considering that the blocks are still four megabytes and you can still run a one terabyte hard drive for the next maybe one or two years and still be OK? 2:06:08 I think I saw like a 12 terabyte hard drive going for like 180 bucks. 2:06:13 You're right. It might not be on a phone per se right now. 2:06:15 But I mean, if we were on a Bitcoin standard, we'd see, you know, between two, three potentially higher megabyte blocks regardless. 2:06:25 So how how does this have an effect on that if block height or block space is still limited, of course, and people can still run nodes on a Raspberry Pi and a one terabyte hard drive? 2:06:39 Super, please chime in. 2:06:41 You can you can explain these things far better than I can. 2:06:44 Yeah. So the first time that I sunk, I'm not sure if it was the past tense of sink, is it sinked or sunk? 2:06:52 But the first time I sunk a node was in 2017, and I did it on a very low powered device. 2:07:00 And it took it took about two weeks to to fully synchronize the blockchain. 2:07:07 And then and then SegWit happened. 2:07:09 And once SegWit happened, we started seeing bigger blocks and they increased three different factors in the in the resource requirements for running a node. 2:07:21 They increased the amount of storage that the blockchain actually takes. 2:07:25 They increased the size of the packets that you're receiving along the wire and thus the bandwidth that you're using. 2:07:31 And they increased the computational resources required to validate each block because there are more transactions and more signatures and stuff to validate. 2:07:40 So your compute went up, your compute costs went up, your storage costs went up and your bandwidth costs went up. 2:07:45 And because of that, it's a struggle now, at least for me, if I try and synchronize a node on my Raspberry Pi, it takes a lot longer now and it just sucks. 2:07:58 So that's why I think having it wasn't so bad when SegWit first came out and we barely ever had a block that was more than one megabyte. 2:08:07 But now most blocks are more than a megabyte. 2:08:10 And so it just makes it hard. 2:08:12 And that's why I want to go back to having smaller blocks again, because it's just hard for me to sink a node down. 2:08:19 So the argument here is that we need to actually decrease block size. 2:08:22 Is that the thing? 2:08:24 Because, you know, obviously, this is I mean, need to is the wrong word. 2:08:28 I would I would like to I would like to. 2:08:31 Yeah, because it would put us it could put us back on the trajectory of like where the difficulty that it that it would have been to sink a node if we had remained at one megabyte. 2:08:43 We could we can only re-approach that level of difficulty where we would have been at at this point if we make them smaller again. 2:08:50 So I would like to do that. 2:08:51 It's not a need thing. 2:08:53 I mean, I can still do it. 2:08:54 It's just it's, you know, my little pie smokes now when it tries to sink, not literally, but, you know, it's harder. 2:08:59 Yeah, I would like it to not have trouble. 2:09:01 It took me about a day to sink. 2:09:03 And and again, it's still I needed a Raspberry Pi and a one terabyte hard drive. 2:09:08 So what could we argue that it is slightly subjective that we won't have enough storage base long term to store this? 2:09:17 Because, again, four megabytes, of course, is more than you know, it's four times more than a one megabyte block. 2:09:24 But the things that are being implemented are still within that block size. 2:09:27 We're not looking to increase the block size. 2:09:29 You know, we have a specific block size currently. 2:09:33 So are we saying that SegWit was the quote unquote original sin and that we should have just stuck with one megabyte blocks? 2:09:40 You know, I just don't you know, whether we had these inscriptions or not, we still on a Bitcoin standard would have hopefully full blocks. 2:09:50 And that would still require a lot of storage with with SegWit. 2:09:56 Yeah, I don't think there were two parts of SegWit. 2:10:00 There was the decision to put the witness data in a separate separate place, and then there was a decision to increase the block size now that we could hide this extra data from old nodes. 2:10:11 And I think SegWit was fine, like just the part of putting the separating the signatures and putting them in this witness section. 2:10:17 But the increase of the block size, I think that was that was a sin. 2:10:21 So not literally. 2:10:22 But yeah, I would like to undo that part. 2:10:26 Keep SegWit, but undo the block size. 2:10:29 That'd be my preference. 2:10:30 Awesome. 2:10:30 Thanks for your input, man. 2:10:31 Appreciate it. 2:10:33 Hey, Luke. 2:10:33 Thanks for joining the stage. 2:10:35 Welcome here. 2:10:36 I'm Henry. 2:10:37 I work for Paul. 2:10:38 And please share your thoughts on any topic that we've been discussing if you'd like to. 2:10:42 It might not be so much tied in with drivechains, but I would say the so-called original sin would be the hard fork in 2013 when we increased it to one meg. 2:10:55 Could you elaborate on that a little bit? 2:10:56 Tell me tell me more. 2:10:58 What's what was it before it was one megabyte? 2:11:01 There was a limit more like SegWit's weight, but it was more or less around 500k per block. 2:11:07 That's very interesting. 2:11:09 So if I hear you correctly, you're saying that very early in Bitcoin's history, the correct, most favorable rate of data accrual to the blockchain was achieved and later, the increase in that rate of data accrual was not favorable. 2:11:30 Right. 2:11:30 Actually, even when it was technically able to get around 500k, there was also a soft limit on the mining code of 250k. 2:11:41 Luke, if I may ask, are you are you sympathetic to any extent to the notion that I was speaking about before you joined the notion that it would be harmonious to achieve a smaller rate of data accrual in a blockchain? 2:11:59 Data accrual, in other words, shrink the block size, but at the same time or roughly around the same time, expand the the potential of sidechains so that we're not just reducing layer one, but at the same time, increasing the potential of layer twos. 2:12:17 And that could help with the with ensuring an adequate rate of income to the miners to secure the network and also a increase in the possibilities for users to opt in to sidechains for their larger blocks if they if they choose to. 2:12:35 So giving, you know, in kind of a Milton Friedman sense of things, let the consumer decide. 2:12:41 And by letting the Bitcoin consumer decide, we retain within the Bitcoin community, in a sense, those users rather than see them leave Bitcoin to do what could be done as a sidechain. 2:12:54 Are you sympathetic to that notion? 2:12:56 Kind of. My main concern is that users need to understand the security tradeoffs of that decision. 2:13:05 Yes, absolutely. 2:13:06 That's exactly right. 2:13:08 Every drivechain, if they were to exist, would have tradeoffs. 2:13:12 They would be in some ways inferior to the experience a person has on Bitcoin main chain, especially things like decentralization and security. 2:13:25 So absolutely. 2:13:27 You're 100 percent right. 2:13:28 It would be it's very important that the articulation of the benefits of the drivechains, each of them is accompanied by disclosure and awareness of the risks. 2:13:40 I totally agree. 2:13:42 An informed consumer is is much better than an uninformed one. 2:13:46 Yeah. 2:13:48 Joe, chime in if you'd like. 2:13:50 Thanks for joining again. 2:13:51 Hey, I hope my audience with me again. 2:13:54 It's a question for Luke. 2:13:58 It would seem like a good compromise position here, then, would just be like, don't make it official software, disclaimers everywhere. 2:14:06 Make it very, very clear, just like with Satoshi Dice. 2:14:10 We knew it wasn't necessarily endorsed by any developers. 2:14:14 It's a big gamble. 2:14:16 And that was very clear from the beginning. 2:14:18 So it would seem like there shouldn't be a problem from cautious, conservative dance, Bitcoin Core dance on, you know, allowing this to go forward. 2:14:36 I missed the question. 2:14:40 I didn't catch that, sorry. 2:14:42 He didn't say what his question was. 2:14:45 Yeah. 2:14:45 Could you could you state your question again louder and more? 2:14:47 Sure. 2:14:48 Maybe that would be great. 2:14:49 Thanks. 2:14:49 Yeah, yeah. 2:14:49 Sorry, guys. 2:14:50 Um, yeah, no, I'm just saying that by analogy to Satoshi Dice, right? 2:14:54 Like it wasn't endorsed by Luke or any core dev, but it was a way to gamble as your Bitcoin. 2:15:01 Why can't just think about drivechain like that, right? 2:15:04 It's just it could be gambling with your Bitcoin. 2:15:06 That's all. 2:15:07 But, you know, it's not implied that it's endorsed just because it's allowed. 2:15:12 I wouldn't think that would be a good selling point, especially since Satoshi Dice was an attack on Bitcoin. 2:15:20 I if I don't remind me about Satoshi Dice, that was a custodial experience for Bitcoiners, correct? 2:15:27 Not a not an open. 2:15:30 No, they were essentially tricking gamblers into making all these tiny transactions and then using one Satoshi output sent back as a indication of whether or not 2:15:41 they won or lost. 2:15:44 Yeah, it was totally not custodial. 2:15:46 And I'm just trying to make that analogy, like if we put caveats everywhere, you know, with the 300 and 301, then it's not like, you know, there's any 2:15:58 Luke has to worry that it's on him that, you know, or any of the Bitcoin devs have to worry that if this screws up that it's their fault. 2:16:05 So I'm just trying to think of this as a. 2:16:07 Yeah, I think that makes you too far on the extreme of overstating how unsafe it is. 2:16:16 Yeah, yeah, sure, sure. 2:16:19 Yeah, the security of of transactions on a drivechain would depend on the fee rate of the, you know, the fees of the transactions on the drivechain. 2:16:30 So that's one aspect of security in terms of double spending and whatnot. 2:16:34 And then 51 percent of the miners are entrusted with, you know, properly managing the drivechain, which can be viewed as an advantage, because if a drivechain were to interfere with other drivechains or with Bitcoin main chain, if a drivechain were to somehow lower the value of Bitcoin by creating some kind of problem, if there were this problematic drivechain, then the community would be able to express its will to discontinue the drivechain through the miners, potentially. 2:17:04 So the nature of the miners role in the maintenance of drivechains can be understood as a strength in that way. 2:17:13 So if there is a problematic drivechain or one that's lowering the value of Bitcoin, then the community has the mechanism through the miners to discontinue it. 2:17:23 But of course, everything you've both said is right about there being a set of benefits as well as tradeoffs. 2:17:37 When users choose to opt into a sidechain that's a drivechain, just like there are tradeoffs with the current format, which is where the users only have the option to use a federated peg sidechain. 2:17:52 So with a federated peg, it's like sending your Bitcoin to Coinbase, one could argue, because if you send your Bitcoin to Coinbase, you're trusting that the people who are controlling that money are going to do it properly and hopefully not be arrested or coerced in some kind of bad outcome. 2:18:14 So personally, I like the idea that the miners are in control. It's a huge multitude of parties, lots of money at stake, lots of profit motive to do the best thing for Bitcoin. 2:18:24 I mean, to be frank, the drivechains are just a very, very large federated sidechain without well-defined members and without some of the guarantees that the legal system might actually do to help a federated sidechain. 2:18:43 But isn't the guarantees of the legal system not part of the ethos of Bitcoin originally? 2:18:50 We're trying to have something which is arising through incentives. 2:18:54 As Satoshi himself wrote, it's all based on incentives, not recourse. 2:18:59 So what he meant there is, in my personal opinion, that we're trying to have a natural market-based emergent order and emergent incentive compatibility without using the fiat system of socially democratically elected coercive forces to enforce the property rights. 2:19:20 Does that feel right to you? 2:19:22 I agree. But the legal system benefit of the traditional federated sidechain is strictly in addition to everything else that a drivechain would already have. 2:19:32 I'd also like to point out, when we talk about incentives, yeah, we're designing a system that's based around incentives. 2:19:40 And whether we like it or not, some people are going to have an incentive of not wanting to get arrested. 2:19:45 As we've even seen in this space, people have been wondering about securities laws and stuff. 2:19:52 That's part of the incentives that we have to deal with. 2:19:54 And systems that we make have to be robust in the face of counter-incentives from the legal system. 2:20:00 Or at least, I would like to make systems that are robust in the face of that. 2:20:05 What we've seen so far with federated peg sidechains is arguably a low rate of adoption. 2:20:11 There is only about $100 million in those sidechains. Meanwhile, some altcoins have 2:20:17 billions of dollars of value. I feel it would be great for the chances of Bitcoinization, 2:20:26 for the growth of Bitcoin's network effect, for it to be not competing with those altcoins, 2:20:33 but instead out-competing them and really eliminating them. It would be great if the 2:20:39 users, all these voters, and if we're going to talk about social issues like political support 2:20:44 for Bitcoin and the number of people who are helping Bitcoin and the legal system, 2:20:49 the sort of IRL reality that Bitcoin exists in. I think it's great if all those altcoin 2:20:57 users and developers are instead Bitcoiners. It would be ideal if they're voting for Bitcoin, 2:21:02 supporting Bitcoin, hoping it succeeds. The legal system is in favor of Bitcoin. I feel that 2:21:10 trying to internalize those users and that development to Bitcoin, that's part of the 2:21:15 drivechain view. I feel that what has just been said about the legal system and its role 2:21:22 with respect to Bitcoin, I think the drivechain is aligned with that notion that we want to have 2:21:27 as many people supporting Bitcoin and using Bitcoin. So if, hypothetically, most or all of 2:21:33 the altcoiners were to become Bitcoiners who used a sidechain of Bitcoin, Bitcoin would have, 2:21:39 as a result of that, many more people who are in favor of Bitcoin and are voting for it and 2:21:44 hoping that, you know, telling their representatives and the government to not attack Bitcoin. 2:21:49 I think the main reason people use altcoins more than Bitcoin sidechains is because of 2:21:56 essentially the scam benefits they want to gain off other people's losses. 2:22:03 As far as the current sidechains, as far as I know, it's mainly liquid and Rootstock at this 2:22:09 point. Having very low usage, I think that's more of a UX issue than anything else. But also 2:22:16 the being aware of the security risks of doing it means people, even the people running the 2:22:22 sidechains, want to minimize funds on them. That's interesting. The security risks in terms 2:22:30 of the fact that if there were a billion dollars in a federated peg, then the people who are 2:22:36 controlling it, the 15 people, they would have a security risk personally. Is that what you mean? 2:22:42 Also, for each of the users, if these 15 people can be, you know, coerced by the government to 2:22:48 taking all the funds and running, the users would lose everything that they had in that sidechain. 2:22:55 Precisely. I agree. That's exactly what I'm saying, that if there were a miner controlled peg, 2:23:02 then instead of 15 specific people being socially selected by the company or organization that 2:23:10 creates the sidechain, instead of that arrangement, which is akin to custodial arrangement, 2:23:16 I would suggest instead the Bitcoin miners, that massive multitude dynamically evolving, 2:23:22 people constantly coming and leaving the set of miners. Many Bitcoin users are themselves miners. 2:23:28 So it's fundamentally different, I think, than as you described it being a large federation. 2:23:34 It is a dynamic one. It's categorically superior, I feel. 2:23:40 It's unfortunately much fewer than 15 miners making up the 51% of the network right now. 2:23:47 Well, I was speaking of hash rate, not the network nodes that create the blocks. Is that 2:23:53 what you had in mind? No, I mean hash rate. You can get to 51% of the hash rate with what, 2:23:59 three, four people? Oh, are you referring to the people who own the companies that run the miners? 2:24:07 More or less. That's a very interesting way of thinking about it. I do feel, though, that 2:24:17 what do you think about the idea that a federated peg with 15 people controlling it is perhaps 2:24:25 something that the market would view as much inferior to having the Bitcoin miners control, 2:24:30 even though, as you correctly say, the number of people who control 51% might be 2:24:37 might be fewer than 15 in some sense. The amount of profit motive and the dynamic nature of Bitcoin 2:24:45 mining is perhaps a great strength of the miner-controlled peg as opposed to the federated 2:24:53 model. I don't think it would logically work out that way. And also, as far as 15, I guess they 2:25:03 might be using 15 right now, but with Taproot, they could potentially make it thousands. 2:25:10 Yeah, I would like to see a federated sidechain with a federation is like a 2:25:15 thousand of one thousand multisig or something. That would be really fun. 2:25:22 On another note, or on a closely related note, so one thing about the current mining pools that 2:25:28 exist is that their member set seems to change on a daily basis. I've personally been in 2:25:35 meetups with people who contribute to a particular pool, talk about their experience there, 2:25:39 and they're like, here, I've tried out five different pools in the last couple of months, 2:25:43 and here are my findings. This one pays out on this basis. This one has these features. 2:25:47 And they'll decide what ones to use, and they'll talk about their reasons for switching from one 2:25:51 to the other. So because of that, I think one factor that I suspect miners would take 2:25:57 into consideration when choosing what pool to use is what are they doing with sidechains? That 2:26:03 would be another feature for them to consider. Are they co-mining or merge mining the z-side 2:26:10 sidechain, or are they merge mining this other one? And because of that being a factor, I think 2:26:16 it would help improve the amount of hash rate that it would make it so that it's effectively more 2:26:24 than four pools. Many of the individual miners who contribute to that pool also make a decision 2:26:31 about which one they're going to go into. And so it increases the number of decision makers 2:26:37 involved. Does that make sense? Yeah, to me, I think so. I think what 2:26:42 you're talking about there is an advantage of drivechain, if I heard you right. And another 2:26:47 way of talking about it is that if drivechain is enabled on Bitcoin, then instead of every new 2:26:54 sidechain requiring a decision about who the new 15 people are going to be, there would be the 2:27:00 ability for all the Bitcoin miners to always be in control of the drivechain pegs. And therefore, 2:27:07 there would be no decision about who is going to control the Bitcoin in the peg. Instead, 2:27:12 it's the Bitcoin miners. So the architecture includes a set of responsibilities for a set of 2:27:19 people, and that can be reused forever ad infinitum. So we could have a multitude of sidechains, 2:27:26 and the Bitcoin miners control the hash rate escrow of each one. And therefore, 2:27:30 there doesn't need to be a new set of 15 people every time. 2:27:34 Honestly, that sounds like a disadvantage. It seems like you would want to be able to 2:27:40 have more options for who the Federation members are rather than only one option. 2:27:47 But there is a sense that the Bitcoin miners are perhaps the most reliable set of parties, 2:27:54 since they're very much economically aligned with the success of Bitcoin. And therefore, 2:28:00 there's a powerful profit motive in order for them to be honest. 2:28:04 And I believe the current situation with mining and the history of mining has 2:28:09 not supported that opinion. 2:28:15 Can I make a point here? Just one thing is that there are like 10 public mining companies, 2:28:22 at least, I think. So I think we should just distinguish whether we're talking about mining 2:28:26 pools, which you can switch from, like Supertestnet said, and then, you know, 2:28:31 thinking about board members on mining companies. So, you know, it is, I think, 2:28:37 kind of a lot, maybe more than you might expect. 2:28:41 But then just one other point, like we're talking about giving people a new option, 2:28:46 right? So there are certain circumstances where it might make sense to use federations. 2:28:51 And then, but I can imagine circumstances where we wouldn't want to use a federation, 2:28:55 and then Drivechain gives us that option. And I think it's also when you have too many 2:29:03 federations, you got to worry about where miners are going to get their fee revenue from, 2:29:08 because Drivechain allows miners to do it. And if there are many different federations, 2:29:15 they'll keep fees down to almost nothing. And then we might have an issue funding mining 2:29:22 in the future. I don't, I'm not of the position that fees for miners is really a big concern. 2:29:31 If people want Bitcoin to work, they're going to mine Bitcoin, whether it's profitable or not. 2:29:37 That's a great, that's a great point. I agree with both of what you said, Joe and Luke, 2:29:42 that ideological mining is certainly one possible result of Bitcoinization. And it could, in theory, 2:29:51 be a sustaining force for the security of the network. Although I am optimistic that for-profit 2:29:58 mining would be a permanent presence in Bitcoin and would be successful. Satoshi, you know, 2:30:06 as a less technical person than, you know, really probably anyone on stage, I'm just a lawyer, Luke, 2:30:12 I'm not like a sophisticated engineer like you. I do like Satoshi's description of how Bitcoin 2:30:19 could work in the future. He does contemplate explicitly ideological mining, but he also said 2:30:24 in that BitDNS thread that merged mining could be a source of network strength in the future. 2:30:33 He was thinking there of, of course, the altcoin BitDNS and how it would increase Bitcoin's 2:30:39 strength through merged mining. But I do wonder if, you know, if he were with us today, he might 2:30:45 countenance, he might support and acknowledge the possibility that drivechain through harnessing 2:30:49 merged mining of sidechains could help secure Bitcoin on a for-profit basis in the future. 2:30:57 And that's exciting to me because I, you know, if you told me there's a project out there and it's 2:31:01 only going to work if people donate to it, I wouldn't feel as excited as if you told me it's 2:31:05 a for-profit capitalistic enterprise that has emerged in order. That, to me, sounds great. 2:31:12 But I also, of course, respect what you said about miners and how the history of Bitcoin 2:31:17 arguably includes, you know, times when, you know, the miners did this or that. 2:31:22 So it's not like they're perfect, right? Yeah. I'm not saying it is going to definitely happen 2:31:27 one way or another. I'm just saying I'm not too concerned with it because it's going to work out 2:31:31 one way. However, it works out in the end. I'm sure there will be a way that it does work out 2:31:36 that particular issue. And as far as miners, the fact that they're still mining huge blocks today 2:31:47 is suggesting they don't really look at Bitcoin's long-term what's good for Bitcoin as much. It's 2:31:53 not like it was a one-time thing where miners didn't care about Bitcoin, but it's an ongoing 2:31:58 thing. Doesn't it weaken your point about ideological mining, though? Like, what if 2:32:04 the world we're in is just one where they're self-interested? And then, like, 2:32:10 Drivechain is the solution that you're pointing to. You know, it'll work out one way or another. 2:32:14 Well, I think probably through something like Drivechain. Luke, to make sure I understood what 2:32:21 you were saying, were you saying just now that it would be good if the miners were to 2:32:25 choose to not, you know, create blocks that have a high amount of data in them 2:32:32 because of, like, the recent episode that we're talking about with, like, 2:32:35 ordinals and whatnot? Even ignoring the recent episode, it's been clear for years now that 2:32:42 these big blocks are harmful to Bitcoin. And miners could very easily make one megabyte or 2:32:49 even 300 kilobyte blocks for the benefit of Bitcoin if they wanted to. 2:32:54 Is it possible that the miners are, in some cases, averse to doing anything that would 2:33:01 be viewed as ideological in nature and are therefore operating under the rationale 2:33:08 that's somewhat legitimate, which is that if they simply process transactions having the highest 2:33:12 fees, then they are immune from criticism? Maybe that's what's going on. Is that possible? They're 2:33:19 waiting for people like you, who are not, you know, so much associated with mining as development, 2:33:25 to lead the discourse on how large the blocks should be rather than the miners engaging in 2:33:32 that activity of, you know, doing things that are not, you know, financially obviously defensible, 2:33:39 like, you know, taking less profit but trying to help keep the block size smaller. 2:33:45 I mean, I've been pretty clear about that particular aspect of mining and block sizes for a long time now. 2:33:56 I don't think miners notice that there is a lot of... 2:34:05 There are miners who care about ideology. We sometimes see it come out because a miner will 2:34:11 do something like put a message in a block that makes some ideological point. 2:34:18 We just did it recently with the Luxor team putting that large JPEG in the block, 2:34:25 and they're making an ideological statement when they did that. Like, they didn't even 2:34:30 take fees for it. So I think they do this stuff all the time. They did it with... 2:34:35 When they blocked SegWit for a long time, a lot of miners were making an ideological statement 2:34:39 about their power and their control, and they wanted, you know, a 2x size increase, and they 2:34:45 weren't happy with what SegWit was giving them and stuff. But I think that's not... 2:34:49 Miners do have ideologies, and they express them in the way they mine blocks. 2:34:57 To make sure I understood exactly what you're saying, Luke, were you saying that 2:35:02 the miners should try to reduce the rate of growth of the data of the blockchain 2:35:08 even if it reduces their profit? Like, for a specific block, if they include a certain 2:35:13 transaction, they get more profit, but it has a lot of data attached to it, 2:35:16 which burdens the nodes, right? So are you saying they should do something other than 2:35:21 make the most money? Because that's what I would consider ideological. 2:35:26 Specifically, we're talking about miners looking at the long-term good of Bitcoin. 2:35:32 I forget which context that was brought up in, but the fact that they are just making 2:35:37 these huge blocks, including spam, and putting their profits first, essentially, 2:35:42 their short-term profits, even at the expense of Bitcoin's long-term viability, suggests that 2:35:48 they're not looking out for Bitcoin as much as may have been assumed or be assumed. 2:35:57 Understood. To me, them simply making as much profit might be just, as I said earlier, 2:36:03 a way for them to be operating in a way that's understandable rather than one that involves 2:36:08 less profit and more ideology, which would involve them wading into the discourse on 2:36:15 how fast the blockchain should grow in size. So that might just be there, or maybe they're 2:36:20 trying to avoid being noticed and avoid being criticized. After all, if they started doing that, 2:36:28 it would be perceived as more ideological than simply making profit from taking the 2:36:33 highest fees. Taking the highest fees is generally thought of as not ideological, right? Is that right? 2:36:43 I would say it's just as ideological, just not in an ideology that is good for Bitcoin. 2:36:52 Understood. I think I get exactly what you mean. Well, the miners wouldn't have to make that 2:36:57 decision if we as a community can simply shrink the block size. Then, 2:37:02 they could continue to operate in the manner that's simple and profitable maximally. 2:37:15 Unfortunately, there would need to be a lot of support from the community more than there 2:37:19 currently is, I believe, for that protocol change enforced on all miners. 2:37:28 Hopefully, we'll get there. I am a fan of reading your tweets and other content, 2:37:33 and I noticed that between you and Paul, there is a resonance. One, at least, if not more, 2:37:41 which is that smaller blocks are vital to the long-term success of Bitcoin. 2:37:47 So, I'm optimistic about how the drivechain vision, if it's successful, would satisfy some 2:37:54 of the concerns and hopes of those who aren't currently drivechain proponents. For example, 2:38:02 facilitating an understanding and interest in shrinking the block size, 2:38:07 which is sort of part of the drivechain vision, even though it's not part of the drivechain BIPs. 2:38:17 Anyone's welcome to jump in and share thoughts on any of that. 2:38:24 Well, we have a bunch of speakers on stage, and everyone's welcome to participate. 2:38:41 If you have any thoughts, you can just speak your mind on any of the topics we've been discussing, 2:38:48 such as smaller blocks, sidechains, the difference between a drivechain and a 2:38:54 federated peg sidechain, whether or not it would be good for Bitcoiners to have the extra option 2:39:01 to use a miner-controlled peg instead of a federated controlled peg. And also, 2:39:09 the most recent topic we've been addressing is merged mining, which is BIP301, which is the 2:39:14 lesser discussed BIP. So drivechain has two BIPs. The first is the most central, which is BIP300, 2:39:25 the miner-controlled peg. But the second is just as interesting, I think, which is blind merged 2:39:31 mining, which has a very interesting effect potentially on the long-term miner income. 2:39:40 I think it could be great for securing Bitcoin far into the future as the subsidy, or as the 2:39:45 coinbase, rather, is halved towards zero over time, over many decades, over a century. It'd 2:39:53 be great to see a growing rate of income from these merged mined sidechains. And that, of course, 2:40:00 is something which some people are skeptical about being good for Bitcoin, but I personally 2:40:05 am persuaded that it would be good. 2:40:08 To have that for-profit arrangement. 2:40:10 Joe, go ahead, please. 2:40:12 Hey, yeah, and I just don't want to talk too much, 2:40:17 so I'm gonna keep it short, 2:40:18 rather than put my hand up to talk. 2:40:21 Anyway, so yeah, I just want to push back on Luke 2:40:25 a little bit. 2:40:27 I think if you're, there's just another way 2:40:30 to interpret the fact that miners 2:40:32 aren't reducing the block size. 2:40:34 And I do, I'm very sympathetic to Luke's point of view. 2:40:38 But isn't the way to interpret that 2:40:39 just that they care more about profit 2:40:43 than you would have thought? 2:40:44 They're not very ideological. 2:40:46 And therefore, we have to think about their incentives 2:40:50 and analyze that seriously. 2:40:53 So I think making sure they get fees 2:40:56 and their long-term incentives line up with, 2:41:01 well, I guess I would just say that 2:41:03 you think their long-term incentives 2:41:05 don't really line up with Bitcoin 2:41:08 because they're mining blocks that are too big. 2:41:11 But let's just, because we have to trust them, 2:41:14 we have to work with them, with their partners. 2:41:16 So I think Drivechain serves to align the incentives. 2:41:21 So when Luke said things will just work out, 2:41:24 well, on the long-term fee issue, 2:41:27 well, Drivechain is the kind of thing 2:41:29 that will line up with that. 2:41:31 So anyway, that's what I have to say. 2:41:36 Joe, there was quite a bit of noise there, 2:41:38 but Luke, do you want to take that question? 2:41:41 No, I kind of agree in the sense 2:41:43 that I'm not saying we shouldn't do anything 2:41:45 and it'll just be magically working out. 2:41:47 I'm thinking as we get, if we encounter a problem, 2:41:52 we'll get through it one way or another. 2:41:54 We might have to change something. 2:41:56 Maybe changing things in advance can help. 2:41:58 I'm not saying we do nothing. 2:42:02 Okay, great, thanks. 2:42:04 I think that's perfectly spoken, Luke. 2:42:07 I agree entirely that in life, 2:42:09 there's sometimes a great advantage from acting earlier, 2:42:12 but sometimes there's also a great advantage 2:42:14 in delaying and considering options further. 2:42:18 So I think that attitude is cool, and I totally respect it 2:42:25 because it's very hard to say 2:42:26 how soon should a solution be adopted 2:42:29 or how much longer might it good to be wait 2:42:31 and contemplate other developments, 2:42:35 other facts, more data, 2:42:36 and more potential solutions to anything. 2:42:40 Of course, we're talking about security in the future, 2:42:43 miner income, whether security should come 2:42:46 from ideological mining or for-profit mining, 2:42:48 whether the for-profit mining 2:42:49 should be only of Bitcoin layer one, 2:42:51 or whether it should be made more complicated 2:42:54 and potentially more robust through merged mining, 2:42:57 and whether the merged mining should be 2:42:59 ordinary merged mining or BIP301 merged mining. 2:43:02 It's all pretty complicated and interesting, 2:43:06 and there's a good debate to be had 2:43:08 about whether acting sooner or later is most favorable. 2:43:15 Hi, Jay, thanks for joining the stage. 2:43:17 Welcome back. 2:43:19 Please join in the conversation. 2:43:21 Also, Metatomist, please join in. 2:43:24 Hey, Henry. 2:43:26 I just came up to mention, 2:43:28 I think I commented on a tweet 2:43:31 that you had a while back. 2:43:32 You had mentioned to come in spaces to talk about it, 2:43:35 and this is not for me to come up and debate 2:43:39 the issue of full nodes and whether they matter or not, 2:43:43 but more of a fundamental question 2:43:47 that I wanted to see if you agreed with it 2:43:50 or if there was some more color to it. 2:43:52 But it seems to me that the sidechain vision, 2:43:58 so to speak, which I'm neither for or against, 2:44:01 I'm more just interested in learning about the benefits, 2:44:05 the trade-offs and all that. 2:44:07 But it seems to me that what it presupposes 2:44:12 is the bias for having a small block size 2:44:18 so that people can continue to download 2:44:21 the entire blockchain and have a full node running at home 2:44:26 or whatever the case may be. 2:44:28 And so I just wanted to ask, 2:44:30 is that the presupposition going into any conversations 2:44:34 about sidechains or reducing the block size, 2:44:39 which I think Luke brought up? 2:44:41 To me, it just seems like that's a presupposition 2:44:44 that is a priori to this discussion. 2:44:48 Okay. 2:44:49 Yeah. 2:44:49 Yeah, the drivechain vision 2:44:51 is absolutely a small block Bitcoin vision. 2:44:54 There is no reason to have the inverse 2:44:57 of the drivechain vision, 2:44:58 which would be there is no reason to have large block 2:45:02 layer one and small block layer two. 2:45:04 In the view of, I think, Paul Sztorc, 2:45:07 who's not here to speak for himself, 2:45:08 but in the view of the designers of drivechain, 2:45:12 the authors of the BIPs, 2:45:14 I think that they would say, 2:45:16 and I think I understand and agree with the notion 2:45:18 that you absolutely wanna make large blocks 2:45:21 to be opt-in, not mandatory for Bitcoiners. 2:45:25 So there would be no reason ever, logically, 2:45:27 to have a large block layer one 2:45:29 and a small block layer two. 2:45:31 The only architecture that makes sense, 2:45:33 and in fact, the one I think is most compelling, 2:45:36 is small block layer one, large block layer two. 2:45:39 Large block being optional, non-mandatory, 2:45:43 and because it exists as a layer two, 2:45:46 meaning a sidechain that, 2:45:48 and in the drivechain vision, 2:45:50 a sidechain in which the peg is controlled by the miners, 2:45:54 there is the option for Bitcoiners 2:45:56 to go into that sidechain, do what they want, 2:45:58 such as have high scalability, low fee, 2:46:01 and have those fees paid almost entirely 2:46:04 to Bitcoin layer one miners. 2:46:06 So that's merged mining, 2:46:07 and this is a harmonious collaboration 2:46:09 between two protocols, 2:46:11 one on layer one, which is decentralized, 2:46:14 digital gold, ossified, robust, 2:46:17 reliable, simple, secure, and layer two. 2:46:22 The layer twos are more experimental. 2:46:24 They're more innovative. 2:46:25 They're more varied, 2:46:27 and to have demand for the layer two token 2:46:30 accrue value to the main chain token 2:46:32 because they're one-for-one exchangeable 2:46:34 at a trading value of one-for-one. 2:46:37 So the synthetic Bitcoin in the drivechain 2:46:41 is redeemable for Bitcoin layer one. 2:46:44 That's the crucial issue 2:46:45 that makes the drivechain 2:46:47 accrue value to main chain Bitcoin. 2:46:50 In other words, imagine if all of the altcoins 2:46:52 existed as drivechains, 2:46:55 Bitcoin's value would be much higher. 2:46:57 Its dominance would be 100%. 2:46:59 This is, of course, an extreme fantasy hypothetical. 2:47:02 I believe it, but I acknowledge it's extreme, 2:47:05 that we would have 100% dominance. 2:47:07 All of the fees paid on all of the altcoins 2:47:10 would be paid to Bitcoin miners, almost 100%, 2:47:13 and that would mean a much higher security for Bitcoin 2:47:18 in terms of the security of the UTXOs, 2:47:20 or more generally speaking, 2:47:21 just the economic security of the network. 2:47:24 So there's about, right now, 2:47:26 roughly 15 times more fees paid to all altcoins 2:47:31 than there is to Bitcoin, roughly, 2:47:33 and that number is increasing. 2:47:35 Bitcoin is losing dominance for block space, 2:47:38 just like it's losing dominance for market cap, 2:47:42 and it would be cool and valuable 2:47:44 for Bitcoin's long-term economic success 2:47:48 to have, instead, a rising dominance towards 100% 2:47:52 for the market cap of Bitcoin, 2:47:53 as well as for the block space value, meaning the fees. 2:47:57 So yeah, drivechain is a small block, 2:48:00 layer one Bitcoin vision. 2:48:01 In fact, the drivechain includes, 2:48:05 I mean, the drivechain BIPs 2:48:06 don't include a block size decrease, 2:48:08 but I believe that most drive chainers 2:48:11 want the block size, in the long run, to come down, 2:48:15 preferably sooner than later, 2:48:16 to shrink down to around 300 kilobytes, 2:48:19 which I think is harmonious 2:48:21 with what Luke and others believe 2:48:22 would be favorable for Bitcoin, 2:48:25 in terms of making sure. 2:48:27 Yeah, please, Luke, chime in on that topic. 2:48:29 You mentioned ossified layer one. 2:48:32 I think if that was a real risk, 2:48:35 that would be a huge downside to drivechains, 2:48:37 and could very well be a reason 2:48:39 to avoid activating it entirely, 2:48:42 if that were to actually be 2:48:43 a real possibility of happening. 2:48:47 It's important that layer one continues to improve, 2:48:50 and people aren't forced onto sidechains 2:48:52 to get the features they need. 2:48:54 I agree with that sentiment. 2:48:56 Let me briefly elaborate on what I meant. 2:48:59 The rate of disagreements and major objections 2:49:04 and calls for changes on layer one 2:49:06 is a source of turbulence within the community, 2:49:09 it seems to me. 2:49:12 When I said that ossification is a goal 2:49:16 of the long-term vision 2:49:17 for having more varied and stronger layer twos, 2:49:22 what I meant is that, to some extent, 2:49:24 the ability for people to develop on a layer two 2:49:27 reduces pressure on the layer one development community. 2:49:31 It reduces pressure and intensity 2:49:33 on the discourse associated 2:49:35 with layer one development and change. 2:49:38 While, of course, ossification is never absolute 2:49:43 and guaranteed for 10,000 years, 2:49:46 there is a notion that a higher degree of ossification 2:49:50 can be favorable in terms of lowering 2:49:54 the need for the community to be adjusting layer one 2:49:57 every five years or so, as has been the case 2017, 2021. 2:50:03 Maybe it would be great if the next change, 2:50:06 if it were drivechain, 2:50:07 could be understood optimistically as being one 2:50:10 that would potentially facilitate a lower rate of pressure 2:50:15 to change layer one Bitcoin. 2:50:16 Does that, how does that sound to you? 2:50:19 I think that would not be a good thing still. 2:50:22 I wouldn't necessarily think 2:50:23 we want to slow down layer one more than we need to 2:50:27 just out of the safety of it. 2:50:30 What I'm saying, though, 2:50:31 is that if certain kinds of changes to layer one 2:50:34 could instead be changes to a layer two, 2:50:37 then they could be experimentally performed on a layer two 2:50:41 in a partitioned and separate way 2:50:43 that wouldn't affect main chain layer one negatively, 2:50:46 perhaps, so that could be a testing ground 2:50:48 for layer one developments. 2:50:49 Does that sound like a favorable dynamic? 2:50:53 Yeah, that certainly does. 2:50:54 I just would hesitate to suggest 2:50:57 that layer one would have to slow down for it. 2:51:00 I think it would improve the safety 2:51:02 of doing the soft works on layer one, 2:51:05 and possibly even speeding them up. 2:51:06 Yes, precisely. 2:51:08 Yeah, so I should be careful 2:51:09 when I use a word like ossification, 2:51:11 because I don't want it to be misconstrued. 2:51:13 Of course, ossification is not part 2:51:16 of the drivechain BIPs. 2:51:18 It is merely a goal of, 2:51:21 some Bitcoiners like to think that it would be favorable 2:51:24 if disputes and civil wars within Bitcoin were diminished. 2:51:29 They view the block size war as an unfortunate thing. 2:51:33 I think I heard Paul say in a podcast recently, 2:51:36 and I don't want to misquote it, 2:51:38 so I'll just say it in my own words, 2:51:39 that it would have been good 2:51:42 if the large blockers had left for a Bitcoin sidechain, 2:51:46 rather than left for an altcoin. 2:51:48 It would have been good if Ethereum people 2:51:50 had left not for an altcoin, 2:51:52 but for a Bitcoin sidechain. 2:51:54 That way, all of the value of what their activity 2:51:57 would have been internalized to Bitcoin, 2:52:00 which accelerates hyper-Bitcoinization, 2:52:03 helps secure Bitcoin's network in terms of miner incentive, 2:52:07 and that way, we don't lose community members 2:52:11 to altcoin projects. 2:52:12 Instead, we keep them in the community, 2:52:15 making Bitcoin's community larger and more varied, 2:52:19 kind of in a capitalistic, heterogeneous community, 2:52:22 all collaborating on top of one L1, 2:52:25 making that L1 very strong and powerful. 2:52:29 So I think that it's inherent in the nature 2:52:32 of a multi-layered system 2:52:33 that the lowest level would be the most stable, 2:52:36 and that's what I'm referring to 2:52:38 when I talked about ossification, 2:52:40 not in the absolutist sense 2:52:41 that we would never again change. 2:52:43 We could, of course, change. 2:52:44 In fact, of course, since the BIP300 and 301 2:52:47 do not include a block size reduction, 2:52:49 there would perhaps be at least one more change 2:52:55 to achieve that if it isn't already done sooner. 2:52:58 So yeah, I'm not in favor of never changing, 2:53:01 and I appreciate you asking about that. 2:53:04 Jay, thanks for joining. 2:53:05 Please chime in with your thoughts. 2:53:08 Yeah, I just, you hear me? 2:53:11 Loud and clear. 2:53:12 Yeah, I just want to push back. 2:53:14 I take the other side. 2:53:15 I think, I don't think we should have smaller blocks. 2:53:18 I think today, I think that the reason 2:53:24 why blocks are no longer full 2:53:28 and the mempools are no longer pushing fee pressure 2:53:33 is because of protocols deciding not to build on Bitcoin 2:53:38 because of this lack of long-term scaling solutions. 2:53:44 So I think bigger blocks actually create more activity, 2:53:49 and that's obviously not enough, 2:53:51 but you also need like a long-term scaling solution. 2:53:55 So I would say that the assumption 2:53:58 that everyone's on the same page, 2:54:00 even people that didn't fork off to Bitcoin Cash, 2:54:03 I mean, SegWit was a block size increase, right? 2:54:07 So I think consensus is that we should try to scale. 2:54:12 We tried to scale. 2:54:13 I mean, look what happened with Taproot. 2:54:14 We tried to squeeze as much as we could, 2:54:16 as much value out of every single byte, 2:54:20 and kind of maybe it was a mistake. 2:54:22 So I think bigger blocks with a scaling solution 2:54:26 is the right way if you want to attract, 2:54:29 you know, more fee pressure and more users. 2:54:31 That's just where I stand. 2:54:35 What would you say in response to those 2:54:36 who would say to you that if the block size 2:54:39 isn't reduced in the future, 2:54:41 then the rate of data accrual to the blockchain 2:54:46 is growing too fast relative to the rate of efficiency 2:54:50 and technology and hardware and bandwidth. 2:54:53 So the ordinary user can't have a full node inexpensively. 2:54:58 Do you? 2:54:59 Yeah, I agree. 2:55:00 I think that number's much higher. 2:55:02 I think that number is much higher than eight megabytes, 2:55:05 you know, maybe 16 or 32. 2:55:08 I don't think that number is four megabytes, 2:55:10 but I agree at some point you can't scale forever. 2:55:12 I'm not talking about infinite blocks, 2:55:14 but I think that bigger blocks, 2:55:17 the reason why, you know, 2:55:18 the reason why the NFT guys are showing up 2:55:19 is because the blocks are empty, right? 2:55:21 So they just going to take all the block space. 2:55:23 In a fair market, if there's a subsidy, every single block, 2:55:28 why isn't it full? 2:55:29 It should be full for NFTs. 2:55:31 If there's a non-zero value to NFTs, 2:55:33 you should fill up all the blocks because there's a subsidy. 2:55:36 So I think the problem is that there's not enough demand 2:55:38 for block space like there was in 2018. 2:55:41 And I believe from a financial markets idea 2:55:44 is the more capacity, the more demand, 2:55:47 not less capacity, it doesn't give you more demand. 2:55:50 The math puts that number at 300K though. 2:55:56 Well, I mean, assuming what? 2:56:00 Assuming like China, like firewalls and stuff? 2:56:06 Assuming the history of technology improving 2:56:10 remains the same rate. 2:56:14 I think what Luke is talking about here is that, 2:56:17 as I said, you want to have the rate of the growth 2:56:20 of the data on the blockchain not be higher 2:56:23 than the rate of the growth of technology 2:56:29 in terms of like, do people have the ability 2:56:31 to put a full node on their laptop or on their phone? 2:56:35 If the data is growing too fast 2:56:38 because the blocks are too large, 2:56:40 then people who are ordinary users 2:56:42 who want to have a full node to validate 2:56:44 that they have been paid Bitcoin will not be able to do it. 2:56:49 And they'll have to rely on someone else, 2:56:51 which is really the definition of centralization 2:56:56 is that you can't personally validate, 2:56:58 but you have to then go to some other party 2:57:01 in some other place. 2:57:02 I understand that side of the argument. 2:57:04 I'm saying that that's, I don't think that's a bigger deal. 2:57:07 And the fact that we have a SegWit block size increase 2:57:10 proves that that was the consensus compromise. 2:57:15 So yeah, I guess, yeah, in the future, 2:57:19 it's gonna get bigger and bigger and bigger, right? 2:57:22 We know that. 2:57:23 And I don't think there's a, 2:57:25 if you think 300 is the perfect number, maybe that's fine. 2:57:29 I think that we're already past it and we should go higher. 2:57:33 Understood. 2:57:34 I don't, like Henry, I think that was kind of my point 2:57:38 is that if I don't, for me at least, 2:57:42 and I'm always willing to be corrected on it, 2:57:45 I just don't necessarily see the world, 2:57:49 the same world where full nodes 2:57:52 have to be a reality for home users. 2:57:56 I mean, like you could use different techniques 2:58:01 to validate a transaction, 2:58:04 or if you see a problem with blocks, 2:58:07 if there's a chain split, 2:58:09 you can see if a transaction was included in both the tips. 2:58:13 Like, I don't- 2:58:14 You might as well be using PayPal at that point. 2:58:17 Why? 2:58:20 It's completely insecure. 2:58:22 Metatomist, I feel that one of the reasons 2:58:25 why gold was so popular around the world for so long 2:58:29 in so many societies is that an ordinary person 2:58:33 could tell the difference between a gold coin 2:58:36 and a fake gold coin. 2:58:38 You could bite it. 2:58:39 You could drop it on the floor and hear the sound. 2:58:42 They would say, sound money, right? 2:58:44 The ordinary person could tell 2:58:47 whether something was gold or not. 2:58:49 They could validate that they have been paid money. 2:58:53 And that's what decentralization is all about, 2:58:56 making the ordinary person able to validate directly. 2:59:00 That's the notion of decentralization 2:59:02 that I think is a coherent definition of the word. 2:59:07 I think it's vitally important 2:59:08 for Bitcoin's long-term success 2:59:11 that the ordinary person can easily exercise the option 2:59:14 at very low cost to validate Bitcoin 2:59:18 and to validate that they've been paid. 2:59:21 The large blocker community, I think, 2:59:23 has some valuable insights other than this topic. 2:59:28 The large blocker community, in my view- 2:59:31 Bitcoin is a large blocker community. 2:59:32 SegWit was a large block increase. 2:59:34 Bitcoin is a large block community. 2:59:37 Yeah, but that begs the question 2:59:39 because as Luke pointed out earlier, 2:59:40 it wasn't always large. 2:59:42 It used to be- 2:59:43 SegWit increased the block size 2:59:44 as a compromise with the same people 2:59:46 that then left Bitcoin to make Bcash. 2:59:49 Yeah, they shouldn't have left, I agree. 2:59:51 But it was a compromise that was the consensus. 2:59:53 But to say, Jay, I appreciate what you're saying a lot, 2:59:56 but I would respond this way, 2:59:58 that to say that it's in consensus right now 3:00:00 is to beg the question 3:00:01 because if we do, as a community, reduce the block size, 3:00:04 then that will be in consensus. 3:00:06 So the question is, what should the block size be? 3:00:09 And Luke pointed out that originally 3:00:11 it was smaller than it is now. 3:00:13 It was even smaller than one megabyte back in 2013, 3:00:16 as he was talking about earlier. 3:00:19 I feel that that was a very good idea to, as it originally was, to have small blocks, and that although this wasn't the vision at the very beginning of Bitcoin, I think that drivechain could greatly strengthen Bitcoin's long-run growth trajectory by enabling large blocks as an opt-in layer two, because that's what I was saying, Metatomist, is the value of large blockers is that they understand 3:00:49 that there is a legitimate technology advantage to large blocks, but I feel that in the drivechain view, the correct understanding is achieved that large blocks should be on top of small blocks. 3:01:01 There should be a sidechain, which is a layer two, that is large block, enabling people to opt in to that trade offset of low decentralization and low fees, high scalability. 3:01:14 And then when they're done with that, they can come back to layer one. And if both layers are sharing hash rate, sharing fees through merged mining, then there's a symbiotic collaborative arrangement there. 3:01:29 So I feel it's unfortunate that the block, it's unfortunate that Bitcoin lost something like 20% of its community back in time when there was that split. It's unfortunate. 3:01:41 And had drivechain been available at that time, maybe that community would have simply gone into a sidechain of Bitcoin and would have never left Bitcoin, and they'd be using Bitcoin's unit of account. 3:01:52 They'd be using a synthetic Bitcoin on a drivechain, which can be redeemed for main chain Bitcoin. And then the network effect of Bitcoin would be larger, the user set would be larger, the hash rate and economic fees would be larger, and the two communities would be coexisting symbiotically, synergistically, collaboratively. 3:02:11 It's very exciting to imagine that the large block Bitcoiners would come back to Bitcoin to use a sidechain. And I believe that if drivechain is created, there will be a profit motive for that to occur. 3:02:24 Because if you want to achieve the software experience of large blocks, but you want Bitcoin's unit of account, that's what a drivechain would offer you. 3:02:34 It would offer you benefits that you can't get on the altcoin version of large blocks. The altcoins compete existentially against Bitcoin for monetary premium. 3:02:45 But this didn't happen. So what actually did happen? So that didn't happen, right? So we didn't, 2017 till now, what actually did happen is the altcoins happened and Ethereum happened. So if drivechain was around, as you say, and people would have used that instead, then okay. But what did they do? They ended up, they couldn't do that and there wasn't enough capacity. So they created altcoins and Ethereum. 3:03:12 So on the other hand, maybe we could say that these altcoins were actually scaling Bitcoin. So whatever you're saying that they should have done in the drivechain, if it was there, it wasn't there. So they use altcoins, right, to scale the testing and the other utilities that can't be done on Bitcoin. 3:03:34 So, you know, that's what happened. So let's skip to today, to 2023 and say in today's reality, what does drivechain do, right? And what would that affect, you know, would altcoiners start using sidechains? Would Bitcoin Cash come back to sidechain? I think it's much more complicated today than it was 2017. 3:03:59 That's right. I agree with you, Jay, 100%. It is more complicated today, because today Bitcoin dominance is much lower than it used to be. And today there are large communities with significant network effects outside of Bitcoin, most conspicuously Ethereum. 3:04:13 However, Bitcoin still at present has the unparalleled status of the largest market cap and the strongest economic security, the biggest network, the strongest narratives, and notably, the most conservative and simple layer one. 3:04:35 So it's the most tested, most reliable. And if Bitcoin were to adopt drivechain, in my view, my optimistic view is that there would be a powerful economic incentive for altcoin users to migrate to the drivechains. 3:04:54 And of course, the founders and promoters of altcoins wouldn't happily do that. But the users are a distinct set of people than the founders and promoters. There are legitimate users of certain altcoins, especially the privacy coins, and the big block coins, that they want to do microtransactions, and they want to do it using a protocol other than Lightning. 3:05:22 So the big blockers have their big block technology. And I think they would be the users would benefit from using the Bitcoin unit of account rather than a unit of account, which is an altcoin that freely floats against Bitcoin and could devalue against Bitcoin. 3:05:37 So there are some economic benefits that would drive some amount of migration from the altcoins to the drivechains, possibly. And the privacy community, similarly, I think they want the privacy tech, and they would prefer that tech to be on a Bitcoin sidechain and use a synthetic Bitcoin rather than suffer the foreign exchange rate, you know, exchange rate risk associated with using a privacy coin. 3:06:04 A privacy coin could devalue against Bitcoin. I think those users might prefer to use a synthetic Bitcoin for its unit of account stability. So it's possible that Bitcoin could magnetize, could attract the privacy altcoin users over to drivechain, could attract the big block users over to drivechains from altcoins. 3:06:29 And similarly, in the long run, maybe all of the users of the smart contract chains, Bitcoin could once again achieve 100% dominance as it had at the beginning. Maybe. That's the dream. What do you think? Crazy? 3:06:47 I don't think it's I think I think I don't think it's crazy. I mean, I think that at least somebody right in the small block community is trying to, you know, solve for the security budget problem, which will only become more present as time goes on. 3:07:04 You know, I don't know what the percentage is right now of dependency on the block subsidy, but it's a it's a problem. I mean, it's not like the, you know, it's the price is what, twenty two thousand dollars right now. And, you know, there's generally speaking, probably not an issue at the moment. But over time, I think people realize that the lack of use, which is really what drives, you know, the fee market is is what's going to solve it. 3:07:31 And so at least there's people trying to solve for this case of non-use. I mean, everybody's been told for the last, you know, I don't know how long to just, you know, hold and don't don't do anything with it. And then if you want to do something with it, you know, use this, you know, layer two or lightning and whatever. 3:07:51 And it just steals fees for miners. And so there's at least somebody talking about it and trying to solve it. And it's interesting. I, you know, the only thing that I am curious about the merge mining part is interesting, you know, from a miner perspective. 3:08:11 But in my opinion, small blocks still lead to miner specialization. And over time, as we're starting to maybe see, starts getting concentrated more and more as people specialize in a mass resources. And it's just how capitalism works in the economies of scale. It's a for profit, you know, function to be a miner. And, you know, currently there's two mining pools that are maybe about 53 percent of the network. 3:08:40 And that's in a small block environment, whereas in, you know, the argument against the big block environment is that it centralizes because the resources become, you know, too cumbersome to mine. 3:08:56 But I think that in a in a large block economy, especially with unlimited block size, where there's no there's no limit, but it's determined by the market and competition of whoever, you know, wants to jump in and try to make money. 3:09:12 I think that that that future is more in line with Bitcoin than, you know, suggesting that individual users need to download like the whole blockchain to decentralize it. Because Luca just said that it would what I had mentioned earlier would make it insecure. But it's not so much that you downloading the blockchain is what decentralizes it. It's what you can do once you figure out something has gone bad. Right. 3:09:41 So you only have so much power as an individual user, even if you didn't like a transaction or something broke the rules or whatever the case may be. You could do all you want in your heart's desire to reject it. But that doesn't necessarily mean that you've done anything to change the reality of that transaction being valid, according to the miners. 3:10:06 And so it's not even so much that you have the ability to see. It's what you can do once you see. And I think that that's the big, big blocker viewpoint is that over time with use people and I think you're making the same argument, but obviously with a completely different predicate. 3:10:26 With use becomes this market where people, you know, where people can pay the miners can can subsidize the security budget. And I think that's the same thing that big blockers are saying. We're just saying do it on chain. 3:10:42 I didn't follow your reasoning when you said that large block layer one doesn't result in miner specialization, but small block layer one does. I think that the size of the blocks is probably completely orthogonal to the degree of specialization in mining. Can you say clearly and simply? 3:11:06 No, no. So what I was saying is that the smaller. So when you have use, right, then you have people who want to come in to take advantage of collecting those fees. And my point is, is that it's more pure in competition when you have more use and more use cases that over time, you would have more people compete for. 3:11:36 Validating those transactions and mining those transactions in in that world. Now, that's not the case right now, obviously. 3:11:46 What I'm wondering is, like, you seem to be saying, if I understand you correctly, which maybe I don't. So correct me if I'm wrong, but you seem to be saying that large block layer one Bitcoin is better than small block layer one Bitcoin, in your view, because large block layer one Bitcoin somehow avoids miner specialization or somehow is more capitalistic. 3:12:06 But I think that small block layer one is just as capitalistic and prone or not prone to miner specialization. I mean, can you kind of try to crystallize what you're saying? 3:12:20 No, no. I'm saying that the economic reality is that specialization occurs across the board, right? 3:12:28 Sure. And Satoshi said that. Yeah, he said in the future, it'll be server farms and professionals who do mining, right? 3:12:35 Yeah. So my point wasn't to say one is one is not going to end up in this reality versus the other. 3:12:42 Mine was more around. And that's why I said, I think that in a sense, we're saying the same thing, but for obviously, in a completely different context, in terms of use becoming the driver for solving the security budget problem. 3:12:59 And for you, it's it's these sidechains which could drive use and also pay the miners through this merge mining reality. 3:13:09 And then for the big blockers, it's just, you know, capacity and ability on on chain to do what the system is capable of, to have all sorts of different variations of economic activity, whether that's, you know, JPEGs or whether that's, you know, some different type of financial transaction to do it all on chain. 3:13:35 And the realities are essentially the same in terms of the mining. So like the accusation of like centralization and big block methodology, I don't think is valid in this case, because eventually the same things are going to happen with small blocks. 3:13:51 Yeah, I see what you're saying. It sounds like you're saying that there is centralization in mining, no matter what, and therefore all talk of centralization or decentralization in small blocks is, is incoherent. 3:14:06 I would respond to that view with restating what we talked about earlier, which is that the notion of centralization or decentralization in the drivechain view is one that focuses on the cost to the ordinary person to validate that they have been paid Bitcoin. 3:14:26 Just like with gold, the ordinary person could bite it, could, you know, knock it on a table and hear it. It was possible for the ordinary person, for the ordinary person to validate that they've been paid gold was possible and was inexpensive. And that kind of decentralization, that notion of decentralization is identical in the small block Bitcoin viewpoint, in my, in my understanding. 3:14:52 But the regular person won't be able to use Bitcoin in this small block. There's a, there's a throughput issue, right? There's, there's just not enough, not enough space for people to use the Bitcoin as money. It just becomes a settlement layer. So we're no longer talking about that user in that world where Bitcoin is just a settlement layer. 3:15:13 The regular user could opt in to the degree of decentralization that she wants in the drivechain format. The regular user could, for example, might speak. Right now, Bitcoin layer one has like a $1 fee, very roughly speaking, to do a transaction. So right now it's not hard. In the far future, it might be a much higher fee. 3:15:35 And then ordinary people might be primarily using some other layer. So what drivechain does is it seeks, it aspires, it aspires to lay the foundation for a multi-layered architecture in which users can opt in to the degree of decentralization that they want. 3:15:54 Like right now, an ordinary person might save some money in physical gold in their safe at their home, or they might have it on a treasure with Bitcoin. And they might also have a layered approach to their finances where they have some money in cash in their wallet and some money in a bank account and maybe even some Bitcoin at Coinbase. 3:16:16 They might have a kind of a flexible, heterogeneous, layered approach to their money. And what drivechain aims to do is create an architecture in which all of those layers are on Bitcoin. And over time, they would grow in a way that we can't fully understand right now. It's hard to know how the future will look in 25 years. 3:16:37 But if we lay the foundation today for miner controlled two-way pegs on Bitcoin, enabling many sidechains to be developed that are arguably peer to peer or arguably trustless in a sense of the word that is resonant with how Bitcoin is trustless or trust distributed or trust minimized, we could say, then that might be great for Bitcoin. 3:17:04 It might lead to great value accrual. It might lead to a lower rate or no rate of attrition of developers and users to altcoins because they want privacy or they want more expressiveness of code or they want more scalability. 3:17:19 All those things could be instead on drivechain. So I agree with you, Jay, that in the distant future, if Bitcoin fees are $1,000 a transaction, ordinary people aren't going to be using it except maybe to do some once in a lifetime money movement. 3:17:34 But most people will be on layers. But the money system is going to be layered, just like our energy system is layered. There isn't like a power plant in everyone's garage. Instead, there's one in each city and people connect to it through a layered architecture. 3:17:50 So money is going to be layered just like other systems and ecologies in technology and nature are layered systems. So drivechain aspires to have Bitcoin layer one be the base of all of blockchain development and value accrual in the future. 3:18:05 And yes, ordinary people won't be necessarily using it all the time. But if they could still validate the base layer and have the option to move into the base layer, then that would be harmonious with what we're trying to achieve here. Do you see it differently? 3:18:22 Yes, I just want to say, so BIP301, you're making the case that BIP301 will enable larger block sidechains. And I agree. I think that maybe we just use, you know, I don't know if you're familiar with space trains. But if you want to make a merge mine sidechain, I think we should just do the merge mine sidechain that we all want, which is Bitcoin script with large blocks. 3:18:49 I think when you throw in all possible blockchain development that could ever exist, right, that really is not something that Bitcoin design or Bitcoin consensus or miners incentives cover. 3:19:05 You know, Bitcoin covers peer-to-peer electronic cash, Bitcoin covers miners taking the largest fee. So, you know, you're making the argument for drivechains, but you're really only making the argument for a sidechain for scaling Bitcoin script and not adding, you know, EVMs or something like that. So that's the pushback I would give on BIP301. 3:19:30 Well, I mean, BIP301 is just a modification of the merge mining that we already have, because it's inconvenient for miners to have to run all this node software for the altcoin or the sidechain. So they don't want to run, for example, Namecoin, Daemon. 3:19:52 And that's really all it is. It's not that, I don't know of any, there's only like one person in the entire world, which is maybe you, I don't remember who it is, but there's only one person who ever expressed any controversy over BIP301 at all. BIP301, I think, is mostly ignored by people. 3:20:13 Yeah, I'm just, I just want to say that BIP301 has... 3:20:17 It could add, it could actually affect the main chain in a small way, depending on what's happening on the sidechain. 3:20:26 So if we could just choose, we could just choose a sidechain we all agree on, I think it actually solves the problem and not just open it up to anyone. 3:20:35 That's kind of a weird argument, though, don't you think? Like, if I'm saying something like, I'm like a Gutenberg with the movable type, 3:20:42 and I say, look, we've got these 26 letters, and we can make whatever we want. And then someone else can say, well, we only need, you know, we only need this one book. 3:20:50 And it's like, well, it shouldn't really be up to me to think of the letter thing, the printing press, the alphabet and all the books, you know, like someone else can come up with a good idea later. 3:21:03 So, Jay, just to build on that, maybe in simpler terms for people in the audience who, who are less familiar with these, this discourse than you are. 3:21:13 I think what Paul's saying there is that, with this analogy of the Gutenberg idea, like, it's great that an unlimited number of books can be created from a certain architecture, 3:21:25 which is the printing press and the letters of the alphabet. So what you were questioning is whether we should, instead of having the drivechain architecture in place, if I heard you correctly, 3:21:36 you were suggesting that we have a certain set of sidechains. But the drivechain architecture does allow for the Bitcoin community to limit the number and quality and kind of the drivechains. 3:21:50 So the drive, the Bitcoin community through the miners can discontinue a problematic drivechain, such as one that has code on it that's interfering with other drivechains or that's reducing the value of the main chain token. 3:22:04 The Bitcoin community can discontinue that drivechain that's problematic. Are you sympathetic to that line of reasoning? 3:22:12 But we don't have to, right. We don't need to discontinue it because we know going in which ones are bad and which ones are good. 3:22:19 But how do you know that though? 3:22:20 Because I could just say when the, when the Ethereum white paper came out, I predicted what I called front running. I predicted that it will eventually lead to reorg risk. And they said it was crazy. And you know, five years later, it happened. MEV happened. 3:22:36 Did you predict that Ethereum would be like one third the market cap on Bitcoin? 3:22:41 No, I'm just talking about the fact that certain protocols... 3:22:44 So then not everything that you predicted comes to pass? 3:22:48 No, I predicted MEV because I understand how incentives, financial markets and financial protocols... 3:22:56 Are you saying that every single thing that you have predicted comes to pass? 3:22:59 No, I'm talking about... 3:23:01 Well then what difference does it make? 3:23:02 Because you're putting the same exact issue with abstract protocols. 3:23:09 My argument is that the Bitcoin miner, Satoshi's incentive structure does not cover certain protocols. 3:23:17 And the protocols it doesn't cover is when the miners could secretly manipulate the utility of the protocol. That's called MEV. 3:23:28 This is a kind of a separate point, but I don't understand people's obsession with MEV personally, because it does seem like MEV is a bad thing. 3:23:36 And it's something that I considered long ago when I did this prediction market technology, blah, blah, blah, blah, blah. 3:23:42 But despite the MEV, it's not as though Ethereum just immediately, you know, someone did the first MEV thing and then Ethereum just burst into flames. 3:23:50 I just said it's a small non-zero issue. I didn't say it's a big burst. 3:23:56 Didn't you just say a moment ago that MEV is... you predicted MEV and therefore we know that no one would ever... 3:24:03 Yeah, that's what I'm saying, that MEV will happen on drivechain as well. 3:24:07 And there's a possibility that a miner running some crazy, you know, high frequency, whatever, drivechain will decide not to switch the head when a new block is signed 3:24:23 and continue trying to find the block that he wants to hash in. 3:24:26 And that's all I'm saying. There's a non-zero effect on main chain when you have an abstract protocol that has consensus. 3:24:35 So you're asking us to... 3:24:37 The merge mining, it allows reorgs of the sidechain without them being reorged on the main chain. 3:24:43 Yes, I know that. So then why do you need... if that's the case, why don't we just use op-return? 3:24:51 Well, the point of that is that if there is MEV, then that's the sidechain's problem. 3:24:58 If there's some reason, like let's say they have some reason to reorg the main chain or do something to the main chain. 3:25:04 What's the purpose of having the hash in BIP301 at all if it doesn't have any meaning? 3:25:13 Well, it has the meaning because it transfers all the fees of the sidechain to the layer-1 Bitcoin miners 3:25:19 and increases the equilibrium difficulty on layer-1 for every single chain that it's attached to. 3:25:24 Right. And it also has meaning because, right, that's the consensus we go with as that's the state of the sidechain. 3:25:32 Now, in order to fork the sidechain, you have to deal with the drama of the sidechain. 3:25:40 But if you're able to get your hash into the main chain, then the other side has to deal with the drama of the forked sidechain. 3:25:47 So there will be a... 3:25:48 What do you mean other side? 3:25:49 You said there's a way to fork the sidechain without forking main chain. Right. 3:25:54 Well, there's a dispute among the two sidechain people. That's what you're talking about? 3:25:58 Right. I'm saying whoever got their thing into Bitcoin Core kind of has a lead up on that. 3:26:04 Or they found a block. 3:26:07 That means they found a block. 3:26:09 They found a block and the other miner wants his hash in the block and they don't care about the blind merge. 3:26:14 I'm assuming all these miners are intimately familiar with the sidechain. 3:26:17 Anyway, I'm just making a point that there's a non-zero effect on miner incentives when you have an abstract protocol. 3:26:24 You're asking the Bitcoin community to come to consensus that this hash represents all possible protocols. 3:26:30 Even the possible protocols that we know are really bad and will create bad incentives. 3:26:36 So instead of coming to consensus on all possible protocols, we should just say limit the ones that Satoshi had in mind that creates the right incentives for miners to keep mining. 3:26:47 I think I'm just going to consensus that this idea is better. It's more worth it to do this idea than to not do it. 3:26:56 The idea is that also it's very presumptuous for any single person to claim that they know in advance, a priori, which ideas will be really, really successful and which ideas will not be successful. 3:27:13 We know which ideas are covered within the strategy. 3:27:16 One thing I know for sure is that anyone who's relying on that is definitely going to be wrong and destroy a lot of useful other stuff in the process. 3:27:25 I'm absolutely certain that that's a mistake. 3:27:27 Jay, may I ask you a question? I find your line of reasoning interesting. 3:27:31 Could you say if Ethereum were a merged mined drivechain of Bitcoin and the native token of that drivechain is a synthetic Bitcoin instead of an altcoin, 3:27:44 instead of being an altcoin called Ether, it were the native token of Ethereum were a synthetic Bitcoin redeemable for Bitcoin. 3:27:51 Do you think Bitcoin would be better off today if all Ethereum users and value were existing as a drivechain, increasing Bitcoin's fees and value? 3:28:01 Do you think that'd be better to have all of Ethereum inside of Bitcoin's community? 3:28:05 Or do you think we're better off having this competitor exist as an altcoin? 3:28:09 What are your thoughts? 3:28:12 Okay, yeah, so that's great. So if that was the case, then a couple of years back, what would have happened was somebody would have wrote this code to reorg in real time Bitcoin in order to fight back to get the added MEV that they want. 3:28:30 Yeah, but don't you think you have a completely fundamental misunderstanding of how it works? 3:28:35 No, no, my question is, knowing this, that we get all of the Ethereum on Bitcoin, but we kind of remove, we change the incentives of the Bitcoin miners from just, you know, doubles, okay, double spends are mutually exclusive. 3:28:51 And we don't know, the miners know nothing about the people doing peer to peer money. 3:28:55 So there's really no incentive to do anything else but look at fees. 3:29:00 When you have other incentives, right, then the miners start becoming quantitative high-frequency trading bots, and not just SHA-256 miners. 3:29:10 So the question is to the community, if that's okay, then I'm fine with it. 3:29:14 I just want to point out that there's a non-zero pressure for miners to do other things than just... 3:29:20 Okay, and that's the question. 3:29:22 I think this is a big misunderstanding in the community, which is that some people think that, you know, they're just oblivious to what mining really is. 3:29:32 Which is that mining requires a full node, but not every full node must be a miner. 3:29:40 And so a miner must do a whole suite of things. 3:29:45 They have to find cheap power, they have to find the good ASIC chips, they have to know about cooling, they have to know about these permits, they have to know about Chinese laws kicking them out of the country. 3:29:57 So it was never, ever, ever, ever the case, remotely, that Bitcoin mining was only running a full node. 3:30:05 It was always running a full node, plus doing a bunch of other extremely competitive business operations. 3:30:12 It had effectively an unlimited number of potential dimensions, like how to find stranded power, how to find a hydroelectric dam that was not... 3:30:22 So it's already an unlimited number of things. 3:30:26 And so if that's what you're... I think this is a big misunderstanding that people say, 3:30:30 I would just prefer mining to be the way that I want it to be. 3:30:34 And people who are just naively think that that's the way Bitcoin mining has worked this time. 3:30:41 I just want to make one last point, and then I'll go. 3:30:43 So in a peer-to-peer money, it's between me and you making the transaction. 3:30:47 The miners can't be involved in our transaction at all. 3:30:51 When you have a protocol that includes anyone, a betting protocol, or an open... 3:30:57 It's a multi-party game for money. 3:30:59 The miners become part of the transaction and part of the game. 3:31:03 They're no longer separate from the peer-to-peer transaction. 3:31:08 We're opening up an attack vector. 3:31:10 It's a non-zero attack vector. 3:31:12 What's happened is that you've just misunderstood the way it's worked the entire time. 3:31:16 The miners... 3:31:18 I don't misunderstand. 3:31:20 It's always a requirement that your transaction be mined in order for the peer-to-peer money thing to go through. 3:31:30 So you can define that however you like as not meeting or meeting your definition of peer-to-peer money. 3:31:36 But that was always the reality. 3:31:38 And it's just trivially straightforward to put in the design that the miners make their cut. 3:31:46 They make a little transaction fee every time they do this. 3:31:48 And because the transaction is private, because the money has value, 3:31:52 they would be motivated to include as many as possible. 3:31:56 And that is exactly how Bitcoin works. 3:32:00 That is how it has always worked. 3:32:03 That is exactly how all the sidechains work as well. 3:32:05 And it's definitely how BIP301 works. 3:32:07 Because BIP301 transforms all the messages on a sidechain, 3:32:11 which none of the miners are looking at at all. 3:32:15 It transforms that into just one single layer one transaction 3:32:19 where the one that pays the highest fee is the one that's included. 3:32:23 Hence the name Blind Merge Mining. 3:32:25 So it's no offense, but you seem to have fundamentally 180 degrees... 3:32:30 So Paul, I fundamentally understand 100% of drivechains. 3:32:34 And the fact that you just can't admit that there's a non-zero chance that the miner incentives will change... 3:32:38 Declining it as a chance is ridiculous, sir. 3:32:40 Because we saw it happen in Ethereum. 3:32:42 We actually saw it happen in Ethereum. 3:32:44 We actually saw it happen in Ethereum. 3:32:46 But we actually saw it happen. 3:32:48 This is not like a theory. 3:32:50 We just watched it happen over the last five years. 3:32:54 What if I told you there's a non-zero chance 3:32:57 that natural gas permits will affect Bitcoin mining incentives? 3:33:01 I would agree. 3:33:03 If it's a truth, I would agree and not fight back. 3:33:05 I would say yes, there's a non-zero chance, but it's not a big deal. 3:33:09 All right, gentlemen, let's keep the conversation totally civil. 3:33:13 By the way, I really appreciate the ideas that are being shared very much. 3:33:17 No, but it's a ridiculous thing to say. 3:33:21 The possibility that something somewhere might be affected. 3:33:26 Something may be affected in a negative way by not doing something. 3:33:28 It misses the complete point, which is that the entire thing has been designed 3:33:32 to be 100% consistent with the way it was before. 3:33:36 Which is the point. 3:33:38 Which is that miners earn transaction fees by including messages. 3:33:42 They have an incentive to maximize their transaction fee revenue. 3:33:46 All of that is 100% the same. 3:33:50 The year 2030 is going to be different than the year 2020. 3:33:54 When the calendar rolls around from 1999 to the year 2000, 3:33:58 something will have happened then that never happened before. 3:34:02 All of human history, which is that the first two digits of a calendar 3:34:06 will go from being 1-9 to being 2-0. 3:34:10 Then you could say, what are the chances that this might affect something? 3:34:14 You know, it's... 3:34:18 I don't know. 3:34:23 May I ask you to clarify? 3:34:27 When I asked you before whether or not 3:34:31 you, in your opinion, would favor all of Ethereum's value 3:34:35 and fees being Bitcoin's value and fees by, 3:34:39 if you could alter history, would you prefer all of Ethereum 3:34:43 having been built as a merged mine sidechain of Bitcoin? 3:34:47 Do you think that would have been good for Bitcoin or bad for Bitcoin? 3:34:51 I didn't hear you give a clear answer to that question. 3:34:55 I'd love to hear you respond to it again. 3:34:59 Do you have an opinion on that or is that a fair question? 3:35:03 Would it be good for Bitcoin to have all of Ethereum's value and fees or not? 3:35:07 Not the MEV fees, not the fees that manipulate retail. 3:35:11 If you had to say just on net, I appreciate you answering, no. 3:35:15 But if you had to say on net, 3:35:19 I respect to that part of Ethereum that you think is deleterious 3:35:23 to its success, but would you on net prefer 3:35:27 that instead of Bitcoin having this large competitor, 3:35:31 would you prefer that all of that development and value accrual 3:35:35 to the token and block space having been value accrual to Bitcoin's token 3:35:39 and block space instead on net? 3:35:43 In other words, more broadly, do you think it's good for Bitcoin 3:35:47 that altcoins are growing or do you think it would be better 3:35:51 if all of the growth and activity would be within Bitcoin 3:35:55 if you had to choose? Because I think that for me, 3:35:59 the drivechain ambition is to bring the altcoins that have value 3:36:03 to Bitcoin and those that are simply Ponzinomics 3:36:07 wouldn't be developed within Bitcoin because you can't use a synthetic Bitcoin. 3:36:11 I agree 100%. I know how to define the ones that have value. 3:36:15 There's a white paper on it and maybe Paul will take a chance 3:36:19 and read it. Just because it's true doesn't mean it's negative. 3:36:23 It's just very easy. Let's say you're familiar with, 3:36:27 for example, ASICBoost. 3:36:31 Let's just say something else is invented that's very ASICBoost-like. 3:36:35 It's like some weird algorithm that, for whatever reason, 3:36:39 it's a piece of software 3:36:43 that makes the ASIC chips somehow, I don't know how, 3:36:47 using magic or whatever, it makes them slightly more efficient. 3:36:51 Somehow it cools the chips 10% more or whatever. 3:36:55 This is a piece of software that you can run alongside what you run 3:36:59 when you mine Bitcoin. We'll call this whatever. 3:37:03 We'll call this magic ASICBoost because it's a fictional product that doesn't exist. 3:37:07 How is that any different than any other thing that miners do? 3:37:11 For example, switching from CPU to GPU to FPGAs 3:37:15 to ASICs or switching from certain types of cooling 3:37:19 to other types or from getting the stranded energy 3:37:23 or making these revenue demand management deals 3:37:27 with the power company, blah, blah, blah, blah, blah. 3:37:31 All of those things, by the way, 3:37:35 are basically the same thing as their decision to include as many 3:37:39 fee-paying transactions as they possibly can in a block. 3:37:43 My question is, how is magic ASICBoost, 3:37:47 this piece of software, 3:37:51 where it has some costs because you have to find the software and run it, 3:37:55 but it has benefits, 3:37:59 how is magic ASICBoost somehow different 3:38:03 than the decision to switch from CPU mining to ASIC mining? 3:38:07 That's my question. 3:38:11 I'm not following, but no, I don't think there's any difference. 3:38:15 Because all you have to do is relabel the magic ASICBoost 3:38:19 as either merge mining revenues or as 3:38:23 the MEV revenues. It makes no difference. 3:38:27 The difference is that the human miner can participate. 3:38:31 Let's say we create rock, paper, scissors transparent 3:38:35 on the blockchain for a million dollars. 3:38:39 And we convince the public that it's completely secure because it's on the blockchain. 3:38:43 But obviously it's not secure because if you put rock, whoever sees that 3:38:47 is going to put paper and win every time. But nobody knows that. 3:38:51 Everyone thinks it's secure. So what's going to happen is the miners are going to be fighting 3:38:55 over those big, ridiculous bets to win the money 3:39:01 because the utility of rock, paper, scissors is not 3:39:05 covered in the Bitcoin blockchain designed by Satoshi 3:39:09 because it's a different utility. It's not 3:39:13 peer-to-peer money. So in that case, the miner is not going to care 3:39:17 about anything else but trying to find those suckers making sucker bets 3:39:21 and then he's going to take the other side of the bet. So the miner is going to be part of the 3:39:25 protocol. That's what I'm saying. When the miner looks into the protocol 3:39:29 only for the suckers. So if there were no suckers then 3:39:33 there either are suckers, in which case they're getting suckered. 3:39:37 And the miners get extra money at their expense. Or there are no suckers, in which case 3:39:41 we're in the exact same situation that we were in before, right? 3:39:45 And nothing has happened. There's magically no suckers. 3:39:49 Right. So the blockchain secures a subset of protocols. It doesn't secure all protocols. 3:39:54 Yeah, but it doesn't mean you're not the user. The user's choice whether or not they want to go 3:39:59 to the sidechain. They're the owner. They own the coins. Like if you say, yeah, I own a car and I 3:40:03 want to use it to film a movie, but I'm never going to drive. So I don't think we should have 3:40:08 consensus in Bitcoin that suckers millions of users out of money because they think and they're 3:40:12 not smart enough to understand. But the layer one consensus does not cover any of the sidechain 3:40:16 consensus for that exact reason. Well, we're putting in the hash, we're putting in the hash. 3:40:21 Yeah, but do you have the same crusade against open timestamps, which also puts 3:40:25 hashes into the... Actually, I wouldn't mind op-return. Why can't we do bit-free online? 3:40:29 You have absolutely no idea what people are timestamping when they do op-return. 3:40:33 So you have no beta this time. That's fine. I have no problem with op-return. 3:40:36 I have no problem with op-return. You just said you had a problem with putting a hash in the 3:40:39 blockchain. I have a problem with a consensus change to Bitcoin to add a hash. The consensus 3:40:44 doesn't cover any of the sidechain's rules. It only covers the BIP300 rules. 3:40:48 The consensus is that we agree that hash represents all possible protocols and that 3:40:54 gives us a stamp of approval. BIP300 does a very simple task 3:40:58 of counting from zero to... I'm a fan of BIP300. I'm a fan of BIP300. 3:41:02 Let me ask a... BIP301, you're the only person on planet Earth. 3:41:07 So you don't like any merge mining at all? Merge mining without the blind merge mining, 3:41:12 without BIP301? I think he's mainly concerned with the 3:41:20 merge mining of the sidechains that would have abstract financial arrangements that could be 3:41:28 resulting in MEV. So I think it's that category of sidechain that he thinks is problematic. 3:41:35 But he also has expressed some... I think I asked you, Jay, what do you think about the fact that 3:41:41 the Bitcoin community can express its will through the mining community that the problematic 3:41:47 drivechain should be discontinued? So if there is an Ethereum-like drivechain, sidechain, 3:41:54 that is creating this MEV, the community of Bitcoiners can decide whether or not that should 3:41:59 persist or not. Maybe they would prefer to have that. I mean, right now, Ethereum is a massive 3:42:04 amount of economic activity, roughly half of Bitcoins. If that were part of Bitcoin's community 3:42:09 instead, a lot of value would be in Bitcoin and coming to Bitcoin miners. Now, part of that, 3:42:16 you find to be a complex and potentially problematic thing where there'd be miners 3:42:23 trying to front run the users because you think that they would not be blind. They would instead 3:42:28 run the node of the sidechain and then try to order the transactions to make more profit, right? 3:42:34 That's where all of Ethereum's value comes from. That's where all the mining comes from. 3:42:38 Literally, Wall Street's taken over Ethereum mining and doing MEV. That's where it's all coming from. 3:42:45 Let's go back to that issue then, because this is very fascinating that you're the only person 3:42:50 on planet Earth who is a fan of BIP300 and does not like BIP301. We should make sure we're, 3:42:58 you know, because we want Jay on our side. We want someone with this level. 3:43:02 But what about my magic software example, which I think is the key for merge mining, 3:43:09 to understanding that merge mining is harmless. And you say there are suckers involved 3:43:14 with MEV and the miners are the predators and the suckers are the prey. 3:43:21 But that has nothing really to do with the regular users of layer one, the regular layer 3:43:29 one Bitcoin users who are not using the MEV. They're not the suckers. And then as soon as 3:43:37 global consciousness rises and suckerism falls back to zero, then this effect you're worried 3:43:45 about will just not happen. Right. So going back on, I think that's Henry, right? 3:43:51 Yeah. Henry's here. I'm the host. 3:43:53 Yeah. Going back on what you're saying, like, yes, so we could remove the bad sidechains. Great. 3:43:58 But what if we, and hear me out, what if we, instead of removing the bad ones, only do the 3:44:04 good ones, right? There's 256 of them. I believe there's only 10 possible, maybe 20 in the rest 3:44:12 of time, real sidechains that have real value. So we could just, a new type of soft fork or a new 3:44:17 type of yearly thing where we add sidechain, we start with a big block one, we do one at a time 3:44:24 instead of saying everything's open. I think I can do it really simply because I think I can share 3:44:37 maybe what you think, Paul, but in simpler terms that the whole audience can appreciate, 3:44:41 because the conversation between you and Jay is very high level. And I want to make sure that 3:44:46 our followers and listeners can understand it all, who are more at my level. So Jay, 3:44:51 I want to emphasize again that if we are correct in our understanding of drivechain, that 3:44:57 the miners can express the will of the community to discontinue any problematic drivechain, 3:45:03 then your suggestion that we only do the good drivechains is already met, is already fulfilled 3:45:10 and satisfied by the drivechain design, because only the good drivechains would be, first of all, 3:45:16 the initiation of each drivechain requires nearly a consensus within the community as 3:45:22 expressed through the miners, and the discontinuation of any problematic drivechain 3:45:27 is also always possible as an expression of the community's will through the miners. 3:45:32 So when you're saying, how do we express, how do we express through the miners? I think 3:45:38 his is slightly different because my, the point of view that I had when I designed 3:45:43 a drivechain was that the miners want to, the miners get paid in Bitcoin, they get paid in 3:45:48 fees, so the miners want to maximize the total quantity of transaction fees and they want to 3:45:52 maximize the Bitcoin price. And so if a sidechain on net reduces the fees or the price or the product 3:46:03 of the fees times the price, they'll naturally have an incentive to either add a sidechain that 3:46:09 should be there or remove a problematic sidechain that is disrupting the, but in Jay's conception, 3:46:15 it seems to me that the miners are sort of like preying on these victims who are these other 3:46:25 people who are not really layer one users, and that seems to be what he is saying, is that correct? 3:46:32 I don't know. 3:46:35 Yeah, Jay, please elaborate if you'd like to. 3:46:39 Yeah, exactly. Yeah, exactly. So people think that in Ethereum, the EVM, I mean, in general, 3:46:45 everyone thinks that if it's on the blockchain, it's secure, but they don't understand that 3:46:51 there are certain protocols where it's order dependent within a block, 3:46:55 and it's not mutually exclusive like a double spend, and you can't tell if someone's manipulating. 3:47:01 And, right, so what they want is you want to get these protocols where users lose pennies every 3:47:08 single time they make a trade, like trading, and then the mine, all shops in that world, all shops 3:47:15 of 56 mining will become Goldman Sachs and Citadel, and they would just be doing, you know, 3:47:22 high frequency trading, market making for alpha, and they won't even care about peer to peer markets 3:47:27 or fees, because they're making a lot more money there if, you know, in that scenario. 3:47:32 Well, the thing about where people make more money is, I think, I don't think this is correct, 3:47:37 although I get this question sometimes. So it's like if the layer one fees and the layer one 3:47:42 Bitcoin price, the marginal value add of the layer one Bitcoin price, and the layer one fees, 3:47:49 which is like how much people care about, you know, the Bitcoin that we know and love, 3:47:53 if that's a certain amount, like X, that's like $5, for example, 3:47:58 then people are only ever going to care about it to the tune of $5. So if something else comes 3:48:06 along and the miners can make $5 caring about Bitcoin, this is a hyperbolic example, but then 3:48:11 they can make $50 caring about MEV on a layer two of Bitcoin, or they can make a billion dollars, 3:48:18 um, they can make a billion dollars caring about a whatever layer, layer three and a half 3:48:24 MEV of the Ethereum sidechains, lightning network, or whatever you want to call it. 3:48:31 That's true that they will care more about the billion dollars than the $5. But what's false 3:48:35 is to say that anything negative is happening. They still they still care $5 about layer one. 3:48:40 And if they if $5 is what we have now, then the $5 is exactly what we have in the future as well. 3:48:48 So nothing net has gone down. And that's the real problem is how to get that $5 number 3:48:55 up. And the fact that they have a side hustle that they care about more is really just a side 3:49:00 effect of right. So so the only change Paul, and the only thing they're going to do different 3:49:05 is they're going to take two seconds before they switch to the new chain to try to reorder. 3:49:10 That's the only thing I'm claiming is going to change is that the miners will be like, 3:49:14 I am still going to keep mining on trying to find this other hash because I know I'm gonna make a 3:49:18 lot of money if I do. And I'll give up in a couple of seconds. But I'm not going to just switch to 3:49:22 the head because I really don't care. I care more about that than that, that that's the only point 3:49:27 I'm making. Well, I mean, it's but you understand what I'm trying to say is the problem is it's only 3:49:33 $5. And then the the other issue is like, if there's if they care, if the disparities are so 3:49:40 great between layer one and the sidechains, value add to the miners as the side hustle, 3:49:47 then one would think you would be even more worried about, I would certainly be much, 3:49:52 much more worried about just the creation of an altcoin that where they can care about the billion 3:49:58 and they don't even have to mess around with because the sidechain is vulnerable because 3:50:03 the way merge mining works, the not every when when a sidechain reorgs, the main chain won't 3:50:10 necessarily reorg at all, you know, by default, it won't be affected in the slightest. But every 3:50:15 main chain reorg also reorgs every single sidechain above it. So I would think if there was if 3:50:22 those are really the numbers that we care about, the Bitcoin value add is $5 and the there's a 3:50:27 billion dollars in MEV on some weird sidechain somewhere. I would say more like that probably 3:50:36 someone would make an altcoin version that I would say it kind of like doesn't really make 3:50:41 any difference in any case. In any case, people just for whatever reason, there's no there's no 3:50:47 demand for for layer one Bitcoin. But the sidechains try to address that by they're inherently 3:50:53 hierarchical. You can't have you can't use the sidechain without going through layer one 3:50:57 or layer one controls the 10 minutes layer one with the origin of every coin. Layer one is 3:51:03 Paul, I made I made this point earlier about, you know, the small block idea. 3:51:10 But could you just let Paul finish his point? And then we'll go to the Alex. 3:51:15 Also, let Jay decide like what? What do you think of my this example with the $5 like it's 3:51:22 like you conjure up a scenario that's very bad for us. And I agree it's possible. I don't think 3:51:28 you know, I don't actually realistically expect this at all. I think that really, there will be 3:51:33 plenty of people who care about layer one. But this the miner the fact that there's my the MEV, 3:51:39 it's a separate thing. You know, it's like if you it's a separate thing. It's like 3:51:46 it's kind of like, I'm not I'm not really sure how to give a great example. But it's like the 3:51:53 MEV that they do. They could like it's fully outsourceable. For example, they could just say 3:51:59 we run this software, which is why I said like the magic ASICBoost, we run the software, 3:52:03 it automatically does all the MEV, and it maximizes the amount of money we collect. 3:52:10 And then that's really no different than just picking the transactions that include the 3:52:15 highest fee. So the all this demand is either coming on layer one from people who want to 3:52:23 transact with Bitcoin, they want Bitcoin, they want to transact, they want they care about 3:52:29 sound money, they care about privacy, they care about self sovereignty. That's demand for that. 3:52:35 And to me, it really seems like your argument is just like that there are all these people out 3:52:39 there. They've got they got wallets full of cash. They're very, they're suckers, and they 3:52:46 will never learn. And they're just willing to pour an endless amount of money into a giant pit 3:52:52 controlled by Goldman Sachs. And it's called perpetual futures 100x leverage. 3:52:59 Right. So this is just like an infinite money making factory, though, in your view. 3:53:04 Exactly what's happening on Ethereum and Solana. 3:53:07 So yeah, but don't you think if people always lose the bet, won't they eventually come around? 3:53:13 Yes, that's true. 3:53:14 Then it will eventually just, it'll eventually just collapse. Or they'll run out of money, 3:53:19 right? It's the other possibility. 3:53:21 That's why we have Super Bowl ads in stadiums named after FTX, because we need more suckers. 3:53:27 Yeah, but eventually the, like, what's the fuel powering this engine you have built 3:53:33 in your argument is like that there are these suckers from MEV. And that we may, 3:53:39 maybe we condone when we when we allow miners to add sidechains, we sort of, 3:53:45 we sort of put Bitcoin's brand on them. 3:53:48 That's it. That's it. Exactly. We have an agreement. It's just a non-zero risk. And 3:53:54 we should just think about it when we design sidechain. 3:53:58 But there's a difference between it being a risk to end users who opt in to that experience and 3:54:05 the effect, as you've articulated, that it would have on the consensus of layer one. 3:54:12 Those are two different points. Is that right? And which of those points are you making? 3:54:15 If there are too many users involved, then the miners will be taken over by 3:54:21 a new crop of miners and they will not care about Bitcoin. They'll only care about this other game. 3:54:26 Would I be right in saying that the risk you're talking about already exists as a category 3:54:32 because since the beginning of Bitcoin, even Satoshi acknowledged and in fact approved of 3:54:39 in writing that his exact words are all networks in the world would share combined CPU power, 3:54:47 increasing total strength. So in the BitDNS thread, Satoshi said explicitly that every 3:54:53 single blockchain in the future would be a merged mind, Bitcoin merged mind blockchain. 3:55:01 So how do you feel about, and also he contemplated poker being on Bitcoin. And in the first version 3:55:07 of Bitcoin's code included poker code, which, you know, raises the kinds of issues you're 3:55:12 talking about, I think. So he was in some sense, even aware of the beginnings of this 3:55:17 conversation we're having today. So what do you think about this notion that in the drivechain 3:55:23 view, we bring all the altcoin activity to Bitcoin and warts and all is the phrase. 3:55:30 So although it has some things that you feel are not good for some users, others who are opting 3:55:37 into those things on altcoins and will forever will do that on Bitcoin. And that makes Bitcoin 3:55:42 economically stronger because it's going to be larger. If this is, if this happens, this migration 3:55:48 and more fees would come to Bitcoin miners. So although you don't seem to like the Mev, 3:55:53 if it were on Bitcoin, that means more fees for Bitcoin miners. Those who suffer are those on the, 3:55:59 who are the users who opted into that. And like, so my original question to you was like, 3:56:06 if all of Ethereum were inside of Bitcoin, making Bitcoin much more valuable and making Bitcoin 3:56:11 miners receive much more miner revenue, wouldn't that be on net beneficial to the Bitcoin community 3:56:17 in terms of it remaining the leader in blockchain and perhaps becoming once again, a hundred percent 3:56:22 dominant. Could be on that better, but it does, it does reduce the security of pure peer to peer 3:56:30 transactions by a smidgen. As long as we acknowledge that and that's fine. 3:56:37 I think we should go. Didn't people have their hands up? I feel bad for such. 3:56:41 Sure. I mean, I just want to say thanks, Jay, for sharing your thoughts. 3:56:44 Yeah, no problem. Thanks guys. 3:56:45 Thank you. Meta and feel free to remain on stage if you'd like. Meta and Alex, 3:56:50 chime in with your thoughts and then we'll maybe wrap up the stage. We've been going 3:56:53 for a couple hours now. So Alex and Meta, thanks for joining. 3:56:56 Sure. Can you hear me? All right. 3:56:59 Loud and clear, man. Go ahead. 3:57:00 I just want to say that, I mean, this debate reminds me of a debate of whether casinos 3:57:06 should be illegal just because they fleece the suckers. And, you know, there's such a, 3:57:10 there's a possibility that the whole MEV debate is moot because there's a technological solution 3:57:15 to MEV, right? There are chains out there that do not enable MEV by design. For example, 3:57:23 if you look at Avalanche or Phantom or other designs that have no blocks and they don't have 3:57:31 a winner-take-all mining paradigm. So you could have a sidechain that simply does not have a 3:57:37 mempool and that every transaction would confirm two prior transactions and collect the fees from 3:57:42 them. In that kind of paradigm, anybody could confirm their own transaction, essentially. 3:57:47 So you would have more of a cooperative mining, not a winner-take-all mining that you see in 3:57:51 Bitcoin, where there would still be specialist miners that go for the juiciest transactions 3:57:57 first. But other transactions that pay smaller fees would be available to be confirmed by other 3:58:04 users who want to collect those fees that do simply want to broadcast their own transaction, 3:58:09 right? So you would have a system more analogous to NASDAQ because, I mean, existing blockchains 3:58:15 have something that resembles a rotating New York Stock Exchange specialist where a blockmaker 3:58:23 essentially gets to know the future ahead of everyone else and they get to manipulate the 3:58:27 content of the block when that happens. But on NASDAQ, right, when you have multiple market 3:58:32 makers, there's chaos. So it's much harder to manipulate the market in that kind of environment. 3:58:38 So if you had a chain, which I hesitate to call a blockchain because it would be blockless. 3:58:44 I mean, if you want to look up this kind of research, it's out there. I know you can look, 3:58:48 you can Google the term graph chains, for example, where you don't have blocks and you don't have a 3:58:53 mempool. You simply have transactions referring to two prior transactions and collecting fees 3:58:59 or performing proof of work and collecting fees, right? In other words, your phone could sit there 3:59:05 for a few seconds doing just a little bit of proof of work and appending whatever fee you want. 3:59:10 But that proof of work would count for something with this transaction chain. 3:59:15 And those transactions that you refer to explicitly, two or more, you would collect 3:59:20 partial fees from them for broadcasting your own transaction. This would be a setup where 3:59:25 you don't have a winner-take-all situation like you have in Bitcoin, 3:59:30 where essentially the entire Internet is competing. 3:59:33 Just for that single next block and whichever miner wins the lottery captures the whole value from that block, while also getting to know a quantum leap into the future ahead of everybody else. 3:59:46 Right. You would have a more like NASDAQ-like situation with a bunch of... 3:59:50 The NYSE specialists cannot do anything about knowing the future of peer-to-peer money. 3:59:55 Well, that's the point. 3:59:56 No, but it's an analogy, right? They're prohibited from trading against the order flow for this reason, because they see the entire order flow and they have an asymmetric knowledge of the order flow, right? 4:00:07 So if you're trading IBM stock and you're a specialist, you see the entire order flow and you're the sole person seeing the order flow. 4:00:14 Right. 4:00:14 So this is the situation analogous to blockchains, which have winner-take-all, single block maker at a time. 4:00:23 So your solution is to make sidechains only allow sidechains that don't have this flaw? 4:00:28 No, I'm not... Let me state first of all that I am in favor of BIP300. It's a very simple and safe change, and it would be much better than not doing it, so not doing it is way riskier. 4:00:41 My only point about BIP300 is that it's not the final word in L2 extensibility, right? 4:00:47 There's other designs that are more complex, such as validity rollups, that would have advantages in my mind over BIP300. 4:00:55 So I'm not also in favor of approving sidechains by miners or shutting them down by miners, because then you have a situation where you have both rules and rulers, right? 4:01:06 It would not be analogous to Bitcoin itself. 4:01:08 If you want to maintain self-sovereignty, you cannot have any kind of committee deciding whether your coins on the sidechains and the sidechain itself should be shut down. 4:01:16 You're essentially going back to some kind of governance, and governance is just another... It's a euphemism for an attack factor, right? 4:01:24 What about UASF? Is that okay? Is UASF governance okay? 4:01:29 Well, I mean, UASF... I don't know how... I mean, I don't know why it's related, but I'm just saying, you can do whatever you want with your own node, right? 4:01:39 But unfortunately, in Bitcoin, you have a situation where, so far, for whatever opaque game theoretic reasons, right? 4:01:47 Thank God, right? The rules haven't really changed too much in a backwards incompatible fashion, although some people might argue that SegWit was a forced evil fork. 4:01:57 And, you know, the nodes that chose not to upgrade to it essentially started doing... downgraded their validation, right? 4:02:03 So, ideally, you would ossify Bitcoin once you added advanced extension mechanisms, precisely because that's the only way to get to this desirable outcome where you have rules but no rulers. 4:02:15 Because the moment rules can change for any reason, that's when you lose your self-sovereignty, right? 4:02:21 Because once you sign up to Bitcoin, you sign up to this particular set of rules. 4:02:25 And essentially, any alteration in the rules that you signed up for is kind of a form of a rug pull, in my mind, right? 4:02:33 So, I'm opposed to having miners endorse sidechains or having miners shut down sidechains. 4:02:39 I say, let 1,000 flowers bloom, and those sidechains that abuse their users will just be outcompeted by the ones that don't. 4:02:46 So, for example, the sidechains that have no possibility of MEV will simply outcompete the sidechains that do. 4:02:54 Yeah, it's all about giving consumers choice and having that be something which doesn't affect the other consumers, the consumers on the main chain or the consumers on the other sidechains. 4:03:06 We've been going for three hours. This has been a really cool conversation. 4:03:12 Why don't we have one final speaker join? I think he has spoken in the past in these talks. 4:03:18 HGXBitcoin. And we'll have his question or comment, and then everyone can chime in if they want. 4:03:28 And then we'll wrap, having gone for three hours. 4:03:32 And by the way, these spaces happen twice a week on Mondays and Thursdays. 4:03:36 And they are hosted by the LayerTwo Labs handle. 4:03:40 I'm Henry. I work for LayerTwo Labs. 4:03:42 And the purpose of these spaces is to promote discussion and understanding of drivechain, which is Bitcoin Improvement Proposal 300 and 301, 4:03:52 which aims to strengthen Bitcoin in terms of its value accrual, as well as the fee income to the network miners and strengthen Bitcoin in those ways. 4:04:05 I think our speaker dropped. Oh, there he is. He's a listener now. 4:04:09 HGX, if you had a question, you're welcome to speak, but you dropped to a listener. 4:04:15 So maybe he requested by mistake. 4:04:19 Well, why don't we wrap for the day, if that's cool, or we could continue. 4:04:25 Paul, what do you think? Should we give it a rest until Thursday or should we continue on right now, three hours in? 4:04:31 I don't know. I think continue if anyone has any. 4:04:35 All right. Why not? 4:04:37 I mean, I've only been here for like half an hour. 4:04:39 I've been here for half an hour as well. 4:04:41 I guess those people who've been here for a long time can just drop out, I would say. 4:04:45 Yeah, sure. 4:04:47 It's like the miners, you know, in BIP300, in Bitcoin, the miners come and go. 4:04:53 It's a dynamic group. So that's what this is all about. People come and go. 4:04:57 I mean, I wonder if you, Paul and Henry, would concede that even though Drivechain is great, 4:05:03 I mean, it's a very non-controversial tiny tweak that's ultra safe. 4:05:07 That's way better. I mean, that should have been done years ago, and I agree with that completely. 4:05:11 It's not necessarily the final word, and it could be out-competed by other L2 extensions. 4:05:17 I do agree. 4:05:19 I do agree, yes. 4:05:22 Although, actually, as time goes on and on and on, I kind of wonder if it would ever really be, 4:05:28 like, how long it would take to be competed, because it seems there's so much misunderstanding 4:05:32 of such a simple thing, I wonder. 4:05:34 But you're talking about... 4:05:36 I'm talking about what happened in Ethereum, right? 4:05:38 Like, we can learn a lesson or two from what happened there, 4:05:40 because they had like a Cambrian explosion of scaling proposals over the last five years. 4:05:44 And, you know, they tried sidechains, they tried Plasma, which is stateful channels, right? 4:05:50 They're not just, you know, like Lightning, just for payments, 4:05:54 that they can complete Lightning-like extensibility of all dApps. 4:05:58 They tried lots and lots of things, and now their entire roadmap has converged on validity roll-ups. 4:06:04 And there's a good reason for that, right? 4:06:06 The two reasons that I see that, like, I would prefer to use a validity roll-up, 4:06:10 but for pragmatic reasons, I support, you know, BIP300 activation, 4:06:14 just because it's easier to get in and it's less subject to bike-shedding 4:06:18 and I don't follow any attempt to do a validity roll-up on Bitcoin, 4:06:22 because people will start arguing to death what kind of proof system we need, et cetera, et cetera. 4:06:26 So I'll settle for sidechains first with a view to validity roll-ups. 4:06:30 And the reason why I prefer validity roll-ups was formulated by, you know, 4:06:34 Mr. Light in his great report at, you know, bitcoinrollups.org, 4:06:38 which is there's two kinds of security in Bitcoin, right? 4:06:40 There's ownership security that's cryptographic, right? 4:06:43 If you secure your keys properly with Shamir multisig or some other kind of multisig solution 4:06:49 and you put yourself beyond, you know, duress, then no one can take away your money, 4:06:53 because nobody can break the cryptography, right? 4:06:57 The other kind of security is the double-spend security, 4:06:59 and this is the one that seemed weird to the cypherpunks, 4:07:01 including, you know, Adam Beck when Bitcoin was proposed. 4:07:03 To them, it didn't seem like game-theoretic or crypto-economic security 4:07:07 was as good as cryptographic security. 4:07:11 Now, what the drivechains propose is they essentially downgrade ownership security 4:07:17 of that site, synthetic Bitcoin, to be crypto-economic. 4:07:21 Now, that's proven good so far, but you still have that downgrading security 4:07:27 from cryptographic down to crypto-economic or game-theoretic security. 4:07:31 And the other issue is that because a sidechain is mined by its miners, 4:07:35 it does not inherit the double-spend security of Bitcoin itself. 4:07:39 Whereas validity rollups preserve both qualities of the L1, right? 4:07:43 In validity rollups, your ownership security on the rollup 4:07:47 is exactly the same as your security of holding an asset on L1. 4:07:53 That's number one. 4:07:55 And number two, the double-spend security for the recipient of the payment 4:07:59 is also exactly the same as it is on L1. 4:08:03 And the third benefit is that rollups use the block space directly, right? 4:08:08 They do not create additional block space. 4:08:10 They essentially use Bitcoin itself. 4:08:12 They would use Bitcoin itself as a data availability layer 4:08:16 that creates no computation for Bitcoin nodes, 4:08:18 but it eats up block space similar to what ordinals are doing today, right? 4:08:22 It just creates opaque data that Bitcoin nodes do not need to compute upon, 4:08:26 but it increases the demand for block space. 4:08:30 And that block space is way more valuable if a single transaction 4:08:34 on an Ethereum rollup, Ethereum-like rollup, 4:08:38 can perform a huge amount of state changes and computation, 4:08:42 but it only becomes a 100-byte transaction, 4:08:44 which is opaque and ignored by the Bitcoin rollup. 4:08:46 So the economic density of rollups could be much higher than Bitcoin, 4:08:50 simply because you could do things like what the market has shown a preference to do. 4:08:56 Namely, the market has craved a version of Bitcoin 4:09:00 that could be used in DeFi protocols. 4:09:02 And that's why WBTC peaked at roughly 300,000 WBTC issued in the last bull market. 4:09:08 And those people essentially are way worse 4:09:10 than the people that are being fleeced by MEV, right? 4:09:12 Because they're essentially trading their gold-standard security Bitcoin 4:09:18 for custodial Bitcoin, and they could be rug-pulled by BitGo anytime, right? 4:09:22 The fact that they're doing it just shows you how great the demand is 4:09:26 for collateralizing Bitcoin, 4:09:28 because people don't want to sell their Bitcoin. 4:09:31 They want to collateralize it, borrow dollars against it, 4:09:33 and benefit in a tax-wise way, 4:09:35 and also benefit for future appreciation of Bitcoin. 4:09:39 Another use case, right? 4:09:41 Another use case that's proven is Bitcoin, 4:09:45 you know, crypto-collateralized stablecoins that are fully decentralized, right? 4:09:49 The world wants a dollar, but it doesn't want USDT or USDC. 4:09:53 It wants a dollar that has Bitcoin security and Bitcoin centralization. 4:09:57 And the only way to do it is to do a rollup 4:09:59 where you can move your coins, 4:10:01 put it into a protocol that issues fully decentralized, unalterable protocol 4:10:05 that cannot be changed. 4:10:07 There is no governance in it. 4:10:09 I mean, there's examples of that on Ethereum. 4:10:11 For example, Liquidity Protocol is considered 4:10:13 the gold standard of decentralized stablecoins 4:10:15 that are collateralized by Ether, right? 4:10:17 So the demand is there. 4:10:21 Are you rolling up Bitcoin Script or you're rolling up EVM? 4:10:25 Well, the rollup can have its own virtual machine. 4:10:29 It can have its own blockchain structure. 4:10:31 It could have any semantics that are completely custom to it. 4:10:37 The only thing it needs from Bitcoin is basically two things. 4:10:41 It needs recursive covenants to move the rollup, 4:10:45 you know, treasury forward block by block. 4:10:47 And it needs this opaque predicate. 4:10:50 I call it OpStark Verify, 4:10:54 which basically returns true or false 4:10:56 when presented with a kilobyte-sized proof, right? 4:10:58 Now, as far as security assumptions of the rollup, right, 4:11:01 there are rollups out there that make fewer security assumptions than Bitcoin itself. 4:11:05 Like, for example, you can build a whole rollup 4:11:07 that assumes nothing except that SHA-256 is secure, 4:11:10 which Bitcoin already assumes. 4:11:12 It introduces no new security assignment. 4:11:14 That's what Starks are. 4:11:16 They're quantum secure. 4:11:18 Like, you can even have a rollup that's quantum secure, 4:11:20 private, has no MEV by design. 4:11:23 And it inherits both ownership and double-spend security from Bitcoin 4:11:28 while at the same time consuming lots of Bitcoin block space 4:11:33 with much higher economic density than, let's say, inscriptions and ordinals, right? 4:11:39 Yeah, so let's do that. 4:11:41 But the thing is, I know what's going to happen, right? 4:11:45 My hope is that we'll be able to sneak in both... 4:11:48 The rollups have an enormous number of downsides 4:11:51 relative to BIP300, right? 4:11:53 So it's possible that in the future, 4:11:55 the rollup word will be the winning meme 4:11:58 and that BIP300 will just be considered 4:12:01 like a very permissive rollup 4:12:04 or a lightweight or very optimistic rollup, 4:12:07 but not unintended. 4:12:09 Do you understand the downsides, though? 4:12:12 Well, do you understand the upsides as far as security, right? 4:12:15 I do, yes. 4:12:17 Let's consider the downsides. 4:12:19 Let's consider the downsides. What are they? 4:12:22 Well, one is, if you read John Light's report, 4:12:25 is that the scalability factor only increases by, like, 3.8. 4:12:30 Well, actually, he argues that it increases by a factor of 100 4:12:34 if your rollup uses account model as opposed to UTXO model. 4:12:37 Yeah, but he didn't put that in the report. 4:12:40 Maybe you read that in my FAQ. 4:12:42 No, no, no. It is in the report, right? 4:12:44 He says if your rollup uses UTXO, you get 3x scalability. 4:12:49 If your rollup uses Ethereum-like account model, it's 100x 4:12:52 at the very least, right? 4:12:54 The report actually talks about different rollup models. 4:12:57 Well, I found that in my own research, 4:13:00 but you understand that in BIP300, it's completely unlimited. 4:13:03 Yes, but see, the problem with BIP300 is not just 4:13:06 that it's like BIP300 is necessary but insufficient, 4:13:11 because let's say that we wave the magic wand 4:13:14 and we had both rollups in BIP300, 4:13:16 let 1,000 flowers bloom. 4:13:18 The problem is that you would need to entice liquidity from Ethereum 4:13:21 and you would need to entice the composability of Ethereum dApps 4:13:24 that are all interacting with each other, 4:13:26 because you can have frontends that execute through three or four dApps, 4:13:29 including aggregators of liquidity and all that stuff. 4:13:32 The reason why all liquidity killers have failed 4:13:35 is precisely because Ethereum has these two giant modes. 4:13:39 One is composability of protocols, and the other one is just liquidity. 4:13:43 So basically, any operation that you would perform on Avalanche, 4:13:47 even though it costs you a penny to do, because the fees are low, 4:13:50 the conversion ratio between your stable coin and Ethereum 4:13:54 will be less favorable on these L1s than it is on Ethereum 4:13:58 because of liquidity. 4:14:00 So I see both rollups and drivechains as necessary but insufficient. 4:14:04 Well, I agree. I agree with you that obviously we should do both. 4:14:08 It's also the case that I would certainly admit that if we did both 4:14:12 and then rollups were significantly more popular, 4:14:17 I would feel kind of like, oh, I really misused a lot of time, of course. 4:14:21 Obviously, I would think that's nonsense. 4:14:23 Yeah, I mean, you're saying that there's a limit to scalability of rollups 4:14:26 simply because they can only do a pack of 100. 4:14:28 Well, that's just the first one out of the gate. 4:14:30 And then you said, blah, blah, blah, maybe it's something else 4:14:32 that no one has described to me. 4:14:34 I've yet to see this. 4:14:36 I read the report and then I, on my own, found the 100. 4:14:41 Maybe he edited it afterward. 4:14:43 Any other downsides to rollups? 4:14:45 Well, as you said, it requires this op, the decay, not approval thing, 4:14:49 which is enormous, way different than just checking if something is an integer 4:14:53 that is bigger than 100. 4:14:55 I can see that the sidechains are trivial. 4:15:00 There's no bike shedding to be done on sidechains. 4:15:03 All the bike shedding has been done, essentially. 4:15:05 What about the extensibility where the sidechain says, 4:15:09 well, we can copy basically anything. 4:15:12 Whereas in the decay rollup situation, 4:15:15 there has to be some net movement of funds 4:15:18 that collapses back down to something comprehensible. 4:15:21 Actually, that's not the case. 4:15:23 For example, they're developing ZK EVMs right now. 4:15:27 So basically, if you created a proof system 4:15:31 that is, let's say, lambda calculus equivalent, 4:15:34 you could prove any computation on a rollup. 4:15:36 There would be no limitation of what happens in the rollup 4:15:39 and what's provable in L1. 4:15:42 The example of that is that they actually created ZK EVMs now, 4:15:45 which is a hairier, much more complex computational paradigm 4:15:49 than, let's say, lambda calculus 4:15:51 or some kind of low-level push-stack machine. 4:15:54 But basically, because of universality of computation, 4:15:59 rollups could essentially be proven no matter what happens on a rollup 4:16:03 in a small kilobyte-sized OP-STARC verify operator, 4:16:08 whose running cost, by the way, has been taken down 4:16:11 to be only 10 times more 4:16:13 than validating a single ECDSA signature. 4:16:16 Let's have SuperTestNet jump in here. 4:16:20 Super, what are your thoughts on this or anything else? 4:16:23 Yeah, I've gone to lots of Bitcoin conferences 4:16:28 and lots of meetups, 4:16:30 and I've been in conversation with many Bitcoiners. 4:16:34 I've never met anyone who uses WBTC, 4:16:38 at least no one who talked about it as a cool thing. 4:16:42 Where are all these people that are putting, 4:16:45 what did you say, $300 million or something into WBTC? 4:16:49 No, actually, WBTC issuance peaked at 300,000 WBTCs, 4:16:53 which is a significant fraction of all of Bitcoin in existence. 4:16:56 It's essentially half the size of the GBTC trust. 4:16:59 It's down to 180,000 WBTCs. 4:17:02 I can tell you, I've used it before, 4:17:04 and the tax savings reasons are so compelling, 4:17:08 and besides, you're not losing control of your Bitcoin. 4:17:10 You don't need to sell your Bitcoin to survive. 4:17:12 That's the reason why there is 300,000 BTC high watermark for WBTC. 4:17:17 You cannot argue with that number, 4:17:19 because that's just the issuance reported 4:17:21 and proven for proof of reserves by BitGo. 4:17:24 The number is correct, and the number is very, very high. 4:17:27 It's billions of dollars, and it is much higher, 4:17:30 two orders of magnitude higher than the total amount of Bitcoin 4:17:33 in, for example, the Lightning Network. 4:17:35 Yeah, it's the biggest sidechain there is, 4:17:37 but it's a custodial sidechain run by BitGo 4:17:40 that can rug pull or OFAC can rug pull all of that coin 4:17:43 and just repossess it for the US government at any time. 4:17:46 The fact that people are doing this tells me that 4:17:49 if they had a way to move Bitcoin into synthetic Bitcoin 4:17:53 either on a sidechain or a roll-up, 4:17:55 the demand would have been orders of magnitude higher to do it, 4:17:58 because collateralization is just so attractive as a tax management 4:18:02 and strategy not to sell your Bitcoin. 4:18:05 This is essentially Sailor 101, right? 4:18:07 Yeah, this $4 billion of value that is in WBTC 4:18:12 is evidence of the market's demand for using a Bitcoin 4:18:16 that is a synthetic Bitcoin, 4:18:18 not real layer 1 Bitcoin, but a synthetic Bitcoin, 4:18:21 meaning a token that's redeemable for Bitcoin 4:18:24 that has Bitcoin's unit of account, 4:18:26 but it has the software features of Ethereum or some other chain. 4:18:31 And by the way, I wanted to point out in the Nest, 4:18:33 I've shared a brief transcription of what John Light said 4:18:37 in a recent Drivechain Twitter space, 4:18:40 where he said, 4:18:43 I think it would make sense to do Drivechains first 4:18:46 rather than wait until validity roll-ups are ready. 4:18:49 So he likes both of them, just like you, Alex. 4:18:52 He likes Drivechain and Bitcoin. 4:18:54 And I do as well. 4:18:56 He asked me about the relative downside. 4:18:59 For one light at the end of the tunnel, 4:19:01 for Drivechains and for validity roll-ups, 4:19:03 maybe this recent OP_VAULT proposal, 4:19:05 because by hook or by crook, 4:19:07 it may be repurposed to do fully recursive covenants, right? 4:19:11 And we know that those enable Drivechains without... 4:19:15 Drivechains only need recursive covenants to be enabled, 4:19:18 although they will be less efficient than BIP300. 4:19:21 They will become permissionless. 4:19:23 Basically, once the recursive covenants are in, 4:19:25 in the form of OP_VAULT or some other thing, 4:19:27 there is no need to ask for permission 4:19:29 from the Merge Bureau, 4:19:31 like Politburo and the Soviet Union of the core, 4:19:33 because... 4:19:35 You're 100% correct. 4:19:37 But when something like that happens, 4:19:39 I just kind of feel all the more that... 4:19:41 Why don't we just do it then? 4:19:43 That's because you expect people to have reason, right? 4:19:46 Your mistake is that you expect people to be reasonable and not emotional, right? 4:19:50 But it's like, the real problem here is what we heard from Jay, 4:19:55 is that people are still subject to this ultimatum game. 4:19:58 When two players, the first one chooses what percentage of $100 he'll take and you get the rest. 4:20:03 If somebody chooses $99, the correct move is to take one as opposed to veto the whole transaction, 4:20:09 because you want to punish every loader, right? 4:20:11 Okay, that's what SuperTestNet, he said it through his bad face. 4:20:14 But there is actually something called super-rationality in a post that I planned to make about game theory at one point, 4:20:19 where it says it is rational to turn down everything other than 50-50. 4:20:23 But SuperTestNet, that's a post for another time. 4:20:27 Yeah, I want to go back to the point I was trying to make earlier. 4:20:32 It's possible for a lot of money to be in a thing and still not have a lot of users. 4:20:37 If WBTC did have a lot of users, I would expect to meet some occasionally. 4:20:41 You're the first person, Alex, I've ever met. 4:20:43 Well, you can see how many users it has by how many WBTC accounts are using Aave protocol 4:20:50 and other protocols that allow you to collateralize WBTC. 4:20:53 We're talking thousands of accounts averaging very large amounts of WBTC. 4:20:57 So these are some OGs putting in 100 more WBTCs in there, 4:21:01 because they realize that rather than incur this huge opportunity cost of selling off their Bitcoin with every bull market, 4:21:07 what they can do instead is retain control of their Bitcoin and just collateralize at 10-20%, 4:21:12 like Saylor is doing, and get liquidity out. 4:21:15 And the whole transaction is not a taxable event. 4:21:19 And your debt is being devalued as the dollar is being printed. 4:21:22 I mean, it's like the best of all possible worlds. 4:21:24 Just count how many users use Aave protocol with WBTC collateralized. 4:21:28 It's thousands of people collateralizing lots of WBTC and other protocols and other chains as well. 4:21:34 It's all out in the open, right? 4:21:37 None of this is unavailable. 4:21:40 I think you say that you wondered if maybe a bunch of OGs are using it. 4:21:48 I think that's possible. 4:21:49 It's also possible that it's a bunch of faceless corporations who hold a bunch of people's Bitcoins and are putting it on Ethereum. 4:21:56 Do you have any problems with corporations? 4:21:58 I don't. 4:22:00 No, I'm just saying that I don't think there are a lot of people using this thing. 4:22:05 I think there's a couple of large holders who are using it. 4:22:08 I think at the top of the bull market, the total value locked up in WBTC was something like $20 billion or more. 4:22:14 At $69,000 in Bitcoin and $300,000 in WBTC, you can do the math of $300,000 times $69,000. 4:22:24 That's a lot of money that was there. 4:22:26 And that money is custodial. 4:22:28 It's completely centralized. 4:22:29 It could be seized by the U.S. government at any second, and yet people do it anyways, right? 4:22:34 It may be a lot of money, but it doesn't necessarily indicate a lot of demand from Bitcoiners. 4:22:39 It might be a demand from a very small number of large corporations who want to do this with other people's money. 4:22:46 If people are holding WBTC, I call it Bitcoiners. 4:22:50 Whether or not they're Bitcoiners or OGs or not, if people have exposure to Bitcoin through WBTC, they have exposure to Bitcoin. 4:22:57 Therefore, they're Bitcoiners. 4:23:01 Sure. Yeah, I think that sounds reasonable. 4:23:04 But I don't think that the number of people who hold WBTC is very large. 4:23:10 I think that there's just a small number of rich people who hold a lot of it. 4:23:14 Well, it's like there's a small number of people doing what Zuckerberg is doing. 4:23:19 On Twitter, he put up some Tesla stock with Goldman Sachs as collateral, and they gave him $20 billion. 4:23:26 Normal people cannot do that because they don't have private banking with Goldman Sachs. 4:23:30 But rich people do this Cantillon effect thing all the time, right? 4:23:35 Yeah. 4:23:37 If it's not a lot of people who are doing this, not a lot of individual Bitcoiners and individual node operators, 4:23:44 then the ones who are doing it just don't count when it comes to trying to get a soft fork into Bitcoin. 4:23:52 Because they don't still make up a significant portion of the network. 4:23:56 It's not a democracy, right? It's not a democracy. It's a free market. 4:24:00 The demand for WBTC is indirectly demand for Bitcoin. 4:24:07 Because all demand for synthetic Bitcoin accrues value indirectly to Bitcoin. 4:24:14 Because the only way to generate a synthetic Bitcoin that's redeemable for Bitcoin is by collecting more Bitcoin as one is issuing the synthetic Bitcoin. 4:24:24 So I feel that the demand, just to make my point clear, the demand for WBTC benefits everyone holding Layer 1 Bitcoin 4:24:35 in the sense that the purchasing power of their Layer 1 Bitcoin goes up as others are demanding this synthetic Bitcoin. 4:24:44 So I feel like there's a harmony there. Super, does that sound like a compelling line of reasoning to you? 4:24:51 Yeah, I think that is a compelling thing to say. 4:24:56 I'm not sure, I'll need to think about how to summarize my point more effectively 4:25:04 because I don't think I fully grasp what I'm trying to say in a way where I can compress the narrative enough. 4:25:11 But thank you for your thoughts, Alex. 4:25:14 I'm glad to have learned, I learned a lot about WBTC today. 4:25:18 And thank you for telling me about it and giving me sources for where I can find more info. 4:25:22 I'm curious if Paul has any more objections to roll-ups because two objections we've heard 4:25:27 which is that there is potentially an upper limit on scalability which actually John Light addresses in his paper 4:25:33 by arguing for roll-ups of roll-ups which essentially enable unbounded scalability 4:25:39 where you have the one layer that's immediately above Bitcoin is 100x scalable 4:25:44 but then it could have roll-ups on top and because there's no loss of security 4:25:48 there's actually a loss of security from Layer 2 roll-up to Layer 3 roll-up. 4:25:53 So you pointed out two problems. One is that maybe there's only 100x to be had there 4:25:58 and two is that maybe it's impossible to prove arbitrary computation using OpStark Verify. 4:26:06 Well, I'm not so much worried about that. 4:26:08 As you were saying, there's also the pipe-shedding that goes into that. 4:26:12 But I think more of the ZK-SNARK stuff, I'm a very... 4:26:16 I'm kind of very skeptical of it. I think it cuts against self-sovereignty and being open-source 4:26:21 because it's something that... I prefer something that the regular user has at least some understanding of. 4:26:27 They'll never ever have... 4:26:29 Yeah, but are you saying regular users understand ECDSA elliptic curve cryptography? 4:26:34 I think they have some understanding. 4:26:36 They have an idea that only the person with the private key can make the signature. 4:26:40 Well, but if an OpStark Verify makes a single cryptographic assumption of SHA-256 4:26:46 being impossible to get a pre-image from, it actually makes fewer assumptions of Bitcoin itself. 4:26:53 It's true that Starks are complex mathematical construction 4:26:56 but you have $20 billion in Ethereum roll-ups as a bounty on them, right? 4:27:01 So if anybody can break OpStark or OpSNARK on Ethereum, they can collect a huge bounty 4:27:06 and that's been going on for a few years now. 4:27:08 So I guess we're at the point where the technology is not that novel anymore. 4:27:13 But 99.9% of people have no idea what elliptic curve math is, let alone elliptic curve cryptography, right? 4:27:21 Well, I think, you know, these are two different issues, but I think one of the issues is... 4:27:27 I agree with you that people can become more familiar with something from exposure, right? 4:27:32 So I agree that some things are a black box. 4:27:35 But as long as people have a little playground where they can throw... 4:27:39 Like, people have something where they can sign a message and look at the signature and then edit the signature 4:27:45 and then watch it go from being valid to being invalid. 4:27:49 That's something. 4:27:50 And then if people know from experience that no one can take their Bitcoin... 4:27:56 So for example, if someone loses their coins in a hack, people know that what happened was 4:28:02 someone got the 12 words or someone got the keys off of their computer. 4:28:06 So I agree with that. That's the first point. I do agree with that first issue. 4:28:10 The second issue is lots of people don't understand ECBSA. 4:28:13 And my question is, to what extent are those people really loyal to Bitcoin itself? 4:28:20 Like, if they don't really know what's going on... 4:28:22 They're not. 4:28:23 Are they actually Bitcoiners? And can't we just replace Venmo and they won't even notice? 4:28:28 The truth is that African villagers don't care about running watchtowers and managing liquidity. 4:28:34 They're just mercenary about it, right? 4:28:36 They just want cheap... 4:28:37 I agree with all that. 4:28:38 But I'm saying the real progress of our movement is actually in the education part. 4:28:44 And so when I see ZKSnarks, I think that's kind of a dead end. 4:28:47 But no one should stop doing that because of that. 4:28:51 That's just my kind of take. 4:28:53 That's not really my... I don't know what you mean. 4:28:56 It's a different type of belief than my other beliefs. 4:28:58 I just kind of think I wouldn't really bet on that. 4:29:01 You could say that public-key cryptography is the simplest version of a zero-knowledge proof. 4:29:06 Because you prove possession of the key without revealing any information about it. 4:29:10 I agree with that. 4:29:11 But I think that's something that we can easily build a little witness, which I even plan to do. 4:29:16 Alex? 4:29:18 People can play around with the keys and they... 4:29:21 You can build the same widget for a Lambda calculus that's provable by ZKStark. 4:29:27 I would be interested to see that widget and play with it myself. 4:29:30 Something I can learn about from ZKStark. 4:29:32 You know what I mean? 4:29:33 I'm having trouble getting behind something that I don't understand. 4:29:35 And it seems like the ZKStark thing is just not right. 4:29:38 People just say, blah, blah, blah, I don't think about it. 4:29:41 It's kind of bounty. 4:29:42 I would break it. 4:29:44 Now when it breaks, then it's like, this is not good enough for someone. 4:29:48 No, I mean, your caution is justified. 4:29:50 But in the interest of saving you and other people time, I mean, ZKStarks are obsolete relative to ZKStarks, 4:29:57 which make way fewer security assumptions. 4:29:59 They just have slightly larger proofs. 4:30:01 So people should just go to that one. 4:30:03 But again, you and I agree. 4:30:06 Would you agree that to wrap this very, very interesting conversation about zero knowledge proofs and roll-ups on Bitcoin, 4:30:14 would you agree that a reasonable take is that the chance that any layer one change happens to facilitate these new technologies is very far in the future. 4:30:26 We're talking five or ten years away for Bitcoin. 4:30:31 Whereas for drivechain, it's a seven-year-old idea that's been discussed. 4:30:35 I agree. 4:30:36 I completely agree. 4:30:37 And also, if there is drivechain first, then there can be a drivechain specifically devoted to experimenting with those roll-ups. 4:30:46 And that would allow possibly for roll-ups to come even sooner to Bitcoin layer one, if they will ever. 4:30:52 I agree completely. 4:30:53 And I anticipate that drivechains will not be merged into the core. 4:30:59 What will happen instead is that the demand for vaulting of Bitcoin will be so strong that some kind of covenant, which is repurposable for drivechains, will be merged in. 4:31:10 And then drivechains become permissionless. 4:31:13 And maybe it's suboptimal relative to Paul's initial design where miners get to fire drivechain or not. 4:31:19 It will be completely permissionless. 4:31:21 But they will get in. 4:31:22 As far as experimentation with ZK proofs, with ZK Starks, there is a huge Cambrian explosion going on out there in Ethereum where you have literally 50 roll-up companies that are well-funded that are all stewing in this primordial stew of innovation out there. 4:31:40 And we ignore that stuff at our own peril. 4:31:42 So eventually, we'll have to basically abandon our not-invented-here syndrome. 4:31:47 But actually, ZK Starks was suggested by Greg Maxwell in 2013 post on Bitcoin Talk. 4:31:52 He said that if you could prove the other chain using a ZK Stark or SNARK proof, you wouldn't need an SPV-verified chain. 4:31:59 So that idea was actually confirmed by the father of StarkNet when he did a report in 2013 in San Jose Bitcoin Conference. 4:32:09 He basically said, why don't we do this strong cryptographic proof of the correctness of transition of the sidechain and not rely on the SPV-style proof? 4:32:20 Are you talking about Eli Ben-Sasson? 4:32:23 Absolutely, yes. 4:32:24 I mean if you go back to 2013 videos, you will see him essentially advocating this for Bitcoin. 4:32:30 But again, Bitcoin wasn't open to this. 4:32:32 So instead, he left for Ethereum. 4:32:34 And now, there is 50 well-funded startups in Ethereum doing validity roll-ups. 4:32:39 Can you talk about what you just said a moment ago, a couple of sentences back about the mindset of innovation and experimentation? 4:32:47 And can you talk about your view on is Bitcoin right now, today, achieving? 4:32:53 No, it's not. 4:32:55 It's essentially like a system that existed in the Soviet Union with the six priests in the Politburo and the Merch Bureau that basically see themselves as gatekeepers. 4:33:06 They don't have the mindset of letting 1,000 flowers bloom and compete. 4:33:10 They have a mindset of let's not… 4:33:13 Can you say if drivechain were adopted by Bitcoin, let's say in a year or two from now or less? 4:33:21 If it were adopted in the relative near future like that in the coming months or years, what do you think would happen within the Bitcoin community? 4:33:29 What would the effects be in your view? 4:33:31 I think it's a net positive and I'm all for it. 4:33:33 But I can tell you that the line of attack on drivechains will be that they don't preserve ownership security or double-spend security. 4:33:41 So therefore, they're not as secure as level one Bitcoin. 4:33:44 And that will be hard to deflect that line of attack. 4:33:47 But I would rather take that than nothing. 4:33:50 On that net, it's a huge benefit. 4:33:52 But you will see people from Ethereum giggling at you because they already moved on past all sidechain design, all state channel designs, the plasma. 4:34:02 They've essentially tried and abandoned all those things. 4:34:05 And what they arrived at is strong cryptographic security of ownership and double-spend. 4:34:09 They're doing nothing but rollups right now. 4:34:11 In fact, the first rollups done on Ethereum were optimistic rollups. 4:34:15 But those are going away in favor of ZK rollups because ZK rollups have caught on. 4:34:19 So nobody can get funding for any other scalability solution in Ethereum at this point. 4:34:24 They've essentially moved on. 4:34:27 But again, if you ask me whether drivechains are positive, absolutely. 4:34:31 It's a great positive. 4:34:32 It will allow all this stuff. 4:34:33 What would you say to someone who says, Alex, the biggest market that Bitcoin should aim to serve is the market for money, not the market for blockchain-based software? 4:34:48 Well, I would say it's a false dilemma. 4:34:50 I would say, why can't it do both? 4:34:53 I'm completely with Paul on the original vision of maximalism where once you invent digital scarcity, you have lots of unknown unknowns for how you can use it. 4:35:04 Now, it's true that Bitcoin is the original app chain, as they say, in the Ethereum community. 4:35:09 And the app is the store of value and peer-to-peer payments. 4:35:12 But in the spirit of Saylor, let's say, Saylor is considered to be somewhat of a maximalist. 4:35:18 Although he argues for stablecoins for the world. 4:35:21 He doesn't argue for SATs used for unit of denomination because volatility is with us for decades. 4:35:27 But I'm saying that any kind of statement that Bitcoin is just for money and not for that, that's just an example of a false dilemma. 4:35:35 It can't be for both. 4:35:37 And that's the original maximalism. 4:35:39 And I agree with Paul completely on this. 4:35:41 Once you have digital scarcity, it should be permissionless innovation about how to use it and let the market select whatever innovative uses, whatever has higher economic density to pay fees on Bitcoin. 4:35:53 Right now, you have a… 4:35:55 Which drivechains do you think, if drivechain is adopted, would be most popular, would have the most value? 4:36:03 Would it be privacy drivechains? 4:36:06 I think the right move, if the drivechains are adopted, the right move would be to essentially do an Ethereum drivechain and copy-paste all the successful protocols from Ethereum. 4:36:16 Because the number one proven use is to have trust-minimized collateralization of Bitcoin and trust-minimized stablecoins that are backed by Bitcoin. 4:36:27 These two uses are 99% of legitimate use of Ethereum. 4:36:32 You have lots of gambling. 4:36:33 You have all kinds of fake yield protocols. 4:36:35 But at the end of the day, most of the value locked on Ethereum DeFi is about collateralization, lending markets like Aave, collateralization, and crypto-based stablecoins. 4:36:46 The market wants a digital dollar, but it doesn't want USDT or USDT. 4:36:50 The market wants a digital dollar like liquidity, except collateralized by Bitcoin, not by Ethereum, which is too volatile. 4:36:57 And Ethereum is centralized. 4:36:59 Liquidity, for example, on Ethereum is the most collateralized stablecoin. 4:37:02 It's not algorithmic Ethereum backed, but it has two points of centralization. 4:37:06 Number one, Ethereum itself is used as collateral. 4:37:09 It's a suboptimal collateral because it's somewhat centralized, and it's also highly volatile. 4:37:13 So Bitcoin would improve on both in that regard. 4:37:16 The other point of centralization it has is that it uses a chain-link Oracle to communicate the price of Ether and USD into the protocol. 4:37:24 So you need to solve both of these to create a truly cryptographically secure ownership of a decentralized stablecoin. 4:37:30 And that stablecoin could then flood the world. 4:37:33 Alex, what do you think would be the long-term effect of not adopting drivechain on Bitcoin? 4:37:40 How do you think Bitcoin would look in 20 years from now? 4:37:42 Well, I mean it might repeat the fate of gold. 4:37:46 The gold was not canceled by governments. 4:37:49 It was out-competed by the dollar. 4:37:51 Because gold was like a store-of-value reserve asset, but it was hard to move. 4:37:56 But when you say it wasn't canceled, I mean it was canceled in 33 and 71, right, when gold was confiscated. 4:38:02 No, but the dollar using telegraph wires had much higher utility. 4:38:07 Because if you wanted to send a ship full of goods from South Africa to Japan, you didn't need to carry gold. 4:38:12 You could just use Bank of England's network. 4:38:16 Yeah, I agree. 4:38:18 It was a combination of political control and the benefits. 4:38:21 Before the gold could be canceled, it was canceled in 1933, right? 4:38:25 Arguably in 1913 when the Federal Reserve was established with all the Federal Reserve notes. 4:38:36 But the system could not get rid of gold until the network of moving dollars at the speed of a telegraph was established. 4:38:44 So dollar just had more uses. 4:38:46 So the real danger, like I'll tell you right now, my nightmare scenario for Bitcoin is as follows. 4:38:51 It's the year 2030 and Ethereum ossifies. 4:38:54 Now that would be a death blow to Bitcoin. 4:38:57 Because once Ethereum ossifies, you can no longer argue that it can rug pull you by changing the protocol, right? 4:39:04 Now you can argue about proof of stake being suboptimal. 4:39:07 But, you know, the existing euro-dollar system is even more fictional than Ethereum, right? 4:39:11 And it's been going for 60 years and it's got a quadrillion dollars worth of derivatives in it. 4:39:15 So my nightmare scenario is that Ethereum simply disbands the Ethereum Foundation and ossifies around the year 2030. 4:39:23 Do you believe that they would need to first shrink their main chain block size? 4:39:29 No, no. I don't believe that because I'll tell you why. 4:39:32 Because there's such a thing as Jevons paradox. 4:39:34 I mean you can look it up on Wikipedia. 4:39:36 But basically the short version is that whenever you add lanes on a highway, the amount of traffic does not decrease, it increases. 4:39:43 Because once you make something more affordable, the amount of additional uses that are uncovered is more than enough to swamp the existing lanes on a highway. 4:39:51 So, in fact, Ethereum right now is about to undergo this huge leap in the amount of available block space. 4:39:58 You can think of Ethereum today as being capable of streaming 80 kilobytes of block space per second. 4:40:05 They're talking about taking that to a gigabyte per second with eigenlayer. 4:40:09 So they're going to make Ethereum block space cheap enough for you to back up your whole life stream into there, not just some NFTs. We're talking about real streaming video going into Ethereum. 4:40:19 And once that is available, the total amount of fees that Ethereum will collect will be much higher, even though the supply block space will be much higher. 4:40:27 So I do not buy this idea that ossifying, you know, that the Bitcoin block space needs to shrink simply because of this Jevons paradox, J-E-V-O-N, you know, if you want to look it up on Wikipedia. 4:40:38 Because it applies to block space, right? 4:40:40 To be clear, my question was, does Ethereum need to shrink its main chain block size before attempting to ossify in the far future? 4:40:50 I don't think I don't believe it does. 4:40:52 And I don't believe they intend to. 4:40:54 Do you support Bitcoin decreasing its block size? 4:40:57 I do not support that because precisely for the reasons of Jevons paradox, which is that if you want more revenue, I don't necessarily support increasing it. 4:41:07 You know, it's let it stay what it is. 4:41:10 Isn't shrinking the block size for either blockchain all about enabling people to more inexpensively validate the blockchain? 4:41:18 Well, let's talk about that. 4:41:20 Let's talk about that. So Bitcoin has four, there's four different components in the cost of a node of Bitcoin. 4:41:27 One is the raw data storage. 4:41:28 The other one is computation. 4:41:30 The third one is bandwidth. 4:41:31 And the fourth one is just the memory capacity to hold UTXO stack, right? 4:41:35 Last I checked, you can buy one terabyte SSD for $39 on Amazon today, right? 4:41:42 One terabyte will be enough to run your Bitcoin node, which is proven for the next hundred years. 4:41:47 OK, as far as memory, you can get 32 gigs of memory for $59. 4:41:52 And the UTXO set today, it's up five gigs. 4:41:55 So you can have 32 gigs for $59 plus, you know, $39 for one terabyte SSD. 4:42:01 And the Internet bandwidth is growing and becoming cheaper, even faster. 4:42:04 So actually, the real bottleneck among the four of those is the UTXO memory, right? 4:42:09 The resident memory for UTXOs right now is like, would be, you know, five million UTXOs. 4:42:15 I mean, last I checked, it's either I might be mistaken on this, but that's the that's the most expensive part of the cost of the node is the RAM. 4:42:24 And again, you can build for $200 with off the shelf components and know that will run for the next 10, 20 years. 4:42:29 Today, in my book, that's cheap enough. 4:42:33 Interesting, you don't you don't have the view that Paul and I think if I'm not mistaken, Luke does, that it would be good if the block size shrunk. 4:42:41 I think it would be negligible, like the cost of assembling your own node would go down by $20, $30. 4:42:48 But the sweet spot for memory, the sweet spot for SSD drive space is one terabyte for $30 on Amazon. 4:42:54 Go Google, go into Amazon and enter one terabyte SSD and you'll see $29.95, $39.99. 4:43:00 From reputable vendors, right? 4:43:02 These are not Chinese companies. 4:43:04 Those are very interesting points. 4:43:06 Super, please jump in. 4:43:09 Yeah, so one thing I'd like to point out is that the the chain is growing at a rate of about one gigabyte per month. 4:43:15 So I don't think a one terabyte hard drive is going to get you through the next 100 years. 4:43:22 It's going to it's going to get you through maybe five. 4:43:26 That's not accurate, because a prune node is only eight, it's only eight gigabytes. 4:43:31 You don't need to maintain the whole archive of the entire chain. 4:43:35 You can keep eight gigabytes today and stay that way forever. 4:43:38 Or if you do insist on having the whole archive of the chain, then yes, one gigabyte per month is going to be one terabyte. 4:43:45 And how many by that time you'll be able to buy 100 terabyte SSD for the same amount. 4:43:51 So as far as I'm concerned, the technology has run away and keeps running away further. 4:43:56 Like you will not need to build a node for less than $150. 4:43:59 It becomes negligible cost. 4:44:01 It's already negligible, pretty much. 4:44:04 For me, it's not negligible. 4:44:07 It's not it's not that easy for me to sync a node right now with the hardware I have. 4:44:13 You're talking about the IBD, right? 4:44:15 That's the bottleneck. 4:44:16 There's an initial block download, right? 4:44:18 Yeah, because the cheapest way to run a node is to buy a used laptop that is 10 times more powerful than Raspberry Pi, but cost $200 on eBay. 4:44:27 And that used laptop will do an IBD in two days. 4:44:31 So once you pay that initial cost of IBD, you no longer need to keep 500 gigabytes around. 4:44:37 You can prune it down to eight gigs. 4:44:41 Sure, I've done that as well. 4:44:44 I live in an area where people don't, not only me, but I don't know anyone in my area who's able to easily acquire an old laptop that can easily do initial block download. 4:44:57 Do you have a mailbox that a used laptop from eBay can be delivered to them? 4:45:04 That's your answer. 4:45:06 But I don't and neither do the people who I interact with. 4:45:09 Well, neither do African villagers, but it doesn't mean that Bitcoin should be $10 per node or cheaper, right? 4:45:15 There has to be some kind. 4:45:17 Yeah, yeah. 4:45:18 That's precisely what I think it means. 4:45:20 No, but if you ask someone like Luke Jr., he says that if you can't run Bitcoin on a used Android that costs $20, then Bitcoin is not decentralized. 4:45:32 So what's your answer to that? 4:45:33 My answer to that is that's an extremist position, right? 4:45:36 My answer to that is that if you want to completely verify your own payments and you cannot pay $100, then perhaps you can share a node between a few people. 4:45:46 Alex, what is the downside of shrinking Layer 1 if we have peer-to-peer Layer 2s? 4:45:53 Why can't we just simply move that activity on an opt-in basis? 4:45:56 I'll tell you what the downside is, right? 4:45:58 If the Layer 1 is downsized and the only banks can afford to pay $1,000 fees to settle transactions on Layer 1, then you essentially priced out almost every other use of Layer 1 for regular people. 4:46:12 I mean, do you want people to sit there waiting for one weekend per month when the fees are affordable before they can move their savings? 4:46:18 That's the downside. 4:46:19 That's actually a much bigger cost. 4:46:22 The cost of spending a couple of hundred dollars on a transaction will be higher than the cost of buying a $200 node that can run existing chain for the next 20, 30 years. 4:46:33 But being able to validate Layer 1 is different than transacting on it. 4:46:37 Well, they're both needed, right? 4:46:38 They're both needed. It's not one or the other. 4:46:41 You need to do both. 4:46:43 Well, we want to make it opt-in and to transact, but to simply validate if it's cheaper, that's good. 4:46:51 Well, yeah, but imagine those people in El Salvador that have $500 in life savings stored in some UTXO. 4:46:58 And then 10 years down the road, once you've shrunk the block size, they see that they can only issue a transaction that costs $100 or more. 4:47:05 That's not fair to them, right? 4:47:08 Essentially, their savings become immobile. 4:47:10 They're basically locked up. 4:47:14 I'm not sure. When you say it's unfair, it's unfair if fees rise. 4:47:23 I'm not saying it's unfair if fees rise. 4:47:24 In fact, Bitcoin's security model requires that the fees rise dramatically. 4:47:29 I'm just saying that the amount of block space we have today, which is four megabytes, as you can see, these four megabyte blocks, that's kind of a good compromise between 4:47:39 a chain that's inexpensive enough to validate for most people, at least in developed countries, and the ability to use this chain as a data availability layer for roll-ups and other L2 extensions. 4:47:53 For example, Lightning Network simply stops working once the fees go high enough, right? 4:47:57 Because punishment transactions won't be worth, will cost more than the punishment that they exert on the person who stole your funds from a channel. 4:48:06 So we have some kind of precedent, right? 4:48:10 We have a system that works today, and there will be absolutely no appetite for shrinking block size, nor do I think we need to. 4:48:18 But I'm not a big blocker. 4:48:20 I think the block size should stay what it is. 4:48:23 And I think it's becoming cheaper to validate that chain every year, right? 4:48:29 You know, when the block wars were happening, the SSD cost five times more. 4:48:34 It sounds like, Alex, you make a very good point, but it sounds like you consider the pruning to be less of a significant negative than others. 4:48:45 Is that a fundamental difference of opinion there? 4:48:47 Pruning is not a negative once you've undergone initial block download, right? 4:48:52 Once you verify the whole chain up to the tip, there is nothing you gain by keeping old blocks. 4:48:57 You can keep just, you know, eight gigabytes. 4:49:00 Isn't that begging the question? 4:49:02 Because if the initial block download does impose a large cost, and then people can prune, doesn't that sort of avoid the problem that we're trying to discuss? 4:49:10 Well, yeah, so the problem is not even there. 4:49:12 Like, what I'm telling you is that go on Amazon.com right now and buy a one terabyte SSD, which is fast, for $39, and that'll be enough to run the chain for the next 10, 20 years as is. 4:49:23 That seems like, to me, that's a very, it's a very, I mean, I can't go to Amazon and buy a one terabyte hard drive if I don't have a mailbox, and I don't have a mailbox. 4:49:31 Well, then you can drive to a store, you can drive to a store and buy a one terabyte SSD, right? 4:49:36 The person can't, has to also have a laptop to use with the hard drive, so the whole thing is more expensive than if it were just a cheap cell phone. 4:49:42 I don't find these arguments convincing, because you can find a worst-case African villager that has $5 to his name, but it doesn't mean that Bitcoin should be accessible to him to run a lightning node and a real node and so on and so forth. 4:49:55 That argument falls apart. 4:49:57 Because, well, I want to go back to that, because earlier I asked why it falls apart, and you said because it's extremist, or that was part of your answer, but sometimes extreme position is the correct one. 4:50:09 It may be, but I'm saying reducing the block size is unnecessary given the current cost of technology. 4:50:15 It's just unnecessary. 4:50:17 And in fact, it's worse than unnecessary. 4:50:21 It's harmful because it reduces the ability of other layers to extend Bitcoin, because there will be layers such as drivechains or roll-ups or lightning network, right? 4:50:34 Which might have high economic density, but if they're all competing for 300 kilobyte block size, you essentially, it's like saying that let's build a highway system that only has one lane in each direction instead of two lanes. 4:50:46 I'd like to take a moment to just say what the space is all about for those who've joined recently. 4:50:54 This is a drivechain focused discussion. 4:50:58 Drivechain is Bitcoin Improvement Proposal 300 and 301. 4:51:02 I'm hosting this. I'm Henry. 4:51:04 I work for LayerTwo Labs, a software development firm focused on developing sidechain technology for Bitcoin. 4:51:12 And what we're discussing right now is a related topic of whether the block size on Bitcoin is ideal in its current form or whether it should return to a smaller block size. 4:51:24 And that's not part of Bitcoin Improvement Proposal 300 and 301. 4:51:28 But it's an interesting topic and one very apropos of recent discussions in crypto Twitter about block size and ordinals. 4:51:35 And that's how we've come to this topic. 4:51:37 And so we can continue with that. 4:51:38 But I also want to mention anyone listening is free to come up and share a thought or a question about this topic or drivechain and how they all relate. 4:51:48 Thanks. Please continue, Alex or Super. 4:51:55 I find it very hard to run a node right now. 4:51:59 Due to the type of lifestyle that I live, the kind of places that I live in, the kind of resources that I have access to, it's very hard for me to run a node. 4:52:09 I'm very much in the position of the African villager who only has a cell phone and would still like in that situation to be able to validate everything and know that his transactions are secure. 4:52:21 Well, wouldn't you agree that it's hard for you to do initial block download? 4:52:25 After that, you would not have problems running. 4:52:30 No, I would have trouble running a node right now because of the amount of data per day that it consumes. 4:52:40 The ideal situation would be that I can fire up my node maybe twice a day. 4:52:46 And during the space of about a 30-minute period, it'll download all of the data it's needed. 4:52:51 It's gotten from the past day or two days and all the transactions that have come in and then validate them. 4:52:58 That's what I would like to do on my cell phone in order to actually say, OK, I'm running a node and it's not hard and anyone can do this. 4:53:07 But we're not in that situation. 4:53:08 Have you considered disabling block upload? 4:53:10 Because it's a setting, right? 4:53:12 If you're running 4, you can disable uploading blocks to other nodes and then your bandwidth will fall dramatically because no nodes will be requesting blocks from you. 4:53:21 I mean, you'll be refusing these requests, so your upstream bandwidth will not be impacted at all. 4:53:27 Yeah, I've turned that off. 4:53:30 But also, one thing I should do is try doing it on my cell phone and see what problems I run into. 4:53:38 The only devices that I've actually done this on are laptop computers, desktop computers, and Raspberry Pis, of which the most difficult one was the Pi. 4:53:46 And I'm using that as a proxy for my experience. 4:53:50 But yeah, when I did everything I could to save bandwidth, it still takes quite a bit, just downloading all the blocks, especially when there's 4 megabytes in it. 4:53:59 Right, so if it's a limitation of your G3 network that's unable to handle 4 megabytes every 10 minutes, then you would have problems running it. 4:54:12 What about any upload? 4:54:15 So basically, the minimum requirement is being able to download 4 megabyte blocks every 10 minutes, which per second, bandwidth-wise, does not amount to more than 128 kilobytes per second. 4:54:26 It's actually less. It's more like 64 kilobytes per second. 4:54:31 If you do a calculation, divide the number of seconds in 10 minutes, 4 megabytes divided by 3,000. 4:54:38 Sorry, there's 3,600 seconds per hour. 4:54:44 It's a little bit hard to hear you, Alex. Paul, welcome to the stage. 4:54:47 Yeah, I stopped being able to hear you about four sentences ago, Alex. 4:54:53 I heard something about, it sounds like you're doing a calculation of the amount of seconds in kilobytes per second. 4:55:02 Now I can't hear you at all. 4:55:04 I'm only here, guys. I apologize for wind noise. 4:55:09 I'll mute myself or I'll stop, but basically what I'm saying is 4 megabytes every 10 minutes is less than 128 kilobytes per second. 4:55:18 Now some cell phones, like Android cell phones, do not give you this much bandwidth. 4:55:23 That would be a problem. 4:55:27 I can't hear you again. 4:55:28 There's something important, though. 4:55:33 The smaller the Layer 1 blocks, the better, because it's a mandatory entrance requirement for everyone. 4:55:40 We have SPV mode, which is also great. 4:55:44 It deserves a completely different reputation than what it has, because it's absolutely amazing. 4:55:49 But that's a conversation for a different time. 4:55:50 SPV mode is going even further, like Layer 1, Layer 3, Layer 2, Layer 1, SPV or whatever. 4:56:00 Disabling uploading is a little bit cheating, one would say, because in order for you to download, someone else has to upload. 4:56:10 The fact that that was the first go-to thing, that struck me as a little off-key, after saying all those extremely expert things about Ethereum. 4:56:20 I agree with you, Paul. Disabling uploading is a pre-loading on the network. 4:56:25 I agree with you. 4:56:26 But so is pruning blocks, because when you prune the blocks, you cannot supply those old blocks to other nodes that want to do IBD. 4:56:33 So this is rampant in Bitcoin today. There's nothing new about that. 4:56:36 In fact, what we should do is we should actually be encouraging this, believe it or not. 4:56:40 I think when people first download the software, it should do as much pre-loading as possible. 4:56:45 It should be SPV only. We should be trying to get that downloads number as high as possible. 4:56:49 And then people should be able to have, I don't know if it would be like a slider or what, but we want to get all the numbers up. 4:56:56 So the best way is to first get all the people to just download the software on day one, or as soon as possible. 4:57:05 ASAP. And then some of those people we can convert to being the fullest of the full nodes. 4:57:12 But it's not like there are people out there who would have been a full node, but for the fact that we gave them the option to cheat. 4:57:23 If people wanted to cheat, they'll cheat. 4:57:26 Ironically, the largest number of full node installers that's happening in the last few days is people who want to do ordinals and inscriptions. 4:57:36 Because ordinals and inscriptions require that you enable TX index on your full node, which disables pruning. 4:57:43 This is 100% correct. So what we should be focusing on, if we want to get the numbers up, we should say, well, how can we build the node? 4:57:51 And I have a couple of ideas in mind for this, but it's like, what should the node be doing that only the node can do, and why would we want TX index? 4:58:02 The marginal cost of going from full to TX index is frankly very small, but the point is we should be saying, let's make the node actually do something so that people decide they want to actually run it now. 4:58:16 It doesn't do anything all the time. 4:58:18 Right. For example, the node could track ordinals and inscriptions, right? 4:58:22 Yeah, that's one example. I mean, we have also something I call CoinNews, like the idea that the block explorer, your full node has all the data required to be a totally private block explorer that is not connected to someone's HTML server or whatever we're doing now. 4:58:40 So there's actually quite a few different things that we could and should do to induce people to run the node. 4:58:46 Well, the best way to do that would be to have Umbro and all these node companies, manufacturer nodes, have the batteries included, essentially. 4:58:56 They should ship you the node with the entire chain downloaded that you can verify by checking a hash of a recent block on multiple block explorers, and then your whole node comes with full IBD and node pruning and all the ordinals and inscriptions enabled as well. 4:59:11 That would be the easiest, most scalable way. 4:59:13 I think this is very close to my point of view, but not identical. 4:59:19 My point of view is that there's a world of difference between syncing the chain up until the present moment and syncing the chain upon which strategy do we rely to keep the chain in sync from the present moment into the future. 4:59:34 So we have present to future, which is completely different, and then we have syncing from day one up to the present. 4:59:44 To me, these are night and day differences. 4:59:47 You can save on IBD, but you cannot save on bandwidth of incoming blocks. 4:59:54 That's exactly right. 4:59:56 I completely, 100% agree that for the initial block download, there's really no reason not to just make that one gigantic... 5:00:02 whatever you want to call it, you know, tarball zip file or something, or just a USB stick that you can buy, etc. 5:00:10 All these companies that are selling you nodes, including Lightning nodes, should give you the option to check off a box, pay maybe $10 more, and have a node that already has IBD that you can verify trustlessly by checking a hash. 5:00:26 Yeah, I agree. Because there's an underappreciated night and day difference between syncing it up until the moment... 5:00:33 But the cultural problem here is that core devs that write C++ don't trust anybody, including the compiler. So it's not enough for them to even compile the C++ code, they need to compile the compiler. 5:00:47 You're completely right. In fact, I think it goes a little further than that, where it's just for whatever reasons, for social reasons, for irrational psychological reasons, this type of idea has trouble even spreading. 5:00:59 The idea that IBD could be faster because of just checking the hash against, you know, the universe that you live in. 5:01:06 There's proposals like Utrixo that saves you the entire IBD download by doing a ZK. 5:01:14 Yeah, I completely agree that Utrixo... There should be different types of full nodes. So, for example, you could have a full node on your phone that uses Utrixo. 5:01:25 You could use a different full node somewhere else that does not. 5:01:29 Your phone... Notice that Utrixo requires more bandwidth, but less space, but your phone actually has an enormous amount of bandwidth because every night you plug it in to charge it and it's not doing anything. 5:01:41 So like from 3 to 5 a.m. it can be like using your 5G or whatever to just... Even this, assuming you don't have Wi-Fi, but even if you didn't have, you know, it could be... 5:01:51 There's actually plenty of spare bandwidth on a phone because you're asleep most of the time. 5:01:56 And so the Utrixo full node is just a very easy idea, but again, like people just don't like it because of this weird culture problems in Bitcoin. 5:02:04 So we just hate good ideas. 5:02:06 Well, I don't know why. 5:02:07 It's because... 5:02:08 There are people who don't like it. Go ahead. 5:02:10 The culture is centralized, right? The culture is monoculture. 5:02:14 It's the culture of hardcore Unix hackers that don't trust their compiler and, you know, use PGP and they need to recompile the compiler on a machine before they will trust anything. 5:02:26 But by the way, speaking of Utrixo, Utrixo itself is obsolete because people from ZK Sync, which is one of the, you know, like Elie Ben-Sassan, whatever, the guys that did ZKStark, they're in the middle of testing, you know, doing a ZKStark of the whole Bitcoin blockchain. 5:02:41 So you just have a single proof that proves that the chain that you have produces the UTXO stat that you have. 5:02:47 You're done. There's not even a need for Utrixo. 5:02:50 Yeah, I agree. I agree with that. 5:02:53 I don't think that people don't... There's a lot of people who don't like it. 5:02:58 I think there's a lot of people who maybe prefer to verify everything. 5:03:03 But if you make a product, like if Umbral today offered, we can now ship your node with IBD already done, I think it'd be very popular. 5:03:12 I think most people would buy that version, even if it did cost an extra $10. 5:03:15 Right. It's all about options, right? 5:03:16 If you want this option of Umbral, check here. 5:03:18 If you want the other option, check there. 5:03:20 Let 1000 flowers bloom. 5:03:21 Let the people choose, basically. 5:03:23 Instead of everybody being an austere monk like Cordevs, not everybody needs to become a Buddhist monk in order for Buddhism to succeed. 5:03:33 This is the same thing. 5:03:37 I do wonder, though, if the precinct node would get... I have no idea. I can see it going either way. 5:03:42 So don't you think maybe some people would be like, whoa, whoa, that's not... 5:03:47 You know, like the Buddhist monk thing. 5:03:49 They're like, you didn't really run the real node. You didn't hike up the mountain. 5:03:53 You have a choice to become a monk or not to become a monk. 5:03:56 Umbral should not deny you the choice. That's all I'm saying. 5:04:00 But that's also the world we live in. 5:04:02 You can make a product that is a full node with IBD already synced. 5:04:07 And if it's better than Umbral, people will buy yours more. 5:04:10 And maybe even Umbral will be like, that's a good idea. We're going to add that as an option. 5:04:14 But for social reasons, you will not be considered a true Scotsman. 5:04:18 You will not be considered a true Bithless. 5:04:21 So this is a peer pressure from the Maxi cult people that just basically require that everybody verify their compiler before they compile everything. 5:04:30 And they perform, you know, an independent reproducible build inside 32 virtual machines, which is what Tor does. 5:04:37 I mean, if you want to go true blue, like, you know, we're talking about Luke-Jr. 5:04:41 You cannot trust your compiler. You cannot even trust your hardware. 5:04:44 I mean, where does it stop, right? 5:04:47 I don't think any Bitcoin maximalist would get mad at you or anything if you said, I wanted a full node, but I didn't want to do IBD, so I downloaded it. 5:04:56 I'm not going to get mad and yell at you or anything. 5:04:58 What I'm saying is that the companies like Umbral do not provide this because it's a reputational risk for them to do it. 5:05:04 Because they would be labeled on Twitter as shit pointers. 5:05:07 You know, you're not doing a true blue full node. It's a reputational risk for them. 5:05:11 So that's why they don't do it. 5:05:14 Well, maybe they just, they just need a couple people, like, Paul Sztorc and me and you all endorse it. 5:05:20 So if we just all endorse it, then they won't get the negative. 5:05:24 No, no, we are not considered true blue Bitcoin maximalists because we are okay with ordinals. 5:05:29 At least I am okay with ordinals, right? 5:05:31 Not only am I okay, but I think, you know, it's a beautiful thing to see a 10 block, 10 blocks to clear mempool after having, you know, one block to clear mempool. 5:05:41 And hopefully that goes to 100 blocks to clear mempool. 5:05:44 The moment you say that, Dan, we are basically poor. 5:05:48 We can't hear you perfectly. 5:05:51 I think celebrity endorsements fix this. 5:05:53 If you get some Bitcoin celebrities to say this is a good idea, then it won't have a negative perception and it won't have come with a reputation risk. 5:06:01 Only from prestigious celebrities like they're Gigi or, you know, Adam Back or, you know, Jameson Lopp or somebody like... 5:06:11 Yeah, I think all those guys would go for it. 5:06:13 I think it didn't cost to offer. 5:06:15 It precinct node when they offered nodes. 5:06:18 Well, and then they discontinued it because there was no money in it. 5:06:21 Nothing but reputational risk and customer service. 5:06:23 They didn't want that business for that reason. 5:06:27 But I don't think their reputation took a hit when they offered that product. 5:06:31 Yeah, but I think that'd be cool. 5:06:33 Jameson Lopp is all for it because he had a product that did this. 5:06:39 You know, like, in a related subject, for example, I don't believe that Lightning is ever going to be flubbed. 5:06:45 Simply because running a Lightning node is completely isomorphic equivalent to running a bank. 5:06:50 A bank that manages liquidity with counterparties. 5:06:53 And forget African villagers, you know. 5:06:55 Nobody wants to run a server on the Internet, right? Period. 5:06:58 Every startup that counted on people running their own servers has failed. 5:07:03 Therefore, Lightning is still very useful. 5:07:05 It's useful for Strike to do private channels with Japanese banks or banks in Nigeria on advertised channels. 5:07:11 But this whole movement that every club needs to run a Lightning node over TOR is completely misguided. 5:07:17 That's just never going to happen. 5:07:20 So, Hampus keeps giving the thumbs down. 5:07:23 I think, Hampus, if you want to speak, that'd be great. 5:07:25 But I think I know what you're going to say. 5:07:27 I kind of agree that to really use Lightning, you technically need a full node. 5:07:32 And you need a Lightning node. 5:07:33 And you need to be connected to the Internet. 5:07:35 But most people don't really do these things, though. 5:07:38 People don't really do those things. 5:07:40 People download an app. 5:07:42 They download a Lightning wallet. 5:07:45 And people don't even know. 5:07:47 Like, half the Lightning wallets are custodial and half are not. 5:07:50 And people don't even know which are which. 5:07:52 Even I forget and I have to keep looking it up. 5:07:55 And by the way, I'm not against those people doing it. 5:07:58 This would be an option to those who want to run their Lightning node on TOR. 5:08:03 Let them manage liquidity with counterparties. 5:08:05 Let them do all this stuff if they so choose. 5:08:08 But it's just completely unrealistic to expect, you know, one billion clubs to onboard into Lightning ever. 5:08:15 Like, we will never see more than a million clubs running Lightning. 5:08:19 Let's see what Hampus, if he wants to say anything. 5:08:25 Yeah, I think, I mean, he probably wouldn't appreciate me trying to speak for him. 5:08:29 But I'm going to do it anyway. 5:08:31 Hampus, you can come up and correct me. 5:08:33 But people can and do run Lightning nodes on their phones. 5:08:37 Hampus makes a product. 5:08:38 Oh, there he is. 5:08:39 He's up here now. 5:08:40 Hampus, take over for me. 5:08:41 Thanks for joining, Hampus. 5:08:42 Go ahead. 5:08:43 Yeah, thank you, Andrew, for hosting this. 5:08:44 I think these talks are really great to have. 5:08:47 I kind of agree with Alex that, like, I don't think every club should have their own umbrella node and have a Lightning node. 5:08:54 Because, like, right now we see that it's taking a toll on the network because some of these nodes are running on poor Wi-Fi connection and stuff. 5:09:02 And it's slowing down payments and stuff. 5:09:05 So I don't think that every club should just host their own Lightning node. 5:09:10 But, as Supertestet said, you can still have your own, like, Lightning wallet on your phone that is using real Lightning channels. 5:09:20 And that is happening today. 5:09:22 So, yeah, I just wanted to chime in on that. 5:09:25 Because, like, having a routing node and having, like, a private Lightning wallet, those are two different things, right, Tindy? 5:09:33 Yeah, but I'm all for it. 5:09:35 It is possible to run a Lightning node, for example, on your phone. 5:09:39 However, are you also running a watchtower? 5:09:42 Are you managing liquidity that's incoming and outgoing from your node? 5:09:45 Clearly the answer is no. 5:09:47 Very few people do that, right? 5:09:49 The problem is that it's a false sense of security that you have. 5:09:52 Like, if you want to become a bank… 5:09:55 You do a trade-off, right? 5:09:57 Right. 5:09:58 If you want to become a bank and manage liquidity with untrusted counterparties, be my guest. 5:10:02 But don't expect the world to do this, right? 5:10:05 No, I don't expect that. 5:10:07 But, I mean, it's a trade-off that the user makes, I suppose. 5:10:10 Like, most Lightning wallets that are a real wallet on the phone, like a node, they use the LSP model. 5:10:17 So, they have, like, a Lightning service provider, like Breeze and Phoenix and Blitz. 5:10:22 Right. 5:10:23 In that case, they're cool into PayPal. 5:10:25 Cool into PayPal, in that case. 5:10:27 It's not even Bitcoin that's being used. 5:10:29 I mean, it's still on the network. 5:10:32 You still use the real Lightning network, and you still have the privacy benefits of using Lightning. 5:10:37 So, I don't buy that at all. 5:10:39 Well, you have privacy benefits, but you only have, you know, SAT IOUs from your LSP. 5:10:44 You don't actually have SATs. 5:10:46 That's incorrect. 5:10:48 You still have real Lightning channels, even if you have a trust to the LSP. 5:10:53 Well, that's it, too. 5:10:55 There's no difference between having, like, a private channel and a public channel. 5:10:59 It's just you have some trust in the LSP, and you don't need to use an LSP either. 5:11:03 I mean, you can connect to it whenever you want. 5:11:05 I mean, isn't it the case that the LSP is actually running the Lightning node, and you're just the channel that doesn't actually carry any SATs? 5:11:13 It just carries commands to the LSP, right? 5:11:15 No, that's not true. 5:11:17 If you use FlixWallet, MyWallet, or Breeze, or Phoenix, you have an actual Lightning node on your phone, like an actual node. 5:11:25 And you can open a channel towards the LSP node in question. 5:11:29 But this channel is just as real as any other channel in the network. 5:11:33 So, no, that's not true. 5:11:35 What happens to your SATs if your LSP goes offline permanently? Do you lose them? 5:11:38 Well, then you will have to force close the channel, but you still have your funds then. 5:11:43 You'll have to wait the timeout period. 5:11:46 There's no difference between having a public channel, like an umbrella node, and having a Lightning wallet on your phone. 5:11:55 That's actually happened to me. 5:11:57 I used one of these Lightning nodes on my phone, and my LSP did go down. 5:12:02 Consequently, when I went to make my next transaction, my phone alerted me that the node was down, and consequently it forced close the channel. 5:12:13 And then I had to wait two weeks to get the money back into my wallet. 5:12:17 But, yeah, I still kept the money, even though the LSP went down. 5:12:20 How much money did you have in your channel, let me ask you this? 5:12:23 At the time, I think it was about $100. 5:12:26 Now, would you be able to close the channel if the fee was more than $100? 5:12:31 I couldn't hear you, Alex, but I think you asked if the fees were really high. 5:12:37 Yeah, if the fee was $50, wouldn't you lose half your money? 5:12:40 Yeah, yeah, you would. 5:12:42 So that's one of the reasons why full block size is a bad idea. 5:12:46 Yeah, I agree fully with that. 5:12:48 Because it disables Lightning, you know, closing transactions, simply. It just makes them uneconomical. 5:12:54 Yeah, I agree with Alex. 5:12:56 Like, if the main chain has high fees, then Lightning just kind of dies. 5:13:01 Because the HLCs and forced close transactions, they cannot be economically viable on the same. 5:13:08 So that's why I personally like having a sidechain, an internet of sidechains that you can deploy Lightning over instead. 5:13:16 Right. 5:13:17 And those could have low fees. 5:13:19 I suggest that you guys take a look at the report about validity roll-ups. 5:13:23 And there's an explicit comparison between Lightning and what a high-volume validity roll-up would look like. 5:13:28 First of all, you would not need to have an online network. 5:13:31 You could truly have a phone, a live wallet for the roll-up. 5:13:34 Second of all, you would not need to manage any liquidity. 5:13:37 You would just issue payments and keep roll-up. 5:13:40 And with that kind of setup, all the problems with the Lightning network would be fixed. 5:13:43 And you would have more security because on a roll-up, your deployments would be just as secure as your private address. 5:13:51 In both senses, in ownership and double status. 5:13:55 So essentially, Lightning was tried on Ethereum as a more generalized form of Lightning called Plasma or state channels. 5:14:02 They tried them both. 5:14:03 They abandoned them both for a good reason, which is because it has these undesirable trade-offs where you have to be, A, online. 5:14:10 Therefore, you have to have warm keys. 5:14:12 B, you don't have full L1 security, either ownership or double-span, right? 5:14:17 And C, you're subject to miner attacks, so Lightning jamming attacks, or simply cancer nodes sitting in a Lightning node graph that are run by two analyses that review all your payments. 5:14:27 You could have a privacy-enabled validity roll-up that suffers from none of those things and gives you exactly the same security as Bitcoin L1. 5:14:36 That's why in the long run, Lightning is very powerful. 5:14:40 I don't think you'll find very many people here who oppose roll-ups. 5:14:45 I imagine most of us think that'd be great to get roll-ups into Bitcoin. 5:14:52 Well, I mean, I'm saying that roll-ups are the future and let the drivechain be the present, you know, one step at a time. 5:15:00 The thing is, the impact of roll-ups on Bitcoin is basically the same as the impact of ordinals and inscriptions. 5:15:06 They just eat up more block space, and they have this opaque predicate that checks the proof that it's just 10 times more expensive than a single signature check. 5:15:15 So from a point of view of impact on Bitcoin validation and the cost of the node, there's occasional transactions, you know, that cost 10 times more to validate than a simple Bitcoin spend transaction. 5:15:26 But those happen once per block on a roll-up, right? 5:15:29 They don't happen all the time. 5:15:30 They happen once every 30 seconds or once every minute, whatever the roll-up block time is. 5:15:36 Assuming it's even a blockchain with blocks. 5:15:38 It could be a blockchain without any MEV. 5:15:41 The technology has moved on, right? 5:15:43 Bitcoin is like this sort of like antique, you know, like sort of preserved kind of like Andaman Islanders, you know, near India where like no innovation penetrates because, you know, we're opposed to all changes kind of thing. 5:15:58 Well, that's a pessimistic view. 5:16:02 Bitcoin still has the largest market cap and economic actors are future oriented. 5:16:07 And therefore, the expectation among the entire market right now is that there's an enormous amount of future demand for Bitcoin. 5:16:16 I can give you a counterexample, right? 5:16:18 Economic actors want vaults, but vaults for some reason haven't been enabled in the money since five years ago. 5:16:24 Every economic actor that pays a lot of Bitcoin, be it on GEO or institutions, want vaults because they increase dramatically ownership security of Bitcoin. 5:16:32 And yet, a tiny tweak to enable vaults has gone nowhere because, you know, the six guys that are doing Merck pull requests in the core don't see the perfect vault solution or whatever. 5:16:44 There's lack of consensus or whatever the excuse is. 5:16:47 But this is like a pressing need to enable vaults to culminate. 5:16:51 And yet, it's just not being done. 5:16:58 Thank you. 5:16:59 It was a little bit hard to hear all of that. 5:17:01 But I agree with what you've said. 5:17:12 Well, everyone is welcome to come up to the stage and share a thought or a question about Drivechain or anything related to it. 5:17:23 This has been a pretty cool space, by the way. 5:17:25 Thank you so much. 5:17:27 I really appreciate you saying that. 5:17:29 I just want to say one more thing, which is that the best strategy for Drivechain community, so to speak, would be to do guerrilla marketing for op vault. 5:17:37 Because it's better to have permission of Drivechains than not to have Drivechains at all. 5:17:43 The idea of Drivechains seems threatening. 5:17:45 But the idea of recursive covenants that would enable the Drivechains to a backdoor seems to be sort of mainstreaming now in Bitcoin community. 5:17:55 Alex, I've never heard of any Bitcoiners who campaigned that we need to get vaults into Bitcoin. 5:18:04 You said earlier that it's been something that OGs have been talking about for a long time. 5:18:08 Can you elaborate more on that? 5:18:10 Yes. 5:18:11 I mean, the example of that was on CTV a year ago when Jeremy Rubin proposed a simplified, super safe version of covenants that would enable vaults. 5:18:22 He essentially was met with the whole peanut gallery on Twitter claiming it's an attack on Bitcoin. 5:18:29 He went through all the movements, all the motions. 5:18:32 He had hackathons. 5:18:34 For two years, he's put up a bounty for Bitcoin for anybody that finds a bug. 5:18:41 The system is supposed to work in a way where if there's no technical objections, then using the old IETF idea that we don't believe in emperors and kings or voting. 5:18:53 We believe in rough consensus and running code. 5:18:55 That was an example for how vaults and covenants in general were rejected simply because of infinite bike sharing. 5:19:02 It seems like it's not the most general solution. 5:19:04 But the general solution would allow recursive covenants. 5:19:08 And there was a lot of thought about recursive covenants enabling government-controlled Bitcoin. 5:19:13 So, essentially, it went nowhere. 5:19:15 But now there's a new proposal, which is doing better marketing, called up-vault, up-unroll, which might have a chance to go through. 5:19:23 And then it could be repurposed to do recursive covenants that would enable space chains, drivechains, and validity roll-ups. 5:19:31 Validity roll-ups would need one more opcode. 5:19:34 They require two opcodes, recursive covenants, and they require an additional opcode. 5:19:40 Opstark. 5:19:41 Opstark-verify, I call it. 5:19:42 Basically, a protocol that returns true or false if the proof is checked out. 5:19:46 But they do require recursive covenants in order to move the treasury from block to block indefinitely so that the treasury can be spent from by the code running opstark-verify. 5:19:57 So vaults are another case like WBTC, where basically you have, you know, hundreds of billions of dollars of Bitcoin secured by institutions that could be secured 10 times better with vaults, right? 5:20:08 Because, you know, the insider attacks and theft would essentially become very, very improbable to succeed because vaults will allow you to monitor the chain for unauthorized transactions and then reroute the withdrawal to another cold address, right? 5:20:22 So it creates another line of defense on large pools of Bitcoin. 5:20:26 Everybody wants them, but for some reason, people who are in core are loathe to do something that's controversial because it's nothing but reputation risk for them, and essentially it's a state of apathy over there, right? 5:20:39 Doing nothing is the least risky dominant strategy, and therefore nothing is done. 5:20:47 In, I think it was 2018, Brian Bishop is a Bitcoin developer, and he made an implementation of vaults that uses pre-signed withdrawals from a Bitcoin address whose private key has been deleted. 5:21:03 Have you looked into that at all? 5:21:05 Yes, it's a very complex system. You know, if you look up Bitcoin.com underscore vault on Google, I apologize for the wind noise, but if you look up... 5:21:15 Yeah, it's really bad, the wind noise. I'm sorry to say. 5:21:18 I'm going to mute myself, basically. 5:21:23 Yeah, I was looking into it recently because it gave me... I found it fascinating that you were able to emulate this vaulting technique that was first pioneered by CTV and now is proposed in OutVault without a soft fork, and all you had to do was create a bunch of pre-signed withdrawals from a Bitcoin address and then delete the private key, and now you've got it. 5:21:43 I thought, that's really cool, but I don't see anyone using it though. 5:21:46 It's because it's very impractical. You create a highly fragile system where if one of those transactions goes missing, you lose all your funds, essentially. 5:21:54 So, it's not a practical, pragmatic, realistic vaulting setup. The recent proposal is the best that's ever come around. It was published a few weeks ago called up underscore vault. 5:22:05 You can just up underscore vault, up underscore unvault, two up codes are proposed, and they create industrial strength, bank level vaults that have all the desirable features while trying to constrain the possible things that could go wrong. 5:22:20 It's sort of like the best proposal yet, and I suspect that if it goes through, it could be repurposed for drivechains, space chains, and other L2 systems as well. 5:22:33 Did you say that the Brian Bishop system is fragile because there's a data availability issue? 5:22:42 Well, because you have toxic data issues. You cannot prove that you destroyed the keys. That's the number one problem, because you have to erase the keys in order for the system to be secure. 5:22:53 So, in an institutional setting, how can you prove that some insider did not keep a copy of the key? That's the biggest problem. 5:23:02 Are you asking me, or is that rhetorical? 5:23:05 That's a rhetorical question. I'm saying any system that has toxic data, which is the data that must be deleted, but there's no way for you to prove that it was deleted, is essentially a non-starter for security. 5:23:16 Well, I suppose one thing you can do is you can have all the people who were involved in the vault do a big multi-sig, an M of M, and then as long as you deleted your key, you know you're safe, because no one can do anything with that key anymore. 5:23:30 So you deleted your shard. 5:23:32 Yes, that would work, but it would require elaborate ceremonies. Yes, that would work. 5:23:38 That's what corporations are, they're big elaborate ceremonies. 5:23:42 Then the problem is that you have these precious transactions that are pre-signed, and actually these vaults cannot respond dynamically to threats. 5:23:50 For example, the whole sequence of pre-signed transactions is hard-coded, and you cannot do key rotation, or for example, you cannot move your cold storage from one provider to another because the keys are already there for the old provider. 5:24:02 It's kind of a lock-in to the cold storage provider as well. 5:24:06 The cold storage provider? I'm not familiar with this term. 5:24:11 What I'm saying is that let's say MicroStrategy is a publicly traded company, right? 5:24:20 I think it happens to store its entire pile of Bitcoin at Nightdig or maybe Coinbase. 5:24:26 I don't know exactly where, but for conflict of interest reasons, it cannot custody its own Bitcoin because it becomes possible for insiders to steal it, right? 5:24:36 So you would have a custodial of your cold storage that your vault would be on top of, but if that company now started charging you 2% per year to custody your Bitcoin, you want to be able to switch the custodial. 5:24:50 Does it make sense? 5:24:55 Well, yes. It's cogent. You've lost me and not lost me. 5:25:01 I got stuck thinking about there's some rule or policy within the company that says they can't hold their own Bitcoin. 5:25:07 That seems like a bad rule. 5:25:09 It's not a company policy. It's a public company policy that custody should not be accessible to insiders that can steal company funds. 5:25:17 That's why corporations like Google do not custody their own money. They have Goldman Sachs or State Street Bank custody their own treasury, right? 5:25:25 It's the same thing here. It's not a company policy. It's just the rules for publicly traded companies. 5:25:31 It seems like a bad rule. It seems like a really good benefit for Goldman Sachs if everyone has to go with it. 5:25:40 Yes, but it plays the separation of powers idea, right? 5:25:44 However imperfect it is, at least your CFO cannot run off with the Bitcoin. 5:25:49 Now, it sort of has this idea that Fidelity or Nighting or Coinbase would be less likely to have the interest to steal your Bitcoin if they are regulated as custodians, as opposed to the combination of your CFO and CEO just pretending like there was a hack and running off with 100,000 Bitcoins from MicroStrategy, right? 5:26:12 Hang on. I got stuck on another thing. I'm only partially listening because my mind's racing now. I'm sorry. 5:26:21 Are you sure there's a rule? You said it's not a corporate policy. It's like a law or something that says companies can't hold their own money. Is that what you're saying? 5:26:32 I'm not a lawyer, but I think every large publicly traded company does not custody its own treasury for a reason, because it's a regulation. 5:26:40 I doubt that. I doubt that's true. 5:26:46 Where would Apple custody $200 billion? It has to keep it in the bank. You cannot create a bank of Apple where it keeps it in the bank. 5:26:53 I recommend Coldcard. 5:26:56 Well, but you see, Bitcoin is another bearer asset, which means that the custody must be even more strict than custody of bank balances, right? 5:27:06 If Apple has bank accounts of 10 giant banks, even more so they should have a custodian for their Bitcoin as opposed to keep it on the Coldcard, because keeping it on a Coldcard makes it easy for the company insiders to run off with the treasury. 5:27:22 I wonder if we're getting too far away from our topic here. Feel free to step in if we're way far away from drivechains at this point. 5:27:32 I'll take your mind racing, because racing is a good thing. At least it's stimulating. I mean, no offense, but if it's an interesting conversation, you can dive right in. 5:27:44 Yeah, so that's what OP_VAULT fixes, right? It's like the insiders can't take the money anymore because the vault construction makes it so it doesn't. So that's what it fixes. 5:27:54 Well, it fixes that and it also fixes outsiders getting hold of your keys or somebody substituting the withdrawal address for their own address, right? 5:28:05 So all kinds of attacks on Bitcoin are essentially addressed by the vault because there's a waiting period of, say, one month when the transaction can be canceled. 5:28:14 And if you just monitor the chain and you see an unauthorized transaction, you can redirect the funds to where you want them to go. 5:28:21 So if vaults fix the insiders running away with the money problem, then that's not a good... I thought you used that as a reason to say Brian Bishop's vault construction is bad because you can't rotate keys. 5:28:35 Well, it's bad because you predefined all the possible escape addresses ahead of time for all time. You cannot change your escape destination address dynamically. 5:28:47 And why is that bad? 5:28:49 Why is that bad? 5:28:50 Because if you predefined your vault withdrawing to a custodian that now wants 10% of your Bitcoin per year, you cannot abandon that custodian and go with somebody else. You become locked into... 5:29:02 But I thought the whole point of vaults was so that we don't have... so that they can feel... the reason they're using custodians is because insiders might run away with their money. 5:29:11 But if they use vaults, then insiders can't run away with their money. So they don't have to use a custodian anymore. 5:29:16 Well, but no, what I'm saying is that they probably still have to use custodians for regulatory reasons. Like, try to look up where MicroStrategy actually custodies its Bitcoin or Tesla for that matter, right? 5:29:27 Neither company keeps it in-house. And that's not going to change regardless of what vaults or what multi-sig setups become available. Simply it's because an outdated regulatory requirement that if you're a publicly traded company, you should not custody your assets in-house, period. No matter what they are. 5:29:44 I doubt that there's any – if anyone can point me to any regulation that says you're not allowed to hold your own money, I'd be delighted to see it. 5:29:53 This is a rule that I'm familiar with from my background in the investment advisor compliance space. Firms are required to use what's called a qualified custodian to hold assets on behalf of others. 5:30:07 If those firms are registered with the SEC in certain cases or if they're publicly listed. So I'm familiar with what Alex is talking about. It's one of the features of the corporate world that if you're an investment advisor or a public company, you may have to hold your client's money with a separate party to avoid the principal agent risk and moral hazard of holding money for others. 5:30:32 But does that apply to your own money? If you're just holding your own money there? 5:30:35 Yes. If you're a publicly traded company, it's not your money. It's your shareholder's money. 5:30:39 Yeah, shareholder's money. You're an agent of the shareholders, right? You're doing what is in their best interest and that's why the government wants you to not be holding on to their assets. 5:30:50 Aren't the shareholders the owners of the company? 5:30:53 Yeah, but they're not the people who are holding the money and therefore people want there to be a separation. 5:31:01 It's a separation of powers idea that operational controls would be separated from 5:31:06 custody of the assets. 5:31:09 put in the nest, this is unrelated, I put in the nest another tweet, 5:31:14 which is a list of websites. 5:31:16 I made this list. 5:31:18 It's useful links for people interested in learning more about Drivechain. 5:31:22 We've got the Drivechain main website, drivechain 5:31:31 There's the Drivechain GitHub repository. Everyone's welcome to join our Telegram group. The Telegram group has over 700 members and there's also some great links to some additional resources like Fiatjaf, Nostr creator and awesome member of the Drivechain talk. 5:31:50 Telegram group, frequent presence there has made a web page devoted to Drivechain which is fiatjaf.com slash Drivechain. 5:32:00 It's a great summary in very plain English of all the benefits of Drivechain as well as a response to some of the more popular objections or questions about it. 5:32:11 I love that website. I recommend it. Again, fiatjaf.com forward slash Drivechain. 5:32:17 I hope those are useful. Yeah, welcome to the stage BTC Currency Curacao. Go ahead with your question or comment. Thanks. 5:32:27 I was wondering if we could touch on the subject of lightning network on the main chain versus lightning network on a sidechain because we got into the cost of node operation and running a full node on a phone. 5:32:44 But actually there's a limitation from lightning being a channel owner going viral because we can't onboard 7 billion people like in a 24 hour period. 5:32:56 But potentially if there was a large block sidechain, then all the plebs could have their own channel and I was just wondering if that was something people wanted to talk about. 5:33:11 Yes, that is accurate and the main disadvantage of sidechains is that they also rely on confirmations. 5:33:21 And in fact, a sidechain confirmation can only be best case scenario as good as a main chain confirmation. 5:33:30 So it's still like six or more as the rule of thumb and at least one. 5:33:36 And really the first one is the really annoying one because I don't think this in practice for most use cases there's no difference between like waiting 10 minutes and waiting an hour. 5:33:45 If either waiting 10 minutes is too long, just hopelessly too long or it's like it has to be instant. 5:33:53 But the main advantage of lightning is speed and the main disadvantage of lightning is onboarding and the main advantage of sidechains is onboarding. 5:34:04 So it's unclear exactly who will like which trade offs for what. 5:34:07 But the important thing to keep in mind is that users are very different people and transactions are also very different. 5:34:14 So, for example, someone may want highly censorship resistant transactions in one case. 5:34:23 So like you have like you're running your drug empire secretly at home, but then when you go buy coffee, you don't need. 5:34:31 You can now, you know, a completely different type of transaction will work for you in that case. 5:34:35 So people are different and the transactions are different. 5:34:37 But yes, another interesting topic is can the sidechain be optimized for lightning? 5:34:43 So can it, for example, what it would have like any pre-valid or sick has no input or L2? 5:34:49 It could be chain or things like taproot or whatever. 5:34:53 I think probably if we had gotten if this is a bizarre thought experiment, but I think a lot of people deep in the technical community, if you ask them to really think about it. 5:35:05 If in a hypothetical world where we prioritized drivechain over taproot, we probably would have had taproot on layer one faster. 5:35:14 So what do I mean by that is we would have had we could have tried taproot out faster. 5:35:19 We could have had it on the sidechain. 5:35:21 You could have been taproot is very good for lightning network because it's homogenizes the transactions. 5:35:29 It's good for multisig. 5:35:31 So those are some of my thoughts. 5:35:34 I do think there are a lot of people will think of them as competitors, which is sort of unfortunate, but also not completely unrealistic. 5:35:44 But more people should explore the idea of. 5:35:48 To what extent they would work together. 5:35:50 I mean, one thing that kind of bothers me is a lot of people say, you know, miners can steal when they're talking about the 300. 5:35:59 But they don't seem to really realize exactly what it takes for them to steal. 5:36:02 It's just like three to six months of just brazenly incorrect behavior. 5:36:07 One hash not matching another hash. 5:36:09 And then whereas the lightning network miners can also steal, it's much easier and they never do. 5:36:14 So I kind of think that both the lightning network and the 300, they'll be very secure and they'll be the combination will be secure. 5:36:21 So I think the combination will actually be really a winning thing for for lots of people. 5:36:25 But unfortunately, when you when you say something like that, you make it's like it's a it's a big risk because it's bound to be at least one person in the audience who has a problem with one chain of that long, long voyage of reasoning. 5:36:43 And they're going to say, oh, this part, I don't like this part. 5:36:46 But that's actually what I do think is the case. 5:36:48 But it's just so difficult of an idea to actually advance in the in the culture and in the space because because, you know, unfortunately, a lot of people have been trained to just this is partly because the scaling war. 5:37:00 But people have been trained to just say, like, lightning is perfect. 5:37:03 Go lightning. Lightning is absolutely the best. 5:37:06 And that's that's all well and good. 5:37:10 But it's kind of partially this is no one's fault in the Bitcoin community. 5:37:17 This is like, you know, people from Bitcoin Cash had terrible counter arguments against lightning. 5:37:23 And this made it look like anyone who argued against lightning at all was like a complete buffoon, which but all of this, this is all my weird backstory. 5:37:32 But but therefore, for whatever reason, certain ideas are very difficult to just convey in the community. 5:37:39 But I think this is a very good topic to be interested in. 5:37:43 To what extent will people actually because the lightning network's advantage in terms of speed is really, really important. 5:37:50 And I personally, if I use the credit card and they don't have the tap to pay, like I have to do the insert chip like that will like ruin my entire afternoon. 5:38:00 I'm just like, why is the world such an awful place? 5:38:05 So you have to think most of the people who work on on lightning and including myself and Hampus and well, any lightning developer I've ever talked to. 5:38:14 None of them think that lightning is that is perfect. 5:38:19 We're too experienced with it to know that it's an extremely important point, which is that. 5:38:25 None of the people who are like the leading experts in the lightning network actually hold that view. 5:38:29 So you're 100 percent right. But you I think I mean, it just looks like from my point of view, the fan club, the fan club is way like out of alignment with the people in the lightning network. 5:38:42 And I noticed that quite a bit. And one great thing was that I. 5:38:49 I think we can find the link. There's John Carvalho did a an interview on it. 5:38:55 Yeah. And that's that's really. And it was called Lightning Limitations, I think. 5:39:00 And it was right. It was like a couple of months after I wrote a blog post called Lightning Network Fundamental Limitations. 5:39:06 So I'm going to when I fall asleep at night, I sometimes take credit for all these things that happen later. 5:39:11 I say that was that was all me and no one will ever know if I was right or not. 5:39:16 But but they talk that they that that particular video is fantastic and everyone should listen to it. 5:39:22 And John did a great job of getting people who their their lightning credentials. 5:39:27 It's completely unassailable. They're like the tip top. 5:39:30 There's only like there's like one or two other people who even could have been there. 5:39:34 And, you know, you get it. That was a really a big sense of of sobering up. 5:39:40 And like they have a very, very accurate view of like all the problems. 5:39:47 And of course, we don't want to like we never want to be pessimistic because problems are a good thing. 5:39:52 Problem means that problems mean that things are being tried and. 5:39:58 It's always good whenever you solve a problem, you have, as Karl Popper said, you have problem children and problem grandchildren. 5:40:04 You just move on to this. So this is a big thing, but it is an enormous disconnect. 5:40:09 And I think people in the Lightning Network community, I just I think no one actually knows like what to do about like what to say, because you never want to give any sucker to the, you know, to the 5:40:22 the people who are going to be in bad faith. But at the same time, you have to have standards of. 5:40:28 So anyway, that's what I'm trying to say. It's like a weird idea that doesn't really fit into anyone's mold. 5:40:35 So the gap between between people who if there if there are any left people who think the lightning is perfect and the knowledgeable people who've worked on it and say, no, it's it's got pretty bad problems. 5:40:46 I think it's mollifying and or smallering and gradually it's going to filter down as people go to conferences and stuff and hear people talk about the problems they're going to see it's not. 5:40:58 Yeah, that's definitely not perfect. And we could definitely use more solutions. 5:41:06 But people seem to think that's like lightning is the end of scaling, but it's really not, right? 5:41:11 Because as we talked about earlier, if the main chain gets too high fees, then the lightning just doesn't work anymore. 5:41:20 So that's why I am pretty interested in drivechains, because you could deploy lightning over drivechains. 5:41:27 But the sentiment I hear is that people seem to think that we can just go with lightning and we don't need to do anything anymore, at least from the general perspective. 5:41:40 But of course, like lightning devs knows that this isn't true, right? They want L2 and other things. 5:41:46 But yeah, I think we need to get people need to understand that we need to do more things than just set them with lightning, because like, yeah, it's it isn't enough. 5:41:57 And we really need to stop thinking about these things. 5:42:00 And I just have to like can try to convey this idea to the audience, which is that since I work on something that is for Bitcoin, but different from lightning, this is kind of inevitably draws me into like the collateral damage or whatever. 5:42:14 Because people talk about this, the people who think lightning is, is perfect, and the end all be all, then I'll say, well, what about this is different than that. 5:42:23 And then I am like in the I'm like the anti lightning person. 5:42:26 And so if anyone who thinks I'm the anti lightning person, I have some I have some very interesting. 5:42:31 I have an interesting topic for you, which is you can look up in in 2015. 5:42:36 I, I added I programmed a lightning network for prediction markets into my project. 5:42:43 I wrote out the spec and I wrote a blog post for that. 5:42:46 And that was back in 2015, long before many of these new lightning people like had ever even come came to Bitcoin at all. 5:42:52 And then another thing is I did a thing with fraud proof meditations on fraud proof that rely critically rely on either lightning channels or just some kind of channel. 5:43:02 And I have to be connected to the lightning network or in some kind of channel. 5:43:08 And I think this is a fascinating idea. 5:43:11 I'm very much in favor of this idea. 5:43:14 But it's like you get we get drawn into this like kind of limitations. 5:43:19 You basically preaching to a choir because this is basically a Polish storks fan club here and we're all, you know, we all like you and love you. 5:43:27 I just wanted to point out that even if chain fees get to a hundred dollars, lightning will continue to work for large institutions. 5:43:34 Right. So strike interfacing with Japanese banks will not have a problem paying a thousand dollar fee because the liquidity that will have in lightning channels will be millions of dollars worth. 5:43:45 So that that is true, that that use case of lightning is incredibly useful because it and it enables your dollar payment system that has no trust in it. 5:43:55 Right. Like, don't don't forget, like today, all the payments between offshore banks happen mediated by central banks. 5:44:02 And, you know, Russian and Iranian and Chinese banks soon perhaps will have problems interfacing with the rest of the world. 5:44:08 But if they all got on lightning and private channels that have millions of dollars of liquidity, you would truly have an international financial system that would settle on Bitcoin would be dispute. 5:44:18 Resolution would be on Bitcoin. 5:44:19 They would all run their own watchtowers and it would be a huge, huge improvement over the existing, you know, Swift, basically. 5:44:29 Yeah, I agree with that fully, of course, I mean, like the lightning we have today with small channels and stuff like that. 5:44:37 Also, of course, it goes with the idea that over the life of the Internet, you know, the last 50 years, any protocol that required you to run your own server all the time has failed. 5:44:51 Right. Like. 5:44:55 Some people out there are still running their mail servers. 5:45:00 But those people are like. 5:45:02 Monks, right, so lightning is a little bit hard to hear you. 5:45:11 OK, is it better now? 5:45:13 Yes. 5:45:14 Yeah. What I'm saying is that lightning is a huge improvement on Swift and it will remain so even if change fees go to a thousand dollars. 5:45:20 That's basically what I wanted to say. 5:45:23 I agree. 5:45:24 And I agree with you 100 percent about that whole running on server thing is. 5:45:28 Only monks do it, basically. 5:45:30 Like, if you want to be a monk running your own SMTP server, you know, you're going to be the guy running your own money and managing liquidity with untrusted counterparties and defending yourself from denial of service attacks that come from North Korea, right? 5:45:42 I think also we have this concept of like it's one thing that's underappreciated is the network effects of money, which is like if some other thing that we don't like, that's not Bitcoin, you know, it could be a theory, it could be whatever, you know, anything, if they give you money, you're going to get it. 5:45:59 If they capture enough, you know, if they convert enough users, if they have enough people who use it, even if those people are idiots, you know, there's many more idiots than there are smart people, of course. 5:46:10 So, but if you get a critical mass of like, you know, it could be anything. 5:46:16 I don't know exactly how it will all play out, but it's through stable coins. 5:46:20 That's how it plays out. 5:46:21 So, but you convert rather people into something that's not Bitcoin, then probably Bitcoin is doomed in that scenario, because even other altcoins that are very different from Bitcoin, anything that has just a few of the big improvements, you know, like it clumps up, there's like a there's like a globbing up, you know, where people use clump onto things. 5:46:41 So they, so if it's, if it has, if you have key pairs, you know, and I have your, you can have your own keys, but maybe you can't run a node, like you have, like, whatever weird version of Ethereum was like, or a super large block thing. 5:46:55 These are just hypothetical examples. 5:46:57 I'm just trying to convey this idea that Bitcoin, you know, it can't just like continue to exist in a world where there is a super, super, super popular altcoin. 5:47:09 You know, it's like people would like to speak as though Bitcoin will just keep going on TikTok next block or whatever, you know, but it's like, let's say Bitcoin stays exactly as popular as it is right now. 5:47:20 But some other altcoin becomes like 100 million times more popular and captures like most Russians use it and like a bunch of people. 5:47:26 Yeah, look at stable coins on Tron, right? 5:47:29 They are competed stable coins on Ethereum right now, like Tether is now moved to Tron, basically. 5:47:35 Like what Bitcoin needs, what Lightning needs, is it needs a decentralized US dollar that can go at the speed of Lightning and whoever delivers that, trust minimized US dollar, that's who the winner is going to be in the long run. 5:47:48 Now, all these proposals like by Tero, by Lightning Labs, I don't find them credible because they will just allow you to issue Tether onto Lightning. 5:47:56 But people don't want Tether, people want a truly decentralized synthetic US dollar, right? 5:48:00 And there is a way to do it, which is that if you have a decentralized, you know, DeFi protocol with Bitcoin collateral backing that US dollar on a drivechain or a validity rollout, then you can issue that onto Lightning. 5:48:15 And then it would be that would be like essentially what the market craves is low cost, decentralized US dollar going at the speed of Lightning over Lightning. 5:48:25 That's essentially the sailor, you know, like best. 5:48:29 Well, you know, ironically, my prediction markets project and the thing that I just mentioned about Lightning Network on prediction markets does enable a type of thing because you have a you'd make a bet against the exchange rate and then it is when the exchange rate moves down, you win the bet. 5:48:48 So you win more coins. 5:48:49 Yeah, but I mean, but the exchange rate goes down. 5:48:52 So you have the same US dollar value. 5:48:54 You would need to disband your team and ossify your prediction market in order for it to be a credible decentralized dollar, right? 5:49:02 Indeed. Well, the technology would have to exist. 5:49:04 People would need as far as disbanding the team. 5:49:08 I know what you mean by that is to say that people would need to have a reason to believe that the coded law, so to speak. 5:49:17 Right. And rules will not be critical. 5:49:19 But like, exactly. 5:49:21 One thing I was thinking about that is when we ossify something, we could make like we can hash the software and we can like make T-shirts or something. 5:49:29 You know, that's why I say that if you want to have nightmares at night and not sleep for the next 10 years, just imagine ossified Ethereum, right? 5:49:35 That's the worst possible outcome for Bitcoin. 5:49:38 There's no greater threat than Ethereum realizing that they can just disband and walking away from it and just leaving. 5:49:45 Believe it or not, I tweeted a little bit about this, like about a year ago or something. 5:49:48 But yeah, I think I agree with this idea. 5:49:51 Yeah, I think they actually do know. 5:49:53 I think the whole time they've been running a stealth campaign and that stuff of them dancing on stage has just been to trick Bitcoiners into complacency. 5:50:03 And they actually do. 5:50:04 They do understand that even though it's better to as a competitor, it's better to be able. 5:50:10 They're being the opposite of Bitcoin in many ways. 5:50:12 So where we are conservative, they are more risk taking and they take more chances. 5:50:17 But I think they also know like it's in the back of their mind always like how do we beat the Bitcoiners at their own game? 5:50:24 And I think they I think they I don't think it's like they're in their top 10 levels of like attention or whatever you want to call it. 5:50:30 But I think they they are aware that they they want to go for like the throat. 5:50:36 They like, you know, the coup de gras. 5:50:38 That would be a coup de gras move. 5:50:39 Like if the Vitalik's roadmap, you know, this this merge, purge, surge, scourge and whatever the hell that roadmap is comes to pass, you know, in eight years and they decide, OK, Ethereum is now so big, so so so relied upon by hundreds of protocols and chains that at this point, like there's no point in altering it in any way. 5:50:58 And they just simply publicly disband and declare that no future version of Ethereum nodes is, you know, blessed, so to speak. 5:51:06 And they essentially they abandon their desire to hard fork. 5:51:09 That would be them making doing the coup de gras on Bitcoin essentially. 5:51:13 And Ethereum will be co-optable by the regulator. 5:51:16 There's no doubt about it. 5:51:17 It would essentially become a better version of the euro dollar system that's controllable by regulators. 5:51:22 So they wouldn't really do a coup de gras, then, because it would just end up, they would end up going the way of the euro dollars. 5:51:30 Well, but the euro dollar is doing fine, right? 5:51:32 Like the euro dollar is doing great right now, right? 5:51:35 The euro dollar made the Fed into a LARPing central bank. 5:51:37 The Fed is not really a central bank. 5:51:39 If you listen to like seven podcasts by Jeff Snyder on Breedlove, you know, podcast, he actually says that the Fed is only LARPing being a central bank. 5:51:48 It's not actually a central bank. 5:51:50 It's not actually a central bank at all because it doesn't do money and it doesn't control interest rates. 5:51:54 It just has this bully pulpit where it tries to convince everybody that it does. 5:51:59 And if enough people believe the myth that don't fight the Fed, then they they tend to affect global liquidity in the euro dollar system indirectly by people sort of believing that the Fed is in control and therefore going along with the Fed instead of fighting the Fed. 5:52:13 Paul, do you agree with that last part he said about co-option? 5:52:17 And do you like suppose, Paul, like in reference to your tweet from a year ago, I recall it, your pinned tweet in April was that if Ethereum were to shrink its main chain block size and ossify, then it would perhaps seal some of the narratives of Bitcoin that are important. 5:52:35 Do you think that it would be, as Alex said, co-optible by the government or would it have perhaps gotten that Bitcoin narrative of of uncorruptibility? 5:52:48 Oh, well, the the point of the ossification is that it does also limit your corruptibility by the government basically to zero because now you can't be negatively affected by anything or positively affected. 5:52:59 Well, it could be co-optible by the government because the Fed could print enough dollars to buy 51 percent of ETH. 5:53:06 And at that point, that control would be irreversible. 5:53:09 That's not the case in Bitcoin. 5:53:10 So even though the rules of Ethereum will not change, the Fed printing a few trillion dollars to buy 51 percent of Ethereum and then running their own data. 5:53:20 That's very creative, but that's not cut and dry because, for example, it's possible in that scenario where the Fed has said we will do whatever it takes to print enough reserves. 5:53:32 They won't announce it, right? 5:53:33 They'll be doing it through agents and you won't know that they're doing it, right? 5:53:37 They will just say, but think about it, though, the the 51 percent of the ETH might not be for sale. 5:53:43 They may drive the price to the sky and then it will be for sale. 5:53:47 It will be it will become for sale once the price goes up 10x. 5:53:52 It will come for sale. 5:53:53 Right. And because the Fed can print a quadrillion dollars, it doesn't matter. 5:53:57 But you understand that the Fed can print an infinite amount of dollars, but they do not have infinite purchasing power. 5:54:03 Right. No, no. 5:54:04 I know. But if the Fed is buying Ethereum with these dollars and it's not spending those Ethereum, it's not creating inflation in the real economy when it's doing that. 5:54:12 I mean, actually, I'm sorry. 5:54:13 I take it back. It would it would create inflation. 5:54:16 But the Fed could be playing a long game where instead of doing it directly, they can just say over the next 30 years, we'll be just adding one percent of Ethereum holdings every year. 5:54:25 So you've gone from saying you've gone from saying that it's corruptible to saying it would take 30 years to corrupt. 5:54:31 No, I mean, I'm saying is that it has a flaw because it's a proof of stake system that Bitcoin does not have. 5:54:36 Namely, that once you said could be building mining operations. 5:54:40 But mining operations cannot change the rules of Bitcoin. 5:54:45 Whereas if you take if you possess most of the stake, you can rewrite the history of the chain, let alone if you possess the majority of the hash rate, you can block the transactions of others. 5:54:55 Can you not? 5:54:57 No, because what will happen is that, you know, if that was the case, then Bitcoin would have no censorship resistance at all. 5:55:03 What you will have is simply like if you have a transaction, first of all, you know, you'll have things like lightning and other ways to hide transactions. 5:55:10 And then you'll have just high fees that some miner in Kazakhstan will take, even though the Fed controlled miners won't. 5:55:19 I think we're just so I don't think that the government, if a government decides they want to take over Ethereum staking industry, I don't think they need to spend a bunch of money buying a bunch of ETH. 5:55:31 A lot of the people who are staking right now are already regulated entities, and so they can just increase the regulations on them to say stuff like we want you to prioritize the transactions that we make and ignore transactions or ignore blocks containing transactions. 5:55:48 That we don't like. And then, boom, without without spending billions and trillions of dollars, they've taken over. 5:55:54 They've taken it over because it's just it's already run by a bunch of corporations that are regulated entities. 5:56:06 Well, this has been interesting. We're trying we're trying to figure out what you think, Alex. 5:56:12 It sounds like you were saying that Ether would be corrupted, but also somehow defeat Bitcoin. 5:56:20 Ether would try to market itself as Bitcoin once they disband. 5:56:25 And that will play along with a lot of institutions and individuals, while in reality it would be just not the case because it's a proof of stake chain that, you know, that can be co-opted by fiat or can be co-opted by regulation. 5:56:39 And it's never truly ossified if somebody can say, hey, Coinbase, you will now run this version of the ETH client. 5:56:46 That's a new hard fork. Right. 5:56:48 So basically, historically, in Ethereum, exchanges decide the fork choice. 5:56:52 And nowadays it's the stable coins. Right. 5:56:54 So, for example, in order to pressure Ethereum, all you have to do is pressure two companies, USDC Assure and USDT Assure. 5:57:00 You can execute an arbitrary hard fork by forcing those two companies. 5:57:09 I'm not hearing you. 5:57:16 You got cut off, Alex. I can't hear him either. 5:57:21 Well, this is an interesting rabbit hole. 5:57:24 Maybe we should continue with it or not. 5:57:26 It's up to those on stage. 5:57:29 I think it's been interesting to hear, Alex, you share a view that, you know, Ether could, if it ossifies, you know, execute a coup de grace against Bitcoin's narratives. 5:57:39 But at the same time, you're saying it would be corruptible. 5:57:41 The whole value proposition of blockchain is to be outside the reach of government. 5:57:46 And there's enormous desire for that value because government is so powerful and so intrusive in society that there is a great demand for commerce that is outside the reach of these unnecessarily intrusive forces. 5:58:01 So I wasn't sure what you were saying when you said that it was going to be corrupted, but also very successful. 5:58:09 But, of course, you know, the fiat money regime is those things. 5:58:13 So there is, unfortunately, that possibility. 5:58:17 Well, I guess it depends on how you define success. 5:58:20 Right. 5:58:23 I think one of the ideas that we have been developing in this conversation is that if a competitor to Bitcoin were to become much larger by market cap and users, then that would pose a certain kind of threat to at least Bitcoin's narrative of monetization. 5:58:41 The narrative of hyper-Bitcoinization, the narrative of Bitcoin becoming the world's future money. 5:58:46 If some other blockchain were to become 10 times larger, then it would be less likely that the average person would consider Bitcoin likely to become the massive layer one of everything of the future. 5:59:01 They would more likely think of that other competitor that's larger as being on that track. 5:59:08 We already have competitors that are bigger than Bitcoin in terms of market cap and usage. 5:59:18 The dollar is an example, and Visa is an example. 5:59:21 It's got way more usage and a lot higher of a market cap. 5:59:25 And people prefer it. 5:59:28 If you ask most people, would you rather do this transaction with Bitcoin or with a Visa card, merchants and users are all like, yeah, let's do the Visa card. 5:59:36 And the fundamental difference there is that those are not peer-to-peer electronic cash. 5:59:41 Those are peer-to-trust, third-party-to-peer electronic cash. 5:59:45 So they're subject to the inflation and permissioned nature of those systems, unlike a peer-to-peer system, which can be fundamentally better. 5:59:55 Right. 5:59:58 Yes, I don't think that Ethereum is peer-to-peer for, well, one reason is even under your standard, where in order to be peer-to-peer, you have to have no social coordination or whatever. 6:00:14 The people who are currently staking are a social club that they have to approve your entry into that social club in order to let you in. 6:00:22 So it's not peer-to-peer, even by your definition, which is different than mine. 6:00:29 Yeah. I mean, the dichotomy that we've drawn in past conversations here at Drivechain Twitter Spaces is I've said that peer-to-peer, in my understanding, has to do with there being no social barrier to entry in order to attain a certain role in a system and instead only an economic barrier. 6:00:49 So if you want to be a Bitcoin miner, you have to be able to afford some hardware. If you want to be a Bitcoin user, you have to be able to get some Bitcoin, and anyone can achieve those roles in society as long as they have a little bit of money and resources. 6:01:06 But it's different in Ethereum, because if you want to become an Ethereum staker, you have to acquire a certain amount of Ethereum, and the transactions in which you acquire that Ethereum have to be approved by the current stakers, and then they have to approve your deposit of that money into a staking address. 6:01:24 So all of this is the current stakers socially saying, okay, we'll let you join our club. And so there's a social barrier to being an Ethereum staker. 6:01:36 So are you saying that if someone is totally anonymous, it is impossible to participate in staking? 6:01:45 It's possible if they let anonymous people in. If the people who are currently staking let you in, then you're good. And if they don't want you in, if they're like, you know, we want your identity first, then you can't get in. 6:01:57 Well, if only we had an Ethereum expert on stage, we could get their view on that view. 6:02:18 But yeah, my view on what peer-to-peer means is that peer-to-peer has to do with whether there's only an economic barrier to attaining a certain role in an activity, and not any social barrier, such as a need for permission or admission. 6:02:40 And I use the phrase peer-to-peer sidechains sometimes because I've seen it in Adam Bak's tweets. So I think that's cool. Other drivechain advocates sometimes refer to the drivechain peg as trustless, but I've been trying to be cautious about that word since nothing is truly trustless. 6:02:58 Hey, BTC Curacao, were you going to say something? 6:03:02 Yeah, you brought the topic back to peer to peer and I was thinking there's like a 6:03:08 new Samsung phone that's like folds and it has one terabyte of space. 6:03:14 And we're talking about like this technology or that technology instead of like 6:03:19 stacking them. So you Tri -XO was mentioned before, 6:03:25 but like there is a purity thing to want to make sure that 6:03:30 you're, Satoshi's belong to the 21 million. 6:03:33 So that's the idea of like bringing the block size down to 300 kilobytes 6:03:38 and, 6:03:41 you know, running a Bitcoin core layer one full node, but then running a different type 6:03:47 of big block sidechain on top that has like you TreeXO and even 6:03:53 lightning on there. 6:03:54 And then what Paul was saying about initial block download doing SPV first. 6:04:00 but that can also be like 6:04:02 in the daytime when you're out on the cellular network then it uses like 6:04:07 SPV and all these things and later on it like gets all the data when 6:04:13 you're charging at night. 6:04:15 so like when you wake up in the morning you'd be like someone cheated 6:04:19 on you the day before, and you could kind of chase them down. And that fits with other economic models. But then we're, we're also getting away from the hosted lightning channels, because that could be a government regulatory, like weakness, potentially, who knows, it's too early to say. And, you know, if we can get, like, connecting to people on tour on our phones, because we keep saying about people don't run nodes, but they do run phones. And if the node is on the phone, it doesn't mean 6:04:49 there won't be archival nodes in the cloud, that'll exist too. And, you know, this more and model. 6:05:05 Well said. 6:05:11 Any more thoughts from the stage or anyone would like to come up and ask a question 6:05:16 about Drivechain or anything related to it? 6:05:22 This has been a record setting Drivechain spaces. 6:05:25 Usually we go for about 90 minutes. 6:05:27 Today we went for six hours. 6:05:30 And we had Luke Dasher show up, which was an unexpected surprise. 6:05:33 Yeah, I loved that Luke joined and shared his thoughts. 6:05:36 I thought they were brilliant. 6:05:38 And if anyone missed it, if you joined just recently, 6:05:41 Don't worry. This space is recorded as our space has always are you can follow 6:05:47 later two labs? 6:05:48 That's me the host. 6:05:49 I'm Henry. I work for Paul who's also on stage and 6:05:54 You can follow later two labs on Twitter our prior spaces are available in our timeline 6:05:59 on Twitter We're hoping to set that set up these audio spaces as a as 6:06:05 a podcast feed in case you prefer to listen to things on demand not live as a podcast 6:06:11 that'll come in the coming weeks. 6:06:14 And there's also other resources that are already available. 6:06:17 like drivechain.info and YouTube videos about Drivechain. 6:06:24 And there is a Telegram group with 700 people in it just talking 6:06:30 about Drivechain. And there's also a Drivechain for Reddit. 6:06:34 and there's 6:06:36 a bunch of other resources that you can find by going to all those places. 6:06:41 If you have a question you want asked or discussed in this space but you don't want to 6:06:44 come up on stage and ask it, can DM it to LayerTwo Labs or 6:06:50 come into the Drivechain forum and send it to me. 6:06:53 Henry on 6:06:56 Paul, 6:07:00 had one question. 6:07:01 you're available to speak at the moment, I'll read the question. 6:07:04 comes from someone. 6:07:06 asked, hey, can you ask Paul to talk about the update of the 6:07:12 software launcher? 6:07:14 is going on with the new release oh yes that's very excited about that 6:07:20 but I've been so busy at this great event going on in Miami vortex it's just 6:07:25 non -stop Bitcoin a 10 a.m. 6:07:29 to like 2 a.m. 6:07:31 really and 6:07:32 I'm actually going to MiamiBitDevs right now because it starts at 7. 6:07:37 I'm, so I haven't had time to give it its due attention, but either as an 6:07:42 announcement or even as, know, but we have this great new concept 6:07:48 where you just, you 6:07:51 one software application and then it does all the other downloading and configuring 6:07:55 behind the scenes. 6:07:56 the goal of this is to make it very easy for people to run the software. 6:08:02 Because if people run the software, then they learn an awful lot of things. 6:08:06 Like I get lots and lots of different questions all the time, constantly, from 6:08:09 people. when I hear the questions, then I know that they haven't run the software 6:08:14 because they ask questions like, know, I had one 6:08:20 today where it was like people thought that the accumulated fees on the main chain were 6:08:25 paid out to the miners once every three months, 6:08:29 which is not the case, the withdrawal cards. 6:08:32 it's like if you, people run the software, would know. 6:08:34 So the goal is to educate people so that people make a fully informed, both the haters 6:08:40 and the, you know, the number one fans, so that everyone knows exactly what 6:08:46 they're talking about here. 6:08:47 And that's what I want. 6:08:49 then the best way to do that is by running the software. 6:08:52 And so we want to make that as easy as possible. 6:08:54 So now we want to take it to the level of just we have one little thing that does it 6:08:59 for you. It's kind of like Steam, or like, you know, Epic Games launcher, you know, so 6:09:04 that's the idea. 6:09:05 And 6:09:06 we have a version of that that is ready to be released just as soon as I 6:09:11 have a couple minutes to make the web page or update the web 6:09:17 page about it or whatever. 6:09:19 But we're going to release that. 6:09:21 And command line version, we're to 6:09:24 have graphical interface version. 6:09:26 So I'm very excited about this. 6:09:29 And we're going to do everything we possibly can to make it as easy as possible for 6:09:32 people to run into it. 6:09:33 I'd like to even get to the point where you can just look with PlayMoney, can just open 6:09:39 a point of web browser to a page, and then you can experiment 6:09:44 BIP300, BIP301, BIP301, BIP301, 6:09:48 BIP301, BIP301, BIP301, BIP BIP301, 301, 6:09:55 BIP BIP BIP BIP BIP BIP301, BIP BIP 6:10:00 BIP 6:10:01 big improvement in that direction because right now you have to download these 6:10:06 different applications. Your computer warns you that this is untrusted software that's 6:10:11 probably virus or whatever. 6:10:14 so we have that issue and 6:10:17 the... so we have all that going on and so you 6:10:23 have to run these... 6:10:24 we try to make it easy where there's these little buttons you click that write these 6:10:28 config files into places but even though we put a very valiant effort 6:10:32 we just need to make it easier still. 6:10:36 We need to just keep going until it's super 6:10:37 easy. So that's what that's all about. 6:10:40 So very excited about that. 6:10:41 The launcher will download, it will download like the main chain for you. 6:10:45 will download the sidechain software. 6:10:48 If you click a little button and you say, want to have this sidechain, it will 6:10:53 download the node software for you. 6:10:55 It will do the checksums, because we put out 6:10:57 the checksums, but do people really check the checksums? 6:11:01 know, people are lazy. 6:11:02 don't check the checksums. 6:11:05 we're happy to check the checksums. 6:11:07 some people do. 6:11:09 And that's the right thing to do. 6:11:11 But you know, here's the thing. 6:11:11 We got the launcher already. 6:11:13 So check that checksum. 6:11:14 And then that will be the last one you ever need 6:11:16 need to check because and then you know we'll all this stuff to configure ball and so 6:11:22 that you know it's all a bit source obviously so but that's the idea we'll be some 6:11:27 check the checks on while they to dim some will the will the user need to 6:11:33 get Ubuntu and VMware still 6:11:37 at first yes but eventually no I mean we're gonna get 6:11:43 we're again the goal is to make it super super easy so with play money you eventually 6:11:47 won't need anything except a web browser so that's my goal anyway I mean we'll see if 6:11:53 we can push the that far in a reasonable 6:11:56 way. I think, 6:11:59 see, Henry, should, everyone should try Ubuntu. 6:12:03 Everyone thinks like, oh, this is really hard. 6:12:05 don't understand anything. 6:12:07 And you just take, just put like a little weekend into it, know? 6:12:10 And then it's not so bad. 6:12:12 I'm sort of like the test case for the Hoi Paloi, 6:12:15 because I'm like least sophisticated member of LayerTwo Labs. 6:12:19 if I can do it, the whole world can do it. 6:12:21 Right. And that's a good thing. 6:12:24 what we want. 6:12:25 want to... 6:12:27 Like, you know how it is, I can divide my time into making the onboarding easier or do 6:12:32 something else. It's like a time and place for 6:12:41 People can go to drivechain.info right now, can download software, they can get 6:12:46 involved. If you are a software engineer or a programmer or an advanced Bitcoiner, you 6:12:52 won't find it difficult at all. 6:12:55 others also may find it easy to get the software and then if you have questions about 6:13:00 it anyone can go to drivechain talk telegram group and ask questions there's 700 6:13:05 people there people will help you out people will guide you through things so the 6:13:11 community is growing every day anyone who's listening 6:13:14 here can get involved in that way and get involved in what may become an enormously 6:13:19 favorable development for Bitcoin, accruing value to Bitcoin's 6:13:24 token and block space. 6:13:28 strengthening Bitcoin in multiple ways. 6:13:33 We 6:13:33 probably will wrap up in next 10 minutes since we've been going for so many hours and 6:13:39 the next Twitter spaces will be on Thursday so we usually go Monday and Thursday. 6:13:44 On this Thursday in particular it'll be in the evening. 6:13:47 Usually we start it a much earlier time but this Thursday it'll be late. 6:13:52 And 6:13:53 it'll be announced through LayerTwo Labs Twitter. 6:13:56 Anyone have any final thoughts to share before we wrap? 6:14:13 Going once, going twice. 6:14:16 Well, thanks to all the speakers on stage. 6:14:18 And again, once I close this space, anyone can listen to the whole thing recorded. 6:14:23 So I encourage anyone who missed Luke speaking earlier a few hours ago to just use the 6:14:29 recording to hear what he said, which was very 6:14:32 interesting and cool. 6:14:35 Have a great day, everyone.
