0:00 here. Okay, thank you for being right on time and responsible. That's awesome. So 0:04 we're gonna talk about Drivechains. That's what you think you're talking 0:06 about? Okay, good. So we are winding down day one at the Litecoin Summit. Are y'all 0:11 excited? I feel like y'all are just mailing that in a little bit, but it's 0:19 alright. It's okay. Paul is the founder and CEO of 0:23 at LayerTwo Labs, creator of BitcoinHivemind.com, blogger drivechain.info, 0:30 and the author of BIP300 slash 301, Coindesk.com, consensus long link here 0:38 that is hard to say to everybody. And that's all I got. And so he's gonna talk 0:42 to us about Drivechains, so get your questions ready. And this is to 0:46 demonstrate what's kind of rude while the MC's talking to do, if you do that 0:49 while the MC's... we're just doing that on purpose to demonstrate that you need to 0:53 have a little more self-awareness than that. They're doing a great job of 0:57 making it look like they don't have that, but that's okay. It's awesome. They don't 1:01 even know we're talking about them. That's okay. Give it up for the kids, the 1:04 future of Litecoin, everybody. There they are. That's awesome. That's cool. This is 1:09 not a conversation, but I appreciate your effort. Okay, awesome. Let's give it up for 1:13 Paul Sztorc, everybody. Sztorc, did I say it right? Rhymes with quartz and sport. That's right, yes. 1:21 Thank you. Okay, so I'm normally, you know, a Bitcoiner, of course, and this is my 1:28 idea for Bitcoin, but I was asked to come here and show it to Litecoin. Litecoin 1:32 took the SegWit idea before Bitcoin, and in particular, I do think that Litecoin... 1:40 I mean, I am a maximalist at heart, and I think only one coin will reach eight 1:43 billion people, and that coin will win, and everything else will probably go to 1:47 zero. So I think if you're Litecoin, you've got to think, like, how can I 1:50 exploit the weaknesses of BTC? But so this idea, it's very simple to me, but for 1:57 some reason, it's complicated. Even the best minds in Bitcoin don't really 2:01 understand it, but we have working software that has a GUI. So this is, like, 2:05 in one slide, what I think what people should do, and that is try the software. 2:11 Go to LayerTwoLabs.com slash download, and I'm going to give you some screenshots 2:14 just so you see what this sort of looks like, but just try it out. It has a fake 2:19 play money coins. So we have a faucet and everything. You can get coins. These are 2:24 not Bitcoins. These are not Litecoins. They're fake coins, but they show you what 2:27 the software would do if you activated this in Litecoin. And then I have a 2:32 website, drivechain.info. There's an unbelievable amount of content there. I 2:37 have another site, BIP300CUSF.com. I'll talk about that if anyone has any 2:41 questions on exactly what to do. And then I think, like, you know, like, you get 2:44 into your head, like, kind of what I am planning for this idea, which is to reach 2:50 eight billion people and have planetary scale, have Zcash-level privacy, have all 2:54 these features, live in a world where the different developers can disagree with 2:58 each other but still be using the same coin. So if you think that this is a good 3:01 idea, this is a very easy thing to actually add to Litecoin, I think. I haven't 3:05 actually looked into it that much, but there is this activator client that 51% of 3:09 the hash rate needs to run and that's basically it. And you can even shut it off 3:14 later. So you can just try this out and maybe if the entire community hates it for 3:18 some reason, you can just go back. So this is, you know, the download page. So 3:23 there's nothing for, you know, a mobile phone yet, but we have all three operating 3:27 systems you can download. And we have a GUI. And this is sort of what it looks 3:30 like. You have this is a version of Bitcoin on the top and then we have all these 3:35 other chains that are one of them is a version of Zcash that I call Zside. And it 3:42 is a clone of the latest version of Zcash, but it has no coins on it. You just send 3:46 the coins from L1 to this L2 chain and then you can use Z addresses and you have 3:53 privacy and you have reusable long ZK-based address. And some of these other 3:59 ones are just like test chains, a blank chain that just says nothing so it's easy 4:03 for you to add your own thing to that. And then Thunder is like a large block side 4:08 chain. That's like my joke a little bit. So this is the drivechain.info site. This 4:12 is just a screenshot. But I have an unbelievable amount of content here. I have an 4:16 enormous number of endorsements as well. If you go to LayerTwoLabs.com slash friends, 4:21 I have a lot of endorsements, but I have one of them here about Adam Beck said this 4:25 on stage in Baltic Honey Badger. He said, a Drivechain arguably could have been more 4:28 important or useful than taproot. So, that's just one tiny endorsement. But it's 4:33 very, very, very, and this is this thing CUSF which is this way of activating a soft 4:36 fork. This are, again, this already exists so you can already download it and you just 4:42 go to this site and I have a paper that explains how it works. So, yeah, again, if you, 4:50 if Litecoin could do this, by this I mean this screenshot on the right, I'm not completely 4:54 sure if there's the, if it can do this like the ZMQ block thing, but if Litecoin is up 5:02 to date with Bitcoin, then it can. And so then you just run this stuff and you just 5:07 need 51% hash rate to run this. And then as I mentioned before, you can actually just 5:13 shut it off and deactivate it if you'd. This is kind of annoying because anyone who has 5:17 put coins into the system will maybe lose them if you were to reverse it. But other 5:23 than that tiny detail is kind of like a very low cost thing. So, that was kind of just 5:28 me trying to throw a lot at you there. But now I have, this is, what I normally do is 5:32 give this talk to the Bitcoiners about what Drivechain is. So now I'm going to try to 5:38 go a little through that, but I do think that Q&A is probably a much better, has a much 5:43 better chance of giving you something that you actually will appreciate and get something 5:48 useful out of. But I'm going to try to give a skeleton here first. And so the idea is, 5:53 again, you just have to cross off Bitcoin and put Litecoin for everything here because 5:57 I really am a Bitcoiner and I'm here for the Bitcoin conference. I'm speaking at the Bitcoin 6:00 conference, but I was asked to come here and I think it would be great if Litecoin took 6:03 this idea. But just replace Bitcoin with Litecoin. And so the idea is that now everything has 6:10 its own chain and its own coin. It has its own software and its own coin. But with the 6:16 Drivechain idea, you only have the one coin. You don't need any of these other coins anymore. 6:23 And then the coins travel among different pieces of software that may have completely 6:29 different, they may be written in completely different programming languages. They may 6:33 be doing completely different things. They may have different block size. So if there's 6:37 ever a big dispute such as the block size dispute or some people don't really want too 6:41 much privacy on BTC for various reasons but other people do want it. So if there's a dispute, 6:48 you just have different pieces of software. And I have some metaphors about this, about 6:55 like, okay. So, yeah, again, my view is that really that one single coin will win and the 7:00 rest will be defeated. But definitely each of the types of thing that people will want 7:07 to do with the blockchain, all of those will exist in different, in form of different software. 7:12 So I kind of have like, Bitcoin today would be like this old phone. And then eventually, 7:17 you still have something that we still call a phone, but it does all these other things. 7:22 You know, it does, you know, it takes video. It takes, it plays audio. It, you know, it 7:29 does all these things. So, money has network effects. So that's kind of a, that's kind 7:33 of one of the reasons why I think. So, yeah, basically, this is kind of like, instead of 7:37 Ethereum, the altcoin, you have this like bit Ethereum, which is like an L2 that does 7:44 everything Ethereum would do, only there are no coins on there to begin with. You send 7:48 the coins back to and from that sort of similar to the Lightning Network. So, yeah, the goal 7:56 would be that if, you know, some people, everyone disagrees over what things to do. So as people 8:00 say, oh, this is great, but can it do smart contracts? Can it do whatever? And instead 8:05 of arguing with them, you just say yes. And similarly, a lot of people have fringe ideas, 8:11 99% of which will be bad, but some of them will be good. And so, how do we know the 99% 8:18 bad versus some that are good? Someone says, oh, I think I can improve Litecoin in this 8:23 case. It only needs my new idea, which is whatever, MimbleWimble extension block. And 8:28 then people, you know, they have to go through this big quality control process, in which 8:33 case, you'll probably filter some things out that are good or let some things through that 8:37 are bad. Or you just let them in, you just say this, use this idea of BIP300, you have 8:42 your own zone and that lets each person try out the ideas that they actually like. Okay. 8:52 Yeah, this is like not that important per se, but this is like me trying to say that 8:56 this is similar to Lightning where you have the coins, the orange coins are in the bottom 9:02 right and you move the coins to maybe the Lightning network, which I don't recommend 9:09 if you saw me on the panel earlier today. But you can also move them to like bit Zcash, 9:13 which is this version of Zcash that is, it has all the feature. It is literally like 9:18 the latest version of the Zcash node software, but just modified slightly so that it only 9:25 moves around coins that have been sent to it from an L1 that has BIP300. So that'd be 9:30 Litecoin in this case. You have Litecoin, send the coins over to the Zcash world and 9:37 you'd have all those features and you could do the same with the Ethereum or any other 9:41 EVM chain or anything else, anything with large blocks or whatever other feature. And 9:49 the way this is supposed to work is that there's only a one way like causality. So if Bitcoin 9:57 core or Litecoin, the blockchain reorganizes its blocks, then everything above it will 10:02 also reorganize, but it's not the other way around. Any chaos that happens in the upper 10:07 zone will be limited over there and it will not destroy L1. So if you go on to L2, you 10:14 choose to take on additional risk and then you get also any, the flexibility and benefits 10:19 of that. So that's the idea. I have like a tiny sort of description of how it works, 10:24 but I don't know if it will make any sense, but hopefully it will make some sense, which 10:27 is you have these blocks on the bottom. Those would be L1 blocks. So in this case, it'd 10:33 be lightning, excuse me, Litecoin blocks, the blue ones. And then the reddish ones on 10:39 top. I think that it's not really supposed to be blue. That is just a weird effect of 10:44 the PDF conversion. It's just supposed to be red only on the top. But the red ones would 10:49 be this BitMonero thing. That's everything Monero is, but only using the Litecoins that 10:55 are sent to it. And they each have a bunch of blocks and they have block headers. Block 11:00 header is the square. And what happens is in BIP300, there's this huge summary of everything 11:06 that happens over three months. Everything that happened over the last three months is 11:09 put into this little hash. And the hash is what is inserted in L1. The hash is really 11:15 what of the, it is a description of all the withdrawal activity. So the deposit and withdrawal 11:21 activity is covered by this big gray sheet. And then the layer one node only sees this 11:29 thing that was inserted into the L1 Coinbase. So it's the L, in BIP300, the L1 layer is 11:38 not actually looking at what happened on L2. It just looks at this summary that is very 11:42 rare once every three months or so. And this is like, I have some examples of our, this 11:49 is what our software looks like. So there's like an example of this happening. This is 11:56 just to give you an idea that this is really not vaporware and we've actually worked on 11:59 it and it exists. So you should try it out for yourself, which I think is the best way. 12:03 I certainly did not understand how Bitcoin worked at all until I downloaded the software 12:08 and played with it for the first time. And of course, many people say that no one ever 12:12 really understands Bitcoin fully. So, there's definitely some truth to that. Jameson Lopp, 12:17 I think, often says something like that. Yeah, another interesting thing about this project 12:21 is all of the fees, as I mentioned earlier on the panel, the lightning panel, with this 12:28 particular type of L2, all of the fees on all of the L2 chains, they all go down to 12:31 the L1 miners. So it's my view that this is the endgame, like, in at the, what I'm trying 12:39 to say is in the long run future, if we succeed at all, like maybe everything in crypto will 12:47 fail and go to zero. But if something succeeds and is wildly popular with among people of 12:53 the earth, people will be using it a lot and generating enormous amounts of transaction 12:59 fee revenue. And so then when we look at who's going to be getting all that revenue, it really 13:06 must be the L1 miners because if it is not, the miners will be maybe envious or jealous 13:12 of whatever else is getting it, like a lightning service provider or arc super node or whatever 13:20 it is, liquid federation. So, all these L2s have this property that the transaction fees 13:29 are not paid to L1 miners, but with this idea, they are. And I think in the long run, it 13:35 will be, basically, all the other L2s will be killed off because the miners will think, 13:41 well, I want all this money. I said this could be hundreds of billions of dollars per 13:43 year. If on the up chance something is successful with the general public and miners have the 13:50 ability to control the L1 chain, so they will, they'll either vertically integrate with all 13:55 these L2s or they will just destroy them to get either way to get the money. And if they 14:01 vertically integrate, then most of the lightning security model is just security theater and 14:07 so people will then, they won't like it anymore. And they'll like something like this instead, 14:11 which is still secure even if. So, this is a neat idea where I'm getting a lot more money 14:16 to the miners. This idea is a very miner-centric idea. And luckily, miners get, have the opportunity 14:23 to make a large and growing in an unlimited sense amount of money if they try the idea 14:31 out. So, it's kind of a neat idea. These are sort of old, but that's the basic idea. Yes, 14:41 I did have, this is a 15 minutes, so I actually think Q&A is way more productive, but I have 14:46 some weird other examples here of which altcoins I think would make great L2 Drivechains, 14:53 L2 sidechains. So, I will do that unless anyone really has like a question or something 15:01 because this is halfway through and I think that, yes, there is, yes, a question. 15:04 The question was about if you create assets on a sidechain. The, in that sense, if you, 15:18 we have a sidechain for that, they're called bit assets. And this is similar to like ordinals 15:22 or counterparty or ERC20 where once you're on the sidechain, this would be like its 15:28 own thing where you have your own keys, you have your own randomness, and you would self-custody 15:33 that in the same sense. I mean, once you're on the L2, you've adopted that new L2 security 15:40 model. And from then on, it's exactly the same as what would ERC20 would be in Ethereum. 15:47 So, it depends on how, it depends on what you're copying. But whatever you copy, it'll 15:53 be just like that. Yes. 15:55 Yes, the question about the emissions of the coins. So, this is, again, these are, these 16:05 are going to be exactly like the altcoins that they copy except for that one thing, 16:10 where they will, those coins, the L2 blockchains, they do not have their own coin at all necessarily 16:17 and you could add one. But they, when you have, you're going to have an L1 that is Litecoin, 16:22 84 million Litecoin, and then you have the L2. And on the L2's first day, it will have 16:27 zero coins on it. You'll have zero coins for a while until someone chooses to deposit. 16:33 And those would be like the first four coins or whatever that are over there. So, there 16:36 is no tail emission, there is no emission at all, there are no new coins being created 16:42 on the L2. The coins are only created on L2 when they're locked on L1, and then when 16:47 they're withdrawn from the L2 and destroyed, they get unlocked on L1, they cannot be moved. 16:52 So, the coins are just moving around and so there is no emission of any kind. Does that 16:58 make sense? No? All right. 16:59 Yes. No. You deposit the LT, you deposit Litecoin to this thing and this thing does 17:18 not necessarily know anything about the real Monero at all. This is like the opportunity 17:26 to take advantage of the Monero's ring signatures and people like the privacy feature, but there 17:32 is no actual XMR. And a lot of people get confused about that for some reason. I think 17:36 this is a, maybe I should explain it to you. Exactly, yes. There is no XMR. And in fact, 17:49 that's partly, some of the wording on the slides, I'm implying that there will be no 17:52 need for the real XMR. Once one coin takes over as a big enough foothold to, it will 17:57 be able to do every actual thing that people want it to do and there will be no need for 18:03 the actual altcoin itself. That was, maybe I'll try to like go back to it. It's a lot 18:07 of slides I got, but I'll just, you know, if you, yes. BIP300 is not in use. I'm sorry. 18:17 It's, you'd be the first. I have never released an activation client until like this month, 18:22 so no one really could use it. But I talked about this idea for a very long time as some 18:27 people know. And it just had no activation client for a while, but we have had, for many 18:32 years, we've had our test network which is a fork, it was a fork of an old version of 18:36 Bitcoin version 1699. That's how old this was. And so that's like what the screenshot 18:43 was you saw before. And so we've had that actual code. And so I was more just tinkering 18:49 with the, our own network with the play money and not releasing a, an act. But now there 18:57 is an act. This CUSF, CUSF activator, that does now exist and that is the easiest and 19:02 best way to activate anything, in my opinion. It's sort of similar because the MimbleWimble 19:17 extension block is like a new optional thing that Litecoin decided to do. And in fact, 19:24 my opinion is that a sidechain is very similar to an extension block. It's kind of like an 19:28 optional extension block where there's that big filter that I had before, that gray blob 19:34 that became the green thing. The Litecoin node is only seeing the green, the tiny green 19:42 thing and it's ignoring what's going on. But really these are an unlimited amount of extension 19:46 blocks that are opaque, sort of. So you have unlimited block space and you have unlimited 19:52 in there. And now, yes, hello. Yes, you did. Fifty-one percent of the hash power is needed 20:08 to activate. This is because although BIP300 does not, although it does not look at everything 20:16 that is happening in the L2 chain, it is doing something on L1 and that thing is either, 20:25 you either conform to that, those rules for this narrowly defined like OPNOT5, you either 20:31 conform to that or you do not. And if you do not, it has to reject the block. And that 20:36 only, that doesn't matter if you have less than 50% hash rate. If you reject the block, 20:40 you'll just be the only one not on the chain anymore. But if 51% or more rejects the block, 20:46 then actually everyone, even just by doing nothing, everyone will automatically only 20:51 be on a version of the chain where the rule is followed all the time, even the people 20:54 who do not want to upgrade to even do this. So people could freely run old version of 20:58 Litecoin, not pay any attention to any of this at all and they will not be affected 21:04 really. But that is why 51% is required to activate any soft fork which this is. So that 21:14 whoever is making the blocks, whichever mining pool or et cetera, they must run the activator 21:22 to make sure that when they make the block, it is not accidentally violating one of the 21:27 BIP300 rules. Does that make sense? No, it's on the L1 side. Yes. The BIP300 part is the 21:40 L1 hash rate. The L1, that's the L1 node, L1 hash rate. But actually, all the things 21:45 that are happening on the L2 chains are on their own L2 network. I don't know how big 21:51 of a, I don't, my guess is it wouldn't be that big of a thing. I mean, every soft fork 21:56 is activated this way and you just put out a new version of the software and if people 22:01 upgrade. In this case, you don't even need to do that. You just need to ask people to 22:06 run the activator if they want and they can, in fact, stop running the activator if they 22:12 really regret it for some reason. Thank you. Yes. If anyone has any more questions. So, 22:22 seven minutes, I can go back to sidechains. I think we should copy because I actually 22:27 have a lot to say about that also. But if anyone has a question, I look down now. Okay. 22:34 So, yes. Zcash is the best one to copy because you have all this privacy and we have already 22:43 built it and it already works, so I just take it for free and it gives everyone one single 22:48 reusable address. So this is very cypherpunk and this is very cool. This is a cool thing 22:53 to just do quickly out of the gate before anyone can complain or, you know. And I had 22:59 this slides because, yes, I was noticing as a Bitcoiner that actually Monero is stealing 23:06 a lot of Bitcoin's thunder. And in fact, I don't know if you guys have seen this but 23:12 I think it was Peter McCormick interviewed Michael Saylor and Michael Saylor famously 23:16 said there is no second best. So I'm sure that would make him very popular at Litecoin 23:21 event. But he said that and then Peter McCormick asked him about, well, what about these people 23:26 who really like privacy? And then Michael Saylor said, well, you know, if you really 23:30 like privacy, maybe you do need a Monero. And of course, the Monero community took that 23:34 little clip and they put it all around. But this shows like, this is an actual use case 23:41 that some people care about. And in particular, people who care about the most are, they can't 23:45 be too loud about it, right? You know, so that's something to keep in mind. Namecoin, 23:50 I think Namecoin is like a totally, I don't know what to say about this. I think this 23:55 idea will be so big in the future. But for some reason, people do not give it the right 24:00 amount of attention today. Namecoin was actually the first, is originally sort of invented 24:05 by Satoshi and everyone should read through this thread. The DNS in generalizing Bitcoin 24:10 is fascinating. But Namecoin lets us do all kinds of crazy things and I have written a 24:15 big article about this that you can read and this is the title. And so if you just Google 24:20 it, you'll find it. But I've written a huge about it that's going to replace logging in, 24:25 usernames, passwords, email, get rid of spam, do all kinds of magical things. So, I think 24:32 this idea is like super good. And we are working on a version that I really like but it's not 24:36 completely finished right now. Yeah, you have these people like impersonators and stuff. 24:41 This is all this, the Namecoin sidechain which I call Bitnames. This will just get 24:46 rid of all this type of thing. Seizing the domain is to be impossible. It just will literally 24:51 not be possible to do this. So like even, you could have like whatever, Ukraine.gov 24:55 and a foreign army could occupy the whole country but they just wouldn't get the name. 25:00 It would be like illegitimate. Then people like have this one, I think. So, yeah. I think, 25:06 yeah. So, people love this NFT, ERC20, ordinals stuff. I say, let everyone have a good time 25:14 if they want to. So, copy that. And then I'm a huge proponent of this prediction market 25:22 idea which has gotten, I've always been a huge proponent of this idea since a very young 25:26 age and even since 2012 and 2013. I started building this Bitcoin prediction market software 25:33 and now actually every election, it pops up a little bit. But in particular, this election 25:37 with Polymarket, we are seeing the cultural significance of these prediction markets. 25:42 So, this is another thing that I think would make a great L2 chain and this is some of 25:46 the, some screenshots of the software that I made back in 2015, I think these are from. 25:53 Okay. Yeah, there's some other ideas. I think it was just three, three and a half minutes 25:58 a little. So, maybe if anyone has any questions, if anyone thought of a question, that would 26:02 be a great time. Yes. Yes. Yeah, all of the L2 chains, I think, should and must be merge 26:11 mined with the L1 chain because first of all, this is like basically free. This is very 26:17 convenient. All the chains get the same hash rate in the proof of work context and then 26:22 all the fees go to the L1 miners. And if you don't do that, then you have to like answer 26:27 a lot of other questions about what to do which are hard to answer. And in particular, 26:31 it's possible that maybe the chain has like an off day. These L2 chains, they don't have 26:36 their own block subsidy. So, if there's few people using them, the block, the whole block 26:41 award will just be zero coins and the whole chain might stall out. Whereas with merge 26:45 mining, no one would have this problem. It would just be every 10 minutes, it just finds 26:49 all the chains. So, I think, I'm a huge proponent of merge mining. And in fact, the BIP301, 26:54 I invented this type of merge mining called Blind Merged Mining where all the L1 miners 26:58 have to do is include the highest paying fee following this new soft fork rules and they 27:03 automatically merge mine all the chains without even looking at them. So, I'm very, very pro 27:09 merge mining. I think that is a great invention. I don't know if anyone has any. It's hard 27:17 to see with the light. Yes? 27:19 Yeah. Well, I think this is the way you should do this. I think you should do something like, 27:29 why is the Bitcoin community? I think this is a key point. So, there's only two minutes 27:32 left. But this is key. This is very key. The Bitcoin community, I really think, has trapped 27:39 itself in like a weird cultural cycle where they have a, they're very into, like they're 27:45 very overconfident and complacent. So, the story of how this idea has gone is very long 27:51 and it involves things like bad luck, like in 2017, the whole miner war erupted over 27:56 the block size war and that caused everyone to hate miners for a while. And this also 28:01 led to everyone, after the block size war was over, everyone thought that the key to 28:06 winning was to resist change as much as possible. So, Bitcoin does not really do very much innovation 28:12 and it also has a contempt for any kind of innovation, you know. It will say like, 28:17 we don't need any of that, 21 million, whatever, fixes everything, blah, blah, blah. So, I 28:23 think, but again, there has no, it has not been an activation client yet. So, I have 28:27 like lots of, this proposal is very controversial. I have lots of big supporters and you can 28:33 look at the LayerTwoLabs.com slash friends list and then it has some crazy enemies who are, 28:38 and some of the enemies is just unreal like, you know, Peter Todd or whatever. We hired 28:42 him to do this review and then he's on stage and he's saying there is no source code for 28:46 this, but the source code with the GUI has existed for like two and a half years when 28:49 he said that. So, he had never visited drivechain.info. He's like a critic of this idea, but he has 28:55 never visited the website. He had no idea that code had been written at all. He never 29:00 read the BIP. So, plenty of people admit they haven't read the BIP if you ask them. You 29:04 know, Pierre Rochard, like famously said, he couldn't read past the first sentence of 29:08 the BIP or he's offended by the, something like that. So, I think it's a completely irrational 29:13 thing and you should take advantage of that, their mistake, especially since this is a 29:18 completely reversible change that doesn't really cost very much. So, I think that's 29:24 just about it on the time. So, thank you very much. Thank you. Thank you.