0:00 Hello, and welcome to Drivechain Twitter Spaces. 0:05 This is Henry of LayerTwo Labs. 0:07 It is Monday, February 27. 0:11 Today, we begin yet another one of our discussions of Drivechain, which is Bitcoin Improvement 0:19 Proposal 300 and 301. 0:25 BIP300 is the big one. 0:28 It's the transformative upgrade proposed for Bitcoin, which would enable hash rate escrows. 0:37 BIP301 is blind merged mining, which is an upgrade for that very important secondary 0:45 part of the project, which is the merged mining component. 0:50 What this is all about, these two BIPs are about enabling advanced facilities for sidechains 0:56 so that Bitcoin's sidechains can, instead of being federated, become peer-to-peer. 1:04 That's how I see it personally. 1:07 I'm excited to have this conversation today with everyone who comes up to the stage and 1:15 speaks. 1:16 Everyone in the audience is welcome to raise your hand and come on up, ask a question or 1:20 comment. 1:22 As we have more people join the room, I look forward to hearing thoughts, criticisms, raves 1:29 and rants about Drivechain. 1:32 We do these Twitter spaces twice a week, every Monday and Thursday. 1:37 They're open to the public. 1:40 Everyone is free to share your thoughts, whether you're new to Drivechain and are just beginning 1:45 to learn about what it is, or whether you're an OG who's been following it for its seven 1:50 years of existence, or whether you're somewhere in between. 1:58 All right, SuperTestNet, welcome to the stage. 2:03 Thank you, my friend. How are you this time? 2:05 I'm well, I'm well. 2:09 Well, you're always out whenever we speak, you're out and about. 2:12 I always hear some noise. 2:14 You must enjoy the great outdoors. 2:17 That's true. 2:18 Right. It's typically because I'm staying in a hostel and I don't like to talk inside 2:25 because there's usually quite a bit of people in there. 2:29 They're having breakfast or having lunch or whatever, talking to their friends. 2:34 Listening to somebody talk on a Twitter space can be, I don't know, disruptive. 2:38 So I usually go outside. 2:41 Cool. 2:43 That sounds cool. 2:44 Well, there are a bunch of things that have been discussed on Twitter and in recent essays 2:51 about Drivechain. 2:53 Recently, an article was written about the Drivechain proposal by MaxMoney21Million. 3:02 So I'll throw his essay up in the nest in case people are interested in seeing it. 3:15 There it is. 3:17 It was written on Substack. 3:19 And this thoughtful person did a great review of Drivechain, studied it in detail. 3:27 Ultimately, the author expresses a neutral to negative view where the person says that 3:34 he doesn't support Drivechain, but he would like to see if the advocates are so enthusiastic 3:43 about it and if they feel that they really want it, he says, then they should do a fork 3:48 and therefore it would run live as an experiment. 3:53 And if it were to do very well, then that would vindicate them. 3:56 And he also explains very logically that if the advocates for Drivechain are so convinced 4:04 that Drivechain is absolutely necessary for Bitcoin, then by doing everything they can 4:12 to promote it, they'll be vindicated eventually one way or the other. 4:19 I mean, that's kind of my personal view on Drivechain is that if Bitcoin fails without it 4:24 or if Bitcoin succeeds with it, then those would show that Drivechain is good. 4:34 Especially if Bitcoin succeeds with it and Drivechain clearly is effective in terms of 4:41 either accruing enormous value to the sidechains and perhaps in addition, if there's clearly 4:50 a narrative gain to Drivechain from enabling peer-to-peer sidechains such that altcoins 4:58 no longer can use as a rationale the lack of Bitcoin's extensibility. 5:05 SuperTestNet, we had some great tweets that we exchanged yesterday. 5:10 What are your thoughts currently on anything? 5:14 On anything. 5:17 I like the MaxMoney article and I recommend it particularly for a paragraph in the section 5:25 called Sidechains in which he gives what I think is the briefest, simplest, most clear 5:33 and concise explanation of how Drivechains work that I've ever seen. 5:38 And the paragraph starts with, withdrawal is the interesting part. 5:42 So I recommend checking out that article just for the sake of even that little paragraph here. 5:47 If you're wondering how Drivechain works, you can learn it in the space of a 50-word thing. 5:54 So, I really like that. 5:57 Yeah, that's my thoughts about that. 5:59 What are your thoughts on Bitcoin's future? 6:05 Oh, also, I fully agree with his statement that just fork Bitcoin and add Drivechains 6:14 to it and see how it goes. 6:16 I think that's a good idea. 6:18 I think that's kind of what the mainchain software that Paul wrote is. 6:25 It's a fork of Bitcoin. 6:27 He literally picked the fork button on GitHub, added support for Drivechain, 6:32 and now he's running it on a TestNet. 6:35 That's exactly what I think should happen. 6:39 Cypherpunks run code, right? 6:41 They write and run code that they think is cool. 6:44 And if other people think it's cool too, then they can run it too. 6:47 So, yeah, I fully endorse that statement. 6:50 Not only is it a good idea to fork Bitcoin and add Drivechain to it, that's what we did. 6:55 And the software is running right now, and you can test it out if you want to. 6:59 So, yeah. 7:04 I saw your tweets yesterday on Ordinals, and I was wondering if you could explain it further. 7:10 It seems to me, SuperTestNet, that your view, which is, if I understand it correctly, 7:15 is an opposition to Ordinals. 7:17 Your view is not consistent with what I presume is the standard pro-Drivechain view on Ordinals. 7:26 If I understand correctly, the pro-Drivechain view, 7:30 and by that I mean most of the sophisticated people who like Drivechain a lot, 7:36 what is their view on Ordinals? 7:38 I think probably it's that Ordinals aren't bad, 7:42 whereas you have this view that Ordinals are not good and should be censored in different ways 7:48 by individuals who don't like them. 7:51 So, can you explain, because I think you probably know what I mean, 7:56 can you explain what the pro-Drivechain view is in your words and then why you depart from it? 8:02 Why you depart from, and this might be a simplistic take, but platform maximalism. 8:09 The idea that Bitcoin should have everything on it. 8:12 Like, let's move all of altcoins, shitcoins, every project, 8:18 so that Bitcoin's layer one is the platform for everything and it has no competition. 8:24 That's the Drivechain view. 8:26 So, you're saying, well, Ordinals aren't good, 8:29 but isn't the Drivechain view that Ordinals are fine and let's not discourage them 8:35 and let's simply enable Drivechain so that the Ordinals can naturally flow 8:40 to their own little neighborhood on the Blockchain, 8:43 which would be like the BitAssets sidechain or Drivechain, 8:48 and that's where the NFTs and whatnot would be, 8:51 some sort of large block Drivechain designed specifically to allow for things like Ordinals to exist. 8:57 So, it's not that we should push them away from the monetary layer, 9:01 it's that they would naturally flow there as fees rise 9:04 so they can have larger block space on the Drivechain. 9:09 Satoshi himself wanted to have poker games on Bitcoin. 9:14 He put poker in the code for Bitcoin. 9:17 Literally, there was like fold, raise, call, these kind of poker terms. 9:23 He didn't build it out completely, 9:25 but he was trying to do peer-to-peer poker on Bitcoin's layer one, was he not? 9:30 So, your view is a movement away from that towards this modern, 9:34 only a few years old idea that the Blockchain should exclusively be for payments 9:41 and nothing more interesting, nothing more complicated, 9:45 because that would somehow compete with the poor people who want to use the payment system, 9:53 but we need to have a layered system where everybody gets what they want. 9:56 That's capitalism. 9:58 In America, we don't say no one can have a casino, no one can have a strip club, 10:03 no one can have a basketball tournament. 10:05 You can only do what we think the economy should be, 10:10 which is farming and education and nothing else, no entertainment. 10:14 That's not, no art museums. 10:16 We don't want to do that. 10:18 We want to be capitalistic. 10:20 Yeah, please jump in. 10:22 Tell me how I'm wrong. 10:24 Sure, sure. 10:25 First, I'd like to mention that I don't think ordinals are bad. 10:29 I think inscriptions are dumb. 10:32 Ordinals is a completely off-chain accounting system 10:37 that pretends that Bitcoins go into addresses in a first-in, first-out method 10:43 so that you can track individual satoshis, 10:46 and ordinals read no on-chain footprint. 10:49 I think they're a pretty clever way to pretend that you can track individual satoshis, 10:54 and then assign them names and assign them data and stuff. 11:00 So that's cool. I don't mind ordinals at all. 11:02 In fact, one of the things I think that's cool about them is they can potentially kill Bitcoin. 11:08 Because if the first-in, first-out accounting model becomes very popular, 11:14 that kind of social construct completely destroys Bitcoin's fungibility, 11:23 and it survives coinjoins and other ways of transferring Bitcoin anonymously. 11:30 They get completely broken and destroyed if you can just track the individual satoshis on that level, 11:36 which would allow for blacklisting of individual UTXOs and stuff. 11:42 So I think they're cool because of that, 11:44 because somebody figured out a way that might actually destroy Bitcoin. 11:47 If that works, that's really useful knowledge to have. 11:53 But the inscriptions, I think, are particularly dumb, 11:56 because they use block space very inefficiently for something that is better done elsewhere. 12:04 So an example is BitTorrent. 12:07 BitTorrent is a great example of file-sharing software that's decentralized, distributed, and censorship-resistant. 12:13 It's a lot better than Bitcoin for doing file-sharing. 12:16 It's been around longer, it works very well, and it doesn't cost as much to use it for file-sharing. 12:24 So if someone wants to put a JPEG on the blockchain so that it's censorship-resistant and can't be taken down by someone, 12:33 I think BitTorrent's a better place to do that. 12:35 If they want to sell it, I think that's where Bitcoin comes in. 12:41 Bitcoin is good for buying things and selling things. 12:45 I don't think it's very good for storing data. 12:48 I like the idea of people buying art with Bitcoin. 12:52 I don't like the idea of people storing art on Bitcoin. 12:56 It's very inefficient, it clogs up my node, it clogs up your node, 13:00 it makes blocks more expensive for all of us if we're trying to do payments. 13:04 There's a better place to do that. 13:07 We have file-sharing that's censorship-resistant. 13:11 It's called BitTorrent, and it's a great thing to do, to use. 13:16 You mentioned the poker client that Satoshi had in the original client, 13:24 or at least partially had in the original client. 13:27 I don't think that's an example of doing non-bitcoin use on the blockchain. 13:32 I think it's an example of doing payments on the blockchain. 13:35 As far as I'm aware, the individual messages, 13:38 such as, I have four aces and a king, or you have a full house, 13:46 those messages were not added to the blockchain. 13:48 They were sent off-chain, peer-to-peer, between people. 13:51 The only thing that was on-chain was the payment to put money into a call, 13:57 or what's it called, into a kitty, 14:00 and then for someone to take that kitty after they won the game. 14:04 It was the payments part that was on the chain, 14:07 and the actual data representing the various parts of the card game, 14:15 that was off-chain. 14:16 I think that's a great way to do it. 14:18 You're using Bitcoin for payments, you're using a different network, 14:21 a peer-to-peer messaging protocol, 14:23 for the stuff that Bitcoin's not good for. 14:28 So yeah, that's kind of my view. 14:30 You use Bitcoin for what it's good for, payments, 14:33 and then if you are using inscriptions or something 14:36 that is not only not a great thing for Bitcoin to do, 14:40 but actually makes it worse, 14:41 it actually makes it harder to run a node, 14:43 I'm in favor of getting rid of that, 14:46 censoring it, soft-working it out, 14:48 so that Bitcoin returns to what it's really good at, 14:51 which is just being money, 14:53 and you can use other things for inscriptions and file sharing. 14:58 If we had a drivechain that was for NFTs, 15:02 and if we had a drivechain that was for big block payments, 15:05 and a drivechain for privacy payments, 15:08 and a drivechain for a peer-to-peer Oracle network, 15:10 like HiveMind, 15:13 do you agree that no longer would you say that Bitcoin is only good for money? 15:21 Instead, you would say something like, 15:23 Bitcoin's layer one is used by people primarily for digital gold, 15:34 and at the same time, 15:36 they also use the higher layer, the drivechain, 15:39 for scalability, fungibility, and other forms of money, 15:45 like efficient money, private money, 15:48 and then in addition, prediction markets, 15:52 and other things, like the BitAssets NFT-focused drivechain. 15:58 So then we would say that the layer one is repurposed 16:02 through profitable software, 16:04 merged mining architecture, BIP301, 16:08 to enable the layer one mining to be doubly useful, 16:16 so it's not just mining layer one, 16:18 it's also mining other blockchains that are on top of Bitcoin, 16:21 so when you say that Bitcoin is for money, 16:24 or something like that, 16:26 I'm just wondering why it is that you express yourself 16:30 in a way that seems at odds with the platform maximalism view of drivechain, 16:35 which you support, like you like the BIPs, 16:39 but the BIPs are all about making Bitcoin for all kinds of things, 16:44 not just money. 16:48 Yeah, so I think I've mentioned this on this basis before, 16:52 in a previous episode, 16:54 but I don't view drivechains as a layer two of Bitcoin. 16:58 I view them as a form of a type of custodial sidechain, 17:02 similar to the ones we have today, 17:04 but better, because letting miners have the money 17:08 is more censorship-resistant 17:10 than letting a fixed federation have the money. 17:15 So from that perspective, 17:17 I don't view using a bid-assets drivechain 17:21 or an each-side drivechain as actually using Bitcoin. 17:25 I would say you stop using Bitcoin 17:27 the moment you move your money onto the drivechain, 17:30 and now you're using that other thing instead. 17:33 From that perspective, I view it as sort of pay-to-access. 17:36 It costs a certain amount of money 17:38 to access the features of this drivechain, 17:40 you move off of Bitcoin in order to do that, 17:43 you deposit your money into this Bitcoin address, 17:46 and later, you have a reasonable expectation 17:49 of getting your money back 17:51 because of the pass-rate escrow. 17:53 That's how it works. 17:54 It gives you your money back when you're done, 17:56 or whatever's left over after you're done using that sidechain. 18:00 So yeah, I kind of view that as a better place to do that 18:03 because you're moving that activity off of Bitcoin 18:05 and onto something that's designed for it. 18:08 However, I don't think a drivechain 18:11 would be better than something like Bitcoin for assets, 18:15 for pictures, in other words. 18:18 I think, still, put your image on Bitcoin 18:23 and then sell it for Bitcoin 18:25 is a better model than put it on a blockchain 18:28 and sell it there. 18:30 But even though I think that's still a dumb place to do it, 18:33 I want people to be able to do that 18:35 because it's better than doing what they're currently doing. 18:38 So, there's that. 18:40 Well, isn't the idea of the ordinals 18:42 that there's some kind of linkage? 18:45 Instead of selling it on one marketplace 18:48 and using Bitcoin, 18:50 the only way Bitcoin is involved is as the payment. 18:55 Instead, the provenance of ownership of the artwork 19:03 is, to some extent, traceable on Bitcoin 19:07 and therefore is more secure and stable 19:10 as a form of documentation of ownership, 19:13 cryptographically verifiable, 19:15 that sort of thing. 19:17 Isn't that the narrative of ordinals? 19:19 That it's kind of like combining... 19:26 Instead of selling on Oversee and paying a Bitcoin... 19:29 Yeah, go ahead. 19:31 Yeah, I would say that that is one of the narratives. 19:36 In fact, it's correct. 19:38 Ordinals are quite an efficient way 19:40 of transferring around the concept of ownership 19:44 from one person to another. 19:46 Because after you've, quote-unquote, 19:48 inscribed a Sajoshi, 19:52 with this extra piece of data, after that, the protocol is extremely efficient. 19:56 Because all you're doing, that Sajoshi just points back to the piece of data you've created, 20:00 and you're just transferring that around as a payment. 20:03 Like, I get 10,000 Sats and you get this Sajoshi that points to a picture of a monkey. 20:10 And so you've effectively bought that picture of a monkey by means of just a simple Bitcoin transaction 20:16 that transferred one Sat to you, some UTXO to you, and your larger UTXO to me. 20:23 And I think that's great. That's really cool technology. 20:26 And it's a really efficient way of transferring the concept of ownership around using the blockchain, 20:32 using what it's good for, which is payments. 20:35 The only inefficient part about it is the part where they store the data, 20:40 store the image itself on Bitcoin's blockchain. 20:43 And there's no reason they need to do that, or at least I don't think so. 20:46 I think if you stored it on something like Bitcoin, and you took the magnet link and hashed that, 20:53 that's the only thing that you need to put on Bitcoin. 20:56 It's like a tiny little hash, Bitcoin's got great tooling for that, 21:00 and you're using the blockchain efficiently. 21:03 Now you're just transferring around an individual Sajoshi and individual payments, 21:06 which Bitcoin is good for, to represent the transfer of ownership of that image. 21:14 So you're buying art with Bitcoin, but you're not storing art on Bitcoin. 21:17 And that's kind of the model that I prefer. 21:22 Okay. So as usual, your response is very sophisticated and is just great for me to hear, 21:31 because your understanding of Ordinals is that of a developer, a software engineer, 21:36 you really understand what's going on here. 21:38 For me, and others listening, perhaps, some others, it's interesting to hear your take. 21:44 I'm able to gather just the kind of overall narrative of what's going on. 21:50 I'd like to pivot to one thing you said in your response, 21:53 which was you talked about the drivechain hash rate escrow being akin to custodial. 22:00 And fundamentally different than the peer-to-peer nature of Bitcoin. 22:08 So you view use of a drivechain as use of something that's not too far away from custodial Bitcoin. 22:17 But you're also a supporter of the notion that the hash rate escrow is an attractive alternative to federated sidechains. 22:30 So is that right? 22:33 Yeah. 22:35 My next question then is, isn't it true that in Bitcoin, 22:42 the majority of hash rate could halt the usability of Bitcoin forever 22:49 in the form of a perpetual hostile attack, which is intended to devalue the token completely? 23:01 And therefore, isn't there a reliance on miners from the get-go? 23:09 And therefore, I think that your differentiation between hash rate escrow and Bitcoin Layer 1 is not so crystal clear to me. 23:25 It sounds like you're saying when you own Bitcoin Layer 1 UTXOs, 23:31 you own something that is a far superior property right interest than when you own the drivechain synthetic Bitcoin. 23:42 Because that can be rugged because the miners could steal it, but they can't steal Layer 1 Bitcoin. 23:48 This is one of the main objections to drivechain is that the miners can steal the drivechain's Bitcoin and they can't steal Layer 1 Bitcoin. 23:58 So therefore, the drivechain situation is much more precarious and introduces a whole different security model. 24:06 But Layer 1 Bitcoin relies on the miners. 24:09 So everyone's relying on the miners. 24:12 If someone comes along, if Janet Yellen tomorrow has 90% of the hash rate, isn't that game over? Probably. 24:21 So why is it that you feel that drivechains are semi-custodial and Layer 1 Bitcoin is much safer? 24:32 I'm wondering why is it you place drivechain on the spectrum so close to a federated sidechain and not close to Layer 1 Bitcoin? 24:42 Because in my view, if we're already trusting the miners to some extent, then more isn't so bad and is much better than trusting 15 individual people. 24:54 Because as we've talked about before, I view mining as peer-to-peer because Bitcoin is peer-to-peer and mining is part of Bitcoin. 25:03 And therefore, hash rate escrow is peer-to-peer. 25:07 And that's fundamentally different than a federation. 25:10 A federation isn't peer-to-peer. 25:13 The individuals involved are socially selected to control the federated multisig, whereas in mining, anyone can start mining and participate in the hash rate escrow control. 25:27 The only barrier is economic, not social. 25:30 And therefore, for me, it's all about is something peer-to-peer or not? 25:34 That's my fundamental thing is like, is it peer-to-peer or not? 25:38 And I feel like you have a different way of looking at it. 25:43 Yeah, so there's a big chunk of what you said that I fully endorse. 25:49 I'm just going to repeat it in my own words because I like it. 25:53 Now I forget how to start it. 25:57 Yet miners, we already trust miners in Bitcoin. 26:03 We trust them for the ordering of transactions and the creation of blocks. 26:07 And because we already trust them, I think it's a good idea to leverage that trust to let people say, I'd like to hold my money with them as well. 26:17 And then use them as the federation, so to speak, or the replacement of a regular federation in the usage of a sidechain. 26:28 I think that's better than federated sidechains. 26:32 And so I endorse it. 26:34 Sounds like a good idea. Let's do that. 26:36 Let's make a bit that makes this hash rate escrow easier to do. 26:41 So, yeah, I endorse that and 100% support it. 26:45 But the previous part, yeah, that's all I can remember of what you said. 26:51 There was something before that that I wanted to get what it was. 26:55 It sounds like you think hash rate escrow is pretty close to a federation sidechain arrangement. 27:01 But I feel hash rate escrow is pretty close to because it's peer to peer, pretty close to a Bitcoin layer one arrangement sort of categorically in terms of it being peer to peer, not federated. 27:15 So I was wondering why you said – my original point was why did you say that hash rate escrow is similar to custodial Bitcoin? 27:23 Yeah, I remember the thing I disagreed with now, which was the stuff about isn't the game over if Janet Yellen gets 90% hash rate. 27:34 And I don't think it is. 27:37 I think that one of the nice things about Bitcoin is that it costs real world money to mine. 27:44 And when you censor certain payments, there's a sense in which you're losing money or you're not gaining as much as you could. 27:55 You have a negative on your income sheet. 27:58 And that negative is the fees you're giving up. 28:01 Fees you're saying I'm not going to mine these transactions because I'm going to censor them. 28:06 I don't agree with whatever they're trying to do, whoever's trying to make them or whatever. 28:10 So you have a negative on your balance sheet. 28:16 And as the number of censored transactions grows, the size of the negative on your balance sheet also grows. 28:23 The size of the income you're not taking, the opportunity cost increases. 28:31 Meanwhile, there's other people who can mine as well. 28:34 It's like you said, anyone can mine. 28:36 Anyone can spin up miners. 28:38 And as the amount of censored transactions grows, they're just going to sit there in the mempool waiting for somebody to mine them and accumulate. 28:48 And eventually, after a long enough period of time, they're likely to become worth someone spinning up enough miners to go overcome Janet Yellen's hash rate because it's now worth it. 29:02 You can make more money by spinning up enough miners to do it than money she has to keep on trying to censor them and trying to censor you. 29:14 Because of that, I think Bitcoin works out in this situation where even if Janet Yellen does get 90% of hash rate, she's only able to censor temporarily. 29:23 She doesn't have custody of your money because after a long enough period of time, after the censored fees rise, she loses control of the network because other people are incentivized to spin up miners as well. 29:36 And Janet Yellen can't stop it. 29:38 There's nothing she can do about it because she doesn't control energy in the world. 29:43 The concept of energy, like the ability for people to accumulate hash rate. 29:55 You can't stop people from doing that. 29:58 Whereas drivechain, I think, is different. 30:00 Or at least it makes that much harder because in order to participate in a drivechain, you have to be in the top 51%. 30:08 And it's really hard to get that amount of hash rate. 30:13 With regular Bitcoin, you don't need to be in the top 51% to mine your own transactions. 30:18 You just need to be part of a set of people who's willing to not censor that particular transaction. 30:26 As long as 51% of people, of miners, aren't censoring, you just need to be part of a much smaller set of people. 30:36 Whereas in order to participate in a drivechain, you need to be in the top 51%, which is a much harder thing to get to. 30:42 So I view that as a big separation between what drivechain offers and what Bitcoin offers. 30:50 Very interesting. 30:52 There is quite a bit of background noise. 30:54 I hope maybe in the future we can find a way to chat in a quieter place. 30:59 But I heard everything you said, and it was very interesting. 31:03 Well, we've talked today quite a bit about ordinals and platform maximalism, as well as the difference between custodial Bitcoin, hash rate escrow, and a federated sidechain, multisig. 31:19 We could go on to any other topics. 31:23 One, I want to mention anyone in the audience is welcome to raise their hand and join our conversation. 31:32 If you have a question or comments about drivechain. 31:35 There have been some pretty cool comments lately from Dr. Adam Back of Blockstream. 31:42 Blockstream's illustrious founder and chief executive officer. 31:48 I will put one of them in the nest. 31:52 He wrote two days ago to Roger Ver. 31:56 Roger Ver was saying a tweet about the block size, and Roger Ver was saying that Bitcoin should increase its block size, and that will vindicate the big blockers. 32:08 And Adam Back replied, better still, Bitcoin adds a drivechain, as I suggested to you in person a few times pre-forks. 32:18 So he's saying years ago. 32:20 You even sponsored some research and development on drivechains back then. 32:24 If you had worked on win-win large block drivechains, there would have been less drama, and you'd have more Bitcoin also. 32:32 Which is a bit of a dig, because there have been rumors of Roger Ver owing money to this or that exchange. 32:39 I have no idea if those are true. 32:41 I just see them on crypto Twitter. 32:44 I do agree with Adam's point about win-win, that a big block drivechain enables the big blockers to get what they want and the small blockers to get what they want. 32:55 So people who want big blocks can opt-in to the drivechain. 32:59 People who want big blocks can opt-in to the big block drivechain. 33:04 Anyone who doesn't want big blocks cannot opt-in to the big block drivechain. 33:08 They can just stay on small block layer one and do lightning there and have everything they need. 33:15 So drivechain fundamentally was inspired in 2015 to avoid disputes within the Bitcoin development community. 33:29 The idea was to enable Bitcoin developers to stay within Bitcoin and use sidechains instead of launching altcoins. 33:38 I think from that perspective, it's also kind of ironic that it's become very controversial and divisive within the Bitcoin developer community. 33:47 Then its purpose is to avoid division. 33:50 I think that's funny. 33:55 Yes, yes, it is ironic. 33:57 It's ironic. 33:58 You know, people sometimes say, you know, maybe Paul will go off and do his own thing. 34:04 And that is ironic because the whole point of drivechain was to enable Bitcoin to be inclusive technologically. 34:14 And I think I like that. 34:17 Let me ask you, do you agree with the narrative that if drivechain had been adopted in 2015? 34:26 Over the last seven years, we might have seen vastly less development on altcoins and vastly more development on Bitcoin. 34:36 And to some extent, very interestingly, there is one scenario. 34:42 Which is that instead of there being so many. 34:49 So many like token launches, there would have just been less overall development in the blockchain space because a lot of the development is not productive. 34:59 And it only exists because there is this rationale that Bitcoin is hard to develop on. 35:06 And that creates a window of discourse for founders to say, I have a new idea and I'm launching something and I have to launch it independently as a new coin because it's hard to build on Bitcoin. 35:18 And therefore, if drivechain were created, one of the effects would simply be that there are fewer altcoins, not that every altcoin would move to Bitcoin. 35:28 Because, of course, things like Dogecoin wouldn't move to Bitcoin. 35:32 They wouldn't move to a drivechain because they're all about being an independent altcoin. 35:40 Well, actually, it's merge mine with Litecoin. 35:42 But the point is that it's an altcoin. 35:44 It's not a synthetic Bitcoin. 35:45 So there still would be speculative tokens sometimes just for Ponzinomics and entertainment. 35:51 But there'd be far less of that, especially the kind that is really a pump and dump, but that masquerades as a legitimate productive technology. 36:00 I'm sure you understand what I mean. 36:02 Do you agree with that narrative that drivechain could have diminished those kinds of problems? 36:06 Yeah. 36:07 Especially because you said could have. 36:09 Or earlier you said might have. 36:11 Yeah, it could have happened and it might have happened. 36:14 I can't rule it out. 36:17 I don't know. 36:19 But if we were reading a newspaper headline today and we were in a world where drivechains was made 15, 5 years ago, it would not surprise me to read a headline that says, like, there could have been a lot of altcoin development if Bitcoin hadn't made drivechains. 36:37 Whew! 36:38 Good thing we avoided that. 36:40 That's like a possible future or possible alternative present we could be living in. 36:44 But I don't know. 36:45 It could also have turned out differently. 36:47 And one thing that makes me suspect that it could also have turned out differently is that we currently have sidechains that are not very popular. 37:00 People aren't using the confidential transactions on Liquid. 37:03 They're using Monero instead. 37:05 People aren't using the Ethereum EVM on Rootstock. 37:10 They're using Ethereum instead. 37:12 And I think the reason for that is it doesn't necessarily go away in a drivechain world. 37:22 Part of the reason might be that people just really don't like federated sidechains. 37:26 They're just unwilling to store their money with this group. 37:31 But I don't think that's really the case because they seem to do that a whole lot. 37:34 Like, that's one of the most popular things you could do on Ethereum and on Monero. 37:39 It's like, give your coins to some custodian and let them do everything for you. 37:44 So I suspect the reason why people like those other things has nothing to do with the technology and more to do with the pump and dump aspect of it. 37:51 Like that meme I shared with you yesterday where the guy's like, everyone should use Monero because it's way more private than Bitcoin. 37:58 And the other guy's like, Bitcoin has CoinJoin wallets and these offer excellent privacy. 38:05 And his counter-interlocutors are like, I don't care about privacy. 38:11 People should buy Monero because I have heavy bags of Monero and I want their price to rise. 38:17 That's what it's really about. It's not really about the additional privacy you can get because Bitcoin already offers really great privacy. 38:24 So I think the same thing might hold true in a drivechain world. 38:29 It might be that people would create altcoins because they don't really care about the technology that you can also do with Bitcoin. 38:36 They care about the pump and dump. 38:38 They really want that. They want something with a chance of rising in price exponentially. 38:43 They're just going to use that. They're going to do that regardless of the fact that if you did it on Bitcoin, you'd get the same technology. 38:50 Or if you did it on a drivechain rather, you'd get the same technology but without the pump and dump. 38:55 I think that might anger people because they want the pump and dump more than they want the Bitcoin. 39:02 Well, I'm curious to hear your thoughts on the following. 39:10 Isn't it true, like you were just describing how the federated sidechains on Bitcoin see not a lot of use but a similar arrangement to federated sidechains see a lot of use on Ethereum. 39:25 Isn't there a narrative difference where on Ethereum, once a project grows very large, it can graduate from what is akin to a custodial or federated arrangement to a higher level of so-called decentralization, 39:44 where they kind of graduate from the... 39:49 ...incubation period, which has a custodial model of security, to a more decentralized model that's more peer-to-peer. 39:59 For example, I've heard people say things like... I've heard someone say a month ago, there are four people who can rug Chainlink. 40:09 I heard someone write that, that it's not really fully decentralized. 40:15 Sounds like Chris Black. 40:17 But someone else told me, well, that might be true, but something like Uniswap doesn't have that, where it is fully decentralized. 40:27 It's not like four guys can just control the whole thing through a backdoor like some of these zero-knowledge layers on Ethereum. 40:35 In the long run, it is possible on Ethereum, if I'm not mistaken, to have a project graduate into a more decentralized, more peer-to-peer ultimate foundation. 40:46 Is that true? And is that lacking? That narrative lacks? 40:50 RSK or Liquid can't announce tomorrow that they're going to decentralize and no longer will there be 15 people who control the multisig. 41:02 It'll all of a sudden be just as decentralized as Bitcoin mining itself or something like that. 41:07 They can't just... I mean, that would be graduating into a drivetrain, for example. 41:11 Like that's what RSK wants to do, but that's not possible on Bitcoin. 41:14 Whereas on Ethereum, is it possible for things to evolve into that higher realm of development? 41:22 Well, it is somewhat of a nuanced answer. 41:28 I want to say, yes, it's possible. 41:30 But I don't think there's a sense in which it's not, because Ethereum itself is a permissioned system. 41:38 The L1 that these protocols are built on top of is a permissioned system, especially after they moved to Proof-of-Stake. 41:46 It was still true before that. 41:48 But now that they moved to Proof-of-Stake, it's very clear that the current people who are running the staking pools are the only ones who get to approve transactions. 41:56 And without their permission, you can't enter that group. 42:00 You have to obtain Ethereum tokens somehow in order to join one of those staking pools. 42:06 And they get to approve whether or not you get those tokens, because that's literally how it works. 42:10 They put their stamp of approval on all transactions, including the ones where you try to enter the staking pools, 42:15 or the transactions where you try to accumulate enough tokens. 42:20 So yeah, it's a totally permissioned system. 42:23 And so there's a sense in which, no, it's not possible for a protocol to be developed on Ethereum that is totally decentralized and has no admin multisig or whatever. 42:35 The people who are running the staking pools, they're an always-present admin multisig or backdoor into all Ethereum contracts, 42:42 because they can stop any contract they want by just not approving those transactions anymore. 42:48 Okay, so you've responded to the question about projects developing into a more decentralized format by criticizing a different dimension of the whole protocol. 43:03 Suppose we were to leave aside the criticisms that you've said about proof-of-stake generally. 43:09 Can you talk specifically about the fact that on Ethereum, its main narrative is that it's a generalized blockchain, so protocols can be created. 43:20 And this is my own kind of simple take on it. 43:23 I welcome you to criticize it. 43:25 It's that people can create what are effectively like drivechains on Ethereum, in the sense that you can build a protocol, it runs peer-to-peer, 43:34 and it's different than the basic Ethereum protocol. 43:38 So, and then, you know, it's like the fees are in Ethereum. 43:42 So in a sense, it kind of sounds to me like Ethereum kind of is aiming for the drivechain format, where it's not explicitly and literally merged mind, 43:55 and they're not literally sidechains, but it's something akin to that. 43:58 So that's, it worries me that like Bitcoin hasn't yet achieved that, those narratives and those technologies. 44:05 Because I feel like in the long run, the generalized blockchain proponents will be vindicated that there are things other than simply money that people want to do on blockchain productively. 44:19 Things like prediction markets, things like, you know, having money with different attributes, like private money, more scalable money, you know, different kinds of money. 44:29 Money itself is heterogeneous, it's not a single monolithic category. 44:33 On blockchain, there's different kinds of money, so it should be layered. 44:37 And that's the sort of, yeah, go ahead with your reply. 44:43 Yeah, I think the popularity of rollups on Ethereum is, I think, a vindication of the drivechain model or something equivalent to it. 44:50 Where it's very popular on Ethereum to launch a sidechain. 44:54 Coinbase is about to launch one, right? 44:56 It's a very popular thing to do right now. 44:58 You launch a sidechain, you create a two-way peg between the sidechain and Ethereum. 45:02 And it's very popular. 45:04 People like them, they use them, they're cheaper on fees. 45:08 Yeah, I think it's a vindication of something similar that we want to do on Bitcoin. 45:13 And it's very cool. 45:15 It's very good, successful, and it delights people. 45:17 It's good technology. 45:19 But another point you made that I want to take issue with is that a main narrative of Ethereum is that you can graduate from a custodial or admin multi-sig kind of contract to one that's fully decentralized. 45:37 But it seems to me that that's not very popular on Ethereum. 45:42 In fact, the reverse seems to be very popular. 45:46 It's not only true that you can create these contracts that don't have an admin multi-sig or a backdoor, leaving aside the vulnerabilities of the L1. 45:57 There have been protocols that have done that. 45:59 MakerDAO started out that way. 46:01 They didn't have an admin multi-sig for the collateralized debt positions that were created. 46:06 Uniswap started out that way. 46:08 For version 1 and version 2 of Uniswap, there was no admin multi-sig that could control this stuff. 46:14 But as Ethereum has grown and as it's developed, the ones that have the admin control of the multi-sig or have an admin backdoor have become more popular. 46:26 MakerDAO now has one. 46:28 And the new version that everyone uses does have an admin multi-sig that controls both. 46:34 Same with Uniswap. 46:36 Uniswap v3 introduced that. 46:38 Now there's someone who can rug you and take your money. 46:41 And those are more popular. 46:43 People like those better. 46:46 Oasis is another example. 46:48 How big does a protocol have to be for someone to decide, now it's time for us to decentralize? 46:53 I don't think there is a number. 46:55 In fact, the bigger it grows, the more value that's locked up in that system, the less they want to decentralize. 47:00 The more they want to have admin control over all that money. 47:04 And the users don't seem to care. 47:06 In fact, they seem to prefer them. 47:08 They migrate to the ones where there is an admin with backdoor access and where they can swoop in and rug pull back money that gets stolen from those systems and have some kind of conceptual buyer protection in them. 47:20 Those are more popular. 47:22 People like custody and they move to systems that do it. 47:25 They move to systems that are custodial because they like them better than systems where they have to take responsibility. 47:30 That's very interesting. 47:35 And as always, you have a very, very good set of facts and knowledge to show how my narratives are all wrong. 47:47 I think mine might be wrong. 47:51 I just said that MakerDAO has an admin backdoor to both. 47:57 And I just said that Uniswap has an admin backdoor to the Uniswap contracts. 48:01 I think it's only a subset. 48:03 I don't think their admin backdoor lets them take whatever they want. 48:07 But I haven't reviewed the code as much. 48:09 I believe it's only for the token they created, the Uniswap token and the MakerDAO token. 48:16 But even there, MakerDAO is just about to add the Maker token as a collateral option. 48:28 Then they will have backdoor access to the contents of the vault. 48:32 The trend is in the direction of let's have more custody and not let's graduate away from being... 48:40 They're graduating to custody. 48:42 They're not graduating to non-custody. 48:52 Interesting. 48:54 Well, I would love to learn more about this where there's this dynamic in Ethereum of projects moving in one direction or the other in terms of decentralization or custodial arrangements. 49:14 And I guess in support of my original view, we could say that there is some degree of narratives in the direction of projects being set free from their incubation custodial arrangement to a higher realm where they're more decentralized and it's more peer-to-peer and it's less ruggable. 49:38 And because that ecosystem traffics in those narratives, there is some interest there. 49:45 And that's something which seems like important because there are narratives and then there's reality and there's a kind of relationship that's circular between them. 50:00 But you're right to point out that the market is demanding the custodial arrangements, of course. 50:07 Tons of people love using Coinbase. 50:10 All of those people could just take self-custody of everything they have. 50:14 But instead, they use Coinbase. 50:17 Coinbase has something like 60 or 100 million customers, I believe. 50:22 So tons of people like things that are somehow convenient or fixable by some higher power rather than the totally self-sovereign approach for everything. 50:32 So yeah, the market is... go ahead with your thought. 50:36 Freedom comes with responsibility. 50:40 And if there's one thing people tend to hate, it's personal responsibility. 50:43 So consequently, most people don't like freedom. 50:47 There's a sense in which this is a really bad situation because freedom is so good and all that. 50:54 But also, I like to let people do the things they like. 50:59 And if somebody doesn't want to be their own bank, I don't think they should have to. 51:04 If they want to use a custodian to make them feel better, go for it. 51:07 If that's available, you can do that. 51:09 I don't want to do that because I really do value freedom and I value personal responsibility. 51:16 Well, well said. 51:27 We have a few new excellent people in the audience. 51:31 All are welcome to come on up and speak, share a question or comment, hang out on the stage. 51:37 Thank you for listening. 51:40 I'll take a moment just to reset the room. 51:43 This is Drivechain Twitter Spaces run by Henry at LayerTwo Labs. 51:47 And I'm thrilled to have these conversations on Twitter twice a week, Mondays and Thursdays, 51:54 where we discuss Bitcoin Improvement Proposal 300 and 301, 51:59 which I think could be transformatively beneficial for Bitcoin by enabling stronger facilities for sidechains. 52:08 I think this is fully aligned with Satoshi's vision that every blockchain in the world would be merge-mined with Bitcoin. 52:16 And the peer-to-peer nature of hash rate escrow and blind merge mining would, I think, strengthen Bitcoin in many ways 52:26 and perhaps just possibly bring the entire Bitcoin, the entire community of blockchain developers and users, 52:33 back onto Bitcoin to use sidechains, which would greatly increase the Bitcoin user count, the Bitcoin security budget, 52:42 the Bitcoin value and Bitcoin's political support around the world. 52:47 Because if we have the entire crypto community using Bitcoin as its layer one, then there's much more unanimity, 52:55 much less time spent arguing with each other, much less adversarial narratives among blockchains. 53:02 Right now, blockchains compete. 53:04 You should bring Ryan Dale up. Ryan Dale's super smart and I'd love to hear his thoughts on all this stuff. 53:08 If you can invite people up to be a speaker, do it for Ryan Dale. 53:12 Yeah, Ryan Dale is absolutely one of the best, most favorite. I love Ryan Dale's talks and it's always awesome. 53:21 If he wants to come up, he can request to come up. I don't usually ask people to come up. 53:28 I let them just come up when they want to because I assume that they're busy and they're driving or they're doing something 53:36 and might just be listening casually. But yeah, Ryan Dale, please join the stage every time you're here. 53:42 We love it when you talk and it's valuable for people to hear the pros and cons of drivechain. 53:50 We don't want to only have supporters on stage. We want to have critics and skeptics share their views. 53:59 And Ryan Dale knows a lot more than I do about Bitcoin technologically. 54:04 So it's great to have someone like you, SuperTestNet, here to perhaps respond when someone comes on stage who's very sophisticated 54:13 and then they can get a sophisticated answer to any comments that are critical or skeptical about drivechain. 54:26 So once again, Ryan Dale, please come up if you'd like to. 54:30 The thing that really excites me about drivechain, and I think for most people this is probably the strongest selling point, 54:35 is drivechain is arguably, potentially, number-go-up technology. 54:40 It's technology that can enable higher rates of value accrual to Bitcoin Layer 1, the token and the block space. 54:50 Both of those things benefit from higher demand. 54:54 When more people are demanding Bitcoin, it sends the Bitcoin price higher because of Bitcoin's price inelastic supply. 55:06 And also, the Bitcoin security budget issue, I think, will grow in importance over time as the fees remain low on Layer 1. 55:18 So if the fees stay low, people are going to want more and more for there to be a way to get those fees up. 55:26 And I think merged mining is Satoshi's own suggestion on how to do that. 55:31 He wrote explicitly that merged mining can increase the strength of the network. 55:36 And that is what got me into drivechain at the very beginning. 55:42 I didn't even understand exactly at first how drivechain increases the value of the Bitcoin token. 55:48 I only understood at first how drivechain increases the value of the other good on the Bitcoin blockchain. 55:55 There are two goods on the Bitcoin blockchain, the token and the block space. 56:00 And the value of the block space is the total transaction fee rate. 56:05 And that total transaction fee rate is potentially enormously increased 56:10 if there is high demand for merged-mined sidechains or merged-mined altcoins like BitDNS. 56:19 That was what Satoshi was talking about when he talked about merged mining. 56:23 He hadn't yet understood that there could be a merged-mined sidechain with a two-way peg. 56:30 That's something which came later in the Bitcoin development history. 56:38 So at first we had just this merged-mined altcoin, BitDNS. 56:42 And by the way, I've been remiss in introducing our latest entrant, Raz. 56:48 Thanks for joining the stage. 56:50 Please chime in with any thoughts or comments you'd like to mention as we're talking. 56:55 Cheers, thank you. Yeah, hey guys. 56:58 I was really hoping to just mention a project that I'm hoping to get rolling this week. 57:05 Last week there was a great tweet that had inspired this idea for a shared community 57:12 for all the various L2s at risk of existing within a silo and having great ideas 57:19 that don't cross-pollinate and help the overall scaling conversation. 57:25 And in order to do that, the thing that I think we should try and what I set up 57:30 was just a simple Discord server. It's called Second Layer. 57:33 So I was going to invite everybody that's interested, and of course Drivechain, 57:37 any of the other scaling projects are welcome to come in there. 57:42 I'm hoping we can get buy-in from some of the bigger ones and have more productive conversations 57:48 and do it with a nice UX that lets you casually go in and out of messaging 57:55 and the voice channel like we get here on Twitter Spaces, which I think is great, 57:59 and Discord as well too. 58:00 So I'll just probably post a link. I don't know if you want to get it on the handle, 58:05 but that was the announcement I wanted to make, so thank you for the platform. 58:12 Great. Thank you. That is great. 58:20 Well, we are one hour into our Twitter Spaces. 58:25 Usually we run until about 11 Pacific, so another half hour, so a total of 90 minutes typically. 58:33 Everyone is welcome to come up to the stage, raise your hand, 58:37 and share your question or comment about Drivechain. 58:42 Drivechain has been around for about seven years, 58:45 and recently we've gotten a lot more interest and support for it. 58:52 In the last year, the level of enthusiasm and interest for Drivechain has increased significantly. 59:01 So one observer told me, who's been watching this space for a year, 59:06 this is just one person's opinion. 59:08 One person told me that they think the likelihood that Drivechain will be adopted on Bitcoin 59:15 in the last year rose from 1% to 5%. 59:23 So I think... 59:25 Let's give ourselves a clap. 59:27 Yeah. 59:28 Round of applause for us. 59:30 Now, I joined in the last year, so whether that was entirely attributable to me, 59:36 that 500% increase, it's unclear. I'm kidding. 59:41 Obviously, I'm just a grain of sand in the ocean. 59:45 So I talked to someone yesterday who said they've known you in the Bitcoin space for over a year, 59:51 because I think you used to work at BlockFi? 59:53 Is there a story there? 59:57 Yeah. So I got interested in crypto and Bitcoin a couple of years ago, and I joined BlockFi. 1:00:04 That was my first experience in crypto. Knowing very little, never having read a book on Bitcoin or anything, I wanted to work at a crypto company. 1:00:15 I applied to Coinbase, Kraken, BlockFi, Gemini, Galaxy, and I got an offer at BlockFi. 1:00:21 I went there. I was a director in the compliance department for two years. 1:00:26 I loved my job. I was very disappointed in the way that things ended, and everybody is. 1:00:36 And as I reflected on my opportunities, I looked at a bunch of things in Ethereum, 1:00:41 like different companies that were starting with zero knowledge, decentralized exchange, 1:00:47 perpetual futures trading, stuff like that. And I could have gone there. 1:00:51 I could have been the compliance person for some global startup with raising tens of millions 1:00:57 of dollars to do something like that, some kind of decentralized trading stuff. 1:01:03 But at the time, a couple of months ago, when I was making this decision, 1:01:09 I knew about Paul Sztorc and LayerTwo Labs, and I was aware that they had created a website and 1:01:15 were looking to hire some people. And one of the opportunities was to be the marketing person. 1:01:21 And I was looking for a job that was legal and compliance focused. But I talked to Paul, 1:01:30 and I said, I want to do legal and compliance. Do you need someone for that? And he said, 1:01:34 well, I really need a guy to do Twitter spaces or a girl. And you could do both. 1:01:40 You could do the legal compliance, if there's any compliance or legal issues, documenting the hiring 1:01:46 of people, stuff like that. And then in addition, you could run the Twitter spaces. So that's what 1:01:51 I'm doing. I wear two hats at the company. And I definitely chose this opportunity, 1:01:58 not out of necessity, but out of genuine belief that there is an enormous transformative 1:02:05 opportunity for Bitcoin to stop failing, stop losing clout, narrative and value, 1:02:15 stop this trend toward losing the market cap crown, and instead adopt drivechain and begin 1:02:25 to build upward back to 100% dominance. So for me, it's a very dramatic thing. Very dramatic. 1:02:38 Look, this is my opinion. I'm not saying this is the future. But just everyone has their outlook 1:02:43 on crypto. So I like to share mine, which is that the lack of drivechain is the problem. 1:02:52 And if it's not, if it's never adopted, I think Bitcoin will get flipped. And there'll be a 1:02:57 security budget problem. And Ethereum will just like take over the world. But I understand a lot 1:03:05 of people would say, Henry, you're crazy. Ethereum is irrelevant. It doesn't matter what they're 1:03:09 doing. But I feel like that's just willful blindness. I feel like there's substantial 1:03:14 kernels of truth in what they're doing and their narratives. Let me put it this way. If I or 1:03:23 anybody wanted to attack Bitcoin, I think the best thing to do would be to say, don't do drivechain. 1:03:30 Just do money. Don't do anything interesting. Don't try to build a prediction market on Bitcoin. 1:03:36 Don't try to build sidechains for privacy, for scalability, for NFTs. Don't don't do any of that. 1:03:45 Just be simple. Just do payments. Digital gold. Because I think this in other words, 1:03:51 this digital gold narrative is terrible. Like gold is a failure. It doesn't have any extensibility. 1:03:56 Like I mean, barely you can make a little ring out of it or a coin. Right. And so it's pretty 1:04:04 limited. But what if it was digital? Well, I just think the digital gold narrative, 1:04:09 it's double edged sword, because on the one hand, sure, if the whole world grocks Bitcoin and buys 1:04:15 it, yes, the value could go to 200 million dollars. I mean, 200 trillion dollars. We could 1:04:20 have a 200 trillion dollar digital gold layer. That's the base layer of the entire economy. 1:04:27 And everyone's trading Bitcoin, IOUs or or lightning. And that like, yes, everyone in the 1:04:34 whole world is like, you know, you and Reindald and like everyone will just be like totally 1:04:39 Bitcoin only. Awesome. And that could happen. That could logically happen. It's possible. 1:04:45 But I do feel there are powerful narratives in the altcoin community that constitute a legitimate 1:04:53 competitor, a threat to the protocol, because in protocols you want to be number one. So I don't 1:04:57 want to see Bitcoin lose its number one status. Bitcoin has, to me, a more libertarian culture. 1:05:03 And that's why I like it. And that's why I felt comfortable going to a Bitcoin only company, 1:05:10 because I feel like the libertarian movement is stronger within Bitcoin. That's ultimately 1:05:14 why I chose Bitcoin when I really had like a choice is that, you know, it's like the Austrian, 1:05:21 the Austrian economics and cypherpunk ethos of like of sort of volunteerism, anarcho-capitalism, 1:05:30 limited government, you know, freedom, individual economic freedom, the site like the 1:05:36 sovereign individual book. Those kinds of ideas, I feel, are more in Bitcoin than in the altcoins. 1:05:43 So I would like for there I would therefore like to see Bitcoin succeed. But I think that what we 1:05:47 need are these sidechains to make really cool projects that might become very large. And even 1:05:54 if they don't, would just make Bitcoin show that it has extensibility. It has cool stuff. And that 1:05:59 would be a powerful narrative game in money. It's all like memes, narratives. It's not just tech. 1:06:06 It's the narratives that are important. We want to have Bitcoin stay the biggest and the most 1:06:11 exciting. So I think that this sort of monetary maximalism, limited view of blockchain is not 1:06:19 right. This idea that altcoins have no legitimate tech and that they're all scams is wrong, 1:06:25 because like peer-to-peer oracles, like hivemind projects like that, we don't want them to be on 1:06:31 altcoins. They're legitimate. We want them on Bitcoin, big block sidechains. They're not scams. 1:06:38 Like the people who left Bitcoin to do big blocks, it would have been better if they had stayed and 1:06:42 done drivechain. But drivechain still isn't possible yet. So I think we need to change, 1:06:49 like as Bill Clinton always used to say, we've got to change. And I just don't understand really why 1:06:57 the most influential thinkers in Bitcoin don't all agree on this. Like we've got Adam Back, 1:07:03 but there's a bunch of very, very influential thinkers who are quiet on the issue or who have 1:07:11 criticized it years ago. And like, I wonder if they're still confident in their view, because 1:07:19 every day the fees are low and the altcoins are growing. So in the worst case scenario, 1:07:26 the altcoin, the biggest one, like flips Bitcoin and then like shrinks its block size, 1:07:33 ossifies its layer one, and then it has the drivechain approach. And now it's bigger and better. 1:07:39 I mean, I know that sounds like, hey, how could that ever be? But this notion that Bitcoin will 1:07:44 always be perfect, I think it originates from sophistry. It originates from the idea that 1:07:49 because it was first, it therefore is best. It's like, I'm not going to name names, but some people, 1:07:55 some prominent podcasters and whatnot say, well, it was the first digitally scarce thing. And 1:08:00 therefore it, because Bitcoin was the invention of digital scarcity, it will forever be the only 1:08:07 legitimate digitally scarce protocol asset. That's not true. And Satoshi himself didn't even say that. 1:08:17 Like, where did this come from? This sort of simplistic sophistry that because Bitcoin was 1:08:23 first, it therefore is the only legitimate thing ever on blockchain. Like, I don't see that it 1:08:30 doesn't like I majored in philosophy, I can kind of detect when someone's like, sort of just with 1:08:35 like just inventing a false line of reasoning. I don't find that line of reasoning compelling. 1:08:40 Like, of course, it was first, and therefore it had a huge advantage. But now it's blowing that 1:08:45 advantage by not optimizing in the direction of drivechain. I mean, in my personal opinion. 1:08:50 Super, please chime in. 1:08:55 Yeah, so I want to go back to what you were saying about hardforks, which you said, you wish 1:09:03 the vCash people had stayed in order to work on a drivechain instead of vCash. I think that's true. 1:09:11 If we'd had drivechains at the time, that would have been a better outcome. One thing that is 1:09:17 very difficult for Bitcoiners to hear is the concept that hardforks are a good thing. Many 1:09:22 people view them as a very big danger. And it's something that Bitcoin lately tries to 1:09:29 avoid doing. But I have a perspective that hardforks are actually a good thing. I think 1:09:36 hardforks are, they've got lots of benefits. But I found a way to say that, that it doesn't wrinkle 1:09:44 the foreheads of Bitcoiners. There's a way to say that that makes Bitcoiners say, oh yeah, 1:09:50 I agree with that. And it is that I'm glad that the vCash people left. I'm glad they left Bitcoin. 1:09:58 And when I say that to people, they're like, oh yeah, yeah, I'm so glad they left. It's good that 1:10:02 we've gotten rid of those people. But what they don't realize is by saying that, they're saying 1:10:07 they're in favor of the hardfork, because that's what vCash was. It was a hard, you can't leave 1:10:11 Bitcoin, or the vCash people couldn't have left Bitcoin without doing a hardfork. One of the 1:10:18 things I like about them though, is that it lets people run the software they want. The vCash 1:10:23 people wanted big blocks so that they hardforked and they got them. I think that's great that they 1:10:28 get to run the software they like, we get to run the software we like, may the best money win. 1:10:33 But yeah, that was also before drivechains, where no one was, they were much less likely to get 1:10:41 activated at that time than they are now. So there's kind of a different scenario now, where 1:10:46 if you, where they could have big blocks without a hardfork now, and then also run the code that 1:10:51 they like, the big block code, but not have to completely depart Bitcoin for it. So I don't 1:10:59 know, I thought that people might be interested in hearing that perspective. 1:11:04 That's interesting you say that, because when I've read Paul's blog posts, it's on truthcoin.info, 1:11:11 it seems like he is emphatically against hardforks. He views hard, and I think it makes sense to me, 1:11:17 because it's a crypto economic claim, which is my favorite part of Bitcoin is the economics, 1:11:23 as opposed to the code. And economically, when a protocol forks, it loses users, 1:11:32 it loses resources. So if you know, Bitcoin splits, like it did with Bitcoin Cash, 20% 1:11:40 of the resources were gone for Bitcoin. The 20% of the users, the miners, that sort of thing. 1:11:47 That's a rough number, I could be wrong about it. But I think I recall that from a blog post, 1:11:52 that it was about 20% of the community broke off, that was damaging to the community. 1:11:58 It's much better for the community to remain whole, and for it to instead have more extensibility, 1:12:05 so that people with different ideas can build on the project without completely leaving. 1:12:12 Like imagine how much poorer America would be if it split in half. And, you know, it would 1:12:19 have half as much, you know, network effect for its money and its military. Now, of course, 1:12:24 that's a bad analogy, because like, probably among libertarians, we all want that to happen. 1:12:30 Ideal scenario, we have drivechains, and they don't have to leave Bitcoin in order to run a big 1:12:34 block, you know, blockchain, they can just do it. Well, they can just make a sidechain that does 1:12:39 that. But also, in the absence of that option, in the absence of drivechain, I think that better 1:12:47 than people staying with Bitcoin, if they don't like it, it's better if they leave it for something 1:12:52 they do like, even if they take 20% of their value with them. I think it's more important 1:12:58 that they do what they like, rather than do something they don't like. So I'm a fan of, 1:13:04 because we had no drivechain option at the time, I think it's better that the big cash people were 1:13:09 able to leave and then make something they like better. And, you know, but it made the best money 1:13:15 win. But so far, Bitcoin's winning by a lot, compared to that one. 1:13:20 So that, yeah, I agree that obviously, Bitcoin is the, by far the most successful of all of the 1:13:25 Bitcoin block, you know, Bitcoin related blockchains, certainly. But I agree with you that 1:13:32 sometimes forking off, you know, getting divorced, sometimes that makes sense. It's a matter of, 1:13:38 you know, how urgent does one feel, one wants to do the technology that one prefers. 1:13:46 And if there's no extensibility, that's adequate, then you have to fork and do something new. 1:13:53 When I read the Ethereum white paper, and Vitalik says that, you know, he talks about colored coins 1:14:00 and other types of projects that were attempts at Bitcoin extensibility. So he reviews the history 1:14:07 of people trying to build on Bitcoin. And he discusses the ways in which they were limited 1:14:13 by Bitcoin's foundational architecture. He never talks about drivechain. Of course, 1:14:20 I think Ethereum predated drivechain. I think Ethereum was 2014 and drivechain was 2015. 1:14:27 So it's interesting. Your point about... 1:14:32 It did. The concept of Ethereum did predate the specific drivechain proposal, but it didn't 1:14:37 predate the concept of merge-mined two-way pegs, of which drivechain is one attempt to implement 1:14:45 that. The sidechains white paper also proposed them using SPV probes. And that came out before 1:14:51 Ethereum. In fact, Ethereum was widely criticized because they didn't go with a two-way peg model. 1:14:56 They went with having a floating currency. First, they did because they didn't know how. 1:15:02 Partly, they did it because they didn't know how to make a two-way peg at the time. 1:15:06 Would the two-way peg have been federated? Are you saying that Ethereum could have just done 1:15:10 what Rootstock did and that that architecture was known and understood at the time of Ethereum's 1:15:16 launch that they could have done a federated sidechain? They could have done a federated 1:15:22 sidechain. And that was, if I remember correctly, that was proposed. In fact, 1:15:25 they were criticized for not doing that. But the sidechain's white paper in 2014 1:15:34 proposed that as something you can do in the meantime until we get a soft fork 1:15:40 that allows Bitcoin to validate SPV groups. And so there was also a criticism of like, 1:15:46 just wait another year or two and we'll soft fork in this alternative. It's better. 1:15:55 All right. Well, anyone in the audience who would like to come up and join the stage 1:16:03 to share a comment or question about drivechain is welcome to. In the nest, we have two tweets. 1:16:11 One is a recent article by MaxMoney21Million. He wrote an essay on drivechain, 1:16:20 and I tweeted a link to it. Ah, we have Reindahl joining the stage. 1:16:30 Hello, sir. How's it going? I'm all right. How are you? 1:16:35 I'm well, thanks. Please chime in with thoughts and criticisms and 1:16:39 anything on the topics we've discussed. I missed a lot of it, but was just listening in 1:16:47 recently. I don't know if you guys have talked about it before, but I think Supertestnet has 1:16:53 sort of a sketch of a design up for a thing called Handcrank, which is like, I'll call it 1:16:59 drivechain's light, but doesn't take a soft fork. And I was reflecting on that design. 1:17:05 And I think we're going to want some kind of covenant opcodes inside of Bitcoin, 1:17:13 which covenant that is, is grist for some healthy debate. But it occurred to me that I think if you 1:17:23 had a covenant opcode, you could actually do drivechains without BIP300 and BIP301. And 1:17:35 the way that that would work is it would be something like, and I'm going to be a little 1:17:39 bit hand-wavy, but Supertestnet had a really interesting idea around if miners include a pub 1:17:48 key in their Coinbase op returns, then you could look back on the past n number of blocks, 50, 1:17:59 100, whatever, and you could build yourself a little multi-sig where the keys are held by 1:18:07 miners from the last however many blocks. And one of the things that's really interesting 1:18:12 about that is you could do something like you say, I'm going to take the pub keys from the 1:18:23 last hundred blocks. I'm going to build a frost threshold signing key where it's a one out of 50. 1:18:32 So any of the miners can sign with this key, but only the miners can sign. And if you had that, 1:18:41 and if you also have a covenant where you say a given output can be moved forward to another 1:18:50 output that has a one block relative time lock on it, and there's six months worth of those 1:18:58 movements forward that it can do. And then at the end of those six month line of transactions, then 1:19:06 you can send it wherever it needs to go. That actually basically does hashrate escrow, 1:19:12 but it can be any transaction in the blockchain can be encumbered by hashrate escrow. It doesn't 1:19:18 just have to be these special slots in the Coinbase, which is what BIP300 does. 1:19:24 So I just thought that it was interesting that because we have relative time locks 1:19:28 and because with Taproot we now have much clever key aggregation. If you had something where you 1:19:37 said the only allowed spend path for this output is to move forward to another state in a line of 1:19:46 states, and after the last one, the coins can be spent anywhere, then you could basically do 1:19:53 hashrate escrow. And yeah, that's super interesting. And then I think if you also 1:19:59 do an output that's like a anyone can spend, like you sign it with sig hash none and sig hash anyone 1:20:10 can pay, then that's like an output that anybody can put in, or I'm sorry, that's a transaction 1:20:16 where anybody can replace the output and it's still valid. So if you were to make transactions 1:20:20 like that, then miners could replace the output with their own address, and that's a way that 1:20:26 you could anchor sidechain blocks by basically bribing miners. So I think those two constructions 1:20:34 actually replace BIP300 and 301, and it's a much smaller set of forks because instead of having 1:20:42 BIP300, which is a fairly complex thing, you just need a covenant system. So if you had CTV, 1:20:50 you could build drivechains. I just think that's really interesting. 1:20:53 Yeah, so there's a couple of people who have demonstrated or proposed ways of emulating 1:20:59 a hashrate escrow using BIP119 or BIP118. Ruben Somsen has a post on Twitter in which he 1:21:08 outlined something called simplified drivechains, which you can search for if you want to look 1:21:12 up more about that, which uses BIP119 to do it, which is BIP119 is also known as 1:21:19 opchecktemplateverify. Zman is a Bitcoin developer on the Bitcoin developer mailing list 1:21:25 who proposed a way to do it using BIP119. Because he opposes hashrate escrows, he opposes BIP300, 1:21:34 he actually gave this as a reason to also oppose BIP119. He was like, you can do drivechains with 1:21:40 BIP119 and drivechains are bad, therefore we should not activate BIP119. And then Jeremy Rubin 1:21:47 posted on his blog, how you can emulate a hashrate escrow using BIP118, which is a 1:21:54 SIGHASH anypreval. So there's a couple of different ways to do it, which I think is 1:21:59 interesting because also the reverse is true. If we get BIP300 before we get those things, 1:22:04 you can also emulate them by just making a sidechain that has a BIP118 sidechain or a BIP119 1:22:10 sidechain. So all of these things can emulate each other, which I think is just fascinating. 1:22:16 No, it's super cool. 1:22:17 If you get one, you get them all. 1:22:19 Yeah. And maybe I read something that Jeremy wrote and it's just been rattling around in the 1:22:24 back of my head. And then I woke up one day and thought I had independently discovered it. That 1:22:27 happens all the time, especially the things that Jeremy writes. He just has a lot of really good 1:22:33 ideas. It's funny, one of my big gripes with 300 and 301 is I think it introduces a lot of weird 1:22:45 political and incentive distortions to the miner ecosystem. So I would actually prefer 1:22:54 something like a, I'll call it a permissionless drivechain system. If you emulate hash rate 1:23:03 escrow and blind merge mining with something like CTV or OPTX hash or something else. 1:23:08 Because there's a couple of things I don't like about the current drivechain design, 1:23:13 but one of them is slots for sidechains in the BIP300 little registry of sidechain withdrawals. 1:23:29 That's a scarce resource and miners have to ultimately decide which ones they activate. 1:23:37 And the way that you activate those is basically by going through a soft fork. 1:23:41 So in some ways you could look at drivechains as being like the soft fork to end all soft forks, 1:23:47 but in other ways we would actually have more soft forks because we would have a big 1:23:53 miner activated soft fork exercise every time somebody wants to turn on a new drivechains. 1:24:01 Soft forks are a big enough pain in the ass now. I don't know if we want to turn 1:24:05 every possible sidechain into a new soft fork activation campaign. Whereas if you said anybody 1:24:13 anywhere can make a sidechain whenever they want by just doing this covenant construction 1:24:20 and then paying miners to do it, that seems like it doesn't really do anything to help 1:24:28 the maybe MEV concerns, but it certainly gets us out of the whole, 1:24:33 oh God, it's Tuesday, we got a soft fork again problem. I think it's interesting. I think it's 1:24:41 actually kind of preferable to having special space in the coinbase just for drivechains. 1:24:47 I'd much rather have a more general construction that you could just so happen to use for this 1:24:52 kind of action. Because what drivechains really are is they're a big federated multisig, 1:24:57 but they're a big federated multisig held by all of the miners. And so the decentralization of the 1:25:03 big federated multisig is as good as the decentralization of your miners. And I think 1:25:09 that your approach plus covenants gets you maybe not all the way there, but pretty close. 1:25:16 A difference that I value between drive chaining and today's federated sidechains is the dynamic 1:25:22 membership sets, the mining poolers that is. There are a lot of miners and they come and go daily, 1:25:27 people turn on and turn off mining equipment. And so the number of people or the set of people 1:25:36 who you're trusting with your money actually changes on a day-by-day basis, which I think 1:25:40 is an improvement. I don't know if it's an improvement over a federated sidechain, 1:25:44 but it's different enough that some people prefer it. And I think that's very reasonable to do. 1:25:49 Yeah, I think so. Yeah, I tend to agree. I think you might be able to do something where you say 1:25:56 it's a closed membership set for the duration of this withdrawal attempt. That's better than 1:26:02 saying we have a static membership set. But I agree with that. It's a closed membership set. 1:26:08 But I agree, the dynamic membership set thing is really important. One of the other concerns that 1:26:15 I have... So another issue though, I wanted to take issue with something you said, which is that 1:26:21 you were talking about how with BIP300, every new sidechain is a softboard. I don't think that's 1:26:29 quite true. But even if it is, if it is true, doing this with covenants instead, 1:26:38 emulating a hash rate escrow with a covenant doesn't fix that, I don't think. Because 1:26:44 you still have to deposit money with miners and they still have to know what rules that 1:26:49 they're supposed to follow in order to let people peg out of that hash rate escrow. 1:26:53 So in order for them to do that, they have to run this extra software if they want to be part of 1:26:59 this hash rate escrow. And that's essentially a software thing. This is another instance of 1:27:03 miners having to... You have to convince them to run your special software, follow the consensus 1:27:09 rules of this alternative sidechain in order to know who's supposed to be able to peg out. 1:27:15 So it still is. They still have to do a miner-activated software effectively every 1:27:21 time somebody wants to add a new sidechain, even if you emulate this with covenants. 1:27:25 But also the other thing is that if we get one drivechain, that's all we need. 1:27:31 We don't need to get miners to run new sets of software every time, because once we have one, 1:27:35 we can put rollups on it or just do more drivechains off of it and then have that set of 1:27:41 miners who are inside that drivechain are the new set of people. So yeah, I don't think you really 1:27:49 do need to do a new software for everyone. So if we end up in a situation where we have 1:27:56 one killer sidechain, we have the capacity for 256 sidechains, but we say, okay, we actually 1:28:04 only need one of them because inside of that sidechain, we're going to have rollups. And 1:28:10 rollups give us so much extensibility and expressiveness that it's all that we ever 1:28:17 need. People just add new rollups all the time. Why don't we just go straight to having some 1:28:24 ZKP opcode in layer one and just do rollups on Bitcoin? I think one of my biggest pause points 1:28:35 for drivechains is I think drivechains are kind of the best solution with circa 2015 technology. 1:28:42 But over the last 10 years, ZKStarks have gone from being a very theoretical thought exercise 1:28:51 to actually being in production and protecting hundreds of billions of dollars. And the rate of 1:28:58 discovery and invention and innovation in succinct ZKPs is just parabolic. 1:29:07 I think it's a pretty reasonable claim to be able to say, I bet within five years, 1:29:12 there will be some ZKP construction that would be suitable on Bitcoin in terms of 1:29:18 validation costs and proof size. So if that's the trend that it's going, and if ZKPs give us 1:29:25 all of the trustless pegout goodness that we're looking for for drivechains, but without 1:29:31 additional incentive distortions or miner centralization concerns, 1:29:36 it seems like that would be a strictly better solution. 1:29:38 Yeah, we have LayerTwo Labs who exist and is pushing for drivechains. And I think that's great. 1:29:47 Here I am in this space pushing for them because this is one of the most likely avenues to get 1:29:54 a two-way peg into Bitcoin. But also, if there was a rollup labs, similar to LayerTwo Labs, 1:30:02 a rollup labs who was pushing for that, and they had code ready, and they had an example 1:30:07 implementation of start proofs, top code, I'd be in there. Telegram, too. There's Twitter spaces, 1:30:14 too, talking about how we should activate that. Because I just want the two-way peg. I don't 1:30:18 particularly care how we get it. No, that's not true. I do care how we get it. But rollups are 1:30:26 good, too. I'm willing to accept that. Currently, I think the most likely avenue to get drivechains 1:30:31 or drivechain-like things into Bitcoin is because of L2. BIP-118, or SIG-HASH-ANY-PREPOUT, 1:30:41 is very popular among the Lightning community because it also brings a lot of features that 1:30:46 improve the Lightning network. And so I think we're pretty likely to get BIP-118 into Bitcoin. 1:30:52 And once we do, then I think that's our avenue. We use that to emulate BIP-300s, Hashrate, Escrow, 1:30:59 and boom. We've got, effectively, drivechains on Bitcoin. Because BIP301 is less important. 1:31:07 It's not even necessary to activate drivechains. It makes them a lot cleaner. But you can do 1:31:12 BIP301, or you can do blind merge mining today. You don't need BIP301 to do that. 1:31:18 It's just a better version of blind merge mining than we can do today. 1:31:22 So yeah, all the ingredients we have to make drivechains will be here if we get BIP-118. 1:31:26 And I think it's pretty likely we will because all the Lightning people want it. 1:31:30 And they've got a lot of pull in the network. 1:31:34 The question of roll-ups versus drivechain is interesting. 1:31:39 Reindahl, you mentioned the roll-ups. And I wanted to point you to a statement made by 1:31:45 John Light in Twitter Spaces here at LayerTwo Labs Twitter Spaces a few weeks ago. 1:31:52 I put it in the nest. I transcribed it where he said, and people can listen to the entire audio 1:31:58 to get the full context. But he said, I think it would make sense to do drivechains first 1:32:03 rather than wait until validity roll-ups are ready. So that's John Light of Bitcoinrollups.com. 1:32:12 He works for Sovereign. And he's a researcher focused on roll-ups for Bitcoin. 1:32:18 So there's this idea that we could just wait five years and get roll-ups. 1:32:23 But there's no guarantee that things will ever happen in the most optimistic sense. 1:32:30 Maybe it's better to adopt a lower technology that might actually accelerate roll-ups on Bitcoin. 1:32:37 Because as SuperTestNet described, the roll-ups could be done on the drivechain first. 1:32:43 And then that would perhaps, if it sees a lot of success, 1:32:47 accelerate the interest in bringing them down to Layer 1. 1:32:52 I think Paul Sztorc also said recently that Taproot might have come sooner to Bitcoin 1:32:57 instead of taking five years. It might have come sooner to Bitcoin, 1:33:02 although I'm not sure when exactly it was first proposed. But my point is that it wouldn't have 1:33:05 taken as many years and months as it did had there been drivechains. Possibly drivechains 1:33:10 can accelerate the adoption of things coming down to Layer 1 because of the ability to run 1:33:17 them as a live test on a drivechain first. So it enables that kind of experimentation. 1:33:22 Instead of a mere testnet, it's like a live Layer 2. So that's a superior way, perhaps, 1:33:29 of getting things brought down to Layer 1. So you might see roll-ups faster on Bitcoin 1:33:34 if there's drivechains first. That's the theory that some have said. 1:33:40 Yeah, I think that's a reasonable theory, because drivechains are so close. 1:33:45 You're really right there. You just need a way to do hashrate escrow, 1:33:48 and there's several different ways to do it. And then you can put roll-ups on a drivechain and have 1:33:55 a two-way peg and do another two-way peg. And the world will be glorious. Two-way pegception 1:34:00 all the way down. To what SuperTestNet said, 1:34:04 there's a lot of ways to emulate hashrate escrow. So maybe what ends up happening is we get 1:34:10 Anyprev out, or we get some other covenant system. I mean, shit, maybe we get OP_VAULT, 1:34:17 and then people use OP_VAULT to emulate hashrate escrow. And boom, now we have 1:34:26 drivechains. There's a lot of ways to do it. Yeah, it's just the one thing that is annoying 1:34:32 to me about drivechains, or one of the things that is annoying to me about drivechains, 1:34:37 is the need to persuade miners to run the software is annoying to me. And I really wish we 1:34:44 had a better way, or a way to do two-way peg sidechains without needing to convince anyone 1:34:50 and beg them to please run their software for me. Yeah, and one of the concerns that I have is, 1:35:00 so there's lots of people who mine Bitcoin. There's lots of people who have an S9, 1:35:06 and they're in their basement, and they pointed at the pool of their choice. 1:35:11 But those individual miners are doing their own block construction, 1:35:15 right? They're outsourcing block construction to the pool operator. And what I hope happens, 1:35:22 whether it's through Stratum V2 or something else, is that we move to a world where 1:35:26 individual miners are doing all their own block. 1:35:32 Only, you know, five mining pools in the world, and they do all the block construction, 1:35:39 then there's really only five people that the government needs to lean on. If you have, 1:35:44 you know, pools are just aggregating hash rate, and everybody does their own block construction, 1:35:50 then it makes it a much more decentralized and much more censorship resistant network. 1:35:54 And one of the concerns that I have with drivechains, both like the BIP300301 construction, 1:36:00 but also like the more general idea, is that if miners have to run sidechain software in order 1:36:09 to like know which peg out to process, or in order to, you know, do other operations that 1:36:15 are important for the consensus of the sidechain, then that is going to push miners to outsource 1:36:24 block construction that includes drivechain as test stations to either mining pools or to 1:36:30 other people, right? Like the dynamic that we've seen happen in Ethereum, where because of MEV, 1:36:41 block construction is now a very highly specialized activity where like margin is made or lost. 1:36:47 You have a lot of Ethereum stakers that outsource block construction to MEV boost 1:36:56 constructors. And I'm worried that we could end up with a similar situation here where, 1:37:01 you know, okay, right now, all that you need to mine Bitcoin is you plug in an S19, 1:37:06 put it in your basement, and like you're mining Bitcoin. If in order to mine Bitcoin 1:37:11 and construct your own blocks, you also need to run like some big block BSV node for the big 1:37:18 block sidechain. And you need to run some super complicated thing for some other super complicated 1:37:24 sidechain. And like, you've got to run all this other software in order to like know which withdrawals 1:37:31 to process. Like people aren't going to do that. So they're just going to outsource block construction 1:37:35 to either their pool operator or to some other service. And it kind of goes in the opposite 1:37:41 direction from where I think we want to go with miner decentralization. I'd like to provide what 1:37:48 I think is the standard drivechain response to that question about the role of the concentration 1:37:58 in the mining sector that could arise from the existence of merged mining being much bigger. 1:38:07 So if there are a bunch of protocols, a bunch of sidechains that are merged mine with Bitcoin, 1:38:12 and they're very large, then, as you say, there could be an incentive financially for the mining 1:38:21 on Bitcoin to include the burden of having to have a node of those sidechains. So the idea is 1:38:30 that this would be an extra cost to miners, and it would drive centralization. So the view is that 1:38:41 the view of this criticism is a view that ordinary home miners wouldn't be able to affordably run 1:38:49 the node of the Thunder sidechain or the HiveMine sidechain, and therefore they would be 1:38:55 less profitable potentially than someone who is doing true blind merged mining, where they're 1:39:02 mining Bitcoin layer one, and therefore they're blind merged mining all of the sidechains, 1:39:07 but they're not running the nodes. So your view, if I understand it, is that the non-blind 1:39:14 merged mining nodes will make more money and therefore have more hash rate and more income, 1:39:20 so this will cause there to be more big miners in Bitcoin, fewer miners, fewer home miners. 1:39:27 But the response to this, Reindahl, is that it is a view which is an arbitrary prejudice 1:39:35 against profitable software. There are in Bitcoin already a number of economic forces that are 1:39:44 driving centralization of Bitcoin mining, and this was understood by Satoshi from the very beginning, when he said that the number of people running a network node would reduce over time, and that it wouldn't be the case that ordinary people would be mining, they would just maybe validate or use, they wouldn't be generating new coins, they wouldn't be running server farms, that was his phrase, server farms. 1:40:07 The concentration in the Bitcoin mining sector was understood from the get-go as a natural result of capitalism and specialization, and the prejudice against merged mining, which is popular among certain drivechain critics, they have an arbitrary prejudice against profitable software. 1:40:25 software. They wouldn't put it that way, but I believe that is the correct 1:40:30 understanding of their view, which is that it constitutes an arbitrary prejudice 1:40:35 against profitable software. 1:40:37 Those same 1:40:38 drivechain critics, I don't think ever would say, that we should try to have Bitcoin 1:40:44 miners never have a load balancing arrangement with a power company. 1:40:50 Like if a 1:40:51 If a large Bitcoin miner with a billion dollars of ASICs has an agreement with a power company 1:40:57 that's specialized, a specialized agreement an ordinary home miner can't have, then the 1:41:04 agreement between the power company and the large Bitcoin miner that's co-located 1:41:08 would be profitable for that Bitcoin miner, enabling it to have a higher rate of profit and hashrate, but we don't bemoan that. 1:41:17 We don't bemoan that some parties can build like a large Bitcoin miner right next to a dam, and a home miner can't do that. 1:41:25 There are forces that are natural in capitalism that lead to specialization and economies of scale, and for people to criticize merged mining as a part of that, I think they're singling out merged mining arbitrarily. 1:41:41 And what merged mining is, is it's profitable activity for miners that takes the form of software. That's the only difference between merged mining and other forms of miner profit, is that merged mining takes the form of software, and therefore criticism of it is arbitrary, and should be recognized as that. 1:42:04 I don't think that's necessarily true. Block construction is something that, for protocol reasons right now, is handled by mining pools, but I don't think anybody wants that to be the case. 1:42:25 We've seen what's happened in the Ethereum community, where after Tornado Cash got OFAC'd, a bunch of MEV boost relays all started censoring transactions to Tornado Cash, among other addresses, and I don't think anybody thinks that that's a good thing. 1:42:46 I mean, I'm looking on the mining dashboard for mempool.space right now, and five mining pools control, looks like about 80% of the hash rate, and right now those five mining pools are doing all the block construction there. 1:43:01 I think it's important for the censorship resistance of the network that more people be able to participate in block construction, and the more that you make block construction into a specialized activity that requires specialized hardware or specialized expertise, I think it reduces the number of people that a government has to lean on in order to start centering transactions efficiently. 1:43:26 So I don't think it's the same as power agreements, because even if miners seek out cheaper power or better cooling, that's still a very permissionless system. 1:43:43 Anybody can go do that, can go and plug in. 1:43:46 I think if you can take a trailer full of S19s and go find cheaper power with them somewhere, and have decentralized block building, I think adding unbounded complexity to block building is materially different than criticizing normal capitalist activity and finding power. 1:44:13 I'll put it this way. When you talk about miner centralization and it going in the wrong direction, are you talking about one miner making more profit and therefore putting another smaller miner out of business, and therefore that is a problem? 1:44:35 Henry, so really quick, when I say that block construction is centralized in the miners, do you know what I'm saying, or are we talking about two different things? 1:44:48 I think I know what you're saying. 1:44:52 you're lab... Yeah, sure. 1:44:54 So, you know, miners in the abstract do is they have a 1:45:00 mempool, people broadcast transactions and those transactions go into the mempool, 1:45:05 right? And like 1:45:08 And then what miners do is they slice 1:45:14 off the top. 1:45:15 The top, know, call it one to four megabytes worth 1:45:21 And they construct a block out of them, and then they try to find a nonce that with the rest of the block hashes to a hash that's below the difficulty. 1:45:33 So selecting which transactions go into the block and assembling all of that together is block construction. 1:45:42 And right now, the way that Bitcoin mining works is if you buy an S19 and you just plug it in, you log into the little interface, and they say, which pool do you want to use? 1:45:53 And you point it at, I don't know, Luxor or ViaBTC or AntPool or whatever, brains, pick your favorite pool. 1:46:02 What ends up happening is that you, as the person running the S19, are not doing that transaction selection, you're not doing that block construction. 1:46:12 What happens is your pool operator, so brains, AntPool, Foundry, F2Pool, whomever, they run a Bitcoin node, and they have a mempool, and they construct the block template, and then they push it down to everybody who's a miner in that pool. 1:46:29 So Foundry right now is about a third of the total hack rate, and there's a whole bunch of miners who mine for Foundry, but the people who actually select what transactions go into blocks that are mined by that pool are Foundry. 1:46:46 So Foundry doesn't have individual miners, so what I'm going to say isn't totally accurate, but if you're an individual miner hooked up to Foundry, and you say, hey, you know what, I really want to include a different set of transactions in this block, you can't. 1:47:03 Foundry hands you a block and says, this is the block that you're going to mine, and you work on it, and you submit shares to the pool, and they pay you out. 1:47:10 So if you had a mempool.space slash mining, and there's a pie chart for all the pools… 1:47:17 One of the reasons that… 1:47:19 Yeah, go ahead. 1:47:22 To me, the concern that… I'm going to try and restate the concern you've brought up in my own words, and then you can tell me if it's accurate, because I have a response for it if it is. 1:47:37 If we activate drivechains right now in a situation where mining is… block construction is done by pools, then those pools are also going to take on the role of constructing blocks for the sidechain and devalidating those blocks. 1:47:56 And this exacerbates the situation where there's a small number of people who governments have to put pressure on in order to make them bend the knee to censorship regulations. 1:48:09 So that's how I would rephrase the concern you've brought up. 1:48:12 And if that's accurate, then it's not a concern for me, because of my experience with people who mine. 1:48:23 It seems to me that the people who mine care a lot, at least in my experience, about what pool they're running and what their policies are and what they're doing. 1:48:32 They go to meetups and they talk about it. 1:48:36 They make little charts and spreadsheets of what the profitability of each mining pool is. 1:48:42 They test them, and they're like, yeah, this is the amount I made while I mined with this mining pool for this amount of time. 1:48:48 And then in the next column of the spreadsheet, they have a different attempt to a different mining pool that they mined with and how long and what profit they made from it. 1:48:57 And actually, they really test these things, and they talk about the policies of various mining pools. 1:49:02 Like when Marathon came out with a censorship policy or a no-fat compliance policy, miners I talked to were like, yeah, I switched away from that pool because I don't like their new censorship policy. 1:49:13 They talk about this stuff. 1:49:15 And they recommend trying a different one, and they propose different things that they've done and how they made profit out of it. 1:49:24 So if we reach a situation where mining pools are pressured by governments to start censoring, then I think that'll be a huge topic of discussion among the mining pool meetups. 1:49:38 And people will say, let's get out of these ones that are being regulated, and we'll move to these other ones that have popped up in unregulated jurisdictions. 1:49:47 And here's my assessment of how much more profit we can make because they're paying out the fees that you get from the censored transactions. 1:49:54 And such. 1:49:56 They'll pay attention, and they'll say, I want to move to this one because it's mining these sidechains that are very profitable for me, and I want to move to these other ones. 1:50:06 They seem to be very into it, and I don't think it's a concern that they'll just blindly stay with pools that are censoring when that's a cost to them, and they can do better by moving to other pools that aren't. 1:50:17 Yeah, I guess what that ends up depending on is that there's operators that are able to pop up in other jurisdictions that can run the right combination of sidechain nodes to maximize profitability. 1:50:33 So I think it's a reasonable response. 1:50:36 What do you think of the miners profit in many different ways? 1:50:41 And they're all trying to be as profitable as possible. 1:50:45 And if any of them do something that makes more profit, then that will tend to force the others to do the same or quit operating in the long run. 1:50:54 And one of the ways miners can profit, one of the thousand ways miners can profit, is by running profitable software. 1:51:00 And therefore, there should be... 1:51:02 I assume you're asking me and Ryan Dale or anyone else? 1:51:06 I was asking Ryan Dale, because he was voicing what I understood, if I understand it correctly, to be the criticism that merged mining, which already exists on Bitcoin, would be greater in terms of profitability. 1:51:18 The criticism that merged mining, which already exists on Bitcoin, would be greater if drivechain is adopted. 1:51:24 And therefore, that wouldn't be good because merged mining is bad because it increases centralization in mining. 1:51:31 But I'm wondering, there are 1,001 things that miners do that can increase centralization in mining. 1:51:38 All of the ways they profit are those 1,001 things. 1:51:42 And the bigger miners have all kinds of advantages. 1:51:44 Running profitable software is just one of them. 1:51:48 So the criticism of merged mining is that it's not good because it increases centralization. 1:51:54 But that's an arbitrary prejudice against software, against profitable software. 1:52:00 The same criticism isn't made against non-software based productivity. 1:52:05 But you're not advocating for a soft fork to Bitcoin to increase the profitability of other arbitrage opportunities that miners have. 1:52:16 You're advocating for this specific proposal. 1:52:21 So this specific proposal opens the door for more specialized block construction. 1:52:29 And I think SupertestNet just had a great response about miners are ultimately profit seeking. 1:52:37 So if it's more profitable to mine with a pool in a different jurisdiction, they'll try to do that unless they have some compliance burden that they're dealing with. 1:52:47 That's a totally reasonable response. 1:52:49 I think nobody's proposing a soft fork to make it easier for miners to go get power sharing agreements at hydrodams. 1:52:58 The soft fork that you're advocating for makes block building a more specialized activity. 1:53:06 And I think I'm saying that we've seen in other ecosystems that as block building becomes more specialized, it also becomes more centralized. 1:53:16 We've seen this play out over the last two months in Ethereum after they moved to proof of stake. 1:53:22 And so I think the question that the ecosystem has to ask itself is if we really want trustless peg outs, which I think we do, then are drivechains the best answer for that? 1:53:40 And I think one of the components for evaluating bestness is what does it do to mining incentives? 1:53:46 And I think there's a clear incentive push here towards more centralization. 1:53:53 And maybe the expressibility and feature set that we get from drivechains is totally worth it. 1:53:59 And we take the hit on more miner centralization. 1:54:04 But I think it's a fair claim that drivechains increases miner centralization. 1:54:14 I think you could argue about how much and what the effect of it would be. 1:54:18 But I think that's definitely a tradeoff. 1:54:20 And I think that's a tradeoff that I'd love to see a little bit more exploration of. 1:54:26 I'd also like to point out that I'm not sure that drivechains are the best way to do a two-way peg. 1:54:33 I haven't looked as much into rollups as someone like John Light has. 1:54:38 I do suspect they're probably a better way to do a two-way peg. 1:54:42 But one thing I do know is that drivechains are very close. 1:54:46 They're very easy to get from where we are. 1:54:48 In fact, I think we probably will get them as soon as Bitcoin 18 gets in. 1:54:53 And the nice thing about drivechains is even if they're not the best way to do it, 1:54:57 they give you access to the best way to do it. 1:54:59 Just make a sidechain that has rollups or an op code and now you've got them. 1:55:05 So yeah, part of the reason why I think drivechains are great is because they're really easy to get into Bitcoin. 1:55:10 And they're probably going to happen pretty soon. 1:55:14 The problem with rollups though, SuperTestNet, is that they really can't be made to be decentralized. 1:55:24 At least in the kind of architectures we've seen. 1:55:27 Just because the whole small block argument to begin with is there's a direct unbreakable trade-off space between the data throughput, 1:55:41 or just the data requirements for validating how many transactions per second or whatever you can have, 1:55:47 and how many people can actually run the nodes and verify stuff. 1:55:52 And the rollup structure is basically just a much, much faster data intensive blockchain 1:56:01 that proves down to a small footprint on the main chain that lots of people can have. 1:56:07 But the rollup itself has dramatically reduced kind of trade-off requirements 1:56:16 compared to things, more interactive protocols like lightning or more generic kind of state channel constructions 1:56:25 where the data availability is kind of on the onus of the people engaging in whatever the thing they're doing is. 1:56:34 Reindahl, you said that drivechain would open the door. 1:56:38 And I appreciated how careful you were with your wording regarding the risks of greater merged mining 1:56:44 leading to more concentration in the mining sector. 1:56:48 Would you agree that merged mining has been around since the very beginning, 1:56:53 and that in theory we could have very large merged mine sidechains on Bitcoin today? 1:56:59 The only reason for that has been that communities haven't chosen to adopt and use them at a large rate. 1:57:06 But it already could occur and that it is potentially a powerful solution to the need for higher fees in the future. 1:57:18 And so I appreciate how you talked about there being trade-offs. 1:57:21 Are you sympathetic to the notion that merged mining would be vastly better than inflation in the future if that were the choice? 1:57:30 So I think that more usage would be better than inflation. 1:57:37 It's not obvious to me that the only way to get more usage is through merged mining. 1:57:43 We could end up in a situation where somehow lightning really takes off 1:57:50 and just lightning channel opening closes and stuff. 1:57:55 Yeah, we just have to fix it first. 1:57:56 Yeah, exactly. 1:57:58 But it could be some other L2 that we use and then all the liquidity management for that drives enough usage to solve fee problems. 1:58:06 Going back to what SupertestNet was saying a few minutes ago, 1:58:13 I think the thing that all of us really want is we want a trustless peg out from sidechains. 1:58:20 It's just not clear to me that drivechains are the optimal set of trade-offs to get us there. 1:58:29 And I think whether it's drivechains or something else, 1:58:34 the long-term health of Bitcoin is going to be contingent on it actually getting usage and people actually using it. 1:58:42 Buying Bitcoin in a custodial exchange and then trading around in custodial exchanges 1:58:49 and never having transactions hit the chain, in my view, is not using Bitcoin. 1:58:56 I know that there's a meme that saving in Bitcoin is using Bitcoin. 1:58:59 I think that that's a coping strategy that people use to deal with the fact that Bitcoin really isn't being used as much as people want them to. 1:59:10 So whether we get more usage through something like drivechains or whether we get more usage from other L2s or other higher layers, who knows? 1:59:19 But I think if we get to a point where we have to really think about something like changing the issuance schedule for Bitcoin 1:59:31 because the incentives don't work out and the security budget starts becoming a problem, 1:59:36 I think at that point it might be time to go do something else. 1:59:50 But do it on a drivechain. 1:59:53 There was this cool moment in the history of classical music, 1:59:58 and this is an analogy to drivechain versus rollups, 2:00:02 that in classical music, a couple decades ago, Glenn Gould wanted to re-record his Goldberg Variations, 2:00:11 which was his breakout huge hit album from the 50s. 2:00:17 So 30 years later in the 80s, he wanted to re-record it because Dolby Digital surround sound recording was possible. 2:00:26 So instead of having it just be in stereo, he wanted to re-do his masterpiece recording using the higher technology. 2:00:34 But it's very interesting that when he re-recorded the Goldberg Variations, they used both systems. 2:00:43 They turned on in the recording studio the stereo system and the Dolby Digital recording system. 2:00:49 And at that time in the 80s, stereo was at its peak. 2:00:54 Stereo was as good as stereo ever had been. 2:00:58 It had developed for a long time. 2:01:01 Dolby Digital was very rudimentary. 2:01:04 So it was higher technology, but it was newer and therefore not refined. 2:01:09 And the stereo recording was actually better. 2:01:13 So they ended up using that because it sounded better. 2:01:17 So it's possible at this moment in Bitcoin development, roll ups are the high technology and drivechain are the low technology. 2:01:27 And it actually sometimes makes sense in life to use the low technology when it's been refined. 2:01:35 Maybe it's more conservative. 2:01:38 Maybe it's more understood. 2:01:39 So it's sometimes better to go forward with that than to use the higher technology. 2:01:47 I mean, in the case of Bitcoin, unlike recording, you can't do both at once. 2:01:52 I mean, you could, but what I'm saying is if you're recording piano music, you could use two different recording systems. 2:01:59 And there's really nothing that's stopping you from that. 2:02:01 There's no reason not to do it. 2:02:03 But with Bitcoin, when we do something, there's risk because we're changing things. 2:02:07 So, I mean, if we're considering two different changes, if we change, there could be risks. 2:02:13 So you don't want to do both at once necessarily. 2:02:15 Probably choose one. 2:02:17 So in this case, there's a bit of an analogy there where it turned out that Glenn Gould, you know, they all liked the stereo recording, even though it wasn't the newer technology. 2:02:26 It wasn't even the inspiration for him to do the recording. 2:02:29 So I think there might if we find the drivechain is adopted in the next one or two years, I think we'll look back and say that it was, you know, seven years in to consideration. 2:02:40 And therefore it was it felt more comfortable for the community, even though we're at the beginning of a growing trend of people talking about like roll ups. 2:02:49 But they're extremely sophisticated. 2:02:51 It uses like advanced mathematics and they're not time tested. 2:02:55 There is not like people have been talking about it for seven years, as far as I understand. 2:03:00 So there is that there is that moment in the history of science sometimes where there's like multiple options and sometimes the lower technology is good. 2:03:08 And as we've discussed in this case, like roll ups on a drivechain could actually bring roll ups to Bitcoin layer one faster, maybe. 2:03:24 I recommend listening to the two different versions of Glenn Gould's recording. 2:03:27 It's really cool. Like there he plays them. 2:03:29 He plays the music, the Goldberg variations, two different ways in those two recordings. 2:03:36 Thank you. I'm a big fan of classical music. 2:03:37 I think I think I will do that. 2:03:42 Well, we've been going for two hours, but I hesitate to end the space. 2:03:47 If anyone has any final thoughts and thanks a lot for our speakers. 2:03:53 I hope you all come back and speak more any time you want. 2:03:56 It was really great to hear the high level of discourse between Reindahl and Supertech. 2:04:03 I guess we'll close the space out and we'll reconvene Thursday. 2:04:07 So this has been Drivechain Twitter Spaces. 2:04:10 We talk every Monday and Thursday. 2:04:12 I'm Henry at LayerTwo Labs. 2:04:14 We are trying to promote understanding, education and support for Drivechain, which is Bitcoin proposal. 2:04:20 Bitcoin Improvement Proposal 300 and 301, an idea that has been talked about since 2015. 2:04:27 It's an idea that has potential, many believe, to increase Bitcoin's value, increase Bitcoin miner revenue, increase Bitcoin extensibility, strengthen Bitcoin's narratives for serving as a platform for a multitude of interesting applications and having more experimentation and innovation on top of Bitcoin, which makes Bitcoin more exciting. 2:04:50 And potentially more valuable, literally, in terms of the purchasing power of your Bitcoin going up because of the existence of peer-to-peer, two-way pegged, merged mind sidechains. 2:05:05 It's a cool idea and you can learn more about it at drivechain.info. 2:05:10 There's also a bunch of other websites that have essays on Drivechain from various Drivechain fans like Fiatjaf and others. 2:05:20 And there's also videos on YouTube. 2:05:22 So there's all kinds of places you can find out more. 2:05:24 You can also join the Drivechain Telegram group, which has over 700 Bitcoiners in it, talking about Drivechain and sharing ideas. 2:05:33 So I'll see you all on Thursday. 2:05:35 Thanks so much for being here.
