0:00 Is that 10 minutes? 0:06 That's 21 minutes. Oh, yeah. He likes the like button. He drew a like button. You need to 0:10 just get an Etch-a-Sketch, bro. You're having a hard time deleting things. 0:17 Welcome again to Hashing It Out. I almost said the Bitcoin podcast there just from like 0:21 pure rote like memory or like what's the word I'm looking for? Like 0:27 a habit for saying so many times. I'm Dr. Corey Petty. I'm your second host. 0:34 Dee is not talking right now because his voice is basically gone. So he's writing things if 0:40 you're watching this video that he's the first host. Say something real quick so they understand 0:45 the Sling Blade action going on right now. Hey, everybody. I'm the host that talks first. 0:52 Dee's kid sneezed in his mouth when he was telling him a secret. So now he's sick for a 0:55 little while. Or maybe licked his eyeballs. Who knows what kids do? They do weird things. 1:01 And who's in the bottom? Who's this guy at the bottom? And I'm the third host, Jesse Broke. 1:09 Broke. Let's get into it. Yeah, let's get into it. What tagline is that from? Let's get into it. 1:14 That's from... I hear that a lot. I don't know where it comes from. I don't know. I've heard 1:20 a lot too. Like one of those content creators, that's their tagline. It's like, let's get into 1:26 it. Oh, it's the really popular one on YouTube. The guy who gets all the tech first. Guy who's 1:33 like the PewDiePie of tech. You know what I'm talking about? Black dude? Yeah. I don't know if 1:40 that's the one I'm referring to. There's somebody else I'm thinking about. Anyway, doesn't matter. 1:46 This episode was fun. Marques Brownlee. I think that's what he says, but I could be really wrong. 1:53 I've got some sweet hot takes for Roundtable after this, but I enjoyed this interview. And I think 1:58 it's interesting to see, like the last episode, if we air these chronologically with how we 2:06 actually record them, then last time we talked about Zero Sync and then BitVM. And 2:13 it's kind of our resurgence into Bitcoin material, because there's stuff happening in Bitcoin worth 2:18 talking about, at least in my eyes. It's like the attempt to create a way to have more functionality 2:28 rooted into the Bitcoin blockchain, allowing for more innovation on top. Layer two is the 2:34 kind of canonical term for that. What does that say? Do you put it back? 2:37 It says, BTC is in a time capsule, a phantom zone. 2:43 Yeah, it is. We can talk about that a little bit. And I talk about that a lot of it, I think, 2:48 in the episode. He indicates why he thinks the time capsule was created and what created it. 2:57 And then I meant to... It's interesting now that you're seeing a resurgence and 3:01 an attempt to use things, as I think people are seeing. I don't know. I don't know if 3:05 people are seeing... I personally think it's like a acknowledged threat of the 3:14 rest of the ecosystem success, which we're seeing the adoption of other chains and the... I don't 3:25 know. There's no reason to use Bitcoin if you can do the same thing elsewhere and users don't care. 3:36 They do the same thing as kind of in quotations, because that's where usually the argument is. It's 3:41 like, it's not safer, it's not as safe, it's not as decentralized, it's ripe with scams, 3:46 whatever. It doesn't really matter. But if I can get my money in, do something with that money, 3:50 get my money out, it doesn't matter functionally. And so for a lot of people, that's the case. 3:58 They're able to use the thing for the time period they want to use it. And all of the hedges that 4:05 traditional ideology that started Bitcoin, mainly like self-sovereignty, 4:11 interest resistance, be your own bank, defeat the traditional financial system, 4:19 all that stuff is very, very long term and doomsday scenario situation, 4:24 which doesn't account for most of the use in blockchains today. So they're seeing that success 4:32 and the associated fees and growth of the ecosystems and that success, and they need 4:37 to do something in order to recapture some of it. They can only do that by allowing for some 4:44 level of innovation on top, namely what's called L2s. But they got to find a way to make L2s 4:51 work for a base layer that doesn't like changing. 4:58 I think you captured the idea of not only this interview, but also the previous one with 5:04 Zerosync and the way that they want to extend what Bitcoin can do right now. And they want 5:15 Ethereum, ideally, and all the other Alt L1s and their associated L2s to effectively 5:20 become spokes with Bitcoin being the hub. Just like every other Alt L1 wants to develop an 5:28 ecosystem of L2s with their own L3s, right? So everybody just wants business capture. 5:35 And that's it at the end of the day. It's really- 5:39 Well, there is a difference there, which we talked about a little bit, and that is 5:42 where the incentives pool, right? So in the eventual use of the system, 5:51 where do the benefits go? Where do the fees go? Does the growth of one part 5:59 help the growth of the entire ecosystem? Is there ability to exit? Are you somewhat captured? 6:07 That's kind of like- Captured is the- I think is the mantra of the one L1 to rule them all. 6:16 And the feeling is, though, that needs to be the case. And everything should be built on top of 6:21 one L1 and only L1. So they want that to be captured. That means that the only way to do 6:28 that is if it can scale and the associated fees of all use somehow benefit the base layer. 6:36 And the ability to exit is not worth it or not available. Whereas kind of a multi-chain 6:45 ecosystem and bridging is the alternative to that, where you kind of do whatever you want, 6:49 wherever you want, and then move your assets wherever you want them to go. 6:56 You can't see that. There we go. BTC needs to learn hard, lean hard into BTC is gold analogy, 7:04 and for the strong use cases, hard asset value. And that's, I think, the equivalent of gold, 7:10 right? The technology equivalent of gold is like, this is where you park things. 7:18 I think that's what they have done. And that's why it's become so ossified. And that's why 7:23 these guys are having such a hard time getting adoption for their ideas. I mean, it's been- 7:29 Yeah, but you can't leverage it very well, right? The ability to leverage that gold 7:33 and then do derivative things on top of it from a technology standpoint is limited in Bitcoin. 7:38 And that's what they're trying to change now. And that's how L2s generally work, 7:44 which we talk about in the show or the interview, is that you pool that digital gold, that Bitcoin 7:51 somewhere, somehow using the Bitcoin rule set, the Bitcoin protocol. And then based on that pooling, 8:00 you're able to do something somewhere else with strong guarantees that can't get stolen, 8:05 can't get taken away, whatever, right? That's all L1 and L2s work. That's how they'll always work. 8:11 And they're finding interesting ways to do that, which give different kinds of guarantees. 8:20 What I think is interesting about 300 is this long withdrawal process that I'm not sure 8:28 works on the timescale that people need it to. So I think I need to look more into that. 8:34 It's equivalent to optimism and a week-long exit time period such that if there is malfeasance, 8:43 it can be pointed out. But we can get into that after the show. 8:48 So let me transition into the interview with Paul Schortz. 8:57 All right. Welcome back to the show. Today, we have an interview with Paul Schortz. 9:06 I would call you maybe a progenitor of Drivechains and BIP300. But why don't we do the 9:11 normal thing and you give us a quick introduction as to where you come from, what you do, and 9:16 what you work on today and kind of how you got here. 9:19 Yeah, the most important thing is that I advanced the cause of this Drivechain idea. 9:25 Where did I come from? Well, I originally came from academia. I have a background in 9:29 statistics and economics. And that got me interested in a lot of things like why, 9:38 because we had the 2008 financial crisis. So it's kind of like, why is economics so bad? 9:43 Why is it so illogical in many ways? That kind of led me into Bitcoin. It also led me into this 9:49 idea with the prediction market, which I think could basically salvage economics mostly, 9:56 which is another neglected idea. And I actually designed a way of doing Bitcoin prediction 10:00 markets, but it is so bizarre that it requires sidechains in order to work. It actually requires 10:06 specific type of sidechains. It's that exotic. And so that led me to work on sidechains and 10:14 sort of led me to pick up where Blockstream left off from my point of view. My point of 10:20 view is that they kind of just abandoned the idea and that I picked it up. So those are some 10:25 important things about me. I mean, in December 2014, Adam Back linked to a blog post I wrote 10:31 about, that was a precursor to one that was called Nothing is Cheaper Than Proof of Work, 10:35 which was the really famous one. But I wrote one that was almost the same where I wrote about 10:40 proof of work being like an auction, like auctioning off a briefcase full of cash. 10:44 And he linked to that, and that was kind of like my big break, so to speak. 10:47 Then it became much more popular after that. And then I spoke at scaling conferences, 10:53 and I speak at all kinds of Bitcoin conferences ever since. I publish technical research. I have 10:57 lots of ideas. One of those ideas became BIP300, and another one became BIP301. 11:03 And collectively, those are known as Drivechain. 11:06 Can you explain? I was just going to ask the question, because I dug a little bit into BIP300. 11:14 So I have an idea, but I didn't look into BIP301, which you just made a reference to. Could you 11:21 maybe give us the idea of Drivechains from BIP300 and then extend it to 301? 11:26 301 is called Blind Merged Mining. And regular merge mining, that was invented by Satoshi himself 11:33 in 2010, and it has been in use ever since. It has the disadvantage that you get paid on the, 11:40 what would be called the L2 maybe, although there was no such terminology at the time. 11:45 And in fact, something like Namecoin could exist independently of BTC, whereas in drive 11:53 chain, that's not the case. None of the Drivechains on L, they all, they're like lightning 11:57 nodes, so they require L1 full node to exist in order for them to exist. But in vanilla merge 12:08 mining, you get paid on the other chain, and you also must run a node of the new thing. You have 12:12 to run like a Namecoin node. So in Blind Merged Mining, you don't need to run anything other than 12:16 the L1 node, and you don't need to do anything other than collect L1 transaction fees, which is 12:21 what already what the miners do. And as a result, they are, it's sort of like a slightly better 12:28 version of merge mining, but it's really not that interesting now, because even though I think, I 12:33 still think we should add it to Bitcoin, but there are many ways to emulate it already. So Ruben 12:40 Thompson invented a few ways that are sort of worse, but they already exist. And SuperTestNet 12:45 has also implemented a few of these that already exist. So this technique is already made it into 12:52 Bitcoin. It's only used in silly things like, I think, a space chain. I think that's kind of a 12:57 silly idea, but some people like it. And this has already been used, so it's kind of like that one 13:04 has already been pushed across the finish line. But we should still do the original design, 13:10 because it maximizes the actual byte efficiency of everything. It's really, it's because we can 13:16 already do it that we might as well do 301. It's just a different kind of merge mining. merge mining 13:21 is a very counterintuitive and bizarre thing that not a lot of people understand. So we could go into 13:27 that, or we could not. But the gist of that is that you can, a miner can find two blocks, a block for 13:34 different blockchains, all at the same time, with no additional work. A really de minimis, like 13:40 absolutely negligible amount of work that has no additional SHA-256 hashing, none of that work. 13:47 So that's a fascinating idea when it comes to sidechains, because it just solves, the sidechain 13:54 problem is this big problem, but it's something like merge mining cuts most of the problem away. 13:59 And it was invented by Satoshi, and it's been in continuous use. So 301 is not that interesting. 14:03 And I don't think, as far as I'm aware, there's no controversy over 301. There's just various 14:07 people who sometimes temporarily misunderstand what it means to have a fee spike, or that fee 14:14 spikes are bad, or that there's anything we can do about them. So people sometimes run into those 14:20 little snags, but then they usually escape from the snags all by themselves. So I think 301 is not 14:26 controversial, and it already exists, and it's, so it's not that big of a deal. But that 301 governs 14:32 how each sidechain's blocks are found. So block, block, block, block, block, where are the blocks 14:38 coming from? So BIP300 does the deposits and the withdrawals to and from the sidechain L2. 14:44 I see. So it seems to be, last week we spoke with Robin Linus from ZeroSync. 14:53 Yeah, he's great. 14:54 It seems to be the ecosystem development with respect to building on top of the Bitcoin 15:00 blockchain is different ways in which you can leverage or root into the Bitcoin blockchain, and 15:07 either the different technology used to do so, or the different kind of trade-offs associated with 15:11 it. I was reading through the DriveTrade peer review stuff, where you go over the main criticisms 15:16 and why you don't think they're legitimate. But can you talk about maybe the differentiation from 15:24 a method like ZeroSync, using like leveraging zero knowledge stuff to root into the Bitcoin 15:29 blockchain, and how Drivechains do that, and what the main, I guess, differences are in your opinion? 15:35 You mean ZeroSync, or do you mean BidVM? 15:38 BidVM, ZeroSync. I see BidVM as a leveraging. 15:46 Well, yeah, ZeroSync is Robin Linus's project to make it much easier to run a full node and have 15:52 it sync instantly. So instead of having everyone download everything and check everything, 15:58 and then serve everything to everyone else, you get this little item that comes with 16:05 the snapshot of the state, and that proves that you reached the state the right way. 16:10 And that has many advantages, and that's ZeroSync. 16:14 Yeah, I see that as like his foot in the door to start people to leverage this technology. 16:18 A pretty big disadvantage of that is that we don't live in a world where people are constantly 16:23 being tricked into coming onto the wrong blockchain. So another disadvantage of it is that 16:28 we don't live, we must, someone must serve the data. But nonetheless, this is a great idea, and we should 16:35 do it, and it, you know, more, getting more research into Bitcoin is always good. But we, someone must, 16:42 you know, if someone asks you for the block, it doesn't solve data, what's called data availability. 16:47 So if someone asks for the block of like, what was block 300,014, if no one on earth has that block, 16:55 and this actually happened to Ripple or something, you know, there's a bunch of blocks that went 16:59 missing. But if no one has this block, we don't know when it is revealed. Someone may reveal it, 17:05 grind it into existence through trial and error or something. When it's revealed, we don't know if 17:10 it's going to be valid or invalid. So we have to assume that it's invalid, because we don't know. 17:18 And so we have to reorg it out. You see what I mean? If we assume it's invalid, and we reorg it out, 17:22 then it just never existed. But if we assume it's valid, and then we include it, and then it later 17:27 turns out it was invalid, then we're doomed, because we have like a multi-year reorg, or more likely. 17:32 And then if it's invalid, it could print like 100, it could have printed like 100 million coins, 17:37 or broken any kind of rule. So that's an issue. The data availability is really the big issue. 17:42 And zero sync does not solve that, but that's great. Zero sync is still great. You still have 17:48 like a thing on a phone, like a full node on a phone. BitVM is also kind of cool. BitVM is 17:58 where people sit down to play a game. They fund this thing, you have this prover verifier system, 18:06 where if anyone ever does something wrong, if they wait too long to respond, or if they make some 18:13 kind of invalid action, their money can be slashed. And when you go into such a state, 18:21 you can make these interesting contracts, where you put yourself at danger or risk of being slashed. 18:26 And you could like, you know, play chess or whatever against someone for money. A disadvantage 18:30 of BitVM is that people cannot join it or leave it. Once it's set up, it's very hard to get 18:38 more people to join. Although I'm sure there must be possible ways with like trees of people, like, 18:44 but you still need like some new action to get people in. Whereas with BIP300, the coins move 18:51 over. It's the coins that move, they're not attached to an identity. The coins move over, 18:56 and then they can change hands on the L2. Now, I didn't realize when I first came up with this idea, 19:03 I thought that was kind of a footnote. But now I see that it's probably the thing that will make 19:10 this the winning L2 out of them all. Because everything else is too much of a 19:16 handicap to be useful. And there's also various contradictions that arise 19:21 in trying to always make it, for example, stuff like ARK or stuff like 19:29 Lightning, ARK, whatever. They make it so that it's always possible to go from L2 to L1. 19:35 But this is a mistake, I think. Because think about it, 8 billion people can't use L1. 19:40 And so if 8 billion people are on L2, what does it matter if the system gives them away 19:46 to each? Because they can't fit on L1. So the ability to unilaterally go back is not worth it. 19:53 It's never going to, it doesn't actually achieve anything. And what you need is some system where 20:00 people on L2 can buy or sell the coins before, they can re-aggregate them before going to L1. 20:06 And the whole point, you can't have both at the same time. You can't have where anyone can 20:11 instantly go back down or where one where they have to change hands. Because that's what the 20:17 person is buying, who's going to self-aggregate them. So that was maybe a little weird for me to 20:24 say, but those are some of my thoughts about all those. Yeah, Robin is a huge supporter of BIP300 20:32 also. I'm definitely, I like the idea of this, I guess, proliferation of ideas of how to scale. 20:40 That's what we need. Yes, we need to do that. We must fight against the mistaken view of that 20:48 everything has already been fixed in Bitcoin and that lightning is perfect and is a scaling messiah 20:53 and has already saved us all. That idea will be the idea that actually kills Bitcoin, unfortunately. 20:59 Fortunately, this new thing revealed this week has further, it must be fixed with this new 21:06 opcode that causes an output to expire. And that will then show people that lightning, 21:14 this is going to be the seventh or eighth soft fork that is needed to support lightning. 21:19 And this, I think, will show people that, in fact, we should go further. We should do covenants 21:23 to do ARK, which is also like a leave lightning and go somewhere else. And we should, in fact, 21:30 do BIP300 so that we can just try all kinds of other different blockchain designs also. 21:34 And we must throw the door open to competition. So I think it's very, 21:41 this new lightning news is good culturally because it will break up this colossal mistake, 21:47 which is the single biggest threat to Bitcoin, which is this idea that everything is perfect 21:51 with the Bitcoin tech stack and that no one needs to think about anything or do anything. 21:56 So even though it's a sort of bad short-term news, it's very good long-term news because it 22:01 speaks to the fact that people might finally wake up for the need to continue to work on Bitcoin. 22:11 The first seven years of Bitcoin's existence, we did something like 16 or 17 different soft forks. 22:16 And then since then, we've only done SegWit and Taproot. And it took SegWit 20 months from when 22:21 it was first proposed to when it was coded. And then it finally activated. It had a long, 22:26 contentious activation from October to August. So it took about a year to be made and then a 22:33 year to activate-ish. And then Taproot was proposed January of 2018, right after SegWit was activated, 22:40 but it wasn't until November, 2021, 46 months. So 20 months, 46. So we have to get that number 22:47 back down to what it was before, which is six months to the previous average. 22:52 I was just going to say, so what's the driving force behind Drivechains, pun intended? 22:57 I just think that, honestly, at first I thought, okay, I came up with the idea because I was 23:03 interested in prediction markets, as I said, and I came up with this convoluted prediction market 23:07 thing, which would have been very disrespectful to bolt on. This is like my weird pet project. 23:13 It's very experimental and bizarre. So I knew that Bitcoin would not trend. That would be 23:18 like kind of like changing Bitcoin into something like Monero or something, changing it to Mimble 23:24 Wimble or something. So I kind of knew that wouldn't happen, but I had asked around about, 23:32 well, what do we do? What if someone wants a completely different design? 23:36 So I was aware of the sidechain idea. This was back in like 2013, 2014. And I said, well, this 23:43 would be a sidechain of Bitcoin. So that's how I first got into sidechains. And then I was 23:47 researching the idea and people had, they were a little confused about the idea because, and they 23:52 still are. Many of the people still are. Some people like Peter Todd, and I think even the 23:56 likes of Greg Maxwell and et cetera. Many of them are still, they have stumbled over this one thing 24:02 that they can't recover from, which is to me, it's just a clear mistake, but I think they just 24:09 tripped over this root or something, and they just cannot get off of it, which is they can't 24:14 keep a bunch of things organized straight. The L1 costs versus the L2 costs versus the, those are 24:21 node costs. And then the mining costs, these are different things. And then pool costs actually 24:25 yet a third thing. If you keep them all straight, you see that they all work out in their own little 24:29 column. But if you accidentally lose track of which is which, you get confused as unfortunately, 24:36 I think they did. Because one of the things they said was they thought that it would be no good to 24:42 scale with sidechains. And so I investigated this claim in 2015 because this block size debate had 24:50 been heating up in 2015. And I thought, well, why can't we just have a large block sidechain? 24:55 And, you know, because then small block people get small blockchain, large block people get large blockchain, to what extent are the small blocker people really kind of like coerced by the backdoor to like, have what is de facto a block size increase. So I was really interested in that. And what I discovered was in Blockstream's design was like unfinished, and it was not really great. And they did have some of these properties that they, you know, they were trying to get rid of. 25:23 That they thought it, they feared it might have and also it didn't. Kind of a long story. I could get into those weeds if you want. But basically, I was like, we could do it a different way. It's much simpler. 25:35 And I published Drivechain in November 2015. And one of the reasons, one of the motivations for posting it was my own prediction markets idea. But another way was just that, like Ethereum was getting big at this time. 25:47 Ethereum had been proposed, like January 2014. But it didn't come out until like mid 2015. Really, it was like vaporware. And then you had stuff like, you know, you had like bit shares, you had like all this stuff, whatever, NXT had like this weird stuff that come out. Counterparty was kind of getting big at the time. Just they're all slightly different from each other, of course. And but the big one was Gavin Andreessen and Mike Hearn had put out Bitcoin XT, the hard, the eight megabyte hard form. 26:15 And so I was like, well, we can and everyone was, you know, the whole thing was like, how do we keep the community together? How do we solve the problem of maintaining decentralization? So previously, this is becoming a long run on story. I hope it's not too boring. But that November 2015 was the Drivechain blog post. And then before that, in September 2015, I had published an essay called measuring decentralization. 26:41 Because I was trying to figure out what, you know, each side wants something. So we have the small blockers want something and the large blockers want, and I was trying to think, well, how can we give both people what they want? And I was like, what is it that the large blockers have a problem with? Okay, they want, they always want there to be block space, they want the fees to be low, if they broadcast a transaction, they want to get it into the next block. 27:05 They don't want to wait for lightning network or some other new thing that hasn't been fully invented yet. 27:13 And so I was like, okay, fine. The small blockers, what do they want? And I was like, well, what they want is the cost of running a full node to remain low. 27:22 The thing is, even at the time, and to this date, like most people agree with me about that. But not all some people really think that some other thing is also important. But I think those people are wrong. They don't realize what they want, unfortunately. I mean, which is a weird position for me to be in. But I carefully, very carefully tried to figure out every single thing. 27:42 I tried to read everything on the subject and talk to all those different people and listen to their podcasts and whatnot. A lot of the other stuff that people think they want, doesn't make sense. So I can give you one example, or more if you're curious, but one is like, people want it to be easy to, to begin to mine. They said, we want it, we don't want it to be difficult for us to start our own mining operation. So they thought, if we have large blocks, it'll be too hard to let go. 28:12 Like sink a full node into expensive, you know, that's literally that. But you see how that, that kind of doesn't really make any sense. Because if you're worried about how expensive it is to mine a block, it's a hash thing. That's not, it's a hash thing. It's not a block thing. Exactly. Right. Like the, that's exactly it, which is your full node is going to check whether or not each block meets the difficulty requirement, but it doesn't matter what the difficulty requirement is. It's just whether or not some number is less than some other number. 28:38 So if you really want it to be easy to mine, then you want the difficulty to be lower. But if you want the difficulty to be lower, then you're just removing proof of work from Bitcoin. Like the difficulty, it is what it is. 28:51 There's one, maybe small argument that the larger the block gets, the larger the latency is, then like block saturation, once you find something, which gives people with like lower network resources, a little bit of a detriment, but you already have situations like that anyway. 29:07 Yes, you have an excellent memory. That was indeed one of the things floating, one of the other things floating around at that time. But by 2014, the block orphan, this is what had exactly happened at around this time was, in 2014, the blocks had naturally started to become big enough for this latency effect to take hold, where a miner would download the block, they would see a new block, they would download it and validate it. 29:34 And this would take a little bit of time, 4, 5, 6, 7, 8, 9, 10, 12 seconds, you know, just a little bit. But however, during that time, they would not be mining the next block, they would be mining, they don't they don't switch blocks until they're finished. So as a result, the you could see it is two charts, as the blocks became fuller, the orphan rate started to go up, it went from basically zero to like, went up. 30:01 But by 2015, it had already crashed back down to zero, because the miners had already set to work solving this problem. And what they had done speaks to the exact heart of this issue. And exactly where still to this day, even the likes of people like Peter Todd, and I think even Greg Maxwell became confused. Greg hasn't commented on this issue in a very long time. So I don't know, maybe he I don't know what he's up to. He's on vacation or something. But the heart of the matter is this. 30:31 The miners started to cut corners and cheat, they use SPV and spy mining to just switch to the next block without validating it at all. And what they had hit on was the fact that miners, this is where I disagree with, out of all the things, people, Satoshi had all these things, and people have their thing of Satoshi was a genius, or they have Satoshi didn't get everything right. I think Satoshi got almost everything right. But there's one thing he didn't quite get right. Which is that he seemed to really think that every miner must run a node. 30:59 But the miners are pursuing efficiency, their job is to hash as cheaply as possible. And if the node starts to get in their way, then they cut the node, they can and should and will and did, they cut the node. And now the miners don't run nodes. And the question is, is this some kind of crisis? 31:18 And to this day, I think it's, people have confused themselves a little bit about this, because on one hand, we say we want everyone to run a node, and we want everyone to be able to run a node. So we think, wait a minute, if miners aren't running a node, this trips off, this sets off the immune system, and says, wait a minute, that's bad. But actually, it's not. The key is your node, it protects you from mistakes made by a miner who does something wrong. So it's because you run a node that you don't care if the miners do or not. 31:48 So I'm not sure this is like a very advanced point. 31:50 I mean, the heart of the matter is that your full node is protecting you. And the miners, they're going to cut corners if they can, if this five or six seconds, because remember, of course, the interblock time is 600 seconds, 10 minutes on average, 600 seconds. And so six seconds is already, you know, 1%. And it can sometimes be longer. 32:15 And it's 600 seconds on average, but you know, half the time, it is shorter than that. And you know, something like 10% of the time, it's much shorter than that, you know. So losing a few seconds actually is like a minus 20% loss of profit of revenue efficiency. And so I mean, of course, profits are revenue minus costs. So the effect on profits can be utterly enormous if everyone is doing this by mining and you're not. 32:43 Turns out those by mining and SPV mining have no negative consequences whatsoever. Because they just let you switch over to block as soon as your competitor finds it, what you do is you take a tiny amount of hash and you connect to if you're the pool administrator, so your foundry or someone, you connect to the other pools, and you see when do they switch their person to the next one, then you just switch yours, that's by mining. 33:06 Now, the question is, but that people always wondered is, is this going to ruin? Is this going to destroy Bitcoin? Because if all the people, everyone in the mining community is not running a node? Well, isn't it liable to just go off in a different, a different direction. But that is the mistake. That is what people fail to keep organized, in my view, because it can't, it can't derail. If you're running a full node, it's because you are running a full node that it can't derail. 33:34 If someone mines an invalid block or something, or there's a block that just doesn't exist, your node will reject it. And so it's because you are running a node, it's because it's cheap to run in a full node, it's because we encourage, paradoxically, it's because we encourage people to run full nodes, that it doesn't matter if 100% of the mining network does not run a full node. 33:55 And so this is the key to unlocking it all, if you think I'm some kind of like crazy crank, or a genius, or whatever, kind of hinges on this point, because the whole idea of sidechains is the users run whichever sidechain node they want. So the users are voluntarily stacking up full node costs for themselves. 34:13 And then whether or not the miners feel an incentive to run these sidechain nodes or not, literally doesn't make any difference. So it doesn't even matter if they feel they must, or if they feel they don't need to, or if they feel like they want to get certainty over the withdrawal status, or if they want to just get it from a friend, or if they want to just guess a lot, or they want to just do what they think other miners are doing. 34:38 My whole point is that it doesn't, none of it makes any difference, because the miners, they'll just do whatever the efficient thing is anyway. If the efficient thing is to have one person on the planet Earth run all sidechain nodes, and then the miners just call them on the phone and ask, it doesn't matter. Or if they all feel, this is because I get it from, I get criticism from all sides. 35:00 Or if it's the case where the miners, someone designed something where the miners must run, and then it's a mandatory cost for miners. That doesn't matter either, because so many things are mandatory costs with miners. Actually, a mandatory cost will cause the difficulty to drop and actually reimburse the miners indirectly. But that, you know, it doesn't matter because miners already spend, they already have a mandatory cost, they already must purchase the latest ASIC hardware, they already must do whatever the efficient cooling thing is. 35:29 The market economy, the economies of scale come into play for mining operations at this point. 35:35 Huge economies of scale and diseconomies of scale. So there's some efficient scale that is the most profitable. And every other scale is at some kind of disadvantage or another. So the idea that one scale is not, that we should panic unless the scale is like what we think it is, that's a completely dead idea. 35:56 I got a few directions in the way I'd like to take this conversation. I'm trying to think about which way I want to go. Because I'm interested in like what you just said springboarded nicely into why Drivechains work is that users kind of keep track of what they want, and then leverage the mining community to make sure that things move forward as they're supposed to, however, they want to end up doing it. 36:22 So like, how do you have that guarantee? How do you basically permissionlessly innovate by having whatever Drivechain you want rooted into the Bitcoin blockchain and let miners do their own thing? I know that's like part of the merge mining process, but like the way I see any layer one, layer two scenario is you're pooling funds via some contract on the main chain. 36:50 And then based on the security of those pooled funds, you make an inference and move them around in various ways on the layer two. And whenever someone wants to leave, they can basically sign a message that says, I want to leave, this is how much money I have, give it back to me on the main chain. 37:05 How is that operating? How are you pooling funds on the layer one and then granting those kind of security guarantees to the layer two via Drivechains? 37:20 Yeah, I have what would be probably described conventionally as the weakest security model of the L2s. And for a while, I fully agreed with that. But as time goes on, I now actually my own idea is growing on me a little more. And I actually think it's the others that will end up being insecure. 37:45 Who knows, time will tell. But basically, in BIP300, all the coins sent to a certain sidechain, they're all in one UTXO. So when you deposit, you thread the UTXOs and you just keep, you have like an account. And then there's this one account that maybe it has like 50,000 BTC in it. 38:07 And over on the sidechain, there's 50,000 coins. Each deposit creates a coin over there. And the coins over there are governed by their own piece of software. Now a distinction between BIP300 and most other L2s is that as you sort of said, most L2s, they'll give you something that where you can, at any time, take that L2 information and put it on L1 and get your coins back. 38:35 So like lightning does this the most obvious way. And so hence, people think that lightning is the most secure. But and so would I have said that probably maybe even like 18 months ago. But now I kind of think it's, it's actually not going to work out in that direction great, really well. So I'll explain what I mean by that in a second. 38:55 But what I'm trying to get at is everything gives us unilateral withdrawals, like ARK. It's always giving you this thing. So that if the ARK supernode gets hit by a meteor, or if you're lightning channel parties, they'll go AWOL. You have something that you can take on L1 and get your coins back. And you think, well, of course, what's the alternative? You know, of course, we need that. 39:17 But what BIP300 does instead is it says the whole withdrawal thing is just up in the air. It's a wet concrete. It hasn't been decided yet. And it could theoretically never be decided. And I what I say is instead, what's happening is the miners can collect all these fees, which is an enormous amount of money. The fees, like for example, Ethereum's daily fees are millions of dollars a day. 39:38 On a random day when I did the math, there were 7.2 million. Of course, it varies from time to time. You can go to a site like cryptofees.info to see what they are today. Usually on the weekend, they are a little lower, I think. 39:54 2 million. 39:55 No. 39:56 Average 2.3 million. 39:58 2.3 for the last week. So millions per day. And, you know, millions per day that is so it's basically like a it's a killing the goose that lays the golden egg type situation where you say this goose is laying millions of dollars a day, if we keep it on. Or we can, you know, kill the goose and take the money on the sidechain because in BIP300, the miners can take all of the money. 40:23 They are the ones who set the withdrawal location. And it's not so easy as they just take it the next day. They have to wait a very long time. They have to fully endorse this long, lengthy process where it's all governed by this one hash that is the same on two locations. So it's very, very, very transparent. It's all very intentional. 40:41 There's no sense in which something is like, oh, we made a mistake, or we got confused. It's very, very, very slow. So a metaphor I often use is like the people buzzing the person out of prison, where they have the two gates and they go and they knock on the door and then they buzz and the next gate closes. And then they buzz them again to get out with like a big plexiglass window. So it's kind of like that. 41:03 So the miners can take this money and move it wherever they wish. And that's what a lot of people think like, wow, that's insane. But, and I would kind of have agreed in the past, but now I'll try to give you an idea of why I think actually, mine is going to end up being the only sane one. And one, the two big reasons are 51% hashrate can already interfere with every L2. Because they can interfere with every L1. 41:30 If you have a proof of work blockchain on L1, the 51% hashrate determines what the blockchain's state is. It determines which blocks have been found. So that's already the case that they can, for example, censor the lightning justice transaction and prevent it from ever making it into the blockchain. So they can already empty someone's channel. 41:51 Is it even worth having arguments that are equivalent to 51% of tax? Because if you don't have a network, if you have a 51% majority mining. 42:22 evil or something like that. So, but I agree with you is this is partly what I'm driving at is that they can hold any UTXO hostage or any transaction hostage. So even something like a multi-sig or like liquid or whatever the miners if they really hated for some reason, they can just interfere with it, disable it at the very least and on almost all cases steal from it. 42:48 So they can already do that. And the question is just, will they want to? And that is where the second part comes in, which is the fees. 42:59 In BIP300, it's an L2, but all the fees go to the L1 miners. So it's the vertically integrated incentive. It's the same. Whereas in the other L2s, this just doesn't, isn't the case. The lightning node operator is going to collect the fee, or the arc super node is going to collect the fee. 43:18 And now that some years have passed and I've gotten a clearer look of how this is supposed to look, it's coming to focus a little bit more. I really think that actually it's, it's, it's not going to be great if, for example, you have something that's getting 2.3 million in fees is on the L2, but the miners are cut out from that and they only get the L1 fees, which are usually like 400,000 a day or something like that. 43:42 You can check the site and see. 43:43 522. 43:44 522. So we can, so it's 10x more fees, but the miners are kind of thinking, well, this is, all this is only possible because of us. We could, we could close this down at any time. Now, and that's, of course, this is, again, this is only a tiny glimpse of what the future will be like. 44:02 And my guess is that the L1 fees on the future will stay at around 500,000, but the L2, the total number of L2 transactions I think could glow, grow to a planetary scale very, very quickly. 44:16 And that if we're talking like Visa is a hundred million in revenue per day, at least. And, and then that's before you count whatever WeChat pay or everything that's in cash. So I think the, the L2 fees will grow and grow and grow and grow and grow and grow on an exponential curve that just grows for a long time. 44:33 And so there will eventually be some kind of conflict. If, if, if the L2 fees are like 10,000 times higher than the L1 fees, the miners would then might be a little bit like, wait a minute, like, should we, why don't we just make ourselves the L1? 44:49 Right. Why don't we just make ourselves the L2? And then it kind of, or maybe they say they have a little, they have some kind of euphemistic program because the incentives aren't aligned. They say, well, use the Foundry lightning channel or something. And then this kind of just becomes BIP300, but worse. Since BIP300 is designed with it in mind that the miners can steal, we at least forced them to go through this extremely slow, transparent, month long process. 45:16 And so, cause it's designed for that. And so that's why I actually think it's, it will end up doing pretty well. I was kind of ashamed of this part of it before, but now I kind of think it was going to hold up because the economics is stronger than, it's much stronger to have, to be in a situation where the miners want the L2 to do well and where they want people to use it. 45:37 And they, to the point where they would maybe hire developers and purchase billboards and things, you know, purchase Superbowl ads, but they want it to work where there's a will, there's a way. And whereas the lightning stuff is more paranoid and it says everyone's out to get us, including the miners. And it makes, much like most paranoid people, it makes too many trade-offs, which undercut the purpose of what they're, you know, it's like you're building a bunker in your backyard. 46:07 It's just, it's not an efficient way. If you really thought that you needed a bunker, then you should probably be doing something else. Try to get on Joe Rogan or something and explain to other people, start some kind of political movement or something, you know, like it's not really going to work. The odds that that's going to be the decisive thing. 46:25 So, so that's kind of a little bit of the lay of the land, as I see with the whole L2 situation. The fees, it's this idea that 51, fighting the 51%, it's kind of not going to work. And the, the fees are the key. 46:44 So I think the fees are the, like the big difference. This, we would think would be an irrelevant detail, but it ends up being pretty, pretty relevant, I think. Otherwise you have to have some kind of situation where the lightning operators are going to pay periodically, but you have like collective action problem. You have stuff like that. 47:04 Well, you end up with a larger economy of scale because efficient node operators have to run both chains at the same time. 47:33 If they don't, and they just want to guess, then they can. The idea that the full node costs will be significant, this is a hangover from a block size war. That was the whole dispute about large blocks versus small blocks, as I said, you know, a few minutes ago. 47:51 I said, small block people want to keep the cost of running a full node down. 48:01 But this is a completely different situation from that. No one's forced to run any of the new nodes at all. In fact, the, each, each sidechain node is its new option. So it's kind of like a bunch of different hotels that you might visit. 48:31 It's a voluntaryism type thing. If I want to see this, then I have to run it. If I want the data, I need to run these things. 48:41 How do I fit 8 billion people into my house? And we're like, okay, we'll build a giant tower. And it's kind of like, well, you can see how if you already own the house, it's, you're not, you're not in love with that idea. But if it's like, okay, instead, we'll let you leave the house and visit these other places. 48:59 Then the complaint doesn't work anymore because someone's saying, well, wait a minute, I don't want there to be a tower. He said, but it doesn't matter because there'll be all these different things. Maybe one will be a tower. It'll be the Roger Ver tower, you know, but maybe one will just be like some kind of four seasons or something, you know, and it'd be really nice and you will like it. 49:16 So the idea that we have to care about the full node costs is again, missing slightly the point. The point was in the block size war was that everyone was in the same building. So it was like, do we want this to be a single family home? Or do we want it to be a super tower? Or do we want it to be something else? 49:33 And of course, this was, I think the big problem politically with the large blockers, they had many problems. Both sides did, of course. But politically, they had no actual alternatives, like they had, you can't beat something with nothing, they say. And they just kind of said, we will hard fork to eight megabytes now, and then we'll hard fork to something else later. And it was kind of like, what was kind of like a big question mark, like what 49:56 the if my memory serves me correctly, it was 50:00 this isn't a network problem now, we'll deal with it when it is a network problem later. So right, 50:02 I'll let it artificially inflate until it becomes an issue. And then we'll deal with it appropriately. 50:06 It's like, we'll build, yeah, we'll bulldoze the house, and we'll keep adding stories. And we're 50:11 like, well, how do we know that we'll still be able to do that? And then like, well, we'll figure it 50:16 out later. So people don't want to really hear we'll figure it out later. But with Bith 300, 50:21 it actually is fixed permanently, because you just don't have to worry about it. You don't have to 50:26 fix permanently, because you just say, here's a single we everyone starts in a single family home, 50:30 all the coins start in a single family home, they can go somewhere else. So they could go to some 50:36 place that is a tower or is something that's medium sized, or something that's really, really 50:40 infinitely sized. And you can go come or go as you please. So now it's up to it's the whole problem 50:47 is kicked away to a different group of people, the L2 developers who compete against each other to 50:53 try to solve that problem. And they push the envelope as far as it wants to be pushed. I mean, 50:57 most of the transactions today are USDT on Tron. So apparently, that's enough for that's enough 51:07 decentralization for like a huge market segment. So that's the point is that this actually is a 51:13 final solution. Because the question was, what size house should there be? But with this is 51:18 just as we start in a small house, and then we go to any, we go to any house we want anyone that 51:24 anyone builds somewhere else of any size, and in the future, you can knock them down and build 51:29 new ones or do nothing. So that is a big difference. Yeah, it's probably appropriately 51:36 analogous to like real estate, right? Like you can you can take responsibility of a bunch of 51:42 different houses if you want to. But not everyone is forced to do so. So you can make a business out 51:48 of, you know, doing real estate, making money off that, off the scarcity of that real estate, 51:52 or just be happy with the one that you have. And then again, the the Drivechain critics get 51:57 something slightly wrong again, where they'll say, well, okay, there's no literal requirement, 52:03 but miners have to do, you know, if miners are making a bunch of money from these sidechains, 52:09 then it'll become a de facto requirement, just like it's a de facto requirement to use ASICs, 52:14 and not CPU mining or something like that. But again, what they don't get is that that's true 52:20 of every mining, everything that's ever been done in mining. So like, they're going to go down the 52:25 line and say, make sure we have to run immersion cooling by these people. There's a prejudice 52:33 against the Drivechain, because it is, is the only mining activity really that takes the form 52:38 of a piece of software. But there's all these other things like the ERCOT demand curtailment 52:45 credits. That's a situation where the government is paying miners not to mine. That's only viable 52:53 at certain scales, you know, like you have to be big enough scale to like, negotiate this deal with 52:59 I'm not sure exactly the details of that. But we can assume it would not have existed at all, 53:03 if mining was not at a certain scale. You know what I mean? Because the power company has to 53:07 find it in their interest to shut off enough electricity. So there's some scale to that. 53:12 There's some cost to that, and there's some benefit to that. So there's innumerable things, 53:17 you go down the line, there's hundreds of things that could affect mining, and have different 53:23 costs and benefits. And so why be prejudiced against this one? And then if you investigate 53:28 more, because of course, each thing that affects mining will affect what is the equilibrium 53:33 efficient miner look like. But this is the perfect thing for mine. This is the thing that gives them 53:38 enormous amounts of revenue from serving actual users of Bitcoin, people paying Bitcoin transaction 53:45 fees using the Bitcoin blockchain, the L2 blockchain. It must cost almost nothing, because 53:52 the miners don't need to run nodes, they can get a node, they can collaborate with an existing 53:58 sidechain full node. This is what 301 does. Even if they couldn't, the node costs must be small, 54:04 because in order for the network to have users, there must be some people running sidechain full 54:08 nodes. So there's no way this can cost as much as like, you know, an S19 or something, you know. 54:14 There's no full node, no matter how expensive, can cost as much as many mining, small-scale mining 54:19 operations cost. So this is something that costs basically nothing, produces huge amount of revenue 54:26 for miners. And it doesn't even, they don't even need to like, they can just use, they can have a 54:33 node that's like far away, you know, like an AWS node that they create, that they like VPN into, 54:39 you know, they don't even need to like physically put anything anywhere. It's just a URL. So this is 54:45 among the things that affect miners costs, this is one of the best, because the more 54:50 miners earn from serving actual users and customers and transaction fees, the more loyal they will be 54:55 to the health of the Bitcoin network versus they'll be loyal to like, we don't really want 55:00 them to be loyal to the government of Texas and what they think, you know, how much 55:06 they think people should be paid to not mine at all. And I don't have anything against that 55:11 program. I think that program is great. I'm just saying that with these people who would complain 55:17 about this topic of sidechain full nodes, to be logically consistent, they have to complain 55:23 about literally every single thing that miners would do since they all affect the costs or 55:28 revenues in some way or another. 55:32 I want to ask you, so like two questions, they're kind of different. So you can pick, 55:38 how close do you feel your Drivechain idea is to being adopted by, you know, Bitcoin Core? 55:42 And then another question, why not go to Ethereum and then try out your prediction markets idea? 55:47 Because it seems like that's what you're trying to build to, right? 55:50 Yes. Well, you know, I think actually the Ethereum is not great for prediction markets or 55:56 oracles, but it's kind of a technical reason that involves the oracles copying each other's work 56:02 and being unable to gain a premium for being honest, since someone can always copy them. 56:09 And that is why you need a certain type of sidechain, I think, to do the peer-to-peer oracle. 56:12 But I think the peer-to-peer oracle is very experimental. And I really hope that it does 56:17 work or that it pushes the envelope in oracle research to something that's much better than 56:23 what we usually get, which is just like multisig with like some arbiter, which I really, really 56:29 hate. And I think we have to go way past that if we're going to get any bigger. 56:32 Bigger multisig seems to be the path. 56:34 Yeah. Right. So that's kind of disappointing. So I think that's the goal. I think what I've 56:45 discovered, though, is that this idea is much more important for Bitcoin than I would have 56:48 thought. There's too much. The block size war is just one example of disagreement. 56:53 And the fact that Ethereum exists at all is another example of disagreement. Of course, 56:56 Vitalik was a Bitcoiner, and he was co-founder of Bitcoin Magazine, and he used to write 57:00 Bitcoin Magazine articles. And he was a big Bitcoiner. And the whole reason that any of 57:05 these altcoins exist at all is because we don't have sidechains, I think. 57:09 People would still launch coins, but they would be like very frivolous coins. 57:13 They'd be like Fabricoin or something. They wouldn't be something real, something that has 57:17 more fees per day than BTC has. That would never have happened if we had sidechains. 57:23 And we would have a more, you know, so the idea allows Bitcoin to have planetary scale 57:29 in some form, not the ideal form, but it lets us give 8 billion people some kind of UTXO, 57:36 and it gives us Zcash-level privacy, and it gives Ethereum-level flexibility, 57:42 and it lets us do these other things. It creates competition for developers. So it's an important 57:46 idea. The question of how close it is adopted by Bitcoin Core, I think that the policy of Bitcoin 57:54 Core is not to touch anything if it's controversial. So as long as the controversy lasts, 58:00 there will be a sort of stalemate in Bitcoin Core. But I think that probably the miners, 58:06 the Bitcoin miners only very recently found out about this idea as of like July or something, 58:12 and I think that that is the more interesting direction to probably go, is to have them 58:17 activated unilaterally. But it's kind of intriguing that in Bitcoin's history, 58:26 usually Bitcoin Core puts out software that miners activate, and so I don't know if 58:30 miners feel guilty about SegWit2x and these other historical events, and so that guilt may 58:39 cause them to delay activating this idea. It's very hard to say, because the idea has been around 58:46 since 2015, and it had a little bit of coming in and out of interest, and now there's 58:51 more interest. I mean, there's certainly a ton more interest now than there was three months ago, and 58:57 there's a ton more interest three months ago than there was six months before today, and so 59:04 there's a lot more interest, and now with Lightning needing more soft forks 59:11 in order to work, that will probably break a lot of the logjam of the soft fork. 59:16 We have a situation where I don't think anyone, like something like APO, BIP-118, any priv out, 59:22 there's no real 59:29 opposition to that, but it still doesn't activate because people don't want to go through 59:34 the soft fork activation process. So I think what needs to happen is either 59:38 the miners need to realize that they need to take more responsibility for 59:42 making money, like they need to take responsibility for the Bitcoin network and not be passive, 59:48 because they think that being passive is the way to placate 59:53 developers and the users, but I think that if they looked into it more, they would realize 59:58 that that's a mistake. But I can see why they would think that now. So we either need that, or 1:00:05 we need people in Bitcoin Core to, the stigma around doing the soft fork should end, 1:00:12 because it is irrational. The idea that we do all these different code changes, 1:00:19 we do all these code changes all the time, but only if something is a soft fork is it 1:00:23 controversial, or it doesn't make any sense. I think how close, it's very hard to say, but 1:00:29 you could point to like 1.19, where that was popular, then unpopular, and then 1:00:35 Jeremy Rubin tried to activate it, and everyone hated it, and now two years later, 1:00:40 everyone sort of loves it again, or they want to switch to TxHash. So the big barriers are, 1:00:53 miners feel guilty, and they don't feel responsible for their own revenues, costs, 1:00:59 and the fate of Bitcoin. They try to say that the developers are responsible for that, and they just 1:01:03 mine at the cheapest cost. So that is all because of guilt over SegWit2x, 1:01:14 all because of like, whatever, Bitmain or something. So that's one thing that could 1:01:18 change. And the second thing is, Bitcoin Core could admit that regular soft forks are good, and 1:01:24 and de-stigmatize them, which now must happen, basically, because of 1:01:33 lightning issues. And then the third thing though, that's big, is that this new 1:01:41 attitude, it's like Michael Saylor style attitude, that Bitcoin has already succeeded, and that it's 1:01:46 only a matter of time before hyper-Bitcoinization happens. That has led people to think that 1:01:52 we don't need to do soft fork, so that soft forks are a risk. Even though soft forks are not a risk, 1:01:57 because a soft fork does not change the protocol for anyone who's running a node. If you run a 1:02:01 node, your node still does everything it was doing before, and it doesn't do any new thing. 1:02:07 So the idea of soft fork being a change is not quite correct. It's always confused me. It's like, 1:02:14 people don't understand the difference between a hard fork and a soft fork. Hard fork is a 1:02:19 de facto expansion of the rule set, such that afterwards you have to, the previous rule set 1:02:27 you were using to validate things no longer works. You need to expand it. So you need to do a hard 1:02:31 fork, so that your node can understand this new introduction of a rule. Because a soft fork is a 1:02:37 further constrainment, whatever, adds further constraints to the rule set you were 1:02:43 previously using, such that the one you were using is still valid. But if you want to add the 1:02:47 additional constraints, then something else works. And that seems to be lost on a lot of people, 1:02:54 so that arbitrary soft forks aren't that big of a deal. It's an opt-in scenario. 1:03:02 Yeah, like every time a block is found, it's sort of a soft fork in a way. 1:03:07 But I think the one thing that we should really emphasize is that many of the soft 1:03:14 forks brought us a lot of these, or just regular BIPs, you could even say. We wouldn't 1:03:21 have HD wallets or BIP39 seed phrases without some kind of invention. But even with the Lightning 1:03:27 network, you needed multi-sig, check lock time verify, check sequence verify, SegWit. So those 1:03:35 are all things that helped Lightning. And the idea of doing the soft fork on L1 to help L2, 1:03:42 that idea should... I mean, that's how we got from 2009 to 2017. 1:03:52 And that was Bitcoin's big success, in terms of price and adoption and culturally. 1:04:00 And I think from 2017 to present, we've had a stagnation, which I think is... 1:04:05 It is the technological stagnation, but it's mostly a cultural stagnation, 1:04:12 where people have said, this is because of the scaling war also, where Bitcoin cash increased 1:04:17 the block size and BTC did not. So the lesson was sort of BTC was not lured into making a hasty 1:04:28 change. That was the lesson, like culturally. So we have to resist temptation. 1:04:35 And that was the lesson, but it's not correct. Really what happened was Bitcoin 1:04:39 cash had a terrible idea. And by creating Bitcoin cash and having Bitcoin cash failed, 1:04:46 or having it fail, that, I think, misled the whole community into deciding on what 1:04:52 a success looked like. Because after the SegWit blockade, it looked like, distrust the miners, 1:04:59 don't change anything ever. Don't criticize lightning, because lightning is perfect, 1:05:04 and it's a scaling messiah. So all of the biggest problems in Bitcoin were actually created as a 1:05:09 result of our victory in the block size war. The victory is a pathway to many defeats. 1:05:16 When I think of trying to, in my mind, mentally anthropomorphize Bitcoin, I think of him 1:05:24 as a really old conservative grandpa. And I think of all the other ecosystems as, I'm not afraid to 1:05:33 high risk, high reward experiments. Yeah, exactly. And it's just, yeah, it's like, 1:05:39 I see you as trying to explain to your grandpa, this is good, grandpa. 1:05:42 Like, you can still be old. Well, the L1 will still be the same. I think that it is, 1:05:53 like, part of the problem is, as you say, 99% of the alternatives are terrible. 1:05:58 So the altcoins, most of them are legit, actual scams. Like, they're not even just bad ideas or 1:06:05 fringe ideas. They're just actual scams. And so if you advocate for sidechains, it looks like you 1:06:10 want all these scams, but that's not the point at all. Let me just jump in and then ask you, 1:06:15 what sort of interesting applications do you want to exist on these L2 sidechains, 1:06:21 like if Drivechains were to exist? Yeah, but isn't it enough to have planet, there's many, 1:06:27 I can give you a long list, but isn't it enough to have planetary scale, like the next day, 1:06:31 and Zcash level privacy? That would already make it- How do you get the Zcash level privacy? 1:06:37 We just copied the Zcash altcoin. We have copied layers, we have it already. 1:06:41 As you send your coins over there, and then- That becomes the shielded pool. 1:06:45 Yeah, you have a shielded pool. And then you have a reusable Z address. So you have a reusable Z 1:06:51 address. So just the fact that you have a reusable address, that itself is the biggest UX 1:06:55 improvement. That would be the biggest UX improvement. That was the hope of Taproot 1:06:58 in some way, shape, or form was leveraging mass to add privacy to the option given the transaction. 1:07:05 But that only works if you are interacting with someone, you have a smart contract, 1:07:10 and then you have a cooperative close or whatever. That's not the same as this, 1:07:14 where any new people, if a bunch of people are depositing, every new person adds to the anonymity 1:07:20 set. And so every single user is in this, like a coin join, you only join with four other people 1:07:24 at a time. But with this, you join with everyone who's using it, and you can join or leave at 1:07:30 any time. And then of course, coin join, it's a fixed amount. You have to have a certain amount, 1:07:37 but not with the Zcash. And with Zcash, only if you use it as a mixer. If you just actually pay 1:07:43 people within this shielded pool, you have the sender and the receiver, and the amount are all 1:07:49 private. And with respect to scale, the idea is not just a huge large block sidechain. The idea 1:07:55 is you have 10 or 12 regional sidechains. You have Western Europe, and you have Southeast Asia, 1:08:04 and then you have maybe you have North America, and then you have the rest of the world. 1:08:08 You have six boundaries you want to make. 1:08:10 Yeah, you start with four, because most of the trade is, of course, internal to each region. 1:08:16 So then you have that, and then it's only when I switch my dollars for euros or something. 1:08:21 And then again, there's a night and day difference between an optional L2, 1:08:28 large block, and a mandatory L1. Because first of all, people are very different, 1:08:35 and many people are already going to be using Venmo, and they're already going to be using 1:08:37 whatever, WeChat Pay. You have these people who, like even within a person, the use case 1:08:48 is different. So like a Ross Albright, he could be like buying coffee, and then he goes home, 1:08:53 and then he's Dread Pirate Roberts on Silk Road. But when he's buying coffee, he doesn't need it 1:08:57 to be fully decentralized L1 whatever thing. But when he's on Silk Road, he can use L1 for 1:09:05 decentralization and security, or he can use Zcash sidechain for privacy. So people are very, very 1:09:09 different. People are very different in how much can they afford a full node. For certain people 1:09:15 like a Roger Ver, it's very easy, very, very easy for him to afford a full node that is two or three 1:09:21 thousand dollars a year versus a couple hundred dollars up front, and then $25 a month or something. 1:09:29 So you have all these things. Who's willing to pay fees? Who's willing to pay for a node? 1:09:35 Who wants which feature? Who wants privacy? Who wants decentralization? These are all big 1:09:40 distributions where people are very different. So those two alone are a lot, but I think honestly 1:09:45 Namecoin and prediction markets, those will be huge. In the future, you will own 1:09:52 one name, and that will be your screen name everywhere. You won't be like, 1:09:58 oh, I'm this on Telegram, I'm this on Twitter. You'll just own the thing. 1:10:03 And on the blockchain, you'll always be able to communicate with the person with on-chain 1:10:07 paymail, which hides the physical location of everyone since everyone downloads the blockchain 1:10:11 and receives it. You'll be able to send a message to Edward Snowden. 1:10:18 You'll be able to send money to Edward Snowden, and he'll be able to send a message to his lawyer. 1:10:22 And now, the message on-chain will just be the intro. So I don't want to be confused for a Bitcoin 1:10:27 SV type person, because I'm not, and we don't care about putting everything on the chain. 1:10:33 But the idea is, I would be able to send Edward Snowden a little message, 1:10:37 where he'll put up a sign that says, I'm Edward Snowden, it costs $200 to message me. 1:10:44 But there'll be a big... Namecoin is going to be like a giant phone book on the internet, 1:10:48 with everyone's name in it. And you can click on their name, and they'll decode. 1:10:53 People have a little spot, a little bit of a welcome sign or something that says, 1:10:57 I'm Edward Snowden, it costs $200 to message me, my telegram is this, 1:11:06 my whatever is this, my PGP key is this, whatever. You have a little spot for that. 1:11:11 And then, you'll be able to introduce yourself on-chain, if you can't reach them through the 1:11:16 normal way. You pay on-chain to the name, you get this message. And the message will say, 1:11:23 hi, Edward Snowden, we'll use these two burner emails or something. And the software will just 1:11:27 do it all eventually. So, you pay to introduce, and then you have encrypted messaging back and 1:11:33 forth, and you can send money back and forth. So, the Canadian truckers is a perfect example of us 1:11:38 dropping the ball completely. After what Canada tried to do, everyone in Canada should be a 1:11:44 Bitcoin user by now. But instead, we screwed everything up. We showed Canada that Bitcoin 1:11:49 doesn't work. Because we tried to, they had tried to organize this protest, and we tried to give 1:12:00 them money, but it was very difficult. And then ended up, the Canadian government ended up 1:12:03 confiscating the Bitcoin anyway. So, they failed completely. Instead, in the Namecoin paradigm, 1:12:10 there's just going to be a Canadian truckers protest, will just be a name. It'll be like 1:12:13 google.com. You own the name, and then they'll start putting out messages and tweets with that, 1:12:20 with that hashtag or whatever you want to call it. And they'll have QR codes, and they'll just get 1:12:24 out there, all organized. And then eventually, word will get out. We'll figure out, okay, 1:12:31 this is the account responsible for this. And people will try to do phishing and stuff, 1:12:36 but then they'll say that it's too asymmetric to have the whole group meet. And they'll say, 1:12:42 don't send to this account. This is a phishing account. That's why it has to be a human readable 1:12:46 name. So, I think that'll be big. And you even see, I predicted this two or three years ago, 1:12:51 maybe three years ago. I predicted that the darknet markets, since all they do is introduce 1:12:58 the buyer and seller to each other, and afterwards, they can just communicate with each other, 1:13:03 that what will happen will be it will decentralize further. There will just be people who give, 1:13:07 who do lists. They make introductions to be like a middleman guy. It would be like, 1:13:12 Silk Road would just be middleman, and they'll do maybe keep track of the ratings. 1:13:18 And everyone else will just be, it'll just be like on Telegram or something, which is now, 1:13:24 I looked into it a few weeks ago, and that has happened. There's no, it's all just Telegram bots 1:13:28 now. Telegram bots. Yeah. You should take a look at the privacy polls stuff that 1:13:37 Amin Soleimani is doing. We did an interview with him, I think a couple of interviews ago. 1:13:41 Oh, yeah, I mean, yeah. It's not released yet. 1:13:43 Yeah. And then in addition to, oh, it hasn't been released yet. Okay. But he has some, I mean, 1:13:48 his privacy papers, or sorry, his privacy polls demo came out seven months ago, and the paper 1:13:53 came out like last month. But that'd be cool for you to look into, as well as the experiments that 1:13:58 they're doing from ZK Hack, in terms of some of the winners, in terms of interacting with other 1:14:03 people through some form of obfuscated identity, but then aligning, essentially, similar interests, 1:14:11 and then you being able to bridge communication channels with them. So not disclosing who each 1:14:15 other are. Yeah. Okay. Let me wrap up my, this is a long answer, but it's an important question. 1:14:20 What's this for? Because, so we have scale privacy, and then I think there's other things, 1:14:25 like you should go to Namecoin, and then bitcoinhivemind.com is where the Prediction 1:14:29 Markets Project lives now. So you can watch my little 20-minute video on why I think that's 1:14:34 important. You can bet on the future, or you can bet on what would happen if we lived in certain 1:14:39 futures. So you can say, like, if we bet on, if we elected this party, or what happened to the country, 1:14:44 or if we fired the CEO, what would happen to this company, or the share price, or something like 1:14:48 that. So that's all very cool. But the bigger, much bigger picture is that by introducing 1:14:54 competition among developers, 1:14:58 that's the more important thing than any individual idea. We have the ability for any new idea to compete and make it out there. So that, that's the really big thing. You know, it's like if someone launches YouTube, and someone, someone such as yourself asks, well, what do you want to see people put on YouTube? But you see, that's really not the point. 1:15:17 Yeah. 1:15:47 I would not send money to immediately to like whatever, like Netanyahu, or Zelensky or whatever, you know what I mean, like, just, or Putin or Hamas, honestly, I'm not, you know, I wouldn't want people to do that. But, but they, the point is, it's, this is supposed to be like a decentralized bank. And that's, I mean, does it work or not, is the question. 1:16:14 We, it was bad for Bitcoin, because that was teed up for us. It was perfect. You know, it was like, perfectly teed up for us. They were doing the absolute wrong thing for really no reason. And they were going way overboard with the whole banning the bank account of anyone who donated to the protests. It was like a completely nonviolent protest. It was, it was like, it was pretty wild. 1:16:41 And what we did is we just showed everyone that it didn't, that it didn't work. 1:16:45 I definitely agree with the sentiment and, and the effort to try and enable that permissionless innovation on top of Bitcoin. So I'm very excited to see where this goes and what ends up winning out. But we have a few more kind of trademark questions we have that are quick to wrap up with. I'll start with, in 10 words or less, can you describe Drivechains? 1:17:08 Hmm. 1:17:13 I don't know. When devs compete, users win. 1:17:18 Hmm. Fees align miners incentives. That's nine words. That's something. 1:17:25 Jesse? 1:17:27 So my, my question is typically, is what you do actually difficult? And you can interpret that however you want. 1:17:33 I don't think so. But apparently it is because it's, this idea is very easily misunderstood. I don't think it's that. It's not really, you know, under the hood, the Drivechain idea is just a counter that counts to 13,000. 1:17:46 I think, I think one thing that is, that I do very differently is, you know, most of my friends and family don't have, I don't like have a lot of like Bitcoin friends and family. I mean, I do have many Bitcoin friends and family, but I don't like, I'm very independent. 1:18:02 And, and I don't like, I don't like to like join the, it's very easy to have the cult mentality take over. And the Bitcoin tribe and people get like, you know, a Bitcoin tattoo and it's a big part of your life. 1:18:18 And the echo chamber. 1:18:19 And yeah, and there's too much echo chamber. So I think that's the really difficult thing to do. Or the really different thing to do. But certain types of people won't make it in an echo chamber. Like I find the echo chamber so annoying. And so, so that's one thing that I kind of worked really hard to, to not be too popular, almost on purpose. 1:18:41 Christopher Hitchens said he wouldn't have dinner with someone if he knew he had to write about them later that day. So, so, so I kind of feel the same way. I'm like, I don't know if I want to be too friendly with these people, even though I'm like all in on Bitcoin. 1:18:55 But I, but be part of being all in on something is, you know, thinking about it with all of your IQ points, you don't want to leave any behind. And that's just what people do is they meet someone and then they, they like them and then their judgment is affected. 1:19:12 And yeah, the, so you see, that's kind of what I, what I do today. I push, I push to say it could, it would be very easy to just say Bitcoin is perfect, right? TikTok next block and just say, and just put up like tweets. 1:19:24 Oh yeah, people say it. And they say, and you just go on mid journey and just make a Bitcoin, Jesus, Bitcoin or something or whatever, heaven, Bitcoin, Citadel. And so I think that's the key is to try to try and try to be unpopular is the key in some sense. 1:19:49 Well, cool. I wish you a lot of luck in your journey to continue to be unpopular. I certainly like the ideas you're pushing forward. 1:19:58 That's such a weird wish. 1:19:59 So yeah, thanks again for coming on the show. I certainly appreciate it. 1:20:04 All right. Welcome to the post interview. And I'm waiting for D to finish writing what he's going to write. And we're back. 1:20:13 There it is. 1:20:14 Welcome to the post interview where we discuss what just happened when our interview with Paul. 1:20:21 Yeah. What are your thoughts? 1:20:23 Yeah, I think, I think just, you know, him being the second person who I've heard talk about L2s on Bitcoin, which I didn't even really look into in any technical depth or care about because Bitcoin is so expensive. 1:20:37 Yeah, I think, I think just, you know, him being the second person who I've heard talk about L2s on Bitcoin, which I didn't even really look into in any technical depth or care about because Bitcoin in my mind has already been ossified to the extent that all the research that's being done in the Ethereum ecosystem or even other alt L1 ecosystems is going so much faster. 1:21:02 And in terms of like implementation than anything that they're going to be able to do. Also, you know, I think, yeah, there's, there's so many different things that like, like a UTXO based transactions from the privacy polls interview was clearly something that even Vitalik was reconsidering with extended UTXO models for transactions. 1:21:29 So like, you know, Bitcoin, again, Bitcoin in my mind is like that old grandpa who's like gold, like he's a gold bug. And I get it. And I think that's exactly what it should be. 1:21:40 I don't think that it should try to, in fear of it not maintaining relevance or wanting to be something more, try to bolt on the similar L2 solutions that Ethereum is trying to do, which are causing it to potentially lose a bit on decentralization in terms of the scale that it's achieving. 1:22:07 And when it comes to like data availability, you know, that's something that Paul kind of touched upon lately. That's something that now has to be a concern when you're scaling, you know, mainnet with L2s, you know, where are the blocks that are happening in the L2s going to go long term? 1:22:24 Because, you know, those L2s operate so cheaply, and with such high, like performance requirements of the underlying blockchain themselves, that no normal person is going to be able to run that. 1:22:39 So being a data janitor of the whole Ethereum ecosystem as something that can provide like, you know, data persistence for, you know, reconstruction of these, you know, state commitments, like that's going to be a very important job. And all these projects like Celestia and the other data availability solutions, they don't actually solve it, right? They just extend the ephemeral data window. 1:23:04 So you still need some part of it. 1:23:06 The aggregation and proofing systems of what you're embedding in the chain is more often than not what people are working on, but the ability to serve that data and hold on to it for long periods of time, no one else. 1:23:18 Exactly. 1:23:19 What you just said, I think that if there's a technical possibility for there to be permissionless innovation on Bitcoin, then it should exist. 1:23:34 So like, I want these things, because like, Bitcoin is fundamentally a different blockchain than all of the other blockchains period, because of the history of proof of work, and it's like, general catch up of the networks. 1:23:51 Like, when you talk about crypto to anyone, they understand Bitcoin, nothing, not anything else, kind of, really. 1:23:57 They'll at least hear the word Bitcoin more often than not than anything else in the ecosystem. 1:24:03 After all the crazy stuff that's happened, not as much the case, but still, Bitcoin is still a thing. 1:24:10 And so like, if you're able to at least enable experimentation on top of it without changing the underlying protocol, which is what most of these things are trying to do, because they can't change the underlying protocol, that's good. 1:24:22 Because then we have a new area of experimentation to see if this works in what is potentially the most secure blockchain in existence. 1:24:30 Whether or not you're able to do it, who knows. 1:24:35 I'll read what Dean wrote. 1:24:37 As devs, are either of you interested in playing with Drivechains? 1:24:42 Well, they don't exist. 1:24:44 Playing with? 1:24:46 Are you talking about the idea? 1:24:48 In the eventuality that they might exist. 1:24:50 No, Zerosync and BitVM are more interesting to me. 1:24:52 I don't know, I need to understand the differences better. 1:24:58 I tend to lean towards zero-knowledge cryptography. 1:25:03 As a solution to pushing the innovation boundary much, much harder. 1:25:09 But the exit scenario, which is mainly what the differences are for most of these things, is like, how are funds pooled and how you get your money out in the event that you want to, is mostly different. 1:25:23 So understanding those differences. 1:25:25 And how do you make a new one? 1:25:29 So like, if I want to spin up a Drivechain, what does that require me to do? 1:25:34 What does it require others to do? 1:25:36 And that amount of missionlessness and the impact it has on the rest of the ecosystem makes a big difference. 1:25:43 So like, yeah, I probably, I want to understand them. 1:25:47 But like, I don't see it making a big difference in where I'm spending my time as a developer, or like, I guess, funder of development. 1:25:58 Anytime soon, because mostly what I'm focused on is privacy. 1:26:06 At a lower, lower, lower level. 1:26:09 Like, at the network level, things like that. 1:26:12 So like, I don't know, it's interesting to me. 1:26:16 And I want to see it grow. 1:26:17 Because one, it gives people more opportunity to build in different places. 1:26:21 And for people to fund that building because they think that development should happen in Bitcoin. 1:26:27 So it's like, if this exists in Bitcoin, then there's more people in Bitcoin throwing their Bitcoin at people to build things on Bitcoin. 1:26:33 That's just more development and more experimentation than there previously was. 1:26:39 I don't see it as like this massive exodus from Ethereum. 1:26:42 It's just more. 1:26:43 Yeah. 1:26:44 But that's the thing. 1:26:45 That's what, like, if I was listening to a bunch of the older podcasts that Paul did. 1:26:50 And really, you know, when I was asking him, what drives you to, you know, build Drivechains or to make this idea happen? 1:26:56 I mean, he really wants to capture all of the, ideally, transaction fees that are happening in Ethereum and then move it to Bitcoin. 1:27:06 That's what he really wants to have happen. 1:27:09 And that's not going to happen. 1:27:11 Even if Drivechains do exist, I don't see that happening. 1:27:14 Just like, you know, we see all these Alt L1 spin up, you know, Avalanche or Polkadot or whatever, what have you. 1:27:21 They create their own little ecosystem. 1:27:24 But at the end of the day, you know, most of the activity comes back to Ethereum. 1:27:29 We'll see. 1:27:30 There's this dynamic over time. 1:27:33 I personally don't see a world where, like, it's all under one chain in any chain whatsoever. 1:27:39 Yeah. 1:27:40 I think they all have a time period of relevance. 1:27:43 Yeah. 1:27:44 The only value that any of these coins have at all is because there's a group of people that designate that value. 1:27:51 And since people are so different, there's always going to be different pools of value because people always agree on difference, like on what they think is valuable or like how they want to do stuff. 1:28:02 There's never going to be a situation where everyone agrees on the same thing in terms of the base layer level value system. 1:28:10 I mean, if you think about it this way, like all these L1s are essentially like different countries. 1:28:15 He's trying to unify all the countries to use one global currency. 1:28:18 That's never going to happen. 1:28:20 Maybe it does. 1:28:24 I mean, if you have a stick, maybe. 1:28:27 Well, yeah. 1:28:29 I don't think so. 1:28:30 Yeah. Big stick. 1:28:31 Yeah. Big stick wins. 1:28:32 I got a big stick somewhere.
