0:00 Back in the day, like before 2015, everyone just thought anyone who worked on Bitcoin would just all get arrested or something. 0:06 This idea requires you to be open-minded to the idea that someone would want to leave the Bitcoin core software. 0:13 But over time, people have been trained not to think of that as a good idea. 0:17 You could make a whole career out of just being like a critic and not actually making anything. 0:21 Even though the correct side won the scaling war, there's no way you can overstate how kind of traumatized the community was in general. 0:31 And I think this is one of the worst things that has ever happened. 0:34 The bigger thing, though, is just why have any rivals at all? 0:37 Like, why tolerate having Ethereum as a number two alternative to Bitcoin? 0:41 The whole design is designed around the sidechains being optional and not harming anyone who's not using them. 0:50 It was a better idea before, as good of an idea it is today. 0:53 It would have been better to do it back then. 0:55 Paul Sztorc is the founder and CEO of LayerTwo Labs, as well as the author of BIP300/301 and a Drivechains advocate. 1:05 In our conversation, we explored the history of Drivechains. 1:09 We talked about the potential pros and cons of implementing them on Bitcoin. 1:14 And we discussed the work that Paul is doing at LayerTwo Labs to help scale Bitcoin. 1:19 Paul has also been added to today's show splits. 1:22 So if you enjoy this episode and if you learn something new, the best way you can show your support for the show is by sending in sats over the Lightning Network. 1:31 You can use any podcasting 2.0 app. 1:34 There are dozens of them. 1:35 But my favorite to use is Fountain. 1:38 Before we get into today's show, just a quick message from our sponsors. 1:41 Today's show is sponsored by Voltage. 1:43 Voltage is the premier provider of Bitcoin and Lightning Node infrastructure. 1:49 Today's show is also sponsored by Stackwork. 1:51 Stackwork is a Lightning-powered transcription tool that takes the best of AIs and humans to create better, faster, and less expensive transcripts. 2:01 We'll have more from Voltage and Stackwork later in the show. 2:04 Paul, welcome to the show. 2:05 Thank you for taking the time. 2:07 I have a lot of questions to ask you about Drivechains, about LayerTwo Labs, all sorts of stuff I want to get into. 2:14 But first, let's start with your background. 2:17 Tell me a little bit about how you first discovered Bitcoin. 2:21 I first discovered it that someone wrote that article about Silk Road, I think, in Wired. 2:27 They wrote that article in, like, 2011, but I didn't read it until later, I think, like 2012. 2:34 And actually, believe it or not, I heard about Bitcoin before along with the Free State Project was sending, like, emails about it. 2:40 And I was like, this is so stupid. 2:42 I thought the idea was horrible. 2:45 And I honestly thought, like, these libertarians are so dumb. 2:47 I was going to, like, unsubscribe from the mailing list because of this. 2:50 And I was like, you can't just start your own currency. 2:52 What about network effects? 2:54 What about the instability? 2:56 You know, like, if, like, someone starts a currency, then you have a copycat. 3:00 What later became, like, live by the fork, die by the fork, and, you know, this whole point. 3:05 So I was like, this idea is stupid. 3:07 Never get any traction. 3:09 And then I read the Silk Road article and everything changed because I didn't understand why they could. 3:15 I was like, why don't they just use credit cards? 3:17 And then it's like, oh, of course, because they have the real name and the billing address of all these people engaging in illegal activity. 3:26 So but then it was like, we already have, like, regular users who are drug addicts who are actually using the whole system. 3:33 So I was like, oh, A, it's finished. 3:36 B, there's no way to, like, cheat the scheme because if someone's, you know, like a drug addict, 3:42 they're going to do whatever they can to get extra drugs for free out of the whole cycle. 3:51 And I was like, oh, it's all right. 3:53 So I thought I was like, I went from thinking it's a terrible idea to like, oh, I'm way too late. 3:58 It's already being used by the layperson in the real world. 4:03 So that was how I got into Bitcoin. 4:05 I read that article and just immediately I just thought this would be used in every illegal transaction in the world. 4:11 And nothing really stops it from being used in every legal transaction in the world as well. 4:16 So it will just system D was like 10. 4:19 It was the second largest economy in the world is like 10 trillion GDP of like all the black gray market activity was was huge. 4:33 So I knew that it was huge. 4:34 I knew about like Hong Kong capital control. 4:36 I knew about all this stuff. 4:37 You know, I knew that there was a demand for this product. 4:41 Like a lot of stuff is illegal gambling. 4:43 They had like Black Thursday. 4:46 Right. 4:46 It only happened a couple years before. 4:47 They just close everything and just take everyone's money. 4:50 So so that got me started on all that. 4:53 That's how I got into it. 4:55 You know, and then the form and stuff and then you're like, oh, this is a real project. 4:59 You know, you test out the software. 5:01 Went to Gavin's faucet. 5:04 Yeah, coins. 5:06 Nice. 5:07 And then so so this is 2012. 5:09 You're starting to learn about it. 5:10 You discover it. 5:11 And now fast forward to a decade later. 5:15 You're starting LayerTwo Labs. 5:17 Talk to me about that 10 year journey and the the the transition from learning about it thinking you're too late to to now building this company trying to trying to further improve scalability and features on 5:31 Bitcoin. 5:32 Sure. 5:33 So 2012 the one thing that happened was the in trade collapsed. 5:41 And this the intraday was my favorite website on the Internet, which is a prediction markets website. 5:45 And I was a very annoyed by this because it would be it was basically closed down by the US government for no reason. 5:51 And this is the institution that like I have like papers where there's like 15 or 16 Nobel Prize winners of the co-authors. 5:59 And they they're all like in favor of this institution. 6:01 I'm a huge believer in this institution and this website closed down and there was another website like bid bet. 6:07 That was like a Bitcoin type of a thing like that. 6:11 But that also had to close. 6:13 There was lots of failures of this thing. 6:15 So I designed this this prediction market concept this blockchain prediction market concept back in 2012 2013. 6:25 And so I was interested in that. 6:26 It's kind of like a little pet project like a little labor of love because I wanted to have prediction markets in the world. 6:33 But it was so bizarre that the project is so complicated that I knew there would be no real way to actually use it with Bitcoin without some kind of like other new idea. 6:45 But that around that time, the idea of the sidechain was invented or pioneered by people. 6:51 Luke Dashjr. mentioned it in a Bitcoin Wizards IRC chat and Greg Maxwell mentioned it. 6:59 So they were talking about this sidechain idea. 7:02 And I thought, oh, this idea is perfect. 7:03 So I inadvertently became an expert on some things that would later be really important, which are like, what could you use a blockchain for that is not Bitcoin core? 7:12 So there was there a Namecoin at the time, which was co-invented by Satoshi, which is about the Internet name system. 7:19 But that was kind of languishing. 7:20 But I kind of always knew about Namecoin and it was always kind of confusing because Namecoin had a separate coin. 7:26 So the separate coin is always a bad thing. 7:28 If you're in Bitcoin, you never wanted to do that because they would create these rivalrous competing projects. 7:35 So I got really into prediction markets. 7:36 And it just as a this is a bizarre side effect of having done that is I became an expert on things like the Oracle problem or like what you would use a blockchain for or not for. 7:49 Then in 2015, we had the scaling war started to get big because Mike Kern and Gavin Andreessen were pushing Bitcoin XT to the eight megabyte hard fork. 8:02 This caused. Let's say this discord in the community and we organized the scaling Bitcoin conferences. 8:16 And so the so the first one was in September in 2015 in Montreal. 8:23 And I had been writing in 2015, like in May. 8:26 I wrote a little. And in September, I wrote a little. 8:29 And then I presented some of what I was talking about at that conference. 8:36 And that was when I first started to notice the problems, which were that people really hated each other and weren't even talking to each other. 8:44 So there was no reasonable debate. 8:48 Actually, in my view, everyone was just trying to say, I'm right. 8:51 And this is how to prove that I'm right. And they weren't actually interested in any kind of win win situation. 8:56 So I presented something I presented like we could basically are now called Fork Futures. 9:01 I said we can make this thing where we can say. 9:05 Because the problem, as I saw it, was how to get the community to decide what to do, like how to do like a governance type of a thing, 9:12 whereas everyone else was just kind of trying to say, like, how can I get my own way and just everyone else is wrong and I will just get what I want? 9:19 And which is obviously a very childish way to look at the world. 9:22 But I was I presented on we can have this way where we we we create this thing with technology and you have two tradable assets or really four or actually eight, believe it or not. 9:36 But under the hood, it would look like two or four. 9:38 And it would be like it would it would let you know what the Bitcoin price would be in the large block future versus the small block future. 9:46 And I would say then we can let the users, the investors, they can take sides before we actually make a decision. 9:53 And we'll say whichever one increases the price the most is just what the community will will want to do, because they'll want to have Bitcoin be the highest price it can possibly be. 10:04 So this will solve all of our problems. It'll let it let us know what what people want. 10:08 It'll communicate that to everyone. And it will communicate that to everyone. 10:15 And then it also just passively paves the way for exactly coordinating everyone's response on the one most desirable thing. 10:25 So this was like a pre fork prediction market. Yeah, it was. 10:31 And so everyone hated this idea, and that was when I got nervous because that because I was like. 10:39 No matter how no matter how many times you get something right, it's only a matter of time. 10:44 If you don't have a good error correcting mechanism, it's only a matter of time before you make a huge mistake. 10:50 And so but it wasn't a big deal, but because because the correct side was the small blocker side and they ended up winning anyway. 10:58 But that was 2015. I presented this idea. Everyone was like, how dare you even. 11:03 But if you go to either side, the small block side or the large block side, people would say, obviously, we're the ones who are right. 11:11 You know, how dare you even side with them for a moment, which suggested to me that everyone was really on the wrong path a lot. 11:19 Because, you see, it doesn't really matter if you're right in any particular disagreement. 11:25 And, of course, you know, as I predicted, it got nastier. 11:30 The sides got nastier and nastier and they started hating each other more. So Blockstream had done this paper in October 2014. 11:37 This 10 year story is going to be really long at this rate. 11:40 But Blockstream had done this paper in 2014 about sidechains. 11:45 And I had finished, I had started working on the prediction markets project because actually Roger Ver, I was working at Yale University and Roger Ver hired me. 11:54 In November of 20, we're going even further back now, November of 2014, Blockstream emailed me about because I was working on this sidechain project. 12:03 And they're like, oh, this is great. We should have a partnership. 12:05 We should do all this stuff. I have these emails with them. 12:08 And then they were worried about prediction market regulation, even though they were based out of Canada at the time where that's more legal. 12:18 It was like everyone back in the day, like before 2015, everyone just thought all the anyone who worked on Bitcoin would just all get arrested or something. 12:26 So something really weird happened later in 2016 that changed everyone's mind. 12:30 But before everyone thought we're all doomed. 12:32 So they were like doing some kind of internal review or something. 12:37 Then I happened to meet Roger Ver the next month in December 2014. 12:42 And he just hired me on the spot because, you know, he's like, you know, Monopoly champ, Mr. Moneybags. 12:48 And he was like, you know, he's not going to wait for blah, blah, blah. 12:52 He would have actually liked it more if the U.S. government hated it. So he would have been more into it. 12:57 And so in through 2015, this period I was describing before, I made this software, which you can find now at BitcoinHiveMind.com. 13:06 We even have a GUI. We have screenshots. 13:09 So the prediction market software actually exists. 13:11 And to this day, it is the superior peer to peer Oracle. 13:15 Everyone else's Oracle technology is awful. 13:18 And this is much better. It's much more complicated, but it's it stands a chance of actually working at scale. 13:26 That's my opinion. So in 2015, by the end of 2015, I had finished this software. 13:33 And then I was like, how do I get the sidechain? 13:35 I had to integrate it into Bitcoin sidechain world. 13:39 So I've actually built all this software long before many of these other people who showed up today. 13:45 You know, we've got a lot of new people who showed up. 13:48 I finished completely this software project. 13:50 Like I finished all this was presenting it scaling Bitcoin long before many of these people like have even shown up or whatever. 13:56 But I finished this software and I was like, how do I bolt it into Bitcoin via sidechain? 14:00 So I had to read the paper for the first time because this Blockstream paper had been thrown around a lot. 14:05 But not a lot of people had actually read it. And I read it in 2015. 14:10 And I just kind of thought that I could actually do better. 14:14 What they had described in Appendix B was this convoluted thing with multiple headers of the sidechain would be like in the transaction. 14:22 The transaction would be like 800 kilobytes or something huge, excuse me, or just this big, like it could be this huge transaction. 14:31 It relied on like statistical luck to shrink the transaction. 14:36 They had this skip list thing. And I was like, this is not really conceived the right way. 14:41 So that led me to develop Drivechain in November 2015. 14:46 And I don't know if we can make the rest of this story shorter, but I wrote that post in November 2015. 14:54 And then in 2016, there was like feedback about it. 14:57 So I made these two huge presentations called one was called sidechain privatization. 15:03 And the other one was called sidechain risks or something like that. 15:08 You know, June 2016 and September 2016. 15:13 And those ideas, the ideas in those presentations have never been understood by anyone else. 15:20 So I guess even the presentations are really good. 15:23 And one of them is like four and a half hours long. 15:25 And the other one is like five hours long. It's like hundreds of slides. 15:29 It's an enormous topic. But no one, they were a failure at convincing people. 15:34 Because to this day, I get questions that were answered in those. 15:39 I get the same. To be honest with you, this is a super rambling answer now. 15:44 But I think it's very interesting that people read the November 2015 Drivechain post. 15:49 If you read that post, you can see that I anticipate on day one, like as publishing the idea, 15:58 the questions that people will have and people today still ask the question. 16:01 So it's just an idea that is just apparently it's very obvious to me, 16:06 but it's not obvious to other people. 16:08 But I guessed what questions they would have and answered them in 2015. 16:13 And you get the same questions today. 16:16 So that's a long buildup. So maybe you want to interrupt me and say... 16:21 No, so this is interesting. 16:23 Guide this journey somewhere. 16:25 Yeah, so you introduced this idea in 2015 of a Drivechain. 16:30 For listeners who aren't familiar, actually, can we just define what that is? 16:33 Just a high level? 16:35 At the time, it was just the title of a blog post I wrote about a type of two-way peg 16:39 because this was the phrase for this idea that it was always known that you could have... 16:44 we have Bitcoin Core and then you could release a version where the coins went one way. 16:49 So you would have maybe new features there that you could opt in and you'd say, 16:54 oh, I have 13 Bitcoin. I'm going to send them over. 16:57 They're basically deleted forever on the first version. 17:02 It's like a one-way street, deleted forever on the first version, 17:06 but you have 13 of the new coin and now you have the new feature 17:09 and then you can hang out with all the people who have opted in to the new feature. 17:13 But you see the problem with that is since it's a one-way street, 17:16 everyone will be very reluctant to send money there. 17:20 And de facto, it's going to basically be like either you convince a super... 17:25 like a critical mass supermajority to like move over. 17:28 Since it's a one-way street, either it's going to be like 17:30 everyone is going to eventually have moved over, right, in de facto, or no one will. 17:37 And even if the coins trade against each other on the market, 17:41 there's nothing stop... in the one-way peg world, 17:43 nothing stops the price from crashing 90% every day for an infinity number of days 17:49 because there's no... you can always fall 90% from where you are. 17:52 So the one-way peg carries with it a risk. 17:57 You have to think about will other people want this software? 18:01 Will other people want... will this have liquidity? 18:05 Will other people want this feature or will they regret coming here? 18:10 And that loses the experimental quality of it. 18:13 Whereas... so the holy grail or the core desire was, 18:18 well, what if we can move the coins over but then move them back? 18:22 Then you lose very little by moving them over 18:25 because if it goes wrong, you can try and move them back. 18:29 And if you can... and then also you're very indifferent as to which network you get paid on 18:36 because maybe you prefer it all to be on one... 18:39 maybe you have like many of these networks, five or six. 18:42 Maybe you prefer network number three. 18:44 But if there's a two-way peg among all of them, 18:48 you can get paid on whatever one you want and just switch it out for the one that you prefer. 18:53 You can get paid on network four. 18:55 And then you can end up with coins on three. 18:58 So that was obviously much better of a situation. 19:01 That's very much like when you have $20 worth of cash and you put it into an ATM. 19:06 And you lose $20 worth of cash but they give you $20 worth of a checking account. 19:11 So the idea of exchanging at par. 19:13 Right. And then you can go to another ATM and withdraw from your checking account. 19:17 Precisely. Or you can pay a bill online and you... now you lose the checking. 19:21 So that's key. The entire modern banking system, this idea of par is like essential. 19:30 The idea that you can break... if you need to go to the laundromat, they have the change machine. 19:34 You put in $5 bill, you lose the $5 bill but you get a bunch of quarters 19:38 because the laundromat machine only takes quarters. 19:42 But it doesn't matter. If you have quarters left over, you can go back into the bank, 19:45 deposit them and get the checking account back. 19:47 So you see that's key. It's part of the secret sauce that makes it all work. 19:53 Right. And so you came up with this idea in 2015. 19:56 And before this conversation, you shared a document with me 20:01 that highlights a lot of the opinions of really prominent Bitcoiners on Drivechains. 20:07 A lot of favorable opinions from folks like Fiat Jeff, Eric Wall, Adam Back, 20:14 Nick Carter, Lalu from Lightning Labs, Pete Rizzo. I can go on and on here. 20:20 There's a lot of people who have spoken out about this topic. 20:23 You've been writing about and researching about for seven years. 20:26 What has... why is the Bitcoin community hung up on this? 20:30 Why hasn't this been implemented in the last seven years? 20:35 Well, that's a good question. Part of it is... some of it is fundamental, 20:39 which is to say this idea requires you to be open-minded to the idea 20:44 that someone would want to leave the Bitcoin core software. 20:47 But over time, people have been trained not to think of that as a good idea. 20:51 And so this is because we've had all these scam... 20:54 like 99% of the non-Bitcoin projects are very disreputable. 21:01 So what the sidechain is basically saying is you can escape Bitcoin core. 21:04 But if you're just a cheerleader for Bitcoin and you say, 21:07 Bitcoin's great, Bitcoin's the best, you know, I heart Bitcoin, 21:12 then this idea is kind of foreign to people. 21:14 So I think that's what it is also is you need to have... 21:17 you need to have an idea of where else you would go and why. 21:20 So for example, one of the things that I used to say back when the community was fighting 21:26 is you could say you have large blocks or small blocks. 21:28 So then this was an obvious answer to the large block people 21:32 of what you would do with the sidechain. 21:35 But you see, as soon as we have the scaling war and they fight and lose, 21:39 now that sounds flaky because everyone learned that large blocks were bad. 21:47 This ignores the night and day difference between large blocks on layer 1 21:52 as mandatory for everyone and large blocks on an optional layer 2. 21:56 This is a night and day difference. 21:57 But most people don't understand that it is a difference at all. 22:01 They just think large blocks equals bad. 22:05 You know, I'm not supposed to say that. 22:06 They have a little list of things they're supposed to say. 22:09 So that's the other thing. 22:10 You need a destination in mind with the sidechain. 22:12 The sidechain says... 22:14 See, because the sidechain view is very unusual. 22:18 Everyone is saying, I'm in Bitcoin, Bitcoin's the coolest club, 22:21 I love Bitcoin, blah, blah, blah. 22:23 Whereas the sidechain view says something like, 22:26 now we can finally break out of this prison. 22:29 It's terrible here. 22:31 We want to go somewhere else. 22:35 We want, like, whatever. 22:37 It looks like we really care about what Ethereum is doing 22:40 or what these other things are doing. 22:42 That's not really the point. 22:43 The point is to just be able to do everything. 22:46 And the point is to have competition among people who develop the software. 22:50 So we have enormous competition in mining where people rise and fall constantly. 22:56 And if someone uses leverage in mining, 23:00 they're making a big bet. 23:02 If they win, they'll out-compete you. 23:04 And if they lose, they plunge into bankruptcy. 23:06 And as we've seen, we're seeing that play out. 23:10 So we want... competition is good for the customer. 23:14 So we want competition. 23:15 So that's what it's about. 23:16 But most people are not creative. 23:18 So they think Bitcoin Core is absolutely perfect. 23:21 Because we've been trained to think of that because of the block size war 23:24 and because of these terrible altcoins 23:27 and because of many other scam projects that I agree that 99% of them are terrible. 23:32 But 1% are actually either de facto excellent 23:38 and we should just take what they have to offer for ourselves, such as Zcash. 23:42 We should just take that. 23:45 And again, so then this is another thing like Zcash. 23:47 The technology is very different than Zcash the coin or the community 23:52 or things like Zucco paying themselves the dev tax or other weird Zcash ideas. 23:59 You have to separate the technology from the... 24:02 But I think that's part of why. 24:04 But the real reason has nothing to do with that. 24:07 I think it's just a historical... 24:11 I don't know what's the word, like a kind of bad luck. 24:14 Because this idea involved hash rate. 24:19 BIP300 involves basically the miners like counting with a little counter up to 13,000 24:25 in the Coinbase transaction of nodes. 24:29 So this idea came out in 2015. 24:31 Like I said, November. 24:33 December, I presented at it at Scaling 2, 24:36 but it was not like a big formal presentation. 24:38 It was just kind of like one of these like you could go up and just talk. 24:41 And so I had like a... 24:43 It wasn't like as pronounced of a talk in that thing. 24:49 It was not even recorded. 24:50 So you can't, I don't think you can look it up because they were over lunch. 24:55 And at Scaling 2, everyone agreed. 25:00 There was a big agreement on SegWit. 25:05 And since it would also, the implementation design 25:08 would also increase the block size. 25:09 So it was a compromise. 25:12 SegWit was the big thing after December. 25:15 So I was like November, excuse me, November, 2015. 25:19 I have like a weird idea that's just text on a page. 25:23 December, big community attention and consensus 25:28 around this thing that has like some, 25:30 a lot of technical research, some code. 25:32 It's a big upgrade for Lightning. 25:34 Lightning was getting big in 2015. 25:37 So that was the idea. 25:39 I don't know if you remember this, 25:40 but, or I don't know what you... 25:42 I would've said it before my time. 25:44 Yeah, so there was this kind of agreement. 25:47 There was like a situation where people said things 25:50 and maybe stuff was taken a little too seriously. 25:52 But basically after Scaling 2, there was this concept 25:54 that SegWit would be ready by April 1st 25:56 of the next year, 2016. 25:59 But it wasn't because software always takes longer 26:02 than you think. 26:03 So it wasn't even close. 26:04 And there was a lot of disagreement 26:05 in the community in 2016. 26:07 And this is the only reason that Ethereum 26:08 ever got big at all. 26:11 So if we had had sidechains before, 26:13 I don't think there would be any altcoins today. 26:15 But now they had an opportunity to get big 26:18 because 2016, people smelled blood. 26:22 They said Bitcoin community doesn't have it all figured out. 26:26 A lot of inviting in 2016. 26:29 And then Scaling 3, the next conference, 26:33 it wasn't until October. 26:34 And SegWit wasn't shipped until after that. 26:38 And believe it or not, the SegWit 3, 26:40 the Scaling 3 itinerary, the schedule, 26:43 had almost nothing in the program was about scalability. 26:47 And in fact, like the whole first half of the first day 26:52 was about privacy. 26:53 And some of the people who came there 26:55 to talk about scalability were actually annoyed, 26:59 including many large blockers, 27:01 including this one miner who left. 27:04 They actually left the conference 27:06 and went back to China to signal, 27:09 to use like 9% of the hash rate to signal 27:11 for Bitcoin Unlimited. 27:14 And this meant that SegWit would not activate 27:15 as a soft fork with the normal way of BIP-9, 95%. 27:21 Hash rate. 27:23 So this led to this SegWit blockade. 27:25 This led to SegWit2x, this led to UASF. 27:29 So this whole thing was a huge distraction 27:32 and it created this polarity. 27:34 This is where I finally get to the point, 27:35 which is it created this miners are evil 27:37 versus good developers framework that everyone, 27:42 that only very recently people even kind of snapped out of. 27:45 Only recently with like Marty Bent, 27:47 great American mining, that was like, 27:50 until then it was like the miners were evil 27:53 and the fact that the large block side lost 27:55 and the fact that UASF won meant that they were untouchable. 27:59 And so this was terrible for my idea 28:02 since it involved people thinking of the miners 28:04 as like just reasonable people 28:06 who want the price of Bitcoin to go up 28:07 and who want transaction fees to go up 28:09 and who are aligned with Bitcoin success. 28:12 Instead, this event made everyone think of miners 28:14 as dangerous people who need to be like controlled 28:20 and so that is what happened. 28:22 And this whole thing was, 28:23 the whole scaling war with SegWit, 28:25 no one was gonna activate anything new 28:26 while SegWit was on the table 28:28 and then SegWit finally activated by UASF. 28:32 This was tremendously disruptive 28:37 because even though the correct side won the scaling war, 28:42 there's no way you can overstate 28:44 how kind of traumatized the community was in general. 28:48 And this was, I think this is one of the worst things 28:50 that's ever happened to the Bitcoin communities 28:53 fighting the scaling war at all. 28:55 It almost would have been better to, 28:57 I'm not sure it would have been better 28:58 but to have people split off 29:00 and have the Bitcoin cash people go out 29:06 was terrible for a lot of reasons. 29:08 But you see, this is not a thing 29:09 that you'll hear a lot of people say 29:11 because a lot of people say those people are losers, 29:13 we're better off without them, whatever. 29:15 But it was more, much worse, 29:18 there's no way to really explain 29:21 like how terrible things became. 29:24 The community before was very fun and very open-minded 29:28 and there was this meme like Bitcoin user not affected 29:30 and people were just having a great time. 29:33 Then after the scaling war, 29:35 there was like a list of allowed opinions you could have. 29:39 You had to say this, 29:40 you had to be friends with the right people, 29:41 you couldn't associate with the bad people. 29:45 And we had various other sociopathic people 29:47 who exploited this crisis to become more powerful 29:52 and work their way up the ladder. 29:55 So they were very good at making little memes and tweeting. 30:00 And these people have no skill 30:02 and they're actually parasites I think on Bitcoin 30:05 but they became very popular 30:08 because they were very skilled like demagogues, 30:11 skilled rhetoric and they wormed their way up 30:15 into the upper echelon. 30:16 And this created this whole community of just like, 30:19 this created like, there was toxicity before 30:23 but it made way more sense. 30:25 But this is sort of the kind of malignant toxicity 30:30 that is just like ignorant and mean-spirited. 30:33 So now if you were to go back, 30:35 if you were to go back in time, 30:37 back to 2015 and if you had your way, 30:41 would your preferable outcome have been 30:43 that anyone who didn't like the direction 30:46 that Bitcoin was headed could opt into their own, 30:49 could create their own kind of sidechain 30:51 and have users decide whether or not they wanna opt in 30:55 while leaving everyone else unaffected? 30:59 Well at the time I had designed the idea 31:00 but I had not produced any software 31:02 because I just thought, well this idea is so good 31:04 that someone else will just make the software. 31:07 So it wasn't until later like, I think like January 2017 31:12 or something, something around then, 31:14 that was when I invented Blind Merged Mining. 31:16 So then that was a blank piece of paper until then. 31:20 And so then it wasn't until then 31:21 that I kind of seriously started to try to produce 31:25 the software and then after I produced the software, 31:28 the BIP300 software, I was like, oh, there's no, 31:30 we don't have sidechains, we need example sidechains 31:33 so that you have something to send. 31:34 It's like inventing one radio, you know? 31:37 You need the second radio for people to understand 31:40 what's going on. 31:41 So I was like, it's this radio, it's this really cool thing 31:43 it turns sound into electromagnetic waves 31:48 but no one knows what's going on 31:50 until you have the second radio and then, okay. 31:51 So I was like, okay. 31:52 So then I started doing that like in 2020. 31:57 And of course I do lots of other things too. 31:59 I haven't only been doing this but this is the main thing 32:02 that I think people should pay attention to. 32:05 Right. 32:05 I usually, mostly I do nothing or I write on my blog, 32:10 I write commentary on my blog, 32:11 I write these enormous blog posts. 32:13 So that was what I was like, mostly a writer. 32:16 Yeah. 32:17 I'm just like a fun Bitcoin presenter. 32:18 Like I give lots of talks all around the world. 32:20 Like so for example, in QCon in 2017, 32:23 I gave a talk on the Oracle problem, which is again, 32:26 what I was mostly interested in at the beginning, 32:28 the prediction markets thing. 32:29 It had nothing to do with any of this. 32:32 So now in the last few years, have you noticed opinions 32:36 shifting and changing at all on the topic of sidechains, 32:39 Drivechains? 32:40 What has that been like? 32:43 Well, I've always had these predictions that, 32:46 so the problem that Drivechain solves 32:49 is this meta consensus problem. 32:51 So it was like we have the blockchain makes consensus, 32:54 everyone's software agrees on what happened, 32:57 but it doesn't make consensus about consensus. 33:00 So that was the block size debate. 33:01 Like what should the blockchain be doing? 33:04 Whatever it is, we can program it 33:06 so that that's what the blockchain does. 33:09 But it can't help us because people disagree. 33:13 So like large blockers or small blockers 33:15 is a perfect example. 33:16 But also Vitalik who wanted turn complete scripts, 33:20 he wanted some kind of state machine with Ethereum. 33:23 Vitalik was a writer, he was a founder of Bitcoin Magazine 33:27 and a writer for Bitcoin Magazine, he was a big Bitcoiner. 33:31 All these people are huge Bitcoiners, of course. 33:32 You know, Roger Ver was a very popular Bitcoiner. 33:35 So almost all the people who left to do successful, 33:39 Zcash, that was like a Matthew Green zero coin thing 33:42 or whatever that was like, all that was Bitcoin stuff, 33:46 it was all Bitcoin stuff. 33:48 So everyone was 100% aligned in Bitcoin. 33:52 But then this topic came up of how, 33:56 what if we have a new feature 33:58 and not everyone wants to upgrade? 34:01 What do we do? 34:03 And this was a vexing problem. 34:05 And a lot of people decided, 34:07 so Monero is a perfect example. 34:09 The Monero people decided, listen, 34:11 I'm not gonna wait for Bitcoin to do ring signatures. 34:14 That turned out to be very smart 34:16 because now it's like whatever, eight years later 34:19 and we don't have them. 34:20 But Monero exists and now Monero has real users. 34:23 So they thought, a lot of this is, 34:28 99% of the altcoins are scams, 34:30 but some are created by people 34:32 with a genuine creative spark 34:34 and they just want something. 34:37 They just think something's better. 34:38 And if it was available to them on Bitcoin, 34:40 they would have taken that risk. 34:41 Yeah, they would never have made the altcoin 34:43 in the first place. 34:44 So the real tragedy is that we didn't just do it 34:46 like a year or we didn't like come to this concept 34:48 like a year earlier, 34:50 or that like, if I could go back in time, 34:52 I think I would go straight to all the large blockers 34:55 and I would say, I would explain to them in detail 34:58 what is about to happen and why they're about to lose 35:02 over the next two or three years 35:04 and why they can't possibly win, 35:06 which is something that I kind of suspected always 35:09 in real time, but now since I'm a time traveler, 35:11 I'll know exactly what happens on every date 35:14 and stuff like that. 35:15 But I'll be able to sketch this out 35:17 and then they'll see that I'm more and more correct 35:20 and my status over there would rise. 35:22 And then I would always be telling them, 35:24 this is what you should do instead. 35:26 You have optional large blocks and it won't affect, 35:30 those people still have their small blocks 35:31 and you'll have your large blocks 35:33 and you'll have the only disadvantage 35:34 is you'll be in SPV mode, which is what you, 35:37 that's what they wanted anyway. 35:38 They wanted everyone to have SPV mode, 35:40 but I'll say this is perfect. 35:41 You guys get large blocks in SPV mode. 35:43 They get small blocks in full node mode. 35:47 Everyone gets what they want. 35:49 Don't do anything else. 35:51 And so then that would probably have helped. 35:54 And if you'd started early enough, 35:56 you could also have gotten ahead of the whole Ethereum thing 35:59 I think I would have ignored. 36:00 Part of it was I thought the community was also interested 36:03 in this task of keeping everyone together 36:07 and making the project growing the tent forever. 36:11 But again, part of the scaling war 36:13 was people could make a whole career 36:17 out of just being a jerk, being like a toxic person 36:20 and kicking people while they're down 36:22 and making fun of, 36:25 you could make a whole career out of just being a critic 36:27 and not actually making anything. 36:29 You can make a whole career out of just arguing a side well. 36:37 And that was, so that was what I noticed 36:39 when I said in 2015 at scaling one, 36:41 I started to notice that. 36:42 I was like, no one wants a win-win thing. 36:47 They just want to do this thing. 36:49 And then if you were blessed by the right people, 36:52 you could raise money and you could get like, 36:55 you could, everyone wanted to buy a lot of Bitcoin 36:57 at that time too. 36:58 So if you could go to VCs and raise like $5 million, 37:00 now it's like you're buying tons of Bitcoin. 37:03 So this was like very attractive. 37:05 No one wanted to cross any of the companies 37:08 that had raised money, 37:09 especially Blockstream was enormously prestigious. 37:12 Gavin Andreessen tweeted, 37:15 I don't even know if you know who the Gavin Andreessen, 37:17 you know who Gavin Andreessen is, right? 37:18 I do, yeah. 37:19 Yeah, seems like a big guy, so obviously. 37:21 And he was like, he tweeted something like, 37:23 if this amazing company offers you a job, 37:25 take it or something. 37:26 And they had all this money. 37:28 They had all these prestigious people working there. 37:32 So I kind of just thought it would all work itself out. 37:35 And so the reality played out very weirdly. 37:39 So like 2016, we had problems in the community, 37:42 but we also, that was the origin of blockchain, not Bitcoin, 37:45 which is this insane distraction that IBM blockchain. 37:50 This also made people think, 37:53 this made people think like anyone who uses a blockchain, 37:56 who uses the word blockchain 37:58 or just talking about blockchain technology 38:00 is a complete fool and is the dumbest person in the room. 38:04 So this was also bad for sidechains 38:05 because the 2016 nonsense in the industry 38:09 that trained people to think, 38:10 okay, Bitcoin is the real thing 38:12 and all this blockchain stuff 38:13 is just a bunch of complete nonsense, 38:15 which basically again, like 99, 38:18 in that case, like 99.99% of that was complete nonsense. 38:23 But this trained people to just say, 38:26 it's Bitcoin, not blockchain. 38:29 That was the origin of all that. 38:30 So again, the toxicity had to ramp up 38:32 to fight off all of this invading junk, but it wasn't- 38:37 Sidechains got caught in the crossfire there, right? 38:39 Exactly, right. 38:40 And then everyone hated the miners from the scaling war. 38:43 So there was like kind of nothing to do. 38:45 And after winning, 38:47 this is a problem that we still have today 38:49 and it's deepened, I think only. 38:52 After winning the block size war, 38:55 the small block side has become very complacent 38:58 and overconfident. 38:59 They just think now it's just, 39:01 this proves that all we have to do is nothing. 39:03 And all we have to do is fight off the bad invading ideas 39:08 that are, we keep it pure. 39:10 We fight off what would the good, 39:12 what it trained people to think is the good thing we did 39:15 was we fought off the large block hard fork 39:17 and that's why the price went up. 39:19 And all we have to do is keep fighting away 39:22 all change with xenophobic 39:24 and anything that changes the protocol at all, 39:27 we have to fight it off. 39:30 And that's why the price went up. 39:31 And as long as we keep doing that, it will just go up 39:33 and then it'll eventually be whatever, $20 million a coin 39:36 and we'll have hyper-Bitcoinization. 39:38 So that's what people were trained to think 39:41 as a result of the scaling war, 39:43 which again, it was like, 39:46 the only thing worse than losing, 39:48 the only thing worse than winning 39:49 would have been losing again. 39:50 I don't know. 39:51 I have to come up with a clever phrase, 39:53 but just the fact that we had this scaling war 39:56 was horrible. 39:58 And it trained people to think that Bitcoin 40:08 should not be changed. 40:09 So people had to do kind of like a 1984 double think also 40:11 because the large block change was bad. 40:17 We fought it off. 40:18 But we did SegWit, which was a large block. 40:21 It was a block size increase. 40:23 So in 2017, we fought off SegWit2x, 40:26 but we activated SegWit, which was a block. 40:31 So there was this kind of like 1984 double think 40:34 where people started to get more tribal 40:39 and careers were ruined. 40:42 And careers were made. 40:43 Like I said, huge amounts of money were won and lost. 40:47 And the Bitcoin cash, all those people went over there 40:50 and they... 40:52 Yeah. 40:53 First everyone's making money, 40:53 then people are losing money. 40:55 So it's hard. 40:56 And then what happened, it was like all blur after that, 40:59 but I can give you more details. 41:00 But that's kind of what the setting of the stage. 41:02 This is probably like total information overload. 41:05 I hope you're enjoying the show so far. 41:06 Just a quick message from our sponsor, Voltage. 41:09 Voltage empowers engineers to integrate Bitcoin 41:11 and lightning network payments into their business stack 41:14 with an enterprise grade experience. 41:17 The team at Voltage is building the complete tool set 41:19 so that you can do more than simply spin up nodes, 41:22 but also understand and interpret your nodes data. 41:25 Their new product Surge gives engineers the capability 41:28 to quickly solve problems and optimize operations. 41:32 With node insights and visibility through time series data, 41:35 you get dynamic and complex insights 41:38 never available before. 41:39 You can get complete control with insanely fast onboarding, 41:43 advanced client side encryption 41:45 and zero management infrastructure, 41:47 making backups, networking and upgrades simple. 41:51 Get a free seven day trial today at voltage.cloud. 41:54 I just wanna make sure I understand 41:56 where you're coming from here. 41:58 Is it that you think in that block size war, 42:01 Bitcoiners were so focused on attacking the other sides 42:05 that they've kind of shied away 42:08 from working on new innovations 42:10 and working on new features and functionalities to Bitcoin 42:15 and rather they've taken the approach 42:16 of just defeat everything else? 42:19 Well, if I had to put on my little, you know, 42:23 like, I don't know, hat and just guess, 42:26 I think the real problem was that the community 42:29 was so full of like libertarians and stuff, 42:31 which is great. 42:32 Like I identify as basically libertarian, 42:34 most Bitcoiners do. 42:36 But people didn't believe in any kind of governance, 42:39 compromise, leadership, 42:41 because the centralization was bad too. 42:42 So no one had the authority. 42:44 So there was kind of a power vacuum kind of, 42:47 and why do I bring this up? 42:49 It's because what happened was you had two groups of people 42:53 and the community was growing. 42:55 And then it was mostly this technical disagreement 42:58 about the block size. 43:01 And the small block size was correct. 43:04 It was not worth the hard fork 43:06 to get a measly eight X improvement. 43:09 You gotta get, we need to get, 43:11 if you did the math and stuff, 43:12 we needed to get like, you know, 43:14 we need like a 10,000 X improvement. 43:16 So that eight X isn't even gonna cut it. 43:20 But you had very different people. 43:22 So for example, one thing that I had never considered, 43:26 I went to an event, it was like a private event, 43:31 and we had some Bitcoin core developers there. 43:33 And we had some people there from other companies 43:34 like Coinbase, Coinbase CEO was there, 43:38 CEO of Blockchain.info was there, 43:41 people were there from BitPay. 43:44 And we were, you know, 43:45 we had these little breakout groups and we had lunch. 43:47 And someone said something 43:49 that I had never really thought of before. 43:51 And there was someone from BitPay said, 43:53 when the blocks get full, our customer service, 43:58 the calls to customer service go up by, 44:01 they said something like, 44:02 they said something like 20 to 80 times as many as normal. 44:09 And I just never viewed it through that lens, you know, 44:12 because a lot of the technical people view it 44:14 through the lens of just like, what can the system support? 44:19 And it was kind of like obvious that this, 44:21 if you're a technical, it's kind of obvious 44:22 that the small blocker side was better. 44:25 But I just, you know, in your head, 44:27 you're kind of just thinking like, 44:28 why do these people care so much about 44:31 increasing the block size like quickly? 44:33 Like they wanted to like, 44:34 there was like you could plot on a graph, 44:36 the blocks getting filled up. 44:38 And of course it was noisy graph, 44:40 but they really wanted to move it up 44:41 so that the blocks were never full. 44:44 But you know, some of the other people who are more abstract 44:47 and more, you know, just technical people, 44:51 you're kind of thinking like, 44:51 well, the blocks like could always be full all the time. 44:54 Like, you know, like that's, 44:55 it seems like a weird thing to try and, 44:58 to try and be impelled by this directive 45:02 that they should never be full. 45:03 Because it kind of, you feel like, you know, 45:04 someone can always cheaply fill them up. 45:06 So then it kind of feels like, 45:07 I even made a post about this 45:09 where I had a graph of the US debt ceiling. 45:12 It's like every time we get near the ceiling, 45:16 we raise the debt limit. 45:17 So the debt limit doesn't really exist in practice. 45:20 Yeah. 45:21 So I made a post comparing that to that. 45:23 And I was like, 45:26 so to most abstract people, 45:28 that was a complete non-starter. 45:30 Yeah. 45:30 But I never really understood. 45:31 I was like, what is the motive? 45:32 What is like the motivation behind this? 45:36 And so it's yeah, yeah. 45:37 Like, you know, if the blocks are full 45:38 and people are trying to use BitPay or something 45:41 and they think they're doing the right thing. 45:42 They're like, okay, I'm part of the future. 45:44 I joined the Bitcoin community. 45:45 I got my Bitcoin. 45:46 Now I'm going to spend it at a store. 45:48 BitPay let you spend Bitcoin at like any store. 45:51 And the merchant would get cash the next day. 45:53 So it was like this amazing deal. 45:54 It was way better for everyone. 45:57 BitPay was a very famous company at the time. 46:00 So everyone was like, people are doing the right thing. 46:03 They're having a great time. 46:06 Yeah. 46:07 But then the blocks are full 46:09 so the transaction just never goes through. 46:11 And they're like, I don't understand. 46:12 You know, like this doesn't happen when you use Venmo 46:14 or when you use credit card. 46:16 It's not like it just doesn't go through. 46:17 If it doesn't go through, that means it's broken. 46:19 And then they call 46:21 and then the customer service gets overloaded. 46:23 So I kind of just never, 46:24 I was trying to like get an understanding 46:26 of like, why do people care about this and that? 46:28 And there was a lot of, 46:31 this is a really hard way of answering your question, 46:33 but it's just, I'm trying to reiterate 46:35 that the community had grown large and diverse 46:39 and people had become very different. 46:42 They were on different paths in life. 46:44 Like many of the elite technical people 46:49 were very resentful of people like Roger 46:50 because Roger was a non-technical person 46:53 who invested a lot of money in Bitcoin 46:56 and he owned huge amounts of Bitcoin. 46:59 And the technical people 47:00 didn't actually own that much Bitcoin. 47:02 But then Roger would go over and say, 47:03 well, you know, these people, 47:04 sure, they say they know a lot according to them, 47:08 but I am a stakeholder. 47:11 I invested in all these companies. 47:12 I invested in Bitcoin. 47:13 I put my life's work, I put my name behind Bitcoin. 47:16 So people had become very different. 47:20 It was just cross Dunbar's number or something. 47:23 And so people, and then people became, 47:25 some people, not most, but at first, 47:28 you know how it is on the internet. 47:30 People started to take little snipes at each other. 47:34 And that's why I say the lack of leadership 47:37 because there was no one to be the adult in the room 47:39 and say, stop doing that. 47:43 Instead, it just went, 47:45 they just got worse and worse and worse and worse. 47:48 I see. 47:48 Forever. 47:50 So I think there's a large number of Bitcoiners today 47:54 that would say, and you kind of alluded to this, 47:57 that we don't need anything else. 47:59 It's Bitcoin's fine. 48:00 Yes, it's a prevailing view. 48:01 We kind of forget everything else. 48:03 Yeah. 48:04 And I think you're making the case 48:06 that we can also accommodate other people's needs 48:10 or wishes or anyone who wants to do anything else 48:14 under the Bitcoin umbrella, but on a sidechain. 48:17 Can you talk to me about what the benefit 48:20 to a Bitcoiner may be of having a sidechain 48:24 that does incorporate, 48:26 let's say the privacy features of Zcash 48:29 or the Turing complete nature of Ethereum 48:33 under the Bitcoin umbrella and as a sidechain 48:35 rather than as a separate blockchain? 48:39 Yes, that's the essential point that you've hit on, 48:41 which is that this idea was designed, 48:47 the idea of like, should we have this new feature or not? 48:50 That's only rational if there's some kind of cost to you. 48:53 So the whole point of sidechains is to say, 48:55 if someone wants to do Turing complete 48:58 or whatever stuff somewhere else, 49:00 then there won't be any costs. 49:02 I'll never suffer as a user of Bitcoin Core 49:05 as a result of someone using the sidechain. 49:08 So again, that's something if you go to the 2015 post, 49:11 you see that's the whole design is designed 49:14 around the sidechains being optional 49:17 and not harming anyone who's not using them. 49:21 So that's the whole, 49:21 and there's a whole talk in the June 2016. 49:24 So, but you're asking about the benefits. 49:27 The benefits are, so like Zcash has a reusable, 49:31 everyone gets one Z address that you can reuse 49:34 and as many times as you like, there's no privacy leak. 49:38 If you shield the coins, then the sender, 49:41 the receiver and the amount are all hidden. 49:44 So you post one reusable address. 49:47 This is a constant problem. 49:48 So first of all, like the privacy in Bitcoin 49:50 leaves much to be desired, 49:51 but just it's really tough to get a user-friendly privacy. 49:56 That's what's really tough, but that's what Zcash has. 49:59 It has, everyone gets this address. 50:00 You get a static address. 50:02 According to some of the research I've done, 50:04 on just the darknet markets, you know, just for my own educational background research, 50:10 but they have this issue where someone will do phishing and they, 50:15 you're tricked into going to a different site that mirrors the site. 50:19 And then they have a fake deposit address and you deposit to the darknet market, 50:26 but it actually goes to the scammer and then you message them and then they say 50:31 you are on the wrong site or something. 50:35 But in Zcash, the site, whatever it would be, Silk Road 2.0, 50:39 they just have one static address that everyone knows. 50:42 So they just have to get that message across one time. 50:45 Then that problem will never happen again. And perfect privacy. 50:49 So many of the darknet markets have gone Monero only. 50:51 This is another thing that I was interested in researching because this was what 50:56 led me to Bitcoin in the first place. 50:59 And it would be, if there was a beginning of the end, 51:01 it would look something like this, 51:02 where Monero is because the darknet markets have real users and real people 51:08 solving a real problem. They've gone only Monero, 51:13 but then Monero is the ring signatures of Monero don't have as much privacy 51:20 potential in steady state as Zcash does. Because once you're in the pool, 51:24 you're mixing with everyone in the pool, the shielded pool. 51:27 And so there's this pool that just grows and grows and grows more user 51:31 friendly. 51:32 I'm also thinking about the benefits though, 51:35 to Bitcoiners who decide they don't want to participate in any of these new 51:39 features. Like is it transaction fees accrued to miners? Is that correct? 51:43 Yes, because of merge mining, 51:45 the layer one miners get the transaction fees from all the networks. 51:50 So by bundling everything under the Bitcoin umbrella, 51:54 you are effectively growing the pool of transaction fees that Bitcoin miners 51:58 get. Is that correct? Yes. Got it. 52:03 I would say the primary benefit though, is that as a Bitcoiner, 52:05 you don't have to worry about people campaigning to change. 52:08 If you want to keep change out and the sidechains are the best thing for you to 52:14 actually do, 52:15 would you actually want to make this one last change because then you can always 52:19 fight people off and they say, we really want this. And you can say, okay, 52:22 great. Do it on the sidechain. 52:24 And then you no longer have to worry about the hard fork like a Bitcoin cash or 52:28 you no longer have to worry about an altcoin like Ethereum. 52:31 Right. And so in a way, is it correct that you view this as, 52:37 you know, that if we look at the total crypto market cap outside of Bitcoin, 52:42 we're looking at hundreds of billions of dollars. 52:44 Do you view this as a hundreds of billions of dollars lesson that Bitcoiners 52:50 should be paying attention to that? Hey, 52:53 there's all this capital and interest and you know, 52:57 there's a whole group of people that many were once Bitcoiners, some were not, 53:02 but there's a group there that could have been under the Bitcoin umbrella, 53:07 could have been adding to the ecosystem and growing the pool of transaction fees 53:12 for miners, 53:14 but are now out and we now have to fight them because they're in a totally 53:19 different ecosystem. Whereas we could have just let them do their own thing, 53:23 not harm us on the Bitcoin main chain, 53:26 but let them be kind of an affiliated sidechain that is entirely opt in and 53:33 doesn't, 53:33 doesn't touch or doesn't interfere with the main chains censorship resistance. 53:42 Yes. Um, I think it's unfortunate. 53:46 So like you can look at lots of different things. 53:47 So you can look at the market cap is one thing that transaction fees is another 53:52 thing. Transaction fees paid, you know, um, you can, 53:56 those are like real customers who are, 54:00 they lose money when they pay the transaction fees. And this is, 54:04 this is some objective indicator of whether or not there's real customers there, 54:08 you know, because the transaction fees, you know, they could be fake, 54:11 but they probably aren't, you know, like, 54:14 and you can look at a graph of the Ethereum transaction fees priced as a dollar 54:20 total dollars versus Bitcoin total dollars. 54:24 And if you graph this, um, on a log scale, 54:28 you'll see that the Ethereum fees used to be one 1000th of BTC fees. 54:34 But this line has gone up on a straight line on this log scale where they're now 54:38 over a hundred times, 10 or a hundred times spending of the day. Uh, 54:43 on average has grown way past being equal and now much higher. 54:47 So they actually have more customers per se. Uh, you can argue about, um, 54:52 there's lots of, you know, qualifiers to that, but the, you, 54:56 you look at the trend and you just see that, 54:58 that all of those transaction fees would have been on Bitcoin and all those, 55:01 those are real users. It's an indication that there's real, real users. 55:05 And it's harder and harder to just dismiss that. 55:08 The bigger thing though is just why have any rivals at all? 55:11 Like why tolerate having Ethereum as a number two alternative to Bitcoin? 55:15 You know, why, why allow any story out there that might persuade people? 55:21 They say, Oh, Bitcoin is like this, but Ethereum has smart contracts. 55:28 It's all open source software. So why, why even allow, why not? And it's just, 55:33 it's more of that. It indicates something about Bitcoin. It's with Bitcoin. 55:38 You have to now it's no longer win-win with Bitcoin. 55:41 You have to choose to give up the Turing complete smart contracts or whatever. 55:48 You give up rich statefulness or, 55:50 and in exchange you get something really conservative and reliable, 55:55 but you could, but again, in the sidechain world, 55:57 you could have something that's even more reliable. And in fact, 56:00 I think you can even shrink the logical thing. 56:02 And I presented at scaling three, 56:04 you can shrink the layer one block size with sidechains because you have the 56:08 other, you have an infinity of block space on the, the layer twos. 56:12 So you can actually have something more conservative, more, 56:16 cause more sustainably conservative. Cause into the future, 56:19 you know that it will be less vulnerable to modification because there'll be no 56:23 one who wants to change the software. 56:26 So that'll be directed into the sidechain. 56:28 So you have something that's more conservative and you can also have the 56:31 Ethereum. And this used to be a mainstream view. 56:34 Like when RSK started in like 2015, 56:37 everyone thought they thought that was just the Bitcoin answer to Ethereum and 56:41 there just won't be an Ethereum. 56:43 But then all this stuff happened with the block size and in 2016. 56:48 And there was a couple of other stuff, things as well. 56:51 I can give you like a giant story about that. 56:54 I'm interested to hear more about RSK and it's, it's development. 56:57 Why do you think that did not become this Ethereum replacement or this will take 57:03 care of all of the Ethereum use cases? Why, why did that not happen? 57:07 To be honest with you, my guess is that Ethereum got big. 57:11 So Ethereum started and it was very small and it was terrible when it started. 57:15 It was like very kind of like fraudulently marketed. 57:19 And in 2015 it was like vaporware and they were like taking money from people. 57:22 It was very, probably like, I don't know, illegal, who knows, uh, you know, 57:26 in terms of like of it secretly being like a kind of security under the hood as 57:32 people have argued today. But like it didn't exist at all. 57:35 People were taking money, 57:35 people were working for free in exchange for like getting some Ethereum when it 57:39 launched. And there was like kind of weird stuff like that going on. 57:42 Whereas Satoshi just released it as a finished project. 57:44 And then like three days later it was like transacting with Hal Finney and it 57:47 worked perfectly and stuff. So that was a very big difference. 57:51 But when Ethereum was just an, a suggestion, 57:55 then the community was like, Oh, 57:57 how can we take this idea for ourselves when it was new? 58:00 But then in 2016 Ethereum started to get really big and this led to everyone 58:05 having the sour grapes. This is like I was saying, 58:07 the community became miserable. The community used to, 58:10 Bitcoin community used to be just very fun and there was no, 58:14 there was no like a thought police. Now they're everywhere. 58:20 Um, but the, and now you get canceled. Now you can get like, 58:23 you can get in Bitcoin, me too'd or something. But, uh, the, 58:28 you, it was like after 2016 it was like, we're in this miserable, 58:32 we're trying to figure things out with scaling. 58:35 We thought everything was going to go great, 58:37 but now we have these two communities that hate each other and they each, 58:39 they assumed that they would get their way for years and they built businesses. 58:44 They built personal brand. They have VC funding, 58:48 millions of dollars, all aligned with going one of the two ways, 58:53 small block, large block. And there's no agreement. 58:56 So in 2016 it was like agreement is hard. Uh, 59:01 everyone was worried about, um, 59:05 like doing the wrong thing. So then a theorem shows up. 59:08 And then I think what really happened was people were like, well, 59:11 it just became really, really common for people to say a theorem is a scam. 59:15 A theorem is stupid or whatever. We don't want that anyway. 59:18 And then as the theorem got bigger and bigger, it became more, 59:21 there's a cognitive dissonance. 59:23 It became more and more difficult for people to just do the most obviously 59:26 correct thing, which is to just steal. We should steal every idea, 59:31 you know, good, bad, or a fringe or rock solid. 59:36 We should just take all the ideas as long as they're, 59:38 as long as we have a way of trying them that doesn't hurt anyone else. 59:43 If you've got a user who wants to use something and you have a minor who wants 59:48 to mine the transaction developer who wants to make the software, 59:51 someone wants to pay the fee, someone wants to invest. 59:53 If you have all those people who want something, 59:56 it's going to be really hard to stop them from getting it. But yeah, 59:59 I think you make a really good point that you make about as long as it doesn't 1:00:03 hurt anyone else or as long as it doesn't interfere with anyone else with what 1:00:07 they want out of Bitcoin. 1:00:09 And I want to hear because everything you've said to this point makes sense 1:00:14 about why Drivechains and why, you know, 1:00:17 opt in sidechains can be useful to Bitcoin without interfering with the base 1:00:22 layer. 1:00:23 What is the best argument that you've heard for why these should not be on 1:00:28 Bitcoin? Why Drivechain should not exist? 1:00:31 Well, I think that the, the best argument is a very, uh, it's very obscure. 1:00:35 No one actually says it. Instead people, 1:00:37 the arguments that are popular are the terrible arguments, 1:00:41 which are misconceptions. 1:00:43 Just that blockchains are bad and, and 1:00:47 one thing is that people don't like the, they don't like what's SPV mode, 1:00:51 which is the so-called miners can steal critique, 1:00:54 but it requires a hundred percent of the miners to spend three months 1:00:58 consecutively on saying that one hash equals some other hat. So again, 1:01:02 the I what's concerning to me is the whole idea was designed around certain 1:01:07 goals in mind. 1:01:09 So the Drivechain idea was designed so that full node would never need to care 1:01:14 about what the sidechain was doing because that's the only way you get this 1:01:18 feature that the zk-SNARK stuff doesn't, 1:01:21 doesn't negatively affect someone's Bitcoin full node. 1:01:26 So it was designed not to look at those things and it was designed, 1:01:31 um, it was designed. So the SPV, 1:01:34 the SPV validation or the SPV proof or BIP300 or whatever you want to call it, 1:01:40 that has the flaw that if you do enough work, you can prove, 1:01:45 you can argue anything. So you can say, if I do enough work, then I'm saying, 1:01:50 I own all the coins on the sidechain. 1:01:52 So pay them out to me on layer one to this address. 1:01:55 You can then steal the coins if you do enough work. But that's, 1:01:58 that's because of that is why I designed BIP300 the way I did, 1:02:03 which is why it takes this enormous amount of time. 1:02:05 It's all focused on one hash. There's only like four hashes per year. 1:02:09 It's very easy to see if they don't match. 1:02:11 It's very easy to introduce a new one to error correct the erroneous hash. 1:02:17 It's very easy for lots of hashes to compete without there being any kind of 1:02:20 like denial of service. It's very easy for a skeptical observer to wait. 1:02:24 They have to like, they can only advance the hash like one unit at a time. 1:02:28 So it's like someone walking from Los Angeles to New York city. 1:02:32 They have to like slowly walk and you can decide, 1:02:35 you can wait in Kansas city, Missouri, in the center of the country. 1:02:39 And you can just say, I'm on vacation. And then if someone, if someone, 1:02:44 if someone calls you in Utah and they say someone's coming, 1:02:48 then you have plenty of time to finish your vacation, come back in Kansas. 1:02:51 So you'll be waiting for them when they, when they arrive in Kansas city. 1:02:54 And then you can, you can shoot them down or you can do something about it. 1:02:57 So the whole thing is designed, the miners can steal critique. 1:02:59 The whole design is designed to address that. 1:03:03 Now with the most important issue with miners can steal is also that the 1:03:07 individual user is opting into the sidechain. So they get the new feature, 1:03:12 but they also have this new risk, but it only accrues to them. 1:03:14 It does not hurt anyone else. But so people keep repeating this idea as if, 1:03:20 because you're right. The only thing is, is if it harms someone on layer one, 1:03:25 this is another issue of those that people have retreated then to the second big 1:03:29 critique, which is that it affects miner incentives, 1:03:33 but you see, 1:03:33 they just keep it so vague that this is unmeetable criteria because literally 1:03:37 everything might affect mining incentives. 1:03:40 If you broadcast a transaction today versus not, 1:03:43 if someone invents a natural gas flaring, if there's perm, 1:03:47 they do the permits, like they get the they can get the tax 1:03:52 rebate for that affects mining. It's like everything. So, and again, 1:03:57 that is why in 2015 I designed it this way, 1:04:00 because when I sat down to design it, I thought, well, I'm the mining world. 1:04:05 Everything does enormous turn. Everything's constantly turning over over there. 1:04:08 You know, you some go from CPUs to a six, 1:04:11 they get them going to the hydroelectric dam. 1:04:14 This idea that you could get power that was free. 1:04:18 That was an innovation that the height of the dam is only using 60% of the, 1:04:23 and you can buy the 40% and relocate mining there. 1:04:27 And the idea that you could actually get energy for less than zero with all 1:04:32 these complicated demand management schemes, you know, or they have the, uh, 1:04:35 you may be familiar with some of this, 1:04:37 where they have a situation where the power company builds at scale, 1:04:44 they build to hit a certain optimum production of electricity amount, 1:04:50 but the, the intraday variation is very high. 1:04:55 And electricity is not yet our battery technology is very inefficient as humans 1:05:03 only in the last like 20 years as it even thanks to like cell phones and like 1:05:07 whatever, maybe Elon Musk or something, who knows. But you know, 1:05:10 like has it gotten okay. 1:05:11 But it's usually like huge percentage of the electricity is lost when you charge 1:05:16 a battery and then D chart, you know, discharge it. 1:05:20 So because of that, it's uh, you know, it's very, um, 1:05:25 they have to build it so that they have the peak and they have to, 1:05:29 they have to make sure that it's always available. 1:05:31 A certain amount is always available for like whatever hospitals and things. Uh, 1:05:35 so they have these schemes where they'll pay the miners to use the electricity 1:05:40 in a very controlled way cause that way they have it smoothed out and then they 1:05:44 can build at scale. There's some, there's some size of the power plant that is 1:05:48 like, you know, the lowest cost per kilowatt hour or something. Yeah. 1:05:52 So that's my point is I always knew in 2015 it was obvious that mining is a 1:05:58 creative world. It was also, this is another issue is that with, um, 1:06:03 I think this is a misunderstanding in, 1:06:05 even in the expert technical Bitcoin community, 1:06:07 which is that people always thought of mining as being a part of Bitcoin, 1:06:12 but really miners are outside of the amount. 1:06:16 Miners are customers of Bitcoin. 1:06:18 They run a full node to figure out if they're being paid and to figure out how 1:06:22 to add the transactions into blocks. 1:06:25 But they run a full node in the same way that they would. 1:06:28 They get power in the same way they have staff there. 1:06:32 It's actually upside down. The miners are customers of Bitcoin. 1:06:36 They are not part of Bitcoin. And this is again, 1:06:40 part of this was this scaling war and the paranoia about the miners can block 1:06:45 SegWit activation. Miners can do things that we don't like. 1:06:48 So we have to regard miners with paranoia and suspicion. 1:06:52 So those are the critiques that I normally get. And again, 1:06:55 it is disturbing because on day zero I designed it with exactly those in mind. 1:07:00 So in one sense, it's, it just means that, um, 1:07:05 everything's going to be fine because what other people are worried about is 1:07:08 what I designed it to, but it also means that there was a disconnect. 1:07:12 Or I think what it really means is just that people are so paranoid that they, 1:07:15 they don't have an open mind to that. I, I actually is built, 1:07:19 it's built up from the ground up with all, 1:07:23 with exactly those things in mind. I think I, 1:07:28 to be honest with you, I think there really is no good reason not to do it. 1:07:31 I have waited for a long time and the, the, 1:07:36 cause you asked the question, like what's the best argument for not doing it? 1:07:38 But I don't, uh, 1:07:39 I don't think there is one relative to the risk of not doing it because the risk 1:07:43 of not doing it is, I think, uh, existential. 1:07:47 It would mean that it's possible for something else to just get big somehow. 1:07:52 And then if something else becomes the global internet money, 1:07:57 then the Bitcoin, you know, we'll go to zero and it would have failed. 1:07:59 And I think that's, even though that's very, very, very unlikely, uh, 1:08:03 I just don't understand why, uh, I, I don't, uh, 1:08:08 there is no real reason as far as I'm concerned, uh, not to at least try it. 1:08:12 Another thing that people don't seem to understand is you activate this by a 1:08:17 soft fork. And if something goes wrong, 1:08:19 you can just do a second soft fork later, very easily. That just says, 1:08:25 it's a soft fork that says the following, the protocol was, 1:08:29 whatever the protocol was on Monday, it is on Tuesday, 1:08:31 but we will never allow any BIP300 messages into a block ever again. 1:08:39 And now all that does that just basically just shuts it off. So you add it, 1:08:42 you turn it, you add BIP300 and then you shut it off. And the only, 1:08:46 the only cost is that you can never again, 1:08:48 send a message that has BIP300 formatted, but that is, that is de minimis, 1:08:54 you know, that's nothing. So you could, 1:08:56 we could try the idea and then shut it off if something bad happens. But again, 1:08:59 the people who think something bad has happened, they just, 1:09:02 none of them have read the November, 2015 posts. If they did, 1:09:05 they would see that I anticipated what they would say already. 1:09:09 And they didn't certainly didn't watch those giant presentations I made in 2016, 1:09:12 which again, some of those go way beyond what even I think anyone today 1:09:18 understands. So the one in June, 2016, 1:09:21 I described why it's actually a good thing to have the miners be able to steal 1:09:25 because it's possible to design sidechains that actually attack other chains 1:09:30 or even that like they will pay if a certain chain reorgs or something. 1:09:36 So it's possible to have unfriendly sidechains that that disturb each other. 1:09:43 But the, but if, if the sidechains are somehow unblockable, perfect code, 1:09:49 which is what some people seem to want, which is also not possible, 1:09:52 but this is like a zk-SNARK rollup type thing where people want the unblockable 1:09:57 magic sidechain. First of all, 1:10:00 it's not possible because the miners can always just stop because get you on the, 1:10:04 what's called the data availability problem, 1:10:06 which is they can censor all the messages from that chain or they can censor the 1:10:09 zk-SNARK proof. So it's not, it's first of all, it's not possible. 1:10:14 The miners always decide what's in the blockchain or not. 1:10:16 So the magic uncensorable chain is not possible. But even if it were, 1:10:20 this would be a terrible thing because you would then have to try to get into the 1:10:25 business of going like message transaction by transaction to see if they were 1:10:28 causing chaos in this. 1:10:30 Whereas in the Drivechain model you have this thing that I called categorical 1:10:36 control, which is like you'd have like the Zcash sidechain 1:10:40 and the miners would add it. And then the, you, 1:10:45 since the miners can destroy a sidechain, which again is very difficult, 1:10:49 it takes six months or something, but since they can and to steal from it, 1:10:52 you push all the problems to the upper level, 1:10:56 which is exactly where they belong because now the sidechain developer, 1:10:59 they're the ones who have to convince the user that your funds will be safe 1:11:04 here because this software is well-designed and the miners are going to want, 1:11:10 they're going to want to keep this around because this software will be 1:11:13 increasing transaction fees. It will be increasing the price of Bitcoin. 1:11:17 It'd be increasing the utility of Bitcoin. It'd be helping Bitcoin. 1:11:19 It'd be essential to Bitcoin's mission, in fact, 1:11:22 to have the Zcash sidechain. 1:11:25 And so that pushes it all. 1:11:27 So you give them a blank canvas to paint on, but then you say, 1:11:32 listen, this had better be good because you are under the gun. 1:11:36 It's actually good to have this, 1:11:38 this is this threat there and say the miners can just take an attack, 1:11:43 the SPV proof or whatever. And so, and again, 1:11:46 that only affects people who've opted in. So again, it's all lined up perfectly. 1:11:50 That was, that's by design is to have it only affect the people who opted in. 1:11:54 That is what means that you have to induce people to opt in. They, 1:11:58 they look over and they say, well, 1:12:00 maybe I'll put $10 in there today and we'll see how it works. 1:12:03 And then that's how you get evolution. 1:12:06 Okay. That makes a lot more sense to me. 1:12:08 I think I have a much clearer picture of where this Drivechain idea is headed. 1:12:13 I hope listeners do as well. 1:12:14 I want to shift the conversation a little bit to the work you're doing on layer 1:12:18 two labs. And I just want to highlight, 1:12:21 I was reading through some of your material I saw on your Twitter page. 1:12:25 I want to read through some of the roadmap and some of the things you've 1:12:29 outlined and get your perspective on where this company is headed next. First, 1:12:33 I'm just going to read, read something from your Twitter. It says, you know, 1:12:37 first we're going to focus on the BIP300 sidechain. 1:12:40 We have six sidechain designs in development already, 1:12:43 including two which are exact clones of Ethereum and Zcash, but Bitcoin only. 1:12:48 These allow for immediate global scale, 1:12:51 easy to use impenetrable privacy and total protocol flexibility. 1:12:55 You go on to say, second, we plan to improve Bitcoin's UX. 1:13:00 It must be easy to use Bitcoin the right way with one's own node and keys. 1:13:05 This will require a revolution in UX and education revolution. 1:13:09 We aim to bring about nodes will be useful and easy to understand. 1:13:14 And then you say, third, we are working on a few high risk, high reward problems. 1:13:18 These include prediction markets and a resurrected Namecoin. 1:13:21 These services, if they are successful, 1:13:24 will revolutionize media and telecommunications just as Bitcoin 1:13:28 revolutionized banking. Now there's a lot of interesting ideas there. 1:13:32 Maybe we can take those one by one, the, those three elements. 1:13:36 I want to first hear about why you've decided to build these six side 1:13:41 chain designs. Why six to start? And what's the, 1:13:45 what's the roadmap for rolling these out? 1:13:48 Well, I gave you the timeline. Is that, remember there, 1:13:50 I did the BIP300 software and then I had, there was no second radio. 1:13:55 So we built one that was just a, 1:13:56 basically we had Bitcoin core with BIP300 and then I had Bitcoin core as a 1:14:00 sidechain with just like nothing happening. So that was the first. 1:14:05 And then, um, 1:14:07 some like one with a larger block size, it's easy to make. 1:14:11 And then, uh, I was like, though, I was like for this to really, 1:14:14 for people to really understand what's going on here, 1:14:17 we needed the Zcash sidechain because Zcash was, first of all, 1:14:20 it was a code fork of Bitcoin back in the day. 1:14:23 I forked like off of Bitcoin version 12 or something. 1:14:27 So that was kind of interesting is that the shared same code. 1:14:31 So it's a little easier, but, but I was like, you really need a new feature. 1:14:36 You know, something that people would actually use. And Zcash, you know, 1:14:40 it has this privacy feature as the impenetrable privacy. And it also has, 1:14:45 it built in it. I don't know how many other people have realized this yet, 1:14:49 but if you have the, the shielded pool thing, 1:14:52 you also have a perfect mixer and I, that was something I called melt cast. 1:14:57 And I wrote a post about that and I had a video about that. So I was like, 1:15:00 we need the Zcash sidechain. So in 2020 I did a little contest. 1:15:05 So in 2020, I did a little contest about like why I paid some money. 1:15:08 I think it was like five Bitcoin if to whoever had the best Zcash sidechain 1:15:14 and someone won the contest and that was great. 1:15:17 And so that's, we got that one. 1:15:21 I mean, then we hired that person and and then we have something interesting 1:15:29 I don't know exactly how I want to explain all this in different, but in parallel, 1:15:34 we had the, this idea of cloning altcoins where you want to copy the latest version 1:15:40 of the altcoin, make a couple of minimal changes, and then it becomes a sidechain. 1:15:44 So you just take the latest, you start with the latest version of the altcoin code. 1:15:48 You know, you go to like, whatever, Ethereum's GitHub. 1:15:52 And then in parallel, we had the, this sidechain template that I made that was like Bitcoin core. 1:15:57 And it was like, it has all the logic for deposits and withdrawals, 1:16:02 the coins going back and forth. 1:16:05 And then we start with that. 1:16:07 That thing, someone made a joke version called train chain, 1:16:10 which is just Bitcoin core with all the photos replaced with pictures of trains 1:16:16 or pictures of me because I did this one video where I had a train metaphor 1:16:20 for the deposits and the withdrawals, like the train going from LA to New York City. 1:16:24 So someone did, made one that was a complete joke. 1:16:27 So then we had large block one, like I already mentioned. 1:16:30 And then we made a, we did make an NFT one because this was again, not too difficult. 1:16:34 And actually I think this is underappreciated because we made a 1:16:37 chain where you can issue your own assets. 1:16:39 So this is very much like counterparty. 1:16:41 This whole, I call it NFT chain, but that's only because I tried that, 1:16:46 that concept got big and I needed a way of explaining it. 1:16:49 It might, it's really called bit assets. 1:16:51 And this idea is a good idea. 1:16:53 And it was a Bitcoin idea long before it was an Ethereum idea. 1:16:56 We had colored coins. 1:16:58 We had a master coin. 1:17:00 Master coin was, you know, it was a Bitcoin thing. 1:17:03 And it sort of later became Tether, became Omni. 1:17:06 And then it became Tether. 1:17:07 But Tether was, you know, Tether was big. 1:17:10 Tether still is big. 1:17:11 So here's a Bitcoin idea. 1:17:14 And this, the bit asset sidechain is much better than the Ethereum, 1:17:17 all the Ethereum, ICO, NFT, et cetera, stuff, because we have the UTXO model. 1:17:22 And you can put the, if you make a new asset, you can put it in a multi-sig output, 1:17:27 or you can put it in a lightning channel or something and send it back and forth. 1:17:30 So it's kind of like a much, so we did. 1:17:34 So some people made like versions off of the template. 1:17:37 And then we cloned, once we got better at cloning things, 1:17:42 we upgrade, updated the clone to the latest clone of Zcash. 1:17:45 And then we redid the cloning technology to clone Ethereum, 1:17:48 because Ethereum is the number two competitor to Bitcoin. 1:17:51 It's more of just, it's, I think people misunderstand the, like my goal with this. 1:17:59 The goal is to just guarantee that no one is turned away. 1:18:04 We don't want to have any users turned away. 1:18:07 And I think instead, again, like I was saying, 1:18:09 people have been trained to think of Ethereum as a scam, 1:18:11 mostly because they, I think it's mostly sour grapes. 1:18:16 They just think we can't have that. 1:18:18 So it must suck. 1:18:20 But that's not reasonable. 1:18:22 What we want to say is we can have everything and there you go. 1:18:25 So that's just a better way of doing it. 1:18:28 Right. 1:18:28 And so now what are the technical challenges associated with implementing these sidechains 1:18:34 and getting this live in production for people to use? 1:18:37 Well, I think right now you can already download it and test it out for yourself. 1:18:42 And we're going to try to make that easier and easier and easier. 1:18:46 Because that's the key. 1:18:47 And we did have, we have like a nice little 1:18:50 graphical user interface that kind of tries to explain what's happening. 1:18:54 So people, it's much easier for people to understand what BIP300 is doing. 1:18:59 Each piece of software, if they run the software, it's always the best way. 1:19:04 And then BIP300 needs to be activated as well? 1:19:06 Yes, it's a soft fork. 1:19:07 When I proposed this in 2015, this was not a big deal. 1:19:11 Because in 2015, we had done like, I think, three soft forks in the fourth quarter alone, 1:19:17 the same time that I wrote it. 1:19:19 So the Bitcoin community used to do many soft forks. 1:19:22 We used to do at least like, we used to do like two a year for the first seven years 1:19:26 of Bitcoin's history. 1:19:29 Then with SegWit, SegWit and Taproot are the only two that have been in the last seven years. 1:19:35 And SegWit took a long, like something like 26 months and, or something like that. 1:19:41 And Taproot took something like 46 months from when it was first, January 2018 was like the 1:19:46 proposal and then has to be coded and activated until November 2021, right? 1:19:53 So it's been getting slower. 1:19:55 The soft fork has been a more and more arduous task. 1:19:59 But I think that's all the more reason to get this one in, because this one lets you 1:20:03 escape to other pieces of software, which can then rapidly develop. 1:20:08 You have one version that takes huge risks and adds all kinds of complicated, whatever 1:20:14 you want to put there. 1:20:14 You can have Jeremy Rubin's thing. 1:20:16 You know, you'd have like two, you could have even two versions of it. 1:20:18 But I think that's all the more reason to get this one in, because this one lets you 1:20:23 have two competing versions. 1:20:25 So you'd have like layer one, and then you could have like new Bitcoin core, liberal 1:20:31 new Bitcoin core, conservative or something, you know, and they would, this is the key 1:20:37 thing is that if you want, if you really want to have competition, because competition is 1:20:42 always the best for the user. 1:20:43 That's the difference between like capitalism and communism and like tyranny and like first 1:20:50 past the post democracy or something, is that the only one who can compete with, you 1:20:57 need, you need like to catch a thief, you need like another thief or whatever, you know 1:21:01 what I mean? 1:21:01 Like you need, the only people who can realistically replace the democratic administration 1:21:08 in the United States is the Republican administration. 1:21:11 And that's, that's too bad that the competition is only that far, but that's better than 1:21:16 just having a tyranny of one, one permanent king or something like that. 1:21:21 And so the reason why I bring that up is because you, if you want to have competition in the 1:21:26 Bitcoin software world, you have to have the two way peg because you don't want, you want 1:21:36 there to be as little a cost as, we want to only have people compete on the code itself, 1:21:40 the features and not on other things like who else is in the coalition, who else is 1:21:45 in the UTXO set. 1:21:46 And that is very, you know, that's the key. 1:21:50 So you want, it's all about helping the user. 1:21:54 And part of the reason is it, I think part of the reason why it's misunderstood is I 1:21:58 think because it actually does harm certain people in the Bitcoin community, such as people 1:22:04 who they just tweet for a living and they don't actually do anything. 1:22:08 Or they, if they are very prestigious, if they have a high rank in the software 1:22:16 hierarchy, then I'm reducing that to perfect competition. 1:22:21 So it's always better to be in a monopolist guild than to have to compete. 1:22:25 You know, like the Uber drivers, they have to compete. 1:22:27 They have to get their five-star rating every single time. 1:22:30 What they do is the same as what other people do. 1:22:33 Users have options. 1:22:34 They can get a different driver. 1:22:37 They can use Lyft instead of Uber. 1:22:39 So the leverage is very low and everyone prefers to be a monopolist where the customer can't 1:22:47 leave and they have to put up with the software no matter how people think it's too slow or 1:22:53 too fast or too liberal or too conservative or the blocks are too big or too small. 1:22:59 The user just has to sit there and take it. 1:23:02 And that is the problem that sidechain solves. 1:23:05 So that's why it's so important. 1:23:06 And now, but that's, I think that's also why there may be, they may be unpopular among 1:23:12 certain people because those people are doing the wrong thing. 1:23:15 Yeah. 1:23:15 And now it may also be that if I was building a protocol off of Bitcoin and now the sidechain 1:23:25 comes up and everyone starts to use it and people are asking, you know, this protocol 1:23:32 to move, migrate over to the sidechain instead as a sidechain, as a, as a independent blockchain 1:23:39 operator, I'd say, I don't, I don't want to do that because I have this monopoly. 1:23:43 Right. 1:23:43 As you, as you mentioned, it's easier, it's safer to be in this monopoly. 1:23:46 So do you think that inhibits the adoption of sidechains? 1:23:52 If all these other projects already exist, you mentioned Zcash, Ethereum, all these things. 1:23:59 What's their incentive then to port over to the sidechain where all of a sudden now 1:24:04 they have to compete directly on the merits of their code. 1:24:07 They don't have any other, they don't have any property that's theirs that they own 1:24:12 and they control anymore. 1:24:13 Yeah, you're absolutely right. 1:24:14 It was a much better idea in 2015 when I had it before these, all these things had a bigger 1:24:19 foothold. 1:24:20 So it was actually a better idea. 1:24:21 And even though it's still, I think probably the most important idea in Bitcoin today is 1:24:28 getting worse as those other places build, build out like a competitive moat or like 1:24:36 a resistance. 1:24:37 And in particular, you've highlighted a very important point that the sidechain coalition 1:24:42 is losing people often. 1:24:44 So like people join, they show up and they say, okay, I love Bitcoin. 1:24:49 I love sidechains. 1:24:50 Sidechains are great. 1:24:51 BIP300, they have a BIP300 flag. 1:24:54 But then after a while they may get impatient because they may say, I want BIP300 because 1:24:58 I want whatever it is. 1:25:00 Like David Vork did that SIA project, which is like a bit hard drive thing, which is a 1:25:06 very interesting project. 1:25:08 So you say, okay, sidechains are great. 1:25:10 But then you look around and you see, and I wanted the prediction markets thing. 1:25:14 So I could have said, instead of focusing on sidechains, I could have just launched 1:25:17 the prediction markets project as an altcoin. 1:25:20 And so I could have done that. 1:25:22 Now, as soon as you do that, now you're out of the sidechain coalition. 1:25:26 Now the last thing you want is after everyone like thumbs down your idea or waited on it 1:25:32 or whatever, they stalled it out. 1:25:34 Now you went and you actually did your idea and you built your community from scratch. 1:25:39 The kind of the last thing you want is to kind of like be stolen and taken back. 1:25:44 And you probably own a lot of the coin, you own a lot of whatever, you own a lot of Zcash. 1:25:49 You built this thing after the Bitcoin community failed to take an interest in your idea. 1:25:57 Then you prove that the idea would have been popular with some customers. 1:26:02 And now the last thing you want is for the sidechain. 1:26:04 So sometimes people don't see it that way. 1:26:06 Sometimes people do. 1:26:07 I think probably David Vork actually would see it that he would be excited to have the 1:26:11 project come back as a Bitcoin sidechain, for example. 1:26:15 But, you know, like the Ethereum people, it's pretty clear that it's not the case, right? 1:26:19 They would not want, they want Ethereum to just win and do the flipping over Bitcoin. 1:26:26 So it would have been much better to try and do this stuff earlier before those things 1:26:31 would get a foothold. 1:26:32 And if we did, we would live in a completely different world. 1:26:35 And all those people would still be Bitcoiners. 1:26:37 And you'd have even whoever is like a very toxic person. 1:26:40 Let's say you have a super toxic person presenting at Bitcoin Miami or something. 1:26:48 They would instead, they would have a different speech. 1:26:50 They would say something like all these projects, they would, first of all, the target of their 1:26:56 ire, their hatred would be like something like Hex or something, you know, or they would 1:27:01 say or Ripple or something. 1:27:03 Some other thing that was, they would say these projects are scams. 1:27:07 They're terrible. 1:27:08 And then they would say anyone who's serious does their project as a Bitcoin sidechain. 1:27:13 Just look at this boy genius Vitalik Buterin who made the Turing Complete sidechain, which 1:27:20 is now one of our biggest sidechains. 1:27:22 And there's no reason to have these. 1:27:24 So people who are today, the toxic people, they would be the same type of person, but 1:27:30 they'd have a different script. 1:27:32 And the script would include thinking of all these people, Roger Ver, Vitalik, they would 1:27:38 all just still be Bitcoiners. 1:27:40 They would never have left. 1:27:41 And so it would have been a better idea. 1:27:43 It was a better idea before. 1:27:44 As good of an idea it is today. 1:27:46 It would have been better to do it back then. 1:27:48 I hope you're enjoying the show so far. 1:27:50 Just a quick message from our sponsor, Stackwork. 1:27:53 Stackwork is a lightning-powered platform for generating high-quality transcripts of 1:27:58 all your audio or video content. 1:28:01 They combine AI engines and hundreds of human workers all over the world who are paid over 1:28:06 the lightning network to assemble these transcripts. 1:28:09 And that's what lets Stackwork create better, faster, and less expensive transcripts. 1:28:15 To see the results for yourself, you can check out my personal website where I host 1:28:19 transcripts for all my podcast episodes. 1:28:22 If you want to learn more about Stackwork, visit stackwork.com. 1:28:26 That is S-T-A-K-work.com. 1:28:29 Okay, I want to get into the second point that you made here for LayerTwo Labs. 1:28:35 It says, second, you plan to improve Bitcoin's UX. 1:28:39 That's kind of terrible, isn't it? 1:28:41 I mean, it's okay, but it's not the worst. 1:28:44 Well, so I want to hear more about what you mean by making nodes useful and easy to understand. 1:28:50 You can already download our software and check some of that out. 1:28:56 One thing that's annoying is the node doesn't explain itself. 1:29:04 So one thing, we put a block explorer in the node, first of all. 1:29:07 So that's kind of a neat thing where now you can check. 1:29:10 Right now, if you want to check, if you just want to see the blockchain as a human, 1:29:18 you have to go on the internet. 1:29:19 And now when you do that, they know that if you go to whatever it is, the block explorer, 1:29:24 blockchain.info, whatever, I don't know, I bring them up because they're so old, 1:29:28 but they're actually, you know, the block explorer is very nice. 1:29:32 And my favorite one, I got to show my favorite one, is this one, yog.io. 1:29:36 It explains what every single byte is doing in every transaction in every block. 1:29:41 It like highlights them with colors. 1:29:42 It's great. 1:29:43 We got to get that into our block explorer. 1:29:45 This color thing is really cool. 1:29:48 So check that out if you can. 1:29:51 Right. 1:29:52 And so you have to go there. 1:29:54 Now you contact their server. 1:29:55 They know your IP address. 1:29:56 They know which transactions you're looking at. 1:29:58 You're going over the internet, you know, you're going out in the open. 1:30:01 So this is not a big deal, but we put the block explorer in the software 1:30:04 so that you can see the blockchain. 1:30:06 And blockchain.info used to have this thing that they got rid of. 1:30:09 And then later they tried to put it back in. 1:30:12 But that I called, in my head, this is my nickname for it. 1:30:15 I call it the transaction fireplace. 1:30:17 But it's this cool thing. 1:30:18 It used to go on their site. 1:30:19 And as transactions came in, it would like scroll them through, I'd say. 1:30:24 And you could just watch. 1:30:25 You could just have it open in your thing. 1:30:27 And you could just watch people transacting on the Bitcoin network. 1:30:30 And then a new block would come in. 1:30:31 And it would do that. 1:30:32 So we put that in the node. 1:30:33 We put that back in because it's cool to see. 1:30:35 You have the node. 1:30:36 And you can see, oh, this is how much Bitcoin people are sending. 1:30:40 And this is the fee they're paying. 1:30:41 And you just have this little thing. 1:30:42 And you can just see things. 1:30:44 Another thing we did is this idea of the hash calculator. 1:30:47 If you're a technical person, you have to take these hashes. 1:30:50 Now, of course, if you're a real programmer, you're programming in the command line. 1:30:54 And you have databases and things. 1:30:57 But that is a little too much work. 1:31:01 That's like taking out the heavy artillery. 1:31:04 Sometimes you just want to see what is the hash of, you know, what if I type in a word like Apple? 1:31:09 What is the hash? 1:31:10 Or if I paste something, I paste a raw transaction, the Bitcoin software says, 1:31:16 the Bitcoin software says, you're told all this stuff is happening. 1:31:20 Like you're told that Bitcoin has blocks that are made of a vector of transactions. 1:31:25 And that if you hash the transactions a certain way, 1:31:28 you get this hash Merkle root, which is in the block. 1:31:30 You're told all this stuff. 1:31:32 But a normal person has no way of understanding what any of it means, if anything. 1:31:36 So let's say you have the transaction. 1:31:38 You have the raw hex. 1:31:40 You have the transaction. 1:31:42 And you put it on your clipboard. 1:31:44 You'd want to just take the hash. 1:31:46 You take what is the hash of that to see that it matches the transaction ID. 1:31:48 You can see for yourself that it does. 1:31:50 You can kind of learn about Bitcoin in the privacy of your own computer. 1:31:54 So we have this hash calculator, which I really like. 1:31:56 And I am a big fan of this. 1:31:57 And this is nothing. 1:31:58 Now, I'm not going to win the Nobel Prize for this. 1:32:00 But it's just this thing. 1:32:02 You open it up. 1:32:03 And if you type, it gives you all the hashes. 1:32:06 And every single time you type a keystroke, it changes the hash for you. 1:32:09 So you can now see, you see exactly what a hash is. 1:32:12 And you can view it different ways, binaries. 1:32:15 Most people struggle with this idea. 1:32:18 But if you just play with the hash calculator for seven seconds, you'll learn exactly what a hash is. 1:32:24 And you'll never forget. 1:32:25 And you understand why the different hashing algorithms are different. 1:32:29 And we do all the ones for you. 1:32:30 We do double-shot 256D. 1:32:32 We do one-shot. 1:32:34 We have different little settings. 1:32:36 So these are things that we already have that you can already download. 1:32:39 And this is only the beginning. 1:32:40 I plan on doing lots of more stuff. 1:32:43 We have something called CoinNews. 1:32:45 This is a weird idea. 1:32:47 This is how I think the community has gone in the wrong direction. 1:32:54 But CoinNews is this fully cosmetic thing that has no change to the protocol. 1:33:03 There's no change to the blockchain. 1:33:04 It's just a user interface thing. 1:33:07 And it displays part of the blockchain in a certain way. 1:33:14 But I think this has the potential to be revolutionary. 1:33:18 And so what it does is, if you like, you can broadcast this CoinNews. 1:33:23 And then you pay a transaction fee. 1:33:25 And what it does is CoinNews will scan the entire Bitcoin blockchain 1:33:31 for anything that's formatted a certain way. 1:33:34 The CoinNews style. 1:33:36 And then they have a little prefix, which is like categories. 1:33:41 So we have US Weekly. 1:33:46 And we have Japan Weekly. 1:33:48 Because people who speak different languages, they don't want to collide with each other. 1:33:52 So this is for everyone's mutual convenience. 1:33:55 And then once it sorts that out, and then the weekly ones last seven days. 1:34:01 And then you can have something else. 1:34:03 One day or less a month. 1:34:05 You can have that's configurable. 1:34:07 And once it sorts all these out, it displays the op return text in the human readable ASCII. 1:34:18 And it sorts them by the transaction fee paid. 1:34:22 That's the key. 1:34:23 So if you want to get the news out there, you just outbid whoever is on the top. 1:34:28 And then you get this thing. 1:34:29 And then every Bitcoiner who's running the node can see the news. 1:34:32 And then everyone knows that everyone else saw it as well. 1:34:34 So this is enormous. 1:34:35 This is a game theoretic implication. 1:34:37 That it's what they call common knowledge. 1:34:39 Which is a technical term in the game theory world. 1:34:42 It doesn't mean what it means. 1:34:45 It means that you know something. 1:34:47 And you know that everyone else knows it as well. 1:34:50 And this is enormous significance. 1:34:52 Versus what's called mutual knowledge. 1:34:53 Which is like you know that you're a spy. 1:34:56 And they know. 1:34:57 Or it's like you know that your wife is cheating on you. 1:35:01 And she knows. 1:35:02 But you don't know that each other knows yet. 1:35:05 So this is like a dramatic situation. 1:35:07 But common knowledge is when everyone knows that everyone knows. 1:35:10 So often like a dictatorship. 1:35:11 Everyone will secretly hate the dictator. 1:35:13 But they don't know how much support there is. 1:35:16 So they just stay home. 1:35:18 But then there's an inflection point. 1:35:20 Something big will happen. 1:35:21 Like that one in Iran. 1:35:22 That one girl dying. 1:35:24 And everyone knows that this has crossed some kind of line. 1:35:28 This is so outrageous. 1:35:29 That they know that it upsets them. 1:35:31 And they know it's very likely to have upset a huge majority of people. 1:35:35 And then this is. 1:35:36 So this is enormous. 1:35:38 So this is called coin news. 1:35:39 It's a simple thing. 1:35:39 Doesn't change anything. 1:35:40 If you don't like it. 1:35:41 Then you don't. 1:35:42 You won't even see it. 1:35:43 If you don't run our software. 1:35:44 But we have like. 1:35:46 People like the operative term graffiti. 1:35:47 They like to put stuff in there. 1:35:49 So it's like this is just some. 1:35:50 These are some examples of things that we've already done. 1:35:52 But I plan to go even further than that. 1:35:54 We want to have it so that you can easily make a wallet. 1:35:56 Because right now you just click a button. 1:35:58 And it gives you a wallet. 1:35:59 But we know that from the Snowden leaks. 1:36:03 That many adversaries have compromised. 1:36:07 Like random number generation. 1:36:08 And things like that. 1:36:09 So we want to. 1:36:10 It's going to be very easy to just generate. 1:36:12 You shuffle a deck of cards or something. 1:36:14 And just type in 20 or 30. 1:36:16 You just fill out the cards. 1:36:18 You just type in 20 or 30 cards. 1:36:20 And again it'll be a situation. 1:36:22 We already have a version of this in our software. 1:36:26 Where you. 1:36:27 Every keystroke recalculates the wallet. 1:36:30 So you can also audit it. 1:36:31 You can call. 1:36:31 You can call up a friend. 1:36:32 Or you can have two computers next to each other. 1:36:34 You can type something in. 1:36:36 You know you type in apple. 1:36:37 Or you type fish 123 space. 1:36:39 And you can see that they behave the same way. 1:36:42 So now you know that it's working. 1:36:43 You know there's a connection. 1:36:44 Between the seed entropy that you type in. 1:36:48 And the wallet that comes out. 1:36:50 And of course it gives you the 12 words. 1:36:51 So that you don't need to memorize the cards. 1:36:55 It gives you the 12 words to restore the same wallet. 1:36:58 And the other thing is we have bit 47. 1:36:59 I can give you a huge list. 1:37:01 You know of like. 1:37:01 There's a huge. 1:37:03 The Canadian truckers I mentioned in the post. 1:37:07 And that was a big wake-up call. 1:37:10 Because that's like pure bitcoin. 1:37:14 That's like the direct center of bitcoin's. 1:37:17 Arisen detra or whatever reason for existing. 1:37:19 So. 1:37:22 Why did we screw that up so badly? 1:37:24 That none of those people got their money basically. 1:37:27 And the Canadian government like confiscated the funds. 1:37:29 And people didn't know how to send them money. 1:37:31 It should be very easy for people to post. 1:37:34 Because it confiscated addresses. 1:37:36 So bit 47 was this idea of people would just have these codes. 1:37:40 And you would just message them. 1:37:44 The first transaction of them would have a little message. 1:37:47 That would link the two of you. 1:37:48 And then you'd have an infinite number of disposable addresses. 1:37:51 That under the hood. 1:37:52 The software would take care of everything. 1:37:55 And they would get the money. 1:37:57 And it would be a new address. 1:37:58 And no one would know. 1:38:00 The only problem is it makes the first transaction like 20% larger. 1:38:04 And people. 1:38:05 Some people in the bitcoin community were like. 1:38:07 This is spamming the blockchain with non. 1:38:12 Transaction data. 1:38:13 And we have to filter all this out. 1:38:15 But I don't have that view at all. 1:38:17 I think we want everything. 1:38:18 We want block space demand to go up. 1:38:19 And we want everyone to be using it for everything. 1:38:22 And especially for something that makes it easy. 1:38:24 To privately send. 1:38:26 To do banking basically. 1:38:27 Which is what the whole point is. 1:38:29 So we dropped the ball on all that. 1:38:32 So those are just some. 1:38:35 And a lot of that stuff we have already. 1:38:37 You can download our software. 1:38:38 And you can see for yourself. 1:38:39 You can see for yourself what I'm kind of aiming for. 1:38:43 And then you can decide like. 1:38:45 Is this one thing that. 1:38:48 I hate to keep rambling on in here. 1:38:49 But as you can tell. 1:38:50 I'm kind of passionate about this issue. 1:38:51 Which is like the bitcoin core is going to change their. 1:38:57 The QT GUI. 1:38:58 Because it's not very good. 1:39:00 And it does nothing like wrong with it per se. 1:39:03 But like the transactions tab is like. 1:39:06 Terrible. 1:39:07 So when I was making the BIP300 software. 1:39:10 Just for my own use. 1:39:13 I would like start changing things. 1:39:15 And deleting things. 1:39:16 And moving things around. 1:39:17 And then I just like. 1:39:18 It's a lot better. 1:39:19 Like one thing that I came up with. 1:39:21 It's just again. 1:39:22 I'm not going to win the Nobel Prize for this. 1:39:23 But the sats. 1:39:25 It's eight digits. 1:39:27 So I put a comma. 1:39:29 The four. 1:39:29 It's four digits. 1:39:30 The decimal point. 1:39:32 Four digits and a comma. 1:39:34 And then four digits. 1:39:35 And that was great. 1:39:37 And then people would notice that. 1:39:38 And then they'd be like. 1:39:39 This is amazing. 1:39:40 And you know. 1:39:40 And I was just like. 1:39:41 Well okay. 1:39:42 Like I was kind of. 1:39:43 I have two minds. 1:39:44 About like should. 1:39:45 Should I keep putting time into this. 1:39:46 But I honestly think that. 1:39:48 I think that. 1:39:49 I think it's. 1:39:51 Right now people are impelled. 1:39:53 Or I double use that word. 1:39:54 But people are persuaded to use. 1:39:57 The. 1:39:58 A full node. 1:39:59 Out of a kind of guilt. 1:40:00 And shame. 1:40:01 That is our current strategy. 1:40:03 It's like. 1:40:03 Do you run a full node. 1:40:04 And if you don't. Then people make fun of you. But I don't think that's. I think that's you know. The node should be. People should use the node. Because they think the node is really cool. And they like. They like to see the block chain. They like to see that their transactions are confirmed. They like to see. They like to see what other people are seeing. This is a. So that's a. That's my big answer for that. I think we've got a long way to go. Even though we've already done a lot. And I think. 1:40:31 I think a lot of that will eventually be. Accepted as a. Best practices. Right. So for example that wallet generation thing. Right now you just click a button. And they say it's random. And when you may generate a wallet. You have no way of knowing it all. I see. Now I want to get into the third component there. Some of the high risk high reward problems you guys are working on at LayerTwo Labs. And you talk a bit about. Prediction markets. Resurrecting Namecoin. And. 1:41:01 You mentioned that if these are successful. They'll revolutionize media and telecommunications. Just as Bitcoin revolutionized banking. Now this is a very big statement. Talk to me about how some of these projects are working. 1:41:15 I've already loaded up the prediction markets thing. Because I'd already done all this work. So I can. That one's easier for me to. If you go to bitcoinhivemind.com you can see all the stuff that I put. I have papers. I have a cool 20 minute presentation. 1:41:27 Where I explain the potential. And the potential is that with prediction markets. The prediction markets are a way of getting everyone to. Getting all society's knowledge in one place. And then broadcasting it out to everyone. So. 1:41:41 If you think that something is. So for example. You can go to electionbettingodds.com right now and see who's likely to win the Super Bowl. And people bet. And there's a certain percentage. And you can also see. This is a very enlightening task because. 1:41:57 On the various prediction market sites you can see who's likely to win the presidency or the nomination. And if you look at this betting data. You'll see that these decisions are being made long before they reach the public. Which is. It makes sense if you think about it. 1:42:13 Like there's no way that you really just decide like two weeks before election day or something within the primaries. I mean it must be a long career in the party. But it's kind of just something you said clear to you like how early they start vetting the list of who is seriously plausibly could win or something like that. 1:42:35 But the potential with prediction markets is these conditional prediction markets where you can say. If this person is elected. What is the unemployment rate going to be? What will the GDP be? What will the value of all the land in the world be? Or within the country? 1:42:54 What will such and such. How much tax revenue will be collected? How much whatever. So if you have that then you can compare the two people. This is exactly like the fork futures idea. You can compare the two candidates or really in the case of the United States the two parties. This is a better way of doing it. You just say you have the Republican Party versus the Democratic Party. 1:43:15 And you can just say look here's what you're going to get if you the Democratic candidate. The government is going to spend this much. The GDP is going to be this. The unemployment rate is going to be this. Whatever you care about you just make markets about it and then you have two columns basically before election day on what will happen over the next four years if you pick one or the other. 1:43:38 And so this is huge because usually the margin of victory is very small. The races are close. Huge numbers of people don't vote and then when you ask them why they don't vote they say because they don't know how to tell which candidate would be better. So you only need a very small number of people to. And again over time the prediction markets will establish there because the way they work is if you think any of the prices are wrong you can make money by doing the trade where it will be right. 1:44:02 So over time they'll continue to correctly predict who will win like the Super Bowl and who will win the Academy Awards and things like that. So over time it will gain some credibility. I have like a million thoughts about prediction markets. So just like an infinite amount of stuff over there. 1:44:22 We can save that for another episode. 1:44:53 You know like you need all this stuff. You got to type it in. Then they got to type in the credit card blah blah blah. If in the world with the Namecoin sidechain it would be something like you would just go and there's no more logging in either with a username and password because there's everything would log in through the Namecoin sidechain in my in my dream world which is the only thing stopping it is you know that the viewers like you getting psyched about it because. 1:45:20 So you go to any site and you just type in you have you own a name like I'm you I whatever like I own Paul that bit or something. They don't have to end in that bit but they started that Satoshi started that convention and I think it's good enough. 1:45:35 You know so so yeah I have I have Paul starts that bit or whatever and I go to whatever it is Delta Airlines and you never log in anyway. You just type in Paul starts that bit. They the little it sends a little notification to your phone or whatever has the private key. 1:45:54 It just says it gives you a little pin number like 6 4 5 1 2 whatever. And then so you never have to remember any password ever again. You just need your 12 words for your Namecoin ID which could be like the same crypto ID for everything. 1:46:08 And then you type in the pen and you log in. You buy the ticket. When you go to the airport they you can look up everything from your name. They can go to global entry and look you up over there. They don't know you know you don't need to remember anything. 1:46:21 And you know it's very similar to the ideas of TBD and slash tags when you talk about the identity being tied to keys. 1:46:31 I think that a lot of people have a lot of people have glimpsed this idea over the it's not again it's not like if this idea is old it's from 2010 like authentication is something that people talk about a lot. 1:46:44 So I don't think that again like I have any particular monopoly on this idea. In fact I'm sure people have some better kind of version of it but lots of people have done it like the Microsoft did. 1:46:59 But that is that doesn't those aren't human readable as far as I remember. If theorem theorem has like an E.N.S. theorem system or something. Bitcoin SV did something like this. 1:47:09 So the key thing to focus on with that is the fact that so many independent people give it their attention or try it. That's what makes it that's what proves it's such a great idea. 1:47:21 People really want it. It's a good idea. People are interested in it. So we should do it. And it's great. 1:47:26 You know another feature is you have this log in which again it's very different than like log in through Facebook or something because you own the key. It's your you actually own it forever. 1:47:36 Yeah. You have a situation where you own you have this screen name on Reddit but then Instagram comes out or then tick tock comes out. 1:47:47 Well now you have to kind of go over there and make sure that you you reserve it in the current system. But in the Namecoin system you always have your one identity is your digital identity and they you don't even need to do anything. 1:47:59 As soon as you go over there they know how to query. They hit the Namecoin blockchain and they they send the ping out to your device and you you decode the pin or however you log whoever you want to log in. 1:48:12 Yeah. So it migrates across platforms and then you get full control as the key owner of who you give the data to. 1:48:18 And you have the same name. So a funny example I give sometimes is this guy does a chess YouTube and in the bottom he has to list all of the all of his screen names and some they're mostly the same. 1:48:31 But sometimes they're not like I like his Facebook one is like a little different. And then it's kind of like the fact that you have to list them all at all. 1:48:38 Mm hmm. That's the problem. You know. And then to let alone we can talk about like deplatforming which is not possible now because you can always message someone on the Namecoin blockchain. 1:48:50 So that's expensive. So again this is where people get confused because they say like we're gonna put social media on the blockchain. 1:48:56 That's a terrible idea because just you know it's a completely different scale. But as long as you have the ability as a last resort to use social media like features in the blockchain context where everyone has the same view. 1:49:16 Everyone has validated nodes that process the same blocks. As long as you have that threat they can't really deplatform you easily because if they kick you off of all these things you can message everyone and say listen my new Twitter account is this or like whatever or I have moved to whatever. 1:49:35 And then they can even have their software just automatically like re follow you or something because they always know it's you because you have the same name you the same public key the same private key. 1:49:46 So that you saw the software will always know that you're talking to the real Jordan Peterson or whatever. 1:49:52 So the potential is enormous actually is enormous and you can see how this is a revolution because it means that you could even have people who they are Internet activists and no one knows their real identity and they have they have a reach and they have the ability to like log into Twitter and they have the ability to like make tech talk videos and no one actually knows who they are even. 1:50:14 And they can get out messages people spam is a big issue but spam was one of the original use cases for Bitcoin where if you want an introduction to someone you can send you send fifty dollars or whatever their software asks for and then they get the message in the special paid message zone. 1:50:33 Yeah now that's a huge that's a revolution all by itself because sometimes you need you want to be able if someone really needs to reach you you want them to be able to reach you but you don't have you have to deal with spam. 1:50:45 So how do we deal with spam right now as we just give it all to Google. 1:50:48 Google does everything. 1:50:49 Google is reading through all of your email. 1:50:52 Every single username password thing has a forget your password link that just lets your email reset the password. 1:50:59 So that's the second way in which Google just can impersonate you or anyone who gets your email. 1:51:06 So and then how do they counter that. 1:51:09 Now when you log into your email they are tracking you for your own protection. 1:51:15 You know like if I if I'm traveling and I try to log in I'm on my desktop computer at home and then I take my laptop and I go to the airport and then I fly to a different country and then I haven't been using the laptop in a while. 1:51:29 I open the laptop I connect to the Wi-Fi and whatever Singapore and then I try to log into my email. 1:51:34 Google will not allow me to log in because they think so. 1:51:37 And then they send me a message they say someone has your password. 1:51:40 You know it was me. 1:51:41 And then I type in the password the secondary password like the backup email. 1:51:45 I've had times when I'll do all the steps and they'll be like identify this blah blah blah text. 1:51:51 They text my phone. 1:51:53 I had a phone at the time made by Google. 1:51:56 I would do all the steps and they would say we're not letting you into your email. 1:52:01 You know which is like in one way that's impressive how I'm sure it must be very difficult for adversaries to break into my email. 1:52:09 But so that's nice in one way. 1:52:11 But you know like when you're trying to read your email it kind of sucks because now your emails off. 1:52:16 Right. 1:52:17 And you're relying on Google rather than cryptographic keys that you own. 1:52:21 Exactly. 1:52:22 Maintain your identity. 1:52:23 And you could set your own paranoia level if you had more control. 1:52:26 You could say you know if you had more. 1:52:29 So this is why it would be it would be a revolution if we could get stuff like that through. 1:52:34 I mean the prediction marketing alone is this. 1:52:37 We have people have a concern over what's persuadable. 1:52:40 So that's why people are focused on like what does Fox News say what does CNN say. 1:52:45 But if people got if the if the disputes over who to elect were resolved in this market based way then we would be free to use television like for entertainment only. 1:52:56 And it would be healthier for everyone. 1:52:58 You know so this is this is obviously. 1:53:00 But that's why I say these are very these are big long shot type things. 1:53:04 Yeah. 1:53:05 I want to finish off with one discussion real quick around lightning because this is a lightning podcast. 1:53:12 And one of the people actually in the in the document you had sent me about Drivechains and the favorable opinions of them was Lalu at Lightning Labs CTO who said that smart contracts and lightning are complementary to one another. 1:53:27 I want to hear a little bit about how these are sidechains and lightning are complementary to each other. 1:53:34 And I want to hear more about how these two technologies can work together to. 1:53:39 We've talked a lot about adding features to Bitcoin. 1:53:42 How can they help scaling Bitcoin throughput. 1:53:46 Well they're very different. 1:53:48 And so that's what helps them work together. 1:53:50 I think like in particular to onboard someone to the proper lightning network you need to. 1:53:56 They need to open a channel on layer one which is a multi signature output on layer one. 1:54:00 So you must broadcast messages on layer one in order to join the lightning network. 1:54:05 And that means the bottleneck for the lightning network will always be the onboarding. 1:54:11 And every time you need to change it add remove alter a channel. 1:54:16 You need to broadcast to layer one. 1:54:18 So there's actually a kind of a tight relationship. 1:54:21 The channel construction and the layer one block size is a very tight relationship. 1:54:26 Although once you have the channels of course you have unlimited freedom to send amongst the whole network of channels. 1:54:35 But I think. 1:54:37 So this is like a theoretical. 1:54:39 But I think that. 1:54:41 So one one interesting idea is that the lightning network can span different block chains easily. 1:54:46 So you have if you have Alice and Bob and they are connected on lightning network on layer one. 1:54:52 And they're also connected on sidechain number three or something. 1:54:56 You also have Alice and Bob. 1:54:58 Since it's the same Alice. 1:55:00 Or in the same Bob. 1:55:02 You know you really only need one. 1:55:03 So you have Carol and you have this big. 1:55:05 That payment can go through. 1:55:08 It can go across the chains actually. 1:55:10 This is the same person. 1:55:11 Alice loses five dollars here as long as she gets five dollars and ten cents there. 1:55:18 But I think the big area is the onboarding because with the sidechains you have an unlimited layer two block space. 1:55:25 And that means you can easily open the channels as many channels as you want there. 1:55:30 Which means you can onboard people to the lightning network. 1:55:34 The chief advantage of the lightning network, as I see them, are like the immediate speed and of the confirmation and the privacy of being off chain. 1:55:44 The sidechain is really the reverse of that. 1:55:46 A sidechain transaction probably slower because best case scenario. 1:55:50 Really, you have the merge mining 100 percent of the time and it's 10 minute block times are the same. 1:55:56 So such things are slower and it has unlimited onboarding capacity. 1:56:03 Lightning network is faster and has a limited onboarding capacity. 1:56:06 So I think that's probably the good synergy. 1:56:08 But I think a second thing you'd want to point out is that the new features like any prevails, you know, sick has no input, stuff like that. 1:56:17 If you want L2, these other new things that you might want to do. 1:56:22 The sidechain could just do them quickly and you could try them there and you either experiment with them there and use them there or experiment with them there as a demonstration of how to bring them safely to layer one more quickly. 1:56:35 I think really the bigger thing is both lightning and sidechains. 1:56:42 We want to get people to actually use the technology for something. 1:56:46 And it's just better if something is one size fits all. 1:56:51 It's better if something is useful in many contexts. 1:56:54 So, for example, you have a funny example I give is like Ross Albright is a hypothetically he is he's running Silk Road from his apartment as a super strategic Bitcoin guy. 1:57:12 But then he's going to go down the street and buy coffee. 1:57:18 There are very different Bitcoin transactions like one. 1:57:21 The privacy is really important. 1:57:24 The other is not so important. 1:57:26 And so you want it's actually the way I see it is it's much better if you have a tool that can take many shapes. 1:57:34 So you say maybe I use lightning today. 1:57:36 Maybe I'll only use the large block sidechain today. 1:57:38 Maybe I use lightning on the large block sidechain Wednesday because the transactions are actually all very different. 1:57:45 Transactions are really different. 1:57:47 I think people don't appreciate that. 1:57:51 Like if you send money like let's say you buy something online when you buy something on Amazon. 1:58:00 They don't you know they're shipping your physical product. 1:58:03 So if you they can do zero conf on that doesn't have to be lightning per se. 1:58:09 Right. 1:58:10 Because if you if you cancel the transaction or it doesn't go through or you double spend them or you replace by fee them. 1:58:18 They are they're just interpreted as the order being canceled and they just won't ship you the thing. 1:58:22 So that but that's different than in the coffee situation. 1:58:25 You know when you buy coffee you're going to walk out with it. 1:58:29 People have different arguments about OK you're on the you're on the security cameras at Starbucks. 1:58:34 So they'll they'll call the police and arrest. 1:58:36 But this is my point is it's all it's all a very different spectrum. 1:58:39 Yeah. 1:58:40 So I'm trying to say that's what I'm trying to paint this picture of like the transactions are actually very very different. 1:58:45 And then you know if you buy something on dark net market it's you. 1:58:50 None of the people trust each other. 1:58:52 So it's a very different type of a thing. 1:58:54 But it may not need to be instant. 1:58:58 So you may that's the Zcash sidechain maybe. 1:59:00 But that's my point is it's like it's better for for each technology. 1:59:06 It's better to have a wide suite of complementary technologies because that we want people to just be in the Bitcoin umbrella. 1:59:16 But yeah to give a concrete answer to your questions I think the onboarding is the big Achilles heel of lightning. 1:59:22 But the sidechains could address it. 1:59:25 I see. 1:59:26 I don't know if I don't know if that will that will be what people like you know I think. 1:59:30 But we'll see. 1:59:33 All right. 1:59:34 I want to finish this off with a segment I do at the end of every show. 1:59:38 It's called the lightning round. 1:59:39 And I got a few rapid fire questions for you just to finish this off. 1:59:43 OK cool. 1:59:44 First one. 1:59:45 Is there any book that has changed your view of the world. 1:59:48 Yes. 1:59:49 The beginning of infinity by David George which is the greatest nonfiction book ever written followed closely by the elephant in the brain by Robin Hansen which is the second greatest. 1:59:59 I was a fan of Robin Hansen from a very young age like 12. 2:00:02 I was reading his blog and everything. 2:00:04 So his book Elephant in the Brain is just like he put he put stapled together a bunch of his you know his thoughts. 2:00:14 But it's a fantastic book. 2:00:15 Interesting. 2:00:16 Kevin Simler. 2:00:17 But the beginning of everyone should read the beginning of infinity by David George. 2:00:20 I will check it out. 2:00:21 Next question. 2:00:23 If you could only hold one asset for the next decade and it could not be Bitcoin what asset would it be. 2:00:29 That's a good question. 2:00:30 It can't be Bitcoin magically. 2:00:32 They have to own something for how long. 2:00:36 10 years. 2:00:37 The next decade. 2:00:38 Yeah. 2:00:40 I think then you just go you know what the basics just go with the S&P 500. 2:00:45 Because it's also inflation proof. 2:00:46 I mean it's not it will be damaged by inflation but it also it's repriced. 2:00:52 So fair enough. 2:00:53 Classic. 2:00:55 What's one thing that you've changed your mind on about Bitcoin in the last year. 2:01:01 The last year. 2:01:03 That's a good question. 2:01:05 One thing you think because there's a lot of Bitcoin and it's also hard to tell when did the last year. 2:01:15 Or more recently maybe it's a better way to put it. 2:01:17 What's something you've just changed your mind on. 2:01:22 Well one thing is I wrote this post. 2:01:24 I wrote this post about lightning in which I researched. 2:01:29 I found something. 2:01:31 It's not it's not great news but I was researching the channel factories and I found a way to attack them for free. 2:01:37 And so then I had a I had a slightly more skeptical view of the channel factories. 2:01:42 And so that that is that does count. 2:01:45 But that's I wish that's not very good news. 2:01:47 That's very something else. 2:01:48 Well I appreciate the the honesty though. 2:01:52 And then finally anyone I already have I already formed so many positive opinions about Bitcoin much more than a year ago. 2:01:58 Yeah. 2:01:59 I like asking that question because it's always nice to hear the opposing views and things that are not necessarily the status quo or things that things that people the narratives that people like to put out into the world. 2:02:11 It's a good question. 2:02:13 Finally one more question is who's one person in the Bitcoin or lightning ecosystem that you'd like to give a shout out to for doing great work. 2:02:26 Let's see. 2:02:27 This is good because I don't want to. 2:02:29 Who's. 2:02:33 Because I want to give it to someone who really deserves it or something and I don't want to give it to someone who doesn't need it. 2:02:37 So there's a lot of people who are doing great like but they don't really need the shout out. 2:02:43 Like I would have done maybe Fiat Jaffa and I would have done a Tadge Dreyse. 2:02:47 But I think like they're already they're already getting a lot. 2:02:50 I feel like I don't understand why people don't like Tadge Dreyse's U3XO. 2:02:55 People just don't seem to be paying a lot of attention to it. 2:02:59 It's probably a good idea. 2:03:01 It's a full node on a mobile phone. 2:03:04 That's pretty cool. 2:03:05 That's worth. 2:03:06 That's worth looking at. 2:03:09 Oh yeah. 2:03:10 Those are good choices. 2:03:12 Who's good. 2:03:14 Maybe like a Mike in space. 2:03:15 I don't know. 2:03:16 We have a little more humor. 2:03:18 We need people not taking themselves so seriously. 2:03:21 Yeah. 2:03:22 Fair enough. 2:03:23 Michael Tidwell runs TabConf. 2:03:24 But again, like I don't know. 2:03:25 I don't want to give the shout out to someone who really who could really use it. 2:03:30 Yeah. 2:03:31 Well you've mentioned some good names there. 2:03:32 I shouted out a hundred people that I cheated. 2:03:34 No. 2:03:35 I appreciate it. 2:03:36 Thank you so much for taking the time today. 2:03:38 This has been an insightful conversation. 2:03:41 Where can people go to learn more about you and the work you're doing at LayerTwo Labs? 2:03:46 Well, we have LayerTwoLabs.com. 2:03:48 And I'm Truthcoin on Twitter. 2:03:52 Truthcoin, T-R-U-T-H. 2:03:56 Twitter is a pretty good place. 2:03:57 I think drivechain.info is really good for information about Drivechain, BIP300, 301. 2:04:05 Those are great. 2:04:06 And drivechain.info links to the blog, Truthcoin.info. 2:04:09 And it links to BitcoinHiveMind.com, the prediction markets site. 2:04:12 Perfect. 2:04:13 So they all link to each other. 2:04:15 So those are some good ways. 2:04:17 Well, thank you again for taking the time. 2:04:19 And I hope we can do it again soon. 2:04:21 Yeah. 2:04:22 Hey, thanks for having me. 2:04:23 All right. 2:04:24 All right. 2:04:25 In the last seven days, you guys sent in 186,257 sats. 2:04:31 That is one of the biggest numbers we've had on this show in a very long time. 2:04:35 So thank you to everyone who's been sending in sats. 2:04:38 As I mentioned last episode, half of the sats you guys sent in this week are going to be going to John Carvalho's charity of choice, Bitcoin Smiles. 2:04:48 I mentioned that on the last episode. 2:04:50 We had 100,000 that came in from a Lightning address. 2:04:54 So I don't actually know who sent that in. 2:04:56 But thank you to whoever did. 2:04:59 Then we had another 86,000 that came in through the Fountain interface. 2:05:02 I can see usernames and we can run through the top five supporters real quick. 2:05:07 First up is NatGasImmersion, who sent in 35,088 sats. 2:05:13 Ion497 sent in 24,534 sats. 2:05:19 Bon sent in 9,898. 2:05:23 Blockchain Boog sent in 5,168. 2:05:28 And Rage underscore AF sent in 2,451 sats. 2:05:34 We also had one comment from Bon on episode 92 with John Carvalho. 2:05:39 Just gave me a smiley face emoji along with the 10,000 sats. 2:05:44 Thank you, Bon. 2:05:45 Thank you to everyone else. 2:05:46 And I cannot wait to see what you guys send in this week.