0:00 Oh, it's working. Pretty sure this is going. 0:06 Wow. Great. 0:09 Hello there, and welcome to the Bitcoin Takeover podcast. This is season 15, episode 16, 0:16 and it's a drunk cast with two important twists. I've invited Paul Sztorc for the fifth time ever 0:26 on the podcast. In the last three months, I think we spent more than 12 hours talking. I think my 0:32 girlfriend right now is jealous because I spent so much time talking with Paul, 0:37 and we spoke so much about Drivechains, and that used to be a big debate. And Bitcoin now, I think 0:44 it flipped a bit into the field of covenants, and it seems like there are way too many proposals. 0:51 And I decided to invite Paul once again and challenge him to not talk about Drivechains 0:58 or BIP300. And the deal is that each time he mentions Drivechains or BIP300 while talking 1:04 about other LayerTwo solutions, he's going to have to send me a Lightning transaction. 1:10 But if the Lightning transaction fails, we both have drinks, and we're going to have to take a 1:17 shot, both at the same time. So it's a drunk cast. I'm not really sure if it's going to work 1:24 out because, you know, do I desire to take the drink that may offset? And I got my liquid, 1:31 look, I got my liquid. Blockstream gave this to me back in the day. Officially sponsored 1:38 and endorsed by Blockstream. Everything we say is officially endorsed by Blockstream. 1:44 I don't know what to say about that, Paul, but I guess we're going to be drinking a lot tonight, 1:50 unless Lightning works. Maybe it will work fine. I mean, I'm the one sending them. I got, 1:56 we should put some parameters on that. Do we do, how many Phoenixes do we get? 2:03 I'll just see how it goes. I got, I got, I got a bunch of, I got a Phoenix, I got, I got Moon. 2:12 Oh, but Moon is not really a Lightning wallet. It's more like a swapping wallet. 2:19 Yeah, Phoenix. I've got a bunch of, I've got a bunch of Electrum where I have so many Electrum 2:25 balances in. You haven't sinned yet, so it's fine. Let's talk about, so you are the CEO of 2:33 LayerTwo Labs, right? Yes, I am. Layer 2 means much more than sidechains or the type of minor 2:41 enforced sidechains, which you are promoting and we're not going to be mentioning. 2:46 What is a Layer 2? You know, a lot of, a lot of internet debates have been had about that. 2:52 A lot of time has been spent. Hey, did you ever see that movie, Catch Me If You Can, 2:59 and he has the cashier's check and he says, it's as good as cash. And he gives it to the 3:08 prostitute. Have you seen that movie? I feel like this is your kind of movie. 3:14 Why? Because there's a prostitute? There's prostitutes in it. 3:19 There's prostitutes, there's financial engineering, 3:23 there's scammers. You haven't seen it? John Williams wrote the score. It's not, you know, 3:34 it's not the greatest, most iconic John Williams score. 3:39 Now I realize that you don't have a good opinion of me. 3:45 Yeah. No, I have a very good opinion of you. No, that's the star, that's whatever, 3:50 Leonardo DiCaprio, whoever that is, is the star of the show. No wait, it's not him. That was it 3:56 instead. No, it is him. I don't know. It's been a really long time since I've seen that movie, 4:00 but he says it's as good as cash. And the point is, that's the point, is you don't get an L1 4:09 UTXO, you get something else. But you have, with it comes a belief that this thing is mostly the 4:17 same. They exchange at par. So you expect it to be redeemed one-to-one, and you gain some convenience, 4:26 but you lose some certainty. There you go, layer two. Okay, fine. So what's a layer two? 4:35 Can you be more specific? That's what I just said. I just said that. 4:39 It's like you don't get L1 BTC, but you get something. You get a VTXO from ARK, 4:46 and you get one Bitcoin, and you get one 10 Bitcoin, and they add up to 11. And you think, 4:54 I got these two VTXOs. No one will be able to screw me from redeeming them for L1 BTC if I wish. 5:06 And also, I can transfer them to other people who believe similarly. And also, the value cannot 5:11 really increase above. It can't really go significantly below or above 11 BTC. So then you 5:19 have something that, while it is not L1 BTC, it almost is. But right now, you're only constructing 5:30 this definition based on the monetary layer. But you're not saying technically what the layer two 5:38 is. Is it a sidechain? Is it something that's built on top like the lightning network? 5:43 Well, I don't think it even has to be anything technical. It could be that you have put coins 5:51 onto an open dime, or even you've just written something on a piece of paper almost. I'm not 5:57 sure where the boundary is. But if you have some reason to believe, okay, I now have taken 6:04 possession of this open dime that has 15 BTC on it. I could give it to someone else, and they will 6:11 understand that this thing is, or like the Caucasus coins. You remember those? 6:20 You mean Causasus? 6:21 I don't remember what the letters were. 6:23 You said Caucasus. 6:25 The Caucasian coins. Yeah, he made one for each race. Like the three rings of power, 6:32 you know, the elven rings. So yes, whatever those were. You get one, and you kind of think, okay, 6:44 the creator of all these coins, he may have peeked at the private key, 6:50 and he may have stolen all the Bitcoin. But no one else has had that problem with 6:55 whatever, Caspian Sea coins. I don't remember what it was, how it was spelled. 6:59 I just remember. 7:00 Esacius. 7:01 Esacius. Yeah, thank you. 7:03 Michael Caldwell, the creator of BIP32, I think. No, 38, sorry. BIP38. 7:11 38, yeah. That's the one where you can encrypt the private key with like two, 7:18 you split it into like two things, so that the manufacturer only has like half of it, 7:22 and then you have a part so that they can't easily conspire when you make like this. 7:28 It's like, I have some, I have some something with that. 7:32 The ballet? 7:33 Yeah, the ballet cards. And I have some, the LayerTwo Labs ones. 7:37 How about that? Not talking about the forbidden thing, but now I have them. Yeah, BIP38, 7:43 there it is. Look at that. We didn't plan this. I just happened to have one near my 7:47 desk. You can't see it, but it says BIP38 Crypto Standard. 7:51 If you go to the right conference, you're going to get a free belly, I think. 7:56 Right. 7:56 They have this sort of marketing going on. I don't know exactly who actually uses it. 8:04 Yeah, that's good. They're kind of a cool novelty. Definitely, I have like normie friends who 8:10 don't really know a lot about Bitcoin, but they like, they like, they like the cards. 8:15 They're like, oh, cool. They wanted to, they all wanted to have, 8:19 to pass them around and look at them. So, for what that's worth. 8:23 So Sean Leary, who is a rare Pepe scientist, wants to know when Caucasian coin launch. 8:30 Yeah. I mean, I feel like we're, we should have gotten that one out of the way a long time ago. 8:39 Anyway, we got sidetracked. 8:42 What's a layer 2, Paul? 8:43 Perfectly. Didn't I explain it? 8:45 You described that. 8:46 So this, this could like sort of be a layer 2 in a way. I mean, OpenDime could be a layer 2. 8:50 It depends on the person's, whether or not there's this group of people who actually has the belief 8:55 that the thing is redeemable. So for OpenDime, there's a like a set of, there's a hardware stack 9:03 and there's, with whatever, Caspian coin, there's, there's like a brand and there's like this, 9:11 this idea behind it, that the creator is just this type of person who would not, you know, 9:15 they're a Bitcoiner and a lot of people, no one has ever complained. And they're just, 9:21 they have the foil sticker and they're kind of neat. So, but you understand what I mean. 9:25 With Lightning, you get, you get something that, you know, it's, it's, it's, it's, it's, 9:33 it's not a L1 UTXO. When you, when you connect and you have zero coin, when you fund, you have 9:38 zero, you open the channel, someone opens the channel to you, you have zero BTC. Then they 9:44 start paying you on Lightning. Your screen says you received whatever BTC, but it's not an L1 UTXO. 9:52 I think your definition is a bit too broad. As in, if I was to take this into consideration, 9:59 then maybe WBTC, which is custodied by BitGo and issued on Ethereum is also a layer two. 10:05 And there are lots of other wrapped projects on Tron and on, what's the other one? Solana or 10:13 whatever. So by your definition, the fact that these Bitcoins got locked in some contract 10:19 and issued on another blockchain, which has a native shit going on top, that's a layer two. 10:26 And I don't think that's the case. Is Liquid a layer two? 10:31 That's debatable. Yeah, I got to there because that's exactly the same as wrapped Bitcoin, 10:35 basically. Yeah, but they're going to say, yeah, but it doesn't have a native shit coin of its own. 10:43 They've been trying to, they've been trying only because they haven't succeeded. They've been 10:47 trying to issue gaming tokens and whatever on Liquid the whole time, confidential assets. 10:55 Oh yeah, but that's not native. That's what I mean, because I can also issue 10:59 whatever, Vlatcoin on Liquid, but it doesn't mean that it's used for paying for transaction fees. 11:07 Well, that's true. In wrapped Bitcoin, you pay the fee in ETH, but you move the BTC, 11:17 you move the BTC instrument. I mean, I suppose that seems like a pretty small difference. 11:26 There's Coco in the chat on YouTube, and he says layer two has to connect to Bitcoin in some way. 11:32 Wrapped BTC on Ethereum doesn't really. But isn't that true for Liquid also? 11:37 Liquid is just a multi-sig on L1 and 11:41 wrapped BTC is just a multi-sig custodian of the BTC. What's the difference there? 11:47 Well, there's more trust involved in WBTC because you have to trust BitGo and you have to trust also 11:55 the blockchain that's transacting it. 11:58 But that's true for Liquid though, right? Don't you have to trust 12:00 the Liquid blockchain doesn't just malfunction? 12:03 Yeah, but it's a federation. It's not one entity. 12:07 For wrapped BTC, it's just like a multi-sig in both cases. 12:13 I mean, at the Bitcoin base layer, you can argue that it's a multi-sig, but 12:18 what happens afterwards, I think there are layers, no pun intended, to the quality. 12:25 The block construction is also a multi-sig. 12:29 Whereas at least with wrapped BTC, you actually have the Ethereum blockchain. 12:36 How is that any better? 12:40 I don't really, I think they're both pretty bad. 12:45 But I think that you have the progress, the forward progress of the Ethereum 12:52 proof of stake chain, which I'm not trying to say that that's great. 13:00 And then for Liquid, there's like this rounds of communication. 13:11 The blocks are constructed by a set of people. 13:18 Okay, let's see. 13:19 You have a very confused look on your face. 13:21 We can agree that Liquid is not a layer 2. 13:23 It's more like layer 1.5 or something. 13:28 But what about Rootstock? 13:31 If there's a BTC redeemable instrument, then that thing is layer 2, I kind of think. 13:41 Maybe what you are trying to say is like, is it still something that has its own independent 13:49 existence the whole time? 13:53 I don't know. 13:56 It doesn't seem to be important to me. 13:58 Like the people who are using these things, like wrapped BTC has like 150,000 BTC in it. 14:10 And even the entire Lightning Network has only less than 5,000. 14:14 And Liquid has less than 4,000. 14:16 So wrapped BTC is an actual thing. 14:19 Whereas I would say that Liquid is not really... 14:23 Liquid and Lightning Network, they're barely things. 14:26 They are like two ten thousandths or a very small percent of the 19.5 million coins that 14:38 are circulating. 14:40 So wrapped BTC, you have to be, I don't know, to even qualify as something, you have to 14:48 be a certain size. 14:51 I understand what you're trying to do here, playing the devil's advocate. 14:55 But I disagree because this TDL argument does not imply necessarily that there's greater 15:02 finality with transactions or better network security. 15:06 It's just that some people want to speculate using BTC on DeFi contracts and they want 15:13 to lend it. 15:14 They want to borrow it. 15:15 They want to do whatever. 15:16 They want to earn yield. 15:17 I'm just saying to qualify for any name at all, including the name of a layer two or 15:25 if it's small, then it's not. 15:27 But I don't know. 15:28 So what's your definition of layer two then? 15:31 Something that's built on top of Bitcoin. 15:34 Something built on top of Bitcoin. 15:36 Doesn't have a native token other than Bitcoin. 15:41 It has to be Bitcoin layer two. 15:43 It can't be like lightning on Litecoin or something. 15:47 So it's built on Bitcoin. 15:50 That part's not important, though, because you'd say it's a Litecoin L2 if it was the 15:53 same thing. 15:54 So it's built on some blockchain. 15:58 And what was the second part? 16:01 And does not have a native token of its own. 16:04 So everything is paid for in BTC. 16:10 But then if you have something where like. 16:14 But doesn't it mean if you have Taro, then lightning stops becoming a layer two? 16:19 That doesn't make any sense. 16:23 What's your argument there about Taro? 16:25 If you have more coins that aren't BTC, you say there has to be the fee. 16:29 The fees can never be if the fees are ever paid in an issued asset. 16:34 Does ever that if lightning ever collects a fee priced in a Taro. 16:41 Vlad coin, then it stops being a layer two. 16:44 I don't know why. 16:44 Why would that matter? 16:46 Why does it matter? 16:46 That's going to be a layer three or whatever. 16:48 And I doubted that the token that you can issue and print as many as you want can ever 16:55 become something that the network accepts as a transaction fee. 16:59 Makes no sense. 17:00 They may out of band, except like a payment of 10 million Sheeb Taro return for something. 17:10 I don't know. 17:12 All right. 17:13 OK, fine. 17:14 I mean, you can also do that on the base layer, right? 17:17 You can send the miners your Ponzi Pepe. 17:21 And you're going to bribe them to basically include your. 17:24 Yeah, I could go to them in person and I could give them whatever a loaf of bread or something. 17:30 Or, you know, a bottle of wine. 17:35 And so. 17:37 The I don't know what difference it makes. 17:42 But maybe we should move on to the next question. 17:44 I'm sure you prepared a long list of questions. 17:47 I did. 17:47 So let's compare rootstock with liquid. 17:50 OK. 17:53 Rootstock. 17:54 Rootstock. 17:58 Well, I assume you mean like. 18:02 merge mining is the relevant difference or I don't know. 18:07 Rootstock, they have. 18:11 Rootstock is also very small and a rootstock has not reached the form that it intends to reach. 18:17 So we would just be looking at it right now where they have these 18:21 HSM boxes and they have this hybrid thing where it's 18:26 they're mostly the federated version of RSK is basically very similar, the same as liquid. 18:33 Although the blocks are merge mined and they pay miners money, they have a large participation 18:41 of the hash rate who earns money in liquid. 18:44 The all the transaction fees are go to a wall controlled by Blockstream. 18:49 According to what they published on that, I don't know if anyone has ever actually checked. 18:53 But according to their own website, that is the case. 18:56 No, I think that's a good distinction. 18:59 For the record, I did have Sergio Damien Lerner on the show. 19:03 You can check out on YouTube or Spotify or whatever it is that you're using and listen 19:08 to that interview. 19:10 I think he's a very interesting guy and super underrated. 19:13 He's the architect of rootstock or RSK, call it what you want. 19:18 And where I draw the distinction between rootstock and liquid is that liquid is static. 19:24 It doesn't aim to be anything more than what it is. 19:27 It's complacent in the fact that it's a federation. 19:30 It's complacent in the fact that it doesn't pay anything to the miners. 19:35 Whereas rootstock is righteous in many, I was about to say virtuous, but it's righteous 19:43 in many ways. 19:44 It's trying to become trust minimized. 19:48 Right now it's using HSMs for security, but it's trying its best to become trust minimized. 19:56 Sergio is playing with BitVM and we're going to talk about that one also shortly. 20:02 And they are paying fees to the miners because they feel like they want to contribute to 20:07 the security of the Bitcoin base layer, which I think is very noble from them. 20:13 Well, I think it's also the only thing that will work in the future. 20:18 We can talk about that if you wish, but I think it's kind of important. 20:24 There's two completely different categories of L2, the ones that pay the miners and the 20:30 ones that do not. 20:31 And if you don't pay the miners and the fees are significant, it's a significant amount 20:36 of money, then eventually there will either be conflict or vertical integration. 20:42 And so there will be... 20:45 And a vertical integration, in a way, is a kind of conflict. 20:48 It just says that everyone else is fired and only the miners actually run the, whatever 20:54 you want to call it, the arc supernode. 20:57 So I think in the long run, those are all dead. 20:59 And in the long run, they will become, ironically, vectors for mining centralization if they 21:06 are successful. 21:08 And they will then lead to a situation where their security assumptions don't even make 21:14 any sense because the one lightning service provider just is like Foundry and it has 55% 21:21 hash rate. 21:22 And it's just the Foundry lightning node is the only lightning node in town because it'll 21:26 No, it's not 55%. 21:28 No, I'm saying the hypothetical future in like 20 years. 21:33 I'm saying, I don't think this will happen, but I think that this is what would happen 21:38 if this is one of the reasons why it wouldn't happen because it doesn't work. 21:46 I'm not sure what you mean by it doesn't work. 21:48 What doesn't? 21:49 The whole point of lightning is all these assumptions about you can, if you're cheated, 21:55 you can go to the chain for justice. 21:59 But to do that, you need to have included the awkwardly named justice transaction that 22:09 needs to be included in the blockchain in a certain amount of time. 22:15 If you have more than 50% hash rate, you can stop it from ever being included. 22:20 Certainly, you can stop it for two weeks or whatever. 22:24 Now, when I bring this up, people who study lightning say, well, yeah, sure. 22:28 Just don't open a channel with anyone who has a lot of hash rate. 22:37 But that is a mistake to say, because all that means is that it's an inducement. 22:43 In the hypothetical world where lightning is the only L2 that's successful, you can 22:48 In the past, we had the last year, we had 1.1 trillion transactions on earth. 22:54 And this number doubles about every five to six years. 22:57 So there'll be five years from now, there'll be 2.2 trillion. 23:02 And if they each pay 10 cents in a transaction fee, and I've chose 10 cents because it means 23:08 you can only be undercut by about nine cents. 23:11 And I mean, you can't really undercut 23:13 And most people don't care that much about nine cents. 23:16 So maybe some people do, but most don't. 23:18 Not enough to switch chains. 23:19 You know what I mean? 23:20 It's an inconvenience to switch from whatever, Solana to whatever, Binance Smart Chain. 23:29 Take your pick. 23:31 And so it's just not worth the nine cents to save nine cents on every transaction. 23:35 So that would be worth, you know, I don't know how much it would be worth, but it's 23:42 that would be worth 10 cents on 2.2 trillion is $220 billion in revenue every year. 23:49 So that is the pile of money available. 23:52 If it goes completely to the LSPs, but not to the L1 miners, this will lead to either 24:01 conflict or vertical integration. 24:02 The miners will say, wait a minute, you're getting $222 billion with a B every year. 24:08 And then it's going to, of course, it will be $440 billion in five years. 24:12 So they'll just think, wait a minute, I don't like that. 24:16 So they will either, they will basically start their own LSPs that only they support. 24:20 But once they have the LSPs, it will be, it's pointless to actually use Lightning in that 24:27 case. 24:27 It's because the justice transactions don't do anything. 24:32 So that's why the ones that do not pay the fee to miners are doomed. 24:36 They will all, miners must get the fee. 24:39 And if they don't, then the miners will take the fee in some, via this vertical integration 24:44 or conflict. 24:46 So if it doesn't pay to the miners, I think it's just broken. 24:52 Okay. 24:52 Before we move on to the next argument, I have to present tonight's sponsor, who is 24:58 Wasabi Wallet. 24:59 Check out the wallet, go to wasabiwallet.io. 25:00 You can download it for free. 25:02 You can use it for its privacy features. 25:04 Even if you don't CoinJoin, you have block filters, you have Tor on top of everything. 25:10 So it's very secure as an interface. 25:13 You also have a buy anything button, which basically is an interface for shopinbid.com. 25:19 And you can tell them what you want and you're going to trigger a command line, 25:24 which interacts with their concierge service. 25:27 You can order stuff using the Wasabi Wallet interface. 25:30 And you can also use some of the largest CoinJoins you'll ever see, 25:35 which have at least 150 inputs and 150 outputs. 25:39 It's huge. If you want to get onto some layer 2, it's probably a good idea to CoinJoin before that. 25:46 If you receive donations, just like I do sometimes, not as much anymore, 25:51 but I still receive donations. 25:53 It's a good idea to mix your coins so that when you use them, 25:57 you don't get the identity of whoever donated them to you. 26:00 I mean, I might as well receive donations from the Binance hacker or whatever. 26:05 And I honestly don't want to deal with that headache. 26:09 So check out Wasabi Wallet. It's pretty cool. 26:12 It uses very nice privacy technology, wasabiwallet.io. 26:18 Thank you guys for sponsoring. 26:20 So, Paul, let's talk about something which is very fashionable nowadays, 26:25 something which is super debated, 26:27 something which seems to basically be the subject of the next soft fork for Bitcoin, 26:33 and that's covenants. 26:35 First of all, what are covenants? 26:37 And then we can dive into the various types of covenants. 26:42 The detail of a covenant is that it is a special transit transaction 26:46 where when you receive money, you say, 26:50 lock this money to the script controlled by me. 26:53 I'm just talking normally, pre-covenant. 26:57 You say, for a normal Bitcoin transaction on-chain, 27:01 someone says, I'll give you some Bitcoin. 27:04 You say, OK, you make a receiving address, make a little QR code, 27:09 and it's locked to a thing that says, 27:12 if I can produce a signature that signs for this public key, 27:16 then the funds are unlocked. 27:20 That's how it normally works. 27:22 The covenant says, I will constrain myself when I send money. 27:28 The money that I put into this, the money I received to this address, 27:33 the money I put into my wallet, 27:36 I can only spend it a certain way. 27:39 That is, in a nutshell, what it is. 27:43 That's the short version. 27:46 So it says, for example, you could say something like, 27:49 I will take this money, and I will only give it to whatever, 27:55 Vlad, WasabiWallet, and IVPN. 28:01 I don't know how much I'm going to give them, but I have to give, 28:04 this is a hypothetical example. 28:05 You say, I have to give it to them, and a little bit for the fee. 28:10 So I have to give it to these three, and I can only send it there. 28:17 So it was originally, one joke name that it was called many years ago 28:21 was the checks in the mail, or check the mail, I think, even, 28:25 was part of it. 28:29 It's like, you haven't received the money yet, but you will. 28:34 For Jeremy's thing, the idea was that you would actually 28:38 denote the exact transaction itself. 28:42 So you'd say something like, I will pay these five people 28:47 this exact amount. 28:49 I will pay exactly this, just not yet. 28:52 First, I'll pay to the hash of that transaction ID, 28:58 maybe because the fees are really unusually high today. 29:01 So instead of paying to this big list, you pay only to a tiny hash. 29:12 So then you do that, and then that transaction can only be 29:16 spent further. 29:18 So it's kind of like the, that is already kind of like an L2, 29:24 because you know that with very likelihood, as soon as this transaction 29:28 is included in a block, at some point, you will get whatever it is, 29:33 5BTC. 29:35 It's pre-specified. 29:40 Okay, you are very specific, and your explanation was basically 29:44 for insiders who already know about this stuff. 29:48 Jeremy's thing is OP_CTV, check template verify. 29:54 Is that what it stands for? 29:56 His original motivation, like the congestion control, 30:00 that was like his original, one of his original use cases. 30:03 And then vaults were also one. 30:06 Vaults are big. 30:08 I think vaults are very important. 30:10 Jamison Lobb maintains this database of people who have had like 30:14 violent criminals break into their house and like just, you know, 30:20 like take their Bitcoin, basically. 30:25 But the vaults are set up so that you take your own money and you say, 30:30 you know, I put a spell on this money where only 1% of it can be removed 30:38 each month or something. 30:42 Unless if you want to withdraw all of it, it goes to this holding location, 30:48 and then like it waits there for like 10 days, 30:52 and then it either goes to the new destination or with a second key, 30:57 a second different private key, you can move it back to the vault. 31:02 So it's kind of like if you do anything with a lot of money, 31:07 the bank will call you and start asking you all kinds of questions like, 31:11 what's this money for? 31:13 Are you being held at gunpoint? 31:15 Should we call the police? 31:17 Stuff like that. 31:19 So you intentionally put it into – you intentionally constrain where the 31:23 money can go for your own benefit. 31:25 This has a big game theoretic implication because of something called 31:31 mechanism design. 31:32 But it's like you can constrain how – if you want to join at all the scheme, 31:37 it's set up in a very constrained way. 31:41 So then you have a lot of flexibility in the design. 31:44 I don't know. 31:45 I hope this makes some sense to someone. 31:48 Is this terrible? 31:49 Is this really a terrible explanation? 31:50 Covenants mean that when you spend the money that you have in the covenant, 31:55 it has to be spent a certain way. 31:57 You have to behave. 31:58 You're putting yourself on notice. 32:02 You have to have good behavior or the money will be whatever. 32:06 It can only be spent a certain way. 32:08 But the constraint is good. 32:09 It's like a contract on yourself. 32:12 Yeah, but why do people promote covenants for purposes? 32:16 Well, they don't know any better. 32:17 They just repeat what they hear on Twitter. 32:19 They have no idea. 32:20 They saw it's a trending topic. 32:22 They just make up some fake opinion about it. 32:25 I mean I haven't even finished my question, 32:27 but I guess you assumed I was going to say something just like, 32:30 I remember when Taproot got activated that people were super excited saying, 32:35 oh, Bitcoin finally has smart contracts. 32:37 Yeah, exactly. 32:38 Oh, we have Schnorr signatures now. 32:42 Yeah, exactly. 32:46 By the way, 32:47 some people promote covenants for the purpose of saying that we're going to 32:50 scale better and it's going to help the Lightning Network and it's going to 32:54 help stuff like BitVM do more complex operations. 32:59 And what else? 33:00 It certainly helps ARK. 33:01 ARK cannot, basically cannot. 33:03 It exists in a very, very hacky form without, 33:09 actually I think Moon Settler posted about that it can't exist at all without 33:13 CTV or something like it. 33:15 CTV is of course not, 33:20 Jeremy Rubin wrote CTV to be very limited on purpose. 33:26 It limited the scope. 33:27 But now that people have decided, 33:29 now that he trailblazed and did all the work to make it good, 33:35 everyone has decided, by everyone I mean like three people, 33:39 has decided that they want the more expressive TX hash. 33:46 Okay, who are the three people? 33:48 I don't know. 33:49 Like I guess probably, 33:55 what is it, Stephen Roos or whatever? 33:58 Or Rose, I don't know how to pronounce. 34:00 Do you know how to pronounce Flemish names? 34:02 What is R-O-O-S-E in that? 34:04 I don't know. 34:05 But he, presumably him. 34:07 Presumably I would guess that Robin Linus and Barack from Ark. 34:14 Can we just start calling him Barack Obama? 34:16 I mean that is definitely the funnier thing. 34:18 Can you just take that as his name? 34:21 Because how cool is that really? 34:24 Those are the only two times in my entire life I've heard that name used. 34:29 It's actually Burak in Turkish. 34:31 So you're pronouncing it as Burak because it's convenient for you as an American. 34:36 Burak. 34:37 That sounds very Turkish. 34:40 He is Turkish. 34:43 Yes, we discussed that at one point. 34:47 But you are right about Robin Linus. 34:50 He was here on the Bitcoin Takeover podcast and he did mention. 34:53 He said TX hash. 34:54 Yeah. 34:56 Actually I interviewed him before he changed his mind. 35:00 At the time he was UpCTV. 35:03 I think now he's on the side of UpCat and it's even more confusing. 35:08 UpCat is an up code that Satoshi wrote and disabled at some point. 35:14 It was disabled in a kind of emergency panic mode. 35:22 Because people were worried about what it was. 35:25 I don't know. 35:26 The script interpreter was a little too powerful. 35:31 So it was tightened down and a lot of stuff was disabled. 35:36 If I'm remembering correctly, there was this theoretical concern about an exponentially increasing amount of items on the stack or something. 35:44 The stack size. 35:47 The total stack size is or was already limited or has now been limited again with TabScript. 35:58 I think. 35:59 Although these details are not easy to get perfect. 36:02 So basically these, I don't know, people just kind of thought that UpCat. 36:09 I mean, UpCat just concatenates two stack items. 36:13 And the weird thing is we have other up codes that are like you can sandwich two things together or like make weird shapes. 36:22 But you cannot just combine two things. 36:25 So we do. 36:26 We have so many weird. 36:28 I think UpCat is I've said this on Twitter. 36:31 I think it's like a canary in the coal mine of like how risk averse are the people running github.com slash Bitcoin slash Bitcoin. 36:44 And does it actually extend this far to blocking UpCat? 36:49 If it does, it will just prove that we are doomed, I think. 36:56 Well, there's a twist to all of this situation because you have liquid, which enabled UpCat. 37:04 And not only that, but they're inviting Burak. 37:08 They're also inviting Burak to build his arc on top of liquid. 37:13 And it seems like the first proof of concept of arc is going to be built on liquid. 37:18 So it almost seems like these people are against something. 37:22 But at the same time, they activated under federation because they want to stay competitive and invite some. 37:28 A lot of that is just like can Blockstream take credit for it? 37:32 Because they raised all this money and they have very little to show for it. 37:37 And and I think they just the whole thing is just like. 37:45 I don't know how else you would explain it. 37:47 How do you explain it that this first of all, I just poured this, so I'm having this. 37:51 You have to have one with me. 37:54 Oh, that's a large shot, Paul. 37:56 It's big. It's huge. 37:59 So what's the purpose of drinking? 38:01 Are you preemptively drinking because you're going to drop the D word? 38:05 No, no, no. I just think. 38:08 It's Chekhov's gun. We have to have at least one. 38:11 I've been concentrating. I haven't brought it up once. 38:13 I haven't. Things have been I've been doing really well. 38:18 You've been quite nice tonight. 38:21 You haven't tried to persuade me into talking about stuff that LayerTwo Labs does. 38:27 But I also need to ask you, do you plan for LayerTwo Labs to focus on something else other than sidechains? 38:37 I think the answer is yes. 38:41 But not in the short term. 38:47 If you're going to have the drink, let's say cheers. 38:51 I made a sound for the microphone so people listening on Spotify later can also get a feel of what we're doing. 38:58 Get the ASMR. 39:00 I'm drinking vodka, by the way. 39:02 I'm not sure what you're having. 39:05 It's vodka. I got my chaser, you know, because I just like a nice cold glass of water. 39:12 You're going to have. Can't be that. 39:21 What are we talking about? TX hash? 39:25 Labs. I think. 39:27 OK, but I just told you moments ago that I perceive an enormous problem with any layer two that does not pass the fees down to the miner. 39:36 So I think all most of the ones that are currently popular, which was just to say, you know, like a tiny amount of Bitcoin, like less than 5000 Bitcoin. 39:48 Those are all just seem doomed to me. 39:52 So I'm not I'm not interested in those. 39:55 There are other types of things that do interest me. 39:57 For example, the idea of there being physical layer two, like the open dime layer two. 40:02 And I don't endorse open open time specifically. 40:05 I'm just saying as an idea of just. 40:08 We should be endorsing Sato dime because this is open source. 40:12 Yes. And they're sponsoring the show, by the way. 40:16 So it's a real. Yeah. 40:18 So it's not that whatever source code available or whatever, whatever that means. 40:24 No, it's open source, but they use the smart card technology, which is not 100 percent observable. 40:31 But at the same time, it's pretty cool. 40:33 You can put your papers on it. 40:35 You can put your Bitcoin on it. 40:37 And then you can gift it to someone physically and you bypass the high fees on the main chain. 40:42 So check out SatoDime.io. 40:46 SatoChip.io. 40:47 And then you have the card and it's not transparent. 40:51 But it's like if you want to be transparent and you say, OK, we'll add we'll add a screen. 40:55 And then you're like, we'll add a keyboard. 40:57 And then eventually you just end up with like a whole laptop, you know, and you're just kind of like, OK, we'll add an operating system. 41:03 It's like, you know what I mean? 41:05 Like where. So I kind of think it's a good smart thing to just. 41:11 I think this one has NFC, so you can tap it on the back of your phone. 41:15 It's so great. Like, you know, the NFC is great. 41:18 And, you know, you can buy a bunch of blank cards and experiment with this. 41:21 I didn't know this. Every phone can program the cards. 41:25 You can go on Amazon like one dollar blank cards and you can have like those like little apps that you can just edit them. 41:31 And, you know, presumably. 41:34 This is related to what SatoChip has done. 41:38 But I'm just saying that the card, the tap thing is great because the tap is a very good like it's a very good way of paying for something because it kind of represents consent. 41:49 It's it's not ambiguous like you don't just take out your wallet and start tapping on things. 41:56 And so it's fast and it's convenient and it's very good. 41:59 I think that's a very good on the. The frontier of possibilities. 42:04 I think that is a winning. It's a winning one. 42:08 I think we're sort of losing this battle and I'm changing the topic a bit, but we used to say, oh, no, these cards are for bankers. 42:17 You know, we're going to scan QR codes and now it seems like QR codes are associated with green passes from the covid era. 42:25 So, yeah, Venmo or WeChat pay or something. 42:32 Yeah, it could be. I think Bitcoin did that before it was cool and then it no longer became cool. 42:39 And now we ended up co-opting this tapping mechanism with NFC technology. 42:46 I think it's fine either way. I think the I honestly just think the tapping is better. 42:51 I mean, when you think about it, you have to take out your phone, which in your phone is trying to distract you all the time. 42:57 Which is so annoying. You know, the phone, it's like whatever. 43:01 It's like whatever the ring of power or something, you know, it's like trying to brainwash you all the time. 43:05 You got to like not look at it and you got to take it out. 43:08 You got to click, open it, do your thing to unlock it, find the app, do the thing. 43:13 OK, wait for the camera to activate, because it always takes like a little second to power up, you know. 43:19 And then you got to hold it over the queue. When you say you could just just take it out and tap. 43:24 It's way better, I think. This is just my thought. 43:29 Yeah, I think tapping is against the spirit of don't trust verify because you're not seeing where the payment is going. 43:36 You're not seeing how much of it you're paying. You're relying on the counterparty, to be honest with you, with everything. 43:44 And then maybe you get a receipt and by the time you get the receipt, it's already too late. 43:50 You could preload the card. You could say like the card is only allowed to spend. 43:59 $20, you put $20 worth of Bitcoin on the card and then you or whatever you tap it or something. 44:06 I don't know. I think I think you're right. But I think the problem is, OK, this is what I say. 44:11 You end up with a lap. You end up building a laptop because you say, OK, we'll put a screen in and we'll say the hardware device will show me how much money is being paid. 44:20 And then you're like, OK, it'll show me the signature and you're like, OK, I'll have a signature checking thing in here. 44:27 I have have Sparrow wallet. Running on this thing and then then it was not Sparrow. 44:36 OK, great. Wasabi, you know, I don't know. I've never used Wasabi, but I've heard they care about privacy. 44:43 Why does why does Samurai and Wasabi, why do they hate each other? 44:50 Actually, Wasabi doesn't hate Samurai. It's Samurai that uses this marketing. 44:55 They realize that they get a lot more engagement if they attack their competition. 45:00 So it's like this. It's a pretty zero sum game where they're trying to one up each other. 45:08 But I think that to Samurai's credit, they actually helped Wasabi improve. 45:13 They provided some useful feedback just by attacking it constantly. 45:17 And they actually got better. But in the case of Samurai, they are lazy to attack. 45:24 So whenever someone points out to their flaws, they're like, no, it's not true. No, it doesn't work like that. You're an idiot, blah, blah, blah. 45:33 They're playing this whole psychological game and they have their own telegram chats and signal chats and echo chambers where. 45:42 Everyone who asks questions like newbies who come along, they're called idiots and they're like, it's like Fight Club, you know, it's a cult. 45:52 Well, I mean, you know, that's plenty of people do that. Plenty of people become frustrated with it. 45:58 You know, and there's, you know, the concept of whatever eternal September and like lurking, you know, like you're supposed to lurk and absorb the norms of the group of the tribe, you know. 46:10 And then I mean, in this course, Samurai appears to be more cypherpunk and more careless. 46:20 But it also got VC funding and the two creators docked themselves for some VC funding. 46:26 And now they claim that they're anonymous. 46:28 But there is a Coindesk article which clearly states their names and how much money they got from a VC firm. 46:35 But which VC firm? 46:38 Cypherpunk Holdings. 46:40 Well, that sounds like it's got a great name. 46:43 It does. It's a publicly listed company from Canada. 46:47 You would think that something like that would maybe they, you know, I don't know, maybe they're fake names or something. 46:53 And Samurai also has a counterparty token because they believed in this vision of a decentralized company and all their investors are holding these tokens. 47:04 That's kind of cool, though. That's not so bad. 47:06 I don't think that type of thing is so bad. 47:08 Like I think if what you say is. 47:13 This is like something that totally exists. 47:16 This is like a. 47:19 Shares of a Delaware Sea Corporation. 47:23 Except that it is on the Bitcoin blockchain and it pays Bitcoin transaction fees. 47:28 Then that doesn't sound so bad to me. 47:32 I think that's normal. 47:33 I think that this I think blockchains will be used for this, even though I think blockchains are way, you know. 47:40 But I think that that actually that that will happen. 47:45 OK, I'm not sure if we finished our conversation about covenants. 47:50 Do you have any proposal that you prefer, prefer or think is. 47:55 The problem is we should do them all. 47:57 I think in a way, OP_CAT most clearly highlights the dysfunction of the system. 48:04 And the fear that the existing people have of of touching activation. 48:09 And it is this irrational fear that is caused will cause horrible problems. 48:14 Has caused already tremendous damage to Bitcoin and will continue to cause and may even kill the project. 48:20 So OP_CAT is the will sound of the alarm the most when it. 48:26 Why, you know, why don't we even have we should have things like probably the best one, the most useful one would be one with the most novelty. 48:34 So that would be like one that is like, I don't know exactly what you would call it, but it was something like, does this UTXO exists in the UTXO set at this time? 48:43 Like, yes or no opcode. 48:44 I don't know. I don't remember what that that has a name, but I don't know what it is, but it's not one of the. 48:49 That one would be the best for like that would give like arc like the golden gun or something. 48:55 It would just be able to like shoot through these problems that it has. 49:00 I don't even think you would need I guess you would not need the arc is confusing. 49:05 So that you would need like I think you don't need to connect or transactions or. 49:09 I don't know, they take some other form or something, but so that would be kind of cool, but that is someone that nothing no one has heard of that. 49:17 CTV has been one that has been like actually. 49:21 People have tried to activate it, so it has the highest activation energy. 49:26 Going in to it and in that way, it's sort of like first in line and in that way, it's better. 49:33 The fact that Jeremy made it. 49:36 Less powerful because people had all these fake concerns. 49:40 He was too nice of a guy or something, and he he made it slightly less powerful to to to more clearly demonstrate that it was harmless. 49:54 Anyway. 49:55 Anyway. 49:58 Anyway, to more clearly demonstrate that it was harmless and so then the as a result, what happened was that you have this situation where TX hash is more powerful. 50:09 I mean, I understand what you're saying. 50:16 And it also seems a bit conspirational, you know, in the sense that you're almost saying that unless a BIP is presented by a black string researcher, it's not going to be good enough to reach consensus, I think even now they can't even now they can't do it. They have created a Frankenstein's monster. 50:35 And now maybe no one can get anything through. The problem is just that it's not a meritocracy at all. If it were a meritocracy, they all of them would have activated by now. 50:46 What's the point, though? Because some of them fulfill the same function. 50:52 But but it's not it's like the question should be, does it serve a point? Might it serve a point to someone and doesn't do no harm like we should that that's the criterion for every other pull request that is merged, the ones that are not soft forks. 51:09 But the distinction between soft fork and non soft fork, it should just be abandoned at this point, it should just be the same consideration as any other thing like this to make the code too difficult to maintain. 51:22 Okay, for OP_CAT, that's obviously not the case that has no has no effect. 51:27 I think super test net made this point that she said it more offensively, a bit. She was like, I bet you didn't think about four megabyte blocks when you activated SegWit plebs. As in, there are always these side effects that happen. When we activated SegWit, we were told that. 51:49 That's not a side effect, though. No. And I have also said that, as you know, I have also I say that loud and proud. I say no one, the people who support SegWit, they didn't know that it was a block size increase. 52:04 Yeah, exactly. It was presented as a fix for the malleability bug. 52:07 Expert people did know. Everyone did know. I mean, everyone, most of the people I knew did know, but most other people who support SegWit don't know. So they don't know. The detractors who hated SegWit, they didn't know anything about it. The supporters didn't know anything about it. 52:21 But that was not a side effect. I mean, I guess the plebs didn't. So if he's talking about the plebs, he's right, I suppose. I'm not sure exactly what he means by that. But I would interpret that to mean most people don't know what they're talking about for or against a bip. So you should just you should just ignore them because they don't they don't know anything. 52:43 You know, it's like it would be like talking to whatever, a dog or something about a bip. 52:50 I mean, that's super elitistic and offensive. 52:53 I wish it weren't true. I wish that it were not the case. But it is. But you were saying yourself about Taproot. Oh, we have smart contracts now. 53:02 Yeah, so we have been told I was a pleb at the time in 2017. I wasn't even running a node. I was just reading news on Bitcoin.com feeling confused. But basically, I remember at the time that it was said that SegWit was good to activate the lightning network. And that was the point of it and to fix the malleability issue, which I did not really understand. And I was like, oh, this is interesting. 53:29 It was not promoted as a block size increase. And then Taproot was presented as this way to bring more privacy to multisigs. And people were like, yeah, of course it does that. And people were like, oh, yeah, it does smart contracts now. 53:46 And Bitcoin is going to have smart contracts and Schnorr signatures because Schnorr signatures have been part of the debate for longer than a decade. And it seemed easier to accept something if it involved Schnorr signatures. But we didn't get all of the Schnorr package. We just got a small dose of Schnorr. 54:07 And we have no cross input signature aggregation, which was... 54:11 And that's another BIP that's being proposed. 54:13 Yeah. 54:14 Chisa or CISA, whatever you call it. 54:19 The problem is, I mean, it's just all of it's kind of irrational. But I don't know. Did you want to nail me down on one particular question? Like, which one do I support? Like, which one? I mean, I support them all, really. But which one should activate? I guess I'd probably just say CTV because it has been active in the process for more. 54:43 But now the big CTV people have switched to LNHance. So now I don't know. Seems like... 54:49 What I think should happen, to be really honest with you, is the one issue is that the miners, they know even less than people who participate on Twitter, because in many cases, a miner who is a hasher, they're kind of a lot like the power company where they hash and they get paid money and they don't even think about what's happening. 55:14 And just like the power company, they make power, they sell it to miners, they don't know anything about Bitcoin. 55:20 But the hashers should all meet at some conference, some mining conference, and decide that they can earn much more money if they educate themselves about soft forks and they should form some kind of council. 55:35 However they think best, they could delegate this task to the pools if they wish, and the people should just meet like twice a year to educate themselves about these matters. 55:47 And then they should notice that no one is taking responsibility for activation. Activation is languishing. Miners can unilaterally activate with 51% hash upgrading. 56:02 If they upgrade and then they put out the version that they run as a backwards compatible soft fork, everyone will switch to that version to maintain compatibility with that. 56:12 So I think they should do that. A lot of people think that's the wrong direction, that's going further in the bad direction, but I think that's the good direction. 56:19 To me, the fact that the miners will be fired if profit maximized, that makes them far more, those are much better, they will be more vigilant about protecting the value of Bitcoin than a bunch of disinterested academic vision of the anointed type software developers who are not the same people who even propose these ideas. 56:48 The people who are just refactoring 5,000 times a day. 56:53 I just realized that we have been speaking for about one hour and I have two more ads to present, so I'm going to present them now and then we can spend the rest of the time, probably three more hours talking. 57:07 So I got to tell you about CryptoSteel, which has been around since 2013. 57:12 They are the original metal backup company. 57:15 They produced the CryptoSteel cassette, which is open source and has been copied by lots of other companies. 57:21 And I know that you, Paul, are friends with the Bill Foddle people, who are basically cloning the CryptoSteel. 57:28 And they also created the CryptoSteel capsule, which is the newer model. 57:32 It's more elegant. 57:34 It is more durable. 57:36 It's super cool. 57:38 I have been wearing that around my neck when I travel through airports just for fun. 57:43 And you can get both of these devices from CryptoSteel.com and get a 10% discount by using promo code BTCTKVR. 57:51 Why should you wear these? 57:53 Why should you use these at all? 57:55 Because paper is not really secure and it can get torn. 58:00 Your maid or whatever, wife or whoever cleans your room, your mom, because obviously you're living in mom's basement, might just throw away the piece of paper that's used to back up your keys. 58:15 And that's a bad idea. 58:16 So if you have this device, nobody's going to try to throw it away in the first place. 58:21 And if you want to hide it, you can do your own pirate map. 58:26 You can bury it in the backyard. 58:28 You can maybe put a hole in your wall and hide your CryptoSteel in there. 58:34 There are lots of cool use cases. 58:36 And you can use it for pretty much every password or private key that you have, including Nostr. 58:42 So if you're using Nostr, get a CryptoSteel today. 58:44 Promo code BTCTKVR. 58:46 Go to CryptoSteel.com. 58:48 And the other ad poll, and I'm very sorry that I keep you waiting for so long, is for IVPN, which has been ranked in a recent YouTube video by Privacy Expert as a top two VPN service, which is on par with only MulVAD. 59:05 And what's different between MulVAD and IVPN is that IVPN lets you pay with Lightning. 59:11 And I know you don't like Lightning transactions, Paul, but if you're paying $5 a month for your VPN service, it's probably not a great idea to pay $3 for the transaction fee. 59:25 And it's better to pay with Lightning if you can do that. 59:30 And if you are not sold on IVPN, you can send an email to trial at IVPN.net. 59:37 And you tell them that you are sent by the Bitcoin Takeover podcast and you're going to receive a 30-day trial. 59:43 You get a code, you activate that, and you can see how the service works. 59:47 Basically, it doesn't require any sort of data from you. 59:51 And you get this code that you activate every time. 59:56 You can pay to extend the time that you can use it, or you can get a new code, or whatever. 1:00:03 It's super cool, it's private, it's all open source. 1:00:06 All the stuff that I'm promoting in this podcast, Wasabi, CryptoSteel, SadoChip and SadoDime, IVPN, it's all open source. 1:00:17 And this podcast also gets published on Spotify and Apple Podcasts using podcast index. 1:00:24 No, podcast generator, which is also open source. 1:00:28 So everything is pretty much open source and in the spirit of Bitcoin, check them out and thank you for listening. 1:00:34 Thank you for not skipping my ads. 1:00:37 So now, Paul, I got to make this remark that you said earlier that Blockstream raised a lot of money. 1:00:43 And they have to account for that by doing stuff which is mostly political. 1:00:48 You also raised a lot of money with your company. 1:00:51 And how are you going to justify that? 1:00:53 I have a business model that I think is great. 1:00:58 But I think if Blockstream, if you convert what they raised into BTC at the time that they raised it, it is like $20 billion. 1:01:10 So some huge amount of money. 1:01:12 And they also have been existing for a really long time. 1:01:15 And that is why I think they have the need to show that it wasn't all for naught. 1:01:24 That's my guess. 1:01:26 I think we have built a lot of stuff at LayerTwo Labs. 1:01:29 We've only been around for basically a year. 1:01:31 And we have already built a lot of this stuff that can't be named in this episode. 1:01:38 But it's really great. 1:01:39 If you go to releases.something.info, then you can try it yourself, which is really something. 1:01:49 But we have done quite a bit. 1:01:54 Obviously, awareness is way up. 1:01:57 The technology has improved a lot. 1:01:59 I actually think a certain thing that cannot be named is very close to activation. 1:02:06 And there's a certain argument to be made that it will activate before Covenants. 1:02:11 Because the Covenants people are ahead in some ways, but they are behind in understanding what it actually takes to activate, I think. 1:02:21 I mean, I can partially agree with you. 1:02:26 And I think what you did is very dangerous for Blockstream and for the way in which the history was written about Bitcoin. 1:02:36 Is that you lifted the veil. 1:02:39 You destroyed the narrative. 1:02:41 We have been told for such a long time that nodes are in control. 1:02:45 And miners are basically controlled by the nodes. 1:02:49 And they don't have any sort of agency. 1:02:51 And you just came and said, no, miners can activate soft forks. 1:02:56 And that's not a popular opinion to express. 1:03:00 And you're going to get put in the corner. 1:03:01 And maybe you're not going to get invited to some dinners with steaks. 1:03:06 You're not going to go to conferences as a keynote speaker or whatever. 1:03:12 They're not going to make you a headliner. 1:03:14 You're going to be marginalized. 1:03:16 And they're going to laugh at you, I think. 1:03:18 But it's a valid point that the miners can do that. 1:03:22 Yeah, the previous view was an oversimplification based off of what would happen with SegWit2x, which is a failed hard fork. 1:03:30 It really has nothing to do with, you know. 1:03:33 Ironically, the UASF, that was a successful soft fork that the miners participated in. 1:03:40 And then it activated as soon as they participated. 1:03:42 So the whole thing is honestly backwards. 1:03:44 The soft fork, you need either the miners or the users can drag the miners. 1:03:49 So you need one of the two. 1:03:51 For a hard fork, you need both. 1:03:53 Both, you need the users, all the users to switch and all the miners to switch. 1:03:56 So the fact that SegWit2x proved that the miners couldn't hard fork Bitcoin, that has nothing to do with whether or not the miners can soft fork Bitcoin. 1:04:12 If you break the heaviest valid chain, longest valid chain rule, heaviest valid chain rule, whatever. 1:04:20 If you break that, you are the one who is now hard forking onto a new network. 1:04:26 So if the miners, miners can activate soft fork unilaterally. 1:04:33 But, you know, it's true that Luke Dashjr. and Adam Back don't agree. 1:04:38 But as far as I can tell, they're really the only ones that I would consider to be like Bitcoin experts who disagree. 1:04:46 I don't know if other people are willing to join them other than, you know, random Twitter bots that are maybe like 14 or 15, which could all just be the same person. 1:04:56 I don't know. So. 1:04:58 I don't know, I would be interested to know if one person who told me in person at TabConf was Burak. 1:05:05 He said that. 1:05:08 It would be the right thing to do is to just go to the miners for activation, not of any BIP he was interested in, but a forbidden one that we can't talk about. 1:05:18 But he said it makes perfect sense. 1:05:21 Especially if the BIP is itself an agreement, basically, between users and miners, then it makes even more sense for because without their participation, they would not. 1:05:33 Then it would be dead on arrival anyway, so it makes sense for them to initiate. 1:05:38 But I don't know, I would be interested to see if other if we can find other people out there. 1:05:44 We can ask people like. 1:05:46 Ask Ruben Thompson or someone like. 1:05:52 What he thinks about this issue of can miners unilaterally activate in a soft fork? 1:05:59 I mean, it's hard to explain something like speedy trial if. 1:06:04 You know, you know what I mean? Like, I don't know. 1:06:07 People like, for example, I don't want to get too far into the weeds, but people like Luke, they have. 1:06:11 Attached to this is a belief that if you don't run the latest version of Bitcoin core, then you're not running a Bitcoin. 1:06:20 Then this is equal. This is completely equal. 1:06:23 If you're one version behind, that is just as bad as if you're running, you know, Electrum and you do not have your own full node. 1:06:32 And then he says, if we don't have critical mass, 80% of people running full node, the latest version, then he just says, then Bitcoin has died. 1:06:41 He just says this black and white isms. 1:06:44 So I have carefully tried to examine his point of view. 1:06:48 I think he's a very interesting guy. 1:06:50 I think he is a Bitcoin expert indisputably, but I, I just don't understand how what he's talking about with this. 1:06:56 I have carefully traced the origins of the soft fork back through Bitcoin talk and through old GitHub comments and other sources. 1:07:09 And I presented it at this at MIT and the slides are on my website. 1:07:15 And so you but I have researched this and the whole point of the soft fork is that it's not just about Bitcoin. 1:07:23 But I have researched this and the whole point of the soft fork is that you cannot get everyone to upgrade. 1:07:28 You only get. But if you get 51% hash rate to upgrade, then you never find there's never a block. 1:07:34 There's never a single block in the heaviest valid chain that breaks the new rules. 1:07:39 That was the whole reason it was invented. 1:07:41 So I don't I don't know. 1:07:44 I would love if someone can explain to me how any of that is mistaken. 1:07:48 I'm all ears, but I doubt it. 1:07:51 You made a very valid point with the speedy trial, because the narrative has been that we got to that UASF point, you know, where the nodes were the ones that activated SegWit. 1:08:05 It was the first time when the node operators actually did that in the history of Bitcoin. 1:08:10 If I can just interrupt you there just to remind you, I'm sure you know this, but you remember that the UASF was to force miners to signal and then to activate. 1:08:21 And the actual SegWit activation actually happened two weeks before that would have gone. 1:08:26 The miners basically folded in the face of the UASF. 1:08:29 So, of course, the UASF almost certainly played a causal role. 1:08:34 But we actually don't necessarily didn't literally play any role. 1:08:37 It did. 1:08:38 SegWit did activate via after the miners upgraded and then their upgraded software signaled. 1:08:46 Accurately that they had updated. 1:08:48 So it didn't even the UASF was never triggered. 1:08:54 It was a very credible threat, but but no one really knows what would have actually happened if if they had UASF and then more than 50 percent of the hash rate had broken the rule. 1:09:08 And then those people would have been on SegWit coin, the minority coin. 1:09:16 I think it just speaks to how that was a stupid way. 1:09:19 What they were trying to get was the block size increase and they tried to hold SegWit hostage to obtain it. 1:09:25 And that's, you know, that's impolite. 1:09:27 And that was not really constructive either. 1:09:30 So I think that's the real reason why people everyone wanted it, including me. 1:09:34 Everyone thought we should just do SegWit after all this effort had been put into it to engineering it and to lightning could not really be tried out. 1:09:44 No one was going to try it out before. 1:09:47 So, yeah, I mean, another thing that Moon Settler points out is that it's not a good idea to have. 1:09:54 People cannot they can only invest so much energy in. 1:10:00 Developing the the BIP or the the soft fork use case. 1:10:08 Pre activation. 1:10:11 Because there's a risk that it won't activate. 1:10:13 And so that's unless you're very independently wealthy. 1:10:18 You know, you can't put all this time into something that may never amount to anything. 1:10:22 So so we have to activate it. 1:10:25 Some of these things you have to activate them kind of to try them out. 1:10:28 They can always be deactivated later. 1:10:30 This is another thing that people don't understand. 1:10:32 They know that the opposite of a soft fork is a hard fork. 1:10:35 But what they don't know is that a soft fork plus a certain type of anti soft fork equals zero. 1:10:41 It was nothing. 1:10:43 So you can get. 1:10:45 It's it's a question of. 1:10:49 You don't loosen the like if you claim up, not six for CTV. 1:10:54 But then you don't like it. 1:10:56 Instead of loosening it back up to anyone can spend, you just tighten it to nobody can ever spend. 1:11:02 And then it just goes away. 1:11:04 So people just apparently Jimmy Song doesn't understand the difference between doesn't understand how that works. 1:11:11 For example. 1:11:13 Oh, you can explain it. 1:11:15 And he's going to pick that up and maybe write a book about it. 1:11:19 I mean, I thought I tried to explain it on in September on Twitter. 1:11:23 I thought I explained it multiple times. 1:11:26 And also there's a very funny panel. 1:11:29 Jimmy moderated a panel with me and Jeremy Rubin on it called Soft Forks panel at two Bitcoin Miami's ago. 1:11:36 And I thought it was a great. 1:11:38 I thought it was a really fun. 1:11:40 It was a great panel, and I thought it was very educational. 1:11:44 So I think anyone who's interested in this topic further should watch that. 1:11:48 I think it's it's kind of fun to see the two of us. 1:11:53 And because now the process is, you know, the soft fork conversation is. 1:11:59 Happening again, so go go back and watch that. 1:12:02 Now, I do remember that. 1:12:05 So you mentioned something interesting with removing soft forks. 1:12:09 I do remember that when ordinal inscriptions caught a lot of attention and they were probably dominant in Bitcoin blocks in terms of numbers and also in terms of paying fees. 1:12:23 People were saying, how do we deactivate SegWit? 1:12:25 Let's give up on this because this is what led to degeneracy. 1:12:30 And we should ossify Bitcoin and never activate anything ever again because we should not mess with the monetary. 1:12:37 Layer of the world or whatever they refer it as. 1:12:43 Yeah, I think there's a call for deactivation of this. 1:12:48 First, they wanted to deactivate Taproot because for some reason people thought Taproot was related. 1:12:51 And then I think they wanted to deactivate the SegWit witness discount, which is what was responsible for making it four megabytes instead of one. 1:13:00 This is a perfect example, though, of the wrongheadedness of this this way of trying to control people. 1:13:06 The right way to control people is to give them what they want in a way that does not allow them to obtain what they want. 1:13:15 Give them a way of obtaining what they want. 1:13:17 Set them on a path where they can get what they want without harming other people. 1:13:25 If instead you try to just stop them from getting what they want, then they will just find some other way of getting it at your expense. 1:13:34 So if we had high transaction throughput and if we had other things, these people would never have been on L1. 1:13:44 And if, you know, like no one would care because either the people using it for payments or for block space storage or for assets, they would not be clogging L1. 1:14:01 And it wouldn't even matter if they did clog L1 because the people who want their money to just stay on L1 and never move, they don't care what the fee is. 1:14:10 They're never moving their money. 1:14:15 So it's only people who partially cared about the banking use case. 1:14:24 I don't know. Sometimes I get the impression that these conversations are not technical, but they mostly concern somebody's ability to politically influence other people. 1:14:42 So it's about narratives and once someone has been presenting a narrative and that narrative is being broken by a different way of using Bitcoin. 1:14:51 Yes. 1:14:53 It seems like they lose their minds and they say, no, we should discourage this at all costs. 1:14:58 And what does that mean? Well, they're going to call people names. 1:14:59 They're going to start blocking whoever disagrees with them, form echo chambers and rally everyone against each other with these factions. 1:15:09 And it makes me wonder sometimes because it's a slippery slope, you know, and it seems like what the guys from Ocean Mining have done lately is more than any government has ever done before. 1:15:23 It's more than any government has ever done in terms of censoring Bitcoin transactions. 1:15:28 And they're setting a pretty dangerous precedent because they're showing how it can be done with something with which maybe a majority of Bitcoin users can agree. 1:15:41 But they're kind of really showing how futile it is in a way because they've only found it's been a month and a half or maybe even two months. 1:15:50 I think that December 3rd was maybe like the official start day and who knows how much. 1:15:57 But they've only found five blocks or so, and this would have been six weeks at least ago. 1:16:04 So that's six, seven thousand blocks into five. 1:16:09 So really, they just show that it's it doesn't work. 1:16:15 It doesn't work. 1:16:17 The system works. 1:16:19 It doesn't matter if you're the government or if you're a former and or current or developer. 1:16:31 Yeah. 1:16:32 So what's your agenda with LayerTwo Labs? 1:16:36 Or just trying to push the stuff which you cannot name during this episode? 1:16:41 Or are you also looking into rollups? 1:16:44 Because I spoke with someone in Argentina and he told me that he regards sidechains as being obsolete. 1:16:52 And he thinks that zero knowledge rollups or sovereign rollups, as they're being introduced in Bitcoin, are much more interesting. 1:17:02 Well, why sovereign rollups? 1:17:04 Those are terrible, I think. 1:17:06 Aren't those the terrible kind? 1:17:08 Those are just nothing. 1:17:10 Those are just basically inscriptions when they're used. 1:17:12 Those are Ethereum using Bitcoin's block space. 1:17:13 Maybe I have. 1:17:15 It's hard to keep all these names down, but I think the sovereign rollup is when basically Ethereum wants to do rolling up over there. 1:17:26 They want to transact in ETH and then they inscribe the rollup on BTC as the data availability later layer, basically. 1:17:34 And this is a parking lot. 1:17:36 So that's that's terrible for Bitcoin. 1:17:38 And why would that even be relevant to the question of Bitcoin sidechains? 1:17:43 I don't know. 1:17:44 It has nothing to do with that. 1:17:46 Are you looking it up right now? 1:17:48 Rollups are being presented as an alternative to sidechains. 1:17:52 Well, they are to some extent. 1:17:55 The rollup requires ZK Prover to be added to L1 and it does nothing to solve data availability, which is the important thing. 1:18:04 Whereas. 1:18:08 So I don't know if you think that also L1 can censor the ZK message. 1:18:14 So it's really not that different. 1:18:16 The adversarial case, either 51 percent is against you or it's not. 1:18:20 And either you pay the fees to them, in which case they're happy to have every transaction go in and they don't want anything censored and they don't want anything to malfunction because they earn the fees. 1:18:30 So either they earn the fees or and in which case the miners are on the team of the everything functioning properly because they make money. 1:18:41 So either you're doing that or you are not doing that, in which case you run into the problem I mentioned at the very beginning, where you have a big conflict between the people earning the fees and the miners. 1:18:54 Leading to vertical integration. 1:18:56 So I don't see a big difference. 1:19:00 The big difference is that there's a lot of downsides in order to make the rollup something that always can be pulled down to L1. 1:19:08 You have to do a lot of work on that. 1:19:10 And then it means like, for example, the validity rollups that I actually saw were like. 1:19:17 You could only get like a 4x throughput increase, whereas in contrast, sidechains is unlimited. 1:19:27 Maybe if you switch from back and forth between UTXO and account. 1:19:33 You can get more, but even then it would be finite. 1:19:39 Whereas with sidechains it is unbounded. 1:19:44 So, and they also like the sidechains, you can just write them in whatever you can write them in any programming language you want, you can write them with any you have. 1:19:52 I think there's currently too much disagreement over what to do, which is gives an edge to the sidechains as well. 1:20:01 Disagreement is good for you have competing people do their different thing. 1:20:07 Yeah, let me turn my attention to the chat because I have been ignoring some people for too long. 1:20:14 Okay. 1:20:15 There's this guy, Arbo, who's getting annoyed. 1:20:18 He's like, enough not talking about sidechain. 1:20:21 Ask the questions, bro. 1:20:23 He asked two questions before this. 1:20:25 The first one was about mining that can steal from the stuff that cannot be named. 1:20:31 Okay, but we can't name that stuff. 1:20:34 Explain in detail what would happen if miners decided not to bridge back the coins or steal them, even if it goes against their interest. 1:20:43 Are they referring to something in particular for that one? 1:20:48 Are miners custodians of the Voldemort? 1:20:52 That's his question. 1:20:54 I say no. 1:20:56 But I don't know. 1:20:58 I think in a way, if they are, then they're custodian of everything. 1:21:01 I mean, are they custodian of the Lightning Network? 1:21:03 If you may open a channel with them. 1:21:06 If you have Lightning plus 51% coalition, and I'm Foundry and I have 75% hash rate, just hypothetical situation. 1:21:16 And you open a Lightning channel to me or just a tier Nolan channel, whatever. 1:21:22 I mean, let's say it's a Lightning channel. 1:21:24 Let's say you're trying to route HTLC or whatever. 1:21:29 I don't know. 1:21:31 But the point is, in that scenario, I think you have just basically, you're giving me the money and you just kind of hope that I give it back. 1:21:42 I can take it at any time. 1:21:44 Do you agree or disagree? 1:21:47 Go on. 1:21:49 I'm trying to understand where you're going with this. 1:21:53 I'm saying in that scenario, then the 75% hash rate is custodian of anything that's deposited in a Lightning Layer 2. 1:22:06 So they would be custodians of everything. 1:22:10 Yeah. 1:22:12 I don't think of mining, though, as having fixed identities. 1:22:15 I don't think of the miners. 1:22:17 I think of it as a process. 1:22:19 It's the mining process. 1:22:21 Because there's no set of people that are permanently in. 1:22:25 And anyone could have bad luck and never find a block again. 1:22:28 And new people could have good luck and just find blocks with a pen and a piece of paper, theoretically. 1:22:34 It's implausible. 1:22:36 So who is in the set? 1:22:38 Everyone and no one. 1:22:39 Everyone and no one. 1:22:41 So it's kind of like, I don't know, you'd say there's something else where scientists or the community of scientists versus some named people. 1:23:04 I think it's a very different thing. 1:23:06 Or even what constitutes something like math. 1:23:09 In terms of proof, like when infinity was invented, people didn't believe in it. 1:23:13 Mathematicians didn't believe in it for a while. 1:23:15 And when imaginary numbers were invented, the mathematicians didn't believe in it for a while. 1:23:20 But then now it's just they ended up accepting the arguments for why they are. 1:23:25 Those things are real. 1:23:27 And at one point, they didn't believe in negative numbers because they thought it was ridiculous. 1:23:32 You have two apples and you take away eight apples. 1:23:36 It doesn't make any sense. 1:23:38 But it does make sense. 1:23:41 So what I'm trying to say is it's a decentralized process that finds the blocks and it has no... 1:23:51 It's from everyone and no one. 1:23:53 It's like whatever. 1:23:55 The agents in the matrix. 1:23:57 It's a bad analogy. 1:23:59 OK, I put another one of these. 1:24:01 This one is also pretty big, but it's not quite as big. 1:24:05 It's not quite as big. 1:24:07 OK, ready? 1:24:09 The stuff that I have been drinking is hard. 1:24:14 What do you mean hard? 1:24:15 What does that mean? 1:24:17 Like 60 degrees Celsius or something. 1:24:20 70 maybe. 1:24:24 What did you say? 1:24:26 I thought you meant like hard liquor. 1:24:28 You mean hot? 1:24:30 The temperature? 1:24:32 Are you talking about the proof? 1:24:33 This is 80 proof. 1:24:35 This is like real vodka. 1:24:41 It's burning my throat. 1:24:43 Anyway, let's move on to his other question. 1:24:48 I hope he's still here. 1:24:50 I hope he likes what he got for that. 1:24:53 No, I don't think so. 1:24:55 Probably not. 1:24:57 He said use sidechain instead of Voldemort to ask the same question. 1:25:00 If miners decide to steal money from the sidechain, what would happen in detail? 1:25:06 But it's not really about a decision. 1:25:10 I suppose it is, but it's like you either buy this economic setup or you don't. 1:25:18 But with $7.2 million being paid every day on Ethereum, that is a net present value of $40 billion or whatever. 1:25:30 It's like a huge amount of money. 1:25:32 So you're going to lose that, this goose that lays the golden eggs. 1:25:37 You're going to lose that if people don't feel comfortable transacting there. 1:25:44 You're saying that it's unlikely to happen, but this guy wants to know if it happens, what are the steps involved? 1:25:51 First step is the miners hack together some software, which is very easy to do. 1:25:58 They hack together software that assembles a transaction. 1:26:02 But our software won't do it. 1:26:04 But it's possible to do. 1:26:06 You make something that will construct a withdrawal transaction that pays them all the coins in the BIP300 script. 1:26:16 Wait, wait, wait. You said BIP300. 1:26:19 I know, but I thought we had to... 1:26:21 You have to send a Lightning payment now. 1:26:24 I thought that since it was already in the question, it was... 1:26:27 Okay. 1:26:29 No, it was sidechains. 1:26:32 Okay, I'm opening Phoenix. 1:26:34 This is our Phoenix right now. 1:26:36 I bet it's not going to work. 1:26:38 We're going to have to drink more. 1:26:40 Because the QR codes don't go over Zoom. 1:26:44 We pre-tried to do it. 1:26:47 You have to turn the brightness way up and manually focus on the screen. 1:26:50 And then even still Zoom makes it into like a Rorschach inkblot. 1:26:56 No, wait. 1:26:58 I have my Phoenix open. 1:27:01 Mine is still connecting to Tor. 1:27:04 Oh, great. 1:27:06 I had to close the app and open it once again to get another route. 1:27:11 Now it's connected. 1:27:13 I went to the receive section. 1:27:16 Can you scan this? 1:27:17 Can you scan Phoenix also? 1:27:19 Let's see here. 1:27:21 Okay, I'm scanning. 1:27:23 I don't know. 1:27:25 It doesn't look good, honestly. 1:27:27 But I'm going to hold it up. 1:27:29 It's very close. 1:27:31 Can you do that thing where you focus the camera before? 1:27:33 Like this? 1:27:35 Wait. 1:27:37 You can try now. 1:27:39 This better work. 1:27:41 To my eye, it looks okay. 1:27:43 But it does look really weird. 1:27:45 I think Zoom does something to it. 1:27:47 I'm not scanning this. 1:27:50 No, it's Zoom. 1:27:52 Zoom. 1:27:54 I think. 1:27:57 I'll show you. 1:27:59 You can see it. 1:28:01 You can show it to people. 1:28:03 I'll send it to you on Telegram. 1:28:05 It makes this weird squiggle. 1:28:07 Look, this is what I see. 1:28:09 This is what I see on the screen and on my phone. 1:28:12 So I don't know. 1:28:14 I think it probably does some kind of video compression. 1:28:17 It's probably very hostile to the. 1:28:19 Look, the QR code really doesn't look like it. 1:28:22 Yeah, the dots have turned into curves for some reason. 1:28:27 Let me try to turn off my filter. 1:28:31 My background. 1:28:33 Maybe this is the one that's causing issues. 1:28:36 So how do I do this? 1:28:39 Choose virtual background. 1:28:42 No, it's none. 1:28:44 Now you're going to have to scan this. 1:28:45 Can you scan this, Paul? 1:28:47 Okay, that looks better. 1:28:49 Let me see. 1:28:52 It looks a lot better, but it's still not working. 1:28:59 I don't know. 1:29:00 It looks really good for me. 1:29:01 Why isn't that? 1:29:06 Can I try again? 1:29:10 After this, you're going to have to explain to me why you hate lightning so much. 1:29:14 I don't really like. 1:29:16 It's not about hating. 1:29:19 This looks much better, but it's still not working. 1:29:26 Should I just send you an invoice to me? 1:29:31 Yeah. 1:29:33 Send it to me on telegram. 1:29:36 I don't know. 1:29:37 It doesn't look great, but it doesn't look that bad either. 1:29:40 It looks way better than before. 1:29:42 But it's not working. 1:29:43 And now it's getting brighter and brighter and brighter, and it's getting worse. 1:29:47 I don't know. 1:29:48 It didn't work for some reason. 1:29:49 The QR code scanner didn't pick it up. 1:29:51 I don't know why. 1:29:54 This has nothing to do with lightning and everything to do with Zoom. 1:29:58 Probably. 1:30:01 So let me copy this. 1:30:03 Copy to clipboard, and now I'm going to send this to you on telegram. 1:30:08 I didn't put an amount. 1:30:10 And Breeze has a very helpful use clipboard button, which is great. 1:30:16 I assume. 1:30:17 Send me something very small that makes absolutely no sense, like dust. 1:30:21 Because you argued that these transactions are not economic or whatever. 1:30:27 Okay. 1:30:28 Let's see here. 1:30:32 Send you a little bit. 1:30:33 We'll see if we can send you $12.12. 1:30:42 Oh, it worked. 1:30:43 It worked. 1:30:44 It worked. 1:30:45 I'm rich. 1:30:46 It said Phoenix to Phoenix, though. 1:30:49 But still. 1:30:50 Right? 1:30:51 I think it was. 1:30:52 You want to do Phoenix to Breeze or Phoenix to Blix? 1:30:56 No, let's not chance it. 1:30:57 Okay? 1:30:59 That already took a long time. 1:31:01 A long time. 1:31:02 Okay, it worked. 1:31:03 Now I made $12 because you mentioned what you were not supposed to mention. 1:31:08 Anyway, you're describing the process. 1:31:10 What happens when miners can actually steal? 1:31:14 They construct the transaction that pays out to them. 1:31:18 And then they take basically the hash of this transaction, and they insert it in where the normal withdrawal hash would go. 1:31:27 This would alert everyone that there's a problem. 1:31:30 Everyone is paying attention. 1:31:32 And then that hash needs to get basically upvoted. 1:31:39 It starts off with a score of zero. 1:31:41 And each block, it can be moved up at most one unit, or it stays where it is, or it can actually be clawed back down one unit. 1:31:52 But it needs to go within six months, which is 26,300 blocks. 1:31:58 It needs to go up to 13,150. 1:32:01 So that's why it has to take the wrong hash in full view of everyone. 1:32:05 It must achieve a very high score. 1:32:09 After it achieves that score, it basically whitelists the transaction for withdrawal. 1:32:14 And they can then broadcast the evil transaction into a block months down the line. 1:32:21 And if it's 51% hash rate, then it will take all six months, because they'll just barely be getting it in time once every other block or so. 1:32:32 And then they broadcast that, and then the money on L1 is transferred to them. 1:32:37 And then the chain that was using that money declares bankruptcy or whatever, and is a failure. 1:32:54 Are you sure that the chain declares bankruptcy after this coordinated 51% attack? 1:33:00 Well, it has no L1 coins now. 1:33:05 Sorry, you mean the sidechain? 1:33:09 Yes. I couldn't say which chain. The L2 chain. 1:33:16 It used to have exactly enough coins to pay everyone out if they all withdrew. 1:33:20 But now it has presumably zero coins, or not enough coins. 1:33:25 Okay, so everyone who deposited their coins into that sidechain loses their deposit. 1:33:33 Yep. 1:33:35 Is there any justice mechanism? 1:33:38 Well, there is nothing that will work against a hash rate majority. 1:33:43 But that's the same with Lightning, though. 1:33:45 None of the Covenant justice mechanisms will work against a huge hash rate majority, which is why it's pointless to compare them, I think, in that way. 1:33:56 You see what I mean? 1:33:57 The huge hash rate majority, if they're willing to do this type of thing that we just discussed, they will also be able to filter out, 1:34:09 they'll just be able to stop the Lightning justice transaction from getting into a block for two weeks. 1:34:15 That's child's play. 1:34:18 Okay, how likely is that to happen? 1:34:21 I think all of those things are very unlikely to happen. 1:34:24 But I'm just, I try to point out that they're very similar to each other, in that they are all. 1:34:30 Because the miners are, you know, participants in Bitcoin, they want Bitcoin to succeed. 1:34:36 It's much better to be in a situation where everyone is on the same team and everyone wants to succeed. 1:34:41 That is better, actually, even than the cryptographic security, because cryptographic security might have like some kind of bug. 1:34:48 And then people will lose funds. 1:34:50 But if everyone wants it to keep working, then even if there's a bug, then they may not exploit the bug. 1:34:59 Because they don't want, they say, wait a minute, if we exploit this bug, we'll lose the transaction fees. 1:35:07 We'll lose the transaction fees. 1:35:09 We'll lose the source of our wealth, which is not the number of coins on the chain at any given time. 1:35:20 Which can always be an arbitrarily small amount. 1:35:22 But it is the total transaction fee throughput. 1:35:28 Yeah, Arvo also wants to know if everyone can interpret that hash, even a normal user. 1:35:33 Yes. 1:35:34 If he detects a corrupted hash, what can he do to prevent it? 1:35:39 The hash will be reported by the L2 chain. 1:35:43 Every L2 chain is reporting the single honest hash because it is produced automatically. 1:35:52 So everyone gets the same answer and everyone knows which one the real one is. 1:35:56 So if one shows up just out of nowhere, everyone knows which one is the one. 1:36:01 If you run a full node of the L2 chain, you will know what it is. 1:36:04 Or even if you run an SPV node and only look at the headers or any other clever techniques that the chain might do to get the word out there. 1:36:11 And the hash updates very rarely. 1:36:15 It only updates once every three to six months. 1:36:21 The real hash is very, very easy to find. 1:36:23 Every other hash is an evil hash that has been conjured out of, you know, whatever it is. 1:36:30 It does not correspond to the actual people who have requested to withdraw on the L2 chain. 1:36:36 So every other hash is the wrong one. 1:36:39 If you detect that it is a mistake, then obviously the first thing to do would be to make sure that some kind of misunderstanding hasn't taken place. 1:36:49 Because it could be a completely innocent mistake. 1:36:52 But yeah, you would start to tell people about it. 1:36:55 You'd say this is the incorrect thing. 1:36:58 You can always put a new hash in. 1:37:00 And when the new hash is upvoted, all the others are downvoted automatically. 1:37:04 So only one can make forward progress towards the goal because only one of them is correct. 1:37:10 So there's never a scenario where two are correct. 1:37:13 So you would start, like anything else, you would think that there's a dispute. 1:37:20 And then you would slowly escalate further and further and further. 1:37:24 You might try to figure out who's doing this wrongdoing and who is responding the wrong way. 1:37:32 You could figure out if certain mining pools support this error. 1:37:39 Or if they are, in fact, behind it, you could explain to the individual hashers who are not the mining pools why this pool may be doing something that benefits them, benefits the pool. 1:37:54 But it will, in the long run, hurt the hashers because the value of the long run transaction fees may be much higher than what can be taken in three months. 1:38:04 So you could appeal to them to switch pools. 1:38:09 You could try all kinds of things. 1:38:14 Arbo also, he seems to be monopolizing the conversation. 1:38:17 So Arbo, just so you know, this is your last question. 1:38:20 I'm going to have to pick up some others. 1:38:22 But he says, what if the sidechain becomes as big as L1 and governments take control of it just to destroy Bitcoin? 1:38:29 Is there any way to prevent this? 1:38:32 Well, if it's the case that it becomes very big and then it is taken over and destroyed, you can always fall back to L1 and then just try again. 1:38:40 Make the same thing a second time. 1:38:42 Or make 10 things that are one tenth as large. 1:38:47 I wouldn't really worry about that. 1:38:49 That sounds like a pretty good scenario. 1:38:53 So you're saying that there's a self-regulating mechanism that might want to prevent this? 1:38:58 They can fail safely without taking the whole thing down. 1:39:00 So it's not like L1. 1:39:01 It's like an infinite L1 block where the network just stops working. 1:39:07 With this, the L2 network is just paused temporarily until the new network comes back. 1:39:15 And meanwhile, L1 is still small and it's still a small block size. 1:39:18 It still works just fine. 1:39:21 So that doesn't sound like such a bad scenario to me. 1:39:27 I mean, we currently live in a situation where most of the financial system is already controlled by the government in that way. 1:39:35 So we're already in that world. 1:39:37 So if we could switch that to everyone at least being a user of Bitcoin temporarily and then have a small setback and then try again, that seems like an improvement relative to where we are now. 1:39:55 Okay. 1:39:57 I don't think Arbo has any more questions, but he did make an observation before this that he said that nobody wants sidechains. 1:40:07 So how can you activate that? 1:40:11 I think that there will be a lot of demand for sidechains. 1:40:16 I think it will be much more than that. 1:40:18 I think the truth is there's no demand for Lightning. 1:40:21 It's less than 5,000 coins. 1:40:23 And there's 150,000, 140,000 for wrapped BTC. 1:40:28 So I don't see any evidence that I think it's actually just Lightning has the numbers are distorted upwards because of just the way the narrative played out. 1:40:41 But the actual hard data supports the fact that people want to not only develop the sidechains, but also use them. 1:40:54 I mean, we have much more transaction fees are paid on Ethereum than on BTC. 1:41:00 And USDT on Tron is like the number one payments chain or something. 1:41:06 So people want to use different blockchain designs. 1:41:12 That is indisputable. 1:41:15 Whether or not they would prefer them, you know, whether or not the right tradeoff is sidechain of BTC, I don't know. 1:41:24 But Lightning is a tiny amount of 0.0, whatever, 2.4 hundredths of a percent, which is nothing. 1:41:37 Yeah, Arbo said, I have more questions, but you told me if it had to be my last one. 1:41:44 Well, I think most of these were addressed in our five hour live stream, which we did like three months ago. 1:41:51 Do other people have questions? 1:41:52 I feel bad for anyone else who may have a question. 1:41:58 If there are no other questions, then you might as well let them keep asking questions. 1:42:03 I don't know. 1:42:04 There was Coco in the chat who was very active. 1:42:10 But he was more reactive, not just active. 1:42:14 He didn't really ask questions. 1:42:15 He was completing some arguments like, yes, layer twos that pay fees to the miners is the way to go. 1:42:23 The layer two, by definition, has to connect to Bitcoin in some way and wrap BTC on Ethereum doesn't really. 1:42:30 He also remarked that you have longer hair now. 1:42:34 I do, yeah. I need a haircut. 1:42:37 No, you're fine. 1:42:42 What else? 1:42:43 Those cold winter months, you want like a little hat. 1:42:47 Regarding OP_CAT, people should then tell us potential issues with it. 1:42:52 It's literally just concatenating two values. 1:42:57 It is harmless. 1:42:58 And SegWit was presented as a block size increase at the time big blockers tried to push their ideas. 1:43:06 He also talked about LNHance, that it has CTV in it too. 1:43:13 Regarding SegWit, again, pushing it without the block size increase, which is technically possible, was seen as unthinkable because everyone's mind was on block size increases. 1:43:23 I think it was a compromise. 1:43:26 It was pitched as like, we will get a 2.3x block size increase out of this. 1:43:34 In fact, I remember people saying, because SegWit2x, they wanted the 2x block size increase. 1:43:39 But plenty of people said, rightly so, they said SegWit already is a 2x block size increase, at least. 1:43:48 Based on prevailing patterns of transaction size, it would have been about 2.3x-ish. 1:44:00 Assuming no inscriptions that are fit completely in the witness section. 1:44:10 It was pitched as a compromise, but plenty of people didn't know that. 1:44:15 They thought something like SegWit makes the transactions smaller, and so you can fit more transactions. 1:44:21 People still think of the witness discount as something that is justified on merit. 1:44:30 Whereas really, it is not really so. 1:44:35 It depends on who you ask, but it's the same number of bytes. 1:44:40 Four megabytes worth of bytes can go across the wire, but they only get charged as much as what one megabyte of a different type of data would get charged. 1:44:54 It does not make the transactions smaller or more efficient, but this is a very widespread view that many, many people had. 1:45:01 I can't believe that we did Phoenix to Phoenix, but I can't believe that it worked immediately on the first try. 1:45:07 I really thought it probably wouldn't work. 1:45:10 But there you go. Phoenix. Sponsored by Phoenix. Next week. 1:45:15 Unlikely, but I'm happy it went through. 1:45:19 Anyway, we also got some comments on X, and they were super positive. 1:45:24 X is the former Twitter, by the way. 1:45:26 And Stephanie So said, loving the clarity and honesty of this conversation. 1:45:31 And also, she seemed to agree with some points and said 100% a couple of times. 1:45:38 And Coco also remarked that, unfortunately, many people still suffer from the PTSD from the block sites. 1:45:46 Yes, this is terrible. 1:45:47 This has caused nothing but... 1:45:48 And this has allowed certain people to work their way up, the wrong kind of person to work their way up the totem pole. 1:45:55 And deceive a bunch of innocent victims into, you know, joining the weird cult. 1:46:02 But really, it's just bad for Bitcoin to have this weird relationship. 1:46:07 I mean, of course, being suspicious and paranoid, that's well enough. 1:46:11 I mean, I understand that. 1:46:13 That's great. 1:46:14 You know, you get an A+. 1:46:15 If you're doing like cryptography and something like this, and you want to be suspicious and paranoid, that's great. 1:46:26 But it just doesn't really make any sense. 1:46:28 Like, you know what I mean? 1:46:30 And this is why I think OP_CAT can help. 1:46:33 Because OP_CAT, it was in the original Bitcoin. 1:46:36 It was kind of hastily disabled. 1:46:39 It does something that regular people can understand, putting two things together on the stack. 1:46:46 And we already have stack things that are way more complicated and weird versions of that. 1:46:53 So it would just show that it is not the proposal itself. 1:46:57 It is just this weird baggage. 1:46:59 I think that that would help. 1:47:04 And the fact that miners can activate a software unilaterally, that is what proves how harmless it is. 1:47:12 Because the software can activate and your node won't even notice. 1:47:16 The fact that you won't notice, that is what proves that it is being done the right way. 1:47:23 You know what I mean? 1:47:25 You don't notice the activation, but you can notice the side effects of the activation. 1:47:30 But think about it. 1:47:31 If the soft fork is coded the right way, and it is like the way most soft forks had in the past. 1:47:39 We are reusing the unused. 1:47:41 Satoshi added those 10 opnops specifically so that they could be used later. 1:47:49 That is exactly why he put them there. 1:47:52 So you take a blank opnop 6 or OP_NOP5 or whatever. 1:47:58 And for old nodes, it always makes it through the script interpreter. 1:48:03 But for new nodes, it sometimes fails the script interpreter. 1:48:07 For new nodes and 51% hash rate. 1:48:10 Now you will only notice the side effects of the soft fork. 1:48:16 If you deliberately go out to use this, what to you is an unused opnop that is supposed to be used to deploy future features. 1:48:26 You suddenly use opnop 6 in your transaction without looking around to see that plenty of other people and plus 51% of the hash rate is using it for something else. 1:48:39 If you do that and you use it in a way that breaks their rules, then the transaction will be invalid. 1:48:46 But even then, nothing really bad is happening. 1:48:48 Your transaction is invalid. 1:48:50 You still have all of your money. 1:48:52 You just redo the transaction some other way with either using opnop 6 differently or using opnop 9 or using nothing, not using that at all. 1:49:01 So what you notice is very, very limited. 1:49:04 You may, in a very, very, very bizarre adversarial edge case where people disagree about activating the soft fork, you might see some blocks get re-org'd. 1:49:14 Which is not good. 1:49:16 However, blocks get accidentally orphaned and re-org'd naturally all the time just based on bad luck and laws of physics. 1:49:26 So it's not even that. 1:49:28 It's not in a new category of thing. 1:49:30 The same thing already happens. 1:49:32 It really is in a category of thing that you would not notice. 1:49:34 The irony is that some things like SegWit and even script versioning, those are very big, huge changes that are not – 1:49:47 So I think SegWit and tap – really SegWit in particular was almost not really – 1:49:54 It was barely a – 1:49:56 It wasn't a soft fork in the same way. 1:49:58 CheckLockTimeVerified just took opnop 2 and it was basically like postdating a check. 1:50:02 It says this transaction is not valid until this block height. 1:50:08 And there's nothing controversial about that. 1:50:11 That's a very different type of thing. 1:50:13 And so in CTV and other things, these other things, when you repurpose an opcode, 1:50:20 that is really – that's very tame. 1:50:26 Because Satoshi put those in there specifically because he knew that we might want to add opcodes later. 1:50:32 That was the whole point. 1:50:34 So I don't know. 1:50:37 It's really a big stretch to say that this is some kind of like – 1:50:41 It's really not even a change to the protocol because you can ignore it completely if you wish. 1:50:47 And also it – 1:50:49 The protocol has these blank slots. 1:50:53 And there are an unlimited number of these. 1:50:56 There are only 10, it's true, but you can do a thing where if we use op9, 1:51:02 then it checks the next two bytes to see like – 1:51:08 Then you can count to 100. 1:51:10 And then you can say if the next two bytes are 99, 1:51:12 check the next three bytes for the next – 1:51:16 So there's an unlimited number of these. 1:51:18 They are not a scarce resource. 1:51:24 They are supposed to be used this way. 1:51:28 So yeah, it just shows you how messed up everyone has gotten, I think. 1:51:34 Well, this is a side note. 1:51:37 I'm a nerd. 1:51:39 In my previous life, I was into constitutionalism. 1:51:42 And the fact that we have these 10 opnops, 1:51:46 it sounds a bit like not just the 10 commandments because I'm not a religious nut. 1:51:52 I'm not Luke to link everything to the Bible. 1:51:56 But you have the Bill of Rights. 1:51:59 And it almost seems like Satoshi left us, you know, 1:52:03 the founding father left us the 10 Bill of Rights and we're not using them. 1:52:07 I don't know how well that analogy works 1:52:11 because, of course, the Bill of Rights were amendments, 1:52:14 changes or whatever to the Constitution. 1:52:17 But each amendment was theoretically – 1:52:19 It's important to note that the amendments, especially the first 10, 1:52:23 those were really, I think, 1:52:26 the Constitution itself is supposed to declare what the government cannot do. 1:52:31 And the 10 amendments in particular, 1:52:34 like the first one says, 1:52:36 Congress shall make no law interfering with freedom of speech, 1:52:41 freedom of religion, et cetera, freedom of the press, 1:52:44 the right to peacefully assemble 1:52:46 and the right to petition the government for the redress of grievances. 1:52:49 But they're saying – 1:52:53 It's like a covenant in a way, 1:52:55 but they're saying things that the government cannot do. 1:52:57 They're shrinking. 1:52:59 So they're very soft fork-like. 1:53:01 They're shrinking the design space of Bitcoin 1:53:06 or whatever, the state space. 1:53:09 You're saying, 1:53:11 the Bitcoin protocol shall not use OPNAP2 for anything 1:53:16 other than check, lock, 10, verify. 1:53:19 You're such a nerd, Paul. 1:53:22 I can't believe this. 1:53:24 Anyway, Dan Anderson said OP underscore full underscore send. 1:53:29 I'm not sure what that one is. 1:53:31 Is that to empty your wallet? 1:53:33 I don't know. 1:53:35 And Coco also remarked that Taproot added a bunch of new OPNAPs, 1:53:38 which they call OP underscore success. 1:53:41 So we have plenty. 1:53:43 Indeed. 1:53:45 Taproot has its own tap script thing. 1:53:47 I don't know how many people will find this interesting, 1:53:50 but they have their own thing. 1:53:53 Yes, it's not a scarce resource. 1:53:55 You only need one and then you have infinite, basically. 1:53:58 Although when Satoshi added them the first time, 1:54:03 I think I'm almost certain that that was a hard fork. 1:54:08 And I think Eric Lombroso also agrees 1:54:10 and also presented at this at the first breaking Bitcoin 1:54:14 in Amsterdam, I think. 1:54:17 But because they were not there before, 1:54:20 those were all fail. 1:54:22 And then they were basically all, 1:54:24 anyone can spend OP64. 1:54:27 Anyone can spend OP66. 1:54:29 And so, 1:54:32 just a little random historical fact for you. 1:54:35 But in those days, 1:54:37 that would be one of only a few hard forks. 1:54:40 One of which would be, I think, 1:54:43 changing from longest chain to heaviest chain, 1:54:46 I think is also a hard fork. 1:54:48 Because if you don't upgrade, 1:54:51 it's quite likely that you'll be on the wrong chain. 1:54:55 Although not inevitably. 1:54:57 But it becomes increasingly likely 1:55:00 that you will be on the wrong chain. 1:55:03 So you must, it's a mandatory upgrade. 1:55:06 Now we have something very spicy. 1:55:09 First of all, there is Coco in the chat who agrees with you. 1:55:12 Does he work for LayerTwo Labs? 1:55:14 If he doesn't, give him a job. 1:55:16 Anyway, Arbo said, 1:55:18 you clearly won the debate against Giacomo Zucco, 1:55:21 yet he hasn't changed his position at all. 1:55:24 Do you have thoughts on that? 1:55:26 Yeah, I thought that was very interesting 1:55:28 when he had this conversation. 1:55:30 Because I had no idea. 1:55:32 He was going to do a thing on what shall not be named. 1:55:35 He almost got me. 1:55:37 I was almost going to say it. 1:55:39 Okay, wait. 1:55:41 What's the context? 1:55:43 When did the debate take place? 1:55:45 Where can people find this? 1:55:47 There was Bitcoin Amsterdam. 1:55:49 Last year? 1:55:51 In 2023. 1:55:53 Like a few months ago. 1:55:55 It was like October, I think. 1:55:57 Does that sound right? 1:55:59 And he was going to give a talk on 1:56:02 letter, letter, letter, number, number, number. 1:56:06 It was just going to be him. 1:56:08 But they didn't know that Paul was here. 1:56:12 So he was like, let's turn it into a debate. 1:56:14 And then they said, let's have someone, 1:56:18 I guess Aaron or someone moderate it. 1:56:20 But then Giacomo said, I think we probably don't need it. 1:56:23 So it's just the two of us, 1:56:25 which I thought was a better format, honestly. 1:56:27 But then, yeah, I just like said, 1:56:30 this is what this is. 1:56:32 And then he spent the whole time complaining about 1:56:34 this is being promoted the wrong way or the tone. 1:56:38 And then at the end, he, 1:56:40 I don't know, he sort of like, 1:56:42 he didn't really, 1:56:44 it's weird, he doesn't seem to really disagree. 1:56:47 I don't know. 1:56:49 I think it's a very good question that the person asked. 1:56:52 Because he, 1:56:55 I think it's probably, to be honest with you, 1:56:57 it's probably just like a RGB compete. 1:56:59 They think it's a competing project, probably. 1:57:01 I think that's, that's what it all comes down to. 1:57:03 I think it's probably most of the explanation. 1:57:09 I think that's also why Peter Todd doesn't like 1:57:12 Drivechains, because, oh, shit. 1:57:14 I'm supposed to drink. 1:57:19 Anyway. 1:57:21 Horrible. 1:57:24 So, 1:57:26 Peter Todd has been thinking about sidechains 1:57:28 since at least 2013. 1:57:30 Yeah, long time, very long time. 1:57:32 And it almost seems like, 1:57:34 I don't think he gave up on the idea. 1:57:36 Maybe that he wants to come up with something better 1:57:38 to one up you. 1:57:40 And maybe that he thinks that 1:57:42 what I'm not supposed to say 1:57:44 can be improved upon. 1:57:46 Yes, he likes the so-called client-side validation. 1:57:48 And so do I. 1:57:50 Everyone wants this. 1:57:52 This is the whole problem of the blockchain 1:57:54 is it's a global state. 1:57:56 And that is hard to grow to the whole world 1:57:58 because of this O-N squared thing. 1:58:00 It's never literally O-N squared anywhere, 1:58:02 but I think we all understand that 1:58:04 it's like you have all the people in the world 1:58:06 are like rows of a table. 1:58:08 And then all the other people of the world are 1:58:10 8 billion rows, 8 billion columns. 1:58:14 There's nothing literally O-N squared, 1:58:16 but it's like that's the state is growing. 1:58:18 So, 1:58:20 that's the state of the software. 1:58:22 And so, 1:58:24 you want to only have, 1:58:26 what he wants is something like 1:58:28 where 1:58:30 each user only, 1:58:32 they're responsible for tracking their own coins 1:58:34 and even the miners aren't in on it. 1:58:36 So, he doesn't even want the miners in 1:58:38 on it at all. 1:58:40 And he doesn't want anyone in on it at all. 1:58:42 So, he doesn't want any shared state. 1:58:45 Whereas I think it's actually not so bad 1:58:47 because in a thing that cannot be named 1:58:49 even like I have done some math. 1:58:51 So, for example, with Solana, 1:58:53 you could check like 1:58:55 Solana has been some of the most 1:58:57 disrespectful to the node costs 1:58:59 at first. 1:59:01 Because at one point there was only like one Solana node 1:59:03 and everyone was making fun of Solana. 1:59:05 I remember January of I think 2022, 1:59:07 everyone was making fun of Solana all the time, 1:59:09 including me. 1:59:11 And someone inside contacted me 1:59:13 and told me 1:59:15 they're down to just one node 1:59:17 in a data center. 1:59:19 That's how bad it is. 1:59:21 Someone told me that. 1:59:23 But, you know, 1:59:25 after now they've been doing more engineering 1:59:27 or they're working on that problem or something. 1:59:29 And apparently now 1:59:31 you can look it up, 1:59:32 there's online calculators. 1:59:34 I asked some friends, 1:59:36 I asked some people who I thought would know. 1:59:38 I looked it up, I cross compared. 1:59:40 It's something like 1:59:42 $3,000 to $15,000 a year 1:59:44 to run a node 1:59:46 and now there's money more than one. 1:59:48 That's not Armageddon. 1:59:50 You know what I mean? 1:59:52 And if you had something like five of those, 1:59:54 that would be 1:59:56 enough to do 1:59:58 like 1.1 trillion transactions a year, 2:00:00 which was the whole, 2:00:02 the entire transaction volume of Earth. 2:00:04 As near as I could estimate it, 2:00:06 it's not easy to estimate such things. 2:00:08 But I gave it a try. 2:00:10 And that was kind of what I came up with. 2:00:12 So you see... 2:00:14 That's such a big blocker argument, 2:00:16 by the way. 2:00:18 It's not that much though. 2:00:20 You know what I mean? 2:00:22 The reason why large blocks on L1 is bad 2:00:24 is because everyone is a moral argument. 2:00:26 Everyone must pay 2:00:28 the cost to get in. 2:00:30 And so not only is it bad whenever that goes up, 2:00:33 it's just kind of bad 2:00:35 not to care about keeping it down. 2:00:37 Does that make sense? 2:00:39 You have to just 2:00:41 take a polite interest 2:00:43 in keeping it down. 2:00:45 Because if it goes up and up and up, 2:00:47 it'll be like the debt ceiling. 2:00:49 And then we'll be doomed. 2:00:51 But really, the actual numbers are not... 2:00:53 I mean, this is... 2:00:55 There's a lot of people out there 2:00:57 who can pay 2:00:59 $3,000 or $15,000 a year. 2:01:01 It's certainly... 2:01:03 I'm not suggesting we do... 2:01:05 But I have done my own math 2:01:07 on, for example, 2:01:09 if there were hypothetically... 2:01:11 I just did this for fun. 2:01:13 It's certainly unnecessary 2:01:15 that we would ever have to do this. 2:01:17 But I'm just saying 2:01:19 a one-gigabyte block size node, 2:01:21 I've calculated that to only be 2:01:23 like a few hundred dollars a month 2:01:25 and like two and a half thousand dollars up front. 2:01:27 And that was years ago. 2:01:29 I bet the cost has actually fallen. 2:01:31 And this does not include things 2:01:33 like keeping the bandwidth private, 2:01:35 which is very important. 2:01:37 But again, in my universe, 2:01:39 there's special chains for privacy only 2:01:41 that are slightly more expensive. 2:01:43 And there's other chains 2:01:45 that are less decentralized, 2:01:47 less private, but cheaper 2:01:49 and easier to run. 2:01:51 So I think you have a big space 2:01:53 of all these different chains 2:01:55 of every different shape and size. 2:01:57 And so that is not... 2:01:59 And you would only... 2:02:01 One, that's complete and total overkill. 2:02:03 And even you'd have to get up 2:02:05 to nine of those 2:02:07 and then you would have 2:02:09 the transaction throughput of the world. 2:02:11 But they would be geographically distributed. 2:02:13 So you'd have like the North America one, 2:02:15 and you'd have like the Europe one, 2:02:18 the Asia one, whatever. 2:02:24 Rest of world. 2:02:28 So you'd probably only need to run the one. 2:02:33 It's just not like... 2:02:35 If it were impossible... 2:02:37 And just think also, 2:02:39 everyone's getting rich. 2:02:41 Just on average, 2:02:43 laws of economics, 2:02:45 every human being is getting wealthier 2:02:47 in terms of how much money 2:02:49 the average person gets in an average year. 2:02:51 And the costs of all these things, 2:02:53 bandwidth, CPU, hard drive, 2:02:57 those things are all falling. 2:02:59 And then with the right engineering, 2:03:01 like Solana correctly shows 2:03:03 that you can take a problem 2:03:05 that's really, really, really difficult 2:03:07 and you find what's the bottleneck? 2:03:09 Why is it... 2:03:11 What's the thing that's costing us the most? 2:03:13 We'll focus our engineering on that. 2:03:15 Okay, what's the next bottleneck? 2:03:17 What's the next... 2:03:19 Sometimes it's just one little thing, 2:03:21 one little misconfigured database 2:03:24 or some memory leak or something 2:03:26 that makes it 100 times more expensive. 2:03:29 So you fix that or you optimize 2:03:31 or you parallelize something 2:03:33 that can be parallel. 2:03:35 You know what I mean? 2:03:37 If you couldn't do them on GPUs, 2:03:39 they would be impossible. 2:03:41 But because we've already lived in a world 2:03:43 where people buy nice gaming hardware 2:03:46 and use it for mining even, 2:03:48 that the GPUs are so strong, 2:03:50 something that would normally 2:03:52 not be computable 2:03:54 in a human lifetime can be... 2:03:56 Everyone can download Midjourney 2:03:58 and have it run on their desktop 2:04:00 and just use their own GPU and do it. 2:04:02 So I don't know if it's Midjourney literally, 2:04:04 but it's like some clone or something. 2:04:06 My friend just did it. 2:04:08 I saw him do it on his own computer. 2:04:10 You don't dial out to the... 2:04:12 It just has the weights. 2:04:14 You just do it yourself. 2:04:16 So what I'm trying to say is 2:04:18 the cost is not... 2:04:20 If you do the math 2:04:22 and then it's like this would cost... 2:04:24 This would quickly become 2:04:26 40 trillion terabytes of space 2:04:29 or something, 2:04:31 and then you know that it's not feasible. 2:04:33 With this certain type of L2, 2:04:35 you can also do UTXO commitments 2:04:37 and throw out old state and stuff. 2:04:39 You do other optimizations 2:04:41 that you think will help. 2:04:43 So the reality is 2:04:47 it's just not that big of a... 2:04:50 Because this is the contrast 2:04:52 between RGB 2:04:54 and other type of sidechain L2. 2:04:57 Like a type of sidechain L2 is that you don't need... 2:05:02 It's just not... You've got to figure out like where are we spending a ton of money? 2:05:08 Is it good to spend tons and tons of time on software engineering 2:05:13 and then not release something for 10 years? 2:05:17 By then, it may be a completely different problem. 2:05:20 This type of thing happens all the time. 2:05:22 There's a whole book about this called The Innovator's Dilemma 2:05:25 about the innovation changes, the consumer's expectations change, 2:05:33 all the other parts of the economy will change. 2:05:37 So you can get very good at building a certain thing that people no longer want. 2:05:44 You can build the best horse and buggy carriage and you finally finish it 2:05:51 and that's the year the car goes mainstream or something like that. 2:05:55 So things have a... It's very tricky to figure out which thing... 2:06:04 So I'm just saying that I don't see it as a big deal. 2:06:10 And that's for a one gigabyte node, which we would be nowhere near that starting off. 2:06:14 It would be one one-hundredth. 2:06:18 First of all, Paul, that's a giga meg. 2:06:22 Yeah, giga meg. 2:06:26 I'm not sure if you get the reference. 2:06:27 We pour one out for whatever, Calvin Air's money. 2:06:32 Let's drink to all the money Calvin Air spent on Craig 2:06:39 that he could have spent on something else. 2:06:44 I'm going to drink to that. 2:06:46 We'll drink to that. 2:06:47 Just think of he could have spent it on any number of vices. 2:06:51 Or... 2:06:54 I mean, this was a pretty dangerous vice, I got to admit. 2:07:07 Did you eat before this? 2:07:08 Because you seem to be much better at ingesting the alcohol 2:07:12 or maybe you have more practice. 2:07:17 I ate a big meal. 2:07:19 And, you know, it's also not great to drink right after eating, 2:07:25 but I think I left just the right amount of time in between, 2:07:28 so I'm nice and full. 2:07:29 I had my delicious lobster ravioli pasta. 2:07:33 It was so good. 2:07:35 Yeah, the Polish lunch, right? 2:07:38 It was so good. 2:07:40 Delicious. 2:07:42 Anyway, it was revealed in the chat that Coco, 2:07:46 who has been commenting on stuff, 2:07:48 is actually Hampus, who is the lead developer of Blix Wallet. 2:07:53 So, hi, Hampus. 2:07:54 Hampus is great. 2:07:56 We should hire Hampus. 2:07:59 Maybe we shouldn't, though. 2:08:00 That would undermine his credibility as a complimenter. 2:08:04 Are you basically saying that anyone who gets hired by LayerTwo Labs 2:08:07 has his credibility compromised? 2:08:10 You know, it's kind of weird because there's a joke. 2:08:14 Nassim Taleb used to tell this joke about... 2:08:16 They'd ask him, what about a conflict of interest? 2:08:18 And he would say, no conflict, no interest, 2:08:21 which was something like, it was a skin in the game thing. 2:08:26 If that guy's not in on, if he's not getting something out of the deal, 2:08:30 then he doesn't want in on the deal. 2:08:33 So it's kind of like, kind of an ironic twist of the thing. 2:08:37 You know what I mean? 2:08:38 Is this making any sense? 2:08:39 He's saying, normally you'd say, OK, 2:08:41 you're promoting, you say you should buy this type of car 2:08:46 because you get a 10% kickback. 2:08:48 You get money if they buy the car. 2:08:50 That's a conflict of interest because maybe they care about your interests, 2:08:54 but maybe they also care about the 10% they get if they sell his car. 2:08:58 But Nassim Taleb kind of flips it around. 2:09:00 He says, I don't want to do business with people 2:09:03 who are pretending to look after my interests. 2:09:07 That's a weak read to lean on, you know, that's flaky and kind of suspicious. 2:09:13 So he's saying something like, 2:09:16 I want them to get something out of this. 2:09:18 You can rely on that. 2:09:20 This is a you can always count on whatever, a selfish person. 2:09:23 I thought this was unfair when this argument was applied. 2:09:26 It was used, this was used to critique Blockstream back in the day. 2:09:29 They say a Blockstream hires all the people who agree with them, 2:09:32 which are certainly true. 2:09:33 But they're not the only people who agree with them. 2:09:35 All the people who agree with them, which are certainly true. 2:09:37 But it's kind of like, what should you do if you agree with someone? 2:09:42 You know, like you should hire them. 2:09:45 Like, it's bad if it leads to people lying about what they really think. 2:09:51 But it's it's also bad if you have a bunch of people who all agree, 2:09:57 but they feel like, oh, if we cooperate, we'll this will be seen as. 2:10:01 Something negative, I mean, that's. 2:10:06 I don't think that's a good idea either. 2:10:10 Cooperation is, you know. 2:10:15 Usually good. 2:10:18 I mean, including Blockstream seem to monopolize Bitcoin development for a while, 2:10:23 but then their developers started to leave. 2:10:27 I think it was, you know, to be to be honest, I think it was not even Blockstream. 2:10:32 It was it was mostly it was just the character of Greg Maxwell just loomed so much. 2:10:40 It was almost like I think it was really mainly him. 2:10:42 And the fact that he was at Blockstream was mostly. 2:10:45 It's like it made it look like Blockstream was influential, but it was really it was really him. 2:10:51 The other thing is Blockstream wasn't really that influential, 2:10:53 is mostly like it very quickly became like Chaincode Labs or something had a higher number. 2:10:59 I don't know if that's true, but I think it probably was true. 2:11:02 Like twenty seventeen. 2:11:04 At least maybe earlier. 2:11:08 I don't know, but, you know, the interesting thing about Blockstream is how little is actually done. 2:11:14 They are no offense. 2:11:15 I mean, they do do a lot of things. 2:11:17 They have a lot of like bullet points. 2:11:19 They have like Jade Wallet, the satellite. 2:11:22 They have. So it probably looks great on PowerPoint, but. 2:11:27 Uh. 2:11:29 Where's the Zcast sidechain, as I'm saying, that's why I built it, because that's that's like number one thing that people should want to have and that we should get, we deserve, we all deserve to use it and we should all. 2:11:40 Yeah, Paul, but let me take it to another territory and I'm getting drunker and I'm less articulate, but you're the kind of person who looks into the kind of innovation that happens on other chains. 2:11:55 Right. You looked at Zcash. 2:11:57 They were able to do these Halo 2 transactions, which are smaller than SegWit transactions, and they're also privacy friendly. 2:12:06 But the conversation and Bitcoin still to this day is that confidential transactions are too large and they don't scale and they're terrible. 2:12:16 And therefore, we should not ever have them. 2:12:19 Nobody. I mean, it's a bad idea to say nobody. 2:12:22 Very few people look into other chains to see what because it's not just shit coinery. 2:12:29 Of course, they have the shit coin, but there is the cryptographic stuff that's being built and it's being researched sometimes for other purposes. 2:12:37 But Zcash has UTXOs, has an architecture very similar to Bitcoin's and has an opt in privacy. 2:12:44 So. 2:12:46 Theoretically, we can take their signatures and soft fork them into Bitcoin and make Bitcoin more efficient. 2:12:53 I think Zucco actually was one of the first people to blog about Bitcoin back in 2009. 2:13:01 So I'm pretty sure that he's playing some sort of villain part right now, trying to say, no, Bitcoin is not good enough and Zcash is the HTTP, HTTPS. 2:13:14 I remember him saying that. 2:13:15 Yeah, it was his metaphor. 2:13:17 But I'm pretty sure that he's building something that will be useful for Bitcoin at one point. 2:13:23 But what I'm trying to say here is that you take your time to research what other chains are doing, whereas Blockstream does not. 2:13:32 So Blockstream would never say, let's have a Zcash sidechain because, first of all, it's not engineered by them. 2:13:39 And secondly, they're still promoting their own technology, which is confidential transactions that are based on some 2014, 2015 research. 2:13:49 By this time, it's pretty obsolete. 2:13:51 Not even, does Monero still use that, if someone knows? 2:13:55 I think they use bulletproofs, but a bulletproof is still more than three times larger than a, at last I checked, which may, this may have changed. 2:14:04 I think it was 2019 that I last checked. 2:14:05 So that's actually been a long time. 2:14:08 But there's still more than like three times larger than like a normal 200 byte Bitcoin transaction. 2:14:15 I don't know if they, they must have gone on to something else. 2:14:19 See, this is funny, even I, you say I look into these things, but there's an awful lot to look into. 2:14:24 It's very easy to forget. 2:14:26 But I think, I don't know. 2:14:28 I don't know if they are doing that or not. 2:14:31 Someone can probably look that up. 2:14:35 And they can probably look up the size also. 2:14:38 Size of a Monero transaction in bytes. 2:14:43 Someone can probably look it up, I bet. 2:14:45 Maybe it's just marketing, but with their latest cryptography, Zcash claims to have been able to have transactions smaller than a hundred bytes. 2:14:55 Yeah, that doesn't sound right, but maybe it is, I don't know, it could be. 2:15:00 That would be really cool if so, because, you know, a Bitcoin transaction is at least, even for Schnorr signature of 64 bytes, and then to select the input is 36. 2:15:10 So that's like minimum possible, would be, I think we cannot possibly get them less than 96 bytes. 2:15:22 Even when I have, I've said if we strip them down completely and we encoded them in a totally different way, like we have a pointless four byte version number at the beginning of every transaction that we don't use, we never use, can count to four billion. 2:15:38 But let's just say we're on, we're not using it at all. 2:15:46 So that's four wasted bytes, really, you should have one for version, but it's definitely three wasted bytes. 2:15:55 And then, you know, almost no one uses the lock time. 2:15:59 Lots of things are unused. 2:16:00 So I wrote a blog post called Small Transactions, I think. 2:16:06 And I think I can only get it, barely get it into the double digits. 2:16:11 So that would be neat if that, it may be the case. 2:16:14 I don't know how they count the bytes, but we could see it's possible. 2:16:21 If so, then that's great. 2:16:22 You know, that's exactly the kind of thing we should just copy and take. 2:16:27 I don't know why we wouldn't do that. 2:16:30 And it is a case of people doing the wrong, morally the wrong thing, because they're making Bitcoin, the project, worse so that they look better. 2:16:41 Which is just immoral. 2:16:44 Yeah, but the philosophy of maximalism has always been that you take whatever has been built somewhere else and you put it on top of Bitcoin. 2:16:54 And the arguments for Bitcoin are always that it's the best form of money. 2:17:01 It's the most resilient network. 2:17:03 It's the one that's actually decentralized. 2:17:07 Well, yeah, that's the case. 2:17:09 But people no longer believe that. 2:17:12 That used to be, used to just people would just say, listen, all this stuff is open source, so it can't, it can't be any other way, other than that Bitcoin will just have the best ZK, SNARK, and never even crossed anyone's mind that there would be something that disabled the 2:17:36 open source inventions from making it onto Bitcoin. 2:17:40 And that is everyone who is obstructing these soft forks, you know, such as CTV or OP_CAT. 2:17:48 No one would ever have dreamed, if you would go back to 2015, no one would ever have dreamed that there would be stuff like this that would that would be ready to go. 2:17:59 And yet the barrier to getting it in would be, I don't know, Twitter or something. 2:18:05 But what it really is, is the apathy of the miners and their neglect of their duty and responsibility to maximize the value of Bitcoin and maximize their own profits. 2:18:18 But they just, I don't know, they're too lazy to, they don't realize that they can, you know, they can like 100x. 2:18:24 I mean, one weird idea I thought about, I kicked around this idea, it's kind of one of those screwball ideas. 2:18:30 I thought I could maybe go to, like, you know, make this insane pitch to someone like, you know, a big investment bank and just say, I will buy up, you know, a huge percentage, 50% of the hardware, the hash rate, and then I will aggressively maximize the value of Bitcoin technologically. 2:18:53 Think about how this would make me the villain in most Bitcoin stories, but I would really be the savior. 2:18:58 And aggressively maximize the tech stack and maximize the transaction throughput and the transaction fee revenue and the price of the coin, the utility and price of the coin. 2:19:09 And then if you can, you can force hyper Bitcoinization to come and you own more than half of the mining, it's kind of a corporate takeover. 2:19:19 And then the value of that equipment would go up astronomically. 2:19:26 So you would be able to, because even though the difficulty would adjust, it would take a little while to adjust. 2:19:33 And in that time, you would have to adjust as more, like, hash rate came online, so that you would have a solid chunk of time where you're just printing Bitcoin that you mine at a certain rate, but that you acquired the hash rate at a certain, a lower equilibrium difficulty. 2:19:52 So then you could pay back the, you know, you could whatever, however you finance to this, this maneuver. 2:20:00 But that's just kind of like a weird idea, I think. 2:20:05 I don't really plan on doing that, but I just think it is weird. 2:20:08 It's not physically possible because I don't think there is a large enough supply of ASIC miners available on the market. 2:20:17 And if you try to go around and pay a premium for whatever was what you, you know, you try to track down people who and say, I'm going to need to, I want to buy your whole operation from you for twice what it's currently worth. 2:20:34 I mean, yeah, but you also have to understand that there are lots of miners who are ideological as opposed to. 2:20:39 Yeah, well, but the problem with that is the ideological miners, they are the ones, I don't think that, I think that quite a few miners, like, so for example, let me tell you, one, I'm pretty sure that most miners, like, they have no idea what Taproot was at all. 2:21:00 You know, so like, even big miners, the pool would call them and ask them or would try to get information like, hey, should we signal for a speedy trial or whatever for Taproot? 2:21:13 And they would just be like, what's Taproot? 2:21:15 They have no idea what it is. 2:21:16 So I think they, the, in terms of, as a significant percentage of the hash rate, ideological, I would say that mostly, much more than 50% of it is completely ignorant of these matters and of their own response, indirect responsibility for this, this mess. 2:21:37 Most of it is because of SegWit2x and the scaling war and then, but you know, it's also like the miners could also fix that. 2:21:43 They could just say, in a way, they, there's a new blockade, the past blockade of SegWit, that was wrong, but now we've replied to that by doing the same mistake where we just don't activate these softworks that are, we have a new SegWit blockade, which is just for OP_CAT instead. 2:22:02 And the miners, instead of blocking it actively, are just, they're blocking with this sort of apathy and neglect of these, the scenario, which they should not, they should not do, and they will, they'll collectively make much more money if they were to stop doing this, but for some reason, it's just very complicated to them, I suppose, or they don't want to, I don't know, I can't really explain it. 2:22:33 Maybe that they're afraid that they're going to use some of their users if they take sides in politics. 2:22:42 So far, I think the miners have been super nice, maybe because the fees and the incentives added up and they have been profitable, but it seems like mining pools stayed out of politics. 2:22:57 I know, but they, the apathy and neglect is, that's different than, to not get involved is not always the right decision, you know, George Orwell wrote something about, it's not possible to be neutral in a war such as the current one, he was talking about World War II. 2:23:17 You know, some people tried, but then, like Switzerland, but then they get made fun of, people would say, oh, you know, do you need help storing your gold, Hitler? What have you been up to lately? Oh, wait, don't tell me, I want to be able to say that I don't know. 2:23:33 I remember seeing John Oliver make that joke in like 2003 or something. So, but yeah, there's certain things you really shouldn't be neutral in the face of, you know, they're not, especially when they affect you in a negative way. 2:23:52 I mean, I'm not saying how it should be or how it shouldn't be, I'm just observing that the miners so far have been pretty apathetic to politics. I mean, there was that whole situation with Bitmain, I think, and that's where it changed. Jihan was very active in politics. 2:24:13 Right. Well, that was the problem, was they, I thought they had a number of very mistaken beliefs, so they did not look into it the right way. And we all suffer as a result. 2:24:27 I mean, you know what I mean, right? Like they saying, the idea that we should burn a hard fork to 2x the block size is not a great idea. And it was, you know, it was not, it was a very unpopular idea. 2:24:45 There were other things they could have done. Could have done a lot of things differently. So it was, they didn't have an answer to how big should the block size actually be then. And in fact, plenty of people said, such people such as Gavin Andreessen, they said something, stuff like, nobody is advocating an unlimited block size. 2:25:15 So you had someone who wanted a large blocker saying, unlimited block size is bad. Just flatly saying that. So this just opens the question. All I'm saying is, is confusing from a messaging point of view. 2:25:31 Like, what do they think the number should be? What is the principle of the matter, rather than just should the line be drawn at 1 million versus 4 million versus 2 million versus 8 million? Very few people had, only Luke was one of the few people who said the block size should be smaller, and he had an actual reason. 2:25:51 He had numbers based on initial block download and things like that. So he was one of the few people that had an actual principle of the matter. And plenty of people just said, this is the status quo. This is what the protocol was when I bought these coins. This is the deal. I want to be able to run a node. This is going to make my node more expensive. I'm complaining. I don't want to do this. 2:26:14 So a couple people had that principle. But the people who are trying to do the hard fork, the hard fork is a serious business. It's saying, we're bending a rule. We're going to break a rule. 2:26:29 And they should have explained, this is what we're going to change the block size to this formula, like permanently or something. And this idea of we'll just hard fork it again when it hits the ceiling, well, then that's just an unlimited block size, just with more steps. 2:26:51 So they didn't really answer a lot of these questions, like how expensive is too expensive for a full node to get? Some of them said, oh, it doesn't matter how expensive it gets. Then you could ask, what if it would cost an infinite amount to run a full node? And they'd say, well, that's not a real – you say, well, you said it didn't matter. 2:27:11 So it wasn't – that was kind of a messed – that was kind of a screwed up scenario. And it's unfortunate that now because of that, we now cannot – we live in a world where people, I don't know, cannot easily talk about these relatively simple and good things. 2:27:40 It's become political and weird. Yeah, I don't know. 2:28:11 We're not talking that much about it. And it seems like it's almost taboo because we have these – we have an ETF nowadays. 2:28:20 He does not like the idea of – I mean, I strongly got the impression that he does not like the idea of the Zcash sidechain. He doesn't think anyone should talk about it or bring it up or even like should even be spoken about. 2:28:38 But he said this in a BTC Times interview. It's called Michael Saylor on Bitcoin's Next Billion Huddlers. It's an interview with Elaine Wu or Elaine Au. I'm not sure how you pronounce that. It's O-U. 2:28:56 And he says, and these are quotes, stop talking about regulatory arbitrage, censorship resistance, privacy and tax evasion because they're bad ideas. We hate that. 2:29:08 And then Elaine added, the conversation began with a huge letdown. I asked Michael Saylor what could motivate greater institutional investment in Bitcoin. After all, if Bitcoin is going to the moon, we're going to need a lot of deep pockets to climb on board. 2:29:24 And this is another quote. People with billions of dollars don't want to invest in crypto networks that support anarchists, Saylor explained. Anything that advertises privacy and freedom from government theft becomes a direct enemy of the FBI, Interpol and every other law enforcement agency on the planet. 2:29:45 I asked Saylor if this was a marketing problem. And he replied, it's a matter of emphasis. The industry would benefit if we didn't call Bitcoin a cryptocurrency, but a crypto asset. 2:30:01 As a currency, Bitcoin not only competes with the Treasury and the Federal Reserve, it also implies a payment network to compete with Square, Apple Pay, Alipay and other services that are both faster and cheaper. 2:30:15 Anyway, this was from 2020, from December 2020. So it was still Michael Saylor's first year when he was still cool and everyone was calling themselves a cyber hornet, was submissive to the giga Chad, and they were happy that he was pumping our bags. 2:30:36 And somehow this interview flew under the radar. It was not too much promoted. This was three years ago, three years ago and one month. 2:30:47 Let me finish. Since then, he was able to establish the Bitcoin Mining Council in North America. And he's basically creating this framework of self-regulation for what miners should do in North America. 2:31:03 And this was in response to Elon Musk's criticism that Bitcoin mining is damaging the environment. And this was the reason why he supposedly, I suppose it had nothing to do with manipulating markets, but he removed Bitcoin as a payment method from the Tesla store. 2:31:23 So it seems like Michael Saylor became part of the culture. He's ingrained with what Bitcoin is. I know people on Twitter slash X who claim that Michael Saylor is Satoshi and he finally returned and right now he is proving to the rest of the world how they should invest in this. 2:31:43 And MicroStrategy is leveraged into Bitcoin. They have a pretty low leverage, but it's still leveraged. And they print more shares, they sell them to raise money and they buy more Bitcoin. 2:31:55 But their intentions are totally the opposite of the intentions of those who first got into Bitcoin and saw some value in it. They didn't care much about the stock market. They didn't want this to be necessarily a commodity, something that you trade on institutional trading desks. 2:32:17 They just wanted to compete with the dollar. They wanted to create a parallel monetary network. It seems like we are losing that focus. Even with the Lightning Network, which was supposed to be the fast way to move Bitcoins right now, they're investing most money into putting the dollar on it. 2:32:35 And some of the privacy features that were presented for Lightning are no longer a priority. I don't know. Even in the case of Lightning Labs, they were working on improving it, but they got a lot of funding for Taro, which was renamed as Taproot Assets. And they're working on that one. 2:32:57 So a long rant, but I don't think many of the ideas that you're presenting with the stuff that we're not mentioning are going to get much traction in the future. Maybe some OGs are going to care about that and provide liquidity, but the new users, they're going to scream shitcoin and big blocks. 2:33:20 Well, I think there's more to it. It's not just like a matter of taste. When Michael Saylor joined, of course, it was COVID. Everyone was locked down. The government was printing a lot of money. So in that context, it was much easier to just think of it as a thing that has 21 million units and that you just buy and it will just go up, the inflation hedge. 2:33:46 I think, though, that if there was the Bitcoin Uncensored crew from 2015, 2016, 2017, there was an argument that went something like this. If it becomes too friendly to regulation, everyone will just use custodial Lightning, everyone will own Bitcoin through the ETF, everything will be fully regulated and fully compliant. 2:34:17 If it goes down that road, it will eventually have to compete with something like issued by whatever, PayPal or Venmo. 2:34:27 And Venmo always have an edge because actually the blockchain database is very inefficient. The database can scale to unlimited size. 2:34:38 So if people wanted to issue Visa coin or something, they could use whatever, SQL or something. They could just have a database of everyone's account information and everyone's balance. 2:34:56 And that is the path that leads ultimately to a zero dollar Bitcoin because you can't compete with that. 2:35:07 And then someone will say, hey, what we need is a version of this that is subversive and that has an independent existence that is unconnected to whatever governments of the world prefer. 2:35:26 And I actually think that that one has a lot of truth to it. I think that that's mostly correct. 2:35:32 So I think it's not just a matter of taste. There really is a matter of true versus false, accurate versus inaccurate. 2:35:38 And the compliant, the coin that does not have just a little bit of that edge, that subversive edge, that one will probably go to zero and the other one will probably be very successful. 2:35:56 You have this tendency to think in extremes that something is going to go up and the other one is going to go to zero. 2:36:08 Yeah, I do. That's how I feel. Yes. Do you think that that is really unlikely? I mean, you speak Romanian, I assume. 2:36:21 Yeah. But you also speak English, but I don't speak any Romanian. 2:36:29 I'm trying to understand your point. 2:36:36 Well, let's fast forward 50 years. How many people in Romania are still going to speak Romanian? 2:36:43 I mean, that's not the best of examples. 2:36:47 Probably a lot of them will be speaking English, though. 2:36:49 We kept our language through thousands of years and we have had Slavic influences and they still haven't changed our language. They just added words. 2:36:59 Yeah, sure. But probably. But of course, like it already happened with like, you know, like a French Canadian. French is sort of dying out in Canada somewhat. 2:37:13 But I just I that's not that's just a tendency that it's just life is easier when you coordinate with people in the same way. 2:37:22 And money is something where you really need to coordinate with people. And it's not good for two people to have different. 2:37:32 Like if you go to a different country, you have to convert just like when you have to convert the language. 2:37:37 You have to say, what does this mean in the language that I understand? You see all the prices. You have to convert the prices. 2:37:44 What is this price in whatever in dollars for my case? To figure out what does it really mean? 2:37:51 And people don't like that. And we only have one. We have the QWERTY keyboard. 2:37:56 I mean, people, they have a different. They have their computer interpret the QWERTY keyboard that they buy with Dvorak or something, but. 2:38:07 I don't know. I just think I think there will only be one that succeeds and the others will go to zero. 2:38:13 I think I think that. Michael Saylor will have it'll be possible to make it go up another 10x. 2:38:24 But it'll start to get difficult because it's like 15 to 20 million dollars a coin is like the ceiling. 2:38:31 So you have to flip like you basically have to have flipped eight billion people at around that time to hit that. 2:38:39 And even if you if you can't do that, then there's a lower ceiling. 2:38:46 I don't know why he doesn't I truthfully don't know why he doesn't understand the value of, for example, the Zcash sidechain that he that he like sort of reject or he appears to reject utterly. 2:38:58 I don't know if this is maybe secretly down deep. He actually is hoping and praying for the Zcash sidechain. 2:39:06 And he's doing a big performance and saying that he doesn't want that type of thing. 2:39:09 But I would think if you're rich, you would know how annoying it is to have other people know about how much money you have. 2:39:18 I would think if I were rich, my number one priority would be making everyone forget about making it really unclear exactly how much money does that person have. 2:39:29 So you would think that that people would be they would get it. But I don't know. 2:39:37 We have two more questions in the chat. One is from Jack Kensick. And he says, is there a reason to go to conferences anymore? 2:39:45 Oh, yes. You're going to discover that Twitter is a an echo chamber and everyone is LARPing and they're not like that in real life. 2:39:54 Even it's true. The most radical of people and the most stubborn who will call you a shit coiner. 2:40:00 If you present some, I don't know, you don't even own a shit coin, but you say, you know, these guys from Monero, they're doing something interesting and they're going to block you and call you a shit coiner. 2:40:10 Then you meet them in person and you will most likely figure out that they own multiple shit coins. But they're a character on Twitter. They're LARPing. 2:40:21 And you will hang out with them until like two or three in the morning. Also, you'd be like these people that have blocked me, but we're hanging out the whole night. So it's kind of a weird effect. 2:40:32 Yeah, that's what I was going to say that if I didn't know you in real life, I would also assume based on your Twitter activity that you're this bitter asshole. 2:40:43 And it seems like your strategy to trigger people and engage them. And there's also the LayerTwo Labs page that posts memes that makes fun of people who are into Bitcoin. 2:40:57 It seems to work for getting engagement, but it doesn't help you get more support, at least not user support. Maybe you're going to get that from miners. I don't know. 2:41:08 I think I have to put out the software version to get user support. So I'm working on that right now. 2:41:18 My point is that if I didn't meet you in person, I would have a completely different opinion of you. But since I met you in person and I understand what kind of person you are and what you're really like, I tend to give you more of a benefit of the doubt. 2:41:38 Just like I gave Giacomo before he blocked me. And I don't understand why, because we seem to be very good friends and he didn't care. He was so reckless. He was like, yeah, this guy disagrees with me, blocked. 2:41:54 He was on the show. He was on my podcast three times. At one point, this is super backstage information. I was editor-in-chief of Crypto Insider in 2019. And the big boss was the investor was speaking with him to potentially do a podcast with me. 2:42:13 And he was on board with it. He was like, yeah, as long as you pay me, I'm going to do this. So my history with Giacomo goes way back. And I'm like, he blocks me just like this. 2:42:23 But this is why you should go to conferences, because you get to see these people in person and figure out that your perception is very different from the reality. And social media is a lie, which should be obvious, but apparently it's really not. 2:42:42 And we also have another question from Otavio Guimaras. And he says, on the Voldemort topic, could Voldemorts also have their own sidechain? If yes, what could be the consequences? If no, what blocks it from happening? So this is inception. You have a sidechain inside of a sidechain. 2:43:04 No, that's possible. The only issue is to withdraw both times. It accumulates the amount of time needed to withdraw. So that's kind of inconvenient. But that's totally possible. And the regular users are not supposed to be doing that withdrawing anyway. So really, it would just be like two fees. And then someone else will slowly walk the coins back. 2:43:31 I wanted to talk about the conferences, though, because I do get the impression that, to me, the attendance and interest at the conferences has been declining significantly year after year for the last three years. 2:43:49 And now they do seem, I don't know, like they do seem predictable. They seem like there's not enough new happening. The real novelty was ordinals, but that was contentious and kind of awkward. 2:44:06 Do you agree or not? I mean, the conferences are smaller, I think. Fewer tickets are sold. I think we had a big opportunity with COVID. 2:44:21 No, I think they're bigger than ever, except that they're all the same. That's what the problem is. They lack identity. With very few exceptions, they're kind of all trying to do the same. And you see the same faces, you hear the same speeches. It gets very predictable after a while. But if you go to a conference, the best idea is not to listen to the talks. No offense, I know. 2:44:45 Yeah, the talks are terrible, I agree. I've been there many times. I think mine are okay. 2:44:50 What I'm saying is that you can watch them on livestream when you go. 2:44:53 Yeah, the hallway is way better, yeah. 2:44:56 You just interact with people, you see someone that you recognize, you go to them, you say hello, you learn something new about what they're really like. Like, Dan Hill, for example, is even more of an asshole in person. 2:45:13 He blocked me on Twitter, he blocked me in real life. I was behind him waiting for food at one point. And he was basically turning his back on me from every angle, you know, trying not to make eye contact with me. We're about the same height, but he's built like a bear. 2:45:33 Yeah, he is definitely. 2:45:37 It was so funny because he was ignoring me. And to me, it was incredible that I was trying to move sideways and stuff and he was finding excuses to turn his back on me. Super funny. 2:45:53 Yeah, I mean, a lot of funny things do happen at the conferences that are just like, yeah, I mean, of course, you know, I've gone to so many, maybe I'm just jaded after going to like 100 of these Bitcoin conferences, I can't take it anymore. 2:46:07 But I do think they, it doesn't really feel, it had more electricity in the past. I don't know if that's maybe just a different, I don't know, maybe I'm misattributing it. 2:46:23 But yeah, I went to a few in, whatever, I went to some in 2014. And it was, they were really small, but there was like, everyone was excited. And you go to every booth, and they'd say, do you want a job? And like, whatever, all this stuff, like, can you use whatever? We always need people for this. 2:46:40 Everyone was like, 24 seven. They were really into it. And they're still into it now. But it's just, there was so many things, you know, like the physical coins, that was a different thing. And I remember BitPay was starting all this stuff. I just remember, it was like, there was a lot of stuff happening, a lot of different things happening. 2:47:04 No, there's still a lot of stuff happening. Sometimes I think there's so much happening that you can't possibly keep up. And I'm not sure if that's a problem. It's a good problem to have, to have so many projects that it's very hard to remember to how many mining services you spoke or how many hardware wallets are out there. 2:47:27 Or how many of these seed plates, by the way, get a CryptoSteel if you haven't already. Promo code BTC to KVR. But there are lots of clones of this. CryptoSteel is the OG one, the one that came first and everyone copied them. And they're still made in Europe. So they have very high quality standard. 2:47:50 Anyway, my point with this is that there's a lot happening. And I agree with you that it's easy to get jaded if you go to a large number of conferences. But I remember the first time when I went to Baltic Honey Badger, it was so exciting. 2:48:08 I mean, that was a great one. I like that one a lot. 2:48:11 It was so exciting. I was watching the stage. I was captivated. 2:48:16 Let me pitch you this on Baltic Honey Badger. Don't read too much into this, anyone who's listening who loves Baltic Honey Badger. But two Baltic Honey Badgers ago, I was there and we did the Unpopular Opinions panel. And we had a great time. And they just let us keep going. So it was like two hours long. 2:48:35 And it was great. I thought everyone was in the room. Everyone was paying attention. I thought people were laughing. 2:48:42 And then this year, it was like short. 2:48:49 Oh, come on. You got Robert Breedlove to moderate. But you weren't there. 2:48:55 I wasn't there. But it was mostly about the forbidden topic also. But it was like, yeah, I guess I wasn't there. So I guess I can't say. 2:49:04 But all the content is – the actual content is not – I don't know. Because maybe that's not true. Because we do have lots of crazy stuff happen all the time. We have crazy debates and things. 2:49:21 I don't know. 2:49:22 I think so. To your point, I also think that the community became more corporate in the sense that a lot of the guys who used to be very cool and they could talk about anything, now it's against their financial incentives. 2:49:36 Because they're affiliated with some big company that's funded by some big money sources. I don't know exactly who or how much. But it seems like they become less willing to discuss nuances as they climb up in ranks. 2:49:53 Yeah, they have their talking points and they have their little simplistic – I don't know. 2:50:00 I remember being super excited when I met Adam back in person for the first time. And then I watched his presentation and it was one of the most boring I've ever seen. 2:50:12 Not just because he's not captivating as a speaker. It's just that he also picked a topic which was related to liquid and stuff. And I didn't find that particularly interesting. 2:50:28 And I saw him at another conference and he actually joined the Telegram chat and asked, what should I talk about? And I said, oh, say something about the Cypherpunk history. 2:50:39 Of course he ignored my message and he spoke about something related to liquid. And this goes back to my point that there is always the financial incentive to shill your own bags. 2:50:49 Yeah, it's a commercial or something. It's like people get up there and they talk and you're just like, whatever. They start to talk and you're like, I've already heard this. I've heard this whole thing. 2:51:03 It seems like validating too. People say, the great such and such on stage at whatever. They must be whatever. It's a little bit wearisome. Anyway, see, there we go. We did three hours. Should we just keep going? 2:51:26 There are still 10 people on YouTube who are watching this. 2:51:29 Are you in Europe? Are you in Romania or a time zone? 2:51:33 It's three in the morning here, but I don't care. I also drank. 2:51:39 Yeah, it's not good. 2:51:41 My first name is Vlad. 2:51:43 It's great for falling asleep, but it's not healthy to fall asleep after. Although it greatly increases the likelihood that I will. Many times I have fallen asleep. 2:51:53 I actually have another interview in nine hours, so I'm going to have to wake up for that one. It's about something of which I'm not supposed to talk yet because it's under embargo, but it has something in common with zero knowledge proofs on Bitcoin and that's the most I can say. 2:52:11 There's a lot of exciting stuff happening, but it flies under the radar and it's a pity, you know, it doesn't get picked up by the big influencers and maybe I shouldn't complain about it and I should be happy that I get to have these guests. 2:52:28 By the way, guys, the ones who are still here, check out the rest of season 15 of the Bitcoin Takeover podcast. I think I have some of the brightest minds in the space right now and the most prolific developers. 2:52:42 I have an episode with John Light, SuperTestNet and Alexei Zamyatin. I hope I pronounced that correctly. And they speak about roll-ups, they speak about BitVM, they speak about all of this avant-garde stuff that right now sounds very, how should I put it, very mystical, very esoteric. 2:53:06 But in a few years it's going to make a huge difference. And I also have an interview with Sergio Lerner and he has a lot of interesting stuff to say. I have an interview with Robert, it's not Robert, it's Robin Linas, the creator of BitVM. 2:53:22 And you should also listen to that one because the work that he does is going to leave a great impact in the future on Bitcoin. And I feel like the potential of BitVM is pretty much untapped. I'm not sure what you think about BitVM. 2:53:39 I know what Sergio thinks about BitVM and he says he can do what you're working on and we cannot say what's BitVM as opposed to a soft fork. 2:53:49 BitVM is a great idea. I mean, one funny thing about it is that Robin did tweet on Twitter, he said something like, he wrote a very nice tweet from my point of view that is something like, BitVM is basically a way to get thing. 2:54:19 The forbidden BIP, you know, whatever, as quickly without doing the soft fork or whatever. 2:54:31 I think, though, yeah, I don't, I'm not sure, it may have the same, some of the fee, passing down the fee issue where you have people validating the peg. 2:54:51 I guess there is a difference between the merge mining part and the deposit withdrawal part. So I guess if you. 2:55:03 Did the, I think we have to wait for the more, the concrete to dry somewhat with BitVM because. 2:55:08 For example, SupertestNet was telling me about how he. 2:55:13 The resource requirements were very high on, he was working on something, something neat. 2:55:21 But the resource requirements were very high. 2:55:25 But the resource requirements were very high. 2:55:28 You know, in terms of. 2:55:31 All these things you have to like, these zero out and so. 2:55:38 Yeah, I don't know, I think we, we should try all these things we, I don't want to be like these people who. 2:55:46 Who lie about my own project to build their own, but we should really just try all these things. I think that is definitely just the best thing. 2:55:55 To do is try lots of things. 2:55:58 We'll get a successful thing out of that group. 2:56:06 Um, I don't know, I, I, I'm definitely very worried by the fact that very few people understand it. I think that's. 2:56:14 That's not good. I think it was easier to understand. 2:56:17 But it was easier to understand Bitcoin after a few months versus this. 2:56:24 Um, yeah, we'll have to see. 2:56:28 But we should be trying all these things. 2:56:33 Yeah, I think also you, Paul, you should check out the Robin Linus interview. 2:56:38 I think he's got some very nice stuff about what we're not supposed to talk about. 2:56:43 And also super testnet. 2:56:44 Very smart guy. 2:56:47 And this is the new generation of Bitcoin Core developers. 2:56:51 They're not bought by Blockstream or Chaincode. 2:56:54 Yeah, but I think the, the cultural stasis, unfortunately, is, uh, it's really going to take someone like Udi or whatever, I think, to break it up the, with like a sledgehammer. 2:57:08 It's, uh, I'm not sure if that's the case, but it, I don't know if it's like, it's too sociopathical, like the, the existing set of stuff. 2:57:23 Like, you remember the interview we did months ago about, like, people would say stuff that was not even close to true, you know, as we both know, but it just doesn't matter. 2:57:33 I know that they were very effective as portraying you in a certain way, and right, as a consequence right now, not too many people talk about the activation of the stuff that we're not supposed to be talking about in this episode. 2:57:49 But that's okay, because, you know, I actually don't think, I think we have to set the precedent that activation should not be by consensus, actually. 2:57:56 So three hours in, I'll throw you this crazy curveball, but I just think it was never, none of the previous softworks actually had consensus either, in the sense of everyone agreeing that they were the thing to do. 2:58:11 So it should be more like a Westminster, like, 51% vote type of thing, honestly, is what I really think, where some people disagree, more people agree than not, and then the idea is attempted, and then if it's not good, then it is abandoned or disabled. 2:58:33 But the fact that these are all opt-in soft forks that no one can be forced to use, that just makes it all the more ridiculous that there is no, there's not even, no one will even do a cost benefit analysis, because there's no cost, that's what's really bizarre. 2:58:50 I never thought about it in these terms, that you don't do a cost benefit, I mean, the cost is always hypothetical, right, you're messing with the code base, you never know, the last time... 2:59:04 This is true of many things that are not soft forks. Any change to the code could, you could put a keylogger in, or you could just put an assert zero, as the BCH did, where the node just crashes, and Matt Corallo was trying to speed up some tiny operation by a couple thousandths of a second, and he inadvertently introduced an inflation bug, that was quickly fixed. 2:59:29 And it would not have taken effect, because it would have hard forked the thing off, but because of the soft fork, we were protected from this mistake. 2:59:37 But you see, these are all changes that were not soft forks, so it doesn't make any difference. 2:59:42 Every single code change is potentially an atomic bomb, but you don't see people going out on Twitter and saying, for every single pull request, which is what you'd have to do to be logically consistent, every single time any pull request was open for anything, to refactor something. 3:00:01 You'd say, well, wait a minute, we're touching the code here. Then people could bike-shed for hours about, hey, maybe this will make the code really hard to maintain in the future. 3:00:15 That's the same way that they could talk about it for OP_CAT, right? That's all they could say, is say, well, maybe this will be hard to maintain. 3:00:26 Or maybe we're going to get a crowd of people saying, we don't like cats, we're dog people, so no OP_CAT. 3:00:34 Yeah, opdog, what would it be? If OP_CAT connects two things on the stack, opdog takes them and throws them away. 3:00:47 That's a crazy idea, but I hope someone picks it up. Release an opdog for confidence. Do that. 3:00:54 It steals the items on the stack and it hides them somewhere else. So they show up on the stack way down the line, in the last place that you look. 3:01:09 Anyway, there's a very good comment from Juan Suescun. I hope I pronounced this correctly. And we can end after this, because you're tired. 3:01:19 And he says, Linus, and he refers to Robin Linus, has this idea of proof-of-stake combined with proof-of-work as a better solution than the stuff we're not supposed to talk about 301. 3:01:36 I was going to say, I knew it was that. 3:01:39 What do you think of that? 3:01:42 I don't think – he and I actually discussed this, Robin and I. I think it's based on a slight misunderstanding of blank one. 3:02:02 Where people – all it does is translate proof-of-work in the form of thermodynamics to the form of L1 coins paid. 3:02:20 I don't think that it is better or – I don't even think that – or significantly different. So, I don't quite agree. I don't know. We would have to get more into the details to know. 3:02:38 I think the idea is something like people stake coins and they can be slashed or something. 3:02:43 But I just think it's – I'm a security budget maximalist type guy, so I just think if you're willing to pay the security budget, you can buy up all the space, the extra block space for yourself. 3:02:56 That ultimately determines people's willingness to reorg the chain or censor the chain. 3:03:04 And so, I think it's all built around that in my mind. 3:03:08 And the actual form it takes are just different versions of that. 3:03:12 This marginal cost equals marginal revenue. Nothing is cheaper than proof-of-work type argument. 3:03:18 So, I don't really see – the only thing I see are does something faithfully translate the security budget into accumulated settlement? 3:03:29 Or does it do that with a lot of errors and friction along the way and making the results sort of worse? 3:03:38 So, I think everything kind of takes that form. I don't think that it is better. 3:03:47 But that's the beauty of blank 00. 3:03:55 You're not required to use blank 00 with blank 01. 3:04:00 You can – they are fully interchangeable. 3:04:04 And you can use one, both, neither, or the other. 3:04:09 It is possible to have a sidechain that is blind merge mined, but that is not – but that has no Bitcoin in it. 3:04:17 It is a full – it could be a full altcoin. 3:04:19 And you can flip the other as well. 3:04:21 You can have something that you deposit coins to that has no blockchain. 3:04:25 So, you can do all kinds of things if you really want. 3:04:30 You don't have to use them together. 3:04:33 Okay, Paul. I think I ran out of questions for now. 3:04:37 This was super fun. 3:04:39 I appreciate your time. 3:04:41 You're always patient. 3:04:43 Some people complained on Twitter like Pledator and a couple of others that you blocked them. 3:04:48 And therefore, they don't care about your opinions anymore when I announced this interview. 3:04:55 What can I say? 3:04:57 What can I say? 3:04:58 I don't really – you got to do something when – it's a situation where you go on Twitter and a lot of people try to talk to me on Twitter. 3:05:07 And it's just not – it's not good to have certain types of – you can't have this type of relationship with like whatever it is, 40,000 Twitter followers or whatever I have. 3:05:23 I don't know how many I have. 3:05:24 But – and then people put low-quality stuff. 3:05:31 The block is not – it's going to sound terrible, but it's not just because I don't want to talk to them. 3:05:37 It's also because they pollute the replies with stuff that I think is – it shouldn't be in the Overton window for my Twitter universe. 3:05:49 So, everyone has their own Overton window, which is great. 3:05:52 And if people – I think I usually am very happy with my block decisions. 3:05:58 I just think if someone – I think it's kind of hard to get blocked by me, to be honest with you. 3:06:08 Even though I block a lot of people, I don't really block people unless I think this person is just a lost cause. 3:06:12 Talking to them is a waste of time. 3:06:14 Listening to them is a waste of time. 3:06:16 I wish I had infinite time to give to everyone. 3:06:20 I certainly do not. 3:06:23 I wish they would watch these interviews, but they don't. 3:06:26 Sorry? 3:06:27 I wish they would watch these interviews, but they don't. 3:06:32 That's what I mean. 3:06:33 You see what I mean? 3:06:34 Now you see why I would block someone like that. 3:06:38 If you're not watching Bitcoin Takeover, you're going to get blocked by Paul. 3:06:42 Keep that in mind. 3:06:45 Just someone who – I don't know. 3:06:50 Yeah, it's not – you're not entitled to attention from someone. 3:06:55 We all accept that, I think. 3:06:58 Whatever. 3:06:59 How would Taylor Swift survive if everyone had to give – she owed everyone two minutes of her every day. 3:07:09 That would be impossible. 3:07:11 You're too much of a star, Paul. 3:07:14 But we have such an OG question in the chat right now that I have to ask it, and I apologize. 3:07:20 I was about to end this, but he said, what was the deal with pool insurance, i.e. Johnset? 3:07:28 That was so – oh, okay. 3:07:31 All right. 3:07:32 I thought they were going to ask about – there was a very old topic about that in which I commented. 3:07:37 Johnset was talking to me recently about paper share and full paper share and these other things. 3:07:46 And we may need to review it briefly. 3:07:49 So like some – I think the relevant difference is some pools are set up so that if the pool never wins a block, you never get paid. 3:08:01 And if the pool is lucky and wins a bunch of blocks, you get paid more than maybe you thought or more than your hash rate – more than you would, quote, deserve for your given hash rate percentage. 3:08:12 Right? 3:08:14 Some pools do that. 3:08:15 But what other pools do is they have – what are you doing now? 3:08:21 What's happening now? 3:08:23 Someone in the chat said, Paul just compared himself to Taylor Swift. 3:08:26 And they replied, yep, I caught that on video. 3:08:31 That's an extreme case. 3:08:32 That's a well-known technique in physics, first principles thinking. 3:08:36 You take the extreme edge case. 3:08:38 I'm saying the most – one of the most famous people in the entire world. 3:08:41 But I'm saying like you can't – so like in some percentage, when you become like more of a public figure and you're like invited on stage and you have like whatever. 3:08:55 You don't have to explain yourself, Paul. 3:08:57 Just go ahead with the pool regarding – 3:08:59 So the other pools, what sometimes they have done is they have decided we will shoulder all of the risk and we will factor this out and we'll say whether or not we – this is the insurance concept. 3:09:13 They say whether or not we find any blocks, we will pay you a certain amount of money per hash basically because it's like a certain amount of money per hundred trillion hashes or something. 3:09:26 So they say if you just hash with us and it makes the hashers more – it makes it very easy for the pools to compare each other. 3:09:35 Excuse me. 3:09:38 I didn't explain that very well. 3:09:39 What I'm saying is if you're a hasher and you're looking at the pools, it makes it easy to pick one pool versus another because you just pick whoever has the highest number. 3:09:47 That's very easy to do, right? 3:09:51 Does this make some sense? 3:09:53 So you go into the store and you – they have two pieces – two things of toothpaste that they're exactly the same but one is 10 cents cheaper. 3:10:02 And you say, okay, I'm only looking at this one number and I picked the number that's best for me. 3:10:08 Of course, there's no such thing as a free lunch. 3:10:12 The downside is the pool must run the risk. 3:10:18 And as John said, he is making an analogy and he understands that I will pick up on it, which I do, about since they're in the business now of shouldering risk, they are a lot like an insurance person because an insurance person insures a bunch of people. 3:10:38 And it says you pay us this amount and if you have a $10,000 medical setback, we'll give you $10,000. 3:10:45 So you just pay – instead of randomly paying out, you pay a small amount. 3:10:50 And instead of it mattering a lot when that happens to you, now it doesn't matter. 3:10:54 However, the insurance company will be ruined if they have lots and lots of claims at various points in time. 3:11:00 So they're in the business of managing risk. 3:11:03 So he's saying that – if I understand his point of view, he and I seem to disagree about this but I'm not exactly sure. 3:11:10 But I think that this paper share thing is very good because it reduces the negotiating leverage of pools and it makes them easier to compare to each other. 3:11:21 Because if one person's number is just a little higher by one millionth of a percent, people just switch to them in an oversimplified case. 3:11:35 So he was talking about that. 3:11:38 And he was saying, I don't understand how they can possibly afford to do this because they will be – they have to bear this insurance cost. 3:11:47 And I'm saying that it's actually good for the pools to suffer. 3:11:51 I think part of the subtext here is that Jentseth is sort of a supporter. 3:11:56 Some people have said he's an investor in Ocean, the pool, which does not do this. 3:12:03 Over the last several years, pools have basically shifted substantially more and more and more towards paper share or a version of paper share. 3:12:16 So they have switched to the thing I prefer because I prefer what is best for the end customer. 3:12:24 And what is best for the end customer is to have no risk and to be able to easily pick the pool with the highest number of maximum pool competitiveness. 3:12:32 And I think it just further shows how – is this explanation making any sense at all? 3:12:37 I think it just further shows how competitive the pool market is getting more competitive. 3:12:42 And in fact, the whole mining ecosystem is actually becoming healthier over time is maybe what I would say. 3:12:51 Now, although it is bad in one way because the pools now need more startup capital. 3:12:58 But this cost is lifted from the individual hashers who no longer need to bear the risk. 3:13:09 So it's a shift from the people who are buying the – the people buying the hashers, the hardware miners, they don't have to pay this cost anymore. 3:13:19 And it shifts up to the pools. 3:13:22 They have to pay and then they have to be – they're more easily – they have to compete against each other. 3:13:29 I don't know if this is making any sense. 3:13:31 So I hope that this is making some sense, though. 3:13:34 But I think it just – the bottom line is probably that people at Ocean are probably trying to figure out why is it – how can we compete against PaperShare? 3:13:47 And they probably – they will probably either switch to the PaperShare category or just continue to not attract hash. 3:13:59 That's my guess. I don't know. 3:14:00 Maybe if the person has a more specific thing they're curious about, they could clarify their question. 3:14:05 I hope that wasn't too much of a train wreck. 3:14:08 Yeah, he also said something. 3:14:10 What derivatives could be used to form a minimum hash rate viable pool? 3:14:16 Yeah, I think the idea of insuring the – the idea of insuring the block. 3:14:28 This is very difficult for me because I took a pen and paper out and I tried to figure out like what does it mean if you are trying to say, okay, you want something that pays off more if you are lucky and find more blocks. 3:14:44 And you want something that pays off less. 3:14:46 But wait a minute, that just is Bitcoin mining. 3:14:50 So it's kind of like trying to figure out like – but I think like it can't work, I think. 3:14:55 It's just fundamentally a thermodynamically random thing. 3:14:59 And if you buy – one issue is if you – imagine – let's say I'm a miner and you and I have a deal. 3:15:07 Our deal is like this. 3:15:10 The deal goes like this. 3:15:12 I'm going to mine as hard as I can. 3:15:14 But if I don't find any blocks, you're going to give me all – you're going to give me like all the money that I didn't make, the value of all these blocks I didn't find. 3:15:24 So then I go to you. 3:15:26 We make this deal and then I go to you the next week and I say, you're not going to believe this, but I didn't find any blocks, so you owe me a ton of money. 3:15:35 And you're going to be like, did you really mine as hard as you could? 3:15:39 And I'm going to be like, yeah, I mined really hard. 3:15:41 Look at my electricity bill. 3:15:42 It's 100 percent real. 3:15:45 And then – so I'm like, I don't know if this – it just seems since it's fundamentally very difficult to audit because it – because you can't keep track of all the hashes or all the shares. 3:16:00 That would be like an unbelievable amount of stuff. 3:16:03 There's not enough hard drive space or bandwidth for that. 3:16:06 So you can't – you can't do – you know what I mean? 3:16:10 To scan through the list is basically almost as much work as actually mining. 3:16:14 Not quite, but close. 3:16:17 So it's like – so yeah, I don't know if anything – if that will work. 3:16:25 Because, you know, the mining, you are – when you mine, you are already sort of selling insurance in a way because you pay a fixed amount. 3:16:46 And then you win money randomly. 3:16:52 And so you are short or – I don't know. 3:16:56 It doesn't really make any difference, really, the point is. 3:16:58 But the – it's maybe the alcohol talking now. 3:17:02 But the point is that minimum viable pool, I think the pool already – they have certain sizes that are set by much bigger factors. 3:17:17 So like the block withholding will affect you if you have a very large pool. 3:17:21 And then if you're too small, then you get hit by the variance. 3:17:25 So there's already like an optimal pool size. 3:17:28 I don't think it has very much to do with – this whole thing about wanting pools to be really small, I don't think that's even desirable. 3:17:39 There's nothing wrong with having like 10 pools that are all 10 percent as long as it's possible always to form a new pool if any of them misbehave that other people will switch to. 3:17:50 So I kind of just don't think – I don't get that. 3:17:54 To me, this seems like people just see the pie chart and they just want the pie chart to look a certain way. 3:17:59 And they don't – I don't really get – do you get it, Vlad? 3:18:03 I understand the impulse, but they want to have like the pie chart be like lots of slivers. 3:18:07 But why is that? Why is that good? 3:18:10 It doesn't matter. 3:18:12 But each – the people – it's false to say that the pool has agency. 3:18:16 You know what I mean? 3:18:17 The people mining at F2 pool, they could all leave and switch to AMP pool on the drop of a hat. 3:18:26 So if there's any flaw in any of the existing pools, people will just switch. 3:18:32 So the problem fixes itself. 3:18:34 I'm not really sure what people hope. 3:18:36 Like what is it that people find so problematic about today's world? 3:18:40 Like is there so much transaction censorship? 3:18:42 Is there so much blockery org? 3:18:46 Like the problem is that the pools do not coordinate to activate soft forks of anything. 3:18:52 So they would almost be better if they were slightly larger, I think. 3:18:57 Because then they would take – they would feel more responsible maybe for the success of the network. 3:19:04 Instead of thinking like they're all just kind of waiting for someone else to make the first move or whatever. 3:19:12 It would be better if – I think maybe it would be better if they were all – I mean what is the Bitcoin Mining Council if it's not, to some extent, those big miners all combining into one organization? 3:19:26 But that would be better if there really was a functioning Bitcoin Mining Council that researched ways of increasing the value of miners. 3:19:39 They would probably conclude that they should heal the damage done to the activation process from 2017. 3:19:49 Which I think they're trying to do, but they are not – they're trying to do by staying out of it. 3:19:54 But they're not – this has created its own version of the exact same problem. 3:19:59 Is that the SegWit blockade was caused by miners. 3:20:04 The SegWit blockade was caused by miners actively ignoring it. 3:20:08 And then all these other – there's a whole long list of things like OP_CAT, 3:20:12 where they are also ignoring those. So it's weird that it's actually the same problem 3:20:19 and the same behavior, but it's framed kind of differently. 3:20:25 Yeah, you know, Paul, last question and then I'm going to go to sleep and you can 3:20:29 go have dinner or something. It should be late in New York or whatever. 3:20:35 That's your time zone. I'm not sure where you're based. But anyway, 3:20:41 why do we bother with any of this instead of just building on Liquid? 3:20:50 Well, I think... 3:20:53 I mean, it's so complex, right? It requires soft forks to change the base layer. 3:20:58 It requires effort. It requires coordination. 3:21:03 Well, if we would, what we'd be saying is that something that we've already done 3:21:08 16 times, the soft fork, because it was done many times in the past, 3:21:18 that we've stopped doing it now. And why would we stop doing it? Because 3:21:22 some people on Twitter who joined two years ago 3:21:29 don't like it or something. Well, I think that would be our point of view. 3:21:37 Right? We'd be like letting the terrorists win. And we would be setting the stage for a much 3:21:42 bigger future disaster, because we'd say everything happens on a corporate-controlled... 3:21:47 Until recently, it wasn't even open source. A wallet where no one knows the key holders, 3:21:54 even who they are, or that they're not all the same person. 3:21:56 No, you're talking about Liquid. Sorry. 3:21:58 Yeah, right. And all the transaction fees go to a wall controlled by the corporation that 3:22:03 created it. So that would really be admitting defeat in many ways. I think it's better to actually 3:22:11 hunt down the real problem and say, what is the real problem? And then destroy that, 3:22:17 because we'll get a much bigger payoff. We'll get a much bigger payoff if we just... If the miners 3:22:24 were able to understand that there is a defective... The Bitcoin development process is too 3:22:37 conservative in some ways. And it's honestly too liberal in other ways. There's too many people 3:22:45 just changing the code for no reason, like refactoring it or whatever, where they should 3:22:49 just... If they don't need to change it, then they shouldn't change it. But it's too conservative in 3:22:55 some ways that negatively affect Bitcoin. And that they should... In some cases, they should 3:23:00 really ignore. Not all, but in some cases, they should really ignore what people on GitHub think. 3:23:11 Just as sometimes the people on GitHub should ignore things that miners think are important. 3:23:18 So we should all recognize that there is a complex set of conflicts of interest. 3:23:23 Miners, users, investors, and developers have interests which... They have many interests 3:23:32 that align, and they each have many interests that are opposite, of course. I hope that's clear. 3:23:40 The miners would benefit if transaction fee rates went up, but that would be bad for users. 3:23:47 The users may want something like privacy that may look bad to some investors. 3:23:58 The developer's priority is maybe their own prestige, or maybe even in just not screwing 3:24:05 something up. So they would prioritize these frivolous refactorings of the code. 3:24:11 But if the developer ships something that makes sense, then it's a good thing. 3:24:15 But if the developer ships something that makes the miners a ton of money, 3:24:19 then the developer will not necessarily get any compensation for that. 3:24:23 So that's a conflict of interest right there. 3:24:28 I think for each, you could make a grid. And for each of those combinations, you could see how 3:24:33 in each case, the interests do not always align. And so you could take any pair and find 3:24:42 something where there was conflict. Developers often prioritize these complicated things that 3:24:49 most people don't understand. For example, consider developers and users. 3:24:54 Developers really like something complicated, such as the Lightning Network, such as Arc, 3:25:00 such as BitVM, such as ZK Rollup, something that only they understand so that they will get 3:25:05 a paid job for years, or maybe even a whole career. And then what the regular user wants 3:25:14 usually is simpler UX, better front end. They want stuff to be easier. They want stuff to be 3:25:26 more self-explanatory. In many cases, they want something simple. 3:25:34 I have this thing, Deniability. There is a pull request that someone else made. It wasn't me. 3:25:40 Deniability is just a tool where you click on it and it schedules you sending money to yourself 3:25:46 in Bitcoin Core, full node. And the idea is just you turn this on and you forget about it. And then 3:25:51 you're walking around, driving around town, buying a cup of coffee. And meanwhile, your money is 3:25:56 being sent away. It looks like other people are spending the money. It's really all going from 3:26:00 you to you. But it just looks like you don't have this money anymore. And then when they arrest you 3:26:06 or whatever, you say, I don't own any Bitcoin anymore. And then they find all this evidence 3:26:10 of the coins moving while you were, someone sent a Bitcoin transaction while you were 3:26:17 on an airplane or something at random times. So that's a simple thing. And of course, 3:26:24 nothing can ever prevent that. But it's almost too simple. You can't take credit for it. 3:26:29 It's not like something like ZK moon math thing. So often what the users want and what 3:26:37 the developers want is very different. One thing is that the user would certainly want 3:26:42 is that the user would prefer that the software reaches a point where it is so good 3:26:47 that developers are no longer required to work on it or update it or even maintain it. 3:26:53 They could just get into a very perfected state. But that would be terrible for many developers. 3:26:59 They would immediately be out of a job. So, and of course, the developer also, 3:27:05 the developers and miners often have nothing in common with each other. 3:27:12 The investor wants the price to go up, but the user doesn't necessarily 3:27:16 care about what the price is if they're a real user. If they're like a Silk Road type user, 3:27:20 for example, they don't care what the price is because they may be buying or selling at any 3:27:25 given stage. They actually prefer the volatility below. But if you're an investor, the downside 3:27:32 is capped at minus 100%, but the upside, it can easily more than double. So the investor prefers 3:27:38 volatility. So I think that that would be a better thing for the miners to wake up to the fact that 3:27:45 there are these conflicts of interest and that they themselves are, I think, probably 3:27:53 suffering unnecessarily because they just have folded immediately kind of. 3:28:05 Yeah. Someone on Twitter actually said, wait, I should read the actual comment. 3:28:11 Where is it? Oh yeah. So Sid Tukul said, big brains talking right here. How do we solve the 3:28:18 problem of no one listening? And he makes a good point because in the three hours in which, 3:28:24 or during which we have been talking, we had 71 listeners on YouTube and 11 of them are still 3:28:31 online. So thank you guys. You're the real heroes. And on Twitter, I think the algorithm has buried 3:28:39 the post long time ago. Last time I checked, there were one, two people listening. 3:28:50 So I don't count on Elon's platform for live streams, but still the question is valid. But 3:29:00 at the same time, what I've learned in five years of doing this podcast is that it's not 3:29:06 quantity that matters. It's quality. It's not a matter of how many thousands of listeners you get. 3:29:14 It's all about who's listening. Because if you get a listener who's involved and knows how to 3:29:21 use this information, it's a net benefit for everyone involved. That's certainly true. I 3:29:27 think it's only a matter of time also when maybe you privately know something and then that 3:29:34 knowledge can pay off for you in a really big way like a lot of, especially in this type of 3:29:40 industry where there's lots of people investing in lots of different things. So I don't know 3:29:46 when or what exactly would form that might take, but I think that this is the kind of thing where 3:29:54 if you develop your understanding to a very high level, I mean, just look at how much money people 3:30:01 made investing in researching in Bitcoin, having a disproportionate understanding of Bitcoin early 3:30:07 on and then making an investment based on that. People would have made a ton of money. And so 3:30:12 I think it's a smart thing to do is just continue to improve your understanding 3:30:18 and maybe just wait. Who knows what will happen. 3:30:22 Well, I've met an OG who was using Mycelium on his phone and he was carrying like 20 Bitcoins 3:30:30 and that's more Bitcoin than I'll ever have. And I told him, you know, you're using your address 3:30:37 and he was like, I don't care. And I was thinking, okay, he doesn't care. 3:30:47 It's like that sometimes. You find plebs who are super concerned about their setup with 3:30:52 WasabiWallet, with Tor and they mix their 0.3 Bitcoin and they put it in cold storage. 3:31:05 They do all the steps correctly and then you get some OG who's walking with a hundred Bitcoins in 3:31:09 his pocket, not caring. People are like, oh, I plugged in an old hard drive. 3:31:13 Turns out there were whatever people say, like whatever, 500 Bitcoin there. Like, oh man. 3:31:20 We even got a suggestion in the chat. Wrap it up, says Jackknife. Thank you for listening, 3:31:26 Jackknife. I mean, it's admirable. 3:31:28 All right. We'll wrap it up then. It's been fun as always. Glad to see you later. 3:31:33 Yeah. Thanks, Paul. 3:31:38 And listen to the rest of the season. Honestly, it's really good.