0:00 Hello Bitcoiners, Colin here. In this episode of the Unhashed Podcast, Mario is still gone, 0:09 but we have something that is obviously better, because what could be worse, am I right? 0:14 Paul Sztorc is on the show today, and he's here to talk peer-to-peer oracles and prediction 0:19 markets. What can you predict what his opinion will be on whether or not Dogecoin is a sidechain 0:24 of Litecoin? Find out the answers to these and other questions on this week's episode 0:28 of the Unhashed Podcast. See you on the other side. 1:28 Hello and welcome to the Unhashed Podcast show, where we bring crypto down to earth and cut 1:54 through all the blockchain bullshit. I'm your host, Colin Alds, and I'm here with your co-host, 1:59 Ruben, the windmill, the Panenkoken, the Dutch rudder, Somsen. Hello. And I'm here with my 2:07 brother, my blood, Brian, the belt buckle, the burger, Alds. Howdy. Your other co-host, Mario, 2:17 the maple leaf, the gib, the jib, the glib, the tactful, but verbose Gibney is still not here, 2:24 but he shall return next week. However, in his stead, we have a very special guest, 2:29 someone we've been teasing about getting on the show for months now, and we just never scheduled 2:35 it. But we said, God damn it. We put our foot down and we said, we're going to bring on Paul, 2:42 the stork, sports stork. I don't know how you say your last name. I was going to ask you because I 2:48 never asked you in person. No, you know that that's that's what you have to do. You have to 2:52 make a stork joke and then you have to use the Paul sports reference. You really know your your 2:58 Bitcoin uncensored history is very important. That's the only the only thing you really need 3:03 to know to navigate the blockchain world. And and then you just kind of make something up and that's 3:10 it. It is pronounced storts because the C, the crescent shape is a different letter in Polish. 3:16 It's not really an English C, it's a Polish name and it's pronounced storts. Yes, 3:22 gotcha. So you speak of speaking of Bitcoin uncensored. Rest in peace. You know, Paul, 3:29 actually, the first time I ever heard of you was on the Bitcoin uncensored episode where they snuck 3:37 into Satoshi roundtable and they hounded you for like 10 minutes trying to get you to show your 3:44 nipples on camera. Oh, yes, I yeah, I remember that, even though I don't remember all of that 3:49 because there was a lot of drinking that night. Yeah, well, they made fun of you for drinking 3:54 Long Island iced tea. I was pounding the Long Island iced tea. That part is 100 percent real. 3:59 They they convinced me. I rewatched it while sober before they put me on the camera. They 4:06 had convinced there was a big scandal as to who had revealed to them the location of the secret 4:12 roundtable meeting because they weren't invited, but they crashed and they knew in advance. 4:16 So they got the you know, they got like the Club Med pass or something so they could be there. 4:22 And they had worked all this out. And so someone everyone was like, who told them? 4:26 How did they find out where it was? And they had convinced me that it was Adam Back, 4:31 even though that was clearly a joke. When I was sober, I realized that they were just 4:34 messing with me at the time. I enthusiastically endorsed it while while drunk and like on the 4:41 show. So that's just one of the many funny things that happened in the show. 4:45 And little did you know that it actually ended up being you that had given away. 4:49 Yeah, right. They say that right. They accused me of that. And then I immediately threw Adam 4:54 Back under the bus. I was like, no, that's not true. It was Adam Back. And then when I rewatched 4:59 it while I was sober, I was like, oh, my God, you know, I was like putting all the pieces together 5:04 as to like what happened. So just for just for the listeners who who may not be 5:11 familiar with you, I think most of them will be, but there might be one or two, you know, 5:16 two out of the five listeners that we have may not know who you are. 5:19 Can you just give everyone sort of a background on on what you're up to, 5:24 who you are, where you're working, what your projects are, that kind of thing? 5:29 Yeah, so I'm like, I have a formal background in economics. And when I discovered 5:38 Bitcoin, I was in graduate school, not ironically, for it was for finance, not for economics. But 5:45 I then moved into a kind of pre PhD research statistician job at Yale University. And the 5:53 guy I was working for, Bill Nordhaus, he actually won the Nobel Prize in economics earlier this year. 6:00 And I was immersed in in academia and economics. And I have a bachelor's degree in economics now 6:07 that so I'm like a big economics statistics guy, which is where I was coming from. And in 6:13 particular, something I really, really like is the the uber Hayek in idea of prediction markets, 6:20 as popularized by the economist, Robin Hanson, but also popularized by how Finney, 6:27 who a lot of people think could plausibly be Satoshi Nakamoto, certainly won someone very 6:33 high on the list. And since he did a reasonable proofs of work, I believe, 6:39 just a few years earlier, which was directly on that path. And so this is a kind of a really 6:45 cool idea, this prediction markets idea. And in 2013, I wrote a little bit of code. 6:51 And in 24, early for 2014, January, I wrote a paper called truth going about a peer to peer 7:01 Oracle, so an Oracle without any authority, and it would, it would try to figure out what happened 7:06 in the real world. And if you could do that, then you could have people and you had Bitcoin, 7:10 you add that you add these ingredients together, and what you get is something where people can 7:17 trade derivatives that are based off of real world events. So if you do that, 7:20 you get a lot of finance, you get a lot of insurance, you get a lot of gambling, 7:26 sports, gambling, and things like that. But in particular, I wanted to use it for something 7:32 that's sometimes called futarchy, which is where you make assets that are co the price of these 7:36 assets co vary with politicians competence. So you'd say like, we'd have like the Trump asset, 7:42 and maybe the I don't know who the front runner is currently in the United States for president, 7:47 but it could be like Joe Biden or something. Yeah, Elizabeth Warren and Kamala Harris. 7:51 And you'd have these assets that would go up in value if conditional on them being elected, 7:56 they would be good for the unemployment rate or something. So there'd just be all these, 8:01 this matrix of prices. And it would just say, well, if you vote this person in this is what 8:07 you can expect the unemployment rate to be in the future, like in 20 the year 2021 2022. 8:14 And that's a very ambitious project. Because of course, a lot of what we a lot of our problems 8:21 today are greatly exacerbated by the fact that the public sector is so unreasonable, 8:28 and that the feedback process for correcting mistakes in the public sector is this very slow 8:35 election process once every few years, and most of the voters can't be bothered to 8:43 look any of this stuff up. Which is understandable because of, you know, 8:48 just the mathematics of voting and the reality of modern life being complicated and all these 8:53 things. So I had a very ambitious kind of vision. And it's actually Roger Ver, Blockstream and Roger 9:00 Ver both tried to offer me a job or Blockstream actually wanted to offer me a kind of partnership 9:06 in November of 2014, I think. And then I just from purely for reasons of timing, I think it 9:14 was Roger Ver who ended up hiring me away from university to work on this project in which I did 9:21 in 2015. And then at the end of 2015, the project involved layer two and sidechain specifically. 9:29 And at the end of 2015, I wrote a paper about a simple two way peg because it seemed like all the 9:34 complicated two way pegs weren't making any progress or coming out. And I'm sure we may 9:41 get into this. But at the end of 2015, I wrote something called drivechain. And then after a while 9:47 in 2016, after kind of presenting it scaling three, I started working on that shifted my 9:54 attention to working on that having worked on the peer to peer Oracle software, and basically 9:59 completed it. And that project said Bitcoin Hivemind.com and Drivechains at drivechain.info. 10:06 So that's a pretty long, that was a pretty long overview of like a ton of things. 10:10 So Paul, our Drivechains, was that also like an attempt to implement prediction markets as 10:17 a sidechain? Or was that not really? Yes, this precisely is that my primary motivation is to 10:23 turn the prediction market software on. But I think... Without creating an altcoin specifically. 10:30 Right. Exactly. The altcoin, you know, it puts the entire... 10:36 There's no way that these projects exist. It's very interesting that the various points of view 10:40 that people have on this and how those points of view are, are described and then misconstrued and 10:46 then propagandized. But I think, you know, you really cannot have an altcoin without it being 10:53 an aggressive competitor to Bitcoin. That's just the nature of these projects that they all compete. 10:59 Yeah. And so there's no real way to introduce an altcoin without trying to harm 11:05 harm, for lack of a better phrase, Bitcoin. And there's no real reason for that. I mean, 11:12 first of all, I think I would lose. But second of all... 11:16 You're resetting the distribution, right? That's part of the problem. Like, 11:20 how do you get these coins equally distributed amongst people? And 11:25 there's just a whole lot of problems there. And it ends up turning into a pump and dump inevitably. 11:31 So obviously, if that's not your goal, if your goal is not to create a token, it would be much 11:36 better if you didn't have to do it and you could just focus on the actual technology, 11:40 which in your case is prediction markets. Yeah, precisely. Gavin Andreessen had an old, 11:46 a long time ago, before numerous dramatic events happened, he said that altcoins were a sneaky way 11:53 of getting around the 21 million coin limit. And I actually think that that is the correct 12:00 take on it, that actually, there's a kind of universe of value and it's split up into various 12:09 currencies that instantiate it. And the US dollar has like a certain market share and the euro has 12:14 a certain market share. And the altcoins are, they are minting new value into existence that 12:23 um, mostly is cannibalizing BTC, not all of it, but I think most of it is cannibalizing 12:30 BTC value that, and then you have that today when people talk about crypto in quotes, you have 12:36 people, Brian Armstrong and the treasury secretary today to talk about crypto. Instead, they could be 12:43 talking about Bitcoin if these other things weren't existent. And that's really what's going 12:48 on here is that Bitcoin was 100% of the crypto kind of at one point, and now it's merely more 12:56 than all the other coins put together. We have to content ourselves with that, but we could probably 13:01 do better, even better than that, I think. I mean, I think there is one small issue here, 13:06 which is that the whole ICO altcoin field is so profitable, that a lot of the money marketing 13:12 goes there, right? So for example, like your, your Drivechains idea, if it was, 13:17 if you made it as an altcoin, it would be much more sought after and, and people would be 13:26 promoting, promoting it if, if they had a coin they could hold on to and profit from promoting 13:30 your idea, right? So, so there is this whole thing, I think, where there is interesting technology 13:36 that's not even getting attention because people don't care because there's not a token they can 13:40 hold and profit from. Well, I think that's true. That could be true for your state chains idea. 13:45 I think one disappointing thing is how, I mean, if you, this is a lesson taught by Dan Larimer, 13:55 I think most of all, which is that if you just launched a coin, you have access to just so many 14:01 brainwashed servants who will just show the coin, do whatever you want to make any excuse for your 14:08 behavior. And that is really, that's really something to be, to be living in a world where 14:15 you know that all you have to do is throw this little switch and you could get millions of 14:19 dollars and you could get like an army of like brainwashed supporters. And it's, that's kind of 14:27 depressing. They could be just opportunists who are better at reading the pump and dump process 14:36 than... I agree with that as well. One of the reasons why it's problematic is that it's a kind 14:41 of crime against truth because it just makes the world much harder to figure out. You can never 14:46 figure out why is anyone saying any of this? Do they actually believe in BSV or is it like a joke 14:52 or is it, you know, is it just a performance? And so that's one annoying thing about all of these 14:59 is that they just make the world more difficult to figure out. You definitely, the more moral 15:04 thing would almost always be on the side of the growth of knowledge and of clarity. And then 15:12 these often just put you, you're just handcuffed to these railroad tracks of just going further 15:17 and further into a place where no one can figure out what anyone's real position is. 15:24 Yeah, I think that's absolutely accurate. And that's maybe the biggest problem where 15:28 you really don't have these tokens being promoted because the technology is good, 15:33 but they're being promoted because people want to find the next idiot that 15:36 buys this token from them. And that just massively distorts the signal of accurate information. And 15:43 yeah, that's a real pity. There is one. The hard fork, I think, is a huge improvement. It still 15:50 has basically the same problem, but it does improve a lot in that the guy running the scheme 15:58 doesn't get to write himself a gigantic check like on day zero, which that's like some of the 16:05 stuff that people put up with. And I just kind of can't believe there is a, this came from Chris 16:11 DeRose, the idea of the military saying in the U.S. that the officers eat last, 16:19 which is taken literally, I believe, but also figuratively that the people in charge, 16:25 they don't get the food until all the subordinates get their food. And that's a 16:31 kind of way of preventing agency cost and corruption, for lack of a better word. It 16:38 just says the guy at the top is going to suffer the most harm, very much the skin in the game 16:43 type thing. But with these projects, you get the exact opposite of that. These people just, 16:48 they get off scot-free immediately. Ethereum, Vitalik can sell 25% of his ETH, 16:53 become a multimillionaire. The project basically hasn't launched given the percent of the features 17:02 that were claimed versus that it has today and the features that it's rapidly losing. 17:08 But it's also, I think, what people want, because they are actually desiring somebody being in 17:14 charge and taking a huge stake and pushing the project forward and making these dream-like 17:20 promises where nothing of it, none of them come true, but it doesn't matter because all you're 17:24 looking for is that next pump, where especially with Ethereum, there's always this new technology 17:30 on the horizon. It's just a couple of months away. Yeah, a couple of months and then it's 17:34 going to be golden. Then there's going to be scaling, infinite transactions. And then every 17:39 time, it just changes. As soon as people don't believe in that thing anymore, then there's a 17:43 new thing that's going to come in a couple of months and it just keeps going. It certainly 17:48 does. And as Zcash in particular, I couldn't believe that people would put up with the 17:53 the dev tax, which is an unbelievable amount of money if you do the math. 18:00 But that's a perfect example. People just put up with it and they just say, we want a 18:04 bunch of smart people in charge. Because there was a fork that took out the dev tax and nobody 18:09 cared about the fork. Right, exactly. And that shows that the market cares about the leaders. 18:14 Yeah, it does. And you'd think if you were just, you know, quietly sitting in a room alone with a 18:19 piece of paper, you'd say, oh, one has a dev tax, one doesn't. So this one must be more valuable. 18:25 Right? Yeah, I mean, I know. People demand having a leader. They cannot not have a leader. 18:35 But that's because the value is in the promises. And that makes it very clear once 18:40 you have this fork where one of them doesn't have the leader, the other one does have the 18:44 leader. And I don't know. I don't know. That's everything, though. I mean, like even in Bitcoin, 18:49 you do see this strange yearning for Satoshi to reemerge. I mean, maybe not among like the super, 18:57 super, I don't know, Bitcoin realists out there. But I feel like among the base or to use a 19:06 Derosian term, the hoi polloi of Bitcoin, you do you do still see this yearning for a leader. 19:13 And we we know we kind of don't want it. But at the same time, we kind of want it. And and I mean, 19:20 maybe it has to do with, you know, you have a face to put out in front of the camera, 19:25 then it helps your bags grow in value faster. But I mean, Bitcoin seems to be doing fine without a 19:30 leader. It's it's gaining dominance. But yet we still kind of want one for some reason or many 19:36 people do, at least maybe not. Maybe not you or me, but well, teamwork is valuable. So that's 19:43 it's normal to want to work on a team. If I think if the protocol got to a point where it never 19:50 changed, all of these discussions would become moot. Right. Because what would the point of it 19:56 be? It would just be like this is Bitcoin and it exists in an eternal, unchanging state. But 20:02 Bitcoin does go through versions and we have a very clever institution of the soft fork, 20:11 which lets all the old versions tag along, even though they're partially degraded to SPV mode, 20:18 which is kind of interesting, because in my view, they kind of like they kind of become like 20:25 an older node, an older full node, like a full node of like Bitcoin version 12 or something 20:31 is like degraded to like 70% full and like 30% SPV or something is kind of a weird phenomenon. 20:41 You can imagine if everything was SegWit blocks, then the pre-SegWit 20:47 nodes would not be verifying any of those transactions. That's what you mean, right? 20:51 Yes. Well, they wouldn't be each individual transaction. They wouldn't be checking the 20:55 signatures. They would be checking that like the accounting added up. But I'm planning to 21:03 write something about this, about this kind of this idea of this full and SPV thing is 21:10 a lot more relative than I think people think it is. You have someone like Luke Jr. who will say 21:15 you have to run a full node. I'm not sure that sentence really means anything in a world where 21:21 the protocol changes because it's who you know in the future, who knows what new popular feature 21:29 will be in Bitcoin version like 23 or something. Right. But that's an interesting kind of concept. 21:35 And for these changes, sorry to interrupt, but I just wanted to finish the point about Satoshi, 21:40 which is that I think it's when the protocol goes to its new versions. So it's like when 21:46 SegWit is added or when someone proposes a hypothetical hard fork to increase the block 21:53 size. Those are where people lose the kind of magic of the blockchain, which is that it just 21:59 tells us what to do. And they say, now, where should we go from here? And then when that happens, 22:05 there's constant appeals to what Satoshi said. And I don't need to tell, I think anyone who's 22:13 been paying attention will see, you will see those everywhere. Yeah. But it's, you know, 22:18 I do think that there is a slight difference between SPV and this kind of soft fork upgrading, 22:25 which is that the old full nodes actually are opting into the soft fork by having these opcodes 22:32 that allow for these soft forks to happen. So it's not like you could run a full node that 22:38 actually just rejects any soft fork, or at least the soft forks that are done through the protocol 22:45 with these opnops or now with the SegWit changes. So you could theoretically run a node that just 22:53 outrightly rejects these, and then you would have that version of the software that doesn't change. 23:00 But people don't want it. So they are already opting into it. 23:03 You would soft fork yourself right off the network if you did that. 23:06 Yeah, you'd hard fork yourself off the network. 23:09 Well, yeah, you'd be out of the network. But I actually, it's interesting, I tried to give a 23:14 talk about this, but I don't think it was successful. But at Building on Bitcoin, 23:20 my talk was trying to be about exactly this, that there were these zones, 23:26 zones in which people had opted in. And so I think what you're getting at is that 23:33 there are these opcodes that have been defined as being, this is the place where new features are. 23:40 And so you will at least know that you are in a new feature world. So you won't be checking it, 23:49 but you'll know, nothing unexpected will happen. You'll say, oh, I expected that eventually people 23:55 would start using these opcodes for something, and maybe I don't know what it is. 24:00 It can get a little confusing if your friend upgrades, they receive a transaction that is 24:08 paid with like opnop7 or something, and you have no idea what that's doing. And then they pay you 24:14 with that money. Now it gets weird because you can check, when you ask him to pay you, 24:20 you can fully check that transaction, but you don't really know how he got the money. 24:26 Right. 24:26 And then it starts to become SPV mode sort of again. But it's funny you bring this up, 24:30 because the entire purpose of this talk that I was trying to give at Building on Bitcoin, which 24:35 I think if you go to drivechain.info literature section, you can look it up. 24:39 And then I also wrote like some bullet points where I linked to the presentation that maybe 24:44 help clarify what I was trying to get at. But what it was, is that this is an advantage of 24:51 sidechains versus protocol upgrades, because with sidechains... 24:56 ...you very explicitly designate a zone where you are not going to look at what's happening at all. 25:03 So it's actually an advantage of sidechains that says, unlike the opnop7 thing, with opnop7, 25:11 it might suddenly become your problem, where if someone says, oh yeah, opnop7 works like this, 25:17 and then you're like, wait a minute, my friend just paid me, but he didn't check properly, 25:22 and now this whole thing is at risk of being unwound and the whole blockchain is probably going to reorganize 25:27 and I'm not going to get paid. But with sidechains, it doesn't work like that at all. 25:31 With sidechains, it actually just says, layer one is not going to look at this ever. 25:37 And so you get paid through the sidechain, but it doesn't matter because the SPV proof cleared 25:42 and now you're home free. So it was actually directly relevant to sidechains 25:48 and transaction theory, if we want to be so bold as to carve this out now, 25:54 which it seems like we might as well come up with a phrase for this now. 25:57 Yeah, I mean, I do think there's a point to be made that you chose not to verify that opnop, 26:03 and it is valid according to your rules. And from the perspective of your old node, 26:08 it just says, hey, my friend, there was this transaction that anybody could claim, 26:13 my friend happened to claim it, and then he gave the money to me. 26:16 And that kind of thing could get reorg too, theoretically. 26:20 So it's, I think it's still within the rules, but it is definitely like, 26:25 there's this question of, oh, are other people going to reject this transaction? 26:29 It's not about you, you specifically think that transaction is valid, but you're uncertain about others. 26:34 No, that's true. But you could think even for any vanilla, normal, completely normal, 26:40 most basic Bitcoin transaction, if that comes to you, who knows? 26:45 It could violate some new software. What about the DARE signatures, right? 26:49 The low S-value or high S-value being banned. 26:53 You never know what other people are accepting. You don't have that guarantee. 26:57 So it actually becomes quite – it becomes inherently social. 27:00 And that's an interesting point about it. 27:03 I mean, that's kind of the issue with all money. 27:07 That is true also, right? You can never know. 27:09 If someone could say the $50 bill is easy to counterfeit, and then they suddenly stop taking it, 27:15 or they suddenly stop taking U.S. dollars completely, which is currency crisis. 27:20 I mean, in India, they woke up one morning and anything larger than 20 rupee wasn't worth – 27:26 I don't remember what the actual denomination was, but there was a lot of bills that were just worthless. 27:31 Yeah, that's true. 27:33 There was a counterfeit problem there, right? Or what was the issue? I forgot. 27:37 They said that it was because the criminals, they called it black money over there, were using those bills. 27:47 But I think it was really – yeah. 27:49 Yeah, well, they made a lot of people into Bitcoin enthusiasts over there, so that's great. 27:57 We should get them – if only we could get them to do that. 27:59 That's my joke on – I don't think – I'm worried that a lot of people aren't getting the joke. 28:04 But on Twitter, I have a joke, the Bitcoin Super PAC. 28:07 The Bitcoin Super PAC is basically like a campaign to destroy the U.S. dollar. 28:11 But I keep – I will retweet like I recently did Bernie Sanders' plan for free college and a financial transactions tax, 28:21 and I was like, this is great. Bitcoin Super PAC supports arbitrary U.S. dollar giveaways and taxes on the financial sector. 28:30 Let's get that financial tax up and free training for everyone, free everything. 28:37 I saw a Bitcoiners for Andrew Yang, and they just wanted to push the U.S. dollar into hyperinflation. 28:49 So I thought that was humorous. 28:50 Yeah, definitely. 28:51 As a Bitcoiner, you should be pro-tax. You should be pro-government spending. 28:56 You should really be like – you should definitely – this is a Chris DeRose thing. 29:00 You should want more of the drug laws to be enforced at the street level, but not for the online darknet markets. 29:09 Pro-Iranian sanctions to – 29:11 Yeah, exactly. 29:12 It does depend on your ultimate goal though. 29:14 If your ultimate goal is just to have society be as good as it can be, I guess you could still say that. 29:19 We need society to fail and reemerge with Bitcoin or something. 29:23 This is what socialists call accelerationism. 29:27 There is this school of thought in socialism where the whole concept is that before you can get to socialism, you have to reach capitalism. 29:38 Before capitalism can end, it has to reach its zenith and then collapse. 29:44 So really, if you're a very dedicated socialist, you need to pull for the most stringent forms of capitalism possible because that's the only way you'll ever reach the goal of socialism because that's just – that's how it works. 29:58 That's the ideology. 29:59 I've not heard that view, but that sounds very interesting. 30:01 Yeah. 30:02 I have a friend who is an accelerationist. 30:06 It's so ironic because he's so opposite of me, but yet for the foreseeable future, his goals are completely aligned with mine. 30:17 That's nice. 30:18 So we're very good friends. 30:20 He'll debate socialists like, you guys are not capitalist enough. 30:24 You need to really embrace this. 30:27 It is interesting that you mentioned the sort of dollar collapse accelerationist line because I do have some other very avowed communist friends. 30:39 I started to change my tune on the free college for everyone because they're always posting on Facebook about how Bernie is going to give everyone free college. 30:48 I'm like, you know what? 30:50 Actually, I do support this now. 30:52 They're like, really? 30:53 I'm like, yeah. 30:54 Anything that accelerates the collapse of the dollar, I'm for, and they're just like flabbergasted by this concept. 31:00 Right. 31:01 Here are some other points. 31:02 Go ahead. 31:03 Exactly. 31:04 We have to – a challenge in the modern age is that the world of political discussion, especially online, is – it's just horrible. 31:15 It's just a horrible place. 31:17 Especially Twitter. 31:19 Yeah, Twitter isn't good. 31:21 Basically, you have I think meme evolution where this stuff evolves. 31:25 Whatever the stuff that is best at spreading through human brains, by any means necessary, by the cheapest tricks, exploiting emotions and things, and that will spread through. 31:38 So a lot of that is evolving against the grain away from rational thought towards – but whatever the point is, is that it's very difficult to discuss politics in like a fun way. 31:50 It's also very difficult in the modern age to critique an idea because of that – what's that law about if you want to produce – if you have to refute some false thing, it takes 10 times the energy than it is to just make up a false thing. 32:04 So often, satire is a really good way, a cheap way of critiquing an idea, and it's also sort of fun. 32:14 So I think for your own sanity, this is a fun thing to do is kind of just be like, yeah, if people start – if you want to do this kind of US dollar collapse point of view, and then you can tell people that in fact, Bitcoin super PAC doesn't even support property rights at all. 32:33 You think that there should be no property of any kind and no banks, and there should be 100% income tax. 32:42 I think that's kind of a fun way to just kind of keep it fun because ultimately, when people start taking this stuff too seriously, it does ruin their lives I think, and you don't want that. 32:57 Your life is more important than any particular political ideology certainly, and your life is – believe it or not, your life is more important than Bitcoin even. 33:04 So it's definitely more important than flavor of the week, presidential nominee. 33:10 Don't give too much of your energy over to that. 33:13 I think you ought to buy Bitcoin super PAC domain. 33:16 I was thinking about taking this very seriously. 33:20 Yeah, Chris DeRose and I, we were actually kind of – what could you do if you went really, really – and that would just be such a funny thing, and you could – if you played your cards right, you could end up on CNN talking about how, well, actually, we don't support property rights, and just kind of let that concept land. 33:41 If you think about free college, I think everything should be free. 33:45 As long as you qualify – look, we want as many things as possible to be free in this country so the dollar will collapse. 33:52 Yeah, well, I think you kind of can't explain it completely, but I think – yeah, I did have some lines worked out that were funny. 33:58 Like we don't support property rights at all, but we do support net neutrality and stuff like that just to kind of throw curveballs in there so that people – and we definitely – we support them for computers. 34:09 You should be able to own a computer and an internet connection. 34:12 So it should be a capital offense to cut any undersea cables. 34:15 That should be like immediate declaration of war if anyone messes with the internet. 34:20 The Bitcoin caucus. 34:22 It's just like we just – whatever is in the interest of Bitcoin, we – 34:28 Well, that's why it's Bitcoin Super PAC. 34:30 I think it's got to be Super PAC because of all the nonsense that – do you guys remember or do you even know what I'm talking about with the Colbert? 34:36 It's like Colbert Super PAC. 34:38 It's not Bitcoin Super PAC. 34:40 It's Colbert Super PAC. 34:41 Swift vote veterans for Bitcoin or something like that too maybe. 34:45 Yeah, that could be funny too. 34:47 You could do like the committee – Swift is destroying America Super PAC or something like that. 34:55 You could go like a negative direction. 34:57 Right. 34:59 Well, before we get too into the weeds, I do want to get into the weekly news wrap because there's a lot of interesting stories here. 35:05 Just the way our show works, Paul, is we talk about each – I read off a little segment for each news item and then we kind of talk about it. 35:15 And the way I want you to view yourself is you're just a regular host and feel free to chime in with whatever thoughts you have. 35:23 But we try to make the first one at least somewhat relevant to whatever guests we have. 35:27 So I'll go ahead and start. 35:29 So number one for our weekly news wrap-up. 35:31 Crypto prediction market veil is closing up shop. 35:34 The platform was a somewhat more user-friendly front end to Augur. 35:37 But due to low demand and, quote, a difficult onboarding process, the team is moving on to other things. 35:42 Now, an ICO-funded company closing down isn't a surprise to anyone, but the fact that it's centered around prediction markets is something to talk about, especially with Paul here. 35:51 So, yeah, guys, thoughts on this very shocking close-up shop here. 35:57 I think the prediction markets are always difficult. 36:01 It's a really nice idea and people want it to work. 36:05 And it is something I think that's worth pursuing. 36:08 But then if you do it in ICO form, it's basically what Paul has been saying. 36:12 It's like you get distracted by the coin and the pumping and you kind of forget about the actual technology and it ends up just not really working out. 36:23 I'm personally curious how Hivemind, how Paul's stuff actually achieves the information getting into the system. 36:31 Because that is, generally speaking, the problem with the prediction market is that, sure, you can make a bet and you can say, oh, this is going to happen or that's going to happen. 36:39 But then it's a real-world event and somebody needs to then report the actual result of the real-world event into the blockchain. 36:47 Or there needs to be some kind of system that incentivizes this. 36:50 Without it being horrible. 36:51 Yeah, maybe this is a complex question. 36:54 I don't know if there's like a short answer. 36:56 Yeah, I don't know. 36:57 I've tried, and unfortunately, I think it's my fault that – well, this is hard. 37:04 Just lie a little bit. 37:05 Just make it easier in a way where you're bending the truth. 37:08 I live in a very – I've got to tell you guys. 37:11 I live in a kind of really strange situation. 37:16 It's a bizarre situation because I really do think that if we had this blockchain prediction markets thing in the world, we could instantiate this idea of futarky. 37:27 And I think that that would – first of all, that would mean a lot less people getting angry about politics online. 37:34 But it would also mean huge increase in global GDP growth and saving millions of lives, hundreds of millions of lives possibly over a pretty short period of time and greatly increasing the chance of success for our species survival and spreading to the universe and other stuff. 37:56 So I honestly think this idea is cosmically very important. 38:01 The other funny thing though is that I try to explain it. 38:04 I put so much effort into explaining the idea versus really just doing it because I want to invite everyone in to the tent so that they can do it the right way and that we can make this spaceship launch. 38:20 And I try so much, and I give talks, and I have produced – if you go to bitcoinhivemind.com, you can see I've produced ridiculous amounts of writing. 38:28 I did read a lot of it, so thank you for that, Paul. 38:32 Yes, you're welcome. Thank you for reading it. 38:34 And I did all these things, and it's a very – it's like a legal gray area, so I had to do all this other stuff that may become problematic. 38:45 I mean I'm not as worried about that because, of course, this is the American – this is the whole timeline of America is – I mean Rosa Parks was doing something illegal. 38:59 The Stonewall rioters were doing something illegal. 39:01 Everything is illegal until people's moral compass is recalibrated, and most of what I've done is just explain things to people. 39:12 But I live in this weird world where I really think this is important, and I've really tried to explain it, but it's just – it's so difficult. 39:19 And again, the explanations are all there. 39:21 Robin Hanson has explained why is the low interest – why is the low demand in our goods? 39:28 It's well-known because the – well, it's well-known for prediction markets in general, which is to say that they are different from markets for milk where there's a lot of surplus. 39:40 What in economics is called surplus? 39:43 So when you go to the store and you buy a gallon of milk for $3 or whatever, you want the milk more than you want $3, and the guy selling you the milk, he's going to take a little profit. 39:56 So he – the milk to him is worth less than $3, so you have actually an overlap. 40:02 You have a big overlap, and that's called surplus. 40:05 The guy who owns the milk store, his edge is called producer surplus, and your edge is called consumer surplus, and you extract a lot. 40:13 I mean think about how much you would pay if you had to for running water and for electricity, and instead you only pay like whatever, $40 a month or whatever it is. 40:22 But if you had to, you'd pay a lot for your internet connection and for other things that you need to have. 40:30 But the prices for them are low, and prediction markets aren't like that. 40:38 So they require a kind of fuel, and I designed this into the – from the very beginning, I designed this way of fueling them. 40:48 Now of course you've got to get some money from somewhere, but – and I don't know. 40:53 I'm at risk of just making this totally incomprehensible to everyone, but you can actually pile all the markets in to one thing, which you can fuel them all at the same time. 41:03 So you can get away with like 10 cents worth of fuel for a lot of markets at once, and obviously things will work better if there is – the more fuel, the better. 41:12 But you need like a kind of – it's not enough to just make the markets. 41:16 You need a big infrastructure in place where there's an incentive for people to pour a lot of fuel in. 41:22 So they need to be liquid markets basically. 41:25 Yeah, so you can go on – I think it's Paddy Power and bet on a lot of different stuff. 41:32 So what makes – 41:34 This is a problem on Intrade.com as well, the site that inspired me. 41:39 That was a real world prediction market closed down in 2012 for a variety of colorful reasons. 41:46 So yeah, but we don't have them in the US because I guess they're somewhat illegal. 41:52 Yeah, I can get into that in a second. 41:54 But I was just going to say on Intrade you would have all these markets, and a lot of them would have no value or low trading volumes or zero trading volumes. 42:03 So there would just be this graveyard of dead markets, and it's very kind of – but this is a known thing. 42:10 So if your prediction market project is going to fail in that way, it really shouldn't because Intrade already taught that lesson, and Robin Hanson explained it in detail. 42:20 I've tried to explain it that merely – this isn't like – you see, normally all you need to do is let the people who make milk get in contact with the people who want to buy milk, and then the market just makes itself. 42:34 But with this, you need some fuel, and this has been explained, and so that's just one thing. 42:42 But then this is another thing that I've explained, and then it's just – again, I'm sort of cursed to live in this bizarre world where I really am trying. 42:51 It was originally my idea to just write this paper and then let a bunch of other people do all of the hard work, fully acknowledging that they would get a lot of credit for it, but also fully acknowledging that I would just be able to not do anything and just relax and not have to do any work. 43:11 But yeah, this is sort of – reality is not kind of working that way, and it seems as though I'm going to have to produce the first alpha 0.1 version under my direct – me doing it myself and with their direct kind of supervision. 43:33 I don't know. I don't want it to be that way, but if you have any specific questions … 43:38 One project that comes to mind that was like that was Wasabi Wallet, where that was something that was not – there was not a huge amount of interest in it until it actually came into existence. 43:51 People started using it. People liked it, and now there are a bunch of developers spending time on it, so it kind of took off from there. 43:59 I think part of the problem is that you have this very complex set of ideas that people don't fully understand, so you kind of have to prove it to them and make it work. 44:08 Certainly. I think it's totally reasonable for people to be skeptical. I think that's good. 44:16 I do think that – yeah, it's very unfair to just say this is like Bitcoin because they're both new and whatever, but what I would suggest is that you can look at when Bitcoin was proposed, how negative the reaction was from the existing field of experts on the cyberpunk mailing list. 44:37 And so I think that anything that's truly new will be – which is weird because I really don't think this is that new. It's a lot of old things. 44:47 Again, I can point people to Hal Finney shilling conditional prediction markets for them to be used in elections exactly the way I described, and that was like 2007. 44:58 Making it work is new because it doesn't work currently. 45:02 Yeah, I think – but yes, I do think – well, it's similar with Drivechain. I was like this is so simple, but also that's turned out to be horribly understood. 45:14 I don't think it's that simple, Paul. That's part of the problem. I have a hard time understanding your ideas, and I do understand to a large degree now. 45:23 And it is funny that I do. So I don't know. The error could be that I'm totally wrong about everything and that I just am – I'm just like a delusional person who is like – I mean that's possible. 45:34 It's possible. 45:35 Certainly. 45:36 I disagree with you. 45:38 Thanks for your support. I mean there are some cracks in that theory, which is that certain people could understand Drivechain sort of immediately, including I think Adam Back and Luke Jr. 45:49 They were able to understand basically the gist of it, which is that whatever comes back through this process is considered valid and that Adam Back in particular was emphasizing the right new thing about it, which is that it's just very compressed and very, very, very slow. 46:04 So that even though anything that comes back goes, you have an obscene amount of time to watch what comes back and react to it, and that is the idea in like a really short sentence. 46:18 So some people could figure it out, and I do get like random emails from people who are like, oh yeah. 46:24 So maybe I can try to translate a couple of these things that you're saying as in like – 46:30 But I don't know if we did. Did I derail everything that we were supposed to be talking about? 46:34 I don't know. I don't know. 46:36 I think it's fine, but I think part of the problem is like – or not the problem, but it is complex. 46:42 So let me try with Drivechains to kind of like give a high-level overview that is going to be the same thing that you said, but hopefully maybe it clicks with more people because I just say it in a different way. 46:54 Which I think with Drivechains, the short summary of it is basically that you're trying to create a sidechain, meaning there's going to be another blockchain where you can move Bitcoins from the mainchain, from the Bitcoin blockchain into this sidechain, and also successfully moving back. 47:14 And that part is kind of where things get tricky. 47:18 So you have this system for sort of like merged mining where people put the headers of the blocks of the sidechain into the Bitcoin blockchain. 47:26 And you have this really smart – and I think that system seems to be pretty flawless. 47:32 It's a system where the miners, the Bitcoin miners do not actually have to know what's inside of these sidechain blocks. 47:38 So they don't have to do any of the verification. 47:40 They just take the blocks from other block creators and they take the one that pays the miners the most. 47:46 And the peg-in mechanism is essentially just somebody sending Bitcoin into one of these sidechains and that essentially makes these Bitcoins freeze on the Bitcoin blockchain. 47:58 And pegging them out requires – and that's what you were mentioning – requires this process where basically the peg-out takes a period of like three months or up to six months I think, even if things go particularly slowly. 48:14 And during this period, essentially if there's anything that the miners are allowing that shouldn't be allowed, so somebody is trying to peg out of a sidechain and trying to get his Bitcoins back into the Bitcoin blockchain. 48:28 And it's actually an invalid transaction according to the sidechain rules. 48:32 Then the hope or the mechanism is that a subset of Bitcoin users is going to basically do a UASF-style soft fork where if the miners actually allow for this invalid transaction to happen, then this block will be rejected by these people. 48:54 And then hopefully, because miners rather have these users not fork out of the network and rather have the users be part of the system and still allow these sidechains to be useful, they will listen to these users that are threatening to basically reject this block. 49:14 And they will actually allow only the peg-outs that are valid to occur. 49:21 Is that accurate? 49:24 I think – well, that was pretty good I think. 49:27 I don't know if – I don't even know at this point what explanation will be clear to people. 49:34 There is something called the curse of knowledge that says once you learn something, you can no longer identify with the students, and so you have less in common with them. 49:42 However, as time goes on, you become worse at explaining things that you know very well. 49:47 It doesn't rely on the UASF. 49:49 I think the way I've tried to explain it now is I just say that it … 49:54 I try to say, look, this is how it should work, and then I say – I just kind of ask people to try to critique that, and then I just respond to the critiques individually. 50:09 I can give you some critiques if you want to give it a try. 50:13 Well, I mean, I don't know if – yeah, I'd be happy to – no, I'm always happy to answer any questions and critiques, and I have done so in ridiculous detail in writing on drivechain.info. 50:26 You can find this huge FAQ, and there's a critiques section. 50:30 I think there are actually no critiques if you accept the assumptions, right? 50:35 Because it's – the whole point is that the assumption is that either the majority of miners is going to behave properly, or if they don't, they'll be forced to behave properly through some kind of action by a subset of Bitcoin users. 50:52 That is the basic security model, right? 50:55 I think that that is what commonly is perceived as what it is. 51:00 I think what I'm really trying to do is build a kind of lever or a magnifying glass or something where the will of the users can be – even though the users are lazy and don't have a lot of free time, and they can't look into everything. 51:16 Through this kind of long delay and this making it very easy to audit because the three- to six-month thing is just a 132-byte thing, and if you want to misbehave, you have to construct it manually. 51:28 But otherwise, it just automatically happens. 51:32 It all happens correctly. 51:34 What I'm trying to do is say that if – I'm really trying to say that the users are in charge and the miners aren't, which is funny because that ends up being kind of flipped around, and people represent the idea as saying the opposite. 51:51 But really what I'm trying to say is that if a sidechain needs to be sort of closed down or improperly withdrawn from, stolen from, then I'm saying that miners will only ultimately be able to get away with that if the sidechain is bad because one often overlooked point – even though I presented about it in 2016 for like four hours – the sidechains aren't guaranteed to all be good. 52:20 Some of them could be bad. 52:22 Some of them could interfere with the peer-to-peer oracle, but some of them could just be paying you to reorg the mainchain or to – if you had a sidechain that did assets or which did names, you can't have there be a second Namecoin that redirects. 52:42 Whatever you want to call it. 52:44 If you had Bitcoin.com, you can't have – or Bitcoin.bit, if you remember the Namecoin domains had this .bit thing where they could – 52:54 Okay, I don't remember. 52:57 So you had Bitcoin.bit, but then you can't have a second piece of software, namecoin2, that is also a Namecoin software, but it points Bitcoin.bit somewhere else. 53:10 So colliding on the names is just harassment of the first sidechain. 53:17 People can choose the chain to follow now. 53:19 Yes, they can. 53:21 But the whole point is that it should be pumping information. 53:24 So when you consult the name – when you consult this system, it's supposed to be telling you where to point your web browser, and when you buy a domain, it's supposed to be giving you – 53:35 Yeah, but you're still picking the system though. 53:37 You're picking Namecoin or namecoin2. 53:39 So there's still an initial choice, and from that choice flows the subsequent direction where the domain takes you. 53:48 That's true, but all I'm trying to say is that in principle, it's possible for the different chains to harass each other or to at least be just pointless copies of each other. 53:57 And so actually, you want some of the chains – and I gave a giant presentation about this if you want to be attacked by PowerPoint slides. 54:08 You can watch it. 54:09 It's somewhere on drivechain.info in the literature section. 54:13 You can look it up. 54:14 And I do demonstrate a number of ways in which different sidechains could attack each other or the main chain. 54:23 And so it's actually not desirable to keep every chain online a priori. 54:30 They should be a little bit more like businesses in a free market where if they do well, then you should want to keep them around. 54:38 And if they do poorly, we should hope that they are evicted basically from the Bitcoin crypto system. 54:45 So let me ask you about this then because I think one of the claims or one of the ways at least I see the security is that even if a minority likes a chain, they can kind of entice miners to keep it by doing this UASF style kind of enforcement. 55:06 But if the chain is somehow bad, but some people perceive it as good, like let's say 10% of Bitcoin users really like this chain. 55:15 And then there's some 30% of Bitcoin users that thinks this chain is bad for Bitcoin. 55:20 And then there's maybe 60% that just doesn't care, doesn't pay attention. 55:24 How does that work out considering that there's now this 10% minority that is adamant on UASF? 55:33 No, absolutely. I've referenced this. This is something I anticipated people would ask about in the November 2015 post and I wrote about it. 55:43 And unfortunately, very few people have made it that far. 55:47 They said that immediately for the first few things. 55:50 I know. I mean, what I mean is that when they write, when they object to the Drivechain, they don't even get to this question. 55:59 They get hung up on something earlier on. 56:02 Yeah, I think the general problem is that people don't accept that the UASF is just a fundamental part of it. 56:08 I will get to that. But the answer is that the miners must do – I mean we must expect them to do and they in practice will do whatever makes them more money. 56:21 So if having this sidechain around increases their transaction fee revenue and also increases the market value of the coin, then we can expect it to stick around, right? 56:33 And so in fact passively, they should manage this portfolio of chains or software features and they should just add things to this portfolio until they discover that the one thing actually is dragging it down. 56:52 It may – almost certainly everything that's active will add to transaction fees, but if it's interfering with people too much, it would be lowering potentially the market value of the coin. 57:03 But doesn't that add a lot of subjectivity because now the miners have to kind of study up on these chains and figure out that, oh, there's this loud percentage. 57:12 It's kind of like take the big blocks versus small blocks. 57:17 Yes, you're absolutely right, and I think this is a hangup that people kind of fall into, which is that the world of mining is in a couple ways the opposite of the world of running a full node. 57:33 But a lot of people in particular in the original Blockstream October 2014 white paper, they conflate them and they say we want it to be very easy to run a full node and we don't want anyone to have a disadvantage in running a full node. 57:50 And then they say a similar thing about mining, and they say we don't want anyone to have an unfair advantage or this. 57:56 But think about all the work that miners already do when they have to research chip designs or how to get cheap power or other things. 58:04 So they have to do a lot of work to be servants. 58:08 But that's not something that people want miners to do. 58:11 Ideally, we'd want the miners to not have to do that as well. 58:14 Because we want the hash rate. 58:16 The chip design to be figured out already. 58:18 We want the hash rate to be – well, yes, obviously we could wave a magic wand and then we'd have no problems at all. 58:23 So you are making a problem that we'd rather not have worse. 58:27 No, I don't think so. 58:28 You're saying it's already a problem, so we might as well make it worse. 58:31 No, I don't think it's a problem actually. 58:33 This is what I'm saying. 58:34 It's actually not a problem because think about this. 58:37 If the NSA or whoever, Russia or the Chinese government, if they wanted to attack Bitcoin, one avenue open to them is to produce a bunch of SHA-256 hardware and just make the chain incomprehensible with a lot of reorgs or just fill it with empty blocks or to do all these other 51% attack style things. 58:57 And they will be doing their research into chip designs and cheap sources of power. 59:02 They will be doing all of that. 59:05 What we really want is symmetry. 59:07 We can't have it be that there's some advantage that a government would have that the regular Bitcoin network doesn't have. 59:16 And so it's actually desirable for miners to be slaving away, trying every day, thinking how can they get more hash rate using every ounce of creativity at their disposal, every ounce of entrepreneurship. 59:29 Do you mean it's a good thing in terms of sunk cost because it's difficult for a government to then go in and do the same thing? 59:36 Or what's the good thing about it? 59:38 I'm not fully following yet. 59:40 I think what Paul is saying is that if there's already an arms race in the private, for lack of a better term, private mining market, then it's going to make it very difficult for a state to come in and improve, selfishly improve on the method to mine and then therefore try and take control of the chain. 1:00:05 If you, and correct us if we're wrong here, but if you increase the complexity, only the free market is going to figure out the most efficient way to navigate that complexity? 1:00:17 Is that good, Paul? 1:00:20 Well, I didn't know about that last part. 1:00:22 Can you explain that again? 1:00:23 Certainly free people will be more creative. 1:00:27 I think in this dynamic world where you have to constantly be improving your mining chip designs and whatever, I actually do think the free market has a strong advantage over some bureaucrats. 1:00:41 Yeah, kind of. 1:00:43 That is a libertarian trope that I would like to believe, and I think in isolation that's true. 1:00:50 But there is something that the state has that private miners don't have, and that is unlimited money, which means they can buy as much electricity as they want more or less. 1:00:59 Well, I didn't know about that last part. 1:01:01 Yeah, I think you're right. 1:01:02 They have an advantage. 1:01:03 They have more money. 1:01:05 The interesting thing is that they would have to agree. 1:01:11 It's a known psychological sort of bias that you perceive your own team as being dangerously divided and that your adversaries are all unified in their purpose and that this is a problem and that they're better at teamwork than you are. 1:01:32 Obviously, people in the government – there's huge disagreement. 1:01:38 We see it playing out right now with the election season coming up, but also inside the bureaucracies, there's all these people with budgets, and they all want the budgets for their own pet projects. 1:01:50 So I don't think it's quite as easy as just saying one guy with infinite money. 1:01:54 Here's another thing that I'd like to bring up, which is that defense against some adversary with infinite resources is not possible, but I think there's also a sense in which it's not even desirable because it kind of – it is a kind of rejection of the whole idea of game theory, which is like how to give yourself the edge. 1:02:20 Chess, you have an equal side, and one person has got to get the upper hand and win. 1:02:24 But if someone has infinite resources, it's kind of like why even think about it at all? 1:02:29 Just surrender on turn one. 1:02:31 So it's not quite that easy. 1:02:34 Definitely, to speak more practically about what you're saying is that the NSA doesn't have infinite resources, but it does have this giant data center in Utah, for example, and it has these other things. 1:02:45 You could get like the Three Gorges Dam in China or something and harness all this power maybe. 1:02:53 And that is why we need all the advantages that we can get, which is to say we need people to be thinking really hard about how can I make efficient Charter 56 chips. 1:03:06 Those people are thinking about how can I stop people from coming and stealing these chips and kind of civil asset forfeituring these chips. 1:03:18 That's even better for the defending Bitcoin team, and the attackers could be the Russian government or the Chinese government or the U.S. government. 1:03:28 So take your pick. 1:03:29 If you love a certain government, there's some other government out there that you probably don't love, and so you want to defend against all of them at once. 1:03:37 And there's also other things like stuff that China and Japan have like a sort of rivalry. 1:03:43 So if China loves something, then maybe Japan hates it, but if China turns on it, then suddenly the Japanese government will love it. 1:03:50 So it's not quite as cut and dry, but I think this does go to the point where we actually want it to be – we want the mining to be – we want people to work very hard. 1:04:03 And we don't – when the difficulty goes up, people celebrate usually. 1:04:10 I mean it depends on why it goes up. 1:04:12 I guess it's always better, like better ASICs or more miner fees. 1:04:19 And that's a sense in which it's become more difficult to mine, but the cost of running a full node is unchanged. 1:04:26 And that is why it's quite desirable. 1:04:30 People should be laser focused on – this is partially why I wrote a giant post in September 2015 about measuring decentralization because there was this big debate about the block size. 1:04:41 And the central issue came down to this idea of surrendering Bitcoin's essential property. 1:04:49 And I said that this property could be summarized with the metric of how difficult it is for you to run a full node or rather start a new one up from scratch and conjure one out of thin air and have it defend you against financial fraud. 1:05:05 And people should be laser focused on that. 1:05:08 But I think people are so focused on that that they – I think they kind of have overdone it and they don't really realize that sidechains actually sidestep that problem completely where you have these all different pieces of software that are all optional. 1:05:26 And so true, if you had to run every sidechain node, it would be getting more and more and more expensive. 1:05:32 But you don't. You don't have to run every – you can only run the ones that you want. 1:05:35 And so in that case, it actually keeps them quite cheap. 1:05:38 And as you were saying earlier about Blind Merged Mining, the miners don't need to run – the mining pool operators are doing the software. 1:05:44 That's the other thing is that this is just another example of specialization. 1:05:48 So you have hashers doing the SHA-256, but then you have mining pool operators. 1:05:54 Again, they already specialize on attracting clients, customers, and they run full nodes and they handle the upgrades. 1:06:03 Most of the hashers, these people who run the hardware, they just point – they have like a stratum thing and they see nothing. 1:06:11 They don't even know what's going on. 1:06:13 They don't do anything about transaction inclusion. 1:06:15 They have no idea. 1:06:16 Can't see anything. 1:06:17 That's part of the conversation about better hash. 1:06:19 Now, so it would be only these specialists, these mining pool operators, and they already do sort of a similar thing where they will recalculate. 1:06:28 Well, what's the most profitable SHA-256 coin? 1:06:31 And they re-divert hash rate on that, and they do merge mining with Namecoin and these other things and sell the coin. 1:06:37 So they already compete, and the fact that they would have to do more I think is good. 1:06:44 It represents an avenue of progress. 1:06:46 We wouldn't want – stability sometimes means perfect in the bad sense that it cannot be improved anymore. 1:06:55 But we want to live in a world where things improve, but also the improvement vector is just another advantage that I think that the liberty movement has over the bad guys. 1:07:11 The bad guys are – to steal some stuff from David Deutsch, one of my favorite people, the enemies of civilization are wrong. 1:07:20 And so they must be kind of – they have a strange relationship with the truth and with criticism, which is to say they avoid looking too carefully at the truth, and they avoid self-criticism. 1:07:37 And so they are slower to improve their ideas, and the good guys are always faster to improve their ideas. 1:07:45 And so we want to live in a world where stuff improves so quickly. 1:07:49 I mean I think that's part of the only reason that – to digress just a little bit, one last digression. 1:07:54 Part of the only reason that technology got off the ground – and by technology I mean of course personal computing and the internet. 1:08:00 It's just that it's so difficult for these other people to understand. 1:08:04 Crazy congressmen, but also like crazy religious leaders who would have probably shouted it all down if they knew about online dating and all this other stuff. 1:08:14 But just no one – none of the older adults could really understand technology, and that is how it turned out. 1:08:22 But anyway, that digressed a bunch of points, so I want to make sure we didn't skip anything and go back. 1:08:26 The original sort of point of digression was where I brought up this idea that you should care a lot about the full node being cheap. 1:08:35 Yes, but I say you actually shouldn't care about how difficult it is to mine, and in fact you want it to be very difficult. 1:08:42 Because you want a process in place that deletes all the inefficient miners ruthlessly, so that it would converge to optimally efficient miners as fast as possible. 1:08:53 And they already have to do a wide variety of things, such as improve their software, possibly merge mine other coins like Namecoin, which they used to do. 1:09:06 I think some of them still do it. 1:09:08 And they need to seek out – the hashers need to seek out cheap sources of power and places where they have better cooling and better property rights or some different mix. 1:09:17 And so this is really no different from that. 1:09:22 Yeah, so I'm still kind of on the side of thinking that mining should be as simple as possible. 1:09:29 So all those things are true, but I think it would be ideal if literally anybody could just mine by sticking something into a plug and starting to mine. 1:09:39 Obviously it doesn't work like that. 1:09:41 You know, that is – but you see, here's the thing. 1:09:43 That is already the case to some extent. 1:09:46 If you're willing to trust the pool, then that's already the case. 1:09:50 Well, I mean you need cheap electricity, so there is more complexity there. 1:09:53 Oh, well, you just said that someone could mine. 1:09:57 But see, now you're going to run into a problem with your own argument I think because you said, I just want anyone to be able to mine. 1:10:04 Okay, but you accept that anyone could mine. 1:10:08 Just maybe they would be at a tremendous disadvantage profitability-wise. 1:10:12 Yeah, I'm just saying it's not easy, but it should be as easy as possible. 1:10:17 The way the difficulty adjustments work is that eventually you only have the optimal people left. 1:10:24 All the other people will be deleted. 1:10:26 Every two weeks, half of the bottom half are being deleted. 1:10:30 So what you're really saying is I wish I could live in a world where everyone was the optimal miner or the optimal mining configuration. 1:10:38 I think you're right. That would be kind of cool, but I'm not sure what it would really imply about physics. 1:10:46 I think I get your argument now. 1:10:49 It's basically no matter how much we try, you'll always get some kind of miner that has this optimum situation. 1:10:58 And because of that, you can't really get around it. 1:11:02 I think it's not hopeless. 1:11:06 Yes, but instead of going for total egalitarian equanimity of having everyone be the same, you can at least retreat to symmetry. 1:11:16 You can say there's nothing that the Russian government can't do that the free market couldn't also do if you gave it more time. 1:11:28 And it is doing all these things. 1:11:30 The free market can form a corporation, which is kind of like a provisional government light where it builds up all these people with officers. 1:11:40 And they can control huge amounts of money, and they can buy a huge amount of land and build a huge data center. 1:11:46 So the giant Bitmain data center or whatever is a kind of mirror, at least the way I see it, of the Utah data center that was built by the NSA. 1:11:57 It's a kind of shadow. 1:12:04 All right. I think we kind of got a hold off. 1:12:09 I don't know. I feel bad for both the two listeners who still have to follow this. 1:12:15 I'll ask you one more final question or concern that might be related to Drivechains here, which is that the sidechain could also potentially hard fork or there could potentially be an issue. 1:12:31 Imagine that Ethereum was a sidechain of Bitcoin, a Drivechain. 1:12:37 And now the DAO happens on Ethereum. 1:12:40 How would Drivechains, how would this system respond to that where you have a group of people that wants to hard fork the sidechain? 1:12:52 And this could be enforced on the Bitcoin layer essentially. 1:12:57 Well, yes, this is the – people are correct. 1:13:00 Their rights to be worried about – well, they're not right about that, but they are right in principle to be worried about a kind of contamination from the sidechain to the mainchain. 1:13:09 And that's really the only thing that you should be worried about at all because once that problem is addressed there, then everyone should be happy about sidechains because they can't harm anything. 1:13:22 And I think that actually that criterion is already met, and what I mean is that the sidechain handles hard forks pretty well already, which is to say that if – well, I'm not sure exactly what I want to explain first because the – but yeah. 1:13:40 Yeah, I think if the sidechain wants to hard fork, it basically won't work because you'll end up with two different pieces of software that will be reporting back two different strings of the crucial 32 bytes. 1:13:54 And so neither of them will ever win through over the three-month game, and so then they'll just like – but what would really happen in practice is just that the hard fork would be ignored and it would be dismissed as an irrelevant piece of software, 1:14:08 which is basically the way I think that hard forks should work. 1:14:11 If you really want a hard fork, what you should just do is you should just add a second sidechain that has different properties, and then you could have Ethereum version one, and then Ethereum version two. 1:14:20 You could have Ethereum classic and Ethereum metallic or something. 1:14:23 But what you asked was actually quite sort of a different question, which is imagine the sidechain has some problem. 1:14:28 Yeah. 1:14:29 The sidechain is allowed to reorganize without affecting the mainchain. 1:14:36 It's a little slow because you still get one block per thing, but they could go back and unwind the chain sort of – what was it? 1:14:46 Binance or whoever was doing that, getting in trouble with suggesting that that could be possible. 1:14:53 So you could do that, and one reason why that would be – 1:14:58 again, I think a lot of this stuff is kind of – it should be code as law. That's what's pitched, and in the long run, building up that – But I do want to ask, is it impossible to hard fork on Drivechains? I don't think it is, right? I think it's not impossible. What you would do is you'd basically just delete the – you can overwrite a slot, so you'd basically just – it'd be the same thing as – 1:15:25 there's this fixed number of slots, which is not really a constraint because you can add more or you can have sidechains of sidechains, so it doesn't really mean anything. 1:15:37 But there's one slot for one specific chain, and now two chains want to use that slot. 1:15:42 All the money goes into a box, and then some of the money is coming out of the box some of the time. There's only one box. 1:15:48 The box – so if you hard fork, you're basically trying to say two different things about what is supposed to be happening when money comes out of this box. 1:16:01 So the box has labels, which refer to – there's no way to guarantee this, which is why I call them labels, which is a good way of describing it. 1:16:13 But the box has these labels, and you can very slowly, over six months, you can delete the – you can overwrite the labels. 1:16:22 So basically what I'm imagining there is that you use all the 256 slots, but there's a sidechain that has no Bitcoin in it, and you want to reuse it. 1:16:30 So you could do that. This would be a very foolish type thing. 1:16:36 But there might be a situation in which you have to. For example, if the software forks itself, and it's just incompatible with – so everybody runs the same software. 1:16:45 But for some reason, 32-bit systems do something else than 64-bit systems, and now suddenly you have a disagreement. 1:16:52 Absolutely. Very important. Excellent. Well, actually, the label does address some of that because it does – there's space there for you to put the hash of the tarball and other things like that. 1:17:04 But you're right. There could always be – the sidechain could just be a total nonsense piece of software that just behaves utterly randomly. 1:17:11 Yeah, it could be designed to fork. 1:17:14 Yeah, exactly. Right. And what will happen then is just that it's going to be very, very, very difficult for people to figure out which 32-bytes is the real 32-bytes when you want to process withdrawals. 1:17:26 And so if the miners then want to steal from the sidechain, there will really be no basis for anyone to even say that they are stealing. 1:17:33 And this is what – that is the case where the whole thing – if the sidechain is very badly designed, it's likely to – certainly, it's likely to be very, very difficult that anyone would ever get any money out of it. 1:17:49 Back out of it, it would become like a one-way peg. 1:17:53 And if there are any improper withdrawals, sort of thefts, then it's much less likely that anyone would be sympathetic to this or care, which is to say affecting the BTC price or affecting people's willingness to use other sidechains. 1:18:08 All right. 1:18:11 I think it's not quite – I mean we want it to be the case that the people who design the sidechain have freedom to do what they think is best and not just what someone else thinks is best. 1:18:25 They should be the director of their own movie or whatever. 1:18:31 They should be running the show, and they're free. 1:18:33 With that freedom comes the possibility of disaster, and that's just the way things are. 1:18:40 So how do people react to the disaster? 1:18:44 They may do some kind of hard fork. 1:18:47 I think in practice, they would have to do – the easiest thing for them to do – they could do many things, I just have to say. 1:18:53 So this is kind of a challenge when talking about sidechains is that a lot of things are possible. 1:18:59 And when we talk about that, it's a separate issue from contaminating the mainchain. 1:19:05 So unfortunately, there's many issues that have all branched off, and they're all kind of – but what I would do is I would do something more like what we did during the March 2013 Bitcoin fork incident. 1:19:19 Where someone patched over a mistake, and then the chain went back, and it did reorganize. 1:19:26 You said, look, here's what we're going to do. 1:19:28 Everyone downgrade or upgrade to this patched version that bans this new thing. 1:19:33 And then the sidechain would passively sort of go back in time, and it would experience a reorganization local to the sidechain. 1:19:42 You understand? 1:19:43 The sidechain blocks would reorganize. 1:19:44 The mainchain blocks would not reorganize. 1:19:47 So that would be, I think, the most prudent course of action, and it happens to be one where the mainchain doesn't necessarily even notice that anything has happened whatsoever. 1:19:57 And certainly the reorganization there would be not enough time to interfere with any of the three-month-long withdrawal things. 1:20:06 So people would not – potentially not even notice whatsoever. 1:20:11 What you're really asking is, can something go wrong in the sidechain such that the mainchain is affected? 1:20:17 But that actually brings us closer to what I was trying to say earlier about how this is a special zone. 1:20:23 And this zone, you only have to check in with it once every three to six months. 1:20:28 And so – 1:20:30 I think rather the problem is that the check-in is minor control. 1:20:34 So if the miners check in on this Ethereum DAO thing, and they're like, oh, what's going on? 1:20:40 You're trying to hard fork this. 1:20:42 You're saying there's consensus, but there doesn't really seem to be consensus. 1:20:45 And now it's the miners who get the final call as to which of these chains to – whether Ethereum Classic is going to be the one that gets to peg out or whether Ethereum is the one that gets to peg out. 1:21:00 They're the final people that get the call. 1:21:02 Actually, the funny thing is, in the case of the reorg and under-Blind Merged Mining, that's not the case, right? 1:21:08 Because people would be bidding out – they would just be paying to – they'd basically be paying to get their blocks mined on layer one. 1:21:19 And so they would just become a bid-off, and then actually it would be the user's transaction fees would passively divert that river one way or the other. 1:21:29 I see. 1:21:30 That's in the reorg case. 1:21:31 Which of these forks gets more fees? 1:21:33 There could be – yes, that would literally just be the thing that ultimately causes old Blind Merged Mining blocks to be referenced, like the little arrow pointing back to them and then say, actually, we think this would be better. 1:21:51 And that would be done totally by the users in the Blind Merged Mining case. 1:21:55 In practice, I do think that there would be mining pools that would run probably all the software because it's a very small – software is a very small cost relative to all this other stuff that they're doing, and they already run custom mining software. 1:22:08 It depends on what kind of sidechain you're running. It could be something really fancy. 1:22:11 I have – yeah, some people do discuss, and I make fun of it as a sort of hypothetical ESPN 4K broadcasting sidechain that is extremely – that's a separate point, but I'd like to bring it up temporarily, which is that I think there is actually a limit on how expensive the node can be to run because regular users have to run it for free. 1:22:39 And so people wonder about will miners be able to run this software if they're only compensated in a little bit of transaction fees or in a lot of transaction fees. 1:22:51 The regular users are going to have to be running this software, and they don't get any transaction fees. 1:22:57 They pay the transaction fees, so it has to be manageable enough for them. 1:23:00 So I think in practice, there actually is a kind of limit. 1:23:04 I guess if you can't run the node, then miners can steal without anybody objecting to it because nobody can verify. 1:23:09 Exactly. No one would know. No one would know. 1:23:11 The point is to make it very auditable and say, look, they've got to bring everything to court on day one in the form of a 32-byte summary, and then from there, that is the most sensitive to refutation because it's very easy for people to highlight exactly where in this block this didn't go the way it should and this says it should be something else. 1:23:32 And so you have a very long time for any errors to be detected and be sort of passively magnified. 1:23:40 Certainly, again, everyone running a sidechain node will know immediately as soon as a theft is attempted. 1:23:46 People who merely run layer one, they won't know unless someone else tells them. 1:23:52 And even if someone else tells them, they won't necessarily care. 1:23:56 But we digressed a little bit because I was going to say something before I said, I don't remember where we lost this thread now. 1:24:03 Well, I think that's probably a good place to put a pin in that. 1:24:07 Yes, maybe. 1:24:08 I think we probably will not be able to get to any more news items, but I definitely want to get to the listener question and to our lightning round before we wrap up here because I think the listeners will enjoy these less arcane topics. 1:24:24 So so this this week's listener question comes from Cameron. 1:24:30 He emailed us and he had a bunch of questions. 1:24:32 I think we're going to spread some of these out. 1:24:34 But he said, if BTC wasn't around, what would each of you be doing your dream job as kids? 1:24:41 So I think I think we should let Paul begin for us. 1:24:44 Paul, what would you be doing if Bitcoin had never come into being? 1:24:49 Well, I think probably I would end up in academia because I was sort of on the trajectory and was literally hired out of it by Bitcoin. 1:24:59 So that's pretty. And then, you know, I'd always been like a studious. 1:25:04 And so I think that's my guess. 1:25:06 Dream job as a kid. 1:25:08 You know, I did. You know, I always did like science and computer. 1:25:12 So it may it may already have been. 1:25:16 I don't know. That's a hard thing to say, you know, because what is your kid? 1:25:20 I think my younger self knew that it shouldn't it shouldn't take itself too seriously and it should defer to its older self's judgment. 1:25:31 But, yeah, I think scientists was like a dream job, I think, probably. 1:25:35 And I think I do kind of basically do something like that. 1:25:38 I'm just imagining you walking up to your like eight year old self and being like, look, kid, painting's not going to do it. 1:25:45 We're we're doing we're doing decentralized prediction markets. 1:25:49 You just need to get on board. You need to give up the dream. 1:25:52 And I would love to, you know, I would love to be like a dream job as an adult. 1:25:56 If you could just magically obtain skills, I would love to be like an orchestra conductor or a concert pianist or something. 1:26:03 I think that would be a really fun dream job as an adult. 1:26:06 If you could just will these skills into existence and you would need to practice like 12 hours a day. 1:26:12 And it's like, how does someone even become an orchestra conductor? Like, I don't even know. 1:26:16 I don't even know. It's a very strange career path, I'm sure. 1:26:19 But Ruben, what would you be doing? Oh, well, I think I'd be more focused on programming because that was this thing that I was. 1:26:32 Doing a lot right before I was learning about Bitcoin, so I think I'd be probably a more professional programmer than I am now. 1:26:42 I'm kind of a hobby programmer at the moment. That's interesting. 1:26:45 It's interesting that. Becoming part of this new fangled tech actually made you less technical. 1:26:57 I mean, I specialized, yeah. 1:27:00 I was going to say, in a programming environment, it's kind of interesting that it worked out that way. 1:27:06 I got sucked up into the Bitcoin rabbit hole and there were a lot of interesting things to learn. 1:27:12 And I think that detracted probably from the programming aspect. 1:27:15 But at the same time, the one thing I'm not really taking into account is that I had a desire to do something more social. 1:27:23 And that is, for me now, the Bitcoin meetup. 1:27:28 And I guess I would have had to, if Bitcoin wasn't around, I would have had to have found something else to do that is social as well. 1:27:35 So I'm not sure what that would have been. Right. 1:27:37 Brian? I mean, when I was a kid, I always wanted to be like an army officer, army man. 1:27:46 So I guess I kind of got to do that a little bit and getting to be a pilot. 1:27:52 But. Yeah, so I guess I'd say that was my dream job. 1:27:58 What would I be doing when I was a kid anyway? 1:28:01 What would I be doing if Bitcoin wasn't around? 1:28:04 I don't know. I might would have stayed and just kept being a pilot. 1:28:10 I don't know. I still like it. I miss it a lot. 1:28:12 So it was a fun job. But, you know, there's the leaving the family and the moral issues. 1:28:21 Right. Yeah. Well, for me as a kid, I was always tossed between being a voice actor or being a painter. 1:28:34 But I was never actually any good at painting, but I just thought it'd be a cool job or being a chemist. 1:28:39 Because I thought all that I thought the only thing chemists did all day was create like volcanoes, like science experiment volcanoes. 1:28:48 I'm like, well, that would be fun to do that all day. Like, that sounds like fun. 1:28:53 And there was one other thing that I wanted to be. But. Oh, man. 1:29:00 If Bitcoin wasn't around. Yeah, I should have thought about this a little bit more. 1:29:05 But I was more thinking about what I was wanting to be as a kid. 1:29:08 I think I think I would probably. Be I would try and I would try a lot harder to be in the video game space, because that is really my other my other love is is video games. 1:29:26 So I hope the whole culture that's that's probably what I would be doing or I'd be trying to do anyway. 1:29:32 So that does it for the listener question. Thank you, Cameron, for asking that. 1:29:36 And we'll try and get to your other questions in the in the coming weeks. 1:29:38 But I thought it'd be interesting to ask that one to Paul. 1:29:41 And that brings us to our price analysis section this week. 1:29:46 Number goes sideways. So just boring, boring old sideways prices. 1:29:52 Such a boring, boring week. I was going to say when I was very erratically. 1:29:57 It did. It did go sideways erratically. You know, we were going to talk about the Trump tweet and the the today's Steve Mnuchin press conference. 1:30:06 And then I say his name. I don't know. I don't know. 1:30:10 People are calling him ass munching lately. 1:30:16 But it is interesting. One thing I found really interesting about the the up and down and then on average sideways movement of the Bitcoin price was when Trump tweeted. 1:30:26 And the price pumped. Everyone said that, oh, Trump made the price pump. 1:30:33 You know, it's because of this tweet that the price pumped. 1:30:36 And then it took like a dump to like below ten thousand dollars per coin like a couple of days after that. 1:30:45 And then everyone said, oh, it dumped because of Trump. 1:30:49 And I think it's a really good lesson that we always try to ascribe some reasonable logic as to why the price does what it does. 1:31:01 And we provide these post hoc explanations for them when really it probably has nothing to do with either of those things. 1:31:09 Or maybe it does, but on the one, but it doesn't on the other. 1:31:12 But it can't be both. It can't be that the tweet caused the pump and then it also caused the dump. 1:31:16 So it's just important that, you know, it's like a very Shakespearean kind of like turning the tables on people who make these arguments. 1:31:24 They take them so seriously and then the exact opposite thing is shown to them. 1:31:30 And then they're just like, you know, how do people deal with this? 1:31:35 This is this nonsense. I do think one thing, though, is that we are seeing greater attention from, you know, driven toward. 1:31:44 I think, you know, we've had Libra and we've had more formal institutions like, you know, the president and the treasury secretary. 1:31:53 All these people is formal. Stuff is paying more attention. 1:31:57 And I think that gives the edge to BTC over less decentralized things because they have been evolving towards centralization. 1:32:09 You know, these are many of these alt coins for efficiency. 1:32:12 You know, they've been evolving in that direction, sort of taking a little cheap shot here or there, like with the Dow or with other stuff that like EOS is doing or whatever. 1:32:22 And and but this where they have the disadvantages in the censorship resistance. 1:32:30 And so I think the decoupling of BTC from all could be attributed to more attention being paid to it by the U.S. government. 1:32:41 I think, yeah, I'm open to the I'm open to the argument that this could all be good for Bitcoin. 1:32:45 I think that remains to be seen. And certainly that's a very interesting topic, talking about the kinds of threats that the state poses once it actually gets afraid. 1:32:57 But I do like your I do like your comparison to Shakespeare. 1:33:01 And I think that it's even Shakespearean to think that, you know, I could just imagine the line like Twas Twas Trump that caused the pump and Twas Trump that caused the dump. 1:33:14 Yeah, right. Or like two people get different news about what happened. 1:33:18 And one person one person gets one person's like servant gets the news that the price went down and the other person gets the news of the price went up. 1:33:25 And then meanwhile, they get the news and they say, oh, I knew it. 1:33:28 This is all because of Trump. And then the other guy says, oh, I knew it. 1:33:30 This is all because of Trump separately. 1:33:32 And then they end up in the same room together and hilarity ensues or they murder each other. 1:33:39 You don't know whether whether it's a comedy or a tragedy. 1:33:43 Are we are we in King Lear or Midsummer Night's Dream? 1:33:46 We don't know. Yeah. Who know? Or maybe a little bit of both. 1:33:49 Yeah. The Tempest. I guess that means it's I guess that means it's time for the lightning round. 1:33:59 Oh, and this week, this week, our lightning round comes to us from Reuben. 1:34:07 So I'm going to let Reuben take it away. 1:34:10 Is it? I don't think it's me. Oh, no. Sorry. It's from Brian. 1:34:13 Never mind. I got it wrong. 1:34:16 Giving you a zing. All right. 1:34:19 I can make some questions on the fly if you want. They're going to be terrible. 1:34:23 I actually do have one. They probably won't be worse than mine. 1:34:27 So, yeah. So I get to go first this week or I get to ask the questions and then I go last. 1:34:36 And then but Paul goes first and then Reuben and then Colin. 1:34:40 Yeah. So, Paul, the way the lightning round works is generally, usually, but not always. 1:34:46 The lightning round consists of a series of of booleans, maybe you'd say, or maybe not boolean, 1:34:53 but but but a binary of two choices. 1:34:59 And you must choose which is the better one, in your opinion. 1:35:04 All right. I'll do my best. All right. 1:35:06 All right. Drivechains or state chains. 1:35:11 Oh, that's mean I can't do any. Just I think they are actually very, very different. 1:35:15 I agree. Yeah. Well, I mean, I'm committed to my prediction markets project, which is really the only reason if there was some way. 1:35:22 If you could do state, if you could use state chains to do like arbitrary programs such that you could instantiate this Bitcoin Hivemind idea with them. 1:35:33 I got to got to go with my own. But I actually do think that the state it's it's unfortunate we didn't have any chance to talk about. 1:35:41 I know I'm just stomping on the rules of the lightning round. 1:35:45 And that's all right. Every single episode is terrible, though, that we we didn't really even get to talk about it. 1:35:50 I was I was perusing some of the state chain stuff so that I could make sure that I but I think state chains really are very, very different from all the other layer twos. 1:36:03 They're probably the most different out of any. 1:36:07 Love the layer Tuesday. I mean, there is a lot of similarity, I think, with just sidechains like the federated security wise. 1:36:13 It's similar, but I think actually if you compare it to federated sidechains like liquid. 1:36:18 Yeah, I think it's. I mean, what is the disadvantage? 1:36:22 I think it's a strict improvement, like in every way, don't you think? 1:36:25 I mean, maybe the UTXO thing. Yeah, the UTXO thing is that is that it's you cannot resize them very easily. 1:36:32 But that just means you have to cut a bunch of UTXOs into like, you know, dollars and cents and nickels and dimes and five dollar bills and twenty dollar bills, you know? 1:36:42 Yeah, that's correct. 1:36:44 Denominations and then we'll be back in business. 1:36:46 So, yeah. 1:36:49 Yeah, no, I agree with that, but I don't. 1:36:51 Yeah, I don't think there's a lot of like comparison to make between Drivechains and state chains. 1:36:56 They are pretty different. 1:36:57 I think actually not only is state chain so different, but actually I think Drivechain is also very different and they're actually probably the furthest from each other. 1:37:05 Yeah, that seems likely. 1:37:07 Yeah, I think they are just totally because Drivechain is this weird like subjective element. 1:37:12 Yeah, it's weird, like strategic. 1:37:16 And it exists in this world of information being not completely consistent, but slowly a tiny amount of it, 32 bytes becoming consistent over a period of six months. 1:37:27 And all this other stuff that why would that happen versus other things that would happen? 1:37:33 And state chains is also totally very different, but it's very mechanical and sort of cut and dry. 1:37:40 The server just does basically multiplication and then subtraction. 1:37:45 Yeah. 1:37:46 And then sends the stuff back and has no idea what's going on. 1:37:48 Yeah. 1:37:49 And it's supposed to work like a clock. 1:37:51 So, there's a lot to talk about, though, because there are a couple things. 1:37:56 So, the lightning network, I mean, excuse me, the lightning round rules have been obliterated. 1:38:01 That was quite a question, though. 1:38:03 I'm not sure if you could really ask that question, given that we didn't really get to talk about state chains. 1:38:10 Anyway, I'll try to do better. 1:38:12 I'll try to make the next one even worse so that I have to. 1:38:15 Oh, don't worry. 1:38:17 Don't worry. 1:38:18 The rest of the round, there'll be one word answers. 1:38:21 Don't worry. 1:38:22 The next one is juicy. 1:38:24 Ruben. 1:38:25 Yeah. 1:38:26 So, Paul's answer is Drivechains. 1:38:30 Drivechains, I assume, because... 1:38:32 It has to be, unfortunately. 1:38:34 Yeah, the prediction market thing. 1:38:36 Yeah. 1:38:37 There is a way to do scripting in state chains through... 1:38:41 Yeah, but what I need is way more than scripting. 1:38:44 It's like a weird new thing. 1:38:47 Yeah, I'm not sure whether or not you could do something along those lines. 1:38:51 But either way, you'd still be stuck with a federation that has some power over it. 1:38:54 I suppose. 1:38:55 Yeah, I don't know. 1:38:56 Yeah, anyway. 1:38:57 Probably not. 1:38:58 Long story. 1:38:59 Yeah, I'll be nice and I'll answer that Drivechains. 1:39:06 Oh, thank you. 1:39:07 They're totally orthogonal, though. 1:39:09 There's no reason why you can't have both of them. 1:39:12 No, no, no. 1:39:14 You have to choose one. 1:39:16 You have to choose one. 1:39:17 Colin. 1:39:18 It's the unfortunate world we live in. 1:39:20 Well, you know, A, I feel like I understand state chains a lot better 1:39:25 because I think they're probably a lot easier to understand. 1:39:28 So just on, I think, likely feasibility, maybe I'm going to go with state chains. 1:39:36 And I want to stick up for my fellow host. 1:39:39 You know, he's, so far in this question, it's been all Drivechains. 1:39:43 Loyalty is a virtue. 1:39:44 Also, it would be very, you know, it's not... 1:39:48 You can't endorse things that you don't know anything about, so that would not be a very honest endorsement. 1:39:53 So I don't really want that. I don't really want people to endorse Drivechain without knowing anything about it. 1:39:58 We just had an entire educational podcast explaining to them how it works. 1:40:02 I can tell you with great certainty, I still don't fucking understand Drivechains. 1:40:08 Well, yeah, I think actually we have a test net, so it may be easier if you just download the software and just, you know, in a safe place. 1:40:15 Don't download it to your private key computer, but download it and just send some money around. 1:40:20 I think that's easy. That's how people learn to Bitcoin, right? That's how I learned it anyway. 1:40:24 At first I was like, what's going on? And then I was like, oh, you get some money from the faucet and you're like, oh, I get it. 1:40:30 It's very easy. I just send money to people. 1:40:33 Brian? 1:40:36 No, the correct answer is Drivechains. And not because I understand it, but because Paul's the guest. 1:40:44 Chivalry. Chivalry is not dead. You've read it here on the show. 1:40:48 All right. Next question, then. 1:40:50 All right. The next question is, is Dogecoin a sidechain of Litecoin? 1:40:58 I'm going to go with no. 1:41:00 No. 1:41:01 And I can explain if you want, but I stick to the rules. 1:41:04 No, no. Go ahead. 1:41:06 I want to hear it. 1:41:08 Yeah, yeah, yeah. 1:41:10 The critical element of the original meaning of the word sidechain implied this two-way peg idea. 1:41:18 So they would imply if it were a sidechain of Litecoin, it would imply that anyone who owned Litecoin would be able to send the money away and it would become Doge-like, whatever that means. 1:41:28 And they'd be able to do Dogecoin things with a different piece of software and then get Litecoin back. 1:41:33 So the absence of the two-way peg is, I think, the crucial feature of the sidechain. 1:41:40 And punting it to a group of friends in the multisig sort of federation thing is, in my view, not really a very honest way of achieving the two-way peg. 1:41:52 But Dogecoin doesn't even have that. 1:41:55 So I think the answer is definitely that it is not a sidechain. 1:42:00 Yeah, there's this desire or a trend – well, it's not really a trend yet, and hopefully it won't be – but to call merged mined chains sidechains. 1:42:09 And I agree with Paul in that a two-way peg is what you call a sidechain and not a merged mined chain with a different coin. 1:42:17 Paul, one of the things that I actually wanted to mention was that I think the Drivechains, the blind merged mining, is completely – without the two-way peg, if you just had an altcoin and you wanted to do merged mining, then the blind merged mining would be perfect for that, no? 1:42:35 Well, blind merged mining requires soft fork to support. 1:42:41 Layer one has to know how to accept transactions such that they're only valid if there's a specific section of real estate. 1:42:55 Yeah, so you need a soft fork to activate it. 1:42:57 Yeah, you can't do it right now. I mean, obviously, on the testnet, we have a testnet where it's working, but that's a testnet. 1:43:04 But if we got the soft fork, then there are chances that you're not just helping two-way pegged Drivechains, but you're also enabling altcoins to use that same technique to do merged mining on Bitcoin, correct? 1:43:22 That is correct. 1:43:23 That sounds a little scary. 1:43:26 What's cool is that actually what happens with blind merged mining is that the people who are assembling blocks, sidechain nodes, they pay themselves the fees on their layer, on their chain or whatever, and then they make a payment of an equivalent amount of money on layer one. 1:43:44 It compresses the whole act of finding the block to one transaction they include on layer one that is paid directly to miners. 1:43:52 So as a result, miners, SHA-256 Bitcoin miners, layer one miners, just by doing nothing, they get all these juicy high-value transactions. 1:44:02 All the transaction fees from all these other chains go to them, and that pumps the hash rate up, means more profits for miners, which means a higher equilibrium hash rate eventually, which means more hash rate security for users. 1:44:19 Obviously, people wonder about the long-run destination of Bitcoin's hash rate security, but this is a cool way of just putting all the transaction fee magnitudes from all these different pieces of software, putting them all into layer one miners. 1:44:38 That is better than what we currently have, which is spreading them thinly over many different miners. 1:44:46 So Paul and Ruben are both a no on Dogecoin being a Litecoin sidechain. That's correct? 1:44:53 That's correct. 1:44:55 Okay. Then for me, I'm all about solidarity and loyalty today. So out of loyalty to Fluffy Pony, I'm going to say yes. 1:45:06 Oh, nice. 1:45:09 Shout out to Fluffy. All right. Well, Colin, you – 1:45:13 He is great. 1:45:15 You and Fluffy, unfortunately, are wrong, and Ruben and Paul are right. 1:45:21 You're just sucking Paul's dick. 1:45:23 Yeah, well, you know, he's the guest. But actually, that's what I thought from the very beginning. 1:45:29 I've got to recommend everyone to come on the show. 1:45:32 Yeah. Dogecoin. 1:45:34 Says the guy getting his dick sucked. 1:45:36 Exactly. 1:45:37 Yeah. I'm just pepper grinder over here. 1:45:40 Next question. 1:45:43 All right. Would you rather every shirt you wear have hair jibbies in it – the hair jibbies are making a comeback in this one – or only be able to use our shitcoin one-ply toilet paper? 1:46:02 What's a hair jibbie? 1:46:05 You know, you get your hair cut, and there's like little pieces of hair. 1:46:10 I missed this episode. 1:46:12 Oh, okay. 1:46:13 I need to go back and listen to it. 1:46:15 Okay, so it's between have hair jibbies or you can only use our shitcoin white paper toilet paper. 1:46:20 Yeah, as your toilet paper. 1:46:22 We'll have to get a rollout to Paul as a thank you. 1:46:25 Yeah. You know what? I think that'll be – any new guests, they get some toilet paper rolls. 1:46:29 They're getting a shitcoin toilet paper? Okay. 1:46:31 Yeah. 1:46:32 I think I can live with weird toilet paper. 1:46:37 So I think I'm going to go with that. 1:46:39 That seems more manageable. 1:46:41 I mean, look, everyone at MCC wiped their ass with our toilet paper. 1:46:45 That's true. 1:46:46 We were the unofficial, official toilet paper sponsor of Magical Crypto Conference. 1:46:52 Yeah. 1:46:53 So what's the downside to using our toilet paper? It just seems like a plus. 1:46:57 You get to read about all these amazing ICO opportunities, and you're up in your ass. 1:47:04 Yeah, I think it's funny. It's a good conversation starter if your guests come over. 1:47:07 I don't know how many conversations you're having while you're taking a shit. 1:47:11 Well, when they come out later, of course. 1:47:13 Well, there's a guy in the stall next to you, and you pass on the – 1:47:16 Whoa! Look at this coin. We got to get in on this. 1:47:22 It's XYO, man. 1:47:23 You see this XYO token? 1:47:25 It's going straight up. 1:47:27 It's going straight up in a Tesla or in a SpaceX rocket. 1:47:33 Boom. 1:47:34 Yeah. 1:47:35 Okay, well, yeah, I, too, am choosing the toilet paper. 1:47:38 Yeah. 1:47:39 Persian bees are the worst. 1:47:41 That's true. 1:47:42 All right. 1:47:46 Okay, last question. 1:47:49 So, as a given, in this question, you know the cure for cancer. 1:47:56 Now, you can do funding through normal VCs, or you could cure 10% more people if you ICO'd a cancer coin. 1:48:10 So, what are you going to do? 1:48:12 Are you going to take the ICO money? 1:48:14 Yeah, I would take the ICO. 1:48:16 I mean, I hate ICOs, but it seems as though many people would die who otherwise wouldn't. 1:48:25 So, I'm definitely against needless death. 1:48:28 And the thing against the ICO is the fact that all the people get paid up front. 1:48:35 It's the opposite of the military ethic of the officers who last, and of any semblance of a logical incentive alignment of all the people in this organization. 1:48:49 And so, if you know that you're going to succeed, and you – I mean, you would never know with certainty, but in your premise, you'd say that if you just had some money, you'd be able to cure people of cancer. 1:49:02 Yeah, I think definitely you would. 1:49:04 I mean, the ICO is bad, but it's only bad for certain reasons. 1:49:10 One is that it fosters obfuscation and dishonesty, and the other is – another of the many reasons is that you get all the money in advance before you do any work. 1:49:26 But with this, you would – you know that you are doing something clearly, and you know that you have already done a lot of work because it was assumed in that. 1:49:36 So, I would definitely – why should the 10 percent or whoever these marginal people are – I mean, what if you did it the other way around? 1:49:47 You said you're doing an ICO. Would you – to avoid the – you can avoid doing an ICO and go to VCs, but 10 percent of the people will die. 1:49:55 So it seems like that's pretty predictive. 1:49:58 Yeah, yeah. I got to go with Paul's answer. He makes a solid case there. 1:50:04 Yeah, I'm ICOing as well. 1:50:07 All right, CancerCoin. Here we come. 1:50:10 CancerCoin is coming. 1:50:12 Paul, just cure cancer so we can make CancerCoin. 1:50:15 If you could do that, like work on that for a little while instead of prediction markets, that would be nice. 1:50:20 That would be great, but I do – I think they're related because the prediction markets are related to – I mean we have – if you can create a society that has much more wealth and has much saner tax policy, you end up with lots of super rich people like Bill Gates and these other people who fund a lot of different research. 1:50:44 You have more – just more capital available. 1:50:47 A rich society can do a lot of NSF grants for cancer research, has hospitals for research, but a poor country can't even begin to cure cancer, and it can't even – a very poor country will get to the point where people die before they'll even get cancer. 1:51:09 Yeah, yeah. 1:51:11 So I actually think it's related, and we want a society where – there is a – you should really check out all the stuff that I have published about, but you can give these politicians any metric you want. 1:51:26 So you could say we want to elect whoever will result in the fewest deaths during their presidency. 1:51:33 That's a very weird thing to bet on or have derivatives on, but you could have something where it's just like, hey, if we elect the Democratic candidate, there will be X deaths, and if we elect the Republican candidate, there will be Y deaths. 1:51:46 Eventually, you'd get to a point where these people are literally meeting the political – the world that I envision is a world where the political parties meet and they say, what can we do out of all the things in the world? 1:52:01 We need to get our deaths projection number down as much as possible, and they'll just get creative, and they're going to be bringing in all the great scientists, and it will be everything about – everything from suicide to opioids, but eventually, once all the low-hanging fruit are picked, they'll be on to – well, a lot of people die from cancer. 1:52:23 A lot of people die from heart attack, and they'll be like – so then they'll be on that. 1:52:28 So once you define a metric for them to compete on, they'll be like, whatever we can do to get it done. 1:52:33 So actually, I do think it's – I hate to be so utopian about this. 1:52:38 I do wonder what kind of – I mean you sort of had that happening in the Soviet Union where they wanted to get their death rate in the hospitals down. 1:52:49 So they just started taking terminally ill people and dumping them on the sidewalk so they would die out of the hospital. 1:52:57 And technically, their hospital death rate went down. 1:53:00 It was like extremely low. 1:53:02 It was like no one died in Soviet hospitals. 1:53:04 So you raise an important point, which is the metric has to be defined very well and not like a kind of deal with the devil kind of trap door into it. 1:53:13 But also, there's a question of exactly who's doing the measuring, and this is like a big project, and that is one of the things that we have to do last even though I have a lot of ideas on that. 1:53:26 I actually think deaths are probably one of the easiest because we have stuff like social security records and birth records, and you really can't – for everyone who dies, there's going to be like an obituary that someone can look up. 1:53:39 And of all the metrics to fake, I think that saying that a bunch of people – just trying to say that a bunch of people who were around and died didn't die, that's going to be pretty difficult to do. 1:53:52 But if the administration is – if their aesthetic goal is getting the deaths down and they control the social security administration, I mean like central governments abuse numbers all the time in their favor. 1:54:08 I mean like the IRS doesn't even have to follow general accepted accounting principles. 1:54:12 You could also ban all cars, and then there's no cars. 1:54:17 But yeah, so you'd have to – well, this is the other thing is you want the metrics to be nice, and there will be many different metrics. 1:54:24 So you could be like – I have talks and stuff about this. 1:54:28 I would argue that if you banned all cars, deaths would definitely go up. 1:54:32 Yeah, I probably would. 1:54:33 You would wonder about how we would get certain food around us. 1:54:38 I mean you could still allow ambulances if that's your concern. 1:54:40 What about food though? 1:54:42 Yeah, the food. 1:54:43 You know, truck drivers. 1:54:44 I don't know. 1:54:45 You make them all automated AI. 1:54:46 I don't know. 1:54:47 Well, that's the thing is we probably should be working on making all of our vehicles automated AI because a lot of people do. 1:54:53 30,000 or so people do die on the freeway where you're basically just staying in between two lines. 1:54:57 And this is what – Elon Musk is already on this project. 1:55:01 So he's boldly a step ahead of what we would otherwise have had in a kind of more reasonable world. 1:55:08 So we put our best man on the job. 1:55:11 Yeah, we've hit the two-hour mark, so I think it's time to – probably time to wrap this up. 1:55:16 But before we go, Paul, I want to give you an opportunity just one last time to tell people where they can check you out and follow you and just that whole sign-off info. 1:55:27 Okay, that's great. 1:55:30 Truthcoin.info is my sort of blog website. 1:55:36 And that's named after the peer-to-peer Oracle paper, and the project is now at BitcoinHiveMind.com. 1:55:44 And I'm at Truthcoin on Twitter. 1:55:47 The Drivechain has its own site. 1:55:49 That's Drivechain.info. 1:55:51 All the sites sort of link together, and the Twitter has a link to the prediction markets project. 1:55:58 So that's how I do all that. 1:56:01 I've been on BitcoinHiveMind, and you have probably written thousands of pages of content there. 1:56:08 So anyone who wants to jump down that rabbit hole will have plenty, plenty to occupy their time. 1:56:13 Maybe over a summer vacation you can make that your summer vacation list. 1:56:17 Actually, now there's two presentations that are pretty good that I think some people like. 1:56:24 So they're up there, and they're sort of near the top, sort of called them out. 1:56:30 So I would definitely check out the slides for Anarchapulco. 1:56:33 That one's down to 20 minutes, and you can read the transcript. 1:56:36 I'm going to have the edited video up there pretty soon. 1:56:40 Well, everyone should go check that out. 1:56:43 Do that, and that's 20 minutes. 1:56:45 And then there's another one that was at TabConf that's 45 minutes. 1:56:48 So if you don't want to go on a big odyssey, you can settle for those two. 1:56:55 All right, guys. Well, yeah, definitely go check out those videos as well 1:56:59 and the notes and the slides if you're interested, and you should be. 1:57:03 So, yeah, go check those out. 1:57:05 Guys, that's going to do it for us. 1:57:07 But you can head to UnhashedPodcast.com where you can find show notes for this episode as well as all the others. 1:57:11 And you can follow us at Unhashed – is it underscore? 1:57:17 Now I'm blanking on our – 1:57:19 No, no, UnhashedPodcast.com. 1:57:21 At Unhashed Podcast. Yeah, right. Yeah, that's it. 1:57:23 So check that out. Follow us there. 1:57:25 Leave us a like, subscribe, comment. 1:57:28 And give a tweet to Paul and thank him for coming on the show. 1:57:31 And, of course, Paul, we appreciate you coming on. 1:57:33 Thank you for your time and for working with us, as you explained, for probably the 100th time, DriveChains. 1:57:39 And we're always happy to talk and have you on. 1:57:42 And I always love getting to meet you in person when we're at the conferences. 1:57:47 Thank you, guys. This has been a lot of fun. 1:57:49 Thank you so much for having me on. 1:57:51 Guys, this has been Unhashed Podcast, the show where we bring crypto down to earth and cut through all the blockchain bullshit. 1:57:55 We'll see you next week when Mario, the prodigal son, returns. 1:58:01 And we'll give you all the updates on what he's been up to. 1:58:04 So we'll see you then. Thank you so much. We love you. 1:58:07 Goodbye. 1:58:11 Hey, guys. Thanks for stopping by and listening. 1:58:14 If you want to help us grow, there are several ways you can help out. 1:58:17 You can donate Bitcoin to us at the address in the Donate page on our website, UnhashedPodcast.com. 1:58:22 Or you can also sponsor our show by getting in touch with us at Mailbag at UnhashedPodcast.com. 1:58:28 And there are a few other things you can do that will cost you nothing but a little time. 1:58:33 You can rate our show on iTunes or wherever you're listening to this. 1:58:36 You can tell a friend about us. 1:58:38 Or most easily, you can retweet our tweets announcing each episode and follow us at Unhashed Podcast. 1:58:44 Or join our Telegram channel at t.me slash Unhashed Podcast. 1:58:49 Again, thanks for listening and helping us grow. 1:58:52 See you on the other side. 1:59:14 Bye-bye. 1:59:44 Unhashed Podcast. 1:59:46 A production of Unhashed Podcast. 1:59:48 www.unhashedpodcast.com 2:00:14 www.unhashedpodcast.com
