0:00 In Bitcoin, there are many derangements. Lightning is one. But a second derangement is the soft fork 0:05 in general. The soft fork is a very, very, very safe, very useful tool. It is opt-in. It is mostly 0:11 reversible and ignorable. So the soft fork is not like a bad thing. It's a very good thing. 0:17 Paul, welcome to Bitcoin Rails. How are you? 0:20 I'm doing great. Thanks for having me. 0:21 I'm so, so excited. This has been like a long time coming. I feel like, you know, 0:25 we've scheduled, we've redone the whole thing. We've rescheduled a couple times. 0:29 It's my fault. Sometimes, you know, I can be the absent-minded professor, maybe. 0:34 I'm just grateful you made it, Paul. And yeah, I'm excited to talk about the story of Drivechains. 0:40 I don't know if you know, like, the background history on the podcast, but so I started this 0:44 pod to cover, you know, Bitcoin technologies, mostly in Bitcoin Season 2, right? I think, 0:50 I don't know if you remember. 0:50 I remember Bitcoin Season 2 from, I remember, East Denver two years ago. 0:54 Correct. That's where we met. I don't know if you remember we met that. 0:57 In person the first time, yeah. 0:58 Exactly. We met in person at East Denver. I was working in ordinals. And yeah, and so like, 1:04 that's sort of like the general theme of the pod. But I feel like Drivechains is a really 1:08 interesting kind of, it's Bitcoin Season 2-esque technology, but it really happened in Season 1. 1:14 And I think that we should discuss that. 1:16 Yeah. There is a lot of like, if Drivechains had happened earlier, there would never maybe have been 1:23 any altcoin phenomenon at all. And so there would never have been needed to have been 1:27 a Bitcoin Season 2. Everyone would have taken it for granted. Who knows? 1:32 Who knows what would have happened? Okay, so we're going to get into like the whole story 1:35 of Drivechains and how it happened. But like, let's just start with talking a little bit about 1:39 you. You were just about to tell me how, offline, you were just about to tell me how you got into 1:43 Bitcoin. 1:45 Well, you know, I got into Bitcoin, at first I had heard about it from the FreeTalk. I don't 1:52 think I heard it on FreeTalk Live. And that was the first thing that happened chronologically. 1:57 But the first thing that happened to me was to get this email from the Free State Project in 2:02 New Hampshire about, if you come to Porkfest, which is this libertarian, you know what I'm 2:08 talking about? 2:08 Of course I know Porkfest. Yeah, yeah. But that's helpful context. So you're a libertarian. 2:14 Certainly back then, I was enough of a libertarian to have signed this thing that said, 2:20 we're going to get like 20,000, I don't remember exactly, but we're going to get like 20,000 2:24 liberty-minded people to sign this pledge. And then we're all going to move to New Hampshire, 2:28 and we're going to change. So that was like back in, you know, whatever, 2006 or something. 2:33 I did hear about the move to New Hampshire pledge. 2:36 So I signed the... I was like too young to move. 2:40 But I signed the... 2:41 This was when? Like, when was this? 2:43 I think it was like, for me, it was like 2006 or something like that, that I first signed. 2:47 And then eventually, like in 2010 or so, they sent this email saying that they're giving away 2:53 free Bitcoin. You know, that was the email that made me unsubscribe from the mailing list. 2:59 You were like, they've gotten into scams. 3:00 I was like, yeah, this is so stupid. You can't just make your own money. 3:04 If that worked, then people would copy it. So ironically, I kind of had sketched out 3:08 a lot of like what would happen later. But I was like, money has important network effects. 3:13 It's socially, it's very important. There's too much stigma, this type of thing. 3:17 These libertarians don't know what they're talking about. 3:20 And so just keep that attitude in mind when people dismiss Drivechain today, 3:24 because now it's swapped around. 3:31 So I got this email and I was like, this is the stupidest thing I've ever done. 3:35 These crazy libertarians are never going to get anything done. 3:37 I was wrong on both counts, obviously. 3:40 And a few people moved, I don't know, 20,000 or whatever. 3:44 But now they have kind of taken over the legislature in New Hampshire, 3:50 the liberty minded people. 3:51 And I don't know if they have a complete, 3:54 I don't know if they've achieved complete control of the state, 3:56 but they're definitely now a very important movement. 3:59 Were they not before this? 4:01 Yeah, there was nothing. 4:01 Wasn't New Hampshire always like the land of the free? 4:04 What is the free and whatever? 4:05 Live free or die. 4:06 Live free or die. That's the New Hampshire motto. 4:09 Yeah. 4:10 Well, it's kind of a quaint, small place. 4:12 It's not, you know, it's too far away. 4:14 It's not Texas. 4:15 Yeah. 4:16 It's like north of Boston, right? 4:17 Right. 4:18 So it's like, you're really, no offense, 4:22 like, you know, it's not going to change the world from there easily. 4:24 Not the most appealing place also to like a call to action, get people to move there. 4:28 You know, like it would be a little tough to incentivize myself personally 4:32 to move there regardless of my politics. 4:33 Right. 4:34 It's a very important decision. 4:37 So you do think like Miami and Texas have been overall better at 4:43 being more of like a dynamic entrepreneur-based sort of economic growth angle? 4:51 Well, there's good quality of life in both of those places, right? 4:54 I mean, like Miami, Austin. 4:56 Yeah, exactly. 4:56 You can imagine like young, ambitious people moving there. 5:00 So were you always a libertarian? 5:02 Well, I don't think so. 5:04 You know, like obviously when you're like, you know, 10 or 11 or something, 5:08 you're not really anything. 5:09 Okay. 5:09 But I did study economics very early. 5:14 I was very interested in it. 5:16 And economics lays bare a lot of important truths about the world that are very easy to grasp, 5:23 but for some reason are not implemented in the world. 5:26 Like, you know, the congestion pricing here in New York, 5:28 or the fact that the minimum wage is not an effective way to help the poor. 5:32 If you want to help the poor, that's great. 5:34 But the minimum wage... 5:35 This is right in an Econ 101 textbook that they gave to us in high school. 5:39 So in high school, this is when you started thinking about this. 5:39 In Greg Manko's AP Econ. 5:42 And so you kind of like... 5:46 You do have to face the fact that places that have studied economics 5:52 have become incredibly prosperous and, you know, implemented certain ideas. 5:55 You know, like you can imagine the Netherlands invented the stock market 5:58 and then became a huge golden age, Amsterdam, etc. 6:02 London, a trade-based naval power, the British Empire, Singapore. 6:09 The institution of capitalism has generally like led to positive growth. 6:13 And so you think like all the suffering in the world that someone experiences 6:18 because they grew up in a communist country and they have to go to the supermarket 6:21 and there's no food there. 6:23 The person comes back and they say, what did you manage to get? 6:25 Did you get any bananas? 6:27 And they say, no. 6:29 You figured this out pretty young, despite, you know, 6:31 because like typically I feel like in American politics, 6:34 it's like you think of like young people as being more socialistic, for lack of a better word. 6:39 Yeah, of course. 6:39 At first, I was kind of into the whole like Richard Dawkins new atheism. 6:43 So that would take me strong to the left when I was like, you know, 14 or 15 or something. 6:48 Okay. 6:49 I think a lot of people reach a point where they become socially liberal, fiscally conservative. 6:54 Right. 6:55 And then they go into libertarian world. 6:56 And then they pick from after that, they pick one of the two teams. 6:59 Right. 7:00 All of that is perfectly rational. 7:02 I think the only irrational thing about that is that people haven't quite grasped that. 7:07 It's intentional. 7:08 Each of the parties has some objectively good ideas. 7:11 And then each of the parties also gets away with as much corruption as the other party is doing. 7:15 So they build up a budget in a way. 7:19 They say, we'll be reasonable on these points in order to fleece people in these other ways. 7:26 Right, right, right. 7:27 Scam the public. 7:28 So of course, the libertarians sort of have the right answer. 7:32 But it's the first past the post two party system. 7:35 It's a waste of time. 7:36 In fact, I think that the libertarian party basically formed in 1971. 7:41 And so, you know, the website WTF happened in 1971. 7:45 The implication is that it's Nixon taking people off the gold standard. 7:48 Right. 7:48 Really, I think the libertarian, the formation of the Libertarian Party actually did more damage. 7:53 Because that's when the Libertarian Party was formed. 7:55 It was 1971, the same year that we went off the gold standard. 7:59 I think you have to like, look at like, because even though it was kind of makes sense, 8:03 it's kind of nothing. 8:04 But people were sick of they were kind of it was almost a reaction to. 8:09 Right. 8:09 I was gonna say it makes sense to me that they like, Richard Nixon was like a crazy statist. 8:14 Right. 8:14 He was against he invented pretext to get he invented on the tape. 8:18 He admitted that he made up the war on drugs to get back at his political opponents, 8:22 the blacks and the hippies. 8:24 He you know, it's like he we Watergate and all this stuff. 8:28 You can see how people would just be like, 8:29 No, it makes complete sense that the Libertarian Party would be like a reaction to coming off of 8:34 the gold standard. 8:35 When you do that, now it means that the you have abandoned the our system, the two party system. 8:41 And I think that was a mistake. 8:43 And in fact, we, we free like the two parties. 8:46 I think I understand how it works, which is that it makes the it is a winner take all 8:53 loser lose all system. 8:55 So when Trump won, the blue party, the Democratic Party was crushed completely and now has to 9:01 suffer for four years. 9:03 So it's really about suffering. 9:04 It's like we have two whips. 9:06 One is red and one is blue. 9:08 And we're whipping this like horse or something. 9:10 And I think is I have a very cynical view. 9:13 But the two party system is an engine that runs on cynicism, actually, because it says 9:19 no matter how bad one party is, you can you can crush them, you can make them really suffer 9:23 by when they lose in other places around the world have a different system where 9:29 power distributed amongst the parties. 9:31 And exactly. 9:32 And so if someone loses a few seats, if they go from 51% to 49, or if they go from like 9:37 32% to like 29% actually nothing will happen. 9:42 And so you don't think that that's like a better, more fair system? 9:45 I don't, because the that system tries to be representative of the people. 9:50 But this is over highly overrated. 9:54 What we really want is accountability to the people. 9:57 And we want a system where you get guillotined if you don't do the best job you could possibly 10:01 do. 10:02 I once heard Casey Rotemore say democracy is a boondoggle. 10:06 I don't know. 10:07 That sounds like a very Casey thing. 10:09 That's a Casey thing to say. 10:11 He's having a lot of fun. 10:12 Was he wearing like a costume when he said that? 10:14 Maybe. 10:14 That sounds about right. 10:16 It was like, it was during that time in his life for sure. 10:21 I like Casey a lot. 10:22 We need more irreverence. 10:24 This is a very important topic. 10:26 It's all related to, of course, Bitcoin culture and it's related to Drivechain tangentially. 10:30 But we have, there's a difference in life between the people who are close up to something 10:37 and they see the details every day. 10:40 And people see something from far away. 10:42 Far away is like one day I'm going to write that book. 10:45 Right. 10:46 But near is, okay, what's the first sentence of the first chapter going to be? 10:51 And it's like, okay, one day I'm going to go, I'm going to take a trip around the world. 10:54 And it's like, okay, why don't we, you notice it sometimes, you think, oh, it would be fun 10:59 to go, you know, I'll go to wherever, Atlanta. 11:02 Then it's a completely different part of your brain that kicks in when you have to sit down, 11:07 open the thing up, look at all the different flights, look at all the hotels. 11:10 I'm going to go on this day, on this specific time. 11:14 That's the near mode versus the far mode is like politicians saying, you know, if we're, 11:21 and we want fairness, we want, you know, whatever, millionaires and billionaires to pay their 11:25 fair share. 11:26 It's incredibly vague. 11:27 Right, right. 11:28 It's more like philosophical than it is action oriented. 11:31 From far, exactly. 11:32 It's very often very impractical. 11:34 And, you know, love is all you need, stuff like that. 11:38 Right. 11:39 Which is great. 11:40 Hold on the heartstrings. 11:41 That's how you get voters. 11:43 And it's so far away that it's always vague and abstract and it has the disadvantage of 11:48 being like, not serious. 11:53 It reminds me kind of, and we'll get a deeper into this, and then I swear we'll go back 11:56 to like the beginning of your story. 11:58 But like Bitcoin governance, I feel like it's much safer to just say like ideological, nice, 12:02 warm, fuzzy things, you know, when you're talking about Bitcoin than it is to actually 12:06 put out plans. 12:07 Yeah, decentralization. 12:09 Plans, right. 12:10 And same with the US government. 12:11 It's like you say like what you actually want to do, you give an actual plan and somebody's 12:15 just going to rip it apart. 12:16 Exactly. 12:16 Right. 12:17 But if you just say warm, fuzzy things, if you just say permissionless decentralization, 12:23 you know, then like, you know, you're good. 12:25 You know, people like you. 12:26 Any concrete, you said it exactly right. 12:28 Any actual plan that has the details. 12:30 Right. 12:30 Will always be disappointing to someone. 12:32 Right. 12:33 And that person will come out and say, I don't like this about the plan. 12:36 If you keep it vague, people won't be able to criticize it. 12:39 And it's also many people have perfected the art. 12:42 If you speak clearly, sometimes you can be clearly wrong. 12:47 So if you say very clearly something like, I hate to say, I hate to pick on, Udi was 12:52 making a big deal about being so right about the Iran war or whatever, which is great. 12:56 Good for him. 12:56 And I don't know anything about that. 12:57 So I'm just happy that he has an ex Mossad agent or whatever. 13:01 I think he's great. 13:01 I love Udi. 13:02 But he's a very funny character. 13:03 But he said also the previous two years ago, he said, when OP_CAT activates by the end of 13:11 this year, talking about 2024, with no controversy, I will like accept everyone's apology or whatever. 13:18 But of course, that hasn't happened. 13:19 Now, of course, I'm just nothing against Udi. 13:21 I think Udi's great. 13:22 I just bring this up. 13:23 I think you and Udi are kind of similar. 13:24 So do I. 13:25 But I'm bringing it up as an example of him being admirably clear. 13:30 He says it will activate by the end. 13:31 You have a specific date. 13:33 It will activate by this date. 13:34 There will be no controversy. 13:35 I will accept everyone's. 13:36 But then that's the issue. 13:38 Whereas other people, the charlatans, of course, the charlatans will say like something vague. 13:45 They'll say, you know, we need Stratum V2 to help with mining decentralization. 13:49 And that'll never be proved wrong. 13:52 You can ask people, how do you measure mining? 13:55 How do you define mining centralization? 13:57 No one will ever give you an answer. 13:59 How do you define MEV? 14:00 No one will ever give you an answer. 14:02 So the charlatans take refuge in the vagueness. 14:06 And yeah, they hide in the lack of clarity, right? 14:09 Right. 14:10 So the two-party system, I don't know, but it has the advantage of someone when you win. 14:17 What the libertarians should do is what we recently did, which is free Ross Ulbricht 14:21 by backing temporarily one side. 14:25 And that is the smarter thing to do. 14:26 You back one side, and you say, we support you. 14:29 And then you say, but you're on a very short leash, and we will pull this support. 14:33 If you stab us in the back, we're going to flip. 14:35 If you're willing to flip, now you have an actual vote. 14:40 There's something at stake. 14:41 Right. 14:41 And this is, you know, I think like the LGBT community did that with the Blue Party. 14:47 Whereas other people, the libertarians are out of the game. 14:51 So you can't get the libertarian vote. 14:53 It's the party principle of never voting for one of the two major parties. 14:56 Right. 14:57 So they have nothing to fear. 14:58 They have no, by ignoring the libertarian party, there's no greed either. 15:04 But they're also kind of like, they're the swing voters, arguably, right? 15:07 Only if they actually vote. 15:09 If they vote. 15:10 That's exactly what we did do. 15:12 And this is sort of what, for some, you know, obviously Trump is a very controversial figure 15:15 in many ways. 15:16 But he was able to do this where he said, listen, I'm the real libertarian vote. 15:19 I'm the weird outsider vote. 15:21 That's because he won both times when he did that. 15:23 He got Kennedy. 15:24 I feel like that was like the tipping point in him really getting the libertarian vote. 15:27 This is a very important example of Trump kind of centralized the power around himself, 15:35 which allowed him to make these ad hoc modifications to the platform. 15:40 Whereas I think probably Kamala is unable to, you know, there's like a huge interlocking set of 15:47 supporters and staff, people who have strong opinions, like she can't go on Joe Rogan or 15:51 whatever or something like that. 15:53 Whereas Trump, there was a time when Trump had to face the pro-life people who wanted the party to 16:01 be more pro-life. 16:02 And he basically just said, just like kick those people out of like the RNC. 16:06 He like basically kicked all these people out. 16:07 They wrote a bunch of blog posts about how upset they were about, because Trump is just 16:12 saying he got rid of Roe v. Wade and that's the last he's going to do. 16:15 So if you want to capture the center, this is why the two-party system works, because 16:20 it's a goal of capturing the center during the election, but then in between the elections, 16:26 it is about persuading more people. 16:29 So it is inherently based on persuasion and consent. 16:33 And so it actually is good in that way. 16:35 And the rival systems are terrible. 16:40 The election actually makes no difference because at the end of the day, they form the 16:43 coalition government and that's the real election. 16:46 So like Germany had like five parties or whatever. 16:50 You vote and then the proportions change. 16:54 So the winning alternative for Deutschland or whatever, they could get like 35% or whatever. 16:59 I don't know, I'm just making this number up. 17:00 I don't even care enough to look into it because it doesn't matter. 17:03 But they could win, but you still have to add up to 51% to form the government, so to speak. 17:11 So the real election is a vote of three out of five of the leaders of these parties. 17:15 And it makes no difference what the German citizens do. 17:17 And so I'm strongly against the European-style proportional representation. 17:23 And I'm strongly in favor of the first past the post. 17:26 It has very little to do with Bitcoin. 17:27 But it is all related because it is all about competition, sorting the best ideas to the top. 17:33 Well, and the two-party system, you have two healthy competitors that fight to the death 17:37 and one wins. 17:38 And this was, I mean, I think this is the key thing. 17:40 This is how you got it. 17:41 This is like a way that people got into Bitcoin, especially like the OG, right. 17:45 The Ron Paul, gold bug, Peter Schiff was right. 17:47 Were you a gold bug? 17:48 I was like a Peter Schiff was right. 17:50 Peter Schiff did this mortgage banker speech in 2006 that everyone should watch. 17:55 And it's amazing. 17:55 He predicted the financial crisis. 17:56 So again, I was someone interested in economics. 17:59 The traditional orthodox economics had this completely wrong from beginning to end. 18:05 You know, they misunderstood and did not predict the financial crisis. 18:08 But on the other hand, there was Peter Schiff who seemed to predict it in detail and explain 18:13 it in detail. 18:14 Prediction is overrated, but explanation is underrated. 18:19 Right. 18:20 He really said like why it would happen. 18:24 And he was saying that this is basically because you have these unaccountable, 18:30 Fannie Mae, Freddie Mac, the Fed, et cetera, the regulators, the politicians, the people. 18:35 It's neat if you really investigate it after the fact, this is only the tip of the iceberg. 18:39 And in fact, Peter Schiff even missed a few things, such as the big financial firms, the 18:47 traders and the CEOs, all the people making these decisions, they're paid on like a bonus 18:51 where they, if they can beat the market by five or 6%, they get a huge bonus. 18:56 If doing so, like AIG, if doing so, even though their insurance company, which makes it make 19:03 even less sense because you think they would know about like correlated risk and stuff. 19:06 But the point is, these people play some bets. 19:11 They earn a huge bonus, 2005, 2006. 19:14 I think maybe it was, I don't remember which it was. 19:19 One of the rating agencies was like the most profitable company in S&P 500. 19:24 Moody's? 19:24 I think it might've been Moody's. 19:25 Yeah, that sounds right. 19:26 In 2005, 2006. 19:27 That sounds right. 19:28 Yeah. 19:28 They... 19:29 They were just printing money, handing out ratings. 19:31 Their job to rate them accurately. 19:34 Yeah, yeah. 19:35 So... 19:35 Terrible. 19:36 They screwed all of us, basically. 19:38 Of course. 19:39 But the question is, you profit, profit, profit, profit, profit. 19:42 Then a huge blow up that obliterates the company, you know, like $5 trillion. 19:49 But then the employees would just walk away. 19:51 They got, they cashed out their bonus. 19:52 They may lose their job now, but they got, you know what I mean? 19:56 Some random guy. 19:57 It's like some random guy on the Titanic is... 20:00 Goes in and he's... 20:02 For steering it closer to the iceberg, he gets like $10, $20. 20:06 And then he just takes the lifeboat away when it hits the iceberg. 20:10 Boom. 20:10 And so... 20:11 So this was only Fannie Mae and Freddie Mac and all that was the tip of that... 20:14 Tip of the metaphorical iceberg. 20:15 So when did... 20:16 Okay, so you were like a Peter Schiff was right type of libertarian. 20:18 Yeah, so he got me into gold. 20:19 And then he got you into gold. 20:21 And then you first heard about Bitcoin, but you were like, this is stupid. 20:24 I thought it was so stupid. 20:25 You were like, the libertarians have lost it. 20:27 And then when did you change your mind about Bitcoin? 20:29 The Silk Road article. 20:31 I didn't read it when it first came out. 20:33 I was months late. 20:35 The Silk Road article? 20:36 There was an article. 20:37 There was one. 20:38 I think it was Wired. 20:39 I can't quite remember. 20:40 But it ended up on Slashdot. 20:42 I did not see it on Slashdot, unfortunately. 20:44 I think everyone who religiously read Slashdot was like a tech news site. 20:48 Okay. 20:49 That people were addicted to back in the day. 20:51 Okay. 20:51 You know, they have these little fads. 20:55 You know, like Twitter is the biggest today. 20:56 I missed this period, yeah. 20:58 But this was like 2011, I think. 21:00 There was an article, Silk Road, the online drug marketplace. 21:04 You can buy anything or something like that. 21:06 Okay. 21:07 And you were like, oh, wow, it's been used. 21:08 I read it in maybe 2011 or something like that. 21:13 Okay. 21:13 So I read it months after it came out. 21:15 And then I thought, oh, I'm too late. 21:17 Yeah, of course. 21:19 Because you had a situation where, well, first of all, I thought it must work. 21:23 Because if you're addicted to drugs, I mean, it was funny. 21:27 Also, Breaking Bad was big at that time. 21:29 You think like the lengths people would go to to get the drugs that they want if they're 21:37 addicted. 21:38 And of course, everyone, I think, you either know someone, friend of a friend, someone 21:43 in the family has alcoholism or something. 21:46 People suddenly get—this was in Nassim Taleb's book, which also came out. 21:49 Black Swan and Antifragile, about someone, a drug addict has a certain number of IQ 21:55 points normally. 21:56 And then when they run low, they suddenly get really, really clever. 22:00 Their IQ goes up. 22:02 And they become a great actor. 22:03 They become hardworking and resourceful. 22:05 And they need to get that. 22:07 And wow, like, you know. 22:09 So I thought it must work because if you could get free drugs out of this anonymous website, 22:15 you know, people would have— 22:17 You figured demand for Bitcoin would increase, basically. 22:20 And I thought, like, people are already now using it to solve a non-Bitcoin problem. 22:26 Right. 22:26 So this is a case where we have fallen from where we were back then. 22:29 Right. 22:29 It was a real use case. 22:31 And I'm sure you're familiar with the Bitcoin Uncensored 2016 podcast, which was all about 22:37 the Bitcoin user. 22:38 And that was a joke. 22:40 The joke was the Bitcoin user is like a drug addict or like a prostitute or whatever. 22:46 They would say the underserved. 22:47 The underserved, yeah. 22:48 That was kind of like the unbanked. 22:50 Right, right. 22:51 But it was like a joke. 22:52 It was like drug dealers are underserved. 22:54 That was like what they were talking about. 22:56 OK, right, right, right. 22:56 And they had this hilarious, you know, this hilarious schtick or whatever. 23:02 They had all these like coded euphemistic words inside jokes. 23:07 To basically talk about prostitutes and drug dealers. 23:09 To basically say these are the real Bitcoin users and all this other stuff that's happening 23:14 with cryptography and with finances is a pretentious distraction. 23:17 It's just Ivory Tower. 23:18 We need to be focusing on the underserved. 23:20 Because, well, this is what's really happening. 23:22 And everything else is just what they'll put on CNBC. 23:25 But it's actually not accurate. 23:26 Right. 23:27 OK. 23:27 We actually have ransomware. 23:28 That narrative has now shifted a little bit. 23:30 And now we're talking about like the starving babies in Africa and remittances. 23:34 Yes. 23:34 It's slightly different. 23:35 In many ways, the blockchain without Bitcoin bank people, the R3 people, these are like 23:42 IBM blockchain, Microsoft Azure blockchain. 23:44 We all laughed at that back then. 23:46 But there is a bizarre sense in which it has come back now. 23:49 Because people say, oh, you shouldn't use Bitcoin for anything. 23:51 Just buy it through the ETF. 23:53 Just buy the Bitcoin treasury company. 23:55 So now you're owning Bitcoin through something registered to your name, like legally. 24:01 It's going to be regulated. 24:02 It's going to pay taxes. 24:04 The treasury company will. 24:05 Treasury company will, you know, it will have to have audits and have, you know, quarterly 24:09 statements and etc. 24:10 And it's kind of like, yeah. 24:12 And they're kind of paper Bitcoin-y. 24:14 I mean, we can have a whole treasury conversation at some point. 24:17 Precisely. 24:18 Wait. 24:18 So OK. 24:19 So then you kind of were like, OK, it's actually being used. 24:22 And that's what turned you on to look into it more deeply. 24:25 And then you read the white paper, went down the whole thing. 24:27 The forum, white paper, etc. 24:28 I got it. 24:28 One thing was I read the, I understood, when I understood how mining worked, then I was 24:32 more interested. 24:33 Really? 24:33 Because I thought it's not going to work if you just create this currency and give it 24:38 to yourself. 24:38 You have to get it out somehow. 24:40 You can't just. 24:41 And this is a hard problem from the gains area. 24:42 Like how do you distribute it? 24:44 Because if you just give it to yourself and your friends, then you give people an incentive 24:48 to. 24:49 Then you give people an incentive to redo that with a separate inventor, do it with them and their friends, and now you don't get critical mass. 24:56 So how do you get people in the coalition? But if you don't give it to yourself and your friends, then what are you going to do? Give it to people who don't understand it? 25:02 Give it to your enemies like you're not going to do any of those things. So I thought that also was like an impossible nut to crack. 25:08 You feel like mining solved the nut of how do you distribute money? 25:12 Yes, which is very important because you need to get people. Everyone has to find out about Bitcoin and then decide, do I want to join or do I want to stay in the fiat world or do I want to basically become an alt-coiner? 25:27 Would be how it would have been put. Would be how it's put now. 25:30 Alt-coining would be having a very broad definition. 25:34 Okay, Bitcoin did that, but I can also do that. And this is Peter Schiff's original complaint about Bitcoin, like I can just replicate this project on my own computer. 25:45 But that's part of what he didn't understand about there's just enough of a reason why enough people would not do that to give it more of a chance. 25:56 Of course, Bitcoin success is not guaranteed. But the point was instead of doing nothing at all or saying something like I gave all the coins to myself on the first day or saying something like I alone have a magic key that can create new coins whenever I want. 26:11 And this would be like a corporation. We can issue new shares because that also is kind of not great. 26:17 No, that's centralized distribution basically. 26:20 And it's kind of off-putting for people. It's like that person's so special. But mining had also solved this problem. 26:26 I didn't know that much. I didn't really know. I knew about cryptographic hashes from the BitTorrent era. 26:33 Okay, so you were somewhat cryptographically aware. 26:36 Only a little. But then I didn't really realize. I hadn't fully grokked at the time how the public-private keys worked. 26:43 Because I thought, oh, when you show up to Bitcoin, you have to register and make an account. 26:49 Because, of course, most things work this way. 26:51 Right, that's the standard. 26:53 Almost everything precisely. 26:55 So I thought, and then I kind of thought, I don't know, what's it going to do? Keep track? Like 8 billion people are going to register an account? 26:59 I was kind of confused about that. 27:02 And then I looked into it after the Silk Road article. 27:07 And I figured out how the public-private keys work. 27:09 And it's like, no, a trillion bajillion accounts already exist. 27:15 And you just pick one. 27:17 And the fact is, there's so many, that if you just pick one at random, no one will ever pick the same one as you. 27:25 If they have the whole population of Earth guessing a million times a second for 2,000 years, that still cumulatively will be 0% out to the 20th decimal point. 27:36 So the very special kind of account model, if you will, or non-account model, was also another big unlock for you in terms of understanding and grokking. 27:46 So you were not an engineer then. You were working in finance? 27:50 I was in graduate school and I was studying math and doing MBA in finance. 27:58 Okay. All right. 27:59 So you were in grad school when this was happening. So then did you immediately go work in Bitcoin after grad school? 28:04 No. I actually went to work for Yale University in the economics department as a statistician. 28:11 Oh, you did? For how long until you decided to go work there? 28:15 Basically until – it was from 2012 to the end of 2014, beginning of 2015. 28:24 This was basically your Bitcoin education period. So you were working at Yale and you were quietly just researching Bitcoin. 28:31 Right. 28:32 Aggressively. 28:33 Right. I was becoming obsessed with it. 28:35 You were becoming obsessed. You got the disease. You caught the illness. Okay. 28:39 And so then did you go – what was your first foray into working in Bitcoin professionally? 28:44 A separate thing that had happened, I'm a huge proponent of this prediction market idea, which has now taken the form of a Polymarket. 28:52 But there was a pre-Polymarket site, which was my favorite website on the whole internet, called Intrade. 28:58 And it was this funny little rinky-dink site, but it was the pre-Polymarket of its day. 29:05 And you could do betting on elections and stuff. 29:07 What was it called? 29:08 Intrade. It's a joke on like insider trading. 29:10 Oh. 29:11 I think. I assume. 29:12 Okay. Sure. 29:13 That's what I always thought. 29:14 Intrade. And this was like a website in 2013 or 2014. 29:17 This guy from Ireland ran it sort of and he would be on CNBC sometimes and they put up the chart of – the volume was unbelievably low. 29:28 But this idea is a huge idea. To me, this idea is like as big as the printing press. 29:33 The prediction market idea in general. 29:35 Yeah. 29:36 Okay. 29:37 And even now, we've only explored the tip of the iceberg of what is possible. 29:41 I have a whole separate website called BitcoinHiveMind.com where people can read all about it. 29:45 I've written tons of stuff and put up videos. 29:47 Were you blogging at this point already? 29:49 I started to because in 2012, the US government closed down Intrade. 29:54 They forced it – the CFTC forced it to close down. 29:57 Okay. 29:58 And so I was being obsessed with Bitcoin at the time and I thought, well, can we do this on Bitcoin? 30:02 I started writing about that. 30:03 Because then the government couldn't shut it down. 30:05 Right. 30:06 So that was the original idea. 30:07 That was how I got in. 30:08 But then I realized people are going to compare this idea to a bunch of horrible ideas that were coming out around the same time. 30:14 No offense. 30:15 But there was these other ideas. 30:16 One was Ethereum, of course, which is kind of funny. 30:18 But there was like BitShares. 30:20 Terrible idea. 30:21 And like NXT and these other low-quality ideas. 30:25 Ethereum was a low-quality idea. 30:28 Well, it's funny because Ethereum – this is the origin of the Bitcoin maximalism type culture maybe. 30:35 And if you look at Ethereum, it does look like a counterexample. 30:40 But actually if you look at the whole set and you just say it's a survivorship bias and you say what actually people wanted was – they didn't want a monopoly. 30:49 They didn't want Bitcoin to be – they didn't want to have all their eggs in one basket. 30:52 Okay. 30:53 So they just wanted some second thing. 30:55 Do you think that's why Ethereum exists? 30:56 Well, I think if you average the Ethereum financial ROI with all the projects that went to zero and failed, whatever. 31:06 Then they were all just some version of we need to diversify. 31:09 I think that is a missing part of the story. 31:13 Even though they're all incredibly correlated and those are just worse and just extra volatile relative to Bitcoin. 31:19 Well, yeah. 31:20 I think that – 31:21 That's a terrible diversification strategy. 31:24 But it's better than nothing at all, which is what we had. 31:27 For many years, there was only Bitcoin. 31:29 Bitcoin had like 99, 95 percent of the coin market cap. 31:35 Right. 31:36 A lot of the stuff on there would be like flash in the pan. 31:38 What was there even before Ethereum? 31:40 Like Omni? 31:41 I don't even know. 31:42 What was Litecoin? 31:43 Counterparty? 31:44 There was Namecoin. 31:45 Oh, right, right. 31:46 There was – right, exactly. 31:47 Namecoin, I forgot. 31:48 There was Peercoin and – 31:49 Those – okay, right. 31:50 There was like a whole stream of like – 31:51 It was this era. 31:52 Litecoin was the silver to Bitcoin's gold. 31:54 That didn't make any sense, but they said it anyway. 31:56 The Bitcoin forks era. 31:57 And then there was like a Feathercoin and Dustcoin. 32:01 They were like Litecoin. 32:02 It was all like – it was all a bunch of nonsense. 32:04 You must have somewhat appreciated, though, this idea of like, okay, we're going to make – 32:09 we're going to create like a programmable option. 32:12 Right. 32:13 And we're going to have something that can do things other than be payments. 32:16 That's how I started the blogging was I was kind of thinking like, okay, I have this good idea, 32:20 but actually there's a lot of these other – it resembles these other ideas that I think are not as good. 32:27 So then I started to start the blog to try to write about what all these ideas were 32:32 and why some were better than others. 32:34 Because you were writing the blog to kind of explore all of this. 32:37 Right. 32:38 And then you actually created a company with the predictions you created. 32:42 You actually actuated this predictions program. 32:44 What happened was Roger Ver hired me away from Yale for about two years. 32:49 Really? 32:50 We even made the software back in 2015. 32:52 I did not know this history. 32:54 Early versions can be found on BitcoinHiveMind.com. 32:57 What was your role? 32:58 What was your – 32:59 We were going to – well, I invented the peer-to-peer – the idea of having the whole thing be decentralized. 33:05 So people would create markets and bet on them. 33:08 It would be like Polymarket, but there would be just software. 33:11 So you helped architect this? 33:12 Right. 33:13 I designed this thing. 33:14 You designed it. 33:15 This is what Truthcoin was called. 33:16 It was a Bitcoin peer-to-peer Oracle system and prediction marketplace. 33:20 But you were not an engineer. 33:22 That was not your background. 33:23 Well, I was – I knew a little bit about writing software. 33:27 Okay. 33:28 Just being self-taught and as like a research academic statistician type person, 33:35 you have to know a certain amount. 33:37 Okay. 33:38 So I was a little bit self-taught and I knew a little bit. 33:41 Okay. 33:43 So I would write the – like a lot of the new pieces of Truthcoin. 33:48 I wrote them myself in R and then in Python and then translate them to C++. 33:53 Okay. 33:54 So you were a self-taught coder. 33:55 So a little bit. 33:56 But yeah, not quite as much. 33:58 But that's sort of what I was doing around 2015. 34:02 Okay. 34:03 Okay. 34:04 And so Roger – I did not realize that you worked directly with Roger Beer on this. 34:07 So what happened to Truthcoin? 34:09 Well, probably it should have launched as a – 34:13 it would have been better if it had taken more of a Monero road 34:16 and just launched as an altcoin because I always thought that we would have sidechains on Bitcoin. 34:20 And because the sidechain is such a great – 34:23 You always thought we would have sidechains. 34:24 Yeah. 34:25 The sidechain idea was old. 34:26 Wasn't there a paper when the whole term sidechain kind of became a thing? 34:28 Yes. 34:29 Was that an Atomback paper? 34:30 Yes, it was. 34:31 Okay. 34:32 It was October 2014 and it was called Enabling Innovation with Pegged Sidechains 34:35 or something like that. 34:36 So this was after that. 34:37 So you were already on the sidechains train at that point. 34:39 It had already been existed. 34:41 There was like a Luke Dashjr. forum post in December 2013, I think. 34:46 About sidechains. 34:47 About – it wasn't called sidechains at the time. 34:49 But the idea existed. 34:51 Something like that. 34:52 And then I – in 2014, I had designed this prediction market thing and I was like – 34:59 but there's no – it's too complicated to be bolted onto Bitcoin. 35:03 They had come up – they being the authors of that paper which included many – 35:09 it was like 12 or so people. 35:12 They had come up with this idea and I thought, okay, great. 35:14 I'll do all the new stuff. 35:16 They will do the sidechain stuff and then I'll just combine it all 35:19 and then this will be great. 35:21 This will be a great sidechain of Bitcoin and that's what I thought. 35:25 This was also kind of like, again, sort of a foray for you 35:28 into like architecting protocol systems kind of, right? 35:31 I mean, which – 35:32 I mean, I suppose. 35:34 Right? 35:35 I mean, this is like sort of a new skill to be flexing that I imagine was useful for you 35:40 when you were thinking about BIP300, BIP300. 35:43 When did the Truthcoin project kind of end for you? 35:46 Yeah, BIP300 is very, very, very, very, very, very simple compared to the prediction market. 35:50 To Truthcoin. 35:51 Right, right, right. 35:52 So I was going to say Truthcoin was like a wild – 35:54 It was very like a long shot, which intentionally so 35:58 because it's kind of like high risk, high reward. 36:00 It actually has never really ended, although I did – 36:03 I thought this is a high risk, high reward. 36:06 In my view, the Drivechain BIP300 stuff is very low risk, also very high reward. 36:12 So I kind of shifted to that. 36:15 But I have never really given up on it. 36:17 In fact, I was talking about it earlier today with someone 36:19 and I rewrote some of it in Rust back in, I think, the winter in December maybe. 36:25 So I still plan to create the Truthcoin Drivechain or whatever. 36:31 Oh, really? 36:32 It's an L2 – 36:33 The Truthcoin Drivechain. 36:35 Yes, it's still different enough from Polymarket that I think it would be a niche for it. 36:41 Polymarket does a bunch of things – 36:42 And it's on Bitcoin. 36:43 Right. 36:44 Polymarket does a bunch of things that I really like 36:46 and that I always advocated for a long time. 36:48 As a prediction market advocate, I said for many, many years – 36:51 I don't know if people will be able to go back and make the super cut of all the times I've said this, 36:54 but I said it a lot in interviews and in forum posts and stuff, in conversations with people. 37:00 I said – and I told Roger also, Roger Ver – 37:03 I said, listen, I will make this thing because I think that this is something that – 37:08 it will be on blockchain. 37:10 People will try to censor this because it will be too disruptive and so they won't like it. 37:15 And even the Polymarket guy, they arrested him and took his phone. 37:18 Yeah, they arrested him. 37:19 Yeah, exactly. 37:20 So you know he was on to something. 37:21 That's what I'm getting at with this. 37:22 The blockchain thing is actually viable, unlike crazy IBM blockchain and Microsoft Azure, 37:26 which is all just a bunch of waste of time nonsense. 37:29 Do you know why Shane was arrested? 37:31 What was the charge that Shane – 37:35 These prediction markets are an unbelievably good idea. 37:37 So you can imagine if you invent the internet and you say, 37:40 we're going to be able to look at how every politician voted or who's donating to every politician. 37:45 Or you invent the printing press. 37:46 We can't have that. 37:47 I think the guilds were like, well, normally you have to train under the master craftsman 37:52 as an apprentice for years, but we're just going to print. 37:55 This is how to tan leather or something. 37:58 This is how to make a whatever, a gear or a clock. 38:02 Right. 38:03 And you can see how this is not – some ideas are just too good. 38:06 Too disruptive. 38:07 Yeah. 38:08 Okay. 38:09 So at what point, though, did you kind of maybe shift focus, 38:12 even if Truthcoin is still – the embers are still there? 38:15 Well, I finished the Truthcoin part at the end of 2015. 38:18 Okay. 38:19 And then I thought, okay, now it's time to connect it all. 38:21 So then I went to Blockstream. 38:22 It turns out Blockstream hadn't done any work on their part. 38:25 What do you mean? 38:26 Oh, you mean on the sidechain? 38:27 Blockstream had originally an idea where you would be able to take coins from Bitcoin L1 38:34 and move them to a different blockchain. 38:36 Today we would say L2. 38:38 At the time they did not. 38:40 At the time, in fact, they had like a column. 38:42 They kind of equivocated, and they said you have asymmetric sidechains and symmetric sidechains. 38:46 The symmetric ones would be kind of like two L1s or something. 38:49 In my view, this is – I had that exact look on my face when I looked into it, 38:53 and I was like, does this even make sense? 38:55 Because what if one of them re-orgs? 38:57 Symmetric means there's no, like, base chain. 39:00 It's like they're equally weighted, and then asymmetric is like there's some more valuable chain 39:05 and some less valuable chain. 39:07 After I looked into it, I decided it didn't make any sense. 39:09 Okay. 39:11 But this was an Adam Back idea. 39:12 100%. 39:13 It's in their paper that you mentioned, the 2014 paper. 39:15 Oh, it is. Okay. 39:16 And I thought I'll make Drivechain be 100% asymmetric. 39:20 And today we would just say an L2 because like lightning, you need a Bitcoin – 39:24 you need a fully synced Bitcoin node to go back to run the lightning node, 39:28 if that makes any sense. 39:29 Oh, my goodness. 39:30 So I thought, you know. 39:31 But it's interesting because the definition – 39:33 this is something we get into on the show a lot is sort of this definition of an L2, 39:37 and so much of it has to do with, you know, trustlessness 39:40 and this ability to go back and forth in a permissionless way. 39:43 But sidechains, I mean, when we think about sidechains now, 39:46 and I think this definition came later after Adam Back's paper, 39:50 but, you know, the federated bridge at some point became the thing. 39:54 I don't know exactly when that happened. 39:56 Not so trustless. 39:57 This is also in the paper, and the interesting thing is it's in Appendix A as a kind of like, 40:03 we'll do this now just so that we have something that works, but we'll abandon it later. 40:08 And there are actually interviews with Greg Maxwell on YouTube 40:12 where he says that this isn't the true two-way peg and this isn't real. 40:16 The federated bridge model. 40:17 And, of course, as you may remember, Matt Corallo tweeted at one point 40:22 he left Blockstream to join Chaincode in some year, maybe 2018. 40:26 Yeah. 40:27 Is that why? 40:28 Did he leave because sidechains were just not enough? 40:31 I don't know if it's unique for him in that complex matter, 40:33 but I do think he later tweeted, and I give him a lot of credit for this, 40:38 but he tweeted something like, 40:41 liquid is not supposed to be used as a real sidechain. 40:45 He didn't quite say it like that, but he said something like, 40:47 we invented liquid to make it easy to send Bitcoin among different exchanges. 40:51 If anyone tries to tell you to use it for a different purpose, 40:55 you should treat them as though they are trying to steal your Bitcoin. 40:58 Wow. 41:00 He was just like, this is not trustless at all. 41:02 Because the multisig part was originally going to be something like, 41:06 people already have some Bitcoin with them in exchange, 41:10 so the exchanges themselves will have some of the multisig keys. 41:13 Right. 41:14 And it's kind of like, now the security model is exactly what it was, more or less. 41:17 And now you can easily move your coins. 41:20 You know, at the drop of a hat, 41:21 you could move it from Coinbase to Kraken or something like that. 41:24 That was the original idea. 41:26 But Blockstream basically put out this paper. 41:30 Blockstream was formed. 41:32 They were theoretically going to start creating these L2s, 41:34 and then they just didn't. 41:35 They just kind of fumbled the bag. 41:37 I think they were misled or either confused about something. 41:43 They have a part of the paper. 41:46 I believe it's section 3.4. 41:49 It might be 4.3. 41:50 It's one of those. 41:51 But they have a risk of centralization of mining, which is a mistake. 41:56 Part of it, it's almost like a math. 41:58 There's no math in it, 41:59 but it's almost as if they dropped a negative one somewhere, 42:03 so they thought something would get worse. 42:09 The more we do this, the worse it will be. 42:11 But actually, the more they do that thing, the better it is. 42:13 So they have a whole backwards conclusion from this. 42:16 I've tweeted about this many times. 42:19 Connect the dots for me, though. 42:22 How are we on centralization? 42:23 So how do we go from L2s to mining centralization? 42:25 This is just a part of their thing. 42:27 They think that, for example, if the L2 has a very expensive node, 42:34 this cost will be a burden to the miners. 42:36 In reality, though, none of this is true. 42:38 This is not an accurate version of the story 42:41 because the miners don't need to run the L2s at all. 42:45 We're on Drivechains now, basically. 42:47 But even if they did, they would only run them if they made more money. 42:52 They can just do nothing if they don't want to participate. 42:54 Then they are where they are now. 42:56 But this is how it happened because Drivechain was from November 2015. 42:59 So this was at the end of the year 2015. 43:02 I thought, oh, now it's time to plug the pieces together. 43:06 And so I thought, okay, now let me see what Blockstream is up to. 43:12 And then I looked into the details. 43:14 This gets into the near versus far thing. 43:16 I looked into the details, and they hadn't actually done anything. 43:18 They had this elements project, but none of it was about sending coins back and forth. 43:22 It was just like their little playground. 43:24 So then I thought, oh, I'm going to have to do this myself, which I did. 43:29 And that's what it was. 43:30 So you're like, okay, I'm going to have to solve this problem 43:32 because Blockstream isn't solving it. 43:34 Yeah, unfortunately. 43:35 And so did you think, I'm going to write a bib, 43:38 or were you interested in starting a company? 43:40 No, I thought I would just write the post, and then everyone would read the post, 43:43 and then they would all just get on board with that idea and steal the idea. 43:46 Were there criticisms, or was it like a plan? 43:48 No, the post was a description. 43:49 It was a description of what would work. 43:51 A description of what would work. 43:52 At the end, I have an FAQ kind of, and I say, how is this different? 43:55 One of the questions is, how is this different from Blockstream? 43:57 So it was effectively like a precursor to the bib, I mean to the two bibs. 44:01 And I thought that I would not have to do any more work on it. 44:05 Was it called Drivechain? 44:06 Is that what you called the paper? 44:07 Yes. 44:08 Okay, you were like, this is the plan for how we're going to actually actuate these L2s. 44:10 Drivechain, the simple two-way peg. 44:12 The simple two-way peg, okay. 44:14 And how was the response to this original paper? 44:16 Originally, it was very, very, very good. 44:18 Really? 44:19 And it was also, it enjoyed a lot of heyday in the end of 2015 and then during 2017. 44:25 But there was a lot of weird history that happened. 44:28 So I don't want to bore anyone with long historical tales. 44:31 But basically, one thing that, in 2015, the Scaling Bitcoin conferences were happening. 44:35 Right. 44:36 So Scaling Bitcoin was very contentious, 44:39 and the hard fork was being threatened left and right by the large blockers. 44:43 So this is, what are we? 44:44 We're in like 2016, 2017? 44:45 This is the end of 2015, I'm still talking about. 44:47 Okay, 2015. 44:48 Because this is what I'm talking about when I first wrote the post. 44:49 Okay. 44:50 In fact, it was before. 44:52 Drivechain was November 2015, which was between Scaling 1 was September and Scaling 2 was December. 44:58 Okay, okay. 44:59 So, okay, so at this time, people are kind of into this paper. 45:04 It's getting... 45:05 Well, what I really wanted to bring up was that at the time, people were worried about scaling. 45:10 They were worried about what to do about the hard fork. 45:13 And they were worried about like governance. 45:15 They were like, okay, we've reached a situation where we don't agree on the block size. 45:19 What if we don't agree on all kinds of other things, you know, with our op return or whatever? 45:23 I was going to say, has anything changed? 45:25 Is anything different? 45:26 Paul, we're going to talk about governance as a common problem. 45:29 This is a common thread on this podcast, is the governance issue. 45:33 So it opens the door because you think, wait a minute, if there's a disagreement that persists, 45:38 probably one side is right and the other side is not. 45:41 We don't know which is which necessarily. 45:44 And so it means that maybe instead of Bitcoin being this unified team that's going to take on, 45:49 maybe we'll have to make a lot of, you know, there'll be a lot of forks in the road. 45:52 Do you worry there will be forks in the future related to these kinds of disagreements? 45:58 I think we could get back to that because that involves like a future thought. 46:02 But actually now I think we should rehabilitate the hard fork and people should do it more. 46:06 And actually because it introduces competition to the Bitcoin software stack 46:11 and it just gives everyone free money. 46:13 People are overly afraid of hard forks. 46:15 Exactly. It made sense. 46:17 What happened at the time was Roger Ver owned Bitcoin.com domain 46:21 and then the fork was called Bitcoin Cash. 46:24 I still met last Thanksgiving, I met a cousin of mine who's a very smart guy. 46:28 He's a lawyer and everything. 46:30 And I told him, oh, yeah, Bitcoin versus Bitcoin Cash. 46:32 These are like, you know, disagreements that people have had. 46:34 And he'd be like, oh, I would have just thought those are the same thing or whatever. 46:38 So the brand confusion angle, I think we should rehabilitate the hard fork 46:43 and we should say you must pick a completely new name every time. 46:47 And I think actually that alone would have fixed a lot of the inherently adversarial. 46:54 But not necessarily, of course. 46:56 But think about it like this. 46:57 Is it really so good that everyone argues all the time? 47:02 A lot of it is performative. 47:04 A lot of these people have no idea what they're talking about, no offense. 47:06 And so is that really better than just split the coin? 47:10 I mean, Bitcoin Cash, everyone gets a dividend. 47:12 Everyone gets free money. 47:14 You can now sell if you don't like Bitcoin Cash. 47:17 You can sell and buy more BTC. 47:20 So you're getting some amount of the one you prefer more. 47:24 That's an interesting way to handle it. 47:26 But people really hate this. 47:28 Psychologically and socially, they hate the hard fork. 47:31 It feels like forced. 47:32 It feels involuntary. 47:34 So the original Drivechains paper was put out basically during the block size wars, 47:39 is what you're telling me. 47:40 And that had an advantage and a disadvantage. 47:42 The disadvantage was actually SegWit was becoming more popular. 47:45 And I saw no reason to challenge SegWit's popularity at the time. 47:51 And Lightning was also popular. 47:54 You were like SegWit makes sense. 47:55 I was very excited about Lightning at the time. 47:58 Now I'm not. 47:59 But at the time, I was very excited about Lightning. 48:02 And I thought this is going to be cool. 48:04 We're going to have instant payments. 48:06 And this will kick off the scaling in layers idea, which actually Drivechain is part of. 48:12 And I guess that's what Blockstream really did. 48:14 I mean, maybe we were being aggressively too harsh on them before. 48:17 They did do something. 48:18 They built CLN. 48:19 They were doing lots of different things, of course. 48:22 In my view, they did not really deliver on the rise in debt rate, why they were created, 48:27 which is to do this sidechain thing. 48:29 But I don't know if people agree with that. 48:31 They built Lightning instead, maybe. 48:33 And they did help with making SegWit happen. 48:36 And so originally it came out and Drivechain was something like now, 48:41 instead of having to deal with the threat of a hard fork, we add Drivechain as a soft fork. 48:47 And now actually you have an infinite number of what is essentially a hard fork, 48:53 where you created L2 with a larger block size. 48:56 You create an L2 that has ring signatures or that has Namecoin, namespace. 49:01 So the threat of the hard fork would be eliminated in the Drivechain world. 49:07 And the need for people to disagree, instead of large blockers disagreeing 49:14 and then trying to hard fork Bitcoin, they would just create. 49:18 So, yeah, so TLDR, this is actually a good opportunity for us to just like quickly TLDR 49:22 Drivechains. So basically you can, people can propose, you can like write an activation 49:26 client, essentially for a sidechain, propose it to miners, miners vote on it and decide 49:32 if it's going to be one of the official Drivechains of Bitcoin. 49:35 There's a limited number that can be created. 49:37 I think it's what number? 49:39 256. 49:40 That's an easy number to remember. 49:41 There is no limit because you can have sidechains of sidechains or you could just add Drivechain 49:44 again. 49:45 Oh, they could be like trees of... 49:46 So that's right. 49:47 Yeah. 49:48 Because it's just like, we'll just use one byte to count. 49:49 Okay. 49:50 And then these chains are by definition, they're mergemined, right? 49:51 This is a mergemining mechanism. 49:52 When you say Drivechain, by definition, they are, right? 49:53 Drivechain, excuse me. 49:54 So the Drivechains are mergemined. 49:55 This is a key thing that I talk about all the time. 49:56 I'm working really closely with Michael Casey. 49:57 He's a really good guy. 49:58 He's a really good guy. 49:59 He's a really good guy. 50:00 He's a really good guy. 50:01 He's a really good guy. 50:02 He's a really good guy. 50:04 of yours. 50:05 I'm a fan of his. 50:06 He's pretty cool, also. 50:07 He's great. 50:08 Yeah. 50:09 But he talks about this all the time. 50:10 He's like his biggest concern with the current new batch of L2s that are springing up is 50:13 they don't contribute security budget, security budget. 50:16 And they are doomed in the long run for that reason, because all you have to do is imagine... 50:30 They are? 50:31 Yeah, imagine that one of them gets really big and has 8 billion users. 50:37 And so this is best case scenario for like Fedament or something. 50:40 That just kills Bitcoin, or does it... 50:42 It's just... 50:43 It creates a situation where, you know, there's 8 billion people. 50:46 People make three transactions a day-ish. 50:50 I'm just making this up, but you know, there's 365 days in a year. 50:52 We're just talking napkin math here. 50:54 So we're talking like, you know, trillions of transactions per year on the earth. 50:58 Okay. 50:59 And you just take 10 cents. 51:01 And now we're talking hundreds of billions of dollars in revenue per year. 51:04 Okay. 51:05 So this is just napkin math, but we're just saying it's a huge amount of money every year. 51:10 And I actually looked it up, and the quantity of payments doubles around every 11 years 51:16 as you have economic growth and wealthier people make more payments. 51:19 Like in the fiat system. 51:20 I'm just talking about on earth, all. 51:23 On earth. 51:24 Payments double every year. 51:25 And this is my napkin math, and it's not supposed to be taken too seriously. 51:27 My point is, it's a huge number that grows. 51:32 If that goes to the ARK supernode, or to the Fedament, or whatever, you know, the roll-up 51:38 sequencer. 51:39 And not to the Bitcoin miners. 51:41 Then the miners will be in a situation where they earn like 20, 30, 40 million dollars 51:45 a year, and the other people's earning a hundred billion a year, 10,000x higher. 51:52 So like, and what are the implications of that? 51:54 How does that kill the L2, and not just hurt Bitcoin L1? 51:57 It's very easy, because the miners at that point will be tempted to do one of two things. 52:03 Both of which they can easily accomplish. 52:05 Number one would be to just vertically integrate, and say, well we have the ARK supernode. 52:10 We have, let's call it, we'll call it the Barack ARK supernode. 52:14 The Barack, can we like, so we'll make an AI of like Barack as like the Pope or something. 52:19 He's leading the, he has the super, the ARK super, the single ARK supernode. 52:22 And he's making trillions of dollars a year on his like globally adopted L2. 52:29 And the miners are getting their like dinky little 30 to 40 million. 52:32 The miners say, okay, now we have. 52:33 Marathon is struggling. 52:34 Yeah, now we're going to have Foundry ARK, or whatever, Marathon ARK. 52:39 So basically the miners will threaten the L2s in this situation, because the miners 52:42 at the end of the day do rule base settlements. 52:46 So like they will have leverage. 52:47 The second thing they can do is kill the, try to kill the L2. 52:49 You think, you know they'll try to like cut a deal. 52:51 There will be some sort of. 52:52 Well, that's the cutting of deals, the vertical integration. 52:54 The vertical. 52:55 They say something like, okay, we have Foundry LSP. 52:58 And now the end user, I would think, I would think if the end user has any brains at all, 53:03 they would think, okay, wait a minute. 53:06 This whole lightning thing, you know, it actually relies on the 51% hash rate, like in a few 53:13 crucial ways. 53:14 Like, you need to be able to get the justice transaction into the chain in time. 53:17 So you think, do I want to open with random big lightning thing, or do I want to open 53:23 with the Foundry LSP? 53:26 The Foundry LSP actually has, is de-risked, it has an advantage, because it's aligned 53:31 with the 51% hash rate. 53:34 So it will, it will take over, basically. 53:36 So you're thinking, it's so funny when you say Foundry LSP, you're thinking like. 53:39 I mean, why not? 53:40 They've already been talking about doing it. 53:42 But these, like these different big mining, oh, and by the way, I think that there are 53:46 going to be like various mining companies that end up like getting involved in all these 53:50 like weird bridges that are being created and stuff. 53:52 I think that's happening, for sure. 53:53 I mean, so the Drivechain kind of like automatically does that for them. 53:57 So that's why it's just better. 53:58 It's just better. 53:59 In a way, it's worse, because it's kind of confusing to them. 54:02 The idea that I have already done everything for them, and the code just, just does it 54:06 actually. 54:07 Well, and it's like more, and then the users get to like decide demand also, like they 54:12 get to decide which bridges are the best, as opposed to the bridges, incentives with 54:16 the miner, whatever incentive structure they've like, you know, unilaterally, individually 54:20 decided with the miners, like impacting. 54:22 Yeah, competition is the, you know, the cure-all, is the one true God or whatever. 54:28 So since Drivechain has the 256, and they're all easier to compare with each other. 54:33 So you just kind of leave that to the developers, let the developers, Jeremy Rubin, let them 54:38 do CTV, let them do APO, TX hash, whatever. 54:43 Let them do all that on their own, you know, Bitcoin liberal or something, Bitcoin, you 54:48 know, Bitcoin, like experimental Bitcoin or whatever you want to call it. 54:54 And then let the users use whatever they find useful, they pay a transaction fee, it goes 55:01 to the miners. 55:03 So since you brought up CTV, I have to ask. 55:06 So your point of view, basically, is like, okay, we just need Drivechains. 55:10 And then like, we don't need to do any of these other like weird opcode things that 55:15 enable trustless bridging, or are you? 55:17 Well, that's, you had a lot of statements kind of rolled up into one thing. 55:22 So first of all, in Bitcoin, there are many derangements have taken over. 55:28 So lightning is one, where people don't even know what they're talking about when they 55:32 talk about lightning. 55:34 And they don't even really, you know, the fact that people don't even understand why 55:38 it is relevant, the fact that it's mostly custodial, which basically means that it doesn't 55:42 work and that people aren't using it. 55:44 Custodial lightning means people are not using lightning. 55:46 Right, right, right. 55:47 So like, but people don't even, they don't even know that enough to figure that out. 55:51 So you have a huge derangement there. 55:53 But a second derangement is the soft fork in general. 55:56 The soft fork is a very, very, very safe, very useful tool. 56:02 It is opt-in. 56:03 It is mostly reversible and ignorable. 56:06 So the soft fork is not like a bad thing. 56:11 It's a very good thing. 56:13 And the fact that it's controversial is because it's so powerful on the upside. 56:18 And it has the ability to be magical. 56:21 But yeah, OpVault or something could maybe do a better job than Coinbase Custody or BitGo 56:30 or something. 56:31 I'm not saying, actually, I think those companies are pretty well behaved. 56:33 I'm just trying to say, actually, I didn't want to say the really evil companies because 56:36 they're so evil. 56:37 They're going to say mean things about me, even more mean things on Twitter than they 56:41 normally say. 56:42 They're afraid of the success of these opcodes such that, like, you know, all these amazing 56:47 things will happen. 56:49 It's just like the printing press concept where some idea is just too good. 56:53 And they threaten, they make other people look bad. 56:55 So the soft fork is, but what I want to say is, we have something like 15 or 16 soft fork 57:00 proposals if you include great consensus cleanup and all this other stuff. 57:05 Right. 57:06 The less radical ones. 57:08 These ones that people have not heard of, you know, internal key or whatever. 57:12 If you make a huge list, there's like a bunch. 57:14 We could do them all, you know, in the next release of Bitcoin safely and then we could 57:19 actually reverse them all and make it so that we had gone back in the next release of Bitcoin. 57:25 It is if they had never existed. 57:27 So that's your point of view, is be more liberal with the soft forks and then if like something 57:31 really bad happens, just reverse it. 57:33 Right. 57:34 But basically it's something bad cannot, these opcode soft forks where it's an op-nop that 57:40 causes the script interpreter to fail with an error if something happens and otherwise 57:44 it succeeds. 57:45 Like, you basically can't have a bad thing happen. 57:48 But people, it sounds like you're being reckless if you say that. 57:51 So this is the scam. 57:53 Everyone is doing like a kind of white knight, safety officer, politician scam and they're 57:58 saying, I'm looking out for you. 57:59 I'm protecting the chain. 58:01 This is all false. 58:02 So that was the first part of you saying, oh, CTV. 58:06 I'm saying like we don't need CTV or whatever. 58:08 We should do CTV. 58:09 We should do all these other things. 58:11 I think OpVault is the one that adds the most non-Drivechain overlap thing because it's 58:18 like an L1 cold storage thing, whereas Drivechain is like a more experimental, take your coins 58:23 to a more experimental L2 zone. 58:26 But we should do all these soft forks. 58:28 The question of who makes the best bridge, I think Drivechain is the best bridge. 58:34 The Drivechain's weakness is that the miners can steal from it. 58:38 But this is not a real weakness because the miners can steal more easily from the Lightning 58:42 Network or from any of the non-mined L2s even. 58:45 Wait, how? 58:46 How? 58:47 Well, they censor almost all of the L2s, including things like BidVM. 58:53 They have like a thing where if someone misbehaves, you put like what's sometimes called the justice 59:00 transaction on L1. 59:02 This enables you, whatever dispute you were having before, let's say you had some coins, 59:07 This is in all these L2s, all the federated multi-sig ones, BidVM ones? 59:10 Well, some have it even worse, but we'll talk about Lightning, for example. 59:14 Someone has eight coins, someone has seven coins. 59:16 There are 15 coins in this multi-sig L2. 59:20 And someone tries to, you really owe them nine coins, but they try to screw you over 59:28 a little bit. 59:30 You really owe them nine coins, but you try to say, oh, I only owe you three coins. 59:36 And when you misbehave, they get to pull the whole thing, the whole 15. 59:41 And almost all of them have this. 59:43 Their original BidVM, I know they have a new version that I haven't poured an entire whatever 59:48 day into to figure out what's going on. 59:50 But the original version, you had to like put like a big bond up, that would always 59:54 be more than, and that's the thing that if you go off script, the other person takes 59:59 the whole thing. 1:00:00 But here's the thing, you have to put that transaction on L1. 1:00:03 So if the miners just say, if 51% hashrate says we're not allowing that transaction in, 1:00:09 you can't do that. 1:00:10 And so the entire security model of the L2 collapses. 1:00:12 So actually, Drivechain is really not any different than those. 1:00:16 That's kind of the point. 1:00:17 You're just saying like, in theory, in any of these systems, miners could collude to 1:00:20 like stop activities, basically, like stop peg outs. 1:00:25 That is also true. 1:00:26 No matter what the L2 can be fully custodial in the sense that there is no way of miners 1:00:31 stealing from it. 1:00:33 They can still block the on ramp and off ramp. 1:00:35 The custodial stuff is even worse because it says instead of the money being in the 1:00:38 code in the process, it just belongs to someone else. 1:00:42 You mentioned MEV earlier, and I want to just circle back to that. 1:00:46 It's another derangement. 1:00:47 These are all derangements. 1:00:48 I can make a huge list. 1:00:49 In fact, I am kind of drafting a post that I'm going to write on the blog. 1:00:53 Bitcoin derangements? 1:00:54 We have very many. 1:00:55 Well, because I was going to say, MEV is the one that I hear the most of. 1:00:58 When people fess up to this reality of like, okay, the truth is that I'm just afraid Bitcoin 1:01:03 will be able to do too much and that it is too good to use your language. 1:01:07 They always reference MEV. 1:01:08 MEV is like the scary thing that could happen. 1:01:12 Notice it's also very vague also. 1:01:14 It is. 1:01:15 It is actually. 1:01:16 I mean, if I asked you, how do you define MEV? 1:01:18 How do you measure MEV? 1:01:19 Well, well, I mean, well, so we get into this all the time because I always tell people 1:01:23 we already have MEV on Bitcoin. 1:01:24 Of course. 1:01:25 That's a very good point. 1:01:27 Truthfully, if I were to say, if I were to say right now, if I were to message, you know, 1:01:32 Mike Casey and say, I will give Marathon $10 if you do a somersault. 1:01:37 Oh, we do this all the time. 1:01:39 That is technically MEV. 1:01:40 No, no. 1:01:41 Oh, Slipstream is just full MEV. 1:01:43 Yeah, exactly. 1:01:44 I mean, we'll mine transactions in all sorts of ways. 1:01:48 We are rational actors who want to get paid. 1:01:50 The point is that was always possible. 1:01:52 Like it's like the Rick and Morty meme, you know, that was always allowed or whatever. 1:01:56 You could always say, I could always just say, listen, it is the policy of LayerTwo Labs. 1:02:00 We will pay 10 cents a year to Foundry if they run all the transactions by us first. 1:02:06 You see, but that's my laugh at the MEV thing. 1:02:08 I just think this is so stupid. 1:02:10 This is what people are worried about. 1:02:11 They're worried about a conditional payment to miners. 1:02:14 People are very specific. 1:02:15 I actually had Matt Crowell on the show and we got into like his definition of MEV and 1:02:20 he had, you know, a broad definition. 1:02:21 His definition, I thought, I think was quite good. 1:02:23 But the thing that I think he mentioned that people are most concerned about is like the 1:02:27 DeFi somersaults and the like really like crazy trading things that's going to make 1:02:33 it such that you need to be a high frequency trader and you need to hire like the most 1:02:37 senior person at Goldman Sachs, you know, if you're going to survive as a miner, right? 1:02:42 Like that's sort of the problem on Ethereum right now is that you have to... 1:02:46 This is what people do. 1:02:47 And I had this MEV derangement written down and I even called it exactly, I wish I'd published 1:02:52 it before now as it would look like I predicted this perfectly, which I did. 1:02:55 But they will point to a problem in Ethereum and they'll say that is what I'm worried about. 1:03:03 But they don't really... 1:03:04 So in Bitcoin... 1:03:05 Do you think that there's another just Ethereum in general is another derangement? 1:03:07 Yeah. 1:03:08 Bitcoin is bad. 1:03:09 I mean, Ethereum is badly designed. 1:03:10 Bitcoin has several processes that would intercept and error correct this thing. 1:03:16 So first of all, in the Drivechain world, the Blind Merged Mining means that basically 1:03:21 the person assembling the block, they do it away from the L1 miners and they just pay 1:03:26 the miners the sum of the transaction fees. 1:03:30 They just say put this hash in a L1 Coinbase, I'll pay you with L1 coins, and then they 1:03:36 collect the L2. 1:03:37 So it's already factored out. 1:03:41 The L1 miners just could do exactly what they were doing before. 1:03:45 They earn L1 coins. 1:03:48 The whole L2 chain could be worth, you know, $100,000 of fees. 1:03:52 It could be $20,000 in overt transaction fees, plus $80,000 in MEV. 1:03:58 It makes no difference. 1:03:59 It's worth $100,000 to whoever assembles the block, they assemble it, they pay themselves 1:04:03 $80,000 worth of indirect MEV somehow, off-chain or whatever. 1:04:07 Doesn't matter. 1:04:08 The block hasn't been found yet. 1:04:10 The block has a certain hash. 1:04:12 Under Blind Merged Mining, there's a BIP301. 1:04:15 They broadcast a message to the miners and they say, it's like Slipstream in a way, and 1:04:20 they say put this hash into the L1 Coinbase, which just takes up a tiny little bit of space, 1:04:27 and I will pay you, you know, one Bitcoin or whatever it is. 1:04:31 Let's say it adds up to 1.03, because I said $100,000, I don't know, you know, so I'll 1:04:35 pay 1.03, and you can only get this 1.03 Bitcoin if you put this hash. 1:04:42 And the software interprets the hash being there as determining which L2 block is the 1:04:47 next L2 block in the L2 chain. 1:04:50 These are the same thing. 1:04:52 So this is just one thing. 1:04:53 I think, because there's other ways in which, in Bitcoin, this MEV thing would not even 1:05:01 happen at all. 1:05:02 So like, in Bitcoin, people switch to, the miners will switch to PPS mostly, not all 1:05:08 of them. 1:05:09 But Papershare is like, the pool does the block assembly, and then the pools compete 1:05:16 with each other. 1:05:17 That's how most of it works now. 1:05:18 Right, exactly. 1:05:19 Right, right. 1:05:20 So it's a situation where the pools compete amongst themselves, and then the hashers compete 1:05:25 in their own universe. 1:05:26 They just compete to have cheap power. 1:05:28 Oh, so you're saying like it's kind of... 1:05:29 They don't care already. 1:05:30 Right, right, right. 1:05:31 So you're saying it's kind of a boondoggle anyway, because, yeah. 1:05:32 So we're trying to find out who do we care, who's the victim here. 1:05:35 Right, right, right, right. 1:05:37 And it imposes huge costs on the pools. 1:05:39 Well, they all have to do it, so... 1:05:41 This also just brings up the elephant in the room, which is like centralization of Bitcoin 1:05:45 in general, right? 1:05:46 Sure. 1:05:47 Another vague concept, though. 1:05:49 I wrote a post measuring centralization in Bitcoin. 1:05:53 I concluded that it's the cost of running a full node, which later became like the accepted 1:05:57 definition for many people. 1:05:59 Wait, that's the definition? 1:06:00 The cost of running a full node is the definition of what? 1:06:04 The cost of centralization in Bitcoin. 1:06:07 But people started sneaking in all these other random stuff about it matters how many pools 1:06:12 there are, it matters what miners' costs are. 1:06:15 None of that can be the case, because the number of pools is based on a statistical 1:06:22 argument about how many days you can go without profit. 1:06:26 Can you go 30 days without profit? 1:06:28 In the early days of Bitcoin, let's say there's only 30 miners. 1:06:33 So now they're each going to find, you know, one out of every 30, you know, this is like 1:06:37 30 blocks. 1:06:38 You know, there's 144 blocks a day. 1:06:39 They're going to find a few blocks a day. 1:06:42 When mining is really small, you don't need pools. 1:06:46 But when you have 1,000th or 1,000,000th of a chance of the hash rate, now you're only 1:06:52 going to find a block 1,000,000th of the 10-minute periods. 1:06:56 So now you need a pool, because you could very easily go two, three, four, five months, 1:07:03 two years without, or you could get lucky and hit two and then be unlucky for five years. 1:07:09 Which means that there's going to be like, right, which means that they're, again, this 1:07:12 is already happening. 1:07:13 There already is miner centralization just because everyone's just a member of a pool. 1:07:16 People use this miner centralization term, but really what it means is, what that phrase 1:07:21 actually refers to is the empowering of the small pools, empowering of the small miners. 1:07:26 Sorry, I said the wrong word there. 1:07:27 Right. 1:07:28 The pools translate. 1:07:29 But it does also mean that there's like 10 companies who are picking all the block time 1:07:33 miners. 1:07:34 No, because it means that there's 10 pools, but that issue should be solved in a different 1:07:39 way by just monitoring the pools to make sure that, and this is what mempool.space does, 1:07:45 and say that no one is censoring a transaction over the long haul. 1:07:50 And that's what mempool.space does. 1:07:52 So you think mempool.space actually plays like a key role? 1:07:54 I think we should go much further. 1:07:56 I have proposed in the past, we should have open source mining pool software, and we should 1:08:03 also have some kind of open source tool that monitors the pools for any misbehavior. 1:08:09 So that miners can deject if they realize that they're part of a pool that's censoring 1:08:14 transactions. 1:08:15 If you think about it, the pool charges like 1% or so, of course, they all charge this 1:08:19 and that or whatever. 1:08:20 No one knows exactly, but there's many different fees. 1:08:23 But let's just say the pool charges 1% of the revenue as this kind of variance reduction 1:08:30 service. 1:08:33 Then they compete against their other 14 pools, so say there's 15 pools. 1:08:39 That amount of money coming in, that is like their brand and that is like sort of the hostage 1:08:46 that we execute. 1:08:47 If they screw up, we say, that's it. 1:08:49 Normally, you were getting for free, you're getting 1% each time, but now you screwed 1:08:53 up. 1:08:54 You're dead now. 1:08:55 Everyone goes to the other 14 pools. 1:08:56 Someone makes a new 15th pool. 1:08:57 Well, it goes back to what you were saying about the government, right? 1:09:00 Government should be about accountability, right? 1:09:01 Right. 1:09:02 Right. 1:09:03 Accountability is superior. 1:09:04 It really just goes back to accountability being the key factor when you're dealing with 1:09:07 like authorities or like, you know, people in power positions. 1:09:11 And so none of this stuff about the MEV is actually worth worrying about, and especially 1:09:15 not if it means that we can't have real Bitcoin scalability, real Bitcoin privacy, which is 1:09:21 what Drivechain would allow and other stuff would allow. 1:09:24 Well, this is the big challenge, right, is everyone's like, MEV, MEV, MEV, and then you 1:09:27 just think about all the things that we could have if we weren't worried about MEV. 1:09:33 And it's a challenge. 1:09:34 Yeah. 1:09:35 It's become a, I don't know what the right metaphor would be, but it's like, you know, 1:09:38 for your safety, like kind of like maybe like a COVID type of a thing. 1:09:42 Right. 1:09:43 Right. 1:09:44 We're doing, for your safety, we're going to long list of like extremely severe, unprecedented, 1:09:48 we're going to take kids out of school for two years. 1:09:52 So let's get back to the Drivechain story. 1:09:54 I'm not in favor of school, but I'm just bringing that up as a, such an extreme measure. 1:09:59 You're right. 1:10:00 You're saying you're like, because this like thing could happen that might not actually 1:10:04 be a real concern, we're going to just, you know, keep you from doing all these things 1:10:09 that you actually want to do that would like clearly, clearly and obviously benefit your 1:10:12 life. 1:10:13 All right, guys, I want to take a quick break to thank you for watching and remind you to 1:10:17 click the follow button on my profile if you'd like more Bitcoin technical deep dives 1:10:22 like this. 1:10:23 I also want to give a shout out to my partners for making the show possible. 1:10:27 Best in Slot and Unisat are of course, co-maintainers of the BRC20 protocol. 1:10:32 They are working on some incredible updates to BRC20, including the BRC20 programmability 1:10:37 module designed by Best in Slot, which is currently in Testnet. 1:10:41 This will make execution of smart contracts for BRC20 possible at the indexer level, which 1:10:47 is about as trustless and Bitcoin native as it gets. 1:10:50 Unisat is also working on a single step transfer function for BRC20, which I know many of you 1:10:55 will be excited about. 1:10:56 That's been widely requested by the BRC20 community. 1:11:00 And last but not least, my incredible layer two partner, Citria, who I couldn't be more 1:11:04 excited about teaming up with. 1:11:06 Citria is working on one of the leading implementations of a BitVM zero knowledge proof style bridge, 1:11:13 an execution environment for Bitcoin. 1:11:15 So they're essentially building what I think could become the canonical Bitcoin roll off. 1:11:20 And they have an absolutely incredible team of people backing them up and getting really 1:11:25 creative about how to push this technology forward. 1:11:28 So my opinion, once we have a truly trust minimized bridge, anything is possible for 1:11:33 Bitcoin. 1:11:34 So very grateful to Citria for their work and for supporting the show. 1:11:38 Let's get back to it. 1:11:39 I think also the Bitcoin project will not survive. 1:11:42 If a rival coin has more users, then that will be the new number one coin. 1:11:51 And people will look back on this and they'll say, well, of course that didn't work. 1:11:54 And then they'll look into it. 1:11:56 This has happened many times where something starts off great and then loses its way. 1:12:00 You know, I play the Star Wars episode one, like behind the scenes video for people sometimes 1:12:06 about like when people just start to assume or the fall of Rome or the unsinkable Titanic. 1:12:11 And people think, well, this doesn't look like it's going to fail. 1:12:17 And that's when people get complacent. 1:12:19 And then it does fail. 1:12:20 Do you feel like you get to like a certain point in understanding Bitcoin governance 1:12:23 where you actually just get to start like a little nervous about like it's... 1:12:28 Well, I think, no, there is a lot of rot, I think. 1:12:31 Rot? 1:12:32 Rot. 1:12:33 Oh, rot. 1:12:34 There's a lot of rot. 1:12:35 Something rotten in the state of Denmark. 1:12:37 That's how far the termites have spread or whatever. 1:12:39 Right. 1:12:41 I feel like your average investor is like not thinking about it, doesn't really understand. 1:12:44 Drivechain would introduce more competition among the developers. 1:12:48 So you would say like, OK, Bitcoin Core is going to do this, they're going to do whatever 1:12:52 you think about Operaturn. 1:12:53 Well, you have your own L2 chain, you do whatever Operaturn you want over there. 1:12:57 Of course, a lot of this is complaining from people who don't know what anyone's talking 1:13:02 about. 1:13:03 And so as a result, those type of people, no one should, no one will listen to them 1:13:09 and no one should listen to them and they're not actually going to create, you know, 95 1:13:13 percent of the complaining is not... 1:13:16 Most of that is concern trolling. 1:13:17 Like if people complain about the energy usage of Bitcoin mining or something, they're like, 1:13:21 oh, you can make your own proof of stake coin or whatever and get people to use that. 1:13:25 They're not going to do that. 1:13:26 They just want to say that they care about the environment or whatever. 1:13:29 So when people say, oh, Bitcoin should have... 1:13:33 The Operaturn limit should be such and such. 1:13:35 A lot of those people really have no idea what they're talking about. 1:13:37 They're not going to like go on GitHub and fork Bitcoin Core and make a new L2 chain 1:13:42 that has their own Operaturn. 1:13:44 And if it's really important, then they will. 1:13:46 But the point is a lot of these, a lot of the complaining is insincere. 1:13:49 But a small percentage of it is very sincere and is very important. 1:13:55 So Robin, I think you may have seen this part of the episode or not, but Robin Linus came 1:13:59 on the show and he said, you know, as a store of value, you know, Bitcoin has already succeeded. 1:14:04 But as a payment system, you know, I'm, quote, realistic, I think is the word that he used. 1:14:08 I'm not sure if it's actually going to ever be a truly permissionless payment system because 1:14:13 he's concerned about ossification. 1:14:15 Do you share that concern? 1:14:17 Right. 1:14:18 Well, the soft fork we used to do to... 1:14:20 We didn't do it like once every six months, but we used to do so many that the average was, was like twice a year. 1:14:27 Really? 1:14:27 Yeah, back in 2015, when Drivechain was published, we did three in December, I think. 1:14:32 And they're just gonna get harder and harder and harder to push through. 1:14:34 Yeah, it was 20 months separated when SegWit was first proposed, when it was coded and then finally 1:14:42 activated. That was 20 months. And then the only thing we've, that was back in 2017. I mean, it seems like only 1:14:50 yesterday, but you know, you're like, in college now or something. You were like, I don't know, like how old you were, you 1:14:56 are young, you weren't back in 2017. It seems like not that long ago. But that was, we had lots and lots of soft forks. 1:15:03 And then we had SegWit and then we had Taproot. And do you want to guess how many months it was separating? It was 1:15:07 January 2018, when it was Taproot was first Bitcoin dev. And then I believe it was 46 months later, in November 2021. 1:15:19 Do you think that's the likely outcome? I mean, do you think that that's like the future that we're headed toward? Eli 1:15:23 Bensonson also said the same thing. 1:15:24 2021. And now it's 2025. So we've had four years with nothing. Now people say CTV. Even that would be a shame because I 1:15:34 think Jeremy Rubin had coded it in 2019 or something, but I interrupted you. 1:15:40 I think 2017, maybe he even got started. No, no, you're right. Maybe something like that. 1:15:44 I think he has like timelines of like when he had the idea, when he had the BIP written, when he had the code written. I 1:15:50 think the code was written, maybe earlier, but I think 2019 at least. 1:15:55 I saw Antoine, Antoine put out an email to the mailing list, I think yesterday, where he was like, let's start having a 1:16:01 serious discussion about CTV. And let's talk about the issues. Do you feel bullish on CTV actually happening? 1:16:08 As I said, in my view that this is there, we have all these derangements. And one of the derangements is that we can't 1:16:14 soft fork. The soft fork is this gift, you know, from God, and we should be on our knees saying so thankful that it exists 1:16:21 at all. And it's amazing. This is one of the things that Robin Linus talks about, about how it's actually the blockchain 1:16:28 model has this advantage that you can upgrade it without developer keys. And that is, and he was, I think recently, he was 1:16:36 saying he's kind of frustrated with BitVM doesn't inherit, the blockchain is so cool. BitVM does not yet have a way to 1:16:43 upgrade without, which kind of makes it less, I don't want to like misquote him or whatever, but it kind of, it makes it 1:16:50 not as cool. Because if you, you either have to stick to one version, which in software, this doesn't seem, anyway, that's kind of a 1:16:58 distraction. Because the CTV question is, we should be doing all these soft forks, we should not have this attitude that they are 1:17:05 something we debate so much. The fact that we have to discuss them for so much is just feeding the hysteria. Yeah, it's, it's 1:17:16 like we're in the Middle Ages, and people believe in witchcraft, and they're burning, burning witches alive. And then it's kind of 1:17:24 like, should we, like, just even to debate is to give more attention and have people thinking about, oh, what are the risks? Is Paul 1:17:34 right? Is Paul trying to mislead us about the witches? Maybe they have him under a spell. Maybe Paul's a witch. 1:17:39 Wait, so okay, so when did this proposal become BIP300/301? And I want to hear the whole story of the cultural, how the 1:17:48 culture responded to this proposal over time. 1:17:53 What happened was SegWit was big when I first proposed it. And I was, you know, the block size war was very uncomfortable 1:18:00 psychologically. So of course, I, the last thing I was going to do- 1:18:04 Even though you think forks should be less psychologically uncomfortable? 1:18:08 I will get to that. I think I may have miss, I may have spoken in not the clearest way, because the word hard fork refers to two 1:18:16 different things. And I have flipped back and forth, unfortunately, but it's, it wasn't me who screwed up the definitions. They were 1:18:24 already screwed up when I got here. But the hard fork actually refers to having BTC, one single coin blockchain, upgrade in a 1:18:37 non-com, you know, in a way that everyone must upgrade, upgrade their software. And there is no actual, like a fork in the road has 1:18:44 two paths, like a culinary fork has the multiple prongs. But the real hard fork is just a straight line with a point and like a 1:18:52 knot where the hard fork happened. But this makes no sense. What Bitcoin Cash actually did, because BTC survived, and it didn't 1:19:00 die, and there was actually, it's more of what you might call an airdrop or a spinoff altcoin. 1:19:06 Bitcoin Cash is a spinoff, right? Because it changed, and some people went that way, but then pretty much everyone stayed. 1:19:13 Yeah, you needed, you need, there was no, like, philosophically, there was no way to even find the Bitcoin Cash network unless you 1:19:19 got either the new software, or you got the new instructions, which were change a one to an eight on August 1, 2017. 1:19:27 How was this whole situation when the block size wars were happening? How would you describe the discomfort? Tell me about the 1:19:34 discomfort. 1:19:35 Yeah, well, you'd sign in, and you'd go to your favorite site, Reddit, or whatever was big at the time, right? BitcoinTalk.org 1:19:43 was still very big. 1:19:43 Best friends were just like ripped apart. 1:19:46 People were saying very mean things about each other. People didn't care, very few people. One thing I presented in September 1:19:55 2015. 1:19:55 These types of divisions are happening now. Now there's like tons of factions that hate each other. 1:19:59 I wonder if, you know... 1:20:01 Was it a different type of warring tribalism? 1:20:04 There was so much optimism in the earlier part of Bitcoin. 1:20:07 So it was the beginning of tribalism. 1:20:10 In 2014 and earlier, the block size debate was always in the background. And it was always like you could kind of tell people 1:20:18 had a sore spot on it. And some people thought this, some people thought that, and it's kind of bubbling up. But overall, the 1:20:26 sense of Bitcoin was that something really new had been created, and that this was like seeing the beginning of the 1:20:31 internet. And we were gonna see like Pets.com, we were gonna see all these scams. 1:20:35 People said, there was that guy where that guy introduces the shitcoin word, where he's like, we're gonna see all this stuff. 1:20:41 And people said, the early days of the internet were like this. 1:20:44 And you really thought, we're gonna live in a world where there's not gonna be any spam, because you're gonna have to pay to 1:20:50 send email. So the whole internet will get this layer of competence and economic balance. 1:20:59 But there was like a unity, it sounds like there was a strong unity amongst Bitcoiners, where the tribalism hadn't hit yet. 1:21:07 The strength in numbers, verus in numerous, that was on the Caucasus coins, the physical coins you could buy, like a 1:21:15 collectible that had Bitcoin. And a lot of people were very helpful and friendly, the newer people. 1:21:20 So there was a lot of optimism, and then the block size war created this growing rift, and this growing, kind of like... 1:21:31 Now that's like the world we live in, though. I mean, now we have so many warring tribes. 1:21:35 It's much worse now. But each year, I thought it can't possibly get any worse than the year. 1:21:39 And in fact, there's a post... 1:21:41 It just keeps getting worse. 1:21:42 I think July 2015, I wrote a post about betting on a prediction market on which we can bet on. 1:21:49 Would the exchange rate be higher with small blocks or large blocks? 1:21:53 You should be like, will CTV be activated in 2026? 1:21:56 So I think on Polymarket, there is one. 1:21:58 Is there a CTV on Polymarket? 1:22:00 Polymarket did what I always... I told Roger, you could do like oracle.bitcoin.com, and you could just quickly make a centralized website and just do it all. 1:22:10 And my idea is... Truthcoin is slightly different from that. 1:22:13 It is like a much hardier weed that can't be destroyed, and it's supposed to attack these very subversive questions. 1:22:20 But Polymarket is much more like... It's not as serious, which is a good thing. 1:22:28 It has more of a sense of humor, and it can do... 1:22:33 But yeah, there was this optimism, and then the block size war was very unpleasant. 1:22:37 Mike Hearn had written about Bitcoin was a failed experiment to New York Times and stuff, and he had rage quit the project. 1:22:47 He wanted to do Bitcoin XT, which is this 8 megabyte hard fork. 1:22:50 Gavin Andreessen, who was the guy in charge, Satoshi himself had handpicked Gavin to be in charge, 1:22:55 but Gavin wanted to be a large blocker, but other people didn't agree with him. 1:22:59 So there was this tension in that way of like, you know... 1:23:03 Where do you fall on the debate? 1:23:04 I was a small blocker the whole time. 1:23:07 One reason was I always believed that we would have these sidechains, and we would scale in layers anyway. 1:23:12 Right, you were always layer scaling, Maxi. 1:23:15 I always thought we would have a large block L2. 1:23:17 So I thought you can put a large block L2 optionally on a mandatory small block L1. 1:23:22 That's the direction that we're headed. 1:23:24 And you cannot do... It doesn't make sense to do the reverse. 1:23:27 You have the mandatory L1 block be huge, and then a small optional L2 block that doesn't make any sense. 1:23:32 No, that makes sense. 1:23:34 The other thing was the... 1:23:35 Did the small blockers like Drivechains more than the big blockers? 1:23:38 Well, I'll get to that. 1:23:40 The small block argument had more of an intellectual sophistication to it. 1:23:44 The small blockers? 1:23:45 Yeah. 1:23:45 The large block was just like, we'll change this small number to a larger number. 1:23:49 We'll impose these costs on everyone who runs a node, and we'll just kind of hope for the best. 1:23:56 Okay. 1:23:57 And that approach... 1:23:57 It was like a simple argument. 1:23:59 It had much... It had a lot going for it. 1:24:01 But the fact that it was simple made it seem not as... 1:24:07 It just made it seem like you didn't want to be associated with it. 1:24:09 Okay. 1:24:10 It almost seemed embarrassing sometimes. 1:24:12 Okay. 1:24:12 Even though there was a lot of true merit behind it. 1:24:15 There is this feeling like there's some shame about being a big blocker. 1:24:19 Right. Well, that's because they... 1:24:22 That's because they lost. 1:24:23 ...bet big and lost. Yeah. 1:24:24 And they didn't just lose. They really... 1:24:25 But it's not just that they lost. 1:24:26 I talked to many of them, and they were certain... Everyone was certain they would win. 1:24:30 Throughout 2015, 2016, everyone was certain we were right and they were wrong. 1:24:33 But even before they lost... 1:24:34 Why would you even want to talk to them? 1:24:35 People would say that to me on both sides. 1:24:36 Even before they lost, there was this sense that there was something a little simplistic 1:24:41 about the argument. 1:24:43 Certainly. Yeah. That's why the more technical people, like what were called the Bitcoin 1:24:47 wizards, they were all small blockers. 1:24:51 The IRC. 1:24:53 Precisely, yes. 1:24:54 Yes. Okay. 1:24:55 And but it was more of like running a node is annoying. 1:25:00 I'm responsible for syncing the whole blockchain. 1:25:03 I got to download and store and then serve it back. 1:25:07 So there was this kind of like... 1:25:08 Like technical people were actually dealing with node running were... 1:25:12 Back then, of course, there weren't really... 1:25:15 Back then, the exchanges would get hacked left and right, and everyone would lose all 1:25:18 their money. 1:25:19 So people didn't keep their money on exchanges. 1:25:21 Right, right. 1:25:22 And everyone who did lost all their money. 1:25:25 Okay, so... 1:25:26 So you were running a node, mostly. 1:25:29 You would run Electrum. 1:25:30 If you were on Bitcoin. 1:25:31 You would either run like Electrum or Bitcoin Core or like two or three other things. 1:25:35 You had to run a node. 1:25:36 You couldn't just like have a Trezor or whatever back then. 1:25:39 That didn't exist. 1:25:41 Right. 1:25:41 When did that revolution happen? 1:25:43 When did the cold storage like Trezor ledger revolution happen? 1:25:47 I mean, I don't know. 1:25:49 I wasn't really interested. 1:25:50 I always think hardware wallets are like not a great idea. 1:25:52 No offense to them. 1:25:53 They're like way better than the exchange. 1:25:56 I mean, that feels like a significant upgrade. 1:25:57 I would say like 2018, 2019 would be like my guess. 1:26:00 Okay. 1:26:00 Is when that... 1:26:01 The ledger leak, I think, wasn't that like 2019 or something? 1:26:04 Okay. 1:26:04 All right. 1:26:05 Okay, fair. 1:26:05 Exactly. 1:26:06 So the Drivechains... 1:26:07 So Drivechains was initially... 1:26:08 So this was... 1:26:10 I'm curious. 1:26:11 So this was well-received at first. 1:26:13 Drivechains were sort of like that. 1:26:14 It made it to the top of R slash Bitcoin. 1:26:16 It was even pinned there for a while. 1:26:19 Of what? 1:26:19 Of what? 1:26:20 R, Reddit, the subreddit. 1:26:21 Oh, okay. 1:26:22 That was the biggest place for news. 1:26:24 Okay, Reddit, Bitcoin Reddit. 1:26:26 And then I got out of the way for SegWit and Lightning. 1:26:32 And so I kind of didn't really pursue the issue. 1:26:34 So you let it go for a minute. 1:26:35 But then SegWit was not... 1:26:39 I did present at Scaling 3 again because I was asked to. 1:26:42 And about scaling with sidechains. 1:26:44 And I gave what I thought was a very good presentation. 1:26:47 But SegWit still had not shipped. 1:26:50 Because you asked about the whole history of it. 1:26:51 Right. 1:26:51 And these are long, boring war stories, perhaps. 1:26:55 But SegWit, it was... 1:26:57 We had Scaling 1 in 2015. 1:26:58 Then at December 2015, Scaling 2, everyone agreed that SegWit would be... 1:27:04 You know, I say everyone agreed. 1:27:05 But the feeling of the room was that we'll do SegWit so that we can do Lightning. 1:27:09 Right. 1:27:09 And then everyone seemed in agreement on that. 1:27:11 Okay. 1:27:13 Someone said... 1:27:14 I don't know who this was. 1:27:15 Someone threw out... 1:27:17 Someone asked, when do you think SegWit will be done? 1:27:19 And someone said, like, April 1st, maybe. 1:27:25 So April 1st came and went. 1:27:27 But SegWit, the code wasn't finished. 1:27:30 Okay. 1:27:31 Software code always takes much longer than you think, of course. 1:27:33 Right. 1:27:34 And this was seen as, like, going back on an agreement or something. 1:27:40 Because by now, these two camps were paranoid. 1:27:44 You know how this is, I think. 1:27:45 Because you seem, like, you know, much smarter than the people who were around at the time. 1:27:50 They were all, like, a bunch of weird, autistic, crazy, emotionally weird, neurotic people, 1:27:55 of course. 1:27:55 Okay. 1:27:56 But, you know, this is what we're dealing with. 1:27:57 Right, right. This is what we're dealing with. 1:27:59 We're dealing with, like, these weird people, of course. 1:28:02 Right. 1:28:02 Which is fine. 1:28:03 Big winners do attract neurotic, paranoid people in general. 1:28:06 Yeah. 1:28:06 Exactly. 1:28:07 Yeah. 1:28:07 We're gonna, you know, fight the state. 1:28:11 And we're going to, like... 1:28:12 Right. 1:28:13 Trust no one. 1:28:14 Yeah. 1:28:15 And we're going to replace the existing financial infrastructure. 1:28:18 So... 1:28:19 Okay. 1:28:19 They were... 1:28:22 In situations like this, people have very uncharitable interpretations of each other's 1:28:26 behavior, right? 1:28:27 Right. 1:28:28 So they were, like, complaining. 1:28:30 And then they flew these people, Matt Corallo and Adam Back and some other people. 1:28:33 They did this, like, Hong Kong agreement. 1:28:35 Mm-hmm. 1:28:36 They said... 1:28:37 Oh, actually, that might have been... 1:28:38 I might be telling a story slightly out of agreement. 1:28:39 The Hong Kong agreement. 1:28:40 Was that, like, when we're going to implement SegWit? 1:28:42 What was the Hong Kong agreement? 1:28:43 Actually, I think that might have been... 1:28:45 I don't want to say now because I can't quite remember, but people can look it up. 1:28:49 But there was a timeline that involved... 1:28:52 What I want to emphasize is that SegWit was not ready on the April 1st date. 1:28:57 Okay. 1:28:58 And, in fact, we spent all of 2016 kind of in limbo. 1:29:02 And Ethereum went from being, like, this very, very tiny nothing project to, like, 1:29:06 gaining a lot of momentum at the time. 1:29:08 So by the time Scaling 3 happened, which was in October of 2016, SegWit still hadn't shipped. 1:29:15 And I'm, like, still just, like, waiting to give my little PowerPoint presentation. 1:29:18 There's no Drivechain code or anything. 1:29:20 And you had basically paused, like, 1:29:22 real development of Drivechains because you were waiting for SegWit to happen. 1:29:25 There's, like, a little bit of, like, tinkering for fun. 1:29:32 Sure. 1:29:33 No BIP, no... 1:29:34 This is, like, a common thing. 1:29:35 Jeremy Rubin was saying the same thing with CTV. 1:29:38 He went through, like, there was, like, a whole period where it's, like, 1:29:40 he wasn't really supposed to, like, push anything forward with CTV 1:29:42 because he was waiting for, I think it was Taproot. 1:29:45 Probably Taproot. 1:29:45 Right, yeah, exactly. 1:29:46 In fact, he did a lot of the legwork or whatever to activate Taproot, possibly because... 1:29:55 But, you know, to get back to our little story, 1:29:58 I told you it would be a long, boring war story type situation. 1:30:01 So, SegWit is not even shipped until the hackathon after Scaling 3. 1:30:09 One of the miners, the ViyaBTC miner, with 9% of the hash rate, 1:30:13 he showed up and the schedule, if you open the program, I have a blog post about this, 1:30:19 there's only, like, three talks in the Scaling 3 program that are actually about scaling. 1:30:24 One of them is mine. 1:30:25 But the ones that are, they are kind of, like, there's no software out. 1:30:31 They're very academic and kind of, like, theoretical. 1:30:34 Okay. 1:30:34 So, if you thought this Scaling 3 would be like Scaling 1 and 2, 1:30:39 you were a little disappointed because Scaling 1 and 2 are kind of like a war summit. 1:30:44 They're kind of like Zelensky and Putin are going to meet and we're going to have a bunch of 1:30:49 UN people with guns there to make sure no one kills anyone, right? 1:30:52 And we're going to kind of, like, see if we can talk this out and we can get something to happen. 1:30:57 But Scaling 3 is, like, this academic, 1:31:00 this, like, cryptography and stuff about privacy. 1:31:02 The whole first half of day one was about privacy. 1:31:05 So, it wasn't even about scaling. 1:31:06 So, that guy actually turned and rebooked his flight and left immediately to signal, 1:31:11 to change his client to Bitcoin Unlimited, which had 9% of the hash rate. 1:31:16 At the time, we used BIP-9 activation, which required a 95% hash rate threshold. 1:31:23 So, right as they're about to finally ship SegWit after almost a year of work, 1:31:27 They couldn't get minor contenders. 1:31:28 They now, well, my guess, I don't know if this is the case, 1:31:33 but my guess is that the ViabTC guy didn't even know about or didn't understand the 95% 1:31:40 threshold or how it would be perceived. 1:31:42 But, of course, this was psychologically traumatic to the developers who were working on SegWit. 1:31:48 They thought, we worked on it this whole time, now what are we going to do? 1:31:52 This is when the soft fork became the political football, 1:31:54 and it's never lost that status, unfortunately. 1:31:58 We had to wait all the way from 2016 through 2017 for it to activate. 1:32:03 The miners did the New York agreement. 1:32:06 They announced that at consensus in May of 2017, which said that SegWit will activate 1:32:15 on August 1st, and then there will be a two megabyte block size increase, 1:32:21 2XL1 megabyte block size increase, three months later in November. 1:32:26 Everyone hated all this. 1:32:27 So, this is all, why does this have to do with Drivechain? 1:32:30 Drivechain is kind of miner-centric. 1:32:31 That's how it stays decentralized, and it doesn't have any of these update keys, 1:32:35 and it doesn't have any of these gimmicks, 1:32:36 like it's not secretly multi-sig beneath the hood or whatever. 1:32:39 But it's inherently related to the miners. 1:32:42 Each block is like a vote. 1:32:44 Each block is like a cross-chain confirmation. 1:32:47 So, it's not like they literally vote. 1:32:50 But in the same way that each block confirms a Bitcoin transaction, 1:32:53 you need a lot of blocks to move the money from the L2 chain back to the L1 chain. 1:33:00 And so, it just uses miners only, and it pays the fees to the miners. 1:33:04 So, the security model is that the miners would farm up the L2 chains for money. 1:33:09 So, since my design was very miner-centric, 1:33:11 miners became unbelievably unpopular during 2017. 1:33:15 And this is also the origin of the Stratum V2. 1:33:18 That's interesting. 1:33:19 Where people say, we're so worried about miners misbehaving, 1:33:23 we're so worried about MEV, the UASF, 1:33:25 to activate SegWit on a bit more or less the same day, in spite of the miners. 1:33:30 So, you're saying that the fact that Drivechains maybe was perceived as being sort of like, 1:33:34 you know, being miner-supportive. 1:33:36 Maybe that's not the way it should be. 1:33:37 In league with the enemy. 1:33:38 Right, in league with the enemy. 1:33:40 This was around the time that miners were becoming unpopular. 1:33:43 Which they kind of still are, right? 1:33:44 Right, they have never recovered. 1:33:46 And they are also like the large blockers. 1:33:48 Even though they have never done anything wrong, the miners. 1:33:52 The irony is SegWit activated before the UASF. 1:33:56 It was almost certainly because of the threat of the imminent UASF, 1:34:00 but miners actually kind of flinched and activated it via BIP-9 two weeks before. 1:34:06 You're saying prior to this moment, basically, 1:34:09 where this 95% threshold wasn't met by the miners when SegWit was attempting to be activated, 1:34:14 you think that's when the minor unpopularity started? 1:34:20 Well, certainly. 1:34:20 Then they signed, the New York agreement was in May 2017. 1:34:25 And 83% of the hash rate had signed this. 1:34:28 And they said, we want SegWit to activate, 1:34:31 and then we want a hard fork from one megabyte to two megabytes on L1. 1:34:37 But this is outrageously unpopular. 1:34:39 And people thought, this is now we're hostage trading for SegWit, 1:34:43 which is something we thought we would have already had by now, 1:34:46 which we think we can get anyway with UASF, which they did. 1:34:50 And then it doesn't make any sense, the three-month delay. 1:34:52 It's like you have a hostage, you're going to exchange hostages. 1:34:56 You get all your hostages back, and then three months later, 1:34:59 you're going to release the, you know, like it was a stupid idea. 1:35:02 And that's why SegWit2x didn't work. 1:35:03 It was one of the many bad ideas of the large blockers. 1:35:08 They were not as skilled technically or, you know, politically. 1:35:15 So SegWit2x fell apart, Bitcoin Cash, 1:35:18 Roger then made a video saying that he supports Bitcoin Cash, 1:35:21 and he's going to support Bitcoin Cash with Bitcoin.com. 1:35:23 Bitcoin Cash, meanwhile, had already accidentally, 1:35:25 you know, I don't know about accidentally, 1:35:27 but it wasn't part of any BTC plan. 1:35:30 It had been created on the same day that SegWit activated, 1:35:33 coincidence or there was no particular reason. 1:35:36 But it had already been in limbo this whole time. 1:35:38 This now kicked off the block size war, which was, 1:35:43 now things got even worse, because now you have BCH versus BTC. 1:35:47 And now people can make money or lose money on Bitcoin.com. 1:35:50 Maybe people get confused about the brand. 1:35:52 So this triggered a whole new period of time. 1:35:55 But right before all this happened, there was in 2017, 1:35:59 as I mentioned to you before, someone, I believe it was 1:36:04 one of the moderators of, I think it was Thamos, 1:36:09 he revived, he had a Luke Dashjr. mailing list post about Drivechain. 1:36:14 He revived it and he said, 1:36:15 we can get small blocks on L1 and large blocks on L2. 1:36:19 And he, with the moderator's special power, 1:36:23 he stuck it on top of our Bitcoin for like, 1:36:26 I don't know, maybe like 10 days or something. 1:36:28 So they became more popular than, 1:36:32 unfortunately, after Roger Ver and the large blocker people split off, 1:36:39 those people would have been like maybe what you might say, 1:36:41 customers of Drivechain. 1:36:43 But now everyone thinks we don't need a compromise, 1:36:46 because everyone thinks they're going to win. 1:36:47 And even Roger Ver thinks Bitcoin Cash will flip BTC when the fees go up. 1:36:52 So now no one's interested in a compromise anymore. 1:36:55 Everyone just, and then even still, 1:36:57 when Bitcoin Cash was kind of defeated by BTC, 1:37:01 then people thought, well, we don't need, 1:37:06 this proves that Bitcoin is the best and we don't, 1:37:09 and that everyone else, every, all variants of it are simply wrong. 1:37:13 And that triggered this long period that lasted us all the way to Bitcoin Season 2, 1:37:16 when people finally were ready to accept 1:37:18 that it might be possible to have an improved idea over, 1:37:23 over hundreds and hundreds of people working for years 1:37:25 to like work on ZK knowledge. 1:37:28 So originally, when all the block size wars were happening, 1:37:30 you kind of took a backseat. 1:37:32 I mean, you had put out this paper, people were talking about it, 1:37:34 but you weren't like really actively, it wasn't a BIP yet. 1:37:37 Had you even, you had likely hadn't even submitted it as a BIP. 1:37:40 Right, I didn't do that until I submitted, 1:37:42 had some kind of version that was like really badly written, 1:37:44 and I'm like very ashamed of. 1:37:46 But then I think it was February 2018, 1:37:48 I had cleaned it up and assigned, 1:37:51 got the numbers assigned by Luke or something that may be correct. 1:37:54 And then did Luke help you write an activation client? 1:37:59 Did Luke work for you at one point? 1:37:59 There was a pull request in 2023, 1:38:03 Luke got like hacked and like all his Bitcoins were stolen or something. 1:38:06 That's right. 1:38:07 So then he was like asking around for work. 1:38:10 And I said, well, we have, this was the truth. 1:38:13 We had done the tinkering with, 1:38:16 as you mentioned with Jeremy Rubin, 1:38:18 you know, you kind of like, you write an idea, 1:38:20 you write a blog post informally, then you write a BIP, more formal, 1:38:23 then you write the code. 1:38:25 All the time you're kind of learning things about like, 1:38:28 it's getting a little bit more specific. 1:38:30 You don't have it all figured out on day one, it's not possible. 1:38:32 Right. 1:38:33 It's kind of like you start building a house, 1:38:35 you kind of like don't really know, like you don't even know, 1:38:38 you're not going to say, what art am I going to put on the walls? 1:38:41 Like you need to wait and see like what the house looks like. 1:38:44 Details emerge as you're building this thing. 1:38:45 Precisely. 1:38:47 What kind of couch am I going to buy? 1:38:48 Like you don't really know, like on day one, it's not possible. 1:38:52 So we're fleshing it out a little bit more. 1:38:55 But we've just been tinkering with the code on an old version of like Bitcoin 16.99, 1:39:01 which is like from 2017. 1:39:03 So I've never like rebased the code. 1:39:07 In other words, we had a version that worked with fake play money. 1:39:12 But it's a fork of Bitcoin Core from 2017. 1:39:14 And now this is 2023 that you're asking about. 1:39:19 And so I was like, well, Luke Dashjr. is an expert in Bitcoin. So maybe he can either like help us rebase or do the pull request. And he wanted to do the pull request. So then he did the work in progress pull requests. But like then it became... He just wrote it, but he never like publicly like supported it or like was like into it. He wasn't an advocate. He just wrote it. I would say that I'm not sure. I think he's sort of against it now. 1:39:46 But actually he had supportive quotes of it. Like as I mentioned, the thing that they most stickied back in 2017 was from Luke talking about how you can get small and large blocks at the same time. 1:39:55 And Luke also, I think he correctly understands that there's no risk to Drivechain because we already have, as he said, this is like his quote, more or less. 1:40:05 He says, we already have merge mining and we already have the ability to just send coins to a group of people or into a certain... You can send your coins into the abyss if you want. So Drivechain does not actually add any new type of risk. 1:40:21 Okay. Interesting. 1:40:51 And if there's too much SPV, it will kill the project. To me, that makes no sense at all. 1:40:54 We're going to come back to this USF because that's like I feel like later a more advanced part of the story. 1:40:59 Okay. So the BIP happens. The BIP is written. At what point... What's the response to this like official formal BIP? Like what was like the height of Drivechains being discussed and talked about and debated? 1:41:11 Well, yeah. After Luke's pull request, I think it did trigger the... Now we have... You can see that we have people who will react like when you get close to Bitcoin Core, there's like an immune system sort of response. You see with the up return and with CTV. 1:41:31 Like immune system response, like a negative immune system response? 1:41:35 Just like an intense skepticism, I would call it. 1:41:37 Anytime Bitcoin Core developers get involved or make decisions or do things, there's all of a sudden like criticisms. 1:41:43 Yeah, which is a good thing. 1:41:45 That's somewhat healthy. 1:41:46 Yeah, that is a good thing. 1:41:47 That's healthy. 1:41:48 Yeah, there's nothing wrong with that. 1:41:49 Right. 1:41:50 It's a sign of how prominent it is. 1:41:53 Right. 1:41:54 But yeah, in this case... 1:41:55 And it's a sign of, you know, I mean... 1:41:56 Then it became like incredibly talked about. 1:42:00 So after the pull request... 1:42:01 That was like late August. 1:42:03 It was like September of 2023. 1:42:05 Then it had this huge explosion of interest and controversy and just completely fabricated nonsensical lies. 1:42:13 I was here for this part. 1:42:15 This I remember. 1:42:16 I was sort of vaguely watching this. 1:42:18 Okay, that makes sense. 1:42:19 So it was end of 2023. 1:42:21 The pull request happens. 1:42:22 This is post him getting hacked. 1:42:24 And then you basically hired him to do this. 1:42:26 And then there was a lot of... 1:42:27 This was right after because I think it was like April or something in 2023 that I first started talking to him, Luke, about this. 1:42:33 And we had just raised LayerTwo Labs had just been created in December of 2022. 1:42:39 And was LayerTwo Labs going to be like the... 1:42:42 What was the intention behind LayerTwo Labs essentially? 1:42:45 Well, yeah, a lot of people are very concerned about the direction Bitcoin was moving in. 1:42:50 And it's basically the fact that you can't even talk about it is a big part of the problem. 1:42:56 It's like the culture makes it difficult to discuss all these derangements and things. 1:43:00 But, yeah, we had a lot of, like, former lightning enthusiasts and people who are interested in the Drivechain idea. 1:43:07 So this is a group of people to basically try to advance, create Drivechains, like create the L2 chains and make them be very good and high quality user experience and give people privacy, give people scale, give them the ability to do the EVM. 1:43:26 The mission of LayerTwo Labs was like broad, like we need to scale Bitcoin. 1:43:30 Basically, it wasn't necessarily dependent on Drivechains. 1:43:34 I would say that it is focused on Drivechains. 1:43:37 No, the business is not focused. 1:43:40 Was there ever a Drivechains dependency in Layer Labs' mission? 1:43:48 Like, did you need those tips to pass? 1:43:50 I wouldn't describe it like that. 1:43:53 No, we do not. 1:43:54 No, no. 1:43:55 But I still think we want – I didn't invent – it's not like I invented Drivechain in order to make – so right now Litecoin, since – because I actually tinker with the software and stuff, too. 1:44:09 So I'm not like Jeremy Rubin. 1:44:11 It's kind of a lot to explain. 1:44:14 But basically what I'm trying to get at is I didn't – right now Litecoin kind of wants to activate BIP300 on their own thing and have their own Drivechains. 1:44:24 Are there any chains that have BIP300 activated? 1:44:27 No. 1:44:28 Well, that's partly because the CUSF client is new. 1:44:32 So this is where it's a little bit difficult to explain. 1:44:36 But just because something is the idea, it doesn't mean that there's activation client. 1:44:40 So even if you write the activation client, that is like a – traditionally that would be like a version of Bitcoin Core that has a couple lines changed. 1:44:47 Right. 1:44:48 They add CTV or something. 1:44:49 Right. 1:44:50 Bitcoin Core, however, is constantly updating their client. 1:44:53 OK. 1:44:54 This is what's called rebasing or rebase hell sometimes. 1:44:57 OK. 1:44:58 Because they are changing the Bitcoin Core. 1:45:01 Right. 1:45:02 Sometimes they have to because of these CVEs, which are secret bugs that only they know about. 1:45:06 Right, right. 1:45:07 And so they have to fix them and they also have to lie about what they're doing. 1:45:10 Right. 1:45:11 Because they can't say – 1:45:12 Because it's like the military. 1:45:13 There is a bug here where – exactly. 1:45:14 Yeah. 1:45:15 Where someone – you can take everyone's money. 1:45:16 Right. 1:45:17 And so they have to fix it and wait for enough people to upgrade and then disclose it two years later. 1:45:22 So you kind of have no choice but to use the latest version. 1:45:26 And you also – it's – you have to – if you make it – this is why – so we made it off of the old 2017 version, but I never rebased it. 1:45:36 Because as soon as you rebase it, you have to keep rebasing it forever. 1:45:39 Right. 1:45:40 And you're just being drained of life vampirically by Bitcoin Core. 1:45:42 Well, and also wouldn't whatever old version inherit any of the bugs that – 1:45:45 Yeah. 1:45:46 Our old version, of course, would have had any bugs that – and, of course, it didn't have – 1:45:49 And those bugs do eventually become public when Bitcoin Core says what they are. 1:45:52 Yes. 1:45:53 Right. 1:45:54 Of course. 1:45:55 Precisely. 1:45:56 Yeah, yeah, yeah. 1:45:57 OK. 1:45:58 So you kind of – you even need to – if you have a fork of Bitcoin Core, you need to upgrade basically. 1:45:59 I mean if you have like a Litecoin. 1:46:01 Yes. 1:46:02 Yeah. 1:46:03 I think Litecoin was just a patch set on – and I think it's – that's very smart when it was to say we are just Bitcoin Core plus this list of changes. 1:46:11 You know what I mean? 1:46:12 It's like we are – 1:46:13 Yeah. 1:46:14 It makes sense. 1:46:15 It makes sense. 1:46:16 OK. 1:46:17 But the point of all this is I didn't really invent Drivechain to make Litecoin be the number one winning coin and destroy Bitcoin. 1:46:20 Well, of course. 1:46:21 Of course. 1:46:22 It would be kind of interesting to just like see it all or to see it in action. 1:46:25 Of course. 1:46:26 Yeah. 1:46:27 And I don't think it would destroy Bitcoin overnight or whatever. 1:46:29 No. 1:46:31 LayerTwo Labs was created by people who want Bitcoin to succeed. 1:46:34 So that's – we have people who believe that that would help. 1:46:38 It's sort of like Starkware and OP_CAT maybe. 1:46:40 It's like they want OP_CAT to happen but they're not dependent on OP_CAT. 1:46:43 Right. 1:46:44 They're like of course going to support OP_CAT. 1:46:46 Yeah. 1:46:47 But like I think many of the fallback plans are worse for – are maybe better for the company but worse for Bitcoin. 1:46:54 So we don't want those. 1:46:55 So what are you like most focused on building at LayerTwo Labs or what were you initially most focused on building? 1:47:01 Some of the things that I was determined to bring, the large block L2, which is basically like a very simple blockchain that just has a larger block size so that we could scale to the world. 1:47:13 We could test the performance. 1:47:16 But another thing I really wanted to do is bring privacy. 1:47:19 We have something where it's like uses the similar orchard crate from Zcash. 1:47:28 So you basically have Z addresses that hide the sender, the receiver, and the amount. 1:47:33 That's something that was invented by a lot of people but basically Zcash. 1:47:38 So it's like protocol development of various – like in various ways. 1:47:42 I thought these are very important things. 1:47:45 We need to get people away from custodial stuff that's not good. 1:47:50 We need to get them away from multisig federation stuff that is custodial and kind of just like pretends not to be for some reason. 1:47:57 And we need to get real privacy, a real privacy option. 1:48:02 Because actually we were losing – around the time in 2022, for the previous years, 2020 through 2022, like all this stuff that I was joking before about Bitcoin Uncensored and the Bitcoin user being a crazed drug addict. 1:48:18 It was like they had all these funny characters on the show, like Flocka Felicia and stuff. 1:48:22 They're like fake people and whatever. 1:48:24 It was like really incredible. 1:48:26 Are those on recording? 1:48:28 Can I go back and listen to that? 1:48:30 It's like a secret society. 1:48:32 I'll link to them. 1:48:34 I want to hear the Bitcoin user podcast. 1:48:36 It's like a big Dropbox link or something that has them all. 1:48:39 And it's incredible. 1:48:41 It's one of the greatest pieces of art ever created. 1:48:45 Okay, I need to listen. 1:48:47 I completely agree. 1:48:48 It's unbelievable. 1:48:49 I won't regret it. 1:48:50 Okay. 1:48:53 The darknet markets that were originally – I remember how I first heard about Bitcoin. 1:48:57 I thought, oh, even I'm too late because now we have regular normal people. 1:49:00 In fact, crazed drug addicts, people who are addicted to hard drugs have gotten this to work. 1:49:04 And they downloaded Tor. 1:49:06 So that was like back in 2011. 1:49:08 Now a lot of those darknet markets have switched to being Monero only. 1:49:14 So I was like, oh, Bitcoin is actually losing ground on like a core pillar of its – what makes it unique. 1:49:21 That's a fair thesis. 1:49:22 It makes it special. 1:49:23 Right. 1:49:24 You're like we need privacy or we're going to lose people to Monero or Zcash. 1:49:28 And then once we open the door to, well, Bitcoin is not – I think there's like a night and day difference between saying, 1:49:37 listen, Bitcoin is open source. 1:49:39 We know what the ideas are. 1:49:41 We will aggressively pursue the best ideas. 1:49:44 We will aggressively pursue adoption by 8 billion people as quickly as possible. 1:49:49 Whenever there are problems, we will fix the problems. 1:49:52 What we have today in Bitcoin Core is nothing like that at all. 1:49:56 We have just like basically it's like a hippie garden where people work on their little – some people like to water their cucumbers or something. 1:50:04 And then even to the point where if you don't – it is like pure communism where you can't even introduce a pull request unless you have reviewed other people's pull requests, even if they're all about nothing. 1:50:15 There's no sense in which you sort the ideas based on how important they are to Bitcoin survival. 1:50:23 It's not like – it should really be like a hospital triage. 1:50:25 It's actually much easier. 1:50:27 The take or my observation of Bitcoin Core developers is they prefer to work on stuff that's low stakes. 1:50:33 Of course, that's part of it also. 1:50:35 Yeah, because they just don't want the criticism. 1:50:37 They don't want the attention of working on something that could actually like be meaningfully – like a meaningful change. 1:50:43 When Taproot – the code was done, Peter Weill, who – I mean Peter Weill. 1:50:49 Peter Weill. 1:50:50 Yeah, exactly. 1:50:51 But he refused to discuss activation and he's extremely, extremely intelligent. 1:50:57 He's very popular. 1:50:58 He's very nice. 1:50:59 Beloved. 1:51:00 Everyone loves him, right? 1:51:01 Yeah. 1:51:02 But he refused to even discuss it, activation. 1:51:04 Well, I feel like he has trauma, right? 1:51:06 Of course. 1:51:07 Yeah, they all have trauma. 1:51:08 Yeah, they all have trauma. 1:51:09 Yeah, exactly. 1:51:10 They have trauma from the block size war and from SegWit activation. 1:51:12 I wonder if he'll come back and start to make comments and notes. 1:51:16 Just say this is a good idea. 1:51:18 You know what I mean? 1:51:19 Yeah, exactly, exactly. 1:51:20 That's what we need. 1:51:21 Exactly. 1:51:22 We also need the miners to do that also. 1:51:23 Jeremy Rubin said the same thing. 1:51:24 Miners just say we want more transaction fee revenue. 1:51:26 We want people using OpVault instead of Coinbase Custody. 1:51:29 Right. 1:51:30 We want on-chain. 1:51:32 We want activity that – a more reliable configuration is when you have 8 billion people using Bitcoin every day. 1:51:40 They pay a transaction fee that goes to the miners. 1:51:42 The miners are loyal to the people. 1:51:44 This is a much more reliable configuration than Bitcoin ETF. 1:51:49 Yeah, this is sort of a good opportunity, I think, to talk about the crux of the issue, which is this government's issue, right? 1:51:55 And a question that I ask guests all the time is sort of how do you manage the challenge between, okay, we want decentralization. 1:52:04 We don't want centralized authority. 1:52:06 But we also want to function in governance and how do you institute that in a decentralized way? 1:52:14 Excuse me. 1:52:15 What's your take? 1:52:16 Yeah, I have a lot of thoughts. 1:52:18 I think, first of all, Drivechain would have been better, much better than SegWit or Taproot. 1:52:24 And if we had had it, then, again, you could have – you could afford – you could more easily afford to have a weird L1 monopolist guild that's kind of like a finished product and it's not moving. 1:52:34 Because you'd have different L2s. 1:52:37 So let's say Jeremy Rubin starts L2 with CTV, but he doesn't put APL or whatever. 1:52:43 So you think Drivechain is the solution to governance? 1:52:46 I do. 1:52:47 I think it would be the best solution. 1:52:48 But I have other thoughts, too, that I'm going to share in a second. 1:52:50 Okay. 1:52:51 But I just think – like let's say you want TxHash instead. 1:52:53 Okay. 1:52:54 TxHash is like a little bit of a – 1:52:55 Then you have a TxHash Drivechain. 1:52:57 Either you go to the L2 and you say add this. 1:52:59 Or? 1:53:00 And you say – now you have recourse if they say no. 1:53:02 So now they have an incentive to look into it and say, am I doing what's best for my users? 1:53:08 And if not, they're going to leave. 1:53:10 That's interesting. 1:53:11 So now you have an incentive to rationally look at it. 1:53:13 Right. 1:53:14 So it has nothing to do with – 1:53:15 Architectures can compete. 1:53:17 The L2 – it could not be the way L1 is today, Bitcoin Core, because the L2 would be afraid of losing its users. 1:53:28 Because, of course, most of the coins will be on L1. 1:53:31 Most people are not going to be doing this wacky CTV thing until it's more mainstream. 1:53:35 So the first user – your chain is going to have to have some kind of purpose to exist. 1:53:39 It has to be like the privacy chain, the Zcash privacy chain. 1:53:42 Right. 1:53:43 Payments, whatever. 1:53:44 The payments chain, the Namecoin chain, whatever. 1:53:47 So if your chain is going to be like the cool chain and you have the payments chain and people need CTV for congestion control or something, and you don't add it, now it opens the door to someone. 1:54:02 Some competitor will come in and make a better payments chain. 1:54:04 And it will be exactly the same as yours because it's open source, but you'll have CTV. 1:54:07 Drivechains enables free market ability to create new governance. 1:54:13 You can basically have authentication. 1:54:15 Once you have Drivechains, you can have authentication on Bitcoin, and it doesn't matter. 1:54:19 You could even have, as I tried to just explain, you could ossify the L2, in which case it would be killed off by a competitor. 1:54:25 So even the ossification of the L2 would not be the worst thing. 1:54:29 You would recover from it. 1:54:30 Right. 1:54:31 Right now, Robin Linus is correct to be worried that we could reach a state where we cannot recover from it in time. 1:54:38 Drivechains enables forever exploration without screwing up the base chain, basically. 1:54:44 Right. 1:54:45 The base chain doesn't even necessarily know how many Drivechains there are or what's going on over there. 1:54:50 It doesn't care. 1:54:51 Yeah. 1:54:52 Yeah. 1:54:53 Interesting. 1:54:54 But there are other ideas. 1:54:55 The other one is to rehabilitate what some people would call the hard fork. 1:55:00 It should more properly be called spin-off altcoin. 1:55:03 Okay. 1:55:04 Or the – 1:55:05 Which I think Luke – speaking of Luke – I think people are thinking maybe Luke will create a fork for filtering. 1:55:12 Yeah. 1:55:14 I don't think – but maybe. 1:55:17 What I think we should do is – when people think of hard fork or they think of spin-off altcoin, 1:55:23 they think of Bitcoin Cash, which was the only serious attempt at doing it and which was a failure, 1:55:28 an embarrassing failure that led to people's careers being – 1:55:31 Destroyed. 1:55:32 Destroyed. 1:55:33 Yeah. 1:55:34 And like who knows how many – what Jihan Wu bet with Bitmain's money, like billions of dollars. 1:55:41 I don't know the exact figure but a lot of – 80 percent of it was lost or something. 1:55:46 Yikes. 1:55:47 So huge consequences. 1:55:50 And so people just think of that failure and then they also think of like – 1:55:55 another one that people think of is Bitcoin SV, which is funny because that one is a spin-off of Bitcoin Cash. 1:55:59 It's not even actually a spin-off of BTC. 1:56:01 It's a spin-off of Bitcoin Cash. 1:56:02 But people also think of like Bitcoin Gold, Bitcoin Diamond. 1:56:05 These are frivolities that are not serious and they were just kind of like for fun. 1:56:11 Nonetheless, we should bring – and Bitcoin Cash I think and Bitcoin SV, 1:56:18 they set the precedent that you should name it Bitcoin. 1:56:21 So I don't blame Bitcoin Gold, Bitcoin Diamond. 1:56:24 I would think that this is – again, this is what people would think to do based on the past. 1:56:29 So I'm not advocating what you think. 1:56:31 I have a slightly new thought, everyone in the audience. 1:56:33 Please give me a tiny – because people hear a hard fork and they'll think, oh, this is going to be like Bitcoin Cash. 1:56:39 We're going to divide the community. 1:56:40 Everyone is going to hate each other again. 1:56:43 My view is that those problems are all relatively easy to fix. 1:56:47 You can just say – it will have a new name and just say we'll give everyone – we're giving everyone free money. 1:56:54 Every Bitcoiner is getting new coins on this new thing. 1:57:00 The smart thing to do is say, well, we wish them the best and then secretly sell a little bit of whichever one you're more skeptical of. 1:57:07 Probably retain mostly both of the coins. 1:57:11 My assumption – 1:57:12 Now we have more competition. 1:57:13 Now the competition is back and you restore this idea that if Bitcoin Core passes on CTV and it shouldn't, it might end up – 1:57:22 because it will be them. 1:57:24 They will really be the ones who would be humiliated if someone launches a new coin and then it were to take over. 1:57:29 So that would inject at least a small amount of competition into what is today a monopolist. 1:57:34 I could be wrong about this because I wasn't really there at this point. 1:57:37 But I would assume that when people talk about the pain of the block size wars and this fork, what they were really referencing is the fact that there was major financial – 1:57:47 people must have lost so much money. 1:57:50 What really motivates people is – this is now psychology armchair hour or whatever. 1:57:58 But really people are motivated by envy. 1:58:01 People are not motivated by greed. 1:58:05 They are motivated by envy and by status and by humiliation, relative comparisons. 1:58:12 You compare yourself – who do you compare yourself to? 1:58:14 A subsistence farmer in Ethiopia or something? 1:58:18 You could spend all day thinking about, oh, my life is so much better than theirs. 1:58:23 But you don't – you compare yourself to like someone – yeah, exactly. 1:58:28 You decided like a similarly situated person. 1:58:32 If you work as a doctor and you have – the doctor in the next office is making twice as much money as you. 1:58:40 It doesn't matter that you're making more money than most people have ever made. 1:58:43 You think, wait a minute. 1:58:45 I'm being scammed somehow. 1:58:47 So 2017, a funny thing about that period is that actually right after – like throughout 2017, the price was skyrocketing. 1:58:56 In fact, when Roger in November – when SegWit2x was called off and Bitcoin Cash was like adopted as – 1:59:01 both of them skyrocketed in value in December. 1:59:04 It hit all-time high, first time past 10,000 I think. 1:59:08 So actually, tons of money was made, but more money was made by some people than others. 1:59:17 Yeah, right, right, right, right. 1:59:19 Exactly. 1:59:20 Fair enough. OK. 1:59:21 And this caused an unquenchable rage and despair in – this is part of human nature I think unfortunately. 1:59:28 So when Drivechains was – when this like all of this noise was happening around Drivechains in 2023, when did that start to shift? 1:59:36 I mean like when – was there like a point where you were like, OK, are you – do you still consider yourself an advocate of Drivechains just forever indefinitely? 1:59:45 Or are you feeling like, OK, there's like a – how do we get the conversation about Drivechains going? 1:59:53 Is that an effort for you? 1:59:55 I still think the – we want to keep improving the software. 1:59:59 So even though we have shipped a lot of great software and we have moved completely away from the non-starter, which would have been a version of Bitcoin Core from 2017. 2:00:08 That was always a non-starter. 2:00:10 So that was fun to play with. 2:00:11 OK. 2:00:12 But yeah, we have built a lot of software. 2:00:15 And I also switched the way BIP300, 301. 2:00:19 That is no longer reliant on changing code in Bitcoin Core. 2:00:23 I have used this new thing, the CUSF, C-U-S-F activator. 2:00:27 So I had to change all that around. 2:00:29 That is partly sort of a – partly it is a cynical look at Bitcoin Core and saying they probably won't do any soft forks anytime soon because they can't. 2:00:38 But it's also kind of a respectful thing of saying they clearly are very bothered by this. 2:00:43 So I just won't bother them. 2:00:45 So it's both of those things. 2:00:46 Would you say it's – I remember the first time we met. 2:00:49 I don't remember if we were talking about this on camera or not. 2:00:51 And I brought it up for the first time. 2:00:53 Exactly. 2:00:54 Yeah, you told me. 2:00:55 And you said that you were – so you were like, OK, we actually don't need to have Bitcoin Core integrate this BIP in order to make this possible. 2:01:01 And I sort of interpreted that as – and it sounds like this is sort of what happened. 2:01:06 I interpreted that as you were like kind of surrendering on trying to get Bitcoin Core to adopt Drivechains or BIP300, BIP301. 2:01:13 You were going to move into this new direction. 2:01:14 Yes. 2:01:15 I don't want Bitcoin Core to do it. 2:01:16 Right. 2:01:17 I think that they don't need to do it. 2:01:18 And they are – they have this weird – I mean – 2:01:25 Unfortunately, it gives, I think, a mistaken impression that what Bitcoin Core does is they get all these ideas and then they sort them on merit and they only pick the best ideas. 2:01:35 And in fact, they say that they're a meritocracy. 2:01:38 Of course, most people who say they're a meritocracy are being defensive and obviously they're probably not a meritocracy. 2:01:44 Another vague term, right? 2:01:45 Because the real meritocracy is like a 400-meter dash or something. 2:01:50 Right. 2:01:51 Or a marathon. 2:01:52 Or free market capitalism. 2:01:53 Where there's a very clear metric on who won. 2:01:58 Right. 2:01:59 You don't have to go around and saying, you know, this is – a push-up contest is a meritocracy. 2:02:06 Everyone already knows. 2:02:08 But you laugh, correctly so, because the laugh is – we all already know that it is like it is. 2:02:14 When you have to point it out, it's because it's actually not a meritocracy. 2:02:17 But they don't – as I said, they have this weird hippie garden type of a thing. 2:02:21 So, when the idea doesn't make it in, it looks as though they have like said there's something wrong with it or whatever. 2:02:30 I don't think that's the case at all. 2:02:32 In fact, it's sort of the reverse. 2:02:35 By giving this impression, they have led people to propose soft forks even when we don't even really need them. 2:02:41 Because they think – it's like another person wants to step up to the plate and try to think. 2:02:46 And they think, oh, I think TxHash was kind of created as a misunderstanding of this kind where you would – a rational person who's new and doesn't understand, doesn't have a lot of history in the space. 2:03:00 They would say, oh, CTV was proposed and then considered. 2:03:05 It's not quite as good for ARC, which is a new or more popular thing. 2:03:11 So, what we need is a different version, my new TxHash version, which is slightly souped up. 2:03:18 And TxHash will make it in where CTV did not because TxHash is better. 2:03:26 That is – all that is a mistake. 2:03:28 That is a trap. 2:03:29 Really what's happened is the soft fork process is broken down. 2:03:32 No soft forks will be merged regardless of their – they don't even care. 2:03:36 They're apathetic about the impact on the project. 2:03:39 And, in fact, as you said, they don't even – the bigger it is, the more they don't want to get involved. 2:03:44 And so, yeah. 2:03:45 So, what explained – 2:03:47 They'll merge a bunch of tests. 2:03:48 I don't feel like we really explained this new direction that you explained to me in Denver two years ago or whatever it was. 2:03:55 To CUSF, yeah. 2:03:56 Yeah, exactly. 2:03:57 So, you're like, OK, Core is probably not going to integrate this anytime soon, this BIP300, BIP301. 2:04:03 So, I'm going to do what? 2:04:05 What's the alternative? 2:04:07 Yeah, I think if people understood the soft fork more, they would see why it's harmless. 2:04:09 But, of course, we have to live – we have to take the world as we find it, right? 2:04:12 Right, right. 2:04:13 So, we can do the next best thing, which is just – I told you about the soft fork being opt-in, reversible, etc. 2:04:19 Well, we can basically just have a second piece of software that runs right next to Bitcoin Core that kind of like intercepts some of the messages. 2:04:26 Kind of like the Ordinal's client, which I remember you told me was an inspiration in this design. 2:04:32 In the paper, I put like the Ordinalization of soft forks or something. 2:04:36 Yeah, yeah. Basically, you just build clients on top. 2:04:39 Yeah. 2:04:40 But the difference between Ordinal's and – 2:04:42 It is slightly different. 2:04:43 Yes, it's different. Let's talk about it. 2:04:45 There's an important difference, which is the Ordinal's is kind of more hands-off. 2:04:49 It's run by clients, not by miners. 2:04:51 And you can just kind of like run it, and it will show you which Ordinal's you own and stuff like that. 2:04:57 But this one needs to be run by 51% hash rate, and it will kick back the invalidate block command. 2:05:05 It has teeth. 2:05:06 It will say if someone breaks a BIP300, 301 rule, it will invalidate the whole block and ask the miners to mine on a different block, thus orphaning that block. 2:05:16 So, it has some teeth. 2:05:17 But it does everything that a normal soft fork would do without changing a single line of code in Bitcoin Core. 2:05:23 It's basically a way to actuate a soft fork without changing Bitcoin Core, without changing the underlying implementations. 2:05:30 Basically, you're just asking miners to run the software that would otherwise actuate a soft fork. 2:05:36 And they can even stop running it. 2:05:38 And this is similar to the example I gave earlier where I said we could code 15 soft forks, activate them, and then just kind of like disable them later. 2:05:46 Do you think this is a potential solution to the governance problem? 2:05:50 I think it is. 2:05:51 Although even this I'm kind of pessimistic about overall. 2:05:55 Because miners also don't want to be unpopular, and they also don't want to run things that don't have social consensus, whatever that means. 2:06:03 Yeah, the miners are more concerned with optics than you might think. 2:06:08 Yeah, especially the big ones. 2:06:10 Yeah, which matter. 2:06:11 And it's kind of bizarre because many of the larger ones are really hated, like AntBull, number two. 2:06:17 Yeah, they already have bad reputations. 2:06:19 But it's not like they burst into flames as a result, right? 2:06:23 Right, right, right. 2:06:24 They make their money regardless. 2:06:25 Exactly. 2:06:26 But now they're going public, and so reputation actually does matter a little bit. 2:06:31 You're absolutely right. 2:06:32 And this happens all the time where they just think, we just don't want to be in the press. 2:06:37 Right, yeah, they don't want to be in the press. 2:06:39 Yeah, they have very elaborate comm strategies that mostly revolve around crisis management. 2:06:46 Yeah. 2:06:48 So the CUSF is kind of just saying, here's what would happen in a normal soft fork. 2:06:55 We'll just draw a line around it and separate it into two pieces of software or something. 2:06:59 So it's actually not—it's as safe as—it's really bizarre because it's kind of just a demonstration about why the soft fork is so safe and why everyone should just get over themselves. 2:07:11 The soft fork should be very much regarded as comparable to any other pull request. 2:07:19 Because any pull request could have a horrible bug or something that messes with the software, which is partly why you should not upgrade your Bitcoin client quickly. 2:07:30 The layperson should not. 2:07:32 The layperson should wait for a while to see if an exchange gets hacked or something. 2:07:37 But this is in direct contrast to what Luke believes is happening. 2:07:42 But you should really not upgrade if you don't need to. 2:07:45 Don't upgrade at all, but if you do want to upgrade, just wait and let other people be the first person through the door. 2:07:51 See if anything bad happens to them. 2:07:56 How have people responded to this idea of the ordinalization of soft forks? 2:08:00 Well, I think some people—the right type of people don't like it. 2:08:06 The right type of people? 2:08:07 Yeah, which is—I'm talking about the horrible— 2:08:09 How are you defining that? 2:08:10 These are like the gatekeepers and the dead weight in Bitcoin Core. 2:08:13 You mean like the powerful people don't like it? 2:08:15 Well, I would just say that people who have more prestige than they deserve and they are contributing to this pointless lack of soft forks in Bitcoin and this sort of prestige economy. 2:08:29 So obviously I knew they wouldn't like it. 2:08:32 So the fact that they didn't like it, I was like, perfect. 2:08:35 Hit the bullseye. 2:08:36 That makes sense. 2:08:37 Tracks. 2:08:38 Great. 2:08:39 And I knew Luke wouldn't like it also. 2:08:41 Luke also doesn't like it. 2:08:42 But Luke doesn't—he doesn't view the soft forks as like these plugins. 2:08:45 He has a very black and white attitude towards everything, but also this idea that you either are running a Bitcoin node or you are like are not. 2:08:57 Maybe pun intended. 2:08:58 But you are running SPV client and that those are not only fake but harming the network and that this is misrepresenting you, your view of the network, like your ability to see that the blocks are accurate. 2:09:15 So—but I don't know. 2:09:17 I just think that's insane. 2:09:19 I've asked Luke many different thought experiment questions over the years. 2:09:22 Like let's say we have 10,000 full nodes and then the entire population of India runs an SPV node for the first time. 2:09:28 But we've added. 2:09:29 We haven't subtracted any nodes. 2:09:31 We've just added a bunch of new users. 2:09:33 Then what? 2:09:34 Now the percentage has crossed his magic 80 percent threshold. 2:09:38 And he says, you know, like according to him, that would kill Bitcoin. 2:09:42 And I ask him, so how does that kill Bitcoin? 2:09:44 How is adding all these SPV nodes that were before people were using—running no node of any kind? 2:09:51 And I never get any kind of answer out of him that I can form a kind of coherent worldview. 2:09:59 Maybe he'll go on—maybe people post this clip and he'll post what is going on. 2:10:04 But I can't figure—I try really hard to figure him out sometimes. 2:10:07 I think he's a very interesting guy. 2:10:10 So some people don't like it, but a lot of people do like it. 2:10:14 I'm pretty sure Robin Linus likes it. 2:10:16 I don't want to, like, speak for people who—but I'm pretty sure the OpVault guy, James, who brought the letter, he had a mailing list post about him liking it a few days ago. 2:10:31 Okay. 2:10:32 But these are two—you could argue that Drivechains or the ordinalization of soft forks are both, like, actual structural things that theoretically could fix the governance issue. 2:10:43 Right, and you see that's why the existing governors don't like it. 2:10:45 Because they're real plans. 2:10:46 They're, like, actual real ways that you could potentially affect how governance works. 2:10:50 They right now have, you know, a monopoly on Bitcoin governance. 2:10:55 They have a veto. 2:10:57 And they means Bitcoin core developers specifically? 2:11:01 Yeah, they don't really, like—it is— 2:11:04 And even that is, like, a weird they. 2:11:07 It's, like, you know, because there's, like, gradations of Bitcoin developers. 2:11:10 I mean, you can go—you can see if you want the names. 2:11:13 You can just go on. 2:11:14 The cabal. 2:11:15 The Bitcoin core cabal. 2:11:16 You can just look at who merges the pull requests, who is commenting on the—and just look at when—who replies to the letter and says—I'm talking about the CTV plus checkstick from Stack letter about, like, we need more time. 2:11:30 Or shouldn't those people review pull requests first? 2:11:34 What's your message to Bitcoin core developers? 2:11:36 What's your message to them? 2:11:38 I would say there are two paths. 2:11:42 A rational path, like just doing what's best for the project. 2:11:46 And then there's kind of, like, a selfish path, which is, like, what's good for their own laziness or conflict avoidance or whatever. 2:11:54 And I would say that if they continue to go down the lazy path, which I regard as, you know, which is what has been happening— 2:12:03 Which is probably more—I think it's—I agree. 2:12:05 It's probably more the reputation management thing. 2:12:07 It's in their own best interest. 2:12:08 Conflict avoidance. 2:12:09 Yeah. 2:12:10 But if they keep doing that, they are making the Bitcoin project worse, and they are running the risk of actually—it will eventually accumulate so much scar tissue that it will be possible to replace— 2:12:23 Bitcoin. 2:12:24 The Bitcoin project will go to zero. 2:12:27 Hopefully it will be, like, a hard fork or something and no investors will be affected. 2:12:32 Do you think it could survive forever the way it is, though? 2:12:35 No, we can't—we cannot— 2:12:37 You think ossification will kill it. 2:12:39 Yeah, it has nothing to do with—it's not like—you could maybe compare it to, like, let's have, like, a biological metaphor, you know, where we say all creatures, you know, die of old age eventually. 2:12:55 But let's say we have a new creature that can just live, like, maybe some jellyfish or something can, like, live forever. 2:13:01 I don't know if I heard that. 2:13:02 Didn't I hear that somewhere? 2:13:03 Who knows if that's true? 2:13:04 Like, you know, how would they—how would anyone even know that? 2:13:06 But maybe they know somehow. 2:13:09 You have a new type of organism that doesn't age. 2:13:14 So that could be a little bit like Bitcoin in the ossification conflict avoidant world. 2:13:19 Okay. 2:13:20 So if it was left alone, it would be fine. 2:13:23 But it's not going to be left alone. 2:13:25 It lives in the jungle. 2:13:26 So if there's another organism right next to you that's evolving, it's growing wings, it can, like, breathe fire and stuff. 2:13:32 If Bitcoin doesn't evolve, it will have a competitor. 2:13:35 Yeah, and it can, like, has teleportation and magic and stuff. 2:13:38 Eventually it will—and it's not a case where, like, you stay on the mountains, I'll stay in the forest. 2:13:45 This is all or nothing network effect driven. 2:13:48 No one is going to want to use, like, the lowest coin on coin market cap. 2:13:54 No one is going to want to use that coin. 2:13:56 So that coin will die out. 2:13:57 Then there'll be a next lowest coin, and they're all going to die out until only one survives. 2:14:02 Don't you think, like, the network effects of Bitcoin will be such that, like, even if there is a more technically advanced thing that blows it out of the water and teleports and sprouts wings, like, that won't matter? 2:14:12 I agree with you that the network effects are very important and may keep it alive. 2:14:16 In a way, that would be worse because we would be stuck with an inferior product and no way to improve it. 2:14:21 So in a way, that might be terrible. 2:14:23 It might be good as a Bitcoin investor. 2:14:25 But we would—it would be kind of like, you know, Fed 2.0 in the sense of being unimprovable. 2:14:32 So we wouldn't necessarily want that, even though that would be a very good outcome, you know, Bitcoin taking over and being unkillable and being— 2:14:40 But you're right that network effects help Bitcoin a lot, especially—and, of course, most of the altcoins are scams and terrible ideas. 2:14:49 And most ideas for Bitcoin are terrible also. 2:14:53 So all that's perfectly true. 2:14:55 However, right now, we don't have—you know, even on the store of value dimension, we are, like, maybe whatever it is, less than 1 percent of global money even, global broad money. 2:15:11 So we're less than 1 percent. 2:15:13 In terms of daily active users, we're nowhere near, like, 4 billion, which would be, like, half of the planet. 2:15:19 You know what I mean? 2:15:20 Like, we don't actually have an unassailable advantage. 2:15:23 We're still a speck of dust. 2:15:24 Most normal people that, you know, that I meet, they just think Bitcoin is a scam, a fake idea. 2:15:32 They don't—you know, Bitcoin versus Ethereum versus, you know, Ripple. 2:15:36 They have no idea, and they don't care at all. 2:15:38 So we are not—even though Bitcoin is the king, it's the king of the slums. 2:15:43 We don't have—we don't really have— 2:15:46 Big fish, small pond. 2:15:47 Right. 2:15:48 We don't really have a winning network effect yet. 2:15:52 We do have a big network effect, but we don't—I don't think we have unassailable network effect. 2:15:57 And in particular, people have been getting, like, more deranged over time with the stuff that they talk about, you know. 2:16:02 Even as a store of value, you're saying? 2:16:05 It's not that big. 2:16:07 It's just not—it's not inevitable even as a store of value is your take. 2:16:11 I don't think that you can separate the functions. 2:16:13 I mean, of course, I don't—you could when you analyze them. 2:16:16 It's like when you, you know, you could, like— 2:16:19 The reason I'm framing it this way is because, like, the criticism that I've heard from others is, like, 2:16:23 ossification is the problem because that will keep us from actuating, you know, permissionless payments and, like, you know, and then— 2:16:30 If something else is used for payments, like, imagine a world where all—Bitcoin is worth $100 trillion. 2:16:37 So it's something like maybe half of all the broad money in the world in terms of value. 2:16:42 So we have maybe that's, like, 50x from here. 2:16:46 I don't know exactly what the—it's, like, $2 trillion. 2:16:48 So maybe if we said $200 trillion, it would be, like, 100x from here. 2:16:51 So the price is 100 times what it is today, and that would be, like, almost—that would be, like, almost 100% of world money. 2:16:58 I don't know the exact—no one, I think, knows the exact numbers, but all the value of all the money in the world. 2:17:03 If we 10x-ed twice—so say we're really successful on the store of value dimension. 2:17:10 You know, we wave a magic wand, and that happens. 2:17:12 But it's like the monkey's paw or something, you know, deal with the devil. 2:17:17 Simultaneously, a different altcoin that is not Bitcoin is used for 90% of the actual payments in the world. 2:17:26 And also—right. 2:17:28 You magically set that up, and then you press play. 2:17:31 And maybe it's not a terrible store of value. 2:17:32 Like, I could see a universe where, like— 2:17:34 It would also be open source. 2:17:36 And have decent hard money properties. 2:17:38 And they would have a fixed supply. 2:17:39 You might even have 21 million coins, although none of that would matter. 2:17:42 It would be mined. 2:17:43 You wouldn't—it's not hard to— 2:17:46 It's not impossible that it could be out-competed by something that was just better. 2:17:50 Like, that's something that just was able to be a store of value and payments. 2:17:53 So, yeah, it's not like—maybe it has, like, a very high block size or something. 2:17:57 It's harder to run a node or something. 2:17:59 But it's being used every day by 80% of the—and then you press play. 2:18:04 Well, I think in that world, the price of Bitcoin is going to start to crash. 2:18:08 You know? 2:18:09 Because people will say, what the hell is the point of Bitcoin now? 2:18:13 And they'll be right, you know? 2:18:15 Because what would be the point? 2:18:17 So I don't think that you can just say— 2:18:20 Even though these are three separate functions of money, you— 2:18:24 I don't think that you just—I don't think the conversation is like, it succeeds as a store of value. 2:18:30 They are interrelated. 2:18:31 Yeah, they are interrelated. 2:18:34 Hot take. 2:18:35 All right, well, fascinating. 2:18:37 Okay, so, yeah, so I think—I mean, I feel like we covered, like, quite a bit today. 2:18:42 What time is it right now? 2:18:43 Oh, my gosh. 2:18:44 Yeah, we've been going for, like, an hour and a half. 2:18:46 This was awesome. 2:18:47 Any final words that you want to share about Drivechains 2:18:51 and sort of the story of how Drivechains is evolving? 2:18:54 People can try the software. 2:18:56 We have a signet, play money. 2:18:58 When you say the software, what exactly does that mean? 2:19:01 If you go to LayerTwoLabs.com slash download, you'll see exactly what it means. 2:19:05 You try it out. 2:19:06 You download this software. 2:19:07 It doesn't actually move real bitcoin. 2:19:09 It moves, like, fake signet coins. 2:19:11 Okay, so this is for people to basically test out what Drivechains would be like in an alternate— 2:19:15 What it wouldn't be like. 2:19:16 Is it testnet? 2:19:17 Basically, yes. 2:19:18 It's basically a testnet Drivechain. 2:19:19 Okay, so if you want to experience this world, then you can go test it out on LayerTwo Labs. 2:19:23 That's a way more reliable way of learning about what it does. 2:19:29 I do think it's also reliable in the sense that a lot of people have certain expectations, 2:19:35 or, like, if people think ARC or whatever, anything, you know, BVM, 2:19:40 they think it will be a certain way, but the design will change, 2:19:45 or maybe there will be unanticipated issues, 2:19:49 so I think that people should check the software out. 2:19:53 That's a much better way of learning about what's really happening. 2:19:59 I didn't understand how bitcoin worked until I used the software. 2:20:02 That makes sense. 2:20:03 Yeah. 2:20:04 I studied it for a while, and then I didn't understand, like, confirmations. 2:20:08 I closed—I had the thing open. 2:20:10 I thought it was, like, BitTorrent. 2:20:12 I had, like, the window open to collect six confirmations, 2:20:16 and I was like, okay, good, I have six. 2:20:18 Then I waited so I would have, like, eight or nine, a couple extra, 2:20:21 and then I closed, like, the window and went to sleep, 2:20:23 and then I opened it the next day, and then it was, like, 200 confirmations. 2:20:26 You were like, wow. 2:20:27 I was like, where are these confirmations coming from? 2:20:29 I didn't, you know. 2:20:31 Sometimes you have to get your hands dirty to, like, really learn the details. 2:20:34 Right. 2:20:35 That was how poorly I understood it when I first was using it. 2:20:38 So I would just say to do that. 2:20:42 I would also say this argument about the non-mined L2s, 2:20:46 I think it's pretty important that I don't think— 2:20:49 I think the successful L2s will be merge-mined. 2:20:53 And will contribute to the security budget of Layer 1. 2:20:55 And it's just easier to have everyone on the same team, 2:20:58 which is the users consuming a service 2:21:01 and the miners collecting a transaction fee. 2:21:04 Speaking of Mike, now we've come full circle. 2:21:06 Mike Casey is also very much on this tip, 2:21:08 and he is making a lot of noise right now 2:21:10 about the importance of merge-mining for Layer 2s, 2:21:12 and I think that that is an under-communicated point, 2:21:16 especially right now with all the L2s. 2:21:18 Yeah, people are not talking about it. 2:21:19 All the L2s, you know, like Lightning, ARK, Fediment, Rollups. 2:21:24 Right. 2:21:25 These are all— 2:21:26 They don't pay miners. 2:21:27 All of them are non-mined, 2:21:28 and I think they're all doomed for that reason alone. 2:21:30 Many of them also have other problems. 2:21:32 Hot take. 2:21:33 Okay, L2s are doomed because they don't pay miners. 2:21:35 We have to figure out how to pay miners. 2:21:36 Yeah. 2:21:37 Thank you so much, Paul. 2:21:38 This was so fun. 2:21:39 Thank you. 2:21:40 Thank you.