0:00 Hey, I'm Jeff and Paul Sztorc, great having you guys on. 0:29 And it's my first threesome. 0:36 How are you guys? 0:37 You never forget your first. 0:39 How are you guys? 0:40 I'm good. 0:41 I mean, I think a little too much Twitter, like Twitter is not good. 0:46 Is it good for the body or is it not? 0:48 Probably not. 0:49 Well, I mean, I woke up at seven this morning and I saw that tweet from, what's his name, 0:54 Alex B. And he completely had no idea what he's talking about when it comes to MEV. 1:03 You know, I was like, reordering transactions. 1:07 And then this guy's like, he completely gets the definition utterly and totally wrong. 1:12 And I was just like, you've just wasted my time. 1:16 Yeah. 1:17 Well, yeah, that's exactly what I feel is that what I think actually happened was he 1:22 realized he was completely wrong. 1:24 And so he just tried it. 1:25 Yes. 1:26 Now he's trying to like, kind of just evade the issue. 1:27 What did he say? 1:28 I missed it. 1:29 Like, did he change something? 1:30 You know, it's just recently. 1:31 It's a poking thing. 1:33 Well, so he's now saying that when he says MEV, he does not see what everyone with a 1:39 brain would think when he says Drivechains cause MEV. 1:43 They would think, okay, Drivechains let us copy altcoins, Ethereum has MEV, but Bitcoin 1:49 does not. 1:50 They're thinking the Ethereum MEV is somehow going to corrupt everything. 1:55 That's what literally everyone with a brain would think. 1:59 And so now he's just like, he's slowly morphed around changing this definition around and 2:04 around and around. 2:05 And now he just literally, well, he said yesterday that to him, it literally just means more 2:11 fees are being paid to the L1 miner. 2:14 So if you were going to pay two cents, if you're going to pay 50 cents for your Bitcoin 2:19 and say you pay 75 cents, that is now MEV that's equal to, exactly according to him, 2:24 equal to the Drivechain MEV effect, but it just means nothing. 2:29 So I don't know. 2:32 I think look forward to more preview of coming attractions. 2:36 I think as more people learn about Drivechain, they will ask, they're going to say, why don't 2:42 we have this? 2:43 And then someone's going to say, well, blah, blah, blah. 2:46 Like maybe some miners might go out of business or they might come into business. 2:51 And it's like, no one has ever cared about that ever. 2:54 It's all fake. 2:55 It's all just fake objections. 2:56 It's not real. 2:57 The idea that what is, why are people now saying, they're saying Drivechain is a block 3:01 size increase. 3:03 I think it's because I try to say it gives the large blockers what they want. 3:08 They really don't get like the core idea is if you wanted the large blocks, you have them. 3:14 If you don't want them, you do not. 3:16 So then they say, well, this is exactly the same as being forced to have large blocks. 3:21 It's the exact opposite of that. 3:23 But I don't know. 3:24 I think the argument is that, I think the large block thing is that somehow they don't 3:29 understand BMM. 3:31 So they think all the miners have to validate all the chains. 3:34 So that's a large block size increase. 3:39 I've also heard one that the guy was saying that you could have an inflation on one of 3:44 the sidechains. 3:46 Stop and decrypt. 3:47 It's been around for a long time. 3:48 Why is he saying that? 3:49 That's like literally the one thing that absolutely they can never do under any circumstances. 3:55 And if people are saying stuff like that, they're saying, oh, what about this L2, either 3:59 have inflation. 4:00 First of all, sidechains can never have inflation because as soon as there's any inflation issue, 4:04 everyone will be, it will be like it's a wonderful life bank run and everyone will try to get 4:10 their money out and most people will not get, the sidechain will just be obliterated like 4:14 in the next very next instant. 4:16 So that will never happen. 4:17 But if it does, it will fix itself instantaneously and only affect the people who opted into 4:23 it. 4:24 But why would like, like this, people say something like this new thing will become 4:31 more popular and it will have inflation over there. 4:35 It's kind of like, like there's so many other things that could be like Coinbase, Custodial 4:41 Lightning or whatever. 4:42 Like no one is, no one is like where it would be a thousand times easier for this story 4:47 to play out. 4:48 It's all just like, you know, I have to say, I don't want to make it into like a kind of 4:52 a dark thing, but you know, the real reasons are something like, I think like value of 4:57 Blockstream stock options, people who have invested in something else, like some kind 5:04 of like they invest in some kind of other company that, you know, something like that 5:08 where they will maybe lose a lot of money or maybe it's maybe a lot of these people 5:13 on Twitter are just like altcoiners, the altcoiners, of course, like Vitalik doesn't really want, 5:19 you know, Bitcoin to get BIP300 and copy Ethereum into a sidechain. 5:25 So I don't know, but I find it like I find it like impossible. 5:29 There's no way that these people have not even read like the November 2015 post, the 5:35 January 2017 post, which were became BIP300/301. 5:41 And it's a very strange. 5:42 I don't I don't think it's a dark, dark, dark motive. 5:45 I think it's just stupidity. 5:48 Blockstream would benefit from BIP300 because Bitcoin would increase in value and Blockstream 5:54 has a bunch of Bitcoins. 5:55 And a lot of people, I think also, but I think maybe they think something. 6:00 Some of them think it doesn't also doesn't make any sense at all. 6:02 The Adam Back is like one of the biggest, longest and biggest supporters, like consistently 6:07 ever since the idea was published in 2015. 6:11 And discussed in 2017, he's like been the only supporter for a while. 6:16 And then then we got like 20 other people. 6:20 The number never goes down. 6:22 I've been seeing a lot of a lot of supporters that I didn't know existed before recently. 6:27 Yes, it's like I think the Alex B thing that he's like, I gave my final understanding of 6:35 what he was trying to say was that if the miner, like the Bitcoin miner can mine a block, 6:42 that means he can mine a block for free. 6:44 So he would have infinite profit if he was also the sidechain miner, like he wouldn't 6:50 have to pay his own opportunity cost. 6:55 I think people say they play with this mandatory word. 6:59 Well, finish it. 7:00 Oh, no, no, no, no, not the mandatory. 7:02 Like if you're the sidechain miner and you're also the Bitcoin miner, that means you mine 7:07 for free, something like that. 7:08 That's what you don't have to pay because it's yours, it's yours. 7:13 Something like he clearly thinks something along the lines of the sidechain block, the 7:18 mainchain block is worth like $4, sidechain block is worth $3. 7:22 Total is worth $7. 7:24 He thinks like if they vertically integrate, they get some kind of big advantage or something. 7:29 Yeah, I mean, I guess he's right. 7:31 He's 43 byte, 143 byte output that switches the money from the person doing the bid. 7:39 So you have a one millionth the size of the block. 7:44 But like this, the whole argument is the whole argument is rotten to the core. 7:48 It all goes down to this idea that we need to care about whether or not some miners go 7:55 out of business, which is like the opposite of what it's just like mining. 7:59 It's always going out of business. 8:02 Yeah. What about mining with cheaper hardware or cheaper energy or whatnot? 8:09 Yeah, that happens. 8:10 Like not all miners are mining with the same price, energy price. 8:15 So to be consistent, they would have to be tweeting every day about how. 8:20 It's a bad thing that Marty Bent works with Great American Mining and like that, that they'd 8:29 use the natural gas tax credit flaring or that people who use the miner to heat their 8:33 swimming pool, they should be going all around and tweeting all about how this is 8:37 terrible. This is a benefit that can only accrue to people who have a pool, a swimming 8:41 pool. This is causing MEV, miner extractable. 8:46 It should be minor like minor heated pool value. 8:51 MHPV, this is MHPV. 8:55 And this is literally happening right now in Ethereum, like people are heating their pools in 9:00 Ethereum too. So this will come to Bitcoin. 9:04 Will come to Bitcoin. 9:05 I mean, it just blows my mind that, of course, like it's mind numbingly obvious that 9:12 someone who's complaining about MEV. 9:16 They literally, the sentences they spoke were something like, this is like Bob McElrath. 9:22 Maybe Bob McElrath has some completely different thing. 9:25 I'm pretty sure it's not the case. 9:26 What all these people do is they just mix up the L1 and L2 over and over again and they 9:30 just can't keep it straight. 9:31 They don't take out a piece of paper and just write it down. 9:33 Here's the things that happen on L1. 9:35 But Bob McElrath, did he not say like last week he was saying like. 9:41 Bitcoin, Ethereum has MEV, but Bitcoin does not, but with Drivechains, MEV will come to 9:47 Bitcoin. Of course, literally everyone would think they're talking about like the MEV 9:53 stuff that happens on Ethereum, the reordering of the transactions and the fact that they 9:56 can like flip order books and things, you know, and like extract more margin. 10:03 But no, this whole time they, so I don't know, like, I don't know what to do with that. 10:07 I like how Alex B tries to say all the time that we don't know, we have no idea what 10:13 MEV is. 10:14 We have no idea what MEV is. 10:14 Apparently, it's something very arcane that only. 10:18 We, we, we, no one took us up on that thing. 10:22 For $250, no one, you know, which is not a ton of money, but of course, we just like. 10:28 No, there was a guy that tried, I comment there, but he, he like, he, he made a, he 10:33 began to try. 10:34 Alex, unfortunately, to win. 10:35 I would love it if he won, but Alex has to say that, yes, this, this example. 10:41 Yeah, but the funny thing that I didn't publish was that I saw the notifications on 10:47 Twitter and he was like, trying to, to start an example and then he deleted the tweets. 10:53 And then I asked him on Telegram and he said, oh, I was trying to, to find MEV. 10:57 And then I, when I finished my example, I saw that there was no MEV, so I deleted the 11:03 tweets. 11:06 So we were saying, Alex or the other guy? 11:08 No, the other guy that was trying. 11:10 Oh, the other guy. 11:11 Oh, the other guy tried to do the example. 11:14 This is exactly, literally exactly what I said would happen. 11:20 Exactly. 11:22 I said, if you write down the example, you'll see there is no MEV effect on anyone. 11:27 There's just people earning more money in exchange for doing what they already do. 11:31 That is exactly what I said. 11:32 When you write down the example, you will see, you'll, you're forced to keep it all 11:36 clear. 11:37 And so that is what the guy, that is what that guy did. 11:39 And that's what Alex is still not going to do. 11:41 And he will still get it wrong until he writes the example down. 11:44 But now he won't, because now he's just going to pretend like he always meant. 11:48 The fact that MEV is this Google search term associated with Ethereum is just a big 11:53 coincidence. That is a big coincidence that just happened to, it just happened to invade 12:00 our Twitter conversation. 12:02 And what he meant the whole time was more fees being paid on L1. 12:07 So, yeah, I mean, there you go. 12:09 None of it really matters because it's all like these, everyone is afraid, people in the 12:15 technical community, they're afraid to like comment on, they don't want to stick their 12:19 neck out for something. 12:20 So they're all spineless, basically. 12:23 Even something like this, that is an optional soft fork that is like completely 12:26 sanitized. They won't, they have, they're too cowardly and they won't actually, but not 12:32 all, many people have done the tweet and we put them at LayerTwoLabs.com slash friends. 12:37 But, yeah, like there's an enormous amount of cowardice in Bitcoin development and you 12:44 can see what happened with Jeremy Rubin. 12:45 You can kind of see why, too, because there's enormous amounts of money at stake, like 12:49 prestige. You get invited to these, and I was invited to all this type of stuff, too, 12:53 like earlier, like in 2017, 2018, 2016, 2015, I would get invited and then people, you 13:00 could just, you could just ask someone to pay, they'd pay business class, they'd pay for 13:05 your flight, pay for your hotel. 13:07 You get to go all around the world to these exotic locales. 13:10 You go to like a Scaling 2 in Hong Kong. 13:13 That's a big deal if you're like a young person and you're like, wow, this is like 13:16 really neat. 13:17 There are many more great times. 13:19 There was like, we had like this big bus that Scaling 2, we went to like this place and 13:23 there were like fireworks. 13:24 There's like this huge stadium there. 13:28 Yeah, it's great. 13:28 So, so there's like all this stuff is on the line. 13:31 And meanwhile, everyone's trying to stack stats. 13:34 So all this stuff is on the line and people don't want to make a mistake and they think 13:41 they just kind of think there's no possible way that the idea is really this good, the 13:46 idea that would have actually kept the large blockers and small blockers together. 13:51 We wouldn't need the toxic people. 13:53 So that's just like what people are going to slowly have to accept because they may 13:58 find it hard to believe, but it is basically the truth. 14:01 So what we have to just hunt down, I think we have to aggressively hunt down. 14:07 Like the last fake remaining reasons, and that's why we are we hired Peter Todd, and I 14:12 think that's money very well spent, I think, based on what his Twitter activity already 14:19 is. And, you know, feel free to take notes and change your strategy completely if you 14:25 listen to this, which I encourage, because what it's ultimately he's going to have to 14:29 do at the end of the day, years from now, maybe I don't know when he'll ultimately have 14:34 to just admit that he was wrong to criticize merge mining in the way that he did back in 14:40 2014. He was trying to help. 14:43 Peter Todd knows probably more about Bitcoin than I do, and, you know, I like look at some 14:48 of the stuff he's written, it's very clear, it's very admirable, but anyone can have a 14:52 anyone can make a mistake, you know, Tiger Woods can have a bad day or something. 14:58 And like, so he has this idea about merge mining that is untrue, that it very significantly 15:03 affects either the economics of individual miners, which is completely false for that 15:09 swimming pool reason we already discussed. 15:11 Miners get all kinds of benefits, costs, the bottom half get fired every two weeks. 15:15 It's completely irrelevant. 15:16 We should not care about what miners do. 15:18 Or he thinks that merge mining significantly affects who can become a mining pool, which 15:25 is completely wrong for a totally different reason. 15:28 But it's because the economics of mining pools, pools, the only reason pools exist is 15:33 because if you have a small miner, one forty five hundredth the size, you'll be more 15:39 than on average more than 31 days before you find a block. 15:43 And that's just too much variance for most people to stomach. 15:47 Even if on average that would be OK, that means that sometimes you're going three or 15:51 four months without any revenue coming in. 15:55 Meanwhile, you have to pay your costs. 15:56 And meanwhile, some guy down the street, same situation as you, same costs. 16:01 But they they hit two in a row off the bat and now they have the flush with cash. 16:06 So that's why pools exist. 16:08 And the any of these effects on like how much the pool software costs is like 16:15 literally one one hundred millionth of the it has no literally no actual effect that 16:22 the idea that the mining pool operator might decide that they they would best serve 16:27 their clients by running sidechain software, running different software, fee maximizing 16:32 software, MEV software, whatever. 16:35 The fact that that would never, ever affect the optimal pool size at all. 16:41 It's just not. And it's also there's an intriguing. 16:45 Isn't the BMM free? 16:47 The BMM means that they don't even have to do it at all anyway. 16:49 Right. But the thing with the BMM is even though sidechains are defined as something that 16:54 uses BIP300/301, Drivechain is defined, excuse me, Drivechain is defined that 17:00 way. Someone could always say something like, well, what if the sidechain designer just. 17:06 Like no one said that ever, no one has ever, no one has been smart enough to think of that 17:10 yet, but they but they could always say, like, what if they said that they program it in 17:14 such a way, even though this isn't really possible, they program in such a way that BMM 17:19 will never work, you know, even though it's just a hash, it's paying money on L1 for a 17:23 hash. To do that, you have to make it like impossible to like hash the block on L2. 17:29 But which is like, you know, but someone could say so, but no one has ever said that 17:33 because because they don't actually they can't tell the difference. 17:36 They don't know Fiat, as you know, perfectly well, Fiat, Joff, Blind Merged Mining and 17:41 regular merge mining are mostly like pretty similar. 17:44 And with the exception that Blind Merged Mining is just much more convenient for literally 17:49 everyone. So that's why everyone will do it. 17:52 But merge mining cannot be stopped on L1. 17:56 There's no way, paradoxically, even though it's very easy to stop most of this is the 18:00 normal philosophical paradigm is inverted because many people think, oh, we can mine 18:04 node filters things out on L1. 18:08 So they think we can filter out. 18:10 So there could be an argument that merge mining without without the blindness could 18:18 somehow affect the incentives. 18:21 But this is already possible. 18:23 It's the same thing as before, where the miners, it's up to the miners what risks they 18:26 want to take in return for what financial compensation. 18:31 So we should. Yeah, but that's already possible. 18:33 And if you introduce Blind Merged Mining, you remove that, you remove that risk. 18:38 Exactly. But even without Blind Merged Mining, it would be something like ASIC boost, where 18:42 something like if they do it to them, that's up to them and they miss a couple, they have 18:47 like false positives or something. 18:49 But that's not an issue. 18:51 The philosophical inversion I would like to highlight is that people think what they think 18:57 is they have a full node and they think this is my full node. 19:00 But then if they think, oh, if I mine, I'm only a small percent of the hash rate. 19:05 So I don't have as much control. 19:06 They think I have less than one percent. 19:09 But of course, if the Bitcoin community grows more to more than 100 people. 19:13 Not if it goes to one hundred and one people, then someone has to go without one percent 19:18 of the hash rate. So what they really want is for Bitcoin to stay like a niche thing that 19:22 only five people have heard of or something. 19:24 But the inversion is you go from the node to the miner to the pool because now they 19:29 think, oh, now I'm just a small, even though I have a huge mining warehouse, I've got to 19:35 outsource my thinking to this pool. 19:38 I've got to outsource my job to this pool. 19:40 And they feel like they feel less powerful. 19:43 But what they do not realize is that that picture is completely upside down. 19:46 And it always has been. 19:48 The node is the one who rejects the miners block. 19:51 So the node trumps the pool in every way. 19:53 The node trumps the miner in every way. 19:55 And similarly, the miners, they don't they cannot reject the block in the normal way. 20:00 But for every every practical sense and purpose, they can do the exact same thing because 20:06 they're the ones who point their hash at the pool and any drop of a hat. 20:10 They can just say, I don't like this pool anymore. 20:13 It's the philosophical equivalent of rejecting a block. 20:16 They say, I reject this pool and they can go immediately to a new pool or start a pool. 20:23 And people just feel upset about these pools. 20:25 They just don't realize that what they want is for there to be a room full of one hundred and one people. 20:30 And they want everyone to have at least one percent of the hash. 20:33 The pool is what is doing that. 20:35 The pool lets all these people mine. 20:37 Whereas before, they would never be able to tolerate the variance. 20:40 The pool is making the job easier. 20:43 So it's the whole thing upside down. 20:45 Haters, they want this mining paradise or something like that. 20:51 Repeat, what did you say, Fiat Jeff? 20:54 You're saying that the Drivechain haters, they want this mining paradise in which everybody mines? 21:03 Yeah, they think they do, but they don't really like. 21:05 So they have a lot of things completely backwards. 21:09 Like one of the things that they don't like, as you now have seen, is they don't like it when there's lots and lots of revenues flowing to the miners. 21:16 So they want everyone to be like a like a kind of like mining for free monk or something. 21:21 And they only want there to be five. 21:23 I don't know if that's what they think. 21:25 That's that's hard to believe. 21:26 I think they don't quite realize it. 21:27 But this whole the security budget concept, the idea of the fees flowing from the sidechains to miners, that does not entice them. 21:35 They just think that is just a bet. 21:38 And what causes specialization in mining is the upward difficulty adjustments. 21:43 Every two weeks, the bottom half of the people are fired. 21:47 And that if you don't want that, if you don't want that evolution to happen. 21:53 If you don't want that evolution to happen, then you have to get rid of difficulty adjustments from blocks. 21:59 That is what you want. 22:00 So that is what that is what these people want. 22:03 They just don't realize it. 22:04 They that is what they want, because they say, well, it might be difficult for someone to mine a block. 22:09 But what what makes it so difficult for people to mine blocks? 22:12 Well, if you didn't have nine million ninety nine point nine nine nine nine nine nine nine nine nine nine nine nine nine percent of that, what makes it difficult to find a block is the upward difficulty adjustment. 22:24 But we know that no one of the first block today, how many blocks we have for a second, for a second. 22:32 We have the hash rate of the first block. 22:35 Yeah, no. 22:36 If you had the same difficulty, like we would have millions of blocks per second. 22:41 That's something that we could probably check without too much. 22:44 But we know we don't really we know that it would be that would say, see, but this is the issue is what is why is it? 22:51 Why do we slow down the blocks? 22:53 It's partly for the twenty one million coin schedule. 22:56 But but it doesn't really make any difference because all it would mean is that all twenty one million coins would be mined sooner. 23:01 It still doesn't like change the twenty one million coin limit. 23:03 It just says instead of the havings being every four years, they would just be like all of them would just happen immediately. 23:10 So but that's not the real reason. 23:12 The real reason is you get a lot more blocks, won't you? 23:15 Of course, yeah, it would it would make it so that confirmations become proportionately less meaningful. 23:20 They would mean like one one billionth of what they mean today. 23:24 It would be a huge mess. 23:25 That doesn't make sense. 23:26 Doesn't make it like clients would be instead of like clients doing only four point four megabytes per year, which is a number that is so low. 23:32 I find it like astounding, which is Satoshi's design that you can check all the proof of work of all the headers for a whole year. 23:39 Four point four megabytes only, which is so small as to be effectively negligible. 23:45 When you download the wallet to your phone, the wallet is going to be more than 40 megabytes. 23:50 So the whole wallet software application is so you have a situation like that. 23:58 No one does FPV anymore. 24:00 Like they do neutrino. 24:03 Well, that isn't just you have to download a filter for each block and then you check. 24:09 Yeah, but that's like that's like SPV plus a little bit. 24:13 You know, it's like SPV in a very much, much less efficient, but. 24:18 But it's slightly more private, it's going to be more private, yeah, yeah, yeah, because the main downside of SPV is that you don't have a full node. 24:27 You can still validate most almost basically everything, but you have to get it from somewhere first. 24:31 Someone has to give this to you. 24:33 You need to find a full node somewhere and they need to give you doesn't do it anymore. 24:39 And so if you ask them, hey, did anyone send any money to such and such, then they're going to know they're going to think, well. 24:48 You know, I mean, I when I was a lot back back in the day when I was like just starting my career, just commenting on Bitcoin or whatever, I thought what the SPV wallet should do is they should just randomly. 24:59 We should redo the whole, we should do the scheme so that all the transactions are numbered in every block, you should learn the maximum, and everyone should just be querying random numbers out of a hat instead of saying, do you have a transaction that matches this TXID, you should instead be like, do we have just just query randomly so that you at least have plausible deniability, but Neutrino is a much, it was very cool, of course, but way less efficient, but that's also because, you know, it's a way less efficient. 25:26 You know, now bandwidth speeds and costs have improved enormously since 2008, when SPV was invented, since it was. 25:35 I don't know, I don't know, the Lightning wallets that do the Neutrino stuff, they take a long time to load and people keep trying to optimize it and make it better. 25:44 They shouldn't, because the whole point of SPV is to provide this very, very good user experience at a cost of less security. 25:56 So I kind of think we should. 25:58 There are some models that use the Electrum thing. 26:00 Yeah, Electrum has been, was like my go-to wallet for most of my Bitcoin. 26:07 Yeah, but there's the protocol that Electrum does, and it's an open thing. 26:11 That's a bunch of free servers that they say are run by Chain Analysis, and you can query there and they will give you everything, all the information you need. 26:21 Yeah, it is not good for privacy for the exact reason we described. 26:26 You need to pair up, every Lite client needs to pair up with a full node that is like a friend, and then you ask them, hey, is this transaction in a block? 26:35 And then they know, they have reason to suspect that, okay, we think that, why would you ask about that unless that was your own transaction? 26:44 Yeah. 26:46 So, anyway, we were talking about this because the SPV would be obliterated if we remove difficulty adjustments for blocks. 26:54 So that's one thing that would be hurt, but another thing is that- 26:56 Another argument that I, sorry, another argument that I saw- 27:00 There you go. 27:01 Sorry, go, go, go. 27:03 Okay, I'll go then. 27:04 It's the, if you, if the blocks are spread out so that they take 10 minutes, but the header is only 80 bytes and the hash of the block is only 32 bytes, of which each header contains the hash of the previous block. 27:19 So you can kind of, you double count for free. 27:22 The, if you live in that situation, then it's, see, Greg Maxwell wrote this proof a long time ago about distributed consensus being impossible. 27:31 And what he, there's a number in his proof where if you swap it with like a zero, basically, I'm speaking very loosely here. 27:40 I hope no one, like, holds me too closely to this interpretation. 27:44 Although I would also be interested to learn if this was exactly the case. 27:47 But I remember, this is what I remember. 27:50 The proof is like, you can, there'll always be forks or something because of, you know, the speed of light or whatever. 27:56 So what you, what Satoshi did is he says, this block, that's really one megabyte. 28:02 And instead of being a continuous thing where the bytes all just blur out, Satoshi packed them into discrete chunks called blocks. 28:12 And even though the speed of light makes it so that information isn't everywhere at once, what Satoshi did was he shrunk the problem down to this tiny size. 28:23 And that size is one 80-byte header making it around the world in less than 10 minutes. 28:33 And 80 bytes is so small and 10 minutes is so long that it's effectively zero, basically. 28:39 The odds that it, like, will not be possible are zero. 28:42 So that's the cheat. 28:44 That's the hack that made, that was, that's the hack that made it all work. 28:49 And that is what you get by slowing the blocks down to make them 10 minutes. 28:53 So that's why we have upward difficulty adjustments. 28:55 And so, but no one seriously wants to do that. 28:57 These are just people who are very confused. 28:59 Almost everyone who's confused about Drivechain, I think they just mix up L1 and L2. 29:05 They just, because they think, because it's the whole thing is like it's supposed to be perfect for everyone. 29:10 So it's like the large block people are like, wait a minute, we don't want any large blocks touching Bitcoin. 29:17 And it's like, well, the small block, the large block people look at it and they say, well, wait a minute. 29:22 Why do, why do I have to move? 29:23 Why am I the one who has to move to a different chain? 29:26 So people mixing up L1, L2, people who don't understand that it's a good thing 29:32 when miners earn more money, like not a bad thing. 29:36 That's a good thing. 29:37 It's like Peter Todd is in that. 29:38 So, I mean, we could talk about Peter Todd in Emerge Mining. 29:41 That he's this crusade about, about it being difficult. 29:46 So this is in the context of the block size war. 29:49 And he was, it was also in the context of him inventing something called the tree chains that he never finished. 29:54 So he had a competitor to sidechain. 29:56 So of course he had to bash sidechains, which is fair game, you know. 30:00 What's the deal with the tree chains? 30:02 I tried to read about it. 30:03 He never finished it because, and I may have been, I don't know to what extent I'm responsible for this. 30:07 But he was talking about it for a while. 30:10 Never materialized. 30:11 Where's tree chains? 30:12 No one knows. 30:13 People would make jokes about it. 30:15 Other elite Bitcoin developers would be like, where is that? 30:17 Oh, it's never going to arrive. 30:19 And then he presented it in a breakout session at Scaling 3 in Milan in 2016, October. 30:28 And then the whole point of it is it's all client-side validation. 30:32 So it became single-use seals. 30:34 But I said, it became RGB probably, something like that. 30:37 But then I asked this question of like, well, the whole point of doing this is 30:42 so that the layer one nodes and the layer one... 30:44 Peter's obsession, I think, philosophically, is engineering obsession. 30:48 You know how people have different engineering obsessions? 30:50 Like mine is giving everyone what they want. 30:53 And his is like, he wants it to just be this blind timestamping server that doesn't have to think. 31:00 And he wants to just timestamp things that he doesn't know what they are. 31:03 And only the clients know. 31:05 Because to him, that is not... 31:07 That's all one, always. 31:09 Only the end user has to do it. 31:11 The irony is that sidechains are sort of more or less what that is. 31:15 Because the sidechains, just as a group, we all opt in to this more expensive node. 31:21 Well, have you seen that RGB proposal, the Prime thing? 31:27 Primer. 31:28 Yeah, it's called Prime. 31:30 They want Bitcoin to morph into this Prime thing that is a fully client-side validated ledger. 31:38 There's not a ledger, it's just these tokens that are client-side validated. 31:42 Right, but the problem with that is... 31:47 I asked him this question and I said, well, the whole point of this is that you want it 31:51 to be so that no one has to validate anything they don't want to validate. 31:57 Or no one has to store anything they don't want to store. 32:01 But the core part of Bitcoin's design is the transaction fee. 32:05 So I said, well, how does the transaction fee work? 32:07 Because in order for the miner to be paid in the treechain coin, they're now going to 32:13 have to be getting this. 32:15 For every transaction they include, they're going to have to have everything. 32:18 And at that point, they just have the whole history now. 32:21 Because every single transaction fee, they need the whole history. 32:25 And then he had no answer to that question. 32:29 And then it's worse with RGB. 32:30 It's kind of like you... 32:32 I don't know exactly how RGB has changed, so maybe it's not that... 32:35 But the idea is that you could pay someone a transaction fee in the RGB asset. 32:44 But again, in order to do that, whoever you're paying the transaction fee, they have to get 32:49 the proof. 32:51 So they have to get all the proofs. 32:52 So they have to get all the proofs, all the client-side things. 32:55 Because the client-side validation, unless it's changed enormously in the last 60 days 33:01 or something, the way it works is you get a thing that it checks in. 33:05 Every time that it's changed hands, when I send you something, I send you a big email 33:10 that has the whole chain. 33:12 And I say, this is when it was created. 33:13 And then here's everything that happened since. 33:15 And now you're the new owner. 33:18 You get the whole email chain. 33:20 So you get like a tiny blockchain of just that asset. 33:23 But then as you can see where I'm going with this, hopefully, which is that in order to 33:26 pay the transaction fee, they need to know if the transaction is valid and they need 33:30 to know what the fee is it's paying. 33:32 So they need to get every email chain from everything. 33:35 So they have just the whole blockchain again. 33:38 So I don't know. 33:39 And also the thing is that you split the assets and then merge assets. 33:43 And then you inherit the entire blockchain from that. 33:47 Yeah, exactly. 33:50 From getting multiple assets and mixing them. 33:54 His obsession is something like the blockchain doesn't contain anything. 33:59 This is what you're talking about with this prime. 34:00 It doesn't contain anything. 34:02 And then everyone else, we have to hold, we have to back up every time we trade. 34:10 And what we hold is like a kind of proof that we own the coin that we show to other people. 34:17 I have another reason. 34:18 It's sponsored by Amazon S3 because everybody wants to use that to back up. 34:23 There's a lot of backing up. 34:24 It should be sponsored by like Dropbox or by like, what is the like big backup? 34:30 Like what's like the one made safe or whatever? 34:32 And that's not the one. 34:34 Filecoin. 34:35 Filecoin. 34:37 Something where you're trying to back things up. 34:39 Like what's it called? 34:39 Like Carbonite? 34:40 It should be sponsored by Carbonite or something like that. 34:42 That would be like a neat. 34:44 But I have an interesting other, which is that I don't think that people would actually, 34:51 I don't think people actually like that. 34:53 People actually like there to be something where they say, this is the thing. 34:57 And everyone knows that I own this coin. 35:00 It's officially registered. 35:01 It's like a land registry or something. 35:04 If you have, because of Alan Turing's universality of computation, 35:09 they have this thing where there's a code in the blockchain. 35:13 It's like a file that it has to be interpreted. 35:15 So it's like file.jpg, like a JPEG versus dot PNG. 35:22 It's a file on the blockchain. 35:24 It's just this tiny code. 35:25 And you say, listen, here's the code. 35:29 And here's my proof. 35:32 And here's the RGB software. 35:34 The RGB software is like the file extension. 35:37 The RGB, it says interpret this and this proof as something that will say, yes, 35:42 Paul owns 80 Giacomo coin. 35:45 Okay. 35:46 So, but the thing is, you could have a different piece of software that I think you'd call RGB2 35:54 that reinterprets the same two inputs in a different way. 35:57 It's just like, I'll shift it over a little bit. 35:59 So then it would say that, no, I don't own that asset. 36:03 And in fact, the software could be arbitrarily rewritten to just say anything like, 36:09 now I own 8,000 Giacomo coin or that Giacomo coin never existed. 36:14 So I don't know why they like RGB so much, but I think I'm in favor of pluralism. 36:19 And I think we should try everything. 36:22 But I don't think I have a guess. 36:24 I have a personal feeling. 36:26 I have a personal guess that people won't like RGB because they want to know that they really, 36:31 they don't want to be responsible. 36:32 They don't want the responsibility for carrying around this luggage of the proof all the time. 36:37 And then the proof depends on someone else having the right software to decode the proof. 36:43 Whereas if all this stuff is just in the blockchain, then I think people would like that more. 36:48 But it'll be in whatever blockchain you want to opt into. 36:51 The Lightning Labs did. 36:53 It's a copy of RGB, but they added a new thing that is, you have something, I don't know the 37:00 name of the planet or universe or whatever, that is a server that anyone can run and people can 37:06 submit their proof to that server. 37:08 And then they get a blockchain, like a blockchain explorer with the proof. 37:13 So everybody can start to rely on that server instead of passing proofs around. 37:19 So yeah, this is another issue. 37:22 Like, I think this was smart. 37:23 I think, weirdly, this is another case where Blockstream did something kind of strange, 37:27 where they said, people rely too much on block explorers. 37:31 So they said, we'll make our own block explorer. 37:33 But I never understood that at all. 37:35 And Fiat, if you run our software, you know that what I did instead is I said, what we have to do, 37:40 what the only thing, what we must do is the full node software must contain a block explorer. 37:47 So that's what we did, of course. 37:50 The problem is that people want to see the addresses and the history in the address. 37:55 And if that coin was spent or not. 37:58 And you need a giant index. 38:00 Index, yeah. 38:01 But the index isn't that bad, you know. 38:03 It's actually because the block size is already so big. 38:06 I think it's only a couple. 38:09 I don't want to say the wrong thing, but I think it's only a few gigabytes more. 38:12 Like, currently, the UTXO says like seven gigabytes. 38:15 And the full transaction index, the blockchain is like 550 or something. 38:20 I'm going to, this is going to be torture. 38:22 But these numbers are approximately correct. 38:24 This is like last time I ran a full node or whatever. 38:26 But it's like 500, 600 gigabytes of block data that can all be pruned. 38:34 It's like seven gigabytes of UTXO. 38:37 And then the transaction index is only like a little bit. 38:39 It's not as though the transaction index. 38:41 But the thing that they run is an Electrum server. 38:44 But now there are these new ones, Electors that is putting Rust and whatever. 38:50 People love this. 38:51 And they use the, yeah, Rust is the best thing. 38:55 You should write Rust. 38:57 Everybody will love it. 38:59 But these, the main pool.space and the Blockstream explorer, they use this Electors thing that 39:09 indexes everything that has happened ever. 39:12 Like, it's not just a transaction index. 39:14 It also has, if this, you can't get this from a normal full node, 39:20 but you can get from this Electors. 39:21 Like if the, whatever UTXO was spent and to where. 39:26 Like they need these to be, to make a very nice block explorer. 39:32 And I can't find the numbers, but it's a lot bigger. 39:37 Yeah. 39:37 But what do you think? 39:40 And they ship these, these Umbral, these Umbral packages, like whatever. 39:44 Oh yeah, I know. 39:46 And they, they put, they put the main pool.space in there. 39:51 But when you run your main pool.space in your own Umbral hardware, you don't get these things 39:57 because they don't come by default. 39:59 So you get a very shitty block explorer that looks like the main pool.space, but you actually 40:04 get, you can't do the same thing that the main pool.space. 40:09 They sell you some fake, fake thing. 40:13 Oh yeah. 40:15 Let's, let's, let's get back onto, there's two topics I would like the, the, the, the 40:19 objections that, that might be had. 40:21 One is the Peter Todd thing. 40:23 And the second one is, I have, correct me if I'm wrong. 40:29 I heard a story about one of the latest evangelists, which is Michael Saylor talking about, 40:38 oh no, just put ZK, Zedcash on Lightning. 40:45 Now, I don't know if that's true, Paul. 40:48 Is that true? 40:48 Did he say that? 40:51 Yeah, he said that. 40:52 He said that. 40:54 So, I don't know. 40:55 It was like off the cuff. 40:55 It was kind of a... 40:56 Oh, was it, was it said in jest? 40:58 Was it said in jest or was it said in seriousness? 41:00 No, I think he was serious. 41:01 But I think it wasn't like a fully published, like a research paper. 41:07 It was just like a little remark. 41:08 But yeah, like that, we know that that doesn't really make any sense at all, does it? 41:11 Right? 41:12 No, not at all. 41:13 Not at all. 41:13 So it doesn't make any sense. 41:14 So, so like, is he, would he be, for example, now Bitcoin's reaching the point where, you 41:19 know, he's looking at it becoming recognized by the US government as an asset. 41:26 So there's a significant stake that he might have. 41:29 And, and maybe he's worried that, that, for example, the inclusion of Drivechains into 41:34 Bitcoin would turn Bitcoin into a security. 41:37 Do you think this is a major concern? 41:38 Yeah, I think that is it. 41:40 I think that's exactly, I've tried to figuring, I was trying to figure him out. 41:43 I was like, is he just like, because he's clearly a smart guy. 41:48 He's clearly committed to Bitcoin. 41:52 So I was like, what is going on? 41:55 And I was like, what it is, is I think it's all just fear of, because he had some kind 42:00 of run in maybe more than one with like the SEC or whatever himself personally. 42:08 And I think that that, it's kind of ironic that we have these people, we have like a 42:11 Roger Ver, these people who's like, their worldview is very, very colored by one thing 42:18 that, which it should, as it should, perhaps it should be. 42:21 But, but, but I think that's his idea is that he needs to sell Bitcoin as like a finished 42:27 project that has no, no changing at all. 42:31 And at first I thought it was just, I always thought I would tell the story about how it's 42:35 the block size war taught everyone to resist all change. 42:38 We resisted change. 42:39 We resisted SegWit2x and then we won the war. 42:43 So that was what I kind of thought. 42:44 But with, with, with him specifically, I think for most people, that is the story. 42:48 But with him specifically, he's comfortably landed into that little story of like, we 42:52 don't need to do anything. 42:54 We don't change anything. 42:55 Bitcoin is finished. 42:56 That's why he wants, he thinks lightning is somehow walled off completely from this idea 43:01 of like efforts of others, how we test or something. 43:05 So that is why he, he has to always say that he is, that Bitcoin is already a finished 43:13 project and it needs absolutely nothing. 43:15 Because if he were to admit that a small army of developers is merging pull requests, you 43:23 know, all the time to Bitcoin core, it, he has to, he has to tell a story where that 43:28 does not affect, Bitcoin could go on without that happening. 43:32 Which he can kind of do if he says, well, they just do these little updates that aren't, 43:36 they don't really mean anything. 43:37 But if there was a big update, then it would mean that back in 2019 or whatever, when he 43:41 invested in Bitcoin, he was investing in security. 43:45 I mean, who cares? 43:46 Like, it's like, but I think that people are afraid of this. 43:50 People are really, really afraid of this. 43:52 Is Michael Saylor like this leader, thought leader of people? 43:57 I never seen him. 43:58 I think he is a leader of, well, Fiat, of course, he doesn't lead anyone who's, who's 44:04 been around for a long time. 44:05 Everyone who, everyone who's been around for a long time knows that when you're new, your 44:09 first two, three years in Bitcoin, you have the worst opinions, most shameful opinions, 44:14 and you should just keep your mouth closed. 44:15 Everyone knows that. 44:16 But the way Bitcoin works is, of course, since it grows so much, every time it grows, it 44:21 will grow like 10x, it will attract 10 times as many people. 44:24 And as a result, 90% of the people at any given point in time are new. 44:30 It's like their first year in Bitcoin. 44:32 So Saylor has basically like a huge critical mass of those people, I think. 44:37 And of course, people like, people like the idea of there being a sophisticated, like 44:42 American businessman, CEO, former rocket scientist from MIT. 44:47 They like the idea of him going around and he has good, he's, he's adopted many of 44:51 our very good memes. 44:53 And he's avoided many of our stupider memes. 44:55 I don't recall him shilling like Stock to Flow or anything like that. 44:58 That would have been really like, okay, this guy is like complete, like, so he's, he has 45:03 the good memes. 45:04 He's mostly avoided the bad memes. 45:07 So he's actually pretty good. 45:09 He's, it's proof of work for him to have invested so much money is proof that he is 45:13 committed. 45:15 He does it prominently. 45:16 He's pretty articulate, you know, is he not? 45:19 Mm hmm. 45:19 You can definitely hand it to a lot of those much dumber people. 45:22 No offense. 45:23 I don't want to really name the names, but we know some people he has done a little 45:28 conversation with and he does kind of crush that person and we haven't heard from them 45:32 in a while. 45:33 Good, good riddance. 45:34 So, so he is great, but I think he, I think he's like constantly thinking about like 45:41 getting some kind of huge fine. 45:43 And, and then Bitcoin is security and he's something like something like that, I think. 45:49 And I think that's the only thing he really thinks about, or even if he thinks there's 45:52 certain things he's thought about. 45:54 Well, the other thing to him is he doesn't want it to become, he wants Bitcoin to become 45:58 kind of like regulated and traceable, which is also a weird breaking point between him 46:04 and a lot of the other people. 46:05 The more of the politically activists like punk type people. 46:10 They, a lot of people, so like the Zcash sidechain is like a negative for him. 46:14 He doesn't want, he doesn't want that to happen. 46:16 Yeah. 46:18 Because he says, we, well, I don't know exactly what, you know, he would say exactly. 46:22 I would be happy to talk to him on some kind of recorded podcast or space or whatever. 46:25 But I think like he, his idea is that it, he, this, this is an idea that has been in 46:33 Bitcoin for a long time, which is that certain things make Bitcoin look bad, make it look 46:37 like it's for crime, make it look like it's whatever. 46:41 And we should just kind of not, we should be more sophisticated about what we emphasize. 46:46 And I think that that's, you know, I think he does that. 46:49 I think he really doesn't want it to. 46:51 And at the same time, he posts tweets or says comments about, you know, like, well, tax 46:56 that, you know, like, and he's, and he's talking about, you know, the Bitcoin trope of dropping 47:01 a Bitcoin in a boating accident type thing. 47:04 So, you know, there's, there's, there's that. 47:09 Yeah, it's clearly, clearly the right answer is to care for privacy. 47:12 And of course, we have to say this as well, which is that the real world is a Straussian 47:19 place that people don't always say what they mean. 47:22 And you don't know if you live in a world where people are being like rounded up and 47:26 killed or something like, so everyone says, oh, we love it here. 47:29 Like everyone always has to say out loud that they don't care for privacy. 47:34 It's only a couple autistic people who are neuroatypical enough to say, no, we, every 47:44 single person must push for privacy as hard as we possibly can, because it is a matter 47:50 of life or death, whether or not someone can say what they truthfully believe and escape 47:58 retribution, valid retribution. 48:01 And that is, that is the difference between, you know, poverty and, and prosperity. 48:10 Shall we? 48:10 Now, the next sort of section I'd like to open up is, is flaws and issues with lightning. 48:15 But we could do that. 48:16 But should we go to Peter Todd? 48:18 Yeah, we can do. 48:18 Yeah, yeah, yeah. 48:19 But, but let's have a quick bathroom break. 48:22 That's okay. 48:23 Are you guys good with that? 48:24 Yo, you're back. 48:25 Okay. 48:26 Three, two, one. 48:27 Bang. 48:28 There we go. 48:30 Okay. 48:30 So, yeah, before we open up the lightning, we can do the Peter Todd thing. 48:33 We've spoken about Michael Saylor. 48:35 What's the Peter Todd thing? 48:37 Well, let's, let's, let's break apart Peter Todd. 48:40 No, no, not necessarily, but we just, let's get to the, the root, the root of what, what 48:47 Peter Todd dislikes. 48:49 What is his motivation for not understanding Drivechains? 48:54 You know? 48:55 Yeah, well, I mean, that's a good question. 48:57 I think, like, he, you saw that over the years, like, he will say certain things, like, 49:06 we can't stop this and Drivechains is a nasty attack or something. 49:10 Or he'll say, like, we, you're dangerous. 49:12 You're broken and dangerous ideas. 49:14 You shouldn't get any attention or something. 49:16 So he really, really hates the idea a lot. 49:20 And. 49:21 But is it just because of BMM or minor schemes too? 49:24 No, it's definitely not miners can steal. 49:27 Peter Todd is much too smart for that because he knows that it's something that only affects 49:31 the miners can steal, only affects the people who deposit. 49:35 So anyone, most, you have to be, the miners can steal. 49:38 Not a lot of people fall for that. 49:40 That's usually, that's something that people fall for. 49:43 Like their first day, the first day you hear about it. 49:46 Whatever. 49:47 Well, I think it's a much stronger, hard to defeat argument. 49:51 I struggle with it myself. 49:53 But why? 49:55 Maybe I'm too stupid, but. 49:57 You're not stupid, I tell you that. 49:59 You're not stupid. 50:00 But why do you struggle with it? 50:02 Well, I've been trying to convince myself that miners won't steal, but it's not up to me, basically. It's up to like how useful the sidechain is. That's the idea. It's like, they're like competing restaurants. So it's like, maybe you live in a world where it's really hard to run a restaurant and most restaurants actually fail. That would be like most sidechains get stolen from. But that's not really, right now, none exist. It's like, you know, it's like, I don't know. 50:29 There's none exist at all. There's none. There's no restaurants. We all have to eat the, we have to eat the prison food every day. We have no choice. And someone says, listen, Roger Veer says, I'll make my own restaurant to cook food for myself. And I'll also sell it to other people. And then they say, no, you're not allowed to do that. 50:52 So like, people are trapped here, we have to be trapped on the Bitcoin core chain. So it's, I'm not saying that it will definitely work. But you know, Fiat, did you see the NPV calculations for the fees? If the fees are like 1.4, or something, Bitcoin per block? 51:11 I didn't see that. 51:12 Well, that is, that is enough. It's like five to $20 billion NPV, it depends on like, very aggressive interest rates and stuff. So, so it's, it's debatable whether or not there's like collective action problems or other things, but, but the fees is worth a lot. And then the fact that if you steal from the coin, it transitions from being a multi network, multi blockchain coin to just being back to only Bitcoin core coin, which you would think, 51:41 would make the coin worth less. It would end the feature. 51:48 Yeah, yeah. 51:49 And then of course, we have all this real evidence that like, no one really, people really do not, there's been, it's been very easy, for example, to attack a Bitcoin SV, very easy to attack other LeFork coins, very easy to attack, like, you could attack the Lightning Network by blocking the justice transaction. 52:10 But no one ever really does it. 52:12 It's easy, like you can just, you can, you can like, open a channel, spend the entire channel, and then rewind the channel opening, like, and get back your money. 52:25 You could. 52:26 Yeah. 52:27 So there's lots of things. 52:28 You could do that, like with 75% of mining hash power over six months, you could just destroy the entire network. 52:38 Because that's, again, people don't really realize the scale of what it takes. 52:41 It's like 75% hash power over six months. 52:44 It's like, you have that, and you, that's, that's on the table. 52:49 And, you know, so it's like, what's actually happening? 52:51 I think. 52:52 What can you do with that? 52:53 Yeah, like a lot, like you, like an unbelievable amount. 52:57 And you don't care about things like the price of the market price of Bitcoin or the stream of fee revenue. 53:02 Like, well, I don't know. 53:04 It's kind of like assuming everything away. 53:06 And instead, what people, what people say is they worry about so many people joining this network. 53:12 And instead, they want to push these people onto, like, literally, like, custodial lightning or, like, Fetament or something. 53:18 Whereas Fetament is going to be robbed 3 million times. 53:22 But that's okay. 53:23 You heard it here first, people. 53:25 Yeah, they talk about it as if it was a protocol or something, some new technology. 53:30 It's like, you're literally encouraging. 53:33 There's going to be, like, a literal, like, just how people are encouraged by ICOs to just, like, specialize and become, like, you know, we had, like, William Mugayar, business blockchain. 53:43 And we had all these weird people, this whole food chain of, like, weirdos and, like, people running conferences and stuff, doing the ICOs, making the white papers. 53:54 Remember they had, like, ICO rank? 53:56 All that crap? 53:57 Assuming that Fetament is successful, there's going to be all this stuff for that, where there's going to be Federank. 54:04 There's going to be people who are professional custodians, and then they will just steal the money. 54:10 And this will happen many times. 54:12 But I don't think this is the Peter Todd line. 54:16 This is more an addressing to fiat jobs. 54:20 The Peter Todd line, to me, is much more obvious to review. 54:25 Like, you just BMM, and everything's perfect. 54:30 Like, you don't affect Bitcoin at all. 54:33 I know why. 54:34 That's what I thought, too. 54:35 But what Peter Todd is saying is something like, some miners must... 54:40 He's saying, and I thought I refuted it long ago, but he's saying something like, some miners... 54:48 You have to look at it. 54:49 In order to understand Peter Todd's thing, you have to look at it from his point of view, which is... 54:52 Is he a communist? 54:54 Well, with respect to... 54:56 He's not pro-miner competition, apparently, or something. 55:00 But we'll unpack it a little bit, where it's like, Peter remembers running a node, and he... 55:07 Back in the day, there was no Blind Merged Mining, because they hadn't invented it yet. 55:11 But he was like, can I run a Namecoin node, which is a hassle, in order to get a little bit of money, like $5? 55:25 $5 a block, or something tiny. 55:28 And he said, well, if I'm a big pool, then it's easier for me. 55:30 I just put up this... 55:31 I set up this mining. 55:33 It's like, everything's piled up. 55:35 Is that a new computer? 55:37 Yeah. 55:38 Yeah. 55:39 What's really crazy about this is how bad it is. 55:42 Because Peter Todd, he divided when he said the cost splits 100 ways, or 1,000 ways, because the pool has 1,000 people. 55:51 But he forgot to divide the benefit by 1,000 ways, also. 55:55 So it's exactly proportional. 55:57 He thinks it's disproportional, but it's just... 55:59 These are just weird mistakes that people made long ago, and for whatever reason, they have just never been corrected, because... 56:07 So he thinks something like, I can't... 56:10 It's easier for a pool to merge mines, so this is yet another advantage the big guys have over me, and I'm going to be pushed out. 56:18 And again, this is a misstatement of the whole thing. 56:21 This is the 101 people can't each have 1% idea, which is that he's getting pushed out, because the network is growing and growing and growing, and there's only 100 percentage points available for everyone. 56:32 That's what's pushing people out. 56:33 Every single person who mines is feeling this. 56:35 They feel like, oh, I'm getting smaller and smaller. 56:38 Well, that's because Bitcoin has become more successful. 56:41 So it's like, that's what you want. 56:44 This is exactly what is happening, is what everyone always wanted. 56:48 And the pools, people rightly say, well, what if these pools misbehave? 56:54 The correct frame, there's been an incorrect frame draped over everything. 57:01 And it's all about, we have to care about what blah, blah, blah, people do. 57:04 The decentralization frame is, the cost of running a full node is your cost of detecting an error on the network and replying to the error. 57:15 So it's all about error correction. 57:17 Now, similarly, we should want to detect errors in pools. 57:22 Namely, the miners themselves should want to do that. 57:24 They should want to run, they should connect their hash rate, point their hash rate at a pool. 57:28 And they should have other software that's like PoolWatch or whatever, that they kind of do have because they do the pool hopping. 57:35 And they also have stuff about like block health, I believe is the official term, where they say, this block could have collected three Bitcoin in fees, but it only collected 2.1. 57:45 And then they divide it and they say, well, this is only a whatever, 70% health block or something. 57:50 So that's what you want. 57:52 You want error correction to be cheap always. 57:55 That is what everyone wants. 57:58 For L1. 58:00 Like for L2, if you want to opt into something with worse error correction, but it has other benefits, then that's your affair. 58:07 That's the same thing we do with everything. 58:08 That's a good thing. 58:10 So, but the idea is we don't want it to make, what people mean when they say miner centralization. 58:18 I'm the only one, I think, on planet Earth who has figured out what the definition is of mining centralization. 58:25 It's the cost of detecting an error made by the mining pools and replying to it. 58:30 That is the only definition that makes any sense. 58:33 Some people say, so for example, Alex B, he thinks he's got people in like a gotcha mode. 58:38 This is how, you know, no offense, this is how unremarkable Alex B is. 58:42 That he thinks that if you, the number of different pools is the metric. 58:48 So if there's only one pool, then that's a bad thing. 58:52 But that's not the case because it doesn't really work like that. 58:55 It's like a restaurant. 58:56 It's like, what if there's only one restaurant? 58:58 Well, imagine that this is the greatest restaurant in the world. 59:01 And it serves the most amazing food for one millionth of a penny. 59:06 And the food comes out quickly and it's the best service in the world. 59:11 This is the optimal restaurant. 59:13 And all 100 percentage points go to this place. 59:18 And the pool, the mining pool never censors, which is the analogy. 59:23 It never censors, it never does anything wrong. 59:26 If the restaurant is perfect already, then actually you don't need a second restaurant. 59:33 It's already perfect by definition. 59:35 And the, what makes it perfect is the turnover, of course. 59:39 But it's like the, if you have a pool, a situation where everything's in one pool. 59:44 Imagine that that is the only pool that does the right thing. 59:50 Every other pool is censoring transactions or maybe censoring all the transactions or doing reorgs or something. 59:58 All the other pools are bad. 1:00:02 Well, then, but there's one that's perfect. 1:00:05 Their behavior is perfect. 1:00:07 They never do anything bad. 1:00:10 Well, then that's actually a situation where you want all the hash rate pointed at that one pool. 1:00:16 Because everything else is just a mistake. 1:00:18 So it's all about errors. 1:00:20 It's all about errors. 1:00:21 Which pools are making the errors? 1:00:24 And if there's only, but, you know, of course, in practice, this is implausible to have. 1:00:29 It's very easy to make more pools. 1:00:31 The variance reduction thing actually, you know, it hits like an optimal point. 1:00:37 The pools, the idea that it would be a bad thing, that it would be a good thing. 1:00:44 So if the metric is number of pools, then all these people, Peter Todd, Alex B., they're also still wrong. 1:00:50 Because the number of pools is not something that will go down because of merged mining. 1:00:58 It's not a fact. 1:00:59 So if we had like 10, if it was like N equals 10 mining pools that each have like whatever, 10%, just make it up. 1:01:07 The fact that we weren't merged mining before, but now we are, that number is not going to change from 10 to 9 because of that. 1:01:15 It's ridiculous because once it reaches the scale of 1 10th or 1 15th or something. 1:01:22 Again, the cost of running the new merged mine software will already be like 100 millionth of whatever the real cost is. 1:01:31 These arguments are all for merged mining, non-blind merged mining. 1:01:34 Exactly. 1:01:35 There's no argument to be had. 1:01:36 Blind merged mining solves it completely. 1:01:38 But they don't even understand blind merged mining. 1:01:41 But the other thing I want to mention is the cost is actually negative because they only run the merged mining software if the revenues from it exceed the costs. 1:01:53 So it's just a bunch of weird mistakes like Peter Todd dividing by cost, but he forgot to divide the revenues. 1:01:59 Or people just thinking they forget that on layer one, everything's mandatory. 1:02:03 But on L2 with merged mining, you can just shut it off. 1:02:06 It's a la carte. 1:02:07 You can turn it on and off whenever you like. 1:02:08 So then they have this weird argument that they think is sophisticated that goes, well, it's because it's profitable that it costs so much. 1:02:15 Because they say it's so profitable that people start doing it. 1:02:19 Then the network difficulty goes up. 1:02:21 And now anyone who's not doing it is losing money. 1:02:26 And, again, that goes down the line of just being an argument against difficulty adjustments. 1:02:30 That's the communist line. 1:02:32 That's the communist line. 1:02:33 Yes. 1:02:34 Exactly. 1:02:35 Yes. 1:02:36 It is. 1:02:37 But I don't think these people are communists. 1:02:39 I just think for one reason or another, they just don't believe. 1:02:43 They just don't really think that this idea could be true because it's so good. 1:02:52 That's what I think it is. 1:02:53 One nice argument that I've been hearing lately is that, oh, do you have other use cases for the hashrate escrow? 1:03:02 One use case is not enough. 1:03:04 Making all possible sidechains in the world is not enough. 1:03:07 It's just one use case. 1:03:08 You need at least one more. 1:03:09 Yeah. 1:03:10 It's kind of like I publish the idea and I say, listen, this idea solves everyone's problems. 1:03:15 And I say, well, you have to do the code. 1:03:17 And they're like, okay, I do the code. 1:03:19 And it's like you have to do the code and you have to code the sidechain also. 1:03:23 And you have to copy. 1:03:24 It's like you have to do an endless list of tasks. 1:03:27 By the time ‑‑ there is some truth to this, though, because the more intelligent someone is, the more easier it is for them to foresee why it's a good idea. 1:03:35 And so you're moving left on the bell curve as you pick up more people, the people who need it spelled out for them. 1:03:43 There will literally be people out there who will probably say something like, I won't believe that Drivechain is a good idea until after everything is coded and it is activated on Bitcoin and lots of people have been using it for like five or six years. 1:03:58 And then they'll believe, you know, then they'll decide that it was worth trying. 1:04:04 Before activating. 1:04:05 Yeah. 1:04:06 So plenty of people will say I won't believe it's a good idea until after. 1:04:09 Going parabolic, right? 1:04:10 That sort of guy. 1:04:12 There was this guy, Sam Walters, I think. 1:04:14 He said, oh, you have to first make the Drivechain and see if people want that before you can activate it. 1:04:22 Yeah, I know. 1:04:25 That's what we're up against. 1:04:27 No offense, Sam. 1:04:28 I mean, I appreciate everyone's attention that they gave attention to my project. 1:04:34 My view is that there's just a vague awareness that there I put this in my pinned tweet that there's a vague awareness that people like Peter Todd, maybe even Greg Maxwell, are against it on the minor centralization mistake, which is a mistake. 1:04:47 Which again, those guys are very, very smart, but smart doesn't mean infallible. 1:04:51 And they are. 1:04:53 The MEV thing was very surprising to me because I thought they had an argument. 1:04:58 I think that was the case of a narcissist who's writing the coattails of people like Peter Todd and another narcissist by the name of Brian Trolls. 1:05:08 I mean, these guys, they're so intellectually, it's really, it's pathetic. 1:05:15 The entire argument of Shinobi is that he just offends you and call you names. 1:05:23 He's got the name Troll in his fucking name, man. 1:05:27 This guy is just a narcissist through and through. 1:05:30 And, well, anyway. 1:05:34 But I thought they had something about MEV. 1:05:37 Yeah, I know. 1:05:38 So what I thought was, it's yet another case of them mixing up L1 and L2. 1:05:44 So I'll just go in and I'll straighten this out. 1:05:46 I'll say, listen, there is MEV on the ETH sidechain, but it's over there. 1:05:50 No one on L1 sees it. 1:05:52 So that's what, of course, I thought it was. 1:05:54 Little did we know. 1:05:55 There was just nothing happening. 1:06:00 Well, I still don't know what was the argument and what's the current argument. 1:06:04 They will never spell it out. 1:06:06 It's just a narcissist looking for attention. 1:06:08 That's it. 1:06:09 That's it. 1:06:10 That's it. 1:06:11 We said with the Lockseye's War, we set up the culture so that people can rise on the totem pole if they are very toxic, basically. 1:06:21 Yes. 1:06:22 So this has trained people to just do this all the time. 1:06:25 They just say, well, I will be the one who cares about Bitcoin safety the most. 1:06:30 So they're like Bitcoin safety officer Karen type people. 1:06:33 And they just want to just say, I'm the one who cares about Bitcoin the most. 1:06:37 And the fact that I am so unreasonable is just a manifestation of how it's really just like a virtue signaling. 1:06:47 It is. 1:06:48 Exactly. 1:06:49 That's all it is. 1:06:50 It's a virtue signaling. 1:06:51 But it's false. 1:06:52 It's false compassion. 1:06:53 It's false compassion for your security. 1:06:55 Oh, please don't do that. 1:06:57 Don't sell T-shirts. 1:06:59 The crucial aspect of it is that they are benefiting from it. 1:07:04 They want to be they want to like start like some kind of. 1:07:07 Yes. 1:07:08 You know, they get they get more status. 1:07:10 They get the invitations. 1:07:11 They get stuff that they get. 1:07:12 They can like start a group or they can maybe start a company. 1:07:16 So they get stuff out of it. 1:07:17 So it's like they are. 1:07:18 They are a parasite. 1:07:20 And my project is just collateral damage. 1:07:22 It has nothing. 1:07:23 They don't even know. 1:07:24 They don't. 1:07:25 It's obvious. 1:07:26 They don't even know anything about the project. 1:07:27 It's just. 1:07:28 It's correct. 1:07:29 An opportune stage. 1:07:30 A platform for them to. 1:07:31 Yeah. 1:07:32 It's like a venue for them to just. 1:07:33 Yes. 1:07:34 Hey, whatever. 1:07:35 So. 1:07:36 Hate. 1:07:37 Hate. 1:07:38 Farm. 1:07:39 Attention. 1:07:40 Kind of style. 1:07:41 That's the Jason Lowery method. 1:07:42 Right. 1:07:43 Yeah. 1:07:45 So. 1:07:46 OK. 1:07:47 We've got. 1:07:48 For example, the consequences of going with Peter Todd is that we no longer do the end 1:07:54 to end principle. 1:07:55 So any feature that comes into Bitcoin. 1:07:57 Well, we've got now a new a new addressing scheme. 1:08:00 We've got a new hashing scheme. 1:08:02 And and here I am. 1:08:03 I'm trying to develop hardware while it's the gods, metal plates and whatnot. 1:08:07 And I'm like, which fucking address do I support? 1:08:10 You know, like. 1:08:13 Yeah. 1:08:14 What do you have? 1:08:15 Yeah. 1:08:16 OK. 1:08:17 So I don't really have a point about that. 1:08:18 But but also. 1:08:19 Well, I mean. 1:08:20 There's so many. 1:08:21 The address format is, I think, a kind of a canary in the coal mine on the development. 1:08:28 I think honestly, I think it's this. 1:08:30 And the descriptor wallets are like. 1:08:33 32 M. 1:08:34 It's 32 M. 1:08:35 Like, why would they do that? 1:08:37 Why would they name it like that with an M? 1:08:39 Why would they do that? 1:08:40 Well, couldn't they just. 1:08:41 I don't know. 1:08:42 I don't know. 1:08:43 I think. 1:08:44 Couldn't they just say, like. 1:08:45 I couldn't do the version numbers before. 1:08:48 Well, that's. 1:08:49 I've complained about this before, where it's like they're unreadable. 1:08:52 Also, it's like they start with they all start with the same, like five characters. 1:08:56 The version number is like the Q or something like it's like designed by Satan or something. 1:09:01 I don't you know, you can't read them. 1:09:05 Whereas before we had thoughts of the one thought to the three. 1:09:10 It was perfect. 1:09:11 Talk to the five is wallet import format for the private. 1:09:15 I kind of like the best 32. 1:09:17 But when they did the best 32 second second birth, I don't understand why they did that. 1:09:24 Like they made a mistake and they made a mistake. 1:09:26 They corrected the mistake. 1:09:27 And so now we have to live with the mistake and live with the old mistake. 1:09:31 You know, addresses are not in the addresses are not in the block chain. 1:09:34 It's just the hash 160 or whatever is in there is not. 1:09:37 So I don't. 1:09:40 That's 32 M. Yeah. 1:09:41 I mean, like when you're trying to research that type of thing, like I don't even know how I even found it. 1:09:47 I was just luckily found it on Reddit that you have to type in batch 32 M to get the new thing that will work. 1:09:55 Did you because I was trying to make a descriptor wallet and again, descriptor wallets are like people think like you should have recorded that. 1:10:04 I know the more we have an enormous disparity between like what people will say on Twitter and what they actually do, 1:10:18 which is none of these people, you know, people who say they like descriptor wallets. 1:10:24 They have never made a descriptor wallet. 1:10:26 So and then people did this with lightning for many years. 1:10:30 None of those people were like lightning, lightning, lightning. 1:10:32 None of them had ever run lightning. 1:10:34 No one do people would say. 1:10:35 Remember, we had many, many people who we had lots of people who are pro lightning. 1:10:42 You guys probably know the names. 1:10:44 And then like on Twitter, I'd like to be on a video. 1:10:47 And they're like, oh, why do I need to run like a lightning node that you need to run a layer one full node in order to run lightning node in the first place? 1:10:56 And like people would retweet. 1:10:58 I remember people would do videos about their experience with lightning. 1:11:02 People would be like retweeting them. 1:11:04 And then someone would point out this person says that they had a really hard time with lightning and they lost all their money. 1:11:10 And then they're like, oh, I just retweeted it to be supportive of lightning. 1:11:13 And it's like people don't. 1:11:15 So no one, you know, everyone is that everyone is a phony. 1:11:18 Everyone is a bullshitter. 1:11:19 Basically. 1:11:20 Ninety nine percent of the tweets are are from people who just they it's not even false. 1:11:29 They have no idea. It's just a performance. 1:11:32 Yeah. They just think. 1:11:34 Being good, whatever. 1:11:36 Yeah. 1:11:38 So you implement today a transactional layer, I believe. 1:11:43 This crossed my mind. 1:11:44 And it doesn't have it basically is trust base. 1:11:48 And I thought that was a very interesting idea. 1:11:50 Very interesting concept. 1:11:51 Could you could you expand a little bit about that? 1:11:53 I'm interested to hear about that. 1:11:56 Oh, that was like the host exchange thing. 1:11:59 It was supposed to be like interface with lightning seamlessly. 1:12:05 But you could just run a wallet and it would be much better than a normal custodial wallet because a normal custodial wallet has all your transactional details. 1:12:14 And this one, they could have one wallet and you could have multiple custodial custodial accounts with multiple providers. 1:12:23 And they wouldn't know very much about you. 1:12:26 And it would be interoperable, etc. 1:12:29 And I think I think the lighting lighting is very broken. 1:12:34 So this was one of the ideas to fix it. 1:12:37 You would just do trust based, but you wouldn't put a lot of money in there and you would just divide your trust between multiple people. 1:12:46 And yeah, mostly lightning today is also very trust based. 1:12:51 So you you you you need your channel peers to not fuck with you and not try to turn your life into hell for it to work. 1:13:00 So it's not a big deal to trust them with a little bit of money. 1:13:05 Yeah, but I did that. 1:13:07 But it was just like you need you needed a bridge like you need a server that would have no more lighting channels and also open a spot for it. 1:13:17 Yeah. 1:13:19 The thing with lightning is there is no way we could possibly understate the amount of just psychological corruption that has happened to people because of the block size war. 1:13:30 So it's not it's not even anything against the light. 1:13:33 Again, I believe in pluralism and I think we should try all these things. 1:13:37 But what happened was there was a scaling war. 1:13:41 People said we want large blocks. 1:13:44 Other people said that's a bad idea. 1:13:46 And then the large block people said, well, what's what are we going to do instead? 1:13:49 And the small block people, myself included, we were like, well, here's this idea. 1:13:53 This is lightning network. 1:13:55 This is much better because now instead of. 1:13:58 Global state, which is like the UTXO said or whatever, which is like clearly not going to work very well. 1:14:06 We have this thing where you prep it and then you have this whole second network. 1:14:11 And then there you just you you are responsible for your own little payments. 1:14:16 And no, no block chain. 1:14:18 So isn't that great? 1:14:20 And that's how it started. 1:14:22 And what happened was that the large blockers started to critique the lightning network. 1:14:26 And many of their critics were wrong or wrong or just nonsensical. 1:14:31 So they were saying this and that they didn't they clearly didn't know of it. 1:14:34 Everyone was it was the same B.S. that is happening now with with with dry chain, basically, 1:14:38 where there was a time when you could watch the original SF bit devs lightning presentation. 1:14:49 And I would watch I would check in month after month. 1:14:53 I would check back at it because what I noticed, I watched the first time I said, oh, this only has like 300 views. 1:14:59 I'm like the 300th person to learn about the lightning network, the future of Bitcoin, the greatest technology like ever invented in the history of mankind up to this point. 1:15:04 And I'm like, OK, that's weird. I'm like number 300. And then I I would come back because I was like, this is a very difficult thing to understand. 1:15:13 I was like, I have to watch it again. And it was like three hundred and fourteen. 1:15:17 I was like, oh, help me in that. You can count me in. I was number 14. 1:15:23 And then so then I started to turn it into a little project where I was like. 1:15:28 I was like, why aren't the critics watching this video, like why aren't like I was like, why doesn't the people who hate on lightning Roger here, whatever, whoever it is, whatever. 1:15:39 Take your pick. Long list of people who could have. I was like, who are these people? 1:15:43 Are they are they watching it or are they like maybe they downloaded it somewhere and they played it to an auditorium? 1:15:50 I'm like trying to figure out. And month after month, year after year would go by. 1:15:54 And it took like two years for this thing to get to 400 views or something. 1:15:57 This was like the only resource other than the white paper, which. 1:16:01 No offense to the people who wrote the lightning white paper, I'm sure they did it. 1:16:04 They put a ton of they poured their heart and soul into it. I bet I found the those butterfly diagrams. 1:16:11 I thought it would have been better if they just weren't in there. I couldn't make any sense of it. 1:16:15 All the naming was horrendous. The presentation was good, though. 1:16:20 And but only 400 people on the planet Earth. 1:16:25 And this is I don't know exactly how YouTube is counting when I watch it, like five or six times. 1:16:29 Like, is it do I eat those counts? I guess my guess is that they must. 1:16:34 Because otherwise, how could that style video get to like a billion? 1:16:37 I was like, what the heck is going on here? And the answer is that no one knew anything about the lightning network. 1:16:42 People for or against. No one knew. 1:16:46 Today, they don't. I've been listening to all the lightning podcasts. 1:16:51 And I think they're starting to get it now. But the supposedly very technical people, they didn't have any. 1:16:58 Even the Beatles, they didn't have any. 1:17:02 They were not paying very much attention to the lightning protocol and what was supposed to do. 1:17:06 And so they didn't know the details. And there was also this split like the Tej Draja. 1:17:13 He said at some point that the other guy, Joseph Poon, was saying that lightning would scale. 1:17:20 Everything would fix the entire world. 1:17:23 And he was more like, no, this can facilitate some transactions like between exchanges and etc. 1:17:28 But it won't scale Bitcoin to the entire world. 1:17:31 But that was the thesis that won the minds of people. 1:17:36 And everybody thought that. And still to this day, like he said, Tej Draja will say that lightning will scale the entire world. 1:17:45 And still to this day, like he said, Tej Draja will say that lightning will scale the entire world. 1:17:51 And still to this day, like he said, Tej Draja will say that the sub fee HTLCs that do not exist, 1:17:59 you can send an HTLC on the lightning network and they actually do not exist as HTLCs. 1:18:05 It's just a fake imagined concept. 1:18:07 He's 100% right about that. 1:18:09 He says that should not happen. 1:18:12 It's actually worse. 1:18:13 But the crazy thing is it seems to me that Peter Todd is not aware of that because that happened also a few days ago. 1:18:20 He posted a screenshot with a bunch of one Satoshi transactions like, oh, it's working. 1:18:25 Yeah, like how can he not understand? 1:18:29 So we can explain this to the audience maybe, 1:18:31 which is that the reason why there's no HTLC below the fee dust limit 1:18:36 is that the HTLC costs a certain amount of bytes to just write into the transaction. 1:18:44 And it expands the size of the transaction such that whatever fee rate you were paying before. 1:18:50 See, because it's not fees in Bitcoin are per byte. 1:18:53 It's how much ink you use. 1:18:55 So let's say you have a... 1:18:57 This is how, for example, people like Roger Ver when they had to combine like 5000 inputs or something, 1:19:02 they could pay hundreds or thousands of dollars. 1:19:06 In transaction fees. 1:19:08 But I'll try to explain this here, 1:19:11 which is that let's say you planned on spending 50 cents for a 220 byte transaction. 1:19:21 And at that rate, 50 cents per 220 bytes, the HTLC for you to route this payment. 1:19:30 The payment, if you were to broadcast this on chain, 1:19:33 let alone for what it would take for you to later redeem it by selecting it as input and providing the script. 1:19:40 I'm not sure if this is going to do a good job of explaining it, 1:19:43 but I'm going to try and maybe Stuart, you can tell me if anyone in the audience is going to get this or whatever. 1:19:50 The amount of ink needed to write down the HTLC will cost more than the whole thing is worth. 1:19:58 The whole thing is worth. 1:19:59 The whole thing is worth five cents. 1:20:01 But now to broadcast it on L1 is going to cost you 25 more cents. 1:20:07 The whole point of having the HTLC is so you can claim that five cents if someone screws you. 1:20:13 But there's no reason to ever do that when it would cost 25 cents in ink to write it down and then another another 50 cents in ink to later redeem it. 1:20:21 It would cost you more. 1:20:22 It's like going to court and someone hits your bike or dings your car and you're going to need to sue them for $50. 1:20:33 But the court taking them to court. 1:20:36 There's a fee to get into the court that is $800. 1:20:42 But you can't tell the person, well, I'm going to take you to court. 1:20:46 They know you won't because you hit it on the head, man. 1:20:49 I think you hit it on the head. 1:20:50 I think you hit it on the head. 1:20:51 Fiat, do you have input to that before I go? 1:20:53 Yeah. 1:20:54 Yeah. 1:20:55 A friend of mine once won a lottery ticket and he won it with a lot of other people in the entire country. 1:21:04 So when he went to the place to get his prize and the prize was barely just enough to pay the bus that he spent. 1:21:20 So that's too bad. 1:21:21 I mean, Fiat, how do you explain what Peter Todd did there? 1:21:24 How do you explain that? 1:21:25 Oh, him showing me that screenshot. 1:21:27 I think he understands it. 1:21:29 I explicitly said the HTLCs do not work. 1:21:32 Because you can still have some version of the Lightning Network that just works if you just say, listen, that's such a small amount of money. 1:21:37 I'll just forward it to you. 1:21:39 And then you forward it to the next person. 1:21:41 It's much worse than that. 1:21:44 It's much worse because they care. 1:21:46 The software treats it as if the HTLC existed. 1:21:51 So if the payment gets stuck, for example, and you have to close the channel and go and claim the HTLC back whenever the time lock expires. 1:22:03 So the node software will do that. 1:22:05 It will close the channel, waste a bunch of fees, and then it will try to claim the HTLC. 1:22:11 But at that point, it will realize the HTLC doesn't exist. 1:22:15 So it's much more dumb if they just agreed to say... 1:22:20 But if you did agree... 1:22:22 There's discussion about this sometimes whenever the Lightning people are not sleeping. 1:22:29 They sometimes talk about this and they say, oh, but if we don't close the channel, then that means the person can steal money from us and we won't do anything. 1:22:40 So there's really no solution. 1:22:42 I wrote an article trying to explain the problem. 1:22:47 There's no solution for this. 1:22:49 You close the channel, but you just lose the channel. 1:22:51 You just lose the channel. 1:22:53 And then the person can open another channel with you and then the person can try to screw you up again. 1:22:59 But they also don't gain anything from that. 1:23:01 So no one is trying to do that on purpose. 1:23:05 But it happens a lot because of bugs and other tricks. 1:23:10 How do you explain what Peter Todd is doing? 1:23:14 Because I said HTLCs don't work when it's below the L1 fee rate. 1:23:19 And they posted that screenshot and I said, those aren't HTLCs, which they clearly aren't. 1:23:24 And if they were, then it was an example where Peter Todd's node was actually prepared to go to court, spend $800 to win like a $20 case. 1:23:34 So that would actually be even worse if they were HTLCs. 1:23:38 The protocol says that the nodes have to agree exactly on what's the transaction they're presigning. 1:23:46 So you can't choose. 1:23:49 The nodes do what they must do always. 1:23:52 So whenever an HTLC is very cheap, the node doesn't create the HTLCs, actually. 1:23:59 I know, but I'm saying, why is Peter Todd saying that those are using HTLCs? 1:24:05 Is it really possible that he does not know? 1:24:08 If he said that, then he doesn't know. 1:24:10 Yeah, I don't know. 1:24:11 I mean, but that's kind of surprising to me. 1:24:13 I remember he saying that, oh, it's not worth for the other node to try to cheat. 1:24:17 So he won't. 1:24:18 But the fact is that they are not HTLCs. 1:24:21 But that's completely different. 1:24:22 They're not like Lightning. 1:24:23 Lightning is very carefully defined as these duplex channels that have HTLCs. 1:24:31 That is what the Lightning network is. 1:24:34 Well, they're called HTLCs in the protocol. 1:24:36 They're called trimmed HTLCs, like HTLCs that you just don't make. 1:24:42 But they're called HTLCs. 1:24:43 They have a payment hash associated with them. 1:24:46 And these payment hashes, they're supposed to identify HTLCs. 1:24:52 And you get a preimage for that to prove that you paid. 1:24:55 And you can use the preimage to redeem the HTLC on the chain. 1:25:01 And you have all of that. 1:25:02 But you don't actually have the HTLC. 1:25:04 It's a very ugly thing. 1:25:07 You get a preimage for the hash doesn't exist anywhere on the blockchain. 1:25:11 Like when you broadcast. 1:25:12 No, no. 1:25:13 On the blockchain, it doesn't exist. 1:25:15 Right. 1:25:16 Because why would you get it? 1:25:18 It doesn't make any sense at all. 1:25:20 So I guess maybe he's saying the trimmed HTLC is a real HTLC, even though it doesn't exist. 1:25:26 Even though that doesn't make sense. 1:25:29 I mean, because the HTLC, what it stands for is hash time locked contract. 1:25:32 So the hash is the whole point. 1:25:35 Yeah. 1:25:36 There's no H anywhere. 1:25:38 There's also no time lock. 1:25:41 This is a time lock. 1:25:42 Yeah. 1:25:45 Yeah, but they just want to treat a payment with a trimmed HTLC as if. 1:25:51 Yeah, but the trimmed HTLC, again, it's like custodial lightning or something. 1:25:55 Other than that, Mrs. Lincoln, how did you like the play? 1:25:58 It's like all the meaning is destroyed. 1:26:02 It's like when they had the hosted blockchain. 1:26:05 And the payment goes to miners. 1:26:08 The amounts go to miners. 1:26:10 Oh, yeah, yeah. 1:26:11 But that's another intriguing. 1:26:13 Doesn't that affect mining incentives? 1:26:15 That's what I was going to say. 1:26:17 This is a completely separate matter. 1:26:19 But what it technically means is that if the L1 fee rate is high, then you should only 1:26:23 open. 1:26:24 It's only incentive compatible if you open the channel with the miners are the ones who 1:26:29 should be opening the channels. 1:26:31 And then the miners control all the channels. 1:26:33 And then it actually becomes a BIP300 hashrate escrow. 1:26:36 The lightning network does. 1:26:38 That's the exact same logic that Peter Todd's weird equilibrium of mining costs, where it's 1:26:43 like $0.10 worth of advantage becomes this insurmountable, unstoppable force that we 1:26:48 have no recourse for. 1:26:51 It's like, oh, OK, well, now miners should be the only ones to open the channels. 1:26:54 Everyone else should have a custodial lightning with the miners. 1:26:57 And then it's like, oh, no, that's just BIP300, except much worse, because you have no 1:27:01 ability to stand as a group against the detect the mistake. 1:27:07 So I'm going to use the two of you as a soundboard for this opinion that I have. 1:27:13 One of the solutions that I want to create for this transactional layer is to say, well, 1:27:19 OK, don't use this sort of like relay type system. 1:27:24 How do I explain this? 1:27:26 The way lightning does it is it uses this, it's supposed to use this hash time lock contract 1:27:31 between these different nodes and sort of find a route through the network. 1:27:35 And if it fails, then the hash time lock contract sort of like, you know, fall back. 1:27:40 You can either, after a certain time, you can grab the contents of this little locker, 1:27:45 or else it just gets forwarded. 1:27:48 And to your point, Paul, I agree with you. 1:27:50 It's you've got like an $800 fee to go to the court to settle for like a $20 thing. 1:27:55 Right. 1:27:57 My thoughts are. 1:27:59 As a as a Drivechain sidechain. 1:28:03 The correct way to do this is you actually do have the underlying network, which is the 1:28:08 sort of sort of flood first forwarding type network or specifically information centric 1:28:15 networking type network that can forward. 1:28:19 So if I just say I want to pay this amount of value from me to you, Fiat Jeff, or you, 1:28:27 Paul, what will happen is the network will see this and see the endpoints, the two public 1:28:32 keys and say, OK, just forward this information and then it'll be the network's responsibility 1:28:37 to get it from me to your public key. 1:28:41 And then once that happens, then we can directly know intermediaries come to an agreement. 1:28:49 Would this be and yeah, and is this the would you say that this is a better way of handling 1:28:55 something like lightning? 1:28:57 But how do you transfer? 1:28:59 How do you transfer? 1:29:01 Yeah, well, you know, the network is intelligent enough to find you. 1:29:06 Yeah, but how does the money go for you? 1:29:08 This is not a great thing about the lightning network is that you you know, you need to 1:29:13 like some people run it behind Tor, which is great. 1:29:16 I mean, I don't know, like if like if people but, you know, it's also like very keyed on 1:29:21 finding your like your IP address and interacting with you, which I think is actually one of 1:29:27 yet more of it's why it will probably not be that popular. 1:29:33 I don't really understand. 1:29:34 It's like your idea is we have these people and we know that now we know the path that 1:29:38 connects a to B. 1:29:39 My point is that the underlying network can be over any transport. 1:29:44 It doesn't have to be over IP. 1:29:45 It could be over radio frequency. 1:29:47 It could be over any transport. 1:29:49 The network is treats it as as an opaque data chunk. 1:29:55 It doesn't give it. 1:29:56 It could be a cat image. 1:29:58 It could be a value. 1:30:00 It could be I don't know. 1:30:01 The point is that it could be something. 1:30:03 And in this in this form, it could be I don't know, maybe a Bitcoin transaction. 1:30:06 But the point is, it's it's just a black box that goes from me to you. 1:30:12 And well, whatever you're going to put into that, it could be a hash time lock contract 1:30:16 between the two of us and not a chain, for example. 1:30:21 That doesn't work. 1:30:23 That doesn't work. 1:30:24 And if you say, well, I mean, the what happens with lightning is everyone already has these 1:30:28 multi signature outputs that are two of two. 1:30:31 They have a certain amount of coins in them. 1:30:33 Yes. 1:30:34 And that there's a split. 1:30:35 So like if there's maybe there's 22 coins in one of these, it could be split like for 18. 1:30:42 Yeah. 1:30:43 But there's actually something on L1 that says whatever. 1:30:45 Twenty two coins. 1:30:47 This output. 1:30:49 That's like the funding of lightning. 1:30:52 So that's why you can move stuff through those HTLC related stuff, because that already exists. 1:31:00 And with your thing, you didn't really explain, like, what is it moving? 1:31:05 What is happening on L1 to move the two? 1:31:08 How do the coins? 1:31:09 Who has what coins? 1:31:11 So, well, OK. 1:31:12 OK. 1:31:13 I mean, so my my main issue here is that my main point that I'm trying to make is that 1:31:18 getting the data from person A to person B is just the problem I'm solving. 1:31:23 The actual value transfer that that's that's that's something that, well, first of all, 1:31:28 it's far away enough that I haven't thought about that clearly enough. 1:31:32 But but the point is that the point is that is me connecting directly from me to you. 1:31:38 And instead of having to go through like a how can I say a first class routing network 1:31:44 specifically designed for routing these payments? 1:31:47 No, don't do that. 1:31:48 Just just use the underlying network, which would communicate this value transfer. 1:31:54 The reason the reason the lightning has these these other network is because we have to 1:31:59 move the money through that. 1:32:01 And the channels have to exist before like they have to exist beforehand. 1:32:07 Doesn't doesn't matter if I can't contact you directly if you're like inside you. 1:32:12 But that's what but that's what causes the eight hundred dollar bill. 1:32:15 You see. 1:32:16 And if I just have. 1:32:17 Am I correct? 1:32:18 But if I just have like if there's just a single hash time lock contract between us, 1:32:22 then you have to. 1:32:24 That's what keeps the chain. 1:32:26 Well, that's what you mean by the eight hundred dollar bill. 1:32:29 Yeah. 1:32:30 The idea with the HTLC is you have a stuff that's already open. 1:32:34 Yes. 1:32:35 And then there are the HTLC is the less the payment goes through a third party. 1:32:40 It's like you don't see. 1:32:42 Because otherwise it's very there's plenty of people in life that you'll pay more than 1:32:46 one time or they'll pay you like, you know, your boss or like your favorite takeout place 1:32:51 or whatever. 1:32:52 So you have a channel with them and then just like a bar tab, but cryptographically enforced 1:32:57 now. 1:32:58 But you see, the real world just has too many instances where you have to pay someone that 1:33:02 you'll never pay again. 1:33:03 Yes. 1:33:04 For that to work. 1:33:06 So. 1:33:07 So the question is, what do we do about that? 1:33:09 And the lightning answers the HTLC. 1:33:11 It lets it lets it lets you make it so that. 1:33:15 I can pay you, you can pay the next person on the chain, and they either all happen or 1:33:20 they don't happen. 1:33:21 So the HTLC is a kind of like a synchronicity event. 1:33:25 It is like. 1:33:27 I don't know, something in a movie where everyone is the same. 1:33:31 Insert movie reference here. 1:33:33 What is it? 1:33:34 I was thinking of something. 1:33:36 OK. 1:33:37 OK. 1:33:39 Yes. 1:33:42 Oh, well, there's a there's actually one thing was in Indiana Jones. 1:33:45 He gets the idol. 1:33:47 He steals the idol at the very beginning. 1:33:49 The latest movie. 1:33:50 He has the gold thing. 1:33:52 Yes. 1:33:53 And he is with that guy. 1:33:55 He's going to swap. 1:33:56 Right. 1:33:57 Are you talking about the latest movie? 1:33:58 Because I have not seen it. 1:33:59 I haven't seen the latest. 1:34:00 No, I'm talking about the. 1:34:01 Oh, you're talking about the one where he swaps it. 1:34:02 Yes. 1:34:03 And he has the thing. 1:34:04 And he has to jump across the chasm. 1:34:07 And the guy says, throw me the rope. 1:34:11 Indy is in trouble. 1:34:12 He says, throw me the rope. 1:34:14 And the guy says, throw me the idol. 1:34:17 And Indy looks at the idol or whatever, and he looks at the rope and he says, 1:34:21 you first. 1:34:22 And the guy looks over and the the door is closing and like the spike 1:34:26 trap is coming down or whatever. 1:34:29 And the guy says, no time to argue. 1:34:32 So Indy throws him the idol. 1:34:36 And then he doesn't throw him the rope. 1:34:38 And then Indy has to use the whip to get across. 1:34:41 And then right in the next room, this is the magic of Steven Spielberg or 1:34:44 whatever, right in the next room, he's been impaled on the spike trap 1:34:48 holding the idol. 1:34:50 So he says something like, adios, senor. 1:34:52 And then Indy sees him and he's like dead. 1:34:54 And he grabs the idol back and he's like, you know, adios, senor, 1:34:57 or whatever. 1:34:58 He says the same thing. 1:34:59 And then he escapes. 1:35:00 So the HTLC is like the rope and the idol going at the same time. 1:35:04 You cannot take the idol without leaving the rope. 1:35:06 That's what the HTLC does. 1:35:08 It only works if you already have the channels open. 1:35:12 Yeah. 1:35:13 So setting up and tearing down those channels is the expensive thing. 1:35:17 The onboarding problem is very big for Lightning. 1:35:20 And one crazy thing that doesn't make any sense to me at all is that I 1:35:24 appear to be the only person who is willing to talk about it at all. 1:35:27 I don't know why or how. 1:35:28 There's not enough room to onboard the whole world. 1:35:30 I just said in April of last year or whatever, I was like, well, 1:35:33 it was February of last year. 1:35:35 Or maybe, I don't know, 1:35:36 maybe the time I'm getting older and I'm losing all my marbles and I 1:35:39 don't know what year it is, but I think it was February of last year. 1:35:43 I was on the mailing list just talking about everything, you know, 1:35:46 this and that. 1:35:47 And then they were like, they were like, yeah, 1:35:51 Lightning is better for onboarding than sidechains. 1:35:55 And I was like, oh, really? 1:35:56 And then I was like, that doesn't sound right. 1:35:58 And so I did the envelope and I was like, this envelope math is terrible. 1:36:00 Like it would take like 122 years to onboard everyone to the Lightning 1:36:04 network. And then they were like, well, channel factories. 1:36:07 And then I was like, what? 1:36:08 And I was like a channel factory doesn't work because if anyone in the 1:36:12 channel factory doesn't participate, 1:36:14 you have to drag the whole thing back on chain. 1:36:16 And the channel factor is like 20 times the size of normal Bitcoin 1:36:19 transaction to do unwind. 1:36:22 And creating it is also like it requires coordination. 1:36:27 So it doesn't fix it at all. 1:36:28 There's a video from Roger Beard where he makes the math. 1:36:32 I kind of vaguely remember he has like an Excel spreadsheet or something. 1:36:37 I don't know. 1:36:38 I vaguely remember that. 1:36:40 Yeah. 1:36:41 But at the time I was like beginning to learn about Lightning and doing 1:36:44 stuff. 1:36:45 Yes. 1:36:46 This is absolutely crucial to point out, 1:36:47 which is that Roger will certainly get the last laugh on that one. 1:36:52 But there were a lot of critique. 1:36:56 I don't think that necessarily like there were a lot of critiques of 1:37:00 Lightning at the time. 1:37:01 And they, 1:37:02 I don't believe that most of the people really understood the Lightning 1:37:05 network when they made the critiques, 1:37:07 just like I think the people who are pro Lightning were also bullshitting. 1:37:11 I think the whole thing was just a bunch of BS really. 1:37:13 And people were just like making stuff up and no one really knew what they 1:37:16 were talking about, 1:37:18 but he's certainly going to get the last laugh on as far as Lightning 1:37:21 onboarding, which I think is. 1:37:25 Very perplexing. 1:37:28 Well, certainly whatever to fix, whatever you have to do to fix that, 1:37:32 it will be so different from the Lightning network proposed by as Roger 1:37:36 and Joseph Poon as to be effectively like a different differently named 1:37:40 thing. 1:37:43 So there you go. 1:37:45 But yeah, I thought that was. 1:37:47 One of the critics was the hub thing. 1:37:49 Oh, 1:37:50 the Lightning was centralizing a few hubs. 1:37:52 The Lightning defenders, 1:37:55 they would all say, no, no, no. 1:37:57 That would never happen. 1:37:58 Right. 1:37:59 Exactly. 1:38:00 And I also thought it wouldn't happen. 1:38:01 I thought, well, why would they, I mean, hubs are great, 1:38:03 but it doesn't matter if they're hubs. 1:38:05 And no, I think I was wrong about that. 1:38:07 And now we have, we see, for example, 1:38:08 the Barak creator of Arc, a brilliant guy, 1:38:12 but he's like, he, he comes out of the gate. 1:38:15 Like he starts to do his Arc explanation. 1:38:18 I've seen it a few times. 1:38:19 There's actually a funny video at Bitcoin plus plus in Austin of me, 1:38:23 everyone in the audience has been confused, 1:38:25 including me being completely confused. 1:38:27 And me just trying. 1:38:28 It's impossible to understand his explanation. 1:38:29 Pull all the idea out of his head. 1:38:31 What he says, 1:38:38 he, what he says, 1:38:39 like right out of the gate, he's like, 1:38:42 so obviously Lightning doesn't work or whatever. 1:38:44 Lightning is terrible. 1:38:45 And then it's like, and then he's like, it only works. 1:38:47 If we have these big hubs that do everything. 1:38:50 And so we need to make these hubs. 1:38:52 We have to make sure that these hubs work. 1:38:54 You can always easily join and leave the hub. 1:38:56 So it's all about hubs. 1:38:58 And everyone is only going to have a connection to one lightning node. 1:39:02 Like they're, they're not going to like have all these things that have, 1:39:05 like, there'll be like a hub one and then like backup hub. 1:39:08 And, and we need to be able to let them open the hub and start spending 1:39:15 before the, so it's like, so he is just like right out of the gate. 1:39:18 Like bro hub. 1:39:20 But it's not, it's not just him. 1:39:22 Like all the other lightning overalls, they're, they're doing the same. 1:39:25 Like they have this LSP thing. 1:39:27 They're like one company running, running a lightning server for all his. 1:39:32 That is a bad one too for the, that's very bad for the, well, hey, 1:39:36 if you interrupt, but you know, it's like the, 1:39:38 that was another thing that they said, 1:39:40 the large blocker said is that these people just become banks. 1:39:43 And at the time I was like, what are they even talking about? 1:39:45 Like banks, like it's like a cryptographic thing. 1:39:48 Who even cares if they call themselves banks doesn't matter. 1:39:51 But now they have become banks like for real. 1:39:53 Like they actually own everyone's Bitcoin and these people don't even own a channel. 1:39:58 And there are two modes, like there's the custodial wallets that are much bigger than everything else. And there are these LSPs, they, they actually don't, they have the money. Like they just open the channel, like you install a wallet, like Phoenix wallet or whatever. And the wallet automatically opens a channel to one specific central hub. And you leave with that. And, and that's been enshrined in the protocol, like new additions to the lighting protocol already, you know, it's a, it's a, it's a, it's a, it's a, it's a, it's a, it's a, it's a, 1:40:25 assume these hubs exist, like you need these to do a bunch of niceties for the protocol. So they accepted that they have model, but the custodial, the custodial stuff is much, much, much more. It exists in much more. 1:40:40 Hmm. So Paul's buggered off for a second. He'll, I'm sure he'll be back. Um, um, yeah. Fiat Jeff. Um, you got, you got, you got interrupted a little bit early on when you're describing, um, um, your, your, your, what's it? The, the, the, the, the, the trusting transactional layer. I don't know what you call that. 1:41:01 Well, I went, I, um, I liked this idea of the hosted channels, which was actually, and the main reason why you wanted to do that was what was the, what problem are you solving? 1:41:12 I want to get, I want to do one follow-up question with Fiat Jeff regarding the, the work that he did on the, on the, the, the trusted transactional layer. Um, and I want to know what problem he's solving. 1:41:30 Well, the problem I solve is I want cheap transactions that work. You don't have to store a bunch of things, run a bunch of things and just want to do. And it's better than using a custodial wallet, which is the preferred solution for the very, very vast majority of Lightning users today. 1:41:51 So how did you get to the main chain? Did you also have some, yeah, yeah, yeah. 1:41:55 No, in this case you would interface with some provider, like some server that has actual Lightning channels and you would trust that one. You trust that server, but that server would forward your payments to the, to the other, to the rest of the network. 1:42:11 I see. Okay. So you're going to have some sort of, um. 1:42:15 I think, I think Lightning is like this, this very convoluted, cumbersome, complex, super failable, like super flaky, whatever. It's very bad. And just so people can tip some 25 Satoshis to others, like you, you don't need that. You don't need all that though. It's whatever. 1:42:42 So if you just made a trust, a network made of trust or small amounts, it would be much easier to do. It would be simpler to be, everything would be much easier and you could make it so it was actually decentralized. 1:42:56 And instead of having a bunch of like, because today you try, everybody's trying to optimize for this super adversarial network, whatever. But what, what happens in the end is 99% of the users are all having a, using a custodial provider, like one of the five custodial providers that exist. 1:43:18 And if you could like, instead of make it, make a actually decentralized network of trust and you trust your friends, I think it would be much better outcome. And you wouldn't use any of that to store your life savings. You would buy a coffee and to tip people, send tips because apparently that's the real, the thing that people love more. 1:43:41 Well, it's America. They do a lot of tipping, right? 1:43:46 Yes. Failing to tip is, you go straight to hell. 1:43:50 Social ostracization for you. 1:43:54 Yeah, it is funny. It's one of those things where the easier the crime is to get away with, the more proportionate the, the, the whatever, the deterrent, like everyone would turn on you. There's not a single person who would defend you. 1:44:12 Get out of here as you walk out the, the, the diner. That's what you guys call it. 1:44:18 I think it's kind of interesting. Like that looks like on one hand, people are worried about, it's really difficult to run a full node. So we have to keep the block size small, but then it's like, we'll use lightning. But then now it's very difficult to run the lightning. So it's kind of like it ended up not. 1:44:36 It's just kind of like a damned if you do, damned if you don't kind of a funny situation, but this is why we should be more pluralist. We should try more things. We should not, we should let everyone try their weird thing. And that's a good thing. That's what we want. We want lots of stuff to be tried. And, but that's not the attitude that we currently have. 1:44:57 Well, that's like free speech, right? You're using speech, you're using code to actually explore different options. And then you say, well, I found something and it actually works. And then people learn from that and evolve it and grow it. And the idea matures. 1:45:10 Satoshi didn't have to justify anything to everyone, anyone. He just, he just, he just did his thing and released it. And it was totally misunderstood for years by even the people who now are, it's like biggest supporters. But now in Bitcoin development, it's kind of like you have to appease the dumbest people, laziest and dumbest. You have to get full consensus from a hundred percent of the dumbest community. 1:45:38 The dumbest person in the community must sign off. 1:45:42 And then you get the trolls and then you get the trolls and throw the trolls into there and then who now cause more problems for you. It's just not scalable. It's just not going to work. It's just not going to work. So that can kind of sort of lead us into maybe the next section. 1:45:57 Last night, I went to a meeting with Mike Young. He's a friend of yours, I believe. And, you know, we saw this meeting post. It's a layer two Asia. And the first thing I did, I saw this and I thought, it's a scam. So I messed up. 1:46:17 I don't really necessarily know like what, I can't really understand what, you know, I can't read Chinese. So it's always a little bit of an arm's length. 1:46:27 No, I mean, well, that's why I forwarded it to you. And I said, Paul, what's going on here? I mean, like, and well, I went with my mate last night and it was a really good talk. Mike does a really great job of communicating the Drivechain thing. You know, he does it in bilingual. He does it in English and Chinese and nearly all of it. 1:46:49 He can speak Cantonese as well. 1:46:51 Does he speak Cantonese? Yeah, well, he grew up and he was born in Hong Kong, but spent a lot of his life in Canada, if I recall correctly. But yeah, he seems like a pretty cool dude. I'm going to take him out for beers. It'll be great to get to know him. 1:47:04 He is a good guy. 1:47:05 Well, I think, you know, I'm committed to bringing this idea into the world. And I think that we're going to try a lot of things to demonstrate the effectiveness of the idea. 1:47:34 And I think a lot of people have really underestimated, like, the idea. And so we're going to try to just, I think the number one priority is to do what's best for the end Bitcoin user, and not necessarily what is best for, you know, Bitcoin Twitter or elite Bitcoin developers, or just people who have opinions. 1:48:00 The dumb people. 1:48:01 So we have, I think, like, that's the important thing to keep in mind. And I think that we will be working on a lot of great stuff at the company and we're going to put out a lot of great software for people to use. And I think people are going to really enjoy it. 1:48:23 That was a non-answer poll. 1:48:28 Okay. All right. All right. So I get as far as you want to push that. And that's fine. All right. Okay. So I thought we were going to get an hour conversation out of that. So now I have to think of the next question. Okay, Paul. 1:48:45 I have a question. I have a question. 1:48:46 Good, good, good, good. Thank you. 1:48:48 The question is, why can't we have like a very bad, but still working version of a prediction market scheme on a federation or custodial? 1:49:03 I think we should. I've always been in favor of this. No, I'm very excited about this. I like to work on my own weird thing, which is Hivemind or whatever, which is kind of like a lightning network thing where it's very convoluted and it's designed to work under the most adversarial of cases. But I don't think, again, like, because I believe in pluralism. So I think people should try all kinds of stuff. 1:49:27 But whenever people ask you, or maybe whenever I asked you, just say, oh, this will not work. 1:49:32 Well, I don't think that it's, I don't think it will work, but I think people should try. You said, why can't we have? I said, well, we could try it. Someone should do it. I would be in favor of someone doing it. 1:49:41 But I think it's difficult. Running a prediction market is basically the same thing as running a big exchange where you control. It's very, it's kind of like the oracles are kind of like custodians. 1:49:55 They control the fate of all the money. And because what they can do is they can say something that the prediction market, it should trade at 100%, but they can switch it so that it trades at 0%. And the thing that didn't happen trades at 100% when it should be zero. 1:50:09 So they can buy for zero the thing and then flip the oracle and extract all the money from the prediction market. So the prediction market oracle is contents under pressure. Single point of failure is extreme stress point for the oracle. 1:50:27 That is a key weakness. So if you're just going to say we have a federation, do it, whatever, then it's going to be difficult if there's someone won't even want to bet on it at first because they'll think what if tons of other people bet and now this becomes the Gangnam style of contract. 1:50:47 Now there's tons of money here. Now they're going to rug pull and kill. So you need it to kind of stay like at just the right size. You need a lot of stuff to happen. It's bad if it becomes too popular. It's bad if it's not popular enough because you think this whole scheme isn't viable. 1:51:03 So now they're going to rug, they're going to exit scam and rug pull. You need to know a lot about who are these people. You need to know about, for example, their time preference, so to speak. So if these people are going to get involved with you, they open a prediction market system and they say we are going to be collecting fees. 1:51:25 So your money is safe for those now. I'm going to do a little Marco Rubio there. They say this thing is we're going to be, you can bet like $1,000 or $10,000 here up front and we're going to be collecting all these transaction fees so you know that we'll be totally honest. But then what if those people like, you know, it's like a three or five multi-sig and you find that the three of those five people they have now they have terminal brain cancer or something. 1:51:53 These are the kind of things that you actually need to know, like their time preference may have switched or they're going to retire or something. So you kind of need to know a lot about the same weaknesses of the Federation as I always said. You need to know about the Federation and what's their deal. Like who are these people? Are they trustworthy? 1:52:07 So these are the many disadvantages that Bitcoin Hivemind Truthcoin does not have. It doesn't have any of those disadvantages. Instead it has a lot of convoluted blah, blah, blah. But we're currently rewriting it in Rust. Everyone out there who loves Rust will be happy to know. 1:52:23 That will make it succeed. Just in that in itself. I mean rewrite the world in Rust, you're good. 1:52:53 What you really need is the prediction markets. There are certain questions that are just so good that everyone will hate them. And these are questions like, would the stock price go up if we fired the CEO? Would the GDP go up if we fired the political party? 1:53:11 And those need to be, these really will become, it needs to be like an armored vehicle where it's built, it's like a Ford F-150. It needs to be like really tough. This is not a case where you can just be like, oh, blah, blah, blah, a bunch of friends will trust each other. 1:53:28 But these things only work also if there's a lot of money on them. People that really know the things, they won't just bet 10 Satoshis. It doesn't make sense. They have to be safe. 1:53:43 Well, maybe I misunderstood you there, but in prediction market world, we want, there's usually like two or three people who know the actual answer and we need to make sure they get the answer out. They can make a ton of money. 1:53:57 Right. Yeah. That's what I'm trying to say. Yeah. It doesn't make any sense for a person. 1:54:03 A ton of money. And we want them to also, we want them to make it privately and like tax-free because that whatever you may feel about whatever, different countries and their tax laws, it just happens to be a cold, hard fact of the universe that every tax is a friction. 1:54:21 And of course being stigmatized as the winner is a friction. So we want to make sure that everyone who contributes to the prediction market, they contribute their hard won knowledge. We need to make sure they rise the totem pole in the form of anonymous, untraceable eCash by winning big. 1:54:39 And they need to know when they make the bet that they will win, which is the whole reason why. So the Oracle system needs to be very robust. 1:54:46 So this is the connection with the Zed Cash sidechain because then they can just come back down to main chain. 1:54:53 Partially because they can switch it out. And what they can do is they could make money on one chain, switch it for Zed Cash and then the coins would – partially sidechains actually do this kind of already because sidechains you can swat. 1:55:10 Once you do cross-chain, you can do either – you can do HTLCs, which would link them, but you can also more likely you would just do something like Coinbase or SideShift where you would just slowly stream them across and swap them with no HTLC, with just the reputation of the exchange and the exchanges, which does work because that is a situation where they stand to make an ongoing enormous amount of money. 1:55:34 And so they would do that and you would send it to them, they send it to you. It's like the coins you get on L1 are now completely different coins than what you won in the prediction market sidechain. 1:55:47 So yeah, but privacy is a very important – like all important things, it has enemies. It has the worst kind of people as its enemies. Every important thing. 1:55:58 Why are prediction markets not done in the fiat world? Like apparently the governments always ban all the prediction markets. Why? And they never give an explanation and people are not aware of why they have this – they specifically target – 1:56:14 It's one of the most important questions in the world. I have researched it myself in enormous detail, but I do not have a real answer for you that I could actually – 1:56:25 What do you have? 1:56:27 But I have some answers for you. Okay, so one is – it's not banned everywhere. In the UK, it's encouraged, but is the UK just a fluke? I don't know, but in the UK – 1:56:38 Is it encouraged? Like it's just sports. 1:56:41 There's an idea that a gentleman – they get into a dispute and they do a wager on it. That's seen as a classy thing. Correctly so. It's seen as a civilized thing to do. 1:56:52 In America, America is hung up on its puritanism. America has various different cultural strands. Some of them are these boorish strands that are like the South and stuff, but the main one that come – where all of our laws and universities and stuff comes from is this Boston, Harvard, Boston, New Haven, like whatever, kind of like – 1:57:18 Ivy League type thing. 1:57:20 And this culture is obsessed with puritanism, and puritanism is all about like self-denial. Gambling is seen as just wrong. Gambling is just a useless thing. It's a vice. It is pointless, so it doesn't – but yeah, there are some other ones. There are some other reasons. 1:57:37 I have a whole list of – this is how you know that I don't have the real answer, because I'm just going to shotgun all the reasons that I have ever found. 1:57:45 Yeah, but the governments, they always allow betting on sports. They never allow betting on other things. 1:57:50 Betting on sports was forbidden in the United States until very recently. FanDuel and GraphKings, which is great for me, they have – they did like a sprint Uber-style attack where they just – they went for – they just rolled the dice. 1:58:03 They were like, this is technically illegal, but they just started in certain states, and they just grew really big, and they became popular. 1:58:10 They started advertising, and then they said – they tried to crack down on it, and then they just said, write to your congressperson and say, we're going to have to close down DraftKings or whatever it is, and then they started to flip the states, flip them into making it legal. 1:58:25 So then sometimes there's very curious things about like – I don't remember the exact rules, but Connecticut has something really silly like it's only – it's illegal if it's too small, if there's like less than one team or more than six teams. 1:58:37 But it's – now it's like those weird carve-outs like – so it's all nonsense really, but the – so it's not the case that it is – but there's other reasons why a bet doesn't really – it's not treated the way it should be treated. 1:58:52 So like we could go back in time and say like the origin of the first democracy or something, or the first printing press, and people would say, well, how could we get knowledge from books? 1:59:03 We should just get it from the church or whatever, the king, or from God, or from my own two eyes. 1:59:11 Why do we need books? 1:59:14 So it's not seen the way we would see it. 1:59:16 The way that you and I may be – the three of us see it perhaps is that the bet is crucial because it means that you're not a bullshitter, and it also scales enormously. 1:59:27 It can be broadcast to the whole world that this person is betting on this. 1:59:31 And unlike a conversation where you have lots of people who have to talk to each other, the bet just stands by itself. 1:59:36 In fact, the prediction market gets more liquid the more people who look at it. 1:59:41 So it has the property that it scales very well. 1:59:45 It actually has good economies of scale, whereas something like a conversation does not, which is why we have to have something like a Joe Rogan podcast. 1:59:53 We have to have like a logarithmic tree of people. 1:59:56 And so the bet is not seen that way now. 1:59:59 When people see a bet in the United States, they think of stuff like betting is dominance because the wealthier person can afford to lose the bet, whereas the poor person is shoved out. 2:00:12 They think like provinciality. 2:00:15 They think betting is something you're supposed to do on irrelevant things like horse gambling. 2:00:22 So why would someone want to bet on something like whether or not the CEO – the stock price would go up if we fired the CEO? 2:00:28 So there's a whole – like there's a whole – Robin Hanson wrote a whole thing. 2:00:31 We'll read it from the great – I'm going to try to find it. 2:00:34 The great man himself. 2:00:36 No, there's a problem with betting. 2:00:38 The greatest – but there's – I have a huge list. 2:00:42 Like one reason is a lot of people don't want the info to get out. 2:00:45 Yes. 2:00:46 So some people actually know that they know that – so, for example, the CEO, if the CEO knows that he's lazy, someone comes in and says, listen, I've got this great idea for this project. 2:00:59 It's going to improve the efficiency of the corporation. 2:01:02 And the CEO says, wow, great. 2:01:04 He says, yeah, it's really easy to do. 2:01:05 It's just like this one little equation. 2:01:07 You just let the people trade anonymously. 2:01:08 They can win money. 2:01:10 And they say, okay, great. 2:01:13 What's the idea? 2:01:15 And the idea is, well, we have to let people bet on whether or not the CEO should be fired. 2:01:19 Now, whose permission do you have to get if you want to try this at Google or something? 2:01:23 It's going to go through him. 2:01:25 So all the bad CEOs exit. 2:01:27 Now, it's an intriguing – it's another thing where it's like double entry bookkeeping. 2:01:30 In a world where everyone does prediction markets, you would look very shady if you didn't do it. 2:01:36 But if you're the first person to do it, then you look something like – it looks like you – what have you – 2:01:42 You're the shady one. 2:01:43 Exactly. 2:01:45 It looks like you're very suspicious. 2:01:47 You say no one does double entry bookkeeping. 2:01:49 But someone says, listen, we're going to have – we're going to keep our books the exact same way as everyone else. 2:01:55 And we're going to hire independent auditors to come in to make sure. 2:01:58 The first thought everyone is thinking is, like, why doesn't this guy trust our accounting department? 2:02:03 Like, surely our great friend, our friend Jeff, the accountant, he would never lie to us. 2:02:10 So people would be like, why are they doing that? 2:02:14 Anyway, okay. 2:02:15 Oh, this is another good one. 2:02:16 This is one from Robin Hanson that I forgot from his list. 2:02:20 Okay. 2:02:21 Read it. 2:02:22 It's a sincerity. 2:02:24 I'm going to read it to you. 2:02:25 It's great. 2:02:26 In many subcultures, it looks bad to care a lot about most any topic of casual conversation. 2:02:32 Because most people just are just having – they're just making small talks. 2:02:37 Such passion suggests that you just don't get the usual social functions of such conversations. 2:02:45 So people are just conversing and they just have fun. 2:02:48 We're not – we're just having fun. 2:02:50 We're just – because we want to hang out. 2:02:52 It's something to do on a Thursday night. 2:02:54 Hang out with your friends. 2:02:55 Most people aren't supposed to actually care about whether or not an idea is true. 2:02:59 Because then we would all have to care about whether or not our ideas were true. 2:03:03 And then it would be like, you know, that would be terrible. 2:03:06 So conflict, here's a great one. 2:03:10 This is why people bullshitted about lightning before. 2:03:15 It's coming full circle. 2:03:17 When we speak, it's seen as signaling our allegiance to something. 2:03:22 So if you – you're supposed to be like – you're not supposed to make too much of a big – this is a very similar idea. 2:03:30 You're not supposed to make too much of a big deal about something. 2:03:33 But when you bet against someone, it's like you're saying, no, I'm – we aren't just having like some kind of disagreement. 2:03:38 I'm calling you out. 2:03:40 I say you are going to be definitely wrong. 2:03:43 And this – I think he's right about this as well, which is that most people don't really want the stakes to be that high. 2:03:50 They were just having a fun little conversation. 2:03:52 And they think any conversation – like what if you had a conversation with, you know, anyone who's like a high – 2:03:57 you had a conversation with like Barack Obama. 2:03:59 You could get Barack Obama for like the podcast or something. 2:04:02 You're just kind of thinking like I'm talking to Barack Obama or whatever. 2:04:06 You don't even really care what's going on. 2:04:08 But if someone says you are wrong about this, that's big. 2:04:15 Yes. 2:04:17 So, yeah, there's lots of these. 2:04:19 Oh, this is another one. 2:04:20 He's got a whole list here, but some of these are not that great. 2:04:22 Like I don't – I think – I appreciate his list, but I'm not going to go to bat for some of these. 2:04:27 But here's another one, greed. 2:04:29 We often try to give the impression that we talk mainly to benefit our listeners. 2:04:35 This is a sacred activity. 2:04:37 So this is – he's saying like, you know, when we talk, we're trying to make it seem like we're such a great guy to have around. 2:04:42 You always want to hear Paul's opinion. 2:04:44 What a smart guy. 2:04:45 But then if you offer to bet, it makes it look like you are getting something selfish and private out of this. 2:04:53 So you're an untrustworthy guy. 2:04:56 Because think about it. 2:04:57 If you're going to win money betting. 2:04:58 You kind of want to trick everyone into thinking that, oh, no, Hillary Clinton really won't win the election. 2:05:02 And then you place the bet and then you're like, oh, actually, I know that she will. 2:05:06 This makes you into kind of like a weird person, you know. These are many reasons. 2:05:13 But yeah, he's got a whole little list here. But this is not just – there's much more to it than that. 2:05:21 I think a lot of it is that a lot of people don't want – like the person you would have to get permission from is – 2:05:26 like you get permission from the government. What if I said we can have – it's the exact same thing as with the CEO. 2:05:31 I say we have this prediction market. It works great. They would say, well – 2:05:35 Do you think the government has thought of that? 2:05:38 I think it's – I think something like this has happened on like a subconscious level. 2:05:44 There's one – there was another thing called the policy analysis market that was like in whatever, 2003 or something. 2:05:50 And the guy who made the website, he did what every website person does. 2:05:57 Similar to this, the layer two infographic. It's like they're trying to make – they're thinking how can I make this – 2:06:04 how can I get this out here, you know. I've got to get my message out. 2:06:08 So they highlighted some contracts that were like people betting on will this guy get assassinated or how many soldiers will die or something. 2:06:18 So they were like this is going to really pop. This is going to go all around the internet, which it did. 2:06:24 And people don't like – they become very uncomfortable. 2:06:28 If you bet on certain things, there's this idea of taboo trade-offs where a trade-off is so bad you shouldn't even be thinking about it. 2:06:36 Shouldn't even be thinking about doing it. 2:06:38 And one is, of course, if you're making money when people die, this makes it kind of seem as though your loyalty is suddenly now divided between things that we all want, 2:06:48 sacred things we all want, and like you can make money. 2:06:51 So that was a bad – and that was a bad day for prediction markets because people called their senator. 2:06:56 That one guy basically killed the – what was that guy's name? 2:07:02 I get a multiple choice, but that one guy basically killed the project. 2:07:07 The guy who was very pro-Snowden. 2:07:09 And I was like, great. I still hate you. 2:07:13 But the – I don't remember his name. I'm happier for it. 2:07:18 I wish I could just forget about him completely. 2:07:20 But they killed this idea, and so that's something where they made it illegal. 2:07:27 But this was – again, it's only because it works so well that it – I think there's some kind of underlying overlap between why it's so stigmatized and why it is actually one of the greatest ideas in the world. 2:07:46 Is the code base open? 2:07:50 Of course. 2:07:51 Yeah, Bitcoin Hivemind. 2:07:52 We have that. 2:07:53 The C++ version is out there. 2:07:54 We'll wait until the Rust version works before releasing it. 2:07:58 Okay, okay. 2:07:59 We're all – 2:08:00 And will it be tied in with the Drivechains? 2:08:04 Yeah, of course. It will be a sidechain, and it will be a BIP300 sidechain. 2:08:07 And of course, anything – the cool thing is it's also open source for free. 2:08:12 That's why you're doing Drivechains, right? 2:08:14 Yes, this is the whole reason why I got into sidechains at all. 2:08:17 We don't need anything else. 2:08:19 The prediction market idea. 2:08:21 And I just thought that Blockstream would do it, but they never did, and that's the story. 2:08:25 And that's the story I've always told for eight years, and that's the truth. 2:08:28 That's how I got into it. 2:08:30 But it wasn't really like I got into it, and then I kind of realized, like, this is a winning idea, and all the arguments against it are nonsense. 2:08:39 Yeah. 2:08:40 And then it wasn't until – let me tell you a lightning story when I really started to think, oh, I must double down on sidechains because it's about custodial lightning. 2:08:53 And I believe this is a February 2018, something like that. 2:08:57 Hmm. 2:08:59 So this was – I mean, it was like, well, now this would be five years ago. 2:09:05 So what was the story? 2:09:07 The story is I was hanging out with some Bitcoiners. 2:09:12 It hadn't quite, like – there was, like, a mixed group. 2:09:16 This is a weird situation where you had some, like, Bitcoin Cash open-minded, large blocker-ish, and then some who were just like, it's all of my Bitcoin Cash, whatever. 2:09:29 So it was, like, a mixed – it was a big, huge party. 2:09:34 And this new wallet had come out, and I believe that it was – was it Blue Wallet or was it Wallet of Satoshi? 2:09:41 It kind of doesn't matter, but it was one of those. 2:09:44 And people said – this was going around, this big party. 2:09:48 This was a huge party. 2:09:50 This was, like, a big event at this giant – we'd taken over this huge hotel. 2:09:54 And it was going around. 2:09:56 We were having fun. 2:09:57 We were drinking, whatever. 2:09:58 They're like, hey, there's this new lightning app on your phone. 2:10:01 It's great. 2:10:02 I think it was – if I had to bet my life on it – 2:10:04 Blue Wallet. 2:10:05 I would say Blue Wallet. 2:10:06 Is that it? 2:10:07 I hope that was it. 2:10:08 So they said, whatever it was, this was it. 2:10:11 And then it was, like, people were like, oh, this is great. 2:10:16 Lightning is amazing. 2:10:17 I love lightning. 2:10:18 This is the beginning of the I love lightning. 2:10:20 Like, it was spreading like wildfire around this party. 2:10:24 And someone – they were like – there was enormous peer pressure to install this. 2:10:30 So I was like, okay, wait a minute. 2:10:31 I don't want to install something on my phone. 2:10:33 I'm, like, a Bitcoiner. 2:10:34 I'm not just going to – but then the peer pressure was so much. 2:10:37 I installed it on my phone. 2:10:39 And I was like, receive – okay. 2:10:41 I was like, I installed it on my phone. 2:10:43 I know that I had not unlocked any phone because I know how lightning works. 2:10:46 I know I have to open a channel, blah, blah, blah. 2:10:48 Now, Fiat Jaffa probably knows where this is going. 2:10:50 Where I downloaded this wallet and I was like, hit receive. 2:10:55 And in my head I was like, question mark. 2:10:59 I held up the QR code and that person sent me, like, 200 sats or something. 2:11:04 And I got it. 2:11:05 And they're like, you see, it confirms instantly. 2:11:08 And I said, oh, did you open a channel? 2:11:11 Because I was like, I didn't open a channel. 2:11:15 So – 2:11:17 It's custodial, right? 2:11:18 And they were like, what's a channel? 2:11:21 And this is a Bitcoiner. 2:11:23 And then I was like, is it custodial? 2:11:25 And then they were like, what's custodial? 2:11:29 So the – 2:11:31 And it was apparent that everyone at the party didn't know what was going on. 2:11:34 But it was kind of like – so we had multiple levels of, like – 2:11:37 The first level is custodial is much worse than real lightning. 2:11:41 Okay? 2:11:42 But then lower – 2:11:44 Another thing is it's terrible if the wallet won't tell you in advance that whether or not it is custodial or not. 2:11:53 And then the third level, even worse than that, is the end user doesn't even know the difference. 2:11:59 They have no idea what's going on. 2:12:02 So that's when I was like, oh. 2:12:05 I was like, I guess this – 2:12:07 I was like, this seems like it's headed for trouble. 2:12:11 Which, of course, it was. 2:12:14 So that was my thought. 2:12:18 That was when I was kind of like, oh. 2:12:20 I kind of just got involved with sidechains because I thought prediction markets are cool. 2:12:24 And then I was analyzing the arguments against them. 2:12:26 And then in 2016, I published. 2:12:28 And I was at scaling three. 2:12:30 And I was like, by the way, we could scale with sidechains. 2:12:33 People say that you can't, but they're wrong. 2:12:35 You easily can. 2:12:36 You just ignore everything. 2:12:38 Then after that, people said, well, what about mining? 2:12:41 Blah, blah, blah. 2:12:42 So that's when I invented Blind Merged Mining in January 2017. 2:12:45 And then I was kind of just working on it. 2:12:47 I was kind of heads down working on that. 2:12:49 And I was working on other stuff too. 2:12:51 I like to just write stuff on my blog. 2:12:53 I just do whatever I want. 2:12:55 So I was doing, like, different stuff. 2:12:59 I had only published the idea of DriveChat. 2:13:01 I had been working on the prediction markets thing until, like, late 2016 or something. 2:13:07 And it wasn't until 2017 that I invented Blind Merged Mining. 2:13:10 And then I decided, okay, we'll actually build this. 2:13:14 So we kind of just started. 2:13:16 So I was like, okay, I'll work on this. 2:13:18 We'll see what other people do. 2:13:20 And then that was 2018, right after. 2:13:22 And I was like, oh, I guess, you know, lightning is what's going to happen with lightning? 2:13:27 So then other people would say, oh, channel factories, L2. 2:13:32 And kind of, again, everyone, this is the most important thing to keep in mind. 2:13:37 Everyone is a bullshitter. 2:13:39 So they would just say L2. 2:13:42 And I would be like, okay, like, I guess that means something, someone. 2:13:46 I'm working on my own thing. 2:13:48 It's not later that you realize, okay, L2 means, like, it's kind of cool. 2:13:52 But L2 means that we can't do the punishment. 2:13:54 So that means that it's a heads, I win, tails, I break even situation, which is probably not good. 2:14:02 So it probably makes these things are, like, not only not helping, but many of them are just useless. 2:14:09 But then with no L2. 2:14:11 The idea of L2 is that would be so much simpler that you could do these channel factories and other stuff on top. 2:14:20 It would be much easier. 2:14:21 But then someone realized that you can't really do it in the simpler way. 2:14:26 Because something, something, the time lock interferes with the channel updates in a way that you have to introduce a bunch of complexity for it to work. 2:14:38 Yeah, I may not remember exactly what it is. 2:14:40 But it's something, I remember Matt Corallo had a thing where there's, like, this endless blowup of, like, factorial states or something. 2:14:46 That is, like, unfixable with the channel factories. 2:14:53 I shouldn't say stuff like that without just, but I. 2:14:56 I don't know. 2:14:58 Well. 2:15:00 The factories already don't work. 2:15:02 Within the factory, you can create or destroy as many channels as you like. 2:15:07 However, if anyone wants to settle or you need to get everyone to sign to, like, refresh it or something. 2:15:14 If any one of those people just dies or falls asleep or something, the whole thing is ruined. 2:15:21 And the idea of onboarding people via channel factories is horrendous. 2:15:26 Because when you onboard them, you're going to start with zero coins. 2:15:30 So now they have no reason not to just, not to just, like, forget about this or lose their password or whatever. 2:15:36 And I don't think that idea is viable at all. 2:15:40 I think that idea is not good. 2:15:42 I think. 2:15:43 No, onboarding people, it's always, I think it's always said it's just custodial. 2:15:46 Like, because they're like, if you have five people and you onboard a sixth, that sixth has no control of anything. 2:15:52 Because the funds are on a multisig of the first five. 2:15:57 Of the first five. 2:15:58 Yeah, the sixth person doesn't have any control. 2:16:02 So I think. 2:16:04 It might be another MEV thing where I went like five moves ahead and just assumed that it was going somewhere. 2:16:11 I thought when they said onboarding by channel factories, they mean like groups of people, 50 people will all join at a time. 2:16:17 And they'll be like one Michael Saylor. 2:16:19 And he'll be like opening heroically channels like 49 and then him. 2:16:23 And they'll just be everyone else will have zero. 2:16:25 And then he'll have like a lot of this stuff. 2:16:27 And that's how it'll all be. 2:16:29 The onboarding will be like 43 bytes per person times 50. 2:16:32 And you just, you go on, you go on like a calendar link. 2:16:36 You schedule an appointment to open your channel with Michael Saylor. 2:16:39 And he fronts you the liquidity, you know. 2:16:43 Like that's where I thought people were going with it. 2:16:46 Even still, though, even in the absurd situation within the limit, which is literally not achievable. 2:16:53 But of like the entire block always being used. 2:16:56 The channels last forever. 2:16:58 They never need to be refreshed. 2:17:01 The most absurd situation where every single Bitcoin block is just one channel factory being opened with one Michael Saylor super rich Bitcoiner. 2:17:08 Every time, every 10 minutes, 24-7. 2:17:13 Still, it takes like six and a half years or something to onboard 8 billion people. 2:17:18 But that thing is nowhere near achievable. 2:17:20 The true rate is like one tenth. 2:17:23 It would take like 60 years or something. 2:17:25 It's not. 2:17:26 For 8 billion people. 2:17:27 Some people say, oh, we don't need 8 billion people. 2:17:30 Some people say, like, for example, another thing Michael Saylor has said many times is that everyone will have thousands of channels. 2:17:36 So that's another thing where you're like doesn't really know that every channel is a risk. 2:17:41 Every channel is a headache. 2:17:43 Every channel divides liquidity. 2:17:45 It's like so. 2:17:47 These are other things that he said, so. 2:17:51 But again, he's new. 2:17:52 He knows an awful lot for someone who's only like a third year Bitcoin or something. 2:17:57 So with all the good stuff on layer two, you've created an organization called Layer 2, right? 2:18:02 LayerTwo Labs. 2:18:04 My view is that the sidechain is the real Layer 2, in fact. 2:18:07 What's the Layer 3? 2:18:08 And I think that actually people will ultimately come around to that point of view and they will be and then people look up old videos and they'll just they won't believe. 2:18:17 They'll be like, what was going on? 2:18:19 It'll be like when we look up old like pets.com or something. 2:18:22 The Internet was. 2:18:27 Yes, yes. 2:18:28 But by that stage, you're in the water, you know, you're in the environment. 2:18:32 And what what is you just know what what is around you and people can't see that they don't have the creative ability to forecast and bring that into their lives and and change the perspectives. 2:18:43 They can't do that. 2:18:44 They can't. 2:18:45 It's certainly not a foregone conclusion that I'll succeed. 2:18:47 Oh, sure. 2:18:49 But I think like the relative costs and benefits are just like very, very favorable. 2:18:56 Like, I don't understand why. 2:18:59 The miners can steal is very dumb because it's not your coins that can be stolen. 2:19:04 So let these other people take the risk. 2:19:06 And it's also like. 2:19:09 It's just clear to me that people have so much disagreement over what the L1 block chain should contain, and people are so creative. 2:19:18 Individual software developer, if they were empowered to do that, they can create their own piece of software. 2:19:25 They could be the CEO of their own sidechain with no bureaucracy. 2:19:31 You know, just think of how different it would have been for a Jeremy Rubin or for Roger Ver or for Vitalik or for whatever. 2:19:37 Riccardo Spogni or whatever, anything. 2:19:39 So it would be very, very different. 2:19:41 And the value they generate, the value they generate just just works towards the ecosystem. 2:19:48 Yeah. 2:19:49 Everyone like in the same tent. 2:19:50 We want network effects. 2:19:51 We want Metcalfe's law. 2:19:52 We want positivity. 2:19:53 We want creativity. 2:19:54 We want risk taking. 2:19:55 Yeah. 2:19:56 It's just obvious to me that nothing. 2:19:58 What what in the world ever worked that had to be justified? 2:20:03 It's the things that work are always just someone has the idea and they just try the idea. 2:20:08 And often it's ridiculed. 2:20:10 So if this kind of means like if your idea is not being ridiculed, it probably sucks. 2:20:15 And that is partly, again, why I just think like the idea is clearly good. 2:20:21 The arguments against it, all of which were easy to foresee in the original November 2015 post. 2:20:30 You could foresee that. 2:20:32 I said, well, this is why the mine. 2:20:33 It looks like the miners can steal, but they really they really can't. 2:20:36 They really won't. 2:20:38 And then the mining thing also, again, like if people actually explain what they when they explained what it was, they had a problem with. 2:20:45 It was very easy for me to just come up with Blind Merged Mining. 2:20:47 The reason why I can't solve their other problems is because they the other problems aren't real. 2:20:51 Yeah. 2:20:52 It's just fabricated nonsense. 2:20:54 It's just like an endless. 2:20:55 It's like a chat. 2:20:56 GPT one. 2:20:59 It's going up and there's nothing there. 2:21:04 Nothing there. 2:21:05 Indeed. 2:21:07 Yeah. 2:21:08 Yeah. 2:21:10 I mean, I'd love to see a world. 2:21:13 I'd love to see a world where you've got like a small, very small core base. 2:21:16 Maybe, for example, using Lib Corp, Lib Bitcoin, you strip out all the nonsense. 2:21:22 You get none of that taproot nonsense. 2:21:24 You just strip it down to bare essentials. 2:21:26 You've got one addressing scheme. 2:21:28 You can transfer value to and from. 2:21:30 And then you specialize in lifting up and down into into sidechains. 2:21:35 And you keep the core base as simple as possible so that people can understand it and maintain it. 2:21:41 Maybe. 2:21:42 Yeah. 2:21:43 And then from there. 2:21:44 I think taproot. 2:21:45 I think it was a mistake to spend so much time on taproot. 2:21:48 But again, I'm a pluralist, so I think we should just do everything. 2:21:51 But, yeah, I don't understand. 2:21:53 Taproot. 2:21:54 You could see the adoption was very, very low. 2:21:57 We seem to be specializing in things that, again, it's the whole thing has evolved away from. 2:22:07 They want to inspire boredom. 2:22:09 Sorry? 2:22:10 To people. 2:22:11 Say again? 2:22:12 Sorry? 2:22:13 No, no. 2:22:14 They want to inspire boredom, like the most boring things. 2:22:17 Yeah, exactly. 2:22:18 It's not like it's because if something's boring or very convoluted, it won't be criticized. 2:22:24 So think about it. 2:22:25 It was so difficult to criticize taproot. 2:22:27 So that is that's how it evolved into being the thing that was tried. 2:22:31 So whereas my thing, it's it is easier to criticize. 2:22:37 That's because it's actually part of it is simple enough for people to actually understand. 2:22:41 And they so. 2:22:43 So I don't really think people understand. 2:22:46 I think most people don't understand it. 2:22:48 I think people think I've seen it many times, like people supporting the idea. 2:22:52 And they think that somehow the merge mining is related to the security of the coins. 2:23:00 They just want to buy shit, man. 2:23:02 They just want to buy shit. 2:23:03 No, but he's saying something else, which is I also have to point out, which is this is similar to the lightning thing, which is that many of the people who are big supporters of the idea. 2:23:11 It's also clear to me that they don't understand it, which puts me in a weird situation. 2:23:17 And even there have been many times when I've been like I've been working on the code or working with people on the code. 2:23:24 And also it's clear that we also like had like a very different understanding of like what. 2:23:30 So I now it does put me in a kind of a strange point of view where I actually think like. 2:23:36 It's very, very, very few. 2:23:38 There are some people who clearly do understand like the whole thing. 2:23:42 But I think the way people decide whether or not they like something is more like it's like more about antibodies. 2:23:49 People have a thing where they think like if it helps the large blockers get what they want, it must be bad. 2:23:56 And similarly, a lot of people who care about Drivechain, I think they understand like. 2:24:03 These people are hypocrites. 2:24:05 They're not real critics. 2:24:06 They are just they're not real critics. 2:24:10 They are just talking for their own benefit. 2:24:12 And they don't really know. 2:24:13 They're saying yes. 2:24:14 And so but they know that the idea that Paul would spend so much time on this and release real software. 2:24:21 It must it must be good. 2:24:23 So people have like this. 2:24:25 It's like a feedback loop with a with a thermostat in their house. 2:24:29 They detect something and they say, OK. 2:24:32 Now I know that one of these people is wrong. 2:24:34 And the other is right. 2:24:35 They look for some certain some sort of some sort of thing. 2:24:39 And but very few people have actually like very few people read the BIP. 2:24:44 Very few people download the software. 2:24:47 That's partly, you know, we should make the software easier to learn, use, but it's relatively easier. 2:24:53 I mean, where who is who has downloaded the BIP 119 software or the 118? 2:24:57 So I like it doesn't exist. 2:24:58 So, you know, but that is similar thing with Jeremy Rubin, where it was 119. 2:25:04 And the idea is. 2:25:07 Like people just decided Jeremy really wants this change, it must be bad, but they didn't know anything about it. 2:25:15 And even the people who are pro, they were pro for some other reason. 2:25:19 Everyone's got some kind of ulterior motive. 2:25:21 So I don't know if he had jobs. 2:25:22 This puts me in a kind of weird ethical spot because. 2:25:25 If I discover that I'm the only one who really understands the idea, then on one hand, do I just say, well, I'll let everyone make their decisions however they however they want to. 2:25:34 That's between them and their God. 2:25:36 However, they they take whatever risks with their because we're all of us having perfect information. 2:25:41 But then it's kind of like. 2:25:44 But we have some new explanation stuff that should be good. 2:25:47 We're updating our website soon. 2:25:48 We're going to have lots of stuff that's going to be great, great demos and things. 2:25:52 We have more sidechains. 2:25:53 We're going to have the large block sidechain. 2:25:55 We're going to have the Namecoin sidechain. 2:25:57 We're going to have eventually the prediction market sidechain and rust. 2:26:01 We're going to have the the large block sidechain is going to have fraud proof. 2:26:04 I think people. 2:26:05 I don't know. 2:26:06 I think people don't care about this testnets. 2:26:09 I made the space chain on testnet, on signet, on Bitcoin. 2:26:13 And like you had like 10 people trying it. 2:26:17 No, it was I care deeply. 2:26:19 Like as soon as I tried all of that stuff, I was like, OK, this is not this is not bullshit. 2:26:24 And then I start reading code. 2:26:25 I'm like, OK, this this I can understand. 2:26:28 But if you if you can read code, you're ready. 2:26:31 Yeah. 2:26:32 OK. 2:26:33 Privileged. 2:26:34 Privileged white privilege to fucking work my ass off to be able to do that. 2:26:37 Fuck off. 2:26:39 Oh, I wanted to ask another. 2:26:40 I think we should end this because I must leave. 2:26:43 But I wanted to ask how exactly Hivemind is supposed to make cheap talk expensive. 2:26:51 Is it like that you would force people to bet on their ideas? 2:26:58 Otherwise, they should shut up. 2:27:00 Or what is it? 2:27:02 OK, so it has it has a couple of meanings. 2:27:05 But basically, it's like there's an important question. 2:27:09 Like the what we vote this political party out, what will happen to the unemployment rate or something? 2:27:16 Yeah, but there is a journalist talking about it on the television. 2:27:19 Instead of people just blah, blah, blah. 2:27:21 They're just talking about it. 2:27:22 Well, it'll be it'll literally be two numbers. 2:27:24 It'll be like, here's the numbers. 2:27:25 Here's the numbers. 2:27:26 Here's the numbers. 2:27:27 Here's the numbers. 2:27:28 Here's the numbers. 2:27:29 Well, there'll be it'll literally be two numbers. 2:27:31 It'll be like, here's the number with the red team. 2:27:35 Here's the blue team, red team, blue team, unemployment number. 2:27:38 And now if you think that number is wrong, you can make money by betting against those numbers. 2:27:43 And you'll make money as long as you aren't wrong. 2:27:46 If you're wrong, you'll lose money. 2:27:47 But other than that, you this is a magic money tree for you. 2:27:51 The other meaning is, of course, that we have to have the Oracle work. 2:27:54 And so I have a peer to peer Oracle. 2:27:56 They also have to tell the truth. 2:27:57 But I want to explain something very important about the design, which is that this is very easy. 2:28:03 This is something that before. 2:28:05 Imagine we bet on an election outcome. 2:28:08 I say. 2:28:09 Trump will win again in 2024. 2:28:13 And. 2:28:15 Today, this is very unclear, but this is what we do. 2:28:18 We lock it in. 2:28:19 We lock it in the betting. 2:28:21 We create the market first. 2:28:22 It's on a very defined issue. 2:28:24 And then we do the betting. 2:28:25 Now, while it's unclear. 2:28:27 The Oracle part doesn't resolve until after the election is over when it is substantially more clear. 2:28:32 Well, of course, the last time was the. 2:28:35 Was, of course, a little bit of a snafu and it ruins my example. 2:28:39 But but mostly after the election, it's very clear who won. 2:28:45 And so that task is a completely different task. 2:28:48 So we have the contract go from before the event to after the event and we resolve it afterwards. 2:28:53 However, since it's all on the block chain is cryptographically referencing the same thing the whole time. 2:28:59 So we can start the betting now while it's still unclear. 2:29:03 And that is that is key. 2:29:06 But you haven't. 2:29:07 But people bet on the topic and the market price is the same for everyone. 2:29:13 Everyone has to point at the same. 2:29:14 This is exactly what Alex B was unable to do. 2:29:17 It's just make numbers that we could all point to. 2:29:20 And and so in the prediction market, it's just a number. 2:29:25 For whatever. 2:29:28 I understand that part, but I was thinking, like, how would people talk about it? 2:29:33 Because people would just stop talking about things. 2:29:36 Yes, you're right. 2:29:37 This is part of my multi-year plan is, of course, extremely complicated. 2:29:40 But but basically, I don't think it would take over on day one. 2:29:45 The prediction market world, we would want it to, like, get some hype somehow, like through political season or whatever it is. 2:29:52 But that's not going to be enough by itself. 2:29:55 It will have to start doing other things, like predicting who will win the Super Bowl, like weeks in advance. 2:30:01 But I was thinking, like, the political commentator on television, he will still have his job, like he won't be fired for a while. 2:30:09 Yes, it's ecological. 2:30:11 They would for a while, but eventually it accumulates like credibility. 2:30:18 Institution accumulates credibility. 2:30:19 And you can also like the person says, they're absolutely certain that someone will win. 2:30:25 The market is giving them four cents on the dollar. 2:30:29 People won't notice the contradiction at first, but over as the years go on and on, people will post memes. 2:30:36 They'll say, like, the guy will be talking and they'll have like the market. 2:30:40 It'll be like, I'm absolutely certain of this. 2:30:42 And it's like the price to be like going down. 2:30:44 And it'll just people, it'll just be ridicule eventually. 2:30:46 But what if he wins? 2:30:48 There's a chance. 2:30:49 Oh, if he wins, there's a chance. 2:30:50 Well, this is this is the other problem you run into with prediction markets where. 2:30:55 Oh, my God, this is an event, something the market gives something. 2:30:58 This happened many times when we had in trade. 2:31:01 The market gave a Supreme Court decision, a thirty five percent chance of happening. 2:31:06 And it didn't happen. 2:31:08 And people said, wow, prediction markets are amazing. 2:31:10 And then a second time there was a different Supreme Court decision. 2:31:13 It gave it like a thirty five, thirty three percent chance of happening. 2:31:18 And it didn't happen. 2:31:20 And people were like, wow, prediction markets are amazing. 2:31:23 How are they doing this? 2:31:25 And then the third time the prediction market gave it about like a thirty five percent chance of like the individual individual mandate being struck down or something. 2:31:35 And then it was upheld that time. 2:31:39 Three out of third one out of three for the thing that's trading at about thirty three percent. 2:31:44 Third one out of three got, quote, wrong. 2:31:50 And then people are like, you see, this proves prediction markets don't work. 2:31:55 No, I'm not saying I'm not saying it's it's it's it's a proof that prediction markets don't work. 2:32:00 I'm saying I was trying to think like that the guy would go on television and he would show his ticket. 2:32:06 Like I bet that I bet that this amount of money that I will win against the majority of the market. 2:32:15 And then he would be able to choose to say whatever his bullshit is he's saying. 2:32:20 And everybody will say, oh, this guy really believes this. 2:32:24 Well, I have a beautiful presentation about this that I never got to give because it was covid canceled the venue. 2:32:29 But but the manipulation, they have this conditional market. 2:32:32 So you bet on two things at once and you say the person will get elected and they will the unemployment rate will go down. 2:32:39 You bet on them both simultaneously. 2:32:41 And that is not something that someone can they can they can make a huge bet that says they can bet it all. 2:32:47 They can amass a huge amount of money and they bet that they will win and the unemployment rate will go down. 2:32:54 It will make it look like they are going to win and the unemployment rate will go down. 2:32:58 But unless they actually make the unemployment rate go down in the real world, they will lose the bet. 2:33:03 So everyone can pile in on the other side of this bet and they can then elect him. 2:33:07 And then after he fails to improve society, you win the bet and you just win a geometrically increasing amount of money. 2:33:13 And the other alternative is, of course, we elect the guy and he does make the world a better place. 2:33:18 And he makes the unemployment rate really low, in which case that was the whole point from the beginning. 2:33:23 So that was the whole point. So who even cares? 2:33:25 So that's the OK. 2:33:27 But yeah, the prediction market's topic is a very big topic. 2:33:31 Fiat Jeff, does that conclude your your line of questions? 2:33:36 I've got to eat my little food here. I'm going to get really hungry. 2:33:39 OK, quickly. 2:33:40 Should we wrap this up now? 2:33:41 Let's wrap it up. 2:33:43 Great, great conversation, though, guys. 2:33:46 Two people I respect greatly. 2:33:49 Respectworthy indeed. 2:33:51 Thank you very much for coming on. 2:33:53 All right, let me end this. 2:34:11 .