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Hello and welcome to the Australian Bitcoin Podcast.

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My name is Daniel Wilczynski.

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So I'll be taking over hosting of the podcast from Justin.

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Justin has left out him at hardblock.

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If you're listening to this, you already know he done a great job with the podcast,
but

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he's moving on to other things within the Bitcoin space.

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You can still find him at Mission Bitcoin on Twitter.

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Justin was particularly, he had huge knowledge about Bitcoin and especially about
privacy.

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I don't have such a big knowledge on the privacy related matters in Bitcoin, but I
have been

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in Bitcoin for a while and I'm always trying to learn more about Bitcoin.

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And this is the aim of the podcast for me to learn about Bitcoin and create content

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that you, the listener, can learn from also.

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So for today's guest, we have Paul Sztorc.

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Paul Sztorc is a longtime Bitcoiner and he's also a longtime advocate since around
2014

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of something called Drivechains.

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So Drivechains is a type of sidechain for Bitcoin.

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In the show, we talk about what exactly are Drivechains and sidechains, however, an
improvement

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to Bitcoin, the potential of the technology, which hasn't really been utilized much
yet.

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But Paul really makes some compelling arguments of why sidechains are something very
interesting,

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very exciting, and why there's a lot of potential there, and why his proposal for
implementing

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Drivechains, why that's an improvement to the existing sidechains.

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So because this is my first time doing, hosting the podcast, there were some issues.

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Mainly, I had some issues with my microphone, which wasn't working, so I had to use
a different

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microphone so the sound quality was not that great, unfortunately.

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But I think the content was still pretty good.

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And if you don't know much about sidechains or Drivechains, I think you'll get
something

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from it.

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This podcast episode is brought to you by Hardblock, Australia's oldest Bitcoin-only
exchange.

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We make it really easy for you to have dollar cost averaging with payments going
from your

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bank account, automated into your hardware wallet.

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If you haven't, give us a shot.

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So let's move on to the show.

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Okay.

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Hi, Paul, welcome to the Australian Bitcoin Podcast.

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How are you doing?

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I'm doing great.

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Thanks for having me.

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Yeah.

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So I've been listening to a lot of your material lately and I heard that you don't
like to

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do introductions.

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You like to just get straight into it.

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It's kind of a waste of the audience's scarce time.

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You know, the audience, they only have so much time in every day and they can decide

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after they hear the meat if they care about who the person is.

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Okay.

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Fair enough.

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But I think there's some value in that.

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So should we get into it?

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Should we get into the meat and potatoes?

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So maybe you can explain to us, what are sidechains?

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How did they originate?

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Where did the idea kind of come from?

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Well, the idea is normally said to have originated with Blockstream's October 2014
paper.

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The actual idea is like slowly evolved, like Satoshi invented merged mining in 2010.

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And that was in relation to the invention of Namecoin.

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And Satoshi understood that they could, in fact, both use the same miners, different

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nodes, same miners.

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And that was kind of, that was not sidechains, but that was still pretty close.

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Because the sidechains get really cool because of merged mining.

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That was 2010.

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Then altcoins started to come out.

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Most of them sucked, but some of them were interesting.

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And the question was, what do we do about this?

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So it was a solution to the problem of altcoins because you had like, people wanted
to try

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different things.

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zk-SNARKs, Ring Signatures, Schnorr Signatures, SegWit, all these stuff you couldn't
try on

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Bitcoin because people hadn't figured out how.

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And they were like, well, we'll try it in a different piece of software.

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But then people were like, that's not good because now we have more and more new
coins

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coming out and we don't want that.

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We want everyone to be unified in one team.

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And so the idea is you send Bitcoin to a different piece of software.

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So the coin, so a sidechain is an altcoin, but without the coin.

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So it's a sidechain, it's an altcoin, but with Bitcoin.

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So a completely different piece of software, but same 21 million Bitcoin.

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OK, and you mentioned Merged Mining.

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So we're going to be talking a lot about Merged Mining.

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So what is Merged Mining?

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Merged Mining means that someone can work on, instead of just trying to find a
Bitcoin

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block, they can do something very easily where they try to find the block of two
different

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blockchains at the same time.

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That does not require them to do any extra hashing at all.

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But if they find the block, they find a Bitcoin block and they find a bunch of other
blocks

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for free.

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And they collect, since they find all those blocks, they collect all the transaction
fees

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and all the block rewards.

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So they get no money in exchange for doing basically nothing.

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And everyone's blocks are united by the same huge mining network.

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So the naive, they're very secure against a naive 51% attack from outside because
they

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have all Bitcoin's hash rate.

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There's a debate over whether or not that actually, when push comes to shove, that
matters

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because the Bitcoin miners only care about the Merged Miners to the extent that they

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contribute revenue.

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So if the revenue is like one one thousandth of the Bitcoin revenue, then they
presumably

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would only care one one thousandth as much.

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But to an attacker who's just going to try to rewrite the chain is as if these other

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altcoins, for example, Namecoin, it's as if they have like a huge amount of hash
power,

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way more than, you know, it's basically a tie with Bitcoin, is the idea.

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So basically when a miner is doing Merged Mining, he's mining on both chains, he's
doing

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the same mining, but he gets a reward from both chains at the same time.

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That's it.

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OK.

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And do current, do side, do all sidechains have to do Merged Mining?

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No.

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And in fact, it's not possible for this, the Merged Mining, a counterintuitive thing
about

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Merged Mining is you would think like you have like the host and then you have a
bunch

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of guests and you think like the host has to like do something to invite the guests

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in, but that's not what happens at all.

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So when Namecoin Merged Mining was invented, what they actually do is they're
actually

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finding the Namecoin block, but the Namecoin block is assembled in such a way that
part

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of the Namecoin block is a Bitcoin block header, so to speak.

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This is very hard to explain, so I'll do my best.

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But basically the point is they switch to a different piece of software.

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So actually Bitcoin Core BTC cannot do anything to stop Namecoin from being Merged
Mined with

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it at all.

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And in that sense, it actually has no idea whether or not how many coins are being
Merged

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Mined.

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So the Merged Mining, and that's for an altcoin.

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That's a situation where you have an alt, Namecoin is an altcoin, it is not a sidechain.

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So an altcoin can do Merged Mining or it cannot do Merged Mining and there's nothing
that

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Bitcoin can do to stop it or cause it to happen or even know whether or not it's
happening

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or do anything about it.

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It's a very independent thing.

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It comes from the guest.

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Right.

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So basically Namecoin has, there's a reference to Namecoin blocks on the Bitcoin
blockchain

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and obviously the Bitcoin blockchain is open.

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So anybody is free to put whatever they want in there and there's a reference to the
Namecoin.

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Namecoin.

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Namecoin.

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Yeah.

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So is that correct?

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Is my understanding correct?

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The actual detail in Namecoin Merged Mining, as I understand it, is there's a
Coinbase

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output that has a hash and that hash is stuff that wouldn't be in a normal Namecoin
block

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header if there was no Merged Mining.

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And then the entire Namecoin block header is actually, includes Bitcoin header, that

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Coinbase output, the Coinbase, you know, the Merkle branch leading to that output.

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And so basically the Namecoin block contains the Bitcoin header, but not the rest of
the

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Bitcoin block, only the header, which is 80 bytes plus, you know, a little bit else.

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Like the Merkle branch is like whatever, like 50 bytes.

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Depends.

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Well, it could be like, it depends, like a couple, maybe a couple of hundred bytes.

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But this is tiny, you know, the one Bitcoin block is between, you know, and now
they're

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like about 2 million, 2 million bytes.

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So this is nothing at all compared to the rest.

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Did you say the Namecoin block chain contains the Bitcoin header?

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Yes.

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Okay.

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Okay.

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So I didn't know, but I thought it was only the Bitcoin block chain that contains
the

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reference to the...

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The Bitcoin block chain contains a Coinbase output.

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So in the first transaction of the block, there is a little hash.

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So there is something inside the Bitcoin, but the merge mining kind of turns a
couple

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things upside down.

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So I hope it's not too confusing.

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It's a very confusing topic.

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It's very, it's very unexpected.

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It's as if you are like pulling a tow cable or something and you start clipping more
stuff

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on and it becomes easier to pull.

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It's a very bizarre and unusual situation.

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But what it's really doing is, well, I don't want to keep saying different things
and maybe

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just more confusing than helpful, but basically the Coinbase pulls off a different
strand.

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And in that transaction, there's a whole, there's a new block header and there's a
new

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block and, but only the people who run the Namecoin software see that.

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Everyone else just sees a bunch of scrambled stuff in the Coinbase.

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Okay.

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Okay.

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So back to the motivations for sidechains.

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So there's an interesting quote, which you said about Satoshi, which I assume it's
true,

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but I heard in one of your talks and where Satoshi said something that in the future

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there will be many different blockchains with different characteristics and
purposes.

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And he said, but old coins are not inherently evil, but in practice, most are wise.

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And I agree with you.

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In practice, most are wise and like a type of kind of Bitcoin maximalists.

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But we don't want to get too...

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I agree with you.

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I think like it's interesting for Bitcoin maximalists, maybe some of them aren't
aware

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of Satoshi's quote about that.

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And I guess there is something to consider is, are some of the old coins, do they
actually

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do something useful?

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I like what you said, also you said something where we keep the Bitcoin buy slayer
very

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simple and secure, and then we can use sidechains for experimenting with more, with
less secure

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and less secure blockchains and less secure and more bloated ideas.

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So is that, does that, yeah, so just what's your comment on that?

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Do you think that's part of the motivations of sidechains?

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I think the thing to read is the thread called the BitDNS and generalizing Bitcoin.

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That's where they invented merge, Satoshi co-invents merge mining.

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And he says a number of interesting things there.

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He says that space in Bitcoin's chain will be expensive in contrast to the merge
mine

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chains, because he says there's going to be an unlimited number of those.

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And he is very okay with them being different.

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It's clear from the context, he doesn't say all this stuff directly, but you should
read

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for yourself and just, it's clear that he's saying the Bitcoin chain will be small
and

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have high fees because it will be, it will be superior.

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It will be a hierarchically superior, but there will be lots of other stuff.

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And he, he talks in a way like he knows that people can add new chains.

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So he knows that some will be low quality.

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So he knows that it has to be designed so that we ignore the low quality networks.

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And so he clearly has in mind this, this big heterogeneity, this big difference that

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there'll be a lot of stuff out there.

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And he, he clearly thought this merge mining thing was kind of a no brainer, but in
practice

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we have seen people want to compete more, compete with Bitcoin and they have their
own

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mining.

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It's very, you know, Ethereum or whatever, it doesn't do merge mining with Bitcoin.

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So it was a very interesting, it's a very interesting thread because you can see
what

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he was thinking in 2010.

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And so that's what everyone should read that.

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And then, you know, they'll see that he co-invents Namecoin sort of.

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And so obviously that's, that's a little bit of a, it's a little bit of a kind of a,
if

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you think about Bitcoin maximalism, it's kind of bizarre that Satoshi would invent
basically

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the first altcoin.

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And that is something that everyone should think about because Satoshi was just a
guy

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into really cool ideas.

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And he set immediately to work, not to discredit Namecoin, but he was like, how can
we fit

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it in?

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How can we fit it into the Bitcoin project?

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Right.

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Yeah.

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Right.

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I think part of the problem is a lot of shitcoiners, their idea isn't really to
experiment and

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do innovation.

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The primary motivation is for them to get rich by creating their altcoins.

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At other people's expense, basically zero sum or negative sum game where it's the
competition

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is not helping anything improve.

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So that's too bad.

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Yeah.

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And that's, that has made people feel annoyed and that has made, and rightly so.

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I mean, something I often say is that there's a big difference between Litecoin,
which is

231
00:16:02,920 --> 00:16:03,920
just big.

232
00:16:03,920 --> 00:16:07,360
There's a big difference between going from nothing to Bitcoin, where Satoshi had to
do

233
00:16:07,360 --> 00:16:13,760
an enormous amount of work, marginal effort to make Bitcoin from a blank piece of
paper.

234
00:16:13,760 --> 00:16:17,520
But then to go from Bitcoin to Litecoin, it's just a couple of lines of code that
are changed.

235
00:16:17,520 --> 00:16:22,520
And so it's quite offensive to just say this is a new thing because it's not,
there's no

236
00:16:22,520 --> 00:16:25,360
actual novelty.

237
00:16:25,360 --> 00:16:26,360
And so that's annoying.

238
00:16:26,360 --> 00:16:30,040
And that has made people close ranks around the Bitcoin software, which now has
actually

239
00:16:30,040 --> 00:16:34,520
cut against sidechains because now people have been trained to think that the
Bitcoin

240
00:16:34,520 --> 00:16:39,520
software is just a priori, just the superior software.

241
00:16:39,520 --> 00:16:45,840
And now they are closed minded and they can't imagine going to some other piece of
software

242
00:16:45,840 --> 00:16:49,280
for any reason, which is too bad.

243
00:16:49,280 --> 00:16:55,520
One huge victim of this is the large block, like a scaling sidechain idea, because
people

244
00:16:55,520 --> 00:17:00,720
have been trained to think the large blocks as bad and if anyone who advocates them
as

245
00:17:00,720 --> 00:17:02,420
very naive.

246
00:17:02,420 --> 00:17:09,140
But really they are bad, but it's bad as like if you could only pick one, you would
pick

247
00:17:09,140 --> 00:17:10,140
the large block.

248
00:17:10,140 --> 00:17:13,340
It's like saying first class is better than coach, you know?

249
00:17:13,340 --> 00:17:15,540
Yes, it is.

250
00:17:15,540 --> 00:17:18,100
But maybe not everyone can afford first class.

251
00:17:18,100 --> 00:17:21,780
So coach should still be around, you know, on an airplane.

252
00:17:21,780 --> 00:17:24,580
So coach should still be around.

253
00:17:24,580 --> 00:17:30,180
If you could get it for free, the plane can tack on a bunch of coach seats.

254
00:17:30,180 --> 00:17:35,380
They're not as good, but it's very irrational for people to oppose that because
there's

255
00:17:35,380 --> 00:17:36,660
no downside.

256
00:17:36,660 --> 00:17:40,940
Whereas changing the layer one block size and increasing it is an enormous downside.

257
00:17:40,940 --> 00:17:43,100
So it's a night and day difference.

258
00:17:43,100 --> 00:17:48,780
But that has been a big casualty of this idea and of the, you know, the anxiousness
of the

259
00:17:48,780 --> 00:17:54,700
shift coiners to release low quality, poorly thought out projects and just shove
them on

260
00:17:54,700 --> 00:17:59,320
people and corrupt all the dialogue around that.

261
00:17:59,320 --> 00:18:00,800
So that is unfortunate.

262
00:18:00,800 --> 00:18:01,800
Yeah.

263
00:18:01,800 --> 00:18:09,600
I think also part of the problem is I feel if as Bitcoin Maxis, if we say there is
some

264
00:18:09,600 --> 00:18:19,000
value in experimenting with altcoins, if we say that shift coiners, we would like,
oh,

265
00:18:19,000 --> 00:18:20,000
so there's some value.

266
00:18:20,000 --> 00:18:29,280
So my shift coin number 5,073, Shiba Inu Classic is like, you know, it's like, you
know, it's

267
00:18:29,280 --> 00:18:30,280
like a private Evercoin.

268
00:18:30,280 --> 00:18:38,560
We will season that to say, okay, so you see these guys assign like altcoins are
good and

269
00:18:38,560 --> 00:18:41,560
release them to push the altcoins.

270
00:18:41,560 --> 00:18:42,560
Yeah.

271
00:18:42,560 --> 00:18:43,560
Right.

272
00:18:43,560 --> 00:18:44,560
That's a hundred percent correct.

273
00:18:44,560 --> 00:18:53,560
So that's too bad because the people who want sidechains, we are constantly, we're
in between

274
00:18:53,560 --> 00:18:57,880
two worlds sort of, because if people want to try something new, they say, I'll do
it

275
00:18:57,880 --> 00:19:01,160
as a sidechain for a little while.

276
00:19:01,160 --> 00:19:07,680
Vitalik Buterin, well, that's a bad example, but David Vorek, we was going to do
like a

277
00:19:07,680 --> 00:19:13,280
bit, like a storage file coin type thing, but there is no, there's no Bitcoin
sidechain.

278
00:19:13,280 --> 00:19:16,360
So he made his altcoin and there's nothing else you can do.

279
00:19:16,360 --> 00:19:21,040
So then once people make their altcoin, now they feel responsible for it.

280
00:19:21,040 --> 00:19:23,800
It pulls people right out of the coalition.

281
00:19:23,800 --> 00:19:30,520
So unfortunately the coalition constantly loses people, which is a big political
problem.

282
00:19:30,520 --> 00:19:32,120
And, okay.

283
00:19:32,120 --> 00:19:34,680
But going back to the history of Bitcoin.

284
00:19:34,680 --> 00:19:43,480
So I believe in 2014 there was the sidechain White Piper released and it, at that
time

285
00:19:43,480 --> 00:19:45,040
it was a pretty big deal.

286
00:19:45,040 --> 00:19:51,760
I remember everybody tweeting how they're reading the sidechain White Piper in the
epiline

287
00:19:51,760 --> 00:19:53,080
and yeah.

288
00:19:53,080 --> 00:19:58,880
So maybe like you can explain, but what was in that sidechain White Piper and what
was

289
00:19:58,880 --> 00:20:01,000
new in there?

290
00:20:01,000 --> 00:20:08,120
Well, it kind of laid out, I'm not exactly sure what they were going for
specifically,

291
00:20:08,120 --> 00:20:12,280
but I think they were trying to put a lot of big names behind it because the number

292
00:20:12,280 --> 00:20:14,800
of coauthors is enormous.

293
00:20:14,800 --> 00:20:19,640
So like when I write something, it's just me, but that paper is like, whatever,
everyone,

294
00:20:19,640 --> 00:20:22,080
Greg Maxwell, Adam Back, Luke Dashjr.

295
00:20:22,080 --> 00:20:23,080
I don't know.

296
00:20:23,080 --> 00:20:28,200
I don't, Peter Weill, all these people, really big names, Mark Freidenbach,
whatever.

297
00:20:28,200 --> 00:20:33,440
These very huge names are on the paper, especially at the time.

298
00:20:33,440 --> 00:20:37,480
And they were, I think they were just trying to like put out some definitions of
things

299
00:20:37,480 --> 00:20:40,680
and they were just trying to get the concept into the Overton window.

300
00:20:40,680 --> 00:20:44,320
And they succeeded completely with that.

301
00:20:44,320 --> 00:20:48,520
They had a lot of like, you could do this or you could do that, which I didn't like

302
00:20:48,520 --> 00:20:51,560
because I thought they should just say exactly what to do.

303
00:20:51,560 --> 00:20:56,160
It should be like a spec, but they said like, you know, they could be symmetric or
asymmetric

304
00:20:56,160 --> 00:21:01,280
or they could be merge mined or not merge mined, or they could be whatever, something
else.

305
00:21:01,280 --> 00:21:06,760
And then they had a proposal in appendix B for something called the skip list.

306
00:21:06,760 --> 00:21:12,480
And that was the sort of the invention, I guess, but that never came to pass.

307
00:21:12,480 --> 00:21:15,080
That was never done.

308
00:21:15,080 --> 00:21:16,320
Okay.

309
00:21:16,320 --> 00:21:24,640
So what were some of the options they talked about and from those options, which
one?

310
00:21:24,640 --> 00:21:27,080
Because we have different ways to do sidechains.

311
00:21:27,080 --> 00:21:29,400
What are some of the different ways to do sidechains?

312
00:21:29,400 --> 00:21:30,400
And what's your opinion?

313
00:21:30,400 --> 00:21:32,720
Which is why we should be doing them?

314
00:21:32,720 --> 00:21:39,360
There's appendix B, but appendix A, I think there's appendix A was just like this
idea

315
00:21:39,360 --> 00:21:41,320
of the federation.

316
00:21:41,320 --> 00:21:46,600
And if you go back and if you read carefully, and if you also, you can go back and
watch

317
00:21:46,600 --> 00:21:53,080
talks given by people from Blockstream around the time, including especially Greg
Maxwell,

318
00:21:53,080 --> 00:21:59,800
who they did this big Blockstream video, and then Greg is introduced as the author
of the

319
00:21:59,800 --> 00:22:02,000
two-way peg.

320
00:22:02,000 --> 00:22:06,720
If you go back and look at it in a historical context, this multisig thing was
supposed

321
00:22:06,720 --> 00:22:11,000
to be like a very temporary stopgap thing.

322
00:22:11,680 --> 00:22:18,160
They were like, we can't do the new technology of sidechains yet, but we can do this
where

323
00:22:18,160 --> 00:22:24,160
we just have a group, basically a multisig wallet.

324
00:22:24,160 --> 00:22:33,000
And they said, we can do that until we get the real, the true sidechain.

325
00:22:33,000 --> 00:22:34,000
But they never did that.

326
00:22:34,000 --> 00:22:36,920
They stuck with this federation thing.

327
00:22:36,920 --> 00:22:43,080
But then over time, because of marketing reasons, because of the block size war,
because

328
00:22:43,080 --> 00:22:47,760
of Samson-Mao related reasons, they started to flip this.

329
00:22:47,760 --> 00:22:53,920
This idea took root in people's heads as the multisig wallet being a real sidechain.

330
00:22:53,920 --> 00:22:57,760
And now that is probably how people use the term.

331
00:22:57,760 --> 00:23:03,120
So the term's definition has changed, which is fine.

332
00:23:03,120 --> 00:23:13,280
But the new definition is kind of like anything that is moving Bitcoin, not on layer
one.

333
00:23:13,280 --> 00:23:20,360
So by that definition, lots of things are sidechains, including every exchange, like

334
00:23:20,360 --> 00:23:27,760
Coinbase is a sidechain, if they have their money in a multisig wallet, which they
do.

335
00:23:27,760 --> 00:23:34,760
So the definition, unfortunately, has been kind of beaten up, which is too bad.

336
00:23:34,760 --> 00:23:42,200
So when you said the federated multisig model, so basically for the audience, so
tell me

337
00:23:42,200 --> 00:23:44,200
if I'm saying this correctly.

338
00:23:44,200 --> 00:23:53,760
But my understanding is basically the sidechain is essentially a kind of multisig
where there's

339
00:23:53,760 --> 00:24:00,240
a few parties, maybe six, seven or eight central parties, but part of that multisig,

340
00:24:00,240 --> 00:24:06,000
and so that's kind of a federated model, and they control, basically, they have to
agree

341
00:24:06,000 --> 00:24:09,240
to the next block.

342
00:24:09,240 --> 00:24:12,360
Is my understanding correct there?

343
00:24:12,360 --> 00:24:19,120
Well, in this context, it refers to the fact that the coins are locked to them.

344
00:24:19,120 --> 00:24:24,400
There's a different thing about how the next block is found, but it happens to be
basically

345
00:24:24,400 --> 00:24:28,360
that same idea.

346
00:24:28,360 --> 00:24:30,480
So there's two separate things.

347
00:24:30,480 --> 00:24:39,080
There's the peg in, peg out, there's the coin thing, what locks the Bitcoin, and
then there

348
00:24:39,080 --> 00:24:40,520
is how the blocks are found.

349
00:24:40,520 --> 00:24:43,200
And so that one would be merge mining.

350
00:24:43,600 --> 00:24:53,120
The other one would be something like BIP300 or the multisig output or something
else.

351
00:24:53,120 --> 00:24:58,760
So the multisig thing in the case of Liquid is, I'm pretty sure, 8 of 15 multisig.

352
00:24:59,262 --> 00:25:20,262
And they also have, it's unclear how anyone knows if this is true or not, but
they're supposedly like HSMs, like these little boxes that hold the keys, and you
can't copy the keys off of them, I mean, supposedly, there's no real way to audit
any of that, or prove any of that, or prove that the keys were generated only on the
box.

353
00:25:21,262 --> 00:25:31,262
So I don't really know why, you know, who they think they're kidding when they keep
saying that, but I guess that's the thing they say, so.

354
00:25:32,262 --> 00:25:50,262
Okay. And just to explain, for the audience, Liquid is probably the most famous
implementation of a sidechain, the most active one, at least. And it's by
Blockstream, and uses that federated model.

355
00:25:51,262 --> 00:26:06,262
Okay, I'm still not 100% sure. So the federated models, they don't control the
creation of blocks, but they decide when you want to transfer coins between the
Bitcoin blockchain and the sidechain.

356
00:26:07,262 --> 00:26:30,262
Yes, particularly when you want to take them out. You say, I want them back on layer
one. I'm a new owner on the sidechain. But layer one isn't looking at the sidechain.
So layer one will just be like, it can't look at the sidechain to know what
happened, but it has to look at something to know who should get the coins and who
should not. And what it does in this case is it asks 15 people, basically.

357
00:26:31,262 --> 00:26:33,262
Okay, okay. Who should, who gets the voice?

358
00:26:33,262 --> 00:26:51,262
It's a big contrast between mining, where there's no fixed list of miners. It can
constantly change. The mining world can constantly change. And if all the miners
died, new miners could show up without any modification to the Bitcoin system.

359
00:26:51,262 --> 00:27:19,262
But in the liquid multisig world, it is a fixed list. I mean, there's ways of
updating the list. But I don't think any of that has been implemented yet. And I
don't think, I'm not sure exactly how. I'm pretty sure to update the list, you need
the 15 people to update it. So it's kind of circular. Whereas none of that is the
case in finding a Bitcoin block or moving Bitcoins. So it's very different in that
way.

360
00:27:21,262 --> 00:27:34,262
Okay. And you also mentioned something called 2iPEG. And so what does that mean
exactly? When we even say pegging in and pegging out and 2iPEG, is 2iPEG a different
module than the federated module?

361
00:27:34,262 --> 00:28:03,262
No, this is a weird phrase, I guess. It comes from, I'm pretty sure it just comes
from like foreign exchange, like forex markets, because it's referring to the idea
that you can have a currency peg. So I'm pretty sure like the EC, the Caribbean
dollar is like 2.5 of those always equals one American dollar or something like
that. So there's a fixed relationship. So you don't have to really worry about, it's
kind of interoperable.

362
00:28:04,262 --> 00:28:26,262
It's kind of like, you know, if you take money out of an ATM, your checking account
balance will go down by a certain amount, $100, and you get $100 in cash. So it's
saying they exchange at par. And that means you don't have to worry about, you don't
have to think about the relevant issues or the risks.

363
00:28:26,262 --> 00:28:44,262
You don't have to think about like, what's the difference between paper currency and
the checking account? Well, nothing really, because you can put $20 into the ATM and
get $20 in the checking account, or you can take $20 out of the ATM. And so you
don't have to like worry about anything. You're just in the same system.

364
00:28:44,262 --> 00:29:09,262
And so the idea is you don't have, you have an altcoin without the coin. How do you
do anything over there? You send seven Bitcoin into it. And then you lose seven
coins on the main chain, Bitcoin Core. And then you gain seven coins on the sidechain. So they are, that's the idea of it's pegged.

365
00:29:09,262 --> 00:29:14,262
When I come back, they pay. So there's no like, there's not like a fluctuating
exchange rate where there's like Coinbase.

366
00:29:15,262 --> 00:29:33,262
Okay. So it basically means the exchange rate is static. So we have the Bitcoin and
let's say Bitcoin sidechain and one Bitcoin exchanges for 10 Bitcoin sidechains.
And that exchange rate is static.

367
00:29:33,262 --> 00:29:37,262
Right. If you did that, then time would be even when it came back. Right.

368
00:29:37,262 --> 00:29:41,262
Yeah. And so that's called a two way peg.

369
00:29:42,262 --> 00:30:10,262
Correct. Because there was originally something called one way pegging, which is all
these are silly names, of course. But the idea was, you can have the coins move in
one direction, where if you wanted them to go on like on a one way street, there was
a block and you could have a situation where you moved like eight coins in and you
got eight coins over there, but you could never get them back out.

370
00:30:10,262 --> 00:30:25,262
But people liked that at first because they were like, this is a cool idea. We can
put new stuff. We can have like Bitcoin 2.0. We could have whatever we want in here.
And the only issue is we have to, as long as we keep making it better and better, no
one will want to go back to the old version.

371
00:30:25,262 --> 00:30:42,262
But people were like, people were kind of like, this is now this depends on an
assumption, you know, because when it's a one way street, you get real nervous about
putting coins in in the first place because you think, now I'm doing something that
I can never undo. So that's no good.

372
00:30:42,262 --> 00:30:57,262
So that's no good. So the two way peg concept just gives you the undo button. You
put coins in the sidechain, you're like, wait a minute, you take them out and
you're worse, you're no worse off than you were before. And you can see how that
would be appealing.

373
00:30:57,262 --> 00:31:17,262
Okay, I understand now. And in the federated model, is the exchange rate controlled
by the federated nodes?

374
00:31:17,262 --> 00:31:29,262
Okay, so now moving on to Drivechains. So that's your idea of how sidechains should
be done. Is that correct?

375
00:31:29,262 --> 00:31:30,262
Yes, it is.

376
00:31:30,262 --> 00:31:37,262
So what is Drivechains? How do they differ from the current implementations like
Liquid?

377
00:31:38,262 --> 00:32:06,262
Yes, well, it's not, they don't use the fixed member, they just use the set of
Bitcoin miners as the, the, the authenticators of which coins go where. So that's
for a variety of reasons. One reason is already, miners have a lot of power in
Bitcoin, believe it or not, they, they don't have a lot, but they, they, they have
kind of enough like to the point where a 50%

378
00:32:06,262 --> 00:32:25,262
of miners were just evil per se, they would, you would be doomed, no matter what the
lightning network would be doomed, sidechains would be doomed, and the regular
chain would be doomed. So you already have, you're already kind of assuming that
they are, if you lose that, then you're losing a lot.

379
00:32:25,262 --> 00:32:46,262
Now the question is, maybe they would be persuaded because the design is bad.
Opportunity makes the thief, as they say. So am I inducing them to steal a bunch of
coins? Well, I say that risk is up to the user to take. So same with Liquid, like
they could, those people could steal their Bitcoin, the, the members of the
multisig.

380
00:32:47,262 --> 00:33:01,262
So I say, we'll just, we'll, well, this is up to the user. And if the, if the chain
is well, the sidechain is well designed, it will increase mining transaction fees,
and it will increase the exchange rate of the coin. So miners will want to keep it
around.

381
00:33:01,262 --> 00:33:23,262
But yeah, so the history of that was Blockstream came on the thing in 2014. In 2015,
it was became clear to me that they were not, they weren't, they were going very
slow, they were not actually releasing the decentralized sidechain technology that
just the multisig bandaid, that was the temporary stopgap.

382
00:33:23,262 --> 00:33:38,262
And so I wrote this post in November 2015. And it was a good, I thought it was a
perfectly good idea because the scaling war was happening and the large blockers,
they were very okay with something called SPV mode.

383
00:33:38,262 --> 00:34:01,262
And that was one something where there was a vulnerability in SPV mode where miners
can steal coins from you if you are only SPV and you're not in a full mode. But I
thought, okay, listen, that we can if they are already willing to assume that, then
it's going to cost them nothing to switch to the large block sidechain.

384
00:34:02,262 --> 00:34:15,262
So I was like, the large blockers will be happy. And the small blockers will be
happy because we're not going to change the block size on mainchain Bitcoin core at
all, it'll stay low. So we have small blocks and large blocks at the same time.

385
00:34:15,262 --> 00:34:35,262
So in 2015, I thought this will be, this is the way to go. This fixes the block size
dilemma, because we just have, we have one of each of the things that we want, and
so that everyone's happy. So that's what I was thinking when it came out.

386
00:34:35,262 --> 00:34:56,262
Unfortunately, the timing wasn't great, because there's scaling one and scaling two,
September 2015 and December 2015. And my idea came out in the middle, but scaling
was set teeing up segregated witness, and then lightning, which was people thought
would be and it was said that would be done by April 1st or something.

387
00:34:57,262 --> 00:35:12,262
I don't know why anyone said that. But they said, we'll do SegWit will be done by
April 1st, and then we'll have lightning, and then everything will be fine. And so
that's what they said. And then that what people focused on that, and they did not
focus on my idea until much later.

388
00:35:12,262 --> 00:35:33,262
Okay, so your idea was during that big block debate, it was about using Drivechains
to give the big blockers what they want, which is a big block sidechain to Bitcoin.
And if they want big blocks, they can just transfer over the Bitcoins to big blocks,
which is like letting the market decide in a fair way.

389
00:35:34,262 --> 00:35:44,262
Yeah, the user can do whatever they want. If they run the large block software, then
they have to process the larger blocks. But if they don't want to do that, then they
just don't have to.

390
00:35:45,262 --> 00:36:04,262
Okay. So, and I'm still like, don't fully understand. So the difference between the
Drivechains and the current sidechains like Liquid is that you don't use the
federated Drivechains, but basically, really, is that the only main difference?

391
00:36:05,262 --> 00:36:18,262
Well, it's kind of a big difference, because you have a little bit of a not your
keys, not your coins problem with Liquid, because it is a federation, but it's like
they have the money.

392
00:36:18,262 --> 00:36:36,262
So in Drivechain, also, the miners have the money. But that's what I was trying to
say before is that mining is like a process. So there's no names, there's no fixed
owners. And so Drivechain, the miners sort of own the coins, but they're kind of
already on the coins, to some extent.

393
00:36:36,262 --> 00:36:50,262
So in Drivechain, the miners own the coins. And what I do instead is I throw a bunch
of stuff in the way of the miners, so that it's very difficult for them to
coordinate to steal the coins.

394
00:36:50,262 --> 00:37:10,262
But if anyone wants to use the system, in an honest way, that happens very quickly
and reliably. So I tried to set it up so that the withdrawals are very slow, they
take months. But this doesn't matter because users can swap the coins without using
PIP 300.

395
00:37:10,262 --> 00:37:29,262
They can swap them out on exchange or using HTLCs or something. So there's no
disadvantage to them. And so the only people who will walk the coins back across
will be very patient people or the miners themselves. And so those people are,
they're unlikely to steal from themselves.

396
00:37:29,262 --> 00:37:50,262
So the whole thing is designed. But there's an important difference versus the
miners. Again, the mining is a process. So mining means that no one can stop you
from adding a new sidechain. If someone killed all the miners, new miners would show
up without anyone doing anything.

397
00:37:50,262 --> 00:38:11,262
So with Liquid, there's a multisig. But if you want to, let's say instead of Liquid,
you wanted to do something else, like Zcash sidechain. In the Liquid model, you have
to find 15 new people. And then you have to say this is a new, excuse me, this is a
new federation.

398
00:38:12,262 --> 00:38:32,262
And then that has no reputation on day one. So people have to decide whether or not
they trust that multisig thing. And so it's difficult to start up something new. But
in PIP 300, we already have the mining network. So you can just spin up a new
sidechain whenever you want.

399
00:38:33,262 --> 00:38:53,262
There's also, I think, a better incentive alignment, because in PIP 300, and in
everything, really, all the money is going to go to the miners, because they can
gate, they can filter anything they don't like. So in PIP 300, the miners get all
the fees. In Liquid, all the fees go to a wallet controlled by Blockstream.

400
00:38:54,262 --> 00:39:06,262
So the miners don't really lose very much if Liquid goes offline, and they don't
really gain a lot if Liquid is popular. In fact, they kind of lose out because the
fees are going down.

401
00:39:07,262 --> 00:39:28,262
So the idea is to align the incentives better. Have miners just be like, miners are
very, they're driven by profits, they want revenue. So they can do this, if they
have an optional activity, where if they want, they can add a chain.

402
00:39:29,262 --> 00:39:49,262
And then there's more revenue for all of them. And then if the chain is badly
behaving, or if there's something wrong, then they lose money. And so that is
designed to keep the miners as cheerleaders and champions of all the sidechains of
the system.

403
00:39:50,262 --> 00:40:07,262
And it's also like, it happens to be the fact that, you know, with mining, it's
unclear the physical location, it's unclear the identity of the miner. So mining is
really a lot, is much better than the multisig idea, because the multisig, you take
out the multisig people, and it's over. But with mining, it is unkillable.

404
00:40:08,262 --> 00:40:14,262
Okay. So does that mean the federated Liquid, it doesn't use emerging mining?

405
00:40:15,262 --> 00:40:34,262
Well, again, it doesn't. But we're talking about the coins. So there's a difference
between the coins, which is the escrow, the account that holds coins that you move
in, custody of the coins. And that's different from how blocks appear. So for
example, Liquid, the blocks are once every minute, I think.

406
00:40:35,262 --> 00:40:58,262
So they, but whereas bitcoins are once every 10 minutes, so that would not be easy,
you could do that with merge mining, but it'd be convoluted. So it's not very, that
was a kind of a giveaway that it's, they do, I don't remember exactly what it is,
but it's some kind of like, like Paxos, some kind of older consensus thing that
doesn't even use mining.

407
00:40:59,262 --> 00:41:05,262
Okay, so we don't really use merge mining on the federated, but the Drivechains do
use merge mining?

408
00:41:06,262 --> 00:41:27,262
Well, yes, because Drivechain is 300 plus 301. And that's the type of merge mining.
But I think you're crazy if you don't do merge mining, because you're already
trusting the miners, no matter what you do, even if you use lightning network, 51%
can still screw you over.

409
00:41:28,262 --> 00:41:50,262
So that's not good. But if you're already going that far, then you kind of lose
nothing by putting the, if you merge mine, then it's the same group. And then this
is in Drivechain 300, the 51% group can move the coins. And so you're really not
losing anything at all by doing merge mining. But what you get is you get all the
mining for free.

410
00:41:50,262 --> 00:42:01,262
Whereas there's also something very bad in sidechains where the sidechains have no
block reward, so they don't make any new coins. So the only thing they have is their
fees. That's the only thing the miners can earn.

411
00:42:02,262 --> 00:42:24,262
So in Bitcoin, we get whatever it is, six and a little minted. And but then we also
get the fees. So it could be like seven Bitcoin total. But on the sidechain, you
only get the fees. So there's a bad situation where the reward is extra volatile on
the sidechain.

412
00:42:25,262 --> 00:42:44,262
Because it can like go to zero, for example, the whole reward 100% of it can go to
zero, whereas it was Bitcoin, it could just go down from seven to 6.25 or whatever.
So then when it's volatile, you don't maybe you don't know when will another block
be found? Will it ever be found? You have an issue.

413
00:42:44,262 --> 00:42:59,262
But if it's merge mining, then all the blocks are just coming in for free. So you
don't have to think about that. You just think how much extra money am I getting?
Oh, 10 cents? Well, that's another 10 cents in my pocket, you know, for free. So it
doesn't really matter as much. You just leave everything running. Okay.

414
00:42:59,262 --> 00:43:08,262
That's why I think you're crazy if you don't do merge mining. But people can do it.
They can do on the sidechain, they can make whatever mistakes they want, and no one
can stop them, including me.

415
00:43:08,262 --> 00:43:37,262
That makes sense. So again, tell me if I'm understanding this correctly. So the
federated model, obviously, the federations could get together to steal money on the
sidechain. And in theory, in your model, if you have more than 50% of the hash
power, the miners could in theory, steal the funds?

416
00:43:38,262 --> 00:43:40,262
The funds that were deposited to the sidechain, yes.

417
00:43:40,262 --> 00:44:06,262
Yeah. And that's different because in Bitcoin, normally, 50% of miners, some people
aren't aware of this, but they wouldn't be able to really steal the coins. They can
stop transactions on the Bitcoin minechain and they can censor, but they can't steal
people's coins. But on the sidechain, like a Drivechain, 50% of miners could in
theory steal the coins. So that's kind of the argument.

418
00:44:06,262 --> 00:44:07,262
It is different.

419
00:44:07,262 --> 00:44:22,262
But it's still much better. What you're saying is it's still much better than the
federated model, because 50% of miners is much better than eight federations, where
you need like four of them to steal coins.

420
00:44:22,262 --> 00:44:49,262
The federation has, well, one again, one problem with the federation is that they
don't, they're not punished by stealing, they just make away with the coins. Whereas
the miners, if you have a situation where there's a base mainchain, and then there's
like four or five really popular sidechains, and then there's like another sidechain
or something. If they steal from that, then the users may all panic. And they may
say, well, the sidechain idea is dead.

421
00:44:50,262 --> 00:45:15,262
And now all this whole stream of revenue that they would have been getting for every
sidechain, and the gain to the exchange rate, because now instead of being a coin
that only does one thing, it's a coin that can do anything. But then if the
sidechain idea is not supported, then that would all be obliterated. So they at
least are punished for stealing.

422
00:45:16,262 --> 00:45:20,262
They have some incentive to keep stealing.

423
00:45:20,262 --> 00:45:21,262
Right.

424
00:45:21,262 --> 00:45:23,262
And yeah, so that makes a lot of sense to me.

425
00:45:24,262 --> 00:45:40,262
It's not like they can just steal. The BIP300 idea is designed around stopping them
from stealing. So what I kind of assume is the sidechain is going to spit out
sidechain full nodes, which are not mandatory.

426
00:45:40,262 --> 00:45:51,262
No one has to run them. But if you do, you get like four hashes a year, every three
months. The sidechain will calculate what the withdrawals should be, what the TXID
should be, basically.

427
00:45:51,262 --> 00:45:58,262
And it's very rare. And that's on purpose. That's to make it easy for people to pay
attention to them.

428
00:45:59,262 --> 00:46:08,262
So you have one hash. With your human eyeball, you can just see the hash and
understand exactly the state of the sidechain.

429
00:46:08,262 --> 00:46:19,262
And when they want to withdraw on layer one, that hash is the thing that's
introduced to everyone. It makes its big debut.

430
00:46:19,262 --> 00:46:26,262
And then it has to make progress over the three months to reach the finish line.

431
00:46:27,262 --> 00:46:30,262
So everyone can easily see if that's not right.

432
00:46:30,262 --> 00:46:40,262
And then they have until then to call the miners and assassinate them or plead with
them or start up different miners or do something else.

433
00:46:40,262 --> 00:46:55,262
So it's not perfect, but for the miners to steal would involve at least a lot of
shame and possibly other feedback involving the price and involving other things.

434
00:46:56,262 --> 00:47:05,262
And involving people's ability to react. It's possible to do a UASF to block the
transaction. Many things are possible.

435
00:47:05,262 --> 00:47:24,262
And so the design of BIP300 is to amplify anyone's ability to reply to the miners'
theft by making it as easy to detect as possible, easy as possible to do something
about, easy as possible to prove that something is going wrong to other people.

436
00:47:24,262 --> 00:47:34,262
Other people out there may point and laugh, but other people may be sympathetic and
may say, well, this isn't right. This isn't a good idea. This isn't going well.

437
00:47:34,262 --> 00:47:38,262
We want everything to be going well. What's going on?

438
00:47:38,262 --> 00:47:42,262
So it starts a feedback loop to try to correct the problem.

439
00:47:42,262 --> 00:47:46,262
And so I don't just say maybe the miners will never take the coins.

440
00:47:46,262 --> 00:48:00,262
There is like a plan. And again, it's not that it's supposed to be perfect, but the
way the plan works is you can only be stolen from if you choose to put your coins
into the sidechain.

441
00:48:00,262 --> 00:48:05,262
So we allow the user to do whatever they want with their money.

442
00:48:05,262 --> 00:48:23,262
So I don't know. I'm not saying it will certainly be a big success, but the coins
will like we allow people to sell Bitcoin and buy Solana or something, you know,
like we can't stop them from we can't stop them from just destroying the coins.

443
00:48:23,262 --> 00:48:31,262
They can send them to one Bitcoin either don't send or they can send them to they
can sell them for fiat or they can sell them for goods and services.

444
00:48:31,262 --> 00:48:38,262
So there's nothing we can do to interfere with the user's sovereignty.

445
00:48:38,262 --> 00:48:47,262
So I say, hey, I give them this option. I say, listen, you could have you could have
Zcash technology, you could have Ethereum technology, you could have whatever you
want prediction market technology.

446
00:48:48,262 --> 00:48:56,262
And, you know, like take it or leave it, you know, if you want to try and, you know,
people will try with a small amount of money first, the money that they're willing
to lose.

447
00:48:56,262 --> 00:49:03,262
And then depending on what happens, all of us will learn about what the exact limit
of this is.

448
00:49:03,262 --> 00:49:11,262
Yeah. And yeah, that makes sense. And it's part of the model of Bitcoin. Bitcoin is
about giving people more power and more responsibility.

449
00:49:11,262 --> 00:49:16,262
And right. They have the responsibility to make their own choices.

450
00:49:16,262 --> 00:49:21,262
That's the whole point of Bitcoin. If we don't respond. Yeah.

451
00:49:21,262 --> 00:49:29,262
Otherwise, we might as well if you don't think people if somebody should make
decisions for them, then might as well go back to the central banking system.

452
00:49:30,262 --> 00:49:34,262
Right. That's not freedom at all. That would be, you know, parentalism or something.

453
00:49:34,262 --> 00:49:42,262
So that is. But yeah, like we when push comes to shove, they're allowed to destroy
the coins, you know.

454
00:49:42,262 --> 00:49:48,262
Yeah, they can just destroy their computer. So it's kind of like, what are we going
to do?

455
00:49:48,262 --> 00:49:58,262
What are we going to do? There's nothing we can do like. So it's kind of like,
again, like that's the design is the design is not just free for all miners.

456
00:49:58,262 --> 00:50:03,262
Grab the coins. The design is like, OK, these are some things that almost everyone
agrees on.

457
00:50:04,361 --> 00:50:17,201
Like overt 51% percent attack and can destroy the network and users are free to make
their own choices and also layer one Bitcoin should not have to look at or care
about anything on the sidechain.

458
00:50:17,521 --> 00:50:21,201
So we have some basic ingredients that make up the design.

459
00:50:21,521 --> 00:50:27,841
And then from there, try to make it really, really difficult for the miners to steal
and try to make it really convenient for the user.

460
00:50:27,921 --> 00:50:44,401
Because, again, the user doesn't have to do the three month thing, the user can say,
I have a 20 sidechain coins and instead of if I did the three month thing, I would
get 20 main chain coins, but maybe I don't want to wait three months so they can go
online and they can just sell them.

461
00:50:44,401 --> 00:50:59,281
They say, I'll sell these 20 sidechain coins for whatever, 19.9 or 19 and a half
layer one coin that happen instantly and they'll have they'll have nothing to do
with BIP300.

462
00:50:59,601 --> 00:51:05,201
But because BIP300 is there, the market price will be locked into a little channel.

463
00:51:06,001 --> 00:51:11,281
It just in practice because it can't go too far beneath a one to one thing.

464
00:51:11,281 --> 00:51:14,321
Otherwise, people will just say, well, I mean, I'll just wait three months.

465
00:51:14,881 --> 00:51:18,801
So as long as you have someone in the whole system that is very patient.

466
00:51:19,921 --> 00:51:26,081
Everyone in the whole system is as patient as that person, because that person will
just buy up people's coins and then wait.

467
00:51:27,041 --> 00:51:28,881
Yeah, so that's the idea.

468
00:51:29,441 --> 00:51:31,521
And the three month thing you're referring.

469
00:51:31,521 --> 00:51:38,961
So that basically means it takes three months to peg in or peg out.

470
00:51:38,961 --> 00:51:39,521
Peg out.

471
00:51:39,521 --> 00:51:40,561
Pegging in is instant.

472
00:51:40,561 --> 00:51:52,081
But if you want to peg out, it takes three months to peg out from this Drivechain
into Bitcoin.

473
00:51:52,081 --> 00:51:53,921
Back to the Bitcoin core, right.

474
00:51:54,561 --> 00:51:59,841
And is that part of the reason also to prevent the stealing of the coins?

475
00:51:59,841 --> 00:52:01,601
Is that really the motivation for that?

476
00:52:02,081 --> 00:52:04,401
So you have three months.

477
00:52:04,401 --> 00:52:08,881
Withdrawal is uniquely identified by a hash.

478
00:52:08,881 --> 00:52:11,041
And that's the hash that the sidechain is going to say.

479
00:52:11,761 --> 00:52:14,241
It will be shouting the hash the whole time.

480
00:52:14,961 --> 00:52:17,921
So you have three months to do something about the...

481
00:52:17,921 --> 00:52:19,361
Right, if the hashes don't match.

482
00:52:20,321 --> 00:52:21,361
So it's pretty simple.

483
00:52:22,081 --> 00:52:22,481
Ask.

484
00:52:23,041 --> 00:52:28,161
Obviously, it's dangerous when you say, well, people will pay attention and then
they'll do something.

485
00:52:28,161 --> 00:52:29,281
Like that's kind of vague.

486
00:52:29,281 --> 00:52:34,481
But what I'm saying is, at least it's very, very easy for anyone to tell whether or
not something is going wrong.

487
00:52:35,361 --> 00:52:37,921
And if somebody does, let's say like we detect.

488
00:52:37,921 --> 00:52:41,761
Okay, I detect the miners are doing something dodgy about three months.

489
00:52:42,481 --> 00:52:42,981
Yeah.

490
00:52:43,361 --> 00:52:44,721
So you can be on vacation.

491
00:52:45,361 --> 00:52:46,961
You can be on vacation.

492
00:52:46,961 --> 00:52:50,881
That's because the three months is also key because people take vacations.

493
00:52:50,961 --> 00:52:52,161
They don't want to watch all the time.

494
00:52:52,161 --> 00:52:53,041
They're going to be asleep.

495
00:52:53,921 --> 00:52:54,961
They're busy.

496
00:52:54,961 --> 00:52:57,121
So they can just be like on vacation.

497
00:52:57,121 --> 00:53:00,001
Someone can call them up and say, emergency.

498
00:53:00,001 --> 00:53:04,081
And they can be like, well, in two weeks when I get back from vacation, I'll look
into it.

499
00:53:04,081 --> 00:53:05,761
Because they still have plenty of time.

500
00:53:06,561 --> 00:53:12,721
So that's the whole thing is that the easier it is for them to react, the more
comfortable they are.

501
00:53:12,721 --> 00:53:15,521
And the more of a deterrent it is.

502
00:53:15,521 --> 00:53:25,281
Because if you break into someone's house at like 4am, you can maybe break in and
steal some stuff and get out before they even get out of their bed or whatever.

503
00:53:25,281 --> 00:53:26,561
They'll be confused.

504
00:53:26,561 --> 00:53:28,401
And that means you might want to try it.

505
00:53:29,361 --> 00:53:35,761
But if you break into their house and all of a sudden you slow down, you become
really, really, really slow.

506
00:53:35,761 --> 00:53:48,481
And they have a whole 24-hour period to whatever it is, take out a fire poker or a
kitchen knife or something and take care of you.

507
00:53:48,481 --> 00:53:53,521
Then you say, well, I'm not going to break into that house because that's a magic
house where I'm going to slow down.

508
00:53:53,521 --> 00:53:54,641
So that's kind of the idea.

509
00:53:54,641 --> 00:54:01,201
Now, the things you would do, they would be like, you want to make sure there's no
like, is there some kind of misunderstanding?

510
00:54:01,201 --> 00:54:03,521
Is there a bug in the software or something like that?

511
00:54:03,521 --> 00:54:06,881
That's very unlikely, but that's always possible.

512
00:54:06,881 --> 00:54:09,681
And then you would say, are all the miners doing this?

513
00:54:09,681 --> 00:54:10,641
Like, is this planned?

514
00:54:10,641 --> 00:54:11,681
Is this intentional?

515
00:54:11,681 --> 00:54:12,321
You know what I mean?

516
00:54:12,321 --> 00:54:17,201
Because if it's slow, again, slow means it has to be intentional.

517
00:54:17,921 --> 00:54:22,961
Because again, it's like you break into someone's house, but you have to stay there
for a long time.

518
00:54:22,961 --> 00:54:28,241
Like if you accidentally break into someone's house, as soon as you realize that
you've done that, you'll get out.

519
00:54:28,241 --> 00:54:30,961
You'll be like, whoa, whoa, whoa, this is a mistake.

520
00:54:30,961 --> 00:54:31,921
I have to get out of here.

521
00:54:32,561 --> 00:54:42,241
But if you're willing to just keep doing it day after day, every block, you know,
every block, then it's kind of like, well, this is intentional.

522
00:54:42,241 --> 00:54:46,401
So at least you know that you can assign blame.

523
00:54:46,401 --> 00:54:50,161
You know, it's not like something was like misconfigured or misunderstanding.

524
00:54:51,521 --> 00:54:52,801
So you have all that.

525
00:54:52,801 --> 00:54:56,801
And then one thing you can do is you can just say, this is very straightforward.

526
00:54:57,521 --> 00:55:02,161
Since the hash is going to be more or less, I'm skipping a little bit of technical
detail here.

527
00:55:02,161 --> 00:55:06,081
But the hash is more or less the TXID of the withdrawal.

528
00:55:06,081 --> 00:55:08,481
And that's the only withdrawal that can be included.

529
00:55:08,481 --> 00:55:11,121
So you can just say, I'm going to not allow.

530
00:55:12,161 --> 00:55:19,201
In the future, after the three-month thing is over, and this transaction, that's
when the withdrawals put into a block.

531
00:55:20,161 --> 00:55:30,401
So you can say, when that happens, I won't allow any block to be mined on my node
that contains this TXID.

532
00:55:30,401 --> 00:55:33,201
This is a banned TXID, because this is bad.

533
00:55:33,201 --> 00:55:38,881
And again, people can do this at completely different times, because it has no
effect until the very end of the road.

534
00:55:38,881 --> 00:55:43,761
So in particular, it has no effect if the miners change their mind and give up.

535
00:55:43,761 --> 00:55:48,801
So nothing bad can ever happen to you if you do this.

536
00:55:49,761 --> 00:55:53,841
And so it's basically a UASF to block the theft.

537
00:55:54,401 --> 00:55:55,921
So you have a long time to coordinate it.

538
00:55:55,921 --> 00:55:59,521
And this is, again, the one I had in mind when I was thinking about this was,

539
00:55:59,521 --> 00:56:04,561
there were two instances in Bitcoin's history where there was a genuine emergency.

540
00:56:05,921 --> 00:56:08,161
And stuff had to be changed.

541
00:56:08,161 --> 00:56:12,561
In particular, in one sense, a lot of code, a lot of engineering had to be done.

542
00:56:12,561 --> 00:56:13,761
And decisions had to be made.

543
00:56:13,761 --> 00:56:15,121
People had to be called.

544
00:56:15,121 --> 00:56:16,561
And they had to shut down.

545
00:56:16,561 --> 00:56:18,801
So one was in July 2015.

546
00:56:20,161 --> 00:56:21,681
The other was earlier.

547
00:56:22,401 --> 00:56:24,401
I don't remember exactly when, but I have this.

548
00:56:24,401 --> 00:56:27,041
I think I put this somewhere in the DriveShame post.

549
00:56:27,841 --> 00:56:31,921
And in both of those instances, I think it was six hours and five hours,

550
00:56:32,641 --> 00:56:39,601
where people would actually write new code and patch the software without anyone
doing anything.

551
00:56:40,561 --> 00:56:43,841
So I was thinking five, six hours to write new code.

552
00:56:43,841 --> 00:56:46,401
But this is a very simple thing where someone can just say,

553
00:56:47,761 --> 00:56:50,001
they can right-click on something and say, ban this.

554
00:56:50,801 --> 00:56:52,801
And again, they have three months to do it.

555
00:56:52,801 --> 00:56:54,641
And everyone can do it at a different time.

556
00:56:54,641 --> 00:56:56,721
And there's no software upgrading.

557
00:56:56,721 --> 00:56:58,241
There's no downloading new software.

558
00:56:58,241 --> 00:56:59,441
There's no doing anything different.

559
00:56:59,441 --> 00:57:01,441
It's just like, do you click the switch or not?

560
00:57:02,481 --> 00:57:06,401
So I was thinking this compares very favorably because you have way more time.

561
00:57:06,401 --> 00:57:07,361
It's way simpler.

562
00:57:07,921 --> 00:57:09,361
Nothing bad can happen to you.

563
00:57:09,921 --> 00:57:13,601
The only bad thing that can happen is, if a lot of nodes reject the transaction

564
00:57:13,601 --> 00:57:15,521
and the miners just plow straight through,

565
00:57:16,081 --> 00:57:18,401
and they say, we're determined to include this transaction,

566
00:57:18,401 --> 00:57:22,161
then what will happen will be your node will stop receiving blocks.

567
00:57:23,681 --> 00:57:25,681
But that's the only bad thing that will happen to you.

568
00:57:25,681 --> 00:57:27,921
And you can just wait at that point.

569
00:57:27,921 --> 00:57:33,441
And if you wait a day or two, then you may decide to give up.

570
00:57:33,441 --> 00:57:37,121
Because they put the transaction in the chain and you aren't following it.

571
00:57:37,121 --> 00:57:38,881
But then you right-click on it again.

572
00:57:38,881 --> 00:57:42,801
And you say, OK, I unbanned this transaction.

573
00:57:43,441 --> 00:57:45,921
And then basically, you're allowing the miners to steal.

574
00:57:46,481 --> 00:57:50,481
But the mere fact that this is so easy and so possible,

575
00:57:50,481 --> 00:57:53,601
again, it's like you're robbing a house and it's slow.

576
00:57:54,321 --> 00:57:59,841
And the person has an enormous gun above the fireplace or something.

577
00:57:59,841 --> 00:58:01,921
And it's very easy to use.

578
00:58:01,921 --> 00:58:06,801
They just press a button and it just blows the whole doorway to shreds.

579
00:58:07,681 --> 00:58:11,281
And so the fact that it's there may be a deterrent.

580
00:58:11,281 --> 00:58:12,241
No one knows for sure.

581
00:58:12,241 --> 00:58:13,761
Maybe all these ideas will be terrible.

582
00:58:13,761 --> 00:58:15,441
And everyone will think that this will never work.

583
00:58:15,441 --> 00:58:17,601
But the fact that it's there is a deterrent.

584
00:58:17,601 --> 00:58:19,761
The miners might say, we tried to steal.

585
00:58:20,721 --> 00:58:26,721
But they ran a successful sympathy campaign in time.

586
00:58:28,161 --> 00:58:30,721
And now we're not going to win because 80% of the nodes

587
00:58:30,721 --> 00:58:32,961
are determined to block this TXID.

588
00:58:33,601 --> 00:58:34,961
So that's one thing you can do.

589
00:58:34,961 --> 00:58:36,721
Another thing you can do is try and figure out,

590
00:58:36,721 --> 00:58:40,001
call the people who are in charge of the big mining pools.

591
00:58:40,481 --> 00:58:41,681
The pools have another thing.

592
00:58:42,881 --> 00:58:46,401
They're very vulnerable because the pools can be very easily replaced.

593
00:58:46,401 --> 00:58:50,321
The hashers are spending hundreds of millions of dollars on equipment,

594
00:58:50,321 --> 00:58:54,161
electricity, and they just want a return on their investment.

595
00:58:54,721 --> 00:58:56,001
You know, they're simple people.

596
00:58:56,001 --> 00:58:58,641
They don't include transactions and blocks.

597
00:58:58,641 --> 00:59:04,721
Most of them don't know anything about what there's a good scaling to.

598
00:59:04,721 --> 00:59:06,001
They had like a minor panel.

599
00:59:06,001 --> 00:59:08,401
The miners were very confused about the block size.

600
00:59:09,361 --> 00:59:12,801
Someone just said on the panel, can someone just tell us what to do?

601
00:59:13,521 --> 00:59:15,121
They live in a completely different world,

602
00:59:15,121 --> 00:59:16,721
where they're just trying to find cheap power.

603
00:59:19,681 --> 00:59:23,201
Something funny about them is that sometimes they're sort of mercenary-like,

604
00:59:23,201 --> 00:59:28,561
where they'll just switch from BTC to BCH,

605
00:59:29,601 --> 00:59:32,721
just based on the day and who pays more money when.

606
00:59:32,721 --> 00:59:37,041
So they kind of like, what's the phrase?

607
00:59:37,041 --> 00:59:40,161
It's kind of just like, it's anyone's business.

608
00:59:41,041 --> 00:59:42,161
They'll work for anyone.

609
00:59:42,161 --> 00:59:45,121
They don't even know what the block is.

610
00:59:45,121 --> 00:59:46,001
They get the template.

611
00:59:46,001 --> 00:59:50,241
The template doesn't have any transactions in it except the Coinbase.

612
00:59:50,241 --> 00:59:52,401
So they don't even know what's going on.

613
00:59:52,401 --> 00:59:55,921
The pools do all the thinking for the miners.

614
00:59:57,361 --> 01:00:00,321
But the problem with the pools is, the problem for them,

615
01:00:00,321 --> 01:00:03,041
and what's good for sidechainers such as myself,

616
01:00:04,801 --> 01:00:06,401
the pools basically have a brand.

617
01:00:06,401 --> 01:00:09,761
They have a brand name, and that's basically it.

618
01:00:09,761 --> 01:00:15,521
So they get a tiny fee in exchange for organizing all this stuff and diffusing the
risk.

619
01:00:16,401 --> 01:00:18,401
So they have special software and stuff.

620
01:00:19,201 --> 01:00:21,841
These would be the people who do the merge mining and everything.

621
01:00:21,841 --> 01:00:26,881
So they have special software, but they get a tiny sliver of a fee.

622
01:00:26,881 --> 01:00:33,601
They get a little bit of money, and they have to attract the hash rate.

623
01:00:34,401 --> 01:00:37,761
They plug in the physical miner, and it makes a bunch of noise,

624
01:00:37,761 --> 01:00:39,521
and they point it at a pool.

625
01:00:40,161 --> 01:00:42,721
And those miners can just point it at a different pool,

626
01:00:42,721 --> 01:00:43,921
you know, at the drop of a hat.

627
01:00:43,921 --> 01:00:48,721
Like, it takes seconds, and they can just bail on the pool

628
01:00:48,721 --> 01:00:52,401
if the pool does anything that they think is not in their own best interest.

629
01:00:53,201 --> 01:00:55,441
So of course, perhaps the pool will say,

630
01:00:56,001 --> 01:01:00,881
we're going to steal from the sidechain and give 99% of it to you guys, the hashers.

631
01:01:01,441 --> 01:01:04,081
But, you know, it's just, like, more stuff to organize.

632
01:01:04,081 --> 01:01:05,601
They have to, like, coordinate.

633
01:01:05,601 --> 01:01:06,641
They have to find out lists.

634
01:01:07,361 --> 01:01:10,801
Whether or not someone hashes, this is another kind of cool thing.

635
01:01:12,001 --> 01:01:16,081
They have to pick the destination of the sidechain funds when they start the attack.

636
01:01:16,641 --> 01:01:18,161
So day zero.

637
01:01:18,161 --> 01:01:22,081
But it's three months later, day 90, or what have you.

638
01:01:23,041 --> 01:01:24,401
That's when it actually pays out.

639
01:01:24,961 --> 01:01:28,161
So they have to make a deal with the current group of hash rate here.

640
01:01:29,121 --> 01:01:31,281
But then if those miners, like, drop out,

641
01:01:31,281 --> 01:01:32,881
they can drop out and go to a different pool.

642
01:01:33,521 --> 01:01:34,561
Now they're already in.

643
01:01:34,561 --> 01:01:36,721
They're already locked in to get some of the theft.

644
01:01:37,441 --> 01:01:39,681
And they just say, well, I'm locked in on the theft,

645
01:01:39,681 --> 01:01:43,841
but now I'll mine somewhere else and get the rewards over there.

646
01:01:44,721 --> 01:01:52,161
And so the sidechain theft can't change the destination of the funds once it starts.

647
01:01:53,121 --> 01:01:56,321
So maybe if anything happens over the three months,

648
01:01:56,321 --> 01:01:59,521
if there's misunderstandings or miscoordination

649
01:01:59,521 --> 01:02:02,401
or just bad leadership of whoever's trying to do this attack,

650
01:02:03,361 --> 01:02:05,601
this would, again, just make people tend to think,

651
01:02:05,601 --> 01:02:09,201
I don't know if this is worth it.

652
01:02:10,401 --> 01:02:11,761
Again, nothing's perfect.

653
01:02:11,761 --> 01:02:12,881
So you have the mining pools.

654
01:02:12,881 --> 01:02:14,881
So the pools are easily replaceable.

655
01:02:14,881 --> 01:02:18,561
You start up a new pool, like, you know, in a day.

656
01:02:18,561 --> 01:02:19,841
You attract hash rate.

657
01:02:20,721 --> 01:02:24,241
So if a pool just goes rogue and tries to steal the coins, that won't work.

658
01:02:24,321 --> 01:02:26,481
For certain, it certainly will not work.

659
01:02:26,481 --> 01:02:27,921
Right. Okay, I get it.

660
01:02:29,361 --> 01:02:32,961
So in terms of implementing Drivechains,

661
01:02:32,961 --> 01:02:36,641
so Drivechains are a better way to do sidechains

662
01:02:37,201 --> 01:02:41,041
and to implement them, to have them within Bitcoin,

663
01:02:41,921 --> 01:02:47,441
we need BIP300/301.

664
01:02:47,441 --> 01:02:48,321
Is that correct?

665
01:02:49,441 --> 01:02:49,941
Yes.

666
01:02:50,741 --> 01:02:51,241
Yes.

667
01:02:52,421 --> 01:02:56,181
Okay, so what's up with BIPs?

668
01:02:56,181 --> 01:02:57,061
Why do we need them?

669
01:02:58,501 --> 01:03:03,861
Well, what enforces this three-month-long gauntlet thing,

670
01:03:04,981 --> 01:03:06,421
that is what BIP300 does.

671
01:03:06,421 --> 01:03:09,621
So it will reject a block that does not,

672
01:03:09,621 --> 01:03:11,701
that tries to withdraw from the sidechain

673
01:03:11,701 --> 01:03:14,821
faster than the three-month thing, basically.

674
01:03:14,821 --> 01:03:19,861
So what the BIP300 does, what the soft fork does,

675
01:03:19,861 --> 01:03:24,661
is it says we put coins into a spendable zone,

676
01:03:25,221 --> 01:03:28,581
but they can only be spent according to these new rules that we add,

677
01:03:28,581 --> 01:03:30,101
the BIP300 rules,

678
01:03:30,101 --> 01:03:33,461
which are this thing, this three-month-long hallway

679
01:03:33,461 --> 01:03:37,221
that you have to go one block, you know, at a time.

680
01:03:38,741 --> 01:03:42,901
And so that's what enforces the long, delayed, slow withdrawal.

681
01:03:45,381 --> 01:03:54,421
Okay, and so is that part of the reason why we haven't implemented that?

682
01:03:54,421 --> 01:03:57,621
Because obviously with Bitcoin development, we're very conservative.

683
01:03:57,621 --> 01:03:58,181
Exactly.

684
01:03:58,181 --> 01:04:01,621
When I proposed it in November 2015, it was not a big deal.

685
01:04:01,621 --> 01:04:03,461
And in fact, I think in the next month,

686
01:04:03,461 --> 01:04:06,341
we activated three soft forks or something.

687
01:04:06,341 --> 01:04:08,981
But unfortunately, you know, for historical reasons,

688
01:04:08,981 --> 01:04:15,381
the development, the overall,

689
01:04:15,381 --> 01:04:19,301
the project has become more slow moving and conservative.

690
01:04:19,301 --> 01:04:22,101
And also there was a lot of misunderstandings about this idea.

691
01:04:22,101 --> 01:04:24,021
I think that still persists,

692
01:04:24,661 --> 01:04:29,861
even among the absolute elite expert tier in Bitcoin.

693
01:04:31,141 --> 01:04:34,021
For a while in the Blockstream paper that I mentioned before,

694
01:04:34,661 --> 01:04:38,101
there is this idea that basically that merge mining

695
01:04:38,181 --> 01:04:44,661
is, has an effect, a significant effect on which miners are profitable,

696
01:04:45,621 --> 01:04:48,261
which I regard as a complete misconception.

697
01:04:49,141 --> 01:04:51,301
But that made people think,

698
01:04:51,301 --> 01:04:55,461
well, anything that can be merged mined is actually bad.

699
01:04:55,461 --> 01:04:56,981
So sidechains are bad.

700
01:04:56,981 --> 01:04:58,421
That was a temporary thing.

701
01:04:58,421 --> 01:04:59,861
But a lot of people still believe that.

702
01:05:01,861 --> 01:05:04,181
But I think that's just a mistake, you know,

703
01:05:04,181 --> 01:05:06,421
because think about it, like lots of things determine

704
01:05:06,421 --> 01:05:10,261
whether or not a miner, some group of miners is profitable or not.

705
01:05:10,261 --> 01:05:14,261
You know, like the invention of that whole natural gas flaring thing

706
01:05:14,901 --> 01:05:17,141
that made some miners more profitable, some less.

707
01:05:17,701 --> 01:05:19,781
I could, you know, I could publish a,

708
01:05:20,981 --> 01:05:23,141
I could make an announcement and say,

709
01:05:23,141 --> 01:05:28,021
if miners register on my website, I'll give them a dollar every year.

710
01:05:29,461 --> 01:05:31,541
That might affect, you know, in quotes,

711
01:05:31,541 --> 01:05:37,541
that might affect which miners are having that additional dollar of revenue.

712
01:05:38,261 --> 01:05:41,781
I could call it merge mining.com, Paul's merge mining site.com.

713
01:05:41,781 --> 01:05:44,341
And then I could say, I'll give, you know, I'll give $10 a year

714
01:05:44,901 --> 01:05:49,141
if the miner gives me their fingerprints or something,

715
01:05:49,141 --> 01:05:53,461
or their retinal scan of their eye, or, you know, I can say anything I want.

716
01:05:53,461 --> 01:05:57,301
And whether the miners make money is sort of up to them.

717
01:05:57,301 --> 01:06:03,781
So I thought this whole thing was a big, huge derailment of the whole conversation.

718
01:06:05,061 --> 01:06:06,501
And I think it is a huge mistake.

719
01:06:06,501 --> 01:06:09,141
In fact, I think it's Bitcoin's biggest setback.

720
01:06:09,141 --> 01:06:14,981
There was this paragraph in the Blockstream sidechain's white paper.

721
01:06:16,501 --> 01:06:18,421
So there was a lot of misconceptions about the idea.

722
01:06:18,421 --> 01:06:20,341
But in general, I think it's just because things are slow.

723
01:06:20,901 --> 01:06:22,421
People like the Lightning Network.

724
01:06:23,541 --> 01:06:27,061
People thought after the scaling war was won,

725
01:06:27,061 --> 01:06:31,061
people thought miners were just evil people who had to be kept on a short leash.

726
01:06:31,061 --> 01:06:33,781
So miners, mining became way out of favor.

727
01:06:33,781 --> 01:06:37,621
It wasn't until like Marty Benton, like the kind of great American mining,

728
01:06:37,621 --> 01:06:42,421
like that even the Bitcoin culture started to like turn back towards mining as being
cool.

729
01:06:42,421 --> 01:06:44,981
There was like a long period of time, because there was a SegWit2x,

730
01:06:44,981 --> 01:06:49,061
which had 83% or whatever it was of the hash power,

731
01:06:50,021 --> 01:06:52,101
signed this sort of agreement, so to speak.

732
01:06:52,101 --> 01:06:53,781
So everyone hated the miners.

733
01:06:53,781 --> 01:06:55,781
That was like 2017, 2018.

734
01:06:55,781 --> 01:07:00,101
That was a big setback for anything related to mining, which this project sort of
is.

735
01:07:01,621 --> 01:07:02,581
So that was bad.

736
01:07:03,541 --> 01:07:08,501
Then, I don't know, like people wanted Taproot, I guess.

737
01:07:09,301 --> 01:07:10,581
So that was...

738
01:07:10,581 --> 01:07:12,261
People were more interested in Lightning type things.

739
01:07:12,261 --> 01:07:16,901
Taproot was sort of like a Lightning thing, was the cooperative close, some other
stuff.

740
01:07:16,901 --> 01:07:19,381
But people kind of got really into Lightning.

741
01:07:19,381 --> 01:07:20,501
And Lightning was like the big...

742
01:07:21,141 --> 01:07:23,141
After the scaling war, it was like Lightning is the victor.

743
01:07:24,901 --> 01:07:27,381
Large blocks, etc. is the loser.

744
01:07:27,381 --> 01:07:30,021
And also changing Bitcoin was seen as...

745
01:07:30,021 --> 01:07:32,341
After the New York agreement, after the SegWit2x,

746
01:07:33,461 --> 01:07:38,501
anything that changed Bitcoin at all was seen as like very heretical.

747
01:07:41,221 --> 01:07:44,501
Which is ironic, because SegWit was, of course, a block size increase.

748
01:07:44,501 --> 01:07:46,181
But, you know, there's a lot of ironies.

749
01:07:46,981 --> 01:07:49,781
But these are some of the factors that made it slow.

750
01:07:49,781 --> 01:07:52,821
Also, I proposed the idea in 2015.

751
01:07:52,821 --> 01:07:56,741
But I just kind of assumed other people would understand how great the idea was

752
01:07:56,741 --> 01:07:59,141
and help write the software or just write it anyway.

753
01:07:59,141 --> 01:08:03,541
But then in like 2016, 2017, I realized that they won't.

754
01:08:04,101 --> 01:08:06,021
So I did software myself.

755
01:08:06,661 --> 01:08:10,181
And I was just taking my sweet time with it, going very slow.

756
01:08:10,981 --> 01:08:13,141
Me and the other people who are collaborating with me,

757
01:08:13,141 --> 01:08:15,221
we're just kind of taking our time and going really slow.

758
01:08:15,861 --> 01:08:18,421
And then, you know, recently I've been like,

759
01:08:18,421 --> 01:08:24,021
let me put out some example sidechains so that people understand what this is for.

760
01:08:24,021 --> 01:08:25,221
They see it with their own two eyes.

761
01:08:25,221 --> 01:08:30,581
So we cloned Zcash into a sidechain and we cloned Ethereum to a sidechain.

762
01:08:31,141 --> 01:08:33,621
So all that stuff didn't even happen until recently.

763
01:08:33,621 --> 01:08:35,861
It was just I was sort of being...

764
01:08:35,861 --> 01:08:38,181
I'm partially responsible because I was going very slow.

765
01:08:38,741 --> 01:08:43,301
Okay, so when you say recently, we've been the last year or so?

766
01:08:43,941 --> 01:08:47,461
The Zcash sidechain, we sort of started it in 2020.

767
01:08:48,581 --> 01:08:51,301
And then we sort of finished it last year.

768
01:08:52,021 --> 01:08:56,021
And then we sort of, we had a big upgrade to it this year.

769
01:08:56,021 --> 01:08:59,061
Because we changed the sidechain template around to make it very easy,

770
01:08:59,061 --> 01:09:01,541
minimal changes to copy the latest version of an altcoin.

771
01:09:01,541 --> 01:09:04,741
So an altcoin, so for example, we had Zcash 4.0.

772
01:09:05,301 --> 01:09:08,581
They spent like a year and a half doing Zcash 5.0.

773
01:09:08,581 --> 01:09:13,301
But in one weekend, we could switch the sidechain from 4.0 to Zcash 5.0.

774
01:09:13,301 --> 01:09:15,541
So we're making it very easier to copy.

775
01:09:15,541 --> 01:09:17,301
And we reuse that technique for Ethereum.

776
01:09:17,301 --> 01:09:21,301
But the Ethereum was like, you know, like the last month or something.

777
01:09:21,301 --> 01:09:22,101
That's pretty recent.

778
01:09:22,901 --> 01:09:29,461
So now it's easier for people to see exactly what they would get out of BIP300.

779
01:09:29,461 --> 01:09:31,461
Whereas before, there was nothing like that.

780
01:09:31,461 --> 01:09:33,301
And before the writing of the BIPs was not...

781
01:09:34,021 --> 01:09:36,661
I mean, I wrote the first part, but it wasn't...

782
01:09:36,661 --> 01:09:38,021
I was like very philosophical.

783
01:09:38,021 --> 01:09:39,221
And now I deleted all that.

784
01:09:39,221 --> 01:09:42,501
And it just says exactly what the software does.

785
01:09:42,501 --> 01:09:43,301
And it's very short.

786
01:09:44,661 --> 01:09:45,381
Okay.

787
01:09:45,381 --> 01:09:51,701
And so a lot of it, this is like we're explaining the arguments against BIP300.

788
01:09:51,701 --> 01:09:55,781
It's talking about the merits of Drivechains.

789
01:09:55,781 --> 01:09:58,581
And some people think there's merits in it.

790
01:09:58,581 --> 01:10:00,661
And some people think there's less merit.

791
01:10:00,661 --> 01:10:02,021
But if we agree that...

792
01:10:04,021 --> 01:10:06,341
I mean, to me, it seems like it has merit.

793
01:10:06,341 --> 01:10:09,701
And it definitely seems a much better way to do things

794
01:10:09,701 --> 01:10:12,661
than the current model of federated sidechains.

795
01:10:12,661 --> 01:10:14,821
That seems pretty obvious to me.

796
01:10:18,741 --> 01:10:21,861
So if we can do sidechains better, that's just a win.

797
01:10:23,541 --> 01:10:24,041
Yeah.

798
01:10:24,661 --> 01:10:28,261
The two big misconceptions were the miners can steal situation.

799
01:10:28,821 --> 01:10:31,701
And what I call miner side hustle.

800
01:10:31,701 --> 01:10:34,021
This idea that merge mining is actually bad.

801
01:10:34,021 --> 01:10:37,461
And again, unfortunately, the miners can steal

802
01:10:37,461 --> 01:10:40,181
was kind of like put forward by Peter Todd in 2015.

803
01:10:40,181 --> 01:10:43,301
But he was doing the right thing because everyone was saying sidechains,

804
01:10:43,301 --> 01:10:46,021
as you said, everyone was saying sidechains are perfect,

805
01:10:46,021 --> 01:10:47,621
the holy grail, blah, blah, blah.

806
01:10:47,621 --> 01:10:50,181
And Peter Todd found like a negative thing to say,

807
01:10:50,181 --> 01:10:51,781
which is always very important.

808
01:10:51,781 --> 01:10:53,861
You always need someone to do that.

809
01:10:53,861 --> 01:10:56,741
But again, the miners can steal critique is dealt with by just saying

810
01:10:58,101 --> 01:11:01,221
the user can observe and they can just say...

811
01:11:01,221 --> 01:11:03,141
They can wait and watch and they could say,

812
01:11:03,141 --> 01:11:05,061
is this right for me or not?

813
01:11:05,061 --> 01:11:07,621
But there's a lot of evidence suggesting it would be because,

814
01:11:08,261 --> 01:11:11,141
again, the large block, the whole large blocker community,

815
01:11:11,141 --> 01:11:14,021
which was a part of the Bitcoin community,

816
01:11:14,021 --> 01:11:17,301
they were very happy with SPV validation.

817
01:11:17,301 --> 01:11:20,501
And that's what the sidechain security model is exactly the same.

818
01:11:20,501 --> 01:11:23,941
So we had a huge number of people who clearly were earnest

819
01:11:23,941 --> 01:11:29,061
in their willingness to downgrade to that security level

820
01:11:29,061 --> 01:11:30,421
in exchange for larger blocks.

821
01:11:30,421 --> 01:11:34,261
So we had like, customers were lined up basically for the idea.

822
01:11:35,061 --> 01:11:36,341
So that's why I think...

823
01:11:36,341 --> 01:11:39,061
And then you look to see today, like how many people use Solana

824
01:11:39,061 --> 01:11:40,501
where you can barely even run a node.

825
01:11:41,061 --> 01:11:44,101
And are these short-lived things?

826
01:11:44,101 --> 01:11:45,941
Yes, but the sidechain can also be short-lived.

827
01:11:45,941 --> 01:11:47,301
So it doesn't even make any difference.

828
01:11:47,301 --> 01:11:50,341
We can just have a sidechain and then it could just die off and who cares?

829
01:11:50,341 --> 01:11:52,581
It would be like a fad, but it doesn't even make any difference.

830
01:11:53,221 --> 01:11:54,501
So that's dealt with with that.

831
01:11:54,501 --> 01:11:56,821
And then this miner side hustle thing, unfortunately, again,

832
01:11:56,821 --> 01:12:01,941
it was endorsed by this secret idea that merge mining is bad.

833
01:12:01,941 --> 01:12:06,741
It was endorsed by the smartest of the smart people

834
01:12:06,741 --> 01:12:09,301
and the most high status people.

835
01:12:09,301 --> 01:12:13,301
So despite the fact that it was not correct, it was very popular.

836
01:12:13,941 --> 01:12:16,901
And I think still people believe it.

837
01:12:16,901 --> 01:12:19,701
But as I said, it's not very relevant

838
01:12:19,701 --> 01:12:23,461
because anything can happen in mining that will tilt the playing field.

839
01:12:23,461 --> 01:12:24,341
Mining is very...

840
01:12:24,341 --> 01:12:26,581
People are going bankrupt all the time in mining.

841
01:12:26,581 --> 01:12:31,061
So some people, some miners use leverage to get an advantage.

842
01:12:31,061 --> 01:12:34,901
But then in a bad unlucky period, they go broke immediately.

843
01:12:35,621 --> 01:12:37,381
There's a natural gas flaring thing.

844
01:12:37,381 --> 01:12:38,581
There's this.

845
01:12:38,581 --> 01:12:40,101
They have to make a million decisions.

846
01:12:40,101 --> 01:12:46,741
And the idea that this software would be a significant cost

847
01:12:48,021 --> 01:12:49,861
because the benefits, anyone gets the benefits.

848
01:12:50,981 --> 01:12:51,861
You understand that, right?

849
01:12:51,861 --> 01:12:52,741
It's like they just...

850
01:12:52,741 --> 01:12:54,181
This money is just there for the taking.

851
01:12:54,181 --> 01:12:55,541
And in proportion to your hash rate,

852
01:12:55,541 --> 01:12:56,421
you just get the benefits.

853
01:12:56,421 --> 01:12:59,381
And then the difficulty goes up as more profits go.

854
01:12:59,381 --> 01:13:04,181
But the idea that the costs could be significant is also very far-fetched

855
01:13:04,181 --> 01:13:06,661
because it's just running more node software.

856
01:13:06,661 --> 01:13:08,421
And that can be expensive.

857
01:13:09,301 --> 01:13:13,621
But the real, the kind of key with that is regular users,

858
01:13:13,621 --> 01:13:18,101
like a regular full node user, they're basically a 0% miner.

859
01:13:20,021 --> 01:13:22,021
So they have to run the node and they get nothing.

860
01:13:22,821 --> 01:13:24,981
So whoever's designing this software,

861
01:13:24,981 --> 01:13:26,581
they need some people to be running the node.

862
01:13:26,581 --> 01:13:27,861
So the network just won't exist.

863
01:13:28,421 --> 01:13:31,301
So there's something, there's a natural feedback loop,

864
01:13:31,301 --> 01:13:33,781
keeping it clamped down.

865
01:13:34,661 --> 01:13:36,741
And if it's too expensive, then the network will just die.

866
01:13:37,781 --> 01:13:39,221
The other thing is if it's too expensive,

867
01:13:39,221 --> 01:13:42,661
miners don't make a profit by running the sidechain.

868
01:13:43,221 --> 01:13:44,901
If it costs more, then they just won't do it.

869
01:13:44,901 --> 01:13:47,381
And then everyone's left exactly the way we are today.

870
01:13:47,381 --> 01:13:48,581
So no one is worse off.

871
01:13:49,461 --> 01:13:51,381
So, but those are the two big,

872
01:13:52,821 --> 01:13:56,741
what I think of as misunderstandings and setbacks.

873
01:13:56,741 --> 01:13:58,661
And that's just too bad because I designed it

874
01:13:58,661 --> 01:14:00,421
with all that in mind from the beginning.

875
01:14:00,421 --> 01:14:02,261
Because I said already we can,

876
01:14:02,261 --> 01:14:04,581
with the miners, with respect to the miners can steal,

877
01:14:04,581 --> 01:14:07,381
I said people can already destroy the coins.

878
01:14:07,381 --> 01:14:09,221
They can already sell the coins for altcoins,

879
01:14:09,221 --> 01:14:10,501
which is the whole point of the sidechain

880
01:14:10,501 --> 01:14:13,301
is to be a superior alternative for the altcoins

881
01:14:13,301 --> 01:14:17,141
as the buyer's decision, consumer sovereignty.

882
01:14:17,941 --> 01:14:20,501
And then with the other case of the minor side hustle,

883
01:14:21,221 --> 01:14:23,221
I designed BIP300 with that in mind.

884
01:14:23,221 --> 01:14:24,581
Because I was saying, well, listen,

885
01:14:24,581 --> 01:14:26,341
we want to protect the full node costs.

886
01:14:26,341 --> 01:14:28,581
When you run a full node, we want that to be cheap.

887
01:14:28,581 --> 01:14:29,861
That's decentralization.

888
01:14:30,741 --> 01:14:33,061
But we do nothing at all to make mining cheap.

889
01:14:33,061 --> 01:14:34,821
Mining is like a, you know, it's just,

890
01:14:34,821 --> 01:14:36,581
it's a runaway train of being,

891
01:14:36,581 --> 01:14:39,301
going wherever it wants and nothing can stop it.

892
01:14:39,301 --> 01:14:44,261
So, and I have a counter argument in a post that I wrote,

893
01:14:44,821 --> 01:14:46,901
second security budget post that I wrote,

894
01:14:46,901 --> 01:14:49,141
where I said, if anyone still believes this,

895
01:14:49,141 --> 01:14:51,061
that merge mining is bad

896
01:14:51,061 --> 01:14:55,461
because it may make it more expensive for miners

897
01:14:55,461 --> 01:14:58,981
or may change, you know, profitability,

898
01:15:00,261 --> 01:15:02,581
scale economies of profitability of mining.

899
01:15:02,744 --> 01:15:08,384
Then I say, you know, why not just remove the upward difficulty adjustments from
Bitcoin, because those are what really make the blocks hard to find.

900
01:15:08,944 --> 01:15:14,944
So that's doing way more to make the blocks hard to find than anything though, the
validation is doing.

901
01:15:15,504 --> 01:15:20,784
So I say, listen, we'll just make the, we'll set the difficulty to its, to its
minimum value and just keep it there forever.

902
01:15:21,024 --> 01:15:23,264
But then everyone can see that that would be a bunch of nonsense.

903
01:15:24,064 --> 01:15:45,344
Maybe not everyone, but the experts that I'm talking about would see that, that,
that is, that's jumping out of, that's jumping straight into a disaster, but that's
all it is, is it because that's what the difficulty adjustment is doing is
constantly firing the bottom half of the mining industry.

904
01:15:46,064 --> 01:15:52,704
So it's constantly doing, it's constantly causing some people to go out of business
and it's constantly making some things mandatory.

905
01:15:52,704 --> 01:15:57,424
You know, I give you, you can't, you have to use an ASIC now, it's mandatory.

906
01:15:57,584 --> 01:16:02,944
So what's the difference between that and saying that ASICs are mandatory versus
GPUs versus CPUs?

907
01:16:03,504 --> 01:16:13,344
What's the difference in saying ASICs are mandatory and saying natural gas flaring
is mandatory or saying that merge mining, a lucrative sidechain is mandatory?

908
01:16:13,904 --> 01:16:15,504
To me, there's absolutely no difference at all.

909
01:16:15,504 --> 01:16:19,744
It's like, you know, it's, so I regard the whole idea as a, just a mistake.

910
01:16:20,624 --> 01:16:38,624
And I think it's a prejudice, in fact, that the developers live in the world of
blockchain software and that misleads them into thinking that they can opine on
merge mining when really it's no more of their business than the natural gas flaring
economics would be.

911
01:16:39,584 --> 01:16:41,584
Everyone knows what I'm talking about with that, right?

912
01:16:41,584 --> 01:16:43,584
Like this idea that the natural gas is flared off.

913
01:16:43,584 --> 01:16:45,584
I understand.

914
01:16:45,584 --> 01:16:47,584
Yeah.

915
01:16:47,584 --> 01:16:49,584
This produces a flame, this produces energy.

916
01:16:49,584 --> 01:16:51,584
So people said, well, we have to do that anyway.

917
01:16:51,584 --> 01:16:53,584
Yeah.

918
01:16:53,584 --> 01:16:57,584
So we'll just put a Bitcoin miner with like a generator there and then we get free
Bitcoin mining.

919
01:16:57,584 --> 01:16:59,584
So that's a great idea.

920
01:16:59,584 --> 01:17:05,584
But that's no different than merge mining or any other source of miner
profitability.

921
01:17:05,584 --> 01:17:07,584
Okay.

922
01:17:08,544 --> 01:17:12,544
So I get voiced to arguments and actually you personally convinced me on them too.

923
01:17:12,544 --> 01:17:16,544
I have another, a third argument, possibly against it.

924
01:17:16,544 --> 01:17:18,544
And I have actually no idea if it's valid.

925
01:17:18,544 --> 01:17:26,544
But so assuming Drivechains have merit, which I believe they do.

926
01:17:26,544 --> 01:17:30,544
And in any case, it's pretty much an optional feature for users to use.

927
01:17:31,504 --> 01:17:39,504
And the mining thing, I think if miners, some miners get more income, but I don't
see a problem with that.

928
01:17:39,504 --> 01:17:49,504
But even if something has merit, it's not always worth it to change the Bitcoin code
base.

929
01:17:49,504 --> 01:17:55,504
Because if everybody, a lot of people have good ideas, but we can't implement
everything in Bitcoin.

930
01:17:55,504 --> 01:17:57,504
We don't want the software to be bloated.

931
01:17:58,464 --> 01:18:04,464
So I guess my question is, but like is BIP301, is that a big change?

932
01:18:04,464 --> 01:18:08,464
Is there any implications for the code base?

933
01:18:08,464 --> 01:18:10,464
Because you see what I'm saying?

934
01:18:10,464 --> 01:18:12,464
Like we can't implement everybody's ideas.

935
01:18:12,464 --> 01:18:14,464
Yes, of course.

936
01:18:14,464 --> 01:18:22,464
Well, it's hard to actually say because you don't know the parameters of that
assessment.

937
01:18:23,424 --> 01:18:33,424
Like at one point we had on the front page, we had like a diff, like a code diff
where you would see here's all the essential code that was changed.

938
01:18:33,424 --> 01:18:39,424
And I don't know, that was like, I think that was like 60 pages long if you printed
it out or something like that.

939
01:18:39,424 --> 01:18:43,424
I don't know if that's, you know, I don't know if that's accurate or if that's like
anymore.

940
01:18:43,424 --> 01:18:49,424
We did a lot of GUI stuff too, because we made like a little GUI thing where you
can, the user can send the coins in a little tab.

941
01:18:50,384 --> 01:18:52,384
So all that stuff wouldn't really count because that's cosmetic.

942
01:18:52,384 --> 01:18:56,384
So that's not really part of the, it's not a part of like Bitcoin D.

943
01:18:56,384 --> 01:19:06,384
But that is like, you know, it's like a kind of, it's a difficult question to answer
without knowing what people's parameters are.

944
01:19:06,384 --> 01:19:10,384
But a couple of things I can say are that it's actually an optional feature.

945
01:19:10,384 --> 01:19:18,384
So SegWit was a mandatory block size increase to run a full node and stay with the
UTXO set.

946
01:19:18,384 --> 01:19:23,344
You needed to, well, in order to stay at full validation, you needed to switch the
software.

947
01:19:23,344 --> 01:19:27,344
The software actually had a completely different block when SegWit came out.

948
01:19:27,344 --> 01:19:29,344
And that was also a block size increase.

949
01:19:29,344 --> 01:19:31,344
So that was very burdensome.

950
01:19:31,344 --> 01:19:35,344
You know, it doubled, well, it really moved it from one megabyte to four megabytes.

951
01:19:35,344 --> 01:19:39,344
But in practice, it sort of more than doubled the block size.

952
01:19:39,344 --> 01:19:47,344
And that was more of a resource, excuse me, more resource consumption, certainly
than Drivechain would ever do.

953
01:19:48,304 --> 01:19:50,304
Because Drivechain is counting a little integer up.

954
01:19:50,304 --> 01:19:58,304
The other thing is that, so not only is it small relative to that and relative to
SegWit, but it's also optional.

955
01:19:58,304 --> 01:20:00,304
You can just not run it.

956
01:20:00,304 --> 01:20:10,304
And all you'll see is, you'll see a bunch of UTXOs accumulating a bunch of coins
that you think you can spend.

957
01:20:11,264 --> 01:20:15,264
But every time you try to spend it, you never make a block.

958
01:20:15,264 --> 01:20:19,264
Your block is never included in the blockchain.

959
01:20:19,264 --> 01:20:27,264
So in that sense, it's pretty much, it's a very light touch compared to things that
have been done in the past.

960
01:20:27,264 --> 01:20:37,264
You know, it's not really, I don't think anyone makes that criticism because they
would have to actually go into the weeds and say,

961
01:20:38,224 --> 01:20:42,224
here's the CPU usage, here's the whatever, and here's...

962
01:20:42,224 --> 01:20:44,224
And I think if they did that, it would be...

963
01:20:44,224 --> 01:20:46,224
Yeah, we probably should do that.

964
01:20:46,224 --> 01:20:48,224
I mean, we did it again at one point, like a couple of years ago.

965
01:20:48,224 --> 01:20:52,224
But it's like, it's very, it's insignificant in this.

966
01:20:52,224 --> 01:20:58,224
Because when each new version, new versions of Bitcoin Core are released, then
there's performance improvements each time.

967
01:20:58,224 --> 01:21:04,224
And then if you have just something simple like CheckLockTimeVerify,

968
01:21:05,184 --> 01:21:09,184
you know, that adds a tiny little thing.

969
01:21:09,184 --> 01:21:13,184
But none of this is as anywhere near as significant as like, you know,

970
01:21:13,184 --> 01:21:17,184
having 500 kilobyte blocks versus 1 megabyte blocks versus 2 megabyte blocks.

971
01:21:17,184 --> 01:21:19,184
Like those things are, that's huge.

972
01:21:19,184 --> 01:21:23,184
Because checking the signatures is very intensive.

973
01:21:23,184 --> 01:21:27,184
And so each, as you have more space, you have many more transactions.

974
01:21:27,184 --> 01:21:29,184
And they have to check every transaction.

975
01:21:29,184 --> 01:21:31,184
They have to update everything.

976
01:21:31,184 --> 01:21:33,184
They have to hold the UTXO set in RAM.

977
01:21:33,184 --> 01:21:35,184
Because there's just 256 sidechains total.

978
01:21:35,184 --> 01:21:37,184
And each one is only one UTXO.

979
01:21:37,184 --> 01:21:41,184
And so there's some, you know, there is overhead.

980
01:21:41,184 --> 01:21:47,184
But there's no way that it is significant in terms of the software performance.

981
01:21:47,184 --> 01:21:51,184
Where it may be, some people might be able to say something.

982
01:21:51,184 --> 01:21:55,184
Or they might say, well, we just don't want, we have the code organized a certain
way.

983
01:21:55,184 --> 01:21:59,184
And we don't want it to be organized the way we organized it.

984
01:22:00,184 --> 01:22:04,184
But, you know, that's kind of like a whose ox gets gored kind of situation.

985
01:22:04,184 --> 01:22:07,184
Where it's like, it's either like this or it's like that.

986
01:22:07,184 --> 01:22:15,184
Or, you know, I don't really see myself as responsible for that particular part of
what it is.

987
01:22:15,184 --> 01:22:17,184
So that's what I'll just say.

988
01:22:17,184 --> 01:22:19,184
It's very low on the resource intensity.

989
01:22:19,184 --> 01:22:21,184
Like very low.

990
01:22:21,184 --> 01:22:25,184
And SegWit was a thousand times worse.

991
01:22:25,184 --> 01:22:27,184
But we did that.

992
01:22:27,184 --> 01:22:31,184
So, but yeah, people are conservative.

993
01:22:31,184 --> 01:22:36,184
And also we shouldn't do anything in Bitcoin without the user's consent.

994
01:22:36,184 --> 01:22:41,184
And consent, in order to really be true consent, it has to be informed.

995
01:22:41,184 --> 01:22:43,184
To some extent it will never be perfectly informed.

996
01:22:43,184 --> 01:22:46,184
But, you know, if your doctor tells you something.

997
01:22:46,184 --> 01:22:49,184
They are required in the United States.

998
01:22:49,184 --> 01:22:51,184
And hopefully, you know, in Australia or something.

999
01:22:51,184 --> 01:22:55,184
They're required to try to explain, give you some idea of what they're about to do.

1000
01:22:55,184 --> 01:23:00,184
You know, they say, we are going to cut out your liver and put someone else's liver
into your body.

1001
01:23:00,184 --> 01:23:04,184
You know, they tell you, like, you understand, like, this is a, here are the risks.

1002
01:23:04,184 --> 01:23:08,184
You'll never, you're not a doctor, so you'll never know what they know.

1003
01:23:08,184 --> 01:23:12,184
But you're supposed to have some idea.

1004
01:23:12,184 --> 01:23:19,184
So the point is we shouldn't have BIP300 unless people have some, they have some
idea of what's going on.

1005
01:23:19,184 --> 01:23:21,184
Okay.

1006
01:23:21,184 --> 01:23:23,184
So I agree with that.

1007
01:23:23,184 --> 01:23:24,184
And we can go slow.

1008
01:23:24,184 --> 01:23:25,184
I think we're going too slow.

1009
01:23:25,184 --> 01:23:27,184
But I guess this is 2015, the idea.

1010
01:23:27,184 --> 01:23:32,184
So people should really make time in their weekend for this.

1011
01:23:32,184 --> 01:23:34,184
So I think it's time for that.

1012
01:23:34,184 --> 01:23:39,184
But, yeah, in general, it should go slow.

1013
01:23:39,184 --> 01:23:48,184
It's possible that Bitcoin already wants to be totally ossified, as it's called,
where it won't change anymore.

1014
01:23:48,184 --> 01:23:54,184
I think it would be a mistake to do that before this because this allows it to
change an unlimited degree in a safe way in the future.

1015
01:23:54,184 --> 01:23:57,184
So this is the one thing you'd want to bank.

1016
01:23:57,184 --> 01:24:00,184
You'd want to get this in before the ossification.

1017
01:24:00,184 --> 01:24:03,184
But, yeah, you never know.

1018
01:24:04,184 --> 01:24:22,184
That type of argument, I think it would be better if people who are very into
computer science have a specific thing, like a specific line of code or a specific
file or something where they say we don't think this file should be like this.

1019
01:24:22,184 --> 01:24:27,184
Because then you can just say, well, okay, can I just change the file, but it does
the exact same thing?

1020
01:24:27,184 --> 01:24:29,184
Then I would do that, of course.

1021
01:24:29,184 --> 01:24:33,184
But I don't think anyone has any real objections of that form.

1022
01:24:33,184 --> 01:24:34,184
Okay.

1023
01:24:34,184 --> 01:24:39,184
And so one last question I have for you before we finish up.

1024
01:24:39,184 --> 01:24:46,184
So what if I put kind of my devil's advocate shitcoin hat on?

1025
01:24:46,184 --> 01:24:53,184
So what if I say, why do we need, like, a sidechain anyway?

1026
01:24:53,184 --> 01:24:55,184
Why do we need a peg?

1027
01:24:55,184 --> 01:25:07,184
We do agree that there's potential merits in some, that there might be a potential
merit in experimenting with characteristics and making altcoins.

1028
01:25:07,184 --> 01:25:09,184
Why have it pegged to Bitcoin in the first place?

1029
01:25:09,184 --> 01:25:14,184
Why not just create a completely separate coin not linked to Bitcoin?

1030
01:25:14,184 --> 01:25:17,184
Well, why not do an altcoin instead, is what you're saying.

1031
01:25:17,184 --> 01:25:18,184
Yeah, yeah.

1032
01:25:18,184 --> 01:25:23,184
Like, why not just do an altcoin instead of a Drivechain sidecoin?

1033
01:25:23,184 --> 01:25:29,184
Well, again, when sidechains were first proposed, the answer to that question was
very self-explanatory.

1034
01:25:29,184 --> 01:25:36,184
Because the whole point was, I have Bitcoin, but now someone invents whatever,
Monero.

1035
01:25:36,184 --> 01:25:39,184
And now my coins are no good.

1036
01:25:39,184 --> 01:25:42,184
I have to sell them and buy Monero.

1037
01:25:42,184 --> 01:25:45,184
And if I time it wrong, then Monero will get popular.

1038
01:25:45,184 --> 01:25:48,184
And maybe Monero will get more popular than Bitcoin.

1039
01:25:48,184 --> 01:25:52,184
The Bitcoin project will just be destroyed because they're very rivalrous, the
projects.

1040
01:25:52,184 --> 01:25:59,184
No one wants to be the smallest coin because that's a precarious situation.

1041
01:25:59,184 --> 01:26:00,184
You're on death's door.

1042
01:26:00,184 --> 01:26:03,184
But once that one dies, then there'll be a new one that's the smallest one.

1043
01:26:03,184 --> 01:26:09,184
And so then you don't have to be a chess grandmaster to see that.

1044
01:26:09,184 --> 01:26:15,184
It's really nice to be on a big coin because you don't want to worry about losing
all of your net worth.

1045
01:26:15,184 --> 01:26:17,184
So in the past, that was very apparent.

1046
01:26:17,184 --> 01:26:23,184
I mean, today, I guess I would say there's a meme I have somewhere in the FAQ, the
Drivechain FAQ,

1047
01:26:23,184 --> 01:26:28,184
where it's like the 20 years later and all these fit in your pocket or something.

1048
01:26:28,184 --> 01:26:33,184
Where it's got the guy with the boombox and he's got a video camera and he's got a
fax machine.

1049
01:26:33,184 --> 01:26:37,184
He's got a camera and he's got all this stuff, headphones.

1050
01:26:37,184 --> 01:26:39,184
He's got a radio.

1051
01:26:39,184 --> 01:26:40,184
He's got all this stuff.

1052
01:26:40,184 --> 01:26:43,184
He's got a VCR player and stuff.

1053
01:26:43,184 --> 01:26:44,184
So he's got all this stuff.

1054
01:26:44,184 --> 01:26:49,184
But now you have a cell phone, and it's just easier to have one thing that does
everything

1055
01:26:49,184 --> 01:26:57,184
than to have all this other extra stuff because you want your one coin to be able to
do every single thing.

1056
01:26:57,184 --> 01:27:03,184
And that means that your investment is never imperiled by technological progress or
innovation

1057
01:27:03,184 --> 01:27:06,184
because there's no limit to how good of an idea that someone could have.

1058
01:27:06,184 --> 01:27:11,184
Tomorrow, if there's the sidechain world, then you wait for the person to have the
idea,

1059
01:27:11,184 --> 01:27:16,184
and then eventually you just make a sidechain, and then you're fine because you have
the idea no matter how good it is.

1060
01:27:16,184 --> 01:27:20,184
I mean it could always be so good that it would just blow Bitcoin completely out,
but that's unlikely, right?

1061
01:27:20,184 --> 01:27:24,184
So it's just something that's so good that you would never even start there,

1062
01:27:24,184 --> 01:27:28,184
and it's so good it defeats the proof of work or something.

1063
01:27:28,184 --> 01:27:34,184
But ignoring that, or a different idea.

1064
01:27:34,184 --> 01:27:35,184
So it doesn't have to even be better.

1065
01:27:35,184 --> 01:27:37,184
It can just be a fringe idea.

1066
01:27:37,184 --> 01:27:47,184
For example, on Bitcoin right now, with only one chain, no sidechains, the blocks
either have to be big or small.

1067
01:27:47,184 --> 01:27:51,184
So someone has to be turned away.

1068
01:27:51,184 --> 01:27:54,184
If you wanted them small, then if they're big, then you're out.

1069
01:27:54,184 --> 01:27:57,184
But if you wanted them big and they're small, then you're out.

1070
01:27:57,184 --> 01:28:00,184
So you're turning people away.

1071
01:28:00,184 --> 01:28:02,184
But in the sidechain world, you can just have everything.

1072
01:28:02,184 --> 01:28:06,184
So you can have a really fringe idea that most people don't like, but that a few
people do like.

1073
01:28:06,184 --> 01:28:09,184
This is called the long tail on the internet.

1074
01:28:09,184 --> 01:28:14,184
Not a lot of people like whatever obscure thing.

1075
01:28:14,184 --> 01:28:16,184
But on the internet, they can all find each other.

1076
01:28:16,184 --> 01:28:20,184
So they have a community.

1077
01:28:20,184 --> 01:28:27,184
So anything that's really fringe or whatever it is that you like.

1078
01:28:27,184 --> 01:28:28,184
I don't know.

1079
01:28:28,184 --> 01:28:29,184
I can't think of a good example right now.

1080
01:28:29,184 --> 01:28:31,184
But like an ocarina of time randomizer or something.

1081
01:28:31,184 --> 01:28:33,184
So something that's obscure.

1082
01:28:33,184 --> 01:28:36,184
On the internet, everyone's there.

1083
01:28:36,184 --> 01:28:40,184
So you can find the other 500 people who are into that thing.

1084
01:28:40,184 --> 01:28:43,184
And you go there.

1085
01:28:43,184 --> 01:28:46,184
When you go to YouTube, you go to ocarina of time randomizer.

1086
01:28:46,184 --> 01:28:49,184
And then millions and millions and billions of other people do not.

1087
01:28:49,184 --> 01:28:52,184
But everyone's on the same YouTube.

1088
01:28:52,184 --> 01:28:59,184
So it's pretty apparent, I think, why you would want to do that.

1089
01:29:00,184 --> 01:29:05,184
The altcoin is also like it's just those people always need to do shilling of the
coin.

1090
01:29:05,184 --> 01:29:06,184
Because it's news.

1091
01:29:06,184 --> 01:29:08,184
They always have an announcement.

1092
01:29:08,184 --> 01:29:10,184
And then people say, like, will it pump?

1093
01:29:10,184 --> 01:29:12,184
And then it's like, will it get listed?

1094
01:29:12,184 --> 01:29:14,184
It creates this whole circus.

1095
01:29:14,184 --> 01:29:19,184
So there's a lot of reasons.

1096
01:29:19,184 --> 01:29:20,184
Okay.

1097
01:29:20,184 --> 01:29:24,184
And also, I guess you would give the security of Bitcoin's hash power, right?

1098
01:29:24,184 --> 01:29:25,184
Right.

1099
01:29:25,184 --> 01:29:26,184
You would.

1100
01:29:26,184 --> 01:29:27,184
As far as mine would.

1101
01:29:27,184 --> 01:29:29,184
But sidechains in particular would.

1102
01:29:29,184 --> 01:29:30,184
Okay.

1103
01:29:30,184 --> 01:29:31,184
Cool.

1104
01:29:31,184 --> 01:29:34,184
Well, I mean, thanks, Paul, for explaining that.

1105
01:29:34,184 --> 01:29:41,184
I think, like, the more I've been reading about sidechains and Drivechains, I've
heard about it many years ago.

1106
01:29:41,184 --> 01:29:45,184
But I never looked into it too much until recently.

1107
01:29:45,184 --> 01:29:50,184
And the more I learn about it, it definitely seems something that has merit.

1108
01:29:50,184 --> 01:29:53,184
So thanks for explaining and helping me.

1109
01:29:53,184 --> 01:29:55,184
My pleasure.

1110
01:29:55,184 --> 01:29:56,184
Yeah.

1111
01:29:56,184 --> 01:30:04,184
If somebody wants to learn more about you or about the Drivechains, where should
they go?

1112
01:30:04,184 --> 01:30:07,184
There's a drivechain.info site.

1113
01:30:07,184 --> 01:30:14,184
And I have, like, a Bitcoin blog at Truthcoin.info.

1114
01:30:14,184 --> 01:30:15,184
So Truthcoin.info.

1115
01:30:15,184 --> 01:30:17,184
I have drivechain.info.

1116
01:30:17,184 --> 01:30:21,184
The drivechain.info, the front page, has links to lots of stuff.

1117
01:30:21,184 --> 01:30:22,184
So I have videos.

1118
01:30:22,184 --> 01:30:24,184
I have, like, a YouTube playlist there.

1119
01:30:24,184 --> 01:30:25,184
I have the software.

1120
01:30:25,184 --> 01:30:32,184
So those are the best things is to either watch YouTube videos, which most people
find easy enough.

1121
01:30:32,184 --> 01:30:39,184
But also the best thing to do, of course, would be to try to download the software
and watch with your own two eyes everything that's happening,

1122
01:30:39,184 --> 01:30:46,184
because we did work pretty hard on the GUI so that it would try to explain to people
what is going on.

1123
01:30:46,184 --> 01:30:47,184
So those are good.

1124
01:30:47,184 --> 01:30:48,184
And then we have links to the BIPs.

1125
01:30:48,184 --> 01:30:49,184
We have the FAQ.

1126
01:30:49,184 --> 01:30:51,184
We have, like, a peer review section.

1127
01:30:51,184 --> 01:30:54,184
We have, like, other articles.

1128
01:30:54,184 --> 01:30:56,184
We have memes.

1129
01:30:56,184 --> 01:30:57,184
We have everything.

1130
01:30:57,184 --> 01:31:05,184
So we have stuff on drivechain.info has all the media, presentations, talks that
I've given,

1131
01:31:05,184 --> 01:31:08,184
links to different blog posts I've written about this topic.

1132
01:31:08,184 --> 01:31:12,184
So there's lots of info on there.

1133
01:31:12,184 --> 01:31:13,184
Okay.

1134
01:31:13,184 --> 01:31:15,184
Cool.

1135
01:31:15,184 --> 01:31:16,184
Yeah.

1136
01:31:16,184 --> 01:31:25,184
Thanks, Paul, for coming on, and thanks for all your work towards Bitcoin and trying
to improve Bitcoin and pushing these ideas.

1137
01:31:25,184 --> 01:31:30,184
And, yeah, hopefully talk to you next time.

1138
01:31:30,184 --> 01:31:31,184
Okay, great.

1139
01:31:31,184 --> 01:31:32,184
Hey, thanks for having me.