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Hello, everyone, and welcome to another Drivechain Twitter Spaces.

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This is Henry of LayerTwo Labs.

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Welcome, everybody.

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Please feel free to raise your hand and come on up to the stage

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if you would like to chat and talk about ideas that we are here to talk about.

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If you have a Drivechain question or comment or rant or thought to share, come on up.

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Some of the tweets that were shared along with this Twitter Spaces post

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are what I'm going to put in the nest.

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Let me get those up.

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Let's see.

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Put those in the nest.

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There's the first one. This one is by Checkmate.

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Checkmate is the lead on-chain analyst at Glassnode and a famous Bitcoiner.

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This was the first of the tweets that I thought we might discuss today.

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So raise your hand and come on up if you'd like to talk about it.

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I'll read it for those who are just listening.

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Maybe people are riding around in their car and unable to read on their phone.

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Checkmate wrote...

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One moment.

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He wrote, all true, but my point is that we should invest in capacity now

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so that scaling up later is achievable.

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Efficiency built today pays dividends in the future.

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I also agree with Paul that we need Drivechains or similar to actually fill that added capacity.

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In short, we need both.

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Of course, this tweet he wrote is part of a thread.

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You can go to the nest and read the whole thread to understand what he's talking about here.

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It caught my eye that he wrote this because this is an on-chain analyst at Glassnode

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who is familiar with Drivechain, familiar with the work of Paul Sztorc,

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and is holding a favorable opinion about it and understands the capacity for Drivechain

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to help Bitcoin achieve its scaling goals and needs.

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And how does Drivechain do that?

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Well, Drivechain enables this amazing synergy between large block and small block protocols.

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What we would have with Drivechain is a small block base layer, the digital gold.

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And above that, on a layer two, we would have a sidechain that could have a larger block

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and that would allow for lower fees, and the two protocols would exist synergistically

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where people could opt in to the sidechain and enjoy its features.

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And then when they're finished, they could come back to main chain Bitcoin.

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And the crucial difference between that arrangement and what we can do today

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is that today the sidechain would have to be federated,

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which would mean that 15 people would hold control over the Bitcoin locked in the peg

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between the sidechain and the main chain.

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But with Drivechain, the indomitable power of the Bitcoin miners would be in control of the peg.

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That's the difference.

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So I think that it's very possible that if Drivechain is adopted,

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Bitcoin sidechains could hold tens of billions of dollars or more in value.

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And all of that value would be accruing to Bitcoin main chain, I think,

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as well as the transaction fees on these sidechains.

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So what we would get is the ability to just clone every good altcoin

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and internalize that value to Bitcoin main chain, potentially.

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It's extremely exciting.

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It could transform the whole crypto space.

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We could see Bitcoin dominance at 100% in the future because of this.

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I know that sounds far-fetched.

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It's just my personal opinion.

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Maybe I'm a dreamer.

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But that's what I believe.

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I think that people to really grok the Drivechain potential have to be economically oriented.

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A lot of people have a cryptography or software engineering background,

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and not so much an economics mindset.

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And it's important to understand Drivechain economically,

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not only from a programming perspective,

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but the perspective that focuses on incentives,

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on the way that value is accrued to property.

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And what Drivechain could do is accrue enormous value to Bitcoin's token,

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as well as Bitcoin's block space.

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So when we're talking about the block space, of course,

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we're talking about the total transaction fee rate.

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And growing that in the future could potentially be a huge source of strength for Bitcoin.

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So as people are joining here, please raise your hand and come on up

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if you'd like to share any thoughts or comments,

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especially on the tweet in the nest or anything else.

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If no one has any comments, then I will move on to tweet number two for our discussion.

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So I'll bring that tweet up.

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Here we go. Tweet number two.

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So first tweet that we discussed was by Checkmate,

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the on-chain analyst at Glassnode who wrote favorably about Drivechain.

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Tweet number two is a favorable tweet from Ari Paul,

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who I think is an investment professional who comments on crypto and Bitcoin.

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He wrote in a thread, he wrote,

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Drivechains are at least four years old.

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The Lightning Network white paper was 2016.

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If there had been aggressive innovation from the user functionality perspective on this stuff,

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I'd agree it would have taken the wind out of many altcoin sales.

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But there wasn't. So it didn't.

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And what he's saying here, in my interpretation,

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is that Drivechain, among other things,

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could have influenced greatly in a negative way the growth of altcoins.

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So if Bitcoin had had this technology,

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this technology to copy altcoin software into sidechains that are controlled by miners with respect to the peg mechanism,

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then a lot of altcoins would not have been founded and grown as they have.

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I interpreted this perspective to be also aligned with the notion that

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Drivechain has influences on the crypto community that are not just technical, but also narratives.

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So the narratives of altcoins, the narrative that we see in the Ethereum white paper,

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this narrative that it's hard or impossible to build on Bitcoin and therefore altcoins are necessary.

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So that narrative would be undermined and eliminated by by Drivechain adoption on Bitcoin, arguably.

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That's my view. That if Bitcoin develops this capacity to create sidechains that are that have a miner controlled peg,

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I think a lot of altcoins would not only not be created as altcoins,

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but instead those software would be on top of Bitcoin, accruing value to Bitcoin, increasing Bitcoin dominance,

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increasing Bitcoin network strength, increasing the speed of Bitcoinization,

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helping maintain Bitcoin as the number one crypto and eventually the only layer one crypto.

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That's really the optimistic long term vision.

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And it's good for everyone in the long run to have one platform we can all share one money,

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one system rather than a competition, rather than a hostile environment of competitive protocols,

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each trying to accrue as much value and network effect.

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Instead, we would have. One collaborative system.

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One market all built on top of Bitcoin, one unit of account.

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And that would lead to a lot of value creation in society.

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Anyone's welcome to come up and tell me I'm totally wrong.

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And if not, we'll move on to our next tweet for discussion.

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Tweet number three. Here we go.

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Tweet number three is from famous cryptocurrency trader Joe 007.

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He has a ton of followers. He wrote, as a self-professed Bitcoin maximalist,

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I support BIP300. Enabling permissionless innovation on top of a stable and conservative Bitcoin base layer

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rather than pushing them into a shit coin sphere is a very important goal.

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That's how modern, versatile Internet came into being.

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End quote. And he's, quote, tweeting Mario Gibney, who wrote,

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noticing a significant uptick in people expressing support for Drivechain's BIP300 in my corner of the Bitcoin world.

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So. These. These Bitcoiners are talking about how Drivechain is growing in support and.

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How it's going to have an enormous influence potentially on the value accrual to Bitcoin relative to altcoins,

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because what we've seen in recent years is altcoins grow and grow and grow.

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Bitcoin dominance falling. Bitcoin fee market not growing as much as it might have otherwise.

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But if Drivechain is adopted, this could be reversed.

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There could be a trend where Bitcoin dominance is rising back towards 100 percent.

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The value accrual in the crypto space is exclusively to Bitcoin.

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Altcoin developers and users move to Bitcoin.

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And the only people who would be left in the altcoin community would be the founders.

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Because the users themselves, as distinct from the founders, the users, they want to be in the best network.

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They want to be in the strongest network. They want to be in the unit of account that's most stable and predictable.

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They want to have the benefit of Bitcoin's monetary policy.

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They want to have all of Bitcoin miners mining their token.

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And what Drivechain does is it allows all for that.

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For example, if someone's using Zcash or if someone's using Bitcoin Cash, those softwares could be copied into sidechains.

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And then the users could use those sidechains on Bitcoin instead of their altcoin.

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They would have the exact same software, but they would be using Bitcoin's unit of account.

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Because the token they'd be using would be redeemable for Bitcoin.

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It would be created by locking up layer one Bitcoin in the hash rate escrow of the sidechain.

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And when they're done, they can come back to layer one Bitcoin.

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That's what Drivechain is all about.

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So I envision Drivechain being adopted.

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The altcoins going to zero literally and the powerful network effects of money leading to 100 percent Bitcoin dominance.

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It's such an optimistic and dramatic vision of the future that I think some people in the Bitcoin Maxi community encounter it with skepticism.

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Even though they talk about Bitcoin being the best, they talk about Bitcoin's inevitable success.

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But this is actually the path forward, and it's one that requires a bit of emotional experience to fully understand.

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It's a powerful idea, and a person has to be comfortable with it and think about it for a while before they fully understand it.

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Because this really is the path forward for Bitcoin to win.

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It would enable a lot of great things for Bitcoin, like shrinking the block size further, ossification potentially, and achieving total dominance,

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achieving much higher fees for layer one, funding the miners forever with transaction fees,

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and moving 100 percent of blockchain economic activity onto Bitcoin to boost Bitcoin's value and the value of Bitcoin's block space.

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It really solves pretty much every problem that exists in this space.

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So it's an extremely powerful idea, and that's why it has so much support.

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As we've looked at these tweets, we have support from Glassnode, Onchain Analyst, we have support from investment professionals like Ari Paul,

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we have support from traders who are Bitcoin maximalists like Joe007.

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I thought this would be a great opportunity today to look at some of these people who are in the space, rather than only looking at the academics.

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We could look at academics who support Bitcoin, like Adam Back at Blockstream, who has a PhD in computer science.

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But I felt like we've looked at that enough in recent talks, and today we should look at people who are more like, not commoners,

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but just like people who are out in the world without a PhD, people who might be trading in altcoins,

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people who might be running a hedge fund or trading or other stuff like that.

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And that's why today I picked this particular set of tweets to look at,

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rather than just looking at the academic perspectives of Dr. Back and others.

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Because it's important what the commoners think, it's important what normal plebs think about drivechain.

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It's not only important to look at what the academics like Dr. Back think.

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But it's great to see that across the board we see support for drivechain.

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Everyone is free to come up, raise your hand, join the conversation.

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We run these twice a week, Mondays and Thursdays.

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And the goal is to have everyone be able to engage, find out how to get involved in drivechain, find out where you can learn more.

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So one way you can learn more is join the drivechain telegram group, which is called Drivechain Talk.

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Another way you can get involved is check out the Reddit spaces called subreddit called rdrivechains.

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And there's also drivechain.info, which is the website of the project.

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And there's a bunch of posts about drivechain by Fiatjaf on his website, fiatjaf.com.

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And. There's also other like websites by fans like drivechain.xyz was created by a fan of drivechain.

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And there's great posts by John Light of Sovereign.

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He has written two posts about why he thinks it is unlikely that the Bitcoin miners would ever steal from the hash rate escrows.

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So everyone's free to come on up and ask a question, share a comment, go on a rant.

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Whatever you want to do is cool. If not, I'll just keep on going.

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But I'm sure everyone would love to hear some some more thoughts from the crowd.

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I just shared in the nest a tweet from Dr. Adam Back, one of the coolest people in crypto, without any doubt.

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He wrote today, Truthcoin made a test net Bitcoin sidechain drivechain with Zcash Crypto for a reason.

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I wouldn't buy the altcoin, but I would try and use the drivechain version.

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Zcash protocol is a bit R&D risky for Bitcoin main chain due to reliance on recent and experimental cryptography.

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That was a tweet from Dr. Back today.

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What Dr. Back is saying there, in my understanding, is that he likes the fact that drivechain enables the Zcash protocol to exist as a sidechain of Bitcoin, not affecting the main chain.

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So what he's really saying here is that it wouldn't be good, in his view, to have Bitcoin main chain be upgraded to include Zcash technology.

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But it would be good to allow for Zcash technology to be on a sidechain.

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That way, if it breaks down, it doesn't affect the main chain.

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So we want to give Bitcoiners the ability to benefit from the Zcash privacy.

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And we want to make it opt in.

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So rather than make all of Bitcoin like Zcash, we want to enable a partitioned, segregated experience where people can opt into the Zcash experience while still using Bitcoin's monetary policy, Bitcoin's unit of account.

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So the goal is, let's say you have some Bitcoin.

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You want to get the experience of Zcash without losing the experience of Bitcoin's economics.

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So you would go into the Zcash sidechain of Bitcoin, which is enabled by drivechain.

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You could do your confidential transactions there and benefit from the extremely strong privacy of Zcash software.

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And then when you're finished, you come back to Bitcoin main chain.

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That's the drivechain vision.

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It gives everybody what they want.

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It gives you all these options.

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We've had a lot of people join.

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Please raise your hand.

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Come on up and comment on anything you'd like to.

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We have some familiar faces and some drivechain experts.

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We also have some newcomers.

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All are welcome to come on up anytime and say what's on your mind.

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What excites you about drivechain today?

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How do you feel about the recent uptick in interest in drivechain?

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You know, we have 700 people, over 700 people are in the drivechain talk telegram group.

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We have over 100 people in the Reddit.

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We have many thousands of people who have visited the drivechain website.

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We have a surge of tweets and interest.

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With every passing day, I think it becomes more obvious to a lot of Bitcoiners that there is enormous potential for drivechain to increase Bitcoin dominance, to increase Bitcoin's fees on the main chain paid to the miners, and to increase the likelihood of success of Bitcoinization by greatly expanding the software that can exist in a manner that accrues value to Bitcoin.

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So if anyone builds valuable software, we want to make it very easy for them to build it on Bitcoin so that it makes Bitcoin more valuable and makes Bitcoin's block space more valuable.

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Those are the two goods, the two economic goods in the Bitcoin network.

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There's the token and there's the block space.

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And we want to make both more valuable because that really is what Bitcoinization is all about.

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It's increasing the demand from society to Bitcoin.

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Is society demanding Bitcoin?

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Do they want Bitcoin and its block space?

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And drivechain enhances that demand by enabling more creativity, innovation, experimentation, more markets to develop on top of Bitcoin.

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It's so interesting because it's the kind of thing that really only exists in an open source protocol context.

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Like if, let's say, Wendy's comes out with a new hamburger, McDonald's can't just copy that hamburger.

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Wendy probably has like a patent on it, right?

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They're going to give it some name and they're going to have certain ingredients and McDonald's isn't going to just copy that.

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But in the realm of open source protocols and software, it's possible for, for example, you know, a large box, a large block fork of Bitcoin, that software to just be copied into a drivechain.

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And then the the community may stop using the altcoin and start using the copy of it that exists as a Bitcoin sidechain because of all the benefits that you would get.

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For example, let's say there's like one billion dollars of value in some large block Bitcoin.

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So. Right now that, you know, let's say it's Bitcoin Cash, so there's these large blockers who are transacting and holding this altcoin and we have a speaker, Cullen.

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I'll just finish my point quickly.

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Imagine if one percent of Bitcoiners sent their Bitcoin to the hash rate escrow of the large block drivechain sidechain, then there would be four billion dollars of value in this large block sidechain of Bitcoin.

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Four billion dollars is much more, I think, than the value of any large block Bitcoin fork.

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So if one percent of Bitcoiners were to use a large block drivechain.

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Then that would be larger, more stable and a more secure.

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Version of the altcoin, and therefore because of the powerful market force of network effects, the large block drivechain would outcompete over time the large block altcoin, because if the drivechain version is a clone of the altcoins software, the users would strictly prefer.

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To use the drivechain insofar as they value the economic profit of using a more stable and.

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Secure version of their software.

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So in this in this hypothetical, I'm posing there's the altcoin version, let's say Bitcoin Cash, and then there's the drivechain version.

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And if one percent of Bitcoiners use the drivechain, then it has four billion dollars because Bitcoin has like four hundred billion dollars of value.

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So if four billion dollars is in the Bitcoin Cash drivechain, then all the Bitcoin Cash users will prefer it because it's going to have a more stable purchasing power, more stable value than the altcoin, because it has Bitcoin's value.

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I'm talking about the token on the drivechain, and it's going to have more fees because if it's four billion dollars instead of two or three billion dollars of market cap, then presumably the fee market and level of activity among the users would be equivalent.

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And therefore it'd be more fees in the larger market cap version, presumably, and therefore it's going to have more security on the on the drivechain.

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So if just a few people start moving over that tips the scales even more, there's a dramatic flip where the altcoin goes to zero as everyone races to get out of the altcoin and buy the the superior drivechain version.

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And then this alters the scales even more.

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It's so dramatic because once one altcoin drops in value billions to zero and all the users and value accrue to the drivechain version that boosts Bitcoin's dominance, that makes all the drivechain tokens, all the native drivechain tokens more valuable along with Bitcoin's main chain token, causing the scales to tip even further.

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There's a dramatic situation where as one altcoin drops in value and Bitcoin accrues its value, its market, its fees, then that makes all of the Bitcoin ecosystem more viable, higher dominance, higher network security, which causes the next altcoin at the margins to also experience this domino effect.

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And what we're going to see is one altcoin after another lose its users and developers and investors to Bitcoin because of drive chainization.

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And it's kind of like the dollar milkshake theory, where one after the other, these currencies collapse, like Brent Johnson's dollar milkshake theory and macroeconomics.

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So I think there's like a Bitcoin milkshake theory, which is similar.

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And I see this really occurring in actual reality in the future, where if drivechain is adopted, which is a big if, right, we all have to get involved and educate others about it.

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But if it's adopted, I see the altcoins devaluing to literally zero and the only people who will be left holding them will be the founders and all of the users will have moved over to the more secure instance of that software, which is on Bitcoin.

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Cullen, what is up, man?

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How are you doing?

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Good, Henry.

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How are you doing?

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Pretty well.

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Thanks for the opportunity to speak.

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I guess you started to dive into the topic that I was curious about, which is really like, what does this look like from like a real world application for an altcoiner?

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You know, for example, if you're somebody who's really a big bull on Ethereum, right, you think Ethereum is really cool, you love all the different dApps and things that can be built on Ethereum, and you hold quite a lot of ETH.

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In a world where BIP300, BIP301 is implemented and being used, I just imagine it would be hard to get altcoiners to switch over for the situation that you outlined earlier, which is, you know, you can't, let's say you hold 100 ETH, you can't port that 100 ETH over into the ETH Bitcoin sidechain to BIP300.

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You'd have to sell the ETH for, you know, fiat to buy Bitcoin or trade directly for Bitcoin to then peg into the ETH sidechain, correct?

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yeah that the two ways you could get into the drivechain our first you could

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sell your Ethereum altcoin for bitcoin and then you could move the

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bitcoin through the hash rate escrow to achieve ownership of the

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drivechain token which is a synthetic bitcoin right meaning it trades one for one

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with bitcoin or You could and this is the way almost everyone will do it 99 %

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people will be ordinary users who will directly experience the hashrate

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escrow. will instead instantly swap from one crypto to another.

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they'll sell their ETH altcoin and buy the Drivechain token, which

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is

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the token of ETH side, and that'll be instant for them.

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It'll be professionals, arbitragers, financial professionals who will be navigating

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the hashrate escrow with its various complexities and

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delays, kind of like the way that almost no

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one interacts with the futures market.

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The futures market in finance has hundreds of billions of dollars of value, but very

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few people interact with futures.

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It's only professionals, speculators, hedge funds, and industrial parties that use the

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futures market. And I think the hash rate escrow mechanism in crypto will

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be similar.

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Gotcha. And you're right, you're right that there's an enormous network effect, know,

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thousands of developers who are working in Ethereum today.

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And this is why, partly, that Ethereum has accrued great value,

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is that people are building in

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Ethereum. As soon as drivechain is adopted, I believe that phenomenon will begin to diminish. Because Bitcoin has a larger market cap, it has a more powerful narrative, in my opinion, which is why I chose this project, instead of, you know, choosing to like work in Ethereum. I believe that Bitcoin's superiority arises from the simplicity and enormous

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success of its layer one architecture. And it is, I think, fundamentally superior to build on a more stable foundation than to build on a foundation that is more complex and risky and experimental. So it's kind of like if you're going to build a house, the layer at the very bottom, you know, in the basement needs to be cement, it shouldn't be an intricate and complex architecture at the very bottom, it should be steel and cement, very heavy,

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immovable, almost impossible to rearrange. So the base layer of the crypto economy, if it is to support $100 trillion, is going to be simple and stable and immovable, ossified. And I think Bitcoin has that simplicity and conservatism for the base layer that's better than Ethereum's relative complexity. For example, Justin Drake of the Ethereum Foundation, who is one of their lead researchers and publishers,

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he says that proof of stake is 20 times more complex than proof of work. So that's one, that's one instance in which proof of stake is perhaps riskier, and more experimental, arguably. So I think that it's not clear, absolutely, that Ethereum's development plan will be sustainable. Whereas for me, it's not as much in doubt whether Bitcoin, especially if it adopts

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Drivechain, will have a robust, secure, stable future path to, you know, ameliorate any of the concerns that are attending Bitcoin, such as its low fees, or the inability to build on top of it. I think Drivechain fixes both of those things, strengthens Bitcoin in those ways, and, and provides a clear path for the future. So I think that if you're looking at two different projects, you know, and one, one is Bitcoin with Drivechain, the other is Ethereum, someone who's coming into the space, I think, will prefer

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the stronger foundation. And therefore, the value accrual and the enormous number of development projects on Ethereum will begin to migrate instantly to Drivechain. And in the long run, I think all of them will migrate to Drivechain instead of, instead of on Ethereum. That's, that's my opinion. And, you know, Bitcoin still has like the larger market cap, we have the market cap crown. So I think we have like the solid foundation. And we have the economics of network effects going for us right now,

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if we adopt Drivechain in the near future, while we are still the market cap leader, I think there's no doubt that there is, it's very possible that all of the projects in the long run will migrate. As I laid out earlier, if just a couple people from any community come over to Drivechain, the, the, the tidal wave has just begun at that point. And of course, the first users of the Drivechains will be Bitcoiners, not altcoiners, it'll be the Bitcoiners who, who come

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into the Drivechain and begin to accrue value on that Drivechain, begin to pay the transaction fees, and begin the process of DriveChainization of this clone of the altcoin software. And if the Bitcoiners, because right now, Bitcoin is so large, as I laid out earlier with the Bcash example, if just 1% of Bitcoiners use the Bcash clone, then the Bcash clone is $4 billion right there.

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So let's say one year in, it's $4 billion, that's bigger than Bitcoin Cash. So now we have a clone of Bitcoin Cash that's bigger than Bitcoin Cash, that is going to necessarily induce migration of all of the users from the altcoin to the Drivechain. So that's, that's the economic dynamics I see leading, even in the case of Ethereum, the same thing will occur, I believe.

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Gotcha. Okay. Thanks very much. Yeah, I guess I think my main concern for altcoiners is that, you know, for ETH or Zcash or any of the larger ones where there's quite a lot of conviction from the users, there would be kind of almost like the sunk cost fallacy, mostly because I think, you know, smart people that use those altcoins will realize quickly that there'll be kind of a, if, if everyone is moving to sidechains, there'll be a big race to the exit to try and sell your altcoin so that you can acquire Bitcoin so that you can then peg it back into the, you know, synthetic sidechain.

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That now represents your altcoins functionality.

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And they might just say, well, never mind, I'll just keep, keep using the altcoin because I don't want to, you know, lose value in, I guess, in fiat terms.

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Yeah, I mean, people will have to choose one or the other.

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You can't have your cake and eat it.

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You have to either, let's say if you have a thousand dollars, that specific thousand dollars is either invested in an altcoin or it's invested in Bitcoin.

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So you have to choose with respect to that specific pile of money.

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And people want to have their pile of money in the thing that is going to be most useful to them at the times and places in the future when they expect to be likely to want to liquidate it.

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That's what money is all about.

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And, yeah, there's a sunk cost, you know, if someone has committed, you know, a lot to the Ethereum project, it is precisely those people who would be most punished, unfortunately, for them.

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If, if drivegenetization is successful, because they're the ones who are going to be the last.

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Hey, SuperTestNet, thanks for joining.

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Please jump in.

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What's on your mind today?

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Hi, I'm not sure if you can hear me very well.

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It's a little bit windy today.

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We can hear you.

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Am I coming through OK?

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Yes.

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Cool. So I question one of the statements you made, which is that if the first people to use a drivechain would be Bitcoiners.

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So the first thing that the first sidechain that I think would switch over is RSK, because they've said many times that they want to that they want drivechain.

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And if drivechain existed, they would already be one.

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So I think RSK would switch over to being a sidechain or a drivechain right away.

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And then all of their users would would now be, you know, Bitcoiners who are using drivechain.

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But that that's about like six people.

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It's like there's nobody using RSK.

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And I think that the same thing would happen for any other drivechain.

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If Bitcoiners want to use sidechains right now can do so and they don't want to.

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They're just not interested.

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So if we made drivechains available, I think we'd see the same thing.

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Bitcoiners would be like, great, now I can use now I can use RSK as a drivechain, but I still don't want to.

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And it just wouldn't attract any volume.

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So what are your thoughts on that?

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Super, as always, you ask the most sophisticated, interesting questions and comments, along with Colin.

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And thanks for that thought.

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You're totally right about RSK.

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The RSK community is awesome.

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It has many years of effort in developing a Ethereum competitor.

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However, I think that I would look at their project a little bit differently.

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I've lately been very interested in the writings of their one of their leaders, Sergio Lerner.

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And in his view and in the view of the RSK people, I think they view their current project as being a Bitcoin project in a in a significant sense.

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So when you said that the Bitcoin users wouldn't be the first users of drivechains, it would be, for example, RSK users.

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They consider themselves Bitcoiners.

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And I think they're right.

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They view their synthetic Bitcoin as equivalent to Bitcoin.

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Their synthetic Bitcoin, which is the native token of their project, which is Rootstock Bitcoin, RBTC, trades one for one with Bitcoin.

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And as Sergio has affirmed recently in tweets last week, the intent of RSK has always been to upgrade into a drivechain instead of their current format, which is a federated peg sidechain.

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In the view of some drivechain thinkers.

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Once drivechain is adopted, people will no longer even think of federated sidechains as sidechains.

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In the view of some drivechain thinkers, including me, once drivechain is adopted, when people talk about a Bitcoin sidechain, they will mean a drivechain.

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They will mean a sidechain that is trustless.

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And I say that with quote unquote, because, of course, nothing in life is perfectly trustless.

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Right. But what we mean here is that it's peer to peer, which I know you and I have discussed in the past.

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But, you know, I spoke last week, I'm not sure if you heard it, about a recent tweet from Adam Back where he referred to peer to peer sidechains in a thread about drivechain.

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And I interpret that to refer to the idea that since Bitcoin is peer to peer cash, Bitcoin mining is part of Bitcoin, Bitcoin mining is peer to peer.

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Anyone can, you know, become a Bitcoin miner.

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I own an ASIC. I'm a Bitcoin miner.

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Right. So everyone can be a Bitcoin miner.

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You don't have to be, you know, receiving a permission slip or a social approval to be a Bitcoin miner.

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So in that sense, it's peer to peer.

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Economically, the only barrier to entry is cost, not social approval and social permission.

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So that's what peer to peer means to me.

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And if we have peer to peer sidechains, if we have these trustless peg sidechains controlled by Bitcoin miners, which anyone, including me, can take part in without permission from anyone else, then drive, then RSK would see more use.

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And also, I do think because the Ethereum community has such a strong and successful marketing effort and robust developer community, the notion that RSK would be the largest drivechain immediately maybe isn't what I would expect.

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I think the first huge wins would be perhaps the Bitcoin BTC cousins, which is the big block Bitcoiners.

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I think that these sort of old friends from the past would perhaps reunite on Bitcoin and

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there would be like a huge use of big block sidechains and also the privacy community just

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as well, like Monero and Zcash.

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These people who want strong privacy, I think they're not speculating so much as they really

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want absolute privacy.

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They're really users of tech.

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They're not just like a, you know, betting on number go up.

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I think that many of them truly want the privacy for their personal reasons, such as maybe

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they're like political dissidents or something.

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They want to send money to Wikileaks without being doxed.

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So as an example.

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So I think that we would see like billions of dollars accrue to the drivechains focused on

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privacy and big blocks.

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And then in the long run, the smart contracting drivechains as well.

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How does that strike you?

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I don't think we would see a large usage for many of those groups, because let's take the two

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big block sidechains that I most frequently think of are Bitcoin Cash and Bitcoin SV.

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Both of them have like two transactions per block.

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It's like there's no one using those chains.

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So if they switched over, like even if all two people who use those sidechains or those

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blockchains switched over to using an equivalent sidechain, it wouldn't be meaningful.

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I think that the reason we see very little usage of any blockchains that are like big block

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or what's it called, or smart or like RSK or liquid is because Bitcoiners just aren't

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interested. They're just like, that doesn't appeal to me.

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I don't want that for my Bitcoin.

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I just want, you know, I want Bitcoin to be Bitcoin and I don't want to use it on a

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sidechain. And everyone else is happy with the blockchains that they create.

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That's kind of my concern is that if it's not really a concern, I want to activate

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drivechains anyway. But if we do, I wonder if anyone will use them because no one wants

383
00:42:08,731 --> 00:42:09,930
to use sidechains right now.

384
00:42:10,690 --> 00:42:12,731
And that's kind of what I think will just continue to happen.

385
00:42:14,810 --> 00:42:19,771
Super, I'm trying to reconcile two thoughts that I feel are distillations of what you're

386
00:42:19,771 --> 00:42:24,970
saying, and I feel that they conflict, so I want to hear your thought on how you reconcile

387
00:42:24,970 --> 00:42:28,211
them or if I've misunderstood what you're saying, because I think what you're saying

388
00:42:28,211 --> 00:42:33,810
is very good. So one thought is that you said people are happy with the blockchains

389
00:42:33,810 --> 00:42:36,690
they're using now. So some people are happy with Bitcoin.

390
00:42:36,690 --> 00:42:38,170
Some people are happy with Ethereum.

391
00:42:38,170 --> 00:42:40,851
Some people are happy with Bitcoin Cash, etc.

392
00:42:41,491 --> 00:42:42,890
Some people are happy with Monero.

393
00:42:44,170 --> 00:42:48,051
So you said people are happy with what they're using now, but you also say that people

394
00:42:48,051 --> 00:42:53,051
might not choose to use any of these drivechains, even if they are made available.

395
00:42:54,051 --> 00:43:02,011
But I think that people are happy only insofar as they expect that their project, that

396
00:43:02,011 --> 00:43:08,450
their asset is going to be most useful to them in terms of its value, accrual in the

397
00:43:08,450 --> 00:43:16,051
future and the features of asset ownership, such as its privacy, its Turing completeness,

398
00:43:16,291 --> 00:43:17,450
its scalability.

399
00:43:18,011 --> 00:43:21,810
So you're saying that they're happy with what they're using now and you're talking about

400
00:43:21,810 --> 00:43:26,610
the altcoiners and the Bitcoiners all being happy, which I don't dispute.

401
00:43:27,011 --> 00:43:32,610
But if drivechain is adopted on Bitcoin, I think it fundamentally opens the door to the

402
00:43:32,610 --> 00:43:34,651
domino effects that I described earlier.

403
00:43:35,211 --> 00:43:40,810
Because, for example, with the privacy community, I look, I'm not someone who uses

404
00:43:40,810 --> 00:43:46,011
Monero every day or something like that or Zcash, but I think there are a lot of people

405
00:43:46,170 --> 00:43:50,371
who are transacting in privacy coins, not because they want it, as I said earlier, to

406
00:43:50,371 --> 00:43:54,170
go up in value as much as they want true privacy for their medium of exchange.

407
00:43:55,170 --> 00:44:01,011
And if that were made possible, there would be some people who would use it on as

408
00:44:01,011 --> 00:44:07,571
Bitcoiners within a Bitcoin context as a drivechain that aren't today because of the

409
00:44:08,170 --> 00:44:12,411
deficiencies of a federated peg relative to a miner controlled peg.

410
00:44:13,011 --> 00:44:17,011
So I think that you would see some adoption of these drivechains if they were made

411
00:44:17,011 --> 00:44:19,170
available. It's kind of like build it and they will come.

412
00:44:19,411 --> 00:44:23,610
And what you're saying is, well, everyone is happy with candles and horses and, you

413
00:44:23,610 --> 00:44:24,931
know, the car, who's going to use it?

414
00:44:24,931 --> 00:44:26,890
Everyone's pretty happy with their with their car.

415
00:44:27,211 --> 00:44:31,771
I think that we would see billions of dollars flow from Bitcoin into the hash rate

416
00:44:31,771 --> 00:44:36,010
escrow for people to experiment, because ultimately what drives all of this is profit.

417
00:44:36,251 --> 00:44:40,730
It's all about profit in the sense of I want my Bitcoin to be profitable.

418
00:44:40,730 --> 00:44:46,931
In the sense of I want my assets to profit me in terms of the valuable user experience,

419
00:44:47,330 --> 00:44:49,651
in terms of value accrual in the future.

420
00:44:50,051 --> 00:44:53,850
And when you're when you're using a drivechain token, you're getting the exact same

421
00:44:53,850 --> 00:44:56,010
software as Zcash.

422
00:44:56,051 --> 00:45:00,531
But instead, you're getting Bitcoin's unit of account, which is just strictly speaking

423
00:45:00,531 --> 00:45:05,010
better. I mean, does anyone I think there are probably plenty of Bitcoiners who would

424
00:45:05,010 --> 00:45:10,251
say I'd like to use a more private, you know, version of Bitcoin in a sidechain.

425
00:45:10,251 --> 00:45:14,051
But I don't want to take the altcoin speculation risk.

426
00:45:14,491 --> 00:45:18,491
So if it's available as a drivechain, I would use it, but I wouldn't use it as an

427
00:45:18,491 --> 00:45:23,491
altcoin. And if just one percent of Bitcoiners go into each of these drivechains, just

428
00:45:23,491 --> 00:45:28,691
one percent, that is four billion dollars in the drivechain.

429
00:45:28,691 --> 00:45:31,091
That's bigger than many of these altcoins.

430
00:45:31,091 --> 00:45:32,130
It's bigger than Monero.

431
00:45:32,251 --> 00:45:33,450
It's bigger than Zcash.

432
00:45:33,491 --> 00:45:34,971
It's bigger than Bitcoin Cash.

433
00:45:35,251 --> 00:45:42,091
So when you say none would go or perhaps almost none, I wonder if it's if if we're

434
00:45:42,091 --> 00:45:50,771
underestimating it and it's one percent right there, we get we get the a larger

435
00:45:50,771 --> 00:45:54,610
version of these altcoins on Bitcoin, which would then pull in all the users because of

436
00:45:54,610 --> 00:45:58,730
network effects and the risk that the altcoin goes to zero as a result.

437
00:45:59,371 --> 00:46:05,290
So right there, Bitcoin gets probably 10 billion dollars of altcoin value through

438
00:46:05,290 --> 00:46:10,450
drivechainization, through that magnetizing the altcoin users over to Bitcoin,

439
00:46:10,931 --> 00:46:15,691
increasing Bitcoin's network effect even further, causing the next set of altcoins to

440
00:46:15,691 --> 00:46:18,251
also flow in. Do you get you get what I'm saying there?

441
00:46:18,251 --> 00:46:20,730
Or does that just strike you as kind of a fantasy?

442
00:46:23,531 --> 00:46:24,971
Yes, I think that's a good answer.

443
00:46:25,931 --> 00:46:29,491
I'm going to try and summarize my earlier earlier point and then say why I think

444
00:46:29,491 --> 00:46:31,091
you've corrected it.

445
00:46:32,330 --> 00:46:38,091
I don't know anyone, any Bitcoin user I've ever met who has ever said anything like,

446
00:46:38,610 --> 00:46:44,051
man, I love Bitcoin, but I really wish I could use it on a chain like on a chain like

447
00:46:44,051 --> 00:46:46,450
Ethereum so I could get their smart contract features.

448
00:46:46,651 --> 00:46:52,371
I've never met any Bitcoiner who was interested in in the additional quote unquote

449
00:46:52,371 --> 00:46:54,610
features that Ethereum offers.

450
00:46:56,491 --> 00:47:00,130
And I've never met any Bitcoiner who was like, man, I really love my Bitcoin, but I

451
00:47:00,130 --> 00:47:03,811
but I sure do wish that I could just use it on a really on a big block sidechain.

452
00:47:03,811 --> 00:47:07,651
I just I just want my regular Bitcoin, but put it on a big block sidechain.

453
00:47:07,811 --> 00:47:09,170
I've never met anyone who wants to do that.

454
00:47:10,211 --> 00:47:13,610
But the reason why I think you did answer my point is because you've brought up

455
00:47:13,610 --> 00:47:19,850
privacy. I have met lots of Bitcoiners who say, I love my Bitcoin, I just wish I could

456
00:47:19,850 --> 00:47:22,811
use it with Monero's privacy or Zcash's privacy.

457
00:47:23,330 --> 00:47:25,410
So I think that's that's the winning ticket right there.

458
00:47:26,170 --> 00:47:28,170
We would we would gain users.

459
00:47:28,410 --> 00:47:31,570
The sidechain that would have a lot of users would be the one would be the privacy

460
00:47:31,570 --> 00:47:35,051
one, because I've actually met people who really want that.

461
00:47:35,531 --> 00:47:40,730
So it kind of makes me wonder why there's not a federated privacy sidechain right

462
00:47:40,730 --> 00:47:45,691
now. How come no one's made, you know, a peg in Monero with it with a federation?

463
00:47:45,730 --> 00:47:47,491
Well, it's a very, very, very important question.

464
00:47:47,491 --> 00:47:51,531
It's a very central question to whether or not the federation is actually a viable

465
00:47:51,531 --> 00:47:52,971
idea when push comes to shove.

466
00:47:53,170 --> 00:47:55,211
So that's that would be my guess.

467
00:47:55,211 --> 00:47:57,211
But I would be certainly very open to be.

468
00:47:59,170 --> 00:48:04,410
Being refuted on that because but my guess would be that people, if it's really

469
00:48:04,410 --> 00:48:09,691
private, then the incentive to steal goes way up because you can steal privately, you

470
00:48:09,691 --> 00:48:10,771
can steal Monero.

471
00:48:11,170 --> 00:48:15,531
So the incentive to steal goes way up unless the people have their reputations at

472
00:48:15,531 --> 00:48:20,651
stake, in which case the other the other you know, the other horn of the bull, you

473
00:48:20,651 --> 00:48:26,610
know, is like pick your poison, which is that they have their public reputation.

474
00:48:26,610 --> 00:48:29,931
And then, you know, a senator makes a phone call and all these people get arrested.

475
00:48:30,450 --> 00:48:36,531
And then, you know, they are seen as being the direct administrators of this money

476
00:48:36,531 --> 00:48:38,051
laundering service, basically.

477
00:48:38,051 --> 00:48:39,410
So that would be an interesting question.

478
00:48:40,131 --> 00:48:46,410
Super, another aspect of what you're saying, what's so interesting to me is you say

479
00:48:46,410 --> 00:48:52,770
that you don't hear Bitcoiners talk about wanting to use a large block sidechain of

480
00:48:52,770 --> 00:48:54,251
Bitcoin, but super.

481
00:48:55,410 --> 00:48:59,730
The way that's really interesting to kind of take that thought you had and flip it

482
00:48:59,730 --> 00:49:05,410
around is to recognize that the Bitcoiners who were saying that in the past left

483
00:49:05,410 --> 00:49:14,290
Bitcoin. So it is precisely that community of historic Bitcoiners who would

484
00:49:14,371 --> 00:49:22,371
potentially serve as the demand for those softwares in a sidechain format.

485
00:49:22,730 --> 00:49:30,850
So if some current Bitcoiners use it and if it grows such that it has more economic

486
00:49:30,850 --> 00:49:36,371
security, more fee revenue than the altcoin, then that community that left Bitcoin in

487
00:49:36,371 --> 00:49:42,051
the past would to the extent that their profit motivated would return if they're

488
00:49:42,051 --> 00:49:47,970
sentimentally motivated to maintain their altcoin and try to fulfill their vision of

489
00:49:47,970 --> 00:49:52,410
conquering Bitcoin and being vindicated historically, then they would remain.

490
00:49:52,410 --> 00:49:59,011
But I believe the overwhelming economic force in markets is not sentimentality, but

491
00:49:59,011 --> 00:50:01,090
it's profit. People want profit.

492
00:50:01,131 --> 00:50:06,931
They want their token to appreciate and they want to have it be useful to them.

493
00:50:07,170 --> 00:50:08,691
And that's what drivechain offers.

494
00:50:08,891 --> 00:50:15,290
So it does require some people to just like swallow their pride and return to Bitcoin and

495
00:50:15,290 --> 00:50:19,931
realize that in the long run, that's actually the most beneficial thing for their

496
00:50:19,931 --> 00:50:22,691
community. And this is where the game theory comes in.

497
00:50:23,691 --> 00:50:28,371
If all of the altcoins do it, then the altcoin that doesn't do it is the one that will

498
00:50:28,371 --> 00:50:33,451
suffer the most. You don't want to be the one left holding the bag when drivechain

499
00:50:34,251 --> 00:50:39,931
leads to so much value accrual to Bitcoin and so many altcoins going to zero.

500
00:50:40,410 --> 00:50:43,170
And I know this is just my view and I can't predict the future.

501
00:50:43,331 --> 00:50:44,730
And maybe you're completely right.

502
00:50:45,891 --> 00:50:50,530
And if that's the case, I think drivechain still has value as you recognize and

503
00:50:50,530 --> 00:50:59,650
promote, which is that the non-adoption of the actual drivechains would not undermine

504
00:50:59,650 --> 00:51:05,811
the fact that the availability of drivechains would remove from altcoin founders the

505
00:51:05,811 --> 00:51:11,891
rationale for their activity, the rationale that it's hard or impossible to build on

506
00:51:11,891 --> 00:51:13,051
Bitcoin trustlessly.

507
00:51:13,730 --> 00:51:15,011
It would remove that rationale.

508
00:51:15,571 --> 00:51:19,970
But I do believe optimistically that drivechain would see many billions of dollars of

509
00:51:19,970 --> 00:51:22,410
real value accrual to Bitcoin and its block space.

510
00:51:23,131 --> 00:51:28,290
I'm not one who thinks that the only reason that we should do it is simply to have a

511
00:51:28,290 --> 00:51:29,530
narrative advantage.

512
00:51:33,650 --> 00:51:38,290
I just wanted to make clear this point that Paul often makes clear, which is that many

513
00:51:38,290 --> 00:51:43,210
people, Super, who are interested in drivechains are specifically those who left in the

514
00:51:43,210 --> 00:51:45,090
past, who left Bitcoin in the past.

515
00:51:45,491 --> 00:51:48,931
So they no longer talk about the need for sidechains because now they're doing an

516
00:51:48,970 --> 00:51:55,011
altcoin. So it is specifically the fact that Bitcoin's sidechain community has suffered

517
00:51:55,011 --> 00:51:56,371
from high rates of attrition.

518
00:51:57,331 --> 00:52:02,210
That's the that's the reason why you don't hear often that people want to use a side

519
00:52:02,210 --> 00:52:06,970
chain, because all that all that they've been able to do in the past was do a federated

520
00:52:06,970 --> 00:52:12,730
sidechain, which means that 15, 15 people, in some cases anonymously, are controlling

521
00:52:12,730 --> 00:52:17,011
that Bitcoin. So right now we have 100 million dollars locked in Bitcoin sidechains

522
00:52:17,371 --> 00:52:19,491
across RSK, Liquid and a few others.

523
00:52:20,131 --> 00:52:21,610
It's about 100 million dollars.

524
00:52:21,891 --> 00:52:23,970
But that's because the setup is weak.

525
00:52:24,210 --> 00:52:26,410
A federated federation is fiat.

526
00:52:26,850 --> 00:52:33,290
It's, you know, some people socially appointed and accepted to manage as a trusted third

527
00:52:33,290 --> 00:52:36,730
party. It's kind of akin to a custodial relationship.

528
00:52:36,730 --> 00:52:42,650
I mean, it's not it's more it's closer to custody than to the trustless and peer to

529
00:52:42,650 --> 00:52:44,090
peer nature of Bitcoin mining.

530
00:52:45,090 --> 00:52:46,410
I would, you know, argue.

531
00:52:49,610 --> 00:52:51,491
Cullen, jump in, man.

532
00:52:51,530 --> 00:52:57,210
What's your thought? I, well, I'll let you go just because I'm thinking of something

533
00:52:57,210 --> 00:52:59,131
that's kind of totally separate from the current topic.

534
00:52:59,131 --> 00:53:00,730
So I don't want to hijack the conversation.

535
00:53:02,970 --> 00:53:09,451
I'm just I'm scrolling through the latest BCH blocks, seven transactions, 35

536
00:53:09,730 --> 00:53:12,850
transactions, 14 transactions.

537
00:53:13,610 --> 00:53:19,210
Like, are we really if 1 percent of those people come over, is it really going to make

538
00:53:19,210 --> 00:53:22,011
the magnitude of difference to the Bitcoin's price?

539
00:53:22,011 --> 00:53:26,170
Because 1 percent of 14 people came over to Bitcoin again.

540
00:53:26,970 --> 00:53:30,131
When I said 1 percent, I was talking only about Bitcoin.

541
00:53:30,610 --> 00:53:35,530
I was talking about if the Bitcoin community were to move 1 percent of its value into the

542
00:53:35,530 --> 00:53:42,331
large block sidechain, that would be four billion dollars on the clone of of the large

543
00:53:42,331 --> 00:53:46,571
block altcoin, possibly, if that's how if that's how it's chosen to be designed.

544
00:53:46,931 --> 00:53:53,371
But who wants that? Like what Bitcoiners want is like, I really want to use my Bitcoin on

545
00:53:53,371 --> 00:53:56,051
a big block sidechain. Have you ever met anyone who wants that?

546
00:53:56,410 --> 00:54:01,011
Well, right now there's all this discussion in the Bitcoin community, as you know, about

547
00:54:01,290 --> 00:54:07,691
whether the block size should be larger or smaller and whether we and how that would

548
00:54:07,691 --> 00:54:16,170
accommodate the desire of some people to do uses of blockchain that are data intensive.

549
00:54:16,691 --> 00:54:22,891
And therefore, if there were a large blockchain sidechain on Bitcoin, then people could opt

550
00:54:22,891 --> 00:54:28,811
in to those tradeoffs of lower decentralization and higher scalability and they could do

551
00:54:28,811 --> 00:54:34,051
what they want to do over there in a way that is harmonious with Bitcoin insofar as it

552
00:54:34,451 --> 00:54:38,331
accrues value to Bitcoin's main chain and pays fees to Bitcoin's miners.

553
00:54:38,770 --> 00:54:45,290
So what we want for Bitcoin is a format that can allow for innovation and experimentation

554
00:54:46,371 --> 00:54:48,691
in a multitude of different softwares.

555
00:54:49,850 --> 00:54:55,290
And not to push the innovators and developers out of our community.

556
00:54:55,691 --> 00:55:02,491
We want people like you who are building, we want to enable them, as you do, to build on

557
00:55:02,491 --> 00:55:09,131
Bitcoin. And we can't know with certainty whether this will lead to enormous success for

558
00:55:09,331 --> 00:55:15,210
the privacy sidechain or the big block sidechain, the NFT sidechain, the Turing Complete

559
00:55:15,210 --> 00:55:19,530
sidechain. We don't know exactly which ones will be most successful and exactly how much.

560
00:55:20,090 --> 00:55:21,811
But if we build it, they may come.

561
00:55:22,210 --> 00:55:28,730
And your point that there are a few transactions on the big block altcoins is interesting

562
00:55:28,730 --> 00:55:32,530
because I hear from their, you know, sort of marketing that they do like trillions of

563
00:55:32,530 --> 00:55:38,290
transactions and have a high volume, at least in theory.

564
00:55:38,530 --> 00:55:40,530
So I guess.

565
00:55:40,571 --> 00:55:41,730
Yeah, it's all theory.

566
00:55:41,730 --> 00:55:46,931
Like they can handle trillions of dollars of volume, but no one's, anyone who has BCH are

567
00:55:46,931 --> 00:55:48,011
not using it on the chain.

568
00:55:48,770 --> 00:55:51,290
They're just hoping the price goes up and they're holding it on an exchange.

569
00:55:52,170 --> 00:55:53,970
Because no one cares. No one cares to use it.

570
00:55:55,011 --> 00:56:00,850
Well, in the long run, in the long run for Bitcoin, there would need to be a higher rate of

571
00:56:00,850 --> 00:56:07,051
transaction fees paid on layer one for the Bitcoin miners to receive sufficient income to

572
00:56:07,051 --> 00:56:09,331
secure the network from a hostile attacker.

573
00:56:09,770 --> 00:56:16,290
So I think that in the long run, if Bitcoin fees go up as they should, ideally, then there

574
00:56:16,290 --> 00:56:19,491
would be increasing demand for a low fee experience.

575
00:56:19,850 --> 00:56:26,131
And I think that large block sidechains could serve as a complement to Lightning.

576
00:56:26,410 --> 00:56:33,051
So instead of people only relying on Lightning as the mechanism for low fee transactions,

577
00:56:33,290 --> 00:56:35,170
there could be large block sidechains.

578
00:56:35,891 --> 00:56:40,491
And that would be a different set of features and experience, a different set of

579
00:56:40,491 --> 00:56:45,491
complexity. And maybe that would be very good for Bitcoin to have that avenue of

580
00:56:45,491 --> 00:56:50,131
development available rather than betting everything on Lightning delivering the low fee

581
00:56:50,131 --> 00:56:51,770
experience. How does that strike you?

582
00:56:52,491 --> 00:56:57,610
Yeah, I think I'm totally in agreement that if fees ever rose and we had big block side

583
00:56:57,610 --> 00:56:59,410
chains available, then I think people would use them.

584
00:57:00,451 --> 00:57:03,530
I don't think we're going to see any immediate, like if we drive, if we activate

585
00:57:03,530 --> 00:57:07,850
drivechains anytime soon, I don't think we're going to see any immediate usage of a big

586
00:57:07,850 --> 00:57:12,051
block sidechain because fees aren't high on Bitcoin and people will just keep using

587
00:57:12,530 --> 00:57:18,851
Bitcoin for ordinals and whatever because they don't like I can just do it on Bitcoin and not

588
00:57:18,851 --> 00:57:22,451
use the sidechain. But yeah, once fees rose, then they would.

589
00:57:24,051 --> 00:57:29,691
I think. Yeah, we had high fees five years ago, you know, back in December of 2017, it was

590
00:57:29,691 --> 00:57:34,811
$50 to send a single Bitcoin transaction and the miners were receiving millions of

591
00:57:34,811 --> 00:57:39,211
dollars a day from that instead of what they currently receive, which is a few hundred

592
00:57:39,211 --> 00:57:40,211
thousand dollars a day.

593
00:57:41,410 --> 00:57:47,931
So well, but only it was only like one day and that happened, I remember 2017 and there

594
00:57:47,931 --> 00:57:55,331
was only one day when when fees were for most of the day, $50 and even on that day, I

595
00:57:55,331 --> 00:57:57,170
still use Bitcoin.

596
00:57:57,571 --> 00:58:01,650
I just I set a low fee and waited and it confirmed the next day or something like that.

597
00:58:02,290 --> 00:58:03,290
Actually, I didn't even do that.

598
00:58:03,290 --> 00:58:07,530
But yeah, there was only one day when they were when they were meaningfully high.

599
00:58:09,931 --> 00:58:15,530
Do you agree that it is necessary for fees to go high permanently for Bitcoin to be

600
00:58:15,530 --> 00:58:16,851
secure in the far future?

601
00:58:18,851 --> 00:58:28,650
Yeah. So I feel like I feel like the best I feel like drive team is going to grow and

602
00:58:28,650 --> 00:58:34,091
popularity, not because it absolutely necessarily will work, but because it is the most

603
00:58:34,091 --> 00:58:36,091
viable path forward for Bitcoin.

604
00:58:37,051 --> 00:58:41,490
In the spirit of Satoshi from long ago, you know, he didn't know if there was going to

605
00:58:41,490 --> 00:58:42,890
be huge success.

606
00:58:43,451 --> 00:58:45,811
He thought it would either go to zero or be huge.

607
00:58:46,170 --> 00:58:50,971
And I feel like that same spirit of innovation and experimentation, kind of like going to

608
00:58:50,971 --> 00:58:53,010
the moon is the spirit of drivechain.

609
00:58:53,410 --> 00:58:58,290
Like I feel we're right now in this room at the very beginning of an enormously

610
00:58:58,290 --> 00:58:59,931
successful program.

611
00:59:01,290 --> 00:59:04,051
I feel like it's the most ambitious program in all of crypto.

612
00:59:04,451 --> 00:59:09,410
We want to have 100 percent of the economic activity on blockchain be built on

613
00:59:09,410 --> 00:59:14,051
Bitcoin, not because it's fun or interesting, but because that is the most profitable

614
00:59:14,211 --> 00:59:16,490
design for everyone involved.

615
00:59:17,611 --> 00:59:23,091
It's better if everyone is sharing one massive network effect, one unit of account.

616
00:59:24,211 --> 00:59:28,811
There isn't going to be many monies in the world in the future, there'll be one money

617
00:59:29,051 --> 00:59:33,130
for all of humanity because that is the most profitable experience for everyone.

618
00:59:33,451 --> 00:59:36,490
Nobody wants to be using a money that everyone else isn't using.

619
00:59:36,731 --> 00:59:40,410
So money has more network effect power than anything else.

620
00:59:40,410 --> 00:59:43,370
It's the ultimate good in terms of network effects.

621
00:59:44,370 --> 00:59:48,931
So for these reasons, I think there'll be only one L1 and that will be the digital gold.

622
00:59:49,331 --> 00:59:54,250
And on top of it, there will be many synthetic versions of Bitcoin.

623
00:59:54,731 --> 00:59:58,530
So they trade one for one with Bitcoin, but they have different software features.

624
00:59:58,890 --> 01:00:01,211
And that's what the drivechain's vision is all about.

625
01:00:01,211 --> 01:00:03,571
So I feel like that's the path forward.

626
01:00:03,541 --> 01:00:10,541
And you're right to ask, would it be the privacy coin that's most successful or would it be the big block sidechain?

627
01:00:10,541 --> 01:00:17,541
Would it be the Turing complete drivechain? Would it be the other drivechains out there?

628
01:00:17,541 --> 01:00:24,541
There's a list of them on the drivechain.info website, and people can read about the different drivechains that are envisioned.

629
01:00:24,541 --> 01:00:28,541
And some of them have already been created in the test software.

630
01:00:29,541 --> 01:00:31,541
But I think all of your questions are totally right.

631
01:00:31,541 --> 01:00:40,541
I feel like it is exactly people like you who will be among the first to develop and innovate and explain what's going on to everyone else.

632
01:00:40,541 --> 01:00:45,541
So I respect all of your questions and skepticism, 100 percent.

633
01:00:49,541 --> 01:00:57,541
Thanks. I'm grateful to have a place to voice my thoughts about it all.

634
01:00:58,541 --> 01:01:06,541
I do think that some of the interesting kind of features or facets of the discourse include what I mentioned earlier,

635
01:01:06,541 --> 01:01:13,541
where the people who are most interested in sidechains, many of them left and did an altcoin.

636
01:01:13,541 --> 01:01:19,541
So when you say when you said that you don't hear that much call for more sidechain development,

637
01:01:19,541 --> 01:01:27,541
that's precisely because the people who would call for it are instead promoting and building like Avalanche or Ethereum or other things.

638
01:01:27,541 --> 01:01:35,541
They don't actually benefit if they talk about how their users could return to Bitcoin, use drivechains and be better off.

639
01:01:35,541 --> 01:01:41,541
It's in their benefit to market that altcoins are fundamentally necessary and valid.

640
01:01:41,541 --> 01:01:49,541
But once drivechains enabled, then that narrative, that rationale is no longer there.

641
01:01:49,541 --> 01:01:57,541
And the users will be magnetized to the drivechain version of that software, especially if it's exactly the same.

642
01:01:57,541 --> 01:02:07,541
If we clone the altcoin software and then there's Bitcoiners who use it and then the altcoin software is being used more on the drivechain than it is on the altcoin.

643
01:02:07,541 --> 01:02:10,541
Right there, it's game over. It is game over.

644
01:02:10,541 --> 01:02:15,541
It's like if I told you you can have an apple.

645
01:02:15,541 --> 01:02:22,541
You know, in my left hand or an apple in my right hand, and they are exactly identical, but the apple in one hand is cheaper than the other.

646
01:02:22,541 --> 01:02:28,541
You would choose the cheaper one if they're identical in every other way.

647
01:02:28,541 --> 01:02:33,541
Colin's had his hand up for a while now. I think he's ready to ask his question now.

648
01:02:33,541 --> 01:02:36,541
Thanks. I was going in a kind of a totally different direction.

649
01:02:36,541 --> 01:02:50,541
But something I was thinking about, and perhaps this doesn't really make any sense, but we know from confirmation from Gary Gensler and other financial regulators that Bitcoin is not a security.

650
01:02:50,541 --> 01:02:56,541
Right. They've been very clear about that. And then they've kind of been waffling about other altcoins, if they are or are not securities.

651
01:02:56,541 --> 01:02:58,541
And it looks like a lot of them likely will be.

652
01:02:58,541 --> 01:03:09,541
So is there any concern, let's say, in the future where drivechains exist and all altcoins have gone to zero and are now federated, you know, peg outs of Bitcoin using sidechains?

653
01:03:09,541 --> 01:03:23,541
Do we then run the risk of running afoul of financial regulators for securities offerings via sidechain?

654
01:03:23,541 --> 01:03:32,541
In my opinion, it would be surprising to me if that were to occur.

655
01:03:32,541 --> 01:03:37,541
I think that we could have like a securities lawyer, you know, visit and opine on that.

656
01:03:37,541 --> 01:03:43,541
I don't want to give like legal advice, but I mean, I am a lawyer, so I'll just share my opinion.

657
01:03:43,541 --> 01:03:46,541
This is like informal and not like a legal opinion at all.

658
01:03:46,541 --> 01:03:48,541
This is just like a personal reaction to your question.

659
01:03:48,541 --> 01:03:57,541
I think it would not be a security for a drivechain to exist because the token is one for one exchangeable to Bitcoin.

660
01:03:57,541 --> 01:04:10,541
So no one would ever buy a drivechain token, meaning one of the tokens that is one for one exchangeable with Bitcoin and fully backed by Bitcoin.

661
01:04:10,541 --> 01:04:23,541
No one would ever buy that in order to try to have a performance that's higher than Bitcoin's performance, because the whole point by design is that these synthetic Bitcoins are exchangeable for Bitcoin.

662
01:04:23,541 --> 01:04:32,541
So I feel like, you know, since Bitcoin isn't a security, something that's one for one redeemable for Bitcoin would also not be a security.

663
01:04:32,541 --> 01:04:36,541
OK, that makes sense to me. Thank you.

664
01:04:41,541 --> 01:04:49,541
Yeah, I mean, Bitcoin is property in the view of the government, so it is.

665
01:04:49,541 --> 01:04:52,541
I think the drivechain tokens would also be property.

666
01:04:52,541 --> 01:05:00,541
Now, there could be security tokens built on, for example, the Turing complete drivechain, like the one that's a clone of Ethereum.

667
01:05:00,541 --> 01:05:03,541
There could be tokens built on there just like there are token.

668
01:05:03,541 --> 01:05:08,541
There are security tokens on liquid blockstreams, liquid sidechain.

669
01:05:08,541 --> 01:05:12,541
So, first of all, it's not it's not a bad thing.

670
01:05:12,541 --> 01:05:18,541
If someone creates a cryptocurrency token that is a registered security, that's possible.

671
01:05:18,541 --> 01:05:25,541
And, you know, blockstreams liquid sidechain is really cool and a really fantastic project.

672
01:05:26,541 --> 01:05:36,541
And a lot of the best thinkers in the sidechain sort of development community are working on liquid.

673
01:05:36,541 --> 01:05:43,541
And I feel that all of that work is valuable and is helpful to understand the value of sidechains.

674
01:05:44,541 --> 01:05:53,541
And drivechain, I think, is harmonious with that project and and is going to elevate everyone who's been working on sidechains.

675
01:05:53,541 --> 01:06:01,541
Will will benefit ultimately from the improvement of of the sidechain architecture that drivechain allows for.

676
01:06:02,541 --> 01:06:16,541
I hope some of the Ordinal's people make unregistered securities on Bitcoin and then we can finally get the regulators mad at us instead of just being mad at Ethereum.

677
01:06:16,541 --> 01:06:18,541
That would be fun.

678
01:06:20,541 --> 01:06:23,541
Yeah, it's very interesting to watch all this debate.

679
01:06:24,541 --> 01:06:33,541
It's interesting how some Bitcoiners would even say that, you know, we shouldn't have a privacy sidechain on Bitcoin because that will invite regulatory scrutiny.

680
01:06:33,541 --> 01:06:37,541
Like, look at how the exchanges don't want to list Monero except Kraken.

681
01:06:37,541 --> 01:06:45,541
Kraken is the one exchange that's run by that really cool guy, Jesse Powell, who is just like, you know what, we're going to support Monero.

682
01:06:45,541 --> 01:06:53,541
And I don't care if like that makes anyone upset because Monero is just private money and people should be free to use that.

683
01:06:53,541 --> 01:06:56,541
Right. It's not a crime to be private. Privacy is a right.

684
01:06:57,541 --> 01:07:01,541
You're not hurting anyone when you're just being private about your personal activities.

685
01:07:01,541 --> 01:07:08,541
So I think that the original ethos of Bitcoin was one that embraced anonymity.

686
01:07:08,541 --> 01:07:13,541
Satoshi wrote about anonymity six different times and he never once criticized it.

687
01:07:13,541 --> 01:07:18,541
He always said anonymity was cool. It was good. People should be free to use Bitcoin anonymously.

688
01:07:20,541 --> 01:07:31,541
And therefore it's a shame if the Bitcoin narratives become one of, well, let's work together hand in hand with the government to make sure the government is happy with Bitcoin.

689
01:07:31,541 --> 01:07:34,541
Because that's not going to be a good path to go down.

690
01:07:34,541 --> 01:07:45,541
Because what's going to happen eventually is the Bitcoin will get really big and then the government will think that it's a threat to the monetary hegemony of the U.S. dollar system.

691
01:07:45,541 --> 01:07:51,541
Because, of course, one big difference between Bitcoin and the dollar is that the government can't print more Bitcoin.

692
01:07:51,541 --> 01:08:09,541
So if Bitcoinization occurs, that disempowers and eliminates the Federal Reserve with respect to the Reserve's ability to, in concert with the Treasury, issue more money to do money drops and helicopter money for all the different special interest groups that benefit from money printing.

693
01:08:09,541 --> 01:08:23,541
So I think that Bitcoinization ultimately conflicts with the fiat system and therefore the notion that we should be trying to partner with big government is not going to work out.

694
01:08:24,541 --> 01:08:28,541
So it would be good if we stay true to our ultimate values, our core values.

695
01:08:28,541 --> 01:08:42,541
Things like volunteerism, free markets, private property, competition and uphold psychopunk ethos of anonymity and anarcho-capitalism.

696
01:08:43,541 --> 01:08:45,541
That's the political philosophy that I like.

697
01:08:45,541 --> 01:09:01,541
And that's what brought me into Bitcoin in the first place was the things that Satoshi referred to with respect to like Von Mises and Rothbard in that thread on the nature of Bitcoin.

698
01:09:03,541 --> 01:09:05,541
You must be a really weird lawyer.

699
01:09:07,541 --> 01:09:09,541
I mean, I'm certainly weird.

700
01:09:10,541 --> 01:09:15,541
So but every lawyer is weird in his or her own way.

701
01:09:16,541 --> 01:09:17,541
What can I say to that?

702
01:09:18,541 --> 01:09:19,541
By the way, welcome.

703
01:09:20,541 --> 01:09:21,541
That's what you said.

704
01:09:22,541 --> 01:09:25,541
Welcome to everyone who has joined.

705
01:09:25,541 --> 01:09:35,541
Please raise your hand and come on up if you'd like to share a thought or ask a question or just speak your mind about drivechain or anything related to it.

706
01:09:35,541 --> 01:09:54,541
The essence of what I was saying, Super, just kind of put it all into one sentence is that I think it'd be cool to have a privacy focused L2, a privacy focused drivechain, a miner control pegged sidechain for Bitcoin focused on privacy.

707
01:09:54,541 --> 01:09:56,541
I think that would be great for us.

708
01:09:56,541 --> 01:09:59,541
It wouldn't make everyone happy, but you can't please everyone all the time.

709
01:10:00,541 --> 01:10:02,541
UFO 42.

710
01:10:03,541 --> 01:10:04,541
Welcome to the stage.

711
01:10:06,541 --> 01:10:07,541
Well, hello.

712
01:10:07,541 --> 01:10:08,541
Thanks for having me up.

713
01:10:09,541 --> 01:10:25,541
I just posted into the little like side conversation chat a question, which is like, what do you guys think about like these cross chain projects, like maybe chaining, whatever, and other stuff?

714
01:10:25,541 --> 01:10:38,541
And do you regard them just as a bridge tech until there will be the one and you're saying layer one Bitcoin left?

715
01:10:38,541 --> 01:10:41,541
Or will this stuff be a long running thing?

716
01:10:41,541 --> 01:11:02,541
And what timeframe would you be talking about until like this whole thing like merges back into the one, in this case, Bitcoin plus sidechains?

717
01:11:05,541 --> 01:11:06,541
Thanks for that question.

718
01:11:06,541 --> 01:11:15,541
Drivechain was an idea that began in 2015, when Paul Sztorc designed it and talked about it in blog posts.

719
01:11:15,541 --> 01:11:26,541
Since then, it has developed greatly in terms of there being a lot of software that demonstrates how it would work and extensive analysis of its economic design.

720
01:11:27,541 --> 01:11:38,541
So it's moving forward when exactly it would achieve consensus and total merger into Bitcoin by its community in terms of getting everything ready for that.

721
01:11:39,541 --> 01:11:50,541
That would be at some point in the future, maybe in the months to come, or the next few years, or maybe there'll be a tidal wave of strong interest and work on it very soon.

722
01:11:51,541 --> 01:12:07,541
So no one knows for sure. And I think the lessons of history would involve looking at how SegWit came into being and how Taproot came into being to understand how drivechain might come into being, what kind of timeline would be involved.

723
01:12:08,541 --> 01:12:12,541
Yeah, this is the thing. It's about consensus within the communities.

724
01:12:13,541 --> 01:12:21,541
I guess Taproot was like, I don't know, a year and a half ago or something, or two.

725
01:12:21,541 --> 01:12:32,541
And I've been following the Lightning stuff from when it was below 100 nodes.

726
01:12:32,541 --> 01:13:00,541
And now there's, I don't know, maybe also 100 million, if you take the US dollar still as the stable in it, and it's working more or less, but sometimes things can take longer than people predict.

727
01:13:03,541 --> 01:13:06,541
Totally.

728
01:13:07,541 --> 01:13:27,541
Some of the things that have led to perhaps the slowing of the rate of drivechain understanding are what I mentioned earlier to Supertestnet, which is that some of the people who were very anxious to have drivechain adopted in Bitcoin left Bitcoin, and they did an altcoin.

729
01:13:28,541 --> 01:13:43,541
So in the case of Paul Sztorc and those who are working on drivechain, and who are talking about it and are interested in it within the Bitcoin community, there has been a consistent and loyalty to Bitcoin, a consistent interest in drivechain and a loyalty to Bitcoin.

730
01:13:44,541 --> 01:14:08,541
So some people remain in Bitcoin and promote the adoption of stronger sidechain technology in the form of drivechain, while others got frustrated or impatient and decided to instead build an altcoin or work on an altcoin that allows for similar technology to drivechain.

731
01:14:08,541 --> 01:14:21,541
So that's one reason why drivechain has had the rate of understanding and success that it has so far, is that some of the people who would have supported it chose to leave Bitcoin and do an altcoin or join an altcoin community.

732
01:14:22,541 --> 01:14:30,541
So I think that's one way to understand the seven year path that drivechain has had.

733
01:14:31,541 --> 01:14:49,541
But I do believe, I mean, I recently got really interested in it over the last year, I chose to join Paul's company to work for LayerTwo Labs and to host these Twitter spaces to promote this idea and to encourage understanding of it and to encourage understanding of how it would strengthen Bitcoin.

734
01:14:49,541 --> 01:15:04,541
To be able to clone the software of any altcoin the community wants and have Bitcoiners use that sidechain rather than having to either not use that kind of software or sell Bitcoin and buy an altcoin to use that kind of software.

735
01:15:04,541 --> 01:15:11,541
That kind of software could include big block software, it can include privacy software, it could include Turing complete software.

736
01:15:11,541 --> 01:15:20,541
Any of the protocols that we see existing in an altcoin format could be cloned to a Bitcoin sidechain as a drivechain.

737
01:15:20,541 --> 01:15:24,541
And then there might be large usage of them.

738
01:15:24,541 --> 01:15:33,541
There might be growth to Bitcoin in terms of value accrual to Bitcoin and Bitcoin's block space from that upgrade.

739
01:15:33,541 --> 01:15:35,541
Well, thank you very much.

740
01:15:35,541 --> 01:15:40,541
Thank you very much. You guys are going to be in Miami in May?

741
01:15:40,541 --> 01:15:48,541
Personally, I haven't been to any conferences.

742
01:15:48,541 --> 01:15:56,541
I mean, I'm on the West Coast and I have a family, so it's hard for me to get away sometimes to attend these things.

743
01:15:57,541 --> 01:16:10,541
But Paul Sztorc, one of the co-authors of the BIPs for drivechain, BIPs 300 and 301, he very frequently attends the major Bitcoin conferences.

744
01:16:10,541 --> 01:16:23,541
For example, he spoke with Adam Back at Bitcoin Amsterdam last year and then again with Adam Back at Honeyball.

745
01:16:23,541 --> 01:16:26,541
That's OK. That's fine. That's totally OK.

746
01:16:26,541 --> 01:16:30,541
I'm just, you know, just looking at all of the ecosystems.

747
01:16:30,541 --> 01:16:41,541
And I personally went out of Bitcoin at some time mostly, but I'm still very interested in what's going on and what's going to happen.

748
01:16:41,541 --> 01:16:44,541
So thank you very much for your answer.

749
01:16:44,541 --> 01:16:47,541
And nice to having me on.

750
01:16:47,541 --> 01:16:49,541
See you guys.

751
01:16:49,541 --> 01:16:59,541
Thanks for joining. Everyone is free to raise your hand and come on up to the stage, ask a question or share comments.

752
01:16:59,541 --> 01:17:05,541
Bitcoin biohacker, welcome back to the stage.

753
01:17:05,541 --> 01:17:10,541
Hey, thanks for picking me up.

754
01:17:10,541 --> 01:17:15,541
This is kind of a difficult question, so probably you might not have an answer.

755
01:17:15,541 --> 01:17:21,541
I've been reading about taxes and Bitcoin and I think the best.

756
01:17:22,541 --> 01:17:41,541
I read an article on DLAPiper.com that said that Bitcoin is not – basically the 1031 exchange, which is where you take real estate and you defer your taxes by buying a larger piece of real estate.

757
01:17:41,541 --> 01:18:01,541
That virtual currencies are not really – they're not really – you can't just go in from one to another and defer those taxes like you can with actual real physical properties.

758
01:18:02,541 --> 01:18:13,541
So I was kind of wondering how would drivechain work with that in terms of the law and taxes?

759
01:18:13,541 --> 01:18:16,541
And obviously you're a Canadian lawyer, is that right?

760
01:18:16,541 --> 01:18:23,541
You're not versed in the U.S. law or the U.S. tax code.

761
01:18:23,541 --> 01:18:26,541
I am regrettably not Canadian.

762
01:18:26,541 --> 01:18:33,541
I think Canadians are very cool and I love Canada, but I am definitely an American and always have been.

763
01:18:33,541 --> 01:18:36,541
And yeah, I'm in California.

764
01:18:36,541 --> 01:18:47,541
I'm not a California licensed attorney, but I am not giving any legal advice nor have I ever on anything in a Twitter space.

765
01:18:48,541 --> 01:19:01,541
Your question is about whether if someone converts his or her Bitcoin into the drivechain synthetic Bitcoin, would that be a taxable event?

766
01:19:01,541 --> 01:19:03,541
I can't comment on that.

767
01:19:06,541 --> 01:19:09,541
Yeah, I guess ultimately the IRS would be responsible for that.

768
01:19:09,541 --> 01:19:11,541
So thanks.

769
01:19:12,541 --> 01:19:13,541
Sure.

770
01:19:17,541 --> 01:19:25,541
I mean, in theory, the value of the synthetic Bitcoin on a drivechain is going to be the value of Bitcoin main chain token.

771
01:19:25,541 --> 01:19:28,541
That's the whole point of a two-way peg.

772
01:19:28,541 --> 01:19:36,541
It's like selling a gold bar that's one ounce for a gold coin that's one ounce, right?

773
01:19:36,541 --> 01:19:41,541
One is a square and the other is a circle, but they're both one ounce of gold.

774
01:19:41,541 --> 01:19:51,541
So it wouldn't typically be profitable when you exchange the square to the circle and then go back from the circle to the square.

775
01:19:51,541 --> 01:20:02,541
So it might be a taxable event that has no gain or loss associated with it because the things have equivalent market value.

776
01:20:03,102 --> 01:20:07,582
Just like if you exchange your Bitcoin into wrapped Bitcoin and then you go from wrapped

777
01:20:07,582 --> 01:20:12,782
Bitcoin back to main chain Bitcoin, or if you go from Bitcoin to liquid Bitcoin and then liquid

778
01:20:12,782 --> 01:20:17,422
Bitcoin back to main chain Bitcoin, the exchanges aren't made for profit and loss. They're made for

779
01:20:18,142 --> 01:20:23,822
the different features available between the sidechains and the main chain.

780
01:20:24,862 --> 01:20:28,302
So it might be a taxable event with no gain or loss. But again,

781
01:20:28,382 --> 01:20:35,421
I don't know as I'm not able to give any legal advice on that. But you could ask a tax person.

782
01:20:35,421 --> 01:20:40,862
I'm seeing online at DLAPiper.com, it says the IRS concludes section 1031 tax deferred like

783
01:20:40,862 --> 01:20:49,502
kind exchange not available for cryptocurrency trades written by Tom Garrarty. So that sounds

784
01:20:49,502 --> 01:20:54,381
correct. Yeah, that's the article. And it's a good article to understand because

785
01:20:55,182 --> 01:21:01,421
it explains further down that article how Ethereum's value is derived not just

786
01:21:01,421 --> 01:21:08,462
because it's a property like Bitcoin, but also from the contracts and the apps built on it.

787
01:21:08,462 --> 01:21:16,862
And then Bitcoin is a property and that is its value. And then it says Litecoin is also not

788
01:21:17,502 --> 01:21:23,822
a property. They don't consider it a property in terms of taxes. It's more of like a security.

789
01:21:24,782 --> 01:21:28,462
And so in each one of those scenarios, Bitcoin to Ethereum,

790
01:21:29,182 --> 01:21:37,182
that's a taxable event because they derive their value differently. Whereas with the

791
01:21:37,661 --> 01:21:45,661
Bitcoin to WrappedBitcoin, it's sort of like you're handing off your keys to someone else

792
01:21:47,741 --> 01:21:55,502
for other purposes, for someone to hold it with the purpose of getting it back. If I understand

793
01:21:55,502 --> 01:22:02,061
WrappedBitcoin correctly, it's like a synthetic Bitcoin. So I guess that

794
01:22:02,462 --> 01:22:12,142
perhaps that could be more closer to what a synthetic or a drivechain would actually be.

795
01:22:12,142 --> 01:22:16,142
But yeah. So I'm looking at this article you've mentioned from DLA Piper,

796
01:22:17,981 --> 01:22:26,302
and it sounds like the article is a description of the IRS's memo. And this memo discussed

797
01:22:26,302 --> 01:22:31,261
just Bitcoin, Litecoin, and Ethereum. And the memo held that if one trades one of these tokens

798
01:22:31,261 --> 01:22:39,261
for the other, one cannot utilize section 1031 tax deferral treatment with respect to any gain.

799
01:22:42,302 --> 01:22:50,701
So that's interesting. Maybe, I'm not sure if it's really relevant to drivechain, but

800
01:22:51,582 --> 01:22:59,341
it's an interesting topic. I mean, obviously in the far future, we all hope as Bitcoiners

801
01:22:59,341 --> 01:23:06,061
that society would become so bullish and favorable about Bitcoin that there is a tax

802
01:23:06,061 --> 01:23:15,341
exemption for Bitcoin. And probably in the best possible situation in the future, the tax

803
01:23:16,142 --> 01:23:25,022
exemption would apply to any synthetic Bitcoin. So if you have the drivechains with their

804
01:23:25,022 --> 01:23:30,862
synthetic Bitcoins on them, that is units of account that are one for one traded with Bitcoin,

805
01:23:30,862 --> 01:23:39,821
fully backed by Bitcoin, then those would be property that if it appreciates in real value,

806
01:23:39,821 --> 01:23:45,102
you wouldn't have to pay a taxable gain on that. So that would be the best possible situation.

807
01:23:45,102 --> 01:23:51,421
If all of this taxable event stuff were to not be a hassle for those living in countries that have

808
01:23:51,421 --> 01:23:58,382
capital gains tax. Supertestnet, you had asked earlier about the low rate of usage of big block

809
01:23:58,382 --> 01:24:03,821
sidechains and how maybe that would mean that there wouldn't be much usage of them. One of the

810
01:24:04,222 --> 01:24:09,421
things that Satoshi was very interested in was microtransactions. He wrote a number of times

811
01:24:09,421 --> 01:24:16,061
that he was interested in there being small, casual transactions, you know, very small

812
01:24:16,061 --> 01:24:22,222
transactions and that this could change the way the economy worked. And there have been some people

813
01:24:22,222 --> 01:24:28,621
who are very interested in that. I think that they probably are more so in the large block community

814
01:24:28,782 --> 01:24:36,861
and trying to facilitate there being an economy of small microtransactions. And I think that a

815
01:24:36,861 --> 01:24:41,662
big box sidechain could bring all those people together to build on that kind of thing.

816
01:24:44,702 --> 01:24:48,942
Especially, oh, I was going to finish that thought with by saying, especially if

817
01:24:48,942 --> 01:24:54,621
such transactions are not capital gains taxed, then there's a lot of potential for

818
01:24:54,861 --> 01:25:00,141
such transactions are not capital gains taxed. Then, you know, if there's no tax on these small

819
01:25:00,141 --> 01:25:05,502
transactions, then there could be much less overhead burden and headache. And that might be,

820
01:25:06,222 --> 01:25:11,102
you know, great for Bitcoin to have this economy of smaller transactions, not just

821
01:25:11,102 --> 01:25:15,901
digital gold, you know, billion dollar money movements once a century, but instead,

822
01:25:16,861 --> 01:25:24,942
you know, a whole interesting high frequency movement of small amounts of Bitcoin, maybe.

823
01:25:30,621 --> 01:25:35,982
Well, you kind of can right now. The people doing the ordinal things are moving dust amounts

824
01:25:35,982 --> 01:25:43,422
of Bitcoin whenever they trade ordinals with one another. So there are, it still happens on Bitcoin

825
01:25:44,061 --> 01:25:48,782
and of course, the Lightning community definitely does that, like Stacker News and recently,

826
01:25:49,901 --> 01:25:55,901
the Nostr folks are all doing, showing how Lightning can be used for microtransactions.

827
01:25:55,901 --> 01:25:59,181
So that is, that stuff is still happening. It's probably happening more than it's ever

828
01:25:59,181 --> 01:26:01,262
happened before in the history of currency.

829
01:26:05,502 --> 01:26:10,861
Super, are you, do you have a favorable attitude towards the possibility of a smaller block size

830
01:26:10,861 --> 01:26:16,301
for Bitcoin layer one? One of the things that Paul wrote about in his most recent blog posts

831
01:26:16,301 --> 01:26:24,061
on truthcoin.info, Paul Sztorc wrote in this post called the sidechain vision for Bitcoin.

832
01:26:24,061 --> 01:26:28,861
He wrote half a year ago, this post, his most recent post. And one of the things that he calls

833
01:26:28,861 --> 01:26:35,102
for among the six different things that he wants to see in Bitcoin, one of the six was to shrink

834
01:26:35,102 --> 01:26:45,341
the block size and also to ossify layer one. And I think that those two goals are possibly achieved

835
01:26:45,982 --> 01:26:51,341
through drivechain. So once we do drivechain, then we could do a block size increase, or we

836
01:26:51,341 --> 01:26:54,861
could do it the other way around. There could be a block, I'm sorry, block size decrease,

837
01:26:54,861 --> 01:26:59,102
a block size decrease and then drivechain or drivechain and then a block size decrease.

838
01:26:59,102 --> 01:27:03,822
Either way isn't, doesn't, it's not terribly important, the exact order, as long as they're

839
01:27:03,822 --> 01:27:09,262
roughly done around the same, you know, period of, you know, one or two years, it probably wouldn't

840
01:27:09,262 --> 01:27:13,982
make a huge difference, the order exactly. But if we shrink the block size in order to make it

841
01:27:13,982 --> 01:27:19,822
cheaper for ordinary people to have a full node so that they can personally and directly validate

842
01:27:19,822 --> 01:27:25,901
that they've been paid Bitcoin, that works harmoniously, I think, with the notion of

843
01:27:25,901 --> 01:27:32,861
enhancing the strength of sidechains so that the sidechain can be the venue for scalability.

844
01:27:33,502 --> 01:27:39,262
So that way people can opt into different sidechains, use the block space on those

845
01:27:39,262 --> 01:27:45,422
sidechains, and that way the small blocks on layer one don't constrain the scalability of Bitcoin.

846
01:27:45,422 --> 01:27:50,542
To your, in your perspective, does that make sense that smaller blocks on Bitcoin layer one

847
01:27:50,542 --> 01:27:55,901
are harmonious with drivechain? Is that one of your motivations for being as interested in drive

848
01:27:55,901 --> 01:28:03,341
chain as you are? Yeah, yes, but probably yes to both questions, although it doesn't,

849
01:28:03,901 --> 01:28:08,301
I don't think about it very often, so I don't know if it is a large motivator, but yeah,

850
01:28:09,502 --> 01:28:14,461
when it occurs to me, like, oh yeah, drivechain would help with that too. But yeah, I think one of

851
01:28:14,461 --> 01:28:20,061
the reasons I would like to see smaller, smaller blocks is because my, because of my own efforts

852
01:28:20,061 --> 01:28:28,061
to sync a node got harder after SegWit. When you synchronize your node now,

853
01:28:29,502 --> 01:28:34,542
you have to download more data, so your bandwidth increases. If you choose to store that data,

854
01:28:34,542 --> 01:28:39,341
you have to store it, and you have to process a lot more transactions. All three factors in

855
01:28:39,982 --> 01:28:47,102
what goes into making a program resource intensive go up. Your storage, your bandwidth,

856
01:28:47,102 --> 01:28:52,782
and your compute costs all rise because of SegWit and its block size increase. So I would

857
01:28:52,782 --> 01:29:01,021
like to undo that aspect of SegWit and go back to only having one megabyte blocks or smaller

858
01:29:02,222 --> 01:29:07,501
so that it's easy, like, if we went smaller, we could maybe undo some of that damage and, like,

859
01:29:07,501 --> 01:29:13,102
get back on track to where it would have been, you know, had we remained at one megabyte the

860
01:29:13,102 --> 01:29:17,821
whole time. Because it just got harder to sync a node, and I would like it to be easier again.

861
01:29:19,982 --> 01:29:27,102
Exactly. Isn't it interesting, Super, how there are some really awesome thinkers in Bitcoin

862
01:29:27,102 --> 01:29:35,662
who want smaller blocks but who don't yet appreciate drivechain or are opposed to it

863
01:29:35,662 --> 01:29:40,701
currently? Like, for example, you know, one of the great thinkers, Luke Dashjr.,

864
01:29:40,701 --> 01:29:46,302
he calls for smaller blocks a lot. He calls for people to contemplate the possibility that

865
01:29:46,302 --> 01:29:51,021
smaller blocks could be very good for Bitcoin, you know, reducing it from one megabyte to 300

866
01:29:51,021 --> 01:29:59,182
kilobytes. And yet he doesn't, in tandem with that view, support, you know, strengthening the

867
01:30:00,302 --> 01:30:07,021
options with respect to sidechain creation via drivechain. So I wonder, how does that add up?

868
01:30:07,021 --> 01:30:11,021
Why do you think that is? Like, people would be okay with shrinking layer one, but then not

869
01:30:11,662 --> 01:30:19,102
building concomitantly the sidechain format to allow for Bitcoin to grow, you know, right?

870
01:30:19,102 --> 01:30:22,701
If you're going to shrink layer one, you want to grow layer two, right?

871
01:30:24,302 --> 01:30:29,182
I don't know. I've never read his comments on the topic, so I don't have any

872
01:30:29,182 --> 01:30:35,501
ability to criticize something I haven't read. Has he written at any length or even

873
01:30:35,742 --> 01:30:41,501
at small length on why he doesn't support drivechain? That's news to me. I didn't even know he

874
01:30:41,501 --> 01:30:48,062
didn't support it. He's written very intelligently and politely about it, as he always does. And so

875
01:30:48,062 --> 01:30:55,021
far, the tweets have been on occasion, and they've been that drivechains, in his view, are slightly

876
01:30:55,021 --> 01:31:01,102
less secure than federated sidechains. That's one tweet he put out. I don't want to quote him too

877
01:31:01,102 --> 01:31:06,941
much without him being here to respond and elaborate on the context. And I'm optimistic

878
01:31:06,941 --> 01:31:11,422
that some of the people who will become the strongest proponents of drivechain are those

879
01:31:11,422 --> 01:31:17,901
who most ardently support smaller blocks on Bitcoin, because it works so well to strengthen

880
01:31:17,901 --> 01:31:24,542
layer two, just as we're shrinking the layer one block size. That way, Bitcoin doesn't become

881
01:31:24,542 --> 01:31:33,261
a project with limited overall capacity and expressiveness and potential. It works so well

882
01:31:33,261 --> 01:31:39,901
to strengthen layer two at the same time as shrinking layer one. And that way, we have this

883
01:31:39,901 --> 01:31:45,742
very decentralized, inexpensive layer one to validate, but at the same time, an enormous

884
01:31:45,742 --> 01:31:51,182
multitude of projects on layer two that are strengthening layer one, because the merged mining

885
01:31:51,821 --> 01:31:57,422
is really the crux of it, that if you're going to have smaller block size on layer one,

886
01:31:57,422 --> 01:32:02,381
that will tend to require high fees, because you're going to have fewer transactions if the

887
01:32:02,381 --> 01:32:07,821
block size gets smaller. So there's less data in the blocks. So the fee associated with each

888
01:32:07,821 --> 01:32:13,742
transaction would have to be a higher average fee in order to sustain a robust fee market

889
01:32:13,742 --> 01:32:19,982
for the miners to be incentivized to secure the network. And merged mining of sidechains

890
01:32:19,982 --> 01:32:26,941
is the path forward, which Satoshi himself talked about merged mining. So it's so harmonious with

891
01:32:26,941 --> 01:32:35,102
these OG Bitcoiners and their ethos that it would be great to see a lot more merged mining

892
01:32:35,102 --> 01:32:40,461
of sidechains, right? Because it's either that or like the three options for the future with

893
01:32:40,461 --> 01:32:47,422
respect to economic security are, as I see it, inflation, do nothing, and merged mining. And

894
01:32:47,422 --> 01:32:51,261
of those three options, I'm sure some people would argue that there's other options, right? They would

895
01:32:51,261 --> 01:32:56,701
put it differently. But to me, it's like inflation, hope for the best, or merged mining. And I love

896
01:32:56,701 --> 01:33:03,422
the merged mining option, because it strengthens layer one, and there's no inflation.

897
01:33:04,302 --> 01:33:08,302
And doing nothing, I don't think, is a viable path in the very long run.

898
01:33:10,222 --> 01:33:14,862
So I'm just looking, I searched this Twitter timeline for the word drivechain,

899
01:33:14,862 --> 01:33:21,662
good dashers. And I see, he mostly talked about it in 2017. He appeared to be a fan

900
01:33:22,381 --> 01:33:29,341
back then. I only see two posts about it in the last year, one of which says drivechain is not

901
01:33:29,341 --> 01:33:35,422
even close to trustless. And then the other one by him from this year says, in the case of drive

902
01:33:35,422 --> 01:33:41,422
chain, miners make more money by just taking all the sidechain funds for themselves. So I don't see,

903
01:33:41,901 --> 01:33:47,102
neither of those seems to be positive statements about it. But also, neither of them says like,

904
01:33:47,102 --> 01:33:55,021
we shouldn't do this, or I don't want this to happen. So I'm not sure. I'm not sure what is,

905
01:33:55,021 --> 01:33:58,622
can you, if you can find something by him where he talks about it at some,

906
01:33:59,982 --> 01:34:06,542
what you said earlier about he thinks federated ones are more secure. I'd like to see that so I

907
01:34:07,501 --> 01:34:14,542
can ask him questions about it. Yeah, I think you're exactly right. He's tweeted only a couple

908
01:34:14,542 --> 01:34:21,261
times ever about it, a few times ever about it. And I didn't really mean to get into an inquiry

909
01:34:22,062 --> 01:34:29,901
about him. I'm just basically... In 2017, he said, how about the SegWit plus drivechain path? Safe

910
01:34:29,901 --> 01:34:34,782
permissionless and gets everyone what they say what they want. Yeah, that seems pretty positive.

911
01:34:34,782 --> 01:34:40,542
So yeah, maybe we could ask him, hey, do you still think this? Well, I think it's pretty clear

912
01:34:40,542 --> 01:34:46,782
at this moment, he wouldn't affirm his original tweet as being his current view. Although I do

913
01:34:46,782 --> 01:34:51,501
very much appreciate and respect the way he articulates his current views, which is that,

914
01:34:52,141 --> 01:34:59,742
as you point out, they haven't been, you know, vociferous or frequent. And he hasn't denounced

915
01:34:59,742 --> 01:35:06,782
the project. He has merely objected to certain angles of, you know, reasoning about it. And

916
01:35:06,782 --> 01:35:11,182
it's possible. I mean, it's certainly the case that he would respect, you know, like the opinion

917
01:35:11,182 --> 01:35:16,701
of others if they were the overwhelming majority of Bitcoiners. And I think he is a great Bitcoiner.

918
01:35:16,701 --> 01:35:22,461
So I'm optimistic. I'm optimistic that among, you see, at this moment, we're at a dramatic moment

919
01:35:22,461 --> 01:35:28,062
where this project is gaining attention. And it's unclear exactly how it will proceed,

920
01:35:28,062 --> 01:35:33,581
because we have some of the leading thinkers in Bitcoin, some, you know, I mean, no one's a leader,

921
01:35:33,581 --> 01:35:40,622
of course, but in a certain sense, like some, you know, people are very interested in it. Others are

922
01:35:40,622 --> 01:35:44,941
opposed to it. And then there's a majority of people, perhaps in the middle, who are making

923
01:35:44,941 --> 01:35:50,622
up their minds and learning about it. And I feel that among those independent voters, in a sense,

924
01:35:50,622 --> 01:35:57,261
there is there is the community that doesn't yet appreciate drivechain, but does appreciate

925
01:35:57,261 --> 01:36:03,182
smaller block size going down to 300 kilobytes. I'm optimistic that thinkers like that, such as

926
01:36:03,182 --> 01:36:12,542
Luke, may in the future evolve their view to appreciate that drivechain works harmoniously

927
01:36:12,542 --> 01:36:17,501
with a smaller layer one block size. Hey, D, thanks for joining the stage.

928
01:36:18,222 --> 01:36:21,901
Welcome for the first time to this space. What's your comment or question?

929
01:36:21,901 --> 01:36:28,381
Yeah, thanks for having me. I was just curious why, you know, obviously super basic question,

930
01:36:28,381 --> 01:36:36,862
but you know, what's the goal of drivechain? Like, why do you think we need it? I guess.

931
01:36:39,102 --> 01:36:44,302
That's a great question. Thanks for asking that. Drivechain is about strengthening Bitcoin

932
01:36:44,302 --> 01:36:52,622
through developing stronger sidechains as options for Bitcoiners to benefit from software

933
01:36:52,622 --> 01:36:59,982
development. So, for example, there could be a sidechain on Bitcoin that uses drivechain technology

934
01:37:00,622 --> 01:37:06,222
that enables Bitcoiners to experience a greater amount of scalability, a greater amount of

935
01:37:06,222 --> 01:37:12,302
privacy, a greater amount of Turing completeness or other software features that currently exist

936
01:37:12,302 --> 01:37:20,221
in altcoins. Instead, with drivechain can exist on Bitcoin. And the Bitcoin that would be locked

937
01:37:20,221 --> 01:37:25,662
in the hash rate escrow technology would be controlled by the Bitcoin miners. So it's a

938
01:37:25,662 --> 01:37:32,942
similar trust model to Bitcoin layer one. Well, while not being identical to it,

939
01:37:34,062 --> 01:37:41,422
it's similar in that the Bitcoin miners, 51% of them have power over the Bitcoin that is held

940
01:37:41,422 --> 01:37:46,702
in the hash rate escrow, which is a term that refers to the drivechain technology that

941
01:37:46,702 --> 01:37:52,062
performs the function of a two way peg. So people send their Bitcoin to the sidechain,

942
01:37:52,062 --> 01:37:58,381
their layer one Bitcoin remains in what's called a hash rate escrow. And to the extent that Bitcoin

943
01:37:58,381 --> 01:38:04,062
is sent into the hash rate escrow, a native token is generated on the sidechain, which is a synthetic

944
01:38:04,062 --> 01:38:11,021
Bitcoin, meaning it's a token that isn't Bitcoin, but it is one for one redeemable with Bitcoin.

945
01:38:11,021 --> 01:38:18,462
And therefore, it is worth one Bitcoin. So it enables the Bitcoin economics of 21 million

946
01:38:18,462 --> 01:38:24,221
to remain the same, while enabling users to experience a different quality of software.

947
01:38:24,221 --> 01:38:30,302
So it's what drivechain does is enables Bitcoin's monetary policy to remain fixed.

948
01:38:30,302 --> 01:38:34,302
So it keeps the quantity of Bitcoin the same, but it makes their quality different

949
01:38:34,861 --> 01:38:39,422
by enabling these redeemable tokens to be issued that have the features of altcoins

950
01:38:39,422 --> 01:38:45,101
without the altcoins economics of monetary inflation and high volatility of purchasing

951
01:38:45,101 --> 01:38:49,342
power. Gotcha. Hey, no, I appreciate that explanation. That's definitely helpful.

952
01:38:49,981 --> 01:38:57,101
I was wondering, you know, maybe a follow up, you know, you say this allows Bitcoin to keep its,

953
01:38:57,101 --> 01:39:03,981
you know, 21 million hard cap. As it stands right now, it still will retain its 21 hard,

954
01:39:03,981 --> 01:39:09,741
you know, there's no BIP to increase the supply. Why do you believe that we need to increase the

955
01:39:09,741 --> 01:39:18,221
supply? I didn't speak that well. I said that it would when I when I said that what drivechain

956
01:39:18,221 --> 01:39:26,942
does is it enables the the 21 million hard cap to remain intact. What I meant there is that when

957
01:39:26,942 --> 01:39:34,621
drivechain is used, the users are locking up their Bitcoin in a hashrate escrow. And as a

958
01:39:34,621 --> 01:39:41,422
result, the users are receiving synthetic Bitcoin on the drivechains on these sidechains. And

959
01:39:42,302 --> 01:39:48,302
therefore, when I refer to the 21 million cap being preserved, I was referring to the quantity

960
01:39:48,302 --> 01:39:55,261
of circulating Bitcoin in the following sense, that when you send a Bitcoin to the hashrate escrow,

961
01:39:56,164 --> 01:40:02,244
you were you were removing it from circulation in a sense. And therefore, it is not a violation

962
01:40:02,244 --> 01:40:09,444
of the 21 million hard cap for the token to be generated on the sidechain that is a synthetic

963
01:40:09,444 --> 01:40:15,764
Bitcoin. So as an example, just in case I know you get it, but in case anyone doesn't get it,

964
01:40:15,764 --> 01:40:20,803
like suppose there's a privacy sidechain on Bitcoin called zSide and there is in the test

965
01:40:20,803 --> 01:40:27,044
software. So if people send one million Bitcoin into the hashrate escrow and they create one

966
01:40:27,044 --> 01:40:33,123
million zSide tokens. So there's a it's a synthetic Bitcoin on this sidechain that's

967
01:40:33,123 --> 01:40:38,884
worth one Bitcoin. There's one million of them now in this hypothetical. The total purchasing

968
01:40:38,884 --> 01:40:48,004
power of all those zSide tokens is one million Bitcoin. And this hasn't caused there to be 22

969
01:40:48,643 --> 01:40:54,164
million Bitcoin in circulation because one million Bitcoin have been removed from circulation in a

970
01:40:54,164 --> 01:41:00,164
sense by sitting in the hashrate escrow. And then if the zSide users are done with what they're

971
01:41:00,164 --> 01:41:04,964
doing, they send them back to the hashrate escrow and then they get their original Bitcoin. The Z

972
01:41:04,964 --> 01:41:10,884
side tokens are deleted from circulation through that process. So what drivechain does is, in a

973
01:41:10,884 --> 01:41:20,723
sense, maintain Bitcoin's monetary policy while increasing the variety of qualities that Bitcoin

974
01:41:20,723 --> 01:41:27,924
can have when it takes the form of the drivechain tokens, which is an opt in format where you don't

975
01:41:27,924 --> 01:41:33,043
have to opt into it. And if you do, you will receive a different feature set in terms of

976
01:41:33,043 --> 01:41:38,324
decentralization being less possibly, but scalability or privacy being more.

977
01:41:39,204 --> 01:41:45,363
So it's all about enabling Bitcoin users to get altcoin software without leaving Bitcoin's

978
01:41:45,363 --> 01:41:52,403
economics. We want to have the altcoin software such as scalability, Turing completeness, privacy

979
01:41:52,403 --> 01:41:59,604
or other software advantages and tradeoffs. We want to internalize that development and innovation to

980
01:41:59,604 --> 01:42:05,523
Bitcoin, making Bitcoin the one stop shop, making everyone happy. Everyone will be able to use

981
01:42:05,523 --> 01:42:11,444
Bitcoin and get any software they want. So the idea of drivechains is it requires a narrative

982
01:42:11,444 --> 01:42:16,323
change within Bitcoin's community. It's going to induce a change in narratives instead of saying

983
01:42:16,323 --> 01:42:24,004
altcoins are all scams. Instead, we recognize the truth, which is that some altcoin technology is

984
01:42:24,004 --> 01:42:29,763
legitimate and it would be better if it were available on Bitcoin. It would be better if

985
01:42:29,763 --> 01:42:37,204
Bitcoiners could opt in without leaving Bitcoin, opt in to larger blocks, to stronger fungibility,

986
01:42:37,204 --> 01:42:43,924
which is privacy, to Turing completeness for smart contracting. So it's all about bringing

987
01:42:43,924 --> 01:42:51,364
in the good altcoin tech. Now, of course, most altcoins aren't substantial, innovative technologies.

988
01:42:51,364 --> 01:42:55,444
Many of them are just Ponzi nomics. People buy a token and hope that others

989
01:42:56,004 --> 01:43:01,603
ape in and the greater fool makes the earlier adopters rich. That's like 99% of altcoins.

990
01:43:01,603 --> 01:43:07,043
But there is a few that are legitimate, like privacy tokens and large blockchains

991
01:43:07,844 --> 01:43:13,284
and large block blockchains and Turing complete, you know, smart contracting blockchains. Those

992
01:43:13,284 --> 01:43:19,043
protocols should be available to Bitcoiners, to the Bitcoiners who want to opt in and use

993
01:43:19,043 --> 01:43:24,243
those things, because as long as that's not possible, except in a federated sidechain,

994
01:43:24,243 --> 01:43:30,004
many Bitcoiners will leave and do altcoining. And it's that harms Bitcoin's value accrual

995
01:43:30,004 --> 01:43:34,564
and it reduces Bitcoin's miner revenue because we're missing out on those fees.

996
01:43:35,444 --> 01:43:38,004
Right. Yeah, no, I appreciate that. It really helps out.

997
01:43:39,683 --> 01:43:42,963
Sorry. Sorry, Super. You had a question. You had a question or you're going to say something I'll

998
01:43:42,963 --> 01:43:53,364
ask after. Yeah, I was going to bring up a point about what you just said about Turing completeness.

999
01:43:55,123 --> 01:44:03,204
I've never I've never seen any any popularly used contract that uses Turing complete properties of

1000
01:44:03,204 --> 01:44:14,564
the BBM or any other blockchain system. Are you aware of any any contract that actually even uses

1001
01:44:15,123 --> 01:44:17,203
like loops or anything like that?

1002
01:44:18,164 --> 01:44:22,963
No, what I'm referring to when I talk about the Turing completeness or the relatively greater

1003
01:44:22,963 --> 01:44:31,444
Turing completeness of, you know, Bitcoin's main rival is the fact that it seems to me,

1004
01:44:32,243 --> 01:44:39,284
not being a programmer like you, that there is a large amount of people who feel that Ethereum,

1005
01:44:39,284 --> 01:44:46,083
because of its technical foundations, affords developers greater flexibility and more flexibility

1006
01:44:46,164 --> 01:44:51,683
greater flexibility and potential for expressiveness of software than Bitcoin's

1007
01:44:51,683 --> 01:44:58,484
layer one does. And that's why it would be great if we had a drivechain, which is a clone of

1008
01:44:58,484 --> 01:45:07,284
Ethereum, as we do in the drivechain test software to to allow developers to use Bitcoin's economics,

1009
01:45:07,284 --> 01:45:13,203
Bitcoin's unit of account, and Bitcoin's miners to secure that sidechain rather than having those

1010
01:45:13,203 --> 01:45:19,923
same developers go to Ethereum to do what they want to do over there. Does that make any sense?

1011
01:45:21,764 --> 01:45:29,844
Yeah, it does. I did an analysis once of the functions that Ethereum has that I think are

1012
01:45:29,844 --> 01:45:35,284
the most used. The functions it has that Bitcoin doesn't, that are the most used in popular smart

1013
01:45:35,284 --> 01:45:42,564
contracts. And I narrowed it down to two, which are op bytes and op ballots. And I think those

1014
01:45:42,564 --> 01:45:48,724
are the ones that really make it so much easier to work on Ethereum. The op balance one lets you

1015
01:45:49,444 --> 01:45:55,044
make a contract that is only valid if you specify another Ethereum address and say,

1016
01:45:55,044 --> 01:45:59,604
like, this transaction can only go through if this other Ethereum address has this balance.

1017
01:46:00,324 --> 01:46:05,363
And Uniswap uses that to say, like, you only get my token if you send me 500 Ether first,

1018
01:46:05,363 --> 01:46:11,923
or whatever. And they can do non-interactive swaps that way. And then the other one's op byte,

1019
01:46:12,083 --> 01:46:17,604
which allows you to do transaction introspection, where you say stuff like, this transaction is only

1020
01:46:17,604 --> 01:46:23,523
valid if so-and-so provides this certain type of information to the contract. You can actually

1021
01:46:23,523 --> 01:46:28,643
expect what information they provide and make the contract valid or invalid based on that.

1022
01:46:28,643 --> 01:46:33,444
And we don't have things like those in Bitcoin. And those are the ones that I think people

1023
01:46:33,444 --> 01:46:38,963
actually use. I don't think they use the smart contracting features. So the idea of going after

1024
01:46:38,963 --> 01:46:44,324
those things seems like it's... I don't know what we would gain by going after putting loops in

1025
01:46:44,324 --> 01:46:49,523
Bitcoin script. But I think it would make it easier for developers to do Ethereum-like stuff on

1026
01:46:49,523 --> 01:46:55,044
Bitcoin are something equivalent to op byte and something equivalent to op balance. And then I

1027
01:46:55,044 --> 01:47:02,164
think that would attract developers back to Bitcoin, in my opinion. I agree with everything

1028
01:47:02,164 --> 01:47:07,923
you've said. When I talked about a drivechain that offers greater Turing completeness, what I

1029
01:47:07,923 --> 01:47:13,284
really meant, and I should have just said it this way, is a drivechain that offers everything

1030
01:47:13,284 --> 01:47:21,604
Ethereum offers. Because that's what the ETH side drivechain would be. It is a clone of Ethereum.

1031
01:47:22,243 --> 01:47:28,643
And you probably understand it 100 times better than I do. But it offers the fundamental features

1032
01:47:28,643 --> 01:47:35,683
of Ethereum because it's a clone of that software. So when I refer to greater Turing completeness,

1033
01:47:35,683 --> 01:47:40,324
I'm just referring to the main difference between Ethereum and Bitcoin. Maybe you can suggest to me

1034
01:47:40,963 --> 01:47:47,284
a phrase to use other than greater Turing completeness to differentiate between Bitcoin

1035
01:47:47,284 --> 01:47:52,803
and Ethereum. How else could I describe it rather than just saying a clone of Ethereum?

1036
01:47:52,803 --> 01:47:57,764
How can we refer to the drivechain that would be a clone of Ethereum in the same way that we refer

1037
01:47:57,764 --> 01:48:02,803
to the big block drivechain as a scalability drivechain and the privacy one as a fungibility

1038
01:48:02,803 --> 01:48:08,884
drivechain? So I was saying the Ethereum clone would be a drivechain that has greater Turing

1039
01:48:08,884 --> 01:48:18,803
completeness than layer one Bitcoin. How would you put it? Probably easier to develop on.

1040
01:48:19,764 --> 01:48:27,363
Maybe that might be the way to put it. Or maybe a more powerful, more opcodes.

1041
01:48:28,484 --> 01:48:31,844
I don't know. I don't have a good answer for what would be a good way to do it.

1042
01:48:31,844 --> 01:48:35,844
I'm still trying to come up with a way because I used to say Turing complete. And then after I

1043
01:48:35,844 --> 01:48:40,164
analyzed, I was like, no one uses the Turing complete functionality of Ethereum. It's too

1044
01:48:40,164 --> 01:48:45,924
expensive. But they do use these other functions. And when I looked at them, I was like, I would

1045
01:48:45,924 --> 01:48:49,924
like those functions. Thank you, Bitcoin. I was making stuff like there is some cool stuff you

1046
01:48:49,924 --> 01:48:55,284
can do with this. So that's my new perspective. It's like op byte and op balance are the things

1047
01:48:55,284 --> 01:48:58,323
that I think we want. But I don't know how to put that in a way that makes it

1048
01:48:59,124 --> 01:49:00,963
simple for other people to understand.

1049
01:49:02,563 --> 01:49:08,563
I want to point the audience to SuperTestNet's recent essay that he wrote in recent weeks

1050
01:49:09,203 --> 01:49:15,924
about BIP300, which is drivechain. It's in the nest. So you can go to that tweet in the nest

1051
01:49:16,484 --> 01:49:25,284
and open his article and see his long form thoughts on the project. Specifically,

1052
01:49:25,284 --> 01:49:32,804
he explores some of the major objections and skepticism around drivechain and talks about

1053
01:49:34,403 --> 01:49:37,364
why he thinks that there is a good response to those objections.

1054
01:49:38,563 --> 01:49:41,284
What's the nest? I don't see anything called the nest.

1055
01:49:42,083 --> 01:49:46,724
The nest is the tweets that I've posted at the top of this Twitter space.

1056
01:49:47,364 --> 01:49:53,523
So I've posted six tweets. The most recent one is a tweet of yours. If you look at the Twitter

1057
01:49:53,523 --> 01:49:59,203
space and you see where I'm speaking is LayerTwo Labs, you're speaking SuperTestNet, we're in

1058
01:49:59,203 --> 01:50:06,323
the top row. Right above that row of speakers is the nest, which is tweets that have been posted

1059
01:50:07,124 --> 01:50:15,443
below the title of the spaces. I only see five and none of them are or whatever.

1060
01:50:18,724 --> 01:50:21,604
There might be a delay. I mean, I posted it like 10 minutes ago.

1061
01:50:22,083 --> 01:50:29,044
So if you scroll through... Okay. You know, Super, sometimes there's glitches where in spaces people

1062
01:50:29,044 --> 01:50:32,643
can't hear each other who are on stage, but the audience can hear you. So it could just be a

1063
01:50:32,643 --> 01:50:41,124
glitch. Maybe it doesn't show you your own tweets and it sort of... What's the author's name?

1064
01:50:41,763 --> 01:50:45,523
Kafka. Orwellian.

1065
01:50:45,523 --> 01:50:50,484
Yeah. Or like sometimes you can't see your own tweets, but you can see everyone else's.

1066
01:50:52,484 --> 01:50:55,924
So do you mind if I ask another question? I really appreciate the space, by the way,

1067
01:50:55,924 --> 01:50:57,203
and I love the discussion.

1068
01:50:57,203 --> 01:50:57,684
I would love it.

1069
01:50:57,684 --> 01:51:01,684
We're not here to argue, right? We're just here to chat. So I appreciate it.

1070
01:51:02,963 --> 01:51:03,844
Totally.

1071
01:51:03,844 --> 01:51:12,164
I guess one other question is, for Bitcoin's sake, you mentioned privacy and stuff like that. And

1072
01:51:12,484 --> 01:51:20,643
I'm kind of under the impression that that might come on, say, an L2 or taproot-enabled

1073
01:51:21,523 --> 01:51:29,124
better privacy in terms of on-chain data, because a multi-sig looks the same as a regular transaction

1074
01:51:29,124 --> 01:51:34,883
and stuff like that. They've kind of obfuscated it a little bit. I guess, what's the difference

1075
01:51:35,364 --> 01:51:44,883
between this and having privacy on an L2? And then maybe as well as, what does drivechain

1076
01:51:44,883 --> 01:51:49,684
help Bitcoin with, right? Because like, yeah, it might help miners out with fees and stuff,

1077
01:51:50,244 --> 01:51:55,684
but what's maybe the main concern and why do you think we need to implement this? Go ahead.

1078
01:51:56,643 --> 01:52:04,724
So the Zcash technology has advanced a lot in recent years. And when you're using Zcash,

1079
01:52:06,244 --> 01:52:12,963
you conceal completely the sender, the recipient, and the amount. This is not the case with Bitcoin

1080
01:52:12,963 --> 01:52:20,083
layer one, where there is some degree of traceability. Of course, Bitcoiners who are

1081
01:52:20,563 --> 01:52:32,323
very sophisticated can use Tor and CoinJoin and Lightning and other things to attempt to conceal

1082
01:52:32,323 --> 01:52:40,883
their transactions. However, the market share of Bitcoin among privacy-oriented blockchain users,

1083
01:52:40,883 --> 01:52:47,763
such as the dark markets and other markets, the market share of Bitcoin has declined in recent

1084
01:52:47,763 --> 01:52:57,844
years as these technologies from Monero and Zcash have improved. So if Bitcoin had a sidechain that

1085
01:52:57,844 --> 01:53:07,523
was a clone of Zcash and Monero, then those sidechains would possibly be successful in

1086
01:53:07,523 --> 01:53:15,044
terms of adoption. So people who want strong privacy might prefer to use Bitcoin's unit

1087
01:53:15,044 --> 01:53:21,203
of account for its low volatility of purchasing power when that unit of account has the software

1088
01:53:21,203 --> 01:53:27,203
features of strong fungibility that are made available by Monero and Zcash technology.

1089
01:53:27,844 --> 01:53:36,244
So the goal here is to bring those blockchain use cases of strong fungibility into the Bitcoin

1090
01:53:36,244 --> 01:53:44,643
economy rather than having these dark markets be altcoin markets. Because one of the original

1091
01:53:44,643 --> 01:53:50,804
inspirations that Satoshi had for electronic peer-to-peer cash is that it wouldn't be lacking

1092
01:53:50,804 --> 01:53:57,364
in anonymity, but instead he wrote again and again how users can be anonymous and users can have

1093
01:53:57,364 --> 01:54:07,443
privacy. So Zcash is frankly more private than Bitcoin in the view of some thinkers. And I find

1094
01:54:07,443 --> 01:54:13,124
that to be compelling. And I also find it to be compelling that it would be good if Bitcoiners

1095
01:54:13,284 --> 01:54:18,244
opt into that rather than having the Bitcoin community simply abandon

1096
01:54:19,763 --> 01:54:28,003
anonymity and privacy as values and instead just hope that a fully doxed Bitcoin experience

1097
01:54:28,003 --> 01:54:31,763
is an acceptable future. I feel like that would be kind of giving up.

1098
01:54:31,763 --> 01:54:36,724
No, yeah, I agree that privacy is important and I agree we're trying to find solutions for that.

1099
01:54:36,724 --> 01:54:49,044
Are you not a fan of L2 privacy implementations? Obviously I'm not a big coder guy, so I don't know

1100
01:54:49,604 --> 01:54:54,484
the details of how that would exist. But I'm under the impression that if we're on a Bitcoin

1101
01:54:54,484 --> 01:54:57,203
standard, a lot of people... It's called drivechain. That's how we get it.

1102
01:54:58,003 --> 01:55:01,604
Well, obviously I'm under the impression like if we're on a Bitcoin standard,

1103
01:55:01,604 --> 01:55:05,284
a lot of people aren't going to be even interacting on L1 because it's going to be

1104
01:55:05,284 --> 01:55:10,244
very costly. So that's why they're being, quote unquote, pushed up to these higher layers.

1105
01:55:12,323 --> 01:55:19,203
In your opinion, do you not see privacy on higher layers, a route to take and

1106
01:55:19,203 --> 01:55:23,284
drivechain is better for that? Or yeah, where do you stand there, I guess?

1107
01:55:26,244 --> 01:55:34,083
Yeah, I totally see in the long run Bitcoin being layered, layered money. And money itself is not a

1108
01:55:34,563 --> 01:55:39,924
monolithic category. There can be money that's more private. There can be money that's more

1109
01:55:39,924 --> 01:55:46,164
scalable. For example, in our money system today, if I mentioned the word money, you might have in

1110
01:55:46,164 --> 01:55:52,244
mind physical coins. You might have in mind a physical check, a paper check. You might have

1111
01:55:52,244 --> 01:55:59,284
in mind money at a bank account. So there's different kinds of money there. There's custodial

1112
01:55:59,284 --> 01:56:04,963
money and there's bearer assets like coins and bills. And there's, you know, the bills can be

1113
01:56:04,963 --> 01:56:10,643
credit money or they can be, you know, there's all different kinds of money and it has different

1114
01:56:10,643 --> 01:56:15,604
layers. And Bitcoin, I think, will be the same where people could, when they refer to like,

1115
01:56:15,604 --> 01:56:20,244
you know, sending Bitcoin around, in the far future, I think if drivechain is adopted and

1116
01:56:20,244 --> 01:56:25,763
very successful, they will be referring either to layer one Bitcoin for a large transaction

1117
01:56:25,763 --> 01:56:33,763
or they'll be referring to a layer two drivechain for a low fee transaction, or they'll be

1118
01:56:33,763 --> 01:56:42,403
referring to a privacy drivechain for an anonymous transaction. So money will have layers. And the

1119
01:56:42,403 --> 01:56:48,003
key insight with drivechain is that on every drivechain, the native token, the main token

1120
01:56:48,003 --> 01:56:53,364
is going to be a synthetic Bitcoin. So there isn't going to be speculation on altcoins. Instead,

1121
01:56:53,364 --> 01:57:01,043
people will hold a synthetic Bitcoin, meaning a cryptocurrency that's 100% backed by Bitcoin

1122
01:57:01,043 --> 01:57:05,844
in a verifiable on-chain manner, because there's Bitcoin held in the hash rate escrow

1123
01:57:05,844 --> 01:57:11,923
that is used to generate the token on the sidechain that is redeemable for that Bitcoin held

1124
01:57:11,923 --> 01:57:18,004
in the hash rate escrow. So what drivechain is all about is giving us unlimited potential

1125
01:57:18,083 --> 01:57:25,124
to copy the software of altcoins into Bitcoin's ecosystem so that Bitcoin can accrue that value

1126
01:57:25,683 --> 01:57:30,644
and accrue that transaction fee revenue. So it enables Bitcoin economically to grow.

1127
01:57:30,644 --> 01:57:37,764
In my personal view, drivechain is an economic upgrade for Bitcoin. It's fundamentally an

1128
01:57:37,764 --> 01:57:43,203
economic advantage for Bitcoin that anything built on an altcoin can be copied into Bitcoin's

1129
01:57:44,163 --> 01:57:48,404
space. And then Bitcoin can accrue that value, those users, that development,

1130
01:57:48,404 --> 01:57:54,244
that future, rather than having some altcoin grow and grow and grow. And eventually that altcoin

1131
01:57:54,244 --> 01:57:59,524
will be the biggest and then it will be the one that has most of the narratives. And if that

1132
01:57:59,524 --> 01:58:05,764
altcoin were to be bigger than Bitcoin and have a design similar to drivechain, then ultimately

1133
01:58:05,764 --> 01:58:12,803
that altcoin would render Bitcoin a lesser relevant and more of like a collectible,

1134
01:58:13,283 --> 01:58:19,764
you know, smaller community. I think that Bitcoin succeeding means that Bitcoin develops the drive

1135
01:58:19,764 --> 01:58:26,724
chain approach, which is that it has the powerful ability to engage in versatile innovations on

1136
01:58:26,724 --> 01:58:34,484
layer twos. The whole, and by design, drivechain is designed to have as small of a possible impact

1137
01:58:35,283 --> 01:58:41,443
on layer one, while at the same time bringing in fees to layer one miners,

1138
01:58:42,004 --> 01:58:47,443
potentially at a very voluminous rate, strengthening Bitcoin. And all the demand for

1139
01:58:47,443 --> 01:58:54,083
the synthetic Bitcoin on the drivechains is demand for Bitcoin layer one. So it accrues value

1140
01:58:54,083 --> 01:59:00,724
to Bitcoin's token and market cap by, you know, having people like, it's just an amazing and

1141
01:59:00,724 --> 01:59:03,524
exciting thing. I think people are getting it more and more every day.

1142
01:59:05,043 --> 01:59:12,244
Yeah, no, I appreciate it. That's a great stance. And I'm still learning about drivechain and I

1143
01:59:12,244 --> 01:59:18,724
don't exactly know where I stand, but I appreciate all the points here, man. I actually jumped up

1144
01:59:18,724 --> 01:59:21,683
because, and I know we have other people in here, so it's going to be my last question.

1145
01:59:23,604 --> 01:59:29,604
You guys are talking about ordinals and inscriptions and that kind of deal. You know,

1146
01:59:29,604 --> 01:59:34,083
we're talking about people that used to be in altcoins and now they're, you know,

1147
01:59:34,083 --> 01:59:41,923
quote unquote inscribing or they want to call minting their JPEGs and files on Bitcoin. How do

1148
01:59:41,923 --> 01:59:47,203
you, you know, that didn't require a change of BIP or anything. I guess that that was enabled

1149
01:59:47,203 --> 01:59:53,043
through Taproot a little bit through the witness data. But just curious your thoughts on that

1150
01:59:53,043 --> 01:59:58,484
approach, because we are seeing, obviously people are, you know, inscribing a bunch of these things

1151
01:59:58,484 --> 02:00:01,764
and they're trying to create projects and blah, blah, blah.

1152
02:00:02,731 --> 02:00:04,251
Yeah, just curious your thoughts on it, I guess.

1153
02:00:09,011 --> 02:00:19,571
Well, it's a great question because the recent conversation on ordinals has raised a lot of interesting topics that are very relevant to drivechain.

1154
02:00:19,571 --> 02:00:45,091
For example, in the drivechain community, there is strong support for the notion that a even smaller block size for Bitcoin layer one would be very valuable to Bitcoin, because it would enable the ordinary user to have an inexpensive node by reducing the rate of growth of the blockchain so that the amount of cost associated with having an expensive node would be significantly reduced.

1155
02:00:49,571 --> 02:01:08,930
So we don't want to have a fastly growing file size for the full nodes.

1156
02:01:09,970 --> 02:01:10,330
Yeah.

1157
02:01:10,330 --> 02:01:22,690
So this ordinals thing has raised this question of like, it also ordinals talks about the ordinals discourse includes discussion of how much data is in a full node.

1158
02:01:22,970 --> 02:01:24,010
So that's one topic.

1159
02:01:24,051 --> 02:01:36,891
Another topic is, are people putting a lot of data into the blockchain without paying commensurately for their load that they're generating for the blockchain?

1160
02:01:37,650 --> 02:01:41,690
So it's a crypto economic discussion of how expensive is it to have a full node?

1161
02:01:41,970 --> 02:01:49,690
How fast are the full nodes growing in size relative to the cost of this hardware associated with that data and bandwidth?

1162
02:01:50,290 --> 02:02:03,610
And it all fits together with drivechain, because on drivechain, I think we would see a sidechain focused on NFTs, like there is this discussion of that on the drivechain.info website, drivechain.info.

1163
02:02:04,091 --> 02:02:12,691
There is a, you know, project number five is called BitAssets, and it says counterparty like, but without touching L1 block space.

1164
02:02:13,691 --> 02:02:22,531
And it's, I think this would be the sidechain that would be, you know, facilitating NFTs and other things like that.

1165
02:02:23,051 --> 02:02:25,850
So I think we would see that activity move away from layer one.

1166
02:02:26,171 --> 02:02:26,570
Gotcha.

1167
02:02:27,130 --> 02:02:28,770
Yeah, no, it's definitely interesting.

1168
02:02:28,770 --> 02:02:37,731
I just, I just see a lot of old coiners, you know, quote unquote, shit coiners moving over to Bitcoin through these inscriptions.

1169
02:02:37,731 --> 02:02:39,850
So it is interesting to me.

1170
02:02:41,171 --> 02:02:44,331
I guess, I guess I lost my train of thought here.

1171
02:02:44,331 --> 02:02:45,331
Sorry, give me a second.

1172
02:02:45,850 --> 02:02:46,891
Let maybe let someone else go.

1173
02:02:46,891 --> 02:02:47,490
I'll come back to it.

1174
02:02:53,611 --> 02:02:57,570
It is a very interesting discourse that we've heard in the Ordinals conversations.

1175
02:02:57,650 --> 02:02:58,010
Yeah.

1176
02:02:58,130 --> 02:03:07,051
Oh, it's, it's like, it's very, it's very important that we make sure that the cost associated with having a full node doesn't grow too fast.

1177
02:03:07,611 --> 02:03:16,130
If the blocks are large, then with every passing day, it becomes perhaps more costly for the ordinary person to have a full node.

1178
02:03:16,410 --> 02:03:24,370
Having a full node be inexpensive is one of the key reasons why it's great that layer one remains small block.

1179
02:03:24,930 --> 02:03:50,930
And it's a very complicated topic, but I think we should err on the side of ensuring decentralization and ensuring inexpensiveness of the full nodes so that ordinary people can validate the blockchain by having a full node, perhaps not only on their laptop, but in the case of many poor people around the world, they could be having a full node on their phone in the future if the block size were smaller.

1180
02:03:51,051 --> 02:03:51,410
Yeah.

1181
02:03:51,611 --> 02:04:07,010
And that's, that's the, that's a position which I think some of the coolest thinkers, in my personal opinion, in Bitcoin have is they would, it would be very valuable to maintain the blocks being small enough so that people can have a full node on their phone.

1182
02:04:07,010 --> 02:04:28,250
And I feel that drivechain is harmonious with that view, because it is a vision for Bitcoin, which has a very expressive and high potential view of the, of the value to Bitcoiners of being able to opt into a sidechain and have those sidechains bringing fees to layer one miners to secure layer one.

1183
02:04:28,250 --> 02:04:41,290
So it's a harmonious relationship between the sidechains and the mainchain and having smaller blocks in the mainchain, I think, works very well if we develop at the same time, the sidechain capabilities.

1184
02:04:41,530 --> 02:04:42,731
So there's like a harmony there.

1185
02:04:42,731 --> 02:04:45,211
It's very synergistic and collaborative.

1186
02:04:45,410 --> 02:04:48,810
Some people will prefer the mainchain and maybe never use a drivechain.

1187
02:04:49,290 --> 02:04:53,491
Some people will primarily use a drivechain and not touch the mainchain.

1188
02:04:53,491 --> 02:05:16,451
But by having a system, an architecture, which makes them both, both of those sets of people that are perhaps not entirely overlapping, collaborate, collaborate, by having a single set of miners and a single unit of account between the sidechain and the mainchain, that creates a very dynamic, collaborative and productive arrangement.

1189
02:05:17,451 --> 02:05:30,970
I think it's very capitalistic because that's what capitalism is all about, is having a shared economy where people are doing different things, but there's a network effect of using a single money, a single unit of account.

1190
02:05:32,051 --> 02:05:33,331
It's pretty exciting to me.

1191
02:05:33,331 --> 02:05:34,451
Yeah, no, I appreciate it.

1192
02:05:34,451 --> 02:05:34,850
Gotcha.

1193
02:05:35,010 --> 02:05:38,290
You mentioned storage and storage concerns.

1194
02:05:38,690 --> 02:05:41,570
Now, obviously, blocks can only be four megabytes.

1195
02:05:41,891 --> 02:05:52,611
Obviously, SegWit didn't, you know, like up to four megabytes, you know, obviously at the time they weren't being filled like they are being now with, you know, JPEGs and other files.

1196
02:05:54,051 --> 02:06:07,771
But, you know, like what's what's the major concern there, considering that the blocks are still four megabytes and you can still run a one terabyte hard drive for the next maybe one or two years and still be OK?

1197
02:06:08,570 --> 02:06:12,371
I think I saw like a 12 terabyte hard drive going for like 180 bucks.

1198
02:06:13,010 --> 02:06:15,810
You're right. It might not be on a phone per se right now.

1199
02:06:15,810 --> 02:06:25,090
But I mean, if we were on a Bitcoin standard, we'd see, you know, between two, three potentially higher megabyte blocks regardless.

1200
02:06:25,130 --> 02:06:37,690
So how how does this have an effect on that if block height or block space is still limited, of course, and people can still run nodes on a Raspberry Pi and a one terabyte hard drive?

1201
02:06:39,290 --> 02:06:41,410
Super, please chime in.

1202
02:06:41,530 --> 02:06:43,810
You can you can explain these things far better than I can.

1203
02:06:44,810 --> 02:06:51,491
Yeah. So the first time that I sunk, I'm not sure if it was the past tense of sink, is it sinked or sunk?

1204
02:06:52,051 --> 02:07:00,491
But the first time I sunk a node was in 2017, and I did it on a very low powered device.

1205
02:07:00,970 --> 02:07:06,690
And it took it took about two weeks to to fully synchronize the blockchain.

1206
02:07:07,651 --> 02:07:09,051
And then and then SegWit happened.

1207
02:07:09,771 --> 02:07:21,250
And once SegWit happened, we started seeing bigger blocks and they increased three different factors in the in the resource requirements for running a node.

1208
02:07:21,290 --> 02:07:24,690
They increased the amount of storage that the blockchain actually takes.

1209
02:07:25,090 --> 02:07:30,931
They increased the size of the packets that you're receiving along the wire and thus the bandwidth that you're using.

1210
02:07:31,290 --> 02:07:39,331
And they increased the computational resources required to validate each block because there are more transactions and more signatures and stuff to validate.

1211
02:07:40,010 --> 02:07:45,211
So your compute went up, your compute costs went up, your storage costs went up and your bandwidth costs went up.

1212
02:07:45,970 --> 02:07:58,530
And because of that, it's a struggle now, at least for me, if I try and synchronize a node on my Raspberry Pi, it takes a lot longer now and it just sucks.

1213
02:07:58,891 --> 02:08:06,931
So that's why I think having it wasn't so bad when SegWit first came out and we barely ever had a block that was more than one megabyte.

1214
02:08:07,290 --> 02:08:09,771
But now most blocks are more than a megabyte.

1215
02:08:10,331 --> 02:08:12,491
And so it just makes it hard.

1216
02:08:12,771 --> 02:08:19,171
And that's why I want to go back to having smaller blocks again, because it's just hard for me to sink a node down.

1217
02:08:19,371 --> 02:08:22,690
So the argument here is that we need to actually decrease block size.

1218
02:08:22,731 --> 02:08:24,771
Is that the thing?

1219
02:08:24,810 --> 02:08:28,331
Because, you know, obviously, this is I mean, need to is the wrong word.

1220
02:08:28,570 --> 02:08:31,410
I would I would like to I would like to.

1221
02:08:31,410 --> 02:08:43,011
Yeah, because it would put us it could put us back on the trajectory of like where the difficulty that it that it would have been to sink a node if we had remained at one megabyte.

1222
02:08:43,410 --> 02:08:50,171
We could we can only re-approach that level of difficulty where we would have been at at this point if we make them smaller again.

1223
02:08:50,571 --> 02:08:51,650
So I would like to do that.

1224
02:08:51,691 --> 02:08:52,691
It's not a need thing.

1225
02:08:53,171 --> 02:08:54,491
I mean, I can still do it.

1226
02:08:54,491 --> 02:08:59,850
It's just it's, you know, my little pie smokes now when it tries to sink, not literally, but, you know, it's harder.

1227
02:08:59,850 --> 02:09:01,970
Yeah, I would like it to not have trouble.

1228
02:09:01,970 --> 02:09:03,330
It took me about a day to sink.

1229
02:09:03,530 --> 02:09:07,890
And and again, it's still I needed a Raspberry Pi and a one terabyte hard drive.

1230
02:09:08,410 --> 02:09:17,210
So what could we argue that it is slightly subjective that we won't have enough storage base long term to store this?

1231
02:09:17,210 --> 02:09:23,210
Because, again, four megabytes, of course, is more than you know, it's four times more than a one megabyte block.

1232
02:09:24,051 --> 02:09:27,611
But the things that are being implemented are still within that block size.

1233
02:09:27,611 --> 02:09:29,450
We're not looking to increase the block size.

1234
02:09:29,811 --> 02:09:32,650
You know, we have a specific block size currently.

1235
02:09:33,131 --> 02:09:39,850
So are we saying that SegWit was the quote unquote original sin and that we should have just stuck with one megabyte blocks?

1236
02:09:40,650 --> 02:09:50,491
You know, I just don't you know, whether we had these inscriptions or not, we still on a Bitcoin standard would have hopefully full blocks.

1237
02:09:50,530 --> 02:09:53,611
And that would still require a lot of storage with with SegWit.

1238
02:09:56,811 --> 02:10:00,330
Yeah, I don't think there were two parts of SegWit.

1239
02:10:00,330 --> 02:10:10,731
There was the decision to put the witness data in a separate separate place, and then there was a decision to increase the block size now that we could hide this extra data from old nodes.

1240
02:10:11,131 --> 02:10:17,371
And I think SegWit was fine, like just the part of putting the separating the signatures and putting them in this witness section.

1241
02:10:17,691 --> 02:10:21,210
But the increase of the block size, I think that was that was a sin.

1242
02:10:21,210 --> 02:10:22,251
So not literally.

1243
02:10:22,251 --> 02:10:25,611
But yeah, I would like to undo that part.

1244
02:10:26,011 --> 02:10:28,571
Keep SegWit, but undo the block size.

1245
02:10:29,051 --> 02:10:30,011
That'd be my preference.

1246
02:10:30,011 --> 02:10:30,251
Awesome.

1247
02:10:30,251 --> 02:10:31,051
Thanks for your input, man.

1248
02:10:31,051 --> 02:10:31,530
Appreciate it.

1249
02:10:33,131 --> 02:10:33,931
Hey, Luke.

1250
02:10:33,931 --> 02:10:35,530
Thanks for joining the stage.

1251
02:10:35,530 --> 02:10:36,811
Welcome here.

1252
02:10:36,811 --> 02:10:37,691
I'm Henry.

1253
02:10:37,691 --> 02:10:38,970
I work for Paul.

1254
02:10:38,970 --> 02:10:42,491
And please share your thoughts on any topic that we've been discussing if you'd like to.

1255
02:10:42,811 --> 02:10:52,890
It might not be so much tied in with drivechains, but I would say the so-called original sin would be the hard fork in 2013 when we increased it to one meg.

1256
02:10:55,450 --> 02:10:56,890
Could you elaborate on that a little bit?

1257
02:10:56,890 --> 02:10:58,011
Tell me tell me more.

1258
02:10:58,011 --> 02:11:00,090
What's what was it before it was one megabyte?

1259
02:11:01,290 --> 02:11:07,290
There was a limit more like SegWit's weight, but it was more or less around 500k per block.

1260
02:11:07,850 --> 02:11:09,131
That's very interesting.

1261
02:11:09,131 --> 02:11:28,571
So if I hear you correctly, you're saying that very early in Bitcoin's history, the correct, most favorable rate of data accrual to the blockchain was achieved and later, the increase in that rate of data accrual was not favorable.

1262
02:11:30,090 --> 02:11:30,571
Right.

1263
02:11:30,811 --> 02:11:38,890
Actually, even when it was technically able to get around 500k, there was also a soft limit on the mining code of 250k.

1264
02:11:41,131 --> 02:11:58,890
Luke, if I may ask, are you are you sympathetic to any extent to the notion that I was speaking about before you joined the notion that it would be harmonious to achieve a smaller rate of data accrual in a blockchain?

1265
02:11:59,051 --> 02:12:16,811
Data accrual, in other words, shrink the block size, but at the same time or roughly around the same time, expand the the potential of sidechains so that we're not just reducing layer one, but at the same time, increasing the potential of layer twos.

1266
02:12:17,131 --> 02:12:35,131
And that could help with the with ensuring an adequate rate of income to the miners to secure the network and also a increase in the possibilities for users to opt in to sidechains for their larger blocks if they if they choose to.

1267
02:12:35,210 --> 02:12:40,890
So giving, you know, in kind of a Milton Friedman sense of things, let the consumer decide.

1268
02:12:41,371 --> 02:12:53,850
And by letting the Bitcoin consumer decide, we retain within the Bitcoin community, in a sense, those users rather than see them leave Bitcoin to do what could be done as a sidechain.

1269
02:12:54,011 --> 02:12:55,530
Are you sympathetic to that notion?

1270
02:12:56,410 --> 02:13:02,811
Kind of. My main concern is that users need to understand the security tradeoffs of that decision.

1271
02:13:05,611 --> 02:13:06,731
Yes, absolutely.

1272
02:13:06,890 --> 02:13:07,850
That's exactly right.

1273
02:13:08,491 --> 02:13:12,491
Every drivechain, if they were to exist, would have tradeoffs.

1274
02:13:12,811 --> 02:13:24,650
They would be in some ways inferior to the experience a person has on Bitcoin main chain, especially things like decentralization and security.

1275
02:13:25,611 --> 02:13:27,290
So absolutely.

1276
02:13:27,290 --> 02:13:28,330
You're 100 percent right.

1277
02:13:28,650 --> 02:13:39,850
It would be it's very important that the articulation of the benefits of the drivechains, each of them is accompanied by disclosure and awareness of the risks.

1278
02:13:40,731 --> 02:13:41,770
I totally agree.

1279
02:13:42,011 --> 02:13:45,691
An informed consumer is is much better than an uninformed one.

1280
02:13:46,011 --> 02:13:46,491
Yeah.

1281
02:13:48,330 --> 02:13:49,931
Joe, chime in if you'd like.

1282
02:13:50,251 --> 02:13:51,210
Thanks for joining again.

1283
02:13:51,850 --> 02:13:54,171
Hey, I hope my audience with me again.

1284
02:13:54,890 --> 02:13:56,410
It's a question for Luke.

1285
02:13:58,090 --> 02:14:06,090
It would seem like a good compromise position here, then, would just be like, don't make it official software, disclaimers everywhere.

1286
02:14:06,890 --> 02:14:09,371
Make it very, very clear, just like with Satoshi Dice.

1287
02:14:10,171 --> 02:14:14,811
We knew it wasn't necessarily endorsed by any developers.

1288
02:14:14,970 --> 02:14:15,931
It's a big gamble.

1289
02:14:16,650 --> 02:14:18,410
And that was very clear from the beginning.

1290
02:14:18,410 --> 02:14:30,491
So it would seem like there shouldn't be a problem from cautious, conservative dance, Bitcoin Core dance on, you know, allowing this to go forward.

1291
02:14:36,330 --> 02:14:37,450
I missed the question.

1292
02:14:40,650 --> 02:14:41,931
I didn't catch that, sorry.

1293
02:14:42,970 --> 02:14:45,051
He didn't say what his question was.

1294
02:14:45,530 --> 02:14:45,770
Yeah.

1295
02:14:45,770 --> 02:14:47,850
Could you could you state your question again louder and more?

1296
02:14:47,931 --> 02:14:48,090
Sure.

1297
02:14:48,090 --> 02:14:49,051
Maybe that would be great.

1298
02:14:49,051 --> 02:14:49,530
Thanks.

1299
02:14:49,530 --> 02:14:49,850
Yeah, yeah.

1300
02:14:49,850 --> 02:14:50,491
Sorry, guys.

1301
02:14:50,491 --> 02:14:54,011
Um, yeah, no, I'm just saying that by analogy to Satoshi Dice, right?

1302
02:14:54,011 --> 02:15:00,811
Like it wasn't endorsed by Luke or any core dev, but it was a way to gamble as your Bitcoin.

1303
02:15:01,850 --> 02:15:04,571
Why can't just think about drivechain like that, right?

1304
02:15:04,571 --> 02:15:06,811
It's just it could be gambling with your Bitcoin.

1305
02:15:06,811 --> 02:15:07,770
That's all.

1306
02:15:07,770 --> 02:15:11,611
But, you know, it's not implied that it's endorsed just because it's allowed.

1307
02:15:12,571 --> 02:15:18,330
I wouldn't think that would be a good selling point, especially since Satoshi Dice was an attack on Bitcoin.

1308
02:15:20,731 --> 02:15:27,850
I if I don't remind me about Satoshi Dice, that was a custodial experience for Bitcoiners, correct?

1309
02:15:27,850 --> 02:15:29,530
Not a not an open.

1310
02:15:30,811 --> 02:15:41,530
No, they were essentially tricking gamblers into making all these tiny transactions and then using one Satoshi output sent back as a indication of whether or not

1311
02:15:41,691 --> 02:15:42,571
they won or lost.

1312
02:15:44,811 --> 02:15:46,811
Yeah, it was totally not custodial.

1313
02:15:46,811 --> 02:15:57,290
And I'm just trying to make that analogy, like if we put caveats everywhere, you know, with the 300 and 301, then it's not like, you know, there's any

1314
02:15:58,171 --> 02:16:05,530
Luke has to worry that it's on him that, you know, or any of the Bitcoin devs have to worry that if this screws up that it's their fault.

1315
02:16:05,530 --> 02:16:07,691
So I'm just trying to think of this as a.

1316
02:16:07,691 --> 02:16:13,450
Yeah, I think that makes you too far on the extreme of overstating how unsafe it is.

1317
02:16:16,491 --> 02:16:17,371
Yeah, yeah, sure, sure.

1318
02:16:19,051 --> 02:16:30,090
Yeah, the security of of transactions on a drivechain would depend on the fee rate of the, you know, the fees of the transactions on the drivechain.

1319
02:16:30,090 --> 02:16:34,491
So that's one aspect of security in terms of double spending and whatnot.

1320
02:16:34,491 --> 02:17:04,410
And then 51 percent of the miners are entrusted with, you know, properly managing the drivechain, which can be viewed as an advantage, because if a drivechain were to interfere with other drivechains or with Bitcoin main chain, if a drivechain were to somehow lower the value of Bitcoin by creating some kind of problem, if there were this problematic drivechain, then the community would be able to express its will to discontinue the drivechain through the miners, potentially.

1321
02:17:04,811 --> 02:17:12,491
So the nature of the miners role in the maintenance of drivechains can be understood as a strength in that way.

1322
02:17:13,371 --> 02:17:23,371
So if there is a problematic drivechain or one that's lowering the value of Bitcoin, then the community has the mechanism through the miners to discontinue it.

1323
02:17:23,371 --> 02:17:35,531
But of course, everything you've both said is right about there being a set of benefits as well as tradeoffs.

1324
02:17:37,850 --> 02:17:52,411
When users choose to opt into a sidechain that's a drivechain, just like there are tradeoffs with the current format, which is where the users only have the option to use a federated peg sidechain.

1325
02:17:52,651 --> 02:18:13,850
So with a federated peg, it's like sending your Bitcoin to Coinbase, one could argue, because if you send your Bitcoin to Coinbase, you're trusting that the people who are controlling that money are going to do it properly and hopefully not be arrested or coerced in some kind of bad outcome.

1326
02:18:14,570 --> 02:18:23,611
So personally, I like the idea that the miners are in control. It's a huge multitude of parties, lots of money at stake, lots of profit motive to do the best thing for Bitcoin.

1327
02:18:24,570 --> 02:18:42,570
I mean, to be frank, the drivechains are just a very, very large federated sidechain without well-defined members and without some of the guarantees that the legal system might actually do to help a federated sidechain.

1328
02:18:43,371 --> 02:18:50,651
But isn't the guarantees of the legal system not part of the ethos of Bitcoin originally?

1329
02:18:50,651 --> 02:18:54,330
We're trying to have something which is arising through incentives.

1330
02:18:54,330 --> 02:18:59,131
As Satoshi himself wrote, it's all based on incentives, not recourse.

1331
02:18:59,210 --> 02:19:20,411
So what he meant there is, in my personal opinion, that we're trying to have a natural market-based emergent order and emergent incentive compatibility without using the fiat system of socially democratically elected coercive forces to enforce the property rights.

1332
02:19:20,411 --> 02:19:22,411
Does that feel right to you?

1333
02:19:22,731 --> 02:19:32,731
I agree. But the legal system benefit of the traditional federated sidechain is strictly in addition to everything else that a drivechain would already have.

1334
02:19:32,731 --> 02:19:40,731
I'd also like to point out, when we talk about incentives, yeah, we're designing a system that's based around incentives.

1335
02:19:40,731 --> 02:19:44,970
And whether we like it or not, some people are going to have an incentive of not wanting to get arrested.

1336
02:19:45,531 --> 02:19:52,570
As we've even seen in this space, people have been wondering about securities laws and stuff.

1337
02:19:52,570 --> 02:19:54,570
That's part of the incentives that we have to deal with.

1338
02:19:54,570 --> 02:20:00,011
And systems that we make have to be robust in the face of counter-incentives from the legal system.

1339
02:20:00,011 --> 02:20:04,011
Or at least, I would like to make systems that are robust in the face of that.

1340
02:20:05,904 --> 02:20:11,264
What we've seen so far with federated peg sidechains is arguably a low rate of adoption.

1341
02:20:11,824 --> 02:20:17,984
There is only about $100 million in those sidechains. Meanwhile, some altcoins have

1342
02:20:17,984 --> 02:20:24,544
billions of dollars of value. I feel it would be great for the chances of Bitcoinization,

1343
02:20:26,784 --> 02:20:33,344
for the growth of Bitcoin's network effect, for it to be not competing with those altcoins,

1344
02:20:33,344 --> 02:20:39,104
but instead out-competing them and really eliminating them. It would be great if the

1345
02:20:39,104 --> 02:20:44,544
users, all these voters, and if we're going to talk about social issues like political support

1346
02:20:44,544 --> 02:20:49,823
for Bitcoin and the number of people who are helping Bitcoin and the legal system,

1347
02:20:49,823 --> 02:20:56,544
the sort of IRL reality that Bitcoin exists in. I think it's great if all those altcoin

1348
02:20:57,264 --> 02:21:02,064
users and developers are instead Bitcoiners. It would be ideal if they're voting for Bitcoin,

1349
02:21:02,064 --> 02:21:10,384
supporting Bitcoin, hoping it succeeds. The legal system is in favor of Bitcoin. I feel that

1350
02:21:10,384 --> 02:21:15,104
trying to internalize those users and that development to Bitcoin, that's part of the

1351
02:21:15,104 --> 02:21:22,623
drivechain view. I feel that what has just been said about the legal system and its role

1352
02:21:22,623 --> 02:21:27,583
with respect to Bitcoin, I think the drivechain is aligned with that notion that we want to have

1353
02:21:27,583 --> 02:21:33,424
as many people supporting Bitcoin and using Bitcoin. So if, hypothetically, most or all of

1354
02:21:33,424 --> 02:21:38,543
the altcoiners were to become Bitcoiners who used a sidechain of Bitcoin, Bitcoin would have,

1355
02:21:39,104 --> 02:21:44,144
as a result of that, many more people who are in favor of Bitcoin and are voting for it and

1356
02:21:44,144 --> 02:21:48,784
hoping that, you know, telling their representatives and the government to not attack Bitcoin.

1357
02:21:49,983 --> 02:21:55,744
I think the main reason people use altcoins more than Bitcoin sidechains is because of

1358
02:21:56,704 --> 02:22:01,104
essentially the scam benefits they want to gain off other people's losses.

1359
02:22:03,344 --> 02:22:09,424
As far as the current sidechains, as far as I know, it's mainly liquid and Rootstock at this

1360
02:22:09,424 --> 02:22:15,264
point. Having very low usage, I think that's more of a UX issue than anything else. But also

1361
02:22:16,703 --> 02:22:22,544
the being aware of the security risks of doing it means people, even the people running the

1362
02:22:22,544 --> 02:22:30,624
sidechains, want to minimize funds on them. That's interesting. The security risks in terms

1363
02:22:30,624 --> 02:22:36,063
of the fact that if there were a billion dollars in a federated peg, then the people who are

1364
02:22:36,063 --> 02:22:40,624
controlling it, the 15 people, they would have a security risk personally. Is that what you mean?

1365
02:22:42,143 --> 02:22:48,303
Also, for each of the users, if these 15 people can be, you know, coerced by the government to

1366
02:22:48,303 --> 02:22:53,744
taking all the funds and running, the users would lose everything that they had in that sidechain.

1367
02:22:55,024 --> 02:23:02,624
Precisely. I agree. That's exactly what I'm saying, that if there were a miner controlled peg,

1368
02:23:02,624 --> 02:23:10,063
then instead of 15 specific people being socially selected by the company or organization that

1369
02:23:10,063 --> 02:23:16,223
creates the sidechain, instead of that arrangement, which is akin to custodial arrangement,

1370
02:23:16,223 --> 02:23:22,703
I would suggest instead the Bitcoin miners, that massive multitude dynamically evolving,

1371
02:23:22,703 --> 02:23:27,744
people constantly coming and leaving the set of miners. Many Bitcoin users are themselves miners.

1372
02:23:28,544 --> 02:23:34,384
So it's fundamentally different, I think, than as you described it being a large federation.

1373
02:23:34,384 --> 02:23:39,503
It is a dynamic one. It's categorically superior, I feel.

1374
02:23:40,223 --> 02:23:46,624
It's unfortunately much fewer than 15 miners making up the 51% of the network right now.

1375
02:23:47,984 --> 02:23:53,984
Well, I was speaking of hash rate, not the network nodes that create the blocks. Is that

1376
02:23:53,984 --> 02:23:59,503
what you had in mind? No, I mean hash rate. You can get to 51% of the hash rate with what,

1377
02:23:59,503 --> 02:24:07,024
three, four people? Oh, are you referring to the people who own the companies that run the miners?

1378
02:24:07,984 --> 02:24:13,663
More or less. That's a very interesting way of thinking about it. I do feel, though, that

1379
02:24:17,024 --> 02:24:25,263
what do you think about the idea that a federated peg with 15 people controlling it is perhaps

1380
02:24:25,263 --> 02:24:30,863
something that the market would view as much inferior to having the Bitcoin miners control,

1381
02:24:30,863 --> 02:24:36,064
even though, as you correctly say, the number of people who control 51% might be

1382
02:24:37,983 --> 02:24:45,024
might be fewer than 15 in some sense. The amount of profit motive and the dynamic nature of Bitcoin

1383
02:24:45,024 --> 02:24:53,423
mining is perhaps a great strength of the miner-controlled peg as opposed to the federated

1384
02:24:53,423 --> 02:25:03,504
model. I don't think it would logically work out that way. And also, as far as 15, I guess they

1385
02:25:03,583 --> 02:25:07,744
might be using 15 right now, but with Taproot, they could potentially make it thousands.

1386
02:25:10,464 --> 02:25:15,423
Yeah, I would like to see a federated sidechain with a federation is like a

1387
02:25:15,423 --> 02:25:18,944
thousand of one thousand multisig or something. That would be really fun.

1388
02:25:22,064 --> 02:25:28,784
On another note, or on a closely related note, so one thing about the current mining pools that

1389
02:25:28,784 --> 02:25:34,064
exist is that their member set seems to change on a daily basis. I've personally been in

1390
02:25:35,184 --> 02:25:39,024
meetups with people who contribute to a particular pool, talk about their experience there,

1391
02:25:39,024 --> 02:25:43,504
and they're like, here, I've tried out five different pools in the last couple of months,

1392
02:25:43,504 --> 02:25:47,744
and here are my findings. This one pays out on this basis. This one has these features.

1393
02:25:47,744 --> 02:25:51,983
And they'll decide what ones to use, and they'll talk about their reasons for switching from one

1394
02:25:51,983 --> 02:25:57,744
to the other. So because of that, I think one factor that I suspect miners would take

1395
02:25:57,744 --> 02:26:03,744
into consideration when choosing what pool to use is what are they doing with sidechains? That

1396
02:26:03,744 --> 02:26:10,944
would be another feature for them to consider. Are they co-mining or merge mining the z-side

1397
02:26:10,944 --> 02:26:16,624
sidechain, or are they merge mining this other one? And because of that being a factor, I think

1398
02:26:16,624 --> 02:26:24,143
it would help improve the amount of hash rate that it would make it so that it's effectively more

1399
02:26:24,143 --> 02:26:31,263
than four pools. Many of the individual miners who contribute to that pool also make a decision

1400
02:26:31,263 --> 02:26:37,263
about which one they're going to go into. And so it increases the number of decision makers

1401
02:26:37,263 --> 02:26:42,944
involved. Does that make sense? Yeah, to me, I think so. I think what

1402
02:26:42,944 --> 02:26:47,823
you're talking about there is an advantage of drivechain, if I heard you right. And another

1403
02:26:47,823 --> 02:26:54,464
way of talking about it is that if drivechain is enabled on Bitcoin, then instead of every new

1404
02:26:54,464 --> 02:27:00,863
sidechain requiring a decision about who the new 15 people are going to be, there would be the

1405
02:27:00,863 --> 02:27:07,344
ability for all the Bitcoin miners to always be in control of the drivechain pegs. And therefore,

1406
02:27:07,344 --> 02:27:12,944
there would be no decision about who is going to control the Bitcoin in the peg. Instead,

1407
02:27:12,944 --> 02:27:19,103
it's the Bitcoin miners. So the architecture includes a set of responsibilities for a set of

1408
02:27:19,103 --> 02:27:26,143
people, and that can be reused forever ad infinitum. So we could have a multitude of sidechains,

1409
02:27:26,143 --> 02:27:30,224
and the Bitcoin miners control the hash rate escrow of each one. And therefore,

1410
02:27:30,224 --> 02:27:33,184
there doesn't need to be a new set of 15 people every time.

1411
02:27:34,383 --> 02:27:40,543
Honestly, that sounds like a disadvantage. It seems like you would want to be able to

1412
02:27:40,543 --> 02:27:46,543
have more options for who the Federation members are rather than only one option.

1413
02:27:47,983 --> 02:27:54,784
But there is a sense that the Bitcoin miners are perhaps the most reliable set of parties,

1414
02:27:54,784 --> 02:28:00,303
since they're very much economically aligned with the success of Bitcoin. And therefore,

1415
02:28:00,303 --> 02:28:03,904
there's a powerful profit motive in order for them to be honest.

1416
02:28:04,863 --> 02:28:09,263
And I believe the current situation with mining and the history of mining has

1417
02:28:09,263 --> 02:28:11,344
not supported that opinion.

1418
02:28:15,504 --> 02:28:22,464
Can I make a point here? Just one thing is that there are like 10 public mining companies,

1419
02:28:22,464 --> 02:28:26,624
at least, I think. So I think we should just distinguish whether we're talking about mining

1420
02:28:26,624 --> 02:28:31,263
pools, which you can switch from, like Supertestnet said, and then, you know,

1421
02:28:31,344 --> 02:28:35,904
thinking about board members on mining companies. So, you know, it is, I think,

1422
02:28:37,424 --> 02:28:39,823
kind of a lot, maybe more than you might expect.

1423
02:28:41,183 --> 02:28:46,464
But then just one other point, like we're talking about giving people a new option,

1424
02:28:46,464 --> 02:28:50,464
right? So there are certain circumstances where it might make sense to use federations.

1425
02:28:51,104 --> 02:28:55,904
And then, but I can imagine circumstances where we wouldn't want to use a federation,

1426
02:28:55,904 --> 02:29:03,424
and then Drivechain gives us that option. And I think it's also when you have too many

1427
02:29:03,424 --> 02:29:08,943
federations, you got to worry about where miners are going to get their fee revenue from,

1428
02:29:08,943 --> 02:29:15,664
because Drivechain allows miners to do it. And if there are many different federations,

1429
02:29:15,664 --> 02:29:22,143
they'll keep fees down to almost nothing. And then we might have an issue funding mining

1430
02:29:22,143 --> 02:29:30,943
in the future. I don't, I'm not of the position that fees for miners is really a big concern.

1431
02:29:31,583 --> 02:29:35,583
If people want Bitcoin to work, they're going to mine Bitcoin, whether it's profitable or not.

1432
02:29:37,183 --> 02:29:42,623
That's a great, that's a great point. I agree with both of what you said, Joe and Luke,

1433
02:29:42,623 --> 02:29:51,583
that ideological mining is certainly one possible result of Bitcoinization. And it could, in theory,

1434
02:29:51,583 --> 02:29:58,623
be a sustaining force for the security of the network. Although I am optimistic that for-profit

1435
02:29:58,623 --> 02:30:06,943
mining would be a permanent presence in Bitcoin and would be successful. Satoshi, you know,

1436
02:30:06,943 --> 02:30:12,304
as a less technical person than, you know, really probably anyone on stage, I'm just a lawyer, Luke,

1437
02:30:12,304 --> 02:30:19,583
I'm not like a sophisticated engineer like you. I do like Satoshi's description of how Bitcoin

1438
02:30:19,583 --> 02:30:24,943
could work in the future. He does contemplate explicitly ideological mining, but he also said

1439
02:30:24,943 --> 02:30:33,263
in that BitDNS thread that merged mining could be a source of network strength in the future.

1440
02:30:33,263 --> 02:30:39,424
He was thinking there of, of course, the altcoin BitDNS and how it would increase Bitcoin's

1441
02:30:39,424 --> 02:30:45,344
strength through merged mining. But I do wonder if, you know, if he were with us today, he might

1442
02:30:45,344 --> 02:30:49,984
countenance, he might support and acknowledge the possibility that drivechain through harnessing

1443
02:30:49,984 --> 02:30:56,464
merged mining of sidechains could help secure Bitcoin on a for-profit basis in the future.

1444
02:30:57,424 --> 02:31:01,823
And that's exciting to me because I, you know, if you told me there's a project out there and it's

1445
02:31:01,823 --> 02:31:05,984
only going to work if people donate to it, I wouldn't feel as excited as if you told me it's

1446
02:31:05,984 --> 02:31:12,304
a for-profit capitalistic enterprise that has emerged in order. That, to me, sounds great.

1447
02:31:12,304 --> 02:31:17,104
But I also, of course, respect what you said about miners and how the history of Bitcoin

1448
02:31:17,104 --> 02:31:22,143
arguably includes, you know, times when, you know, the miners did this or that.

1449
02:31:22,143 --> 02:31:27,904
So it's not like they're perfect, right? Yeah. I'm not saying it is going to definitely happen

1450
02:31:27,904 --> 02:31:31,743
one way or another. I'm just saying I'm not too concerned with it because it's going to work out

1451
02:31:31,743 --> 02:31:36,464
one way. However, it works out in the end. I'm sure there will be a way that it does work out

1452
02:31:36,464 --> 02:31:46,623
that particular issue. And as far as miners, the fact that they're still mining huge blocks today

1453
02:31:47,583 --> 02:31:53,503
is suggesting they don't really look at Bitcoin's long-term what's good for Bitcoin as much. It's

1454
02:31:53,503 --> 02:31:58,383
not like it was a one-time thing where miners didn't care about Bitcoin, but it's an ongoing

1455
02:31:58,383 --> 02:32:04,063
thing. Doesn't it weaken your point about ideological mining, though? Like, what if

1456
02:32:04,063 --> 02:32:09,424
the world we're in is just one where they're self-interested? And then, like,

1457
02:32:10,143 --> 02:32:14,943
Drivechain is the solution that you're pointing to. You know, it'll work out one way or another.

1458
02:32:14,943 --> 02:32:21,024
Well, I think probably through something like Drivechain. Luke, to make sure I understood what

1459
02:32:21,024 --> 02:32:24,703
you were saying, were you saying just now that it would be good if the miners were to

1460
02:32:25,664 --> 02:32:32,143
choose to not, you know, create blocks that have a high amount of data in them

1461
02:32:32,143 --> 02:32:35,984
because of, like, the recent episode that we're talking about with, like,

1462
02:32:35,984 --> 02:32:42,943
ordinals and whatnot? Even ignoring the recent episode, it's been clear for years now that

1463
02:32:42,943 --> 02:32:49,583
these big blocks are harmful to Bitcoin. And miners could very easily make one megabyte or

1464
02:32:49,583 --> 02:32:53,583
even 300 kilobyte blocks for the benefit of Bitcoin if they wanted to.

1465
02:32:54,544 --> 02:33:00,864
Is it possible that the miners are, in some cases, averse to doing anything that would

1466
02:33:01,583 --> 02:33:08,383
be viewed as ideological in nature and are therefore operating under the rationale

1467
02:33:08,383 --> 02:33:12,623
that's somewhat legitimate, which is that if they simply process transactions having the highest

1468
02:33:12,623 --> 02:33:19,183
fees, then they are immune from criticism? Maybe that's what's going on. Is that possible? They're

1469
02:33:19,263 --> 02:33:25,583
waiting for people like you, who are not, you know, so much associated with mining as development,

1470
02:33:25,583 --> 02:33:32,224
to lead the discourse on how large the blocks should be rather than the miners engaging in

1471
02:33:32,224 --> 02:33:39,503
that activity of, you know, doing things that are not, you know, financially obviously defensible,

1472
02:33:39,503 --> 02:33:44,224
like, you know, taking less profit but trying to help keep the block size smaller.

1473
02:33:45,104 --> 02:33:52,544
I mean, I've been pretty clear about that particular aspect of mining and block sizes for a long time now.

1474
02:33:56,544 --> 02:34:04,063
I don't think miners notice that there is a lot of...

1475
02:34:05,503 --> 02:34:11,583
There are miners who care about ideology. We sometimes see it come out because a miner will

1476
02:34:11,664 --> 02:34:18,464
do something like put a message in a block that makes some ideological point.

1477
02:34:18,464 --> 02:34:25,823
We just did it recently with the Luxor team putting that large JPEG in the block,

1478
02:34:25,823 --> 02:34:30,784
and they're making an ideological statement when they did that. Like, they didn't even

1479
02:34:30,784 --> 02:34:35,104
take fees for it. So I think they do this stuff all the time. They did it with...

1480
02:34:35,104 --> 02:34:39,183
When they blocked SegWit for a long time, a lot of miners were making an ideological statement

1481
02:34:39,743 --> 02:34:45,183
about their power and their control, and they wanted, you know, a 2x size increase, and they

1482
02:34:45,183 --> 02:34:49,743
weren't happy with what SegWit was giving them and stuff. But I think that's not...

1483
02:34:49,743 --> 02:34:53,664
Miners do have ideologies, and they express them in the way they mine blocks.

1484
02:34:57,823 --> 02:35:01,183
To make sure I understood exactly what you're saying, Luke, were you saying that

1485
02:35:02,304 --> 02:35:08,544
the miners should try to reduce the rate of growth of the data of the blockchain

1486
02:35:08,544 --> 02:35:13,424
even if it reduces their profit? Like, for a specific block, if they include a certain

1487
02:35:13,424 --> 02:35:16,943
transaction, they get more profit, but it has a lot of data attached to it,

1488
02:35:16,943 --> 02:35:21,263
which burdens the nodes, right? So are you saying they should do something other than

1489
02:35:21,263 --> 02:35:25,984
make the most money? Because that's what I would consider ideological.

1490
02:35:26,623 --> 02:35:32,063
Specifically, we're talking about miners looking at the long-term good of Bitcoin.

1491
02:35:32,943 --> 02:35:37,823
I forget which context that was brought up in, but the fact that they are just making

1492
02:35:37,823 --> 02:35:42,383
these huge blocks, including spam, and putting their profits first, essentially,

1493
02:35:42,383 --> 02:35:48,943
their short-term profits, even at the expense of Bitcoin's long-term viability, suggests that

1494
02:35:48,943 --> 02:35:54,943
they're not looking out for Bitcoin as much as may have been assumed or be assumed.

1495
02:35:57,984 --> 02:36:03,664
Understood. To me, them simply making as much profit might be just, as I said earlier,

1496
02:36:03,664 --> 02:36:08,623
a way for them to be operating in a way that's understandable rather than one that involves

1497
02:36:08,623 --> 02:36:13,823
less profit and more ideology, which would involve them wading into the discourse on

1498
02:36:15,104 --> 02:36:20,864
how fast the blockchain should grow in size. So that might just be there, or maybe they're

1499
02:36:20,864 --> 02:36:28,703
trying to avoid being noticed and avoid being criticized. After all, if they started doing that,

1500
02:36:28,703 --> 02:36:33,024
it would be perceived as more ideological than simply making profit from taking the

1501
02:36:33,024 --> 02:36:40,143
highest fees. Taking the highest fees is generally thought of as not ideological, right? Is that right?

1502
02:36:43,984 --> 02:36:50,703
I would say it's just as ideological, just not in an ideology that is good for Bitcoin.

1503
02:36:52,304 --> 02:36:57,904
Understood. I think I get exactly what you mean. Well, the miners wouldn't have to make that

1504
02:36:57,904 --> 02:37:02,784
decision if we as a community can simply shrink the block size. Then,

1505
02:37:02,784 --> 02:37:07,904
they could continue to operate in the manner that's simple and profitable maximally.

1506
02:37:15,584 --> 02:37:19,664
Unfortunately, there would need to be a lot of support from the community more than there

1507
02:37:19,664 --> 02:37:23,743
currently is, I believe, for that protocol change enforced on all miners.

1508
02:37:28,223 --> 02:37:33,024
Hopefully, we'll get there. I am a fan of reading your tweets and other content,

1509
02:37:33,584 --> 02:37:41,263
and I noticed that between you and Paul, there is a resonance. One, at least, if not more,

1510
02:37:41,263 --> 02:37:45,904
which is that smaller blocks are vital to the long-term success of Bitcoin.

1511
02:37:47,743 --> 02:37:54,383
So, I'm optimistic about how the drivechain vision, if it's successful, would satisfy some

1512
02:37:54,383 --> 02:38:01,184
of the concerns and hopes of those who aren't currently drivechain proponents. For example,

1513
02:38:02,143 --> 02:38:07,024
facilitating an understanding and interest in shrinking the block size,

1514
02:38:07,024 --> 02:38:11,343
which is sort of part of the drivechain vision, even though it's not part of the drivechain BIPs.

1515
02:38:17,103 --> 02:38:19,904
Anyone's welcome to jump in and share thoughts on any of that.

1516
02:38:24,383 --> 02:38:39,503
Well, we have a bunch of speakers on stage, and everyone's welcome to participate.

1517
02:38:41,184 --> 02:38:48,383
If you have any thoughts, you can just speak your mind on any of the topics we've been discussing,

1518
02:38:48,383 --> 02:38:54,863
such as smaller blocks, sidechains, the difference between a drivechain and a

1519
02:38:54,863 --> 02:39:01,664
federated peg sidechain, whether or not it would be good for Bitcoiners to have the extra option

1520
02:39:01,664 --> 02:39:09,424
to use a miner-controlled peg instead of a federated controlled peg. And also,

1521
02:39:09,424 --> 02:39:14,784
the most recent topic we've been addressing is merged mining, which is BIP301, which is the

1522
02:39:14,784 --> 02:39:24,383
lesser discussed BIP. So drivechain has two BIPs. The first is the most central, which is BIP300,

1523
02:39:25,024 --> 02:39:31,503
the miner-controlled peg. But the second is just as interesting, I think, which is blind merged

1524
02:39:31,503 --> 02:39:39,503
mining, which has a very interesting effect potentially on the long-term miner income.

1525
02:39:40,463 --> 02:39:45,664
I think it could be great for securing Bitcoin far into the future as the subsidy, or as the

1526
02:39:45,664 --> 02:39:53,503
coinbase, rather, is halved towards zero over time, over many decades, over a century. It'd

1527
02:39:53,503 --> 02:40:00,784
be great to see a growing rate of income from these merged mined sidechains. And that, of course,

1528
02:40:00,784 --> 02:40:05,103
is something which some people are skeptical about being good for Bitcoin, but I personally

1529
02:40:05,103 --> 02:40:07,664
am persuaded that it would be good.

1530
02:40:08,603 --> 02:40:10,403
To have that for-profit arrangement.

1531
02:40:10,403 --> 02:40:11,563
Joe, go ahead, please.

1532
02:40:12,963 --> 02:40:17,123
Hey, yeah, and I just don't want to talk too much,

1533
02:40:17,123 --> 02:40:18,843
so I'm gonna keep it short,

1534
02:40:18,843 --> 02:40:21,363
rather than put my hand up to talk.

1535
02:40:21,363 --> 02:40:25,883
Anyway, so yeah, I just want to push back on Luke

1536
02:40:25,883 --> 02:40:26,723
a little bit.

1537
02:40:27,763 --> 02:40:30,203
I think if you're, there's just another way

1538
02:40:30,203 --> 02:40:32,003
to interpret the fact that miners

1539
02:40:32,003 --> 02:40:34,363
aren't reducing the block size.

1540
02:40:34,363 --> 02:40:37,123
And I do, I'm very sympathetic to Luke's point of view.

1541
02:40:38,162 --> 02:40:39,923
But isn't the way to interpret that

1542
02:40:39,923 --> 02:40:43,163
just that they care more about profit

1543
02:40:43,163 --> 02:40:44,522
than you would have thought?

1544
02:40:44,522 --> 02:40:46,923
They're not very ideological.

1545
02:40:46,923 --> 02:40:50,963
And therefore, we have to think about their incentives

1546
02:40:50,963 --> 02:40:53,202
and analyze that seriously.

1547
02:40:53,202 --> 02:40:56,443
So I think making sure they get fees

1548
02:40:56,443 --> 02:41:00,283
and their long-term incentives line up with,

1549
02:41:01,722 --> 02:41:03,562
well, I guess I would just say that

1550
02:41:03,562 --> 02:41:05,242
you think their long-term incentives

1551
02:41:05,242 --> 02:41:07,483
don't really line up with Bitcoin

1552
02:41:08,323 --> 02:41:10,242
because they're mining blocks that are too big.

1553
02:41:11,202 --> 02:41:14,003
But let's just, because we have to trust them,

1554
02:41:14,003 --> 02:41:16,802
we have to work with them, with their partners.

1555
02:41:16,802 --> 02:41:21,003
So I think Drivechain serves to align the incentives.

1556
02:41:21,003 --> 02:41:24,763
So when Luke said things will just work out,

1557
02:41:24,763 --> 02:41:27,882
well, on the long-term fee issue,

1558
02:41:27,882 --> 02:41:29,963
well, Drivechain is the kind of thing

1559
02:41:29,963 --> 02:41:31,963
that will line up with that.

1560
02:41:31,963 --> 02:41:35,043
So anyway, that's what I have to say.

1561
02:41:36,043 --> 02:41:38,763
Joe, there was quite a bit of noise there,

1562
02:41:38,763 --> 02:41:41,683
but Luke, do you want to take that question?

1563
02:41:41,683 --> 02:41:43,923
No, I kind of agree in the sense

1564
02:41:43,923 --> 02:41:45,723
that I'm not saying we shouldn't do anything

1565
02:41:45,723 --> 02:41:47,842
and it'll just be magically working out.

1566
02:41:47,842 --> 02:41:52,522
I'm thinking as we get, if we encounter a problem,

1567
02:41:52,522 --> 02:41:54,122
we'll get through it one way or another.

1568
02:41:54,122 --> 02:41:56,202
We might have to change something.

1569
02:41:56,202 --> 02:41:58,723
Maybe changing things in advance can help.

1570
02:41:58,723 --> 02:42:00,442
I'm not saying we do nothing.

1571
02:42:02,403 --> 02:42:04,442
Okay, great, thanks.

1572
02:42:04,442 --> 02:42:07,083
I think that's perfectly spoken, Luke.

1573
02:42:07,083 --> 02:42:09,963
I agree entirely that in life,

1574
02:42:09,963 --> 02:42:12,842
there's sometimes a great advantage from acting earlier,

1575
02:42:12,842 --> 02:42:14,562
but sometimes there's also a great advantage

1576
02:42:14,562 --> 02:42:18,722
in delaying and considering options further.

1577
02:42:18,722 --> 02:42:23,722
So I think that attitude is cool, and I totally respect it

1578
02:42:25,162 --> 02:42:26,563
because it's very hard to say

1579
02:42:26,563 --> 02:42:29,242
how soon should a solution be adopted

1580
02:42:29,242 --> 02:42:31,923
or how much longer might it good to be wait

1581
02:42:31,923 --> 02:42:34,242
and contemplate other developments,

1582
02:42:35,043 --> 02:42:36,603
other facts, more data,

1583
02:42:36,603 --> 02:42:40,683
and more potential solutions to anything.

1584
02:42:40,683 --> 02:42:43,603
Of course, we're talking about security in the future,

1585
02:42:43,603 --> 02:42:46,282
miner income, whether security should come

1586
02:42:46,282 --> 02:42:48,642
from ideological mining or for-profit mining,

1587
02:42:48,642 --> 02:42:49,882
whether the for-profit mining

1588
02:42:49,882 --> 02:42:51,763
should be only of Bitcoin layer one,

1589
02:42:51,763 --> 02:42:54,442
or whether it should be made more complicated

1590
02:42:54,442 --> 02:42:57,002
and potentially more robust through merged mining,

1591
02:42:57,002 --> 02:42:59,203
and whether the merged mining should be

1592
02:42:59,203 --> 02:43:02,843
ordinary merged mining or BIP301 merged mining.

1593
02:43:02,843 --> 02:43:06,483
It's all pretty complicated and interesting,

1594
02:43:06,483 --> 02:43:08,082
and there's a good debate to be had

1595
02:43:08,082 --> 02:43:11,843
about whether acting sooner or later is most favorable.

1596
02:43:15,002 --> 02:43:17,362
Hi, Jay, thanks for joining the stage.

1597
02:43:17,362 --> 02:43:18,203
Welcome back.

1598
02:43:19,963 --> 02:43:21,043
Please join in the conversation.

1599
02:43:21,043 --> 02:43:24,203
Also, Metatomist, please join in.

1600
02:43:24,203 --> 02:43:25,043
Hey, Henry.

1601
02:43:26,923 --> 02:43:28,403
I just came up to mention,

1602
02:43:28,403 --> 02:43:31,882
I think I commented on a tweet

1603
02:43:31,882 --> 02:43:32,882
that you had a while back.

1604
02:43:32,882 --> 02:43:35,763
You had mentioned to come in spaces to talk about it,

1605
02:43:35,763 --> 02:43:39,522
and this is not for me to come up and debate

1606
02:43:39,522 --> 02:43:43,203
the issue of full nodes and whether they matter or not,

1607
02:43:43,203 --> 02:43:47,162
but more of a fundamental question

1608
02:43:47,162 --> 02:43:50,242
that I wanted to see if you agreed with it

1609
02:43:50,242 --> 02:43:52,802
or if there was some more color to it.

1610
02:43:52,802 --> 02:43:57,483
But it seems to me that the sidechain vision,

1611
02:43:58,442 --> 02:44:01,282
so to speak, which I'm neither for or against,

1612
02:44:01,843 --> 02:44:05,722
I'm more just interested in learning about the benefits,

1613
02:44:05,722 --> 02:44:07,242
the trade-offs and all that.

1614
02:44:07,242 --> 02:44:12,242
But it seems to me that what it presupposes

1615
02:44:12,442 --> 02:44:17,442
is the bias for having a small block size

1616
02:44:18,323 --> 02:44:21,763
so that people can continue to download

1617
02:44:21,763 --> 02:44:26,523
the entire blockchain and have a full node running at home

1618
02:44:26,523 --> 02:44:28,282
or whatever the case may be.

1619
02:44:28,282 --> 02:44:30,562
And so I just wanted to ask,

1620
02:44:30,562 --> 02:44:34,722
is that the presupposition going into any conversations

1621
02:44:34,722 --> 02:44:39,002
about sidechains or reducing the block size,

1622
02:44:39,002 --> 02:44:40,562
which I think Luke brought up?

1623
02:44:41,803 --> 02:44:44,002
To me, it just seems like that's a presupposition

1624
02:44:44,002 --> 02:44:48,243
that is a priori to this discussion.

1625
02:44:48,243 --> 02:44:49,083
Okay.

1626
02:44:49,083 --> 02:44:49,923
Yeah.

1627
02:44:49,923 --> 02:44:51,363
Yeah, the drivechain vision

1628
02:44:51,363 --> 02:44:54,323
is absolutely a small block Bitcoin vision.

1629
02:44:54,323 --> 02:44:57,323
There is no reason to have the inverse

1630
02:44:57,363 --> 02:44:58,402
of the drivechain vision,

1631
02:44:58,402 --> 02:45:02,002
which would be there is no reason to have large block

1632
02:45:02,002 --> 02:45:04,842
layer one and small block layer two.

1633
02:45:04,842 --> 02:45:07,243
In the view of, I think, Paul Sztorc,

1634
02:45:07,243 --> 02:45:08,643
who's not here to speak for himself,

1635
02:45:08,643 --> 02:45:12,243
but in the view of the designers of drivechain,

1636
02:45:12,243 --> 02:45:13,523
the authors of the BIPs,

1637
02:45:14,523 --> 02:45:16,203
I think that they would say,

1638
02:45:16,203 --> 02:45:18,243
and I think I understand and agree with the notion

1639
02:45:18,243 --> 02:45:21,483
that you absolutely wanna make large blocks

1640
02:45:21,483 --> 02:45:25,483
to be opt-in, not mandatory for Bitcoiners.

1641
02:45:25,483 --> 02:45:27,882
So there would be no reason ever, logically,

1642
02:45:27,882 --> 02:45:29,803
to have a large block layer one

1643
02:45:29,803 --> 02:45:31,122
and a small block layer two.

1644
02:45:31,122 --> 02:45:33,562
The only architecture that makes sense,

1645
02:45:33,562 --> 02:45:36,002
and in fact, the one I think is most compelling,

1646
02:45:36,002 --> 02:45:39,643
is small block layer one, large block layer two.

1647
02:45:39,643 --> 02:45:43,002
Large block being optional, non-mandatory,

1648
02:45:43,002 --> 02:45:46,162
and because it exists as a layer two,

1649
02:45:46,162 --> 02:45:48,923
meaning a sidechain that,

1650
02:45:48,923 --> 02:45:50,122
and in the drivechain vision,

1651
02:45:50,122 --> 02:45:54,282
a sidechain in which the peg is controlled by the miners,

1652
02:45:54,282 --> 02:45:56,523
there is the option for Bitcoiners

1653
02:45:56,523 --> 02:45:58,643
to go into that sidechain, do what they want,

1654
02:45:58,643 --> 02:46:01,643
such as have high scalability, low fee,

1655
02:46:01,643 --> 02:46:04,243
and have those fees paid almost entirely

1656
02:46:04,243 --> 02:46:06,282
to Bitcoin layer one miners.

1657
02:46:06,282 --> 02:46:07,923
So that's merged mining,

1658
02:46:07,923 --> 02:46:09,962
and this is a harmonious collaboration

1659
02:46:09,962 --> 02:46:11,402
between two protocols,

1660
02:46:11,402 --> 02:46:14,162
one on layer one, which is decentralized,

1661
02:46:14,162 --> 02:46:17,363
digital gold, ossified, robust,

1662
02:46:17,363 --> 02:46:22,203
reliable, simple, secure, and layer two.

1663
02:46:22,243 --> 02:46:24,282
The layer twos are more experimental.

1664
02:46:24,282 --> 02:46:25,323
They're more innovative.

1665
02:46:25,323 --> 02:46:26,363
They're more varied,

1666
02:46:27,282 --> 02:46:30,402
and to have demand for the layer two token

1667
02:46:30,402 --> 02:46:32,402
accrue value to the main chain token

1668
02:46:32,402 --> 02:46:34,603
because they're one-for-one exchangeable

1669
02:46:34,603 --> 02:46:37,282
at a trading value of one-for-one.

1670
02:46:37,282 --> 02:46:40,722
So the synthetic Bitcoin in the drivechain

1671
02:46:41,562 --> 02:46:44,243
is redeemable for Bitcoin layer one.

1672
02:46:44,243 --> 02:46:45,923
That's the crucial issue

1673
02:46:45,923 --> 02:46:47,643
that makes the drivechain

1674
02:46:47,643 --> 02:46:50,043
accrue value to main chain Bitcoin.

1675
02:46:50,043 --> 02:46:52,643
In other words, imagine if all of the altcoins

1676
02:46:52,643 --> 02:46:55,523
existed as drivechains,

1677
02:46:55,523 --> 02:46:57,442
Bitcoin's value would be much higher.

1678
02:46:57,442 --> 02:46:59,122
Its dominance would be 100%.

1679
02:46:59,122 --> 02:47:02,002
This is, of course, an extreme fantasy hypothetical.

1680
02:47:02,002 --> 02:47:05,002
I believe it, but I acknowledge it's extreme,

1681
02:47:05,002 --> 02:47:07,682
that we would have 100% dominance.

1682
02:47:07,682 --> 02:47:10,803
All of the fees paid on all of the altcoins

1683
02:47:10,803 --> 02:47:13,962
would be paid to Bitcoin miners, almost 100%,

1684
02:47:13,962 --> 02:47:18,162
and that would mean a much higher security for Bitcoin

1685
02:47:18,162 --> 02:47:20,323
in terms of the security of the UTXOs,

1686
02:47:20,323 --> 02:47:21,442
or more generally speaking,

1687
02:47:21,442 --> 02:47:24,442
just the economic security of the network.

1688
02:47:24,442 --> 02:47:26,643
So there's about, right now,

1689
02:47:26,643 --> 02:47:31,323
roughly 15 times more fees paid to all altcoins

1690
02:47:31,323 --> 02:47:33,803
than there is to Bitcoin, roughly,

1691
02:47:33,803 --> 02:47:35,603
and that number is increasing.

1692
02:47:35,603 --> 02:47:38,523
Bitcoin is losing dominance for block space,

1693
02:47:38,523 --> 02:47:42,122
just like it's losing dominance for market cap,

1694
02:47:42,122 --> 02:47:44,122
and it would be cool and valuable

1695
02:47:44,122 --> 02:47:46,763
for Bitcoin's long-term economic success

1696
02:47:48,243 --> 02:47:52,043
to have, instead, a rising dominance towards 100%

1697
02:47:52,043 --> 02:47:53,483
for the market cap of Bitcoin,

1698
02:47:53,483 --> 02:47:57,523
as well as for the block space value, meaning the fees.

1699
02:47:57,523 --> 02:48:00,442
So yeah, drivechain is a small block,

1700
02:48:00,442 --> 02:48:01,882
layer one Bitcoin vision.

1701
02:48:01,882 --> 02:48:04,122
In fact, the drivechain includes,

1702
02:48:05,523 --> 02:48:06,523
I mean, the drivechain BIPs

1703
02:48:06,523 --> 02:48:08,002
don't include a block size decrease,

1704
02:48:08,002 --> 02:48:11,562
but I believe that most drive chainers

1705
02:48:11,562 --> 02:48:15,282
want the block size, in the long run, to come down,

1706
02:48:15,282 --> 02:48:16,882
preferably sooner than later,

1707
02:48:16,882 --> 02:48:19,643
to shrink down to around 300 kilobytes,

1708
02:48:19,643 --> 02:48:21,203
which I think is harmonious

1709
02:48:21,203 --> 02:48:22,803
with what Luke and others believe

1710
02:48:22,803 --> 02:48:25,162
would be favorable for Bitcoin,

1711
02:48:25,162 --> 02:48:27,162
in terms of making sure.

1712
02:48:27,162 --> 02:48:29,882
Yeah, please, Luke, chime in on that topic.

1713
02:48:29,882 --> 02:48:32,803
You mentioned ossified layer one.

1714
02:48:32,803 --> 02:48:35,282
I think if that was a real risk,

1715
02:48:35,282 --> 02:48:37,562
that would be a huge downside to drivechains,

1716
02:48:37,562 --> 02:48:39,562
and could very well be a reason

1717
02:48:39,562 --> 02:48:42,282
to avoid activating it entirely,

1718
02:48:42,282 --> 02:48:43,563
if that were to actually be

1719
02:48:43,563 --> 02:48:47,522
a real possibility of happening.

1720
02:48:47,522 --> 02:48:50,243
It's important that layer one continues to improve,

1721
02:48:50,243 --> 02:48:52,322
and people aren't forced onto sidechains

1722
02:48:52,322 --> 02:48:54,803
to get the features they need.

1723
02:48:54,803 --> 02:48:56,443
I agree with that sentiment.

1724
02:48:56,443 --> 02:48:59,522
Let me briefly elaborate on what I meant.

1725
02:48:59,522 --> 02:49:04,483
The rate of disagreements and major objections

1726
02:49:04,483 --> 02:49:06,683
and calls for changes on layer one

1727
02:49:06,683 --> 02:49:09,603
is a source of turbulence within the community,

1728
02:49:09,603 --> 02:49:11,483
it seems to me.

1729
02:49:12,363 --> 02:49:16,162
When I said that ossification is a goal

1730
02:49:16,162 --> 02:49:17,842
of the long-term vision

1731
02:49:17,842 --> 02:49:22,043
for having more varied and stronger layer twos,

1732
02:49:22,043 --> 02:49:24,683
what I meant is that, to some extent,

1733
02:49:24,683 --> 02:49:27,162
the ability for people to develop on a layer two

1734
02:49:27,162 --> 02:49:31,123
reduces pressure on the layer one development community.

1735
02:49:31,123 --> 02:49:33,243
It reduces pressure and intensity

1736
02:49:33,243 --> 02:49:35,123
on the discourse associated

1737
02:49:35,123 --> 02:49:38,322
with layer one development and change.

1738
02:49:38,363 --> 02:49:43,363
While, of course, ossification is never absolute

1739
02:49:43,603 --> 02:49:46,642
and guaranteed for 10,000 years,

1740
02:49:46,642 --> 02:49:50,883
there is a notion that a higher degree of ossification

1741
02:49:50,883 --> 02:49:54,003
can be favorable in terms of lowering

1742
02:49:54,003 --> 02:49:57,642
the need for the community to be adjusting layer one

1743
02:49:57,642 --> 02:50:02,322
every five years or so, as has been the case 2017, 2021.

1744
02:50:03,402 --> 02:50:06,243
Maybe it would be great if the next change,

1745
02:50:06,243 --> 02:50:07,722
if it were drivechain,

1746
02:50:07,722 --> 02:50:10,483
could be understood optimistically as being one

1747
02:50:10,483 --> 02:50:15,003
that would potentially facilitate a lower rate of pressure

1748
02:50:15,003 --> 02:50:16,962
to change layer one Bitcoin.

1749
02:50:16,962 --> 02:50:19,202
Does that, how does that sound to you?

1750
02:50:19,202 --> 02:50:22,363
I think that would not be a good thing still.

1751
02:50:22,363 --> 02:50:23,842
I wouldn't necessarily think

1752
02:50:23,842 --> 02:50:27,003
we want to slow down layer one more than we need to

1753
02:50:27,003 --> 02:50:28,842
just out of the safety of it.

1754
02:50:30,722 --> 02:50:31,842
What I'm saying, though,

1755
02:50:31,842 --> 02:50:34,803
is that if certain kinds of changes to layer one

1756
02:50:34,803 --> 02:50:37,162
could instead be changes to a layer two,

1757
02:50:37,162 --> 02:50:41,363
then they could be experimentally performed on a layer two

1758
02:50:41,363 --> 02:50:43,883
in a partitioned and separate way

1759
02:50:43,883 --> 02:50:46,282
that wouldn't affect main chain layer one negatively,

1760
02:50:46,282 --> 02:50:48,722
perhaps, so that could be a testing ground

1761
02:50:48,722 --> 02:50:49,883
for layer one developments.

1762
02:50:49,883 --> 02:50:53,603
Does that sound like a favorable dynamic?

1763
02:50:53,603 --> 02:50:54,883
Yeah, that certainly does.

1764
02:50:54,883 --> 02:50:57,443
I just would hesitate to suggest

1765
02:50:57,443 --> 02:51:00,522
that layer one would have to slow down for it.

1766
02:51:00,522 --> 02:51:02,082
I think it would improve the safety

1767
02:51:02,082 --> 02:51:04,483
of doing the soft works on layer one,

1768
02:51:05,162 --> 02:51:06,962
and possibly even speeding them up.

1769
02:51:06,962 --> 02:51:08,443
Yes, precisely.

1770
02:51:08,443 --> 02:51:09,803
Yeah, so I should be careful

1771
02:51:09,803 --> 02:51:11,522
when I use a word like ossification,

1772
02:51:11,522 --> 02:51:13,603
because I don't want it to be misconstrued.

1773
02:51:13,603 --> 02:51:16,162
Of course, ossification is not part

1774
02:51:16,162 --> 02:51:18,003
of the drivechain BIPs.

1775
02:51:18,003 --> 02:51:21,443
It is merely a goal of,

1776
02:51:21,443 --> 02:51:24,842
some Bitcoiners like to think that it would be favorable

1777
02:51:24,842 --> 02:51:29,443
if disputes and civil wars within Bitcoin were diminished.

1778
02:51:29,443 --> 02:51:33,363
They view the block size war as an unfortunate thing.

1779
02:51:33,402 --> 02:51:36,962
I think I heard Paul say in a podcast recently,

1780
02:51:36,962 --> 02:51:38,202
and I don't want to misquote it,

1781
02:51:38,202 --> 02:51:39,842
so I'll just say it in my own words,

1782
02:51:39,842 --> 02:51:42,202
that it would have been good

1783
02:51:42,202 --> 02:51:46,322
if the large blockers had left for a Bitcoin sidechain,

1784
02:51:46,322 --> 02:51:48,243
rather than left for an altcoin.

1785
02:51:48,243 --> 02:51:50,162
It would have been good if Ethereum people

1786
02:51:50,162 --> 02:51:52,642
had left not for an altcoin,

1787
02:51:52,642 --> 02:51:54,202
but for a Bitcoin sidechain.

1788
02:51:54,202 --> 02:51:57,842
That way, all of the value of what their activity

1789
02:51:57,842 --> 02:52:00,402
would have been internalized to Bitcoin,

1790
02:52:00,402 --> 02:52:02,803
which accelerates hyper-Bitcoinization,

1791
02:52:03,762 --> 02:52:07,603
helps secure Bitcoin's network in terms of miner incentive,

1792
02:52:07,603 --> 02:52:11,363
and that way, we don't lose community members

1793
02:52:11,363 --> 02:52:12,603
to altcoin projects.

1794
02:52:12,603 --> 02:52:15,642
Instead, we keep them in the community,

1795
02:52:15,642 --> 02:52:19,363
making Bitcoin's community larger and more varied,

1796
02:52:19,363 --> 02:52:22,803
kind of in a capitalistic, heterogeneous community,

1797
02:52:22,803 --> 02:52:25,722
all collaborating on top of one L1,

1798
02:52:25,722 --> 02:52:29,043
making that L1 very strong and powerful.

1799
02:52:29,043 --> 02:52:32,322
So I think that it's inherent in the nature

1800
02:52:32,322 --> 02:52:33,563
of a multi-layered system

1801
02:52:33,563 --> 02:52:36,803
that the lowest level would be the most stable,

1802
02:52:36,803 --> 02:52:38,282
and that's what I'm referring to

1803
02:52:38,282 --> 02:52:40,082
when I talked about ossification,

1804
02:52:40,082 --> 02:52:41,603
not in the absolutist sense

1805
02:52:41,603 --> 02:52:43,402
that we would never again change.

1806
02:52:43,402 --> 02:52:44,322
We could, of course, change.

1807
02:52:44,322 --> 02:52:47,762
In fact, of course, since the BIP300 and 301

1808
02:52:47,762 --> 02:52:49,883
do not include a block size reduction,

1809
02:52:49,883 --> 02:52:53,803
there would perhaps be at least one more change

1810
02:52:55,243 --> 02:52:58,483
to achieve that if it isn't already done sooner.

1811
02:52:58,483 --> 02:53:01,363
So yeah, I'm not in favor of never changing,

1812
02:53:01,363 --> 02:53:03,363
and I appreciate you asking about that.

1813
02:53:04,243 --> 02:53:05,642
Jay, thanks for joining.

1814
02:53:05,642 --> 02:53:08,202
Please chime in with your thoughts.

1815
02:53:08,202 --> 02:53:10,202
Yeah, I just, you hear me?

1816
02:53:11,123 --> 02:53:12,162
Loud and clear.

1817
02:53:12,162 --> 02:53:14,082
Yeah, I just want to push back.

1818
02:53:14,082 --> 02:53:15,043
I take the other side.

1819
02:53:15,043 --> 02:53:18,842
I think, I don't think we should have smaller blocks.

1820
02:53:18,842 --> 02:53:23,842
I think today, I think that the reason

1821
02:53:24,683 --> 02:53:28,363
why blocks are no longer full

1822
02:53:28,363 --> 02:53:33,043
and the mempools are no longer pushing fee pressure

1823
02:53:33,043 --> 02:53:38,043
is because of protocols deciding not to build on Bitcoin

1824
02:53:38,883 --> 02:53:43,883
because of this lack of long-term scaling solutions.

1825
02:53:44,803 --> 02:53:49,803
So I think bigger blocks actually create more activity,

1826
02:53:49,803 --> 02:53:51,883
and that's obviously not enough,

1827
02:53:51,883 --> 02:53:55,322
but you also need like a long-term scaling solution.

1828
02:53:55,322 --> 02:53:58,043
So I would say that the assumption

1829
02:53:58,043 --> 02:54:00,243
that everyone's on the same page,

1830
02:54:00,243 --> 02:54:03,402
even people that didn't fork off to Bitcoin Cash,

1831
02:54:03,402 --> 02:54:07,923
I mean, SegWit was a block size increase, right?

1832
02:54:07,923 --> 02:54:12,522
So I think consensus is that we should try to scale.

1833
02:54:12,522 --> 02:54:13,402
We tried to scale.

1834
02:54:13,402 --> 02:54:14,683
I mean, look what happened with Taproot.

1835
02:54:14,683 --> 02:54:16,642
We tried to squeeze as much as we could,

1836
02:54:16,642 --> 02:54:19,243
as much value out of every single byte,

1837
02:54:20,123 --> 02:54:22,563
and kind of maybe it was a mistake.

1838
02:54:22,563 --> 02:54:26,563
So I think bigger blocks with a scaling solution

1839
02:54:26,563 --> 02:54:29,043
is the right way if you want to attract,

1840
02:54:29,043 --> 02:54:31,762
you know, more fee pressure and more users.

1841
02:54:31,762 --> 02:54:33,762
That's just where I stand.

1842
02:54:35,003 --> 02:54:36,642
What would you say in response to those

1843
02:54:36,642 --> 02:54:39,642
who would say to you that if the block size

1844
02:54:39,642 --> 02:54:41,762
isn't reduced in the future,

1845
02:54:41,762 --> 02:54:46,162
then the rate of data accrual to the blockchain

1846
02:54:46,162 --> 02:54:50,883
is growing too fast relative to the rate of efficiency

1847
02:54:50,883 --> 02:54:53,642
and technology and hardware and bandwidth.

1848
02:54:53,642 --> 02:54:58,642
So the ordinary user can't have a full node inexpensively.

1849
02:54:58,642 --> 02:54:59,483
Do you?

1850
02:54:59,483 --> 02:55:00,402
Yeah, I agree.

1851
02:55:00,402 --> 02:55:02,803
I think that number's much higher.

1852
02:55:02,803 --> 02:55:05,402
I think that number is much higher than eight megabytes,

1853
02:55:05,402 --> 02:55:08,243
you know, maybe 16 or 32.

1854
02:55:08,243 --> 02:55:10,483
I don't think that number is four megabytes,

1855
02:55:10,483 --> 02:55:12,603
but I agree at some point you can't scale forever.

1856
02:55:12,603 --> 02:55:14,683
I'm not talking about infinite blocks,

1857
02:55:14,683 --> 02:55:17,603
but I think that bigger blocks,

1858
02:55:17,603 --> 02:55:18,522
the reason why, you know,

1859
02:55:18,522 --> 02:55:19,923
the reason why the NFT guys are showing up

1860
02:55:19,923 --> 02:55:21,923
is because the blocks are empty, right?

1861
02:55:21,923 --> 02:55:23,762
So they just going to take all the block space.

1862
02:55:23,762 --> 02:55:28,683
In a fair market, if there's a subsidy, every single block,

1863
02:55:28,683 --> 02:55:29,722
why isn't it full?

1864
02:55:29,722 --> 02:55:31,123
It should be full for NFTs.

1865
02:55:31,123 --> 02:55:33,243
If there's a non-zero value to NFTs,

1866
02:55:33,243 --> 02:55:36,043
you should fill up all the blocks because there's a subsidy.

1867
02:55:36,043 --> 02:55:38,842
So I think the problem is that there's not enough demand

1868
02:55:38,842 --> 02:55:41,603
for block space like there was in 2018.

1869
02:55:41,603 --> 02:55:44,243
And I believe from a financial markets idea

1870
02:55:44,243 --> 02:55:47,363
is the more capacity, the more demand,

1871
02:55:47,363 --> 02:55:50,842
not less capacity, it doesn't give you more demand.

1872
02:55:50,842 --> 02:55:53,443
The math puts that number at 300K though.

1873
02:55:56,483 --> 02:56:00,603
Well, I mean, assuming what?

1874
02:56:00,603 --> 02:56:05,603
Assuming like China, like firewalls and stuff?

1875
02:56:06,603 --> 02:56:10,322
Assuming the history of technology improving

1876
02:56:10,322 --> 02:56:11,722
remains the same rate.

1877
02:56:14,683 --> 02:56:17,202
I think what Luke is talking about here is that,

1878
02:56:17,202 --> 02:56:20,603
as I said, you want to have the rate of the growth

1879
02:56:20,603 --> 02:56:23,762
of the data on the blockchain not be higher

1880
02:56:23,762 --> 02:56:28,762
than the rate of the growth of technology

1881
02:56:29,402 --> 02:56:31,603
in terms of like, do people have the ability

1882
02:56:31,603 --> 02:56:35,443
to put a full node on their laptop or on their phone?

1883
02:56:35,443 --> 02:56:38,363
If the data is growing too fast

1884
02:56:38,363 --> 02:56:40,243
because the blocks are too large,

1885
02:56:40,243 --> 02:56:42,923
then people who are ordinary users

1886
02:56:42,923 --> 02:56:44,883
who want to have a full node to validate

1887
02:56:44,883 --> 02:56:49,282
that they have been paid Bitcoin will not be able to do it.

1888
02:56:49,282 --> 02:56:51,043
And they'll have to rely on someone else,

1889
02:56:51,043 --> 02:56:56,043
which is really the definition of centralization

1890
02:56:56,243 --> 02:56:58,962
is that you can't personally validate,

1891
02:56:58,962 --> 02:57:01,322
but you have to then go to some other party

1892
02:57:01,322 --> 02:57:02,363
in some other place.

1893
02:57:02,363 --> 02:57:04,762
I understand that side of the argument.

1894
02:57:04,762 --> 02:57:07,443
I'm saying that that's, I don't think that's a bigger deal.

1895
02:57:07,443 --> 02:57:10,842
And the fact that we have a SegWit block size increase

1896
02:57:10,842 --> 02:57:14,322
proves that that was the consensus compromise.

1897
02:57:15,603 --> 02:57:19,483
So yeah, I guess, yeah, in the future,

1898
02:57:19,483 --> 02:57:22,163
it's gonna get bigger and bigger and bigger, right?

1899
02:57:22,163 --> 02:57:23,003
We know that.

1900
02:57:23,003 --> 02:57:24,322
And I don't think there's a,

1901
02:57:25,562 --> 02:57:29,202
if you think 300 is the perfect number, maybe that's fine.

1902
02:57:29,202 --> 02:57:32,802
I think that we're already past it and we should go higher.

1903
02:57:33,922 --> 02:57:34,842
Understood.

1904
02:57:34,842 --> 02:57:38,163
I don't, like Henry, I think that was kind of my point

1905
02:57:38,163 --> 02:57:42,842
is that if I don't, for me at least,

1906
02:57:42,842 --> 02:57:45,722
and I'm always willing to be corrected on it,

1907
02:57:45,722 --> 02:57:49,523
I just don't necessarily see the world,

1908
02:57:49,523 --> 02:57:52,243
the same world where full nodes

1909
02:57:52,243 --> 02:57:56,123
have to be a reality for home users.

1910
02:57:56,123 --> 02:58:01,123
I mean, like you could use different techniques

1911
02:58:01,883 --> 02:58:04,202
to validate a transaction,

1912
02:58:04,202 --> 02:58:07,042
or if you see a problem with blocks,

1913
02:58:07,042 --> 02:58:08,403
if there's a chain split,

1914
02:58:09,722 --> 02:58:13,442
you can see if a transaction was included in both the tips.

1915
02:58:13,442 --> 02:58:14,883
Like, I don't-

1916
02:58:14,883 --> 02:58:17,842
You might as well be using PayPal at that point.

1917
02:58:17,842 --> 02:58:18,682
Why?

1918
02:58:20,042 --> 02:58:21,442
It's completely insecure.

1919
02:58:22,722 --> 02:58:25,322
Metatomist, I feel that one of the reasons

1920
02:58:25,322 --> 02:58:29,603
why gold was so popular around the world for so long

1921
02:58:29,603 --> 02:58:33,483
in so many societies is that an ordinary person

1922
02:58:33,483 --> 02:58:36,603
could tell the difference between a gold coin

1923
02:58:36,643 --> 02:58:38,523
and a fake gold coin.

1924
02:58:38,523 --> 02:58:39,643
You could bite it.

1925
02:58:39,643 --> 02:58:42,243
You could drop it on the floor and hear the sound.

1926
02:58:42,243 --> 02:58:44,603
They would say, sound money, right?

1927
02:58:44,603 --> 02:58:47,202
The ordinary person could tell

1928
02:58:47,202 --> 02:58:49,523
whether something was gold or not.

1929
02:58:49,523 --> 02:58:53,322
They could validate that they have been paid money.

1930
02:58:53,322 --> 02:58:56,322
And that's what decentralization is all about,

1931
02:58:56,322 --> 02:59:00,562
making the ordinary person able to validate directly.

1932
02:59:00,562 --> 02:59:02,922
That's the notion of decentralization

1933
02:59:02,922 --> 02:59:06,483
that I think is a coherent definition of the word.

1934
02:59:07,322 --> 02:59:08,922
I think it's vitally important

1935
02:59:08,922 --> 02:59:11,363
for Bitcoin's long-term success

1936
02:59:11,363 --> 02:59:14,763
that the ordinary person can easily exercise the option

1937
02:59:14,763 --> 02:59:18,243
at very low cost to validate Bitcoin

1938
02:59:18,243 --> 02:59:20,243
and to validate that they've been paid.

1939
02:59:21,082 --> 02:59:23,962
The large blocker community, I think,

1940
02:59:23,962 --> 02:59:28,163
has some valuable insights other than this topic.

1941
02:59:28,163 --> 02:59:31,042
The large blocker community, in my view-

1942
02:59:31,042 --> 02:59:32,722
Bitcoin is a large blocker community.

1943
02:59:32,722 --> 02:59:34,842
SegWit was a large block increase.

1944
02:59:34,883 --> 02:59:36,883
Bitcoin is a large block community.

1945
02:59:37,842 --> 02:59:39,123
Yeah, but that begs the question

1946
02:59:39,123 --> 02:59:40,842
because as Luke pointed out earlier,

1947
02:59:40,842 --> 02:59:42,562
it wasn't always large.

1948
02:59:42,562 --> 02:59:43,403
It used to be-

1949
02:59:43,403 --> 02:59:44,922
SegWit increased the block size

1950
02:59:44,922 --> 02:59:46,643
as a compromise with the same people

1951
02:59:46,643 --> 02:59:49,562
that then left Bitcoin to make Bcash.

1952
02:59:49,562 --> 02:59:51,123
Yeah, they shouldn't have left, I agree.

1953
02:59:51,123 --> 02:59:53,842
But it was a compromise that was the consensus.

1954
02:59:53,842 --> 02:59:56,442
But to say, Jay, I appreciate what you're saying a lot,

1955
02:59:56,442 --> 02:59:58,163
but I would respond this way,

1956
02:59:58,163 --> 03:00:00,682
that to say that it's in consensus right now

1957
03:00:00,682 --> 03:00:01,883
is to beg the question

1958
03:00:01,922 --> 03:00:04,922
because if we do, as a community, reduce the block size,

1959
03:00:04,922 --> 03:00:06,643
then that will be in consensus.

1960
03:00:06,643 --> 03:00:09,763
So the question is, what should the block size be?

1961
03:00:09,763 --> 03:00:11,722
And Luke pointed out that originally

1962
03:00:11,722 --> 03:00:13,283
it was smaller than it is now.

1963
03:00:13,283 --> 03:00:16,483
It was even smaller than one megabyte back in 2013,

1964
03:00:16,483 --> 03:00:18,082
as he was talking about earlier.

1965
03:00:19,156 --> 03:00:49,156
I feel that that was a very good idea to, as it originally was, to have small blocks, and that although this wasn't the vision at the very beginning of Bitcoin, I think that drivechain could greatly strengthen Bitcoin's long-run growth trajectory by enabling large blocks as an opt-in layer two, because that's what I was saying, Metatomist, is the value of large blockers is that they understand

1966
03:00:49,156 --> 03:01:01,156
that there is a legitimate technology advantage to large blocks, but I feel that in the drivechain view, the correct understanding is achieved that large blocks should be on top of small blocks.

1967
03:01:01,156 --> 03:01:14,156
There should be a sidechain, which is a layer two, that is large block, enabling people to opt in to that trade offset of low decentralization and low fees, high scalability.

1968
03:01:14,156 --> 03:01:28,156
And then when they're done with that, they can come back to layer one. And if both layers are sharing hash rate, sharing fees through merged mining, then there's a symbiotic collaborative arrangement there.

1969
03:01:29,156 --> 03:01:41,156
So I feel it's unfortunate that the block, it's unfortunate that Bitcoin lost something like 20% of its community back in time when there was that split. It's unfortunate.

1970
03:01:41,156 --> 03:01:52,156
And had drivechain been available at that time, maybe that community would have simply gone into a sidechain of Bitcoin and would have never left Bitcoin, and they'd be using Bitcoin's unit of account.

1971
03:01:52,156 --> 03:02:11,156
They'd be using a synthetic Bitcoin on a drivechain, which can be redeemed for main chain Bitcoin. And then the network effect of Bitcoin would be larger, the user set would be larger, the hash rate and economic fees would be larger, and the two communities would be coexisting symbiotically, synergistically, collaboratively.

1972
03:02:11,156 --> 03:02:24,156
It's very exciting to imagine that the large block Bitcoiners would come back to Bitcoin to use a sidechain. And I believe that if drivechain is created, there will be a profit motive for that to occur.

1973
03:02:24,156 --> 03:02:34,156
Because if you want to achieve the software experience of large blocks, but you want Bitcoin's unit of account, that's what a drivechain would offer you.

1974
03:02:34,156 --> 03:02:44,156
It would offer you benefits that you can't get on the altcoin version of large blocks. The altcoins compete existentially against Bitcoin for monetary premium.

1975
03:02:45,156 --> 03:03:12,156
But this didn't happen. So what actually did happen? So that didn't happen, right? So we didn't, 2017 till now, what actually did happen is the altcoins happened and Ethereum happened. So if drivechain was around, as you say, and people would have used that instead, then okay. But what did they do? They ended up, they couldn't do that and there wasn't enough capacity. So they created altcoins and Ethereum.

1976
03:03:12,156 --> 03:03:33,156
So on the other hand, maybe we could say that these altcoins were actually scaling Bitcoin. So whatever you're saying that they should have done in the drivechain, if it was there, it wasn't there. So they use altcoins, right, to scale the testing and the other utilities that can't be done on Bitcoin.

1977
03:03:34,156 --> 03:03:58,156
So, you know, that's what happened. So let's skip to today, to 2023 and say in today's reality, what does drivechain do, right? And what would that affect, you know, would altcoiners start using sidechains? Would Bitcoin Cash come back to sidechain? I think it's much more complicated today than it was 2017.

1978
03:03:59,156 --> 03:04:13,156
That's right. I agree with you, Jay, 100%. It is more complicated today, because today Bitcoin dominance is much lower than it used to be. And today there are large communities with significant network effects outside of Bitcoin, most conspicuously Ethereum.

1979
03:04:13,156 --> 03:04:35,156
However, Bitcoin still at present has the unparalleled status of the largest market cap and the strongest economic security, the biggest network, the strongest narratives, and notably, the most conservative and simple layer one.

1980
03:04:35,156 --> 03:04:54,156
So it's the most tested, most reliable. And if Bitcoin were to adopt drivechain, in my view, my optimistic view is that there would be a powerful economic incentive for altcoin users to migrate to the drivechains.

1981
03:04:54,156 --> 03:05:22,156
And of course, the founders and promoters of altcoins wouldn't happily do that. But the users are a distinct set of people than the founders and promoters. There are legitimate users of certain altcoins, especially the privacy coins, and the big block coins, that they want to do microtransactions, and they want to do it using a protocol other than Lightning.

1982
03:05:22,156 --> 03:05:37,156
So the big blockers have their big block technology. And I think they would be the users would benefit from using the Bitcoin unit of account rather than a unit of account, which is an altcoin that freely floats against Bitcoin and could devalue against Bitcoin.

1983
03:05:37,156 --> 03:06:03,156
So there are some economic benefits that would drive some amount of migration from the altcoins to the drivechains, possibly. And the privacy community, similarly, I think they want the privacy tech, and they would prefer that tech to be on a Bitcoin sidechain and use a synthetic Bitcoin rather than suffer the foreign exchange rate, you know, exchange rate risk associated with using a privacy coin.

1984
03:06:04,156 --> 03:06:29,156
A privacy coin could devalue against Bitcoin. I think those users might prefer to use a synthetic Bitcoin for its unit of account stability. So it's possible that Bitcoin could magnetize, could attract the privacy altcoin users over to drivechain, could attract the big block users over to drivechains from altcoins.

1985
03:06:29,156 --> 03:06:47,156
And similarly, in the long run, maybe all of the users of the smart contract chains, Bitcoin could once again achieve 100% dominance as it had at the beginning. Maybe. That's the dream. What do you think? Crazy?

1986
03:06:47,156 --> 03:07:04,156
I don't think it's I think I think I don't think it's crazy. I mean, I think that at least somebody right in the small block community is trying to, you know, solve for the security budget problem, which will only become more present as time goes on.

1987
03:07:04,156 --> 03:07:31,156
You know, I don't know what the percentage is right now of dependency on the block subsidy, but it's a it's a problem. I mean, it's not like the, you know, it's the price is what, twenty two thousand dollars right now. And, you know, there's generally speaking, probably not an issue at the moment. But over time, I think people realize that the lack of use, which is really what drives, you know, the fee market is is what's going to solve it.

1988
03:07:31,156 --> 03:07:51,156
And so at least there's people trying to solve for this case of non-use. I mean, everybody's been told for the last, you know, I don't know how long to just, you know, hold and don't don't do anything with it. And then if you want to do something with it, you know, use this, you know, layer two or lightning and whatever.

1989
03:07:51,156 --> 03:08:11,156
And it just steals fees for miners. And so there's at least somebody talking about it and trying to solve it. And it's interesting. I, you know, the only thing that I am curious about the merge mining part is interesting, you know, from a miner perspective.

1990
03:08:11,156 --> 03:08:40,156
But in my opinion, small blocks still lead to miner specialization. And over time, as we're starting to maybe see, starts getting concentrated more and more as people specialize in a mass resources. And it's just how capitalism works in the economies of scale. It's a for profit, you know, function to be a miner. And, you know, currently there's two mining pools that are maybe about 53 percent of the network.

1991
03:08:40,156 --> 03:08:56,156
And that's in a small block environment, whereas in, you know, the argument against the big block environment is that it centralizes because the resources become, you know, too cumbersome to mine.

1992
03:08:56,156 --> 03:09:12,156
But I think that in a in a large block economy, especially with unlimited block size, where there's no there's no limit, but it's determined by the market and competition of whoever, you know, wants to jump in and try to make money.

1993
03:09:12,156 --> 03:09:41,156
I think that that that future is more in line with Bitcoin than, you know, suggesting that individual users need to download like the whole blockchain to decentralize it. Because Luca just said that it would what I had mentioned earlier would make it insecure. But it's not so much that you downloading the blockchain is what decentralizes it. It's what you can do once you figure out something has gone bad. Right.

1994
03:09:41,156 --> 03:10:05,156
So you only have so much power as an individual user, even if you didn't like a transaction or something broke the rules or whatever the case may be. You could do all you want in your heart's desire to reject it. But that doesn't necessarily mean that you've done anything to change the reality of that transaction being valid, according to the miners.

1995
03:10:06,156 --> 03:10:25,156
And so it's not even so much that you have the ability to see. It's what you can do once you see. And I think that that's the big, big blocker viewpoint is that over time with use people and I think you're making the same argument, but obviously with a completely different predicate.

1996
03:10:26,156 --> 03:10:42,156
With use becomes this market where people, you know, where people can pay the miners can can subsidize the security budget. And I think that's the same thing that big blockers are saying. We're just saying do it on chain.

1997
03:10:42,156 --> 03:11:06,156
I didn't follow your reasoning when you said that large block layer one doesn't result in miner specialization, but small block layer one does. I think that the size of the blocks is probably completely orthogonal to the degree of specialization in mining. Can you say clearly and simply?

1998
03:11:06,156 --> 03:11:35,156
No, no. So what I was saying is that the smaller. So when you have use, right, then you have people who want to come in to take advantage of collecting those fees. And my point is, is that it's more pure in competition when you have more use and more use cases that over time, you would have more people compete for.

1999
03:11:36,156 --> 03:11:45,156
Validating those transactions and mining those transactions in in that world. Now, that's not the case right now, obviously.

2000
03:11:46,156 --> 03:12:05,156
What I'm wondering is, like, you seem to be saying, if I understand you correctly, which maybe I don't. So correct me if I'm wrong, but you seem to be saying that large block layer one Bitcoin is better than small block layer one Bitcoin, in your view, because large block layer one Bitcoin somehow avoids miner specialization or somehow is more capitalistic.

2001
03:12:06,156 --> 03:12:20,156
But I think that small block layer one is just as capitalistic and prone or not prone to miner specialization. I mean, can you kind of try to crystallize what you're saying?

2002
03:12:20,156 --> 03:12:28,156
No, no. I'm saying that the economic reality is that specialization occurs across the board, right?

2003
03:12:28,156 --> 03:12:34,156
Sure. And Satoshi said that. Yeah, he said in the future, it'll be server farms and professionals who do mining, right?

2004
03:12:35,156 --> 03:12:41,156
Yeah. So my point wasn't to say one is one is not going to end up in this reality versus the other.

2005
03:12:42,156 --> 03:12:59,156
Mine was more around. And that's why I said, I think that in a sense, we're saying the same thing, but for obviously, in a completely different context, in terms of use becoming the driver for solving the security budget problem.

2006
03:12:59,156 --> 03:13:08,156
And for you, it's it's these sidechains which could drive use and also pay the miners through this merge mining reality.

2007
03:13:09,156 --> 03:13:35,156
And then for the big blockers, it's just, you know, capacity and ability on on chain to do what the system is capable of, to have all sorts of different variations of economic activity, whether that's, you know, JPEGs or whether that's, you know, some different type of financial transaction to do it all on chain.

2008
03:13:35,156 --> 03:13:51,156
And the realities are essentially the same in terms of the mining. So like the accusation of like centralization and big block methodology, I don't think is valid in this case, because eventually the same things are going to happen with small blocks.

2009
03:13:51,156 --> 03:14:06,156
Yeah, I see what you're saying. It sounds like you're saying that there is centralization in mining, no matter what, and therefore all talk of centralization or decentralization in small blocks is, is incoherent.

2010
03:14:06,156 --> 03:14:25,156
I would respond to that view with restating what we talked about earlier, which is that the notion of centralization or decentralization in the drivechain view is one that focuses on the cost to the ordinary person to validate that they have been paid Bitcoin.

2011
03:14:26,156 --> 03:14:51,156
Just like with gold, the ordinary person could bite it, could, you know, knock it on a table and hear it. It was possible for the ordinary person, for the ordinary person to validate that they've been paid gold was possible and was inexpensive. And that kind of decentralization, that notion of decentralization is identical in the small block Bitcoin viewpoint, in my, in my understanding.

2012
03:14:52,156 --> 03:15:12,156
But the regular person won't be able to use Bitcoin in this small block. There's a, there's a throughput issue, right? There's, there's just not enough, not enough space for people to use the Bitcoin as money. It just becomes a settlement layer. So we're no longer talking about that user in that world where Bitcoin is just a settlement layer.

2013
03:15:13,156 --> 03:15:35,156
The regular user could opt in to the degree of decentralization that she wants in the drivechain format. The regular user could, for example, might speak. Right now, Bitcoin layer one has like a $1 fee, very roughly speaking, to do a transaction. So right now it's not hard. In the far future, it might be a much higher fee.

2014
03:15:35,156 --> 03:15:54,156
And then ordinary people might be primarily using some other layer. So what drivechain does is it seeks, it aspires, it aspires to lay the foundation for a multi-layered architecture in which users can opt in to the degree of decentralization that they want.

2015
03:15:54,156 --> 03:16:15,156
Like right now, an ordinary person might save some money in physical gold in their safe at their home, or they might have it on a treasure with Bitcoin. And they might also have a layered approach to their finances where they have some money in cash in their wallet and some money in a bank account and maybe even some Bitcoin at Coinbase.

2016
03:16:16,156 --> 03:16:37,156
They might have a kind of a flexible, heterogeneous, layered approach to their money. And what drivechain aims to do is create an architecture in which all of those layers are on Bitcoin. And over time, they would grow in a way that we can't fully understand right now. It's hard to know how the future will look in 25 years.

2017
03:16:37,156 --> 03:17:03,156
But if we lay the foundation today for miner controlled two-way pegs on Bitcoin, enabling many sidechains to be developed that are arguably peer to peer or arguably trustless in a sense of the word that is resonant with how Bitcoin is trustless or trust distributed or trust minimized, we could say, then that might be great for Bitcoin.

2018
03:17:04,156 --> 03:17:19,156
It might lead to great value accrual. It might lead to a lower rate or no rate of attrition of developers and users to altcoins because they want privacy or they want more expressiveness of code or they want more scalability.

2019
03:17:19,156 --> 03:17:33,156
All those things could be instead on drivechain. So I agree with you, Jay, that in the distant future, if Bitcoin fees are $1,000 a transaction, ordinary people aren't going to be using it except maybe to do some once in a lifetime money movement.

2020
03:17:34,156 --> 03:17:50,156
But most people will be on layers. But the money system is going to be layered, just like our energy system is layered. There isn't like a power plant in everyone's garage. Instead, there's one in each city and people connect to it through a layered architecture.

2021
03:17:50,156 --> 03:18:04,156
So money is going to be layered just like other systems and ecologies in technology and nature are layered systems. So drivechain aspires to have Bitcoin layer one be the base of all of blockchain development and value accrual in the future.

2022
03:18:05,156 --> 03:18:21,156
And yes, ordinary people won't be necessarily using it all the time. But if they could still validate the base layer and have the option to move into the base layer, then that would be harmonious with what we're trying to achieve here. Do you see it differently?

2023
03:18:22,156 --> 03:18:49,156
Yes, I just want to say, so BIP301, you're making the case that BIP301 will enable larger block sidechains. And I agree. I think that maybe we just use, you know, I don't know if you're familiar with space trains. But if you want to make a merge mine sidechain, I think we should just do the merge mine sidechain that we all want, which is Bitcoin script with large blocks.

2024
03:18:49,156 --> 03:19:05,156
I think when you throw in all possible blockchain development that could ever exist, right, that really is not something that Bitcoin design or Bitcoin consensus or miners incentives cover.

2025
03:19:05,156 --> 03:19:29,156
You know, Bitcoin covers peer-to-peer electronic cash, Bitcoin covers miners taking the largest fee. So, you know, you're making the argument for drivechains, but you're really only making the argument for a sidechain for scaling Bitcoin script and not adding, you know, EVMs or something like that. So that's the pushback I would give on BIP301.

2026
03:19:30,156 --> 03:19:51,156
Well, I mean, BIP301 is just a modification of the merge mining that we already have, because it's inconvenient for miners to have to run all this node software for the altcoin or the sidechain. So they don't want to run, for example, Namecoin, Daemon.

2027
03:19:52,156 --> 03:20:11,156
And that's really all it is. It's not that, I don't know of any, there's only like one person in the entire world, which is maybe you, I don't remember who it is, but there's only one person who ever expressed any controversy over BIP301 at all. BIP301, I think, is mostly ignored by people.

2028
03:20:13,156 --> 03:20:17,156
Yeah, I'm just, I just want to say that BIP301 has...

2029
03:20:17,430 --> 03:20:26,230
It could add, it could actually affect the main chain in a small way, depending on what's happening on the sidechain.

2030
03:20:26,230 --> 03:20:35,229
So if we could just choose, we could just choose a sidechain we all agree on, I think it actually solves the problem and not just open it up to anyone.

2031
03:20:35,229 --> 03:20:41,229
That's kind of a weird argument, though, don't you think? Like, if I'm saying something like, I'm like a Gutenberg with the movable type,

2032
03:20:42,030 --> 03:20:50,029
and I say, look, we've got these 26 letters, and we can make whatever we want. And then someone else can say, well, we only need, you know, we only need this one book.

2033
03:20:50,029 --> 03:21:03,029
And it's like, well, it shouldn't really be up to me to think of the letter thing, the printing press, the alphabet and all the books, you know, like someone else can come up with a good idea later.

2034
03:21:03,830 --> 03:21:13,830
So, Jay, just to build on that, maybe in simpler terms for people in the audience who, who are less familiar with these, this discourse than you are.

2035
03:21:13,830 --> 03:21:25,830
I think what Paul's saying there is that, with this analogy of the Gutenberg idea, like, it's great that an unlimited number of books can be created from a certain architecture,

2036
03:21:25,830 --> 03:21:36,629
which is the printing press and the letters of the alphabet. So what you were questioning is whether we should, instead of having the drivechain architecture in place, if I heard you correctly,

2037
03:21:36,629 --> 03:21:50,629
you were suggesting that we have a certain set of sidechains. But the drivechain architecture does allow for the Bitcoin community to limit the number and quality and kind of the drivechains.

2038
03:21:50,629 --> 03:22:04,430
So the drive, the Bitcoin community through the miners can discontinue a problematic drivechain, such as one that has code on it that's interfering with other drivechains or that's reducing the value of the main chain token.

2039
03:22:04,430 --> 03:22:11,430
The Bitcoin community can discontinue that drivechain that's problematic. Are you sympathetic to that line of reasoning?

2040
03:22:12,430 --> 03:22:19,230
But we don't have to, right. We don't need to discontinue it because we know going in which ones are bad and which ones are good.

2041
03:22:19,230 --> 03:22:20,230
But how do you know that though?

2042
03:22:20,230 --> 03:22:36,230
Because I could just say when the, when the Ethereum white paper came out, I predicted what I called front running. I predicted that it will eventually lead to reorg risk. And they said it was crazy. And you know, five years later, it happened. MEV happened.

2043
03:22:36,230 --> 03:22:40,230
Did you predict that Ethereum would be like one third the market cap on Bitcoin?

2044
03:22:41,030 --> 03:22:44,030
No, I'm just talking about the fact that certain protocols...

2045
03:22:44,030 --> 03:22:48,030
So then not everything that you predicted comes to pass?

2046
03:22:48,030 --> 03:22:56,030
No, I predicted MEV because I understand how incentives, financial markets and financial protocols...

2047
03:22:56,030 --> 03:22:59,030
Are you saying that every single thing that you have predicted comes to pass?

2048
03:22:59,030 --> 03:23:01,030
No, I'm talking about...

2049
03:23:01,030 --> 03:23:02,030
Well then what difference does it make?

2050
03:23:02,030 --> 03:23:09,030
Because you're putting the same exact issue with abstract protocols.

2051
03:23:09,829 --> 03:23:17,829
My argument is that the Bitcoin miner, Satoshi's incentive structure does not cover certain protocols.

2052
03:23:17,829 --> 03:23:27,829
And the protocols it doesn't cover is when the miners could secretly manipulate the utility of the protocol. That's called MEV.

2053
03:23:28,629 --> 03:23:36,629
This is a kind of a separate point, but I don't understand people's obsession with MEV personally, because it does seem like MEV is a bad thing.

2054
03:23:36,629 --> 03:23:42,629
And it's something that I considered long ago when I did this prediction market technology, blah, blah, blah, blah, blah.

2055
03:23:42,629 --> 03:23:50,629
But despite the MEV, it's not as though Ethereum just immediately, you know, someone did the first MEV thing and then Ethereum just burst into flames.

2056
03:23:50,629 --> 03:23:55,629
I just said it's a small non-zero issue. I didn't say it's a big burst.

2057
03:23:56,430 --> 03:24:03,430
Didn't you just say a moment ago that MEV is... you predicted MEV and therefore we know that no one would ever...

2058
03:24:03,430 --> 03:24:07,430
Yeah, that's what I'm saying, that MEV will happen on drivechain as well.

2059
03:24:07,430 --> 03:24:22,430
And there's a possibility that a miner running some crazy, you know, high frequency, whatever, drivechain will decide not to switch the head when a new block is signed

2060
03:24:23,230 --> 03:24:26,230
and continue trying to find the block that he wants to hash in.

2061
03:24:26,230 --> 03:24:35,229
And that's all I'm saying. There's a non-zero effect on main chain when you have an abstract protocol that has consensus.

2062
03:24:35,229 --> 03:24:37,229
So you're asking us to...

2063
03:24:37,229 --> 03:24:43,229
The merge mining, it allows reorgs of the sidechain without them being reorged on the main chain.

2064
03:24:43,229 --> 03:24:50,229
Yes, I know that. So then why do you need... if that's the case, why don't we just use op-return?

2065
03:24:51,030 --> 03:24:58,030
Well, the point of that is that if there is MEV, then that's the sidechain's problem.

2066
03:24:58,030 --> 03:25:04,030
If there's some reason, like let's say they have some reason to reorg the main chain or do something to the main chain.

2067
03:25:04,030 --> 03:25:13,030
What's the purpose of having the hash in BIP301 at all if it doesn't have any meaning?

2068
03:25:13,829 --> 03:25:19,829
Well, it has the meaning because it transfers all the fees of the sidechain to the layer-1 Bitcoin miners

2069
03:25:19,829 --> 03:25:24,829
and increases the equilibrium difficulty on layer-1 for every single chain that it's attached to.

2070
03:25:24,829 --> 03:25:32,829
Right. And it also has meaning because, right, that's the consensus we go with as that's the state of the sidechain.

2071
03:25:32,829 --> 03:25:39,829
Now, in order to fork the sidechain, you have to deal with the drama of the sidechain.

2072
03:25:40,630 --> 03:25:47,630
But if you're able to get your hash into the main chain, then the other side has to deal with the drama of the forked sidechain.

2073
03:25:47,630 --> 03:25:48,630
So there will be a...

2074
03:25:48,630 --> 03:25:49,630
What do you mean other side?

2075
03:25:49,630 --> 03:25:54,630
You said there's a way to fork the sidechain without forking main chain. Right.

2076
03:25:54,630 --> 03:25:58,630
Well, there's a dispute among the two sidechain people. That's what you're talking about?

2077
03:25:58,630 --> 03:26:04,630
Right. I'm saying whoever got their thing into Bitcoin Core kind of has a lead up on that.

2078
03:26:04,630 --> 03:26:06,630
Or they found a block.

2079
03:26:07,430 --> 03:26:09,430
That means they found a block.

2080
03:26:09,430 --> 03:26:14,430
They found a block and the other miner wants his hash in the block and they don't care about the blind merge.

2081
03:26:14,430 --> 03:26:17,430
I'm assuming all these miners are intimately familiar with the sidechain.

2082
03:26:17,430 --> 03:26:24,430
Anyway, I'm just making a point that there's a non-zero effect on miner incentives when you have an abstract protocol.

2083
03:26:24,430 --> 03:26:30,430
You're asking the Bitcoin community to come to consensus that this hash represents all possible protocols.

2084
03:26:30,430 --> 03:26:35,430
Even the possible protocols that we know are really bad and will create bad incentives.

2085
03:26:36,229 --> 03:26:47,229
So instead of coming to consensus on all possible protocols, we should just say limit the ones that Satoshi had in mind that creates the right incentives for miners to keep mining.

2086
03:26:47,229 --> 03:26:55,229
I think I'm just going to consensus that this idea is better. It's more worth it to do this idea than to not do it.

2087
03:26:56,030 --> 03:27:13,030
The idea is that also it's very presumptuous for any single person to claim that they know in advance, a priori, which ideas will be really, really successful and which ideas will not be successful.

2088
03:27:13,030 --> 03:27:16,030
We know which ideas are covered within the strategy.

2089
03:27:16,829 --> 03:27:25,829
One thing I know for sure is that anyone who's relying on that is definitely going to be wrong and destroy a lot of useful other stuff in the process.

2090
03:27:25,829 --> 03:27:27,829
I'm absolutely certain that that's a mistake.

2091
03:27:27,829 --> 03:27:31,829
Jay, may I ask you a question? I find your line of reasoning interesting.

2092
03:27:31,829 --> 03:27:43,829
Could you say if Ethereum were a merged mined drivechain of Bitcoin and the native token of that drivechain is a synthetic Bitcoin instead of an altcoin,

2093
03:27:44,630 --> 03:27:51,630
instead of being an altcoin called Ether, it were the native token of Ethereum were a synthetic Bitcoin redeemable for Bitcoin.

2094
03:27:51,630 --> 03:28:01,630
Do you think Bitcoin would be better off today if all Ethereum users and value were existing as a drivechain, increasing Bitcoin's fees and value?

2095
03:28:01,630 --> 03:28:05,630
Do you think that'd be better to have all of Ethereum inside of Bitcoin's community?

2096
03:28:05,630 --> 03:28:09,630
Or do you think we're better off having this competitor exist as an altcoin?

2097
03:28:09,630 --> 03:28:11,630
What are your thoughts?

2098
03:28:12,430 --> 03:28:30,430
Okay, yeah, so that's great. So if that was the case, then a couple of years back, what would have happened was somebody would have wrote this code to reorg in real time Bitcoin in order to fight back to get the added MEV that they want.

2099
03:28:30,430 --> 03:28:34,430
Yeah, but don't you think you have a completely fundamental misunderstanding of how it works?

2100
03:28:35,229 --> 03:28:51,229
No, no, my question is, knowing this, that we get all of the Ethereum on Bitcoin, but we kind of remove, we change the incentives of the Bitcoin miners from just, you know, doubles, okay, double spends are mutually exclusive.

2101
03:28:51,229 --> 03:28:55,229
And we don't know, the miners know nothing about the people doing peer to peer money.

2102
03:28:55,229 --> 03:28:59,229
So there's really no incentive to do anything else but look at fees.

2103
03:29:00,029 --> 03:29:10,029
When you have other incentives, right, then the miners start becoming quantitative high-frequency trading bots, and not just SHA-256 miners.

2104
03:29:10,029 --> 03:29:14,029
So the question is to the community, if that's okay, then I'm fine with it.

2105
03:29:14,029 --> 03:29:20,029
I just want to point out that there's a non-zero pressure for miners to do other things than just...

2106
03:29:20,029 --> 03:29:22,029
Okay, and that's the question.

2107
03:29:22,830 --> 03:29:32,830
I think this is a big misunderstanding in the community, which is that some people think that, you know, they're just oblivious to what mining really is.

2108
03:29:32,830 --> 03:29:40,830
Which is that mining requires a full node, but not every full node must be a miner.

2109
03:29:40,830 --> 03:29:44,830
And so a miner must do a whole suite of things.

2110
03:29:45,630 --> 03:29:57,630
They have to find cheap power, they have to find the good ASIC chips, they have to know about cooling, they have to know about these permits, they have to know about Chinese laws kicking them out of the country.

2111
03:29:57,630 --> 03:30:05,630
So it was never, ever, ever, ever the case, remotely, that Bitcoin mining was only running a full node.

2112
03:30:05,630 --> 03:30:11,630
It was always running a full node, plus doing a bunch of other extremely competitive business operations.

2113
03:30:12,430 --> 03:30:22,430
It had effectively an unlimited number of potential dimensions, like how to find stranded power, how to find a hydroelectric dam that was not...

2114
03:30:22,430 --> 03:30:26,430
So it's already an unlimited number of things.

2115
03:30:26,430 --> 03:30:30,430
And so if that's what you're... I think this is a big misunderstanding that people say,

2116
03:30:30,430 --> 03:30:34,430
I would just prefer mining to be the way that I want it to be.

2117
03:30:34,430 --> 03:30:40,430
And people who are just naively think that that's the way Bitcoin mining has worked this time.

2118
03:30:41,229 --> 03:30:43,229
I just want to make one last point, and then I'll go.

2119
03:30:43,229 --> 03:30:47,229
So in a peer-to-peer money, it's between me and you making the transaction.

2120
03:30:47,229 --> 03:30:51,229
The miners can't be involved in our transaction at all.

2121
03:30:51,229 --> 03:30:57,229
When you have a protocol that includes anyone, a betting protocol, or an open...

2122
03:30:57,229 --> 03:30:59,229
It's a multi-party game for money.

2123
03:30:59,229 --> 03:31:03,229
The miners become part of the transaction and part of the game.

2124
03:31:03,229 --> 03:31:07,229
They're no longer separate from the peer-to-peer transaction.

2125
03:31:08,029 --> 03:31:10,029
We're opening up an attack vector.

2126
03:31:10,029 --> 03:31:12,029
It's a non-zero attack vector.

2127
03:31:12,029 --> 03:31:16,029
What's happened is that you've just misunderstood the way it's worked the entire time.

2128
03:31:16,029 --> 03:31:18,029
The miners...

2129
03:31:18,029 --> 03:31:20,029
I don't misunderstand.

2130
03:31:20,029 --> 03:31:30,029
It's always a requirement that your transaction be mined in order for the peer-to-peer money thing to go through.

2131
03:31:30,029 --> 03:31:36,029
So you can define that however you like as not meeting or meeting your definition of peer-to-peer money.

2132
03:31:36,830 --> 03:31:38,830
But that was always the reality.

2133
03:31:38,830 --> 03:31:46,830
And it's just trivially straightforward to put in the design that the miners make their cut.

2134
03:31:46,830 --> 03:31:48,830
They make a little transaction fee every time they do this.

2135
03:31:48,830 --> 03:31:52,830
And because the transaction is private, because the money has value,

2136
03:31:52,830 --> 03:31:56,830
they would be motivated to include as many as possible.

2137
03:31:56,830 --> 03:32:00,830
And that is exactly how Bitcoin works.

2138
03:32:00,830 --> 03:32:02,830
That is how it has always worked.

2139
03:32:03,630 --> 03:32:05,630
That is exactly how all the sidechains work as well.

2140
03:32:05,630 --> 03:32:07,630
And it's definitely how BIP301 works.

2141
03:32:07,630 --> 03:32:11,630
Because BIP301 transforms all the messages on a sidechain,

2142
03:32:11,630 --> 03:32:15,630
which none of the miners are looking at at all.

2143
03:32:15,630 --> 03:32:19,630
It transforms that into just one single layer one transaction

2144
03:32:19,630 --> 03:32:23,630
where the one that pays the highest fee is the one that's included.

2145
03:32:23,630 --> 03:32:25,630
Hence the name Blind Merge Mining.

2146
03:32:25,630 --> 03:32:29,630
So it's no offense, but you seem to have fundamentally 180 degrees...

2147
03:32:30,430 --> 03:32:34,430
So Paul, I fundamentally understand 100% of drivechains.

2148
03:32:34,430 --> 03:32:38,430
And the fact that you just can't admit that there's a non-zero chance that the miner incentives will change...

2149
03:32:38,430 --> 03:32:40,430
Declining it as a chance is ridiculous, sir.

2150
03:32:40,430 --> 03:32:42,430
Because we saw it happen in Ethereum.

2151
03:32:42,430 --> 03:32:44,430
We actually saw it happen in Ethereum.

2152
03:32:44,430 --> 03:32:46,430
We actually saw it happen in Ethereum.

2153
03:32:46,430 --> 03:32:48,430
But we actually saw it happen.

2154
03:32:48,430 --> 03:32:50,430
This is not like a theory.

2155
03:32:50,430 --> 03:32:52,430
We just watched it happen over the last five years.

2156
03:32:54,430 --> 03:32:56,430
What if I told you there's a non-zero chance

2157
03:32:57,229 --> 03:33:01,229
that natural gas permits will affect Bitcoin mining incentives?

2158
03:33:01,229 --> 03:33:03,229
I would agree.

2159
03:33:03,229 --> 03:33:05,229
If it's a truth, I would agree and not fight back.

2160
03:33:05,229 --> 03:33:09,229
I would say yes, there's a non-zero chance, but it's not a big deal.

2161
03:33:09,229 --> 03:33:13,229
All right, gentlemen, let's keep the conversation totally civil.

2162
03:33:13,229 --> 03:33:17,229
By the way, I really appreciate the ideas that are being shared very much.

2163
03:33:17,229 --> 03:33:21,229
No, but it's a ridiculous thing to say.

2164
03:33:21,229 --> 03:33:25,229
The possibility that something somewhere might be affected.

2165
03:33:26,029 --> 03:33:28,029
Something may be affected in a negative way by not doing something.

2166
03:33:28,029 --> 03:33:32,029
It misses the complete point, which is that the entire thing has been designed

2167
03:33:32,029 --> 03:33:36,029
to be 100% consistent with the way it was before.

2168
03:33:36,029 --> 03:33:38,029
Which is the point.

2169
03:33:38,029 --> 03:33:42,029
Which is that miners earn transaction fees by including messages.

2170
03:33:42,029 --> 03:33:46,029
They have an incentive to maximize their transaction fee revenue.

2171
03:33:46,029 --> 03:33:50,029
All of that is 100% the same.

2172
03:33:50,029 --> 03:33:54,029
The year 2030 is going to be different than the year 2020.

2173
03:33:54,830 --> 03:33:58,830
When the calendar rolls around from 1999 to the year 2000,

2174
03:33:58,830 --> 03:34:02,830
something will have happened then that never happened before.

2175
03:34:02,830 --> 03:34:06,830
All of human history, which is that the first two digits of a calendar

2176
03:34:06,830 --> 03:34:10,830
will go from being 1-9 to being 2-0.

2177
03:34:10,830 --> 03:34:14,830
Then you could say, what are the chances that this might affect something?

2178
03:34:14,830 --> 03:34:18,830
You know, it's...

2179
03:34:18,830 --> 03:34:22,830
I don't know.

2180
03:34:23,630 --> 03:34:27,630
May I ask you to clarify?

2181
03:34:27,630 --> 03:34:31,630
When I asked you before whether or not

2182
03:34:31,630 --> 03:34:35,630
you, in your opinion, would favor all of Ethereum's value

2183
03:34:35,630 --> 03:34:39,630
and fees being Bitcoin's value and fees by,

2184
03:34:39,630 --> 03:34:43,630
if you could alter history, would you prefer all of Ethereum

2185
03:34:43,630 --> 03:34:47,630
having been built as a merged mine sidechain of Bitcoin?

2186
03:34:47,630 --> 03:34:51,630
Do you think that would have been good for Bitcoin or bad for Bitcoin?

2187
03:34:51,630 --> 03:34:55,630
I didn't hear you give a clear answer to that question.

2188
03:34:55,630 --> 03:34:59,630
I'd love to hear you respond to it again.

2189
03:34:59,630 --> 03:35:03,630
Do you have an opinion on that or is that a fair question?

2190
03:35:03,630 --> 03:35:07,630
Would it be good for Bitcoin to have all of Ethereum's value and fees or not?

2191
03:35:07,630 --> 03:35:11,630
Not the MEV fees, not the fees that manipulate retail.

2192
03:35:11,630 --> 03:35:15,630
If you had to say just on net, I appreciate you answering, no.

2193
03:35:15,630 --> 03:35:19,630
But if you had to say on net,

2194
03:35:19,630 --> 03:35:23,630
I respect to that part of Ethereum that you think is deleterious

2195
03:35:23,630 --> 03:35:27,630
to its success, but would you on net prefer

2196
03:35:27,630 --> 03:35:31,630
that instead of Bitcoin having this large competitor,

2197
03:35:31,630 --> 03:35:35,630
would you prefer that all of that development and value accrual

2198
03:35:35,630 --> 03:35:39,630
to the token and block space having been value accrual to Bitcoin's token

2199
03:35:39,630 --> 03:35:43,630
and block space instead on net?

2200
03:35:43,630 --> 03:35:47,630
In other words, more broadly, do you think it's good for Bitcoin

2201
03:35:47,630 --> 03:35:51,630
that altcoins are growing or do you think it would be better

2202
03:35:51,630 --> 03:35:55,630
if all of the growth and activity would be within Bitcoin

2203
03:35:55,630 --> 03:35:59,630
if you had to choose? Because I think that for me,

2204
03:35:59,630 --> 03:36:03,630
the drivechain ambition is to bring the altcoins that have value

2205
03:36:03,630 --> 03:36:07,630
to Bitcoin and those that are simply Ponzinomics

2206
03:36:07,630 --> 03:36:11,630
wouldn't be developed within Bitcoin because you can't use a synthetic Bitcoin.

2207
03:36:11,630 --> 03:36:15,630
I agree 100%. I know how to define the ones that have value.

2208
03:36:15,630 --> 03:36:19,630
There's a white paper on it and maybe Paul will take a chance

2209
03:36:19,630 --> 03:36:23,630
and read it. Just because it's true doesn't mean it's negative.

2210
03:36:23,630 --> 03:36:27,630
It's just very easy. Let's say you're familiar with,

2211
03:36:27,630 --> 03:36:31,630
for example, ASICBoost.

2212
03:36:31,630 --> 03:36:35,630
Let's just say something else is invented that's very ASICBoost-like.

2213
03:36:35,630 --> 03:36:39,630
It's like some weird algorithm that, for whatever reason,

2214
03:36:39,630 --> 03:36:43,630
it's a piece of software

2215
03:36:43,630 --> 03:36:47,630
that makes the ASIC chips somehow, I don't know how,

2216
03:36:47,630 --> 03:36:51,630
using magic or whatever, it makes them slightly more efficient.

2217
03:36:51,630 --> 03:36:55,630
Somehow it cools the chips 10% more or whatever.

2218
03:36:55,630 --> 03:36:59,630
This is a piece of software that you can run alongside what you run

2219
03:36:59,630 --> 03:37:03,630
when you mine Bitcoin. We'll call this whatever.

2220
03:37:03,630 --> 03:37:07,630
We'll call this magic ASICBoost because it's a fictional product that doesn't exist.

2221
03:37:07,630 --> 03:37:11,630
How is that any different than any other thing that miners do?

2222
03:37:11,630 --> 03:37:15,630
For example, switching from CPU to GPU to FPGAs

2223
03:37:15,630 --> 03:37:19,630
to ASICs or switching from certain types of cooling

2224
03:37:19,630 --> 03:37:23,629
to other types or from getting the stranded energy

2225
03:37:23,629 --> 03:37:27,629
or making these revenue demand management deals

2226
03:37:27,629 --> 03:37:31,629
with the power company, blah, blah, blah, blah, blah.

2227
03:37:31,629 --> 03:37:35,629
All of those things, by the way,

2228
03:37:35,629 --> 03:37:39,629
are basically the same thing as their decision to include as many

2229
03:37:39,629 --> 03:37:43,629
fee-paying transactions as they possibly can in a block.

2230
03:37:43,629 --> 03:37:47,629
My question is, how is magic ASICBoost,

2231
03:37:47,629 --> 03:37:51,629
this piece of software,

2232
03:37:51,629 --> 03:37:55,629
where it has some costs because you have to find the software and run it,

2233
03:37:55,629 --> 03:37:59,629
but it has benefits,

2234
03:37:59,629 --> 03:38:03,629
how is magic ASICBoost somehow different

2235
03:38:03,629 --> 03:38:07,629
than the decision to switch from CPU mining to ASIC mining?

2236
03:38:07,629 --> 03:38:11,629
That's my question.

2237
03:38:11,629 --> 03:38:15,629
I'm not following, but no, I don't think there's any difference.

2238
03:38:15,629 --> 03:38:19,629
Because all you have to do is relabel the magic ASICBoost

2239
03:38:19,629 --> 03:38:23,629
as either merge mining revenues or as

2240
03:38:23,629 --> 03:38:27,629
the MEV revenues. It makes no difference.

2241
03:38:27,629 --> 03:38:31,629
The difference is that the human miner can participate.

2242
03:38:31,629 --> 03:38:35,629
Let's say we create rock, paper, scissors transparent

2243
03:38:35,629 --> 03:38:39,629
on the blockchain for a million dollars.

2244
03:38:39,629 --> 03:38:43,629
And we convince the public that it's completely secure because it's on the blockchain.

2245
03:38:43,629 --> 03:38:47,629
But obviously it's not secure because if you put rock, whoever sees that

2246
03:38:47,629 --> 03:38:51,629
is going to put paper and win every time. But nobody knows that.

2247
03:38:51,629 --> 03:38:55,629
Everyone thinks it's secure. So what's going to happen is the miners are going to be fighting

2248
03:38:55,629 --> 03:39:01,629
over those big, ridiculous bets to win the money

2249
03:39:01,629 --> 03:39:05,629
because the utility of rock, paper, scissors is not

2250
03:39:05,629 --> 03:39:09,629
covered in the Bitcoin blockchain designed by Satoshi

2251
03:39:09,629 --> 03:39:13,629
because it's a different utility. It's not

2252
03:39:13,629 --> 03:39:17,629
peer-to-peer money. So in that case, the miner is not going to care

2253
03:39:17,629 --> 03:39:21,629
about anything else but trying to find those suckers making sucker bets

2254
03:39:21,629 --> 03:39:25,629
and then he's going to take the other side of the bet. So the miner is going to be part of the

2255
03:39:25,629 --> 03:39:29,629
protocol. That's what I'm saying. When the miner looks into the protocol

2256
03:39:29,629 --> 03:39:33,629
only for the suckers. So if there were no suckers then

2257
03:39:33,629 --> 03:39:37,629
there either are suckers, in which case they're getting suckered.

2258
03:39:37,629 --> 03:39:41,629
And the miners get extra money at their expense. Or there are no suckers, in which case

2259
03:39:41,629 --> 03:39:45,629
we're in the exact same situation that we were in before, right?

2260
03:39:45,629 --> 03:39:49,629
And nothing has happened. There's magically no suckers.

2261
03:39:49,654 --> 03:39:54,854
Right. So the blockchain secures a subset of protocols. It doesn't secure all protocols.

2262
03:39:54,854 --> 03:39:59,254
Yeah, but it doesn't mean you're not the user. The user's choice whether or not they want to go

2263
03:39:59,254 --> 03:40:03,894
to the sidechain. They're the owner. They own the coins. Like if you say, yeah, I own a car and I

2264
03:40:03,894 --> 03:40:08,454
want to use it to film a movie, but I'm never going to drive. So I don't think we should have

2265
03:40:08,454 --> 03:40:12,774
consensus in Bitcoin that suckers millions of users out of money because they think and they're

2266
03:40:12,774 --> 03:40:16,454
not smart enough to understand. But the layer one consensus does not cover any of the sidechain

2267
03:40:16,454 --> 03:40:21,334
consensus for that exact reason. Well, we're putting in the hash, we're putting in the hash.

2268
03:40:21,334 --> 03:40:25,014
Yeah, but do you have the same crusade against open timestamps, which also puts

2269
03:40:25,014 --> 03:40:29,174
hashes into the... Actually, I wouldn't mind op-return. Why can't we do bit-free online?

2270
03:40:29,174 --> 03:40:33,414
You have absolutely no idea what people are timestamping when they do op-return.

2271
03:40:33,414 --> 03:40:35,814
So you have no beta this time. That's fine. I have no problem with op-return.

2272
03:40:36,453 --> 03:40:39,174
I have no problem with op-return. You just said you had a problem with putting a hash in the

2273
03:40:39,174 --> 03:40:43,734
blockchain. I have a problem with a consensus change to Bitcoin to add a hash. The consensus

2274
03:40:44,133 --> 03:40:47,253
doesn't cover any of the sidechain's rules. It only covers the BIP300 rules.

2275
03:40:48,694 --> 03:40:54,293
The consensus is that we agree that hash represents all possible protocols and that

2276
03:40:54,293 --> 03:40:58,293
gives us a stamp of approval. BIP300 does a very simple task

2277
03:40:58,293 --> 03:41:02,613
of counting from zero to... I'm a fan of BIP300. I'm a fan of BIP300.

2278
03:41:02,613 --> 03:41:06,213
Let me ask a... BIP301, you're the only person on planet Earth.

2279
03:41:07,734 --> 03:41:12,454
So you don't like any merge mining at all? Merge mining without the blind merge mining,

2280
03:41:12,454 --> 03:41:19,893
without BIP301? I think he's mainly concerned with the

2281
03:41:20,533 --> 03:41:28,933
merge mining of the sidechains that would have abstract financial arrangements that could be

2282
03:41:28,933 --> 03:41:35,094
resulting in MEV. So I think it's that category of sidechain that he thinks is problematic.

2283
03:41:35,094 --> 03:41:41,893
But he also has expressed some... I think I asked you, Jay, what do you think about the fact that

2284
03:41:41,893 --> 03:41:47,654
the Bitcoin community can express its will through the mining community that the problematic

2285
03:41:47,654 --> 03:41:54,694
drivechain should be discontinued? So if there is an Ethereum-like drivechain, sidechain,

2286
03:41:54,694 --> 03:41:59,093
that is creating this MEV, the community of Bitcoiners can decide whether or not that should

2287
03:41:59,093 --> 03:42:04,453
persist or not. Maybe they would prefer to have that. I mean, right now, Ethereum is a massive

2288
03:42:04,453 --> 03:42:09,813
amount of economic activity, roughly half of Bitcoins. If that were part of Bitcoin's community

2289
03:42:09,813 --> 03:42:16,453
instead, a lot of value would be in Bitcoin and coming to Bitcoin miners. Now, part of that,

2290
03:42:16,453 --> 03:42:23,173
you find to be a complex and potentially problematic thing where there'd be miners

2291
03:42:23,173 --> 03:42:28,294
trying to front run the users because you think that they would not be blind. They would instead

2292
03:42:28,294 --> 03:42:34,214
run the node of the sidechain and then try to order the transactions to make more profit, right?

2293
03:42:34,214 --> 03:42:38,054
That's where all of Ethereum's value comes from. That's where all the mining comes from.

2294
03:42:38,294 --> 03:42:45,093
Literally, Wall Street's taken over Ethereum mining and doing MEV. That's where it's all coming from.

2295
03:42:45,654 --> 03:42:50,054
Let's go back to that issue then, because this is very fascinating that you're the only person

2296
03:42:50,054 --> 03:42:58,774
on planet Earth who is a fan of BIP300 and does not like BIP301. We should make sure we're,

2297
03:42:58,774 --> 03:43:02,294
you know, because we want Jay on our side. We want someone with this level.

2298
03:43:02,294 --> 03:43:09,494
But what about my magic software example, which I think is the key for merge mining,

2299
03:43:09,494 --> 03:43:14,214
to understanding that merge mining is harmless. And you say there are suckers involved

2300
03:43:14,214 --> 03:43:19,654
with MEV and the miners are the predators and the suckers are the prey.

2301
03:43:21,893 --> 03:43:29,334
But that has nothing really to do with the regular users of layer one, the regular layer

2302
03:43:29,334 --> 03:43:36,134
one Bitcoin users who are not using the MEV. They're not the suckers. And then as soon as

2303
03:43:37,574 --> 03:43:45,654
global consciousness rises and suckerism falls back to zero, then this effect you're worried

2304
03:43:45,654 --> 03:43:51,253
about will just not happen. Right. So going back on, I think that's Henry, right?

2305
03:43:51,253 --> 03:43:53,093
Yeah. Henry's here. I'm the host.

2306
03:43:53,093 --> 03:43:58,854
Yeah. Going back on what you're saying, like, yes, so we could remove the bad sidechains. Great.

2307
03:43:58,934 --> 03:44:04,613
But what if we, and hear me out, what if we, instead of removing the bad ones, only do the

2308
03:44:04,613 --> 03:44:12,613
good ones, right? There's 256 of them. I believe there's only 10 possible, maybe 20 in the rest

2309
03:44:12,613 --> 03:44:17,814
of time, real sidechains that have real value. So we could just, a new type of soft fork or a new

2310
03:44:17,814 --> 03:44:24,133
type of yearly thing where we add sidechain, we start with a big block one, we do one at a time

2311
03:44:24,853 --> 03:44:36,613
instead of saying everything's open. I think I can do it really simply because I think I can share

2312
03:44:37,334 --> 03:44:41,413
maybe what you think, Paul, but in simpler terms that the whole audience can appreciate,

2313
03:44:41,413 --> 03:44:46,133
because the conversation between you and Jay is very high level. And I want to make sure that

2314
03:44:46,133 --> 03:44:51,814
our followers and listeners can understand it all, who are more at my level. So Jay,

2315
03:44:51,814 --> 03:44:57,413
I want to emphasize again that if we are correct in our understanding of drivechain, that

2316
03:44:57,413 --> 03:45:03,654
the miners can express the will of the community to discontinue any problematic drivechain,

2317
03:45:03,654 --> 03:45:10,453
then your suggestion that we only do the good drivechains is already met, is already fulfilled

2318
03:45:10,453 --> 03:45:16,613
and satisfied by the drivechain design, because only the good drivechains would be, first of all,

2319
03:45:16,613 --> 03:45:22,374
the initiation of each drivechain requires nearly a consensus within the community as

2320
03:45:22,374 --> 03:45:27,173
expressed through the miners, and the discontinuation of any problematic drivechain

2321
03:45:27,173 --> 03:45:32,054
is also always possible as an expression of the community's will through the miners.

2322
03:45:32,054 --> 03:45:36,293
So when you're saying, how do we express, how do we express through the miners? I think

2323
03:45:38,054 --> 03:45:42,374
his is slightly different because my, the point of view that I had when I designed

2324
03:45:43,254 --> 03:45:48,613
a drivechain was that the miners want to, the miners get paid in Bitcoin, they get paid in

2325
03:45:48,613 --> 03:45:52,853
fees, so the miners want to maximize the total quantity of transaction fees and they want to

2326
03:45:52,853 --> 03:46:03,173
maximize the Bitcoin price. And so if a sidechain on net reduces the fees or the price or the product

2327
03:46:03,173 --> 03:46:09,094
of the fees times the price, they'll naturally have an incentive to either add a sidechain that

2328
03:46:09,094 --> 03:46:15,974
should be there or remove a problematic sidechain that is disrupting the, but in Jay's conception,

2329
03:46:15,974 --> 03:46:25,573
it seems to me that the miners are sort of like preying on these victims who are these other

2330
03:46:25,573 --> 03:46:32,453
people who are not really layer one users, and that seems to be what he is saying, is that correct?

2331
03:46:32,534 --> 03:46:33,013
I don't know.

2332
03:46:35,733 --> 03:46:38,133
Yeah, Jay, please elaborate if you'd like to.

2333
03:46:39,013 --> 03:46:45,573
Yeah, exactly. Yeah, exactly. So people think that in Ethereum, the EVM, I mean, in general,

2334
03:46:45,573 --> 03:46:50,613
everyone thinks that if it's on the blockchain, it's secure, but they don't understand that

2335
03:46:51,173 --> 03:46:55,013
there are certain protocols where it's order dependent within a block,

2336
03:46:55,733 --> 03:47:00,293
and it's not mutually exclusive like a double spend, and you can't tell if someone's manipulating.

2337
03:47:01,173 --> 03:47:08,693
And, right, so what they want is you want to get these protocols where users lose pennies every

2338
03:47:08,693 --> 03:47:15,494
single time they make a trade, like trading, and then the mine, all shops in that world, all shops

2339
03:47:15,494 --> 03:47:22,453
of 56 mining will become Goldman Sachs and Citadel, and they would just be doing, you know,

2340
03:47:22,453 --> 03:47:27,173
high frequency trading, market making for alpha, and they won't even care about peer to peer markets

2341
03:47:27,173 --> 03:47:32,054
or fees, because they're making a lot more money there if, you know, in that scenario.

2342
03:47:32,054 --> 03:47:37,413
Well, the thing about where people make more money is, I think, I don't think this is correct,

2343
03:47:37,413 --> 03:47:42,054
although I get this question sometimes. So it's like if the layer one fees and the layer one

2344
03:47:42,054 --> 03:47:49,334
Bitcoin price, the marginal value add of the layer one Bitcoin price, and the layer one fees,

2345
03:47:49,334 --> 03:47:53,893
which is like how much people care about, you know, the Bitcoin that we know and love,

2346
03:47:53,893 --> 03:47:57,413
if that's a certain amount, like X, that's like $5, for example,

2347
03:47:58,774 --> 03:48:06,054
then people are only ever going to care about it to the tune of $5. So if something else comes

2348
03:48:06,054 --> 03:48:11,494
along and the miners can make $5 caring about Bitcoin, this is a hyperbolic example, but then

2349
03:48:11,494 --> 03:48:17,733
they can make $50 caring about MEV on a layer two of Bitcoin, or they can make a billion dollars,

2350
03:48:18,534 --> 03:48:23,734
um, they can make a billion dollars caring about a whatever layer, layer three and a half

2351
03:48:24,373 --> 03:48:29,734
MEV of the Ethereum sidechains, lightning network, or whatever you want to call it.

2352
03:48:31,414 --> 03:48:35,573
That's true that they will care more about the billion dollars than the $5. But what's false

2353
03:48:35,573 --> 03:48:40,933
is to say that anything negative is happening. They still they still care $5 about layer one.

2354
03:48:40,933 --> 03:48:48,854
And if they if $5 is what we have now, then the $5 is exactly what we have in the future as well.

2355
03:48:48,854 --> 03:48:54,774
So nothing net has gone down. And that's the real problem is how to get that $5 number

2356
03:48:55,493 --> 03:49:00,693
up. And the fact that they have a side hustle that they care about more is really just a side

2357
03:49:00,693 --> 03:49:05,253
effect of right. So so the only change Paul, and the only thing they're going to do different

2358
03:49:05,253 --> 03:49:10,453
is they're going to take two seconds before they switch to the new chain to try to reorder.

2359
03:49:10,453 --> 03:49:14,053
That's the only thing I'm claiming is going to change is that the miners will be like,

2360
03:49:14,053 --> 03:49:18,133
I am still going to keep mining on trying to find this other hash because I know I'm gonna make a

2361
03:49:18,133 --> 03:49:22,373
lot of money if I do. And I'll give up in a couple of seconds. But I'm not going to just switch to

2362
03:49:22,373 --> 03:49:27,414
the head because I really don't care. I care more about that than that, that that's the only point

2363
03:49:27,414 --> 03:49:33,094
I'm making. Well, I mean, it's but you understand what I'm trying to say is the problem is it's only

2364
03:49:33,094 --> 03:49:40,854
$5. And then the the other issue is like, if there's if they care, if the disparities are so

2365
03:49:40,854 --> 03:49:47,654
great between layer one and the sidechains, value add to the miners as the side hustle,

2366
03:49:47,654 --> 03:49:52,933
then one would think you would be even more worried about, I would certainly be much,

2367
03:49:52,933 --> 03:49:58,933
much more worried about just the creation of an altcoin that where they can care about the billion

2368
03:49:58,933 --> 03:50:03,414
and they don't even have to mess around with because the sidechain is vulnerable because

2369
03:50:03,414 --> 03:50:10,133
the way merge mining works, the not every when when a sidechain reorgs, the main chain won't

2370
03:50:10,133 --> 03:50:15,493
necessarily reorg at all, you know, by default, it won't be affected in the slightest. But every

2371
03:50:15,493 --> 03:50:22,053
main chain reorg also reorgs every single sidechain above it. So I would think if there was if

2372
03:50:22,053 --> 03:50:27,013
those are really the numbers that we care about, the Bitcoin value add is $5 and the there's a

2373
03:50:27,013 --> 03:50:36,053
billion dollars in MEV on some weird sidechain somewhere. I would say more like that probably

2374
03:50:36,933 --> 03:50:41,813
someone would make an altcoin version that I would say it kind of like doesn't really make

2375
03:50:41,813 --> 03:50:47,174
any difference in any case. In any case, people just for whatever reason, there's no there's no

2376
03:50:47,174 --> 03:50:53,974
demand for for layer one Bitcoin. But the sidechains try to address that by they're inherently

2377
03:50:53,974 --> 03:50:57,734
hierarchical. You can't have you can't use the sidechain without going through layer one

2378
03:50:57,734 --> 03:51:03,813
or layer one controls the 10 minutes layer one with the origin of every coin. Layer one is

2379
03:51:03,813 --> 03:51:10,534
Paul, I made I made this point earlier about, you know, the small block idea.

2380
03:51:10,534 --> 03:51:14,133
But could you just let Paul finish his point? And then we'll go to the Alex.

2381
03:51:15,334 --> 03:51:21,813
Also, let Jay decide like what? What do you think of my this example with the $5 like it's

2382
03:51:22,053 --> 03:51:28,854
like you conjure up a scenario that's very bad for us. And I agree it's possible. I don't think

2383
03:51:28,854 --> 03:51:33,094
you know, I don't actually realistically expect this at all. I think that really, there will be

2384
03:51:33,094 --> 03:51:38,453
plenty of people who care about layer one. But this the miner the fact that there's my the MEV,

2385
03:51:39,493 --> 03:51:46,133
it's a separate thing. You know, it's like if you it's a separate thing. It's like

2386
03:51:46,933 --> 03:51:52,693
it's kind of like, I'm not I'm not really sure how to give a great example. But it's like the

2387
03:51:53,334 --> 03:51:59,334
MEV that they do. They could like it's fully outsourceable. For example, they could just say

2388
03:51:59,334 --> 03:52:03,734
we run this software, which is why I said like the magic ASICBoost, we run the software,

2389
03:52:03,734 --> 03:52:09,493
it automatically does all the MEV, and it maximizes the amount of money we collect.

2390
03:52:10,774 --> 03:52:15,013
And then that's really no different than just picking the transactions that include the

2391
03:52:15,094 --> 03:52:23,334
highest fee. So the all this demand is either coming on layer one from people who want to

2392
03:52:23,334 --> 03:52:29,654
transact with Bitcoin, they want Bitcoin, they want to transact, they want they care about

2393
03:52:29,654 --> 03:52:35,174
sound money, they care about privacy, they care about self sovereignty. That's demand for that.

2394
03:52:35,813 --> 03:52:39,573
And to me, it really seems like your argument is just like that there are all these people out

2395
03:52:39,573 --> 03:52:46,214
there. They've got they got wallets full of cash. They're very, they're suckers, and they

2396
03:52:46,214 --> 03:52:51,573
will never learn. And they're just willing to pour an endless amount of money into a giant pit

2397
03:52:52,933 --> 03:52:57,893
controlled by Goldman Sachs. And it's called perpetual futures 100x leverage.

2398
03:52:59,493 --> 03:53:03,573
Right. So this is just like an infinite money making factory, though, in your view.

2399
03:53:04,534 --> 03:53:07,974
Exactly what's happening on Ethereum and Solana.

2400
03:53:07,974 --> 03:53:11,974
So yeah, but don't you think if people always lose the bet, won't they eventually come around?

2401
03:53:13,334 --> 03:53:14,693
Yes, that's true.

2402
03:53:14,693 --> 03:53:19,813
Then it will eventually just, it'll eventually just collapse. Or they'll run out of money,

2403
03:53:19,813 --> 03:53:21,013
right? It's the other possibility.

2404
03:53:21,974 --> 03:53:26,453
That's why we have Super Bowl ads in stadiums named after FTX, because we need more suckers.

2405
03:53:27,414 --> 03:53:33,573
Yeah, but eventually the, like, what's the fuel powering this engine you have built

2406
03:53:33,573 --> 03:53:39,893
in your argument is like that there are these suckers from MEV. And that we may,

2407
03:53:39,893 --> 03:53:44,133
maybe we condone when we when we allow miners to add sidechains, we sort of,

2408
03:53:45,334 --> 03:53:48,693
we sort of put Bitcoin's brand on them.

2409
03:53:48,693 --> 03:53:54,534
That's it. That's it. Exactly. We have an agreement. It's just a non-zero risk. And

2410
03:53:54,854 --> 03:53:57,573
we should just think about it when we design sidechain.

2411
03:53:58,214 --> 03:54:04,854
But there's a difference between it being a risk to end users who opt in to that experience and

2412
03:54:05,734 --> 03:54:12,693
the effect, as you've articulated, that it would have on the consensus of layer one.

2413
03:54:12,693 --> 03:54:15,974
Those are two different points. Is that right? And which of those points are you making?

2414
03:54:15,974 --> 03:54:20,774
If there are too many users involved, then the miners will be taken over by

2415
03:54:21,253 --> 03:54:25,493
a new crop of miners and they will not care about Bitcoin. They'll only care about this other game.

2416
03:54:26,933 --> 03:54:32,614
Would I be right in saying that the risk you're talking about already exists as a category

2417
03:54:32,614 --> 03:54:39,174
because since the beginning of Bitcoin, even Satoshi acknowledged and in fact approved of

2418
03:54:39,174 --> 03:54:47,813
in writing that his exact words are all networks in the world would share combined CPU power,

2419
03:54:47,813 --> 03:54:53,974
increasing total strength. So in the BitDNS thread, Satoshi said explicitly that every

2420
03:54:53,974 --> 03:55:01,094
single blockchain in the future would be a merged mind, Bitcoin merged mind blockchain.

2421
03:55:01,094 --> 03:55:07,654
So how do you feel about, and also he contemplated poker being on Bitcoin. And in the first version

2422
03:55:07,654 --> 03:55:12,373
of Bitcoin's code included poker code, which, you know, raises the kinds of issues you're

2423
03:55:12,373 --> 03:55:17,573
talking about, I think. So he was in some sense, even aware of the beginnings of this

2424
03:55:17,573 --> 03:55:23,334
conversation we're having today. So what do you think about this notion that in the drivechain

2425
03:55:23,334 --> 03:55:30,933
view, we bring all the altcoin activity to Bitcoin and warts and all is the phrase.

2426
03:55:30,933 --> 03:55:37,414
So although it has some things that you feel are not good for some users, others who are opting

2427
03:55:37,414 --> 03:55:42,854
into those things on altcoins and will forever will do that on Bitcoin. And that makes Bitcoin

2428
03:55:42,854 --> 03:55:48,534
economically stronger because it's going to be larger. If this is, if this happens, this migration

2429
03:55:48,534 --> 03:55:53,013
and more fees would come to Bitcoin miners. So although you don't seem to like the Mev,

2430
03:55:53,573 --> 03:55:59,974
if it were on Bitcoin, that means more fees for Bitcoin miners. Those who suffer are those on the,

2431
03:55:59,974 --> 03:56:06,133
who are the users who opted into that. And like, so my original question to you was like,

2432
03:56:06,133 --> 03:56:11,174
if all of Ethereum were inside of Bitcoin, making Bitcoin much more valuable and making Bitcoin

2433
03:56:11,174 --> 03:56:17,813
miners receive much more miner revenue, wouldn't that be on net beneficial to the Bitcoin community

2434
03:56:17,813 --> 03:56:22,933
in terms of it remaining the leader in blockchain and perhaps becoming once again, a hundred percent

2435
03:56:22,933 --> 03:56:30,133
dominant. Could be on that better, but it does, it does reduce the security of pure peer to peer

2436
03:56:30,133 --> 03:56:36,534
transactions by a smidgen. As long as we acknowledge that and that's fine.

2437
03:56:37,813 --> 03:56:41,334
I think we should go. Didn't people have their hands up? I feel bad for such.

2438
03:56:41,334 --> 03:56:44,534
Sure. I mean, I just want to say thanks, Jay, for sharing your thoughts.

2439
03:56:44,534 --> 03:56:45,974
Yeah, no problem. Thanks guys.

2440
03:56:45,974 --> 03:56:49,734
Thank you. Meta and feel free to remain on stage if you'd like. Meta and Alex,

2441
03:56:50,453 --> 03:56:53,253
chime in with your thoughts and then we'll maybe wrap up the stage. We've been going

2442
03:56:53,253 --> 03:56:56,773
for a couple hours now. So Alex and Meta, thanks for joining.

2443
03:56:56,773 --> 03:56:58,293
Sure. Can you hear me? All right.

2444
03:56:59,173 --> 03:57:00,933
Loud and clear, man. Go ahead.

2445
03:57:00,933 --> 03:57:06,053
I just want to say that, I mean, this debate reminds me of a debate of whether casinos

2446
03:57:06,053 --> 03:57:10,854
should be illegal just because they fleece the suckers. And, you know, there's such a,

2447
03:57:10,854 --> 03:57:15,813
there's a possibility that the whole MEV debate is moot because there's a technological solution

2448
03:57:15,813 --> 03:57:22,614
to MEV, right? There are chains out there that do not enable MEV by design. For example,

2449
03:57:23,573 --> 03:57:31,173
if you look at Avalanche or Phantom or other designs that have no blocks and they don't have

2450
03:57:31,173 --> 03:57:37,494
a winner-take-all mining paradigm. So you could have a sidechain that simply does not have a

2451
03:57:37,494 --> 03:57:42,134
mempool and that every transaction would confirm two prior transactions and collect the fees from

2452
03:57:42,134 --> 03:57:46,533
them. In that kind of paradigm, anybody could confirm their own transaction, essentially.

2453
03:57:47,653 --> 03:57:51,974
So you would have more of a cooperative mining, not a winner-take-all mining that you see in

2454
03:57:51,974 --> 03:57:57,494
Bitcoin, where there would still be specialist miners that go for the juiciest transactions

2455
03:57:57,494 --> 03:58:04,053
first. But other transactions that pay smaller fees would be available to be confirmed by other

2456
03:58:04,053 --> 03:58:09,734
users who want to collect those fees that do simply want to broadcast their own transaction,

2457
03:58:09,734 --> 03:58:15,494
right? So you would have a system more analogous to NASDAQ because, I mean, existing blockchains

2458
03:58:15,494 --> 03:58:23,014
have something that resembles a rotating New York Stock Exchange specialist where a blockmaker

2459
03:58:23,014 --> 03:58:27,334
essentially gets to know the future ahead of everyone else and they get to manipulate the

2460
03:58:27,334 --> 03:58:32,374
content of the block when that happens. But on NASDAQ, right, when you have multiple market

2461
03:58:32,374 --> 03:58:38,374
makers, there's chaos. So it's much harder to manipulate the market in that kind of environment.

2462
03:58:38,374 --> 03:58:44,693
So if you had a chain, which I hesitate to call a blockchain because it would be blockless.

2463
03:58:44,693 --> 03:58:48,693
I mean, if you want to look up this kind of research, it's out there. I know you can look,

2464
03:58:48,693 --> 03:58:53,653
you can Google the term graph chains, for example, where you don't have blocks and you don't have a

2465
03:58:53,653 --> 03:58:59,653
mempool. You simply have transactions referring to two prior transactions and collecting fees

2466
03:58:59,653 --> 03:59:05,173
or performing proof of work and collecting fees, right? In other words, your phone could sit there

2467
03:59:05,173 --> 03:59:10,053
for a few seconds doing just a little bit of proof of work and appending whatever fee you want.

2468
03:59:10,614 --> 03:59:15,173
But that proof of work would count for something with this transaction chain.

2469
03:59:15,894 --> 03:59:20,693
And those transactions that you refer to explicitly, two or more, you would collect

2470
03:59:20,693 --> 03:59:25,974
partial fees from them for broadcasting your own transaction. This would be a setup where

2471
03:59:25,974 --> 03:59:30,533
you don't have a winner-take-all situation like you have in Bitcoin,

2472
03:59:30,533 --> 03:59:33,653
where essentially the entire Internet is competing.

2473
03:59:33,823 --> 03:59:46,703
Just for that single next block and whichever miner wins the lottery captures the whole value from that block, while also getting to know a quantum leap into the future ahead of everybody else.

2474
03:59:46,703 --> 03:59:50,063
Right. You would have a more like NASDAQ-like situation with a bunch of...

2475
03:59:50,063 --> 03:59:55,263
The NYSE specialists cannot do anything about knowing the future of peer-to-peer money.

2476
03:59:55,263 --> 03:59:56,382
Well, that's the point.

2477
03:59:56,382 --> 04:00:07,343
No, but it's an analogy, right? They're prohibited from trading against the order flow for this reason, because they see the entire order flow and they have an asymmetric knowledge of the order flow, right?

2478
04:00:07,343 --> 04:00:14,622
So if you're trading IBM stock and you're a specialist, you see the entire order flow and you're the sole person seeing the order flow.

2479
04:00:14,622 --> 04:00:14,942
Right.

2480
04:00:14,942 --> 04:00:22,782
So this is the situation analogous to blockchains, which have winner-take-all, single block maker at a time.

2481
04:00:23,102 --> 04:00:28,223
So your solution is to make sidechains only allow sidechains that don't have this flaw?

2482
04:00:28,223 --> 04:00:40,863
No, I'm not... Let me state first of all that I am in favor of BIP300. It's a very simple and safe change, and it would be much better than not doing it, so not doing it is way riskier.

2483
04:00:41,422 --> 04:00:47,102
My only point about BIP300 is that it's not the final word in L2 extensibility, right?

2484
04:00:47,102 --> 04:00:54,863
There's other designs that are more complex, such as validity rollups, that would have advantages in my mind over BIP300.

2485
04:00:55,583 --> 04:01:06,223
So I'm not also in favor of approving sidechains by miners or shutting them down by miners, because then you have a situation where you have both rules and rulers, right?

2486
04:01:06,223 --> 04:01:08,143
It would not be analogous to Bitcoin itself.

2487
04:01:08,143 --> 04:01:16,943
If you want to maintain self-sovereignty, you cannot have any kind of committee deciding whether your coins on the sidechains and the sidechain itself should be shut down.

2488
04:01:16,943 --> 04:01:24,943
You're essentially going back to some kind of governance, and governance is just another... It's a euphemism for an attack factor, right?

2489
04:01:24,943 --> 04:01:28,943
What about UASF? Is that okay? Is UASF governance okay?

2490
04:01:29,263 --> 04:01:39,263
Well, I mean, UASF... I don't know how... I mean, I don't know why it's related, but I'm just saying, you can do whatever you want with your own node, right?

2491
04:01:39,263 --> 04:01:47,263
But unfortunately, in Bitcoin, you have a situation where, so far, for whatever opaque game theoretic reasons, right?

2492
04:01:47,263 --> 04:01:57,263
Thank God, right? The rules haven't really changed too much in a backwards incompatible fashion, although some people might argue that SegWit was a forced evil fork.

2493
04:01:57,582 --> 04:02:03,582
And, you know, the nodes that chose not to upgrade to it essentially started doing... downgraded their validation, right?

2494
04:02:03,582 --> 04:02:15,582
So, ideally, you would ossify Bitcoin once you added advanced extension mechanisms, precisely because that's the only way to get to this desirable outcome where you have rules but no rulers.

2495
04:02:15,582 --> 04:02:21,582
Because the moment rules can change for any reason, that's when you lose your self-sovereignty, right?

2496
04:02:21,903 --> 04:02:25,903
Because once you sign up to Bitcoin, you sign up to this particular set of rules.

2497
04:02:25,903 --> 04:02:33,903
And essentially, any alteration in the rules that you signed up for is kind of a form of a rug pull, in my mind, right?

2498
04:02:33,903 --> 04:02:39,903
So, I'm opposed to having miners endorse sidechains or having miners shut down sidechains.

2499
04:02:39,903 --> 04:02:45,903
I say, let 1,000 flowers bloom, and those sidechains that abuse their users will just be outcompeted by the ones that don't.

2500
04:02:46,222 --> 04:02:54,222
So, for example, the sidechains that have no possibility of MEV will simply outcompete the sidechains that do.

2501
04:02:54,222 --> 04:03:06,222
Yeah, it's all about giving consumers choice and having that be something which doesn't affect the other consumers, the consumers on the main chain or the consumers on the other sidechains.

2502
04:03:06,222 --> 04:03:12,222
We've been going for three hours. This has been a really cool conversation.

2503
04:03:12,543 --> 04:03:18,543
Why don't we have one final speaker join? I think he has spoken in the past in these talks.

2504
04:03:18,543 --> 04:03:28,543
HGXBitcoin. And we'll have his question or comment, and then everyone can chime in if they want.

2505
04:03:28,543 --> 04:03:32,543
And then we'll wrap, having gone for three hours.

2506
04:03:32,543 --> 04:03:36,543
And by the way, these spaces happen twice a week on Mondays and Thursdays.

2507
04:03:36,862 --> 04:03:40,862
And they are hosted by the LayerTwo Labs handle.

2508
04:03:40,862 --> 04:03:42,862
I'm Henry. I work for LayerTwo Labs.

2509
04:03:42,862 --> 04:03:52,863
And the purpose of these spaces is to promote discussion and understanding of drivechain, which is Bitcoin Improvement Proposal 300 and 301,

2510
04:03:52,863 --> 04:04:04,863
which aims to strengthen Bitcoin in terms of its value accrual, as well as the fee income to the network miners and strengthen Bitcoin in those ways.

2511
04:04:05,182 --> 04:04:09,182
I think our speaker dropped. Oh, there he is. He's a listener now.

2512
04:04:09,182 --> 04:04:15,182
HGX, if you had a question, you're welcome to speak, but you dropped to a listener.

2513
04:04:15,182 --> 04:04:19,182
So maybe he requested by mistake.

2514
04:04:19,182 --> 04:04:25,182
Well, why don't we wrap for the day, if that's cool, or we could continue.

2515
04:04:25,182 --> 04:04:31,182
Paul, what do you think? Should we give it a rest until Thursday or should we continue on right now, three hours in?

2516
04:04:31,502 --> 04:04:35,502
I don't know. I think continue if anyone has any.

2517
04:04:35,502 --> 04:04:37,502
All right. Why not?

2518
04:04:37,502 --> 04:04:39,502
I mean, I've only been here for like half an hour.

2519
04:04:39,502 --> 04:04:41,502
I've been here for half an hour as well.

2520
04:04:41,502 --> 04:04:45,502
I guess those people who've been here for a long time can just drop out, I would say.

2521
04:04:45,502 --> 04:04:47,502
Yeah, sure.

2522
04:04:47,502 --> 04:04:53,502
It's like the miners, you know, in BIP300, in Bitcoin, the miners come and go.

2523
04:04:53,502 --> 04:04:57,502
It's a dynamic group. So that's what this is all about. People come and go.

2524
04:04:57,823 --> 04:05:03,823
I mean, I wonder if you, Paul and Henry, would concede that even though Drivechain is great,

2525
04:05:03,823 --> 04:05:07,823
I mean, it's a very non-controversial tiny tweak that's ultra safe.

2526
04:05:07,823 --> 04:05:11,823
That's way better. I mean, that should have been done years ago, and I agree with that completely.

2527
04:05:11,823 --> 04:05:17,823
It's not necessarily the final word, and it could be out-competed by other L2 extensions.

2528
04:05:17,823 --> 04:05:19,823
I do agree.

2529
04:05:19,823 --> 04:05:21,823
I do agree, yes.

2530
04:05:22,143 --> 04:05:28,143
Although, actually, as time goes on and on and on, I kind of wonder if it would ever really be,

2531
04:05:28,143 --> 04:05:32,143
like, how long it would take to be competed, because it seems there's so much misunderstanding

2532
04:05:32,143 --> 04:05:34,143
of such a simple thing, I wonder.

2533
04:05:34,143 --> 04:05:36,143
But you're talking about...

2534
04:05:36,143 --> 04:05:38,143
I'm talking about what happened in Ethereum, right?

2535
04:05:38,143 --> 04:05:40,143
Like, we can learn a lesson or two from what happened there,

2536
04:05:40,143 --> 04:05:44,143
because they had like a Cambrian explosion of scaling proposals over the last five years.

2537
04:05:44,143 --> 04:05:50,143
And, you know, they tried sidechains, they tried Plasma, which is stateful channels, right?

2538
04:05:50,463 --> 04:05:54,463
They're not just, you know, like Lightning, just for payments,

2539
04:05:54,463 --> 04:05:58,463
that they can complete Lightning-like extensibility of all dApps.

2540
04:05:58,463 --> 04:06:04,463
They tried lots and lots of things, and now their entire roadmap has converged on validity roll-ups.

2541
04:06:04,463 --> 04:06:06,463
And there's a good reason for that, right?

2542
04:06:06,463 --> 04:06:10,463
The two reasons that I see that, like, I would prefer to use a validity roll-up,

2543
04:06:10,463 --> 04:06:14,463
but for pragmatic reasons, I support, you know, BIP300 activation,

2544
04:06:14,463 --> 04:06:18,463
just because it's easier to get in and it's less subject to bike-shedding

2545
04:06:18,782 --> 04:06:22,782
and I don't follow any attempt to do a validity roll-up on Bitcoin,

2546
04:06:22,782 --> 04:06:26,782
because people will start arguing to death what kind of proof system we need, et cetera, et cetera.

2547
04:06:26,782 --> 04:06:30,782
So I'll settle for sidechains first with a view to validity roll-ups.

2548
04:06:30,782 --> 04:06:34,782
And the reason why I prefer validity roll-ups was formulated by, you know,

2549
04:06:34,782 --> 04:06:38,782
Mr. Light in his great report at, you know, bitcoinrollups.org,

2550
04:06:38,782 --> 04:06:40,782
which is there's two kinds of security in Bitcoin, right?

2551
04:06:40,782 --> 04:06:42,782
There's ownership security that's cryptographic, right?

2552
04:06:43,102 --> 04:06:49,102
If you secure your keys properly with Shamir multisig or some other kind of multisig solution

2553
04:06:49,102 --> 04:06:53,102
and you put yourself beyond, you know, duress, then no one can take away your money,

2554
04:06:53,102 --> 04:06:57,102
because nobody can break the cryptography, right?

2555
04:06:57,102 --> 04:06:59,102
The other kind of security is the double-spend security,

2556
04:06:59,102 --> 04:07:01,102
and this is the one that seemed weird to the cypherpunks,

2557
04:07:01,102 --> 04:07:03,102
including, you know, Adam Beck when Bitcoin was proposed.

2558
04:07:03,102 --> 04:07:07,102
To them, it didn't seem like game-theoretic or crypto-economic security

2559
04:07:07,102 --> 04:07:11,102
was as good as cryptographic security.

2560
04:07:11,423 --> 04:07:17,423
Now, what the drivechains propose is they essentially downgrade ownership security

2561
04:07:17,423 --> 04:07:21,423
of that site, synthetic Bitcoin, to be crypto-economic.

2562
04:07:21,423 --> 04:07:27,423
Now, that's proven good so far, but you still have that downgrading security

2563
04:07:27,423 --> 04:07:31,423
from cryptographic down to crypto-economic or game-theoretic security.

2564
04:07:31,423 --> 04:07:35,423
And the other issue is that because a sidechain is mined by its miners,

2565
04:07:35,423 --> 04:07:39,423
it does not inherit the double-spend security of Bitcoin itself.

2566
04:07:39,743 --> 04:07:43,743
Whereas validity rollups preserve both qualities of the L1, right?

2567
04:07:43,743 --> 04:07:47,743
In validity rollups, your ownership security on the rollup

2568
04:07:47,743 --> 04:07:53,743
is exactly the same as your security of holding an asset on L1.

2569
04:07:53,743 --> 04:07:55,743
That's number one.

2570
04:07:55,743 --> 04:07:59,743
And number two, the double-spend security for the recipient of the payment

2571
04:07:59,743 --> 04:08:03,743
is also exactly the same as it is on L1.

2572
04:08:03,743 --> 04:08:07,742
And the third benefit is that rollups use the block space directly, right?

2573
04:08:08,062 --> 04:08:10,062
They do not create additional block space.

2574
04:08:10,062 --> 04:08:12,062
They essentially use Bitcoin itself.

2575
04:08:12,062 --> 04:08:16,062
They would use Bitcoin itself as a data availability layer

2576
04:08:16,062 --> 04:08:18,062
that creates no computation for Bitcoin nodes,

2577
04:08:18,062 --> 04:08:22,062
but it eats up block space similar to what ordinals are doing today, right?

2578
04:08:22,062 --> 04:08:26,062
It just creates opaque data that Bitcoin nodes do not need to compute upon,

2579
04:08:26,062 --> 04:08:30,062
but it increases the demand for block space.

2580
04:08:30,062 --> 04:08:34,062
And that block space is way more valuable if a single transaction

2581
04:08:34,382 --> 04:08:38,382
on an Ethereum rollup, Ethereum-like rollup,

2582
04:08:38,382 --> 04:08:42,382
can perform a huge amount of state changes and computation,

2583
04:08:42,382 --> 04:08:44,382
but it only becomes a 100-byte transaction,

2584
04:08:44,382 --> 04:08:46,382
which is opaque and ignored by the Bitcoin rollup.

2585
04:08:46,382 --> 04:08:50,382
So the economic density of rollups could be much higher than Bitcoin,

2586
04:08:50,382 --> 04:08:56,382
simply because you could do things like what the market has shown a preference to do.

2587
04:08:56,382 --> 04:09:00,382
Namely, the market has craved a version of Bitcoin

2588
04:09:00,382 --> 04:09:02,382
that could be used in DeFi protocols.

2589
04:09:02,703 --> 04:09:08,703
And that's why WBTC peaked at roughly 300,000 WBTC issued in the last bull market.

2590
04:09:08,703 --> 04:09:10,703
And those people essentially are way worse

2591
04:09:10,703 --> 04:09:12,703
than the people that are being fleeced by MEV, right?

2592
04:09:12,703 --> 04:09:18,703
Because they're essentially trading their gold-standard security Bitcoin

2593
04:09:18,703 --> 04:09:22,703
for custodial Bitcoin, and they could be rug-pulled by BitGo anytime, right?

2594
04:09:22,703 --> 04:09:26,703
The fact that they're doing it just shows you how great the demand is

2595
04:09:26,703 --> 04:09:28,703
for collateralizing Bitcoin,

2596
04:09:28,703 --> 04:09:30,703
because people don't want to sell their Bitcoin.

2597
04:09:31,023 --> 04:09:33,023
They want to collateralize it, borrow dollars against it,

2598
04:09:33,023 --> 04:09:35,023
and benefit in a tax-wise way,

2599
04:09:35,023 --> 04:09:39,023
and also benefit for future appreciation of Bitcoin.

2600
04:09:39,023 --> 04:09:41,023
Another use case, right?

2601
04:09:41,023 --> 04:09:45,023
Another use case that's proven is Bitcoin,

2602
04:09:45,023 --> 04:09:49,023
you know, crypto-collateralized stablecoins that are fully decentralized, right?

2603
04:09:49,023 --> 04:09:53,023
The world wants a dollar, but it doesn't want USDT or USDC.

2604
04:09:53,023 --> 04:09:57,023
It wants a dollar that has Bitcoin security and Bitcoin centralization.

2605
04:09:57,023 --> 04:09:59,023
And the only way to do it is to do a rollup

2606
04:09:59,343 --> 04:10:01,343
where you can move your coins,

2607
04:10:01,343 --> 04:10:05,343
put it into a protocol that issues fully decentralized, unalterable protocol

2608
04:10:05,343 --> 04:10:07,343
that cannot be changed.

2609
04:10:07,343 --> 04:10:09,343
There is no governance in it.

2610
04:10:09,343 --> 04:10:11,343
I mean, there's examples of that on Ethereum.

2611
04:10:11,343 --> 04:10:13,343
For example, Liquidity Protocol is considered

2612
04:10:13,343 --> 04:10:15,343
the gold standard of decentralized stablecoins

2613
04:10:15,343 --> 04:10:17,343
that are collateralized by Ether, right?

2614
04:10:17,343 --> 04:10:19,343
So the demand is there.

2615
04:10:21,343 --> 04:10:25,343
Are you rolling up Bitcoin Script or you're rolling up EVM?

2616
04:10:25,663 --> 04:10:29,663
Well, the rollup can have its own virtual machine.

2617
04:10:29,663 --> 04:10:31,663
It can have its own blockchain structure.

2618
04:10:31,663 --> 04:10:37,663
It could have any semantics that are completely custom to it.

2619
04:10:37,663 --> 04:10:41,663
The only thing it needs from Bitcoin is basically two things.

2620
04:10:41,663 --> 04:10:45,663
It needs recursive covenants to move the rollup,

2621
04:10:45,663 --> 04:10:47,663
you know, treasury forward block by block.

2622
04:10:47,663 --> 04:10:50,663
And it needs this opaque predicate.

2623
04:10:50,663 --> 04:10:54,663
I call it OpStark Verify,

2624
04:10:54,982 --> 04:10:56,982
which basically returns true or false

2625
04:10:56,982 --> 04:10:58,982
when presented with a kilobyte-sized proof, right?

2626
04:10:58,982 --> 04:11:01,982
Now, as far as security assumptions of the rollup, right,

2627
04:11:01,982 --> 04:11:05,982
there are rollups out there that make fewer security assumptions than Bitcoin itself.

2628
04:11:05,982 --> 04:11:07,982
Like, for example, you can build a whole rollup

2629
04:11:07,982 --> 04:11:10,982
that assumes nothing except that SHA-256 is secure,

2630
04:11:10,982 --> 04:11:12,982
which Bitcoin already assumes.

2631
04:11:12,982 --> 04:11:14,982
It introduces no new security assignment.

2632
04:11:14,982 --> 04:11:16,982
That's what Starks are.

2633
04:11:16,982 --> 04:11:18,982
They're quantum secure.

2634
04:11:18,982 --> 04:11:20,982
Like, you can even have a rollup that's quantum secure,

2635
04:11:20,982 --> 04:11:22,982
private, has no MEV by design.

2636
04:11:23,302 --> 04:11:28,302
And it inherits both ownership and double-spend security from Bitcoin

2637
04:11:28,302 --> 04:11:33,302
while at the same time consuming lots of Bitcoin block space

2638
04:11:33,302 --> 04:11:39,302
with much higher economic density than, let's say, inscriptions and ordinals, right?

2639
04:11:39,302 --> 04:11:41,302
Yeah, so let's do that.

2640
04:11:41,302 --> 04:11:45,302
But the thing is, I know what's going to happen, right?

2641
04:11:45,302 --> 04:11:48,302
My hope is that we'll be able to sneak in both...

2642
04:11:48,302 --> 04:11:51,302
The rollups have an enormous number of downsides

2643
04:11:51,622 --> 04:11:53,622
relative to BIP300, right?

2644
04:11:53,622 --> 04:11:55,622
So it's possible that in the future,

2645
04:11:55,622 --> 04:11:58,622
the rollup word will be the winning meme

2646
04:11:58,622 --> 04:12:01,622
and that BIP300 will just be considered

2647
04:12:01,622 --> 04:12:04,622
like a very permissive rollup

2648
04:12:04,622 --> 04:12:07,622
or a lightweight or very optimistic rollup,

2649
04:12:07,622 --> 04:12:09,622
but not unintended.

2650
04:12:09,622 --> 04:12:12,622
Do you understand the downsides, though?

2651
04:12:12,622 --> 04:12:15,622
Well, do you understand the upsides as far as security, right?

2652
04:12:15,622 --> 04:12:17,622
I do, yes.

2653
04:12:17,622 --> 04:12:19,622
Let's consider the downsides.

2654
04:12:19,942 --> 04:12:22,942
Let's consider the downsides. What are they?

2655
04:12:22,942 --> 04:12:25,942
Well, one is, if you read John Light's report,

2656
04:12:25,942 --> 04:12:30,942
is that the scalability factor only increases by, like, 3.8.

2657
04:12:30,942 --> 04:12:34,942
Well, actually, he argues that it increases by a factor of 100

2658
04:12:34,942 --> 04:12:37,942
if your rollup uses account model as opposed to UTXO model.

2659
04:12:37,942 --> 04:12:40,942
Yeah, but he didn't put that in the report.

2660
04:12:40,942 --> 04:12:42,942
Maybe you read that in my FAQ.

2661
04:12:42,942 --> 04:12:44,942
No, no, no. It is in the report, right?

2662
04:12:44,942 --> 04:12:48,942
He says if your rollup uses UTXO, you get 3x scalability.

2663
04:12:49,263 --> 04:12:52,263
If your rollup uses Ethereum-like account model, it's 100x

2664
04:12:52,263 --> 04:12:54,263
at the very least, right?

2665
04:12:54,263 --> 04:12:57,263
The report actually talks about different rollup models.

2666
04:12:57,263 --> 04:13:00,263
Well, I found that in my own research,

2667
04:13:00,263 --> 04:13:03,263
but you understand that in BIP300, it's completely unlimited.

2668
04:13:03,263 --> 04:13:06,263
Yes, but see, the problem with BIP300 is not just

2669
04:13:06,263 --> 04:13:11,263
that it's like BIP300 is necessary but insufficient,

2670
04:13:11,263 --> 04:13:14,263
because let's say that we wave the magic wand

2671
04:13:14,263 --> 04:13:16,263
and we had both rollups in BIP300,

2672
04:13:16,263 --> 04:13:18,263
let 1,000 flowers bloom.

2673
04:13:18,583 --> 04:13:21,583
The problem is that you would need to entice liquidity from Ethereum

2674
04:13:21,583 --> 04:13:24,583
and you would need to entice the composability of Ethereum dApps

2675
04:13:24,583 --> 04:13:26,583
that are all interacting with each other,

2676
04:13:26,583 --> 04:13:29,583
because you can have frontends that execute through three or four dApps,

2677
04:13:29,583 --> 04:13:32,583
including aggregators of liquidity and all that stuff.

2678
04:13:32,583 --> 04:13:35,583
The reason why all liquidity killers have failed

2679
04:13:35,583 --> 04:13:39,583
is precisely because Ethereum has these two giant modes.

2680
04:13:39,583 --> 04:13:43,583
One is composability of protocols, and the other one is just liquidity.

2681
04:13:43,583 --> 04:13:47,583
So basically, any operation that you would perform on Avalanche,

2682
04:13:47,903 --> 04:13:50,903
even though it costs you a penny to do, because the fees are low,

2683
04:13:50,903 --> 04:13:54,903
the conversion ratio between your stable coin and Ethereum

2684
04:13:54,903 --> 04:13:58,903
will be less favorable on these L1s than it is on Ethereum

2685
04:13:58,903 --> 04:14:00,903
because of liquidity.

2686
04:14:00,903 --> 04:14:04,903
So I see both rollups and drivechains as necessary but insufficient.

2687
04:14:04,903 --> 04:14:08,903
Well, I agree. I agree with you that obviously we should do both.

2688
04:14:08,903 --> 04:14:12,903
It's also the case that I would certainly admit that if we did both

2689
04:14:12,903 --> 04:14:16,903
and then rollups were significantly more popular,

2690
04:14:17,223 --> 04:14:21,223
I would feel kind of like, oh, I really misused a lot of time, of course.

2691
04:14:21,223 --> 04:14:23,223
Obviously, I would think that's nonsense.

2692
04:14:23,223 --> 04:14:26,223
Yeah, I mean, you're saying that there's a limit to scalability of rollups

2693
04:14:26,223 --> 04:14:28,223
simply because they can only do a pack of 100.

2694
04:14:28,223 --> 04:14:30,223
Well, that's just the first one out of the gate.

2695
04:14:30,223 --> 04:14:32,223
And then you said, blah, blah, blah, maybe it's something else

2696
04:14:32,223 --> 04:14:34,223
that no one has described to me.

2697
04:14:34,223 --> 04:14:36,223
I've yet to see this.

2698
04:14:36,223 --> 04:14:41,223
I read the report and then I, on my own, found the 100.

2699
04:14:41,223 --> 04:14:43,223
Maybe he edited it afterward.

2700
04:14:43,223 --> 04:14:45,223
Any other downsides to rollups?

2701
04:14:45,542 --> 04:14:49,542
Well, as you said, it requires this op, the decay, not approval thing,

2702
04:14:49,542 --> 04:14:53,542
which is enormous, way different than just checking if something is an integer

2703
04:14:53,542 --> 04:14:55,542
that is bigger than 100.

2704
04:14:55,542 --> 04:15:00,542
I can see that the sidechains are trivial.

2705
04:15:00,542 --> 04:15:03,542
There's no bike shedding to be done on sidechains.

2706
04:15:03,542 --> 04:15:05,542
All the bike shedding has been done, essentially.

2707
04:15:05,542 --> 04:15:09,542
What about the extensibility where the sidechain says,

2708
04:15:09,542 --> 04:15:12,542
well, we can copy basically anything.

2709
04:15:12,862 --> 04:15:15,862
Whereas in the decay rollup situation,

2710
04:15:15,862 --> 04:15:18,862
there has to be some net movement of funds

2711
04:15:18,862 --> 04:15:21,862
that collapses back down to something comprehensible.

2712
04:15:21,862 --> 04:15:23,862
Actually, that's not the case.

2713
04:15:23,862 --> 04:15:27,862
For example, they're developing ZK EVMs right now.

2714
04:15:27,862 --> 04:15:31,862
So basically, if you created a proof system

2715
04:15:31,862 --> 04:15:34,862
that is, let's say, lambda calculus equivalent,

2716
04:15:34,862 --> 04:15:36,862
you could prove any computation on a rollup.

2717
04:15:36,862 --> 04:15:39,862
There would be no limitation of what happens in the rollup

2718
04:15:39,862 --> 04:15:41,862
and what's provable in L1.

2719
04:15:42,182 --> 04:15:45,182
The example of that is that they actually created ZK EVMs now,

2720
04:15:45,182 --> 04:15:49,182
which is a hairier, much more complex computational paradigm

2721
04:15:49,182 --> 04:15:51,182
than, let's say, lambda calculus

2722
04:15:51,182 --> 04:15:54,182
or some kind of low-level push-stack machine.

2723
04:15:54,182 --> 04:15:59,182
But basically, because of universality of computation,

2724
04:15:59,182 --> 04:16:03,182
rollups could essentially be proven no matter what happens on a rollup

2725
04:16:03,182 --> 04:16:08,182
in a small kilobyte-sized OP-STARC verify operator,

2726
04:16:08,182 --> 04:16:11,182
whose running cost, by the way, has been taken down

2727
04:16:11,502 --> 04:16:13,502
to be only 10 times more

2728
04:16:13,502 --> 04:16:16,502
than validating a single ECDSA signature.

2729
04:16:16,502 --> 04:16:20,502
Let's have SuperTestNet jump in here.

2730
04:16:20,502 --> 04:16:23,502
Super, what are your thoughts on this or anything else?

2731
04:16:23,502 --> 04:16:28,502
Yeah, I've gone to lots of Bitcoin conferences

2732
04:16:28,502 --> 04:16:30,502
and lots of meetups,

2733
04:16:30,502 --> 04:16:34,502
and I've been in conversation with many Bitcoiners.

2734
04:16:34,502 --> 04:16:38,503
I've never met anyone who uses WBTC,

2735
04:16:38,823 --> 04:16:42,823
at least no one who talked about it as a cool thing.

2736
04:16:42,823 --> 04:16:45,823
Where are all these people that are putting,

2737
04:16:45,823 --> 04:16:49,823
what did you say, $300 million or something into WBTC?

2738
04:16:49,823 --> 04:16:53,823
No, actually, WBTC issuance peaked at 300,000 WBTCs,

2739
04:16:53,823 --> 04:16:56,823
which is a significant fraction of all of Bitcoin in existence.

2740
04:16:56,823 --> 04:16:59,823
It's essentially half the size of the GBTC trust.

2741
04:16:59,823 --> 04:17:02,823
It's down to 180,000 WBTCs.

2742
04:17:02,823 --> 04:17:04,823
I can tell you, I've used it before,

2743
04:17:04,823 --> 04:17:07,823
and the tax savings reasons are so compelling,

2744
04:17:08,142 --> 04:17:10,142
and besides, you're not losing control of your Bitcoin.

2745
04:17:10,142 --> 04:17:12,142
You don't need to sell your Bitcoin to survive.

2746
04:17:12,142 --> 04:17:17,142
That's the reason why there is 300,000 BTC high watermark for WBTC.

2747
04:17:17,142 --> 04:17:19,142
You cannot argue with that number,

2748
04:17:19,142 --> 04:17:21,142
because that's just the issuance reported

2749
04:17:21,142 --> 04:17:24,142
and proven for proof of reserves by BitGo.

2750
04:17:24,142 --> 04:17:27,142
The number is correct, and the number is very, very high.

2751
04:17:27,142 --> 04:17:30,142
It's billions of dollars, and it is much higher,

2752
04:17:30,142 --> 04:17:33,142
two orders of magnitude higher than the total amount of Bitcoin

2753
04:17:33,142 --> 04:17:35,142
in, for example, the Lightning Network.

2754
04:17:35,463 --> 04:17:37,463
Yeah, it's the biggest sidechain there is,

2755
04:17:37,463 --> 04:17:40,463
but it's a custodial sidechain run by BitGo

2756
04:17:40,463 --> 04:17:43,463
that can rug pull or OFAC can rug pull all of that coin

2757
04:17:43,463 --> 04:17:46,463
and just repossess it for the US government at any time.

2758
04:17:46,463 --> 04:17:49,463
The fact that people are doing this tells me that

2759
04:17:49,463 --> 04:17:53,463
if they had a way to move Bitcoin into synthetic Bitcoin

2760
04:17:53,463 --> 04:17:55,463
either on a sidechain or a roll-up,

2761
04:17:55,463 --> 04:17:58,463
the demand would have been orders of magnitude higher to do it,

2762
04:17:58,463 --> 04:18:02,463
because collateralization is just so attractive as a tax management

2763
04:18:02,782 --> 04:18:05,782
and strategy not to sell your Bitcoin.

2764
04:18:05,782 --> 04:18:07,782
This is essentially Sailor 101, right?

2765
04:18:07,782 --> 04:18:12,782
Yeah, this $4 billion of value that is in WBTC

2766
04:18:12,782 --> 04:18:16,782
is evidence of the market's demand for using a Bitcoin

2767
04:18:16,782 --> 04:18:18,782
that is a synthetic Bitcoin,

2768
04:18:18,782 --> 04:18:21,782
not real layer 1 Bitcoin, but a synthetic Bitcoin,

2769
04:18:21,782 --> 04:18:24,782
meaning a token that's redeemable for Bitcoin

2770
04:18:24,782 --> 04:18:26,782
that has Bitcoin's unit of account,

2771
04:18:26,782 --> 04:18:30,782
but it has the software features of Ethereum or some other chain.

2772
04:18:31,103 --> 04:18:33,103
And by the way, I wanted to point out in the Nest,

2773
04:18:33,103 --> 04:18:37,103
I've shared a brief transcription of what John Light said

2774
04:18:37,103 --> 04:18:40,103
in a recent Drivechain Twitter space,

2775
04:18:40,103 --> 04:18:43,103
where he said,

2776
04:18:43,103 --> 04:18:46,103
I think it would make sense to do Drivechains first

2777
04:18:46,103 --> 04:18:49,103
rather than wait until validity roll-ups are ready.

2778
04:18:49,103 --> 04:18:52,103
So he likes both of them, just like you, Alex.

2779
04:18:52,103 --> 04:18:54,103
He likes Drivechain and Bitcoin.

2780
04:18:54,103 --> 04:18:56,103
And I do as well.

2781
04:18:56,103 --> 04:18:59,103
He asked me about the relative downside.

2782
04:18:59,422 --> 04:19:01,422
For one light at the end of the tunnel,

2783
04:19:01,422 --> 04:19:03,422
for Drivechains and for validity roll-ups,

2784
04:19:03,422 --> 04:19:05,422
maybe this recent OP_VAULT proposal,

2785
04:19:05,422 --> 04:19:07,422
because by hook or by crook,

2786
04:19:07,422 --> 04:19:11,422
it may be repurposed to do fully recursive covenants, right?

2787
04:19:11,422 --> 04:19:15,422
And we know that those enable Drivechains without...

2788
04:19:15,422 --> 04:19:18,422
Drivechains only need recursive covenants to be enabled,

2789
04:19:18,422 --> 04:19:21,422
although they will be less efficient than BIP300.

2790
04:19:21,422 --> 04:19:23,422
They will become permissionless.

2791
04:19:23,422 --> 04:19:25,422
Basically, once the recursive covenants are in,

2792
04:19:25,422 --> 04:19:27,422
in the form of OP_VAULT or some other thing,

2793
04:19:27,743 --> 04:19:29,743
there is no need to ask for permission

2794
04:19:29,743 --> 04:19:31,743
from the Merge Bureau,

2795
04:19:31,743 --> 04:19:33,743
like Politburo and the Soviet Union of the core,

2796
04:19:33,743 --> 04:19:35,743
because...

2797
04:19:35,743 --> 04:19:37,743
You're 100% correct.

2798
04:19:37,743 --> 04:19:39,743
But when something like that happens,

2799
04:19:39,743 --> 04:19:41,743
I just kind of feel all the more that...

2800
04:19:41,328 --> 04:19:43,328
Why don't we just do it then?

2801
04:19:43,328 --> 04:19:46,328
That's because you expect people to have reason, right?

2802
04:19:46,328 --> 04:19:50,328
Your mistake is that you expect people to be reasonable and not emotional, right?

2803
04:19:50,328 --> 04:19:55,328
But it's like, the real problem here is what we heard from Jay,

2804
04:19:55,328 --> 04:19:58,328
is that people are still subject to this ultimatum game.

2805
04:19:58,328 --> 04:20:03,328
When two players, the first one chooses what percentage of $100 he'll take and you get the rest.

2806
04:20:03,328 --> 04:20:09,328
If somebody chooses $99, the correct move is to take one as opposed to veto the whole transaction,

2807
04:20:09,328 --> 04:20:11,328
because you want to punish every loader, right?

2808
04:20:11,328 --> 04:20:14,328
Okay, that's what SuperTestNet, he said it through his bad face.

2809
04:20:14,328 --> 04:20:19,328
But there is actually something called super-rationality in a post that I planned to make about game theory at one point,

2810
04:20:19,328 --> 04:20:23,328
where it says it is rational to turn down everything other than 50-50.

2811
04:20:23,328 --> 04:20:27,328
But SuperTestNet, that's a post for another time.

2812
04:20:27,328 --> 04:20:32,328
Yeah, I want to go back to the point I was trying to make earlier.

2813
04:20:32,328 --> 04:20:37,328
It's possible for a lot of money to be in a thing and still not have a lot of users.

2814
04:20:37,328 --> 04:20:41,328
If WBTC did have a lot of users, I would expect to meet some occasionally.

2815
04:20:41,328 --> 04:20:43,328
You're the first person, Alex, I've ever met.

2816
04:20:43,328 --> 04:20:50,328
Well, you can see how many users it has by how many WBTC accounts are using Aave protocol

2817
04:20:50,328 --> 04:20:53,328
and other protocols that allow you to collateralize WBTC.

2818
04:20:53,328 --> 04:20:57,328
We're talking thousands of accounts averaging very large amounts of WBTC.

2819
04:20:57,328 --> 04:21:01,328
So these are some OGs putting in 100 more WBTCs in there,

2820
04:21:01,328 --> 04:21:07,328
because they realize that rather than incur this huge opportunity cost of selling off their Bitcoin with every bull market,

2821
04:21:07,328 --> 04:21:12,328
what they can do instead is retain control of their Bitcoin and just collateralize at 10-20%,

2822
04:21:12,328 --> 04:21:15,328
like Saylor is doing, and get liquidity out.

2823
04:21:15,328 --> 04:21:19,328
And the whole transaction is not a taxable event.

2824
04:21:19,328 --> 04:21:22,328
And your debt is being devalued as the dollar is being printed.

2825
04:21:22,328 --> 04:21:24,328
I mean, it's like the best of all possible worlds.

2826
04:21:24,328 --> 04:21:28,328
Just count how many users use Aave protocol with WBTC collateralized.

2827
04:21:28,328 --> 04:21:34,328
It's thousands of people collateralizing lots of WBTC and other protocols and other chains as well.

2828
04:21:34,328 --> 04:21:37,328
It's all out in the open, right?

2829
04:21:37,328 --> 04:21:40,328
None of this is unavailable.

2830
04:21:40,328 --> 04:21:48,328
I think you say that you wondered if maybe a bunch of OGs are using it.

2831
04:21:48,328 --> 04:21:49,328
I think that's possible.

2832
04:21:49,328 --> 04:21:56,328
It's also possible that it's a bunch of faceless corporations who hold a bunch of people's Bitcoins and are putting it on Ethereum.

2833
04:21:56,328 --> 04:21:58,328
Do you have any problems with corporations?

2834
04:21:58,328 --> 04:22:00,328
I don't.

2835
04:22:00,328 --> 04:22:05,328
No, I'm just saying that I don't think there are a lot of people using this thing.

2836
04:22:05,328 --> 04:22:08,328
I think there's a couple of large holders who are using it.

2837
04:22:08,328 --> 04:22:14,328
I think at the top of the bull market, the total value locked up in WBTC was something like $20 billion or more.

2838
04:22:14,328 --> 04:22:24,328
At $69,000 in Bitcoin and $300,000 in WBTC, you can do the math of $300,000 times $69,000.

2839
04:22:24,328 --> 04:22:26,328
That's a lot of money that was there.

2840
04:22:26,328 --> 04:22:28,328
And that money is custodial.

2841
04:22:28,328 --> 04:22:29,328
It's completely centralized.

2842
04:22:29,328 --> 04:22:34,328
It could be seized by the U.S. government at any second, and yet people do it anyways, right?

2843
04:22:34,328 --> 04:22:39,328
It may be a lot of money, but it doesn't necessarily indicate a lot of demand from Bitcoiners.

2844
04:22:39,328 --> 04:22:46,328
It might be a demand from a very small number of large corporations who want to do this with other people's money.

2845
04:22:46,328 --> 04:22:50,328
If people are holding WBTC, I call it Bitcoiners.

2846
04:22:50,328 --> 04:22:57,328
Whether or not they're Bitcoiners or OGs or not, if people have exposure to Bitcoin through WBTC, they have exposure to Bitcoin.

2847
04:22:57,328 --> 04:22:58,328
Therefore, they're Bitcoiners.

2848
04:23:01,328 --> 04:23:04,328
Sure. Yeah, I think that sounds reasonable.

2849
04:23:04,328 --> 04:23:10,328
But I don't think that the number of people who hold WBTC is very large.

2850
04:23:10,328 --> 04:23:14,328
I think that there's just a small number of rich people who hold a lot of it.

2851
04:23:14,328 --> 04:23:19,328
Well, it's like there's a small number of people doing what Zuckerberg is doing.

2852
04:23:19,328 --> 04:23:26,328
On Twitter, he put up some Tesla stock with Goldman Sachs as collateral, and they gave him $20 billion.

2853
04:23:26,328 --> 04:23:30,328
Normal people cannot do that because they don't have private banking with Goldman Sachs.

2854
04:23:30,328 --> 04:23:33,328
But rich people do this Cantillon effect thing all the time, right?

2855
04:23:35,328 --> 04:23:36,328
Yeah.

2856
04:23:37,328 --> 04:23:44,328
If it's not a lot of people who are doing this, not a lot of individual Bitcoiners and individual node operators,

2857
04:23:44,328 --> 04:23:52,328
then the ones who are doing it just don't count when it comes to trying to get a soft fork into Bitcoin.

2858
04:23:52,328 --> 04:23:56,328
Because they don't still make up a significant portion of the network.

2859
04:23:56,328 --> 04:23:59,328
It's not a democracy, right? It's not a democracy. It's a free market.

2860
04:24:00,328 --> 04:24:07,328
The demand for WBTC is indirectly demand for Bitcoin.

2861
04:24:07,328 --> 04:24:14,328
Because all demand for synthetic Bitcoin accrues value indirectly to Bitcoin.

2862
04:24:14,328 --> 04:24:23,328
Because the only way to generate a synthetic Bitcoin that's redeemable for Bitcoin is by collecting more Bitcoin as one is issuing the synthetic Bitcoin.

2863
04:24:24,328 --> 04:24:35,328
So I feel that the demand, just to make my point clear, the demand for WBTC benefits everyone holding Layer 1 Bitcoin

2864
04:24:35,328 --> 04:24:44,328
in the sense that the purchasing power of their Layer 1 Bitcoin goes up as others are demanding this synthetic Bitcoin.

2865
04:24:44,328 --> 04:24:50,328
So I feel like there's a harmony there. Super, does that sound like a compelling line of reasoning to you?

2866
04:24:51,328 --> 04:24:56,328
Yeah, I think that is a compelling thing to say.

2867
04:24:56,328 --> 04:25:04,328
I'm not sure, I'll need to think about how to summarize my point more effectively

2868
04:25:04,328 --> 04:25:11,328
because I don't think I fully grasp what I'm trying to say in a way where I can compress the narrative enough.

2869
04:25:11,328 --> 04:25:14,328
But thank you for your thoughts, Alex.

2870
04:25:14,328 --> 04:25:18,328
I'm glad to have learned, I learned a lot about WBTC today.

2871
04:25:18,328 --> 04:25:22,328
And thank you for telling me about it and giving me sources for where I can find more info.

2872
04:25:22,328 --> 04:25:27,328
I'm curious if Paul has any more objections to roll-ups because two objections we've heard

2873
04:25:27,328 --> 04:25:33,328
which is that there is potentially an upper limit on scalability which actually John Light addresses in his paper

2874
04:25:33,328 --> 04:25:39,328
by arguing for roll-ups of roll-ups which essentially enable unbounded scalability

2875
04:25:39,328 --> 04:25:44,328
where you have the one layer that's immediately above Bitcoin is 100x scalable

2876
04:25:44,328 --> 04:25:48,328
but then it could have roll-ups on top and because there's no loss of security

2877
04:25:48,328 --> 04:25:53,328
there's actually a loss of security from Layer 2 roll-up to Layer 3 roll-up.

2878
04:25:53,328 --> 04:25:58,328
So you pointed out two problems. One is that maybe there's only 100x to be had there

2879
04:25:58,328 --> 04:26:06,328
and two is that maybe it's impossible to prove arbitrary computation using OpStark Verify.

2880
04:26:06,328 --> 04:26:08,328
Well, I'm not so much worried about that.

2881
04:26:08,328 --> 04:26:12,328
As you were saying, there's also the pipe-shedding that goes into that.

2882
04:26:12,328 --> 04:26:16,328
But I think more of the ZK-SNARK stuff, I'm a very...

2883
04:26:16,328 --> 04:26:21,328
I'm kind of very skeptical of it. I think it cuts against self-sovereignty and being open-source

2884
04:26:21,328 --> 04:26:27,328
because it's something that... I prefer something that the regular user has at least some understanding of.

2885
04:26:27,328 --> 04:26:29,328
They'll never ever have...

2886
04:26:29,328 --> 04:26:34,328
Yeah, but are you saying regular users understand ECDSA elliptic curve cryptography?

2887
04:26:34,328 --> 04:26:36,328
I think they have some understanding.

2888
04:26:36,328 --> 04:26:40,328
They have an idea that only the person with the private key can make the signature.

2889
04:26:40,328 --> 04:26:46,328
Well, but if an OpStark Verify makes a single cryptographic assumption of SHA-256

2890
04:26:46,328 --> 04:26:53,328
being impossible to get a pre-image from, it actually makes fewer assumptions of Bitcoin itself.

2891
04:26:53,328 --> 04:26:56,328
It's true that Starks are complex mathematical construction

2892
04:26:56,328 --> 04:27:01,328
but you have $20 billion in Ethereum roll-ups as a bounty on them, right?

2893
04:27:01,328 --> 04:27:06,328
So if anybody can break OpStark or OpSNARK on Ethereum, they can collect a huge bounty

2894
04:27:06,328 --> 04:27:08,328
and that's been going on for a few years now.

2895
04:27:08,328 --> 04:27:13,328
So I guess we're at the point where the technology is not that novel anymore.

2896
04:27:13,328 --> 04:27:21,328
But 99.9% of people have no idea what elliptic curve math is, let alone elliptic curve cryptography, right?

2897
04:27:21,328 --> 04:27:27,328
Well, I think, you know, these are two different issues, but I think one of the issues is...

2898
04:27:27,328 --> 04:27:32,328
I agree with you that people can become more familiar with something from exposure, right?

2899
04:27:32,328 --> 04:27:35,328
So I agree that some things are a black box.

2900
04:27:35,328 --> 04:27:39,328
But as long as people have a little playground where they can throw...

2901
04:27:39,328 --> 04:27:45,328
Like, people have something where they can sign a message and look at the signature and then edit the signature

2902
04:27:45,328 --> 04:27:49,328
and then watch it go from being valid to being invalid.

2903
04:27:49,328 --> 04:27:50,328
That's something.

2904
04:27:50,328 --> 04:27:55,328
And then if people know from experience that no one can take their Bitcoin...

2905
04:27:56,328 --> 04:28:02,328
So for example, if someone loses their coins in a hack, people know that what happened was

2906
04:28:02,328 --> 04:28:06,328
someone got the 12 words or someone got the keys off of their computer.

2907
04:28:06,328 --> 04:28:10,328
So I agree with that. That's the first point. I do agree with that first issue.

2908
04:28:10,328 --> 04:28:13,328
The second issue is lots of people don't understand ECBSA.

2909
04:28:13,328 --> 04:28:20,328
And my question is, to what extent are those people really loyal to Bitcoin itself?

2910
04:28:20,328 --> 04:28:22,328
Like, if they don't really know what's going on...

2911
04:28:22,328 --> 04:28:23,328
They're not.

2912
04:28:23,328 --> 04:28:28,328
Are they actually Bitcoiners? And can't we just replace Venmo and they won't even notice?

2913
04:28:28,328 --> 04:28:34,328
The truth is that African villagers don't care about running watchtowers and managing liquidity.

2914
04:28:34,328 --> 04:28:36,328
They're just mercenary about it, right?

2915
04:28:36,328 --> 04:28:37,328
They just want cheap...

2916
04:28:37,328 --> 04:28:38,328
I agree with all that.

2917
04:28:38,328 --> 04:28:44,328
But I'm saying the real progress of our movement is actually in the education part.

2918
04:28:44,328 --> 04:28:47,328
And so when I see ZKSnarks, I think that's kind of a dead end.

2919
04:28:47,328 --> 04:28:50,328
But no one should stop doing that because of that.

2920
04:28:51,328 --> 04:28:53,328
That's just my kind of take.

2921
04:28:53,328 --> 04:28:56,328
That's not really my... I don't know what you mean.

2922
04:28:56,328 --> 04:28:58,328
It's a different type of belief than my other beliefs.

2923
04:28:58,328 --> 04:29:01,328
I just kind of think I wouldn't really bet on that.

2924
04:29:01,328 --> 04:29:06,328
You could say that public-key cryptography is the simplest version of a zero-knowledge proof.

2925
04:29:06,328 --> 04:29:10,328
Because you prove possession of the key without revealing any information about it.

2926
04:29:10,328 --> 04:29:11,328
I agree with that.

2927
04:29:11,328 --> 04:29:16,328
But I think that's something that we can easily build a little witness, which I even plan to do.

2928
04:29:16,328 --> 04:29:17,328
Alex?

2929
04:29:18,328 --> 04:29:21,328
People can play around with the keys and they...

2930
04:29:21,328 --> 04:29:27,328
You can build the same widget for a Lambda calculus that's provable by ZKStark.

2931
04:29:27,328 --> 04:29:30,328
I would be interested to see that widget and play with it myself.

2932
04:29:30,328 --> 04:29:32,328
Something I can learn about from ZKStark.

2933
04:29:32,328 --> 04:29:33,328
You know what I mean?

2934
04:29:33,328 --> 04:29:35,328
I'm having trouble getting behind something that I don't understand.

2935
04:29:35,328 --> 04:29:38,328
And it seems like the ZKStark thing is just not right.

2936
04:29:38,328 --> 04:29:41,328
People just say, blah, blah, blah, I don't think about it.

2937
04:29:41,328 --> 04:29:42,328
It's kind of bounty.

2938
04:29:42,328 --> 04:29:43,328
I would break it.

2939
04:29:44,328 --> 04:29:48,328
Now when it breaks, then it's like, this is not good enough for someone.

2940
04:29:48,328 --> 04:29:50,328
No, I mean, your caution is justified.

2941
04:29:50,328 --> 04:29:57,328
But in the interest of saving you and other people time, I mean, ZKStarks are obsolete relative to ZKStarks,

2942
04:29:57,328 --> 04:29:59,328
which make way fewer security assumptions.

2943
04:29:59,328 --> 04:30:01,328
They just have slightly larger proofs.

2944
04:30:01,328 --> 04:30:03,328
So people should just go to that one.

2945
04:30:03,328 --> 04:30:05,328
But again, you and I agree.

2946
04:30:06,328 --> 04:30:14,328
Would you agree that to wrap this very, very interesting conversation about zero knowledge proofs and roll-ups on Bitcoin,

2947
04:30:14,328 --> 04:30:26,328
would you agree that a reasonable take is that the chance that any layer one change happens to facilitate these new technologies is very far in the future.

2948
04:30:26,328 --> 04:30:31,328
We're talking five or ten years away for Bitcoin.

2949
04:30:31,328 --> 04:30:35,328
Whereas for drivechain, it's a seven-year-old idea that's been discussed.

2950
04:30:35,328 --> 04:30:36,328
I agree.

2951
04:30:36,328 --> 04:30:37,328
I completely agree.

2952
04:30:37,328 --> 04:30:46,328
And also, if there is drivechain first, then there can be a drivechain specifically devoted to experimenting with those roll-ups.

2953
04:30:46,328 --> 04:30:52,328
And that would allow possibly for roll-ups to come even sooner to Bitcoin layer one, if they will ever.

2954
04:30:52,328 --> 04:30:53,328
I agree completely.

2955
04:30:53,328 --> 04:30:59,328
And I anticipate that drivechains will not be merged into the core.

2956
04:30:59,328 --> 04:31:10,328
What will happen instead is that the demand for vaulting of Bitcoin will be so strong that some kind of covenant, which is repurposable for drivechains, will be merged in.

2957
04:31:10,328 --> 04:31:13,328
And then drivechains become permissionless.

2958
04:31:13,328 --> 04:31:19,328
And maybe it's suboptimal relative to Paul's initial design where miners get to fire drivechain or not.

2959
04:31:19,328 --> 04:31:21,328
It will be completely permissionless.

2960
04:31:21,328 --> 04:31:22,328
But they will get in.

2961
04:31:22,328 --> 04:31:40,328
As far as experimentation with ZK proofs, with ZK Starks, there is a huge Cambrian explosion going on out there in Ethereum where you have literally 50 roll-up companies that are well-funded that are all stewing in this primordial stew of innovation out there.

2962
04:31:40,328 --> 04:31:42,328
And we ignore that stuff at our own peril.

2963
04:31:42,328 --> 04:31:47,328
So eventually, we'll have to basically abandon our not-invented-here syndrome.

2964
04:31:47,328 --> 04:31:52,328
But actually, ZK Starks was suggested by Greg Maxwell in 2013 post on Bitcoin Talk.

2965
04:31:52,328 --> 04:31:59,328
He said that if you could prove the other chain using a ZK Stark or SNARK proof, you wouldn't need an SPV-verified chain.

2966
04:31:59,328 --> 04:32:09,328
So that idea was actually confirmed by the father of StarkNet when he did a report in 2013 in San Jose Bitcoin Conference.

2967
04:32:09,328 --> 04:32:20,328
He basically said, why don't we do this strong cryptographic proof of the correctness of transition of the sidechain and not rely on the SPV-style proof?

2968
04:32:20,328 --> 04:32:23,328
Are you talking about Eli Ben-Sasson?

2969
04:32:23,328 --> 04:32:24,328
Absolutely, yes.

2970
04:32:24,328 --> 04:32:30,328
I mean if you go back to 2013 videos, you will see him essentially advocating this for Bitcoin.

2971
04:32:30,328 --> 04:32:32,328
But again, Bitcoin wasn't open to this.

2972
04:32:32,328 --> 04:32:34,328
So instead, he left for Ethereum.

2973
04:32:34,328 --> 04:32:39,328
And now, there is 50 well-funded startups in Ethereum doing validity roll-ups.

2974
04:32:39,328 --> 04:32:47,328
Can you talk about what you just said a moment ago, a couple of sentences back about the mindset of innovation and experimentation?

2975
04:32:47,328 --> 04:32:53,328
And can you talk about your view on is Bitcoin right now, today, achieving?

2976
04:32:53,328 --> 04:32:54,328
No, it's not.

2977
04:32:55,328 --> 04:33:06,328
It's essentially like a system that existed in the Soviet Union with the six priests in the Politburo and the Merch Bureau that basically see themselves as gatekeepers.

2978
04:33:06,328 --> 04:33:10,328
They don't have the mindset of letting 1,000 flowers bloom and compete.

2979
04:33:10,328 --> 04:33:13,328
They have a mindset of let's not…

2980
04:33:13,328 --> 04:33:21,328
Can you say if drivechain were adopted by Bitcoin, let's say in a year or two from now or less?

2981
04:33:21,328 --> 04:33:29,328
If it were adopted in the relative near future like that in the coming months or years, what do you think would happen within the Bitcoin community?

2982
04:33:29,328 --> 04:33:31,328
What would the effects be in your view?

2983
04:33:31,328 --> 04:33:33,328
I think it's a net positive and I'm all for it.

2984
04:33:33,328 --> 04:33:41,328
But I can tell you that the line of attack on drivechains will be that they don't preserve ownership security or double-spend security.

2985
04:33:41,328 --> 04:33:44,328
So therefore, they're not as secure as level one Bitcoin.

2986
04:33:44,328 --> 04:33:47,328
And that will be hard to deflect that line of attack.

2987
04:33:47,328 --> 04:33:49,328
But I would rather take that than nothing.

2988
04:33:50,328 --> 04:33:52,328
On that net, it's a huge benefit.

2989
04:33:52,328 --> 04:34:02,328
But you will see people from Ethereum giggling at you because they already moved on past all sidechain design, all state channel designs, the plasma.

2990
04:34:02,328 --> 04:34:05,328
They've essentially tried and abandoned all those things.

2991
04:34:05,328 --> 04:34:09,328
And what they arrived at is strong cryptographic security of ownership and double-spend.

2992
04:34:09,328 --> 04:34:11,328
They're doing nothing but rollups right now.

2993
04:34:11,328 --> 04:34:15,328
In fact, the first rollups done on Ethereum were optimistic rollups.

2994
04:34:15,328 --> 04:34:19,328
But those are going away in favor of ZK rollups because ZK rollups have caught on.

2995
04:34:19,328 --> 04:34:24,328
So nobody can get funding for any other scalability solution in Ethereum at this point.

2996
04:34:24,328 --> 04:34:26,328
They've essentially moved on.

2997
04:34:27,328 --> 04:34:31,328
But again, if you ask me whether drivechains are positive, absolutely.

2998
04:34:31,328 --> 04:34:32,328
It's a great positive.

2999
04:34:32,328 --> 04:34:33,328
It will allow all this stuff.

3000
04:34:33,328 --> 04:34:48,328
What would you say to someone who says, Alex, the biggest market that Bitcoin should aim to serve is the market for money, not the market for blockchain-based software?

3001
04:34:48,328 --> 04:34:50,328
Well, I would say it's a false dilemma.

3002
04:34:50,328 --> 04:34:52,328
I would say, why can't it do both?

3003
04:34:53,328 --> 04:35:04,328
I'm completely with Paul on the original vision of maximalism where once you invent digital scarcity, you have lots of unknown unknowns for how you can use it.

3004
04:35:04,328 --> 04:35:09,328
Now, it's true that Bitcoin is the original app chain, as they say, in the Ethereum community.

3005
04:35:09,328 --> 04:35:12,328
And the app is the store of value and peer-to-peer payments.

3006
04:35:12,328 --> 04:35:18,328
But in the spirit of Saylor, let's say, Saylor is considered to be somewhat of a maximalist.

3007
04:35:18,328 --> 04:35:21,328
Although he argues for stablecoins for the world.

3008
04:35:21,328 --> 04:35:27,328
He doesn't argue for SATs used for unit of denomination because volatility is with us for decades.

3009
04:35:27,328 --> 04:35:35,328
But I'm saying that any kind of statement that Bitcoin is just for money and not for that, that's just an example of a false dilemma.

3010
04:35:35,328 --> 04:35:37,328
It can't be for both.

3011
04:35:37,328 --> 04:35:39,328
And that's the original maximalism.

3012
04:35:39,328 --> 04:35:41,328
And I agree with Paul completely on this.

3013
04:35:41,328 --> 04:35:53,328
Once you have digital scarcity, it should be permissionless innovation about how to use it and let the market select whatever innovative uses, whatever has higher economic density to pay fees on Bitcoin.

3014
04:35:53,328 --> 04:35:55,328
Right now, you have a…

3015
04:35:55,328 --> 04:36:03,328
Which drivechains do you think, if drivechain is adopted, would be most popular, would have the most value?

3016
04:36:03,328 --> 04:36:05,328
Would it be privacy drivechains?

3017
04:36:06,328 --> 04:36:16,328
I think the right move, if the drivechains are adopted, the right move would be to essentially do an Ethereum drivechain and copy-paste all the successful protocols from Ethereum.

3018
04:36:16,328 --> 04:36:27,328
Because the number one proven use is to have trust-minimized collateralization of Bitcoin and trust-minimized stablecoins that are backed by Bitcoin.

3019
04:36:27,328 --> 04:36:31,328
These two uses are 99% of legitimate use of Ethereum.

3020
04:36:32,328 --> 04:36:33,328
You have lots of gambling.

3021
04:36:33,328 --> 04:36:35,328
You have all kinds of fake yield protocols.

3022
04:36:35,328 --> 04:36:46,328
But at the end of the day, most of the value locked on Ethereum DeFi is about collateralization, lending markets like Aave, collateralization, and crypto-based stablecoins.

3023
04:36:46,328 --> 04:36:50,328
The market wants a digital dollar, but it doesn't want USDT or USDT.

3024
04:36:50,328 --> 04:36:57,328
The market wants a digital dollar like liquidity, except collateralized by Bitcoin, not by Ethereum, which is too volatile.

3025
04:36:57,328 --> 04:36:59,328
And Ethereum is centralized.

3026
04:36:59,328 --> 04:37:02,328
Liquidity, for example, on Ethereum is the most collateralized stablecoin.

3027
04:37:02,328 --> 04:37:06,328
It's not algorithmic Ethereum backed, but it has two points of centralization.

3028
04:37:06,328 --> 04:37:09,328
Number one, Ethereum itself is used as collateral.

3029
04:37:09,328 --> 04:37:13,328
It's a suboptimal collateral because it's somewhat centralized, and it's also highly volatile.

3030
04:37:13,328 --> 04:37:16,328
So Bitcoin would improve on both in that regard.

3031
04:37:16,328 --> 04:37:23,328
The other point of centralization it has is that it uses a chain-link Oracle to communicate the price of Ether and USD into the protocol.

3032
04:37:24,328 --> 04:37:30,328
So you need to solve both of these to create a truly cryptographically secure ownership of a decentralized stablecoin.

3033
04:37:30,328 --> 04:37:33,328
And that stablecoin could then flood the world.

3034
04:37:33,328 --> 04:37:40,328
Alex, what do you think would be the long-term effect of not adopting drivechain on Bitcoin?

3035
04:37:40,328 --> 04:37:42,328
How do you think Bitcoin would look in 20 years from now?

3036
04:37:42,328 --> 04:37:46,328
Well, I mean it might repeat the fate of gold.

3037
04:37:46,328 --> 04:37:49,328
The gold was not canceled by governments.

3038
04:37:49,328 --> 04:37:51,328
It was out-competed by the dollar.

3039
04:37:51,328 --> 04:37:56,328
Because gold was like a store-of-value reserve asset, but it was hard to move.

3040
04:37:56,328 --> 04:38:02,328
But when you say it wasn't canceled, I mean it was canceled in 33 and 71, right, when gold was confiscated.

3041
04:38:02,328 --> 04:38:07,328
No, but the dollar using telegraph wires had much higher utility.

3042
04:38:07,328 --> 04:38:12,328
Because if you wanted to send a ship full of goods from South Africa to Japan, you didn't need to carry gold.

3043
04:38:12,328 --> 04:38:16,328
You could just use Bank of England's network.

3044
04:38:16,328 --> 04:38:17,328
Yeah, I agree.

3045
04:38:18,328 --> 04:38:21,328
It was a combination of political control and the benefits.

3046
04:38:21,328 --> 04:38:25,328
Before the gold could be canceled, it was canceled in 1933, right?

3047
04:38:25,328 --> 04:38:36,328
Arguably in 1913 when the Federal Reserve was established with all the Federal Reserve notes.

3048
04:38:36,328 --> 04:38:44,328
But the system could not get rid of gold until the network of moving dollars at the speed of a telegraph was established.

3049
04:38:44,328 --> 04:38:46,328
So dollar just had more uses.

3050
04:38:46,328 --> 04:38:51,328
So the real danger, like I'll tell you right now, my nightmare scenario for Bitcoin is as follows.

3051
04:38:51,328 --> 04:38:54,328
It's the year 2030 and Ethereum ossifies.

3052
04:38:54,328 --> 04:38:57,328
Now that would be a death blow to Bitcoin.

3053
04:38:57,328 --> 04:39:04,328
Because once Ethereum ossifies, you can no longer argue that it can rug pull you by changing the protocol, right?

3054
04:39:04,328 --> 04:39:07,328
Now you can argue about proof of stake being suboptimal.

3055
04:39:07,328 --> 04:39:11,328
But, you know, the existing euro-dollar system is even more fictional than Ethereum, right?

3056
04:39:11,328 --> 04:39:15,328
And it's been going for 60 years and it's got a quadrillion dollars worth of derivatives in it.

3057
04:39:15,328 --> 04:39:23,328
So my nightmare scenario is that Ethereum simply disbands the Ethereum Foundation and ossifies around the year 2030.

3058
04:39:23,328 --> 04:39:29,328
Do you believe that they would need to first shrink their main chain block size?

3059
04:39:29,328 --> 04:39:32,328
No, no. I don't believe that because I'll tell you why.

3060
04:39:32,328 --> 04:39:34,328
Because there's such a thing as Jevons paradox.

3061
04:39:34,328 --> 04:39:36,328
I mean you can look it up on Wikipedia.

3062
04:39:36,328 --> 04:39:43,328
But basically the short version is that whenever you add lanes on a highway, the amount of traffic does not decrease, it increases.

3063
04:39:43,328 --> 04:39:51,328
Because once you make something more affordable, the amount of additional uses that are uncovered is more than enough to swamp the existing lanes on a highway.

3064
04:39:51,328 --> 04:39:58,328
So, in fact, Ethereum right now is about to undergo this huge leap in the amount of available block space.

3065
04:39:58,328 --> 04:40:05,328
You can think of Ethereum today as being capable of streaming 80 kilobytes of block space per second.

3066
04:40:05,328 --> 04:40:09,328
They're talking about taking that to a gigabyte per second with eigenlayer.

3067
04:40:09,274 --> 04:40:19,034
So they're going to make Ethereum block space cheap enough for you to back up your whole life stream into there, not just some NFTs. We're talking about real streaming video going into Ethereum.

3068
04:40:19,034 --> 04:40:27,674
And once that is available, the total amount of fees that Ethereum will collect will be much higher, even though the supply block space will be much higher.

3069
04:40:27,674 --> 04:40:38,474
So I do not buy this idea that ossifying, you know, that the Bitcoin block space needs to shrink simply because of this Jevons paradox, J-E-V-O-N, you know, if you want to look it up on Wikipedia.

3070
04:40:38,474 --> 04:40:40,634
Because it applies to block space, right?

3071
04:40:40,634 --> 04:40:49,594
To be clear, my question was, does Ethereum need to shrink its main chain block size before attempting to ossify in the far future?

3072
04:40:50,674 --> 04:40:52,193
I don't think I don't believe it does.

3073
04:40:52,193 --> 04:40:53,553
And I don't believe they intend to.

3074
04:40:54,913 --> 04:40:57,674
Do you support Bitcoin decreasing its block size?

3075
04:40:57,713 --> 04:41:06,834
I do not support that because precisely for the reasons of Jevons paradox, which is that if you want more revenue, I don't necessarily support increasing it.

3076
04:41:07,233 --> 04:41:10,274
You know, it's let it stay what it is.

3077
04:41:10,834 --> 04:41:18,634
Isn't shrinking the block size for either blockchain all about enabling people to more inexpensively validate the blockchain?

3078
04:41:18,793 --> 04:41:20,793
Well, let's talk about that.

3079
04:41:20,793 --> 04:41:27,113
Let's talk about that. So Bitcoin has four, there's four different components in the cost of a node of Bitcoin.

3080
04:41:27,113 --> 04:41:28,674
One is the raw data storage.

3081
04:41:28,873 --> 04:41:30,193
The other one is computation.

3082
04:41:30,193 --> 04:41:31,394
The third one is bandwidth.

3083
04:41:31,714 --> 04:41:35,513
And the fourth one is just the memory capacity to hold UTXO stack, right?

3084
04:41:35,833 --> 04:41:42,314
Last I checked, you can buy one terabyte SSD for $39 on Amazon today, right?

3085
04:41:42,314 --> 04:41:46,553
One terabyte will be enough to run your Bitcoin node, which is proven for the next hundred years.

3086
04:41:47,113 --> 04:41:52,473
OK, as far as memory, you can get 32 gigs of memory for $59.

3087
04:41:52,473 --> 04:41:55,113
And the UTXO set today, it's up five gigs.

3088
04:41:55,634 --> 04:42:01,394
So you can have 32 gigs for $59 plus, you know, $39 for one terabyte SSD.

3089
04:42:01,594 --> 04:42:04,754
And the Internet bandwidth is growing and becoming cheaper, even faster.

3090
04:42:04,754 --> 04:42:09,714
So actually, the real bottleneck among the four of those is the UTXO memory, right?

3091
04:42:09,714 --> 04:42:15,074
The resident memory for UTXOs right now is like, would be, you know, five million UTXOs.

3092
04:42:15,074 --> 04:42:23,434
I mean, last I checked, it's either I might be mistaken on this, but that's the that's the most expensive part of the cost of the node is the RAM.

3093
04:42:24,154 --> 04:42:29,154
And again, you can build for $200 with off the shelf components and know that will run for the next 10, 20 years.

3094
04:42:29,553 --> 04:42:32,274
Today, in my book, that's cheap enough.

3095
04:42:33,234 --> 04:42:41,113
Interesting, you don't you don't have the view that Paul and I think if I'm not mistaken, Luke does, that it would be good if the block size shrunk.

3096
04:42:41,113 --> 04:42:47,714
I think it would be negligible, like the cost of assembling your own node would go down by $20, $30.

3097
04:42:48,154 --> 04:42:54,274
But the sweet spot for memory, the sweet spot for SSD drive space is one terabyte for $30 on Amazon.

3098
04:42:54,274 --> 04:42:59,753
Go Google, go into Amazon and enter one terabyte SSD and you'll see $29.95, $39.99.

3099
04:43:00,553 --> 04:43:02,874
From reputable vendors, right?

3100
04:43:02,874 --> 04:43:04,274
These are not Chinese companies.

3101
04:43:04,714 --> 04:43:06,234
Those are very interesting points.

3102
04:43:06,753 --> 04:43:07,994
Super, please jump in.

3103
04:43:09,313 --> 04:43:14,594
Yeah, so one thing I'd like to point out is that the the chain is growing at a rate of about one gigabyte per month.

3104
04:43:15,234 --> 04:43:20,953
So I don't think a one terabyte hard drive is going to get you through the next 100 years.

3105
04:43:22,154 --> 04:43:25,154
It's going to it's going to get you through maybe five.

3106
04:43:26,074 --> 04:43:31,234
That's not accurate, because a prune node is only eight, it's only eight gigabytes.

3107
04:43:31,473 --> 04:43:34,074
You don't need to maintain the whole archive of the entire chain.

3108
04:43:35,193 --> 04:43:37,913
You can keep eight gigabytes today and stay that way forever.

3109
04:43:38,393 --> 04:43:45,553
Or if you do insist on having the whole archive of the chain, then yes, one gigabyte per month is going to be one terabyte.

3110
04:43:45,553 --> 04:43:51,193
And how many by that time you'll be able to buy 100 terabyte SSD for the same amount.

3111
04:43:51,753 --> 04:43:55,833
So as far as I'm concerned, the technology has run away and keeps running away further.

3112
04:43:56,113 --> 04:43:59,553
Like you will not need to build a node for less than $150.

3113
04:43:59,714 --> 04:44:01,234
It becomes negligible cost.

3114
04:44:01,234 --> 04:44:03,033
It's already negligible, pretty much.

3115
04:44:04,994 --> 04:44:06,753
For me, it's not negligible.

3116
04:44:07,193 --> 04:44:13,193
It's not it's not that easy for me to sync a node right now with the hardware I have.

3117
04:44:13,874 --> 04:44:15,473
You're talking about the IBD, right?

3118
04:44:15,473 --> 04:44:16,313
That's the bottleneck.

3119
04:44:16,313 --> 04:44:18,033
There's an initial block download, right?

3120
04:44:18,753 --> 04:44:27,314
Yeah, because the cheapest way to run a node is to buy a used laptop that is 10 times more powerful than Raspberry Pi, but cost $200 on eBay.

3121
04:44:27,793 --> 04:44:30,594
And that used laptop will do an IBD in two days.

3122
04:44:31,513 --> 04:44:37,034
So once you pay that initial cost of IBD, you no longer need to keep 500 gigabytes around.

3123
04:44:37,274 --> 04:44:38,793
You can prune it down to eight gigs.

3124
04:44:41,434 --> 04:44:43,474
Sure, I've done that as well.

3125
04:44:44,474 --> 04:44:57,793
I live in an area where people don't, not only me, but I don't know anyone in my area who's able to easily acquire an old laptop that can easily do initial block download.

3126
04:44:57,833 --> 04:45:04,073
Do you have a mailbox that a used laptop from eBay can be delivered to them?

3127
04:45:04,073 --> 04:45:04,793
That's your answer.

3128
04:45:06,073 --> 04:45:09,233
But I don't and neither do the people who I interact with.

3129
04:45:09,353 --> 04:45:15,434
Well, neither do African villagers, but it doesn't mean that Bitcoin should be $10 per node or cheaper, right?

3130
04:45:15,874 --> 04:45:17,154
There has to be some kind.

3131
04:45:17,194 --> 04:45:17,953
Yeah, yeah.

3132
04:45:18,194 --> 04:45:19,994
That's precisely what I think it means.

3133
04:45:20,754 --> 04:45:30,833
No, but if you ask someone like Luke Jr., he says that if you can't run Bitcoin on a used Android that costs $20, then Bitcoin is not decentralized.

3134
04:45:32,673 --> 04:45:33,833
So what's your answer to that?

3135
04:45:33,994 --> 04:45:36,513
My answer to that is that's an extremist position, right?

3136
04:45:36,914 --> 04:45:45,914
My answer to that is that if you want to completely verify your own payments and you cannot pay $100, then perhaps you can share a node between a few people.

3137
04:45:46,113 --> 04:45:53,353
Alex, what is the downside of shrinking Layer 1 if we have peer-to-peer Layer 2s?

3138
04:45:53,673 --> 04:45:56,513
Why can't we just simply move that activity on an opt-in basis?

3139
04:45:56,513 --> 04:45:58,073
I'll tell you what the downside is, right?

3140
04:45:58,113 --> 04:46:12,073
If the Layer 1 is downsized and the only banks can afford to pay $1,000 fees to settle transactions on Layer 1, then you essentially priced out almost every other use of Layer 1 for regular people.

3141
04:46:12,073 --> 04:46:17,754
I mean, do you want people to sit there waiting for one weekend per month when the fees are affordable before they can move their savings?

3142
04:46:18,353 --> 04:46:19,353
That's the downside.

3143
04:46:19,914 --> 04:46:21,793
That's actually a much bigger cost.

3144
04:46:22,154 --> 04:46:31,434
The cost of spending a couple of hundred dollars on a transaction will be higher than the cost of buying a $200 node that can run existing chain for the next 20, 30 years.

3145
04:46:33,314 --> 04:46:37,154
But being able to validate Layer 1 is different than transacting on it.

3146
04:46:37,233 --> 04:46:38,513
Well, they're both needed, right?

3147
04:46:38,513 --> 04:46:40,434
They're both needed. It's not one or the other.

3148
04:46:41,154 --> 04:46:42,154
You need to do both.

3149
04:46:43,154 --> 04:46:51,594
Well, we want to make it opt-in and to transact, but to simply validate if it's cheaper, that's good.

3150
04:46:51,914 --> 04:46:57,994
Well, yeah, but imagine those people in El Salvador that have $500 in life savings stored in some UTXO.

3151
04:46:58,474 --> 04:47:05,194
And then 10 years down the road, once you've shrunk the block size, they see that they can only issue a transaction that costs $100 or more.

3152
04:47:05,673 --> 04:47:06,754
That's not fair to them, right?

3153
04:47:08,314 --> 04:47:10,113
Essentially, their savings become immobile.

3154
04:47:10,754 --> 04:47:12,513
They're basically locked up.

3155
04:47:14,673 --> 04:47:20,914
I'm not sure. When you say it's unfair, it's unfair if fees rise.

3156
04:47:23,314 --> 04:47:24,874
I'm not saying it's unfair if fees rise.

3157
04:47:24,914 --> 04:47:28,754
In fact, Bitcoin's security model requires that the fees rise dramatically.

3158
04:47:29,393 --> 04:47:39,233
I'm just saying that the amount of block space we have today, which is four megabytes, as you can see, these four megabyte blocks, that's kind of a good compromise between

3159
04:47:39,793 --> 04:47:52,914
a chain that's inexpensive enough to validate for most people, at least in developed countries, and the ability to use this chain as a data availability layer for roll-ups and other L2 extensions.

3160
04:47:53,113 --> 04:47:57,073
For example, Lightning Network simply stops working once the fees go high enough, right?

3161
04:47:57,073 --> 04:48:05,314
Because punishment transactions won't be worth, will cost more than the punishment that they exert on the person who stole your funds from a channel.

3162
04:48:06,113 --> 04:48:10,434
So we have some kind of precedent, right?

3163
04:48:10,434 --> 04:48:17,793
We have a system that works today, and there will be absolutely no appetite for shrinking block size, nor do I think we need to.

3164
04:48:18,154 --> 04:48:20,073
But I'm not a big blocker.

3165
04:48:20,073 --> 04:48:21,953
I think the block size should stay what it is.

3166
04:48:23,434 --> 04:48:28,113
And I think it's becoming cheaper to validate that chain every year, right?

3167
04:48:29,233 --> 04:48:33,874
You know, when the block wars were happening, the SSD cost five times more.

3168
04:48:34,194 --> 04:48:45,633
It sounds like, Alex, you make a very good point, but it sounds like you consider the pruning to be less of a significant negative than others.

3169
04:48:45,633 --> 04:48:47,914
Is that a fundamental difference of opinion there?

3170
04:48:47,914 --> 04:48:52,034
Pruning is not a negative once you've undergone initial block download, right?

3171
04:48:52,034 --> 04:48:57,914
Once you verify the whole chain up to the tip, there is nothing you gain by keeping old blocks.

3172
04:48:57,914 --> 04:49:00,073
You can keep just, you know, eight gigabytes.

3173
04:49:00,794 --> 04:49:02,073
Isn't that begging the question?

3174
04:49:02,073 --> 04:49:10,154
Because if the initial block download does impose a large cost, and then people can prune, doesn't that sort of avoid the problem that we're trying to discuss?

3175
04:49:10,154 --> 04:49:12,393
Well, yeah, so the problem is not even there.

3176
04:49:12,393 --> 04:49:22,073
Like, what I'm telling you is that go on Amazon.com right now and buy a one terabyte SSD, which is fast, for $39, and that'll be enough to run the chain for the next 10, 20 years as is.

3177
04:49:23,034 --> 04:49:31,433
That seems like, to me, that's a very, it's a very, I mean, I can't go to Amazon and buy a one terabyte hard drive if I don't have a mailbox, and I don't have a mailbox.

3178
04:49:31,433 --> 04:49:36,313
Well, then you can drive to a store, you can drive to a store and buy a one terabyte SSD, right?

3179
04:49:36,313 --> 04:49:42,873
The person can't, has to also have a laptop to use with the hard drive, so the whole thing is more expensive than if it were just a cheap cell phone.

3180
04:49:42,873 --> 04:49:55,753
I don't find these arguments convincing, because you can find a worst-case African villager that has $5 to his name, but it doesn't mean that Bitcoin should be accessible to him to run a lightning node and a real node and so on and so forth.

3181
04:49:55,753 --> 04:49:57,753
That argument falls apart.

3182
04:49:57,753 --> 04:50:09,114
Because, well, I want to go back to that, because earlier I asked why it falls apart, and you said because it's extremist, or that was part of your answer, but sometimes extreme position is the correct one.

3183
04:50:09,114 --> 04:50:15,513
It may be, but I'm saying reducing the block size is unnecessary given the current cost of technology.

3184
04:50:15,513 --> 04:50:17,513
It's just unnecessary.

3185
04:50:17,513 --> 04:50:21,274
And in fact, it's worse than unnecessary.

3186
04:50:21,274 --> 04:50:34,073
It's harmful because it reduces the ability of other layers to extend Bitcoin, because there will be layers such as drivechains or roll-ups or lightning network, right?

3187
04:50:34,073 --> 04:50:46,073
Which might have high economic density, but if they're all competing for 300 kilobyte block size, you essentially, it's like saying that let's build a highway system that only has one lane in each direction instead of two lanes.

3188
04:50:46,073 --> 04:50:54,073
I'd like to take a moment to just say what the space is all about for those who've joined recently.

3189
04:50:54,073 --> 04:50:58,073
This is a drivechain focused discussion.

3190
04:50:58,073 --> 04:51:02,073
Drivechain is Bitcoin Improvement Proposal 300 and 301.

3191
04:51:02,073 --> 04:51:04,073
I'm hosting this. I'm Henry.

3192
04:51:04,073 --> 04:51:12,073
I work for LayerTwo Labs, a software development firm focused on developing sidechain technology for Bitcoin.

3193
04:51:12,073 --> 04:51:24,073
And what we're discussing right now is a related topic of whether the block size on Bitcoin is ideal in its current form or whether it should return to a smaller block size.

3194
04:51:24,073 --> 04:51:28,073
And that's not part of Bitcoin Improvement Proposal 300 and 301.

3195
04:51:28,073 --> 04:51:35,073
But it's an interesting topic and one very apropos of recent discussions in crypto Twitter about block size and ordinals.

3196
04:51:35,073 --> 04:51:37,073
And that's how we've come to this topic.

3197
04:51:37,073 --> 04:51:38,073
And so we can continue with that.

3198
04:51:38,073 --> 04:51:48,073
But I also want to mention anyone listening is free to come up and share a thought or a question about this topic or drivechain and how they all relate.

3199
04:51:48,073 --> 04:51:54,073
Thanks. Please continue, Alex or Super.

3200
04:51:55,073 --> 04:51:59,073
I find it very hard to run a node right now.

3201
04:51:59,073 --> 04:52:09,073
Due to the type of lifestyle that I live, the kind of places that I live in, the kind of resources that I have access to, it's very hard for me to run a node.

3202
04:52:09,073 --> 04:52:20,073
I'm very much in the position of the African villager who only has a cell phone and would still like in that situation to be able to validate everything and know that his transactions are secure.

3203
04:52:21,073 --> 04:52:25,073
Well, wouldn't you agree that it's hard for you to do initial block download?

3204
04:52:25,073 --> 04:52:27,073
After that, you would not have problems running.

3205
04:52:30,073 --> 04:52:39,073
No, I would have trouble running a node right now because of the amount of data per day that it consumes.

3206
04:52:40,073 --> 04:52:46,073
The ideal situation would be that I can fire up my node maybe twice a day.

3207
04:52:46,073 --> 04:52:51,073
And during the space of about a 30-minute period, it'll download all of the data it's needed.

3208
04:52:51,073 --> 04:52:58,073
It's gotten from the past day or two days and all the transactions that have come in and then validate them.

3209
04:52:58,073 --> 04:53:06,073
That's what I would like to do on my cell phone in order to actually say, OK, I'm running a node and it's not hard and anyone can do this.

3210
04:53:07,073 --> 04:53:08,073
But we're not in that situation.

3211
04:53:08,073 --> 04:53:10,073
Have you considered disabling block upload?

3212
04:53:10,073 --> 04:53:12,073
Because it's a setting, right?

3213
04:53:12,073 --> 04:53:21,073
If you're running 4, you can disable uploading blocks to other nodes and then your bandwidth will fall dramatically because no nodes will be requesting blocks from you.

3214
04:53:21,073 --> 04:53:25,073
I mean, you'll be refusing these requests, so your upstream bandwidth will not be impacted at all.

3215
04:53:27,073 --> 04:53:29,073
Yeah, I've turned that off.

3216
04:53:30,073 --> 04:53:38,073
But also, one thing I should do is try doing it on my cell phone and see what problems I run into.

3217
04:53:38,073 --> 04:53:46,073
The only devices that I've actually done this on are laptop computers, desktop computers, and Raspberry Pis, of which the most difficult one was the Pi.

3218
04:53:46,073 --> 04:53:49,073
And I'm using that as a proxy for my experience.

3219
04:53:50,073 --> 04:53:59,073
But yeah, when I did everything I could to save bandwidth, it still takes quite a bit, just downloading all the blocks, especially when there's 4 megabytes in it.

3220
04:53:59,073 --> 04:54:12,073
Right, so if it's a limitation of your G3 network that's unable to handle 4 megabytes every 10 minutes, then you would have problems running it.

3221
04:54:12,073 --> 04:54:14,073
What about any upload?

3222
04:54:15,073 --> 04:54:26,073
So basically, the minimum requirement is being able to download 4 megabyte blocks every 10 minutes, which per second, bandwidth-wise, does not amount to more than 128 kilobytes per second.

3223
04:54:26,073 --> 04:54:30,073
It's actually less. It's more like 64 kilobytes per second.

3224
04:54:31,073 --> 04:54:36,073
If you do a calculation, divide the number of seconds in 10 minutes, 4 megabytes divided by 3,000.

3225
04:54:38,073 --> 04:54:42,073
Sorry, there's 3,600 seconds per hour.

3226
04:54:44,073 --> 04:54:47,073
It's a little bit hard to hear you, Alex. Paul, welcome to the stage.

3227
04:54:47,073 --> 04:54:52,073
Yeah, I stopped being able to hear you about four sentences ago, Alex.

3228
04:54:53,073 --> 04:54:59,073
I heard something about, it sounds like you're doing a calculation of the amount of seconds in kilobytes per second.

3229
04:55:02,073 --> 04:55:04,073
Now I can't hear you at all.

3230
04:55:04,073 --> 04:55:07,073
I'm only here, guys. I apologize for wind noise.

3231
04:55:09,073 --> 04:55:18,073
I'll mute myself or I'll stop, but basically what I'm saying is 4 megabytes every 10 minutes is less than 128 kilobytes per second.

3232
04:55:18,073 --> 04:55:22,073
Now some cell phones, like Android cell phones, do not give you this much bandwidth.

3233
04:55:23,073 --> 04:55:25,073
That would be a problem.

3234
04:55:27,073 --> 04:55:28,073
I can't hear you again.

3235
04:55:28,073 --> 04:55:30,073
There's something important, though.

3236
04:55:33,073 --> 04:55:39,073
The smaller the Layer 1 blocks, the better, because it's a mandatory entrance requirement for everyone.

3237
04:55:40,073 --> 04:55:42,073
We have SPV mode, which is also great.

3238
04:55:44,073 --> 04:55:48,073
It deserves a completely different reputation than what it has, because it's absolutely amazing.

3239
04:55:49,073 --> 04:55:50,073
But that's a conversation for a different time.

3240
04:55:50,073 --> 04:55:57,073
SPV mode is going even further, like Layer 1, Layer 3, Layer 2, Layer 1, SPV or whatever.

3241
04:56:00,073 --> 04:56:08,073
Disabling uploading is a little bit cheating, one would say, because in order for you to download, someone else has to upload.

3242
04:56:10,073 --> 04:56:19,073
The fact that that was the first go-to thing, that struck me as a little off-key, after saying all those extremely expert things about Ethereum.

3243
04:56:20,073 --> 04:56:24,073
I agree with you, Paul. Disabling uploading is a pre-loading on the network.

3244
04:56:25,073 --> 04:56:26,073
I agree with you.

3245
04:56:26,073 --> 04:56:32,073
But so is pruning blocks, because when you prune the blocks, you cannot supply those old blocks to other nodes that want to do IBD.

3246
04:56:33,073 --> 04:56:36,073
So this is rampant in Bitcoin today. There's nothing new about that.

3247
04:56:36,073 --> 04:56:39,073
In fact, what we should do is we should actually be encouraging this, believe it or not.

3248
04:56:40,073 --> 04:56:44,073
I think when people first download the software, it should do as much pre-loading as possible.

3249
04:56:45,073 --> 04:56:48,073
It should be SPV only. We should be trying to get that downloads number as high as possible.

3250
04:56:49,073 --> 04:56:55,073
And then people should be able to have, I don't know if it would be like a slider or what, but we want to get all the numbers up.

3251
04:56:56,073 --> 04:57:04,073
So the best way is to first get all the people to just download the software on day one, or as soon as possible.

3252
04:57:05,073 --> 04:57:11,073
ASAP. And then some of those people we can convert to being the fullest of the full nodes.

3253
04:57:12,073 --> 04:57:22,074
But it's not like there are people out there who would have been a full node, but for the fact that we gave them the option to cheat.

3254
04:57:23,074 --> 04:57:25,074
If people wanted to cheat, they'll cheat.

3255
04:57:26,074 --> 04:57:35,074
Ironically, the largest number of full node installers that's happening in the last few days is people who want to do ordinals and inscriptions.

3256
04:57:36,074 --> 04:57:42,074
Because ordinals and inscriptions require that you enable TX index on your full node, which disables pruning.

3257
04:57:43,074 --> 04:57:50,074
This is 100% correct. So what we should be focusing on, if we want to get the numbers up, we should say, well, how can we build the node?

3258
04:57:51,074 --> 04:58:01,074
And I have a couple of ideas in mind for this, but it's like, what should the node be doing that only the node can do, and why would we want TX index?

3259
04:58:02,074 --> 04:58:15,074
The marginal cost of going from full to TX index is frankly very small, but the point is we should be saying, let's make the node actually do something so that people decide they want to actually run it now.

3260
04:58:16,074 --> 04:58:17,074
It doesn't do anything all the time.

3261
04:58:18,074 --> 04:58:21,074
Right. For example, the node could track ordinals and inscriptions, right?

3262
04:58:22,074 --> 04:58:39,074
Yeah, that's one example. I mean, we have also something I call CoinNews, like the idea that the block explorer, your full node has all the data required to be a totally private block explorer that is not connected to someone's HTML server or whatever we're doing now.

3263
04:58:40,074 --> 04:58:45,074
So there's actually quite a few different things that we could and should do to induce people to run the node.

3264
04:58:46,074 --> 04:58:55,074
Well, the best way to do that would be to have Umbro and all these node companies, manufacturer nodes, have the batteries included, essentially.

3265
04:58:56,074 --> 04:59:10,074
They should ship you the node with the entire chain downloaded that you can verify by checking a hash of a recent block on multiple block explorers, and then your whole node comes with full IBD and node pruning and all the ordinals and inscriptions enabled as well.

3266
04:59:11,074 --> 04:59:12,074
That would be the easiest, most scalable way.

3267
04:59:13,074 --> 04:59:18,074
I think this is very close to my point of view, but not identical.

3268
04:59:19,074 --> 04:59:33,074
My point of view is that there's a world of difference between syncing the chain up until the present moment and syncing the chain upon which strategy do we rely to keep the chain in sync from the present moment into the future.

3269
04:59:34,074 --> 04:59:43,074
So we have present to future, which is completely different, and then we have syncing from day one up to the present.

3270
04:59:44,074 --> 04:59:46,074
To me, these are night and day differences.

3271
04:59:47,074 --> 04:59:53,074
You can save on IBD, but you cannot save on bandwidth of incoming blocks.

3272
04:59:54,074 --> 04:59:55,074
That's exactly right.

3273
04:59:56,074 --> 05:00:02,074
I completely, 100% agree that for the initial block download, there's really no reason not to just make that one gigantic...

3274
05:00:02,952 --> 05:00:10,952
whatever you want to call it, you know, tarball zip file or something, or just a USB stick that you can buy, etc.

3275
05:00:10,952 --> 05:00:25,952
All these companies that are selling you nodes, including Lightning nodes, should give you the option to check off a box, pay maybe $10 more, and have a node that already has IBD that you can verify trustlessly by checking a hash.

3276
05:00:26,952 --> 05:00:33,952
Yeah, I agree. Because there's an underappreciated night and day difference between syncing it up until the moment...

3277
05:00:33,952 --> 05:00:46,952
But the cultural problem here is that core devs that write C++ don't trust anybody, including the compiler. So it's not enough for them to even compile the C++ code, they need to compile the compiler.

3278
05:00:47,952 --> 05:00:59,952
You're completely right. In fact, I think it goes a little further than that, where it's just for whatever reasons, for social reasons, for irrational psychological reasons, this type of idea has trouble even spreading.

3279
05:00:59,952 --> 05:01:06,952
The idea that IBD could be faster because of just checking the hash against, you know, the universe that you live in.

3280
05:01:06,952 --> 05:01:14,952
There's proposals like Utrixo that saves you the entire IBD download by doing a ZK.

3281
05:01:14,952 --> 05:01:25,952
Yeah, I completely agree that Utrixo... There should be different types of full nodes. So, for example, you could have a full node on your phone that uses Utrixo.

3282
05:01:25,952 --> 05:01:28,952
You could use a different full node somewhere else that does not.

3283
05:01:29,952 --> 05:01:41,952
Your phone... Notice that Utrixo requires more bandwidth, but less space, but your phone actually has an enormous amount of bandwidth because every night you plug it in to charge it and it's not doing anything.

3284
05:01:41,952 --> 05:01:50,952
So like from 3 to 5 a.m. it can be like using your 5G or whatever to just... Even this, assuming you don't have Wi-Fi, but even if you didn't have, you know, it could be...

3285
05:01:51,952 --> 05:01:56,952
There's actually plenty of spare bandwidth on a phone because you're asleep most of the time.

3286
05:01:56,952 --> 05:02:04,952
And so the Utrixo full node is just a very easy idea, but again, like people just don't like it because of this weird culture problems in Bitcoin.

3287
05:02:04,952 --> 05:02:06,952
So we just hate good ideas.

3288
05:02:06,952 --> 05:02:07,952
Well, I don't know why.

3289
05:02:07,952 --> 05:02:08,952
It's because...

3290
05:02:08,952 --> 05:02:10,952
There are people who don't like it. Go ahead.

3291
05:02:10,952 --> 05:02:14,952
The culture is centralized, right? The culture is monoculture.

3292
05:02:14,952 --> 05:02:26,952
It's the culture of hardcore Unix hackers that don't trust their compiler and, you know, use PGP and they need to recompile the compiler on a machine before they will trust anything.

3293
05:02:26,952 --> 05:02:41,952
But by the way, speaking of Utrixo, Utrixo itself is obsolete because people from ZK Sync, which is one of the, you know, like Elie Ben-Sassan, whatever, the guys that did ZKStark, they're in the middle of testing, you know, doing a ZKStark of the whole Bitcoin blockchain.

3294
05:02:41,952 --> 05:02:47,952
So you just have a single proof that proves that the chain that you have produces the UTXO stat that you have.

3295
05:02:47,952 --> 05:02:50,952
You're done. There's not even a need for Utrixo.

3296
05:02:50,952 --> 05:02:53,952
Yeah, I agree. I agree with that.

3297
05:02:53,952 --> 05:02:58,952
I don't think that people don't... There's a lot of people who don't like it.

3298
05:02:58,952 --> 05:03:02,952
I think there's a lot of people who maybe prefer to verify everything.

3299
05:03:03,952 --> 05:03:12,952
But if you make a product, like if Umbral today offered, we can now ship your node with IBD already done, I think it'd be very popular.

3300
05:03:12,952 --> 05:03:15,952
I think most people would buy that version, even if it did cost an extra $10.

3301
05:03:15,952 --> 05:03:16,952
Right. It's all about options, right?

3302
05:03:16,952 --> 05:03:18,952
If you want this option of Umbral, check here.

3303
05:03:18,952 --> 05:03:20,952
If you want the other option, check there.

3304
05:03:20,952 --> 05:03:21,952
Let 1000 flowers bloom.

3305
05:03:21,952 --> 05:03:23,952
Let the people choose, basically.

3306
05:03:23,952 --> 05:03:33,952
Instead of everybody being an austere monk like Cordevs, not everybody needs to become a Buddhist monk in order for Buddhism to succeed.

3307
05:03:33,952 --> 05:03:35,952
This is the same thing.

3308
05:03:37,952 --> 05:03:42,952
I do wonder, though, if the precinct node would get... I have no idea. I can see it going either way.

3309
05:03:42,952 --> 05:03:47,952
So don't you think maybe some people would be like, whoa, whoa, that's not...

3310
05:03:47,952 --> 05:03:49,952
You know, like the Buddhist monk thing.

3311
05:03:49,952 --> 05:03:52,952
They're like, you didn't really run the real node. You didn't hike up the mountain.

3312
05:03:53,952 --> 05:03:56,952
You have a choice to become a monk or not to become a monk.

3313
05:03:56,952 --> 05:03:59,952
Umbral should not deny you the choice. That's all I'm saying.

3314
05:04:00,952 --> 05:04:02,952
But that's also the world we live in.

3315
05:04:02,952 --> 05:04:07,952
You can make a product that is a full node with IBD already synced.

3316
05:04:07,952 --> 05:04:10,952
And if it's better than Umbral, people will buy yours more.

3317
05:04:10,952 --> 05:04:14,952
And maybe even Umbral will be like, that's a good idea. We're going to add that as an option.

3318
05:04:14,952 --> 05:04:18,952
But for social reasons, you will not be considered a true Scotsman.

3319
05:04:18,952 --> 05:04:21,952
You will not be considered a true Bithless.

3320
05:04:21,952 --> 05:04:30,952
So this is a peer pressure from the Maxi cult people that just basically require that everybody verify their compiler before they compile everything.

3321
05:04:30,952 --> 05:04:37,952
And they perform, you know, an independent reproducible build inside 32 virtual machines, which is what Tor does.

3322
05:04:37,952 --> 05:04:41,952
I mean, if you want to go true blue, like, you know, we're talking about Luke-Jr.

3323
05:04:41,952 --> 05:04:44,952
You cannot trust your compiler. You cannot even trust your hardware.

3324
05:04:44,952 --> 05:04:46,952
I mean, where does it stop, right?

3325
05:04:47,952 --> 05:04:56,952
I don't think any Bitcoin maximalist would get mad at you or anything if you said, I wanted a full node, but I didn't want to do IBD, so I downloaded it.

3326
05:04:56,952 --> 05:04:58,952
I'm not going to get mad and yell at you or anything.

3327
05:04:58,952 --> 05:05:04,952
What I'm saying is that the companies like Umbral do not provide this because it's a reputational risk for them to do it.

3328
05:05:04,952 --> 05:05:07,952
Because they would be labeled on Twitter as shit pointers.

3329
05:05:07,952 --> 05:05:11,952
You know, you're not doing a true blue full node. It's a reputational risk for them.

3330
05:05:11,952 --> 05:05:13,952
So that's why they don't do it.

3331
05:05:14,952 --> 05:05:20,952
Well, maybe they just, they just need a couple people, like, Paul Sztorc and me and you all endorse it.

3332
05:05:20,952 --> 05:05:24,952
So if we just all endorse it, then they won't get the negative.

3333
05:05:24,952 --> 05:05:29,952
No, no, we are not considered true blue Bitcoin maximalists because we are okay with ordinals.

3334
05:05:29,952 --> 05:05:31,952
At least I am okay with ordinals, right?

3335
05:05:31,952 --> 05:05:41,952
Not only am I okay, but I think, you know, it's a beautiful thing to see a 10 block, 10 blocks to clear mempool after having, you know, one block to clear mempool.

3336
05:05:41,952 --> 05:05:44,952
And hopefully that goes to 100 blocks to clear mempool.

3337
05:05:44,952 --> 05:05:48,952
The moment you say that, Dan, we are basically poor.

3338
05:05:48,952 --> 05:05:50,952
We can't hear you perfectly.

3339
05:05:51,952 --> 05:05:53,952
I think celebrity endorsements fix this.

3340
05:05:53,952 --> 05:06:01,952
If you get some Bitcoin celebrities to say this is a good idea, then it won't have a negative perception and it won't have come with a reputation risk.

3341
05:06:01,952 --> 05:06:11,952
Only from prestigious celebrities like they're Gigi or, you know, Adam Back or, you know, Jameson Lopp or somebody like...

3342
05:06:11,952 --> 05:06:13,952
Yeah, I think all those guys would go for it.

3343
05:06:13,952 --> 05:06:15,952
I think it didn't cost to offer.

3344
05:06:15,952 --> 05:06:18,952
It precinct node when they offered nodes.

3345
05:06:18,952 --> 05:06:21,952
Well, and then they discontinued it because there was no money in it.

3346
05:06:21,952 --> 05:06:23,952
Nothing but reputational risk and customer service.

3347
05:06:23,952 --> 05:06:25,952
They didn't want that business for that reason.

3348
05:06:27,952 --> 05:06:30,952
But I don't think their reputation took a hit when they offered that product.

3349
05:06:31,952 --> 05:06:33,952
Yeah, but I think that'd be cool.

3350
05:06:33,952 --> 05:06:36,952
Jameson Lopp is all for it because he had a product that did this.

3351
05:06:39,952 --> 05:06:45,952
You know, like, in a related subject, for example, I don't believe that Lightning is ever going to be flubbed.

3352
05:06:45,952 --> 05:06:50,952
Simply because running a Lightning node is completely isomorphic equivalent to running a bank.

3353
05:06:50,952 --> 05:06:53,952
A bank that manages liquidity with counterparties.

3354
05:06:53,952 --> 05:06:55,952
And forget African villagers, you know.

3355
05:06:55,952 --> 05:06:58,952
Nobody wants to run a server on the Internet, right? Period.

3356
05:06:58,952 --> 05:07:03,952
Every startup that counted on people running their own servers has failed.

3357
05:07:03,952 --> 05:07:05,952
Therefore, Lightning is still very useful.

3358
05:07:05,952 --> 05:07:11,952
It's useful for Strike to do private channels with Japanese banks or banks in Nigeria on advertised channels.

3359
05:07:11,952 --> 05:07:17,952
But this whole movement that every club needs to run a Lightning node over TOR is completely misguided.

3360
05:07:17,952 --> 05:07:19,952
That's just never going to happen.

3361
05:07:20,952 --> 05:07:23,952
So, Hampus keeps giving the thumbs down.

3362
05:07:23,952 --> 05:07:25,952
I think, Hampus, if you want to speak, that'd be great.

3363
05:07:25,952 --> 05:07:27,952
But I think I know what you're going to say.

3364
05:07:27,952 --> 05:07:32,952
I kind of agree that to really use Lightning, you technically need a full node.

3365
05:07:32,952 --> 05:07:33,952
And you need a Lightning node.

3366
05:07:33,952 --> 05:07:35,952
And you need to be connected to the Internet.

3367
05:07:35,952 --> 05:07:38,952
But most people don't really do these things, though.

3368
05:07:38,952 --> 05:07:40,952
People don't really do those things.

3369
05:07:40,952 --> 05:07:42,952
People download an app.

3370
05:07:42,952 --> 05:07:45,952
They download a Lightning wallet.

3371
05:07:45,952 --> 05:07:47,952
And people don't even know.

3372
05:07:47,952 --> 05:07:50,952
Like, half the Lightning wallets are custodial and half are not.

3373
05:07:50,952 --> 05:07:52,952
And people don't even know which are which.

3374
05:07:52,952 --> 05:07:54,952
Even I forget and I have to keep looking it up.

3375
05:07:55,952 --> 05:07:58,952
And by the way, I'm not against those people doing it.

3376
05:07:58,952 --> 05:08:03,952
This would be an option to those who want to run their Lightning node on TOR.

3377
05:08:03,952 --> 05:08:05,952
Let them manage liquidity with counterparties.

3378
05:08:05,952 --> 05:08:08,952
Let them do all this stuff if they so choose.

3379
05:08:08,952 --> 05:08:15,952
But it's just completely unrealistic to expect, you know, one billion clubs to onboard into Lightning ever.

3380
05:08:15,952 --> 05:08:19,952
Like, we will never see more than a million clubs running Lightning.

3381
05:08:19,952 --> 05:08:25,952
Let's see what Hampus, if he wants to say anything.

3382
05:08:25,952 --> 05:08:29,952
Yeah, I think, I mean, he probably wouldn't appreciate me trying to speak for him.

3383
05:08:29,952 --> 05:08:31,952
But I'm going to do it anyway.

3384
05:08:31,952 --> 05:08:33,952
Hampus, you can come up and correct me.

3385
05:08:33,952 --> 05:08:37,952
But people can and do run Lightning nodes on their phones.

3386
05:08:37,952 --> 05:08:38,952
Hampus makes a product.

3387
05:08:38,952 --> 05:08:39,952
Oh, there he is.

3388
05:08:39,952 --> 05:08:40,952
He's up here now.

3389
05:08:40,952 --> 05:08:41,952
Hampus, take over for me.

3390
05:08:41,952 --> 05:08:42,952
Thanks for joining, Hampus.

3391
05:08:42,952 --> 05:08:43,952
Go ahead.

3392
05:08:43,952 --> 05:08:44,952
Yeah, thank you, Andrew, for hosting this.

3393
05:08:44,952 --> 05:08:47,952
I think these talks are really great to have.

3394
05:08:47,952 --> 05:08:54,952
I kind of agree with Alex that, like, I don't think every club should have their own umbrella node and have a Lightning node.

3395
05:08:54,952 --> 05:09:02,952
Because, like, right now we see that it's taking a toll on the network because some of these nodes are running on poor Wi-Fi connection and stuff.

3396
05:09:02,952 --> 05:09:05,952
And it's slowing down payments and stuff.

3397
05:09:05,952 --> 05:09:10,952
So I don't think that every club should just host their own Lightning node.

3398
05:09:10,952 --> 05:09:20,952
But, as Supertestet said, you can still have your own, like, Lightning wallet on your phone that is using real Lightning channels.

3399
05:09:20,952 --> 05:09:22,952
And that is happening today.

3400
05:09:22,952 --> 05:09:25,952
So, yeah, I just wanted to chime in on that.

3401
05:09:25,952 --> 05:09:33,952
Because, like, having a routing node and having, like, a private Lightning wallet, those are two different things, right, Tindy?

3402
05:09:33,952 --> 05:09:35,952
Yeah, but I'm all for it.

3403
05:09:35,952 --> 05:09:39,952
It is possible to run a Lightning node, for example, on your phone.

3404
05:09:39,952 --> 05:09:42,952
However, are you also running a watchtower?

3405
05:09:42,952 --> 05:09:45,952
Are you managing liquidity that's incoming and outgoing from your node?

3406
05:09:45,952 --> 05:09:47,952
Clearly the answer is no.

3407
05:09:47,952 --> 05:09:49,952
Very few people do that, right?

3408
05:09:49,952 --> 05:09:52,952
The problem is that it's a false sense of security that you have.

3409
05:09:52,952 --> 05:09:55,952
Like, if you want to become a bank…

3410
05:09:55,952 --> 05:09:57,952
You do a trade-off, right?

3411
05:09:57,952 --> 05:09:58,952
Right.

3412
05:09:58,952 --> 05:10:02,952
If you want to become a bank and manage liquidity with untrusted counterparties, be my guest.

3413
05:10:02,952 --> 05:10:05,952
But don't expect the world to do this, right?

3414
05:10:05,952 --> 05:10:07,952
No, I don't expect that.

3415
05:10:07,952 --> 05:10:10,952
But, I mean, it's a trade-off that the user makes, I suppose.

3416
05:10:10,952 --> 05:10:17,952
Like, most Lightning wallets that are a real wallet on the phone, like a node, they use the LSP model.

3417
05:10:17,952 --> 05:10:22,952
So, they have, like, a Lightning service provider, like Breeze and Phoenix and Blitz.

3418
05:10:22,952 --> 05:10:23,952
Right.

3419
05:10:23,952 --> 05:10:25,952
In that case, they're cool into PayPal.

3420
05:10:25,952 --> 05:10:27,952
Cool into PayPal, in that case.

3421
05:10:27,952 --> 05:10:29,952
It's not even Bitcoin that's being used.

3422
05:10:29,952 --> 05:10:32,952
I mean, it's still on the network.

3423
05:10:32,952 --> 05:10:37,952
You still use the real Lightning network, and you still have the privacy benefits of using Lightning.

3424
05:10:37,952 --> 05:10:39,952
So, I don't buy that at all.

3425
05:10:39,952 --> 05:10:44,952
Well, you have privacy benefits, but you only have, you know, SAT IOUs from your LSP.

3426
05:10:44,952 --> 05:10:46,952
You don't actually have SATs.

3427
05:10:46,952 --> 05:10:48,952
That's incorrect.

3428
05:10:48,952 --> 05:10:53,952
You still have real Lightning channels, even if you have a trust to the LSP.

3429
05:10:53,952 --> 05:10:55,952
Well, that's it, too.

3430
05:10:55,952 --> 05:10:59,952
There's no difference between having, like, a private channel and a public channel.

3431
05:10:59,952 --> 05:11:03,952
It's just you have some trust in the LSP, and you don't need to use an LSP either.

3432
05:11:03,952 --> 05:11:05,952
I mean, you can connect to it whenever you want.

3433
05:11:05,952 --> 05:11:13,952
I mean, isn't it the case that the LSP is actually running the Lightning node, and you're just the channel that doesn't actually carry any SATs?

3434
05:11:13,952 --> 05:11:15,952
It just carries commands to the LSP, right?

3435
05:11:15,952 --> 05:11:17,952
No, that's not true.

3436
05:11:17,952 --> 05:11:25,952
If you use FlixWallet, MyWallet, or Breeze, or Phoenix, you have an actual Lightning node on your phone, like an actual node.

3437
05:11:25,952 --> 05:11:29,952
And you can open a channel towards the LSP node in question.

3438
05:11:29,952 --> 05:11:33,952
But this channel is just as real as any other channel in the network.

3439
05:11:33,952 --> 05:11:35,952
So, no, that's not true.

3440
05:11:35,952 --> 05:11:38,952
What happens to your SATs if your LSP goes offline permanently? Do you lose them?

3441
05:11:38,952 --> 05:11:43,952
Well, then you will have to force close the channel, but you still have your funds then.

3442
05:11:43,952 --> 05:11:46,952
You'll have to wait the timeout period.

3443
05:11:46,952 --> 05:11:55,952
There's no difference between having a public channel, like an umbrella node, and having a Lightning wallet on your phone.

3444
05:11:55,952 --> 05:11:57,952
That's actually happened to me.

3445
05:11:57,952 --> 05:12:01,952
I used one of these Lightning nodes on my phone, and my LSP did go down.

3446
05:12:02,952 --> 05:12:13,952
Consequently, when I went to make my next transaction, my phone alerted me that the node was down, and consequently it forced close the channel.

3447
05:12:13,952 --> 05:12:17,952
And then I had to wait two weeks to get the money back into my wallet.

3448
05:12:17,952 --> 05:12:20,952
But, yeah, I still kept the money, even though the LSP went down.

3449
05:12:20,952 --> 05:12:23,952
How much money did you have in your channel, let me ask you this?

3450
05:12:23,952 --> 05:12:26,952
At the time, I think it was about $100.

3451
05:12:26,952 --> 05:12:30,952
Now, would you be able to close the channel if the fee was more than $100?

3452
05:12:31,952 --> 05:12:37,952
I couldn't hear you, Alex, but I think you asked if the fees were really high.

3453
05:12:37,952 --> 05:12:40,952
Yeah, if the fee was $50, wouldn't you lose half your money?

3454
05:12:40,952 --> 05:12:42,952
Yeah, yeah, you would.

3455
05:12:42,952 --> 05:12:46,952
So that's one of the reasons why full block size is a bad idea.

3456
05:12:46,952 --> 05:12:48,952
Yeah, I agree fully with that.

3457
05:12:48,952 --> 05:12:53,952
Because it disables Lightning, you know, closing transactions, simply. It just makes them uneconomical.

3458
05:12:54,952 --> 05:12:56,952
Yeah, I agree with Alex.

3459
05:12:56,952 --> 05:13:01,952
Like, if the main chain has high fees, then Lightning just kind of dies.

3460
05:13:01,952 --> 05:13:08,952
Because the HLCs and forced close transactions, they cannot be economically viable on the same.

3461
05:13:08,952 --> 05:13:16,952
So that's why I personally like having a sidechain, an internet of sidechains that you can deploy Lightning over instead.

3462
05:13:16,952 --> 05:13:17,952
Right.

3463
05:13:17,952 --> 05:13:19,952
And those could have low fees.

3464
05:13:19,952 --> 05:13:23,952
I suggest that you guys take a look at the report about validity roll-ups.

3465
05:13:23,952 --> 05:13:28,952
And there's an explicit comparison between Lightning and what a high-volume validity roll-up would look like.

3466
05:13:28,952 --> 05:13:31,952
First of all, you would not need to have an online network.

3467
05:13:31,952 --> 05:13:34,952
You could truly have a phone, a live wallet for the roll-up.

3468
05:13:34,952 --> 05:13:37,952
Second of all, you would not need to manage any liquidity.

3469
05:13:37,952 --> 05:13:40,952
You would just issue payments and keep roll-up.

3470
05:13:40,952 --> 05:13:43,952
And with that kind of setup, all the problems with the Lightning network would be fixed.

3471
05:13:43,952 --> 05:13:51,952
And you would have more security because on a roll-up, your deployments would be just as secure as your private address.

3472
05:13:51,952 --> 05:13:55,952
In both senses, in ownership and double status.

3473
05:13:55,952 --> 05:14:02,952
So essentially, Lightning was tried on Ethereum as a more generalized form of Lightning called Plasma or state channels.

3474
05:14:02,952 --> 05:14:03,952
They tried them both.

3475
05:14:03,952 --> 05:14:10,952
They abandoned them both for a good reason, which is because it has these undesirable trade-offs where you have to be, A, online.

3476
05:14:10,952 --> 05:14:12,952
Therefore, you have to have warm keys.

3477
05:14:12,952 --> 05:14:17,952
B, you don't have full L1 security, either ownership or double-span, right?

3478
05:14:17,952 --> 05:14:27,952
And C, you're subject to miner attacks, so Lightning jamming attacks, or simply cancer nodes sitting in a Lightning node graph that are run by two analyses that review all your payments.

3479
05:14:27,952 --> 05:14:36,952
You could have a privacy-enabled validity roll-up that suffers from none of those things and gives you exactly the same security as Bitcoin L1.

3480
05:14:36,952 --> 05:14:39,952
That's why in the long run, Lightning is very powerful.

3481
05:14:40,952 --> 05:14:45,952
I don't think you'll find very many people here who oppose roll-ups.

3482
05:14:45,952 --> 05:14:50,952
I imagine most of us think that'd be great to get roll-ups into Bitcoin.

3483
05:14:52,952 --> 05:15:00,952
Well, I mean, I'm saying that roll-ups are the future and let the drivechain be the present, you know, one step at a time.

3484
05:15:00,952 --> 05:15:06,952
The thing is, the impact of roll-ups on Bitcoin is basically the same as the impact of ordinals and inscriptions.

3485
05:15:06,952 --> 05:15:15,952
They just eat up more block space, and they have this opaque predicate that checks the proof that it's just 10 times more expensive than a single signature check.

3486
05:15:15,952 --> 05:15:26,952
So from a point of view of impact on Bitcoin validation and the cost of the node, there's occasional transactions, you know, that cost 10 times more to validate than a simple Bitcoin spend transaction.

3487
05:15:26,952 --> 05:15:29,952
But those happen once per block on a roll-up, right?

3488
05:15:29,952 --> 05:15:30,952
They don't happen all the time.

3489
05:15:30,952 --> 05:15:36,952
They happen once every 30 seconds or once every minute, whatever the roll-up block time is.

3490
05:15:36,952 --> 05:15:38,952
Assuming it's even a blockchain with blocks.

3491
05:15:38,952 --> 05:15:41,952
It could be a blockchain without any MEV.

3492
05:15:41,952 --> 05:15:43,952
The technology has moved on, right?

3493
05:15:43,952 --> 05:15:58,952
Bitcoin is like this sort of like antique, you know, like sort of preserved kind of like Andaman Islanders, you know, near India where like no innovation penetrates because, you know, we're opposed to all changes kind of thing.

3494
05:15:58,952 --> 05:16:01,952
Well, that's a pessimistic view.

3495
05:16:02,952 --> 05:16:07,952
Bitcoin still has the largest market cap and economic actors are future oriented.

3496
05:16:07,952 --> 05:16:15,952
And therefore, the expectation among the entire market right now is that there's an enormous amount of future demand for Bitcoin.

3497
05:16:16,952 --> 05:16:18,952
I can give you a counterexample, right?

3498
05:16:18,952 --> 05:16:24,952
Economic actors want vaults, but vaults for some reason haven't been enabled in the money since five years ago.

3499
05:16:24,952 --> 05:16:32,952
Every economic actor that pays a lot of Bitcoin, be it on GEO or institutions, want vaults because they increase dramatically ownership security of Bitcoin.

3500
05:16:32,952 --> 05:16:44,952
And yet, a tiny tweak to enable vaults has gone nowhere because, you know, the six guys that are doing Merck pull requests in the core don't see the perfect vault solution or whatever.

3501
05:16:44,952 --> 05:16:47,952
There's lack of consensus or whatever the excuse is.

3502
05:16:47,952 --> 05:16:51,952
But this is like a pressing need to enable vaults to culminate.

3503
05:16:51,952 --> 05:16:54,952
And yet, it's just not being done.

3504
05:16:58,952 --> 05:16:59,952
Thank you.

3505
05:16:59,952 --> 05:17:01,952
It was a little bit hard to hear all of that.

3506
05:17:01,952 --> 05:17:03,952
But I agree with what you've said.

3507
05:17:12,952 --> 05:17:21,952
Well, everyone is welcome to come up to the stage and share a thought or a question about Drivechain or anything related to it.

3508
05:17:23,952 --> 05:17:25,952
This has been a pretty cool space, by the way.

3509
05:17:25,952 --> 05:17:27,952
Thank you so much.

3510
05:17:27,952 --> 05:17:29,952
I really appreciate you saying that.

3511
05:17:29,952 --> 05:17:37,952
I just want to say one more thing, which is that the best strategy for Drivechain community, so to speak, would be to do guerrilla marketing for op vault.

3512
05:17:37,952 --> 05:17:43,952
Because it's better to have permission of Drivechains than not to have Drivechains at all.

3513
05:17:43,952 --> 05:17:45,952
The idea of Drivechains seems threatening.

3514
05:17:45,952 --> 05:17:54,952
But the idea of recursive covenants that would enable the Drivechains to a backdoor seems to be sort of mainstreaming now in Bitcoin community.

3515
05:17:55,952 --> 05:18:04,952
Alex, I've never heard of any Bitcoiners who campaigned that we need to get vaults into Bitcoin.

3516
05:18:04,952 --> 05:18:08,952
You said earlier that it's been something that OGs have been talking about for a long time.

3517
05:18:08,952 --> 05:18:10,952
Can you elaborate more on that?

3518
05:18:10,952 --> 05:18:11,952
Yes.

3519
05:18:11,952 --> 05:18:22,952
I mean, the example of that was on CTV a year ago when Jeremy Rubin proposed a simplified, super safe version of covenants that would enable vaults.

3520
05:18:22,952 --> 05:18:29,952
He essentially was met with the whole peanut gallery on Twitter claiming it's an attack on Bitcoin.

3521
05:18:29,952 --> 05:18:32,952
He went through all the movements, all the motions.

3522
05:18:32,952 --> 05:18:34,952
He had hackathons.

3523
05:18:34,952 --> 05:18:40,952
For two years, he's put up a bounty for Bitcoin for anybody that finds a bug.

3524
05:18:41,952 --> 05:18:53,952
The system is supposed to work in a way where if there's no technical objections, then using the old IETF idea that we don't believe in emperors and kings or voting.

3525
05:18:53,952 --> 05:18:55,952
We believe in rough consensus and running code.

3526
05:18:55,952 --> 05:19:02,952
That was an example for how vaults and covenants in general were rejected simply because of infinite bike sharing.

3527
05:19:02,952 --> 05:19:04,952
It seems like it's not the most general solution.

3528
05:19:04,952 --> 05:19:08,952
But the general solution would allow recursive covenants.

3529
05:19:08,952 --> 05:19:13,952
And there was a lot of thought about recursive covenants enabling government-controlled Bitcoin.

3530
05:19:13,952 --> 05:19:15,952
So, essentially, it went nowhere.

3531
05:19:15,952 --> 05:19:23,952
But now there's a new proposal, which is doing better marketing, called up-vault, up-unroll, which might have a chance to go through.

3532
05:19:23,952 --> 05:19:31,952
And then it could be repurposed to do recursive covenants that would enable space chains, drivechains, and validity roll-ups.

3533
05:19:31,952 --> 05:19:33,952
Validity roll-ups would need one more opcode.

3534
05:19:34,952 --> 05:19:40,952
They require two opcodes, recursive covenants, and they require an additional opcode.

3535
05:19:40,952 --> 05:19:41,952
Opstark.

3536
05:19:41,952 --> 05:19:42,952
Opstark-verify, I call it.

3537
05:19:42,952 --> 05:19:46,952
Basically, a protocol that returns true or false if the proof is checked out.

3538
05:19:46,952 --> 05:19:56,952
But they do require recursive covenants in order to move the treasury from block to block indefinitely so that the treasury can be spent from by the code running opstark-verify.

3539
05:19:57,603 --> 05:20:08,603
So vaults are another case like WBTC, where basically you have, you know, hundreds of billions of dollars of Bitcoin secured by institutions that could be secured 10 times better with vaults, right?

3540
05:20:08,603 --> 05:20:22,603
Because, you know, the insider attacks and theft would essentially become very, very improbable to succeed because vaults will allow you to monitor the chain for unauthorized transactions and then reroute the withdrawal to another cold address, right?

3541
05:20:22,603 --> 05:20:26,603
So it creates another line of defense on large pools of Bitcoin.

3542
05:20:26,603 --> 05:20:39,603
Everybody wants them, but for some reason, people who are in core are loathe to do something that's controversial because it's nothing but reputation risk for them, and essentially it's a state of apathy over there, right?

3543
05:20:39,603 --> 05:20:46,603
Doing nothing is the least risky dominant strategy, and therefore nothing is done.

3544
05:20:47,603 --> 05:21:03,603
In, I think it was 2018, Brian Bishop is a Bitcoin developer, and he made an implementation of vaults that uses pre-signed withdrawals from a Bitcoin address whose private key has been deleted.

3545
05:21:03,603 --> 05:21:05,603
Have you looked into that at all?

3546
05:21:05,603 --> 05:21:14,603
Yes, it's a very complex system. You know, if you look up Bitcoin.com underscore vault on Google, I apologize for the wind noise, but if you look up...

3547
05:21:15,603 --> 05:21:18,603
Yeah, it's really bad, the wind noise. I'm sorry to say.

3548
05:21:18,603 --> 05:21:20,603
I'm going to mute myself, basically.

3549
05:21:23,603 --> 05:21:43,603
Yeah, I was looking into it recently because it gave me... I found it fascinating that you were able to emulate this vaulting technique that was first pioneered by CTV and now is proposed in OutVault without a soft fork, and all you had to do was create a bunch of pre-signed withdrawals from a Bitcoin address and then delete the private key, and now you've got it.

3550
05:21:43,603 --> 05:21:46,603
I thought, that's really cool, but I don't see anyone using it though.

3551
05:21:46,603 --> 05:21:54,603
It's because it's very impractical. You create a highly fragile system where if one of those transactions goes missing, you lose all your funds, essentially.

3552
05:21:54,603 --> 05:22:05,603
So, it's not a practical, pragmatic, realistic vaulting setup. The recent proposal is the best that's ever come around. It was published a few weeks ago called up underscore vault.

3553
05:22:05,603 --> 05:22:20,603
You can just up underscore vault, up underscore unvault, two up codes are proposed, and they create industrial strength, bank level vaults that have all the desirable features while trying to constrain the possible things that could go wrong.

3554
05:22:20,603 --> 05:22:33,603
It's sort of like the best proposal yet, and I suspect that if it goes through, it could be repurposed for drivechains, space chains, and other L2 systems as well.

3555
05:22:33,603 --> 05:22:41,603
Did you say that the Brian Bishop system is fragile because there's a data availability issue?

3556
05:22:42,603 --> 05:22:53,603
Well, because you have toxic data issues. You cannot prove that you destroyed the keys. That's the number one problem, because you have to erase the keys in order for the system to be secure.

3557
05:22:53,603 --> 05:23:02,603
So, in an institutional setting, how can you prove that some insider did not keep a copy of the key? That's the biggest problem.

3558
05:23:02,603 --> 05:23:05,603
Are you asking me, or is that rhetorical?

3559
05:23:05,603 --> 05:23:16,603
That's a rhetorical question. I'm saying any system that has toxic data, which is the data that must be deleted, but there's no way for you to prove that it was deleted, is essentially a non-starter for security.

3560
05:23:16,603 --> 05:23:30,603
Well, I suppose one thing you can do is you can have all the people who were involved in the vault do a big multi-sig, an M of M, and then as long as you deleted your key, you know you're safe, because no one can do anything with that key anymore.

3561
05:23:30,603 --> 05:23:32,603
So you deleted your shard.

3562
05:23:32,603 --> 05:23:38,603
Yes, that would work, but it would require elaborate ceremonies. Yes, that would work.

3563
05:23:38,603 --> 05:23:42,603
That's what corporations are, they're big elaborate ceremonies.

3564
05:23:42,603 --> 05:23:50,603
Then the problem is that you have these precious transactions that are pre-signed, and actually these vaults cannot respond dynamically to threats.

3565
05:23:50,603 --> 05:24:02,603
For example, the whole sequence of pre-signed transactions is hard-coded, and you cannot do key rotation, or for example, you cannot move your cold storage from one provider to another because the keys are already there for the old provider.

3566
05:24:02,603 --> 05:24:06,603
It's kind of a lock-in to the cold storage provider as well.

3567
05:24:06,603 --> 05:24:11,603
The cold storage provider? I'm not familiar with this term.

3568
05:24:11,603 --> 05:24:20,603
What I'm saying is that let's say MicroStrategy is a publicly traded company, right?

3569
05:24:20,603 --> 05:24:26,603
I think it happens to store its entire pile of Bitcoin at Nightdig or maybe Coinbase.

3570
05:24:26,603 --> 05:24:36,603
I don't know exactly where, but for conflict of interest reasons, it cannot custody its own Bitcoin because it becomes possible for insiders to steal it, right?

3571
05:24:36,603 --> 05:24:50,603
So you would have a custodial of your cold storage that your vault would be on top of, but if that company now started charging you 2% per year to custody your Bitcoin, you want to be able to switch the custodial.

3572
05:24:50,603 --> 05:24:54,603
Does it make sense?

3573
05:24:55,603 --> 05:25:01,603
Well, yes. It's cogent. You've lost me and not lost me.

3574
05:25:01,603 --> 05:25:07,603
I got stuck thinking about there's some rule or policy within the company that says they can't hold their own Bitcoin.

3575
05:25:07,603 --> 05:25:09,603
That seems like a bad rule.

3576
05:25:09,603 --> 05:25:17,603
It's not a company policy. It's a public company policy that custody should not be accessible to insiders that can steal company funds.

3577
05:25:17,603 --> 05:25:25,603
That's why corporations like Google do not custody their own money. They have Goldman Sachs or State Street Bank custody their own treasury, right?

3578
05:25:25,603 --> 05:25:31,603
It's the same thing here. It's not a company policy. It's just the rules for publicly traded companies.

3579
05:25:31,603 --> 05:25:40,603
It seems like a bad rule. It seems like a really good benefit for Goldman Sachs if everyone has to go with it.

3580
05:25:40,603 --> 05:25:44,603
Yes, but it plays the separation of powers idea, right?

3581
05:25:44,603 --> 05:25:49,603
However imperfect it is, at least your CFO cannot run off with the Bitcoin.

3582
05:25:49,603 --> 05:26:11,603
Now, it sort of has this idea that Fidelity or Nighting or Coinbase would be less likely to have the interest to steal your Bitcoin if they are regulated as custodians, as opposed to the combination of your CFO and CEO just pretending like there was a hack and running off with 100,000 Bitcoins from MicroStrategy, right?

3583
05:26:12,603 --> 05:26:21,603
Hang on. I got stuck on another thing. I'm only partially listening because my mind's racing now. I'm sorry.

3584
05:26:21,603 --> 05:26:31,603
Are you sure there's a rule? You said it's not a corporate policy. It's like a law or something that says companies can't hold their own money. Is that what you're saying?

3585
05:26:32,603 --> 05:26:40,603
I'm not a lawyer, but I think every large publicly traded company does not custody its own treasury for a reason, because it's a regulation.

3586
05:26:40,603 --> 05:26:46,603
I doubt that. I doubt that's true.

3587
05:26:46,603 --> 05:26:53,603
Where would Apple custody $200 billion? It has to keep it in the bank. You cannot create a bank of Apple where it keeps it in the bank.

3588
05:26:53,603 --> 05:26:55,603
I recommend Coldcard.

3589
05:26:56,603 --> 05:27:06,603
Well, but you see, Bitcoin is another bearer asset, which means that the custody must be even more strict than custody of bank balances, right?

3590
05:27:06,603 --> 05:27:21,603
If Apple has bank accounts of 10 giant banks, even more so they should have a custodian for their Bitcoin as opposed to keep it on the Coldcard, because keeping it on a Coldcard makes it easy for the company insiders to run off with the treasury.

3591
05:27:22,603 --> 05:27:32,603
I wonder if we're getting too far away from our topic here. Feel free to step in if we're way far away from drivechains at this point.

3592
05:27:32,603 --> 05:27:43,603
I'll take your mind racing, because racing is a good thing. At least it's stimulating. I mean, no offense, but if it's an interesting conversation, you can dive right in.

3593
05:27:44,603 --> 05:27:54,603
Yeah, so that's what OP_VAULT fixes, right? It's like the insiders can't take the money anymore because the vault construction makes it so it doesn't. So that's what it fixes.

3594
05:27:54,603 --> 05:28:05,603
Well, it fixes that and it also fixes outsiders getting hold of your keys or somebody substituting the withdrawal address for their own address, right?

3595
05:28:05,603 --> 05:28:14,603
So all kinds of attacks on Bitcoin are essentially addressed by the vault because there's a waiting period of, say, one month when the transaction can be canceled.

3596
05:28:14,603 --> 05:28:20,603
And if you just monitor the chain and you see an unauthorized transaction, you can redirect the funds to where you want them to go.

3597
05:28:21,603 --> 05:28:35,603
So if vaults fix the insiders running away with the money problem, then that's not a good... I thought you used that as a reason to say Brian Bishop's vault construction is bad because you can't rotate keys.

3598
05:28:35,603 --> 05:28:46,603
Well, it's bad because you predefined all the possible escape addresses ahead of time for all time. You cannot change your escape destination address dynamically.

3599
05:28:47,603 --> 05:28:49,603
And why is that bad?

3600
05:28:49,603 --> 05:28:50,603
Why is that bad?

3601
05:28:50,603 --> 05:29:02,603
Because if you predefined your vault withdrawing to a custodian that now wants 10% of your Bitcoin per year, you cannot abandon that custodian and go with somebody else. You become locked into...

3602
05:29:02,603 --> 05:29:11,603
But I thought the whole point of vaults was so that we don't have... so that they can feel... the reason they're using custodians is because insiders might run away with their money.

3603
05:29:11,603 --> 05:29:16,603
But if they use vaults, then insiders can't run away with their money. So they don't have to use a custodian anymore.

3604
05:29:16,603 --> 05:29:27,603
Well, but no, what I'm saying is that they probably still have to use custodians for regulatory reasons. Like, try to look up where MicroStrategy actually custodies its Bitcoin or Tesla for that matter, right?

3605
05:29:27,603 --> 05:29:44,603
Neither company keeps it in-house. And that's not going to change regardless of what vaults or what multi-sig setups become available. Simply it's because an outdated regulatory requirement that if you're a publicly traded company, you should not custody your assets in-house, period. No matter what they are.

3606
05:29:44,603 --> 05:29:52,603
I doubt that there's any – if anyone can point me to any regulation that says you're not allowed to hold your own money, I'd be delighted to see it.

3607
05:29:53,603 --> 05:30:06,603
This is a rule that I'm familiar with from my background in the investment advisor compliance space. Firms are required to use what's called a qualified custodian to hold assets on behalf of others.

3608
05:30:07,603 --> 05:30:32,603
If those firms are registered with the SEC in certain cases or if they're publicly listed. So I'm familiar with what Alex is talking about. It's one of the features of the corporate world that if you're an investment advisor or a public company, you may have to hold your client's money with a separate party to avoid the principal agent risk and moral hazard of holding money for others.

3609
05:30:32,603 --> 05:30:35,603
But does that apply to your own money? If you're just holding your own money there?

3610
05:30:35,603 --> 05:30:39,603
Yes. If you're a publicly traded company, it's not your money. It's your shareholder's money.

3611
05:30:39,603 --> 05:30:50,603
Yeah, shareholder's money. You're an agent of the shareholders, right? You're doing what is in their best interest and that's why the government wants you to not be holding on to their assets.

3612
05:30:50,603 --> 05:30:53,603
Aren't the shareholders the owners of the company?

3613
05:30:53,603 --> 05:31:00,603
Yeah, but they're not the people who are holding the money and therefore people want there to be a separation.

3614
05:31:01,063 --> 05:31:06,303
It's a separation of powers idea that operational controls would be separated from

3615
05:31:06,303 --> 05:31:07,803
custody of the assets.

3616
05:31:09,603 --> 05:31:13,503
put in the nest, this is unrelated, I put in the nest another tweet,

3617
05:31:14,017 --> 05:31:16,017
which is a list of websites.

3618
05:31:16,657 --> 05:31:17,397
I made this list.

3619
05:31:18,097 --> 05:31:21,697
It's useful links for people interested in learning more about Drivechain.

3620
05:31:22,277 --> 05:31:26,217
We've got the Drivechain main website, drivechain

3621
05:31:31,603 --> 05:31:49,603
There's the Drivechain GitHub repository. Everyone's welcome to join our Telegram group. The Telegram group has over 700 members and there's also some great links to some additional resources like Fiatjaf, Nostr creator and awesome member of the Drivechain talk.

3622
05:31:50,603 --> 05:32:00,603
Telegram group, frequent presence there has made a web page devoted to Drivechain which is fiatjaf.com slash Drivechain.

3623
05:32:00,603 --> 05:32:11,603
It's a great summary in very plain English of all the benefits of Drivechain as well as a response to some of the more popular objections or questions about it.

3624
05:32:11,603 --> 05:32:16,603
I love that website. I recommend it. Again, fiatjaf.com forward slash Drivechain.

3625
05:32:17,603 --> 05:32:27,603
I hope those are useful. Yeah, welcome to the stage BTC Currency Curacao. Go ahead with your question or comment. Thanks.

3626
05:32:27,603 --> 05:32:43,603
I was wondering if we could touch on the subject of lightning network on the main chain versus lightning network on a sidechain because we got into the cost of node operation and running a full node on a phone.

3627
05:32:44,603 --> 05:32:56,603
But actually there's a limitation from lightning being a channel owner going viral because we can't onboard 7 billion people like in a 24 hour period.

3628
05:32:56,603 --> 05:33:11,603
But potentially if there was a large block sidechain, then all the plebs could have their own channel and I was just wondering if that was something people wanted to talk about.

3629
05:33:11,603 --> 05:33:21,603
Yes, that is accurate and the main disadvantage of sidechains is that they also rely on confirmations.

3630
05:33:21,603 --> 05:33:30,603
And in fact, a sidechain confirmation can only be best case scenario as good as a main chain confirmation.

3631
05:33:30,603 --> 05:33:35,603
So it's still like six or more as the rule of thumb and at least one.

3632
05:33:36,603 --> 05:33:45,603
And really the first one is the really annoying one because I don't think this in practice for most use cases there's no difference between like waiting 10 minutes and waiting an hour.

3633
05:33:45,603 --> 05:33:53,603
If either waiting 10 minutes is too long, just hopelessly too long or it's like it has to be instant.

3634
05:33:53,603 --> 05:34:04,603
But the main advantage of lightning is speed and the main disadvantage of lightning is onboarding and the main advantage of sidechains is onboarding.

3635
05:34:04,603 --> 05:34:07,603
So it's unclear exactly who will like which trade offs for what.

3636
05:34:07,603 --> 05:34:14,603
But the important thing to keep in mind is that users are very different people and transactions are also very different.

3637
05:34:14,603 --> 05:34:22,603
So, for example, someone may want highly censorship resistant transactions in one case.

3638
05:34:23,603 --> 05:34:31,603
So like you have like you're running your drug empire secretly at home, but then when you go buy coffee, you don't need.

3639
05:34:31,603 --> 05:34:35,603
You can now, you know, a completely different type of transaction will work for you in that case.

3640
05:34:35,603 --> 05:34:37,603
So people are different and the transactions are different.

3641
05:34:37,603 --> 05:34:43,603
But yes, another interesting topic is can the sidechain be optimized for lightning?

3642
05:34:43,603 --> 05:34:49,603
So can it, for example, what it would have like any pre-valid or sick has no input or L2?

3643
05:34:49,603 --> 05:34:53,603
It could be chain or things like taproot or whatever.

3644
05:34:53,603 --> 05:35:04,603
I think probably if we had gotten if this is a bizarre thought experiment, but I think a lot of people deep in the technical community, if you ask them to really think about it.

3645
05:35:05,603 --> 05:35:14,603
If in a hypothetical world where we prioritized drivechain over taproot, we probably would have had taproot on layer one faster.

3646
05:35:14,603 --> 05:35:19,603
So what do I mean by that is we would have had we could have tried taproot out faster.

3647
05:35:19,603 --> 05:35:21,603
We could have had it on the sidechain.

3648
05:35:21,603 --> 05:35:29,603
You could have been taproot is very good for lightning network because it's homogenizes the transactions.

3649
05:35:29,603 --> 05:35:31,603
It's good for multisig.

3650
05:35:31,603 --> 05:35:34,603
So those are some of my thoughts.

3651
05:35:34,603 --> 05:35:44,603
I do think there are a lot of people will think of them as competitors, which is sort of unfortunate, but also not completely unrealistic.

3652
05:35:44,603 --> 05:35:48,603
But more people should explore the idea of.

3653
05:35:48,603 --> 05:35:50,603
To what extent they would work together.

3654
05:35:50,603 --> 05:35:58,603
I mean, one thing that kind of bothers me is a lot of people say, you know, miners can steal when they're talking about the 300.

3655
05:35:59,603 --> 05:36:02,603
But they don't seem to really realize exactly what it takes for them to steal.

3656
05:36:02,603 --> 05:36:07,603
It's just like three to six months of just brazenly incorrect behavior.

3657
05:36:07,603 --> 05:36:09,603
One hash not matching another hash.

3658
05:36:09,603 --> 05:36:14,603
And then whereas the lightning network miners can also steal, it's much easier and they never do.

3659
05:36:14,603 --> 05:36:21,603
So I kind of think that both the lightning network and the 300, they'll be very secure and they'll be the combination will be secure.

3660
05:36:21,603 --> 05:36:25,603
So I think the combination will actually be really a winning thing for for lots of people.

3661
05:36:25,603 --> 05:36:43,603
But unfortunately, when you when you say something like that, you make it's like it's a it's a big risk because it's bound to be at least one person in the audience who has a problem with one chain of that long, long voyage of reasoning.

3662
05:36:43,603 --> 05:36:46,603
And they're going to say, oh, this part, I don't like this part.

3663
05:36:46,603 --> 05:36:48,603
But that's actually what I do think is the case.

3664
05:36:48,603 --> 05:37:00,603
But it's just so difficult of an idea to actually advance in the in the culture and in the space because because, you know, unfortunately, a lot of people have been trained to just this is partly because the scaling war.

3665
05:37:00,603 --> 05:37:03,603
But people have been trained to just say, like, lightning is perfect.

3666
05:37:03,603 --> 05:37:06,603
Go lightning. Lightning is absolutely the best.

3667
05:37:06,603 --> 05:37:10,603
And that's that's all well and good.

3668
05:37:10,603 --> 05:37:17,603
But it's kind of partially this is no one's fault in the Bitcoin community.

3669
05:37:17,603 --> 05:37:23,603
This is like, you know, people from Bitcoin Cash had terrible counter arguments against lightning.

3670
05:37:23,603 --> 05:37:32,603
And this made it look like anyone who argued against lightning at all was like a complete buffoon, which but all of this, this is all my weird backstory.

3671
05:37:32,603 --> 05:37:39,603
But but therefore, for whatever reason, certain ideas are very difficult to just convey in the community.

3672
05:37:39,603 --> 05:37:43,603
But I think this is a very good topic to be interested in.

3673
05:37:43,603 --> 05:37:50,603
To what extent will people actually because the lightning network's advantage in terms of speed is really, really important.

3674
05:37:50,603 --> 05:38:00,603
And I personally, if I use the credit card and they don't have the tap to pay, like I have to do the insert chip like that will like ruin my entire afternoon.

3675
05:38:00,603 --> 05:38:05,603
I'm just like, why is the world such an awful place?

3676
05:38:05,603 --> 05:38:14,603
So you have to think most of the people who work on on lightning and including myself and Hampus and well, any lightning developer I've ever talked to.

3677
05:38:14,603 --> 05:38:19,603
None of them think that lightning is that is perfect.

3678
05:38:19,603 --> 05:38:25,603
We're too experienced with it to know that it's an extremely important point, which is that.

3679
05:38:25,603 --> 05:38:29,603
None of the people who are like the leading experts in the lightning network actually hold that view.

3680
05:38:29,603 --> 05:38:42,603
So you're 100 percent right. But you I think I mean, it just looks like from my point of view, the fan club, the fan club is way like out of alignment with the people in the lightning network.

3681
05:38:42,603 --> 05:38:49,603
And I noticed that quite a bit. And one great thing was that I.

3682
05:38:49,603 --> 05:38:54,603
I think we can find the link. There's John Carvalho did a an interview on it.

3683
05:38:55,603 --> 05:39:00,603
Yeah. And that's that's really. And it was called Lightning Limitations, I think.

3684
05:39:00,603 --> 05:39:06,603
And it was right. It was like a couple of months after I wrote a blog post called Lightning Network Fundamental Limitations.

3685
05:39:06,603 --> 05:39:11,603
So I'm going to when I fall asleep at night, I sometimes take credit for all these things that happen later.

3686
05:39:11,603 --> 05:39:15,603
I say that was that was all me and no one will ever know if I was right or not.

3687
05:39:16,603 --> 05:39:22,603
But but they talk that they that that particular video is fantastic and everyone should listen to it.

3688
05:39:22,603 --> 05:39:27,603
And John did a great job of getting people who their their lightning credentials.

3689
05:39:27,603 --> 05:39:30,603
It's completely unassailable. They're like the tip top.

3690
05:39:30,603 --> 05:39:34,603
There's only like there's like one or two other people who even could have been there.

3691
05:39:34,603 --> 05:39:40,603
And, you know, you get it. That was a really a big sense of of sobering up.

3692
05:39:40,603 --> 05:39:47,603
And like they have a very, very accurate view of like all the problems.

3693
05:39:47,603 --> 05:39:52,603
And of course, we don't want to like we never want to be pessimistic because problems are a good thing.

3694
05:39:52,603 --> 05:39:56,603
Problem means that problems mean that things are being tried and.

3695
05:39:58,397 --> 05:40:04,037
It's always good whenever you solve a problem, you have, as Karl Popper said, you have problem children and problem grandchildren.

3696
05:40:04,837 --> 05:40:09,237
You just move on to this. So this is a big thing, but it is an enormous disconnect.

3697
05:40:09,237 --> 05:40:21,957
And I think people in the Lightning Network community, I just I think no one actually knows like what to do about like what to say, because you never want to give any sucker to the, you know, to the

3698
05:40:22,917 --> 05:40:28,677
the people who are going to be in bad faith. But at the same time, you have to have standards of.

3699
05:40:28,677 --> 05:40:35,477
So anyway, that's what I'm trying to say. It's like a weird idea that doesn't really fit into anyone's mold.

3700
05:40:35,477 --> 05:40:46,436
So the gap between between people who if there if there are any left people who think the lightning is perfect and the knowledgeable people who've worked on it and say, no, it's it's got pretty bad problems.

3701
05:40:46,997 --> 05:40:58,276
I think it's mollifying and or smallering and gradually it's going to filter down as people go to conferences and stuff and hear people talk about the problems they're going to see it's not.

3702
05:40:58,276 --> 05:41:01,157
Yeah, that's definitely not perfect. And we could definitely use more solutions.

3703
05:41:06,276 --> 05:41:11,397
But people seem to think that's like lightning is the end of scaling, but it's really not, right?

3704
05:41:11,397 --> 05:41:19,397
Because as we talked about earlier, if the main chain gets too high fees, then the lightning just doesn't work anymore.

3705
05:41:20,037 --> 05:41:26,757
So that's why I am pretty interested in drivechains, because you could deploy lightning over drivechains.

3706
05:41:27,476 --> 05:41:40,357
But the sentiment I hear is that people seem to think that we can just go with lightning and we don't need to do anything anymore, at least from the general perspective.

3707
05:41:40,437 --> 05:41:45,317
But of course, like lightning devs knows that this isn't true, right? They want L2 and other things.

3708
05:41:46,437 --> 05:41:57,077
But yeah, I think we need to get people need to understand that we need to do more things than just set them with lightning, because like, yeah, it's it isn't enough.

3709
05:41:57,317 --> 05:41:59,957
And we really need to stop thinking about these things.

3710
05:42:00,757 --> 05:42:14,916
And I just have to like can try to convey this idea to the audience, which is that since I work on something that is for Bitcoin, but different from lightning, this is kind of inevitably draws me into like the collateral damage or whatever.

3711
05:42:14,916 --> 05:42:22,916
Because people talk about this, the people who think lightning is, is perfect, and the end all be all, then I'll say, well, what about this is different than that.

3712
05:42:23,316 --> 05:42:26,597
And then I am like in the I'm like the anti lightning person.

3713
05:42:26,597 --> 05:42:30,756
And so if anyone who thinks I'm the anti lightning person, I have some I have some very interesting.

3714
05:42:31,637 --> 05:42:36,196
I have an interesting topic for you, which is you can look up in in 2015.

3715
05:42:36,597 --> 05:42:43,396
I, I added I programmed a lightning network for prediction markets into my project.

3716
05:42:43,396 --> 05:42:46,036
I wrote out the spec and I wrote a blog post for that.

3717
05:42:46,036 --> 05:42:52,196
And that was back in 2015, long before many of these new lightning people like had ever even come came to Bitcoin at all.

3718
05:42:52,437 --> 05:43:01,717
And then another thing is I did a thing with fraud proof meditations on fraud proof that rely critically rely on either lightning channels or just some kind of channel.

3719
05:43:02,357 --> 05:43:08,116
And I have to be connected to the lightning network or in some kind of channel.

3720
05:43:08,116 --> 05:43:10,836
And I think this is a fascinating idea.

3721
05:43:11,157 --> 05:43:13,556
I'm very much in favor of this idea.

3722
05:43:14,036 --> 05:43:19,637
But it's like you get we get drawn into this like kind of limitations.

3723
05:43:19,637 --> 05:43:26,836
You basically preaching to a choir because this is basically a Polish storks fan club here and we're all, you know, we all like you and love you.

3724
05:43:27,157 --> 05:43:34,056
I just wanted to point out that even if chain fees get to a hundred dollars, lightning will continue to work for large institutions.

3725
05:43:34,517 --> 05:43:44,276
Right. So strike interfacing with Japanese banks will not have a problem paying a thousand dollar fee because the liquidity that will have in lightning channels will be millions of dollars worth.

3726
05:43:45,237 --> 05:43:55,717
So that that is true, that that use case of lightning is incredibly useful because it and it enables your dollar payment system that has no trust in it.

3727
05:43:55,717 --> 05:44:02,196
Right. Like, don't don't forget, like today, all the payments between offshore banks happen mediated by central banks.

3728
05:44:02,517 --> 05:44:08,196
And, you know, Russian and Iranian and Chinese banks soon perhaps will have problems interfacing with the rest of the world.

3729
05:44:08,517 --> 05:44:17,957
But if they all got on lightning and private channels that have millions of dollars of liquidity, you would truly have an international financial system that would settle on Bitcoin would be dispute.

3730
05:44:18,117 --> 05:44:19,716
Resolution would be on Bitcoin.

3731
05:44:19,716 --> 05:44:26,476
They would all run their own watchtowers and it would be a huge, huge improvement over the existing, you know, Swift, basically.

3732
05:44:29,156 --> 05:44:36,557
Yeah, I agree with that fully, of course, I mean, like the lightning we have today with small channels and stuff like that.

3733
05:44:37,117 --> 05:44:51,837
Also, of course, it goes with the idea that over the life of the Internet, you know, the last 50 years, any protocol that required you to run your own server all the time has failed.

3734
05:44:51,837 --> 05:44:52,316
Right. Like.

3735
05:44:55,077 --> 05:44:57,436
Some people out there are still running their mail servers.

3736
05:45:00,316 --> 05:45:01,397
But those people are like.

3737
05:45:02,397 --> 05:45:09,117
Monks, right, so lightning is a little bit hard to hear you.

3738
05:45:11,596 --> 05:45:12,637
OK, is it better now?

3739
05:45:13,196 --> 05:45:13,677
Yes.

3740
05:45:14,237 --> 05:45:20,357
Yeah. What I'm saying is that lightning is a huge improvement on Swift and it will remain so even if change fees go to a thousand dollars.

3741
05:45:20,837 --> 05:45:22,436
That's basically what I wanted to say.

3742
05:45:23,117 --> 05:45:23,637
I agree.

3743
05:45:24,596 --> 05:45:27,876
And I agree with you 100 percent about that whole running on server thing is.

3744
05:45:28,277 --> 05:45:29,797
Only monks do it, basically.

3745
05:45:30,077 --> 05:45:41,916
Like, if you want to be a monk running your own SMTP server, you know, you're going to be the guy running your own money and managing liquidity with untrusted counterparties and defending yourself from denial of service attacks that come from North Korea, right?

3746
05:45:42,637 --> 05:45:59,677
I think also we have this concept of like it's one thing that's underappreciated is the network effects of money, which is like if some other thing that we don't like, that's not Bitcoin, you know, it could be a theory, it could be whatever, you know, anything, if they give you money, you're going to get it.

3747
05:45:59,876 --> 05:46:10,916
If they capture enough, you know, if they convert enough users, if they have enough people who use it, even if those people are idiots, you know, there's many more idiots than there are smart people, of course.

3748
05:46:10,996 --> 05:46:16,196
So, but if you get a critical mass of like, you know, it could be anything.

3749
05:46:16,196 --> 05:46:20,077
I don't know exactly how it will all play out, but it's through stable coins.

3750
05:46:20,117 --> 05:46:21,036
That's how it plays out.

3751
05:46:21,357 --> 05:46:41,837
So, but you convert rather people into something that's not Bitcoin, then probably Bitcoin is doomed in that scenario, because even other altcoins that are very different from Bitcoin, anything that has just a few of the big improvements, you know, like it clumps up, there's like a there's like a globbing up, you know, where people use clump onto things.

3752
05:46:41,837 --> 05:46:55,517
So they, so if it's, if it has, if you have key pairs, you know, and I have your, you can have your own keys, but maybe you can't run a node, like you have, like, whatever weird version of Ethereum was like, or a super large block thing.

3753
05:46:55,677 --> 05:46:57,196
These are just hypothetical examples.

3754
05:46:57,677 --> 05:47:08,996
I'm just trying to convey this idea that Bitcoin, you know, it can't just like continue to exist in a world where there is a super, super, super popular altcoin.

3755
05:47:09,237 --> 05:47:20,277
You know, it's like people would like to speak as though Bitcoin will just keep going on TikTok next block or whatever, you know, but it's like, let's say Bitcoin stays exactly as popular as it is right now.

3756
05:47:20,277 --> 05:47:26,397
But some other altcoin becomes like 100 million times more popular and captures like most Russians use it and like a bunch of people.

3757
05:47:26,397 --> 05:47:29,596
Yeah, look at stable coins on Tron, right?

3758
05:47:29,596 --> 05:47:34,557
They are competed stable coins on Ethereum right now, like Tether is now moved to Tron, basically.

3759
05:47:35,277 --> 05:47:47,957
Like what Bitcoin needs, what Lightning needs, is it needs a decentralized US dollar that can go at the speed of Lightning and whoever delivers that, trust minimized US dollar, that's who the winner is going to be in the long run.

3760
05:47:48,476 --> 05:47:55,557
Now, all these proposals like by Tero, by Lightning Labs, I don't find them credible because they will just allow you to issue Tether onto Lightning.

3761
05:47:56,117 --> 05:48:00,476
But people don't want Tether, people want a truly decentralized synthetic US dollar, right?

3762
05:48:00,916 --> 05:48:14,996
And there is a way to do it, which is that if you have a decentralized, you know, DeFi protocol with Bitcoin collateral backing that US dollar on a drivechain or a validity rollout, then you can issue that onto Lightning.

3763
05:48:15,476 --> 05:48:23,637
And then it would be that would be like essentially what the market craves is low cost, decentralized US dollar going at the speed of Lightning over Lightning.

3764
05:48:25,916 --> 05:48:28,996
That's essentially the sailor, you know, like best.

3765
05:48:29,196 --> 05:48:48,116
Well, you know, ironically, my prediction markets project and the thing that I just mentioned about Lightning Network on prediction markets does enable a type of thing because you have a you'd make a bet against the exchange rate and then it is when the exchange rate moves down, you win the bet.

3766
05:48:48,157 --> 05:48:49,756
So you win more coins.

3767
05:48:49,837 --> 05:48:52,676
Yeah, but I mean, but the exchange rate goes down.

3768
05:48:52,676 --> 05:48:54,316
So you have the same US dollar value.

3769
05:48:54,637 --> 05:49:01,796
You would need to disband your team and ossify your prediction market in order for it to be a credible decentralized dollar, right?

3770
05:49:02,477 --> 05:49:04,876
Indeed. Well, the technology would have to exist.

3771
05:49:04,917 --> 05:49:07,717
People would need as far as disbanding the team.

3772
05:49:08,037 --> 05:49:17,236
I know what you mean by that is to say that people would need to have a reason to believe that the coded law, so to speak.

3773
05:49:17,556 --> 05:49:19,196
Right. And rules will not be critical.

3774
05:49:19,637 --> 05:49:20,796
But like, exactly.

3775
05:49:21,796 --> 05:49:29,196
One thing I was thinking about that is when we ossify something, we could make like we can hash the software and we can like make T-shirts or something.

3776
05:49:29,196 --> 05:49:35,756
You know, that's why I say that if you want to have nightmares at night and not sleep for the next 10 years, just imagine ossified Ethereum, right?

3777
05:49:35,756 --> 05:49:37,717
That's the worst possible outcome for Bitcoin.

3778
05:49:38,236 --> 05:49:44,236
There's no greater threat than Ethereum realizing that they can just disband and walking away from it and just leaving.

3779
05:49:45,196 --> 05:49:48,597
Believe it or not, I tweeted a little bit about this, like about a year ago or something.

3780
05:49:48,796 --> 05:49:51,157
But yeah, I think I agree with this idea.

3781
05:49:51,756 --> 05:49:53,556
Yeah, I think they actually do know.

3782
05:49:53,556 --> 05:50:03,556
I think the whole time they've been running a stealth campaign and that stuff of them dancing on stage has just been to trick Bitcoiners into complacency.

3783
05:50:03,556 --> 05:50:04,676
And they actually do.

3784
05:50:04,676 --> 05:50:10,196
They do understand that even though it's better to as a competitor, it's better to be able.

3785
05:50:10,597 --> 05:50:12,397
They're being the opposite of Bitcoin in many ways.

3786
05:50:12,436 --> 05:50:16,876
So where we are conservative, they are more risk taking and they take more chances.

3787
05:50:17,196 --> 05:50:24,236
But I think they also know like it's in the back of their mind always like how do we beat the Bitcoiners at their own game?

3788
05:50:24,597 --> 05:50:30,717
And I think they I think they I don't think it's like they're in their top 10 levels of like attention or whatever you want to call it.

3789
05:50:30,717 --> 05:50:36,077
But I think they they are aware that they they want to go for like the throat.

3790
05:50:36,077 --> 05:50:37,637
They like, you know, the coup de gras.

3791
05:50:38,157 --> 05:50:39,397
That would be a coup de gras move.

3792
05:50:39,397 --> 05:50:58,597
Like if the Vitalik's roadmap, you know, this this merge, purge, surge, scourge and whatever the hell that roadmap is comes to pass, you know, in eight years and they decide, OK, Ethereum is now so big, so so so relied upon by hundreds of protocols and chains that at this point, like there's no point in altering it in any way.

3793
05:50:58,597 --> 05:51:06,556
And they just simply publicly disband and declare that no future version of Ethereum nodes is, you know, blessed, so to speak.

3794
05:51:06,556 --> 05:51:09,196
And they essentially they abandon their desire to hard fork.

3795
05:51:09,717 --> 05:51:13,477
That would be them making doing the coup de gras on Bitcoin essentially.

3796
05:51:13,477 --> 05:51:16,077
And Ethereum will be co-optable by the regulator.

3797
05:51:16,196 --> 05:51:17,157
There's no doubt about it.

3798
05:51:17,517 --> 05:51:21,637
It would essentially become a better version of the euro dollar system that's controllable by regulators.

3799
05:51:22,637 --> 05:51:30,597
So they wouldn't really do a coup de gras, then, because it would just end up, they would end up going the way of the euro dollars.

3800
05:51:30,597 --> 05:51:32,876
Well, but the euro dollar is doing fine, right?

3801
05:51:32,876 --> 05:51:35,277
Like the euro dollar is doing great right now, right?

3802
05:51:35,277 --> 05:51:37,996
The euro dollar made the Fed into a LARPing central bank.

3803
05:51:37,996 --> 05:51:39,517
The Fed is not really a central bank.

3804
05:51:39,517 --> 05:51:48,996
If you listen to like seven podcasts by Jeff Snyder on Breedlove, you know, podcast, he actually says that the Fed is only LARPing being a central bank.

3805
05:51:48,996 --> 05:51:50,597
It's not actually a central bank.

3806
05:51:50,637 --> 05:51:54,597
It's not actually a central bank at all because it doesn't do money and it doesn't control interest rates.

3807
05:51:54,876 --> 05:51:59,037
It just has this bully pulpit where it tries to convince everybody that it does.

3808
05:51:59,316 --> 05:52:13,157
And if enough people believe the myth that don't fight the Fed, then they they tend to affect global liquidity in the euro dollar system indirectly by people sort of believing that the Fed is in control and therefore going along with the Fed instead of fighting the Fed.

3809
05:52:13,756 --> 05:52:17,477
Paul, do you agree with that last part he said about co-option?

3810
05:52:17,676 --> 05:52:35,196
And do you like suppose, Paul, like in reference to your tweet from a year ago, I recall it, your pinned tweet in April was that if Ethereum were to shrink its main chain block size and ossify, then it would perhaps seal some of the narratives of Bitcoin that are important.

3811
05:52:35,477 --> 05:52:45,796
Do you think that it would be, as Alex said, co-optible by the government or would it have perhaps gotten that Bitcoin narrative of of uncorruptibility?

3812
05:52:48,157 --> 05:52:59,517
Oh, well, the the point of the ossification is that it does also limit your corruptibility by the government basically to zero because now you can't be negatively affected by anything or positively affected.

3813
05:52:59,517 --> 05:53:05,717
Well, it could be co-optible by the government because the Fed could print enough dollars to buy 51 percent of ETH.

3814
05:53:06,037 --> 05:53:08,597
And at that point, that control would be irreversible.

3815
05:53:09,436 --> 05:53:10,717
That's not the case in Bitcoin.

3816
05:53:10,957 --> 05:53:19,556
So even though the rules of Ethereum will not change, the Fed printing a few trillion dollars to buy 51 percent of Ethereum and then running their own data.

3817
05:53:20,316 --> 05:53:32,517
That's very creative, but that's not cut and dry because, for example, it's possible in that scenario where the Fed has said we will do whatever it takes to print enough reserves.

3818
05:53:32,756 --> 05:53:33,837
They won't announce it, right?

3819
05:53:33,837 --> 05:53:36,717
They'll be doing it through agents and you won't know that they're doing it, right?

3820
05:53:37,077 --> 05:53:43,837
They will just say, but think about it, though, the the 51 percent of the ETH might not be for sale.

3821
05:53:43,837 --> 05:53:47,676
They may drive the price to the sky and then it will be for sale.

3822
05:53:47,917 --> 05:53:51,436
It will be it will become for sale once the price goes up 10x.

3823
05:53:52,077 --> 05:53:53,157
It will come for sale.

3824
05:53:53,157 --> 05:53:57,157
Right. And because the Fed can print a quadrillion dollars, it doesn't matter.

3825
05:53:57,157 --> 05:54:03,037
But you understand that the Fed can print an infinite amount of dollars, but they do not have infinite purchasing power.

3826
05:54:03,157 --> 05:54:04,316
Right. No, no.

3827
05:54:04,316 --> 05:54:12,876
I know. But if the Fed is buying Ethereum with these dollars and it's not spending those Ethereum, it's not creating inflation in the real economy when it's doing that.

3828
05:54:12,917 --> 05:54:13,756
I mean, actually, I'm sorry.

3829
05:54:13,756 --> 05:54:16,756
I take it back. It would it would create inflation.

3830
05:54:16,756 --> 05:54:25,077
But the Fed could be playing a long game where instead of doing it directly, they can just say over the next 30 years, we'll be just adding one percent of Ethereum holdings every year.

3831
05:54:25,796 --> 05:54:31,277
So you've gone from saying you've gone from saying that it's corruptible to saying it would take 30 years to corrupt.

3832
05:54:31,316 --> 05:54:36,397
No, I mean, I'm saying is that it has a flaw because it's a proof of stake system that Bitcoin does not have.

3833
05:54:36,397 --> 05:54:40,796
Namely, that once you said could be building mining operations.

3834
05:54:40,796 --> 05:54:45,316
But mining operations cannot change the rules of Bitcoin.

3835
05:54:45,316 --> 05:54:55,796
Whereas if you take if you possess most of the stake, you can rewrite the history of the chain, let alone if you possess the majority of the hash rate, you can block the transactions of others.

3836
05:54:55,796 --> 05:54:56,356
Can you not?

3837
05:54:57,356 --> 05:55:02,996
No, because what will happen is that, you know, if that was the case, then Bitcoin would have no censorship resistance at all.

3838
05:55:03,236 --> 05:55:10,556
What you will have is simply like if you have a transaction, first of all, you know, you'll have things like lightning and other ways to hide transactions.

3839
05:55:10,556 --> 05:55:18,077
And then you'll have just high fees that some miner in Kazakhstan will take, even though the Fed controlled miners won't.

3840
05:55:19,077 --> 05:55:31,077
I think we're just so I don't think that the government, if a government decides they want to take over Ethereum staking industry, I don't think they need to spend a bunch of money buying a bunch of ETH.

3841
05:55:31,077 --> 05:55:47,077
A lot of the people who are staking right now are already regulated entities, and so they can just increase the regulations on them to say stuff like we want you to prioritize the transactions that we make and ignore transactions or ignore blocks containing transactions.

3842
05:55:48,077 --> 05:55:54,077
That we don't like. And then, boom, without without spending billions and trillions of dollars, they've taken over.

3843
05:55:54,077 --> 05:55:59,077
They've taken it over because it's just it's already run by a bunch of corporations that are regulated entities.

3844
05:56:06,077 --> 05:56:11,077
Well, this has been interesting. We're trying we're trying to figure out what you think, Alex.

3845
05:56:12,077 --> 05:56:18,077
It sounds like you were saying that Ether would be corrupted, but also somehow defeat Bitcoin.

3846
05:56:20,077 --> 05:56:25,077
Ether would try to market itself as Bitcoin once they disband.

3847
05:56:25,077 --> 05:56:39,077
And that will play along with a lot of institutions and individuals, while in reality it would be just not the case because it's a proof of stake chain that, you know, that can be co-opted by fiat or can be co-opted by regulation.

3848
05:56:39,077 --> 05:56:46,077
And it's never truly ossified if somebody can say, hey, Coinbase, you will now run this version of the ETH client.

3849
05:56:46,077 --> 05:56:48,077
That's a new hard fork. Right.

3850
05:56:48,077 --> 05:56:52,077
So basically, historically, in Ethereum, exchanges decide the fork choice.

3851
05:56:52,077 --> 05:56:54,077
And nowadays it's the stable coins. Right.

3852
05:56:54,077 --> 05:57:00,077
So, for example, in order to pressure Ethereum, all you have to do is pressure two companies, USDC Assure and USDT Assure.

3853
05:57:00,077 --> 05:57:05,076
You can execute an arbitrary hard fork by forcing those two companies.

3854
05:57:09,076 --> 05:57:16,076
I'm not hearing you.

3855
05:57:16,076 --> 05:57:21,076
You got cut off, Alex. I can't hear him either.

3856
05:57:21,076 --> 05:57:24,076
Well, this is an interesting rabbit hole.

3857
05:57:24,076 --> 05:57:26,076
Maybe we should continue with it or not.

3858
05:57:26,076 --> 05:57:28,076
It's up to those on stage.

3859
05:57:29,076 --> 05:57:39,076
I think it's been interesting to hear, Alex, you share a view that, you know, Ether could, if it ossifies, you know, execute a coup de grace against Bitcoin's narratives.

3860
05:57:39,076 --> 05:57:41,076
But at the same time, you're saying it would be corruptible.

3861
05:57:41,076 --> 05:57:46,076
The whole value proposition of blockchain is to be outside the reach of government.

3862
05:57:46,076 --> 05:58:01,076
And there's enormous desire for that value because government is so powerful and so intrusive in society that there is a great demand for commerce that is outside the reach of these unnecessarily intrusive forces.

3863
05:58:01,076 --> 05:58:09,076
So I wasn't sure what you were saying when you said that it was going to be corrupted, but also very successful.

3864
05:58:09,076 --> 05:58:13,076
But, of course, you know, the fiat money regime is those things.

3865
05:58:13,076 --> 05:58:17,076
So there is, unfortunately, that possibility.

3866
05:58:17,076 --> 05:58:20,076
Well, I guess it depends on how you define success.

3867
05:58:20,076 --> 05:58:22,076
Right.

3868
05:58:23,076 --> 05:58:41,076
I think one of the ideas that we have been developing in this conversation is that if a competitor to Bitcoin were to become much larger by market cap and users, then that would pose a certain kind of threat to at least Bitcoin's narrative of monetization.

3869
05:58:41,076 --> 05:58:46,076
The narrative of hyper-Bitcoinization, the narrative of Bitcoin becoming the world's future money.

3870
05:58:46,076 --> 05:59:01,076
If some other blockchain were to become 10 times larger, then it would be less likely that the average person would consider Bitcoin likely to become the massive layer one of everything of the future.

3871
05:59:01,076 --> 05:59:07,076
They would more likely think of that other competitor that's larger as being on that track.

3872
05:59:08,076 --> 05:59:18,076
We already have competitors that are bigger than Bitcoin in terms of market cap and usage.

3873
05:59:18,076 --> 05:59:21,076
The dollar is an example, and Visa is an example.

3874
05:59:21,076 --> 05:59:25,076
It's got way more usage and a lot higher of a market cap.

3875
05:59:25,076 --> 05:59:28,076
And people prefer it.

3876
05:59:28,076 --> 05:59:35,076
If you ask most people, would you rather do this transaction with Bitcoin or with a Visa card, merchants and users are all like, yeah, let's do the Visa card.

3877
05:59:36,076 --> 05:59:41,076
And the fundamental difference there is that those are not peer-to-peer electronic cash.

3878
05:59:41,076 --> 05:59:45,076
Those are peer-to-trust, third-party-to-peer electronic cash.

3879
05:59:45,076 --> 05:59:53,076
So they're subject to the inflation and permissioned nature of those systems, unlike a peer-to-peer system, which can be fundamentally better.

3880
05:59:55,076 --> 05:59:56,076
Right.

3881
05:59:58,100 --> 06:00:13,540
Yes, I don't think that Ethereum is peer-to-peer for, well, one reason is even under your standard, where in order to be peer-to-peer, you have to have no social coordination or whatever.

3882
06:00:14,300 --> 06:00:21,819
The people who are currently staking are a social club that they have to approve your entry into that social club in order to let you in.

3883
06:00:22,819 --> 06:00:29,180
So it's not peer-to-peer, even by your definition, which is different than mine.

3884
06:00:29,620 --> 06:00:48,180
Yeah. I mean, the dichotomy that we've drawn in past conversations here at Drivechain Twitter Spaces is I've said that peer-to-peer, in my understanding, has to do with there being no social barrier to entry in order to attain a certain role in a system and instead only an economic barrier.

3885
06:00:49,180 --> 06:01:05,540
So if you want to be a Bitcoin miner, you have to be able to afford some hardware. If you want to be a Bitcoin user, you have to be able to get some Bitcoin, and anyone can achieve those roles in society as long as they have a little bit of money and resources.

3886
06:01:06,540 --> 06:01:24,900
But it's different in Ethereum, because if you want to become an Ethereum staker, you have to acquire a certain amount of Ethereum, and the transactions in which you acquire that Ethereum have to be approved by the current stakers, and then they have to approve your deposit of that money into a staking address.

3887
06:01:24,900 --> 06:01:36,260
So all of this is the current stakers socially saying, okay, we'll let you join our club. And so there's a social barrier to being an Ethereum staker.

3888
06:01:36,900 --> 06:01:44,260
So are you saying that if someone is totally anonymous, it is impossible to participate in staking?

3889
06:01:45,260 --> 06:01:57,619
It's possible if they let anonymous people in. If the people who are currently staking let you in, then you're good. And if they don't want you in, if they're like, you know, we want your identity first, then you can't get in.

3890
06:01:57,619 --> 06:02:18,980
Well, if only we had an Ethereum expert on stage, we could get their view on that view.

3891
06:02:18,980 --> 06:02:40,340
But yeah, my view on what peer-to-peer means is that peer-to-peer has to do with whether there's only an economic barrier to attaining a certain role in an activity, and not any social barrier, such as a need for permission or admission.

3892
06:02:40,340 --> 06:02:57,700
And I use the phrase peer-to-peer sidechains sometimes because I've seen it in Adam Bak's tweets. So I think that's cool. Other drivechain advocates sometimes refer to the drivechain peg as trustless, but I've been trying to be cautious about that word since nothing is truly trustless.

3893
06:02:58,340 --> 06:03:00,700
Hey, BTC Curacao, were you going to say something?

3894
06:03:02,060 --> 06:03:08,040
Yeah, you brought the topic back to peer to peer and I was thinking there's like a

3895
06:03:08,040 --> 06:03:13,460
new Samsung phone that's like folds and it has one terabyte of space.

3896
06:03:14,020 --> 06:03:19,240
And we're talking about like this technology or that technology instead of like

3897
06:03:19,240 --> 06:03:25,000
stacking them. So you Tri -XO was mentioned before,

3898
06:03:25,260 --> 06:03:30,060
but like there is a purity thing to want to make sure that

3899
06:03:30,060 --> 06:03:33,780
you're, Satoshi's belong to the 21 million.

3900
06:03:33,920 --> 06:03:38,860
So that's the idea of like bringing the block size down to 300 kilobytes

3901
06:03:38,860 --> 06:03:40,240
and,

3902
06:03:41,560 --> 06:03:47,260
you know, running a Bitcoin core layer one full node, but then running a different type

3903
06:03:47,260 --> 06:03:53,260
of big block sidechain on top that has like you TreeXO and even

3904
06:03:53,260 --> 06:03:54,420
lightning on there.

3905
06:03:54,640 --> 06:04:00,480
And then what Paul was saying about initial block download doing SPV first.

3906
06:04:00,480 --> 06:04:01,940
but that can also be like

3907
06:04:02,160 --> 06:04:07,620
in the daytime when you're out on the cellular network then it uses like

3908
06:04:07,620 --> 06:04:13,220
SPV and all these things and later on it like gets all the data when

3909
06:04:13,220 --> 06:04:14,820
you're charging at night.

3910
06:04:15,920 --> 06:04:19,899
so like when you wake up in the morning you'd be like someone cheated

3911
06:04:19,899 --> 06:04:49,899
on you the day before, and you could kind of chase them down. And that fits with other economic models. But then we're, we're also getting away from the hosted lightning channels, because that could be a government regulatory, like weakness, potentially, who knows, it's too early to say. And, you know, if we can get, like, connecting to people on tour on our phones, because we keep saying about people don't run nodes, but they do run phones. And if the node is on the phone, it doesn't mean

3912
06:04:49,899 --> 06:04:57,820
there won't be archival nodes in the cloud, that'll exist too. And, you know, this more and model.

3913
06:05:05,260 --> 06:05:06,059
Well said.

3914
06:05:11,560 --> 06:05:16,080
Any more thoughts from the stage or anyone would like to come up and ask a question

3915
06:05:16,080 --> 06:05:19,140
about Drivechain or anything related to it?

3916
06:05:22,180 --> 06:05:24,880
This has been a record setting Drivechain spaces.

3917
06:05:25,040 --> 06:05:26,660
Usually we go for about 90 minutes.

3918
06:05:27,420 --> 06:05:29,320
Today we went for six hours.

3919
06:05:30,180 --> 06:05:32,920
And we had Luke Dasher show up, which was an unexpected surprise.

3920
06:05:33,640 --> 06:05:36,200
Yeah, I loved that Luke joined and shared his thoughts.

3921
06:05:36,840 --> 06:05:37,820
I thought they were brilliant.

3922
06:05:38,440 --> 06:05:41,180
And if anyone missed it, if you joined just recently,

3923
06:05:41,899 --> 06:05:47,679
Don't worry. This space is recorded as our space has always are you can follow

3924
06:05:47,679 --> 06:05:48,659
later two labs?

3925
06:05:48,939 --> 06:05:49,959
That's me the host.

3926
06:05:49,999 --> 06:05:53,119
I'm Henry. I work for Paul who's also on stage and

3927
06:05:54,439 --> 06:05:59,859
You can follow later two labs on Twitter our prior spaces are available in our timeline

3928
06:05:59,859 --> 06:06:05,819
on Twitter We're hoping to set that set up these audio spaces as a as

3929
06:06:05,819 --> 06:06:11,299
a podcast feed in case you prefer to listen to things on demand not live as a podcast

3930
06:06:11,299 --> 06:06:13,419
that'll come in the coming weeks.

3931
06:06:14,979 --> 06:06:17,739
And there's also other resources that are already available.

3932
06:06:17,919 --> 06:06:23,299
like drivechain.info and YouTube videos about Drivechain.

3933
06:06:24,179 --> 06:06:30,139
And there is a Telegram group with 700 people in it just talking

3934
06:06:30,139 --> 06:06:34,239
about Drivechain. And there's also a Drivechain for Reddit.

3935
06:06:34,239 --> 06:06:36,566
and there's

3936
06:06:36,626 --> 06:06:40,446
a bunch of other resources that you can find by going to all those places.

3937
06:06:41,206 --> 06:06:44,686
If you have a question you want asked or discussed in this space but you don't want to

3938
06:06:44,686 --> 06:06:50,586
come up on stage and ask it, can DM it to LayerTwo Labs or

3939
06:06:50,586 --> 06:06:53,746
come into the Drivechain forum and send it to me.

3940
06:06:53,966 --> 06:06:55,233
Henry on

3941
06:06:56,793 --> 06:06:57,393
Paul,

3942
06:07:00,293 --> 06:07:01,073
had one question.

3943
06:07:01,213 --> 06:07:04,413
you're available to speak at the moment, I'll read the question.

3944
06:07:04,973 --> 06:07:06,353
comes from someone.

3945
06:07:06,673 --> 06:07:12,313
asked, hey, can you ask Paul to talk about the update of the

3946
06:07:12,313 --> 06:07:13,193
software launcher?

3947
06:07:14,119 --> 06:07:20,119
is going on with the new release oh yes that's very excited about that

3948
06:07:20,119 --> 06:07:25,519
but I've been so busy at this great event going on in Miami vortex it's just

3949
06:07:25,519 --> 06:07:28,839
non -stop Bitcoin a 10 a.m.

3950
06:07:29,939 --> 06:07:31,319
to like 2 a.m.

3951
06:07:31,379 --> 06:07:32,566
really and

3952
06:07:32,826 --> 06:07:35,906
I'm actually going to MiamiBitDevs right now because it starts at 7.

3953
06:07:37,346 --> 06:07:42,946
I'm, so I haven't had time to give it its due attention, but either as an

3954
06:07:42,946 --> 06:07:48,566
announcement or even as, know, but we have this great new concept

3955
06:07:48,566 --> 06:07:51,233
where you just, you

3956
06:07:51,973 --> 06:07:55,773
one software application and then it does all the other downloading and configuring

3957
06:07:55,773 --> 06:07:56,573
behind the scenes.

3958
06:07:56,853 --> 06:08:01,473
the goal of this is to make it very easy for people to run the software.

3959
06:08:02,813 --> 06:08:05,953
Because if people run the software, then they learn an awful lot of things.

3960
06:08:06,113 --> 06:08:09,899
Like I get lots and lots of different questions all the time, constantly, from

3961
06:08:09,939 --> 06:08:14,419
people. when I hear the questions, then I know that they haven't run the software

3962
06:08:14,419 --> 06:08:20,299
because they ask questions like, know, I had one

3963
06:08:20,299 --> 06:08:25,839
today where it was like people thought that the accumulated fees on the main chain were

3964
06:08:25,839 --> 06:08:28,566
paid out to the miners once every three months,

3965
06:08:29,186 --> 06:08:31,686
which is not the case, the withdrawal cards.

3966
06:08:32,166 --> 06:08:34,366
it's like if you, people run the software, would know.

3967
06:08:34,646 --> 06:08:40,166
So the goal is to educate people so that people make a fully informed, both the haters

3968
06:08:40,166 --> 06:08:46,106
and the, you know, the number one fans, so that everyone knows exactly what

3969
06:08:46,106 --> 06:08:47,046
they're talking about here.

3970
06:08:47,493 --> 06:08:49,013
And that's what I want.

3971
06:08:49,233 --> 06:08:52,513
then the best way to do that is by running the software.

3972
06:08:52,653 --> 06:08:54,253
And so we want to make that as easy as possible.

3973
06:08:54,373 --> 06:08:59,233
So now we want to take it to the level of just we have one little thing that does it

3974
06:08:59,233 --> 06:09:04,013
for you. It's kind of like Steam, or like, you know, Epic Games launcher, you know, so

3975
06:09:04,013 --> 06:09:05,013
that's the idea.

3976
06:09:05,633 --> 06:09:05,899
And

3977
06:09:06,019 --> 06:09:11,819
we have a version of that that is ready to be released just as soon as I

3978
06:09:11,819 --> 06:09:17,619
have a couple minutes to make the web page or update the web

3979
06:09:17,619 --> 06:09:19,239
page about it or whatever.

3980
06:09:19,439 --> 06:09:21,579
But we're going to release that.

3981
06:09:21,919 --> 06:09:24,519
And command line version, we're to

3982
06:09:24,566 --> 06:09:26,126
have graphical interface version.

3983
06:09:26,926 --> 06:09:28,206
So I'm very excited about this.

3984
06:09:29,226 --> 06:09:32,826
And we're going to do everything we possibly can to make it as easy as possible for

3985
06:09:32,826 --> 06:09:33,526
people to run into it.

3986
06:09:33,546 --> 06:09:39,206
I'd like to even get to the point where you can just look with PlayMoney, can just open

3987
06:09:39,206 --> 06:09:43,233
a point of web browser to a page, and then you can experiment

3988
06:09:44,293 --> 06:09:46,933
BIP300, BIP301, BIP301, BIP301,

3989
06:09:48,893 --> 06:09:52,653
BIP301, BIP301, BIP301, BIP BIP301, 301,

3990
06:09:55,293 --> 06:10:00,893
BIP BIP BIP BIP BIP BIP301, BIP BIP

3991
06:10:00,893 --> 06:10:01,899
BIP

3992
06:10:01,899 --> 06:10:06,179
big improvement in that direction because right now you have to download these

3993
06:10:06,179 --> 06:10:11,499
different applications. Your computer warns you that this is untrusted software that's

3994
06:10:11,499 --> 06:10:13,239
probably virus or whatever.

3995
06:10:14,639 --> 06:10:17,779
so we have that issue and

3996
06:10:17,779 --> 06:10:23,679
the... so we have all that going on and so you

3997
06:10:23,679 --> 06:10:24,229
have to run these...

3998
06:10:24,619 --> 06:10:28,039
we try to make it easy where there's these little buttons you click that write these

3999
06:10:28,039 --> 06:10:32,539
config files into places but even though we put a very valiant effort

4000
06:10:32,539 --> 06:10:35,919
we just need to make it easier still.

4001
06:10:36,079 --> 06:10:37,859
We need to just keep going until it's super

4002
06:10:37,899 --> 06:10:39,279
easy. So that's what that's all about.

4003
06:10:40,179 --> 06:10:41,299
So very excited about that.

4004
06:10:41,899 --> 06:10:45,819
The launcher will download, it will download like the main chain for you.

4005
06:10:45,959 --> 06:10:48,679
will download the sidechain software.

4006
06:10:48,759 --> 06:10:53,479
If you click a little button and you say, want to have this sidechain, it will

4007
06:10:53,479 --> 06:10:55,399
download the node software for you.

4008
06:10:55,439 --> 06:10:57,359
It will do the checksums, because we put out

4009
06:10:57,438 --> 06:11:01,078
the checksums, but do people really check the checksums?

4010
06:11:01,378 --> 06:11:02,678
know, people are lazy.

4011
06:11:02,838 --> 06:11:03,838
don't check the checksums.

4012
06:11:05,218 --> 06:11:06,498
we're happy to check the checksums.

4013
06:11:07,998 --> 06:11:08,658
some people do.

4014
06:11:09,118 --> 06:11:10,618
And that's the right thing to do.

4015
06:11:11,058 --> 06:11:11,818
But you know, here's the thing.

4016
06:11:11,918 --> 06:11:12,898
We got the launcher already.

4017
06:11:13,058 --> 06:11:14,058
So check that checksum.

4018
06:11:14,498 --> 06:11:16,976
And then that will be the last one you ever need

4019
06:11:16,976 --> 06:11:22,336
need to check because and then you know we'll all this stuff to configure ball and so

4020
06:11:22,336 --> 06:11:27,236
that you know it's all a bit source obviously so but that's the idea we'll be some

4021
06:11:27,236 --> 06:11:33,116
check the checks on while they to dim some will the will the user need to

4022
06:11:33,116 --> 06:11:35,116
get Ubuntu and VMware still

4023
06:11:37,975 --> 06:11:43,455
at first yes but eventually no I mean we're gonna get

4024
06:11:43,455 --> 06:11:47,675
we're again the goal is to make it super super easy so with play money you eventually

4025
06:11:47,675 --> 06:11:53,035
won't need anything except a web browser so that's my goal anyway I mean we'll see if

4026
06:11:53,035 --> 06:11:55,675
we can push the that far in a reasonable

4027
06:11:56,053 --> 06:11:58,673
way. I think,

4028
06:11:59,893 --> 06:12:03,713
see, Henry, should, everyone should try Ubuntu.

4029
06:12:03,893 --> 06:12:05,513
Everyone thinks like, oh, this is really hard.

4030
06:12:05,693 --> 06:12:06,573
don't understand anything.

4031
06:12:07,273 --> 06:12:09,893
And you just take, just put like a little weekend into it, know?

4032
06:12:10,933 --> 06:12:12,093
And then it's not so bad.

4033
06:12:12,493 --> 06:12:15,592
I'm sort of like the test case for the Hoi Paloi,

4034
06:12:15,812 --> 06:12:18,772
because I'm like least sophisticated member of LayerTwo Labs.

4035
06:12:19,172 --> 06:12:21,372
if I can do it, the whole world can do it.

4036
06:12:21,872 --> 06:12:24,312
Right. And that's a good thing.

4037
06:12:24,492 --> 06:12:24,812
what we want.

4038
06:12:25,012 --> 06:12:25,632
want to...

4039
06:12:27,412 --> 06:12:32,932
Like, you know how it is, I can divide my time into making the onboarding easier or do

4040
06:12:32,932 --> 06:12:34,952
something else. It's like a time and place for

4041
06:12:41,470 --> 06:12:46,930
People can go to drivechain.info right now, can download software, they can get

4042
06:12:46,930 --> 06:12:52,430
involved. If you are a software engineer or a programmer or an advanced Bitcoiner, you

4043
06:12:52,430 --> 06:12:54,090
won't find it difficult at all.

4044
06:12:55,149 --> 06:13:00,469
others also may find it easy to get the software and then if you have questions about

4045
06:13:00,469 --> 06:13:05,449
it anyone can go to drivechain talk telegram group and ask questions there's 700

4046
06:13:05,449 --> 06:13:11,089
people there people will help you out people will guide you through things so the

4047
06:13:11,089 --> 06:13:14,189
community is growing every day anyone who's listening

4048
06:13:14,207 --> 06:13:19,947
here can get involved in that way and get involved in what may become an enormously

4049
06:13:19,947 --> 06:13:24,927
favorable development for Bitcoin, accruing value to Bitcoin's

4050
06:13:24,927 --> 06:13:28,187
token and block space.

4051
06:13:28,887 --> 06:13:30,887
strengthening Bitcoin in multiple ways.

4052
06:13:33,327 --> 06:13:33,746
We

4053
06:13:33,966 --> 06:13:39,006
probably will wrap up in next 10 minutes since we've been going for so many hours and

4054
06:13:39,006 --> 06:13:43,646
the next Twitter spaces will be on Thursday so we usually go Monday and Thursday.

4055
06:13:44,626 --> 06:13:46,746
On this Thursday in particular it'll be in the evening.

4056
06:13:47,186 --> 06:13:51,126
Usually we start it a much earlier time but this Thursday it'll be late.

4057
06:13:52,926 --> 06:13:53,284
And

4058
06:13:53,284 --> 06:13:55,264
it'll be announced through LayerTwo Labs Twitter.

4059
06:13:56,824 --> 06:13:59,244
Anyone have any final thoughts to share before we wrap?

4060
06:14:13,702 --> 06:14:15,022
Going once, going twice.

4061
06:14:16,882 --> 06:14:18,602
Well, thanks to all the speakers on stage.

4062
06:14:18,982 --> 06:14:22,742
And again, once I close this space, anyone can listen to the whole thing recorded.

4063
06:14:23,302 --> 06:14:29,082
So I encourage anyone who missed Luke speaking earlier a few hours ago to just use the

4064
06:14:29,082 --> 06:14:32,202
recording to hear what he said, which was very

4065
06:14:32,361 --> 06:14:33,281
interesting and cool.

4066
06:14:35,521 --> 06:14:36,821
Have a great day, everyone.