Hello, DriveChainers, and welcome to today's Drivechain Twitter Spaces.
I'm Henry of LayerTwo Labs.
In our last Drivechain Twitter Spaces, we went on for six hours,
and it was quite an epic Drivechain Twitter Spaces.
Today, we're aiming to have a short one.
We'll just go for one hour.
I thought it might be nice to read an essay I recently posted on Substack
called Why I Support Drivechain for Bitcoin,
the Crypto Economic Potential of Peer-to-Peer Sidechains.
Here we go. Here's the overview section.
All Bitcoin sidechain pegs at present are federated by necessity.
Drivechain would change that by introducing advanced Bitcoin sidechains
called Drivechains that feature a peer-to-peer peg
From a social perspective,
Drivechains may become Bitcoin's exciting final frontier
for innovation, creativity, and technological inclusiveness,
ensuring that Bitcoin development never stops growing
to serve humanity's manifold demands with respect to blockchain technology.
In economic terms, the introduction of Drivechains
may lead to substantially higher value accrual
to Bitcoin and its block space,
which in turn would help maintain Bitcoin's status
as the cryptocurrency offering unsurpassed network effect
and economic security.
Drivechain may increase Bitcoin dominance.
Drivechains by design would serve as partitioned environments
on Bitcoin for innovative technologies
such as large blocks, peer-to-peer oracles,
strong fungibility, greater Turing completeness,
and other software.
The availability of Drivechains could induce a migration
of developers and users to Bitcoin,
catalyzing substantial value accrual to Bitcoin
and expanding its network effect.
Moreover, the availability of Drivechains
would deprive altcoin founders and promoters of the rationale
that it's hard or impossible to build on Bitcoin.
Drivechain may increase Bitcoin miner revenue.
Bitcoin in its current form arguably features
a problematic trend of low total transaction fee rate.
As a result, criticism of the long-term fee-reliant
economic security model of Bitcoin in its current form
is not entirely without merit.
However, if Drivechain adoption induces growth
of the trajectory of Bitcoin miner revenue
by fostering substantially higher transaction fees
from merged mind sidechains,
such criticism may become wholly untenable.
Well, that's the essay.
I'm finished reading it.
You can find it at my substack, henrymagrum.substack.com.
It's available for free.
I wrote it to summarize my personal view on Drivechain,
why I'm incredibly excited about it,
why I think it's going to have a transformative impact
in my expectation on Bitcoin
in terms of accelerating Bitcoinization
by increasing Bitcoin dominance, increasing Bitcoin value,
increasing Bitcoin miner revenue, which increases network security.
It's going to, I think, draw altcoin developers and users to Bitcoin
because the altcoin software can be copied
into a Bitcoin sidechain and the peg in, peg out mechanism
would be miner controlled instead of federated.
So what Drivechain does, it can be described different ways.
One way of describing it is it makes Bitcoin sidechains better
because it enables Bitcoin sidechains to feature
a miner controlled peg rather than a federated peg.
Right now, all Bitcoin sidechains use a federated peg.
Or I should say more precisely,
the Bitcoin sidechains that have a two-way peg for Bitcoin
will necessarily at this time feature a federated peg.
So understanding what Drivechain is all about
requires understanding the difference between a federated peg
and a miner controlled peg.
So these are some of the crypto-economic features of sidechains
that aren't present in other parts of economics.
So this is a novel area.
What Drivechain does is a crypto-economic innovation for Bitcoin
that increases Bitcoin's extensibility.
It increases Bitcoin's potential value accrual.
And also, it strengthens the options available
to arrange for merged mining of Bitcoin sidechains
by making people to use binary merged mining
instead of ordinary merged mining.
So there's a bunch of interesting features
that Drivechain brings to Bitcoin.
And I think that if it had been adopted years ago,
we would see perhaps billions of dollars
in Bitcoin sidechains today,
increasing Bitcoin's network effect and value.
But instead, that multitudinous sort of multi-layered design
has been present in Ethereum increasingly.
However, I think there's an opportunity for Bitcoin
to adopt this upgrade at this time
and begin to leverage Bitcoin's unparalleled network effect
to its advantage by platforming these softwares on sidechains
that will attract users.
For example, privacy sidechains, big block sidechains,
and smart contracting sidechains
could all be very successful on Bitcoin
instead of those softwares being used as altcoins,
where the value accrual and monetary premium of the altcoin
is in competition with Bitcoin
rather than part of Bitcoin's value.
So in the Drivechain design,
these softwares would be used by Bitcoiners
in a Bitcoin sidechain context
rather than Bitcoiners who want to use those softwares
resorting to using altcoins instead
or just not using those softwares at all.
So the softwares I'm talking about
include things like ring signatures on privacy altcoins
for confidentiality and fungibility,
as well as big blocks on the big block altcoins,
like Bitcoin Cash or others.
And then there's other technologies
like peer-to-peer oracle networks,
something that Augur and Chainlink and others
are trying to develop,
but I think that they could instead exist on Bitcoin in a sidechain.
And there's even a detailed proposal for that called HiveMind,
which the Drivechain co-author Paul Sztorc has designed
and is looking forward to launching as a Bitcoin sidechain
once Drivechain is enacted in the future.
If anyone listening would like to come up and ask a question,
they're free to.
They can just raise their hand.
We have a few people in the audience
who might want to come up,
so you're welcome to do that.
I'll continue with my reading of my essay though
until someone does.
The last part of the essay is a list of useful links.
We've got the drivechain.info website
so that's drivechain.info.
That is the website of the Drivechain project.
There's lots of resources there,
including the Drivechain Bitcoin node software
you can download,
which is a testnet.
And there's a great write-up on Drivechain by Fiatjaf,
the inventor of Nostr,
who is an emphatic supporter of Drivechain.
His write-up on Drivechain is at his website,
fiatjaf.com.
That's f-i-a-t-j-a-f.com
forward slash drivechain.html.
A great essay recently written by SuperTestNet,
a developer focused on Lightning and Nostr and other things,
is available and you can find a link to that on my sub stack.
All right, Maverick.
I will let you up to ask your question or comment.
Welcome to the stage, sir.
How's it going?
How's your Thursday going?
Hola, can you hear me?
I can.
Hi, welcome.
Nice to e-meet you.
I guess my question is,
I've been pretty convinced for a while.
I'm non-technical but
for the need for something
like Drivechain.
Could you describe,
I guess, who or what are the main,
I guess, political or technical blockers to getting the appropriate BIP
passed?
If those are clear or maybe they're unclear or they're obscure,
can you get a little more insight into who or what
and maybe a timeline on
what you guys would like to see
in terms of movement on that BIP
being included in
some type of soft fork or upgrade to Bitcoin?
Maverick, that's an awesome question.
I wonder many of those same things myself.
The
answer is
I just, I muted your mic while I'm answering just because there was some background noise.
But feel free to come off mic and jump back in if you'd like.
So you asked a bunch of cool questions like what are the blockers?
What is the political
reality right now with respect to Drivechain?
You know, political in the sense of like what's going on in the Bitcoin community in terms of Drivechain
interest
and energy and excitement
and support.
And then what's the timeline that we're looking at?
And what would the process look like for it's, you know, becoming part of Bitcoin
the way that in 2017 SegWit
became part of Bitcoin
and in 2021
Taproot became part of Bitcoin.
Both of those
soft fork upgrades to Bitcoin took
a significant amount of time in terms of months
of deliberation and fine-tuning.
So
with Drivechain, I think
we're looking potentially at
months or years,
but things could evolve
in a surprising and interesting way.
It really depends on
the level of interest within the community
in terms of, you know, people giving
support for it and devoting energy to
making it totally ready for implementation
and merge
in terms of the code.
So
there is work to be done.
People can get involved
and contribute
the ways to
figure out, you know, how to get more involved.
If it's something that really excites you a lot, like for me,
it's
the first Avenue is like to engage in the Twitter
in the Telegram group, the Drivechain Talk Telegram group.
And
and that's where the Drivechain leaders and thinkers
and fans hang out, share ideas.
And then there's also LayerTwo Labs, which I work for.
And
you know, we're hosting these spaces.
So it's awesome that you're here since you're curious and interested in the topic.
And then I would say as a point of optimism,
and then I would say as a point of optimism, Maverick,
just in response to your great question
about the timeline and the political
situation,
I would say that we have a lot of energy right now.
For example, at last year,
one significant Drivechain supporter, Adam Back of Blockstream,
you know, their excellent co-founder and CEO
appeared twice on stage
to talk about sidechains and Drivechains and related topics
with Paul Sztorc,
the Drivechain Bips co-author.
So he's interested in this topic.
Blockstream likes sidechains.
They have Liquid.
So they're interested in the topic of sidechains generally,
which Drivechain is part of that topic.
And
I feel like other
well-known thinkers,
I don't want to say leaders because, you know, Bitcoin is leaderless in a sense,
but other well-known thinkers
are interested in Drivechain, some of them.
So
I recently made a list, in fact,
of like all of the most well-known people
and I made a list.
There's 50 people in that list.
Many of them recognize names in Bitcoin,
including people like Peter McCormick, Guy Swan,
Nick Carter, Eric Wall, all kinds of people who are Bitcoin maxis or
kind of they have one foot in Bitcoin, one foot in crypto.
There's even some altcoiners who like Drivechain.
I mean, part of what Drivechain is all about
is unifying the entire crypto community onto Bitcoin.
So it's all about bringing all of the altcoiners
into Bitcoin to make Bitcoin's value
much higher and Bitcoin's user base much higher,
Bitcoin's miner security,
fee transaction like revenue much higher.
So it's
it's about making Bitcoin like the one-stop shop for everything in crypto,
you know,
all the good, all the bad, everything,
bringing it all to Bitcoin.
So Bitcoin is the,
has no competition.
Bitcoin is like the,
is like the crypto
that's dominant.
And that's what hyper-Bitcoinization would be about.
There'd be no competition,
even from fiat.
It would be like the only thing in town
and its value would be astronomical.
So
Drivechain's a part of that future story that could play out
and there are notable supporters.
So if you go to drivechain.info forward slash friends,
then you see the list that I made
which has these supporters and all of the support that I've shown is like
they're quotes.
Of support from tweets and I provide the link so you can see
the full context for each statement to make sure you understand,
you know,
it's not taken out of context.
I give the quote
with the source so everyone can read
all of the context for each statement.
But yeah, I would say Maverick,
like it's hard to know when exactly things will happen.
It's kind of like asking,
you know,
in the years before like marriage equality happened or
you know,
marijuana legalization happens in a state
or at the federal level.
It's like
it's hard to pinpoint when the one that will happen.
Like let's take for example,
marijuana legalization,
you know,
millions of Americans support that.
Right now,
I think 27
states.
So a majority of US states have legalized it at the state level
at some degree,
either a ticketable offense or totally legal,
you know,
in certain quantities and but yeah,
and yet we see at the federal level
after decades of advocacy for the
this for the decriminalization
of THC.
We still see at the federal level
criminalization on the books with the Drug Act from decades ago.
So at some point in the next couple of years,
perhaps during a second Biden administration or whatever,
there could be
finally,
you know,
this change
at the political level at the federal level and I think
drivechains kind of similar
where it's something many Bitcoiners want
but it requires
sufficient political will
to percolate through the community so that there's many
many more people like you
people who know what drivechain is
who are interested in it
who have a notion of what it's all about and why it's valuable
and who might say to a friend
I support this.
I think this will make Bitcoin better
when we have a vast majority of Bitcoiners saying that
then
the
I think that we would see
that that political will materialize
in terms of what's actually the code and what
what soft works are adopted and what aren't
so I'm optimistic in the near future hard to say exactly when
we'll actually see
the and then one other thing is that
and this is kind of a complicated and controversial
notion, but
some people might just
you know pontificate that if the flippening occurs
and Ethereum or Ethereum gets close to flipping Bitcoin by
market cap
some might say that
that would you know, perhaps threaten some Bitcoin
narratives
narratives like
that Bitcoin is always the best investment number go up,
you know that it's going to become the world's money.
It wouldn't be great if like something else had a larger
network effect that had a similar
you know
technological foundation and you know
being on blockchain and being a free market kind of project.
Of course Ethereum lacks many important things that Bitcoin
has like
you know anonymous founder
and sort of ethical,
you know origins
and you know what there is no ICO
there wasn't like marketing Satoshi just put it out there
in a very pure
way.
So and also Bitcoin was the first and nothing else will
ever be have that singular status in terms of the order
of cryptos.
So Bitcoin has a lot of advantages
and a great narrative, but
if it were to be flipped that wouldn't be helpful for its
narratives, right?
And it would certainly supercharge the energy within
the altcoin community
because then there'd be a race to see who can flip Ethereum.
Maybe it's going to be some other thing like Avalanche
Solana or whatever.
So it would be great if Bitcoin could maintain its status as
the one and only the biggest and the best and in the long
run regain a hundred percent dominance rather than where it
is now, which is lower
than the 50%.
So I think it'd be great if Bitcoin could could sustain
being number one.
It could if it could keep the market cap crown.
So to answer your question about politics, I do believe
that one factor that is potentially relevant
is if the coins
sort of like the threat of flipping continues to grow and
Ethereum gets to be like let's say 75% of Bitcoin's market
cap within a year or something like that
instead of being like half of Bitcoin's market cap where it
is now.
If that were to happen, I think possibly
that would motivate the community to be less
conservative.
And another way of putting that is to say that the Overton
window might widen
as we say in like philosophy like the Overton window
widening meaning
as you know, the
the acceptability of innovative and progressive ideas
becomes, you know, higher.
There's more tolerance for new ideas.
There's less tolerance for conservatism.
So maybe, you know, drivechain might in the eyes of many
people be the next soft fork, but they're also saying
some people might say, well, maybe we don't need a soft
fork.
Maybe we can just stay how we are until things really seem
to be necessary for change.
So I think that maybe if the flippening gets closer than
the
the appetite for something like drivechain might get higher.
But I really don't like that way of thinking.
I would much prefer
let me be clear.
I would much prefer that drivechain
is adopted
not
out of a desire to
make Bitcoin
more competitive.
I would much rather desire.
I would much rather prefer
that drivechain is adopted solely on the basis of a desire
to embrace innovation
on Bitcoin.
That, you know, the desire to have Bitcoin be a place for technological innovation, for building, you know, build on Bitcoin, develop new ideas, experiment, test.
And that's what drivechain allows. It allows for sidechains to exist and be created a new experimental technology that are these technologies aren't available on layer one Bitcoin.
And instead of having to go use an altcoin, you can use Bitcoin by using a sidechain on Bitcoin.
Now, of course, there's a there's a trust model which is different than layer one Bitcoin.
The fees may be lower or higher.
The security, you know, in most cases would be lower almost by necessity.
But the there still is a lot of value there to be created.
Right. Because like the security on the altcoin is even worse, probably in some cases, as the case may be, depending on the facts and circumstances, it's better that all of these users and developers build on Bitcoin rather than build on altcoins.
So the drivechain vision is the vision that we we bring in all that value and development and experimentation and value creation and accrual to Bitcoin.
So I'm optimistic that will happen.
And I would like for the motivation to be positive and to be about building and building, not to be worrying about the flippening.
But I do feel a realistic and honest answer to your question is that both of those factors are motivations for drivechain.
Some people like it because it helps Bitcoin compete with altcoins.
Others like it because they just like innovation.
They like positive thinking and innovating and they don't really care about what's going on outside of Bitcoin.
They want Bitcoin to be as best as it can be as a as a bedrock for innovation and value accrual and value creation.
So I like that optimistic vision, not the vision that's out of fear and competition, but rather the vision of building.
So that's it.
Have you seen an uptick in, because I would expect at least like there's been a little narrative shift with the whole ordinal ordeal for, you know, just use cases that are outside of the narrow, I guess the narrow imagination of certain like elements within Bitcoin, which I think they're valid.
But I think they've dropped the ball on some of these other, let's say, digitally native use cases.
Have you seen any uptick from like people like kind of coming into the drivechain community from that and seeing kind of like, hey, there's another there's this other use case that brings.
That's kind of silly, but brings, you know, fees to miners and kind of solidifies some of that that I guess that the security model going forward and having a greater percentage of your mining revenue coming from fees instead of coming from newly minted Bitcoin.
I was wondering if you have seen that or, you know, some type of shift.
And then also kind of going back in history, I'm glad to hear that Adam Back is, I guess, partial to towards drivechain.
I don't know how true this is, but just listening and reading the discussion about drivechain over the years, it seemed like the block stream kind of liquid.
Contingent was a roadblock, or maybe that was my misinterpretation, because I could see how maybe liquid or block stream could see drivechain as some type of competition for, you know, liquids revenue model, which I don't like.
I would I would be like, well, you should you guys should try to build your own drivechain.
But maybe I'd like for you to kind of correct me or or maybe, you know, agree that like there has been a I guess a narrative shift with that contingent and being a little less hostile towards drivechain.
So I guess it sounds like a separate question.
Those are those are all great questions.
The first was about ordinals and the second was about the kind of Bitcoin community history in terms of the role of blockstream in the adoption or non adoption of drivechain since drivechain was first created in 2015 or seven years in.
And had there been a shift in terms of like higher support from this, you know, very well known company within the Bitcoin space.
So regarding the ordinals, drivechain is very harmonious with the ordinals news that's been talked about for weeks, which is that people are doing NFTs on Bitcoin.
There is a drivechain that's planned, which would focus on NFTs and similar technology.
So this is called the BitAssets drivechain.
And this is inspired by Bitcoin's past with Counterparty and similar things.
But it would be much improved.
It would be like the greatest place to do NFTs on Bitcoin, as well as other technologies potentially like like stable stable coins.
And but regarding NFTs and ordinals, what the BitAssets drivechain would allow that ordinals don't is there are a few like technical advantages that would make people much happier with using BitAssets if drivechain were possible.
Right now, they could instead be doing ordinals on BitAssets and it would be much better in certain ways.
So the BitAssets sidechain and now I'm quoting from the drivechain website just to make sure I give you the right technical description.
You can find what I'm about to say, which is just a sentence or two from drivechain.info forward slash projects forward slash index dot html.
Or you can just go to drivechain.info and then click on the right hand menu where it says projects, sidechain projects, and you'll see six projects and others as well that are planned that are envisioned.
So once drivechain is adopted, these drivechains are likely to be launched in reality on on Bitcoin as drivechains, as you know, BIP300 and 301 sidechains.
So one of them is called BitAssets.
And so the problem with NFT projects in the past on Bitcoin is that they consumed layer one block space and they also confused retail users in terms of like attaching, you know, like images to specific satoshis.
It's like a complicated way of doing things.
Whereas with the BitAssets sidechain, it's better because the BitAssets sidechain would have its own blockchain, you know, a sidechain of Bitcoin and its own block space because that's how sidechains work in drivechain.
And it would use Bitcoin for all transaction fees, which makes clear that Bitcoin is money and that the the assets are separate so that assets aren't like attached to like some individual satoshi or whatnot.
The way Ordinals works, Ordinals is a little bit complicated.
It was, you know, it seems based on the discussions I've heard, it was sort of discovered as sort of like an exploit or a loophole in the way things are done.
Whereas the BitAssets approach is like very clearly aligned in every way economically and technically.
It's like very straightforward how things would be done, why they're done that way.
It's not like an exploit, you know, or at least one couldn't argue that it is.
And it doesn't compete with layer one block space to the degree that like Ordinals do.
So there's that advantage.
So, yeah, NFTs on Bitcoin will be supercharged with drivechain in specifically the BitAssets drivechain.
And so if drivechain is adopted and if the BitAssets drivechain is launched, then, you know, if everything in the best possible case, we see an enormous market for NFTs on that drivechain.
And that'd be really cool because NFTs are something that people like.
And there's some people who are very, very smart who think they're not just simply art, but they could be like part of people's kind of online experience in various ways.
And we want to enable that innovation to accrue value to Bitcoin.
So if it turns out that NFTs are like the big thing over the next 20 years, like growing humongously, you know, disproving all of the detractors and skeptics, we would we would want that value to accrue to Bitcoin and not to Ethereum.
You know, because Bitcoin is the offers a base layer that is incorruptibly, you know, simple, time tested, excellent in terms of its sort of its inception and the ethos of its inception.
It's cypherpunk heritage, kind of libertarian sort of objectives and origins.
That's what really draws me to it.
And I like how Bitcoin has that movement within it of politically minded kind of technological revolutionaries.
So, yeah, NFTs are made possible and we separate it from the base chain.
So unlike ordinals where people are debating, is this bad?
Is it good? And it's weighing down the layer one nodes with all this stuff they have to prune or not.
And there's discussions about all that.
So we have a separate block space for NFTs when we do it on a drivechain.
And that removes that kind of political friction.
And then your second question was about Blockstream.
It sounds like you've been in Bitcoin longer than I have, Maverick.
I came into Bitcoin about two years ago, roughly speaking, and I've been like extremely interested during part of that.
And I would say the history of Blockstream is something I've been learning about.
They have a great website with a lot of really good content.
They have brilliant people there like Greg who have been there or are there now.
So a lot of great names who've written many good essays like Greg Maxwell, Adam Back, Andrew Poultra and Luke Jass Jr.
You know, either is right now or has been a Blockstream member.
And he spoke in our last drivechain space to me and others, which was really great.
Very smart guy. And I feel that no matter what happened in the past and no matter what reasons there were for, you know, the support by any particular person for any project.
At this moment, it looks like things are getting very favorable within the community in terms of people gradually moving forward in terms of openly supporting drivechain.
And I respect totally anyone's hesitation because the history of Bitcoin, it seems there have been times of friction.
There have been times of community, you know, factions where, you know, some people weren't happy and they wanted big blocks or they wanted this or that.
So I understand the hesitation that some may have regarding changes.
And as long as we're doing well, which we are, right, we're number one, the biggest crypto.
So long as things are going well, some would say, why change?
Why fix a thing that's broken?
So, of course, the rationale for drivechain is very compelling.
And sometimes it makes sense to improve even when you're ahead, like when Tiger Woods, when he was like number one in the world by far, he announced that he was going to like significantly alter his swing of the golf club because he wanted to be even better.
So it's good to always be trying to be best.
I mean, Bitcoiners often say we're so early.
That's a mantra. We're so early.
We're so early. Well, yeah, that works both ways, right?
Like if you're running a race, you've taken three steps and you're in the lead.
That's not necessarily the beginning of a victory.
You could be running too fast and run out of energy and then you end up, you know, having a heart attack halfway through the race and then someone else wins.
So I think it's great for us to be scientific.
Ultimately, what drivechain is about is being scientific and rational and careful and intelligent and ambitious.
So what drivechains about is asking ourselves, what is the most compelling crypto economic design that a cryptocurrency can possibly have?
And then in the case of Bitcoin, how can we upgrade Bitcoin to reflect that optimal design?
So the optimal design is one that's going to have tremendous extensibility.
So that's what Adam Beck likes to use when he talks about Bitcoin.
Like I've transcribed some of his statements about not Bitcoin or drivechain just to be really like detail oriented in my appreciation of them.
So one of the words he uses sometimes is this notion of extensibility.
So if you look it up, it's a really great word.
The dictionary definition is within computing extensibility means the quality of being designed to allow the addition of new capabilities or functionality.
So the quote example is, quote, the software has been written from the ground up for extensibility and customization, end quote.
So that really speaks to me about drivechain.
This is all about enabling people to create other protocols, but use the Bitcoin unit of account and with a two way peg enable the demand on the sidechain to create demand for Bitcoin.
So if we have like a privacy sidechain and people demand the token on that sidechain, they have to like Bitcoin will be sent into the two way peg to generate the token on the sidechain.
So all demand for the token that's native on the drivechain will be demand for Bitcoin.
So it enables basically all the demand for altcoins to instead be demand for Bitcoin.
This sends Bitcoin's price to the moon, right?
Like right now, if we had this, we would have double the Bitcoin price or more because there would be so much like support and harmony among Bitcoin users, none of them leaving to do altcoins, but instead just staying and building on Bitcoin.
So, of course, it's not going to bring, you know, the nirvana.
We're still going to have people who use crypto assets for speculative purposes and this and that.
But, you know, Satoshi himself put poker code into Bitcoin's first software.
He had like put he had like call, raise, fold.
You can read the code and see where he wrote poker terms and the code to make an actual on chain poker situation like in Bitcoin.
So if anyone's like saying, oh, shit, coins are just a casino, it's just gambling.
Well, hello, the guy who made Bitcoin.
Like he wasn't a puritan, he was a he was a dude.
He liked to play poker like nothing's wrong with other people being free to have some fun and speculate on this or that, play a game.
He would have loved entities.
He would have loved that.
Yeah, go ahead.
That type of stuff. I mean, yeah, I'm totally on board.
Like speculation is a uniquely human activity.
Right. We're very forward focus people.
And yeah, I'm totally on board with that.
I understand people's criticisms about speculation, speculation being the only activity which, you know, like any activity, you drink too much water and that's bad for you, too.
So I get that point.
And, you know, poker and all those other stuff are usually great use cases for that stuff.
But what is it called?
I, I was really driven or I should say I didn't mean to say it that way, but I've always been very impressed with drivechain what Paul's done, because I think he very thoughtfully this isn't a question, just more of a statement, balanced a lot of different interests and philosophical orientations, because I do appreciate Bitcoin's conservatism.
And the risk of, you know, moving fast and breaking things.
But you also have this dual component within Bitcoin that is highly experimental and drivechain seems to thread the needle of balancing a lot of different interests while only really instituting, from what I can understand, a very small change at the protocol level.
Right. You're not really not turning Bitcoin into, you know, Ethereum or, you know, bolting on any other like odd features.
And almost all the, you know, dumb or exciting or experimental initiatives can be done on these separate networks that Bitcoiners can, you know, risk if they they can risk their Bitcoin if they choose to.
And if, you know, if they if they want to stay away from it completely and just huddle, they can do that, too.
So I was always just kind of confused for a while as like why this wasn't a and I know you can't speak to it, but it always baffled me why that wasn't a a bigger push.
And and like you said, you know, there's risk to doing things, but there's also risk to not doing things.
And I think it's been a big miss, in my opinion, that this hasn't been pushed through.
But I'm glad that Paul and yourself and others are are keeping at it.
And it sounds like, especially with guys like Adam Back and others talking a little more positively, that this actually could come a lot faster than people think.
And I I take your example of like how political things can seem out of the Overton window and things happen and all of a sudden it becomes a thing.
And it seems like drive change on that trajectory.
Anyways, end of my speech there.
That was a great speech.
I loved it. I agree with everything you said.
It's going to be very interesting to watch this matter evolve.
There are some times in life when very good ideas are not pursued by a person or a community that has the opportunity to pursue them.
People make mistakes all the time in life.
Since we're fallible, we have incomplete information biases, you know, personal sort of commitments and ideas.
So there's no guarantee that any group, like any person, the perfect thing and people could be interested in an idea that's good for the wrong reasons.
So.
Well, if you could, if you could diagnose, you know, just like your armchair psychologist as an armchair psychologist, you know, what what do you think was the what were the big mental blockers?
Or, you know, personal or, you know, what were the big blockers that kind of allowed this to, you know, just kind of like be put off to the side?
Because to me, this is like a bigger drivechain in my order of priorities, you know, and I have no I have no connection to Bitcoin Core, but like, you know, the drivechain is a much bigger deal than whatever SegWit brought in or even Taproot.
You know, that's just my, I guess, unqualified opinion, but it just seemed to me that the.
The risk of not doing something like that and the improvements that have been made outside of Bitcoin were like, hey, you know, if you want to continue to keep dominance, right, there are these other markets that have opened up and whether you like them or not, you know, people want to, yeah, they want to experiment and this was the perfect thing.
So, yeah, I don't know. I don't know if you have any thoughts on what was the the psychological or technical blockers.
One of the concerns is that miners will be malfeasant, there is this there's this concern, there's a concern that miners can't be trusted, and this is an impression, whether accurate or not, that arose in the wake of the block size war of 2015 to 2017.
Drivechain, because of its technological design, you know, involves the miners and it involves them in a significant way.
So if one has an aversion to miners generally, if one's outlook on Bitcoin is that the nodes are supreme and the miners are secondary and in some cases can't be trusted, then this attitude about Bitcoin, whether right or wrong, would lead to perhaps a lesser level of enthusiasm for drivechain.
A lesser level of belief that drivechains would both potentially accrue enormous value and be sustainable in terms of having an incentive compatible design.
Incentive compatibility, as you know, refers to the notion that a crypto economic system will produce a value and accrue value, even despite the fact that the participants are in a peer to peer, you know, blockchain arrangement, mutually distrusting, potentially anonymous, potentially and self-interested, potentially, despite those factors in the design.
And the assumptions there, there is an emergent value and incentive compatibility.
And some people have aversion to the idea that if there is greater focus on miners being relied upon to do the right thing, then the system wouldn't be sustainable.
Of course, in drivechain, all the evidence, in my view, shows that there would be sustained value in the drivechains, the money would not be stolen out of the hashrate escrow, there wouldn't be this miner theft.
There's a great essay by John Light of Sovereign, who is an expert on zero knowledge, proofs and roll ups and other related, you know, cutting edge things in crypto.
And he wrote two great blog posts about whether or not the hypothesis of drivechain critics is correct, that the miners are likely to rob the hashrate escrow of the Bitcoin held there for the miners greedy, you know, pursuit of profit.
So I think the miners are like a restaurateur where they don't want to rob the customers, they want the customers to come back so much that the restaurant can expand and build a second floor and a third floor and have customers endlessly coming in.
And the idea that the restaurant one day would decide to just walk into the restaurant and say, hey, everyone, you know, give us your money, and then they would get all the money out of the wallets and purses, and then they would never again have a customer ever, but they would have gotten a one off profit, you know, windfall, and they wouldn't have had to serve any food, they could just get the money.
So the drivechain skeptics think that the drivechain design, some of the skeptics think that the miners will just steal from the hashrate escrow, these people, in many cases, probably aren't aware that the theft would involve a number of months, and would be immediately apparent from the beginning that it began from the first second of the theft, in my understanding, the theft would be known.
And it would be known that over 51% of all the Bitcoin hashrate is being deployed for the purpose of this malfeasant behavior.
The critics also probably aren't aware that the very possibility of the miners, you know, control over the hashrate escrow in that way, is actually a part of the intended design of drivechain, because it would not be malfeasant for the miners to do that action, if the maintenance of the drivechain were not in the best interests of the Bitcoin community.
If the Bitcoin community determined that a drivechain needed to discontinue, to prevent its further threat of somehow lowering the value of Bitcoin or interfering with another drivechain, then the miners terminating the drivechain would be the community's will expressed through the miners.
So the fact that the miners have some control over the hashrate escrow has benefits in certain situations.
So the critics probably aren't aware of that.
And if the critics are aware of all that, and their only criticism is that the miners will steal in their expectation, the critics then are resorting to a kind of anti-capitalist mentality, in which the critics believe that it would not be right for the Bitcoin users to have the option to use a drivechain because the drivechain would be unsafe.
But of course, that's no different in nature than no-coiners saying that Bitcoin is fundamentally insecure, that it could have a bug, and therefore the government should ban it to stop all this Bitcoining.
And the Bitcoiners respond, of course, with, well, let the free market decide.
Well, I think that the cryptocurrency of the future that will accrue the most value, have the largest network effect, and in the end become the world's base layer of all the money, that crypto is going to be one that has the maximum extensibility and allows its users to do whatever they want on top of the system in a way that allows the system to accrue value from the user's demands and preferences.
Not a system that has a narrow mandate.
Some Bitcoiners would say, in complete contradiction of Satoshi's own writings and behavior, that some Bitcoiners might say, well, Bitcoin is only for money.
But of course, that ignores the fact that money is a heterogeneous economic category.
There is multiple kinds of money.
There's blockchain money, which is very private, and that's what's being used more and more in the dark markets instead of Bitcoin.
People want to use Monero or Zcash because it's so private.
They don't want to be traced.
And with Bitcoin, if you're very sophisticated, you can probably do it anonymously fully.
But I think my understanding is that with Monero, let's just be honest.
Let's just tell the truth.
Monero probably is more private than Bitcoin.
For any level of sophistication of the user, if you're using a privacy-focused altcoin, you're probably getting more privacy because that's what they're prioritizing.
And some of the Bitcoiners might respond, well, it's just a speculative altcoin and that's all there is to it.
They just deny.
They're in denial of the idea that some technology allows for greater privacy.
And the same applies to the big blocks.
Big blocks have some potential use case, right?
Lower decentralization, meaning fewer nodes, more expensive nodes, but lower fees, too.
So the Bitcoiners will say, well, there's lightning.
That'll give the low fees.
So basically, it's best if Bitcoiners have more choices, more options.
That's what capitalism is all about.
That's why we have very rich, free markets, because the government isn't making too many decisions for people.
And the fewer, the less regulation, the more consumer choice there is, the more value accrual and entrepreneurial, competitive, free market process value accrual occurs when everyone can just do whatever they want.
And that is kind of the drivechain mentality.
It's more capitalistic, in my opinion.
It's more economics oriented.
It's not as much sort of this narrower kind of cryptographic security is the only level of security mindset.
There's some people who want things to be absolutely secure.
Like there's this great tweet from Adam Back from 2019 where he writes, and I'm now quoting from memory so I could have it a little bit wrong.
But he tweeted, in Bitcoin, the signatures are cryptographically secured and therefore asymmetrically secure.
Signatures are asymmetrically secure.
But transaction finality is unfortunately not.
And he used the word unfortunately.
I thought that was telling.
It was a very brilliant tweet, very intelligent tweet.
And it affirmed the fact that in Bitcoin, like your signatures are very secure.
The miners can't just like rob, even if they have a powerful computer, they can't rob you of your Bitcoin on layer one.
But transaction finality does depend on an economic.
Majority of hash rate is not being used as a hostile attack vector.
So there is this issue in Bitcoin, the threat of like a hostile miner having a majority of hash rate and blocking transactions.
You jump in. I'm just going on.
I think that was a good breakdown of the kind of the psychology and reasoning that I've seen.
Kind of this, I understand not trusting the miners, but there's this like insistence on dreaming up these malicious miners that are completely and totally irrational and are just looking to steal people's shit.
And a lot of the same arguments that I and I think Paul had pointed this out for a while, like, you know, like you were saying, they are looking for this perfect security that doesn't even exist within the layer one itself.
Right. That is highly reliant upon, let's say, economic self-interest and assumptions for security.
And it seems to work pretty well.
I guess the other I guess this would be the last question.
You brought up John Light and he's been awesome.
I've learned a lot from him over the years, but he, you know, just I don't I don't know.
I'm just, you know, seeing some of the stuff that he's published over the over the years.
Have you guys had have you talked to have you and Paul and later to talk to him about his research with validity roll ups and potentially doing like, I guess, I guess you'd call it a validity drivechain on.
Yeah, that that would settle transactions to Bitcoin.
Has that has that come up, I guess, within his research and your your efforts to get people to build a bunch of different drivechains?
Yeah, John appeared on some Twitter spaces that we hosted like a month ago or maybe it was less than that, like a couple of weeks ago.
So if you DM me, I will try to find them for you.
It wouldn't be hard for me to do that.
So please feel free to just send a DM and I'll get you that because you're curious about that.
But I can say just in brief that I have a quote because it's in the friends of drivechain spreadsheet that I made all these like quotes from people who have a favorable attitude about drivechain and have shared it publicly.
You know, people of who have a well-known name like John Light.
So I have the quote in front of me.
What he said in the Twitter spaces to me was, quote, I would like to see both validity roll ups and drivechains offered as options for people on Bitcoin layer one.
And then I have a dot, dot, dot.
So he said some other stuff.
And then he said the following.
I think it would make sense to do drivechains first rather than wait.
I think it would make sense to do drivechains first rather than wait until validity roll ups are ready.
So I think it's very sensible.
I mean, he is so much more sophisticated than I'll ever be.
But I get what he's saying, I believe, which is that like they're both cool and maybe validity roll ups are even better.
However, if drivechains can be ready in a year from today and validity roll ups can be ready in 10 years from today, you know, to meet like the Bitcoiners appetite for certainty and conservatism, then of course.
And also I think he or someone has said that it's very possible that no, this wasn't him, but someone said that Paul said that if we had done drivechain taproot would have come faster to Bitcoin because we could have tested it first on a drivechain.
So I think that John might be supportive of that notion.
People who love validity roll ups could do it on a drivechain.
They wouldn't have to go to an altcoin.
And then they could experience it within the Bitcoin ecosystem in a safer partitioned context because that's what drivechains are.
They're by design partitioned, meaning that if they fail, it doesn't cause total system failure.
It just causes the failure of the drivechain.
So, yeah, things can come faster to layer one if they're if they're very successful on the drivechain.
That's kind of what drivechain does is it allows for like a multitude of developers to build stuff on top of Bitcoin on a layer two.
And if it's very, very successful and has like, you know, let's say it grows and grows to be like, you know, 60 percent of the value of Bitcoin is like in this drivechain.
Then the community naturally would say, well, this this technology is obviously very demanded and very successful.
Perhaps we should make it part of Bitcoin layer one.
And that way the base layer can benefit from that.
And that way the security model is the base layer security model.
Right. So it's it's a way of testing things.
I think as Paul describes it, I think I'm not I think I'm I'm not sure if I'm applying these ideas.
Right. But I think he he says it allows for Bitcoin development.
Instead of being primarily deliberative in nature, it would become more so competitive in the sense that like the people developing one drivechain, like the privacy drivechain.
If they're really into that, they develop that accrues a ton of value more than other drivechains.
And maybe that technology could eventually come to Bitcoin layer one.
So it allows for a kind of developer competition, which is a superior and more capitalistic method for for understanding the world than mere deliberation.
Like deliberation is the way the government works.
Right. We think and think and think and then we do something.
Whereas competition, that's where there's price signals. That's where there's property at stake.
So it's better if we have the developers compete rather than developers just have to, like, gain status in the community and then politically achieve their implementation.
A lot of a lot of the status gains are, you know, from, I don't know, you know, like just broadcasting your pure thoughts.
Right. Where a lot of the status games before very early on in Bitcoin were very, like, technical and what you could build.
And then it became a little more like, all right, who's going to repeat, you know, who's going to repeat the lines in a pithier way kind of thing.
And I love that. Let's see. Drivechain is something that puts experimentation back into Bitcoin.
And then, like you said before, you have these, let's say, live test nets for L1 Bitcoin that these immature technologies and ways of doing things could be incorporated later after we have loads and loads of empirical data and experience and whatnot.
But, yeah, so big supporter. And thanks for taking the time to answer questions.
Oh, that's my pleasure.
Are you, if you don't mind, like you said, you just got into Bitcoin a couple of years ago with Paul. Could you share what you were working on before where your headspace was?
Sure. I'd be happy to. So my first experience in crypto came after nine years on Wall Street. I was a compliance focused professional with a law degree working at three different investment management firms.
And then I got really excited about Bitcoin and in crypto generally at the time. And I went to work at a crypto service provider platform, BlockFi. After two years at BlockFi, I had made a lot of friends. I had learned a lot about crypto.
My ideas on crypto had evolved a lot. And I had become at that time obsessed with drivechain and a believer. I had become a believer that Bitcoin had potential to regain 100 percent dominance and fulfill the hopes of those who would like to see Bitcoinization of the monetary system globally.
So. Among various options I had in the crypto space, I chose to go to a Bitcoin only software development firm, LayerTwo Labs, a very innovative and special firm within the Bitcoin space, in my view. And here I am.
So I've had one crypto experience before this, and I reflected and decided to go into a Bitcoin focused company and help it succeed. And they needed someone who could do both a bit of marketing as well as a bit of law.
So I'm thrilled to have this dual hat role as both legal and, you know, a more public kind of facing role of running these Twitter spaces and also helping out with like, you know, I put things to the Reddit and we're planning on having a Discord and we already have a great drivechain talk Telegram group.
And the things that we're doing will just continue to grow and become more and more exciting. There's going to be more and more people involved. It's going to be bigger and bigger. And I'm very excited about it. I'm thrilled to be a part of it.
I don't have like 10 years of experience in crypto. Some people have like all this many years of experience. They know everyone. I'm a fresh face to some extent. And I love to learn about the history, to learn from people like you who have been following it for much longer than I have. And it's valuable to hear your perspectives.
Every person counts. Every bit of conversation in the Bitcoin community is meaningful. People go to meetups. They talk. Things like this spread from one person to another at a time.
It's very emergent, like grassroots.
And then at some point, you know, we have people getting up on stage, who everyone knows, and they're supporting it.
And then it's reached the ultimate level of support.
And then finally it gets over the finish line and we find out whether it can, you know, deliver in reality, not just in testing.
And there's never a perfect certainty in life.
Who knows what the future holds?
I'm very personally much of like a total Kool-Aid drinking believer in this project.
Like, I think about it so much I have trouble falling asleep at night.
I talk about it.
That's good. That means you're doing that means you're doing the right thing.
Yeah. Like I talk about it incessantly to friends and family.
This is a multi-trillion dollar idea in the sense that like blockchain of money is going to become, it's going to re-establish free market money in the world.
Like we went to the era of fiat and we're going to turn it into free market money, digital gold.
Right. But the interesting thing is that what sidechains does is it allows for digital gold to be not the only value proposition of blockchain.
So the notion that it's like this quote, like Bitcoin, not blockchain, which is the title of a famous like Parker Lewis essay blog post.
It's a great essay, but it's just obviously wrong.
Look, at what point are we all going to recognize the truth, which is that it's not just about digital gold.
People want to do all kinds of things on blockchain and even money itself.
As I said earlier, there could be money that's more scalable or that's more private.
So money itself is a heterogeneous category.
For example, Bitcoin, like a layer one Bitcoin transaction doesn't have the exact same guarantees as a lightning transaction.
They're different. Lightning settles instantly and has lower fees, but has a different user experience, has a different trust model.
Right. Like the channels aren't the same thing as like sending Bitcoin on layer one.
So already people are aware that Bitcoin has like different use cases, different models of user experience.
And the truth is that what's what's possible on blockchain is much more expansive, varied than what this narrow concept has.
So I think for Drivechain to succeed, we have to have a revision of narratives in the community towards appreciating the multitudinous applications that are possible in a sustainable and valuable way on blockchain, which is exactly what Satoshi himself said about BitDNS.
He said in the future, all the networks in the world will be merged mine with Bitcoin.
The phrase all the networks in the world refers to many blockchains, not just one.
It refers to maybe a dozen or more.
Like I mean, all the networks in the world.
It sounds like he's referring to a multitude of things.
Go ahead.
I wanted to get your take on this.
I think what happens, just going off of your point about digital gold and how that's limiting.
I think part of what happens is people get boxed in or captured by their the metaphors they're using to try to describe something to people.
And and then they start trying to fit that, like make the technology fit their metaphor, where before they were just trying to translate what this thing is that no one really knows into something, you know, grabbing on to something that
other people understand.
So I think what what's happened a lot in the Bitcoin sphere is that, you know, it's so new and groundbreaking.
It's it's been very, very difficult to describe what it is to people simply.
Right. And kind of give them a coherent, pithy, you know, nice answer.
And digital gold was like the and I agree it was it is and was the like the most tangible, real metaphor that made sense for Bitcoin.
But it got to the point, I'd say, over the last four or five years where people were just completely stuck in that frame and were needlessly standing in front of the technology itself to keep it within that metaphor.
If that if that makes sense.
Right. Like initially, early on, a lot of these a lot of the thoughts you're having were very, very prevalent.
And then all of a sudden they kind of just got whipped away.
And I think part of that happened.
I don't know if this is like a concept, but like metaphor capture or you just have this.
Yeah, you have this new phenomenon and you're searching for things that it's kind of like.
And then once you settle on what it's kind of like, you know, you kind of just sit on that and don't you don't really get to the essence of what this thing is.
And this thing is much more than, quote unquote, digital gold.
And then on your your Parker Lewis con, I they've put out I love the guys on chain and they put up some great.
Something fantastic pieces that I like agree with, it's like I'm there like 95 percent, but they often like Parker's pieces and I've never had the chance to talk to him about it, but I like I don't know how much he knows or doesn't know.
Like he seems to know a lot about 20th century monetary history, but there seems to be a gap where like there's this assumption by Bitcoin is that there's always ever only been like one money at any given time.
Right. And only one form of it.
And like you were saying, money's a very heterogeneous thing.
And I literally can't find a a time in history where there was literally just one thing like everyone used gold, you know, like, yes, people use gold over over time.
But there are a lot of different monetary media, you know, bronze, silver, silk, all types of paper media, just ledgers in general.
So I don't know how that became a thing in the Bitcoin community.
I think those are two things that have really held it back for the narrative.
It's the metaphor capture.
And then thinking that somehow I don't know how this came into people's heads that, you know, there's only one only one thing can win and everything else dies.
And it literally has never happened in history.
And the history of the crypto markets have played out in such a way to show that, like, no, the the market usually likes a few different options.
And there are power laws at work.
That's I think people are confusing power laws for like winner take all, you know, and those are very different things.
You hardly ever see winner take all in anything.
It's usually some type of power law.
Like you don't see true equality and you don't see just winner take all completely.
It's usually like, all right, you have a few winners and then like a really long tail of, let's say, moderate winners to, let's say, you know, barely winning or losing.
But I guess my two key points is like this notion that it's inevitable and there's only one that one money that everyone just converges on.
And then the metaphor capture of like, all right, we're trying to explain this thing and we're going to settle on this.
And then people that yeah.
And then it just becomes a thing where you're trying to fit the the new thing into an old box.
It just doesn't make sense.
I agree so much with the spirit of everything you just said.
I'd like to give you my spin on some of the things in case you find it interesting.
So I do believe there will be one money in the world in the following sense.
I think there will be one unit of account.
So it's possible for Bitcoin through drivechain to offer varied models of privacy, scalability and security.
However, among the drivechains and the layer one, the unit of account would still be Bitcoin.
So the phrase I like to use, I'm not sure if this phrase is used among other drivechain proponents, is the term synthetic Bitcoin to refer to the unit of account on the drivechains.
So as you understand, you have Bitcoin on layer one, you send it into the two way peg, you get the drivechain token.
It's a synthetic Bitcoin, meaning.
That it is approximately exactly the same value of a Bitcoin on the market because it's redeemable for Bitcoin through the two way peg, but it has a different software feature set.
So it might have the software features of Zcash, but it has a unit of account that's almost identical to Bitcoin in terms of like.
Because you can exchange it for layer one Bitcoin, it's going to trade one for one with Bitcoin.
So when we say that there'll be one money in the future because of network effects, I think we're right.
So the Bitcoiners are right about how there'll be one money in the future insofar as the world achieves a reduction in political jurisdiction friction.
And instead, there's like one money, like if the whole world were free market, there would be only one money.
But would that unit of account be a fiat money?
I don't think so because of the trust model of inflation being a risk.
So with Bitcoin, there's stability, the monetary policy, and therefore I think it would be the unit of account being non-inflationary, non-deflationary either.
It's just in the sense of deflation I prefer, which is that there is a fixed quantity.
Some can be lost, but you can't like create more of it outside of the algorithmic programmatic inflation schedule.
And if any is lost, that doesn't harm anybody else who doesn't lose their Bitcoin.
So the circulating supply has an extremely predictable model of distribution and quantity.
And what I'm trying to say here is that on the one hand, you totally grok what I said about multitudes of features and like people wanting to convert it into a more scalable or more private or more expressive in terms of the code format.
So that's what drivechain effectuates.
But the native token on the drivechain is a synthetic Bitcoin.
And for that reason, it increases Bitcoin's network effect because there people will probably refer to the Bitcoin on the sidechain as like as like a synthetic Bitcoin in the same way that people know that like, you know, a certificate for gold, you know, trades at roughly the same value as gold, depending on whether the issuer is reliable.
When the Bitcoin miners are the issuer or the controller, rather of the drivechain tokens, it's trustless is going to get right.
There's no body that's probably more trustworthy than them.
Right. There's billions of dollars at stake and that'll only get bigger.
There's a massive profit motive.
There's miners all over the world.
And so my point is that I didn't I didn't want you to go down that path because it sounded like you were saying there is going to be a multi coin, multi money feature.
I think there's only one money in the future.
And with drivechain, it's likely in my expectation that it'll be Bitcoin and people will have the one Bitcoin if that's the price of something like like, for example, suppose you want to buy something.
In a market where the things are very low cost, so you're buying something where people want to trade in that marketplace with a very scalable Bitcoin, like a Bitcoin Cash type of scalability, larger blocks.
That marketplace would have all of its prices and would say this costs five, you know.
This costs five tokens, but the unit of account is going to be the drivechain token for the large block drivechain, but all you have to do is convert your Bitcoin into that.
Into that version of Bitcoin, that synthetic Bitcoin with more scalability and then buy the stuff you want.
If it's low, if it's like, you know, a small amount, people would use like a very scalable drivechain token, but then they can easily convert back to layer one Bitcoin if they wanted to.
So they're still going to be thinking of Bitcoin terms like unit of account, like one Bitcoin.
So that unit of account network effect will be very large.
I like that nuance of breaking down, like basically Bitcoin, the long game.
And I do agree as it becoming the sole kind of dominant unit of account, most reliable.
Right. Once you have that, especially once you have that 21 million limit reached.
Right. You have a what is it called?
Something that doesn't change a constant rate and constants are extremely important, you know, to build any type of like strong edifice, either scientifically or philosophically, economically.
So I do agree on that point.
I guess my point was like there's lots of different, let's say, means of payments.
Right. And different stores of value out there.
And and that not not that my multi, I guess the vision that I'm bringing up is that my multi coin future isn't a like there's a thousand crypto currencies that are actually used as currencies.
But just just my like reading of the historical record, it's it's we shouldn't be surprised that there are two or three dominant, you know, global means of payment.
Right. Or something of that effect.
But I do I do agree with your nuance of like something becoming the the standard for for measurement.
And then I guess what was the other point I was going to bring up?
So network effects.
So, you know, I don't think anyone disagrees with the the power of network effects, but what does shave away at that and what crypto really shaves away at in terms of network effects is through like really on demand swaps.
Right. Being able to swap in and out of any any asset around the world really like eats away at any type of like advantage that networks network effects have.
So that's what I think ultimately will like takes away from the overarching like complete Bitcoin dominance is just like being able to move on is extremely easy.
Right. It's it's it's not it's it's very hard to lock someone into it.
And then, yeah, I guess that was the only I guess nuance I wanted to add to that.
I see the low switching costs as not a barrier to network effect hegemony, but instead the opposite.
If people can easily switch, they'll switch to the best thing.
But I but my my point is this like the the I don't know, the the will to like that's a stranger valuation is very strong, you know, people there's always going to be a group that wants to go against the status quo, you know, like I don't I don't see this like pure I do see Bitcoin dominance being, you know, being or Bitcoin being dominant, you know,
into the like, you know, next couple of decades, century, whatnot.
But even if drivechain is instituted, which I think it should be, there's still going to be demand for alternative like monies, economic systems and means of payment.
And the switching costs being so low and so frictionless make that, yeah, the plausibility of like complete Bitcoinization are a pipe dream.
I do think dominating the power law is within the realm of possibilities, especially with something like drivechain.
But, you know, I could be wrong in that.
It just like from what I've seen in crypto and then over time, like switching costs are a big deal to like alleviating lock in.
And like you were saying, you know, we think that Bitcoin is the best.
But, you know, there's very passionate, smart people, you know, either in fiat or, you know, Ethereum or whatnot that will, you know, they're just oriented different and value different things.
I used to be more in your camp, but I've become a little more.
Yeah, less confident in that, like pronounce.
Maybe you're right.
So I understand what you're saying, I think.
But imagine there's a privacy coin that has a market cap of one billion.
And imagine that drivechain is adopted and one percent of Bitcoiners send their Bitcoin into the drivechain, which has a clone of the software that exists in the altcoin.
What we would have at that moment is a four billion dollar drivechain version of the exact same software that's in the altcoin, which has a market cap of one billion in our hypothetical.
Now, imagine you're a user who's trying to decide, should I?
If I'm going to open up a business, should I support this altcoin, should I try to have people pay me in the altcoin?
Or should I try to have people pay me in the drivechain version, which has identical software, it's just as private, but it has a four billion dollar market cap instead of a one billion.
So we can assume that in this hypothetical, let's just assume that the fee rate on the altcoin is one fourth the fee rate on the drivechain.
So the security in terms of the finality of transactions is greater on the drivechain version.
The privacy is identically good.
And the drivechain version has a unit of account, which is a synthetic Bitcoin.
So you're pricing things effectively in Bitcoin, economically speaking, because the drivechain unit of account is a synthetic Bitcoin redeemable for Bitcoin.
So in various ways, the drivechain version is strictly better from a user experience.
So the only reason someone would prefer the altcoin is if they have a sentimental attachment to it, a non-economic preference for the altcoin over using the drivechain version.
So if they choose the altcoin version, they're going to have they're going to be using a token which has a free floating exchange rate relative to Bitcoin's value.
That exchange rate could be worse over time.
There could be a fall in the in the real purchasing power of that altcoin relative to its.
Clone, which is the drivechain version that uses a synthetic Bitcoin with Bitcoin's unparalleled assurance of purchasing power.
Now, of course, Bitcoin can decline in real terms, but everyone kind of knows today that the chances that Bitcoin goes to zero are probably lower than any other crypto asset.
And certainly they're lower than something that has less than one hundredth the value of Bitcoin.
Bitcoin right now is like roughly half a trillion dollars.
In our hypothetical, the altcoin had a one billion dollar valuation, which is a reasonable assumption.
I mean, a reasonable hypothetical, because we're talking about a privacy coin.
They have value of like one to three billion.
Last time I checked, like Monero and Zcash, they're like each one or two billion dollars.
Roughly, that looks like a month ago.
So in our hypothetical, Maverick, you were saying maybe the future is multi coined.
Maybe people will just launch other things and do other things for different reasons.
But I'm telling you, people are motivated very much by profit.
That's why they all go to work.
They want profit.
Right. Most people have a job.
They care about economics.
They care about not losing money, not losing value, not wasting their time.
These are all economic inspirations.
People will, for these same reasons, prefer the drivechain token, which is a clone of the software on the altcoin.
So they have identical privacy guarantees, except that in our hypothetical, the drivechain version has one percent of Bitcoin's market cap.
So it's four billion.
So it's bigger and therefore better in terms of security and stability of purchasing power.
It's just better. There's not going to be any privacy coins.
Maybe if drivechains adopted and the drivechain privacy drivechain is successful, it could have like it could just it could just magnetize all the users out of the altcoins because they're going to be smaller than the drivechain version because it's going to have Bitcoin's unit of account, which is stable.
People want that stability, especially the privacy people.
I think I just suspect they're not trying to speculate.
They're trying to have anonymous transactions.
They really care about privacy so much.
But once they're one thing they want, the best of both worlds, they want Bitcoin's unit of account with their privacy software.
And that's what drivechain gives you.
It gives you the economics of Bitcoin with the software features of the altcoin.
So that's like the best of all worlds.
I agree.
I like the privacy angle, another angle.
And I don't know. Yeah, maybe you guys have talked about this in another space.
But from what I know about, let's say, global reserve currencies over the last couple hundred years, like pretty much all of them, you know, they were issued by countries.
But what made a lot of them or part of what makes them powerful in their use case powerful is that they were used in capital formation and debt and like equity markets.
And I think Bitcoin is missed out on that and something that Ethereum has kind of done in like a pseudo way.
But it would be cool to have some type of, I don't know how possible this is, but some type of drivechain with some type of security token focus where, you know, companies or, you know, even individuals or organizations can have some type of, let's say, Bitcoin native platform to
you know, issue debt, issue equity and do it on Bitcoin rails.
And even with, you know, maybe a synthetic Bitcoin or even Bitcoin itself.
I don't know if that has come up at all, but I think that's something that Bitcoin is missing and that almost every other global reserve currency has had, you know, like the Dutch, the British, the U.S.
all had very, very deep liquid capital markets that, you know, you had to you had to use the USD or the pound or the Dutch counterpart as, you know, a method of payment or a method of allocating capital.
Well, the largest drivechain of the future might be the ETH side, which is a clone of Ethereum.
And the reason why I say might is that we don't want to commit the sin of illogical reasoning where we assume that if we change one variable, everything else stays the same.
Right. The world is extremely complicated and there's no way to project into the future that simply because the largest altcoin today is Ethereum, therefore the largest drivechain would be a clone of Ethereum.
However, it's not unreasonable to expect that that is a possibility in the future.
So what you're talking about is like blockchain based securities, blockchain based debt, other other arrangements that involve an expressive like software platform.
So that would be perhaps like the Ethereum drivechain.
So, yeah, that's one of the ones.
Yeah, I didn't know. I didn't know you made that.
Is that like, is there a testnet for that already?
Oh, wow.
It's up and running.
Yeah, so the testnet currently has Zcash clone.
And I'm not sure, but I think they like removed the like developer tax that like is paid to like like they cloned it, but I'm not sure.
Maybe I should actually just figure out that exactly because I'm still getting up to speed on some of these particular drivechain implementations in the testnet and their exact specifics.
But, yeah, there's the Zcash and there's also the ETH side and they're up and running and people can like use them and interact with them and build on them.
To my understanding, you're probably more technical than I am.
So you can like get into that.
And then next time we chat, you can teach me about it.
I assure you, I assure you I'm not. We're probably on the same level.
But yeah, I mean, the main idea is that like maybe in the future, there'll be just no altcoins and everyone will just use drivechains.
I know it sounds like a dream, right? But sometimes such things can occur.
And the reason why they would occur is not because of just arbitrary future circumstances, but rather the market forces that I described earlier, such as people's preference to use software not available on Bitcoin layer one, but to still enjoy the use of a synthetic Bitcoin from an economic user experience standpoint.
So that's the genius of drivechain is it gives you Bitcoin's economics.
In other words, one way of putting it that's kind of cool is it maintains the supply cap of 21 million while unlocking infinite variation of software.
So the way that it maintains the supply cap of 21 million, or we could say it this way, it maintains Bitcoin's quantity, but increases the quality possibilities for Bitcoin, different quality.
So when you go into a drivechain, the issuance of the drivechain tokens is limited strictly to the collection of Bitcoin in the hash rate escrow.
And when I talk about like the limited issuance of the drivechain tokens, I'm talking about the native currency, the essential synthetic Bitcoin.
There, of course, could be security tokens like you talked about on such a thing as ETH side, but on some drivechains like a privacy drivechain, there would probably just be the synthetic Bitcoin that has the Zcash features.
And the cool thing is that the issuance of the drivechain token is limited to the collection of Bitcoin in the hash rate escrow such that the circulating supply of Bitcoin is maintained at 21 million.
In other words, there's like, let's say, just to make it very simple, let's just say in a hypothetical future state, there's 21 million Bitcoin that have been issued.
One million have been sent to a particular hash rate escrow, causing there to be one million units of synthetic Bitcoin on the drivechain.
And then when the users are finished using the drivechain, they send those one million units back to layer one Bitcoin, and then there's no more units on the drivechain.
And now the circulating supply is the same, 21 million, but they're all on layer one again.
So that's how it works is like I'm considering layer one Bitcoin in a hash rate escrow to not be quote unquote circulating.
And I feel like that's a reasonable claim to make because that description, it correctly assumes that they're not being spent on goods and services because they're in the hash rate escrow.
So they're participating in this feature that is part of the whole design.
So that's how I see it.
And that's something Paul or someone wrote, which is that drivechain is about maintaining the supply cap, but increasing the quality, the qualities that Bitcoin can have.
And this is something Greg Maxwell, I think, celebrated like years ago in some talk in 2015.
He talked about the trustless two way peg being the future development that would enhance the potential for Bitcoin to have more experimental capabilities, innovation, value accrual to the blockchain.
And that's what Liquid has been.
It's been a great effort to have the best sidechain possible at the time.
And I think the next step forward for these sidechain enthusiasts would be drivechain, which I think would elevate everyone in the space, including those who have worked on Liquid and RSK and other sidechains.
It would give all these developers and users a stronger system to use and they would see much greater use and they would be able to develop technologies that would bring them a lot of success in terms of seeing their ideas fulfilled on Bitcoin rather than an altcoin.
Agreed. Thanks for taking the time to answer all my questions.
I guess the last one is, does Layer 2 have a physical, if you're able to docks, do you guys have a physical location or are you guys a virtual team kind of all over the place?
That's right. I got to hang out after this. Virtual?
Virtual, yeah. I mean, I live in Los Angeles. I'm not there right now, but it's a virtual team and some people are on the East Coast.
Part of LA.
Some people are elsewhere.
Docksing is your location. You don't have to give me the exact address.
I live in central LA.
Okay. Near Los Feliz?
I mean, if you're in LA area, I would love to meet you for coffee. You could DM me.
I'm not. I've spent a lot of time there. I used to live in San Diego for a while. But yeah, I've been to LA a lot and will probably be there. I'll hit you up next time I am in town. That'd be great.
Yeah, just send me a DM and we'll be in touch. Absolutely. I'd love to meet anyone, chat, hang out, and especially if someone is as interested and well-spoken as you, it'd be great to know who you are.
Same here. Thanks for the time and we'll talk later. I got to get going.
Let me just say, you've been great. Please come back in the future if you'd like. I'd love to talk more with you.
Cool. Will do. Thank you.
All right. So this has been Drivechain Twitter Spaces and we've been going for an hour and a half today. I think that we'll wrap now since we went for six hours last time and it was pretty awesome and exhausting at the same time.
So today, before someone joins and brings in a massive greater crowd than what we've had, I'd like to thank our ardent listeners for listening to every little detail.
This Spaces has obviously been at a different time than what we usually have. In the past few weeks we've been doing Mondays and Thursdays in the morning on West Coast Time.
And now I think we're going to do Mondays in the morning and Thursdays it'll be in the evening, West Coast Time, like today.
That's what we did today and maybe that variation will bring in a different set of listeners. And of course these Spaces will continue to be recorded as they have been today so people can listen on demand at their convenience.
We are planning to put the recordings onto a podcast so people can listen to a podcasting app like SoundCloud or Spotify.
That's something I need to work on so I have to figure out how to do that.
So yeah, I have lots of things to do. Thank you everyone who's listened and who will listen. Thanks so much to our awesome speaker Maverick and I'll see you all on Monday.
Until then, please continue to read about Drivechain on the various websites that are available like drivechain.info, join the Telegram group.
We have over 700 people in the Drivechain Telegram group. It's growing every day.
It's awesome to see. There's also a Reddit and there's other places where you can get involved like the GitHub for example.
You can of course read the bits there and learn about all that.
See you next time everybody. Thanks for listening.