here. Okay, thank you for being right on time and responsible. That's awesome. So

we're gonna talk about Drivechains. That's what you think you're talking

about? Okay, good. So we are winding down day one at the Litecoin Summit. Are y'all

excited? I feel like y'all are just mailing that in a little bit, but it's

alright. It's okay. Paul is the founder and CEO of

at LayerTwo Labs, creator of BitcoinHivemind.com, blogger drivechain.info,

and the author of BIP300 slash 301, Coindesk.com, consensus long link here

that is hard to say to everybody. And that's all I got. And so he's gonna talk

to us about Drivechains, so get your questions ready. And this is to

demonstrate what's kind of rude while the MC's talking to do, if you do that

while the MC's... we're just doing that on purpose to demonstrate that you need to

have a little more self-awareness than that. They're doing a great job of

making it look like they don't have that, but that's okay. It's awesome. They don't

even know we're talking about them. That's okay. Give it up for the kids, the

future of Litecoin, everybody. There they are. That's awesome. That's cool. This is

not a conversation, but I appreciate your effort. Okay, awesome. Let's give it up for

Paul Sztorc, everybody. Sztorc, did I say it right? Rhymes with quartz and sport. That's right, yes.

Thank you. Okay, so I'm normally, you know, a Bitcoiner, of course, and this is my

idea for Bitcoin, but I was asked to come here and show it to Litecoin. Litecoin

took the SegWit idea before Bitcoin, and in particular, I do think that Litecoin...

I mean, I am a maximalist at heart, and I think only one coin will reach eight

billion people, and that coin will win, and everything else will probably go to

zero. So I think if you're Litecoin, you've got to think, like, how can I

exploit the weaknesses of BTC? But so this idea, it's very simple to me, but for

some reason, it's complicated. Even the best minds in Bitcoin don't really

understand it, but we have working software that has a GUI. So this is, like,

in one slide, what I think what people should do, and that is try the software.

Go to LayerTwoLabs.com slash download, and I'm going to give you some screenshots

just so you see what this sort of looks like, but just try it out. It has a fake

play money coins. So we have a faucet and everything. You can get coins. These are

not Bitcoins. These are not Litecoins. They're fake coins, but they show you what

the software would do if you activated this in Litecoin. And then I have a

website, drivechain.info. There's an unbelievable amount of content there. I

have another site, BIP300CUSF.com. I'll talk about that if anyone has any

questions on exactly what to do. And then I think, like, you know, like, you get

into your head, like, kind of what I am planning for this idea, which is to reach

eight billion people and have planetary scale, have Zcash-level privacy, have all

these features, live in a world where the different developers can disagree with

each other but still be using the same coin. So if you think that this is a good

idea, this is a very easy thing to actually add to Litecoin, I think. I haven't

actually looked into it that much, but there is this activator client that 51% of

the hash rate needs to run and that's basically it. And you can even shut it off

later. So you can just try this out and maybe if the entire community hates it for

some reason, you can just go back. So this is, you know, the download page. So

there's nothing for, you know, a mobile phone yet, but we have all three operating

systems you can download. And we have a GUI. And this is sort of what it looks

like. You have this is a version of Bitcoin on the top and then we have all these

other chains that are one of them is a version of Zcash that I call Zside. And it

is a clone of the latest version of Zcash, but it has no coins on it. You just send

the coins from L1 to this L2 chain and then you can use Z addresses and you have

privacy and you have reusable long ZK-based address. And some of these other

ones are just like test chains, a blank chain that just says nothing so it's easy

for you to add your own thing to that. And then Thunder is like a large block sidechain. That's like my joke a little bit. So this is the drivechain.info site. This

is just a screenshot. But I have an unbelievable amount of content here. I have an

enormous number of endorsements as well. If you go to LayerTwoLabs.com slash friends,

I have a lot of endorsements, but I have one of them here about Adam Beck said this

on stage in Baltic Honey Badger. He said, a Drivechain arguably could have been more

important or useful than taproot. So, that's just one tiny endorsement. But it's

very, very, very, and this is this thing CUSF which is this way of activating a soft

fork. This are, again, this already exists so you can already download it and you just

go to this site and I have a paper that explains how it works. So, yeah, again, if you,

if Litecoin could do this, by this I mean this screenshot on the right, I'm not completely

sure if there's the, if it can do this like the ZMQ block thing, but if Litecoin is up

to date with Bitcoin, then it can. And so then you just run this stuff and you just

need 51% hash rate to run this. And then as I mentioned before, you can actually just

shut it off and deactivate it if you'd. This is kind of annoying because anyone who has

put coins into the system will maybe lose them if you were to reverse it. But other

than that tiny detail is kind of like a very low cost thing. So, that was kind of just

me trying to throw a lot at you there. But now I have, this is, what I normally do is

give this talk to the Bitcoiners about what Drivechain is. So now I'm going to try to

go a little through that, but I do think that Q&A is probably a much better, has a much

better chance of giving you something that you actually will appreciate and get something

useful out of. But I'm going to try to give a skeleton here first. And so the idea is,

again, you just have to cross off Bitcoin and put Litecoin for everything here because

I really am a Bitcoiner and I'm here for the Bitcoin conference. I'm speaking at the Bitcoin

conference, but I was asked to come here and I think it would be great if Litecoin took

this idea. But just replace Bitcoin with Litecoin. And so the idea is that now everything has

its own chain and its own coin. It has its own software and its own coin. But with the

Drivechain idea, you only have the one coin. You don't need any of these other coins anymore.

And then the coins travel among different pieces of software that may have completely

different, they may be written in completely different programming languages. They may

be doing completely different things. They may have different block size. So if there's

ever a big dispute such as the block size dispute or some people don't really want too

much privacy on BTC for various reasons but other people do want it. So if there's a dispute,

you just have different pieces of software. And I have some metaphors about this, about

like, okay. So, yeah, again, my view is that really that one single coin will win and the

rest will be defeated. But definitely each of the types of thing that people will want

to do with the blockchain, all of those will exist in different, in form of different software.

So I kind of have like, Bitcoin today would be like this old phone. And then eventually,

you still have something that we still call a phone, but it does all these other things.

You know, it does, you know, it takes video. It takes, it plays audio. It, you know, it

does all these things. So, money has network effects. So that's kind of a, that's kind

of one of the reasons why I think. So, yeah, basically, this is kind of like, instead of

Ethereum, the altcoin, you have this like bit Ethereum, which is like an L2 that does

everything Ethereum would do, only there are no coins on there to begin with. You send

the coins back to and from that sort of similar to the Lightning Network. So, yeah, the goal

would be that if, you know, some people, everyone disagrees over what things to do. So as people

say, oh, this is great, but can it do smart contracts? Can it do whatever? And instead

of arguing with them, you just say yes. And similarly, a lot of people have fringe ideas,

99% of which will be bad, but some of them will be good. And so, how do we know the 99%

bad versus some that are good? Someone says, oh, I think I can improve Litecoin in this

case. It only needs my new idea, which is whatever, MimbleWimble extension block. And

then people, you know, they have to go through this big quality control process, in which

case, you'll probably filter some things out that are good or let some things through that

are bad. Or you just let them in, you just say this, use this idea of BIP300, you have

your own zone and that lets each person try out the ideas that they actually like. Okay.

Yeah, this is like not that important per se, but this is like me trying to say that

this is similar to Lightning where you have the coins, the orange coins are in the bottom

right and you move the coins to maybe the Lightning network, which I don't recommend

if you saw me on the panel earlier today. But you can also move them to like bit Zcash,

which is this version of Zcash that is, it has all the feature. It is literally like

the latest version of the Zcash node software, but just modified slightly so that it only

moves around coins that have been sent to it from an L1 that has BIP300. So that'd be

Litecoin in this case. You have Litecoin, send the coins over to the Zcash world and

you'd have all those features and you could do the same with the Ethereum or any other

EVM chain or anything else, anything with large blocks or whatever other feature. And

the way this is supposed to work is that there's only a one way like causality. So if Bitcoin

core or Litecoin, the blockchain reorganizes its blocks, then everything above it will

also reorganize, but it's not the other way around. Any chaos that happens in the upper

zone will be limited over there and it will not destroy L1. So if you go on to L2, you

choose to take on additional risk and then you get also any, the flexibility and benefits

of that. So that's the idea. I have like a tiny sort of description of how it works,

but I don't know if it will make any sense, but hopefully it will make some sense, which

is you have these blocks on the bottom. Those would be L1 blocks. So in this case, it'd

be lightning, excuse me, Litecoin blocks, the blue ones. And then the reddish ones on

top. I think that it's not really supposed to be blue. That is just a weird effect of

the PDF conversion. It's just supposed to be red only on the top. But the red ones would

be this BitMonero thing. That's everything Monero is, but only using the Litecoins that

are sent to it. And they each have a bunch of blocks and they have block headers. Block

header is the square. And what happens is in BIP300, there's this huge summary of everything

that happens over three months. Everything that happened over the last three months is

put into this little hash. And the hash is what is inserted in L1. The hash is really

what of the, it is a description of all the withdrawal activity. So the deposit and withdrawal

activity is covered by this big gray sheet. And then the layer one node only sees this

thing that was inserted into the L1 Coinbase. So it's the L, in BIP300, the L1 layer is

not actually looking at what happened on L2. It just looks at this summary that is very

rare once every three months or so. And this is like, I have some examples of our, this

is what our software looks like. So there's like an example of this happening. This is

just to give you an idea that this is really not vaporware and we've actually worked on

it and it exists. So you should try it out for yourself, which I think is the best way.

I certainly did not understand how Bitcoin worked at all until I downloaded the software

and played with it for the first time. And of course, many people say that no one ever

really understands Bitcoin fully. So, there's definitely some truth to that. Jameson Lopp,

I think, often says something like that. Yeah, another interesting thing about this project

is all of the fees, as I mentioned earlier on the panel, the lightning panel, with this

particular type of L2, all of the fees on all of the L2 chains, they all go down to

the L1 miners. So it's my view that this is the endgame, like, in at the, what I'm trying

to say is in the long run future, if we succeed at all, like maybe everything in crypto will

fail and go to zero. But if something succeeds and is wildly popular with among people of

the earth, people will be using it a lot and generating enormous amounts of transaction

fee revenue. And so then when we look at who's going to be getting all that revenue, it really

must be the L1 miners because if it is not, the miners will be maybe envious or jealous

of whatever else is getting it, like a lightning service provider or arc super node or whatever

it is, liquid federation. So, all these L2s have this property that the transaction fees

are not paid to L1 miners, but with this idea, they are. And I think in the long run, it

will be, basically, all the other L2s will be killed off because the miners will think,

well, I want all this money. I said this could be hundreds of billions of dollars per

year. If on the up chance something is successful with the general public and miners have the

ability to control the L1 chain, so they will, they'll either vertically integrate with all

these L2s or they will just destroy them to get either way to get the money. And if they

vertically integrate, then most of the lightning security model is just security theater and

so people will then, they won't like it anymore. And they'll like something like this instead,

which is still secure even if. So, this is a neat idea where I'm getting a lot more money

to the miners. This idea is a very miner-centric idea. And luckily, miners get, have the opportunity

to make a large and growing in an unlimited sense amount of money if they try the idea

out. So, it's kind of a neat idea. These are sort of old, but that's the basic idea. Yes,

I did have, this is a 15 minutes, so I actually think Q&A is way more productive, but I have

some weird other examples here of which altcoins I think would make great L2 Drivechains,

L2 sidechains. So, I will do that unless anyone really has like a question or something

because this is halfway through and I think that, yes, there is, yes, a question.

The question was about if you create assets on a sidechain. The, in that sense, if you,

we have a sidechain for that, they're called bit assets. And this is similar to like ordinals

or counterparty or ERC20 where once you're on the sidechain, this would be like its

own thing where you have your own keys, you have your own randomness, and you would self-custody

that in the same sense. I mean, once you're on the L2, you've adopted that new L2 security

model. And from then on, it's exactly the same as what would ERC20 would be in Ethereum.

So, it depends on how, it depends on what you're copying. But whatever you copy, it'll

be just like that. Yes.

Yes, the question about the emissions of the coins. So, this is, again, these are, these

are going to be exactly like the altcoins that they copy except for that one thing,

where they will, those coins, the L2 blockchains, they do not have their own coin at all necessarily

and you could add one. But they, when you have, you're going to have an L1 that is Litecoin,

84 million Litecoin, and then you have the L2. And on the L2's first day, it will have

zero coins on it. You'll have zero coins for a while until someone chooses to deposit.

And those would be like the first four coins or whatever that are over there. So, there

is no tail emission, there is no emission at all, there are no new coins being created

on the L2. The coins are only created on L2 when they're locked on L1, and then when

they're withdrawn from the L2 and destroyed, they get unlocked on L1, they cannot be moved.

So, the coins are just moving around and so there is no emission of any kind. Does that

make sense? No? All right.

Yes. No. You deposit the LT, you deposit Litecoin to this thing and this thing does

not necessarily know anything about the real Monero at all. This is like the opportunity

to take advantage of the Monero's ring signatures and people like the privacy feature, but there

is no actual XMR. And a lot of people get confused about that for some reason. I think

this is a, maybe I should explain it to you. Exactly, yes. There is no XMR. And in fact,

that's partly, some of the wording on the slides, I'm implying that there will be no

need for the real XMR. Once one coin takes over as a big enough foothold to, it will

be able to do every actual thing that people want it to do and there will be no need for

the actual altcoin itself. That was, maybe I'll try to like go back to it. It's a lot

of slides I got, but I'll just, you know, if you, yes. BIP300 is not in use. I'm sorry.

It's, you'd be the first. I have never released an activation client until like this month,

so no one really could use it. But I talked about this idea for a very long time as some

people know. And it just had no activation client for a while, but we have had, for many

years, we've had our test network which is a fork, it was a fork of an old version of

Bitcoin version 1699. That's how old this was. And so that's like what the screenshot

was you saw before. And so we've had that actual code. And so I was more just tinkering

with the, our own network with the play money and not releasing a, an act. But now there

is an act. This CUSF, CUSF activator, that does now exist and that is the easiest and

best way to activate anything, in my opinion. It's sort of similar because the MimbleWimble

extension block is like a new optional thing that Litecoin decided to do. And in fact,

my opinion is that a sidechain is very similar to an extension block. It's kind of like an

optional extension block where there's that big filter that I had before, that gray blob

that became the green thing. The Litecoin node is only seeing the green, the tiny green

thing and it's ignoring what's going on. But really these are an unlimited amount of extension

blocks that are opaque, sort of. So you have unlimited block space and you have unlimited

in there. And now, yes, hello. Yes, you did. Fifty-one percent of the hash power is needed

to activate. This is because although BIP300 does not, although it does not look at everything

that is happening in the L2 chain, it is doing something on L1 and that thing is either,

you either conform to that, those rules for this narrowly defined like OPNOT5, you either

conform to that or you do not. And if you do not, it has to reject the block. And that

only, that doesn't matter if you have less than 50% hash rate. If you reject the block,

you'll just be the only one not on the chain anymore. But if 51% or more rejects the block,

then actually everyone, even just by doing nothing, everyone will automatically only

be on a version of the chain where the rule is followed all the time, even the people

who do not want to upgrade to even do this. So people could freely run old version of

Litecoin, not pay any attention to any of this at all and they will not be affected

really. But that is why 51% is required to activate any soft fork which this is. So that

whoever is making the blocks, whichever mining pool or et cetera, they must run the activator

to make sure that when they make the block, it is not accidentally violating one of the

BIP300 rules. Does that make sense? No, it's on the L1 side. Yes. The BIP300 part is the

L1 hash rate. The L1, that's the L1 node, L1 hash rate. But actually, all the things

that are happening on the L2 chains are on their own L2 network. I don't know how big

of a, I don't, my guess is it wouldn't be that big of a thing. I mean, every soft fork

is activated this way and you just put out a new version of the software and if people

upgrade. In this case, you don't even need to do that. You just need to ask people to

run the activator if they want and they can, in fact, stop running the activator if they

really regret it for some reason. Thank you. Yes. If anyone has any more questions. So,

seven minutes, I can go back to sidechains. I think we should copy because I actually

have a lot to say about that also. But if anyone has a question, I look down now. Okay.

So, yes. Zcash is the best one to copy because you have all this privacy and we have already

built it and it already works, so I just take it for free and it gives everyone one single

reusable address. So this is very cypherpunk and this is very cool. This is a cool thing

to just do quickly out of the gate before anyone can complain or, you know. And I had

this slides because, yes, I was noticing as a Bitcoiner that actually Monero is stealing

a lot of Bitcoin's thunder. And in fact, I don't know if you guys have seen this but

I think it was Peter McCormick interviewed Michael Saylor and Michael Saylor famously

said there is no second best. So I'm sure that would make him very popular at Litecoin

event. But he said that and then Peter McCormick asked him about, well, what about these people

who really like privacy? And then Michael Saylor said, well, you know, if you really

like privacy, maybe you do need a Monero. And of course, the Monero community took that

little clip and they put it all around. But this shows like, this is an actual use case

that some people care about. And in particular, people who care about the most are, they can't

be too loud about it, right? You know, so that's something to keep in mind. Namecoin,

I think Namecoin is like a totally, I don't know what to say about this. I think this

idea will be so big in the future. But for some reason, people do not give it the right

amount of attention today. Namecoin was actually the first, is originally sort of invented

by Satoshi and everyone should read through this thread. The DNS in generalizing Bitcoin

is fascinating. But Namecoin lets us do all kinds of crazy things and I have written a

big article about this that you can read and this is the title. And so if you just Google

it, you'll find it. But I've written a huge about it that's going to replace logging in,

usernames, passwords, email, get rid of spam, do all kinds of magical things. So, I think

this idea is like super good. And we are working on a version that I really like but it's not

completely finished right now. Yeah, you have these people like impersonators and stuff.

This is all this, the Namecoin sidechain which I call Bitnames. This will just get

rid of all this type of thing. Seizing the domain is to be impossible. It just will literally

not be possible to do this. So like even, you could have like whatever, Ukraine.gov

and a foreign army could occupy the whole country but they just wouldn't get the name.

It would be like illegitimate. Then people like have this one, I think. So, yeah. I think,

yeah. So, people love this NFT, ERC20, ordinals stuff. I say, let everyone have a good time

if they want to. So, copy that. And then I'm a huge proponent of this prediction market

idea which has gotten, I've always been a huge proponent of this idea since a very young

age and even since 2012 and 2013. I started building this Bitcoin prediction market software

and now actually every election, it pops up a little bit. But in particular, this election

with Polymarket, we are seeing the cultural significance of these prediction markets.

So, this is another thing that I think would make a great L2 chain and this is some of

the, some screenshots of the software that I made back in 2015, I think these are from.

Okay. Yeah, there's some other ideas. I think it was just three, three and a half minutes

a little. So, maybe if anyone has any questions, if anyone thought of a question, that would

be a great time. Yes. Yes. Yeah, all of the L2 chains, I think, should and must be merge

mined with the L1 chain because first of all, this is like basically free. This is very

convenient. All the chains get the same hash rate in the proof of work context and then

all the fees go to the L1 miners. And if you don't do that, then you have to like answer

a lot of other questions about what to do which are hard to answer. And in particular,

it's possible that maybe the chain has like an off day. These L2 chains, they don't have

their own block subsidy. So, if there's few people using them, the block, the whole block

award will just be zero coins and the whole chain might stall out. Whereas with merge

mining, no one would have this problem. It would just be every 10 minutes, it just finds

all the chains. So, I think, I'm a huge proponent of merge mining. And in fact, the BIP301,

I invented this type of merge mining called Blind Merged Mining where all the L1 miners

have to do is include the highest paying fee following this new soft fork rules and they

automatically merge mine all the chains without even looking at them. So, I'm very, very pro

merge mining. I think that is a great invention. I don't know if anyone has any. It's hard

to see with the light. Yes?

Yeah. Well, I think this is the way you should do this. I think you should do something like,

why is the Bitcoin community? I think this is a key point. So, there's only two minutes

left. But this is key. This is very key. The Bitcoin community, I really think, has trapped

itself in like a weird cultural cycle where they have a, they're very into, like they're

very overconfident and complacent. So, the story of how this idea has gone is very long

and it involves things like bad luck, like in 2017, the whole miner war erupted over

the block size war and that caused everyone to hate miners for a while. And this also

led to everyone, after the block size war was over, everyone thought that the key to

winning was to resist change as much as possible. So, Bitcoin does not really do very much innovation

and it also has a contempt for any kind of innovation, you know. It will say like,

we don't need any of that, 21 million, whatever, fixes everything, blah, blah, blah. So, I

think, but again, there has no, it has not been an activation client yet. So, I have

like lots of, this proposal is very controversial. I have lots of big supporters and you can

look at the LayerTwoLabs.com slash friends list and then it has some crazy enemies who are,

and some of the enemies is just unreal like, you know, Peter Todd or whatever. We hired

him to do this review and then he's on stage and he's saying there is no source code for

this, but the source code with the GUI has existed for like two and a half years when

he said that. So, he had never visited drivechain.info. He's like a critic of this idea, but he has

never visited the website. He had no idea that code had been written at all. He never

read the BIP. So, plenty of people admit they haven't read the BIP if you ask them. You

know, Pierre Rochard, like famously said, he couldn't read past the first sentence of

the BIP or he's offended by the, something like that. So, I think it's a completely irrational

thing and you should take advantage of that, their mistake, especially since this is a

completely reversible change that doesn't really cost very much. So, I think that's

just about it on the time. So, thank you very much. Thank you. Thank you.