Hello and welcome to Drivechain.
This is Drivechain Twitter Spaces.
We are live on February 23rd,
2023,
are experiencing a tremendous uptick in
interest and for BIP300 and that is
Bitcoin Improvement Proposal 300 for Hashrate escrow and 301 for
blind merged mining.
These
are developments for Bitcoin which would greatly
increase Bitcoin extensibility, meaning that people would be able to build all kinds of
interesting applications and protocols on top of Bitcoin.
and all demand for those applications and protocols
would
accrue to Bitcoin layer one value and block space, strengthening
Bitcoin, increasing Bitcoin's value and making the whole Bitcoin ecosystem larger,
more useful, more interesting, more varied, more experimental and innovative, while at
the same time enabling
layer one to become more conservative, more ossified, more digital gold,
higher fees, higher economic security.
So it's a total win -win in many ways.
who don't even want to use the drivechains would benefit from their existence in the
same way
that we all benefit in many ways from the
capitalistic economy where all kinds of people are creating
interesting things, not all of which we personally use, but we benefit from the growth
of that whole ecosystem economically.
For example, if someone
is just holding Bitcoin, LayerOne, token, that person benefits when
other people are transacting because that transacting fee revenue
causes higher network security which invites more usage and more
hodling and more confidence in Bitcoin.
Bitcoin
a long -term transaction fee -reliant economic security
model.
That is what gave rise in 2018 to the discovery that
a hostile perpetual majority miner
attacker would be able to halt the use of the
block space for honest transactions and ultimately devalue LayerOne token.
for this reason, people have been concerned since then, since about 2018,
with that possibility.
the best answer to that so -called security budget FUD, in my
view, is to understand that drivechain adoption would eliminate that
possibility. I believe.
drivechain adoption would
lead to the use of a multitude of merged mined sidechains on Bitcoin
at a rate much higher than present.
the nature of the merged mining would be advanced in comparison to today.
It would be blind merged mining instead of ordinary merged mining.
and it
would be and blind merged mining means that running the sidechain node is optional for
the miner and then in addition the peg in peg out situation
for the sidechains would be peer to peer instead of federated
currently all bitcoin sidechains are
federated. That means that 15 parties, in the case of an ordinary
sidechain, control the multisig where the Bitcoin is held.
I think that is the reason why the sidechains today do not see extraordinarily large
use on Bitcoin.
that Federation
is unattractive both as a technical matter in terms of its trust model
and also as a narrative matter.
People like to be involved in crypto projects that they feel are extremely exciting.
Nobody wants to work on a boring crypto project.
And the federation is not an exciting
model.
wants to be involved with these trusted third parties on Bitcoin.
Instead, they would like is a miner controlled peg, I believe.
The miner controlled peg would be called peer to peer and it would be in fact peer to
peer because Bitcoin is peer to peer
therefore Bitcoin mining is peer to peer.
therefore, a miner -controlled peg is peer to peer.
So therefore, Drivechains are peer to peer with respect to the peg, with
respect to
maintenance of the proper handling of the Bitcoin as it's locked in the hashrate
escrow, while the sidechain user is holding and transacting
the sidechain token, which is a synthetic Bitcoin.
The native token of each drivechain, I believe, will be a synthetic Bitcoin
that trades one -to -one with Bitcoin.
And it's very exciting.
We have a lot of really cool people who like this idea.
have Adam Back saying it's cool.
He's said that like in 10 different tweets and statements, know, pretty cool, cool,
etc.
He thinks that sidechains are cool.
This is like one of the coolest people in Bitcoin.
His name is on the white paper.
He's the only person named in the white paper.
Nobody else has their name in the body of the white paper.
Of course, in the endnotes, we've got awesome people like Wei Dai and others who are
mentioned in the endnotes, the footnotes.
in the body of the white paper, there's Adam,
Back, he's a drivechain of someone who speaks favorably about Drivechain.
In addition, we've got Fiatjaf, the inventor of Noster,
a whole bunch of other people.
Guy Swan speaks about Drivechain very favorably.
Peter McCormick and a whole host of other interesting people.
If
you're curious to know who likes Drivechain, well, I, Henry, of LayerTwo Labs have made
a list for you.
And you can read the list if you go to drivechain.info forward slash friends.
That's drivechain.info forward slash friends.
And there you will see a
spreadsheet with the people who have made favorable statements publicly in
writing about Drivechain.
So we have a nice friendly statement from Ruben Somson who wrote, I would like
to see Drivechain happen and run it as an experiment and see how it goes.
And
And I think that's great.
And you can open the link to read the entire context.
For each of these, it's important to see the whole context.
You know, I'm a lawyer.
like to make sure I provide full context.
That way no one can say I'm taking something out of context.
So I give a link in every case so you can listen to the entire episode of Ruben's
podcast on which he made that statement.
And there's also well -known Bitcoiners like, you know,
Hampus Schorberg and Anton Kumei Doski and
Checkmate of Glassnode and Aaron Van
Mario Gibney, MikeInSpace, Michael Tidwell,
Vlad Castilla, Torkel Rogstad, Sergio Lerner, Eden Yago,
John Light,
the philosophers Andrew Bailey and Troy Cross, and also some multi -coin investors
and software engineers
like Eric Wall and his pal Nick Carter and others.
Many people all across the whole intellectual spectrum of software engineers and
developers to sidechain enthusiasts like Sovereign Matt, John
Light, and Eden Yago,
and Sergio Lerner, well as, you know, cryptographers and blockstream
engineers like Adam Back, and we have a whole amazing group of people
who understand all kinds of things about Bitcoin, people who want to see
more extensibility, and then people
who want to see more fees for the security budget, as well as people who
just want to see Bitcoin be the most exciting place.
So, there's the narrative, the technology, and the economics.
And those all together create the gestalt that is the drivechain value proposition.
It's something that strengthens Bitcoin economically.
It's something that makes Bitcoin more extensible technologically in terms of making
development larger, more varied, more interesting and more
exciting. then in addition to those narratives of technology, there's also the
economics. frankly
Drivechain,
has economic value proposition in terms of increasing value accrual to Bitcoin, making
Bitcoin more valuable.
go up, like sending Bitcoin to a million dollars a coin, to 15 million dollars a coin.
Now, of course, those are outlandish numbers.
And I'm not saying, you know, an investment recommendation,
Everyone should consult their advisor and their rabbi and priest on what they should do
in life. I do believe, in my personal opinion, that Drivechain, if
adopted, has some potential to make Bitcoin much more valuable.
Even for those people who aren't using the Drivechain at
all, if you're not using any Drivechain, just holding LayerOne Bitcoin for the next
hundred years, you still benefit from development and demand
for Bitcoin. So, will Bitcoin be valuable in 10 years, in 100
years? Will it be much more valuable, or will it be as valuable as today, or will it
be less valuable?
Well, I think the answer to those questions depends on whether or not Bitcoin
expands its extensibility by adopting drivechain to enable a multitude
of experimental and innovative sidechains that are peer -to -peer.
That will make Bitcoin more exciting,
It'll make people build on Bitcoin.
And when you build on Bitcoin, you increase demand for Bitcoin because there's only 21
million. See, that's the real cool thing about drivechain.
It keeps the hard cap in place.
The synthetic Bitcoin on the sidechains can't be issued unless Bitcoin
is locked in the hashrate escrow for each sidechain.
what Bitcoin does, Drivechain does rather is it maintains the
quantity of Bitcoin but increases the qualities that a Bitcoin can have.
That's one way of talking about it.
There was a great tweet recently from
Dr. Adam Back of Blockstream where he said, this great tweet,
said, let me find the tweet.
Let's see, here's one of them.
He said, we're probably going to need sidechains, drivechains, where we're going, to
onboard the next billion users soon.
That's a great one.
but the tweet I'm looking for,
I'll find it right now.
Here it is.
He wrote, maximalist, altcoin senior rich
critic. There it is.
what does he mean by that?
Innovation maximalist, altcoin senior ridge critic.
He means that Drivechain enables, this is my interpretation of what he's saying in that
thread,
Drivechain enables Bitcoin to have these new qualities on its sidechains in a peer -to
-peer
manner but there is no issuance of Bitcoin to do that.
So right now if you want to make an interesting new protocol and you want it be peer -to
-peer completely you would have to launch an altcoin or build on Ethereum or something
else. You can't build on Bitcoin in a peer -to -peer manner and
a two -way pegged sidechain.
That's important because there technically are peer -to -peer, one -way pegged space
chains, spook chains, that kind of thing.
But there isn't the maintenance of the unit of account in a two -way pegged manner
unless we have Drivechain.
I think what Adam Back is talking about there is to have a full sidechain.
In the truest sense, need a two -way pegged, peer -to -peer peg.
And, yeah, -way peg, that's peer -to -peer.
That is what he's talking about, I believe.
So that's what Drivechain enables.
It avoids the altcoin senior rich, which is the money
money issuance, but it enables the innovation.
to make Bitcoin as varied as possible, we want that multitude of sidechains built on
top, one for privacy, one for hive mind, peer to peer oracle network, one
for bit names, one for bit assets, one for, you know,
know, big block Bitcoin, you know, bring that whole big blocker community back
to Bitcoin and have them do it all on a sidechain or two, you know, one for Bitcoin
Cash, one for BSV, let them compete, see which one does better.
But critically, what they're competing therefore on is not
demand for a speculative token distinct from Bitcoin.
They would be using synthetic Bitcoin, and the only difference between the protocols as
sidechains on Bitcoin would be the software.
So we would be able to see exactly which software is best because the users would flow
to that
that one? So how large should the blocks be?
Well, we can open a bunch of different drivechains with different sized block sizes,
and then we'll see which one provides users with the most attractive trade -offs in
terms of lower decentralization, larger blocks, lower fees,
Drivechain is capitalistic.
allows developers to compete, rather than Bitcoin community having to
together every five years and deliberate and somehow come up with the right solution
for everything, all on one chain.
It's
we let experimentation and innovation have a lower barrier by enabling it in a
partitioned manner on sidechain.
With all that said, I welcome anyone to come on up to the stage,
tell me why I'm wrong,
talk about your thoughts and feelings
feelings on Drivechain today.
All are welcome to raise your hand and speak your mind.
Well, not seeing anyone comment.
we'll go through
We've got the Adam Back tweet which is Innovation Maximalist Altcoin Senior Ridge
Critic. We also have a great tweet from Fiatjaf.
He writes, just a few days ago, Drivechains enable a new kind of escrow that is
strictly superior
to 11 of 15 multi -sigs.
One that is simple, decentralized, fluid, censorship resistant, and easy to set up.
Instead of voting with keys, you vote with hashrate.
So that's a great statement by Fiatjaf.
I
I agree with him.
I think that if Drivechain is adopted, there will be no more substantial use
of federated sidechains.
Instead, the word sidechain will refer to a drivechain,
and federated multisigs will
be categorically understood to be custodial Bitcoin.
the opponents of Drivechain tend to say, well,
a two -way peg controlled by the miners is akin to custodial Bitcoin.
And they also say, you
you know, don't know who the miners are.
So it's worse, because at least in a federation, you might know who those 15 people
are. feel this is cope.
This is cope.
This is people making arguments that I wonder if they really believe them.
Because how can a person possibly
be a Bitcoiner and at the same time have a distrust for miners that's so
strong that they doubt the whole security model of mining and the economic incentives
of the miners?
I mean that's a fundamental part of Bitcoin.
Since the very beginning of Bitcoin it has been made
very clear by Satoshi at the beginning of the white paper that transaction
finality depends on the economic balance of miner incentives
opposed to hostile mining.
And if the majority of miners were behave in
a malfeasant manner, then as Satoshi has always said, there would be instability.
And what we've always had is a majority of miners behaving not in a malfeasant manner,
but instead the miners in Bitcoin, despite being
potentially anonymous,
-interested,
mutually distrusting,
overcome the
challenges of Byzantine fault tolerance and civil resistance.
they overcome the crypto
cryptoeconomic complexities and challenges.
And what happens is an emergent order of miners behaving in a way that is both
profitable for themselves and in their best interests, and at the same
time productive and mutually beneficial for the other participants in the network.
So that is what incentive compatibility refers to.
when we're speaking about algorithm design, speak about incentive compatibility.
So when people say, well, you know, we shouldn't trust the miners with the sidechains,
say let the consumer choose.
Let consumers choose, because drivechain doesn't mean you can't do multi -sig anymore.
It just means that people have the option to use a peer -to -peer sidechain
peg instead of a federated one.
If anyone would like to come up and ask a
question, I would love that.
I will mention also that there are a bunch of resources that are great places to go
for Drivechain information.
can go to drivechain.info and you can also go to
fiatjof.com forward slash drivechain.
So let's make sure that's the right.
Well, that's not it.
It's fiatjof.com and then you click on Bitcoin and then you click on Drivechain.
So, ah, the website is fiatjof.com forward slash drivechain.html.
I guess the
easiest way to send you there is just www.fiatjaf
.com. So again it's www
.fiatjaf.com
and then click on Bitcoin and then click on Drivechain.
This is the website of Fiatjaf,
the creator of Noster, a fantastically popular program
among Bitcoiners and others for communicating and computing.
So he is an example of a builder who is focused on Bitcoin, among other things, and
likes Drivechain
a lot. So that's why I like to reference him, along with Dr.
Back of Blockstream, to excellent builders within the Bitcoin space.
And there are many other people who like Bitcoin too, of almost as great renown.
Anyone
in the audience who'd like to come up and ask a question or make a comment, you're
welcome to. click raise your hand in the Twitter space.
This is Drivechain Twitter Spaces hosted by LayerTwo Labs.
I am Henry.
I work for LayerTwo Labs.
We have been doing these Twitter spaces every Monday and Thursday for a month or two
now, and
to keep on doing it.
every Monday and Thursday we're up here on Twitter.
Feel free to follow this account, LayerTwo Labs, to get more
notices about these Twitter spaces and listen to them in the future.
So anyone in the audience should come on up.
There's a bunch of you down there.
Don't be shy.
Raise your hand and talk about what Drivechain means to you.
Oh great, we have a question.
Hello, Carl.
Welcome to the stage, Carl.
Thanks for joining.
Yeah, no problem.
thanks for sharing and obviously still really, you know, new to all this just trying to
pick up a few tidbits here and there.
if, um, if drivechains, you know, if it if it's something that can be
used, you know, without affecting the base layer at all, what do you think the like
the pushback is or the holdup is for like, more people to experiment with this and like
who who do you need to convince to get this to become like more more commonplace and
more, I guess, well, well tested.
Those are great questions. The.
I just. I just muted you while I answer and then please take yourself off mute and comment more whenever you'd like to while I'm while I'm talking or after I'm done.
Thank you for your question. It's a great question. The objections to drive. So, as I understand from your question, you're interested in hearing about what are the objections to drivechain.
And then if those objections are unpopular and everyone likes drivechain, then how do we proceed forward? Or who are the people who are most important in determining whether the community goes forward with this idea?
So. Drivechain has been around for about seven years and during those seven years, it has become more formalized in terms of the code being ready and the idea moving from a concept into an actual like program that can be merged into Bitcoin.
So we are somewhere along the road from. It being at the very beginning, just the concept, you know, just a blog post or two to it now being somewhat close, maybe like, you know, like let's say if the Bitcoin community were fully interested in doing drivechain as soon as possible starting today.
If there was total unanimity and support for it, then we could probably have it activated on Bitcoin in maybe 12 months from now at the earliest. That's my personal understanding. And I'd welcome others to correct me if they have a different view. But the drivechain code would need to be combed over very carefully, would have to be updated to the latest version of everything.
And then it could be if you could just stay on mute. That way there's no like background noise. That'd be great. The. So there's some work to be done that's technical in terms of like combing over the details, not combing over the sense of like going through and optimizing and perfecting, dotting all the I's, crossing all the T's, rebasing the code so it matches the latest version and then they can merge it through.
So there are people who are maintainers of Bitcoin Core. There are five or four of them. I mean, there are six and then one recently resigned. You know, it's a great set of people who maintain the code. Now, they're not in control, but they do of the code in every sense. But they are maintaining it.
So when the community appears to have strong consensus where lots of people like an overwhelming majority support something, then these maintainers, as I understand, can can can merge the code that's ready to be merged. And that's part of the process.
And then in terms of your other question, where how do we like what are the objections? So the two leading objections to drivechain, I think, are both misunderstandings of its design. They're both economic in nature, these objections. So they're not about the code. These objections have to do with the crypto economic design of drivechain.
One objection, probably the more popular one, and one that's, I think, simpler is and one that's also clearly wrong, in my in my opinion, is the notion that the the Bitcoin miners would steal the Bitcoin that's in the hash rate escrow.
So this objection has a view that if drivechain is adopted, then the drivechains will never accrue much value. Because if they were to have some Bitcoin in these hash rate escrows, then the Bitcoin miners would take the Bitcoin out of the hash rate escrow for themselves.
This objection is wrong because it is in the Bitcoin miners economic best interests. It's in their profit motive interest to not destroy the drivechain by doing that, but instead to enable the drivechain to grow very large, so that there is a permanent flow of transaction fees from the drivechain because the drivechains are merged mind.
So all the transaction fees on the drivechain are paid almost 100% to the Bitcoin miners on layer one, and they're paid in Bitcoin for that with blind merge mining. So the miners aren't going to destroy the drivechains, they're going to do everything they can to encourage their use.
It's kind of like if you had a restaurant, and some skeptics said, well, you know, no one's going to come to your restaurant because you might rob them. Well, of course, restaurant owners almost never rob their customers. Instead, they serve them food and hope that the customers come back again and again forever.
So there's that profit motive that encourages a peaceful and collaborative, productive, mutually beneficial relationship rather than a zero sum exploitative relationship.
So that's the first objection to drivechain, this objection, which is wrong. People thinking that the miners will steal from the hash rate escrow, such a theft would take months to occur. And the instant it began, it would be publicly visible on the blockchain that it is occurring.
And it would require over half of all of Bitcoin's hash rate for it to occur. So the attacker would have to be controlling the majority of Bitcoin's hash rate, which is extremely expensive. And then they would have to act in a malfeasant manner.
And this would, if they were to carry that theft out, harm Bitcoin generally. So it would lower the value of Bitcoin, I think, because it would show that the drivechain design doesn't work if that were to occur like that.
So the miners wouldn't get the fees from the drivechains, because then drivechains would have a weak economic model, a weak security model. So I just think in every way, the miners are incentivized to do the opposite.
They're incentivized to strengthen the drivechain to properly behave and to foster the use of the drivechains for their fees. And the miners want to make Bitcoin more valuable, because that makes the mining machines more valuable.
If a miner has like a billion dollars invested in Bitcoin mining machines, then he wants or she wants the mining machines to be more valuable by Bitcoin being more valuable. So overall, the miners have an incentive to make it all work.
And then to answer your question, the second objection to drivechain is incompatible with the first objection, the first one being about the theft of the Bitcoin.
The second objection is that the miners will unduly centralize because of merged mining being present in a greater magnitude on Bitcoin if the drivechains become very successful.
So this objection says not that the drivechains will be stolen from, but rather that they'll grow extremely large and that drivechain will be very successful.
But then that will cause more centralization in the mining industry on Bitcoin.
And this is a misunderstanding of how Bitcoin mining works, because Bitcoin miners have all sorts of ways of profiting, such as having agreements with power companies, using cheap electricity, getting better machines, and using profitable mining software, such as merged mining software, and doing merged mining with or without the nodes.
All of that is just another form of profit.
So people who don't like merged mining say that drivechain will encourage more and will encourage more merged mining.
And that is the second objection to drivechain, this notion that it's bad because it has to do with merged mining and it would encourage more merged mining.
But of course, merged mining is simply another way of profiting for miners.
So the people who don't like merged mining are arbitrarily prejudiced against software-based profitable activity for miners.
But there's no rational basis for that prejudice.
There's no good reason to think that software as a means of profit for miners is bad, while, for example, grid balancing agreements between miners and energy producers is good.
Or, similarly, if one doesn't like profitable software for miners, but does like miners getting better ASICs, there's no rational basis for that prejudice against the software.
So that is the second objection to drivechain.
It is an irrational and arbitrary prejudice against profitable software for miners.
So, yeah, Carl, thanks for those questions. What's your follow-up?
No, that was very thorough and good.
So basically, it would have to be activated almost like SegWit, kind of, like reach the same level of consensus would be kind of what triggers it.
Am I correct there?
I think so.
Okay. And then last question, and I'm pretty sure I know, but just wanted to clarify.
So even for those people that were worried that the miners would steal their funds, the only funds at risk would be the ones that were voluntarily placed in this escrow in the first place, correct?
Yeah, yeah.
If you don't send your Bitcoin into the hash rate escrow, then you are not at all subject to the security model of the hash rate escrow.
And it's really no different than, like, if you send your Bitcoin to Coinbase and someone else doesn't, that other person has nothing to do with the Coinbase security model.
So the best thing for you is to have the option to do whatever you want with your Bitcoin.
So when you have more options, you're better off because it should be up to you to subjectively determine, in your opinion, which of the options you have is the one you want to take.
You don't want to have other people make decisions for you.
So the best thing for Bitcoiners is to be able to try out using the drivechain design if they want to.
And I think there's a lot of indications that the drivechains, if they're enabled on Bitcoin, will in the long run become an enormous part of the Bitcoin ecosystem.
And that a lot of the value of Bitcoin will be in the hash rate escrow.
Maybe half or more of all Bitcoin in the long run will be locked in these hash rate escrows as the users want to use the sidechains because their fees will be lower.
And the software on the sidechain will be varied and interesting and valuable in comparison to Bitcoin Layer 1, which would become a long term store of value.
But most people don't want to just keep all their money in Layer 1 Bitcoin.
They want to have some of their money in a design that is more lower fee or more private or that has other features.
So just like you don't have just one form of money right now.
You have probably paper money and money in a bank account and also physical money and some gold or maybe you also have some real estate.
All different kinds of ways of holding value for different reasons.
And.
Another interesting way of looking at this is that even if the drivechains do not see that much economic utilization, like if they don't have that much value, like let's say drivechains adopted and 10 years later, only 1% of Bitcoin's value is in drivechains, even if that occurs, it is possible that drivechain will have materially benefited Bitcoin because no longer will altcoin founders be able to say after
drivechains adopted, no longer will those altcoin founders be able to say that it's impossible or difficult to build on Bitcoin.
So Bitcoin gains a narrative when drivechain is adopted.
And that narrative is that it is possible to build a peer to peer protocol on Bitcoin without using a federation, instead using a peer to peer design where the miners control the hashrate escrow.
So Bitcoin becomes more interesting and has stronger narratives when drivechain is adopted, even if the economic uptake of the drivechains themselves is not monumental.
But I think it will be huge.
I think it'll be so large.
And I think that in the distant future, if drivechains adopted 15 years later, I think the majority of.
Of the miner income might be from the transaction fees on the drivechains.
Because if you have, let's say, 10 different sidechains, each with a large community of users all doing transactions and all of those transaction fees are paid are brought down to the layer one miners, then that ecosystem is very powerful and the layer one security is very strong.
So that's the amazing like synergistic synergy of the drivechain design is that a multitude of sidechains all are funneling fees down to layer one, making layer one extremely powerful and that would completely solve the security budget, potentially, you know, as the coinbase is halved every four years, it's great to see the fees going up and currently they're not going up very much right now.
It costs less than two dollars, I believe, to send a layer one Bitcoin transaction right now.
The daily value paid to Bitcoin miners on chain from transaction fees, I think, is under half a million dollars a day.
And if things remain that way for a long time, then we would have, you know, one or two more halvings, as we do every four years, and then the coinbase will be lower and unless Bitcoin, you know, is mooning, there will begin to be a larger chorus of people calling for inflation on Bitcoin.
And it's so disappointing because, you know, one of Bitcoin's strongest narratives and it's most compelling, one of its most compelling value propositions is that it is not inflationary, unlike fiat money, which, you know, almost without exception has that inflation problem.
So if not, without exception.
So, yeah, I'm not sure Bitcoin will be like a cool, exciting place to be if there's inflation.
And I think that, like, it's so disappointing that the people who are in favor of inflation, they tend to think that drivechain is not a good idea.
I think that's really the most interesting thing to me is how is it possible that Bitcoiners, some of them, and there's just a few, I think they're very smart people.
I think they're very smart people, but I'm truly puzzled as to why it is that any notable Bitcoiner would prefer to advocate for inflation for Bitcoin rather than advocate for greater merged mining.
Because merged mining boosts the transaction fee revenue instead of messing with the monetary policy.
The monetary policy of Bitcoin is monumentally important as a narrative.
There's a world of difference between never being more than 21 million and some rate of increase above 21 million.
There's a world of difference there.
So I'm just puzzled.
I feel like if we could simply convince, like you asked me, who do we have to convince?
One way of going forward in terms of advocacy is if we could simply convince the advocates for inflation to stop advocating for that and instead advocate for greater merged mining.
In other words, build more merged mine protocols on Bitcoin, make them more attractive and stronger instead of having them be as RSK does.
RSK is the largest merged mine protocol for Bitcoin in terms of transaction fee revenue.
I haven't checked lately exactly how much free revenue it is, but Bitcoin miners have, over the years that RSK has existed, they've received a substantial amount of money from the transaction fees from RSK.
And it would be great to see that revenue grow a lot.
So if they were using a peer-to-peer connection to that protocol, then that would be like a drivechain design.
And the RSK community actually wants to migrate to a drivechain.
It's in their white paper.
Why don't you jump in with your thoughts, Carl, on that, on anything?
No, I thought that was really great.
Yeah, those are just a few questions I had because it doesn't really make sense to me.
I know I get how it's really anything with Bitcoin.
It's very difficult to get consensus and adopt new ideas.
But yeah, just as I've learned a little bit more about drivechains, just kind of curious as to why it's taken so long and what people's concerns are.
Because it's not something that, at least in my circles, gets talked about a whole ton.
But it sounds really interesting.
I love the idea of Bitcoin being able to kind of, I don't know, I guess like maybe steal features, if you would, of different altcoins and things like that.
I remember early on when I talked to people about Bitcoin, they'd bring up the comment like, well, what's stopping another coin from having a better protocol for this reason or that reason?
And I was like, well, it's programmable money.
So Bitcoin could always just steal it if they needed to.
Yeah, it just sounds like, from what I know, and granted, I'm not a very technical person, drivechain sounds like an elegant solution to that where it's a lot easier to adopt whatever those features may be for whomever feels that they're beneficial.
As opposed to trying to convince a whole community to, you know, make a change to a protocol for every little thing that Bitcoin might want to, you know, kind of take from another coin.
Yeah, well said.
Of course, you know, the notion of stealing software is one way of talking about it.
I feel that copying the protocols makes a lot of sense in terms of how to talk about these things.
I know that's what you probably meant and or would be sympathetic to that, you know, less exploitative term.
The copying of protocols is perfectly fine in the open source realm.
So yeah, if there's like a, let's say a privacy software out there using ring signatures or other things, and Bitcoin adopts drivechain architecture, then that software could be copied or cloned into a drivechain with little or no changes made to it.
And then there would be that software on top of Bitcoin available for Bitcoiners and they would be able to hold a synthetic Bitcoin in the drivechain, in that sidechain and benefit from that privacy technology while maintaining exposure to Bitcoin's value rather than holding an altcoin.
And, you know, perhaps getting the privacy technology on the altcoin, but suffering from the altcoins exchange rate fluctuations negatively against Bitcoin's value.
So, yeah, that's really the drivechain design, which you maintain exposure to Bitcoin's value while getting the software that would have been on altcoin only.
Now it's on a drivechain as well.
So in the best possible scenario, in the most optimistic drivechain vision, what we would see in the long run after a drivechain is adopted is that every valuable software is built on Bitcoin and there is no altcoin.
And that would involve multiple communities migrating to drivechains once drivechains are available.
So the privacy altcoin community, they would see, you know, the drivechain version and they would see how large it is.
Like, for example, if Bitcoin has a drivechain that offers privacy tech and if 1% of Bitcoiners send their Bitcoin into that sidechain, into that drivechain, then that would be a $4 billion drivechain by market cap.
And if we can assume hypothetically that there would be a proportionally large transaction fee volume, then the security on that sidechain would be greater and the market cap would be greater than any altcoin for privacy.
Like Monero and Zcash, I have in mind, their market caps are not $4 billion.
So the market cap of this drivechain is greater than those, hypothetically, and its security is stronger.
So then the users on those altcoins would simply sell their altcoin and buy Bitcoin to use the drivechain that offers this privacy.
Because presumably these privacy altcoin holders are very interested in the technology of their altcoin, not in the speculative potential of the altcoin appreciating above Bitcoin's rate of appreciation.
So I think that these communities that have genuine usage, rather than merely being like a Ponzinomics operation, those communities that have genuine use would migrate to drivechain.
So, for example, Zcash and Monero, those communities might migrate to drivechain, but something like Hexcoin or something like Dogecoin probably wouldn't, because those are more like Ponzinomic type coins.
So yeah, the ones with genuine use.
So another genuine use type technology would be the big block Bitcoiners.
So they genuinely believe, and they're right, that a large block protocol is a legitimate technology.
Their error, I think, is that they think that the large block technology should be the layer one, or some of them feel that there shouldn't be any layers.
There should be just a monolithic blockchain like Solana.
So that's an error.
I think money should be layered.
I think this is an idea that appeals to Bitcoiners a lot.
I think that's one of the strengths of drivechain is that it embraces the layered money notion.
I think there's even a popular book on Bitcoin called Layered Money by one of the investor, you know, investment professionals who talks about Bitcoin.
So I think the big blockers, their rightful home is as a sidechain on Bitcoin, because large blocks mean lower decentralization, which means it's harder for an ordinary person to afford to have a full node to validate.
So the proper place for that is in an opt-in arrangement where it's a sidechain.
So instead of everyone having to use it, it's something people can opt into for smaller value transactions like buying a coffee.
So I think we'd see the privacy community come over to drivechain and also the big block.
The big block Bitcoin community come back to Bitcoin for drivechain.
And then also the largest out there is the smart contracting users and developers on Ethereum.
So winning them over would also be part of the drivechain vision, bringing them all back to Bitcoin, bringing all that value to Bitcoin and all those transaction fees.
There's enormously high transaction fees over to Bitcoin miners.
So all of that could be built on Bitcoin.
And in the best possible scenario, all of that would migrate to Bitcoin.
Do you have any more questions or thoughts to share?
No, thank you so much.
I'm curious if you want to share, how did you discover drivechain?
What was the thing that got you into it at first?
Paul was at our meetup a few weeks ago, actually.
I've just kind of heard the term thrown around a little bit.
When we were sitting there, he kind of gave me a brief little drivechains 101.
I'm just interested in learning more about it basically as I had some time on my hands here.
That's cool.
Yeah, I've never met Paul in person, but it's cool that you saw him at a meetup.
And he is my boss.
So I think it's cool that you met him.
And I hope you had a great time with that meetup.
Bitcoin meetups are an awesome place to learn and discuss drivechain.
A lot of the people who have been around in Bitcoin for a long time are very informed about drivechain and are excited about it.
My Twitter feed is full of people who are excited about it.
And there are 700 people in the drivechain talk telegram group.
Over 700 who are interested in drivechain and talking about it.
So it's a growing movement.
And it's cool that you go to Bitcoin meetups.
Hello, welcome to the stage, Body Airport Luggage Thief.
Hey, hey.
What's your question or comment?
Hey, I've listened to a couple of your spaces.
I was wondering if you could go over quickly what the mechanism would be from keeping the drivechain protocol from being bloated from too many sidechains or too many drivechains joining the protocol.
You know what I mean?
You went over it in a different space, but I don't know.
I'm kind of the left side of the bell curve moron.
So I was just wondering if you could maybe touch on that again.
That's great. A great question.
I appreciate your question and the way you asked it.
And I'm glad to have you here.
Your question is very good because you're interested in the notion of bloat.
And that's a hot topic right now with ordinals.
And people are concerned about, you know, how does a blockchain become bloated?
What does it mean for there to be bloat or, you know, dead weight or and who is who is the burdened party when there is bloat?
So currently we're seeing with ordinals.
And this is kind of a tangent from your question, but I'll answer your question.
With ordinals, we're seeing people talk about bloat.
And they're talking about it because what's happening is that the rate of data accrual to the Bitcoin blockchain nodes is growing more quickly than it used to.
It used to be a few years ago that every block, every 10 minutes approximately, was, you know, a megabyte.
And then after a few years, it was two megabytes.
And then it's jumping up now.
Into like higher numbers.
I looked at it yesterday.
I don't want to misstate it.
But in the last few weeks because of ordinals, you can see a spike in this.
Let me try to find the chart just online so I can.
So I can talk about it very accurately.
I think I was looking at the one on blockchain.com, which people always tell me, you know, hey, it's not.
It's run by Bitcoin Cash people or something.
But.
It's free and the data appears to be totally legitimate.
So on this on this chart, they have like a block explorer.
I'm bringing it up now.
I want to be able to talk about it precisely with the data.
OK.
OK.
It's loading.
Well, as that's loading, I'll say that basically what we're seeing with ordinals is a higher rate of of data, you know, because the blocks are larger on average because of these files being included in transactions that are, you know, utilizing or exploiting, depending on how you want to talk about it.
The.
You know, some of the developments in Bitcoin.
So they're not paying a whole lot to the miners for those transactions relative to the size of the.
Well, I don't want to make a controversial statement about it.
Basically, there's this notion of bloat.
And what it means is that if you want to run a full node, you're going to have to include this data or somehow prune it.
And then there's a tradeoff involved in that, arguably.
So.
People don't like bloat.
So I think that in a drivechain arrangement, what we would see is very high fees on layer one, which would migrate naturally the type of activity of ordinals to a drivechain that's intended to facilitate that kind of activity in a way that's efficient and most favorable for the users involved.
Just like some people want to have like a restaurant that's vegetarian.
Other people don't want to have a restaurant that's vegetarian.
So there's and there ends up being like multiple restaurants and the appropriate people go to the appropriate one and everyone's happy.
So.
I think that on layer one Bitcoin, what we'd want to see are high fees and financial transactions and very low block size so that people can validate layer one inexpensively, maybe even on their phone.
That would be ideal.
So.
Your could you remind me?
You know, I apologize.
It's been a long morning for me.
Could you remind me what was the first part of your question?
I think I was the the other question was like, so if side I'm not like ideological about any of this, like I thought the ordinals were kind of annoying, but I mean, I'm running a home miner, so I appreciate the extra little bit of extra fees.
But the I'm not ideological about I'm just trying to like because there's big pushback from some of the Bitcoin pleb people. I consider myself a pleb about just like the you addressed it before about the.
Oh, yes. The number of that's right. The number of drivechains. Yes, of course. So this is the way that's a great question. It's very common question on drivechain. So it's a good one. The the drivechain design right now is optimal because it allows for over 200 drivechains.
And there have been some people who've written articles about how many different drivechains there would be. And as far as I know, not anyone has seriously proposed that there would be a shortfall of available slots for drivechains.
In fact, the drivechain designers themselves feel that 200 might be way more than what are really actually needed and used. So we have a ton of available slots because there is only so many different valuable protocols out there that would need to be their own drivechain.
Multiple activities could occur and would most profitably and efficiently occur on a single drivechain in some cases, like a smart contracting drivechain, like Ethereum, it could be its own drivechain. And all the stuff on Ethereum could be happening on a drivechain. And then there could be a separate protocol just for privacy, a separate protocol, a separate drivechain just for, you know, a BCH or BSV style, large block drivechain,
which we call Thunder, kind of like lightning. So a Thunder drivechain would be a big block drivechain. And there'd be a privacy one too. That's that one called Zside, uses extremely advanced privacy technology from Zcash, where, you know, a transaction is concealed in terms of its sender, and its recipient and the amount involved. And it's like totally untraceable and very cypherpunk secure.
And so there's been thoughts by the drivechain designers themselves. I mean, of course, these are the people who if anybody's going to have ideas about all the different kinds of drivechains that might be wanted, these are the people who would be like in favor of listing many of them, right?
So they've only been able to come up with like 20 or 30, like in that range, 20 to 30 different drivechains. And that actually includes the notion that about maybe approximately 10 of them would be the same design, but distinct. So 10, I think that 10 are like the Thunder drivechain.
So there's actually going to be so much demand in the future, potentially, for large block drivechains, that there will be more than one of them. Because that just like, you know, McDonald's, right, there isn't just one McDonald's. There's like many of them, because there's so many people out there, that the best way to serve them all efficiently is to have multiple locations that are the same design.
Similarly, there would be in the future, potentially, like 10 different Thunder, big block drivechains. So that's like roughly leaving like 10 or so more others that are distinct, like the privacy, the smart contracts, the hive mind drivechain, which is a peer to peer Oracle network. So overall, there'd be like 10 to 20 or 30 at most drivechains.
So that would leave like, roughly 200 empty slots. And some people say, well, what if there's more than 200 drivechains? What if we run out of slots? Well, then you can have drivechains on drivechains. And you could also do a fork, you know, another soft fork of Bitcoin to increase the number of slots. One reason why they didn't make the number of slots at the very beginning, like 10,000, is because that that would have increased the amount of data.
Involved in layer one for drivechain. So right now, the way drivechain is designed, it's designed to have an extremely small footprint of data on layer one, because of course, the drivechain designers themselves are emphatically small block Bitcoiners. In fact, they have voiced support for contemplating Bitcoin blocks becoming even smaller on layer one.
So they're part of that small block camp that's like very small block camp. Because that's what decentralization is all about, you know, bringing nodes, the phones, like having a node in your smartphone, that kind of thing requires blocks to be quite small. So the, to address your question, kind of wrapping it all up, we like small blocks. And we think that 200 plus drivechain slots are more than enough to start.
And the reason why it isn't like 2000 is that that would have involved a slightly higher footprint of data for nodes, which ties back into that small block issue. So yeah, you're right, like there can be lots of drivechains. And then this in the distant future, the issue could be revisited, or there could just be drivechains on drivechains, and then no need to change anything.
Also, just on this topic of like forks and whatnot, the, if there ever were a problem with drivechain, it could be forked out. Right, we could go backwards in theory, just like some people are saying, let's get rid of like taproot or SegWit. Like some people are always saying that kind of thing. I don't support that. But the, you know, these things can be reversed in theory. So that's something to think about.
And I feel quite confident that like, this is an idea seven years in, which is gaining support and has support among some of the most well known Bitcoiners alive. So drivechain is a very conservative step. And at the same time, its advocates like me need to be respectful that no change for Bitcoin's consensus rules is a small change.
And that changing Bitcoin is like doing heart surgery. Changing opcodes are an invasive procedure. So it should be done with only the greatest respect for the importance of conservatism, the importance of safety.
And along those lines, it's important to recognize that drivechain, while it is a change, it is a change which is understood and intended to be one that helps avoid future changes.
So anyone who says, hey, let's not change Bitcoin ever again, that person ironically, should be actually in favor of an additional change, which is the drivechain change, because drivechain is a change which would enable innovation and experimentation on Bitcoin in these partitioned layer twos, these sidechains, which avoids the need to change layer one.
Like if somebody says, hey, let's do zero knowledge proofs. Let's do roll ups. Let's do ring signatures. Let's do any of these advanced ideas on Bitcoin. Right now, the only way to do that is to go into a federated sidechain or an altcoin.
So it can't be done on Bitcoin because a federated sidechain really isn't on Bitcoin. It's not peer to peer. It's federated. And the altcoin, of course, isn't on Bitcoin. It's completely distinct from Bitcoin. The altcoin competes with Bitcoin.
So that's the reason why Liquid is great. At least Liquid isn't competing with Bitcoin for monetary premium. The native token on Liquid is Liquid Bitcoin. Now, Liquid does compete with Bitcoin for transaction fees because it's not a merged mind sidechain like RSK.
RSK, I want to study it more because it's the thing which is the closest to a drivechain. However, it's fundamentally different from a drivechain because it's not a peer to peer two way peg. So I think it's cool that their native token is a synthetic Bitcoin and they're merged minds. They have those two things going for them.
But it's also not peer to peer. It's federated and therefore it's small size, I don't think should be viewed as any indication of the potential demand for drivechains. So I'm optimistic about the notion that drivechains are fundamentally different than federations and therefore the demand for drivechains could be in the billions. Like on Ethereum, they have billions of dollars on L2s. And I think in Bitcoin, the same thing could be true and even more so.
Well, if any more questions from the audience, let me just like reset the room. This is Drivechain Twitter Spaces. We go every Monday and Thursday. I'm Henry Magrum. I'm an employee of LayerTwo Labs.
I fell in love with Drivechain a year ago when its co-author, Paul Sztorc, appeared on Nick Carter's podcast in January. I think it was January 31st, 2022. And that got me really interested in the security budget and how merged mining can fix the security budget and avoid inflation for Bitcoin.
This is a hot topic. Every day I see this Ethereum maxi investor, Justin Bonds, and also Evan Van Ness, an Ethereum maxi. Actually, I shouldn't describe them that way. I don't know exactly what they think. But it seems like they're Ethereum promoters. And they're saying, both of them, that Bitcoin is going to need to do inflation. And they mock Bitcoin on this count.
So I think they're mistaken because of the possibility of Drivechain. But I also think that they will be vindicated if Bitcoin doesn't do Drivechain. So I'm kind of a Drivechain maxi, personally. I feel like this is the change that will make Bitcoin much stronger and cooler and win.
But I'm not so in love with Bitcoin that I think that Bitcoin will succeed regardless of what changes are done. It's interesting philosophically how, if you're too in love with a project, that can actually stifle its development.
If you have kids and you say, my kids are perfect. Well, if you overdo that too much, then you're not going to teach them things. You're not going to encourage them to be better. You're not going to encourage them to learn. So if people say Bitcoin is perfect, it'll succeed. It doesn't need to change. We don't have to worry about anything for Bitcoin. Just buy it and you'll be rich and you'll have eternal riches.
And, you know, great things. Then the outcome from that mentality is one of sclerosis and inertia and complacency. So what's going to happen in the worst case scenario, and this is kind of like doom and gloom, but in the worst case scenario, Bitcoin is flipped in its market cap.
And then the Ethereum promoters declare victory and a lot of Bitcoiners might leave and just buy Ethereum and assume that Ethereum is now the better investment and that Bitcoin is becoming a digital gold in the worst sense.
A investment which is like some kind of like historical relic. Like this cypherpunk community that's diminishing in relevance and importance. So I think the drivechain can transform Bitcoin by making it bigger and better and maintain its leadership and in fact increase its dominance.
Let's get back to 100% dominant. Let's not have any competition. Let's have 100% of altcoin projects on Bitcoin. That's right. All the altcoins, the good and the bad, the shitcoins, bring them all over to Bitcoin and we'll get all of the value, all of the miner fee revenue, all the transaction fees, and then Bitcoin will have no competition.
Bitcoin layer one will be the basis and platform for everything in crypto without exception. It'll have no competition and it'll be so big and there'll be so many people using it that the political support for it will be much stronger.
So right now with Ethereum, they did the proof of stake thing and they're trying to argue that that's a more sustainable and ecological approach. And if they were all using a Bitcoin sidechain, they wouldn't be saying those things.
So if everyone's building on Bitcoin, then Bitcoin has no enemies. And or at least within the crypto realm, it would have no enemies and no competition. So that's the ideal situation is to have everything built on Bitcoin. And that's what drivechain aspires to produce.
Henry, can I ask another question?
Yes, please.
through. don't have any great inputs, arguments or defenses.
so what happens with Lightning?
Because Lightning right now, I consider it kind of like a semi -private security
blanket. Like I don't know enough about Monero and if
I should even trust
something like Monero.
So Lightning is my security blanket.
I got a note and I can send it privately if I'm careful, put it a mixer and
then make sure I'm sending it with a private channel if I have to.
I don't really plan on, I don't wanna have to do any of that stuff, but just say that
one day that's where we're at.
So what does it do with if we adopt drivechains, then what happens with Lightning? Like does Lightning become obsolete and then we have to implement some kind of ring signature side or drivechain thingy? I don't know. What's your take on that?
I see drivechain as a complement to Lightning. So Lightning is awesome. And a lot of brilliant people work in the Lightning development space. And there are many users of Lightning around the world. And the Lightning experience includes valuable tradeoffs and benefits.
So there could be a drivechain which is built to facilitate Lightning use. And there could be Lightning use on multiple drivechains. And a lot of the ideas and technology of Lightning would be enhanced and facilitated through drivechain. So I see them not as competition, but as complements to each other and options. So that's sort of the view.
Now to be totally fair and honest, there's also a view which is that Lightning is not enough, to be frank. And doing all of the transactions for the world on Lightning, that model probably isn't a viable picture of the future.
And the evidence so far suggests that. And like the rate at which things are going kind of suggests that. So people need to get real about the fact that like Bitcoin needs more than just Lightning. And the work on Lightning has been excellent so far, and it should continue.
But it would be good if the sidechain vision is also pursued and also available. And there will definitely be some overlap and synergy between those two, you know, views and projects.
Well, I have scheduled a conversation on Clubhouse, which is a separate social audio platform. And it starts in 10 minutes. So anyone who wants to transition over there is welcome to. Let me share in the room here, a link to that. So that anyone who wants to join can.
I'm going to start at 11 o'clock.
So there it is in the nest. That's a link to the newly formed Bitcoin drivechain friends house in Clubhouse. Clubhouse has these houses, and you can belong to a house. And then once you belong to the house, you can attend the rooms in the house. It has this house and rooms analogy going on.
So why don't we break now? And then in about five minutes, we'll be there. If you'd like to join. The people in Cafe Bitcoin, a lot of them have been chatting with me for like over a year. So it's a much more familiar environment. Whereas Twitter spaces has strangers come and go into Twitter spaces like this, which is also great. It's great to have those different kinds of conversations.
Here it tends to be tends to be more formal. And over there, it's like very familiar and casual. So it's a different kind of conversation. You're all welcome to join. No one has to join. It's all optional. And I'll see you again all on Monday.
And in the meantime, I encourage you to check out our YouTube channel, LayerTwo Labs. We have a YouTube channel, you can find it if you go to drivechain.info. Or if you just go to I'll, I'll tell you exactly how to find it.
It's well, if you just go to YouTube and search for LayerTwo Labs, you'll find it. And yeah, anyway, thanks, everyone for joining. Thanks again for the questions. We had really great questions today. Thank you for those who joined the stage. Please come back on Monday or any other time and ask more questions and share your comments.
Anyone who has a criticism or concern about drivechain is especially encouraged to attend, because it is those who are thinking carefully and critically about drivechain, who do a valuable service to Bitcoin and to drivechain by ensuring that this project is valuable and worthwhile.
And it's precisely those who are critics of drivechain, who I'm most interested in connecting with and getting them the best possible answers so that they can be converted, frankly, into proponents.
People who are outspoken critics and, you know, enthusiastic thinkers are the ones who are most useful to engage with in this kind of situation. Because time is of the essence. We want to do this change as soon as possible at the appropriate time.
And that way it isn't delayed, because every day that Bitcoin exists without drivechain is another day when the technological, narrative and economic benefits of drivechain are deprived from Bitcoiners and given to altcoiners, which creates in the long run, in the worst possible case, a scenario where Bitcoin loses its network effect dominance, its market cap dominance and its narrative momentum and energy.
And would no longer have a monetization narrative, a narrative of, you know, becoming the world's money and the winning protocol. It's important in the realm of protocol competition for there to be, for one to be a winner, right?
You don't want to be a small protocol. You want to be big, as big as possible. And that's what drivechain is all about. It's about making Bitcoin as big as possible.
All right. Thanks again. See you next time.