Hello everybody and welcome to Encrypted Livestream and today we are talking to Paul Sztorc.

It's the founder and CEO at LayerTwo Labs and founder at eCash.com.

So welcome to all who watch us on YouTube and Twitter.

And if you want to share the ideas that Paul Sztorc is persuading, so share this translation on Twitter and whatever social network.

Paul, hey, nice to see you. I can say nice to see you in Ukraine online, but though you're in Ukrainian livestream.

Oh, well, hey, thanks for having me.

Cool. So we have a bunch of questions and we also have some questions from our audience.

I will ask them later so we can stick to our plan.

And the first question is, so let's start simple.

Tell us, please, what do you do in Bitcoin and how you got into this space in the first place?

Do you remember when you first heard about Bitcoin?

What was your very first reaction?

This is brilliant or this is nonsense.

Well, you know, the big news I have now is that later in August, we're doing this hard fork of Bitcoin where, you know, we'll talk about this for sure.

So this is the big news. So that's that's kind of what I'm doing now.

And you can read all about that on eCash.com and etc.

How did I first get into Bitcoin?

You know, when I first heard about it, I did think it was nonsense.

It was all the way back in 2010 or 2011.

Maybe it's 2011. I think it was 2010.

And there was there was this thing, the Free State Project in America, where they wanted a bunch of libertarians to move to one single state in the United States, New Hampshire.

And they were saying, if you come to a pork fest, this like it's kind of a conference and they will give you free Bitcoin.

And I was like, this is the silliest thing I've ever heard in my entire life.

These crazy libertarians are trying to.

So I did think it was ridiculous, but eventually I read the Wired article about Silk Road, which was the online marketplace where you could buy drugs.

And I was not interested in buying any drugs, but I thought it was intriguing because you would think someone who's like a drug addict or, you know, they really want the drugs.

So I would think like some part of it must work, you know, because if they could get free drugs out of it, they probably would.

So that article kind of made me like think like, wait a minute, like I actually thought, oh, I'm too late because it's already being used by regular people.

It's too late to like speculate in it. That was like 2011 or something when I kind of heard about it the second time.

So you didn't like the drugs, but you do like the idea of free money that's not controlled by any government.

Yeah, if you have a background in economics.

And so I knew all about, like, for example, the inflation tax.

And I knew a lot about banking and the history of banking and the Federal Reserve.

I knew a lot about international payments even back then.

And, you know, with the drug thing, I just thought like if you if people who are interested in drugs, they'll do anything to get their their drugs.

They'll like do they'll do they'll tell all kinds of lies.

They'll they'll break the law. They'll steal.

So I was just kind of thinking, huh, it's weird that someone built this anonymous kind of computer thing and it's holding up.

You know, it's not it's work. It's actually working.

So that that kind of made me think it was much more serious than just what I had thought about it when I got a silly email from libertarians at the Free State Project.

And what were your first steps in Bitcoin?

I mean, what is your background?

What what what first steps you do in Bitcoin?

Well, you know, I had to read the forum.

That was very interesting back in the day.

Bitcoin talk dot org.

At the time, there weren't as many posts, so everyone could read the whole thing.

So you could go back and read.

There are only so many new posts each day.

And there was a lot of backlog.

So you could you could read them on that.

That was very interesting.

That made me also think, oh, this is much more serious than I had first thought.

And yeah, then eventually I started a blog and it was about the technology behind Bitcoin and it was like linked to from the forum.

My big break was when Adam Back linked to it in 2014 in December.

I think Adam Back linked to it on Bitcoin talk.

And he said, oh, there's this argument about nothing will be will ever be cheaper than proof of work because there was a huge proof of work, proof of stake debate at the time.

And so that was sort of how I became more well-known back in the day.

And then, you know, I've been presenting at Bitcoin conferences.

I presented every year at TabComp.

I presented the scaling Bitcoin conferences.

So I've I have been very active at, you know, Bitcoin Plus Plus, Building on Bitcoin, all these things.

The main magazine conference I've spoken to every single Bitcoin magazine conference except for the Middle East, North Africa ones.

But so, yeah, I've been in the conference circuit a lot.

I've been in lots of conversations.

I put a lot of published lots of writing.

So I did quite a bit.

That's cool. So you're a real OG.

You've been in this industry for a long time.

So how has it changed over those years?

Are you happy with the direction Bitcoin is heading in or is there something you disagree with?

For example, the growing institutionalization, the fact that funds and governments are increasingly the ones in the game rather than decentralized community.

Well, I don't have a problem with that by itself, but I do have a lot of problems.

I wrote this article over a year ago called The Derangements of Bitcoin, which is that these are just a bunch of just a long list of false things that we believe or that we are sort of chasing.

But we are not.

We're not. We've been very slow to correct the mistakes.

So I think people can find that that article about all of the things.

So the fact that institutions are getting involved, I think that's a very normal part of growing.

The problem is just overall, we have the wrong voices being influential.

So, for example, I don't mind that Michael Saylor is buying the coins, but then Michael Saylor will try to weigh in on ossification or what he thinks ossification is or what he thinks Bitcoin development is.

And similarly, we have, you know, we have BlackRock and we have ETFs.

All that stuff is great.

But then they try to weigh in on quantum or something and they don't really know what they're talking about.

So in that way, it's well, that's one thing that's gotten worse.

So back in back in the day, certainly in 2011 or 2014, even if you went to a Bitcoin convention, you know, and you went to like the BitPay booth, for example, BitPay used to be much more important now.

Not so much. But if you went to the BitPay booth, the CEO was just in the booth.

I mean, there were other people there, like maybe eight or so people.

But you could just, you know, you could just at lunch, all the lunch was just in one place.

So when you're eating, you could just go right up to Barry Silbert and start talking to him if you wanted to.

So everyone's way more accessible.

But today it would be very hard to, you know, talk to Michael Saylor, try to talk some sense into him or any of these other people.

So as it's grown, the conversation has become more difficult.

And I think with the scaling Bitcoin in 2050, we had kind of like a, you might call it a Dunbar's number thing.

There's this idea that humans can only have like 150 or so like real relationships at a time.

And because it's just there's only so much room in your in your mind for that.

And that so I think the community then started to split.

And this has continued to happen with the altcoins and stuff like that.

So that's one way it's gotten worse.

But I still think that it's kind of natural thing when you scale and people become more influential and more valuable.

And I think it's natural.

It's a pity for sure that you can just go with Barry Silbert or Saylor on lunch, but it's pretty natural.

So of all the things the community predicted in the early days, what actually came true and what turned out to be naive fantasy, if you can remember some.

Well, BitPay was certainly this idea that you could every merchant would accept Bitcoin because you would go to the merchant.

You'd say, hey, the credit card charges you a certain amount flat fee and plus a percent, whereas BitPay will do the first million dollars of transaction processing for free.

They will convert it from Bitcoin to U.S. dollars for you, and then they'll put it in your bank account 24 hours later.

And that was quite a pitch.

And that was much better than the credit card companies where you could get charged back up to 90 days in the future.

You could get it charged back and have a payment reversed.

And the credit card companies charge more money.

So. So actually, there was quite a good pitch, but that didn't really pan out.

The whole payments use case did not really take off.

So that would be one thing where it didn't quite go the direction expected.

Another thing that I think is interesting to point out, and you got to give some people credit, even though I I criticize some people a lot, but I give some of them some credit as well, which is that many of the early Bitcoin developers at the time, they were convinced that they were going to be like arrested or maybe even, you know, threatened or something like that, assassinated and threatened by governments or their own governments or something like that.

None of that really happened either.

That did, of course, some some people, the samurai devs.

And so it's like, you know, six or eight people.

But everyone always thought, oh, there'll be a time when, like, the website goes down, everything gets like scrubbed.

You know, nothing like that really happened, which is interesting.

So those are some things that didn't quite happen from an early age.

Like it was really to me, I thought Bitcoin had enormous potential and that you would people would see like, OK, this could be used for every dark market transaction, every illegal transaction, every tax evasion, everyone, everyone who's getting divorced and trying to hide money for this or every like kind of like sinister.

But it can also be used for every.

Legitimate transaction, and they look the same, so you can have both blend in.

And on top of all that, there's no inflation tax, which there's it seemed obvious to me at the time that every government in the world, they love printing, printing money.

So and controlling them.

Yeah, right.

So it was kind of like, you know, especially like there was still recently after 2008 financial crisis.

It was kind of, you know, the euro obviously was it seemed like the euro was not being managed great.

It seemed like every other it seemed like every single currency was on it.

So it's to me, it always added up to like a big success for Bitcoin.

So that so a lot of that did did pan out exactly the way I thought.

So there's a big mixture.

Sure, sure.

But mostly it it came better than you expected.

Right.

Well, I had really high expectations.

OK, one thing that was also worse than expected was that there used to always be this idea that, OK, since Bitcoin's open source, whatever is invented, we'll just add it bolted onto Bitcoin.

And in practice, that hasn't happened at all.

And we haven't even had the open ended like L2 ecosystem that would facilitate that on the optional L2s.

So that's part of why I'm introducing a new option, the new fork option.

So that because that was pretty disappointing because we've had all this stuff where people have invented new privacy technology, new scalable, you know, ideas, new ways of like doing convenience.

So like there was originally this idea of Namecoin and Ethereum had the E.N.S.

And so some ideas have been reinvented many times.

Even USDT.

That was originally way back when that was a coin.

Yeah. So so this idea that since Bitcoin's open source, you can't compete with it technologically.

That is another thing that didn't.

But, yeah, mostly I would say my expectation was super high and they were basically met.

But I think actually, you know, I was thinking Bitcoin would be even bigger.

It would be like in use around the world and it would be, you know, I actually thought it would be even bigger.

So it's funny you say that, that it exceeded that because my expectations were really, really, really high.

When I figured that out, I was like, wow, this is it.

I guess I guess still that if you today will show what happened to you like in 2011, you say, wow.

Yeah, because, of course, it has gone up ninety nine million percent from ten cents per coin to one hundred thousand dollars per coin.

So that's obviously the greatest performance in the history.

And that's not even about the price. It's about like the adoption and all these suits talking about Bitcoin and adding it to ETFs and all this kind of stuff.

And having the president presidential candidate Donald Trump speak in the Nashville conference in twenty twenty four.

That would have been that would have kind of blown my mind if someone had said back in back in 2011 or back in 2014.

They say in 10 years, a presidential candidate will be courting.

Because I remember even in the crypto winter of 2018, there was no we were not sure that everything will not collapse.

Now we're sure that Bitcoin and crypto will will not disappear.

But even in 2018, it was not like very sure about it.

I've lived there a few winters. I mean, even I remember there was a tweet.

Maybe, you know, this tweet. There was a tweet from Eric Wall because it was about it was partially about Ukraine.

And it was like it was like Christine Lagarde is saying cryptocurrencies are not money.

Full stop. But then it was like also saying Ukraine has gotten all these donations in in BTC and Ethereum because the traditional.

Like there's no other way for individual person to like directly donate.

And so it was kind of like it was kind of like this moment where.

Yeah, we've always had lots of skeptics, but there's always been like the Canadian truckers, COVID protests.

Like there's always been clues that fundamentally it's a very, very good idea.

And so that's that's always those clues have always been there, you know, even though it's.

I remember another tweet by Peter Todd when they said that he's Satoshi Nakamoto.

And he tweeted, if I was Satoshi Nakamoto, Ukraine has like a million of FPV drones.

So you're a well-known figure in the community and the innovator, but not everyone is a fan of your ideas.

So tell us exactly you came up with what exactly you came up with that so many people argue with you about.

Well, yes, this idea of drive chain.

And I think, first of all, I think that even though this idea is pretty simple, I think there's just something about new technology that makes people want to.

Maybe it's too abstract, and so they don't.

But I think the real reason why a lot of people don't like it is because it does make a lot of stuff look worse by comparison.

Like, for example, Blockstream was this whole company that was started and they raised like basically there is 21 million in 2014.

And then they raised another 55 million in 2015.

And they according to them, they converted all this to BTC.

So this is like one hundred and fifty five thousand BTC.

And then they raised hundreds of millions of dollars since.

They're a very, very famous company, but they did they raise their money to do side chains.

And then they kind of basically did not do that.

But that's sort of similar to what this idea is.

And then my idea of drive chain is also that happens to be a little bit better than the Lightning Network.

So I think the Lightning people may possibly, I don't know, feel threatened by that.

And there's a whole developer prestige economy where if someone has prestige and other people don't.

And so I think I think a lot of that's part of it.

I think it's also like a bunch of weird misunderstandings and bad timing.

So like the drive chain idea is a minor centric L2.

It's just a my merge mind.

And then it's the the deposits and withdrawals are are sort of gated by the miners to some extent.

And the idea is they're making so much.

Miners would be making so much money from the transaction fees that they would keep the deposits and withdrawals moving, which is like takes them no effort to do.

So it's like a bunch of free money and no effort.

And then versus. But I think during the block size war, there became this idea of extreme skepticism of the miners because miners were doing Segway to X back in 2017.

And so I think that's that's part of it.

Another thing is over time, the purity tests, the toxic maximalist purity tests have have evolved and become, I think, very deranged.

So in the past, it was like, should we allow Litecoin to show up at a Bitcoin convention?

And people would say no, because Litecoin is basically just like a copy and paste of Bitcoin.

But now it's become even if you want to build, if you want to do something, you say we're going to have the same Zcash level privacy transactions on Bitcoin that only using BTC.

Well, just because you are alluding to the fact because you're saying that there's something good about an altcoin somewhere, people now don't like that, which that's I think is truly ridiculous and bizarre.

But, yeah, I don't know why. You know, one of our Peter Todd.

So I actually like Peter Todd quite a bit, but he's a huge critic of drive chain.

And then we paid him to write an article about why.

But the article and you can see I have the article and like the response.

But in his article, basically every single sentence and paragraph is is wrong.

So I was very disappointed. And it also was kind of clear that he had never visited the website because he didn't even realize that the code was out.

He was saying there's no code for this. And actually there had been code for like two and a half years at that point, including like a graphical user interface and stuff.

So I think a lot of it is just people are too busy to look into things.

There's a lot of claims out there.

You just waste your money. But on the other hand, he just proved that you're right. Right.

Right. Well, because, you know, we really wanted to know, like, what what are the arguments against this?

So and of course, I think Peter is one of the best.

Like he would be one of the highest quality critiques if they were real.

But since they really weren't, then I thought, OK, well, then probably a lot of these other people are copying Peter's test, so to speak.

And they just think maybe. So I think that could be I think a lot of it is just a mistake.

Some people think it's too good to be true, because what I'm arguing is that we have something that scales Bitcoin to eight billion people and gives Zcash level privacy and gives infinite extensibility.

You can have gone to different L2s, solves governance indirectly because it doesn't matter if what the L1 does or what all the L2s do, because you can start a new L2 that solves security budget.

So I think people just can't wrap their head around how good it is to some extent.

Or it could be a giant disaster and it might be completely wrong.

So one of your ideas that's been actively discussed right now is the e-cash fork.

And we know that Bitcoin forks happen fairly rarely.

So why is that? It's a good question, because I think actually we should do it more.

But really, there was only one kind of serious Bitcoin fork in the sense of hard forking into a new project.

And that was Bitcoin cash back in 2017.

And of course, Bitcoin tries to do the soft fork upgrade where it doesn't split the network, but it does upgrade.

And you both styles of software run in parallel.

But even that doesn't happen now.

So now nothing happens.

So it's kind of like...

Unfortunately.

Yeah. So because a lot of this stuff, the soft forks are opt-in, reversible and ignorable upgrades.

So we should do more. It kind of proves that they're actually quite helpful and there's nothing wrong with them.

And even that's become a controversial statement, even though to me it's completely straightforward and obvious.

As to why the hard fork is so rare, I don't know, because it gives everyone free money.

And after Bitcoin cash, it's true, there were a long series of kind of copycat imitators.

It was like a Bitcoin gold, Bitcoin diamond, Bitcoin private or whatever.

Those were mostly insincere.

Those were just kind of people playing around.

But I think people should do the hard fork more.

I would say it is something of a last resort where people would say, well, splitting the network is inconvenient.

Because everyone has to worry about which coins they might want to have or lose or focus on.

And so there is a little bit of an inconvenience.

But overall, it just lets us have...

Some people want apples, some people want oranges.

And this is as well.

For every apple, it just splits into an apple and an orange.

You would think this idea would be much more popular.

You think everyone would be cheering this on and saying, let's do it a hundred times.

And every time there's any dispute and anyone wants to talk about quantum or something, we'll just do another thing.

And then we'll at least get to see what the actual software is like.

Give birth to a new wave of forks.

Yeah, I think that's actually pretty rational.

But probably one reason why it's rare is that the Maxi cult, the idea of just Bitcoin is the only thing you need, is very, very strong psychologically.

So people are not even in the frame of mind where they would say, oh, let's just have a bunch of...

I can be the consumer and we'll just have five or six things and I can just choose among them as I wish.

People really want there to be one team, one brand, which is fine as long as the brand doesn't have some kind of fatal flaw.

OK, and like a question from Bitcoin Newbie, who actually has the right to fork Bitcoin?

Do you need anyone's permission or you can just run it and whatever?

Well, I would say that anyone can do it.

But I think in a way that proves that there still is a pretty high barrier to entry, because why would anyone pay attention to thousands and thousands and thousands,

thousands of forks? So you do need to get a critical mass of people to switch over to their idea and to just give it the attention that it needs.

And even if you don't have that on day one, you need to have the ability to get it at some point in the future.

So that that's needed.

But I think that's the thing is the hard fork is what you do when you cannot get the soft fork and or when you cannot persuade people.

So this was similar to in Bitcoin Cash.

They were trying to get the block size increase for a really long time, but they had not persuaded enough people.

And then they just launched Bitcoin Cash and they thought, well, here it is.

So it's actually easier to in one in one sense, it's easier to do the hard fork, launch a new project.

Of course, then, you know, you have to say, how is this project going to compete with BTC?

So you need really good reasons why you think it's going to ultimately be better than BTC.

So that's that's my next question.

So we are talking that Bitcoin forks are rare and projects like Bitcoin Cash, Bitcoin SV, Bitcoin Gold, we don't see them now.

So why couldn't any of them overtake the original?

What were their problem?

Well, I think Bitcoin Cash actually was not a great idea in many ways.

So I think it was a bad idea, bad execution, bad, a long list of things.

So I can give you a really, really long list and maybe you can just interrupt me when you've heard enough or something.

But but for starters, the core dispute between the large blockers and small blockers was this block size thing.

Now, the small blocker said you can have a small block L1 and then you could put large block L2.

And that's exactly what I'm trying to do with drive chain and with e-cash.

So small block L1, optional large block L2.

And this works great because the L2 is optional.

And but the L, every L2 needs the L1.

So it's just like this is the clever thing to do is have the cheaper thing be mandatory for everyone and the more expensive thing be an optional add in.

The Bitcoin Cash idea was to take the L1 and multiply it by eight, which would have bought you a little bit of time.

But ultimately, the eight megabyte block size, that's not enough to scale to the whole planet Earth either.

So it's not actually a final solution.

It just kicks the can down the road.

You know, it just buys you a little bit of time.

Before you have to hard fork again, and if that really had worked.

Then at that point, you know, BTC, the original could also have hard forked.

You know, if they do eight to 32, BTC could have done one to 32.

So just the core idea is not good.

And the strategy of getting there by the hard fork is not good.

I also think it's suffered by by having the same name, you know, the Bitcoin Cash name.

I think that was just a pointlessly confusing thing to have two projects with the same name.

Especially when one of those projects is the number one brand, like in the whole cryptocurrency industry, in the longest project.

So I thought that was that was confusing.

The way they, the large blockers went about getting what they wanted was that there was this thing Segway 2X that they agreed about in May of 2017.

Then in August, Omari Sashay created Bitcoin Cash, but he didn't like really tell anyone about it.

And then not until November, months later, not until November, did they abandon Segway 2X and then switch to Bitcoin Cash.

So it was kind of not very planned out.

And it was very like, you know, it already Bitcoin Cash already been existing for months before they before people when I say they, I mean, like the big media outlets of the large blocker world had told anyone about it.

So I think that, you know, it was just like kind of confusing.

Another thing is that the core idea, not only was it bad from a technical point of view, but it was actually somewhat unpopular because most people were small blockers at the time.

Most people believed correctly they should scale in layers.

A lot. There's a lot of optimism about the Lightning Network back then.

So most people thought, you know, we should try that.

There already was the Segway idea already increased the block size from one to four megabytes.

So there was people already thought we'd worked out this compromise.

So these are all these crazy things that happen with Bitcoin Cash.

Now, of course, Bitcoin SV and Bitcoin Gold.

Bitcoin SV, that was a fork of BCH, so that was actually not a fork of BTC.

And there's the fork of BCH and it kind of underlined this problem with the forks, which is that you fork once.

If you fork, it has to be like a permanent fix to some problem that can't be fixed any other way.

You know, so that's if you want to do the fork, you have to say there's some problem.

But once we do this one fork out of necessity, it'll be gone forever.

But this is not what happened with Bitcoin Cash, because Bitcoin Cash was like, oh, we hate all these Bitcoin Core developers.

We'll fire them all.

We'll switch to Bitcoin Cash developers who will be, you know, perfect angels and everything will be everything will be Nirvana and it will be perfection at that point.

And and of course, what you know, what they got was just a new problem.

And then they had the fork.

There was a new developer dispute similar to the block size dispute in the social dynamics of it all.

And then they had to split away again.

And so that was this problem with and then BCH later split two more times, I think.

So that's the problem is when you when you don't fix the fundamental problem, which is each time you hard fork and then all the reasons for ignoring the fork apply double each time.

You just think, well, this is just an endless list of people who can't like it's like postponing the problem, not solving it.

Right. And it's just and then you have just fewer people.

So, yeah, you had some people disagree, the group splits, but now you have two groups that are each smaller and eventually they're going to there's going to be more disagreement.

So using the hard fork as to handle disagreement is is rough.

You have to use it to fix some some bigger thing where the idea of disagreement itself in the future will not be as as likely.

And then Bitcoin Gold was a fork of BTC, but I kind of thought of it as a joke or maybe even in an attempt to discredit BCH, because this began this idea in Bitcoin that, oh, you can have all these forks.

And they were they were never really very big.

So I think only Bitcoin Cash was the only like real fork that had like an actual vision and said like they wanted to stand for something.

They wanted to stand for being large block and they wanted to scale to eight billion people and get lots of merchant adoption.

So and then even Bitcoin Cash, I think, was actually very, very even though it had all these problems and had a bad strategy and had bad execution, it was very successful.

I think it actually when when it finally debuted in November, it did make it to the number two.

It had flipped into Ethereum for one day on coin market cap.

And that's the origin of Vitalik Buterin has a tweet which says, congrats on this.

Seriously, it became a meme later, but it actually became number two.

It was 15 percent of BTC market cap for like the first week.

Then it started to slip away, which is which I that makes perfect sense.

I think you have, you know, with the fork, the first year or the first two years are like your big opportunity to make it.

And if you don't, then you fail.

And I think that's exactly what happened.

But really, a 15 percent, a lot of people don't realize.

So like Ethereum, I don't know the exact number right now and, of course, constantly changing all the time.

But Ethereum has always been less than, you know, there's a few times, but Ethereum has always been less than a third or less than a quarter of BTC market cap.

So you have BTC number one, then you have Ethereum.

But if you cut BTC into four pieces, each of those pieces is bigger than Ethereum.

So for Bitcoin Cash to open at 15 percent of BTC, that was enough to propel it into the number two spot, actually.

So now there's no guarantee that anything would happen the same way with this fork.

But so you're looking it up now and seeing what's the lay of the land.

I think that at the moment, Bitcoin is like five times bigger than Ethereum.

Yeah. So that would be like 20 percent.

So if theoretically, and I'm not saying that this would happen, but I'm just saying you can imagine.

So if Bitcoin Cash opened at 15-ish percent for like the first seven days, if hypothetically the e-cash launched at 21 or 20.001 percent, which again, I'm not saying, I'm just trying to give people an idea that it's within.

This is like what happened in the past.

And it's like one of the theoretical part that would make it number two on the whole list.

So that so I actually think Bitcoin Cash did pretty well, even though I was never a supporter of Bitcoin Cash.

I thought it wasn't a good idea.

I thought it wasn't a great.

It wasn't a good enough reason to use the hard fork.

It didn't solve the problem permanently.

It had a terrible, the overall goal of having large blocks on L1 was bad, bad strategy, bad execution, bad name, bad timing, bad everything.

So even though I think Bitcoin Cash didn't do very well, it ended up giving a lot of people money.

A lot of people sold the Bitcoin Cash and got more BTC.

So that was a good bonus for Bitcoin holders.

Yeah. So we're just coming to e-cash, I guess.

So why are you proposing a fork now?

What is the key idea behind the e-cash?

Well, the reason for the fork is this idea of the derangements of Bitcoin.

You see, if there was just some problem in BTC, you could just say this is the problem and this is the solution.

And then we would fix the problem and we would just go on with our lives.

But the problem is that the BTC culture, I think, is having too difficult of a time fixing these problems.

And the lack of soft fork, the fact that we haven't had a soft fork since 2021, whereas we used to do two a year.

And the last two soft fork, Segwit and Taproot, were built to support Lightning, which I think has been a mistake and a misallocation of resources.

So it's really the problem of the culture.

But the fork will be, you know, the L1 software will be almost exactly the same as Bitcoin Core.

And then we have this thing, the Core Untouched Soft Fork, this Q-SYF activator that activates BIT300 and 301.

And with this technique, we could activate more soft forks as well.

We could add quantum to resistance signatures to L1.

We could have OP-CAT, OP-VAULT to L1.

So all that stuff would be great.

And we would like to do that.

All that stuff just lets you have more L2s.

You have this competing space of L2s.

So it's really to create, split the community into a new community, people who are serious about scaling Bitcoin to eight billion people, solving Bitcoin's problems.

I just think the BTC community is too big now.

And it is too irrational.

It's too much work to fix it from within.

And it's better to start a competitor that either show it as a passive, you know, it's rather passive.

The community of Bitcoin.

So we're just sitting and waiting till the price go to the whatever.

Yeah, that's exactly right.

And my idea is, my view is that it's going to take a lot of work to make Bitcoin a success.

But BTC, there's this idea that it's already perfect.

It's already unimprovable.

It's already, it should not change.

A lot of people have this view.

This is the Michael Saylor view.

Many miners have this view.

They say Bitcoin shouldn't change at all.

The soft fork, of course, is not really a change.

You know, people figured that out already.

The soft fork is a way of keeping the old protocol and adding a new one right next to it and then having them all in the series cooperate with each other.

So actually, the soft fork is not not a change to the protocol.

It's everything good about a change, but minus all of the problems with the change.

So people have already figured that out in 2012.

So I just think, you know, things are actually not as good as they could be in Bitcoin.

You know, there's lots of different ideas for better privacy, better scalability, better user experience.

And it's just we live in an environment where those ideas can't come into existence in BTC anywhere near as easily enough as they should.

So I think that is not good.

And I think it's actually we don't realize how big of a risk we're taking.

So it's just, you know, this is just a thing.

The fork is not, you know, it's in one sense, I think it's quite dramatic because I'm saying like BTC is kind of maybe doomed and we need to escape onto this life raft.

But in another sense, it's really not that weird at all, because the creating a fork, it's not like it, you know, it's not really that expensive or that much work.

You have to sure you have to get some people together.

You have to get like, you know, the domain name and stuff like that.

But it's not actually that expensive to create the fork.

If I'm wrong, all this stuff will go away and no one will really be affected that much other than that.

Everyone got free e-cash.

So if I'm wrong, the costs are very low.

But if I'm right, then I'll basically rescue the project, the Bitcoin project.

So it's as a matter of cost benefit.

It's a it's very, very, very reasonable thing to do because the costs are pretty low.

The benefits are enormous.

And even if it's a failure, we'll learn a lot in the process.

We'll learn about like how what happens with hard forks.

We'll learn about the drive chain L2.

Like, does it work? Is it popular?

So it's, you know, it's quite a I think it's quite a good idea and more people should do it.

But I'm not sure if people, you know, I'm not sure if other people see it that way.

And I see a lot of questions in the comments about the name that there is e-cash already.

So how do you find the name e-cash and why e-cash?

Well, there is a terrible project that's like ranked like one hundred and seventy five or something.

And it only has the market cap of the project is much less than like what many Bitcoin companies like.

Like race like Blockstream raised like two hundred million dollars.

But the whole market cap of the ECX or XCC or whatever, the OMRI.

So that one is very, very small.

And then so e-cash.com and e-cash.org and e-cash.net, all the domains were available.

So I think it's hard.

You don't want to have any confusion over the name and you don't want to have two projects sharing a name.

But at the same time, I don't think that just because someone somewhere used the name once, that automatically gives them a monopoly over it until the end of time.

Because nothing would you would never be able to start anything that way.

You know what I mean? Like what if you wanted to start Google and they said, well, hey, that already that's already that word is already used for a mathematic term for a quantity.

Or even if, you know, someone somebody this is you discover somewhere that someone.

So so I'm not really worried about that.

I think the e-cash.com will be way more than enough to fix the brand confusion.

And I think this project will launch nowhere near the I mean, it's already being pre-traded by people at around between like thirty five and three hundred and fifty dollars.

So that would put it like nowhere near the other e-cash.

There's actually a lot of things named e-cash, of course.

So like the Fediment is an e-cash version.

There's this Bitcoin project.

This is a custodial cashew e-cash.

So it's actually just like I see it kind of as more of a generic name.

In fact, you have an email, you have an e-scooter or something like that.

And I guess the first draft of Satoshi's white paper was called e-cash.pdf.

Yeah, right.

So that will be a great story for you.

So you choose this name because of Satoshi's first drive.

So the real.

Well, yeah, you know, to me, it was just the e-cash.com was available and not very expensive.

So I thought if anyone was serious, you know what I mean?

Like if these other projects were serious about.

They really, really love the name e-cash, you know what I mean, because anyone can just do some hobby project.

And just but like, why didn't they buy the e-cash.com?

It had been available for sale for like, I don't know exactly how long, but, you know, it was just like sort of there.

So I thought that all of these projects are not they're not very serious about, you know what I mean?

Because anyone can just pick a name and just say, oh, you know.

So if I understood you correctly, you want not to complicate the things to make it easy.

So if there is if there is possibility to make a fork, let's do it.

If it fix some problems of Bitcoin, great.

If it's like a failure, OK, we will rethink it, make an analysis, homework and do it again.

Right. That's right.

That's cool, I guess. People should think more in terms of expected value and not about the likelihood of success.

You know, you got to think like, oh, what if there is, you know, what if there's some kind of military operation where you could assassinate?

Well, I don't know. We're going to get this like tripped.

I was going to assassinate Vladimir Putin or something.

This is going to get like a trip by all the AI scanners or something.

But the point is, you have some desperate maneuver that might end the war, but it has only a two percent chance of succeeding.

And it's like, well, you know, it kind of depends on how expensive it is.

I'm fucking bet on it.

Yeah, right. So it's kind of like and then when you try to find a Bitcoin block, it's like you you're mining.

Each individual mining attempt is very unlikely to hit the block.

But, you know, it's just there's the cheap, the basic and do many, many attempts per second.

And so so that's the rational thing.

It's kind of like, hey, yeah, it's kind of like, you know, if you're trying to ask out a girl or any other thing like we were talking before about, you're kind of like, hey, we'll just try any.

We're on board for trying any wacky thing that might might work, you know, to help us solve our problem.

And then it turns out it's problem solved.

So. So, yeah, it's kind of like how much does it cost?

Benefit is really the lens that you should look at it through.

It's like, what does it really cost to launch the new project if the project will almost certainly fail if it doesn't do anything?

That was like Bitcoin, gold, Bitcoin, diamond.

Like they didn't really do anything.

They said that they did, but it wasn't very sincere.

They were just sort of saying, oh, well, this is a this is a version of Bitcoin that has SHA-3 or something.

You know, these are like not very.

Useful, but if you're right about, you know, if I'm right about these problems in BTC, then we have a long history in BTC of of dissatisfaction with various things.

So we have this whole podcast industrial complex that was shilling cold card and stuff like that instead of working on OPVAL, instead of working on multisig.

So it just means that over time the problems will build up and it means over time as the competitors, you know, you have USDT on Tron or you have Ethereum.

The competitors will be working hard every day.

BTC will be slacking off.

So over time, there will be this big difference between the state of what the state of the art can do, what the industry can do and what the.

And what BTC can do, and eventually it will just become too embarrassing to sustain and they'll have to be a change of some kind.

OK, I want to dive deeply in e-cash, so you're talking about seven sidechains at fork, so five already live and two in progress.

Let's talk about each of them like in short.

So we have Thunder, right?

It's a high throughout payments sidechain.

So it's the decision for payments, like payment solution, right?

That's right. And you can.

So one interesting thing about Thunder is we have tested it to an enormous volume of transactions.

And we had last summer, we had a contest to improve the performance.

And part of the contest was the computer would generate like an enormous number of transactions, connect these blocks, then disconnect them and then reconnect them again and time the software to see how quickly it can process the incoming blocks, the incoming transactions.

And so what's important about this is the Lightning Network in BTC, they couldn't even do a test like this because there is no way to process those that many.

There's no way to onboard that many people to the Lightning Network at all, let alone.

But we have it in like a reproducible GitHub test that anyone could run.

Anyone can just click on onto GitHub and you can see the test for yourself.

You can see everything about it, how it was made and what it does.

And so we've already tested it to something that the existing L2s on BTC can't even do.

So that by itself is an extremely significant innovation, but that's really just one out of a handful.

So but just that by itself is this is and all this is this is scaling and onboarding eight billion people.

There's no liquidity problems like with Lightning.

There's no onboarding problem with like with Lightning, there's no, you know, you need to refresh the channel, there's no idea of HTLC, so there's no sensitivity to the L1 fee rate, you don't have to be online in order to receive money, you don't have to sign in order to receive money, so it's much, much better.

The transaction fees are automatically aggregated and paid down to the L1 miners, so it also addresses security budget.

So so all this by itself, you know, even if again, even if there's a 2% chance that I'm right about this, it would make it a very significant invention for BTC.

And it's gone much further than all this other stuff.

You have stuff like ARK, or, you know, or whatever, Fediment or whatever, where it's kind of like that stuff is very halfheartedly endorsed, and I think has less than 2% chance of being successful, whereas this has kind of already been tested, this is only missing like, you know, a few components to go viral among users and be adopted in a serious way.

So I think it's, I like the situation with Peter Todd, when you said just show me where I'm wrong.

So all the guys who are watching this stream can go to ecash.com slash sidechains.

And there are links to GitHub, where you can check it and test it and whatever.

So if I understood you correctly, the security part is z-site, right?

It's modelled on Zcash, right?

That's right.

Yeah.

So that Zcash is, of course, an altcoin, where you get these Z addresses, and they blind, they hide the sender, the receiver and the amount.

So this is really, really good privacy. And you can even reuse the Z address, because it hides the sender, the receiver and the amount. So it doesn't matter that you can post the same address, you don't have to give people a new address. And z-site is just the Zcash orchard crate as an L2 of Bitcoin, you know, basically. So it just says, you know, everything that all this cool stuff that they have been working on for years, and they're just going to hide it. And it's really, really cool.

As a Bitcoiner, we could have that. And that would be much better than CoinJoin. CoinJoin is not very good. You only mix with four people each time. You have to pay the on-chain fee on L1 each time. They have to have like, has to have like a coordinator, there's only you can only do it in certain amounts, because you have to have be present with other users. And we're in the Zcash, z-site idea, everyone goes into the same dark pool, and then they come out at the

same. So the anonymity set is way bigger. It's much easier to use. So again, I think it's just it's much better than the state of the art in BTC, which is CoinJoin, which most people don't even use.

So you just took the idea that you liked and that worked well and added to sidechain z-site, right?

Right. I don't necessarily want to be saying, oh, which L2s should exist. I kind of want to say, OK, this is stuff that other people like, you know, the altcoin, the Zcash altcoin, they've worked a lot on it. So we'll just we'll just borrow that.

So this is more of the idea that I was talking about at the beginning, where because it's all open source, you would think people would just take the best stuff. So that's kind of getting back to that.

Which means that you can add in the future some more stuff than will possibly in need for a cash and add additional sidechains, right?

Yeah, it's a very good point, because it's my view that just having the option to add a new L2, that is actually much, much more important than any individual L2. So the fact that you can recover from a situation where the developers are bad.

This is the Bitcoin Cash problem in a way, because they were thinking, according to the Bitcoin Cash people, Bitcoin Core developers aren't good, so we need new ones.

But the problem is the ones that they got, they also didn't like, and then they had to get rid of them again and again.

But with this idea, I'm saying, listen, you keep L1 as Bitcoin Core, L2 are mostly just altcoins that are good, some custom made ones that are variants of also like, for example, Bitnames is very similar to Namecoin, but not quite the same.

But then you have, even if all of these are bad, even if everyone, all the developers are terrible, well, you can always just launch a new L2, and the coins convert at the one to one rate.

So it's like going to an ATM or something and taking $20 out of your bank account and getting $20 worth of cash, or whatever the case may be.

So yeah, it's great.

So it's like Thunder and Zebra and playing Bitnames, it's different teams, right?

And they can be competition between them.

So if you don't like some L2, they can be replaced by some better guys, right?

Those three happen to be very similar.

And all, well, actually, no, you're right.

Yeah, those are different.

Yeah. So yeah, so actually, those, yeah, you have no idea.

Maybe those people hate each other, or maybe they don't.

What I was trying to say is that those are all based on the Rust, we had like a Rust like template.

And at one point, we had a bunch of different sidechain templates, but over time, one of them came to dominate.

But there are actually some additional sidechains proposed by other people.

So someone who has nothing to do with me, they proposed it, again, Elements Plus.

So Blockstream has this Elements blockchain that they made.

And we added like, or I suggested that he add, it had Opcat already, it had a bunch of other stuff.

I said, you could add CTV to that.

And you could call it Elements Plus.

So there's Elements Plus, I don't know if it is activated on the new test dry run network.

But so then, and then there's a few people have proposed other ones in addition to the ones that we have.

And so I'm pretty sure there'll be at least three more, some Elements Plus one, some EVM one,

and then someone that has a bunch of stuff that I forgot how to pronounce.

But it's some kind of, they're very impressed with themselves, whatever it is.

So there's at least three more coming from other people.

And there could, who knows, there could be more.

And some of them will probably be terrible, and some will be great.

And that's fine.

But it's a rather scalable system, I guess.

I want to reply to this comment.

Z-site, it's the name of sidechain, but Zebra, it's the name of the team who make it.

So the third is BitNames.

It's for decentralized identity and DNS.

It's the thing that was not available in Bitcoin.

So it's in use now.

There was originally this project Namecoin that was co-invented by Satoshi back in the year 2010.

And this always had a lot of potential, but for some reason, it was never developed.

And I don't know why.

But it's a very cool idea, because it says just as you have this scarce 21 million coins,

you could have scarce names someone could own, you know, encrypted, that bit or whatever.

And why have ICANN, why have the ICANN registrar system,

where you have to pay with maybe a credit card,

and they can take the domain, the government can seize the domain from you.

When instead we can have this cypherpuck thing, it's better in every single way.

It's like you own the name permanently, you don't rent the name, you own the name permanently.

It can never be seized.

You own it anonymously, cryptographically.

We also, we live in a world where people, you know, are worried about being like de-platformed.

You know, you could get kicked off of YouTube, or you could get kicked off of X or whatever.

People really worry about that.

So you don't have a very strong property right to the name.

But with this, you would.

And with this, you know, you can have the computer talk under the hood and say,

okay, here's, look me up on BitNames.

This is my telegram, this is my phone number, this is my email, this is my PGP key,

this is my website, this is my personal website, this is my Onion website.

So the potential is really enormous.

This is my Noster, this is my Twitter, this is my Instagram.

So the potential is enormous for the, to have a strong property right to your name.

And yeah, I think this could eventually fix spam, this could eventually fix all logging in.

Because you try to log in, they would just say, instead of you logging into their system,

you would go to log in and they would just look you up in BitNames.

And they would send you some kind of encrypted thing and you'd hit the button and say,

oh, this is him.

And so.

It's not a new idea.

I mean, the whole identity through all the internet, but maybe it will work.

Right.

I completely agree with you that.

So again, it's like Namecoin, you know, it was tried.

There was also like, there's like other stuff, Handshake and these other things there.

They're very interesting.

And it's been tried a few times.

Again, the story I'm trying to pitch is that, you know, eCash would get to 8 billion people.

So I was like, I would have felt bad to not have it.

But I actually think there are BitNames a little bit better than some of the other,

the predecessors as well.

So, but it's just there and people are interested in, and I think it will have.

For example, I think it's, you know, if we go all the way back to that Silk Road case of the online

drug site, they have constantly, because they have to have the onion link,

they constantly have phishing problems.

So with the, just to visit it, you have to type the giant garbled, you have to find the link,

which is a bunch of nonsensical characters.

And then there's people always imitating them to steal.

They say, oh, deposit coins here.

So this is a very interesting project.

I have a couple of friends who researched these darknet markets that I made after the article.

I became very interested in it.

So there's huge phishing problem.

There's a huge impersonation problem.

When people go to the site, they typically, I don't know if it, like,

still works this way or something, but you typically are asked to provide your PGP key

and the merchant's key, and you're supposed to do everything encrypted so that even the site doesn't

know, like, what address you want stuff shipped to and things like that.

So a lot of this stuff could be more easily automated, you know, with something like a bitname.

So you just own the name and you have, then you have your real name and then you have your alt name.

You know, like how Neo in the Matrix, he's Mr. Anderson in the real world,

but then he's Neo when he's the hacker, you know.

So it's like you have your other name, and your other name is doing all the shady stuff,

and then your regular name is respectable.

Sure.

I reply, we will talk about the airdrop and the wallet.

So we will ask Paul about that a bit later.

Now I want to continue diving into the fork.

So the next sidechain is BitAssets.

It's for NFTs and ERC-20 style tokens.

So it's like an answer to Ordinals and all this BRC-20 stuff, right?

Because even for me, not a very technical guy, so the problems of BRC and Ordinals are obvious.

It's like, it's not working correct.

So what's different in BitAssets?

Well, I think it's just better.

First of all, it's just more organized and tidier to move this stuff off of L1 onto an L2,

where you can kind of play, it's like a playground and you can do whatever you want over there.

And we want it to be easy for people to just make.

I think the easier it is for people to just make new stuff, the more fun they will have,

but also the more they'll kind of just get it out of their system.

You know, they can do it over there.

And, you know, a lot of this stuff is legitimate.

So like the NFTs and stuff, a lot of that is kind of, you know, kind of strange or not,

it's not very useful, but sometimes it is because, you know, sometimes people need to issue,

like, for example, stock in a company, equity in a company.

And that you need, it's actually quite relevant to figure out, okay,

how much total stock has been issued.

This is a service that the U.S. government offers, actually.

You go to Delaware, it's, I don't know if it's the federal guy, I don't know exactly how it works.

Most, in America, most of the corporations are registered in Delaware for an obscure historical reason.

But you can, like, go online and look up, like, oh, how many shares of stock are you seeing?

So that when you buy a share, you know what percentage you have.

You have to register and you have to pay hundreds of dollars per year for this thing.

There's also, you know, you got to keep in mind that stablecoins, which are really, really big,

that's basically, you know, just an NFT that's backed by someone, you know,

that's just, you issue these units and then Tether says that they will, you can redeem.

So it's a backed thing.

So that's a huge use case.

And so we would be foolish if we didn't support it.

Is it correct that you can, like, in future start USDT, for example, on BitAssets?

Oh, yeah, certainly.

And in fact, I think because we don't even want to wait for them, someone has cooked up,

they've created some kind of thing where it's like a USDT underscore D or something,

where basically you offer it on BitAssets and then it's redeemable in USDT cryptographically.

So it's just like kind of one.

So that's like you hit the ground running.

Wrapped USDT.

Exactly, right.

So then you have that and then you don't have to wait for USDT, although probably when the real USDT

shows up over there, it will be pretty popular.

And BitAssets can also be home for a new wave of meme coins, right?

Yes.

Whatever.

Okay.

So Photon, it's like a bit harder thing.

So what is that?

Quantum resistance sidechain.

Well, it's very similar to...

All it is, is I was thinking, you know, we have this quantum debate.

Everyone's worried about a quantum computer that can sign away your funds even if you didn't give it

the private key because it can just guess a trillion passwords and things at once using its quantum technology.

So the quantum debate was getting really big and we were like, well, we can just ship a version that has

quantum resistance signature options.

And I was also thinking we would do separately from this L2 back on L1 with the second QSYF.

We have one in the works to do it on L1.

I'm not sure if either of these will actually help people, but I was hoping it would at least move the

debate forward a little bit because, you know, with quantum, it's very abstract and it's kind of like, what should we do?

And then people bike shed.

You know, they argue over these little details of like, oh, should we do this one or this other one or this?

So I thought we'll put one, we'll just put one out and just show people this is how easy it is.

You just put one out.

People can kind of practice and see how they like these signatures and see if they like the performance.

It may help eventually Bitcoin decide what it wants to do on L1 or it may be very popular if people decide that they really trust the drive

chain technology a lot and they're really worried about quantum resistant signatures.

They could say, hey, listen, I'm keeping all my money in a quantum resistant signature because I'm very worried about quantum.

If people think that, then that L2 photon would be for them.

So it's like a hedge against the future problems of like, well, again, it's easy to just kind of throw it out and we just staple in some quantum resistant signatures.

Maybe they are very slow or maybe they consume many bytes, but hey, you can just ship something out and say, listen, here's a thing.

So and then we can that's a lot better than just talking about it, which is what a lot of people are doing.

We just say, hey, you have choice, right?

You can use it or not use it.

If your security is number one for you, so you can pay like more and spend more time on that.

That's exactly right.

OK, got it. We have Truthcoin and Coinshift.

It's like prediction market and decentralized exchange.

And it's obvious because market needs it.

Yeah, I was a huge prediction market guy for a really long time.

In fact, in 2013, I was arguing we should bring prediction markets to Bitcoin.

So I have a different site, BitcoinHiveMind.com, and I was a huge shill for a huge supporter of prediction markets.

And so one of my earlier ideas, really, is how to do this peer to peer oracle, how to do this online crypto prediction market thing.

And I was like championing this for a very, very long time, long before there was a poly market or a calc sheet or anything like that.

And so now, yeah, this is, again, an idea that I was working on in Bitcoin from 2013 to like 2015.

And but there was no way to add it to Bitcoin because Bitcoin is slow on soft forks, slow on sidechain, slow on all this programmability and stuff.

So there was no way to actually add it to Bitcoin.

But now there actually is.

So I think that, again, it's something that has a lot of potential that will be very complicated.

And I don't know if it will be fully operational by the time launch later this month.

But I don't. But, you know, we'll see again.

It's like it's there.

You can see it. Anyone can get involved and help, you know, especially with AI and stuff.

We can write software much faster than we could before.

And Decentralized Exchange, it's for all the tokens which were pushed on the BitAssets, right?

No, no, no. BitAssets can already do a decentralized exchange for its own tokens.

Coinshift is slightly different.

Coinshift asks this really bizarre question.

And it says Coinshift depends on the L1 of eCash in order to know about which coins have been deposited and withdrawn.

So that's all the L2s require the L1, same as the Lightning Node requires a Bitcoin Core L1.

But Coinshift asks this other bizarre question.

It says, you know, what if there were what if the Coinshift needed multiple L1s?

And in fact, to run Coinshift, you have to basically download other full node software of altcoins.

And then if you do that, the Coinshift is aware of which altcoin transactions have confirmed.

And it can then you can then swap altcoins inside Coinshift.

Now, I'm not sure if this idea is going to totally work, but I think it I think it might.

And in any event, a version like 1.0 is kind of up there already.

So we'll see if anyone likes this.

I think it could be a very useful tool in terms of like, like making it so that you have an option if the exchanges don't do necessarily what you want.

So I think that that could be cool.

But that's a very interesting sort of experimental idea.

At a first glance, which I look at seven sidechains and they think of some DeFi stuff, you mean lending and borrowing and all this kind of stuff, which can be a certain sidechain or maybe you you think of another place like in some bit assets or maybe or and the other stuff is like RVA.

RWA, I mean tokenization of everything stuff.

Do you think about it?

Well, so with respect to like a DeFi smart contracts type of thing, there actually was we had something called ETH side, which was like EVM chain.

And I wasn't that interested in it.

But I think someone, as I mentioned, maybe 20 minutes ago, someone is bringing it back in a better version with like a rust EVM.

So there will be like EVM.

I don't know, like, you know, obviously, a lot of that stuff is popular in terms of the transaction fees spent.

You can go to a site crypto fees that info and you can see Ethereum has more transaction fees than Bitcoin.

I think partly, though, that's just because the BTC fees are so, so low.

And that it's mostly that BTC is doing a bad job.

But, yeah, I think the idea is that I would rather not pass any judgment.

You know what I mean? I would not want to say, oh, I think people should do this.

I think we should do that.

People should just do whatever they want to do.

And if they think something's a good idea, they can try it.

I mean, it's like a natural way to develop new ecosystems in the days.

So when a new ecosystem arrives, so it needs some traditional stuff like its own exchange, its own token creating facility and DeFi stuff and all this kind of stuff.

So I guess you will need some DeFi stuff if you want your system to be complete.

Yeah, I think perhaps, probably, I don't know.

It depends on what people really want.

Like, I think in part, investors must be very annoyed when they open coinmarketcap.com or something and they see all these different coins and they just kind of think, like, how do I know which one to pick or something like that?

So that's my guess.

And so that's what this is trying to say, is that this will be the final thing because it will just absorb everything that everyone else can do, even to a greater extent than Ethereum was.

Because Ethereum was like, oh, it's like Bitcoin, but you could use smart contracts or something like that.

But Ethereum also had its own governance issue and its own block size issue.

And of course, when Ethereum blocks fill up, that's when people abandon it and go to Solana or to whatever.

So with this idea, all these different chains, even chains that are the same but different sizes, like Solana, like EVM, like kind of like a larger block version of Ethereum to some extent, and the whole EVM family, different sizes.

In my conception, these are all just L2s of different size and they're all linked to the same 21 million coins.

Okay, let's talk about airdrop a bit, because I see a lot of questions in the chat.

So what would you advise an ordinary person who's simply holding Bitcoin?

Do they need to do anything special before August or they can leave anything alone or they need some wallet special or whatever?

Well, the most important thing is to have self-custody of the BTC, because if you have BTC through someone else, if you own BTC through, you know, Coinbase or MicroStrategy or whatever, they are the real owner and they will get the credit.

And so, yeah, self-custody may be difficult for some.

But so if you want to be owning your own UTXO, you know, you're going to own the coins and you have the private key at the moment of the fork, which is like, you know, in like a few weeks, the end of August.

So that's the most important thing.

Then you want to probably split the coins.

And there is an easy way to do that.

I mean, it's easy from my point of view, but probably from a regular person would be totally confused and whatever.

So there will be, you know, I'm sure there will be.

We have like splitting tool that you can use, but I'm sure that it's also suspicious for people to just download software in the crypto industry.

You don't want to just download random software for people.

So we have we will publish we have published documents about how to split the coins so that because when they're created, they're kind of moving lockstep.

They might move together.

So if you if they split and then you send the BTC, you send the e-cash to the new destination also.

So you want to split them so that they have separate fate.

And that's so that's what you should do.

Yeah, if you want one thing, if people are interested is we have these dry run.

We have a practice hard forks that we're doing.

So we're currently on dry run number three.

And basically what I'm saying is you can just download that and you can practice that one should behave mostly the same way that the real fork behaves.

So except that it'll be a bunch of coins that are useless now and they will be useless in the future.

And so but you can try it out for yourself.

If you're a technical person and you want to really like practice, you can just practice on the network.

But if you're just a normal person, you want to just own BTC.

Try not to spend any BTC until you've split the coins.

And so try not to spend it, you know, until you've.

I mean, I mean, if you have bitcoins on some regular non-custodial wallet, like trust wallet, is it works?

Yeah, as long as you don't move them, do you have them, you know, you can take your time in that case.

So you can just say, OK, I just I'm holding them on August 23rd or whatever it is.

Then they they will split into two and then as long as you don't touch them, they'll stay there as two pieces, then you have to you have to split them off and to if people want more information about that, I mean, what you would do is there's this a transaction you can make so that it only moves the eCash, but not the BTC, and that's because we've tinkered with the end lock time, if you do the one beneath the end of the lock time, that's the end of the lock time, you know,

the max. It's a transaction that cannot be broadcast in the BTC network for like 500 years, but it will be instantly broadcast on ECX, then they'll be split and then you have them in in two different places.

You can buy and sell them independently, but otherwise they'll be like a package deal.

OK, is it easier with the eCash wallet, which is available?

Yeah, we have a mobile wallet.

I think it's pretty good.

And yeah, the mobile wallet will tell you like you have this many coins, you have to split.

But of course, you have to import in order to get the you'd have to import your BTC private key.

And I don't know if people want to do that with something that they just downloaded versus something that they actually trust they've trusted for years.

That would be I could understand how people would say, oh, I want to.

So I don't know, it's kind of like a little bit of a.

No matter what you do, you either have to like do it yourself, but then you have to research these technical details about and lock time or you use a splitting tool, but then splitting tool as your.

Private key to your BTC, so that's I think a smart thing is just it depends what kind of person you are, OK, if what you are is someone who's invested and you're holding because you think that one day Bitcoin technology will be really, really good.

And you don't plan on moving, sending or selling or moving your coins, then all you have to do is have them in self custody and do nothing, and that's that's that's pretty good.

If you're someone who's making and buying and selling and you're moving a lot of BTC around all the time, then you should probably research the splitter tools that you can split immediately.

If you just keep your coins on an exchange, you have to hope that the exchange will and I don't know, I can't answer for the exchange.

I have there are a few exchanges that I think will, but then I don't know if they all will credit.

And of course, even if they say they do, then maybe they'll screw it up or maybe they'll change their mind.

So I can't necessarily vouch for what the exchange if the exchange will give you.

When I say exchange, I mean like one of these big places that have a huge.

Yeah. If you own through the ETF, if you own through the.

So like some of the ETF, the BlackRock ETF, they have language in there that says we will just pick which if there's a hard fork, we will just pick which side you get and you don't necessarily get anything else.

Now, I don't know if they're serious about that or if they are whatever, but, you know, if they plan on pocketing the.

All of the for them, so I have absolutely no idea, and even if I did, I don't know if they're going to change their mind or or what's the most reliable thing is to have self custody of your own BTC, not not touch it for a while.

Look around and see, you know, see what other people actually I found.

A text on our website, which is called Who Can Receive E-Cash Coins and What Will It Take?

So it's the like explainer for for those who want to to get their drop and do it properly.

It's in English, Russian and Polish if you if you need.

And on our GitHub, we have like a fast facts site that has like lots of information and I don't know if it will.

One of them is how to split the coins.

And you picked the interesting topic about the big wallets.

So probably the most controversial aspect of the upcoming fork is as far as community is concerned, is the resignment of the coins attributed to Satoshi Nakamoto, for example, or another big holders.

So can you explain in your own words what what you are doing with these coins and what I'm not doing?

Yeah, absolutely. I think this is a really, really good idea that people should copy.

But some people, I think they have to warm up to it.

You know, they don't they don't quite like it right now, but they just have to think about it a little bit more and they will like it.

So what we do is there's this pattern called the Potosi pattern.

Satoshi mined 1.1 million coins using this weird miner.

And he left distinct traces.

These are all very, very early coins.

And instead of giving Satoshi all 1.1 million e-cash, we're only giving him 600,000 and the other 500,000 we're giving to the supporters to help make the project possible in the first place.

And the reason this is a good idea, I mean, there's a lot of different reasons.

But one is that it gives people an incentive to launch forks that are actually good and where a lot of work has been put in before the fork actually happens.

So you want to have all the work done up front.

And you also want the fork, you know, if the fork doesn't have a critical mass of advocates and people giving it attention and people rooting for it at the beginning.

It might stall out.

So you want to build support first before you bother anyone, before you go on any podcasts or whatever.

Build all the support.

Build all this technology.

You do it first and then launch later.

And this is just like a really good idea because it means that the alternative would be to have a lot of people sacrifice up front.

And then be treated the same way as the skeptics as when the fork actually launches.

So I wrote a kind of an article about this where I put it on X so we can maybe link to it or whatever.

But I think this is a really, really cool idea because this is like privatizes the.

It means that if there's any mistake in, for example, Bitcoin Core or E-cash or anything else, it's a huge mistake in Monero.

There's now a way to profit by fixing it.

And this is great.

It just means that people be scouring these networks for anything they think they can improve.

Launching a new version, giving everyone free money, including Satoshi, is 600,000 coins that otherwise he would have had zero.

So this is, I think, you know, very controversial because it's kind of like, you know, what gives someone the right to move coins around or something like that.

But I think that's the wrong way of thinking about it.

The right way of thinking about it is how many, how much E-cash would everyone get in a world where no one did this type of thing?

How many hard forks would there be in a world where no one did this type of thing?

Probably everyone would just get zero instead of getting 600 because the project would never exist in the first place.

And even if it would have existed, would it have been built as quickly or would people have, you know, what is how does it work?

It's very hard to run a project when you have people putting in different levels of effort.

So you have a project and one person is working five times as hard as someone else.

Well, with this, you can reward that person with five times as many of the pre-E-cash versus one fifth for the other person.

So you can have a whole growth process and you can give people a reward that is contingent on the value of the project when it launches.

So versus if you do the pure fork, then you cannot.

And of course, nothing is stopping someone from just taking this and releasing yet another fork that doesn't have the socially reassigned coins or doing any other thing, you know, or doing 250 instead of 500,000 or doing all 1.1 million.

So I think it is controversial, but I think that the people who dislike it or pretend to dislike it, I think they're being dishonest in many different ways.

So for one thing, they're sort of saying like, I think about it like this, either this drive chain stuff is a good idea or it's not.

OK, if it's a good idea, then why isn't BTC doing it?

And if it's not a good idea, then it doesn't matter.

Who cares? It's Satoshi's coins plus a bad idea.

It's two bad ideas.

This will just be some bad project.

It won't work.

And then it's like it's like a new project on Ethereum sent like millions of coins to Vitalik and he just either sold it immediately and spend it on Ukraine or something like that.

Does it concern only Satoshi's tokens or another other big holders like Satoshi?

And I think they are they are also like abandoned, basically.

Satoshi had a miner that he'd only turned on after waiting five minutes between each block.

So they were the miner was just to move the network along.

I don't even think he was trying to get the coins.

And I don't think he has any plans to revisit the coins.

If he does, he still has 600,000 coins, just enormous amounts.

It's only Satoshi's coins that have this patoshi pattern.

And they were all mined in like 2009, 2010, maybe a few of them.

But I think, yeah, I have a lot of disagreements with Michael Saylor.

In fact, I think he's a very clueless person and overall.

But he did, you know, he bought the BTC fair and square.

I'm not exactly sure if he will even end up getting any cash, because who knows?

You know, presumably he has them with some custodian or Coinbase or something.

He may have them with something that that person may have it down in there.

That person may have it down in their fine print of the contract that they get to keep any hard fork.

I have no idea what will happen with that.

So I don't know.

But hopefully they look into it if they care.

Or if they don't care, then maybe they don't.

You know, it's pre-trading.

Even if the pre-trading is like $36 to like $300 per coin, that's actually a pretty small percent.

So if it's $100 per coin versus BTC rises to $100,000 per coin, that is one thousandth.

So just that's pretty low, actually.

So maybe they just decide that they don't care.

Or maybe it'll open at a completely different price.

Much higher, much lower.

Could be anything.

Anything could happen, you know.

For sure.

By the way, does the question of who Satoshi is actually matter to you?

Or is it better that he stays unknown forever?

Well, clearly he wanted to remain anonymous.

So I'm happy that he achieved his goal, I think.

And I see no reason to, let's say, interfere with his plans to remain anonymous.

So I think that that's fine.

Certainly as a matter of history, it would be interesting.

The same way it would be if it was like Einstein had come up with a bunch of equations by,

you know, using LSD or by using meditation or something.

Or that he plagiarized them from someone else.

That as a matter of history, that would be very, very interesting.

Of course, the actual physics of the equations doesn't matter in the slightest.

And so similarly, you know, the ideas and the code, they certainly stand by themselves.

So yeah, I think a lot of people have actually figured out

clues about who Satoshi might be.

And they're just not saying anything because it's very impolite.

It's an impolite thing to do.

There are some cool clues out there, though.

Okay, so we have 90 minutes of super interesting conversation.

Now we can ask some questions from the audience.

I have a few at my dock.

And you can also ask in the comments.

I will tell them.

So the first question from our audience is,

Hey, Paul, you mentioned that since 2017,

Bitcoin Core has only pushed through two soft forks.

And both are backed by Greg Maxwell, who is no longer involved in the project.

Does this mean the software activation path is effectively dead?

And is that exactly why the e-cash plan emerged as a separate layer one?

I would say yes.

And I would also add that the soft fork is a really, really good thing.

It lets us do all this cool stuff.

And it has basically no downsides.

So the fact that we're not doing it proves how crazy we are.

You know what I mean?

It's kind of like if you walk into a village,

you walk into a town and they say,

Oh, you know, here we just like, I don't know,

here we burn all of our food before we eat it.

You know what I mean?

Like you just like instead of cooking it, they just burn it all.

And you're like, why don't you just not burn it?

And they're like, oh, well, and they just they just carry on.

You think like, oh, this place is crazy.

I have to get out of here.

So that's the issue.

That's why I wrote in the derangements of Bitcoin.

We do a lot of stuff that just makes no sense at all.

And when you look into it further, you see,

oh, it makes even less sense than I thought.

And so, you know, the fact that we can't do soft forks anymore

speaks to how crazy the community is.

And its days are maybe numbered.

You know, it might be the end.

But, you know, again, I hope not.

I hope that Bitcoin does super, super well.

But that is, I would say yes to that question.

OK, another question is about why doing fork during the bear market?

Why don't you wait till the bull market when there are more changes

that projects will get nice traction and chances of surviving?

Well, it's a good question.

I mean, no one knows when you got to plan this type of thing out.

And no one knows when a bull market will end or begin or.

I do think there is a natural cycle of.

You know, success leading to irrational optimism, right,

and then leading to overdoing it and then pessimism leading to over.

So I think there's an overcorrection each time.

So there's good news and there's bad news.

But then there's inflated expectations and then overly pessimistic.

So even though I do believe in this sort of cycle to some extent,

it's not the same thing as the, you know, the seasons,

you know, where we can predict it to the exact day.

We know exactly when the darkest day of the year is going to be December 21st, you know.

Only postwar.

So with this, we don't really know, like, oh, why don't you wait until the bear market ends?

Well, when is that going to be?

I don't know when that is.

You know what I mean?

You got to plan it out months in advance.

So if I knew that, maybe I would.

So if I knew that, maybe I would.

But I do think that also part of the bull and bear markets,

I don't think they are divinely ordained.

You know what I mean?

I think they actually come about because of the behavior of people.

So it could be that launching this project is what kicks off the next bull market.

I'm not saying that that's necessarily the case,

but it could be like, oh, there's this project.

Then suddenly everyone starts copying the fork ideas.

Now Bitcoiners are just getting hundreds of free different forks.

And now everyone has all this money.

And then eventually the mainstream world wakes up to the fact that,

oh, actually, Bitcoin is not just one project.

Bitcoin is this tradition and culture.

And there's actually now a way to have different teams that compete and all hate each other.

They all launch coins.

And every time they do that, as a Bitcoin holder, you get free money.

Then that might be a completely new narrative that just like...

Now, I'm not saying that any of that will happen.

But I think that the bull and the bear market, they're partly caused by people's work.

Okay, you already mentioned some incentives.

So there's a question from the audience.

How do you plan to onboard new users and projects?

Any incentives in the marketing scenario?

My strategy is to lower the cost.

So I think that's better than...

We have, you know, we actually do...

Of course, we hire programmers all the time.

So if someone wants to work, that's great.

And they should just show up and start fixing things.

We have the bug hunts contest.

We have lots of stuff that we do.

So we do hire people.

And that's how we ended up with, you know, bid names and et cetera, bid assets.

So I don't want to necessarily rely too much on my vision for what people might want.

Instead, I want it to be more open and say, you know, whatever it is.

I think some things that make it easier for people to develop these new projects

and onboard the new users are just if you just get out of people's way, actually.

Because oftentimes in Bitcoin, you have something where some genius person will show up.

Here's my genius project.

You know, you have like a Jeremy Rubin, you know, and he's doing CTV or whatever.

But then he can't get CTV because there's no soft forks.

Same for, you know, Vitalik Buterin or Roger Ver.

Vitalik Buterin, they tried to start Ethereum on BTC back in the day.

And Roger Ver, they tried to have large blocks on BTC.

You know, people tried really hard to get it on BTC, but they just couldn't.

So first, we're going to lower that cost to zero.

We want to make it so that people can launch new L2s.

So part of the reason to put out a few different L2s is so that other people can then look at those

and just say, OK, this is now a template for a fully working L2.

I just want to modify these parts, change the color and add my new feature that people are going to like.

So if you do all that stuff, you're lowering the cost because you don't know who to hire.

If you hire someone, you might hire a great person.

You might hire a mediocre person.

You might hire the best person in the world.

Or you might hire the 10th best person in the world.

It's very hard to tell.

You know, it's a really big risk when you hire someone.

I know.

Yeah.

So then the better thing is to try to lower the barriers as much as possible

so that they can just launch, you know, they can just spend one Saturday,

make their project, launch the project,

and then say, like, oh, here's my project.

Then they get all the credit.

They get all the glory.

They're a benevolent dictator of their own project.

They stay in their own GitHub repository.

And that's what a lot of people like, is a lot of people do it just for the glory alone

or for the hack value, you know, just to prove that they can.

So those are the people we really want, is those kind of superstar, impressive people.

That's a lot better than just hiring someone.

So I guess you just have, like, product-centric project where product on the first plate,

not the marketing, not all this, you know, influencer kind of stuff.

When you don't actually care about the price of token,

you more care about the problems that should be solved by this product.

I would agree.

I think it's kind of hard.

Marketing is kind of hard because you spend the marketing.

Then, well, first of all, a lot of people take issue with it.

It's like a lot of people hate crypto, and they don't even allow marketing,

which is a bad sign.

So I'm not sure if this is true, but I think YouTube doesn't allow.

I don't really haven't checked that much.

It says it's funny.

It speaks to how little I have.

No, YouTube is more or less.

Meta is burning, like, every second ads with crypto.

And Google Ads, a bit better, but not very easy.

So some people really push against it, and they say,

don't advertise your crypto junk anywhere near, you know.

So some people don't like it at all.

Then it's kind of like, where would you go?

Like, where do I get my news?

Like, I get a lot of it from X.

I would look at maybe, you know, because a lot of people, like, I have the Brave.

Obviously, I had, like, AdBlock Plus, the plugins.

So I personally don't see a lot of ads.

I have YouTube Premium.

I don't even see any ads.

So, like, where are these?

What exactly would I even do?

It is a little bit overwhelming, and I'm not exactly sure.

So you could go down that road, or you could just keep improving the product and just hope that.

I think that the problem is that people don't do very active marketing for crypto,

because after, like, a big marketing budget, and then the president of one country

makes some rates for the countries, and every time crypto goes down,

and all your marketing budget is, like, going away.

And that's why it's more clever, I guess, to build product-centric community,

which is active, which is eager to do some improvements, to do some work.

And then the bigger audience will come to the products, which actually work,

which actually easier to use, cheaper to use, and all this kind of stuff.

Yeah, I think, so for example, like, with Tesla, in the United States,

you would see a lot of, you used to see a lot of car commercials.

Of course, you used to see a lot of car commercials, automobile commercials on television,

on TV, but now with streaming, people don't really watch traditional cable television

or broadcast television, so it's actually been a while since I've seen a car ad.

But even when Tesla was getting started in, like, whatever that was, 2008 or something,

you know, there has never been, like, a Tesla commercial, really.

And the advertising for Tesla is basically just, like, Elon's Twitter account,

and yet it's an enormously successful company, so it's theoretically possible

to stay product-oriented and let the marketing take care of itself.

Of course, this is a classic trap that engineering-minded people make,

and they think, oh, if I just build the best product,

the customer will be the path to my front door.

You know, with respect to distribution and marketing,

I think actually doing the hard fork is a pretty decent distribution.

You know, it's kind of like maybe a silver bullet, because it's like now everyone in Bitcoin,

they could at least tell their friends, hey, listen, we have free money, by the way.

And then now everyone has some incentive to look into the project and decide, hey,

what is this about? Do I want to get rid of it? Do I want to ignore it?

So I think that that does give you a lot of firepower

in the marketing and distribution side.

Will it be enough? It's very hard.

If any project to work, it requires a lot of events to coincide perfectly,

so I don't know if it will be enough, but that does help, I think.

The question from our audience is, how to connect my ASIC miner to this project?

Is it possible?

Yes, but it won't be...

Maybe not.

Okay, yeah.

It won't be possible.

God bless.

All right, thank you.

Got some dust there or something.

So, yeah, it won't do anything until August 23rd, because it won't have forked off since then.

But there is, if you go to github.com and you go to

github.com and you go to, it's ecash-com is the site.

We have this Fast Facts repository pinned at the top,

and there's like a how to mine,

how to create your own mining pool if you want,

or how to join the mining pool.

Now the thing is, there's so many links

that I sometimes get them confused,

but I think it's pool.drivechain.info

or something like that, if you go to,

but that's why I say go to the GitHub thing first.

We have to, you know what we have to do

is we have to organize them all in one place,

which there is drivechain.dev slash config.

They'll dump all these links at you.

But there's something, there's a,

I think it's pool.drivechain.info.

If it's not, it's one of those other things.

You can check out the pool.

Pool is itself open source, and I think is actually,

I'm not gonna say it's better

than existing pool software at all,

but it does do some cool things

that traditional pool software does not do,

including it pays people out on the L2,

which means that it can pay you out

much, much more frequently,

and it can pay out, you know,

you could have four billion people mining,

and it would still be working.

So that is pretty neat,

and I don't know why the existing mining pools

in BTC are not open source, but they aren't.

And ours is, so maybe ours will, you know,

ours is just like a skeleton right now,

but of course, since it's open source,

and since we have LLMs,

and it's very easy for me to imagine

that over time, over a few months,

the pool would just start to gain

all of this functionality and performance and convenience

just because it's open source.

I don't know why.

I tried to look for, as a Bitcoiner,

just out of curiosity, I was trying to find out like,

oh, how do all these pools work?

And I really couldn't find,

ironically, you know, I didn't look,

I didn't look and see if Ocean is open source.

Maybe Ocean is the one that is open source,

but I disagree with an enormous number

of design decisions with Luke,

and I think PPS is the way to go.

PPS is way better, I think.

Luke hates PPS, so.

So that's funny that maybe Ocean is,

I didn't look, maybe it's not.

That would be even more bizarre if it's not.

I don't know why, you know,

it's really hard to find this mining pool software.

So we just made some,

one of the people working for us

was one of the, a really good contributor to Stratum V2,

but he and I both think Stratum V2

is actually just not that good,

and you can do a lot better.

So we were, so that's part of the pool.

And it is SHA-256 mine, the same as BTC.

It's basically the L1 is almost,

the layer one is basically exactly the same as Bitcoin Core.

And if you go to the GitHub,

you'll see that we didn't even rename it

because if you rename it, it breaks a bunch of tests.

So it's just called Bitcoin,

and I changed the README,

but it's just Bitcoin, and it will remain so

because as Bitcoin releases version 32, 33, 34,

we'll just keep copying the changes.

So the plan is not to compete with Bitcoin on L1,

and the plan is to copy L1,

copy Bitcoin Core,

so that you just keep whatever you like about that,

including the SHA-256 mining.

Okay, I think that if some of the audience

have some questions, you can go to ekash.com,

and like 95, 99% of these questions will be answered there.

There is a link to Ekash GitHub there.

So before asking questions, go to ekash.com,

and you will find most of your answers there.

I guess that we're done for today.

Thank you for this interesting conversation.

It was really, I really had fun

because today I learned something new.

I changed my mind to something,

some perspectives maybe,

so it was very useful and interesting.

You're always welcome on our online streams,

and maybe when the world will finish,

we will wait for you to offline conference,

which is, we host a conference each year in Kyiv.

So whenever the world will finish, you're welcome.

Great, hopefully soon.

Yeah, hopefully.

2% of you talking about.

Yeah, well, I mean, how much longer can it go on?

I mean, I'm sure it might be,

I don't know, we've all heard this and that,

like rumors and things,

but it might be that it might get a little bit worse

before it ends.

But I just hope, you just think like,

oh, it's just dragging on and on,

and how much support does Vladimir Putin still have

in Russia and just keep this moving on?

But I've also heard that he's very, very, very skilled at,

you know, sticking around.

So that's too bad.

We'll win for sure.

So it's just a matter of time.

Okay, so thank you.

And you can still, I guess, ask questions in the comments

after the live stream will finish.

Maybe the most interesting of them we will ask in text.

If Paul will have time,

we'll post some article maybe later.

So, but you can find answers on hikesh.com one more time.

It'll be much easier and faster.

Okay, thank you.

It was Paul Sztorc,

the founder and CEO at Layer 2 Labs

and founder at ekash.com,

the fork of Bitcoin that will go live like in 18 days,

24 hours, nine minutes, and 20 seconds.

It's also available on ekash.com,

so you can watch it online.

Okay, have a good one.

Thank you for coming.

Bye-bye.

Yeah, thanks very much.

♪♪♪